Sitting of 21 May 1986

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

    Rate Support
    Mr. Favellasked the Secretary of State for the Environment what assessment he has made of the comparative amount of Government support in per capita terms enjoyed by ratepayers (a) in the north of England and (b) in the south of England.
    The Secretary of State for the Environment (Mr. Kenneth Baker): Government support to local authorities, in the form of aggregate Exchequer grant per capita, in 1986–87 amounted to £222 in the south of England and to £307 in the north, about 40 per cent. higher. The corresponding figure for the midlands is £243.
    Mr. Favell: With figures like these, why the clamour from the Socialist town halls of the north, such as Liverpool, Manchester and Sheffield, that they are being robbed of their birthright? Is it to cover up for their over-indulgence? Does my right hon. Friend have an addition to make to the Government's "must get the message across" list?
    Mr. Baker: Yes. It is clear from the figures that under the rate support grant system the Government continue to give substantially higher sums of money to those in the north. This is one aspect of the north-south divide and a fact that is not generally recognised. For example, looking at RSG alone, in the last years of the Labour Administration the north got 28 per cent. more than the south. Now, under this Government, the north gets 50 per cent. per head more than the south.
    Mr. Tony Banks: Now that the Secretary of State is getting out of the frying pan, will he tell the House whether he truly believes that there should be no Government control over rates? If so, does he think that his successor will share his belief?
    Mr. Baker: The rates policy that I have pursued and set out in my Green Paper is very clear. I have made it clear that the system of local government finance needs a complete and absolute overhaul. I have put my proposals on the table. We await proposals from other parties.
    Mr. Fallon: Does my right hon. Friend agree that those figures make it all the more disgraceful that Darlington borough council has not only increased the rates by 21 per cent. but has increased its spending by 21 per cent.? What does he have to say to a council which puts water slides before jobs?
    Mr. Baker: My hon. Friend is absolutely right. The total budgets of local authorities for next year show an increase of over 8 per cent., the inevitable consequence of which must be higher rate increases. The point that I have demonstrated in the grants is that substantial sums of money flow to local authorities, disproportionately in favour of the north.
    Mr. Eastham: Is the Minister not being a little dishonest when he tries to draw a simple analysis between the north and the south? I remind him that the north was the home of the industrial revolution. Consequently, it was left with the legacy of all the rubbish and old buildings that had to be replaced. Is that not why the north needs extra money?
    Mr. Baker: I have made it clear that I do not begrudge this flow of money, and in fact the rate support grant system achieves that aim. On top of that, we have introduced an urban aid programme, which again is principally directed to the towns and cities of the north.
    Mr. Marland: Is my right hon. Friend aware that in some counties in the south, espcially Gloucestershire, with which I am most familiar, funds that have been reallocated this year have not been distributed by the Liberal-Labour pact which is now in power in Gloucestershire? Does he agree that that distorts many of these figures?
    Mr. Baker: I have sympathy with my hon. Friend. Wherever a Liberal-Labour pact gets into power, things go wrong.
    Mr. Straw: I wish the Secretary of State well, whatever the future holds for him later this afternoon. From our point of view, although we have had a few disagreements with him, we think that whoever replaces him is likely to be worse, especially if it is his right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), or even worse his right hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley).
    Does the right hon. Gentleman accept that the overall figures that he has given obscure the fact that inner city areas in the north as well as the south have suffered severely, especially Labour areas? For example, Sheffield and Manchester received only 45 per cent. of their total expenditure by way of grant. How can he justify the fact that Newcastle, although it spends less on some services than Wandsworth, has only 20 per cent. of its expenditure covered by grant, while Wandsworth has 85 per cent.?
    Mr. Baker: The hon. Gentleman, who knows better than most the complexities of the rate support grant system, will know why grant varies from authority to authority. We are trying to devise a system to reward those authorities which give good value for money to their ratepayers.
    I thank the hon. Gentleman for what I took to be good wishes. I may not be the only spokesman on the move.

    Voluntary Organisations
    Mr. Rogersasked the Secretary of State for the Environmnt when he last met representatives of the voluntary organisations in Greater London and the metropolitan counties to discuss funding arrangements under the Local Government Act 1985.
    The Parliamentary Under-Secretary of State for the Environment (Sir George Young): My right hon. Friend

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    last met representatives of voluntary organisations to discuss the effects of abolition on 24 March. There are no plans at present for a further meeting.
    Mr. Rogers: When will the money which the GLC allocated for forward funding be returned to the boroughs as a result of that being declared unlawful by the House of Lords?
    Sir George Young: That is a matter for the London Residuary Body, not the Government.
    Mr. Simon Hughes: Why, in the borough of Southwark, although there was one urban programme grant to the Silwood estate, for which we are grateful, was the total urban programme cut by half this year from about £200,000 to about £100,000? Although boroughs such as mine in south London are clearly deprived, why do they not qualify for any of the more important statuses under the urban programme as programme partnership authorities? Is it not about time that we looked again at the urban programme and the funding of urban areas, which clearly does not always meet the needs of the most deprived parts of our inner cities?
    Sir George Young: I hope that the hon. Gentleman will recognise that one of the inner city initiatives, under my right hon. and learned Friend the Paymaster General, was set up in the London borough of Southwark with extra resources of about £1 million behind it. We shall consider Southwark's urban programme. I do not think that it has applied under the Inner Urban Areas Act 1978 for assistance to industry, to which it is entitled, and that is something that I shall also be pursuing with the borough.
    Dr. Cunningham: Will the Under-Secretary clarify the Government's intentions with respect to the Secretary of State's letter of 20 March 1986 about the proposed rate-capping of the arrangements to fund voluntary organisations in London? Would it not be scandalous, and further undermine the Government's commitments in the House of Lords and elsewhere to the voluntary organisations, if the already inadequate level of funding under the Richmond scheme were to be held by that draconian use of the Local Government Act 1985? In that connection, will the Government also clarify their intentions on funding for voluntary organisations in the metropolitan areas?
    Sir George Young: There seems to have been some genuine misunderstanding about this. Earlier this year the London boroughs decided to have a budget of £27 million. We have made it clear that we have no plans to reduce that figure, and the Government have an open mind on next year's budget.

    Radiation
    Sir David Priceasked the Secretary of State for the Environment what are his latest estimates of the highest and lowest levels of natural background radiation within the United Kingdom; how the former compares with acceptable international standards of safety from radiation; and if he will make a statement.
    The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): Excluding the contribution from the daughter products of radon in dwellings, which varies very widely, the radiation doses from natural background range from about 0·9 mSv
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    per year to 1·5 mSv per year. Including the contribution from radon, a typical range is from 1 to 10 mSv per year. For artificial sources of radiation, the internationally recommended dose limit for exposure of members of the public over many years is 1 mSv per year.
    Sir David Price: Does my on Friend agree that those figures show that there is a wide variation in levels of natural radiation? Can we then conclude that there is much still to be identified and measured when it comes to judging radiation levels, and that we should not add to man-made levels of radiation if we can possibly avoid it?
    Mr. Waldegrave: I do not disagree with my hon. Friend. On average, exposure to people from industrial sources is a good deal less than 1 per cent. of annual exposure. That puts the thing into perspective. The great majority of radiation comes from natural cosmic radiation, rocks and so on.
    Mr. Campbell-Savours: Is not the belching filth that comes out of Britain's coal-fired power stations for more damaging to the environment, and particularly to the Lake District, than any radiation? Is it not time that we took our gloves off in the argument over the impact on the environment of nuclear or coal-fired power?
    Mr. Waldegrave: I am not sure that I would agree with the hon. Gentleman about "any radiation", but he is right to remind us that there are problems of pollution with any major form of power generation. It is probably true that the most intractable of all long-term environmental problems will be carbon dioxide and the heating of the atmosphere.
    Mr. Kenneth Carlisle: Does my hon. Friend agree that his original answer was extremely erudite but totally incomprehensible to all hon. Members with the exception of the few who have had a very good education in that sphere? Is it not therefore important to evolve a meaningful form of language that brings home to people exactly what we are talking about?
    Mr. Waldegrave: I agree with my hon. Friend, but it is also vital to have the data available so that those who have had the education to which my hon. Friend referred can interpret it properly. It is difficult to simplify things a lot without confusing the issue further. However, in order to help my hon. Friend, other hon. Members and, indeed, myself, we have prepared a comparative table of sources of radiation which has been made available in the Library of the House and, I think, in the Vote Office.
    Mr. Frank Cook: The Minister has told the House that, according to international bodies, the acceptable level is 1mSv a year. If so, why has the legally enforceable level in this country been set by the most recent ionising regulations at 5mSv a year? Why do America and West Germany have levels that are 20 times more stringent than those in Britain?
    Mr. Waldegrave: The hon. Gentleman has made the mistake of believing everything in that "Panorama" programme. I have to say that in almost every critical respect that programme was wrong. The methods by which we calculate safe dose limits in this country are different from those in the United States and Germany. Ours are tighter than those in Germany, and equivalent to those in the United States. The issue is so important that I am providing every hon. Member with a briefing note on that programme, which contained many mistakes.
    Mr. Ward: My hon. Friend will be aware that this morning there was a leak from the Cap de la Hague waste treatment plant near Cherbourg. That is a matter of concern to my constituents and to others on the south coast because there have been other incidents in the past. As a result of that leak was there any emission into the atmosphere, and what precautions are the Government taking to keep everybody informed?
    Mr. Waldegrave: I can reassure my hon. Friend and his constituents. My officials and officials of the Radiochemical Inspectorate have been in touch with their opposite numbers in France. There was no leakage of radiation from the building concerned and, therefore, no impact on the outside environment in France, let alone in the United Kingdom.
    Dr. David Clark: When the Minister responded to my hon. Friend the Member for Stockton, North, (Mr. Cook) about the "Panorama" programme, was he saying—this is important—that the standards of radiation measurement in the United Kingdom are higher than they are in Germany or in the United States of America?
    Mr. Waldegrave: The measurements are the same. We are talking about safety levels. I am advised that although they are differently calibrated or put together, the effective protection levels for the population in Britain are tighter than they are in Germany and equivalent to those in the United States.

    Council Estates (Sale)
    Mr. Roy Hughesasked the Secretary of State for the Environment what representations he has received and from what bodies concerning the proposal to sell off whole council estates or parts of estates to private developers.
    The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): My right hon. Friend has received many representations on this general issue. They have come from organisations representing interested parties, from individual Members of this House, and from members of the public.
    Mr. Hughes: Does the Minister appreciate that the proposals are causing particular anxiety among tenants because of the threat of eviction? Does the Minister recognise that as time goes on developers will invariably choose the better sites? What is happening about waiting lists, tranfer lists and the homeless? What assurances can the Minister give about these sensitive issues?
    Mr. Patten: Some tenants have been unnecessarily alarmed by the literature put through their doors during the recent local government elections campaign. Much of that literature was not factually correct. Under the proposals to which the hon. Gentleman refers tenants will enjoy a high measure of protection, on all fours with the protection that council tenants receive when councils move their tenants from one council property to another, and similar to the protection that private tenants get when private landlords move their tenants from one place to another with the approval of the courts.
    Mr. Dover: Is my hon. Friend aware that many hon. Members fully support the proposals because they will end the often inhuman and remote management by housing authorities and lead to much better management in the private sector?
    Mr. Patten: I believe that the private sector, and, perhaps, new institutional forms of management can provide a lot. It is interesting that a substantial number of Labour-controlled local authorities are seeking to involve the private sector in the interests of the people who live in their areas.
    Mr. Allan Roberts: Will the Minister confirm, or deny, recent reports in the press about a speech that he made that he intends to allow council housing not only to be sold off against residents' wishes, but to force such property to be sold by councils against the wishes of the councils?
    Mr. Patten: The best thing that I can do is to send the hon. Gentleman a copy of the speech so that he can see exactly what I said. I can sum up exactly the feeling and sentiment of my speech by quoting one sentence, in which I said:
    "The Government's goal is to recreate in our cities a diverse and socially welcome pattern of different types of housing available for rent which will match and complement the diversity and richness of our owner-occupied stock."
    I shall send the hon. Gentleman a copy of my speech.
    Mr. Neil Hamilton: Was not my hon. Friend too mealy-mouthed in his response to the hon. Member for Newport, East (Mr. Hughes)? Is my hon. Friend aware of the unscrupulous propaganda circulated in my constituency during the recent local government elections by the Labour party in Manchester about the threats that the Government were holding over the heads of tenants in my constituency and stating that it was an absolute fact that when the Housing and Planning Bill went through they would be evicted? Perhaps my hon. Friend should beef up his answer in response to my intervention.
    Mr. Patten: I can see that I need some training in this approach from my hon. Friend. He will be aware of the letter that I wrote to him a day or so ago condemning in clear and unequivocal terms the leaflets that were put through so many doors in Manchester. However, in my characteristically, I hope, subfusc and reasonable approach when answering questions, I was seeking to say that we should put the recent local elections behind us with the scaremongering leaflets that were circulated during those local elections. Let us tell tenants in public sector stock, particularly elderly tenants, exactly what the facts and the truth are. That is so important in politics.
    Mr. John Fraser: Does the Minister accept that the best way to add to the diversity and choice of housing is to allow local authorities and housing associations to continue with the task of building homes for rent, on which the Minister and his Department have been screwing them down for the last seven years? If he wants to assure tenants about houses being sold off to the private sector, should he not give to tenants the same veto on sales to the private sector as he has promised tenants in respect of the privatisation of management? Will he give that assurance and change the Housing and Planning Bill in another place?
    Mr. Patten: The hon. Gentleman, who served on the Standing Committee on the Housing and Planning Bill, will be well aware of the considerable assurances that I have given during the examination of the Bill. I think that the hon. Gentleman, who is a London Member, is, to a great extent, playing the wrong tune over new building. In London and our other great cities we should be finding

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    ways of bringing back into use the scandalously large number of empty council houses and flats to house the people who need that accommodation.
    Mr. Cartwright: Is the Minister aware that there is widespread support for the case to break up centralised, monolithic and remote local authority housing management? Will he be taking practical steps to encourage the development of housing co-operatives, housing associations and neighbourhood housing trusts rather than taking the easy option of simply selling the estates off into the private sector?
    Mr. Patten: On some occasions the option which might be appropriate could well be selling off part, not necessarily all, of the accommodation on an estate. I entirely agree with the hon. Member for Woolwich (Mr. Cartwright) that a variety of ways of breaking up monolithic tenures would be very appropriate, especially if they are the sorts of tenures which the people who live in those flats and houses want. That is why we need a radical re-examination of our policies towards rented housing in the public and private sectors.

    Housing (Coventry)
    Mr. Nellistasked the Secretary of State for the Environment what information he has as to the numbers of houses in Coventry unfit for human habitation, substandard or requiring major repairs.
    Sir George Young: Coventry provides its assessment of stock condition as part of its annual housing investment programme return.
    Its summary for both public and private stock as at 1 April 1985 was as follows: number of unfit dwellings, 939; number of fit dwellings lacking standard amenities, 5,409: number of non-substandard dwellings in need of renovation, 13,644.
    Mr. Nellist: Considering that the Minister has recently visited Coventry, South-East, is he not aware that the appalling figure of over 20,000 houses represents almost one in six of all private and public houses in the city of Coventry? Is it not true that the cuts of almost £100 million in the past seven years in rate support grant for Coventry has meant that for five years the Labour council has not had the money to start to build a single council family house? Does he accept that the thousands of families who live in those houses in Coventry, apart from welcoming the resignation of his Government, could do with an injection of capital for the building of decent houses for people and providing proper jobs for workers?
    Sir George Young: The hon. Gentleman mentioned cuts, but the figure for expenditure on housing by Coventry was £13·4 million in 1982–83 and £19·8 million in 1985–86. Therefore, there have not been dramatic reductions in capital investment on housing by Coventry. I very much welcome the initiatives that Coventry is now at last beginning to take to interest the private sector in helping to tackle some of the problems mentioned by the hon. Gentleman.

    Housing (Leicester)
    Mr. Peter Bruinvelsasked the Secretary of State for the Environment what plans he has to seek to speed up the sale of council houses and flats within Leicester.
    Mr. John Patten: I understand that over 4,000 flats and houses have been sold under the right to buy in Leicester, but only 13 flats had been sold at the end of December 1985.
    This low level of flat sales is a common pattern across the country. For that reason, the Government have announced proposals, contained in the Housing and Planning Bill, designed to encourage the sale of flats under the right to buy.
    Mr. Bruinvels: Is that not a shocking indictment of the Labour-controlled Leicester city council? It just does not care. In fact, it has sold only 12 flats and 4,300 council houses and there are still 34,400 council houses and flats left ready to be sold with 700 people waiting to buy them. Will my hon. Friend do everything in his power to give the people of Leicester the opportunity of owning something that should belong to them and not to the dreadful Labour-controlled council?
    Mr. Patten: I entirely agree with my hon. Friend. It is a pity that Leicester, like other councils — for example, Manchester and Nottingham — is paying so little attention to the aspirations of the people who live in its area. I wish that the controlling Labour group on Leicester city council had watched the recent Labour party political broadcast on television, which was a great paean of praise for home ownership and showed a welcome conversion to our policies.

    Peak Park Planning Board
    Mr. Knoxasked the Secretary of State for the Environment whether he has any plans to introduce direct elections to the Peak Park Planning Board.
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): No, Sir. We have already provided for statutory district council representation on the board in the Wildlife and Countryside Act 1981.
    Mr. Knox: Since the Peak park is one of only two areas in the country where planning is undertaken without directly elected representatives being involved in final decisions, why should those of my constituents who live in the Peak park put up with this undemocratic treatment?
    Mrs. Rumbold: Twelve local authorities are involved in the administration of the Peak district park, and direct elections would be impractical in those circumstances. Two thirds of the members are appointed by the councils. I expect that they would be capable of representing the interests of the Peak park. We recognise the advantages of choosing members with local knowledge and experience when we appoint them from the Department.
    Mr. Andrew F. Bennett: Does the hon. Lady accept that there is a strong case for improving the representation of people from Greater Manchester and Sheffield, who use the Peak park at weekends and at other times for recreation? There is considerable resentment in those areas over the fact that in recent years their representation on the Peak Park Planning Board has been reduced.
    Mrs. Rumbold: Locally elected people from the wards in the Peak park could represent the interests to which the hon. Gentleman referred.
    Mr. Franks: The Minister will be aware of my great anxiety about the planning procedures in south Cumbria,

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    which incorporates the Lake District Special Planning Board. The Minister may also be aware that the Peak park——
    Mr. Speaker: Order. The question relates to the Peak park.
    Mr. Franks: This relates to the principle, Mr. Speaker.
    Mr. Speaker: That is a different matter.

    House Building
    Mr. Dubsasked the Secretary of State for the Environment how many public sector housing starts are planned for 1986–87; and how this figure compares with 1978–79.
    Mr. John Patten: My Department does not forecast housing starts or completions in the public or private sector.
    Mr. Dubs: Will the Minister confirm that, nevertheless, there has been a significant fall in public sector housing starts during the lifetime of the Government, that in many inner cities no public sector houses are being built and that several million people cannot afford, for reasons of low income or unemployment, to buy in the private market? Among them are hundreds of thousands of people who are badly housed and overcrowded, and the Government's housing policy offers them no hope.
    Mr. Patten: That is exactly what the Labour party said before we started the process of council house sales, never mind the present position The balance of new build has switched between 1979 and now, nowhere more successfully than in Wandsworth, which has done a marvellous job. By selling properties, Wandsworth was able to spend last year about £58 million—the biggest housing investment programme in London—and this has allowed it to spend more on maintaining and repairing its council house stock than any Labour or alliance-controlled council in London.
    Mr. Heddle: Does my hon. Friend agree that the way to curb homelessness is through the maximum use of existing housing stock? The number of houses left empty, not for two, four or six months, but for a year, is a scar on the face of a caring society and an indictment of many Labour-controlled housing authorities. Does he agree with the proposition that the answer to homelessness might be for councils to give house keys to people on their waiting lists who are do-it-yourself experts and who could renovate the houses in exchange for a compensatory rent-free period?
    Mr. Patten: That is a possibility. That view was expressed by the Opposition during the Committee stage of the Housing and Planning Bill. It is clearly something to consider. It saddens me that there is so much housing need and so many empty houses and flats, not only in the council, but in the private, sector. It is absurd that we cannot, as men of good will, find a consensus and so bring back much of the empty properties and house more of our people.
    Mr. Raynsford: Does the Minister agree that, coinciding with the dramatic decline in public sector starts, there has been a continuing increase in homelessness? There are now more homeless families accommodated in
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    bed-and-breakfast hotels than ever before because there are insufficient public sector homes for them. Is it not wasteful of public finance to spend money on bed-and-breakfast accommodation? Is the Minister aware that in Wandsworth, because of the increase in homelessness, there are people in bed-and-breakfast accommodation who should be in public sector housing?
    Mr. Patten: The hon. Gentleman, with his experience in these matters, should look at the large number of empty properties in London boroughs, seek ways with us to bring them back into use, through better management in the public sector, and try to find ways to bring down the absurdly high number of empty private properties to rent, by looking hard at that area.
    Mr. Batiste: Does my hon. Friend agree that Left-wing local authorities which refuse to enter into imaginative partnership with the private sector for the improvement and renovation of their derelict housing stock are denying their citizens the right to decent housing? What action will he take to force such local authorities to act responsibly and in the interests of the people who live in their cities?
    Mr. Patten: I agree entirely with my hon. Friend. He is absolutely right and my answer is a clear and unequivocal yes. I am happy to report that many Labour authorities, such as Salford and Oldham, have been collaborating and co-operating with better housing for their own tenants and inhabitants. Some councils are not so co-operative, including places such as Manchester, Nottingham, and Leicester—we have heard their names before—and, in particular, Liverpool. I think that the tenants will, in the end, force councils to take action that they should have taken long ago. If they do not do so, we may have to take action.
    Mr. Freeson: No matter how much private investment is brought into joint action with public authorities, we need more public investment to deal with the very large number of private dwellings that are in grave need of repair and renovation and could be put to use by housing associations and local authorities if money were available to buy and repair them.
    Mr. Patten: Money is one half of the equation. The other half is the inhibition that so many private landlords feel about improving and bringing back into use their own stock which is being kept empty. If the right hon. Gentleman is putting forward a suggestion and would like a response from us, I say, "By all means put forward your suggestion, but recognise that the expenditure of extra money on the improvement grant system will not necessarily bring back the empties. "If only the Labour party would move a bit on the private rented sector, we would be in business.
    Mr. Squire: Further to the question of the hon. Member for Fulham (Mr. Raynsford), will my hon. Friend confirm that he wishes to see the phasing out of bed and breakast accommodation as a means of solving homelessness, on both social and financial grounds?
    Mr. Patten: Yes. It is a method of last resort, to be used only when everything else has failed.
    Mr. Rooker: Does the Minister accept that the public, whether owners, tenants or the homeless, rightly condemn the 100,000 empty dwellings in the public sector, and, in many ways, condemn them more than they condemn the

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    500,000 empty homes in the private sector? If there were genuine good will to do something about the matter, surely the Government would have accepted the Opposition's new clause to the Housing and Planning Bill, which would have allowed people who have been on the waiting list for more than 12 months to take over the tenancy of a property that has been empty for more than six months and was available for letting.
    The Minister must appreciate that his predecessors, playing the numbers game, have left millions of our fellow citizens in junk housing which will have to come down. That being so, why was the Government's national building programme for new homes down by 70,000 last year on the figure for 1978, the last full year of the Labour Government?
    Mr. Patten: I agree with a great deal of what the hon. Gentleman has said. It reflects something that I mentioned in a speech yesterday to which he was good enough to listen. I said that councils had
    "segregated council tenants on estates and labelled them with a distinctive address and a distinctive architecture. For many, it has not been a social success."
    It is because of that fact that we need to start again and to look at the provision of social housing in this country. Perhaps the scheme mentioned by the hon. Gentleman, which we were not able to accommodate in Committee, should be looked at again—if only we can find a way of stopping people getting into flats that have been empty for six months, 12 months, or longer, and taking accommodation that is more than they need. That is the one problem with that scheme. If the hon. Gentleman can think of a way round the problem, I should be pleased to hear from him.
    Mr. Meadowcroft: Is the Minister aware that this is often a self-inflicted problem? In Leeds during the past two decades some 10,000 more houses have been demolished than have been built. Given that there is a need for rented accommodation, it is important to present a package of refurbishments for housing association dwellings and public sector starts. Will his statistics reflect that and make the point that we have to get on with housing for rent? We should not be demolishing houses that could be refurbished.
    Mr. Patten: Demolition is rather like putting people in bed-and-breakfast accommodation and should be a last resort. I entirely agree with the hon. Member for Leeds, West (Mr. Meadowcroft) that we need a greater diversity of provision on our housing estates.

    Land Disposal
    Mr. Andrew MacKayasked the Secretary of State for the Environment if he is satisfied with the rate of disposal of building land in the inner cities by public bodies.
    Mr. Kenneth Baker: No, but I believe that better progress is being made since we set up the registers of unused land. Some 38,000 acres have gone from the registers, including since 1984, 4,400 acres of inner city derelict land.
    Mr. MacKay: During my right hon. Friend's all too short but positive stewardship in the Department of the Environment, may I ask whether he has seen enough to agree that it is disappointing that more public sector land has not been sold for housing in the inner cities? Does he
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    agree that one of the many reasons for that is that there is not much incentive for builders to build in the inner cities when they are able to build on green field sites in my constituency and elsewhere?
    Mr. Baker: I have issued 107 notices to dispose of surplus land and 25 directions were issued following those. It is disappointing that there are still substantial quantities of unused derelict land in the inner cities, especially in the north. It serves no one's purpose to leave that land derelict. One of the ways in which we can abate the development pressures in the sort of area that my hon. Friend represents is by bringing as much as possible of that land back into active use.
    Mr. Winnick: Some of this building land could undoubtedly be used by local authorities to supply the accommodation so desperately required by people who have no accommodation at all. Why does the Minister not recognise this? Is he aware that if the rumours are true he is to be replaced by the present Minister of Transport, a noted Right-wing fanatic? If that is true, those who are in desperate need of housing can give up all hope.
    Mr. Baker: Quite a lot of this derelict land is owned by local authorities, and nearly all of it is owned by statutory authorities. It is a matter of motivating them to dispose of it to bring development forward. Two grants are available, the derelict land grant, which we have increased to £90 million a year, and the urban development grant, which we have increased to £25 million a year. I wish it were possible to educate certain councils to get on with the business of disposing of that land.
    Mr. Gow: Is my right hon. Friend aware that the dissatisfaction that he has expressed about the rate of progress in selling unused land now on the land registers is shared by those on the Benches behind him? Is he further aware that there is a widespread belief on the Tory Benches that it is wrong, morally, socially and economically, for public bodies to hold on to land for which they have no operational requirement, either today or tomorrow? Will my right hon. Friend urgently consider taking further and specific powers to secure the release of unused land so that it can be put to better use by others?
    Mr. Baker: I agree wholeheartedly with my hon. Friend. He asked about extra powers. We are using the powers available to the Secretary of State for the Environment, but more has to be done. It is morally indefensible to allow land to lie vacant when it could be used for industrial development and for houses.
    Dr. Cunningham: Is not this problem just a symptom of the Government's abysmal failure on inner city policy in general? By systematically removing financial resources from those authorities which were trying to deal with these problems they have created a situation in which local authorities cannot use the land because they have no money. They do not want to sell it because if they need land later it would cost them a lot more to buy it back. In addition, because the problems of the inner cities are getting worse, land in the hands of private developers is also lying idle because people will not invest until the Government and local authorities start tackling the problems with more vigour.
    Mr. Baker: I reject completely the criticism of the stewardship of myself and my predecessors in relation to the inner cities. I remind the hon. Gentleman of the figures

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    that I gave earlier of the proportionately greater amount of money that is provided under the rate support grant system to the towns and cities of the north, of the way in which we have trebled the amount of support through the urban programme to the towns and cities, and of the triumphant success of the greatest reclamation of any inner city area in the world—London docklands.
    Mr. Nicholas Winterton: What incentive is there for responsible Conservative-controlled authorities, such as the borough of Macclesfield, to sell land that is surplus to their requirements if they are then unable to spend that money on the sorts of desirable projects that are in the best interests of the people of the area—such as housing for the elderly, young marrieds and single people—because of the limits on the spending of capital receipts? How can my right hon. Friend urge his policy upon such a council when it is against the best interests of that council as it cannot spend the money when it has sold the land?
    Mr. Baker: The amount of cash that is received by local authorities on selling the land remains theirs, and they can use it either to redeem debts—and some £2 billion has been used to do so—or there is a system of cumulative borrowing powers under the capital control system.

    Radiation
    Mr. Simon Hughesasked the Secretary of State for the Environment what steps have been taken to improve the arrangements for co-ordinating Government monitoring of radiation levels following the leak from the Chernobyl nuclear power station.
    Mr. Waldegrave: Arrangements for co-ordinating monitoring of radiation levels have been in operation for a number of years and worked effectively after the accident at Chernobyl. My Department will be examining its procedures in the light of recent events to determine whether any changes are desirable.
    Mr. Hughes: Does the Minister accept that it does no good to the Government's reputation for co-ordinating any environmental policy if they change their Secretary of State for the Environment three times in three years? On the question of radiation levels, does the Minister accept that we need more progress than we have seen to date on the co-ordination of seven Government Departments and six other agencies, and that so far we have received only a babble of unrelated technical information, rather than plain information for the ordinary person? Does he also accept the figures produced in Nature magazine on 15 May by three employees of the NRPB, which showed that although the increase in radiation in the south of England was only 1 per cent., in the north it was 15 per cent. above average? Should that not be a salutory warning?
    Mr. Waldegrave: The joke was feeble, the second part of the question was wrong, and the last part in relation to the figures in Nature was roughly right. The hon. Gentleman should read the rest of the article, which says that these background levels are still of trivial proportions.
    Mr. Neil Thorne: Will my hon. Friend take this opportunity to thank the local authority emergency planning officers for all the work that they do in assisting the Government to monitor these levels, particularly their role in the civil emergency sphere?
    Mr. Waldegrave: Let me widen my hon. Friend's question. I should like to pay tribute to those local authority officers, but I should also like to pay tribute to all the people who manned the monitoring stations. According to Murphy's law, such an accident was bound to happen on a bank holiday weekend, but these people did their jobs very well throughout that weekend and subsequently.
    Mr. Dalyell: In the light of the Minister's courteous phone call to me last Friday, has he been able to check whether on Saturday 26 April or on Sunday 27 April there was any inquiry about graphite fires in reactors to the International Atomic Energy Authority, the CEGB or the AEA emanating from Russian sources?
    Mr. Waldegrave: As behoves any Minister questioned by the hon. Gentleman, I have checked and rechecked the answer that I have given him. I have been unable to find any contact other than the one that I described by Mr. Emerson of the International Atomic Energy Agency on 29 April. After careful checking, I have been unable to find any other contact.
    Mr. Roger King: Is my hon. Friend aware that Southwark and many other areas throughout the country are designated nuclear-free zones and that the people of those areas have been subjected to Russian fallout? What is he doing to acquaint the Russians with the fact that we have nuclear-free zones? Furthermore, is he aware of what level of protest, if any, has gone from those zones to the Russians?
    Mr. Waldegrave: Behind my hon. Friend's question lies a serious point, because a number of local authorities under Left-wing Labour control have taken a negative view about civil defence. Contingency plans were not involved in this incident, but they might have to be in a more serious one, if there ever was one; pray God, there will not. Many of those attitudes are extremely irresponsible.
    Dr. Cunningham: Will the Minister be a little more explicit about the telephone call to which he referred in response to my hon. Friend the Member for Linlithgow (Mr. Dalyell)? If it is the case that a British official in the International Atomic Energy Agency received an inquiry from Russia on 29 April about how to deal with a graphite fire, why was that information not communicated immediately to the British Government? Would it not have made a major difference to the preparedness of the country and of the emergency services if that potential warning and been acted upon? [Interruption.] If I were a Conservative Member I would not underestimate the genuine concern of the British people about the nature of this incident and the way it has been handled. Is it not extraordinary that the information was not communicated to the Government immediately?
    Mr. Waldegrave: Though no one doubts the heroism and the technical competence that have now been brought to bear by the Russians on this tragedy, if any Government have to answer questions about cover-ups, it is not the British Government.

    Rate Support Grant
    Mr. Corbettasked the Secretary of State for the Environment when he proposes to issue the "Rate Support Grant Supplementary Report" for 1986–87.
    Mrs. Rumbold: My hon. Friend the Minister for Environment, Countryside and Local Government announced to the House on 10 April our intention to seek to place beyond doubt the issues raised over the Secretary of State's powers under the Local Government, Planning and Land Act 1980 to determine block grant multipliers. Until the legislation, which we shall shortly introduce to the House, has passed all its stages and received Royal Assent, we have been advised that it would not be appropriate to make any further supplementary reports. The Secretary of State will therefore lay the first supplementary report for 1986–87 before the House for its approval as soon as he is able.
    Mr. Corbett: Will the Minister think again about the answer that she has just given to the House and undertake that the Secretary of State will obey the decision of the court, which found that the city of Birmingham had had about £7 million stolen from it, on top of about £508 million in the last five financial years? In short, will the Minister say that the Government will obey the law rather than seek to change it retrospectively?
    Mrs. Rumbold: It is a fact that had Birmingham pursued the court case that it intended to pursue there would have been the most incredible turmoil from 1981 onwards for all authorities, including Birmingham. All that the Government have sought to do is to put matters right within the House to bring about a situation which all authorities, as well as local authority associations and Opposition Members, had always understood to be the case.
    Mr. Yeo: When my hon. Friend is considering rate support grant issues, will she pay particular attention to the outstanding record of Suffolk county council in keeping within Government guidelines? Will she also urge her colleagues to give Suffolk county council more favourable treatment under the rate support grant in future?
    Mrs. Rumbold: I am grateful to my hon. Friend for his question. That is a matter that my right hon. Friend will consider in the next block grant assessments.
    Mr. Haynes: Having listened to all the waffle at the Dispatch Box this afternoon, I am afraid that my local authority in Ashfield will suffer another serious reduction in rate support grant for the next financial year. I do not know with whom the Minister can have a word, because apparently the Secretary of State is moving on and I do not know who is taking over. Will the Minister have a word with whoever takes over about releasing the money received from council house sales so that we can provide better services for our people in Ashfield?
    Mrs. Rumbold: Wiser people than I have avoided speculating at this Dispatch Box.
    Mr. Straw: Why does the Minister not come clean about the disreputable nature of the Government's actions? Will she confirm that Birmingham was not pursuing its case, but had won it, and that the Government are now seeking to overturn a decision in Birmingham's favour which was lawfully arrived at in the high court of justice? Will she also confirm that the delay in introducing the Bill is because of major drafting problems, and that the net result of the series of decisions is to deprive Birmingham and other authorities of millions of pounds to which they are entitled, and to create further uncertainty for every local authority in the land?
    Mrs. Rumbold: I must point out to the hon. Gentleman that a number of Labour authorities would stand to lose if we were to pursue the course that he has just set out. Birmingham is not likely to lose and, indeed, no authorities are likely to lose. The practice that was followed is commonly understood and has continued during the past few years, and we shall continue to use it. The legislation is simply to achieve what was thought to be the position.

    Hampton Court Palace
    Mr. Jesselasked the Secretary of State for the Environment when he expects to receive the report of Sir John Garlick following the fire in Hampton Court palace.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): My right hon. Friend has asked Sir John Garlick to complete a thorough inquiry as quickly as possible.
    Mr. Jessel: Can my hon. Friend say how long it will take to complete the repairs and reinstatement before reopening the palace completely to the public? What can be done to speed that up, as Hampton Court palace is not only a royal palace of great importance but a major national museum and a highly valued amenity for local people?
    Mr. Tracey: My hon. Friend naturally takes a deep interest in Hampton Court palace, which is in his constituency. I can reassure him that all the state apartments are now open to the public, except for the rooms on the south front which were damaged by the fire and those immediately adjacent to them. We hope to reopen the outside area of the south front this weekend, but it is too soon to say when the remaining apartments will be fully restored and reopened.

    Local Government Services (Privatisation)
    Mr. David Atkinsonasked the Secretary of State for the Environment if he will make a statement on his proposals to privatise local government services following his recent consultations.
    Mr. Waldegrave: It remains our firm intention to introduce legislation to require competition for a range of local authority services as soon as the parliamentary timetable permits.
    Mr. Atkinson: Now that it has been proved beyond all reasonable doubt that the most remarkable savings have been made by privatising local government services, without a loss of standards in those services and with the full approval of the electorate, as was amply demonstrated in the election results of 8 May, will my hon. Friend hasten the time when he plans to introduce legislation to oblige all local authorities to put such services to the competitive test?
    Mr. Waldegrave: I can only repeat what I said in my initial answer, that, without in any way anticipating the contents of the Queen's Speech, if legislative time is available, the Government intend to take further action in this area.
    Mr. Tony Lloyd: What conclusion does the Minister draw from the large number of formerly Conservative-controlled authorities which reject the privatisation of

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    services, particularly the borough of Trafford, which examined in detail the possibility of privatising refuse collection and decided that it would not make economic sense?
    Mr. Waldegrave: I draw the same conclusion as I draw from the fact that a number of Conservative councils which were at the forefront of privatisation, including Bath, Wandsworth, Westminister, and Merton, did rather well at the local elections, namely, that what controls the swings at modern local government elections is, unfortunately, the national position.

    Water Metering
    Mr. Freemanasked the Secretary of State for the Environment what progress has been made by water authorities in further trials of universal residential metering.
    Mr. John Patten: Following consultations on the Watts report. the water industry is developing a coordinated programme of trials.
    Mr. Freeman: Bearing in mind the Government's excellent proposals for the abolition of the residential rating system, does my hon. Friend agree that the water authorities should now be giving urgent consideration to the introduction of universal metering as the only viable alternative system?
    Mr. Patten: I congratulate my hon. Friend on his excellent question, and I have read and greatly admired his pamphlet on water metering. If domestic rating is abolished, clearly we must replace it with some other basis for charging for the water industry. That could well be via water metering. That is why we need well conducted trials to consider the pros and cons of water metering as a method of charging fairly for water.
    Mr. Boyes: Are the Government not aiming to change the whole nature of the water authorities before the metering experiment takes place? Are chairmen of water authorities not informing the elected representatives that their services will no longer be needed because they are to be replaced with a number of full-time executives? The Labour party condemns the loss of the elected representatives of the water authorities. How, and from where, will the Minister choose the full-time executives? Is it not disgraceful, unacceptable and disgusting that the Government will be changing the nature of water authorities before Parliament has had an opportunity to debate the matter and decide its attitude to the water authorities?
    Mr. Patten: The answers to the hon. Gentleman's questions are no, no, no and no. I cannot see the link between his questions and the question on water metering.

Privilege
3.30 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker, In accordance with the new rules on procedure, I raised with you on Monday night and Tuesday morning a possible contempt of the House in breach of privilege in relation to Leigh and Linklater. Will you find it possible to rule, Mr. Speaker, before the Whit recess?
Mr. Speaker: The hon. Gentleman has written to me, correctly, and I am considering the matter.

Education Expenditure (HMI Report)
3.31 pm
Mr. Charles Radice: On a point of order, Mr. Speaker. It is not a matter of surprise that the Government have not made a statement on the report——
Mr. Speaker: Order. I am frequently surprised, but is this a matter for me?
Mr. Radice: The point of order, Mr. Speaker, concerns the report of the HMI on the effects of local authority expenditure policies on education provision, which is published today but on which no statement has been made to the House, despite the fact that it shows that overall schools are generally stretched for money and resources. I should have thought that that was a matter of great importance for Members, pupils, parents and teachers, and that the Secretary of State for Education and Science, whoever he or she is, would have had the courtesy to make a statement to the House.
Mr. Speaker: I have received no request for a statement. There may be one tomorrow.
Mr. Harry Greenway: Further to that point of order, Mr. Speaker, ——
Mr. Speaker: Order. This is not really a matter for me.
Mr. Greenway: Further to that point of order, Mr. Speaker. Is it not surprising that the Labour party, when in government, never published such reports?
Mr. Speaker: Order. Let us be surprised by the ballot. For motions on Friday 6 June.

Education Expenditure (HMI Report)

  BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 6 JUNE
  Members successful in the ballot were:
  Mr. Tam Dalyell: I beg to give notice that on 6 June I shall raise the subject of my concern at the behaviour of the Prime Minister in relation to Westlands, the sending of F111s to Libya, and the Falklands war.
  Mr. Cecil Franks: I beg to give notice that on 6 June I shall draw attention to the extension of privatisation of local government services.
  Mr. Clive Soley.

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: With the leave of the House, I shall put together the Questions on the two motions relating to Statutory Instruments.
  Ordered,
  That the draft Education Support Grants (Amendment) Regulations 1986 be referred to a Standing Committee on Statutory Instruments, &c.
  That the Value Added Tax (Handicapped Persons and Charities) Order 1986 (S.I., 1986, No. 530) be referred to a Standing Committee on Statutory Instruments, &c. —[Mr. Durant.]

Public Safety Information Bill
3.35 pm
Mr. Robin Squire: I beg to move,
That leave be given to bring in a Bill to provide for greater public access to information on public safety matters; to give local authorities and their officers certain duties to bring such matters to the attention of the public in order to ensure greater public safety and for related purposes.
It seems appropriate that the issue of public safety should be raised at this time, as there has been much debate on safety in the past few weeks. A great deal of that debate has centred on the right to know about information concerning dangers and hazards which may threaten the public. My Bill deals with some of the less spectacular —if that is the right word—but nevertheless actual and potential dangers that confront people in their everyday lives. Although they are lesser dangers in one sense, in another they are equally important in that for many people they exist all the time.
The Bill would do three things. First, it would ensure that where there is a matter of public danger about which a local authority or any of its officers obtains information —public danger in that case is defined as danger in any place to which the public have access or any place which people occupy, except as freeholders or leaseholders—it must be brought to the attention of the next appropriate committee and discussed in public. The press and the public would thus be alerted and councillors would be seen to be deciding what action to take. That in itself would be a spur to action and would give the public considerable protection.
Secondly, any member of the public likely to be affected by the hazard would be told of the information that the council had. They would have a right to see the information and to copy it on payment of a reasonable copying fee.
Thirdly, the information must be placed on a public register, which would be available for inspection at all reasonable hours. That would enable the press and the public to obtain an overall picture of the amount of information on any one danger. That is a straghtforward measure, although inevitably it covers many areas. I am afraid that it is indicative of the dangers which people face these days.
Last year there was the Bradford City football tragedy. Councillor Farley, the former council leader, has been quoted as saying that, had the Bill been law, the fire would not have occurred with the resulting disaster. His reason for saying that is easy to understand. Both Bradford city council and West Yorkshire metropolitan county council had on their files a report which contained the words:
"The timber construction is a fire hazard … a carelessly discarded cigarette could give rise to a fire risk."
The report was filed. It never reached the agenda of any council committee or sub-committee. Had the Bill been law, the officers would have been under a duty to put the matter on the agenda and it would have been discussed in public. As Councillor Farley stated, and I fully accept, for such a debate the Strangers Gallery would have been packed and the press would have widely reported the danger. It is inconceivable that no remedial action would have been taken, in which case the fire and the tragedy would not have occurred.
For that reason, the Bradford city council has not only declared its support for the Bill but has started voluntarily
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to implement it as far as the current law allows, because it realises that the Local Government (Access to Information) Act would not change the situation. That act gives the public rights once items reach an agenda, but for public safety that may not happen, or it may happen all too late. All the examples I shall give to the House would not be affected by my 1985 Act. That is why I believe the new Bill is necessary.
A Department of the Environment survey reveals that, of 334,000 houses in multi-occupation — HMOs — in England and Wales, 38 per cent. lack the legal requirement on means of escape from fire — that is, 127,000 houses occupied by perhaps 750,000 people. Yet those people have no legal right to see the information held by local authorities on the dangers in which they live. On average, two people die from fire in such properties every day.
The Institution of Environmental Health Officers is concerned about the lack of rights for occupants of HMOs. Its working party urged last year that occupants should have the right to view copies of notices served on landlords. The reason is obvious. The notice may stress the lack of means of escape or some other danger, such as lethal wiring, or loose brickwork, but the occupiers who live in danger have no right to see it. My Bill would give effect to the institution's recommendations.
Thousands of homeless families spend months and even years in overcrowded and, for the ratepayer, enormously expensive bed and breakfast establishments. Often they lack proper fire safety certificates issued by the fire authority under the Fire Precautions Act 1971. Yet fire officers are prevented, by section 21 of that Act, from informing the residents of the bed and breakfast establishment, or even the local environmental health officers, of the dangers they have found on their inspections. Thus, millions of pounds of ratepayers' money is spent on placing the homeless in establishments that may well be dangerous while other servants of the ratepayers—fire officers—are prevented from telling them of the dangers in which they live.
Section 17 of the Control of Pollution Act 1974 gives county councils considerable information on the disposal of dangerous waste materials; yet, as an interdepartmental working party reported last month, the county council is
"under an obligation to keep records of these matters but there is no specific obligation to make these records public".
The public therefore may live, work or play in the vicinity of a dangerous waste site but they may never be told— until, of course, an accident happens. An EEC directive will shortly give councils additional duties regarding transfrontier shipment of hazardous wastes, but, as the Government working party reports,
"The Directive contains no mention of release of information".
Only last week, a Which? survey showed that many large stores lack adequate means of escape from fire, yet neither store owners nor fire authorities have any obligation to notify the public of the results of any surveys. Will it take another Bradford-type fire before there is a duty to inform the public? The Bill seeks to avoid that risk.
Many authorities collect considerable information on asbestos, but there is no obligation upon them to inform the public, or even those in immediate contact with the hazard. Hon. Members may remember the televised demolition, or would-be demolition, a few months ago by Hackney borough council of Northaird Point—the tower

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block that would not fall down and remained half standing after the explosion. During the preparation for the demolition, the council discovered that there was asbestos in the building, and, presumably relevant precautions were taken. However, on the Trowbridge estate there were seven other tower blocks of similar design, and the council was under no obligation to inform those tenants of the presence of asbestos. After pressure, information reached the tenants. But it cannot be right that that information reached them only through pressure. A better way of doing things is to give tenants the right to know.
I could give many other examples, but fortunately, as I am sure hon. Members would say, time does not allow me to do so. In promoting the Bill, I already have the support of 26 local authorities, seven of which have already said that they will implement the Bill voluntarily as far as they are able within the current law. Bradford city council has not only already done this, but its officers have drawn up a code of practice. The council expects no difficulties in implementing the Bill, but I am bound to say that, even if administrative difficulty is put forward as a reason for opposing the Bill—as it was by some as a reason for opposing my Bill last year—the saving of lives must take precedence over that reason. Friendly discussions have already been held with some local authority associations which have reservations but more on technical drafting points than on the principle.
I believe that my Bill is in line with Government thinking on matters of public safety. The interdepartmental working party on pollution matters to which I have referred recommended greater public access to information, following the Royal Commission recommendation
"that there should be a presumption in favour of unrestricted public access"
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to information on pollution. My hon. Friend the Minister for Environment, Countryside and Local Government, in his preface to the working party report, stated:
"The Government accepts the broad thrust"
of the working party report.
A consideration and discussion document by the Health and Safety Commission has recommended greater access to health and safety information, following a statement in the House by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), the then Minister of State, Department of Employment, that
"the presumption must be in favour of openness rather than secrecy."
In a press release dated 4 March 1986, the Department of Employment announced that the Under-Secretary of State, Department of Employment,
"endorsed the Commission's proposals to make the public aware of the health and safety consequences of industrial activity".
I feel that my Bill, which deals purely with the local authority aspect of public safety, is in accordance with current thinking on these matters. I urge the House to give leave for it to be introduced.
Question put and agreed to.
Bill ordered to be brought in by Mr. Robin Squire, Sir Bernard Braine, Mr. Chris Smith, Mr. Allan Roberts, Mr. Geoff Lawler, Mr. Simon Hughes, Mr. Piers Merchant, Mr. Archie Kirkwood, Mr. Michael Hancock and Mr. Steve Norris.

Public Safety Information Bill
  PUBLIC SAFETY (INFORMATION)
  Mr. Robin Squire accordingly presented a Bill to provide for greater public access to information on public safety matters; to give local authorities and their officers certain duties to bring such matters to the attention of the public in order to ensure greater public safety and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed. [Bill 165.]
Orders of the Day

  Legal Aid (Scotland) Bill [Lords]
  Order for Second Reading read.
  Mr. Speaker: Before I call upon the Minister, I must tell the House that I have selected the reasoned amendment in the name of the Leader of the Opposition.
  3.45 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): I beg to move, That the Bill be now read a Second time.
  Although legal aid in litigation has a long history in Scotland, it has existed in its modern form only since the implementation of the Legal Aid and Solicitors (Scotland) Act 1949. One of the opponents of that Act suggested that its provisions were virtually the liquidation of the profession in Scotland, but the rapid expansion of the legal profession in Scotland has demonstrated how inaccurate that was. The 1949 Act was implemented initially for civil actions only and the problems of providing criminal legal aid were not resolved until the passage of the Criminal Justice (Scotland) Act 1963 which allowed its introduction in the following year, with an extension to district courts as recently as 1975. The availability of advice and assistance in matters not involving litigation was clarified in the Legal Advice and Assistance Act 1972. I have mentioned briefly the developments since 1949 to illustrate the piecemeal fashion in which the present system has evolved.
  There have been continuing criticisms of certain aspects of the legal aid arrangements, some from their very inception. The Royal Commission on legal services in Scotland, in its report published in May 1980, highlighted some of these. The Government concluded that changes were necessary and eventually we issued a consultation paper, over a year ago now, seeking views on what these changes should be.
  The Royal Commission, which contained a fair sprinkling of lawyers, supported the view that it was wrong in principle for the Law Society, as the governing body of the solicitors' profession, to be responsible for supervising the payment of public funds to its own members, as it could not assert effectively the interests of the public purse where these conflicted with those of the profession. The scope for conflict of interest was subsequently increased through the assumption by the Secretary of State under the Divorce Jurisdiction, Court Fees and Legal Aid (Scotland) Act 1983 of responsibility for determination of legal aid fees.
  In our consultation there was general support for the proposition that there should be established an independent board to administer most aspects of legal aid. This view was indeed reflected in the debate in the Scottish Grand Committee last July when the Opposition spokesman indicated that an independent body would be acceptable. Indeed, all those commenting attached great importance to the independence of the board, in particular in reaching decisions on legal aid applications. Although it was never the intention that the Secretary of State should be involved in such decisions, we have made it clear on the face of the
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  Bill in clause 3(4) that any guidance given by the Secretary of State shall not affect the consideration or disposal of applications.
  I am also certain that a board containing members with the knowledge or experience referred to in clause 1(4) covering business, finance, information technology, management and administration, and consumer and social affairs as well as law and court procedures, will be better qualified to administer the legal aid arrangements than a body consisting entirely or predominantly of lawyers. It is important that there should be one body with express responsibility for the administration of legal aid and for reviewing its operation. In a sense, we are not so much establishing a new non-departmental public body to administer legal aid as changing the nature of an existing body and strengthening its management. The staff carrying out the functions will be broadly the same as those carrying them out at present.
  While some improvements in administrative arrangements have been made in recent years, I am convinced that there is considerable scope and a real need for further rationalisation. The need stems in part from the vast expansion of legal aid expenditure in recent years. If administrative costs are left out of account, net expenditure on legal aid has increased from £7·8 million in 1978–79 to £38·5 million in 1985–86, an increase of over 390 per cent. compared with an increase in the retail price index of about 90 per cent. over the corresponding period. We simply do not know enough about the reasons for this expansion, especially in relation to criminal legal aid. One of the main defects of the present arrangements is the absence of management information to assist in the determination of how effectively and efficiently the system is operating and where changes should be made. There is also a very strong case for making better use of suitable management and other systems, including those relevant to public sector administration and accounting. I do not think that anyone could reasonably object to changes designed to secure that legal aid is available where it is needed and that it represents, and can be seen to represent, value for the increasingly large amounts of taxpayers' money expended on it.
  The board will, of course, be taking over not only the various responsibilities of the Law Society and its legal aid central committee, but also those of the Scottish Home and Health Department in relation to the assessment of financial eligibility for civil legal aid. This will result, for the first time, in the same body considering both the general merits and the financial eligibility of applications for civil legal aid.
  The board will also assume from the courts responsibility for dealing with applications for legal aid in summary, but not solemn, criminal cases. The inconsistency in the application of the various criteria for the award of legal aid, notably interests of justice and undue financial hardship, has been the subject of continuous criticism since criminal legal aid was introduced. The Royal Commission echoed this criticism and it has been repeated since then. In its 1983–84 annual report on the Scottish legal aid scheme, the legal aid central committee suggested that the procedure for granting criminal legal aid should be altered in the interests of uniformity, justice and possible economy. Such reservations as have been expressed about the arrangements envisaged under the Bill have tended to centre not on the transfer of responsibility designed to ensure greater

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  consistency but on whether the new arrangements can be introduced without materially increasing delays in court proceedings. All concerned are anxious to avoid delay wherever practicable.
  The Bill in fact provides for the automatic availability of legal aid in the most urgent cases and I am satisfied that it will be possible to devise arrangements designed to limit to a minimum any delays in the consideration of applications. This is one of the matters to which special attention will be given by the management consultants whom I have recently appointed. I should perhaps emphasise that they will be advising on the administrative arrangements and not on policy questions.
  Another all too valid criticism of the legal aid arrangements is the difficulty of finding a way through the maze of primary and secondary legislation. The Bill seeks to remedy this by adopting a clearer and more systematic approach. It deals separately with administration, with advice and assistance, with civil legal aid, with criminal legal aid and other forms of legal aid, and makes separate provision for each category. The consolidation of the primary legislation will serve to make it more intelligible. For example, the text of section 1 of the Legal Aid (Scotland) Act 1967 has been amended in previous legislation in nine different ways. The Bill also provides for a reduction in the number of types of secondary legislation through the abolition of schemes which account for much of the existing corpus of secondary legislation. These will, to a significant extent, be replaced by regulations. This has led to some criticism which I regard as unfair. We are replacing schemes which are not subject to parliamentary scrutiny by regulations which are.
  I have referred to the major criticisms of the present arrangements and what might be done to meet them. Hon. Members will note that much of the Bill re-enacts existing legislation in a clearer form and that—criminal legal aid apart — it changes the administration rather than the substance of legal aid services. It may be helpful to the House if I outline the main new provisions in the Bill and how we envisage that arrangements might operate in future.
  Clause 1 provides for the establishment of the Scottish Legal Aid Board which will unite most aspects of legal aid. I am confident that the combination of the various responsibilities in one body will lead to significant improvements in the administration in Scotland by overcoming the present fragmentation. I have already referred to the knowledge and experience which it is desirable that the board should have and we are inviting suggestions for board members from the Law Society, the Faculty of Advocates, the Scottish Consumer Council, the Scottish Association of Citizens Advice Bureaux and the Convention of Scottish Local Authorities. When my right hon. and learned Friend the Secretary of State comes to make the appointments, the deciding factors will be personal qualities and experience rather than representation of particular interests.
  Mr. Nicholas Fairbairn: Can my hon. Friend advise us of the sort of salaries that the 30 members of that wonderful board are likely to receive?
  Mr. MacKay: I am not sure whether my hon. and learned Friend asks that question out of interest or
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  disinterest. However, my hon. and learned Friend the Solicitor-General for Scotland will give the figures if we come to any conclusion on the matter at the end of the debate.
  As to the staff of the board, personnel at present engaged on legal aid work will have the opportunity to transfer and the appropriate safeguards are set out in schedule 1. Part I and schedule 1 which relate to the establishment, functions and operations of the board, including its financial duties, are broadly in line with the provisions for other non-departmental public bodies.
  Part II covers advice and assistance, and part III civil legal aid. Apart from the transfer of supervisory responsibility to the board there are few changes of substance.
  I now turn to part IV which deals with criminal legal aid, and I should take the opportunity to explain how we propose to introduce assistance by way of representation for certain criminal cases.
  The arrangements for criminal legal aid in the more serious cases dealt with under solemn procedure will remain essentially unchanged. The responsibility for considering applications will continue to rest with the courts. As at present, the courts will have to consider the financial criterion of whether undue hardship will be caused to the accused or his dependants, but not whether the award of legal aid will be in the interests of justice.
  As for summary cases, there have always been doubts as to how far the courts which try cases should be involved in the award or refusal of legal aid on interests of justice grounds. There is accordingly a good case for transferring responsibility from the courts. Indeed, my understanding is that this will be welcomed by many sheriffs. As I have mentioned, the main concern is that this might in some instances result in delay in court business. This is why in developing our proposals we are paying special attention to the need to reduce to a minimum the time taken for the submission and consideration of applications. It should be practicable for the board to deal with urgent applications in a matter of days and other applications within a time scale that should not materially delay court proceedings.
  Mr. Dick Douglas: I confess that I am not an expert in these matters, but representations have been made, particularly during the miners' strike, about the anomalies in the granting of legal aid. May I take it that there will be a more uniform standard in Scotland and that legal aid will be granted more expeditiously?
  Mr. MacKay: The hon. Gentleman has drawn attention to something that has been raised before. He is right to suggest that, if consideration of granting legal aid in summary cases is taken away from individual courts and given to this body, there is every possibility that the granting of applications will be done on a more uniform basis throughout Scotland. Some of the criticisms of Opposition Members will then no longer be valid.
  Mr. Donald Dewar: We all have at least some respect for the principle of consistency. The figures were given by the Lord Advocate in the House of Lords, so that the Minister will be aware that the granting of legal aid for summary cases in the sheriff courts varies from a 90 per cent. to 58 per cent. success rate. Has the Minister formed a view about what the success rate will be under the new system?
  Mr. MacKay: The hon. Member for Glasgow, Garscadden (Mr. Dewar) rightly draws attention to the variations. The success rate is sometimes over 90 per cent. I should not like to form a view because that will be a matter for the board to decide. It will have to try to impose a uniform system throughout Scotland. Clearly the rate will be between 60 per cent. and 90 per cent. —that is logical.
  The hon. Member for Garscadden appears to agree that variations of 60 per cent. to over 90 per cent. show that we should have a more uniform system. The board's independence is important. If I said that the rate would be 80 per cent. or 72 per cent. hon. Members would immediately say that I was preordaining what the board should do. I am not doing that. I would expect something between the two extremes.
  Mr. James Wallace: The Minister refers to the time that the board might take to determine applications. Has he considered what may happen if a foreign skipper is brought into Orkney or to the Western Isles because of a contravention of a sea fisheries regulation? His catch might be left rotting on the quayside. How quickly could that skipper's application for legal aid be settled?
  Mr. MacKay: I am not sure whether the hon. Gentleman's premise is right, because means have to be taken into account. I am not sure whether a foreign skipper with a large catch would be able to apply for legal aid. That is a bad example, but the hon. Gentleman makes a reasonable point. We must ensure that legal aid decisions are given quickly. We shall be looking to the board and the management consultants to find a way of administrating the scheme so that no undue delay is involved.
  Mr. Barry Porter: I am sorry to involve myself in Caledonian matters, but what would happen to an Everton supporter who had been to watch Celtic playing and it was alleged that to finance that expedition he had robbed or burgled in Glasgow and he was arrested? According to the Minister, the board would deal with the matter in days. What would we do with that Everton supporter? Would we lock him up during those few days or would the matter be dealt with as it would be in England where a duty solicitor would appear for him —or is the solicitor supposed to do the job for nothing?
  Mr. MacKay: My hon. Friend intervenes at the right moment because I was about to deal with the question of people in custody. People in custody will receive automatic legal aid until the conclusion of the first diet at which a plea of guilty or not guilty is tendered. In cases where the accused is in custody and pleads guilty, he will be entitled to automatic legal aid up to the final disposal of his case. Where the accused remains in custody after a not guilty plea at the first diet, he will be entitled to receive legal aid from the time he submits an application until the application has been determined. This should help to avoid delay in the preparation of cases.
  Mr. Fairbairn: That is not in the Bill. How are we supposed to know that that is the idea?
  Mr. MacKay: I am always cautious about crossing swords with my hon. and learned Friend the Member for
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  Perth and Kinross (Mr. Fairbairn), but I draw his attention to clause 22 in which I hope he may find something that will help him.
  As at present, solicitors will be able to provide advice and assistance to those charged with an offence. Where an accused being dealt with under summary proceedings is not in custody, the intention is that criminal legal aid should be available in general after the accused has pled not guilty at the first diet. For other proceedings we are proposing to introduce by regulations made under clause 9, assistance by way of representation — inelegantly described as ABWOR. Where the accused pleads guilty at the first diet he will receive ABWOR, if certain requirements are met up to the final disposal of the case. The intention is that the decision whether ABWOR should be provided should rest, initially at least, with the solicitor who will have to satisfy himself that the applicant is financially eligible and that the provision of ABWOR is justified in accordance with prescribed criteria. These criteria are likely to be related to the factors taken into account in determining whether the interests of justice criterion is met, insofar as they are relevant in the case of a guilty plea.
  Mr. Fairbairn: On a point of order, Mr. Speaker. The Minister referred me to clause 2 of the Bill——
  Mr. MacKay: Clause 22.
  Mr. Fairbairn: I am sorry, I must have misheard. but that is no better.
  Mr. Speaker: Order. The hon. and learned Gentleman had better work it out and come back.
  Mr. MacKay: While the decision will rest with the individual solicitor, he will require to obtain the approval of the board in any case where he wishes to exceed the prescribed financial limit, as for other advice and assistance cases.
  Those accused who plead not guilty at the first diet will, after any necessary consultation with their solicitor, make their applications to the board on a form which will in effect require the applicant to provide information designed to show that the relevant criteria are met— notably those relating to the interests of justice and undue financial hardship. Consideration of interests of justice where a legal opinion is required will be undertaken either by the board's legal staff or, more probably, referred to a reporter—a solicitor in private practice—for his view. The board will issue its decision in the light of any recommendation on interests of justice and of its own consideration of the financial factors. We shall be bringing forward in Committee an amendment to clause 24 to spell out factors to be taken into account in considering whether the interests of justice criterion is met. The granting of legal aid is not dependent on the accused person's criminal record.
  Mr. Porter: Why is a not guilty plea treated as rather more important than a plea in mitigation of a guilty plea, which appears to be of significance in the Bill? That has not been my experience over 20 years. I should have thought that pleas in mitigation by people who have pleaded guilty are as important, if not more important. than pleas of not guilty.
  Mr. MacKay: I have already dealt with that matter in the proposals for ABWOR. That deals adequately with those who plead guilty.

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  Part V deals with the employment of solicitors by the board. It is largely based on part II of the Legal Advice and Assistance Act 1972 which has never been brought into operation. Nor is it the intention that part V should be brought into operation at an early stage, although it is desirable to retain this reserve power to supplement legal aid arrangements if this should be required some time in the future.
  The miscellaneous provisions in part VI are again largely based upon those in existing legislation — for example, those covering the arrangements for legal aid in proceedings arising out of children's hearings and in contempt of court cases, those setting out the responsibilities of solicitors and counsel and powers to regulate procedure, fees and other matters.
  While I have not covered all the provisions in the Bill, I trust that the House will agree that it was right to concentrate on the major changes. I am confident that the House will agree with the main aims of these changes—to achieve greater consistency in the award of legal aid to increase efficiency, effectiveness and economy in the system, and to eliminate the possibility of abuse.
  Although I have no doubt that hon. Members will wish to examine certain provisions of the Bill in greater detail in Committee, I very much hope that they will give general support to measures which are designed to improve materially the legal aid arrangements in Scotland. I accordingly commend the Bill to the House.
  4.10 pm
  Mr. Donald Dewar: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "This House declines to give a Second Reading to a Bill which does not adequately safeguard the independence of the proposed Scottish Legal Aid Board; provides no satisfactory appeal procedure for an applicant refused legal aid; and offers no effective guarantee that the right of the individual citizen to legal representation in the civil and criminal courts will not be eroded under the Government's policy of public expenditure restraint by the use of the powers given to the Secretary of State for Scotland to regulate such matters by order."
  Even the most unpromising Scottish debates always turn out to be diverting in the event. This debate is improving at the sight of the Parliamentary Under-Secretary promising us ABWOR from SLAB. I have every sympathy with the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) who seems to be having some difficulty with his two times table. I know that there are occasions when all of us see double, but on this occasion he seems to be seeing single. That must be disconcerting.
  I start by lodging something of a muted protest. I think that the Minister would agree that the time for the debate is short. We are being invited to dispose of an important Second Reading debate in some haste. I recognise that one reason for that is the debate on shipbuilding. I certainly welcome the fact that there is to be discussion of the serious and tragic consequences of the announcement by British Shipbuilders. However, I certainly do not welcome the fact that this debate is being telescoped into about three hours. Many of my colleagues who would have liked to be here are engaged with constituents. In fact, a group of stewards are down from my constituency. Obviously I have to be present for the debate, otherwise I would be in the same position. I know that protests were made about
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  that, but they were blocked or ignored and the word came back that the Government felt that they might not be able to sustain a full debate on this matter. That was the rumour. I sympathise with them. I know that in many areas of Scotland Conservatives are not thick on the ground. They are about as common as a breeding colony of great auks.
  We work in rather special circumstances in the House. Conservatives are more plentiful and they are artificially protected, at least until the next election. I should have hoped that there would be enough to sustain a full——
  Mr. Porter: On a point of order, Mr. Speaker. Is there any chance of the hon. Gentleman getting to the content of the Bill?
  Mr. Dewar: All I can say is that I have read the Bill, as the hon. Gentleman may discover. That is certainly more than he has done, judging from his earlier intervention.
  I regret that we do not have more time. I am sure that the Minister will accept that I regret the fact that the Secretary of State for Scotland will not be with us during the debate. I understand that he is in Scotland. It may be that he is looking for Tory supporters and in that case, like Captain Oates, he may be some time. This is an important piece of legislation and it is unfortunate that the Secretary of State has not decided to take part in the discussion of one of the few Bills that is part of the Government's Scottish programme for this Session.
  Before I turn to the merits of the measure, I should declare an interest. I am still a partner in a Glasgow firm of solicitors which, although it has a wide and varied practice, undertakes a certain amount of legal aid work. I am also, of course, as are other right hon. and hon. Members, a member of the Law Society of Scotland. Therefore, I have at least an indirect interest in legal aid in Scotland and, who knows, at some future date I may have a direct interest.
  The Minister has represented the Bill as a sensible reorganisation and has predictably prayed in aid the Royal Commission on legal services in Scotland chaired by Lord Hughes. Although I accept the case for the independent Legal Aid Board, I do not think that it is an animal which is in any way related to the Legal Services Commission proposed in the report of the Royal Commission. I think that anyone who has read or remembers that report will agree. Of course, there is a case for making sure that there is no conflict of interest or, perhaps more accurately, apparent conflict of interest. That should always be avoided.
  I think that it is a little bit of an anomaly that the Law Society of Scotland should have been in sole charge of the administration of legal aid when its own members so clearly had a direct interest in how that duty was discharged. I hasten to say that, not against the background of any criticism of the Law Society but merely because I believe that independence must be a public and visible virtue. I accept that, against that background, there is an argument for the transfer of the responsibility to an independent Legal Aid Board for Scotland. Therefore, I give my broad support to that key proposal, which I accept is the foundation of the Bill.
  Having said that, I must remind the House that we have some doubts about how the change is being introduced and what lies behind the rather spare outline of reform that

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  appears in the legislation. The reasoned amendment reflects our caution and our substantial reservations on a number of points. I intend to invite my right hon. and hon. Friends to divide on the reasoned amendment, although not on Second Reading, at the end of the debate.
  I shall try to run through my doubts rather quickly. This is very much an enabling Bill. It is only a sketch. I think that it is an example of a dangerous trend whereby the House delegates an enormous amount of power to Ministers. There are wide areas in the legislation which will have to be defined by administrative order and it is possible that if the Minister was so minded he could do what he likes when he likes, irrespective of opinion from other interested parties and bodies. I know that there is a check of parliamentary scrutiny but in the world in which we operate, one and a half hours, often squeezed in after 10 o'clock, with no prospect of amendment, is not an adequate or important safeguard. We would be left with a brief and, no doubt, symbolic outbreak of lamentation from the Opposition. We would become professional mourners, no more than that, if the Minister abuses the power that is proposed in the legislation.
  I suspect that there will be widespread support for my next point, even from Conservative Members. We do not know a great deal about how this will work. I keep asking the most fundamental questions of colleagues who have been involved in negotiations and discussions with the Government, and they say "We do not know the answer." It is bad to ask us to put legislation on the statute book when we do not know about the nuts and bolts and have no real vision of what will happen. I hope that the Minister will be able to make draft regulations available either during or before the Committee stage so that those hon. Members who are engaged in the detailed consideration of the Bill are in a happier position than we are now.
  The measure has been through the House of Lords and perhaps I could take a moment to pay a tribute to the work that was done by some of my colleagues. Lord Morton of Shuna was making his debut on the Front Bench on a law reform Bill. His expertise is certainly of great help to me. Lord Wheatley has retired from the rarefied atmosphere of the courts. We certainly value his views on these matters, whatever other people may think. The Government have had a good deal of time to prepare the regulations. I do not think that it is unreasonable at least to see drafts at this stage.
  I want to raise one or two points, if only to give the Minister notice that they will almost certainly come up in Committee. I do not think that he will be surprised by them. We are proposing to take the granting of criminal legal aid from the courts. I think that I understood this from the Minister's speech, but I want to confirm that it is proposed that there should be a local solicitor who will get the application as the delegated man from the Legal Aid Board and, presumably, he will take the initial decision as to whether legal aid should be granted. Perhaps I have an interest as someone who used to work professionally with the children's panel system, but I am not sure that the term "reporter", which the Minister used and which is often used, is the happiest. That may be a small point to which some further thought could be given.
  I would still put in a plea to the Minister—again I think that I will have widespread support—that there should be a residual power to the court to grant legal aid in criminal cases. It will, of course, exist for a plea in mitigation if the court is thinking of a sentence of
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  imprisonment and it will exist in solemn procedures where the courts will retain their present primacy of position. It is possible, without any great ingenuity, to imagine many cases in which circumstances may arise which would not be known to the reporter—if that is his term—when he initially considers the application but in which there might apparently be a pressing need for representation at the trial. It would be wrong if the sheriff could not deal with such an emergency.
  The applicant may have a handicap, either a speech or hearing defect. Perhaps the witnesses are children and there are special difficulties about young children. It might become evident to the sheriff that it was in the interests of justice that legal aid should be granted. As I understand it—and I am open to correction—that power would not exist as the Bill is presently drafted. The Minister should consider that omission.
  I hope that in the Minister's reply we shall hear something about the negotiations and discussions that have taken place between the justices of the peace. I know that they were looking for a departure from the principle of the Bill and I suspect that the Minister will not be prepared to make that change. The justices of the peace wanted the magistrates to continue to be the main granters of legal aid in district courts. I should be interested to know what happened in the discussions and whether any accommodation or agreement was reached with that important group.
  The Opposition are keen to see the definition of the interests of justice. I have seen many ingenious shots at defining the interests of justice. We will want to consider that closely in Committee and it is important that those Members who will be members of the Committee should have an early opportunity to consider the Government's attempt at defining what some would consider to be the indefinable.
  I recognise the case for consistency of approach in courts over the granting of legal aid. I accept the point about the variations. The 90 per cent. that I mentioned in my intervention is the all-Scottish figure. The Lord Advocate mentioned variations between 99 per cent. and 58 per cent. Anyone who was aware of the proper anxieties that existed during the miners' strike will know that the Opposition have sympathy with the idea of that variation and that the evident injustices that arose during the miners' strike, based upon geographical charts, should not be tolerated.
  A consistent approach must depend on a right of appeal; I stress that point very strongly. In civil legal aid, as the Bill is presently drawn—again, I am open to correction —the right of appeal will be lost. At present, someone seeking aid who is refused by the local committee can go to the central committee. There is no such provision, as I understand it, in the Bill as drafted. That provision should be restored and extended. All of us have experienced cases where a sheriff or, under the new proposals, the reporter, has refused legal aid and the constituent has gone to his Member of Parliament. Many of us have felt that such people have had a raw deal, that the person is at risk, that the charge is a serious one and that the person involved will rind it very difficult to finance his defence.
  If we are to change the position, it is important that we should include a right of appeal. That should he to an independent body, but if that is too ambitious there should be a right of appeal to the legal aid board, or some sub-committee of that board. There should be an Internal

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  review from the reporter's decision. That would strengthen the liberties of the subject and would be an important improvement. We will push that point hard in Committee.
  I believe that the Committee stage will be interesting. Although I might be accused of putting forward a vested interest, there will be an argument about whether the Bill should contain a commitment of fair and reasonable remuneration. That has been strongly resisted by Ministers. I would not have thought that fair and reasonable remuneration was a challenging concept. However, the adventures of Lord Hailsham in courts in other parts of the world, and the possible arrival of the applied right to consultation, have sent a shiver down the Department's collective spine. The Opposition will want to probe that point.
  It is universally accepted that there is a need to ensure the independence of the board. I welcome the concessions that have been made about membership. As I understand it, the Minister went a little further in his speech today when he said that there would be direct consultation with the Law Society, the Faculty of Advocates and other institutions. We will want to consider the Minister's words to decide whether that formula is satisfactory. I hope that the appointments, and particularly that of chairman, whatever the salary, will not simply be a matter of plucking someone from the top of the queue of the departmental list of the great, the good and the simply deserving. That is an important matter, and I hope that the Minister will give careful attention to those appointments.
  In Committee we will have to take a hard look at clause 3(4), to which the Minister referred. The clause states:
  "The Board shall have regard … to such guidance as may from time to time be given by the Secretary of State."
  The Minister went on proudly to say that there is a proviso to that and that that will not prejudice the consideration of an application. I take the Minister's point. However, we are worried that the guidance that may be laid down by Ministers will prevent many people and certain classes of people from making applications. If there are no applications to consider, because people are ineligible, it is little consolation to say that applications should not be prejudiced by that guidance.
  I know that other hon. Members wish to speak, but I have several other matters to which I shall refer in passing. They are of a general nature, but they are important. The Minister may believe that my colleagues and, may be said, I myself, take an unduly suspicious and grudging view in our approach to this legislation. I recognise that many of the powers are contained in the Legal Aid (Scotland) Act 1967. However, we must decide whether we can trust the Government and their attitude on these matters. I am not making a personal judgment about the Minister; I am talking about the policy which he must implement. Like all junior Ministers, he receives messages from on high. The policy he must follow has some dangerous overtones.
  There should be an adequate and comprehensive legal service and any citizen who has a legitimate interest to pursue or who is at risk in the courts should genuinely be able to promote his own defence or representation. If he is not able to do that, there should be the provision for him to do so. That is the bottom line. I want to be sure, during the remaining stages of the Bill, that the Government share that priority.
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  There have been some worrying signs and there is an atmosphere of hostility about legal aid. There has been talk of escalating costs, about value for money and the need for control. In its most perjorative form, it would seem that, when talking about legal aid administration, the Minister was addressing himself to local government in Scotland. I cannot think of a more damaging way to express that.
  I have an uneasy feeling that the reorganisation might be an excuse to cut expenditure and put the right to representation at hazard. I concede immediately that there is no doubt that there has been a massive increase in legal aid costs. The Minister quoted the figures, and his are more up to date than mine. I have the figures for 1979–80 and 1983–84. Criminal legal aid costs rose between those years from £5·7 million to £18 million and civil legal aid rose from £3·9 million to £13·4 million.
  I accept that those are formidable figures. However, they must be put into perspective. When we consider the figure of £18 million for criminal legal aid in 1983–84, it is worth remembering that the procurator fiscal service Crown office in that year cost more than £11 million. That is also a large sum, but no one grudges it. I am sure that only a small proportion of that figure was taken up by the activities of the Solicitor-General.
  As one of my hon. Friends has said, legal aid is bound to be on a rising curve as crime increases. I will not get into a slanging match about who is responsible for that. However, on the same time scale of 1979–85, there has been a 36 per cent. increase in crimes reported to the police in Scotland. That is bound to work its way through into legal aid costs. The applications over four years rose from 43,077 to 68,402. Court appearances have risen and the prison population has increased and that will have an impact upon legal aid requirements. Sometimes we quote the legal aid figures in a vacuum and that can create an alarmist picture of what is a genuine problem but is explicable and perhaps inevitable in many ways.
  Mr. Albert McQuarrie: The hon. Gentleman says that there has been an increase in crime of 36 per cent.—my figure is 40 per cent. —over the past six years. Surely legal aid cases should similarly have gone up by 40 per cent.
  Mr. Dewar: No. That is too simplistic. We could argue the matter at length, but I am merely putting the matter in a broader context.
  Mr. John MacKay: I appreciate some of the points that the hon. Gentleman is making, but between 1978–79 and 1984–85 the number of people assisted in criminal proceedings rose from 84,000 to 96,000—a 14 per cent. rise, which is not on the sort of scale that the hon. Gentleman was surmising from the crime figures.
  Mr. Dewar: I was putting the figures in context and saying that there are factors that must be given weight. I accept that there is a problem and I am not trying to sweep it under the table. The Minister and I may disagree about the weight to be given to various factors, but we are all concerned about the same matter.
  The argument is almost always about criminal legal aid, but I find the civil legal aid figures a great deal more alarming. Those costs have increased from £3·9 million to £13·4 million in four years. The cost per case rose from £298 to £615. The rise per head—if that is the right term—on the civil side is very much higher, and a

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  number of anxieties follow from that fact. People of modest means faced with a legal aid contribution of £500 or £600 do not know how to meet that cost.
  There is a genuine and sharp cause for anxiety about the cost of litigation, a wider issue, which we cannot discuss now but which we should note. Criminal courts receive considerable public scrutiny but what happens in the more genteel and labyrinthine passages of civil litigation sometimes escapes attention.
  No one wants to ignore the problem of cost, but the answer is not to reach for the Treasury axe. That would put liberties at risk. We must have a more subtle and graded approach.
  We ought to consider court proceedings and methods of charging fees as well as the level of fees. The hon. and learned Member for Perth and Kinross has taken a particular interest in procedure matters and I have never been convinced by the argument of the Law Society, of which I am a member, that there is no profit in looking at English experience on the availability of statements. A number of such areas might merit continuing study.
  I hope that our worries are not justified, because I recognise that the Bill will reach the statute book. Our worries have been reinforced by the Minister's consultation paper, in which some fairly extraordinary suggestions were canvassed about the number of times that someone had received legal aid in the past being a consideration in whether he should be granted legal aid in the present and about attempts being made to gauge the likely penalty in a case and to weigh its seriousness against the cost to public funds. Some of those suggestions were marks that were set up to be knocked down, but they caused anxiety and I do not believe that we have been too suspicious in mentioning them.
  The Legal Advice and Assistance (Financial Conditions) Regulations 1986 provide that many people, particularly those in need, should be disqualified from benefiting from the legal aid advice and assistance scheme. That action was taken almost by administrative fiat. The Government said that, when income was being assessed, the offset for dependants should be reduced from 50 per cent. of the supplementary benefit scale to 25 per cent. The certain result of that is that very many people, often from the poorest groups in society, will be deprived of contact with a solicitor or other legal advice when they are considering whether they have a defence or a claim that should be pursued.
  The Government's decision was petty and mistaken. It was penny-pinching of the worst sort and will cost a considerable price. It will bring into Scotland and other parts of the United Kingdom unmet need with a vengence. If that is the shape of things to come, our suspicious scepticism of some of the proposals on the table is justified.
  I have made a long speech, and perhaps I am compensating myself for not serving on the Standing Committee. However, I think that the length of my speech has been justified, because this is an important subject and the Government have proposed a major reform.
  The key is the attitude of Ministers and the Government. The Bill is a neutral framework and we must examine what the Government intend to do. One argument in the consultative document that was never knocked down and was the basis of the Minister's approach to legal aid
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  was deeply mistaken and I hope that it will not taint his view of how matters should develop. It was the argument
  that legal aid
  "should permit those of insufficient means the same opportunity to pursue or defend their rights as is available to those of moderate rather than abundant means. It should not in general be available in a case which would not be pursued by a person of moderate means."
  The trouble is that we are reaching the stage when many good cases cannot be pursued by a man of moderate means, because of the cost of litigation. The cost of proving oneself innocent in a criminal court, when the system provides no recompense to a person who is acquitted, is a serious matter which is not addressed in the Bill.
  If the consultation paper approach to legal aid is carried through, it will have serious consequences. Rights will not be enforced, because it will be too expensive to enforce them, and courts will be faced with many people who are unrepresented. That will be bad for justice, because a person who is not represented does not put forward a proper defence. It would be even worse if more people pleaded guilty and paid the fine or served the sentence of 30 days as the line of least resistance, because the prospect of raising £300 or £400 for their defence was beyond their energy or beyond their means.
  The Lord Advocate said in the House on 20 February that there were discrepancies. He quoted the figures and said that people were not receiving what they might obtain elsewhere. That is obviously true in the sheriff courts where there are 60 per cent. success rates for legal aid applications. The Lord Advocate said that somewhere there had been injustice. I agree with him. The problem is how to cure the injustice. It is implied that we must move one way or the other, and it is not good enough to say that we shall stand in the middle and that there will be an arbitrary figure to which the legal aid board will have to conform, irrespective of the circumstances.
  It is important that we accept that legal aid is demand-led and that the legal aid board or its reporters should 'lave the right to use their judgment. That is not a frivolous point. The section on the financial effects of the Bill includes a phrase that is not reassuring. It says:
  "greater consistency in the award and refusal of legal aid … may result in savings."
  The word used is "may", but the person who wrote that is clearly hoping that by getting greater consistency we shall save money. That suggests that there is. An assumption that legal aid will be refused to a large number of people who would receive it at present.
  Mr. McQuarrie: Will the hon. Gentleman give way? Mr. Dewar: No; I am just finishing.
  If legal aid is to be refused to more people, our suspicions are justified and the right to representation is in danger. It is fundamental to freedom that those at hazard in the courts and from the complexities of our legal system should receive the aid that their situation deserves, We are determined to ensure that everything that we do throughout the remaining stages of the Bill is aimed at achieving that end.
  4.39 pm
  Mr. Nicholas Fairbairn: I congratulate the hon. Member for Glasgow, Garscadden (Mr. Dewar) on his speech. I regret that both time and,

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  probably, his interest prevented him from putting many matters more robustly, but he has done the House and Scotland a service by raising the issues that he mentioned.
  No doubt I, too, should declare an interest, which is that, when instructed by the hon. Member for Garscadden and his partners and others, I have been the recipient on occasion of legal aid funds. In mitigation, I am bound to say that whereas criminal legal aid was authorised for Scotland and England in 1949, it was not effective in Scotland for 11 years, until 1960, and I defended many people for capital murder for the sum that one then received of £1·98 travelling allowance. It cannot be claimed that anything that I say on this matter is inspired by my interest in the fees that I might have received.
  There has been a tradition in Scotland since King James V passed his Act in 1424 that
  "sic a man"
  speaking of a man accused by the Crown—
  "shall have a wyse and lyl advocate to pled his cause."
  The honourable tradition of Scotland is that no man goes without the best lawyer, whatever charge is made against him, presuming as we do his innocence. If the Crown is to be represented by a lawyer, as it is in Scotland, even on the most minor occasion, it is right that the accused man, whose innocence is presumed, should also be entitled to be defended by a lawyer.
  I was not elected at the last election to enlarge the number of quangos. I am against quangos. It was argued by the hon. Member for Garscadden that the Law Society appeared to be offending against the great principle of natural law, that it is judex in sua re—judge in its own cause—in granting legal aid. That is not a proven case, and I have not heard any complaint about it. The Law Society and those who serve on it have conducted the granting of legal aid with judgment, parsimony and humanity.
  I have never heard complaints about the Law Society's administration of the legal aid fund. I want to address my remarks to the Prime Minister, and I hope that my hon. Friend the Member for Aberdeen, South (Mr. Malone) is listening and will transmit them to the Prime Minister, because I know her views on these matters. We are setting up a new quango. Any hon. Member who wishes to find out about the motivation of a quango will find that it is inadvertently included in the introduction, the explanatory note as it was called, to the Bill. Perhaps it should be called the indiscreet note. It says on page IV:
  "The Bill should reduce the number of staff working in the Scottish Office by about 50."
  No doubt the permanent secretary will be able to say, "Prime Minister, I am a great guy. I have decreased my staff by 50."
  The Bill goes on to say:
  "These posts, and around 220 Law Society posts will be transferred to the Board"—
  that is not our board, so we will not accept responsibility for adding 270 people to the Civil Service, and no doubt somebody will be rewarded for that enlargement—
  "which will initially employ about 300 staff including those transferred."
  I understood that the Government were supposed to be reducing numbers in the Civil Service, but by a complete fraud they have managed to increase the number from 220 in the Law Society to 300 extra civil servants.
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  I want to know from the Minister what salaries these people will be paid. It is all very well for the hon. Member for Garscadden to say that it is marvellous that there will be a toffee-apple merchant and a consumer and a one-armed bandit on this board because that will be awfully fair. I have never held the view that we should have quangos on which everybody who is anybody or nothing is able to have a voice. I do not regard that as a sane way of running the granting or refusing of legal aid. I can say who the 30 people on the board will be: they will be the bored. They will get the jobs and some of them will probably receive the rises recommended in the top people's salary review. They will be the people deciding whether Mrs. Pennysmith, who is charged with stealing a postal order worth 5p, should get legal aid. I find that offensive and absurd.
  I was not elected to pass legislation which has no meaning and which is not for the decision of this House, but merely says that we will set up a game of draughts and the Secretary of State — whether he is a Socialist Secretary of State, God help us, or an alliance one, which is a fantasy anyway, or a Conservative Secretary of State —will invent the rules. He will tell us whether all the draughts will be of the same colour, whether there will be only seven squares or whether the board will be triangular. That is what the Bill will allow, because it attempts to set up a statute which any person who understands English and has the intelligence required to win Mastermind could not understand. It sets up a situation in which 23 subsidiary opportunities of regulation are supplied by the Secretary of State.
  I do not know who the Secretary of State will be, but whoever he is, whether he is a Labour, Tory or alliance Secretary of State, he will not write the regulations. They will pass across his desk with a whisper of wind and then come to the House. At 11 o'clock at night, after we have been voting on whether we should have bombed Libya, they will pass through the House without notice.
  The questions raised in the Bill are fundamental, because the Bill says that the lawyers will get fair and reasonable remuneration. What is fair and reasonable? I understand that the words fair and reasonable are used. Let us assume that it is defeated lawyers who define a reasonable man, perhaps a man on the top deck of a Clapham omnibus, which does not help us in Scotland. I have always taken the view that the phrase "beyond reasonable doubt" is an amazing concept in the law of Scotland, where we have majority verdicts. If eight people think the chap is innocent, or if seven think he is guilty, or the other way round, I should have thought that that was a fair doubt.
  Mr. John MacKay: My hon. and learned Friend made a point about fair and reasonable remuneration. Where is that in the Bill?
  Mr. Fairbairn: If it is not in the Bill, why not? That is the point that I am making, and I am thrilled to know that, having slowly dug a little trench, the Minister fell into it.
  As the hon. Member for Garscadden said, there may be many occasions in a summary trial when the grant of legal aid ought to be immediate. Difficult points of law or evidence may arise, and if the sheriff must then go to the board—given that it is a bureaucracy, and particularly if there are 30 more members than at present all subject to these huge salaries—it will be no more than a farce.

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  One of the great traditions in Scotland is that a man in custody on a summary charge must be tried within 40 days. How many of those days will be taken up while this wretched board considers whether legal aid should be granted before those who represent the person can investigate the crime or know that they will be paid for doing so?
  Clause 22 appears to contradict what I have said, but as the hon. Member for Garscadden said, the concept is that this will save money. How will it do so? When the concept of cash and the interests of justice come into conflict, in which way will this glorious universally representative board jump? We need only look at clause 3(4), which states:
  "The Board shall have regard, in the exercise of its functions, to such guidance"—
  it sounds like a meeting of Jehovah's Witnesses—
  "as may from time to time he given by the Secretary of State; but such guidance shall not affect the consideration or disposal of applications for legal aid or advice and assistance."
  What will the guidance be about? Will it say, "You are only allowed to talk in turn; you will have to have green hair when you turn up at board meetings, but it will not affect your decision."?
  The Bill is a bluff that says nothing comprehensible to the sensible person. It is not addressed to principle. Its purpose is to save money on the legal aid scheme.
  Mr. Donald Stewart: Cuts again.
  Mr. Fairbairn: It is not cuts again. It is a wrong approach to a correct attitude, which is how to save public money being wrongly spent on lawyers. I can tell the House how to do so, but the last way in which I would do it is to do what is proposed in the Bill. If legal aid was given to everyone who applied for it, and if we cut the leash of all lawyers and they ran for ever, be it in respect of planning inquiries or whatever, the money spent on the administration that the Bill introduces would be saved and legal aid would cost less. I believe that to be a truth.
  There are abuses and wrongs in the legal aid system, and there are advantages in going to trial when one should not. There are advantages in giving a client advice that should not be given, which I trust neither I nor the hon. Member for Garscadden have ever done. There are methods which I have consistently suggested to my hon. and learned Friend the Solicitor-General for Scotland, and which I proposed when I was Solicitor-General for Scotland — which have never been in doubt — which could stop such abuses.
  The Bill is not the way to do so. It will enlarge bureaucracy and decrease justice, and it misunderstands the concept of equity which King James V introduced as long ago as 1424, and which the lawyers of Scotland were happy to do for nothing.
  This is a bad Bill. Justice will not be done, because since 1979 the fees paid for legal aid have fallen substantially by 40 per cent. I do not want to see bad justice. I do not want to see lawyers advising their clients to go to trial because the fees are so low that they would benefit from doing so, or because the fees are so low that they have to benefit by doing so.
  This is a bitter and wrong circle that is contrary to the principles of equity and justice. I am sorry that this scheme has been proposed. It is bad. It inspires a bureaucracy that is interested in its own enlargement and mitigation. It will
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  do nothing for justice. Let us not forget the principle of justice in Scotland, which is who matters most. Each of them is accused by the state.
  4.56 pm
  Mr. James Wallace: Following the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) and the hon. Member for Glasgow, Garscadden (Mr. Dewar), I find that many of the most formidable points against the Bill have already been made.
  I share the view expressed by the hon. Member for Garscadden. It was disappointing that the Secretary of State for Scotland did not introduce the debate on this extremely important Bill. Instead, that was left to the Minister who, when he moved the legal advice and assistance regulations in November 1984, had difficulty in distinguishing between the green form under the English procedure and the pink form under the Scottish procedure. From his knowledge of ABWOR and so on, the Minister today showed that he is not as green as he was on that previous occasion. However, it is a pity that for such an important piece of Scottish legislation the Secretary of State was not present.
  Any Bill that deals with the individual and his relationship with the administration of justice is by definition of importance, the more so when the provisions of a Bill such as this amount to a fundamental reform of our legal aid system. We are dealing with an insidious Bill, not only for what it says in parts but more significantly for what it does not say. In effect, it is a Trojan horse of a Bill. On the outside it does not look particularly dangerous, but once it is enacted all sorts of regulations might come tumbling out that could badly affect the interests of justice in Scotland.
  Almost one in two of the clauses provide for secondary legislation. It is undoubtedly much more convenient for the Executive to operate by way of secondary legislation particularly, as is the case with some of the Bill's provisions, if the negative procedure is to be used. The hon. and learned Member for Perth and Kinross referred to the fact that regulations may well be discussed at 11 o'clock at night, but in some cases, particularly under the negative procedure, they may be shunted upstairs to a Committee, where hon. Members cannot possibly deal with the issues, where the regulations are incapable of amendment and where effectively they cannot be stopped. It would amount to an abdication of our duties as a legislature if we left almost entirely in the hands of the Executive the circumstances in which one may qualify for legal assistance or the criteria for determining whether it is reasonable for a person to receive civil legal aid.
  Turning to the provisions for criminal legal aid, where a person's liberty, livelihood or reputation may be at stake, it cannot be right to give the Secretary of State a free hand, as clause 21(2) purports to do. It says:
  "The Secretary of State may, by regulations made under this section, prescribe by reference to such considerations as appear to him to be appropriate any class or stage of proceedings in connection with which criminal legal aid shall or, as the case may be, shall not be available."
  That will not necessarily apply to the present Administration. Even if one were dealing with a Secretary of State on whom one could rely to be benevolent, it would still be important that the House should have a positive input on these matters and that regulations should not be left on a "take it or leave it" basis.

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  Even if we have a benevolent Administration today —which is perhaps—we cannot be sure about what will happen in future. Any class of proceedings for which legal aid might be made available could, if a future Secretary of State wished, exclude offences arising out of an industrial dispute. That might not happen, but one has to provide for circumstances in which there could be political motivation.
  In April last year, in answer to an oral question from the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), the Solicitor-General for Scotland said:
  "The hon. Gentleman reveals what I have always suspected. He believes that the prosecution system should be used for political purposes."
  Replying to the hon. Member for Glasgow, Cathcart (Mr. Maxton), he said:
  "Once again, the hon. Gentleman shows that he wants to introduce a political element into prosecutions." — [Official Report, 17 April 1985; Vol. 95, c. 260.]
  It may be unlikely that either of those hon. Gentlemen will ever occupy the position of Secretary of State for Scotland, but it is not impossible. If the Solicitor-General for Scotland fears that they might use the prosecution system for political purposes, might they not use the legal aid system for political purposes? We must be on our guard against that, and we cannot do that effectively by leaving so many important areas of eligibility for legal aid to secondary legislation.
  The very minimum that many of us will want in Committee will be the affirmative resolution procedure for some regulations which are currently to be subject to annulment by either House. As an example, I cite clause 9 which deals with the regulations on eligibility for legal advice and assistance. Amendments will be tabled to attempt to circumscribe the secondary legislation. In other cases amendments should set out expressly what the regulations should include.
  Reference has already been made, particularly by the Minister in opening the debate, to the interests of justice. There are some advances in the Bill on what happens at present, because there is wide diversity in the granting of legal aid applications by sheriffs in different parts of the country. It is unsatisfactory that in some smaller sheriffs' courts the sheriff who is asked to determine whether it is in the interests of justice to grant legal aid will also be the sheriff who will subsequently preside at the trial.
  There is merit in the case for greater consistency, but I would rather not have this qualification in the Bill. As the hon. and learned Member for Perth and Kinross has indicated, if the full weight of the Crown is being brought against an individual, with the Crown using a qualified lawyer to prosecute the case, then, particularly having regard to the penalties which might follow, it is only right, if the financial qualifications are satisfied, that the accused person should be granted legal representation.
  If the phrase "interests of justice" is still to be considered by the board, it should not be left to be determined by the Executive by means of regulation. The suggestions in the consultative document do not fill one with great confidence about what may happen. The consultative document suggested that it might not be in the interests of justice to give legal aid to people who have had legal aid on several previous occasions. I see no reason why persistent offenders should not be given the same presumption of innocence as others.
  Mr. John MacKay rose——
  Mr. Wallace: If the Minister can assure me that that will not be in the regulations, I shall gladly give way.
  Mr. MacKay: I can only assume that the hon. Gentleman did not listen to what I said. On the two points that he has just raised, I made it clear in my speech that in Committee we shall be bringing forward an amendment to clause 24 to spell out the factors to be taken into account in considering whether the "interests of justice" criterion is met. Immediately after that I said:
  "The granting of legal aid is not dependent on the accused person's criminal record."
  Therefore, I do not see the point in the hon. Gentleman's raking up these matters again.
  Mr. Wallace: I apologise to the Minister. I listened carefully to his speech but I did not hear him say that. I thought he was indicating that there would be draft regulations. I did not understand that he intended to table an amendment. I am pleased to be corrected. Nevertheless, it does not detract from my main point. I do not think that the "interests of justice" should be a qualification when dealing with the granting of criminal legal aid in summary cases.
  I endorse what has already been said about the absence of any appeals mechanism following the refusal of legal aid. Attention must be given to that in Committee. We must also consider the scope of legal aid. Increasingly the matters on which individuals have their rights challenged, or on which they wish to make claims, arise in areas where legal aid is not available, such as industrial tribunals, medical appeal tribunals, and the many other tribunals which have proliferated recently. Those often affect individuals in their everyday life, so we should consider how the scope of legal aid might be extended.
  Small businesses, as corporate bodies or sometimes as unincorporated partnerships, may find themselves involved in taxation cases and feel that they cannot go the whole way in challenging the Inland Revenue because of lack of resources. An examination might be made of how such firms could qualify for legal aid.
  I have had complaints from people in my constituency who have been non-assisted parties and who, when they have won the case, have not been able to get their expenses back, so they have been much worse off at the end. The severe hardship test, which exists at the moment and which is to be re-enacted, is not necessarily the fairest way of dealing with such a person.
  The board will be a major innovation following the 36 years during which the Law Society of Scotland has administered legal aid. The Opposition Front Bench and the Scottish Consumer Council, in letters to all Scottish Members, have said that it is not right that the professional body that manages the legal aid scheme should at the same time have what might be seen as a competing professional interest. It is only fair to record that during the period when the Law Society of Scotland has administered the scheme, there have never been specific charges of mismanagement or substantive evidence of impropriety on the part of the Law Society in the administration of the fund. The only justification for the establishment of the board, therefore, is that not only should justice be done but that it should be seen to be done.
  If independence is important, it is equally important that the board should be seen to be fully independent of

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  the Secretary of State for Scotland, not least at a time when an increasing number of actions are being brought against the Secretary of State for Scotland or other Ministers because of the increasing availability of judicial review. Nevertheless, the Government have decided upon a board, to which the Secretary of State will appoint the members, to which he will appoint the chairman and to which, under clause 3(4) he will give guidance. We have heard that guidance will not affect individual applications for legal aid. I should be interested to know from the Minister or the Solicitor-General for Scotland what sort of guidance is envisaged under clause 3(4). In Committee, we shall wish to satisfy ourselves that, when set up, the board will be as independent as possible from the Government.
  It is important to look at the purposes of the Bill, apart from the establishment of a board which may be seen to be independent. One always comes back to the financial constraints and the give-away in the explanatory memorandum regarding the Bill's financial effects which has already been quoted. There are undoubtedly ways of improving efficiency and getting better value for money for legal services in Scotland. In recent years we have seen the development of divorce actions moving to the sheriff courts and now involving a minimum amount of work. That is one way of saving money. There are now a number of fixed penalties for motoring offences, and there is a diversion from prosecution, and the motor vehicle rectification schemes. They all save money. We should look to save money through our procedures rather than through the mechanism of legal aid.
  The long title of the Legal Aid and Solicitors (Scotland) Act 1949 said that the measure sought
  "to make legal aid and advice in Scotland more readily available for persons of small or moderate means."
  Yet the consultative document that preceded this Bill said that legal aid should in general not be available in a case which would not be pursued by a person of moderate means. That is contradictory. I fear that in a number of cases people of moderate means will feel that they cannot assert or fully defend their rights because of the present structure of legal aid. As legal aid limits have failed to keep pace with inflation, some people have found themselves beyond its scope.
  As the hon. and learned Member for Perth and Kinross said, the legal profession in Scotland has a long tradition of making its services available free, particularly for criminal legal aid. I fear that the Bill goes a long way to undermining that tradition.
  For the reasons given, my right hon. and hon. Friends and I will happily support the reasoned amendment.
  5.12 pm
  Mr. Michael Hirst: I accept that I am a fairly unusual animal on the Government Back Benches, in that I have no direct or indirect interest in the law. However, as a graduate in law from a Scottish university, I have been intrigued to discover how many of my acquaintances from 20 years ago have sought to renew that acquaintance, and, in particular, to ensure that they have access to my right ear. I must pay tribute to their skills of advocacy, because the many lawyers in my constituency —the cream of the west of Scotland legal fraternity — have been singularly effective in lobbying me during the past few months. Indeed, they were so well organised that they started the lobbying process last summer even before the Bill was published.
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  In a year in which I have constantly been lobbied by many interest groups, I must compliment them on having done so in the most civilised way possible. They got themselves together, organised a most agreeable buffet supper, and over a second helping of excellent salmon mousse I agreed to make robust representations on Second Reading today. In fairness, they presented their case most succinctly and honoured their bargain not to bombard me with lengthy letters that would require long answers. That was before they deployed their secret weapon—a most agreeable and charming young lady who put the points to me most effectively. [Interruption.] Fortunately, everything that I say in the House is privileged, and the legal community has no right of recourse against me.
  I accept the need for a review of the system after 36 years, and the Minister cogently argued why reform was needed. It would be wrong of me to delay the House by saying anything further on that point. However, the separation of the powers of the judiciary and the Executive should in no way be compromised. That is a vital constitutional principle. I understand the fears that have been expressed on both sides of the House about the extent of the use of regulations under the Bill. Equally, I can appreciate the problems if, instead of regulatory powers, the Government were to try to introduce in primary legislation a prescriptive structure for legal aid. The disadvantage in that is that it would not allow the legal aid system to respond to the undoubted changes that will take place in future. I have argued that the content of the regulatory powers seems to be about reasonable.
  I should like my hon. and learned Friend the Solicitor-General to assure me that there will be appropriate parliamentary control over these regulations. I have looked quickly at the Bill, and it seems that relatively few of the regulatory powers which are being granted involve an affirmative resolution of the House. I should like to know what is in the Government's mind regarding some of the areas where there will be regulations. I seek reassurance that the regulations will not be used in any way to exclude a category of crime from eligibility for legal aid.
  The paragraph on the financial effects of the Bill confirms the expectation of higher administration costs, which it is hoped, will be offset by savings and a greater throughput of cases, hut it then states:
  "greater consistency in the award and refusal of legal aid, in particular criminal legal aid, may result in savings."
  I repeat the point expressed by the hon. Member for Glasgow, Garscadden (Mr. Dewar), that many lawyers and members of the public fear that there is an intention to cash-limit legal aid. To summarise the weight of representations that I have received from many lawyers in my constituency, there is an impression that the intention may be to cash-limit legal aid. I have assured them that that is a misconception, but I invite the Solicitor-General to assure the House that there is no intention to deny legal aid in any way because of that.
  The hon. Member for Glasgow, Garscadden referred to Dumbarton district court. According to my figures, 99 per cent. of applications for legal aid there are granted, whereas only about 60 per cent. are granted in the Dundee district court. He questioned how there could be justice when in one area the level of awards granted is high, and in another it is low. There may be special circumstances of which I am unaware, but in a constituency case, which I have referred to the Minister, when three young men

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  were accused of a crime in identical circumstances, two were granted legal aid, and one was not. For the sake of my constituent and for my information, I should like to know why that was so.
  Questions have been asked about the composition of the board, and the importance of its independence has constantly been reiterated. I notice from the Bill that two of its members will be members of the Faculty of Advocates and two will be members of the Law Society. I hope that there will be appropriate consultation to establish in advance the breadth of experience and suitability for the job of those who represent those interests on the board. I echo the point made about the need for independence of the board.
  The Minister was asked about the speed of reaction of the board. It is critical to establish that. My hon. Friend showed a touching, and I hope justified, faith in the ability of the management consultants to come up with a scheme which allows speedy approval or otherwise of applications for legal aid. I beg him to forgive my cynicism about what management consultants can achieve. Bearing in mind that legal aid applicatons in summary cases will go straight to the board and bypass the court, I want to be satisfied that there will be no question of the board's not responding sufficiently quickly and of the person facing the problem of obtaining a suitable defence before he appears in court.
  Is there any case for a residual power in the court to grant legal aid, instead of it being hog-tied to the board? It is perhaps because many hon. Members tend to get cases from aggrieved constituents for whom the system has gone wrong that we recognise the fallibility in the organisation of administrative structures. It is important in the interests of justice to be sure that the boards can take appropriate action to let the accused or the person involved in litigation know precisely where he stands on a legal aid application.
  I am well aware that there has never been a right of appeal against the refusal of legal aid in criminal cases in Scotland. I notice that such a right of appeal exists in England and Wales, and, unlike the hon. Member for Dundee, East (Mr. Wilson), who always perceives a slight upon the Scottish people, I simply raise this point to seek some information as to why there should be no right of appeal in Scottish cases.
  For example, I should be interested to know how many cases in England and Wales result in an appeal against the refusal to grant legal aid. I should further be interested to know in what proportion of these cases the appeal is upheld, because if these figures are significant it would show that the system is a vital safety net in the right of appeal. In that case, I should want an assurance that my hon. and learned Friend will at least consider whether a similar arrangement would be appropriate in Scotland.
  Mr. Fairbairn: My hon. Friend should know, and I dare say that the hon. Member for Dundee, East (Mr. Wilson), although he always casts slights on the people of Scotland, will know, as a solicitor, that there is a right of appeal in civil legal aid cases, which the Bill takes away.
  Mr. Hirst: I have no doubt that my hon. and learned Friend, as a member of the Committee, will follow up that point. I am seeking to fly a kite for the right of appeal in criminal cases. I wonder whether, if a formal right of appeal is not being given, there can be a review of the procedure.
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  Clause 15 deals with financial conditions, and perhaps it is appropriate that somebody who escaped from the law to the accounting profession should automatically turn to this clause. It deals with the financial limits in civil legal aid. I notice that a person may be refused civil legal aid if his disposable capital receipts are £4,710—a modest. sum of money—or if his disposable income does not exceed £5,415 a year after making allowances for his domestic circumstances, mortgage and the rest.
  The clause gives me slight unease, because we have established in the legislation a prescriptive limit which, in the case of an individual whose disposable income is El above the limit, will bar him from eligibility. I notice the hon. Member for Falkirk, East (Mr. Ewing) shaking his head. If my hon. and learned Friend the Minister cannot give me clarification, perhaps the hon. Gentleman would like to do so.
  Mr. Harry Ewing: I shall do it later.
  Mr. Hirst: I am grateful.
  Mr. Dewar: As I understand it, these limits are similar to the ones presently in operation, so there will not be a change in the system. If the hon. Member has a grievance about it, I am surprised that he has not cleared it before now.
  Mr. Hirst: I am aware that this is a replication of what we now have. However, a Second Reading debate allows Members to raise points of principle about the continuation of the system after we move on to the new arrangements. I have frequently made the point that the people who have middling incomes are those who are probably least able to embark on litigation, for the simple reason that they could be exposed to substantial costs. I should be interested to know how disposable capital is defined. This has produced a novel concept. For example, a man who, like myself, has tried to make provision for his family and has invested in a retirement policy, or a life assurance policy, may find that such policies are regarded as disposable capital because they have a potential surrender value. Will the man who has stuck some money into a bank or building society against a rainy day find that he will be discriminated against for legal aid purposes?
  Would it not be more reasonable to make legal aid available, provided that one can establish probabilis causa, subject to the litigant being required to make a contribution depending on his or her circumstances, as determined by the board? I appreciate that that would have a revenue implication, because it would bring into the net people who at the moment are debarred. The House has properly shown a concern for the rights of a person without a modest income to obtain legal aid, and I hope that in its wisdom it will not overlook those who, because of their material circumstances, do not qualify, and will not under the new Act, but who nevertheless do not have the resources to embark with confidence on satisfying their rights in a court of law.
  I have no brief from the legal profession to raise the point of its members' financial remuneration. However, I was interested in the amusing exchange between my hon. and learned Friend the Minister and my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn). The latter asked about fees for those engaged in legal aid work. I understand that in English legislation it is

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  necessary for fees to be "fair and reasonable", but Scotland has never had such a definition, and the Bill simply restates that position.
  Will my hon. and learned Friend the Solicitor-General address himself to this problem and introduce something in the Bill about the fairness and reasonableness of fees for those engaged in legal aid work? If the figure of remuneration drops below a reasonable and realistic level, there must be a danger that more experienced legal practitioners will cease to take legal aid work and will pass it on to much less experienced junior people.
  I recognise that a balance needs to be struck, and I am aware that many people who went through university with me were able to found firms, and invariably nowadays seem to be extremely prosperous, on legal aid, which in a sense has helped them on their way. However, I should not like to think that the remuneration from legal aid would be such that competent, talented and experienced legal practitioners, who could give the defendant or the accused the chance of a decent experienced representation, would be deterred from undertaking the work, and the cases would be left to the mercy of relatively junior and inexperienced legal practitioners. I am sure that the Minister will agree that the interests of justice would not be best served in that way.
  I seem to be adopting an alliance sense of fairness and balance. The argument that legal aid cases are not being dealt with by skilled practitioners has not been made positively, nor has it been established.
  It has perhaps been a little indulgent on my part to have bored the House so long with my points. Because of my membership of the Committee discussing the Finance Bill, there is probably no chance of my being on the Committee on this Bill to move amendments and raise these points. However, in view of the fact that I represent many legal practitioners, I feel strongly that the points of concern that they have represented to me should be aired in the House, and I am grateful to the House for letting me do so.
  5.29 pm
  Mr. Willie W. Hamilton: I am modest enough to believe that I am well qualified to speak in the debate, first, because I am an Englishman; secondly, because I am a layman: thirdly, because I do not like lawyers very much; and, fourthly, because I am a Socialist. It is well to approach the matter in that mood. I have occasionally met lawyers whom I respected and liked a little, but I could count them on the fingers of one hand. I have considerable affection for the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), not least since he spoke earlier in the debate. Everyone who has spoken in the debate has adduced reasons why we should treat the Bill with the gravest of reservations.
  I echo the tributes paid by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) to Lord Morton, Lord Wheatley, Lord Wilson and Lord Hughes—
  Mr. Fairbairn: And Lord Ross.
  Mr. Hamilton: And Lord Ross. English peers such as Lord Foot and even Lord Denning have expressed the gravest reservations about the Bill.
  The worries might be encapsulated under four headings. The first and most important is the questionable independence of the board. The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) made an extremely
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  valid point. It is critical that the judiciary is seen to be separate from the Executive, but the Bill is a big step in the opposite direction. Secondly, the Secretary of State has enormous powers in this area. He is almost saying, "You get on to the field and play the game and I will decide the rules as we go along. Moreover, we shall decide the rules at midnight, when most hon. Members have decided to go to bed."
  Thirdly, many hon. Members have said that the right of appeal is being eroded——
  The Solicitor-General for Scotland (Mr. Peter Fraser): No.
  Mr. Hamilton: I hope that the Solicitor-General will make it clear that the right of appeal is not being eroded. It is certainly not being extended. The Scots are in a worse position on this matter than are the English. Where the Scottish law is inferior to the English law, we should not allow it to continue a moment longer.
  The fourth cause for concern relates to my point about being a Socialist. I have long believed that, in 1945, the Labour Government should have treated legal aid in the same way as they treated health, so that every man and woman had the right to protect himself, his honour arid his reputation in the law courts in the same way as the individual had access to medical treatment, irrespective of means. That is not possible now. I doubt whether any Government would lift their eyes up to that height and that ideal in the foreseeable future.
  On 2 July last year, the Scottish Grand Committee debated the law and legal services. My hon. Friend the Member for Falkirk, East (Mr. Ewing) asserted that we wanted an independent body to administer legal aid. He specifically said that we did not want a Government quango where legal aid would be restricted by the annual edict of the Treasury. That is precisely what we are getting. The hon. and learned Member for Perth and Kinross was right. My hon. Friend's fears have been realised in the Bill.
  The Parliamentary Under-Secretary of State for Scotland—the hon. Member for Edinburgh, South (Mr. Ancram) —had not spoken for more than a few minutes in that debate before he began to moan about the escalating cost of legal aid. The figures that he quoted, excluding administrative costs, were about £7·5 million in 1978–79 and about £33·5 million in 1983–84. Despite the challenge from my hon. Friend the Member for Garscadden, the Minister said that he did not know what the causes were. The Minister who spoke today, the hon. Member for Argyll and Bute (Mr. MacKay), mentioned the escalating cost again without referring to the causes or how to eliminate or reduce the causes of the escalation.
  The hon. Member for Aberdeen, South (Mr. Malone) has been elevated since he spoke in the debate. He had similar misgivings about the contents of the consultative document and the Government's real intentions in the matter. Does he have the same reservations now that he has seen the Bill? His reservations should have been fortified by the contents of this wretched Bill.
  In replying to that debate, the Solicitor-General said nothing special — that is not unusual for him — but quoted again the Government's alleged motives for introducing the legislation, including the ominously repeated Government phrase, "the need to get value for money." When I hear a Minister use that expression, I

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  reach for my gun, because it is another word for slashed expenditure, whether on education, housing, health or local government.
  The Bill got a rough reception in the other place. On 20 February, on Second Reading, the Lord Advocate repeated the expression "value for money", the threat or the promise to put available resources to better use and pointed further to the scope to eliminate the possibility of abuse, although there has been no sign in this debate or then of where that abuse occurred. The hon. and learned Member for Perth and Kinross made it clear that the abuse lies in the high charges of the lawyers, and I entirely agree with him.
  Mr. Porter: Justify that.
  Mr. Hamilton: I am not here to justify it. The lawyers are better able to justify it, although I suspect that they will not. The trade union leaders have much to learn about organisation and greed from the lawyers. I have never seen a poor lawyer.
  Mr. Porter: Is there the slightest possibility of the hon. Gentleman adducing some evidence in support of that assertion? Does he have any idea how much solicitors are paid in Scotland, England, Wales or Timbuktu? Does he have any idea of the legal aid rates for counsel in Scotland, England or Wales? If he does not, will he kindly shut up?
  Mr. Hamilton: I am grateful for the hon. Gentleman's courtesy. I shall reply to him in kind. He is here as an English lawyer — he is not especially interested in Scottish matters—but he is not a poor lawyer. I repeat that I have never seen a poor lawyer.
  Mr. Porter: If the hon. Gentleman addressed his remarks to the managers of the Midland bank, he might find that they had something different to say.
  Mr. Hamilton: I shall ignore that as I wish to continue my speech.
  None of the seven peers who spoke in the Second Reading debate—from both sides of the House—gave the Bill his wholehearted support. I think I am right in saying that they were all eminent lawyers. I had a great affection for them as I read their speeches. Lord Morton of Shuna said:
  "It is far from clear how the proposed arrangements are to improve efficiency and effectiveness." — [Official Report, House of Lords, 20 February 1986; Vol. 471, c. 762.]
  The Lord Advocate made that claim also. Lord Morton continued ——
  Mr. Deputy Speaker (Mr. Harold Walker): Order. It is not permissible to quote directly from the House of Lords record of the current Session, other than to quote a Minister.
  Mr. Hamilton: I had hoped to escape that, through ignorance in certain quarters.
  There is no doubt that almost every one of those peers expressed his reservations about the matter. Lord Hughes, who had been the chairman of the Royal Commission on legal services in Scotland, whose report was published in May 1980, expressed the view, contrary to the claim made by the Lord Advocate, that the Bill did not encapsulate the recommendations of the Royal Commission. The Lord Advocate sought to create the impression that they proposed the board that the Government now proposes.
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  They did nothing of the kind. Indeed, they went out of their way to say that the board must be independent of the Executive and of Government. He concluded, despite his reservations, by saying that the Bill might be amended sufficiently to make it acceptable to him and the House. How wrong he was. During the Committee. Report and Third Reading stages, not a single amendment of any substance was accepted by the Government.
  The Government intend to scrap the existing system of legal aid in its entirety and to substitute an instrument that is wholly and solely in the Executive's control. Moreover, the Government intend to do so by a whole series of regulations about which the House knows nothing. I suspect that in Committee we shall still not know anything about the regulations. In other words, we are legislating in the dark, thus enabling the Government to get on with their dirty work.
  All members of the proposed Legal Aid Board will be appointed by the Secretary of State for Scotland. One Member of the House of Lords, which is a civilised and moderate place, used the expression "Executive stooges". One Member said that any man of honour and respectability would not serve on the board, because he would be expected to be guided and directed by the Secretary of State. The Secretary of State will have complete control over legal aid and cash limits. I suspect that cash limits will be decided annually by the Treasury. There is bound to be an increase in the legal aid bill for all sorts of reasons. The Treasury will then say, "You will not get more than EX million". It will be just too bad if a man or a woman in Scotland wants legal aid. If the money has run out, they will have to do without it.
  That is why virtually every organisation in Scotland which is interested in the Bill — the Law Society of Scotland, the Scottish Consumer Council, the Scottish Council for Civil Liberties, the Scottish Association of Citizens Advice Bureaux, and so on—have expressed grave concern and anxiety about the contents of the Bill. There are built-in reasons why the legal aid bill is bound to increase.
  Mr. Fairbairn: It should not be assumed, if we are to start cutting out the cheaper or more trivial cases, that the principle involved in each of them is any less important than the principle involved for those who will receive legal aid.
  Mr. Hamilton: I entirely agree. The hon. and learned Gentleman and I had better be on the Committee which considers the Bill, because I, as a layman, and he, as a skilled lawyer, are thinking pretty much along the same lines. I am an enthusiastic amateur in that respect. The hon. and learned Gentleman cannot claim that. However, the basic concept is right. Every individual in Scotland and Britain must have available to him the advice and guidance of a lawyer, irrespective of his ability to pay for it. The Bill is a missed opportunity in that sense. We should have looked at the whole basic principle, about which the hon. and learned Gentleman intervened, to see how a system could be worked out to underpin that basic principle.
  It is well known that the law of our land is necessarily voluminous and perhaps needlessly complex. I often think that Bills have been drafted by lawyers for lawyers, because the more complex they are, the bigger the pickings for the legal profession in the law courts. It is difficult for the average layman to comprehend the law

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  which he is expected, and adjured, to obey. He is also rightly fearful of lawyers and their colossal expense. In my view, the principle of equality of all men before the law has always been a joke in very bad taste. One gets the justice for which one can afford to pay. I fear that the basic principle on which legal aid was originally introduced in Scotland is being seriously eroded by the Bill.
  I return to the point I made about the inevitable in-built escalation of costs for legal aid. The combination of the growing crime rate, increasing unemployment and poverty, and the large and increasing number of workers on low pay, will increase costs. Lord Wheatley made the point in the other place that there has been an increase in the number of court cases as a result of legislation introduced by the Government. Acts such as the Tenants Rights, Etc. (Scotland) Act 1980, the Matrimonial Homes (Family Protection) (Scotland) Act 1981, and the Rent (Scotland) Act 1984 give more scope for litigation. That combustible collection has led, and will inevitably continue to lead, to an escalation in the demand for and cost of legal aid.
  Mr. John MacKay: The hon. Gentleman has said time and again that the Government are about to indulge in great cuts in legal aid. I draw his attention to page iv of the Bill, which deals with the financial effects of the Bill. The last sentence states:
  "It is not possible to forecast what the effect will be on legal aid expenditure, which is demand led".
  There is nothing there that would allow the hon. Gentleman to make the assertions he has made.
  Mr. Hamilton: Indeed there is. The Minister did not read on. It continues:
  "but greater consistency in the award and refusal of legal aid, in particular criminal legal aid, may result in savings."
  It might result in increased expenditure, but the record of this Government during the last seven years leads the Opposition and an increasing number of people to believe that the purpose of this exercise, as in so many other instances, is to cut public expenditure. The basic purpose of this legislation is to give control to the Treasury over cash limits and to say, irrespective of the needs of the individual who might be suffering injustice, "You will not get it."
  Mr. McQuarrie: Is it not fair to say that one of the greatest dangers might be that the cuts will be made by an independent board, not necessarily on instructions from the Government?
  Mr. Hamilton: I am not referring to instructions from the Government. I am dealing with what, in my view, will happen. The Treasury will impose a cash limit. Irrespective of the merits of individual cases in Scotland, they will be subject to limits and controls and to the possible refusal of aid.
  The Bill attacks the fundamental principle upon which legal aid ought to be based. For that reason, if for no other, the Opposition will oppose it.
  5.51 pm
  Mr. Barry Porter: The hon. Member for Fife, Central (Mr. Hamilton) says that all lawyers are evil and wicked and that the English versions are even more evil and wicked than their Scottish counterparts. If he were able to refer to the manager of a certain local
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  branch of the Midland bank, he would find that I am not a rich lawyer. He may wonder, therefore, why I am taking an interest in this debate.
  I am English. However, it seems to me and to the Law Society, for which I do not speak but which has drawn my attention to this matter, that what is likely to happen in Scotland could impinge upon the legal aid system in England and Wales. As an Englishman, I suppose that I have as much right to plead an interest in Scotland as the hon. Member for Glasgow, Cathcart (Mr. Maxton) who, certainly in this generation, is as English as I am. At least my father served in the 1st Battalion of the Liverpool Scottish and later in the 51st Highland Division, and a kilt of an indeterminate hue still hangs in the family wardrobe. That has very little to do with this debate.
  My interest in the debate does not relate to the fees that lawyers receive either in Scotland or in England and Wales. My view is that legal aid fees for lawyers in England and Wales and, I assume, in Scotland are fair and reasonable. They are neither over-generous not under-generous, but nobody who is concerned with criminal matters can complain about that.
  I suspect that this Bill is no more than a cost-cutting exercise. I have no particular objection to that, except that I believe that it is being approached from the wrong direction. I want no part in trying to prevent those who are perfectly entitled to it from obtaining legal aid.
  Another method of approaching an exercise of this nature has been put forward by the Law Society for England and Wales. Nobody denies that the expenditure of £300 million on legal aid justifies investigation. One could say that public money should not be spent to uphold restrictive practices that are not in the public interest. Furthermore, the money paid to solicitors while they waited for cases to come on accounted last year for 20 per cent. of legal aid expenditure. More sensible listing procedures would reduce that expenditure. We should also consider the simplification of court procedures in substantial trials, both criminal and civil. Again, that would reduce legal aid expenditure.
  I do not understand why a Government who are committed to the protection of the individual and to the right of the individual to be properly represented in both civil and criminal cases should adopt this view. However it may be presented, the board that is proposed will not be regarded as independent. It will be a Government body. There are to be many regulations, but I do not intend to reiterate, to the point of boredom, what has already been said about that in the other place, or in this House today.
  We do not know what the regulations will be. I doubt whether we shall know what they will be, even when the Bill has been considered in Committee. They will be in the hands of the Government. It has already been said that this is all in the minds of Ministers. They may be similar to the convivial, genial fellows who are here at the moment, but what happens if uncongenial, unconvivial Ministers, Conservative, Labour or alliance, replace them? We cannot adopt a system that depends upon the whims of those who happen to be sitting on the Treasury Bench. That would be absolutely ridiculous.
  Mr. Fairbairn: My hon. Friend does not seriously imagine, does he, that Ministers write regulations? If so, he has not watched "Yes, Minister" with sufficient perspicacity.
  Mr. Porter: I did not intend to go as far as that, but I take my hon. and learned Friend's point. I am sure that the present Ministers deal with their civil servants in a vicious and hard-headed way. However, I take his point that other Ministers would not have the same backbone as they display. That makes my point for me.
  Another matter of concern to me is that, in this Bill, guilty pleas are to be treated as though they are of no consequence. The Law Society has put that point of view to me. It has been said that guilty pleas can be left to magistrates, sheriffs or social workers and that those who plead guilty do not need the benefit of legal advice. After 20 years' experience, I believe that is absolutely contrary to any kind of justice, and I hope that is not what the Bill means.
  I object to the fact that Ministers will have the power to decide that in any kind of criminal case, or at any stage within a case, legal aid should not be made available. If I am right about that, it is appalling.
  My last point is even more appalling. Under this system, an accused person might not have the right to choose his own advocate and adviser. That is not right. We should be moving towards the establishment of state defenders. After 20 years' experience I know that those who have consulted either my partners or me—most of whom have pleaded guilty on one occasion or another, although on other occasions they have pleaded not guilty —have chosen those whom they respect and honour and whom they have known over the years. They do not want an "odd bod" whom they have never seen before to be forced upon them. The Bill cannot and should not deprive them of the right to choose.
  On those bases, I have little confidence in the Bill. Perhaps the Whip will take notice that my invitation to dinner at 7 o'clock will be honoured.
  5.59 pm
  Mr. Gordon Wilson: The Bill makes a fool of the legislature. The primary complaint that any of us can make in dealing with legislation is that it does not give us an adequate clue as to the powers that a Government are seeking to obtain. By every standard of parliamentary draftsmanship the Bill fails. The draftsmen, or the Ministers who authorised the Bill, should hang their heads in shame. If one reads through it one gets the odd clue as to what the Government might be about, but, again and again, we are told that regulations will be prepared. We all know the farcical way in which the House, through its procedures, deals with regulations. Statutory instruments cannot really be controlled by us. We cannot alter them in any way. At the end of the day we have to vote for or against them, and it is usually the Government's majority that passes them into effect. However, basically, we do not have the time or the opportunity to deal with them.
  A material criticism of the Bill—a criticism which was justified in the other place—is that the Bill is a blank cheque. In no way does it seek to lay out the changes that the Government have in mind. One could argue—the Hughes commission said that there should be a change in the administration of legal aid—that the Government are justified in what they are about. But, in the absence of any information in the Bill, we must assume that there is a reason why the Government do not wish to come clean with the House.
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  In answering the criticism of lack of information about what they intend, the Government have made the rather peculiar suggestion that a firm of management consultants is now working on smoothing out the procedures to see whether savings can be made. If they intended to do that, they should have done it before the Bill was brought before the House so that we could try to quantify what the changes might be.
  Another thing that I find rather peculiar about the Bill is that it seems to break every rule in the parliamentary rule book on the way in which these things should be done. It is particularly disquieting that the Government have sought the kind of legislation that attempts to railroad through substantial changes without giving hon. Members an opportunity to debate them in the full knowledge of what the Government intend.
  The first major change in the Bill is the proposal to set up a Scottish Legal Aid Board. The Hughes commission proposed that there should be an independent board and that the administration of the legal aid system should be taken away from the Law Society. I was not over-enthused by that recommendation. When such a change is made, one should be able to point to its administration and financial advantages.
  The Minister is a great adherent of privatisation in the National Health Service. He has said many times that savings could be made on cleaning and other facilities in the Health Service and that such things should not be left to the public sector. The Bill is a complete and utter reversal of Government policy. In plain language, the Government are nationalising the legal aid system and taking it away from a private contractor. It would be interesting to see how the Government can justify that in ideological, if not financial, terms. It is rather amusing that this Minister of all Ministers was responsible for that.
  Mr. McQuarrie: Does the hon. Gentleman agree that as legal aid has been run efficiently and effectively in Scotland since 1949, a Bill of this nature is not justified at this time?
  Mr. Wilson: I am glad that the hon. Gentleman has made that point.
  I speak for myself, not as a nominal solicitor. I am on the roll and I am a net contributor to the finances of the Law Society every year, for which I receive a magazine. That is the sole benefit. In all fairness, I have to say that I have rarely come across any complaints about inefficiency or delay in the way in which the Law Society of Scotland organises the legal aid service. There have been plenty of complaints about the nature of the legal aid system. Plenty of complaints have come in from people of limited means, particularly those involved in matrimonial cases, who have to pay a share of the costs, which they find difficult, particularly if they have married a second time. There have been complaints from those who have been refused legal aid with no redress. But little complaint has been made of the administrative procedures, or, indeed, the way in which the Law Society has carried out that function.
  If the Government really wanted to make a change, they should have considered the possibility—I am not blind to English experience, although I do not necessarily approve of it automatically—of adopting one particular example. In England, the Lord Chancellor has an independent policy advisory committee which helps him

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  to adjust the overall distribution of legal aid—to extend it in other ways and perhaps to withdraw some of it from matrimonial causes as the procedures made recourse to legal action less likely. We do not have that system in Scotland. The Scottish Legal Aid Board will have to accept instructions from the Government rather than have a policy advisory role. I am not convinced that the board will necessarily be independent. Those who are appointed to it and accept office will find that they are given instructions by the Government as to what should be done. They will be managerial and executive by nature, rather than policy formulators.
  The Minister has explained to me to some extent how the Government intend to deal with the tens of thousands of legal aid applications for summary criminal cases, but I am still perplexed about the practicability of that. At present in a sheriff or district court, when the application for legal aid is presented, it is possible for the sheriff to ask what the defence is, which can be stated then and there, and other questions can be asked to ascertain whether the application is in pursuance of justice. When it has to be put down on paper and referred to a reporter, who will no doubt have to make his recommendation back to a centre, which will have to cross-check it in order to make sure that uniformity is being adopted and that all the criteria are essentially available, one can see that growing.
  The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) pointed to the provisions in the Bill which affect manpower. He made great play about the transfer of staff from the Scottish Office, over and above the existing 220 members of staff in the Law Society. That is hardly paring away at manpower. There is also the question of another 300 staff. But who will pay for the reporters and solicitors who carry out the adjudication? Have the extra staff per year been worked out? I would like to know what the overall manpower requirement will be, taking into account the man hours of solicitors who will have to be paid for looking at the tens of thousands of summary legal applications that presently go before the courts every day.
  I also take the point forcefully, vigorously and effectively made by the hon. Member for Fife, Central (Mr. Hamilton), that when it came to costs, one should remember the sinister sentence at the end of the passage on the financial effects of the Bill:
  "It is not possible to forecast what the effect will be on legal aid expenditure"—
  I am not sure whether that is true, and it may be indelicate for the Government to specify the possible effects, but I am sure that they have a shrewd idea of the savings that they hope to make—
  "which is demand led"
  that may be so at present but it may not be in future—
  "but greater consistency in the award and refusal of legal aid, in particular criminal legal aid, may result in savings."
  The Minister rightly pointed to the astronomic increases in legal aid caused by the very success of the system. If savings are to be made, where are they to be found? Are they to be made from a reduction in the cost of administration? On the very information that we have been given about effects on manpower, the Bill will lead to an increase in the cost of administration.
  The Government complain about the variations in the cost of legal aid. However, paragraph 3 of the consultation paper put out by the Home and Health Department says:
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  "The need for change arises also from the Government's policy of improving accountability for, and the control and monitoring of, expenditure for public services including those like legal aid which are demand-led."
  Mr. Willie W. Hamilton: Under "Financial effects of the Bill", we read:
  "the provision of more detailed management information will increase initially the cost of administering legal aid by a small amount."
  The Bill does not specify how small that amount is, but there will be some increase in the administrative cost.
  Mr. Wilson: The Bill says that the cost will be increased by "a small amount", but, as extra people will be needed, the cost will obviously increase. If the present system can be operated by the Law Society, why do civil servants have to be transferred from the Scottish Office? Is it that they might otherwise be made redundant, and that that would not be acceptable to the Government?
  Mr. John MacKay: The civil servants who are involved from the Scottish Office are those currently in the Home and Health Department who are looking at the financial aspect of eligibility. They will be transferred, because financial eligibility will be covered by the Scottish Legal Aid Board.
  Mr. Wilson: It remains to be seen what the final effect will be. When we start looking at the accounts for that department in a couple of years, I think we will see that the cost has rocketed out of control.
  Even if the costs of administration are neutral, which I do not accept, how will savings be made? The figure of between 58 and 90 per cent. has been given for the range of refusals and grants of legal aid. Does consistency mean that the 58 per cent. figure will be brought up to 90 per cent., or that the 90 per cent. figure will be dragged down to 80, 70 or even 60 per cent? A tremendous amount could be saved by doing that. One of the briefing papers on the Bill says:
  "Those cases that are left become by definition major cases where a man's liberty, livelihood or reputation may be at stake."
  If the aim is to increase the refusal rate in legal aid cases, substantial savings will obviously be made, but perhaps at the cost of justice. No hon. Member, apart from those on the Government Front Bench, would want that.
  Mr. MacKay: I am grateful to the hon. Gentleman for giving way again. Is he quite happy for 60 per cent. to be accepted in some places and for 99 per cent. to be accepted in others? Is he quite happy about such inconsistency continuing?
  Mr. Wilson: The Minister shows signs of excitement and overheating. I am perfectly willing to deal with that question, as I was about to touch on it. From the outset, there should have been a system of appeal for criminal legal aid. Those refused legal aid could then appeal to another body instead of having their case heard before a sheriff. That would introduce more equity into the system. But as far as I can see from the Bill, the Government want to reduce the number of successful grants of legal aid at the expense of justice.
  The Government should have looked further at ways in which the system could be adapted. I do not intend to spell out all the criticisms that could be made, but I have a copy of the observations of the Criminal Sub-Committee of the Joint Committee with the Faculty of Advocates in relation to the smooth running of the Supreme Court in Scotland. A saving could have been made right there, by using a

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  shorter title. That committee made it clear that there are tremendous problems that add to the cost of the prosecution service, even though the Government rightly decided that more cases could be taken on indictment for those involved in the sale or spreading of drugs.
  The Government have had plenty of opportunity to attack those aspects of the process of justice that inhibit the system and that add to the cost that is ultimately met by the state. There is also an impact on the Crown. Both tabs are, of course, picked up at the end of the day by the taxpayer. The Government could have made plenty of other reforms if they wanted to reduce costs. I have always thought that a benefit of our legal aid system was that it helped those who would otherwise not have the ability to express themselves in court or to hire legal aid. As a result of the Bill, legal aid applicants will not be any better off. Indeed, the reverse is true—they will be worse off. The Government, by disguising their intentions, are deceiving the House disgracefully.
  6.15 pm
  Mrs. Anna McCurley: When I first see a Bill that is proposed by the Government, I look for the good in it. I have tried very hard to find the good bits in this Bill. As I read it, and as I listened to my hon. Friend the Minister this afternoon, I was reminded of the word "chutzpah". My simple dictionary defines it as "effrontery". Although it has far more generous and subtle connotations in its normal application, and is a term of admiration rather than condemnation, I believe that in this case it took some chutzpah to bring a piece of primary legislation to the House that is quite so devoid of detailed information.
  No doubt some flesh will be put on the bare bones in Committee, but there are some questions that need serious answers which may or may not be given. I proposed to go into the aspects of legal aid that concern those on the financial margins, but I am grateful to my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst) for having already outlined the plight of some people who are not poor but who can be impoverished by the legal system and who do not qualify for legal aid. I doubt whether this legislation will assist them.
  Of course I believe that the legal aid set-up as it exists is not wholly satisfactory, and appears to be uneven in its application throughout Scotland's courts, but I wonder whether the Bill ensures that it will be satisfactory, without destroying the very concepts under which it was established—equity, efficiency and economy. I wonder what the definition of economy is in this case. From my reading of the Bill I could not decide whether it meant a reduction in the administrative costs of legal aid or that there was to be a reduction in awards.
  As primary legislation, the Bill leaves a lot to be desired and a great deal to chance. It is open to political manipulation. Perhaps I should not say that, as generally I am a supporter of the Government, but I am thinking not for now but for the future. How can we wholly support a Bill if we do not know exactly how the Secretary of State will apply the system?
  Schedule 2 provides that the new board is to be independent. How independent is independent if the Secretary of State operates extensively by regulation? Will laymen be represented on the new board, and will they be
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  independent? Would it not be a good idea to include by right, in addition to the two solicitors, the two advocates and one other legal expert—as set out in clause 1(5)—representation from some of the important bodies in Scotland such as the Scottish Council for Civil Liberties, the Scottish Association of Citzens Advice Bureaux and the Scottish Consumer Council?
  I do not believe that the Bill is a cost or manpower-cutting exercise. Arithmetic was never my strongest talent, but, according to the preamble to the Bill, this nice new quango is to employ more than 300 people—an increase of 30 rather than a decrease of 50, as stated. Perhaps my arithmetic is similar to that which the Chinese invented, but if I slide beads to different parts of the abacus it makes no difference to the number of beads making the tally. On this abacus I find 30 extra beads. I think that the Scottish Office should take note of that ancient and worthy system.
  What about efficiency? Will the Bill ensure a better job than that which is done under the current set-up, which is reasonably efficient? It is completely computerised and all the committee work is centralised already.
  On equity in criminal legal aid, by regulation, what is the definition of "class"? Surely one cannot make regulations to control class or type of proceedings. Should not legal aid be available to everyone who qualifies financially? The state pays for the prosecuting system. Should it not also be prepared to pay for legal representation? What is meant by the term
  "in the interests of justice"?
  Will that be defined in Committee? The Bill certainly is not precise enough.
  The issue of appeal in criminal cases has been well argued by my hon. Friends, and I agree with their views. I worried when the Minister became bogged down in the percentages of approved cases. It sounded as though a covert quota system was to be applied. What do percentages matter so long as each case is judged on its merits?
  I welcome some aspects of the Bill. I believe that everyone should have access to justice. Although the Bill does not state this, the spirit is embodied in it. Public confidence in representation needs to be improved. I hope that the Bill will operate to the advantage of the hard-pressed legal profession.
  Mr. Fairbairn: My hon. Friend might imagine that the new Legal Aid Board will operate to the benefit of the hard-pressed legal profession, but she must remember the creation of the Scottish courts administration which, for the first time, is now headed by someone who is not a lawyer but is responsible for the administration of the courts. That has created a huge bureaucracy which is not satisfactory to the legal profession.
  Mrs. McCurley: I am grateful to my hon. and learned Friend for his comments. I have no detailed knowledge of the matter, but I know that some members of the legal profession do not come into the category which the hon. Member for Fife, Central (Mr. Hamilton) described. There are lawyers and lawyers. There are the rich and the not so rich. If a firm takes on an extensive case under legal aid, cash flow problems can arise because there might be a delay of several months before the bill is paid. The bigger bills tend to be pushed aside while the smaller bills are

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  attended to. The large bills look horrific and are cast aside, so the firms have to wait. I hope that that problem will be solved.
  If my questions are answered satisfactorily, I can assure the Minister that I shall have no hesitation in supporting the Bill.
  6.26 pm
  Mr. William McKelvey: I congratulate my hon. Friend the Member for Fife, Central (Mr. Hamilton) on his pugnacious speech. He showed that he had no great love for lawyers. The hon. Member for Wirral, South (Mr. Porter), who is a lawyer, made a fine speech which revealed that he pursues the course of justice, as do the majority of lawyers. I like lawyers. I am fond of honest and good lawyers.
  The Minister has missed yet another opportunity. There are flaws in the present system of granting legal aid in Scotland. I am not a lawyer, but I might be regarded as an amateur lawyer because of my trade union activities. Mine was a great trade union and I was an honest trade unionist.
  We are discussing a lousy and scabby Bill. I am a man of simple words. I do not know who conjured up the Bill or who its author was, but it is a smokescreen. I am looking forward to the Committee and I volunteer for membership of it. I shall be a willing prisoner.
  Once again, the Secretary of State for Scotland is not content with the immense powers that he has already seized. He is entering another domain to seize even greater powers. How on earth can he say to the people of Scotland that the body—including the chairman—which is to administer legal aid in Scotland should be hand-picked by the Secretary of State and that not one elected representative will be on what is supposed to be a democratic body? We are asked to believe that the Secretary of State will not try to influence that body, yet some of the cases with which it will have to deal will be brought against the Secretary of State. The board will have to put to one side the fact that its members have been hand-picked by the Secretary of State and make an honest judgment. That simply cannot be done. It will put a tremendous pressure on the members of that board.
  Mr. Fairbairn: If the hon. Gentleman, or any other hon. Member who has attended this debate, and I were to put on the back of an envelope the names of the sort of drips who should be on the board the names submitted by each hon. Member would be very different.
  Mr. McKelvey: Of course they would be different. The names should be put to the appropriate bodies so that they can be elected as representatives. Earlier an hon. Member suggested that representatives should be elected from bodies such as the citizens advice bureaux. If such representatives were elected, we should then have a truly representative body. Why should we not have a secret ballot since the Government are pushing for such legislation? On this occasion I would support them.
  The Bill is shrouded in terms which leave much to the imagination, yet the Minister shakes his head vigorously when we conjure up what we regard as horrors and defects in the Bill. All those defects will be picked out in Committee and, if we are not satisfied with the answers, we shall vote against Third Reading.
  I now return to the question of the formation of the body, the manner in which it will operate and the cost.
  402
  Some hon. Members have referred to the figures showing the effects of the Bill on public service manpower. It may be that there will be no more people employed, but the Bill says:
  "The Bill should reduce the number of staff working in the Scottish Office by about 50."
  That does not mean that 50 jobs will be lost; we do not have to worry about that. Those 50 staff will be transferred, along with 220 Law Society posts, to the board, which will initially employ about 300. I am not an expert at figures, but 220 plus 50 is 270. If one takes that away from 300, it leaves 30. Therefore, I assume that there will be an additional 30 staff.
  This is one area in which the Bill has some merit. We are at last producing jobs. They may not be real jobs, but at least they are jobs. My worry is that 30 salaries may have to come from the budget. If that happens, 30, 50 or 100 appellants may be refused legal aid simply because the necessary finance is not available. I am seriously concerned about that.
  For years there has been anxiety in various establishments about the cost of legal aid. Some years ago lawyers were accused of milking the system, of lining their pockets and of suggesting that clients should first plead not guilty and then guilty when they appear before the bench. Lawyers had been warned by the Government to keep their house in order or there would be cuts. They did not keep themselves in sufficient order and these cuts are to be made.
  The purpose of the consultative process was not to find defects in the legal aid system but to find a way of cutting costs. There was a great opportunity to change the system. One of the defects was that there was no right of appeal if one appeared before a sheriff and did not receive legal aid on the ground that it would not be in the "interest of justice". That is a marvellous phrase, and I look forward to having it explained to me in Committee.
  We know what happened in Kilmarnock where some people were refused legal aid. There were differences across the country on how legal aid should be applied. The problem was that one had no right of appeal. I want to know what kind of appeal body we will have under this system and who the appeal body will be. The Secretary of State is already to pick the committee to administer the legal aid, and, if there is to be an appeal body picked by him and answerable to him, it makes the whole system a mockery. It is a complete injustice, and the best thing we can do is to scrap it and start again.
  6.33 pm
  Mr. Harry Ewing: It must have been a tremendous relief to the Parliamentary Under-Secretary and to the Solicitor-General for Scotland to hear the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) say that she supported the Bill. It is significant that the hon. Lady is the only Member who has said that she supports the Bill. The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) said that if he had satisfactory answers he would consider supporting the Bill. One thing about the hon. Gentleman is that he always asks questions to which he knows he will receive satisfactory answers.
  My hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) put his finger on the nub of the debate. The Government have lost a golden opportunity to reform the legal aid system Very few argue that there should not be some change in the administration of the

  403
  legal aid system in Scotland. Indeed, my hon. Friend the Member for Fife, Central (Mr. Hamilton), in a reference to my contribution to the debate in the Scottish Grand Committee, put our position clearly. We argued then, and our reasoned amendment argues now, for an independent board to administer legal aid. The Under-Secretary says that we have that, but we have not. Clause 1 provides for a board that comprises no fewer than 11 and no more than 15 members, all appointed by the Secretary of State. Two of them are to be appointed in consultation with the Faculty of Advocates, two in consultation with the Law Society, and one must have qualifications or qualities in relation to court administration and court work. The other 10—it need not be 10—will come from some other source, all appointed by the Secretary of State. That may be good or bad.
  If the Secretary of State were to make the 11 or 15 appointments and then leave the matter, there would be a strong argument for claiming that it was an independent board. The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) made it clear that the Bill provides an opportunity for 23 different kinds of direction to be given to what the Solicitor-General and the Under-Secretary are trying to convince us is an independent board. Some of those directions are very dangerous.
  The Under-Secretary has intervened in speeches from both sides of the House on the question of a reduction in the resources available for criminal and civil legal aid. The financial memorandum is quite clear. It was quoted by my hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Fife, Central and by the hon. Members for Orkney and Shetland (Mr. Wallace) and for Dundee, East (Mr. Wilson). It makes it clear that it is expected that the amount spent on legal aid, not administrative costs, will be less than the present sum.
  The Under-Secretary says that it is demand-led. Of course it is demand-led. However, there are various ways to control something which is demand-led. Clause 24 provides opportunities to create a situation in which one can control a demand-led service. Under clause 24 the Secretary of State will define certain conditions under which criminal legal aid will not be available. We look forward with keen anticipation to seeing what those conditions are.
  Mr. Fairbairn rose——
  Mr. Ewing: I shall give way shortly.
  The Minister has twice said that he will bring forward an amendment to clause 24. I do not know what that amendment will be, and I suspect that the Minister is not yet clear about it. However, I would guess that the amendment will cover the point made by my hon. Friend the Member for Garscadden in seeking to give a definition of what is not in the "interest of justice". As my hon. Friend said, we have seen attempts over the years to produce definitions of what is not in the interest of justice. The definition of what is not in the interest of justice would dictate the number of people in criminal cases who qualify for legal aid.
  Before I leave my comments on the board, may I say that a false impression may be created that the board will consider applications for legal aid. The board will not do
  404
  that. The reason for the increase in administrative costs is that the board will employ people to consider the applications.
  The most interesting points made by the Minister were made in interventions. It would have been better if the Minister's good points had been made in his speech. He said that the financial qualifications were important. He also said that the reason for 50 members of staff being transferred from the Scottish Office to the board was that these people were the staff in the Scottish Home and Health Department who dealt with financial qualifications. They were to be transferred to the board.
  Does the Minister mean that the responsibility for deciding financial limits, if and when the Bill reaches the statute book, and for deciding disposable capital and income levels will be transferred to the board? That responsibility has always rested with both Houses of Parliament. If the Minister is not saying that, he will have to produce a different explanation as to why the 50 members of staff are being transferred to the board. Parliament must always have a say in financial qualifications for legal aid. With great sincerity, I must say that that was not the impression that the Minister gave. We will have an opportunity to discuss that in greater detail in Committee.
  I have already argued for an independent board. I would be the first to admit that successive Governments ought to have introduced an appeal procedure when criminal legal aid is disallowed and I take my share of the blame for that omission. In recent years there has been even greater trouble about the refusal of criminal legal aid by the sheriff or the justice in the district courts.
  There has always been an appeal against the refusal of civil legal aid. The applicant would apply to the local committee for civil legal aid and, if his application was refused, he had the right of appeal to the central committee. As the hon. and learned Member for Perth and Kinross said, the Bill removes the right of appeal in cases of civil legal aid. If the Bill reaches the statute book in its present form, applicants for civil legal aid will no longer have a right of appeal. The Solicitor-General for Scotland is shaking his head. but that is what the Bill will achieve. It will remove the right of appeal for applicants for civil legal aid.
  Never has there been a more opportune moment to introduce an appeal system for criminal legal aid than in our consideration of the Bill. I give advance notice to the Ministers who will be dealing with the Bill that we will pursue this point in Committee.
  We will be pressing for the restoration of the appeal mechanism in cases of civil legal aid applicants and for the introduction of an appeal mechanism for applications for criminal legal aid. We will pursue many other points in Committee. As my hon. Friend the Member for Kilmarnock and Loudoun said, the House will be guilty of missing a first-class opportunity to bring our legal aid system up to date if we do not get the Bill right.
  Over the years we have reviewed and extended the system of criminal and civil legal aid, and we have extended the system of tribunals and appeals. We are not suggesting that the system does not need modernising, but we will not accept a cheap way out. We believe that the Bill presents those who use the legal aid system with a cheap option, and that is not acceptable to the Opposition.
  6.46 pm
  The Solicitor-General for Scotland (Mr. Peter Fraser): The hon. Member for Glasgow, Garscadden (Mr. Dewar) put his finger on the central point when he said that the existing arrangements for the administration of legal aid in Scotland and the Law Society's role was, contrary to the way that he approached that matter in the Opposition's amendment, something of an anomaly. He said that the Bill provided a neutral framework.
  The starting point for these matters can be found in the provision and recommendation made by the Royal Commission headed by Lord Hughes which reported in May 1980. As the hon. Member for Orkney and Shetland (Mr. Wallace) said, removing the power from the Law Society of Scotland is not an attack on the society. Nor is it accurate to say that there have been gross abuses by the Law Society in the past.
  The Royal Commission, in paragraph 8.68 of its report, states:
  "No-one has suggested that anything the Law Society has done is improper; nor have we found anything to suggest that. Rather the argument is that lawyers benefit financially from legal aid, and it is not proper that their professional organisation should be seen to be the body responsible for administering it. We think that the principle of this argument is sound."
  Some indignation has been expressed during the debate, but I have not perceived in the arguments advanced that in principle the line taken by Lord Hughes and by the Government is in any way essentially unsound. Although hon. Members have received many representations from lawyers in Scotland, the Scottish Consumer Council has said that in principle it believes it is appropriate that there should be an independent board.
  A number of criticisms have been made of the board. Some hon. Members believe that in some way the independence of the board is not properly guaranteed. In answer to that criticism, I must stress that clause 1 states:
  "The Board shall consist of not less than 11 and not more than 15 members".
  I must tell my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) that there will not be 30 members on the board. We would not permit that kind of growth. There will be two members of the Faculty of Advocates, two members of the Law Society and one member who has experience of the procedure and practice of the court. There will be a minority of people therefore with legal experience. I believe that that is the right balance.
  As my hon. Friend the Under-Secretary of State said in answer to my hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley), we will arrange to consult those interested bodies, such as the Scottish Consumer Council and the Scottish Association of Citizens' Advice Bureaux, to determine who they might put forward for inclusion on the board. It is not a substantial argument that a body of people would always be present as placemen of the Secretary of State, simply to do his bidding. It is important to examine the extent to which they can be subject to the Secretary of State's discretion and control in the running of the board.
  A number of hon. Members have referred to clause 3(4):
  "The Board shall have regard, in the exercise of its functions, to such guidance as may from time to time be given by the Secretary of State".
  We may wish to examine that provision in Committee, but I should tell hon. Members that it is intended that the
  406
  guidance will deal with administrative matters and will be mainly intended to safeguard the position of those in the Scottish Office who are responsible for accounting matters. It will be connected with the setting out of accounts, the arrangement of internal audits——
  Mr. Dewar rose——
  The Solicitor-General for Scotland: I appreciate the hon. Gentleman's interest, but I do not have time to give way.
  The guidance will be to do with the matters that I have outlined rather than to tell the board which cases it should deal with and which applications it should not deal with. I should have thought that it was clear from that clause that the guidance should not affect the consideration of applications for legal aid.
  It has been suggested that, by the introduction of a board, the Government are trying to reduce the amount of legal aid that is granted. Detailed consideration has been given to the section headed "Financial Effects of the Bill". With customary skill, the hon. Member for Fife, Central (Mr. Hamilton) read the first part of the first sentence, but missed out the last parts of the second and third sentences. That section states:
  "It is not possible to forecast what the effect will be on legal aid expenditure, which is demand led, but greater consistency in the award and refusal of legal aid, in particular criminal legal aid, may result in savings."
  That is the most that could be said with regard to expenditure being demand-led. Indeed, it is arguable that, if there is consistency between the courts that allow legal aid in 58 per cent. of cases and those that allow legal aid in all cases, there may be an increase in the sum spent on legal aid.
  We look for savings in the existing arrangements for the administration of legal aid. I was a little surprised that some hon. Members think that there has never been criticism of that administration. A number of independent lay members of the legal aid central committee have criticised the arrangements from time to time.
  Mr. Dewar rose——
  The Solicitor-General for Scotland: I am sorry, but I cannot give way. I have only a few minutes in which to reply.
  Clause 40 requires the Secretary of State to pay to the board
  "such sums as are required … to meet payments out of the legal aid fund.
  It has been suggested that too much is left to regulations that Parliament cannot adequately scrutinise. I appreciate that it is some time since the hon. Member for Dundee, East (Mr. Wilson) was in private practice, but even he must recall that many arrangements for legal aid are promulgated through schemes under the Legal Aid (Scotland) Act and are made by the Law Society. Those provisions come nowhere near Parliament and there is no requirement on the Law Society to put them before Parliament. We shall ensure that there will be a requirement to make regulations covering about 23 topics, and the core regulations will be subject to the affirmative resolution procedure.
  It might appear to those who know nothing about the existing framework and have little regard for its present operation that greater powers are being given to the Secretary of State to make regulations, but he is not taking

  407
  greater regulatory powers to deal with matters that were previously covered by primary legislation. I challenge the hon. Member for Falkirk, East (Mr. Ewing) to find any area in the Bill where the Secretary of State is taking additional powers. Great play has been made of the number of powers that the Secretary of State has, but no one has said where those additional powers are to be found.
  Mr. Ewing rose——
  The Solicitor-General for Scotland: The hon. Gentleman can rise to that challenge in the weeks that lie ahead.
  The hon. Member for Garscadden had anxieties about clause 21(2), but the power there is a repetition, with one slight modification, of a power that has been available to every Secretary of State for Scotland since 1949, when civil legal aid was first introduced. The regulation-making power will be used primarily to set up a dividing line between summary proceedings covered by criminal legal aid and those covered by assistance by way of representation. I do not accept that our proposals are a significant innovation.
  Under clause 24 we shall make regulations setting out the factors to be taken into account in determining "the interests of justice". I repeat for the third time, to ensure that there is no further confusion, that the granting of legal aid will not depend on the criminal record of the applicant.
  As the debate drew to a conclusion, it seemed to be suggested that we were trying to restrict the circumstances in which legal aid could be granted and that that was being done at the bidding of the Chancellor of the Exchequer to ensure that there were fewer successful applications for legal aid in Scotland. I ask hon. Members to look at what Lord Hughes said in his report:
  "We therefore recommend that the criteria for granting criminal legal aid to defend a summary prosecution should be laid down in statute."
  We intend to follow that route.
  There has been confusion about appeals. A number of my hon. Friends seem to be under the misapprehension that the existing right of appeal in civil cases is being removed. That is not the case. The difficulty arises because the existing right of appeal is contained in regulations. We intend to introduce new regulations that will continue to allow a right of appeal in civil matters. I understand how the confusion arose, and I hope that I have reassured hon. Members that we have no sinister motives.
  We have made it clear that we do not expect to introduce a formal procedure for appeal in criminal matters, but we can discuss that matter further.
  I do not have time now to answer all the points put to me, but I shall attempt to do so in writing or in Committee.
  I emphasise that the primary aims of the Bill are, first, to improve the administration of legal aid in Scotland by bringing together under the control of the board the various functions which are at the moment fragmented between several different bodies; secondly, to increase consistency in the award of legal aid; and, thirdly, to clarify, simplify and consolidate legal aid legislation in Scotland. Contrary to some opinions that have been expressed during the debate, I have little doubt that once this legislation is on the statute book it will be widely welcomed in Scotland, because it will allow members of the public — not
  408
  lawyers, but people who need legal aid — to defend themselves in the criminal courts or to pursue their actions in the civil courts. They will recognise that we are introducing a wise and proper provision.
  Question put, That the amendment be made:—
  The House divided: Ayes 166, Noes 266.

  Division No. 191]

  [7 pm

  AYES

  Adams, Allen (Paisley N)

  Godman, Dr Norman

  Alton, David

  Gould, Bryan

  Anderson, Donald

  Gourlay, Harry

  Archer, Rt Hon Peter

  Hamilton, James (M'well N)

  Atkinson, N. (Tottenham)

  Hamilton, W. W. (Fife Central)

  Bagier, Gordon A. T.

  Harrison, Rt Hon Walter

  Banks, Tony (Newham NW)

  Haynes, Frank

  Barnett, Guy

  Hogg, N. (C'nauld & Kilsyth)

  Barron, Kevin

  Holland, Stuart (Vauxhall)

  Beckett, Mrs Margaret

  Home Robertson, John

  Beith, A. J.

  Howells, Geraint

  Bell, Stuart

  Hoyle, Douglas

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

  Hughes, Dr Mark (Durham)

  Bermingham, Gerald

  Hughes, Robert (Aberdeen N)

  Bidwell, Sydney

  Hughes, Roy (Newport East)

  Boothroyd, Miss Betty

  Janner, Hon Greville

  Boyes, Roland

  Jenkins, Rt Hon Roy (Hillh'd)

  Brown, Gordon (D'f'mline E)

  John, Brynmor

  Brown, Hugh D. (Provan)

  Johnston, Sir Russell

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

  Jones, Barry (Alyn & Deeside)

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

  Kaufman, Rt Hon Gerald

  Bruce, Malcolm

  Kirkwood, Archy

  Buchan, Norman

  Lambie, David

  Caborn, Richard

  Lamond, James

  Callaghan, Rt Hon J.

  Leadbitter, Ted

  Callaghan, Jim (Heyw'd & M)

  Leighton, Ronald

  Campbell, Ian

  Lewis, Ron (Carlisle)

  Campbell-Savours, Dale

  Lewis, Terence (Worsley)

  Canavan, Dennis

  Litherland, Robert

  Carlile, Alexander (Montg'y)

  Livsey, Richard

  Cartwright, John

  Lloyd, Tony (Stretford)

  Clark, Dr David (S Shields)

  McCartney, Hugh

  Clay, Robert

  McDonald, Dr Oonagh

  Clelland, David Gordon

  McKay, Allen (Penistone)

  Clwyd, Mrs Ann

  McKelvey, William

  Cocks, Rt Hon M. (Bristol S)

  MacKenzie, Rt Hon Gregor

  Coleman, Donald

  Maclennan, Robert

  Conlan, Bernard

  McNamara, Kevin

  Cook, Frank (Stockton North)

  Madden, Max

  Cook, Robin F. (Livingston)

  Marek, Dr John

  Corbyn, Jeremy

  Marshall, David (Shettleston)

  Craigen, J. M.

  Martin, Michael

  Crowther, Stan

  Maxton, John

  Cunliffe, Lawrence

  Meadowcroft, Michael

  Cunningham, Dr John

  Michie, William

  Dalyell, Tarn

  Millan, Rt Hon Bruce

  Davies, Rt Hon Denzil (L'lli)

  Morris, Rt Hon A. (W'shawe)

  Davies, Ronald (Caerphilly)

  Morris, Rt Hon J. (Aberavon)

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

  Nellist, David

  Deakins, Eric

  O'Brien, William

  Dewar, Donald

  O'Neill, Martin

  Dixon, Donald

  Orme, Rt Hon Stanley

  Dormand, Jack

  Park, George

  Douglas, Dick

  Parry, Robert

  Dubs, Alfred

  Patchett, Terry

  Eadie, Alex

  Pavitt, Laurie

  Eastham, Ken

  Pendry, Tom

  Edwards, Bob (Wh'mpt'n SE)

  Penhaligon, David

  Ewing, Harry

  Pike, Peter

  Fairbairn, Nicholas

  Powell, Raymond (Ogmore)

  Fatchett, Derek

  Prescott, John

  Faulds, Andrew

  Randall, Stuart

  Fields, T. (L'pool Broad Gn)

  Redmond, Martin

  Fisher, Mark

  Rees, Rt Hon M. (Leeds S)

  Flannery, Martin

  Roberts, Ernest (Hackney N)

  Forrester, John

  Robertson, George

  Foster, Derek

  Rogers, Allan

  Foulkes, George

  Rooker, J. W.

  Freeson, Rt Hon Reginald

  Ross, Ernest (Dundee W)

  Garrett, W. E.

  Ross, Stephen (Isle of Wight)

  409

  Ryder, Richard

  Wallace, James

  Sheldon, Rt Hon R.

  Wardell, Gareth (Gower)

  Shields, Mrs Elizabeth

  Wareing, Robert

  Silkin, Rt Hon J.

  Weetch, Ken

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

  Welsh, Michael

  Soley, Clive

  White, James

  Spearing, Nigel

  Wilson, Gordon

  Stewart, Rt Hon D. (W Isles)

  Winnick, David

  Stott, Roger

  Woodall, Alec

  Strang. Gavin

  Wrigglesworth, Ian

  Thomas, Dafydd (Merioneth)

  Young, David (Bolton SE)

  Thomas, Dr R. (Carmarthen)

  Thompson, J. (Wansbeck)

  Tellers for the Ayes:

  Tinn, James

  Mr. John McWilliam and Mr. Chris Smith.

  Wainwright, R.

  NOES

  Adley, Robert

  Dicks, Terry

  Aitken, Jonathan

  Dorrell, Stephen

  Alexander, Richard

  Douglas-Hamilton, Lord J.

  Alison, Rt Hon Michael

  Dover, Den

  Ancram, Michael

  du Cann, Rt Hon Sir Edward

  Arnold, Tom

  Durant, Tony

  Ashby, David

  Dykes, Hugh

  Atkins, Rt Hon Sir H.

  Edwards, Rt Hon N. (P'broke)

  Atkinson, David (B'm'th E)

  Eggar, Tim

  Baker, Nicholas (Dorset N)

  Emery, Sir Peter

  Baldry, Tony

  Evennett, David

  Banks, Robert (Harrogate)

  Eyre, Sir Reginald

  Batiste, Spencer

  Fallon, Michael

  Bellingham, Henry

  Farr, Sir John

  Bendall, Vivian

  Favell, Anthony

  Bennett, Rt Hon Sir Frederic

  Fenner, Mrs Peggy

  Benyon, William

  Fletcher, Alexander

  Best, Keith

  Fookes, Miss Janet

  Bevan, David Gilroy

  Forman, Nigel

  Biffen, Rt Hon John

  Forsyth, Michael (Stirling)

  Blackburn, John

  Forth, Eric

  Blaker, Rt Hon Sir Peter

  Fowler, Rt Hon Norman

  Bonsor, Sir Nicholas

  Fox, Marcus

  Boscawen, Hon Robert

  Franks, Cecil

  Bottomley, Peter

  Fraser, Peter (Angus East)

  Bottomley, Mrs Virginia

  Freeman, Roger

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

  Fry, Peter

  Bowden, Gerald (Dulwich)

  Galley, Roy

  Braine, Rt Hon Sir Bernard

  Gardiner, George (Reigate)

  Brandon-Bravo, Martin

  Gardner, Sir Edward (Fylde)

  Brinton, Tim

  Garel-Jones, Tristan

  Brittan, Rt Hon Leon

  Glyn, Dr Alan

  Brooke, Hon Peter

  Goodhart, Sir Philip

  Brown, M. (Brigg & Cl'thpes)

  Gorst, John

  Bruinvels, Peter

  Gow, Ian

  Buchanan-Smith, Rt Hon A.

  Gower, Sir Raymond

  Buck, Sir Antony

  Grant, Sir Anthony

  Budgen, Nick

  Greenway, Harry

  Bulmer, Esmond

  Gregory, Conal

  Butler, Rt Hon Sir Adam

  Griffiths, Peter (Portsm'th N)

  Butterfill, John

  Grist, Ian

  Carlisle, John (Luton N)

  Ground, Patrick

  Carlisle, Kenneth (Lincoln)

  Grylls, Michael

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

  Hamilton, Hon A. (Epsom)

  Carttiss, Michael

  Hamilton, Neil (Tatton)

  Cash, William

  Hampson, Dr Keith

  Channon, Rt Hon Paul

  Hanley, Jeremy

  Chapman, Sydney

  Hannam, John

  Chope, Christopher

  Hargreaves, Kenneth

  Clark, Dr Michael (Rochford)

  Harris, David

  Clark, Sir W. (Croydon S)

  Harvey, Robert

  Clarke, Rt Hon K. (Rushcliffe)

  Havers, Rt Hon Sir Michael

  Clegg, Sir Walter

  Hawkins, C. (High Peak)

  Cockeram, Eric

  Hawkins, Sir Paul (N'folk SW)

  Colvin, Michael

  Hawksley, Warren

  Coombs, Simon

  Hayes, J.

  Cope, John

  Hayhoe, Rt Hon Barney

  Cormack, Patrick

  Heseltine, Rt Hon Michael

  Couchman, James

  Hickmet, Richard

  Critchley, Julian

  Hicks, Robert

  Crouch, David

  Hill, James

  Currie, Mrs Edwina

  Hind, Kenneth

  Dickens, Geoffrey

  Hirst, Michael

  410

  Hogg, Hon Douglas (Gr'th'm)

  Murphy, Christopher

  Holland, Sir Philip (Gedling)

  Neale, Gerrard

  Holt, Richard

  Nelson, Anthony

  Hordern, Sir Peter

  Newton, Tony

  Howard, Michael

  Nicholls, Patrick

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

  Norris, Steven

  Howell, Rt Hon D. (G'ldford)

  Onslow, Cranley

  Howell, Ralph (Norfolk, N)

  Oppenheim, Phillip

  Hubbard-Miles, Peter

  Ottaway, Richard

  Hunt, David (Wirral W)

  Page, Sir John (Harrow W)

  Hunt, John (Ravensbourne)

  Page, Richard (Herts SW)

  Hunter, Andrew

  Patten, J. (Oxf W & Abgdn)

  Jackson, Robert

  Pawsey, James

  Jessel, Toby

  Percival, Rt Hon Sir Ian

  Johnson Smith, Sir Geoffrey

  Pollock, Alexander

  Jones, Gwilym (Cardiff N)

  Portillo, Michael

  Jones, Robert (Herts W)

  Powell, William (Corby)

  Jopling, Rt Hon Michael

  Powley, John

  Kellett-Bowman, Mrs Elaine

  Prentice, Rt Hon Reg

  Kershaw, Sir Anthony

  Price, Sir David

  Key, Robert

  Proctor, K. Harvey

  King, Roger (B'ham N'field)

  Pym, Rt Hon Francis

  King, Rt Hon Tom

  Raffan, Keith

  Knight, Greg (Derby N)

  Rees, Rt Hon Peter (Dover)

  Knight, Dame Jill (Edgbaston)

  Rhodes James, Robert

  Knowles, Michael

  Rhys Williams, Sir Brandon

  Knox, David

  Rost, Peter

  Lang, Ian

  Rowe, Andrew

  Lawler, Geoffrey

  Rumbold, Mrs Angela

  Lawrence, Ivan

  Sainsbury, Hon Timothy

  Lee, John (Pendle)

  Shaw, Giles (Pudsey)

  Leigh, Edward (Gainsbor'gh)

  Shaw, Sir Michael (Scarb')

  Lennox-Boyd, Hon Mark

  Shepherd, Colin (Hereford)

  Lester, Jim

  Silvester, Fred

  Lightbown, David

  Sims, Roger

  Lilley, Peter

  Skeet, Sir Trevor

  Lloyd, Ian (Havant)

  Smith, Sir Dudley (Warwick)

  Lloyd, Peter (Fareham)

  Smith, Tim (Beaconsfield)

  Lord, Michael

  Soames, Hon Nicholas

  Lyell, Nicholas

  Speller, Tony

  McCrindle, Robert

  Spencer, Derek

  McCurley, Mrs Anna

  Spicer, Michael (S Worcs)

  Macfarlane, Neil

  Stanbrook, Ivor

  MacGregor, Rt Hon John

  Stewart, Allan (Eastwood)

  MacKay, Andrew (Berkshire)

  Stewart, Andrew (Sherwood)

  MacKay, John (Argyll & Bute)

  Stradling Thomas, Sir John

  Maclean, David John

  Taylor, John (Solihull)

  McLoughlin, Patrick

  Taylor, Teddy (S'end E)

  McNair-Wilson, M. (N'bury)

  Temple-Morris, Peter

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

  Terlezki, Stefan

  McQuarrie, Albert

  Thompson, Patrick (N'ich N)

  Madel, David

  Thorne, Neil (llford S)

  Major, John

  Thurnham, Peter

  Malins, Humfrey

  Trotter, Neville

  Maples, John

  Viggers, Peter

  Marland, Paul

  Waddington, David

  Marlow, Antony

  Wakeham, Rt Hon John

  Marshall, Michael (Arundel)

  Walker, Rt Hon P. (W'cester)

  Mates, Michael

  Waller, Gary

  Mather, Carol

  Ward, John

  Maude, Hon Francis

  Warren, Kenneth

  Maxwell-Hyslop, Robin

  Watson, John

  Mayhew, Sir Patrick

  Wheeler, John

  Mellor, David

  Wiggin, Jerry

  Merchant, Piers

  Wolfson, Mark

  Meyer, Sir Anthony

  Wood, Timothy

  Miller, Hal (B'grove)

  Yeo, Tim

  Moate, Roger

  Young, Sir George (Acton)

  Monro, Sir Hector

  Morris, M. (N'hampton S)

  Tellers for the Noes:

  Morrison, Hon P. (Chester)

  Mr. Donald Thompson and Mr. Gerald Malone.

  Mudd, David

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 41 (Amendment on Second or Third Reading) and agreed to.
  Bill accordingly read a Second time and committed to a Standing Committee, pursuant to Standing Order No. 42 (Committal of Bills).
  Ordered,
  That, notwithstanding anything in paragraph (2) of Standing Order No. 63 (Constitution of Standing Committees) and Standing Order No. 72 (Scottish Standing Committees), the Bill be considered by a Scottish Standing Committee.—[Mr. John MacKay.]

  Legal Aid (Scotland) Bill [Lords]

    LEGAL AID (SCOTLAND) BILL [LORDS] [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That for the purpose of any Act resulting from the Legal Aid (Scotland) Bill, it is expedient to authorise—
    (1) the payment out of moneys provided by Parliament of—

    (a) such sums as are required (after allowing for certain payments into the Fund) to meet payments out of the Fund under the Act;

    (b) such sums as the Secretary of State may, with the approval of the Treasury, determine are required for the other expenditure of the Board;

    (c) the amount required to make up any deficit in the Legal Aid (Scotland) Fund established under section 9 of the Legal Aid (Scotland) Act 1967 on the winding up of that fund;

    (2) the making of payments into the Consolidated Fund; and for the purposes of this Resolution the expressions 'the Fund' and 'the Board' shall be construed in accordance with any Act resulting from the Legal Aid (Scotland) Bill. —[Mr. Lennox-Boyd.]

  Shipbuilding Industry
  Mr. Deputy Speaker (Mr. Ernest Armstrong): We now come to the debate on the shipbuilding industry. Mr. Speaker has selected the amendment. I should also inform the House that 18 hon. Members, apart from the Front Benchers, have already intimated that they would like to catch my eye. The debate will end at 10 o'clock, and I therefore ask for brevity.
  7.13 pm
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): I beg to move,
  That this House notes the massive slump in demand for merchant ships which has led to cutbacks in shipyards throughout the world; regrets that this has inevitably led to contraction in the United Kingdom's own merchant shipbuilding industry despite the Government's extensive and continued support for British Shipbuilders (including over £1,400 million since 1979); and welcomes the Government's package of measures to provide special assistance to those affected.
  In view of what you have said, Mr. Deputy Speaker, I shall try not to detain the House for too long, although this is a very important topic.
  The crisis in the shipbuilding industry has been with us since the mid-1970s. It began when world demand fell in the wake of the first oil price shock just as massive and efficient new capacity was coming on stream. In 1973 the world order book stood at 129 million gross tonnes. At the end of 1985 it stood at only 26 million gross tonnes. The latest estimate suggests that there is about 30 per cent. excess capacity in shipping world wide, despite a record rate of scrapping last year.
  After a number of years during which orders for new ships had remained at low levels—some 12 million to 13 million compensated gross tonnes—new order levels fell last year to less than 11 million cgt, with a distinct worsening between the first and second halves of the year. In the first six months of 1985 new orders world wide amounted to 5·8 million cgt, and in the second six months the figure was 4·9 million cgt.
  First estimates suggest that the situation was no better in the first quarter of 1986. The only firm figures that we have are for January of this year, which have been given in a written answer. Although we should not take one month's figures too seriously, they nevertheless show all too clearly how difficult the market has now become. We took only 6,000 cgt, the French 1,000 and the Germans 9,000. These figures speak for themselves.
  The House must face the fact that the outlook is bleak. No one believes that an upturn is in prospect before 1990. Indeed, many people believe that the recovery will be well beyond that date. It is not only British Shipbuilders which has had to cut back in these circumstances. The Germans have cut capacity, the French are cutting capacity, and the Swedes have effectively abandoned merchant shipbuilding, despite having some of the most modern facilities in Europe. The Dutch have refused to support their industry in building the sister ship to the large North sea ferry won by Govan. The Japanese are having to adjust and have cut 10,000 jobs since the beginning of this year. Another 20,000 could go — perhaps 30,000 in all. Even the Koreans have lost jobs and have cut back plans for new capacity.
  Therefore, British Shipbuilders is not alone. The bulk of British Shipbuilders' present order book was won in the

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  first half of 1985, when BS secured orders for some 160,000 cgt. BS has won very little since because, with few exceptions, the orders have not been available. That is not a question of lack of Government support, and I emphasise that. The Government have given support to British Shipbuilders on a quite unprecedented scale since 1979 — more than £1,100 million by way of public dividend capital to cover the corporation's general operations, and more than £230 million by way of intervention fund support for individual merchant orders. BS orders have also been supported by the home credit scheme to the tune of welt in excess of £100 million.
  The House must recognise that very considerable support has been given, and of course we are anxious to do all that we can from now on. The House recently agreed a Bill, which is now in another place, which will enable the borrowing powers of BS to be increased by a further £200 million.
  Because of the world situation, BS has had to make very painful decisions. The corporation looked at a variety of options. Its aim was to take the option that would in these difficult circumstances provide the best chance for merchant shipbuilding in this country. It chose an option which, as the House knows, unfortunately involved closures and redundancies, because British Shipbuilders simply did not believe that it made commercial sense to retain more capacity than orders could be found for.
  BS recommended this option to me, and I accepted it as offering the best prospect for the business as a whole. The changes that BS plans over the months ahead will make it fitter to face the future, but the future depends on new orders, and the House may be assured that we shall do all that we can to ensure that those orders are won.
  BS has announced a fall in employment from 10,000 to 6,500 by next March, but by no stretch of the imagination is this the end of merchant shipbuilding in this country, as some hon. Members have suggested. The House should not forget that about 2,000 people are also employed in private sector merchant shipbuilding in Great Britain. This sector has largely maintained jobs over the years by supplying such ships as small coasters, fishing vessels and so on. There are also more than 4,000 people employed at Harland and Wolff, and about 27,000 in the newly privatised warship yards.
  I now come to the whole question of public sector orders. Some people suggest that these should be brought forward, and others seem to believe that such orders can be conjured from thin air. Over the past year the Ministry of Defence has placed a number of very important orders. In 1985 and the first quarter of 1986, ship and submarine orders to the value of £1·86 billion have been placed. This includes the three Upholder class submarines from Calumet' Laird, two type 22 frigates — one for Cammells and for Swan Hunter — the first AOR for Harland and Wolff, three mine counter-measure vessels, and a nuclear fleet submarine and the first Trident submarine, both from Vickers at Barrow. That is an impressive list, which will be augmented by type 23 frigate orders and by the second AOR order, for which Swan Hunter has been given a favourable opportunity to bid.
  The recently privatised warship yards have also had successes beyond the Ministry of Defence orders for the Royal Navy to which I have just referred. For example, Brooke Marine at Lowestoft is in the advanced stages of negotiation of four separate contracts worth some £14
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  million, which will keep its labour force of over 500 employed for the next year. It is also pursuing a number of other contracts. Vosper Thornycroft UK Limited has recently won a further contract from Oman for a fast strike craft of the Province class worth well over £30 million. It is also negotiating a major naval contract in Pakistan with the support of the Government. I hope that that will he successful.
  On the purely merchant side, there are orders coming shortly for a fisheries protection vessel and two ferries for the Scottish islands. I am delighted to announce that the Government intend to finance from the aid programme a newly built ship to provide adequate services for St. Helena. That ship will be built in a United Kingdom yard. Tenders for a replacement ship for Tuvalu, also financed as aid, will go to our yards in the next two to three months. This is good news. It is quite unrealistic to invent orders, or to build ships simply for the sake of building ships. There is no sense in that.
  I have heard it suggested by some hon. Members that our support for the industry is less competitive than the support in other countries. It is not always easy to make direct comparisons between the support given by different countries. It is certainly misleading to focus on just one aspect of support given in one country — say, credit terms—and to compare that element, either favourably or unfavourably, with the credit terms available here, without also considering how other elements of support compare.
  In the United Kingdom our main method of support is the shipbuilding intervention fund—a direct production subsidy. By agreement with the Commission, under the Community fifth directive on aids to shipbuilding, we have the ability to offer support at up to 20·5 per cent. of contract price to help BS or private sector yards match far east prices.
  In addition, favourable credit terms are available under the home credit scheme. These conform to the terms of the OECD understanding on credit for ships. We are able to offer credit on 80 per cent. of the ship price at 7·5 per cent. interest for eight and a half years. These match the terms generally available elsewhere, though some countries which offer less or no direct production aid compensate by offering more favourable credit terms. Finally, we are ready by use of the aid and trade provision to offer considerably better credit terms in appropriate cases to match competition from other countries. I am anxious that we should do so.
  Within the Community, state aids to shipbuilding are currently covered by the fifth directive, which expires at the end of the year. Although discussions have begun on a new Community regime, no proposals have yet come forward from the Commission. We are therefore pressing the Commission to table proposals which take full account of all the aids currently available, both direct and indirect including tax incentives, to shipowners and to investors in new ships, as well as aids to shipbuilders. We are determined that the new Community aid regime should be fair and should allow shipbuilders in this country to compete on equal terms with their European rivals.
  Mr. James Tinn: In the negotiations, will the Secretary of State try to ensure that intervention fund assistance does not carry with it the requirement that British Shipbuilders must break even on every contract? Private and foreign competitors are not subjected to that

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  requirement. It is not easy to see why British Shipbuilders should have to meet it. Will the Secretary of State do something about that?
  Mr. Channon: I shall examine the point that the hon. Gentleman has made. I cannot unilaterally make a change in the rules of the European Commission. The Commission has not yet put forward proposals to the Community for the next stage. The point that the hon. Gentleman has made is very important, and we shall bear it in mind during the negotiations.
  Now I want to turn to the measures that I announced last week to help deal with the redundancies resulting from the contraction of British Shipbuilders. In regard to the support of up to £5 million to enable it to set up a new subsidiary, British Shipbuilders Enterprise Ltd., I can now tell the House that the new company will be in operation in July.
  In the steel industry areas, 30,000 jobs have been created by BSC Industries, and 20,000 more are forecast to follow. In coal, NCB (Enterprises) Ltd. has already created 6,000 jobs in 18 months of operation. BS employees facing redundancy will know that skills and resources are available on hand to help. There will be money to help take advantage of retraining and redeployment opportunities, and money and advice for those wishing to take the initiative of setting up their own businesses. British Shipbuilders is pressing ahead with the arrangements.
  The head office, with the chief executive, will be based in Middlesbrough. There will also be regional directors for the north-east on the Wear, and for Scotland at Strathclyde. BS Enterprise will therefore be particularly well placed to help the men of Smiths dock and their families, as well as those at other yards, including Troon. In addition, I explained last week that my right hon. Friend the Secretary of State for Employment has asked the Manpower Services Commission to provide a further £1 million specifically for the retraining of BS redundant employees, in direct co-operation with the new enterprise corporation.
  I can well understand the feelings of hon. Members, particularly those from the north-east, at the latest news. The north-east of England continues to receive large sums in support of the regional economy there, and that is right. In that area, 97 per cent. of the working population are within assisted areas eligible for schemes of regional aid. More than £800 million has been spent on regional assistance since 1979 in the form of regional development grants and regional selective assistance. This massive injection of funds has helped to create or safeguard 79,000 jobs.
  Over the same period, the Manpower Services Commission has spent £300 million, and the Department of the Environment has funded economic, social and environmental projects to the value of £300 million.
  Mr. Nicholas Brown: May I draw the Minister back to shipbuilding? Yesterday, in answer to a question from my hon. Friend the Member for Wallsend (Mr. Garrett), the Prime Minister said:
  "There are not many public orders to be brought forward, apart from the naval shipyard orders that are coming forward." —[Official Report, 20 May 1986: Vol. 98, c. 178.]
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  Is that a commitment by the Government to bring forward the naval shipbuilding programme?
  Mr. Channon: I have already described the naval shipbuilding orders that are coming forward and that have come forward in the past few months; for example, the second AOR that we have talked about for Swan Hunter and, I hope, the type 23 frigate.
  As the House knows from the announcement last week, new measures to help cope with the shipbuilding crisis also include an extra £1 million for the city action team, £ 1 million for the reclamation of derelict land and a further £2 million to be added to the urban programme allocation for the region.
  Dr. Norman A. Godman: On the question of the involvement of the Manpower Services Commission, may I point out to the Secretary of State that community enterprises in my constituency find the MSC less than helpful when they make applications for help to create jobs for unemployed shipyard workers? Will he ask his right hon. Friend to look into that?
  Mr. Channon: I shall certainly put that to my right hon. Friend, with whom I have already discussed the problem. He is anxious that such problems should be resolved and that we should have a flexible system between all Departments of Government that are involved in the exercise, so as to ensure that there are no difficulties such as the one the hon. Gentleman mentioned.
  I have already tried to describe to the House the position on orders, not only in the United Kingdom, but throughout the world.
  The Manpower Services Commission will work closely with British Shipbuilders Enterprise Ltd. — [Interruption.] I should have thought that the House would be interested in learning this. [Interruption.] I have already told the House the position on orders throughout the world. The House may find it unpalatable, but it is the truth. British industry is in exactly the same position as industry throughout the world, and we are blinding ourselves if we imagine that that is not the case.
  Mr. Robert C. Brown: I am sure that the Minister does not want to mislead the House or the country. What about the three Ministry of Defence orders a year that we want? If British Shipbuilders Enterprise Ltd. was 10 times as successful as NCB (Enterprise) Ltd., it would still be a disaster for the shipbuilding areas.
  Mr. Channon: I am telling the House of the measures which I believe will be of substantial help to the north-east. I hope that that will prove to be the case. I have already described the position on orders that have been made and are coming, including Ministry of Defence orders and merchant orders. I have already announced two further orders. [Interruption.] I announced them a few moments ago. I cannot invent orders for which there is no demand. I can tell the House where orders are, and of orders which are coming.
  The Manpower Services Commission is important and will work closely with British Shipbuilders Enterprise Ltd. to ensure the effective retraining of redundant BS employees. With regard to the extra sums for reclamation and the urban programme, the Departments concerned are writing to local authorities in the area concerned —

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  Tyneside, Wearside, and Teesside — asking for bids against this allocation. Preference will be given to projects which are directly job-creative or supportive.
  Mr. Tony Speller: While we are on the subject of assistance for those made unemployed, may I bring my right hon. Friend back to his point about development area status? Appledore, which is the first name on British Shipbuilders' programme, does not enjoy that status. Similarly, the numbers being reduced there are so relatively small that the cost of various aid programmes may outweigh the so-called value in the savings. May I point out that the smallest order of any size ship would be a substantial salmon in our part of the world. but a mere minnow up country? Will my right hon. Friend bear that in mind when the minnow orders come through?
  Mr. Channon: I understand what my hon. Friend says. At present Appledore is building two dredgers, and I understand that there are good prospects for a third dredger from a new customer to the yard. I hope that that order is won. I recognise the force of my hon. Friend's comments. It is extremely difficult to alter the map, and once I start doing that there will be a great many arguments in different areas.
  Mr. John Smith: Answer the question.
  Mr. Channon: I have already answered my hon. Friend's question and I think that he is satisfied with it. [Interruption.] Let him speak for himself.
  BS Enterprise Ltd. will also operate in Scotland. My right hon. and learned Friend the Secretary of State for Scotland is urgently considering additional help for the areas affected north of the border. [Interruption.] I have already explained to the House the measures that I am proposing in the north-east, and my right hon. and learned Friend is proposing similar measures for Scotland.
  I disagree strongly with the Opposition's amendment that conditions in merchant shipbuilding are the result of Government neglect. I have explained that this is a worldwide crisis from which we cannot be immune. Opposition Members who are complaining must face the fact that an injection of £1,500 million during the past seven years is a curious definition of neglect.
  Mr. John Smith: That figure has been used constantly. It is normally a figure of £1,400 million, but the Secretary of State has added £1 million to it. As we are debating merchant shipbuilding, will the Secretary of State tell us how much of that sum was investment in merchant shipping?
  Mr. Channon: About £230 million was spent on the intervention programme, and the other £1,100 million is the main part of Government help for BS during the past seven years. [Interruption.] Let me tell the House the exact position. BS has received nearly £1·5 billion from the Government since 1979. Public dividend capital of more than £1,100 million has funded BS's general operations. Intervention fund money amounting to £236 million has been spent as a subsidy on contract prices to help BS win orders against far east competition. [Interruption.] I have already told the House the figures for BS as a whole.
  Mr. John Smith: Will the Secretary of State give way?
  Mr. Channon: I must press on. I have given the House the figures, and they relate to BS operations since 1979.
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  If the House challenges me on them, and I shall be surprised if it does, I can tell it that that is a great deal more than was spent under the Labour Government.
  Mr. Smith: The Secretary of State was asked a precise question: how much of the much-quoted figure was investment in merchant shipbuilding yards? If he does not know the answer, will he please tell us?
  Mr. Channon: I have told the House the answer perfectly clearly. Incidentally, the total support for shipbuilding under the Labour Government was £130 million. [Interruption.] Members may well laugh. It is because they feel guilty. We have invested 10 times that sum and more.
  As I have told the House, during the past seven years support for BS has been nearly £1·5 billion, which is 10 times as much as in the past. Anyone who says that that is neglect is completely misreading the position. I am determined to support BS.
  Mr. Bob Clay: Will the Minister give way?
  Mr. Channon: No, I must continue.
  We are prepared to spend a great deal of money supporting BS, and we are keen to support the business.
  Mr. Tony Marlow: The taxpayers are.
  Mr. Channon: Indeed, the taxpayers are. We are keen to inspire the confidence of owners in the industry's ability to compete, build and deliver on time. The House knows how vulnerable confidence in a business can be in these circumstances. It will not help if hon. Members in any part of the House—I make no allegation of this—talk down the industry at present. [Interruption.] The House has a clear choice this evening. I say that the British merchant shipbuilding industry will survive, and I hope that no hon. Member will challenge that. I believe that the orders on which BS depends can be won.
  The Opposition have asked for a task force. My hon. Friends the Ministers at the Department of Trade and Industry and, indeed, all Ministers, including myself, will miss no opportunity to support BS in its efforts to secure the orders that it needs. That is the right approach. The Opposition talk about a maritime strategy. As the House well knows, the problem is that there is massive over-capacity in shipping world wide. There are many cheap and modern secondhand ships available at all-too-attractive prices to meet most needs. General investment incentives to British shipowners do not seem to be the answer to the problem. Making ships ever cheaper risks exacerbating the difficulties in the shipping market, which can only delay the upturn in shipbuilding itself.
  In these difficult circumstances, I believe that no sensible alternative could have been devised. This is widely appreciated in informed circles outside the House, and I suspect that it is widely understood inside the House, whatever hon. Members may say. I ask the House to support the Motion.
  7.38 pm
  Mr. John Smith: I beg to move. to leave out from "House" to the end of the Question and to add instead thereof:
  "deplores the crisis facing the British merchant shipbuilding industry and the closures and redundancies caused by Government neglect and indifference; notes with dismay the

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  disastrous contraction in the British merchant fleet since 1979 with its consequent adverse effect on shipbuilding; believes that an island nation requires a strong shipbuilding industry for its trade and defence; and calls upon the Government as a matter of urgency to establish a task force to secure sufficient public and private sector orders at home and abroad to maintain as a minimum the existing capacity and workforce of the industry.".
  Few people would have thought it possible that after recent announcements a Secretary of State for Trade and Industry could make a speech in the House which did not mention even one of the three yards which is scheduled for closure. I hope that it was, perhaps, a sense of shame which held him back from reminding us that Smith's Dock, the Ferguson-Ailsa yard at Troon and Clark Kincaid at Wallsend must close completely. It is incredible that they were not even touched on in his speech.
  Let me remind the Secretary of State of the facts of merchant shipbuilding. When the Government came to power in 1979, 30,000 people were employed in merchant shipbuilding—few enough. The number declined, until, prior to the present announcements only 10,000 were working in merchant shipbuilding. As a result of these announcements, the work force will be cut to 6,500. In one naval yard, Vickers at Barrow, far more people are employed than in the whole of the British merchant shipbuilding industry, so shrunk has it become.
  The Secretary of State keeps telling us about new measures in the wake of shipbuilding closures. I remind him that some of the areas that will be affected by these announcements already have the British Steel Corporation (Enterprises) Ltd, the NCB (Enterprise) Ltd. and the recently announced British Rail (Enterprise) Ltd. Now they will have the British Shipbuilders Enterprise Ltd. If the Government would give half the attention that they give to such schemes to saving jobs in existing industries, they would not have to bother running around creating enterprise schemes as a result of every closure that flows from their policies.
  I shall try to speak briefly, because many hon. Members representing British merchant shipbuilding areas will want to catch your eye, Mr. Speaker. The point of the debate is that the Government must reach a clear political determination that they will maintain a merchant shipbuilding industry. I did not discern any sense of purpose or dynamism from the Secretary of State's approach to this matter. He was rather laid back and said that it was sad that orders had declined, but he was not sure whether many more were coming, although he would do what he could. He added that he hoped that the industry would survive and that Labour Members would not cause a loss of confidence in the industry.
  The Government should show some confidence in the industry. It was their folly, in splitting off the naval yards from the merchant yards, that put the latter at the heart of this crisis. The former chairman, Sir Robert Atkinson, and not just hon. Members, described that as a national disaster. The Secretary of State referred to the naval shipbuilding yards. I do not know what message he was seeking to give us, but he knows quite well that the type 23 frigates and possibly the single-role minehunters could be put back into the ordering programme.
  I am not sure what the right hon. Gentleman meant when he said that these orders were coming forward. Does he mean that the ordering time has been brought forward? "Coming forward" is an ambiguous phrase. I hope that he
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  is not misleading us, because the naval yards are deeply concerned about the timing of the programme. The Secretary of State should know from the defence review in the White Paper that, because of the cost of Trident, all the rest of the naval ordering programme is put in difficulty. It is likely that there will be substantial delays and perhaps workers will be laid off only to be brought back after some time, with a consequent need for further training, together with the disruption to their lives in the meantime.
  At the same time as the crisis in the shipbuilding industry there is that in merchant shipping. I remind the House of the numbers of ships that were British owned and registered in 1979 —1,194. Now, in 1986, there are 617. Half the ships in the British Merchant Navy have disappeared since 1979. The figure is paralleled in the number of million tonnes deadweight. There were 36·6 million in 1979, but it is now down to less than half that figure, at 15·5 million tonnes. We have lost half our merchant shipping fleet, so it is no surprise that we have a crisis in the merchant shipbuilding industry.
  To lose half our merchant fleet and to put at risk the very existence of merchant shipbuilding is a folly in an industrial trading nation. The Government must resolve to do something about it, and then take action.
  The action proposed in our amendment, which was put forcefully to the Secretary of State by Labour Members earlier this week, is that we should establish a task force. It should incorporate all the relevant Departments —Trade and Industry, Defence, Transport and Overseas Development. If the Prime Minister would say that it was the Government's priority that this work should be done, the task force might produce some action to get the necessary orders. The Secretary of State was interviewed on radio on Monday and asked about this idea, as to have such a task force would require a clear aim. That is true, but the Government do not have a clear aim. They should find one.
  A task force should tackle three urgent priorities. The first is the bringing forward of public sector orders. The Secretary of State raises his hands and says that public sector orders are not there, but if they were there they would solve the problem. We know that it was this negligent Government that let the Trinity House lightship order go abroad and be built in a foreign yard. It was this negligent Government that allowed the Pacific nuclear carriers, the majority shareholder in which is a publicly owned industry—British Nuclear Fuels Ltd. —to go to Japan, which had only a minority interest in the company. These are two orders that should have gone from the public sector to help British shipbuilding yards.
  There is no energy, action or initiative in the Government in seeking out public sector orders, for say, survey ships, fishery protection vessels and fleet auxiliary vessels. An imaginative Government could have brought forward orders for these ships, even though they might not be needed at the end of this year, the middle of next year or even the year after that. They could be used to meet the crisis in British merchant shipbuilding.
  Secondly, the Government should improve the packages of support. The Secretary of State says that it is difficult to compare the packages of support as between one country and another. That makes it easier for the Government to claim that they are meeting the international average. Our industry is fighting for its survival, and the Government should have the best

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  packages of support in a fiercely competitive world. It is unthinkable that British Shipbuilders should go in to bat for the Chinese shallow draught containers or the Cuban refrigerated vessels and, because of a slight difference in loan or credit provision, lose these substantial orders, with the result that even more shipyards go out of business. The Government should resolve, whatever the international competition, to beat it in terms of support for loans and credits.
  If I heard the Secretary of State say something like that at the Dispatch Box, I would begin to have some confidence in the Government's handling of the industry. If he wants to see confidence return to the British shipbuilding industry, let him do something about it. Let him make a statement such as that, which would give confidence not only in the industry but in those who place the orders.
  Thirdly, the Government must urgently examine ways of bringing forward orders from British shipowners to be placed in British shipyards. The Government know, because they have been told by British shipowners, of the effect on the industry of some of the changes in taxation. The point has been made clear time after time, and occasionally Conservative Members have reminded the Government about this. Time is urgent and the Government should examine ways in which extensions can be given and orders brought forward to be placed in British yards. Unfortunately, in the past, too few orders have gone to British yards, but this is a crisis that should be met with an adequate response.
  Today, workers have come from all over the merchant shipbuilding industry to lobby Members of Parliament. They have come from Devon. the Clyde, Teesside and Wearside. I have had the pleasure of meeting many of them today and I knew many of them before. To look at the faces of these people, whose lives and families are dependent on there being a merchant shipbuilding industry in this country, is, for me at least, a humbling experience. To know that generations of crafts, skills and training and dedication are represented by families whose lives are dependent on the merchant shipbuilding industry is also humbling. It is for their sake that we ask the Government to take urgent action.
  Our case goes well beyond what some might call, although I would not, the narrow interest of those who live in our merchant shipbuilding communities and who have faced so much travail in recent years. The whole of the nation will be diminished significantly if we lose our merchant shipbuilding capacity, or if it is brought down so low that it cannot maintain the essential research, design and engineering capability and a dedicated work force and management.
  What is more, our strategic interests which, as an island nation, have always depended on a strong merchant fleet to protect our trading groups will be diminished. The case for urgent action by the Government is overwhelming. I am sorry to say that the Secretary of State's response was thoroughly inadequate. I call on Parliament and the people to make the Government change their mind.
  7.49 pm
  Sir Edward du Cann: Before I comment in detail on what the right hon. and learned Member for Monklands, East (Mr. Smith) said, perhaps I may make a general comment. This is the ninth and probably the last Parliament in which I shall serve as a Member of this
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  House. That is nothing in terms of service by comparison with the Father of the House, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), whom it is good to see this evening. However long one serves here, one reflects upon the history that one has seen. During my time in the House I have watched the decline of many manufacturing industries and the extinction of others—motor cycles, television, radio, optical instruments, motor cars and so on. Too many have declined and too many have gone. We choose many fancy words to describe the process—and rationalisation is one. To me, it has been a history of industrial disaster.
  Sometimes the circumstances have been bitter, as when the great Sheffield company producing engineering steels, of which I was chairman for a time, was smashed into oblivion by unfair competition from its British state-subsidised competitor. That was unforgivable. Today a parallel exists with British shipbuilders fighting off unfair foreign competition. Future generations will never forgive us if we do not say that this process of attrition in British manufacturing industry has gone far enough. It is time to cry halt.
  Perhaps some problems for many of Britain's industries were inevitable in the highly competitive world market. Perhaps there were too many complacent managements. Perhaps the entrepreneur and manager have not had and still do not have a sufficiently honoured place in society. Socialism has not helped here, nor for that matter has our education system. Perhaps the Conservative party has not been constructive enough in outflanking a hitherto recalcitrant trade union leadership by advancing ideas of industrial co-partnership—perhaps many things, but all that lies in the past.
  British shipyard workers have been steadily putting their house in order and becoming more competitive. There have been huge advances in productivity, which is up 15 per cent. in the last two years. The absurdities of demarcation are largely a thing of the past. Nowadays there is almost interchangeability of crafts. As the right hon. and learned Member for Monklands, East said. these fine, skilled men who work in the shipyards deserve our support. Once their skills are lost, they will be lost for ever.
  I am sure that the House appreciated the assurances and the obvious good will of my right hon. Friend the Secretary of State. What was surprising—I put it no higher than that—was how little he could say about how shipbuilding might be helped. What depressed me in recent exchanges in the House, when my right hon. Friend the Secretary of State was obliged to make his announcement last Wednesday —he is not responsible for the position in the shipyards, but he has to account for it—when the Prime Minister answered my question last Thursday, and even more when I listened to the shipyard workers from Middlesbrough and Wallsend speaking on the radio, was the mood of apparent fatalism. I challenge that. Indeed, I repudiate it. We can mitigate the current trends and perhaps arrest or even reverse them. We must make the attempt.
  If I have a quarrel with the Government—in general, I am a strong supporter of the Government's economic policy, not least the medium-term financial strategy, arid I applaud the successes and realism that it has brought — it is because I see some of my senior colleagues failing to offer a clear perception of what strategy we should adopt in respect of Britain's maritime affairs. The

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  Government are failing to offer constructive overall support to our maritime industries, and failing to set an example of determination to conquer their problems. God knows, the problems are large, but the Government could attempt to conquer them and to project what our nation so urgently longs for—a sympathetic leadership.
  It is our duty to give our people hope. What is to be done? We all know the causes of the problem. My right hon. Friend the Secretary of State described them succinctly and accurately. World trade has increased eight times since the end of the war. The world's trading fleet is twice the size needed to carry it. Too many ships are chasing too few cargoes. There is no disagreement about the analysis of the problem.
  The right hon. and learned Member for Monklands, East spelt out the appalling decline in the British merchant fleet, which in 1965 was the largest in the world. I wish to complete the scenario that he was painting as he did not project the figures ahead. If the decline continues at the present rate, in 10 years' time there will be only 200 to 300 ships on the British register. One distant water trawling fleet has already been decimated. Fewer than 50 per cent. of the offshore supply vessels servicing British rigs are British.
  I can put in a sentence what we should be advocating. More orders for British ships to be built in British yards will not be obtained until ship owning in Britain becomes more profitable. The first thing that we must do is to make ship owning in Britain profitable.
  A vast range of marine industries are providing employment and earning wealth for our nation. They include shipbuilding, ship repairing, finance, insurance, ship broking, chartering, marine engineering, electronics and a host of others. Those industries depend for a large part of their prosperity on a thriving and substantial British merchant fleet. The premier requirement to achieve full export potential in any industry is, and always has been, a strong home base. That we could and must provide.
  Responsibility for maritime affairs spans a dozen Departments of state. Here I part company with the Opposition amendment. The Departments responsible for maritime affairs span transport, energy, agriculture and fisheries, defence, the Foreign Office, trade and industry and even education. Nations such as Japan, France and others co-ordinate their approach to maritime affairs, and so should we. Why is this not done?
  The Government should not create a task force. That may be a step in the right direction, but it would be better if one Minister of Cabinet rank had supreme responsibility for maritime affairs. Working through the Cabinet Committee system there would be three main areas for his effort. The Father of the House took a step in this direction at the end of his premiership. I am sorry that it was not followed up.
  The first of the three main areas of the Cabinet Minister's efforts would be domestic—to bring together and co-ordinate the maritime research effort. That is vital, because the new ships which may be sold in the future will be sold only if they are the most modern. The Minister could ensure a benevolent fiscal regime for shipowners. In 1984, it was sheer folly to remove the only fiscal advantage existing for shipowners in Britain. Why not give incentives to British owners who place orders in British shipyards?
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  If it is true that well over 95 per cent. of all our trade goes by sea, and if it is true, as alas it is, that 75 per cent. of our exports are transported in foreign-owned ships, we face an emergency. The problem is not only economic. It applies to the defence aspects of the matter. So emergency measures are necessary. Let us place advance orders. Let us ensure that our credit facilities, about which my right hon. Friend the Secretary of State spoke, are not merely available on a scale to match competitors, but are better than those of our competitors. Why should we not go better?
  As the right hon. and learned Member for Monklands, East said, it is a disgrace that we should allow orders to go to foreign yards on the instructions of Ministers.
  If we do not take action, ultimately we shall have no yards at all. Much taxpayers' money will be lost, compared with the theoretical savings, comparatively speaking, of a few pounds which we might have gained in placing the Trinity House order in Korea rather than in the United Kingdom. Men of the world know very well that sometimes people must invest a little more to protect what they have already risked.
  It should be the duty of the senior Minister to get the United Kingdom a fair deal in Europe. My hon. Friend the Member for Eastleigh (Sir D. Price) has spoken many times in the House with prescience and good sense about the way in which cabotage arrangements in Europe are wholly unsatisfactory from the point of view of the United Kingdom. That is a scandal which must be ended promptly. The Minister should also see that substandard ships are kept out of European harbours. Why should we have to compete against those who do not put the same premium on safety as we do in Europe?
  The House has already debated the transport papers which were prepared by the European Commission. I do not think that we need repeat that debate. I thought that the papers were weak and inward looking. However, they were a start. Strong European Community policy is crucial. What is the point of belonging to the Community if we do not use the powers that that alliance of nations should confer? After all, the European Community does 25 per cent. of the world's trade. It ships from its ports more than twice the volume that is shipped from the ports of the United States and more than three times that of Japan. We have great clout in the Community. That is supposed to be the great advantage of being a member. However, we do not use that strength anything like as constructively in international affairs as we might.
  There is another area where I would wish to see Britain taking a stronger lead in the world. In the 1950s, Britain was the largest mechant shipbuilder in the world. Since 1961, Japan has dominated the world's shipbuilding industry. Japan built over half the world's ships in 1984–85. In 1985, yards in the far east—Japan, Korea and other countries—accounted for 70 per cent. of the world's shipbuilding. Europe accounted for only 16 per cent., and the United Kingdom for less than 1 per cent.
  Shipyards in the far east have built and are building ships without regard for the genuine needs of world shipping. They are the real villains of the piece. This folly must be brought to an end, and promptly. If it is not, our shipbuilding industry is doomed. That is an unacceptable prospect. However, it is not inevitable. We must take the lead with Europe and the United States to rationalise the world's shipbuilding industry and to increase the rate of scrapping, by legal means or by giving financial

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  incentives. Speculative shipbuilding must be penalised. We must be ready to retaliate against those nations which do not co-operate. If the Japanese or the Koreans will not co-operate, let us stop buying their motor cars, radios and televisions.
  Those are long-term aims. Until the supply of ships available to trade is brought back into balance with the volume of cargoes to be carried and there is equality of opportunity, shipowning will never be fully profitable. We should start work on those aims today. I long to hear my right hon. Friend say that that is precisely what we will do.
  I am not prepared to accept— I am sure that our Government and country are not prepared to accept—as an immutable law of the free market the crisis that affects our maritime industries, including shipbuilding. If present trends continue, our merchant fleet will decline to almost nothing. Our shipbuilding industry, except for some highly specialised functions, will disappear, and so probably will shipbuilding throughout the whole of Europe. As the right hon. and learned Member for Monklands, East said—I agree wholeheartedly with him — a substantial and prosperous merchant fleet is indispensable, strategically and economically, to the United Kingdom and the European Community. There has been too much hand wringing and too little determination and imagination in policy regarding the maritime industries. The time for action is now.
  8.5 pm
  Mr. James Callaghan: The right hon. Member for Taunton (Sir E. du Cann) said that he could not vote with the Opposition tonight because we would lose in any case. I hope that hon. Members who are not present will forgive the right hon. Gentleman if he continues to make speeches like the one that he has just made. Over the past few years he has consistently made every effort, with considerable criticism, to draw the attention of the Government to the position into which we have fallen.
  I know that my hon. Friends who represent shipbuilding constituencies are anxious to leap at the Secretary of State for Trade and Industry. I shall not stand in the way of them getting at their prey. However, I wish to say a few words. I hope that my hon. Friends will forgive me, and I promise that I shall not speak for long.
  The only conclusion that I could draw from the Minister's speech was that he has given up the ghost. The Government's policy—I do not know whether that is the right way to describe it — is limp, lethargic and whingeing. The air of defeatism that pervades the Government Front Bench over shipbuilding shows that it has no conception of the nature of the problem and the magnitude of the disaster that will befall this country.
  The average life of a merchant ship is 20 years. The world's fleet turns over, on average, every 20 years. Therefore, the majority of the ships that will be carrying the trade of the world at the beginning of the 21st century, in 14 years' time, have not been built. They are still to be built. We do not know what their ownership will be, we do not know who will finance them, we do not know in which yards they will be built, and we do not know under which flag they will sail. That presents the Government with an opportunity. There is no reason for defeatism.
  Why should we not have a substantial slice of building those unbuilt ships? I put the proposition the other way round. We must have a substantial slice of those ships.
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  Millions of tonnes will be built in the next 20 years. If only I could inject into the Minister some energy, some atmosphere of understanding of what is required, perhaps we could have more hope, as the right hon. Member for Taunton said, about the future.
  It is claimed that 50 per cent. of the running costs of any ship are absorbed by capital charges. If that is the case, here is an obvious means of helping shipbuilding. Yet, as the right hon. Gentleman and my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), pointed out, the Chancellor took away the 100 per cent. depreciation allowance. That measure was especially favourable to British shipowners because they were allowed to take it in any year. The measure was deliberately destroyed in 1984. If the two cases that I have given are correct, surely there is an opportunity for this country to play a full part again?
  What should we do in the meantime? People have rubbished my proposal about returning to a scrap-and-build programme, similar to that of 1935. I shall illustrate what happened at that time. The industry was in a similar position. There was a tremendous surplus of ships. Ships were laid up and rusting in ports. I remember that, and some of my hon. Friends and hon. Members will have read about it. Shipowners were given a capital subsidy, or a loan at a cheap interest rate, for a new ship provided that they destroyed two tonnes for every tonne they built. That was the scheme. It resulted in many old ships being destroyed and replaced with a new, young fleet, and we reaped a considerable benefit from it. In fact, 186,000 gross tonnes were built under that scheme. Does the Secretary of State know the gross tonnage ordered last year from British yards? It was 8,600 tonnes, but under the much criticised scrap-and-build scheme, 186,000 tonnes were ordered.
  Of course the scrap-and-build scheme is not a remedy, but is it not a palliative? Would not such a proposition be put forward by any active Government to lessen the magnitude of the disaster that will overtake us? I do not know why the proposal has been rubbished. The shipbuilding industry may offer different proposals. Any assistant principal in the Department of Trade and Industry could produce, within a couple of hours, a dozen different proposals by which the Government could subsidise and offer incentives to shipowners and the shipbuilding industry. There has been a total failure to use any imagination in dealing with the problem.
  The Secretary of State tells us that the Navy has brought forward orders, but what about the orders that it withdrew? The Minister is a pretty fair controversialist, but I challenge him to answer this question: was not the invitation to re-tender for the three type 23s merely a delaying device to ensure that the Navy did not overrun its budget in the financial year? We know that it was. It was done deliberately for that purpose. When that happens, how can we believe that the Government are in earnest or that they are trying to match the size of the problem with what is required?
  I should like to re-emphasise the comments of my right hon. and learned Friend the Member for Monklands. East on the Navy. It is not just a matter of asking the shipbuilders to resubmit tenders. The Navy could expand the hydrographic service and build a guard ship for Gibraltar. Coastal protection is inadequate. There could be a new class of frigate. We could re-invent the corvette, which did such wonderful service 45 years ago. They were

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  cheap and there were many of them. What is more, the new ships would require crews. The Navy would be assured of manpower. On the naval and on the merchant side, plenty could be done, and one job in the shipyards supports three outside.
  Why do the Government seem to be so myopic about the present position? I do not want to disturb those Conservative Members who may support some of my comments, but I must ask whether the trouble is the fact that the Government are relying on market forces. This seems to shine through everything that the Secretary of State says, such as, "It is a great shame the world market is too big. The ships are there and there is nothing we can do about it."
  I urge those Conservative Members who are listening to me to wake up the Government, at least on this issue if not on others. The Government must wake up to the fact that if market forces are allowed to operate unchecked —I recognise that some help has been given—they will destroy our merchant shipping fleet and, in due course, our shipping industry. The House is beginning to say to the Government, "We have had enough. We shall not stand for your supine attitude to this problem. You must get off your backside and do something about it." Action could be taken, if only the Government would take it.
  If there is one mistake that the Government make in this and other matters, it is that they are trying to present a false choice between running down our manufacturing industry and applying high technology. I beg Ministers to believe that that is a false choice. High technology is necessary, but it will be successful only if it is built on the back of a successful manufacturing industry. High technology does not replace manufacturing industry—it is designed to bring manufacturing industry into the 21st century. It should be applied to shipbuilding.
  The Government should knock together the heads of the shipowners and the shipbuilding industry. The shipowners are no angels. They always want to have their cake and eat it at the same time. I agree with the right hon. Member for Taunton that there must be profits in that industry but the shipowners must contribute something.
  I agree with the idea of my right hon. and learned Friend the Member for Monklands, East for an integrated task force to bring shipowners and the industry together. Conditions should be established under which both can profit satisfactorily.
  If the House will take the Government by the scruff of the neck, we will begin to sound the tocsin and make them recognise the value to this country of a shipbuilding industry, and also recognise that the shipping industry and the Royal Navy are vital to our future prosperity and welfare.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. I am grateful to the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) for his brevity. I hope that his example will be followed, because many hon. Members are desperately anxious to address the House.
  8.15 pm
  Mr. Piers Merchant: My concern first and last in this matter is for the ordinary shipyard worker and his family. He is a tradesman with
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  pride in his work and skill in his fingertips and his expertise has produced the finest ships that sail the seven seas. The quality of his work is unquestioned, his breadth of skill undiminished and the depth of his pride unfathomable. Anyone who has seen at close quarters the launch of a locally built ship, a destroyer or merchantman, cannot escape sharing in that pride.
  Therefore, I want as much as any hon. Member to see the yards humming with activity, new ships being built, British shipowners ordering new British ships from British yards because they are the best and dozens of foreign orders being placed because of our worthy reputation and competitive prices. That has been done in the past, and there is no reason why it cannot be done in the future.
  It would be the cruellest of delusions to pretend that that can happen at this time, if the facts clearly speak otherwise. It is right that Government policy should be directed fundamentally to the interest of the people in the yards, and that interest requires, first, that people are told the truth. It is the ultimate deception to keep thousands of men frozen in employment in an industry on false promises of future expectations. It is an insult to their skills to expect them to continue to build ships that no one wants at prices that no one is prepared to pay. It would be fatally demoralising to build for stocks when we all know the extent of world over-capacity. To perpetrate such a deception would be a final betrayal, and not an act of kindness, for the men in those yards. Better to know the truth and face the unpalatable today than to live on illusions now and face a far worse collapse when it inevitably comes.
  The best interest of the shipyard worker surely lies in a healthy economy. A healthy economy is a flexible one which can adapt swiftly and effectively to changing world conditions, demand and markets. However sentimental it may be, it does no good to preserve merely for the sake of preservation or artificially to delay change knowing that it must come sooner or later.
  But to say that is not to preach against state aid. I am not against money being made available for a period to tide over a cycle in demand. That has been done, and rightly so, since before 1979, with £1·5 billion being made available, as my right hon. Friend the Secretary of State said. However, if there is no prospect of recovery in the foreseeable future, one cannot expect profitable industry for —it is from there that the money comes—elsewhere in Britain to jeopardise its future and employment prospects by carrying for ever the enormous and growing burden of continuing subsidies in another sector.
  That there is no prospect of a clear upswing is evident from example after example. The world surplus in shipping vessels which has been quoted in the House today —and it is massive in bulk carriers, for example—is proof enough. So is the parlous state of the order book, not to mention the heavy over-capacity in production facilities and the difficulty of competing with the cheap labour options of Third world countries.
  The reaction of other countries to their shipbuilding industries is also indicative. Catastrophic cutbacks in shipyard employment have been made elsewhere. In Japan, for example, Hitachi Zosen is to reduce its work force by a third—5,000—by March 1987. I am tempted to say that, if the Japanese are having to do that, what hope is there for other countries? The Japanese shipbuilding industry as a whole expects to cut back by 18,000 jobs. In Korea, redundancies and restructuring are on the cards.

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  It is interesting to note that Korea, which to a large extent was responsible for stealing the orders that might otherwise have come to British yards, is talking, because its economy is so flexible, of restructuring its shipbuilding industry and moving its capital and its work force into other sectors of heavy industry.
  Mr. Stuart Bell (Middlesborough): The hon. Gentleman referred to the cutback in numbers in the Japanese and South Korean shipbuilding industries. However, does he accept that Japan and South Korea have captured 65 per cent. of the world's shipbuilding market and that our share of the world market is less than 1 per cent.? Therefore, is not the cutback in our work force more significant than the cutback in South Korea and Japan?
  Mr. Merchant: I agree with the hon. Gentleman, but what is most significant of all is the position in which we find ourselves today because of our failure in the late 1950s and in the 1960s and 1970s to grab and to maintain our share of what was then a very large market. We have allowed the Japanese and the South Koreans to establish that leadership. We are now paying the price for our dereliction of duty.
  In Spain, 17,000 jobs are likely to be lost in the near future. In the United States, 50,000 jobs have been lost in the last few years. I make no mention of the tens of thousands of other jobs that have been lost throughout Europe. I quote those figures to show that this is not just a British problem. It is a severe, world-wide problem. This is not the time to talk about throwing further huge sums of money into the industry when it is clear that other countries have come to the conclusion that the only way to deal with the crisis is by retrenchment.
  It is also absurd and wrong to pretend that the situation will be otherwise in the near future, or to mislead people by pretending that everything will suddenly change for the better. The reality has to be faced by the Government and by the industry, just as the previous Labour Government faced the beginning of this crisis in the 1970s when, as has already been mentioned, it oversaw the loss of 20,000 jobs in the industry.
  It is also pretty futile to try to cast blame on the Government for the present crisis. Much of the change of fortune in British yards has been due to circumstances beyond our control: to Third world labour costs, massive new investment abroad and tough competition which previously did not exist. In the 1950s, many of these other yards did not exist, and could not therefore provide any competition.
  However, we can still learn two lessons. First, much of the management in our yards was antiquated, slow to invest, bad at marketing and offhand to the point of being Victorian in its industrial relations. Secondly, the unions in the yards were equally backward-looking and inflexible, unwilling to change their work practices and imposing senseless demarcation lines. They were suspicious about promoting a new partnership in the industry, and in dispute after dispute they were aggressive to the point of destruction.
  I am glad that in the past few years—but it is only in the past few years — much of this has dramatically improved. However, the situation has not been entirely remedied, and it is wise, therefore, to bear that in mind. A recent study that I carried out in Tyne and Wear revealed that in the past 30 months there have been 14 recorded
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  disputes that led to strikes, walk-outs or overtime bans and, therefore, to the loss of orders. It goes without saying that partnership rather than confrontation in the 1960s. and 1970s would have led to far fewer redundancies, greater competitiveness and healthier yards in the 1980s. It is too late to salvage many of the jobs that have been lost, but it is not too late to learn and to preserve something for the future. I believe that that is what this Government are doing.
  Mr. Bob Clay: Will the hon. Gentleman explain how it is possible that disputes have led to the loss of orders when, according to the Secretary of State, there are no orders to be had?
  Mr. Merchant: I was referring to the past when many orders were available. Surely the hon. Gentleman appreciates that, if a yard goes on strike and damages its reputation, those who place orders are unlikely to place them with that yard. Furthermore, if by destructive disputes a yard becomes uncompetitive in cash terms, or in terms of meeting deadlines, foreign buyers will not place orders with those yards. I was pointing to the past when there were many such examples.
  I began by saying that, first and last, we should consider the plight of the shipyard worker. He is now facing the imminent prospect of life without work, income or prospects after possibly years of stable and productive employment. Therefore, it is right that we should do all that we can to find new work and alternative prospects for him.
  I welcome the Government's initiative in making available a special aid package of about £10 million to help to cater for this problem. It has been far too easily brushed aside as insignificant. This package is generous and it will achieve a great deal. Palliative action is necessary, and much of the funding will be for that. But there is more, too. A good deal of this funding will go towards providing new work, new jobs and new enterprise.
  I repeat my earlier request, which was made at the time of the statement. I ask my right hon. Friend to look very carefully at the application of this funding in order to ensure that it is used most effectively. I repeat also my request that he should consider giving the overall responsibility of emergency economic aid and relief in these areas to a nominated Minister. It is important for the Government to demonstrate their real interest in the problem by such an appointment. It would also enable the Government to effect easily and constructively a coordination of roles in the north-east, for example. At present, that is sadly absent.
  There is more that can be done. I do not ask for a heavy increase in regional aid or subsidy. However, I think that there is a case for the selective concentration of aid and incentives in specific areas that have been hit by such industrial restructuring. The rich farming areas of Northumberland do not need special status, but the narrow strip of industrial dereliction along the banks of the Tyne, for example, needs help.
  I think that my right hon. Friend could help by directing his policy in the north-east less to the region as a whole, in so far as it has a clear definition in any case—and different people define it differently—and more to the specific problem areas that are clearly identifiable. An enhanced package of enterprise zone incentives and reliefs, coupled with direct investment aid, marketing, and

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  Government schemes, could transform an area relatively swiftly which otherwise will be tainted for years by an ill wind which has made an industry vanish almost as fatally as the Marie Celeste.
  8.28 pm
  Mr. James Tinn: I am tempted to refer to what has already been said by a number of right hon. and hon. Members, particularly Conservative Members, who are concerned about the future of two great industries. However, in deference to those hon. Members who have particular constituency responsibilities, I shall refrain from doing so.
  Those of us who went to see the Secretary of State last Monday were grateful to him for his courtesy, though not for his message. On many occasions in the past, together with other anxious colleagues, I have been to that Department on similar errands, but I have to say, without any touch of exaggeration, that I can remember no time when we met with a more negative response.
  I pointed yet again, as I had done the previous Wednesday, to the remarkable record of survival of the Smith's Dock on Teesside and to the fact that right up to the time of the closure announcement an energetic and enterprising management was chasing the few orders that were available. I believe that the managing director was in Cuba at the time. So often in the past, with remarkably astonishing results, the yard has fought back from near disaster to survival. Only last November the then chairman of British Shipbuilders wrote to me accepting and agreeing with similar words of praise to mine for the achievement of everyone at the yard. In that letter the only criticism that he had was of one or two loose words that had got into the press, hinting that there might be some problems for the yard in future, which he said was nonsense.
  Therefore, it seemed reasonable to ask the Minister whether such a yard would be allowed to take up any orders that it might be able to obtain even at this late stage and even with this notice of execution hanging over it. Three times I asked the Minister, because I did not want in any way to misunderstand or misquote him, and each time he said that there was no hope, or words to that effect. I am sorry to say that that was confirmed to me last night by the chairman of British Shipbuilders. He told me that if, against the odds, the yard was able yet again to obtain orders to enable it to carry on, they would be passed to other yards — presumably assuming that the customer would accept that—and the execution would proceed as planned. Smith's Dock, the largest of the yards to close, is the soft option chosen by the Government and by British Shipbuilders.
  Nevertheless, I tried to get some comfort for the future, even if there is none to be had for the present. Bearing in mind the cyclical nature of the shipbuilding industry, which means that today's over-capacity is likely to be tomorrow's much-needed and highly profitable plant, I asked the Secretary of State about the fate of the equipment in the yards after they had been closed. I asked whether it would be mothballed. It seemed that the one positive moment in our talks came when he assured me—I am sure in good faith—that it would be kept available on a care and maintenance basis. That, at least, held out a glimmer of hope for the men of Smith's Dock and Troon and for their youngsters who hoped to follow them. It was
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  at least a crumb of comfort, but, sadly, even that disappeared when I talked to the chairman of British Shipbuilders last night.
  There is no prospect of the yard being maintained. The most useful and attractive pieces of equipment will be transferred to other yards and the rest will be sold off—grassed over like the Consett iron works where I used to work many years ago; grassed over like a graveyard without gravestones. The last lingering hope of a shipbuilding presence on the Tees, the country's third largest port, will disappear. I cannot help wondering why the Minister was not told, because I am sure that he did not know when he spoke to me the day before.
  The early reactions on Teeside were excellently expressed in an editorial in our local Evening Gazette yesterday. First, it referred to my anger and warning earlier in the week to the Minister of possible consequences in terms of civil unrest on Teeside. It pointed out, as I did, that compared with others, such as Liverpool and Belfast, which have had Government benefits heaped upon them whenever they have stepped violently out of line, Teeside's reputation for calm and constructive acceptance of industrial decline has invited only further body blows.
  The paper describes how Teessiders have learned to live with the contraction of their basic industries, even some of their post-war modern industries, and how, for instance, steel on Teesside is breaking records with output, productivity and quality. Meanwhile, displaced workers set up businesses and scour the world for work because there is none here at home. There are few construction or industrial sites in the middle east, for instance, without a sizeable contingent of Teessiders separated from homes and families.
  Yet, as yesterday's editorial went on to say, since the Government came to power, and almost with their first breath, one of their first actions was to cancel the Property Services Agency development in Middlesbrough. The editor said:
  "It has squeezed Teesside until the blood ran"—
  a justifiable figure of speech only, until now. The Minister's assurance that British Shipbuilders Enterprise Ltd. will be set up in Middlesbrough is little more than an offer to open up a branch of undertakers to help the bereaved.
  I understand that the Minister is to come to Teesside tomorrow and, instead of merely driving past the yard, as had been intended, he is to stop for half an hour. He will not stop at the yard itself, but at least he will meet one or two representatives. Half an hour for 1,400 men who have lost their jobs is perhaps some measure of his priorities in his busy day. A two-minutes silence might have been more apt.
  I make no apology for talking almost exclusively about my area. It is my responsibility. I am conscious of the number of other deeply worried hon. Members waiting to speak. However, the Government have a wider responsibility, and that is to listen to the House. They should listen to the voices on both sides, to their own supporters, such as the hon. Member for Eastleigh (Sir D. Price) and the right hon. Member for Taunton (Sir E. du Cann), as well as to my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan).
  Will the Minister listen to the British Maritime League, of which many of us are supporters? Will the Prime Minister recognise the interdependence of shipbuilding

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  and shipping and so reorganise areas of Government responsibility that our vital strategic needs as a maritime nation can be better protected than under the present system of fragmented responsibility between Departments? Above all, if the Government really cannot do anything to protect and redevelop those vital national interests, will the Prime Minister render just one last service, still well within her power, and go? The people of Teesside have had enough. The Minister said that he supports shipbuilding, presumably in the same way as a hearse supports the coffin on the way to the grave.
  8.37 pm
  Sir David Price: I am sure that the House listened to the hon. Member for Redcar (Mr. Tinn) with great interest and sympathy. He and other hon. Members who represent the north-east will know that I used to have a working connection with Teesside in the days when I played a more constructive role, helping to develop the sites at Wilton and Billingham. As the hon. Gentleman knows, I also had experience in the 1960s as a Minister at the Board of Trade and I can honestly say that we brought new industry to the north-east. Therefore, I listened to the hon. Gentleman with great affection.
  I want once again to place on record the fact that I have a constituency interest in shipbuilding and in shipping. I also have a personal interest. I should tell the House that the shipping companies with which I have a connection were the only British shipping companies, as far as I know, to take delivery of new ships from British yards last year. I want to place that on the record. Therefore, I am speaking about what I am doing.
  I think that the House knows that I have a deep interest in the future of the British maritime industries, as does my right hon. Friend the Member for Taunton (Sir E. du Cann) and the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan). I care about it passionately. I use the word "care". It is not just a matter of calculation but something that one feels deep down inside. I say that as someone who served in the Army rather than the Navy, so I picked up that feeling later.
  There is no doubt that the problem facing British merchant shipping stems in the first instance from the decline in the British merchant marine. When my right hon. Friend the Secretary of State made his statement on this subject I intervened to make that point. Indeed, I do not think that it is controversial. But my right hon. Friend is correct to say that it is the excess capacity in shipping and shipbuilding worldwide which is largely responsible for the crisis in British merchant shipbuilding.
  However, the degree of unfair competition involved is not sufficiently understood. That competition comes from Japan and Korea. During the past 10 years, Japan has never dropped below 46 per cent. of new deliveries of all world ships. Its yards produced 53 per cent. of the total world output in 1984–85. Together, the yards of Japan, Taiwan, South Korea and China accounted for almost 70 per cent. last year. By contrast, the whole of Europe produced only just over 16 per cent., and the United Kingdom produced less than one per cent.
  Many of the far eastern prices are lower than the cost of materials in Britain. One does not need to be a sophisticated lawyer or economist to know that that is dumping and unfair competition. It is obvious that shipbuilding cannot survive unless ships are built. But as a result of that far eastern competition, both the British and
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  the European industries are near to closure. People may ask whether that matters. The answer is that it does. in both the short and long term. We must retain a minimum shipbuilding capacity in Britain and in the other European countries. We can argue among ourselves as to what that minimum should be, but we must take action against Japanese dumping, and such action would he more effective if we took it in conjunction with our European colleagues. That would be in the national interest.
  In the European context, we sometimes criticise our officials for being purer than the pure. We say, "Let's play to French rules." In this instance, we should play to Japanese rules. They consist of going to great international forums, signing the most impeccable treaties of free trade, entertaining world leaders, burning joss sticks before the altar of Adam Smith and then proceeding to run a thoroughly mercantile policy. It is in our interest and in that of our European partners to take action against the Japanese. I come from a generation who do not view the Japanese with the total objectivity with which the younger generation may do. If it was witihin the rules of order, I would use a precise description of the Japanese which we soldiers used.
  It is essential that we in Europe take countervailing action against the Japanese and Koreans. Other measures might be useful, but that action would go to the guts of the whole thing. I invite hon. Members to join me and to take the consequences. Given Japan's trade policy and the way in which it treats our exports, I believe that we could easily take that risk. As my right hon. Friend the Member for Taunton and the right hon. Member for Cardiff, South and Penarth said, there are palliatives that are not as fundamental but that can and should be taken now. They are the classic measures of placing orders for Government vessels, warships and auxiliaries in home yards, facilitating orders for export, such as the five container ships projected for China, the matching of credit terms for legitimate orders, and the retaining of orders over which the Government have control in this country. However, I accept that the latter are limited.
  Last year, the Trinity House lightship went to South Korea— [HON. MEMBERS: "Shame.") Was that really necessary? I know that Trinity House did not want to place the order there, but it had no support from the Government. We could take those measures now, although they would not go to the guts of the problem, which is unfair competition from the far east. That must be dealt with.
  We have been talking about merchant shipping, but I must declare a constituency interest because of my shipyard of Vosper Thornycroft, which is dedicated to naval orders. I beg the Government not to put back the present naval ordering programme. We have a particular set of orders on the single-role minehunter. We have got the lead vessel, but if we do not get the follow-up orders, as agreed with the Royal Navy, we will be in trouble. Whatever the constraints on the Ministry of Defence's finances, I beg it not to cut back on the agreed ordering programme.
  We must retain our industrial capability. I speak as an industrial engineer and as one who will, tomorrow, have served the House for 31 years. I warn the House to beware of the Treasury argument. The Treasury does not change, regardless of who is in government. It argues that the

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  cheapest is best. At times I suspect that the yard that the Treasury sneakingly prefers is not the shipyard but the graveyard. That is a future which I reject.
  8.47 pm
  Mr. Bruce Millan: I am pleased to speak after the hon. Member for Eastleigh (Sir D. Price). Indeed, in shipping and shipbuilding debates I often speak after him. He has a keen interest in the industry and a commitment to the health of the shipping and shipbuilding industries. He is one of the few Conservative Members of whom that can be said—more is the pity. I agreed with everything that he said.
  The Minister gave the impression that the Japanese industry was in crisis. Some crisis! It has a total order book of 9·7 million tonnes. It has 4 million tonnes that it has not even started to build. The South Koreans have 4·7 million tonnes on the order book, and 2 million tonnes that they have not yet started to build. British Shipbuilders does not have a single ship in its order book that is not already being built. By spring next year, every one of them will be completed. Some of the yards that are being retained will run out of work long before then. That is how grave the crisis is.
  It is not just the Government's defeatism that depresses me, but the fact that we are going over familiar ground. Only three weeks ago we pointed out the impending crisis in the industry. On 28 April, we warned the Government what would happen because of the parlous state of British order books. A month or two ago the right hon. Member for Taunton (Sir E. du Cann) spoke in a debate on the European Commission's proposals for shipping, and attention was drawn to the fact that a lack of a maritime policy in this country was disastrous for economic, industrial and strategic reasons.
  The Government have not listened. We met the Secretary of State for Trade and Industry on Monday and he said that shipping policy was nothing to do with him. That is the problem. A Minister responsible for shipping did not believe in shipping. I wonder whether his successor will be any better. The Government have had no shipping or maritime policy and they have not tried to bring together the shipping and shipbuilding interests.
  As my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) said, British shipowners bear a responsibility for the present situation. They have been adept at producing schemes for financial assistance for shipping, but they have never been willing for those orders to be tied to British yards. Any assistance scheme for British shipping should be tied to ordering in British yards.
  Not a single Japanese ship ordered over the last 10 years or more has been built in other than a Japanese yard. We have not had that home base for the industry. I do not want to burden the House with statistics, but they demonstrate that the British shipping industry has the poorest record for home ordering in Europe. It does not compare with what has happened in Japan and a number of other countries.
  We want what happens in Japan to happen here. British shipping orders—there have been few recently—should, except in exceptional circumstances, be filled in British yards. That would give us a base for our shipbuilding industry. Ways of achieving that have been described repeatedly, but they have been ignored. The Minister said
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  the other day that scrap and build had been tried but had failed. That was an example of abysmal ignorance. The scheme was tried first in the 1930s. Only a year or two ago in shipbuilding debates did Ministers state that the scheme was worth pursuing in the Common Market. Protracted discussions took place within the Community on the scrap-and-build policy. Some of us urged that if the discussions could not be brought to a successful conclusion we should introduce the policy unilaterally. At that time the Government responded a little, but nothing happened. Today the policy is dismissed out of hand, as are the task force and public sector orders. All that we hear from the Minister is a catalogue of reasons why we should do nothing to help the shipbuilding industry in what could be a terminal crisis.
  Much could be done about public sector orders. The Ailsa yard at Troon is not clapped out. It is modern, and has had much money spent on it. It is small, but for its size it has excellent facilities and it has been the subject of much capital expenditure. It is faced with closure, but surely it is not impossible for it to gain public sector orders, if not others, so that it can be saved for the sake of the community and of the shipbuilding industry.
  The intervention fund policy until recently allocated money, but it was never spent because the restrictions were such that the orders could never be obtained. It looked good for all that money to be available, but it was never spent. The last figure was £25 million. The Government talk about £1·5 billion as if all that went into merchant shipbuilding, but it also involves naval yards and capital investment. In the last year £25 million has been spent in intervention fund assistance. There is flexibility now, but it has come too late.
  The Minister mentioned the aid and trade provision. One would have thought that that was an initiative which had been part of Government policy for years, but it was announced only in November 1985. The damage had already been done. Limited action by the Government always comes too late and it is always ineffective in dealing with the crisis. The crisis is far worse than it has ever been, even for an industry which has suffered cyclical trends, with boom periods and times of great difficulty.
  The orders are there to be won. Govan is an excellent yard with first-class facilities, excellent management and a work force which has co-operated in terms of delivery and industrial relations and which has done well in recent years. We are desperately anxious to obtain the order for the Chinese container ships. The order would go partly to Govan and partly to the north-east. We need an absolute Government commitment. We are talking not about a private enterprise company, but about a state-owned company supported by the Chinese Government. We are talking about a Government-to-Government negotiation. The Chinese will drive a hard bargain, but the order can be won. I hope that it will be won and that we shall have an absolute commitment from the Government to ensure that we get that order.
  The Govan yard is also tendering for the Brittany Ferries order from France. I know enough about the French Government to know that they will do everything possible to ensure that the order stays in France and does not come to Britain. A number of other yards outside Britain are also interested. We shall achieve that order only if the British Government make a commitment which is at least equal to the commitment that the French and Japanese Governments make to shipbuilding and other

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  industries. Almost every industrial country makes commitments to its basic industries. The idea of leaving everything to the free market and free competition and then we shall somehow survive is absurd.
  When the Government announcement was made last week they thought that the problem would go away; that it was a seven-day wonder and that no one would care. Ministers said on television that we must look to the future, and that the industry was clapped out and out of date. [Interruption.]
  It is no use the Secretary of State shaking his head because the Secretary of State who was supposed to be in charge of employment said that on television. I think that the Government believed that the problem would go away and that there would be no reaction, but the crisis has struck a chord in the public's mind. People are worried about our shipbuilding industry and about our future as a maritime nation.
  The General Assembly of the Church of Scotland, at its meeting in Edinburgh today, passed a resolution asking for a maritime policy. It was full of good sense. It demanded a response from the Government. Tonight we are demanding that response— before it is too late—to save the merchant shipbuilding industry.
  8.58 pm
  Mr. Neville Trotter: It was interesting while preparing for this debate to dig out from the archives the report on British shipbuilding by Booz-Allen which came out in 1972. I believe that it was the first document I perused when I first took an interest in the industry. The report refers, at a time before either the world recession or the emergence of the Korean shipyards, to the problems of increasing competition, over-capacity and the fact that Government support alone could not ensure a long-term market for our industry. As far as I can remember, Korea in fact was not mentioned at all in the report.
  When I first went there in 1975 the Koreans were just starting to build ships. They had not built any ships before 1974, and now that little country on the other side of the world has more capacity than the whole of Europe put together. They pay such low wage rates and work such long hours in those yards, and in the steelworks which supply the yards, that they have an advantage of about four to one in labour costs when compared with European yards. That is a formidable problem of competition for all the western European shipbuilding countries.
  When the Booz-Allen report was produced 14 years ago there was much criticism of the lack of efficiency and organisation in the British shipbuilding industry. Of course, it was well justified and well documented. I should, however, like to pay tribute tonight to the efficiency that we now see in the British yards.
  The right hon. Member for Glasgow, Govan (Mr. Millan) referred to the Govan shipyard. I remember my first visit to that yard not long after 1972, and I remember wondering whether James Onedin had just ordered his first steamboat there. The yard was very archaic in every way. Its equipment was that of the previous century. Govan is now a modern yard, and I pay tribute to what has been achieved there and at the other yards. I do not think that efficiency is any longer one of the problems facing us. To the credit of all those involved, we now have an efficient and modern shipbuilding industry.
  Why are we in the serious predicament that we are debating tonight? It is due not to a lack of efficiency but
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  firstly to the competition I have referred to, especially from Korea. The Koreans have a completely different type of life. There is no welfare state and no resulting overhead for their yards to carry. They work hours which are twice those worked in this country and pay half of what we would regard as reasonable.
  Another fundamental reason for the problem is the collapse in the demand for ships. Sir Adrian Swire, chairman of the International Chamber of Shipping, referred to this as being the worst depression ever seen in shipping—a full 10 years of constant bad news, with almost every sector
  "depressed and suffering from chronic oversupply of tonnage."
  He referred to the "short-lived new dawn" and "hopes of optimism" which had at times been current, but these hopes were always dashed. He wisely pointed out the effect and influence of the banks on the present ordering position with their massive loans to shipowners in recent years. The banks, he points out,
  "finally realised that they could not buy themselves out of trouble."
  Therefore, they have now cut off funds for new building. Banks around the world are owed enormous sums of money by shipowning companies that are in great difficulties.
  Sir Adrian drew the rather depressing conclusion that it was "frustrating, and profoundly sobering", that one must conclude that the over-tonnaging problem was intractable and
  "that the interests of governments, of shipbuilders, of shipowners and of banks, who collectively have a common interest in improving their economic well-being, are individually too divergent to develop any successful common initiative."
  That is the nub of the problem. How do we obtain the co-ordination that we need to tackle the problem when there are so many different interests involved? Shipowners and shipbuilders by no means necessarily have the same interests. In fact, their interests are often in conflict. The East is in conflict with the West and the countries of Europe are in conflict with one another. If there is one industry above all others which is international, t is the shipping industry and that makes it very difficult to deal with the problems we are discussing.
  I believe that there must be more international co-ordination in tackling the problem and the Common Market must be the first place where one logically looks for a start to be made. My hon. Friend the Member for Eastleigh (Sir D. Price), who speaks with such knowledge and wisdom on these matters, has already drawn our attention to the need for co-operation in dealing with the problem. I believe that I am right in saying that it is Britain's turn to preside at the Council of Ministers later this year. This will provide a great opportunity for us to take the initiative in dealing with this problem.
  When will the depression end? There are estimates that it will end by the 1990s and that we shall then see a significant upturn in orders although there have been false dawns and false hopes before. At the moment the freight rates in the general tramp market are less that they were 10 years ago. They have been as much as three and a half times as high as they are today. There are ships on the oceans of the world where even the operating costs are not covered by the income they are earning. As we have heard tonight, there are vast numbers of ships laid up around the world and they equate to several years' capacity of the world's shipyards.

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  I have numerous cuttings pointing out the international nature of the problem. I shall not delay other speakers by reading from too many. However, there are headlines, such as
  "Dutch yard in bankruptcy"
  and
  "10,000 jobs at risk in West German yards"
  They also refer to how the Swedish shipyards lost their battle for survival. I visited the Swedish industry in 1974. At that time it was bigger than any other in the world, except Japan. Yet the Swedish industry has now disappeared and all the yards have closed. There is not one major shipyard left in Sweden. I could quote numerous other examples from other shipbuilding countries.
  It is no comfort for the people on Teesside or the engine builders on Tyneside to realise that their competitors in other western countries face the same problems. We have a unique opportunity in this country to take action. We still have a major Merchant Navy. We cannot influence buyers or owners in the rest of the world, but surely we should be able to influence our own Merchant Navy. It is not a question of going to British shipowners and just asking them to buy. Repeated attempts have been made to do that. The information that I have is that, in the present state of the world shipping market, the immediate answer from the British shipowners is that they do not want to know. They do not want to buy any ships in the present climate.
  Something must be done to stimulate our shipowners. Something must be done through the tax regime to make it worth while once again for them to buy ships. At one time Britain was a tax haven for shipowners. That is perhaps hard to believe. Yet many foreign shipowners found it worth while to trade under the British flag. Why can we not try to recreate such conditions? That must prove to be a good investment. I know that the Treasury would claim that it would lose income by doing that. However, in the long run it would surely be to our advantage to recreate that state of affairs, and I would suggest that the benefit would not in fact be long in coming.
  The problems do not simply lie with those employed in the shipyards. The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) referred to the statistic of 3:1 behind the shipyards. That ratio is probably higher today because the marine equipment industry has been successful in exporting. That industry has therefore not yet suffered as much as the shipbuilding industry. The proportion of jobs in the manufacture of parts is thus probably higher now than it used to be.
  Industries like the marine equipment industry must retain a home market. If there is no home market, these firms will go down the plughole as well. We should be concerned about the jobs not only in the shipyards but in the marine equipment industry throughout the country which are also at risk.
  I have mentioned the efficiency that now exists in our yards, and I have spoken about the need to ensure fair competition, which we can achieve only through international action. I have said that we must stimulate orders, especially through our own Merchant Navy.
  I believe that the Government's record on financial aid is commendable. The Government have given a great deal of money to the industry. I believe that we should include Harland and Wolff in our consideration of financial aid.
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  That large yard in Belfast, which was recently the source of such concern to the people of Tyneside through its entering the order for the fleet auxiliaries, does not come under the same Department and thus is usually omitted from the quoted figures for aid. I believe that in fact Harland and Wolff should come under the same Department as the rest of the British shipbuilding industry. We should certainly take into account its finances.
  I calculate that, including the money that has gone to Harland and Wolff, on each working day over the past seven years some £1 million of taxpayers' money has gone to the shipbuilding industry. The Government cannot be faulted on the amount of money that has been provided. Whether all that money has been wisely spent is another matter.
  Reference has been made to the fact that not all the available intervention fund money has been used. That is most unfortunate. I know that that is not the fault or the wish of the Government. They have sought to be allowed to give a higher intervention fund percentage. I believe that the Government tried to obtain from the EEC permission to pay 35 per cent., but the EEC would not go beyond the present 22·5 per cent. As a result, there have been cases where the subsidy has been insufficient to obtain orders, and the lack of orders has meant that the total money available has not been spent. Our presidency of the Council of Ministers may allow us to correct that position.
  I do not believe a lack of money is the cause of the problems in the industry. Indeed, those at the head of British Shipbuilders have told me that money is not the basic problem. It is a problem not of lack of finance, but of lack of orders.
  Aid must certainly continue to be available if we are to obtain future orders. I am sure that it will continue, and I have not heard any suggestion at all that it will not be available. We must also match the soft credit that is offered at times, against the rules, by our competitors. I am not sure that we have always kept to the rules, but we will not debate that tonight.
  I have observed a change in attitude over the years to countering our competitors' terms. At one time, when one referred to the competition offering better terms, one was told, "We are British and we play by the rules." After a while, one heard that only if there was written evidence that the other side had broken the rules—almost if one could get a sworn statement from the other Government —perhaps then the British Government would help to match them. That was not much good. Then there was a stage when, at the eleventh hour, if a yard was desperate, with an order on the verge of being lost some help might be considered. By that time it was usually too late. I am glad to say that there is now a much more realistic assessment of the important role of soft credit in obtaining the few orders that are available.
  The future of the merchant side of the industry depends on our success in attracting orders for specialist and sophisticated ships. Research and development are therefore extremely important. I hope that we shall soon embark on the construction of an "efficient" ship—that is the name given by British Shipbuilders to a forward-looking project for a very modern ship, especially economic to operate, on the design of which considerable money has been spent, but the ship itself has still to be built. Such ships can provide the key to the future success of the industry.

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  Our shipbuilding industry must not be allowed to disappear. I know that the Government do not desire or intend that it should disappear. We are, as we have always been, a maritime nation. Not merely our history, but our future requires us to have a minimum size for the industry, and we have surely now reached that size.
  Several Hon. Members rose ——
  Mr. Speaker: Order. It may be of assistance to the House if I say that the Front-Bench spokesmen will seek to rise at 20 minutes to 10. A large number of hon. Members still wish to speak.
  9.11 pm
  Mr. Ian Wrigglesworth: I shall try to help other hon. Members to take part in this important debate, which has not given us the time to rehearse all the important arguments.
  I hope that the message has got through loud and clear to the Government from both sides of the House. The right hon. Members for Taunton (Sir E. du Cann) and for Cardiff, South and Penarth (Mr. Callaghan) and the hon. Member for Eastleigh (Sir D. Price) have made the facts plain and made the solutions plain. It is clear that we are debating the extermination of the shipbuilding industry and whether the Government have the political will to keep the industry in being.
  I hope that the message getting through to Ministers is that both sides of the House wish to ensure that, by the methods suggested, the industry is maintained. I support all the suggestions made about action in the European Community and strengthening the support given to the industry through credit and about support through the intervention fund, public sector orders and scrap and build. There are many ways in which the Government can ensure the survival of the industry, if they have the will.
  As the hon. Member for Redcar (Mr. Tinn) said, Teesside has suffered a devastating blow. We have the highest unemployment—at 22 per cent. —of any county in the United Kingdom. In inner town wards it is 30 or 40 per cent. and the county council estimates that, if the shipyard is closed, unemployment in at least one ward on Teesside will be 60 per cent. That is an unacceptable and untenable situation for any part of the country.
  I hope that on his visit to the area tomorrow the Secretary of State will make an announcement at least to give some hope that the action taken by local authorities, the enterprise agency and the new body that is being established will be drawn together. Various Government Departments, local authorities and other bodies are trying to help, and all that action needs to be brought together.
  I hope that when the right hon. Gentleman sees the situation on Teesside for himself he will speak to his colleagues in the Department of the Environment, the Department of Employment and other Government Departments to ensure that help is co-ordinated and focused in a much better way. The Government have had suggestions from hon. Members and from the industry about how they can help the industry to survive. I hope that the loud, clear and unanimous message coming from the House will make Ministers act.
  9.15 pm
  Mr. Richard Ottaway: I shall endeavour to be brief. Many Opposition Members are closer to the action than I am, although there are many suppliers of maritime equipment in the Nottingham area.
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  It is common ground that the root of the problem faced by the shipping industry is worldwide over-capacity. As I told the House before, in Elefsis bay just outside Athens there are 1,000 ships laid up. Hundreds of ships are laid up in the fjords of Norway, and the Burmah Endeavour lying in Southampton dockyard is a harsh reminder of the over-capacity. We read of cancelled orders by the Hong Kong fleet and the closure of the Wartsila yard in Finland. All that comes as no surprise when we bear in mind that the world has twice the number of ships that it needs.
  The problem is not confined to Europe, because in Japan last year the enormous Sanko fleet went into liquidation. That is an illustration of the ludicrous policy of ordering ships for which there is no work. The situation is worsening. Last year was bad, but this year is even worse. In the port of London last week was the Maersk Mariner, one of the most revolutionary and technologically up-to-date vessel that the world has seen. There is no employment for it at all, and it came into service only three weeks ago. Because of the collapse of the American tourist industry, at least two cruise lines are likely to go to the wall in the next few weeks.
  In shipping, freight rates are depressed. That is nice for consumers, but the shipowner can compete only by flagging out, and it is estimated that about £350,000 a year can be saved per ship by flagging out. Leaving aside the defence issue, do we actually need any more British ships? It makes no difference whether a vessel coming up Southampton water is flying the red duster or the Panamanian flag. There is no shortage of ships to bring in the nation's raw materials and basic commodities.
  What is happening is widespread throughout Europe. [Interruption.] The hon. Gentleman jumps to conclusions. I am trying to outline the position and say which policies should be adopted. All the fleets in Europe are suffering from the same cause. Some 25 per cent. of the world's cargo movements are in and out of Europe. That is twice the number of cargo movements in the United States.
  It is essential that we maintain some sort of fleet in Europe, and that fleet should preferably be built in European yards. That illustrates the importance of the emerging European maritime transport policy. I returned from Brussels this afternoon with members of the Bow group. We had been considering making an input to the European maritime transport policy. That policy is important because it is a first step towards a concerted European maritime policy. The dilemma about that policy is the direction that it will take.
  On the one hand, we could adopt protectionism and, on the other hand, we could have a protective policy. The seamen's unions want protectionism because that means more jobs, but protectionism costs a lot of money and if we opt for Community cabotage the result will be high prices. We then have to ask ourselves, who will pay those high prices? If we go down the road of protectionism, the United States will interpret that in an obvious way and retaliate, most likely by extending the Jones Act to the cross trades. The excellent report by the Select Committee of the House of Lords on European maritime transport policy says in paragraph 51:
  "If the world became more protectionist, it would be increasingly difficult to compete in the cross trades, and that would lead to further reductions in the United Kingdom's fleet".

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  We do not want further reductions in the United Kingdom fleet and we must take steps to ensure that there are no such reductions. Protectionism would result in nothing gained and possibly everything lost.
  If we adopt a protective policy, the first thing we must do is to create a genuine open market. We must take the full proposals currently before the Commission on which we are now close to consensus. I urge the Government not to treat regulations 1, 2 and 3 without doing a deal on regulation 4 at the same time, because we will never get the French and the Germans to agree about a proper system of cabotage if we lose what little leverage we have by proceeding on the other three regulations.
  We must also protect ourselves against unfair competition from, say, the Russian fleet. That is why regulation 1 is so important, because it will give Europe the power to respond to the unfair Russian competition that we are currently experiencing. [HON. MEMBERS: "What about shipbuilding?"] I am coming to that, but one cannot look at shipbuilding on its own. The two are totally interrelated but distinct problems, and we must deal with one before dealing with the other. However, whichever route one takes, there will be a decline in shipbuilding. The harsh choice that the Government must face is that either we have no ships or we have protectionism.
  At the end of the day, the Government are faced with the inevitable fact that there must be some form of subsidy. But how does one subsidise shipping? We should continue the soft loans which have been available and which many other hon. Members have discussed. We should have a "use British ships" policy. I am dismayed that Government cargoes are carried on foreign flag vessels, and the Government's freight agents should be instructed to show more flexibility in the fixing of ships. If there are such enormous subsidies for shipbuilding, why cannot there be subsidies for ship operators as well?
  As the right hon. and learned Member for Monklands, East (Mr. Smith) said, why cannot we have tax concessions to British flag vessels? There is no reason whatever why capital allowances that were taken away from British shipowners should not be restored. In fact, there would be nothing to lose by making the British flag a tax-free zone. As has already been said, this could result in Britain becoming a tax haven, and when that was done in Greece there was a dramatic expansion in the size of the Greek fleet.
  We must also concentrate our efforts on special projects. It is a little known fact among Opposition Members that, while, sadly, there are closures, in the last few weeks an office has been opened in Middlesbrough by Cenargo, which at present is the only growing British company. It will be formally opened tomorrow. That company makes special products and enterprises. We must also look at defence, which many hon. Members have already mentioned and on which I shall not dwell.
  It is a sad but self-evident fact that we do not need an official shipbuilding industry to have an efficient fleet. If hon. Members do not believe me, they need only look at the aircraft industry to appreciate that. That has been accepted by Australia and Canada, which have completely abandoned having their own fleets and shipbuilding industries and which now charter vessels as and when required.
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  We are in a mess as a result of over-capacity, and that is the fault of shipbuilding policy. To be frank, loans have been too easy to come by in recent years, and that applies throughout the world. The United States lines, which run a non-stop container service, could get their hands on 12 vessels without paying a penny, and that results in a constant over-supply and consequently a reduction in freight rates. That has crippled British shipowners.
  Opposition Members will remember the subsidies for Polish ships in the mid-1970s, and while they welcomed the jobs that that created, they should also bear in mind that it put a British shipping company into liquidation. [HON. MEMBERS: "Stop filibustering."] I am not filibustering. Every word that I am saying is solid stuff.
  I wish to put forward four aspects of policy. First, we should embark on a scrapping policy and should not build at the same time. Over the last decade, the subsidies to the British ship industry would have allowed us to buy every surplus tanker in the world and to scrap them. That is the kind of subsidy that has gone into British shipbuilding, and that is a way in which money could be made available.
  We should concentrate on building up the defence of the country and, where possible, we should bring forward orders. I understand that there is an internal dispute about whether the extra funds for such a policy should be in the Defence budget or in the Trade and Industry budget. I urge upon the Front Bench that the defence of the country should not suffer as a result of the policies needed to deal with the social problems faced in the shipbuilding industry.
  We should have a European shipping policy. When we have the Presidency of the Council of Ministers, the Commission should be instructed to examine the concept of a European shipbuilding policy. When the Prime Minister talks about the advantages of a worldwide summit, shipbuilding should go on the agenda of such a summit. The Government must be positive. They should be like the company that is opening up in Middlesbrough; they should think positively and they should be positive.
  9.25 pm
  Mr. Gordon A. T. Bagier: I hope the hon. Member for Nottingham, North (Mr. Ottaway) will forgive me if I suggest that he has shown almost atrocious cheek in lecturing us from his position as a representative of Nottingham Slipway. It ill becomes him to lecture us. His was the second discordant speech today. The first was by the Secretary of State. Every other speech, from both sides of the House, attempted to make a positive contribution to the discussion.
  This has been a heck of a week. Along with some others, I came down on Monday morning hoping to get some light from the Secretary of State. Some of us had left home very early in the morning. When we went in to see the Secretary of State we were a little despondent about the position, but we came out devastated. The Secretary of State could not give us any hope about the long-term future of shipbuilding. He hoped something would happen, he believed that something might happen, but we heard nothing from him about Government policy or about how he saw the future of British shipbuilding.
  Again this evening he has talked about how much money has been put into shipbuilding by his Government since 1979. He did not give the other part of the equation —the reduction of the work force from 55,000 to just under 6,000.

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  On Tuesday my hon. Friend the Member for Sunderland, North (Mr. Clay), local authority members from Wearside and I went to see Phillip Hares, the chairman of British Shipbuilders. I believe that he and his team are doing everything that they can to bring orders to British shipyards. I am not saying that he blames the Government for what is happening. I do not believe for one moment that he wants to be made redundant. I believe that he genuinely wants to help and that he is fully aware of the difficulties.
  We need a political move from the Secretary of State. We want to hear clearly and unequivocally that the policy of Her Majesty's Government is to maintain a shipbuilding capacity in the United Kingdom. The Secretary of State has dodged that question. He dodged it three times on Monday morning, and he has not yet said anything constructive about Government policy.
  One could almost say that all hon. Members who have spoken in the debate have been unanimous about how far the Government should go in helping British shipyards. I shall not rehearse the arguments that have been put forward eloquently by all my colleagues. The Secretary of State should consider deeply what is happening in the areas where massive redundancies will take place. Over the weekend and at the beginning of the week it was even suggested that we would have no shipbuilding industry.
  In Sunderland we will lose 925 jobs. What will that mean? In the local context, those 925 men will join 20,918 others who are already on the dole. So the palliative of £10 million for all the areas will have to be spread over that additional number. The hon. Member for Tynemouth (Mr. Trotter) said that for every one shipyard job there were three outside. That will mean that we will have 22,000 men on the dole in Sunderland.
  The local authority has done its utmost to help. For example, it has provided rate relief for shipyard buildings in Sunderland, at a cost of £127,500 per annum. It has done river dredging, at a cost of approximately £200,000 per annum, for which it has not charged the shipbuilding industry a penny. It is providing £3,000 and space for BS to go to the Stavanger offshore oil exhibition. Even more important, for the youngsters it is providing the cash for 23 apprentices to start work in the yard and learn the craft, which it hopes they will be able to use in future.
  It is very important tonight to have a message of hope from the Government, and an unequivocal statement that British Shipbuilding has a future in the United Kingdom, and that the Government will work along the lines suggested by all my colleagues. If they can give that assurance, BS has some chance of capturing orders, because it will be backed by a Government dedicated to maintaining shipbuilding. At present we are not sure if that is so. That is the answer that we want from the Secretary of State.
  9.30 pm
  Mr. Richard Holt: Until a short while ago few people would have heard of Chernobyl. Until the terrible disaster at Aberfan, few people would have heard of Aberfan. Langbaurgh is not particularly well known among my colleagues in the House. When I go to the bar and people ask me the name of my constituency, I discover few have heard of it. Few have heard of the district council area in which Smith's Dock is situated.
  The closure of Smith's Dock will devastate the area. It comes on top of other closures along the river during the
  446
  past six years. The number of jobs at British Steel has decreased from 22,821 in April 1980 to today's 7,607—a net loss of 15,214 jobs. The number at ICI has dropped from 12,500 to 7,300. Now Smith's Dock, which lies between the two on the river, is about to be closed.
  Tonight we can make only short speeches, but I wish to emphasise the fact that the River Tees is not the River Tyne, that the Wear is in between, and that they are all north of Watford. It is time that some members of the Government spent time living in the north-east, not merely visiting it, in order to understand the impact of their policies on the region.
  This evening I have listened to a litany of ideas. I would be less than fair to the Government if I did not think that they had thought of all of them, investigated them, arid concluded that there was something wrong with all of them, but I cannot believe that. The Government should be taking on board all the points that have been made by hon. Members on both sides of the House.
  A little while ago the Government floated an idea about British Leyland, and found themselves with a meal that they could not digest. They have now produced a menu which, again, they will have difficulty in digesting The British shipbuilding industry is not the British car industry. It is far more fundamental and important to our future, and we cannot allow it to decline until it becomes like the refrigeration industry, in which I once worked, or the motor-cycle industry, both of which have gone.
  Langbaurgh does not have a great deal of history, and will not have a future if present events continue. We produced one of the greatest seamen in the world in Captain Cook. If he had looked at the future as the Government are doing, wrung his hands and said, "My goodness, there is nothing I can do about this," we would never have found Australia, let alone New Zealand.
  There are ideas that should be pursued. Some of them may be zany and not worth a great deal of consideration. I shall throw one in: why not build a ship at Smith's Dock with NHS funds, and fill it will all the people who need sea voyages for their health? That would create employment, maintain the industry, fulfil an NHS need, and stimulate the sort of thinking in which my Front Bench should be engaged.
  9.34 pm
  Mr. Ted Garrett: We study history and from that we try to learn lessons. If ever there were an example of none of the lessons being learnt, it is the shipbuilding industry. Successive Governments have stated the nature of the problem and commissioned reports, such as the Swallow and the Geddes reports, but every move towards reforming the industry has faltered for the reason mentioned by the hon. Member for Eastleigh (Sir D. Price)—the Treasury. All efforts have collapsed because of Treasury stubborness. I blame no particular Minister or Chancellor of the Exchequer. They are all guilty.
  This is the final episode for British shipbuilding. If a rescue operation is not planned now, and if the Government do not interfere in British Shipbuilders' plans for closure, the position will spell ultimate doom, as many hon. Members have pointed out. Having said that. I do not want it spread around that I am saying that the industry will collapse completely. However, I make it clear that such a fate is damned close, and the problem could be terminal. Wallsend has been battered to the point where the

  447
  blackness and apathy have to be seen to be believed. The coal industry has gone, the merchant shipbuilding industry has gone, general engineering is going and so is the marine engineering industry unless something happens.
  The Secretary of State spoke about the vast sums of money that have been put into the infrastructure of the region by this and previous Governments. What is the good of putting in the infrastructure if no balance for the taxpayer comes out of it? We have spent thousands of millions of pounds that are a loss to the British taxpayer. If I were a taxpayer living in the more affluent areas, I would be asking my Member of Parliament why something could not be done to redress the balance so that the losses could be recouped for the general kitty.
  It is no use having good roads and schools if nothing is done to get maximum advantage. If this situation continues, we might as well close the polytechnics, because there will be no requirement for technical education, and we might as well close the universities because there will be no places for naval architects. If I am accused of giving the Government ideas, I apologise. I hope that the more enlightened members of the Government think that I am being facetious, although the underlying purpose is serious.
  Money has been put into various funds. I should like the Government to collaborate with British Shipbuilders and the unions in considering redundancy schemes for the industry. If the worst comes to the worst, the men will be unemployed for many years. About 890 men from Clark Kincaid in my constituency will be paid off this year. It might surprise the House to know that the 20 to 24 age group will be the worst affected. They will receive the least redundancy payments because the scheme is based on age and length of service. Therefore, the redundancy payment scheme must be examined, and the Government must try to squeeze something from the Treasury to enhance the value of the scheme.
  9.38 pm
  Mr. David Lambie: In the short time left before the Front-Bench spokesmen rise to speak, I cannot deliver the speech that I have prepared on behalf of the shipyard workers at the Ailsa yard in Troon —one of the yards faced with closure. Like many right hon. and hon. Members, I am bitter and angry at the attitude of the Government, and especially this Secretary of State, towards shipbuilding in the United Kingdom. Last week, at the Tory party conference in Perth, the Prime Minister spoke of a caring Prime Minister and a caring Tory Government. The Minister whom I met last Monday was like a dead fish. He showed no compassion and no care for anyone. He was not interested in the future of our constituents, especially those in the Troon and Ayrshire area. If the Minister cannot solve the problems of the shipbuilding and shipping industry he should get out and allow someone else to move in and put forward a proposition that will at least help us.
  I have had experience of enterprise trusts, such as BSC (Industry) Ltd, NCB (Enterprise) Ltd and British Shipbuilders Enterprise Ltd, which was a local enterprise trust. Despite all the cosmetic attempts to assist in Cunninghame, one man in every four is unemployed. Coalminers and other workers are still unemployed. If the Government do not get rid of those who are unable to deal
  448
  with the problems and replace them, even with other Tories, such as those right hon. and hon. Members who have spoken tonight, we shall see the end of Britain as a manufacturing country. We shall see the end of the communities of hon. Members on both sides of the House. Tonight we make a plea on behalf of those communities.
  9.41 pm
  Mr. Gordon Brown: As my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) emphasised, the debate is about whether this island trading nation, with more than 1,000 years of maritime traditions, will continue to have a strategic capacity to build merchant ships.
  The Minister's speech was completely devoid of any proposal or fresh initiative to save the industry. He said that he wanted to save the industry. What we want from the Government is a commitment to implement measures that will save the industry. The Minister said that the closures and the cuts would make the industry leaner and, therefore, fitter. How much fitter can a skeleton become? Has the Minister looked at the statement by the man he praised only last week, Mr. Graham Day, who said of cuts such as these:
  "The industry will not be leaner and more fit. It will not be here."?
  There is a leanness beyond which life is not sustainable.
  I ask the House whether, at any previous point in the 700-year history of Parliament, until the seven years of this Government, the prospect of the disappearance of our entire merchant shipbuilding industry could have been imaginable, far less seriously contemplated. On any previous occasion, could any Government, of any political colour, have attracted even their most ardent and enthusiastic supporters into their Lobby to defend such a policy?
  Britain, the biggest island state in Europe, survives by a seagoing trade. Ninety per cent. of our trade arrives and departs by sea. Our merchant fleet is the fourth arm of our defence. Should we face, with resignation, the prospect of the shipbuilding industry reaching such a point of collapse? The only future that the Minister can put before us is that we conduct our trade and protect our defences in ships bought in Japan, repaired and refitted in Korea or Taiwan, crewed in Panama and flying the flag of Liberia. This is the Government who claimed that they would make Britain great again.
  Tonight we have heard from Members who represent Middlesbrough, Govan, Ayrshire and Sunderland about the desolation in our shipbuilding communities. Those. communities and work forces have done everything that the Government have asked of them. In the areas of productivity, flexibility, wage negotiations and industrial relations they have made sacrifices to help the Government's industrial strategy. They are now asked to sacrifice their jobs because of the Government's spending strategy. They are the mass casualties in the Government's economic war of attrition. They are told from the comfort of Whitehall that things are getting better, that we are in the sixth year of growth and that there is no crisis, but there is despair in the communities that Ministers refuse to visit, and desolation in the faces that they never see.
  Tonight we have heard also from some Conservative Members. They are perhaps isolated voices in the Conservative party, but I believe that they are representative of a Conservative tradition. The right hon.

  449
  Member for Taunton (Sir E. du Cann) and the hon. Member for Eastleigh (Sir D. Price) did more in a few short minutes to speak up for the Conservative party's maritime traditions than any Minister has done in the seven long years under this Administration.
  The Government's proposition is that Britain is suffering because the world is suffering, that the British shipbuilding industry is in crisis because the world's shipbuilding industry is in crisis, as though we have borne an equal burden of the cuts and closures. If there has been an equal sacrifice, why, since 1979, have the French, Germans and Italians—far less the Japanese and the Koreans—lost 5,000, 6,000, 7,000 or 8,000 workers in their merchant shipbuilding industry, while Britain has lost 25,000 workers, and the number is increasing? Why has their capacity been cut by a third or a half, while our capacity has been cut by two thirds? Why has the share of world orders of those countries remained relatively stable, while Britain's share, which used to be 50 per cent., is now less than I per cent.? Why is it that other countries with the least to gain do most to protect their industries, while this country, with the most to gain, does least?
  The proposition of the Secretary of State is that there is no shortage of support for the industry, only a shortage of orders, and that if contracts were there the cash would be there to support them. If that is so, why did we lose the British Nuclear Fuels contract to Japan? Why did the Trinity House contract go to Korea? Why did the right hon. Gentleman's officials have to say to a Committee in the other place that for years we have been beaten hands down by our competitors in France and Germany? Why did the chairman of British Shipbuilders have to say last week, when he announced redundancies, that one of the major problems he faced was not orders but how to survive within the financial limits set by the Government?
  If Government support is not the problem, why do the Government not advance the public sector orders about which hon. Members have talked—Ministry of Defence, coastal protection and fishery protection orders? There are plenty of projects which, if the Secretary of State put his mind to it, could be brought forward to save the shipbuilding yards. If support is not the problem, why does the Secretary of State not accept the recommendations of the Committee in another place and of the General Council of British Shipping that we take measures to persuade British shipowners to buy British, to repair British and to fly the British flag? If the right hon. Gentleman is serious about saving the shipbuilding industry, he will bring forward such proposals.
  Is the Secretary of State not simply giving the same reassurances that were given in public in 1983 and 1984 —that he is doing what he can and doing his best? Sir Robert Atkinson, the chairman of British Shipbuilders at the time, said that although those statements were being made in public, in private the Government were hell-bent on sabotaging the industry. He said that the Government never talked about developments, new research and the industry's future. In the most telling phrase of all, he said that when the Government talked about closures and redundancies a gleam came into their eyes.
  Throughout the last week and during this debate we have had no more than hand-wringing apologies and the supine defence of the mistaken policies of failed Ministers in a discredited Government who are pursuing a bankrupt ideological solution that relies upon free market forces that will not work. The Government tell us that they are
  450
  creating real and lasting jobs in new areas and new industries, whereas we have heard tonight that they are creating real and lasting unemployment in new areas and new industries.
  Before the Minister of State ends his speech this evening, I should like him to answer three questions. We know that 10 million tonnes of world orders are available this year. Will the Minister set up a task force to ensure that many' of these orders come to Britain? We know that it is within the Minister's power, through public sector orders, to save yards and prevent closures. Will he ensure that, throughout the public services and the public sector, a search is made and that decisions are made to advance orders? If the Japanese say that as long as there is an ocean to sail there will be a Japanese shipbuilding industry to build for it, why do we not say the same? If this Government will not fight for the industry, we shall, and we shall have the country behind us.
  9.51 pm
  The Minister of State, Department of Trade and Industry (Mr. Peter Morrison): The right hon. Member for Glasgow, Govan (Mr. Millan) said that people are concerned about our shipbuilding industry. I agree with him. Those who work in the shipbuilding industry live in closely knit communities, and in many cases they live in areas of high unemployment. The shipbuilding industry is part of our industrial heritage and became very successful in the market place. Today it is operating neither in the international market place nor in the domestic and European market place.
  The Father of the House, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) and my right hon. Friend the Member for Taunton (Sir E. du Cann) reminded the House of the importance of the manufacturing sector to this country. I agree with them. The right hon. Gentleman said that high tech is very important to this country, but that the traditional industries are also very important. I agree with him. High tech makes the traditional industries as competitive as they can possibly be.
  All right hon. and hon. Members acknowledge that during the last 10 years British Shipbuilders has undergone a massive change. Last week's announcement was a further step towards rationalisation. I accept immediately that that does not make it any the less painful, but the fact remains that there is a world surplus of both ships and shipyards. I agree with the hon. Member for Dunfermline, East (Mr. Brown) that this country needs orders. That is what this debate is about.
  When, in 1977, the right hon. Member for Manchester, Gorton (Mr. Kaufman) held the position that I hold now, he said that shipbuilding industries all over the world, from Japan to Sweden, were accepting the inevitability of contraction and that Britain could not be insulated from this trend. I agree with him. This Government are in a precisely similar position to that in which he found himself then.
  Perfectly reasonably, certain strands have run through the debate. The right hon. and learned Member for Monklands, East (Mr. Smith) and other Opposition Members have asked whether the Government are committed to British Shipbuilders. The answer to that, as the right hon. and learned Gentleman has heard me say twice during the proceedings on what is now the British Shipbuilders (Borrowing Powers) Act 1983, is yes. I say

  451
  it again. We are, otherwise we would not have introduced that measure. The right hon. Member for Cardiff, South and Penarth, the Father of the House, suggested that we had given up the ghost. I assure him that that is not the case.
  Perfectly reasonably, right hon. and hon. Members asked whether we are doing everything possible by way of support. My answer to that, as I told the right hon. and learned Member for Monklands, East and his hon. Friends during proceedings on the British Shipbuilders (Borrowing Powers) Act, is also yes.
  I listened carefully to what hon. Members had to say, but they did not propose any specific changes in terms of support that we could make. If they have specific points to make, I am happy that they should do so. Opposition Members also asked whether we are doing everything that we can to secure orders. I assure all hon. Members that we are doing precisely that.
  The hon. Member for Redcar (Mr. Tinn) asked about the follow-on from the fifth directive. That will cease to operate at the end of this year, and I give him an undertaking that, if I understood him correctly, we shall be going down precisely the route that he would like us to go. That is to say that we would wish to see that we are on an equal footing with all our European counterparts. My hon. Friend the Member for Tynemouth (Mr. Trotter) pointed out that we shall have an opportunity to secure that as President of the Council during the latter half of this year, and that will be an opportunity that we shall want to grab.
  The right hon. and learned Member for Monklands, East tended, as did some of his hon. Friends, to mock British Shipbuilders Enterprise Ltd. The right hon. and learned Gentleman has steel communities close to his constituency, and I hope he will agree that BSC (Industry) Ltd. has had impressive achievements, although he may want such achievements to go further.
  The right hon. and learned Gentleman also asked why we have not referred to the yards—Smith's Dock, Clark Kincaid and Ferguson-Ailsa. The simple answer is that in each case decisions have to be made for commercial industrial purposes. If it were not Smith's dock it would have to be another yard. As hon. Members will appreciate, the matter is ultimately for decision by British Shipbuilders. However, if that is the way that the right hon. and learned Gentleman wants us to proceed, it would be robbing Peter to pay Paul.
  The right hon. and learned Gentleman talked about losing our merchant fleet. That, I accept, is correct, but my right hon. Friend the Member for Taunton pointed out that shipping, like any other business, has to be profitable, and it is no doubt for that reasons principally that the position is as it is.
  The right hon. and learned Gentleman and the hon. Member for Dunfermline, East suggested a task force. The three specific points that they wish us to look into—bringing forward public orders, improving the package of support and looking at what can be done for British shipowners — are all matters that are currently under review.
  The hon. Member for Sunderland, South (Mr. Bagier) asked me about the long-term future of British
  452
  shipbuilding. I conclude by saying that as far as I am concerned it will get all the backing from us that is possible.
  Question put, That the amendment be made:—
  The House divided: Ayes 205, Noes 277.

  Division No. 192]

  [10 pm

  AYES

  Adams, Allen (Paisley N)

  Fatchett, Derek

  Alton, David

  Faulds, Andrew

  Anderson, Donald

  Fields, T. (L'pool Broad Gn)

  Archer, Rt Hon Peter

  Fisher, Mark

  Ashdown, Paddy

  Flannery, Martin

  Ashley, Rt Hon Jack

  Foot, Rt Hon Michael

  Ashton, Joe

  Forrester, John

  Atkinson, N. (Tottenham)

  Foster, Derek

  Bagier, Gordon A. T.

  Foulkes, George

  Banks, Tony (Newham NW)

  Fraser, J. (Norwood)

  Barnett, Guy

  Freeson, Rt Hon Reginald

  Barron, Kevin

  Garrett, W. E.

  Beckett, Mrs Margaret

  George, Bruce

  Beith, A. J.

  Godman, Dr Norman

  Bell, Stuart

  Gould, Bryan

  Benn, Rt Hon Tony

  Gourlay, Harry

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

  Hamilton, James (M'well N)

  Bermingham, Gerald

  Hamilton, W. W. (Fife Central)

  Bidwell, Sydney

  Hancock, Michael

  Blair, Anthony

  Harrison, Rt Hon Walter

  Boothroyd, Miss Betty

  Hattersley, Rt Hon Roy

  Boyes, Roland

  Healey, Rt Hon Denis

  Brown, Gordon (D'f'mline E)

  Heffer, Eric S.

  Brown, Hugh D. (Provan)

  Hogg, N. (C'nauld & Kilsyth)

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

  Holland, Stuart (Vauxhall)

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

  Home Robertson, John

  Brown, Ron (E'burgh, Leith)

  Howells, Geraint

  Bruce, Malcolm

  Hoyle, Douglas

  Buchan, Norman

  Hughes, Dr Mark (Durham)

  Caborn, Richard

  Hughes, Robert (Aberdeen N)

  Callaghan, Rt Hon J.

  Hughes, Roy (Newport East)

  Callaghan, Jim (Heyw'd & M)

  Hughes, Simon (Southward)

  Campbell, Ian

  Janner, Hon Greville

  Campbell-Savours, Dale

  Jenkins, Rt Hon Roy (Hillh'd)

  Canavan, Dennis

  John, Brynmor

  Carlile, Alexander (Montg'y)

  Johnston, Sir Russell

  Cartwright, John

  Jones, Barry (Alyn & Deeside)

  Clark, Dr David (S Shields)

  Kaufman, Rt Hon Gerald

  Clarke, Thomas

  Kennedy, Charles

  Clay, Robert

  Kilroy-Silk, Robert

  Clelland, David Gordon

  Kinnock, Rt Hon Neil

  Clwyd, Mrs Ann

  Kirkwood, Archy

  Cocks, Rt Hon M. (Bristol S)

  Lambie, David

  Cohen, Harry

  Lamond, James

  Coleman, Donald

  Leadbitter, Ted

  Conlan, Bernard

  Leighton, Ronald

  Cook, Frank (Stockton North)

  Lewis, Ron (Carlisle)

  Cook, Robin F. (Livingston)

  Lewis, Terence (Worsley)

  Corbyn, Jeremy

  Litherland, Robert

  Cox, Thomas (Tooting)

  Livsey, Richard

  Craigen, J. M.

  Lloyd, Tony (Stretford)

  Crowther, Stan

  McCartney, Hugh

  Cunliffe, Lawrence

  McDonald, Dr Oonagh

  Cunningham, Dr John

  McKay, Allen (Penistone)

  Dalyell, Tarn

  McKelvey, William

  Davies, Rt Hon Denzil (L'lli)

  MacKenzie, Rt Hon Gregor

  Davies, Ronald (Caerphilly)

  Maclennan, Robert

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

  McNamara, Kevin

  Deakins, Eric

  McWilliam, John

  Dewar, Donald

  Madden, Max

  Dobson, Frank

  Marek, Dr John

  Dormand, Jack

  Marshall, David (Shettleston)

  Douglas, Dick

  Martin, Michael

  Dubs, Alfred

  Mason, Rt Hon Roy

  Duffy, A. E. P.

  Maxton, John

  Dunwoody, Hon Mrs G.

  Maynard, Miss Joan

  Eadie, Alex

  Meacher, Michael

  Eastham, Ken

  Meadowcroft, Michael

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

  Michie, William

  Evans, John (St. Helens N)

  Mikardo, Ian

  Ewing, Harry

  Millan, Rt Hon Bruce

  453

  Mitchell, Austin (G't Grimsby)

  Short, Ms Clare (Ladywood)

  Morris, Rt Hon A. (W'shawe)

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

  Morris, Rt Hon J. (Aberavon)

  Silkin, Rt Hon J.

  Nellist, David

  Skinner, Dennis

  O'Brien, William

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

  O'Neill, Martin

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

  Orme, Rt Hon Stanley

  Soley, Clive

  Owen, Rt Hon Dr David

  Spearing, Nigel

  Park, George

  Steel, Rt Hon David

  Parry, Robert

  Stewart, Rt Hon D. (W Isles)

  Patchett, Terry

  Stott, Roger

  Pavitt, Laurie

  Strang, Gavin

  Pendry, Tom

  Straw, Jack

  Pike, Peter

  Thomas, Dafydd (Merioneth)

  Powell, Raymond (Ogmore)

  Thomas, Dr R. (Carmarthen)

  Prescott, John

  Thompson, J. (Wansbeck)

  Radice, Giles

  Tinn, James

  Randall; Stuart

  Wallace, James

  Raynsford, Nick

  Wardell, Gareth (Gower)

  Redmond, Martin

  Wareing, Robert

  Rees, Rt Hon M. (Leeds S)

  Weetch, Ken

  Richardson, Ms Jo

  Welsh, Michael

  Roberts, Ernest (Hackney N)

  White, James

  Robertson, George

  Williams, Rt Hon A.

  Robinson, G. (Coventry NW)

  Wilson, Gordon

  Rogers, Allan

  Winnick, David

  Rooker, J. W.

  Woodall, Alec

  Ross, Ernest (Dundee W)

  Wrigglesworth, Ian

  Ross, Stephen (Isle of Wight)

  Young, David (Bolton SE)

  Ryman, John

  Sedgemore, Brian

  Tellers for the Ayes:

  Sheerman, Barry

  Mr. Don Dixon and Mr. Frank Haynes.

  Sheldon, Rt Hon R.

  Shields, Mrs Elizabeth

  NOES

  Adley, Robert

  Channon, Rt Hon Paul

  Aitken, Jonathan

  Chapman, Sydney

  Alexander, Richard

  Chope, Christopher

  Alison, Rt Hon Michael

  Clark, Dr Michael (Rochford)

  Ancram, Michael

  Clark, Sir W. (Croydon S)

  Arnold, Tom

  Clarke, Rt Hon K. (Rushcliffe)

  Ashby, David

  Clegg, Sir Walter

  Atkins, Rt Hon Sir H.

  Cockeram, Eric

  Atkinson, David (B'm'th E)

  Colvin, Michael

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

  Coombs, Simon

  Baker, Nicholas (Dorset N)

  Cope, John

  Baldry, Tony

  Cormack, Patrick

  Banks, Robert (Harrogate)

  Couchman, James

  Batiste, Spencer

  Cranborne, Viscount

  Bellingham, Henry

  Critchley, Julian

  Bendall, Vivian

  Crouch, David

  Best, Keith

  Currie, Mrs Edwina

  Bevan, David Gilroy

  Dickens, Geoffrey

  Biffen, Rt Hon John

  Dicks, Terry

  Blackburn, John

  Dorrell, Stephen

  Blaker. Rt Hon Sir Peter

  Douglas-Hamilton, Lord J.

  Body, Sir Richard

  Dover, Den

  Bonsor, Sir Nicholas

  Durant, Tony

  Bottomley, Peter

  Edwards, Rt Hon N. (P'broke)

  Bottomley, Mrs Virginia

  Eggar, Tim

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

  Emery, Sir Peter

  Bowden, Gerald (Dulwich)

  Evennett, David

  Braine, Rt Hon Sir Bernard

  Eyre, Sir Reginald

  Brandon-Bravo, Martin

  Fallon, Michael

  Brinton, Tim

  Farr, Sir John

  Brittan, Rt Hon Leon

  Favell, Anthony

  Brown, M. (Brigg & Cl'thpes)

  Fenner, Mrs Peggy

  Bruinvels, Peter

  Fletcher, Alexander

  Buchanan-Smith, Rt Hon A.

  Fookes, Miss Janet

  Buck, Sir Antony

  Forman, Nigel

  Budgen, Nick

  Forsyth, Michael (Stirling)

  Bulmer, Esmond

  Forth, Eric

  Burt, Alistair

  Fowler, Rt Hon Norman

  Butcher, John

  Fox, Marcus

  Butler, Rt Hon Sir Adam

  Franks, Cecil

  Carlisle, Kenneth (Lincoln)

  Fraser, Peter (Angus East)

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

  Freeman, Roger

  Carttiss, Michael

  Fry, Peter

  Cash, William

  Gale, Roger

  454

  Galley, Roy

  MacGregor, Rt Hon John

  Gardiner, George (Reigate)

  MacKay, Andrew (Berkshire)

  Gardner, Sir Edward (Fylde)

  MacKay, John (Argyll & Bute)

  Garel-Jones, Tristan

  Maclean, David John

  Gilmour, Rt Hon Sir Ian

  McLoughlin, Patrick

  Glyn, Dr Alan

  McNair-Wilson, M. (N'bury)

  Gorst, John

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

  Gow, Ian

  McQuarrie, Albert

  Gower, Sir Raymond

  Madel, David

  Grant, Sir Anthony

  Major, John

  Greenway, Harry

  Malins, Humfrey

  Gregory, Conal

  Malone, Gerald

  Griffiths, Peter (Portsm'th N)

  Maples, John

  Grist, Ian

  Marland, Paul

  Ground, Patrick

  Marlow, Antony

  Grylls, Michael

  Marshall, Michael (Arundel)

  Hamilton, Hon A. (Epsom)

  Mates, Michael

  Hamilton, Neil (Tatton)

  Mather, Carol

  Hampson, Dr Keith

  Maxwell-Hyslop, Robin

  Hanley, Jeremy

  Mayhew, Sir Patrick

  Hannam, John

  Merchant, Piers

  Hargreaves, Kenneth

  Meyer, Sir Anthony

  Harris, David

  Miller, Hal (B'grove)

  Harvey, Robert

  Mills, lain (Meriden)

  Havers, Rt Hon Sir Michael

  Miscampbell, Norman

  Hawkins, C. (High Peak)

  Moate, Roger

  Hawkins, Sir Paul (N'folk SW)

  Monro, Sir Hector

  Hawksley, Warren

  Moore, Rt Hon John

  Hayes, J.

  Morris, M. (N'hampton S)

  Hayhoe, Rt Hon Barney

  Morrison, Hon C. (Devizes)

  Heathcoat-Amory, David

  Morrison, Hon P. (Chester)

  Heddle, John

  Moynihan, Hon C.

  Heseltine, Rt Hon Michael

  Murphy, Christopher

  Hickmet, Richard

  Neale, Gerrard

  Hicks, Robert

  Nelson, Anthony

  Higgins, Rt Hon Terence L.

  Neubert, Michael

  Hill, James

  Newton, Tony

  Hind, Kenneth

  Nicholls, Patrick

  Hirst, Michael

  Norris, Steven

  Hogg, Hon Douglas (Gr'th'm)

  Onslow, Cranley

  Holland, Sir Philip (Gedling)

  Oppenheim, Phillip

  Holt, Richard

  Ottaway, Richard

  Hordern, Sir Peter

  Page, Sir John (Harrow W)

  Howard, Michael

  Page, Richard (Herts SW)

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

  Patten, Christopher (Bath)

  Howell, Rt Hon D, (G'ldford)

  Patten, J. (Oxf W & Abgdn)

  Howell, Ralph (Norfolk, N)

  Pattie, Geoffrey

  Hubbard-Miles, Peter

  Pawsey, James

  Hunt, David (Wirral W)

  Percival, Rt Hon Sir Ian

  Hunt, John (Ravensbourne)

  Pollock, Alexander

  Hunter, Andrew

  Porter, Barry

  Jackson, Robert

  Portillo, Michael

  Jessel, Toby

  Powell, William (Corby)

  Johnson Smith, Sir Geoffrey

  Powley, John

  Jones, Gwilym (Cardiff N)

  Prentice, Rt Hon Reg

  Jones, Robert (Herts W)

  Price, Sir David

  Kellett-Bowman, Mrs Elaine

  Proctor, K. Harvey

  Kershaw, Sir Anthony

  Raffan, Keith

  Key, Robert

  Raison, Rt Hon Timothy

  King, Roger (B'ham N'field)

  Rees, Rt Hon Peter (Dover)

  King, Rt Hon Tom

  Rhodes James, Robert

  Knight, Greg (Derby N)

  Rhys Williams, Sir Brandon

  Knight, Dame Jill (Edgbaston)

  Rost, Peter

  Knowles, Michael

  Rowe, Andrew

  Knox, David

  Sainsbury, Hon Timothy

  Lang, Ian

  Shaw, Giles (Pudsey)

  Lawler, Geoffrey

  Shaw, Sir Michael (Scarb')

  Lawrence, Ivan

  Shepherd, Colin (Hereford)

  Lee, John (Pendle)

  Silvester, Fred

  Leigh, Edward (Gainsbor'gh)

  Sims, Roger

  Lennox-Boyd, Hon Mark

  Skeet, Sir Trevor

  Lester, Jim

  Smith, Sir Dudley (Warwick)

  Lightbown, David

  Smith, Tim (Beaconsfield)

  Lilley, Peter

  Soames, Hon Nicholas

  Lloyd, Ian (Havant)

  Spencer, Derek

  Lord, Michael

  Spicer, Michael (S Worcs)

  Lyell, Nicholas

  Stanbrook, Ivor

  McCrindle, Robert

  Stevens, Lewis (Nuneaton)

  McCurley, Mrs Anna

  Stewart, Allan (Eastwood)

  Macfarlane, Neil

  Stewart, Andrew (Sherwood)

  455

  Stradling Thomas, Sir John

  Viggers, Peter

  Tapsell, Sir Peter

  Wakeham, Rt Hon John

  Taylor, John (Solihull)

  Waldegrave, Hon William

  Taylor, Teddy (S'end E)

  Walker, Rt Hon P. (W'cester)

  Terlezki, Stefan

  Wall, Sir Patrick

  Thompson, Donald (Calder V)

  Waller, Gary

  Thompson, Patrick (N'ich N)

  Ward, John

  Thome, Neil (llford S)

  Watson, John

  Thumham, Peter

  Wells, Sir John (Maidstone)

  Townsend, Cyril D. (B'heath)

  Wheeler, John

  Trippier, David

  Wiggin, Jerry

  Trotter, Neville

  Wilkinson, John

  Twinn, Dr Ian

  Wolfson, Mark

  Vaughan, Sir Gerard

  Wood, Timothy

  456

  Yeo, Tim

  Mr. Peter Lloyd and Mr. Francis Maude.

  Tellers for the Noes:

  Question accordingly negatived.
  Main Question put and agreed to.
  Resolved,
  That this House notes the massive slump in demand for merchant ships which has led to cutbacks in shipyards throughout the world; regrets that this has inevitably led to contraction in the United Kingdom's own merchant shipbuilding industry despite the Government's extensive and continued support for British Shipbuilders (including over £1,400 million since 1979); and welcomes the Government's package of measures to provide special assistance to those affected.

  Radioactive Waste (Disposal)
  10.14 pm
  Mr. Michael Brown: On a point of order, Mr. Speaker. We are about to debate the Town and Country Planning (NIREX) Special Development Order, which was laid before the House by the Secretary of State for Education and Science when he held another position in the Cabinet. You will notice, Mr. Speaker, that the last page of the order, which is dated 7 May 1986, contains the name of the former Secretary of State for the Environment.
  The Secretary of State for the Environment appointed earlier today has plainly not had an opportunity to consider the details of the order, let alone the representations made by me, Glanford borough council, Humberside county council, North and South Killingholme parish councils, East Halton parish council, Brigg town council, Cleethorpes district council and many other local authorities in my constituency and in the constituencies represented by my right hon. Friend the Patronage Secretary, my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) and my hon. Friend the Member for Grantham (Mr. Hogg). If my right hon. Friend had had an opportunity to consider those representations, his judgment might have been different from that of the former Secretary of State for the Environment.
  I now see my right hon. Friend the Secretary of State for the Environment on the Government Front Bench. I cannot believe, in fairness to him, that he will have had an opportunity between leaving the Department of Transport this afternoon and entering the Department of the Environment, with all the business involved in moving from one Department to another, to be briefed by his officials on the impact of the order on my constituency and the constituencies of the other hon. Members who are affected by the order.
  There is a case for the House not pursuing its consideration of the special development order until my right hon. Friend the Secretary of State for the Environment has had an opportunity to reflect upon the consultation process which took place between 25 February and 18 April. It is essential for him, as the new Secretary of State wanting to bring a fresh judgment to the matter, to bear in mind that the policy on nuclear waste disposal and the eventual publication of the order was changed when my right hon. Friend the Member for Mole Valley (Mr. Baker) took over as Secretary of State for the Environment from my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin). You will recall, Mr. Speaker, that my right hon. Friend the Member for Wanstead and Woodford proposed that intermediate waste be included in the order——
  Mr. Speaker: Order. These remarks would be more appropriate to the hon. Gentleman's speech, if he should catch my eye a second time.
  Mr. Brown: May I conclude my point of order and request you, Mr. Speaker, to ask the Secretary of State for the Environment, whom I congratulate on his appointment, to say whether he wishes to have time to consider
  458
  this policy, as he was not involved in its details? He might wish to suggest that the House should not pursue the matter today.
  Mr. Douglas Hogg: Further to that point of order, Mr. Speaker. My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) has put forward a powerful case for not debating the special development order tonight, and I support what he has said. However, there is, I regret to say, yet another point which he did not make. The order is ultra vires.
  It is absolutely clear that the order is laid by a Secretary of State, but we are entitled to ask, "By which Secretary of State?" I know perfectly well that my right hon. Friend the new Secretary of State for Education and Science laid the order. He told me so and I believe him. However, I am entitled to ask my right hon. Friend the new Secretary of State for the Environment whether he has had an opportunity to ratify that decision. If he has not, we are being asked to consider a special development order which has never been laid by the relevant Secretary of State.
  You, Mr. Speaker, have the rare good fortune to have by your side my right hon. and learned Friend the Attorney-General. It is customary on these occasions to ask for his advice on complicated matters of law, and I cannot believe that, faced with such a complicated matter of law, the House can let the Attorney-General go away without giving us his assistance.
  I think that I speak for the entire House—at least for those hon. Members who are not on the payroll—when I say that we desire to hear the Attorney-General on this important point. Even if I cannot prevail on my right hon. and learned Friend to come to the Dispatch Box, may I repeat the point made by my hon. Friend the Member for Brigg and Cleethorpes? When you were elected, Mr. Speaker, you stressed the importance of representing Back Benchers. My hon. Friend and I, who represent constituencies deeply touched by the special development order, stand alone because the payroll is against us, the Labour party, in substance, is against us, and the Liberal party has not made up its mind. [Interruption.] I am sorry; some have and some have not. Liberal Members are in a state of complete ambivalence and the SDP is in an even worse state.
  Mr. Speaker: Order. Again, these are all points that the hon. Member could——
  Mr. Hogg: Forgive me, Mr. Speaker——
  Mr. Speaker: Order. I have got the gist of what has been said by the hon. Members for Grantham (Mr. Hogg) and for Brigg and Cleethorpes (Mr. Brown). I have had the advantage of a whispered conversation with a Law Officer and the hon. Member for Grantham will know, because he is a constitutional expert in his way, that ministerial responsibility is indivisible. There is nothing ultra vires about the order.
  Mr. Austin Mitchell: On a point of order, Mr. Speaker. I seek your advice on what I can tell my constituents. They are fighting to preserve their area and the surrounding district from what amounts to a 100-year blight. During that fight they have written hundreds of letters to the Secretary of State, signed petitions in their thousands to Parliament and to the Secretary of State, and sent deputations to the Secretary of State. It is true that they have been listened to mainly by junior Ministers—by acolytes—but——
  Mr. Speaker: Order. I am sure that they have, but what is the point of order for me?
  Mr. Mitchell: It is a question for you, Mr. Speaker. My constituents feel that all the representations and arguments that they have made have been channelled up to a Secretary of State who has now moved on. They have not had the chance to have those arguments heard by the new Secretary of State. It is on the basis of those arguments that the right hon. Gentleman will or will not relegate them to the 100-year blight of the special development order. It is important that they feel satisfied that their views have reached the man who is making the decision. What can I tell my constituents——
  Mr. Speaker: What the hon. Gentleman tells his constituents is what I have already said to the hon. Member for Grantham (Mr. Hogg), that ministerial responsibility is indivisible.
  Mr. Hogg: Further to that point of order——
  Mr. Speaker: Order. I have dealt with the point of order.
  Mr. Richard Hickmet: I should like to raise an entirely different point of order on a matter of procedure, and I raise it in the light of the consideration by the Joint Committee on Statutory Instruments. It is about the certified copy of the Town and Country Planning (England and Wales) NIREX Special Development Order which was laid before the House on 14 May. The original order signed by the Secretary of State has not been laid before the House. Indeed, it never is. The order that was considered yesterday was a certified copy. The certified copy which is in the Journal Office contains approximately 40 amendments.
  What is sought tonight is approval of the order made by the Secretary of State under that statutory instrument, under section 24 and section 287 (5) of the Town and Country Planning Act 1971. It has to be approved in this House. The first step is for the order itself to be laid before the House. A certified copy has been laid before the House, but I raise no point of order on that fact alone. I should like to refer you, Mr. Speaker, to page 614 of "Erskine May", which says:
  "Statutory instruments and other documents which require to be laid must be complete and in full, and correct."
  My hon. Friend the Member for Grantham (Mr. Hogg) has your copy of "Erskine May", Mr. Speaker.
  My first point is that an error contained in the copy of a statutory instrument laid before the House vitiates the laying of the order. I refer you, Mr. Speaker, to the ruling made by Mr. Speaker in the House on 15 May 1946. Sir John Mellor said:
  "I wish to put a Question to you, Mr. Speaker, of which I have given Private Notice. It is whether your attention has been called to the error of approximately 30 per cent. in the maximum price of certain cloth, prescribed in the purported copy of Statutory Rule and Order No. 179 of 1946, and related Schedule 2A, which copy was presented to Parliament on 14th March; whether your attention has also been called to the purported correction of the error by the Board of Trade by a correcting slip issued on 26th April, upon which date the time for moving to annul the Order normally expired; and if you will rule whether the Order was validly presented, and, if so, upon what date'?"
  Your predecessor made this ruling, Mr. Speaker:
  "My attention has been called to the error contained in the copy of Statutory Order No. 179, laid on 14th March, or rather in the Related Schedule 2A, by which this Order was accompanied. The period of 40 days during which, under the parent statute—the Goods and Services (Price Control) Act,
  460
  1941, Section 17—the Order could be prayed against has now elapsed. The error to which my attention is directed occurs in page 21, line 11, column 2(a) of the Related Schedule, and consists in the printing of `2s.10½d.' in place of `2s.0½d.'. A corrigendum slip indicating the error was issued on 26th April. The question I have to decide is whether the error contained in the copy of the Statutory Order, as presented, vitiates the laying of the Order before the House for the purposes of proceedings in this House under the Act."
  Your predecessor ruled as follows, Mr. Speaker:
  "There is no precise precedent which covers this case. But it has on several occasions been ruled by my predecessors in the Chair, in the case of the laying before the House of Statutory Orders in dummy, that the period, for which an Order has to lie before the House, begins on the date on which a complete copy of the Order is available to Members. This principle, in my view, requires that the copy of an order laid should not only be complete but also correct." —[OfficialReport, 15 May 1946; Vol. 422, c. 1880–81.]
  Mr. Speaker: Order. The hon. Gentleman is boring the House. If he is alleging that there is something incorrect in this order, that is one thing, but I have before me the certified true copy of Statutory Instrument No. 812. As he has drawn my attention to page 614 of "Erskine May" and read part of it, let me quote the relevant part which states:
  "The laying copies must be certified by the responsible Department as true copies of the original document retained by the Department".
  A true, certified copy that has been duly signed has been laid in this case. It is not out of order in any way. Therefore, what is the hon. Gentleman's point?
  Mr. Hickmet: May I answer that, Mr. Speaker?
  Mr. Speaker: Order. The hon. Gentleman must put a point of order to me with which I can deal. I have dealt with what he has said, and there is nothing more to say. We must move on. I call the hon. Member for South Shields (Dr. Clark).
  10.31 pm
  Dr. David Clark rose——
  Several Hon. Members rose——
  Dr. Clark: I beg to move, That an humble Address be presented to Her Majesty, praying that the Town and Country Planning (NIREX) Special Development Order 1986 (SI, 1986, No. 812), dated 7th May 1986, a copy of which was laid before this House on 14th May, be annulled.
  Mr. Michael Brown: On a point of order, Mr. Speaker. I hope that you have not yet called the hon. Member for South Shields (Dr. Clark), because following the point of order——
  Mr. Speaker: Order. The hon. Member for Glanford and Scunthorpe (Mr. Hickmet) had a good run, and I have dealt with his points.
  Mr. Michael Brown rose——
  Mr. Speaker: Order. The hon. Gentleman can make his points during his speech.
  Dr. Clark: We are obviously discussing a matter which although on the surface is narrow and technical, is one of great concern and emotion, as we have seen. Hon. Members rightly feel that this is a serious issue.
  Technically the issue is narrow—whether we grant NIREX a special development order to allow it to bypass the planning procedure and start exploratory work on a near-surface site for the disposal of radioactive waste. It is true to say, without any exaggeration, that the

  461
  background to this apparently straightforward application is of great national interest because it will have implications, stretching far into the future, with which our descendents will have to live for generations to come. Such a responsibility is grave, and I hope to persuade the House that it would be an error to grant NIREX this special development order.
  Although the nuclear and radioactive issue appears complicated, it is not impossible for the layman to grasp. It is incumbent upon us as legislators to try to understand these complicated isues and then to explain them to our constituents. In that sense I pay a warm tribute to the Chairman and members of the Select Committee on the Environment for their recent report on radioactive waste. It was first-class, and it has helped the learning curve of some hon. Members, including myself. It has helped to clarify in my mind how we should be tackling some of these fundamental issues that will remain with us, whether or not we are in favour of nuclear energy and weaponry and, much more fundamentally, whether or not we are in favour of medical treatment that involves radioactive material.
  The waste from those activities will remain with us, and we shall have to tackle it. Tonight we are discussing how we might tackle only one type of waste—very low-level waste. I ask for reassurance from the Government that we are talking about only very low-level waste. I assume that the statement on 2 May about intermediate waste stands.
  Mr. Douglas Hogg: I am sure the hon. Gentleman appreciates that there is a distinction between waste known as low-level waste and waste known as very low-level waste.
  Dr. Clark: If the hon. Gentleman had been more patient, he would have heard me put that very point to the Minister. I was about to ask the Minister whether it is true that only short-lived, non-alpha low-activity waste would be deposited in these sites. As the hon. Member for Grantham (Mr. Hogg) has indicated, there are different types of low-level waste. It is important that the point is made.
  We are talking now not about the technical application of tackling the problem but how we go about the exploratory work. It might be useful if I quickly rehearse the chronology leading up to the order.
  The House will remember that on 25 October 1983 the Government announced that two sites would be investigated to see whether they were suitable for low-level and intermediate-level waste. One was a shallow facility at Elstow in Bedfordshire, and the other was at Billingham in Cleveland, where it was proposed to have a deep repository in an anhydrite mine.
  It was decided, even by the Government, that the Billingham proposal would be unsuitable. In January 1985 they announced that that proposal would be abandoned but that they would press ahead and look for at least two other sites with shallow trenches. The proposal to deposit waste at Billingham may have been sound scientifically and technically, but it illustrates the difficulty which we face when dealing with the nuclear industry, because we are dealing with public perception and understanding. While the proposal may have been sound technically, in terms of psychology it was sheer madness to attempt to locate a nuclear dump under an area that was not only greatly built-up but that had on it one of the largest chemical complexes
  462
  in the United Kingdom. That indicates the difference in perception between us as laymen and nuclear scientists. Anyhow, the Government rightly decided that Billingham was not a suitable site. On 25 February this year they announced that three additional sites were proposed for exploration by NIREX — South Killinghotme in Humberside, Fulbeck in Lincolnshire and Bradwell in Essex. We then had the announcement of 2 May, to which I have already referred, when the Government appeared to say that they were talking about only low-level waste. That is the background.
  During a very good and thorough debate on 13 March we had a general philosophical discussion about nuclear waste. Many of the arguments which will be developed further tonight were deployed at that stage. Since that debate the whole world has experienced something which has heightened the nuclear awareness of every person in the northern hemisphere. I do not think there is anyone in the House or in the country whose awareness of nuclear and radioactive matters has not been heightened by the terrible disaster at Chernobyl. It would not be the slightest exaggeration to say that that has created a great deal of fear, anguish and anxiety among millions of people.
  For the first time many people who had not questioned radioactivity or nuclear power have begun to question it. It would be surprising if that was not so. Indeed, that experience has been traumatic in the true meaning of the word. Many people's perceptions will never be the same again. On top of a series of unfortunate and, by themselves, usually minor incidents in this country, principally at Sellafield, that has heightened anxiety to an unprecedented level. Only today we heard of an unfortunate accident just across the Channel in France, reminding us again that the nuclear industry knows no national boundaries. At Cap de la Hague five personnel have been affected by radioactivity in what I understand is a nuclear waste unit. Perhaps the Minister can advise us whether it was in the reprocessing plant or in the waste unit.
  The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): It was in the reprocessing plant.
  Dr. Clark: I am grateful for that information. It highlights the difficulty of getting information, and getting it across to the general public. The basic thrust of my argument is that it is yet another incident which increases public anxiety about radioactive and nuclear matters.
  It had been my impression that even the Government had changed their attitude and realised the significance of the factors that I have mentioned. When the former Secretary of State for the Environment, who has now transferred to the Department of Education and Science, addressed the House on 13 May, his stridency and, if I may say so, arrogance had gone, to be replaced with a softer, gentler more understanding and reassuring line. It appeared that the Government had realised the significance of the aftermath of Chernobyl. Unfortunately, that humility was shattered the next day when they laid this order.
  If the Government are successful with the order, a complete stage in the normal planning procedure will be bypassed. It would be sheer folly and, I predict, counter to the Government's intentions to bypass the normal planning procedure. At this time of great public anxiety

  463
  we should be seeking to open up the debate and to reassure people. There is an on us onus to persuade the public of the merits of our case, whatever it may be. Yet, this is a proposal to stifle public debate and to remove from the public arena the opportunity for people, through their democratically elected representatives, to make their voices heard. That is crass stupidity. We should be allowing opportunities for both sides to make their case. We should not try to stifle the debate.
  The Minister may respond by saying that local authorities can reject the application for the exploratory work. Perhaps I may remind the House that we are talking not about a man, a dog and a measuring rod, but about a well assembled, highly technical, sophisticated, expensive operation, and rightly so. I refer hon. Members to paragraph 5 of the order, which sets out in detail the extent of the work which would be permitted without any consultation with local authority representatives, if the order is passed. It is extensive and may last for two or possibly even five years.
  Mr. Hickmet: Does the hon. Gentleman agree that the laying of an SDO to carry out works of this magnitude goes far beyond the powers envisaged in the statute for giving the Secretary of State permission to bypass planning procedure? Does he agree that this is a unique exercise of those delegated powers?
  Dr. Clark: The hon. Gentleman has a good point. As he has said, there are occasions when it is right and proper to stray from the normal planning procedures, but this matter is of such public concern that it is wrong to use the special development order procedure. It is sad that the Government have used this procedure eight times. The Government's record on planning is not good.
  The Minister might argue that the local authorities could reject the application, and that would be it. However, it would not, because if the local authority rejected the application—the Humberside authority has already said that it will do so—it would be open to NIREX to appeal directly to the Secretary of State. If he is so minded, after having examined the merits of the case, he could then grant permission for the exploratory work. At least, the general public would then have had the opportunity to hear the merits of the case for the locality being used.
  Similarly, the Minister might say that a local authority could try to delay progress and refuse to discuss the application. He must know that in such cases, if, after eight weeks, no consideration has been given to the application by the local authority, NIREX can refer the application direct to the Secretary of State, and he could, if he thought it right, grant permission for the exploratory work. In that case, the onus would be on the local authority, and it would be its responsibility if it stifled local debate.
  The Minister keeps going on about how important it is to get this under way, but I wonder whether a delay of three or four months, which would be the maximum, would matter too much, bearing in mind that we have a year or two years in hand. I fully accept that there are difficulties, and that Drigg cannot indefinitely contain all the waste that will be produced.
  The scientists tell us that the site chosen will be safe, but everyone admits that in the public perception there is
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  a gap between what the scientists say and what they mean. I quote again the example of the suggestion of Billingham. A psychological factor is involved that the Government, by placing the orders and restricting the public debate, are doing nothing to allay. These fears are heightened—I do not say this discourteously—by the appointment of the new Secretary of State. His record as Secretary of State for Transport was not good on public inquiries. He decided to go ahead with the Channel tunnel—the greatest engineering enterprise for decades—without even a public inquiry. After a Committee of both Houses of Parliament recommended that the Okehampton bypass should go by the southern route, he decided to use his parliamentary muscle to overturn the decision.
  Mr. Stan Crowther: I am following with great interest the points that my hon. Friend is making, and I agree about the desirability of going through the proper planning procedures with, if necessary, a public inquiry preceding an appeal to the Secretary of State. However, as in this case the Secretary of State is proposing the order, does it not show that he has already made up his mind before he has heard the case? Therefore, would not any public inquiry be a farce and a waste of time?
  Dr. Clark: My hon. Friend, with his usual perception, went right to the logic of the case. If we cannot change the Government's mind—it may be closed—at least we can have a public debate and an opportunity to discuss the merits of the case.
  I submit that the proposal before us, in the form of this order, is inappropritate. I believe that it will set back the cause that the Minister proposes. It will heighten suspicion about the Government's intentions, as my hon. Friend the Member for Rotherham (Mr. Crowther) has said, and, more importantly, it will do nothing to allay the genuine fears of millions of people.
  10.51 pm
  The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): On 13 May the House debated and approved a motion on nuclear matters. This included an endorsement of the Government's first stage response on 2 May to the report of the Select Committee on the Environment on radioactive waste. That response reaffirmed the principles on which the Government's policy on the management of radioactive waste is based. It also set out the Government's comments on those recommendations in the Committee's report that were directly relevant to the concept of a near-surface facility. It is against that background that the Government have brought forward the special development order now under debate.
  I should like to say why the Government consider the special development order procedure to be appropriate. I must say to the hon. Member for South Shields (Dr. Clark), whose advice on such matters the House greatly respects, that there has been a little selective amnesia. He will remember, and the hon. Member for Copeland (Dr. Cunningham) will recall even better, that the great THORP project was approved under the special order development procedure. Before the hon. Member for Southwark and Bermondsey (Mr. Hughes), who is the Liberal party's spokesman, gets too excited, I must remind him of a moving speech made by the present leader of the SDP, the right hon. Member for Plymouth, Devonport (Dr. Owen).
  Mr. Simon Hughes: During the debate in March 1978, when the prayer against the order was moved by my right hon. Friend the leader of the Liberal party—if the Minister checks he may confirm this—no speech was made by the present leader of the SDP. Indeed, there was total unanimity, not only on the Liberal Benches, but on Labour and Tory Back Benches in opposing the special development order.
  Mr. Waldegrave: I can confirm that the Liberal party's position on Sellafield has been reasonably consistent. Tomorrow, I shall send the hon. Gentleman a copy of the speech made by the right hon. Member for Devonport, which took a rather different line. I shall not press that in terms of alliance unity.
  The Government accept that there is a need for a near-surface facility for the disposal of low-level waste. The only national disposal site at present is at Drigg in Cumbria. It has a finite capacity. I was grateful for the confirmation by the hon. Member for South Shields that he recognises that, as does the hon. Member for Copeland, who must know the site better than most of us.
  Another site is needed, whether or not the nuclear power programme continues. That is a separate debate. The Government believe that nuclear power, subject to stringent safety provisions, has a continuing role to play, but even if, and perhaps especially if, all existing power stations were to close tomorrow, a new site would still be required. The hon. Member for Copeland, in his speech on 13 May, accepted that need, as did the Environment Committee in its report.
  Mr. Ian Campbell: Will the Minister tell the House when the new site will be approved?
  Mr. Waldegrave: I shall deal with that. I shall turn to what is obviously a fundamental point later in my speech. My hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) bases his opposition to the development on that point. When he deploys his arguments, I shall try to respond to them.
  Before any site can be developed, NIREX, as the developer, must have sufficient information to determine whether a site is suitable and can be defended at a public inquiry. That requires detailed information, not least on the geology and hydrogeology of the site.
  The Government considered whether preliminary geological investigation of each site should be the subject of a separate planning inquiry—we considered that quite seriously, as hon. Members would have asked us to do—to be followed by a further inquiry into any subsequent proposal to develop a particular site. This could have taken a number of years. The idea that there would have been a three-month delay is a little optimistic. In reality, there might have been two long inquiries laid end on end.
  The Government rejected that course because they believed that it was wrong unnecessarily to subject any community to such a period of uncertainty. In doing so we were responding—I shall not exaggerate—to points made, not by everyone in the area, but by a number of wise, elected representatives of some of the areas. My hon. and learned Friend the Member for Mid-Bedfordshire was in the lead. On 24 January 1985 he said that the special development order procedure was sensible. I understand that there is another argument, but it seemed to us that, as long as there was a proper and detailed public inquiry in
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  due course, the idea of subjecting the local communities to what might have amounted to three or four years of continuing inquiry would have been in the interests of no one.
  The special development order was issued in draft to give those with an interest an opportunity to comment. I have met the hon. Members representing all the constituencies concerned and have visited all the sites. A number of changes have subsequently been made to the order.
  Mr. Austin Mitchell: Ha, Ha.
  Mr. Waldegrave: The most important—I hope that even the hon. Gentleman will recognise that it is an important change—is a decision to amend the order to allow NIREX to carry out drilling for the investigation of a site to take low-level waste only. The Environment Committee asked for that change, as have many hon. Members and the communities that they represent. The Government do not accept that there are any scientific or technical reasons why short-lived intermediate-level waste should not be disposed of in a near-surface site. Nevertheless, we recognise that many people would be reassured if any near-surface facility that is developed were used only for low-level waste.
  Mr. Hickmet: If the order allows NIREX to carry out a survey to determine whether a site is suitable for low-level waste only, does it not follow that at some future date it might be possible for the site that was surveyed and adopted to be used for the disposal of intermediate-level waste? There is no guarantee in the long term that the site would not be so used. Is that right?
  Mr. Waldegrave: There are several extra levels of guarantee, but basically the same guarantee exists as is involved in adapting planning permission to do something other than the purpose for which it was originally granted. Further planning permission would have to be granted. What is more, there are further fall-backs. The authorisation issued by my Department concerning what would go into the site would have to be altered. The whole procedure would have to be re-opened. My hon. Friend need not be too anxious on that score. I recognise his point. It has been made to me by the citizens and elected representatives in the areas that I have visited. I hope that that helps. It is important to have that point on the record.
  Mr. Jeremy Corbyn: Will the hon. Gentleman tell us what representations he has received from the right hon. Member for Colchester, South and Maldon (Mr. Wakeham) about the site of Bradwell power station, because the right hon. Gentleman is not likely to be able to speak in the debate?
  Mr. Waldegrave: I do not know whether that is an attempt to embarrass my right hon. Friend. I am not sure that my right hon. Friend needs the hon. Gentleman's help to put across his views. Indeed, I am not sure that the Labour Front Bench needs the hon. Gentleman's help. We recognise that many people would be reassured if any near-surface facility that is developed were used only for low-level waste. For that reason, we have decided that both short-lived and long-lived intermediate-level waste should be stored, pending the identification and development of a deep disposal site or until the radioactivity has reduced sufficiently for disposal at a low-level waste facility.

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  Other significant changes have been made which should be of direct benefit to those communities surrounding the sites.
  Mr. Hickmet: With respect, my hon. Friend has just made a very serious comment. He referred to waste being stored until such time as the intermediate-level waste is no longer as radioactive as it might be, or until it can be defined as low-level waste. Is he saying that at some future date the waste that would not be stored now might be stored at the facility that is ultimately chosen?
  Mr. Waldegrave: My hon. Friend is undoubtedly becoming more expert every day in these matters. We all know that if we wait long enough the substances will not be radioactive at all. The shorter-life intermediate-level waste converts itself by the inexorable processes of nature into low-level waste if one waits long enough.
  A point put to me by a number of representatives was that the SDO will now run for five years instead of being open ended. This means that all work on site must be completed within five years. NIREX is now required to make detailed after-care arrangements for the sites, which it will have to maintain for two years. These are subject to the agreement of the relevant local authority. NIREX will have to give the local authorities concerned information on its proposed investigatory work and bring it up to date at intervals.
  Time limits have been set on when operations may be carried out. In general, these restrict operations to between the hours of 7 am and 7 pm and prohibit work on a Sunday or a public holiday. There are also limits on the noise that may be generated.
  Mr. Michael Brown: Will my hon. Friend tell the House when he expects NIREX, within the limits that are set by the order, to be in a position to name its site?
  Mr. Waldegrave: That is a slightly different timetable from the one to which I referred. I referred to a less interesting but nevertheless still important point, namely, limiting the interference and noise around the site. NIREX needs to take its measurements and drillings for a full year in order to obtain the full hydrological cycle. If NIREX goes on to the site in July, it will need to drill for a full year until the next July. There will then be a considerable period of analysis by NIREX of the data before it brings before a public inquiry one or more of the sites. I cannot give an exact timetable. It depends upon what NIREX finds. Some of my hon. Friends have said to me that NIREX will rapidly discover geological reasons why a particular site is unsatisfactory and that that will allow it to release the site.
  Sir Trevor Skeet: I cannot understand why my hon. Friend is asking for five years. Will he give an undertaking that when the geological examinations have been carried out and he is satisfied about the water table he will release almost immediately those sites that are found to be unsuitable?
  Mr. Waldegrave: The reason for the five-year period is that it is just possible that if a particular site went before a public inquiry the inspector would ask NIREX to take certain additional measures. That is why it has been brought down to a finite period, but one which should overlap the public inquiry.
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  I was often asked, when I visited each of these sites and talked to local communities and councillors, why the Government had allowed NIREX to select a particular site for investigation. That is to misunderstand the respective roles of NIREX and my Department.
  It is the responsibility of the authorising Department to ensure, by general oversight and the use of its statutory powers, that high standards of waste management are maintained, that potential hazards are reduced to levels that are not only acceptable, but as low as reasonably achievable, and that the public are fully safeguarded, both now and for future generations. This includes scrutiny by the Radiochemical Inspectorate of my Department, the Nuclear Installations Inspectorate and the Ministry of Agriculture, Fisheries and Food to ensure that the terms of the authorisation are met. My right hon. Friend the Secretary of State for the Environment, together with my right hon. and learned Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Wales, are responsible for the overall strategy of waste management.
  The implementation of the strategy falls to the nuclear industry. It is the particular responsibility of NIREX to develop comprehensive plans for dealing with low-level and intermediate-level wastes.
  It has been for NIREX, on the basis of information available to it, to identify the sites that it considers to be suitable for a near-surface facility, and it has identified the four sites referred to in the SDO. If the House allows this order to proceed, as I would urge it to do, NIREX will be able to collect the geological information that it needs. It will then have to decide which site, if any, to put forward and set out the design of that facility.
  My right hon. Friend the Secretary of State for the Environment has already made it clear that any application will be subject to a public inquiry. My Department set out the
  "principles for the protection of the human environment"
  in December 1984.
  Mr. Douglas Hogg: Will my hon. Friend give an undertaking that the public inquiry's ambit will be very wide? It is not sufficient to concentrate on specific site criteria. The inspector must be allowed to look at all methods of disposing of low-level nuclear waste and to determine the most appropriate method.
  Mr. Waldegrave: My hon. Friend has made an important point, which has been made to me in relation to all the sites. I am in a little difficulty, in that it will obviously be for Ministers of the day to decide whether they want to make any policy statement to the inspector. However, it is important to realise that, regardless of whether the Secretary of State of the day says that the Government's preferred policy is that if a proper site can be found, there should be a low-level facility, it remains open to the inspector to allow any evidence that he regards as relevant.
  Mr. Hogg: I understand that an undertaking cannot be made to give a specific remit to the inspector to enable him to discuss all questions of disposal, but will my hon. Friend give an assurance that this Government will not prevent the inspector from looking into the wider questions of disposal, including all alternative methods?
  Mr. Waldegrave: I can give my hon. Friend a better assurance than that. It is not within the power of Ministers

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  to prevent the inspector from allowing evidence that he believes to be relevant to the inquiry. For example, if it could persuasively be shown that the route of disposal on offer was less satisfactory than another route, a case would have to be made that was of relevance to the inquiry. I understand that we do not have the power to exclude such evidence.
  Mr. Simon Hughes: Although that answer is satisfactory in a limited way, does the Minister agree that, as the Select Committee says in paragraph 99, the poor state of research in the United Kingdom means that it is impossible to make an informed choice at this stage between the different options? Thus, within the context of a planning inquiry, it would not be possible for an inspector to make a proper assessment. We need the research before that evaluative judgment can be made.
  Mr. Waldegrave: Perhaps the hon. Gentleman underestimates the extent to which there is an international interchange of research on this issue. Perhaps, too, he overestimates the extent to which the Select Committee's criticisms of the research effort involved in this country—with which I have some sympathy—relate to high and intermediate-level waste. Members of that Committee may be in the Chamber, but I think they believed that we would be wise, for example, to have an underground laboratory like the one that I shall see soon in Canada.
  Those who offered alternative well-documented routes would not have much difficulty in making a case, although I do not believe that such a case would necessarily carry the day.
  Mr. Nicholas Lyell (Mid-Bedfordshire): Pending the conclusion of investigations into individual sites, will my hon. Friend give an assurance that the Government, and NIREX, acting under Government instructions, will continue to investigate thoroughly alternative solutions for the disposal of low, as well as intermediate and high-level waste?
  Mr. Waldegrave: Most of the options urged on me by hon. Members have involved adding low-level waste to intermediate-level waste in some sort of facility. Work is continuing, and I think will expand, on the development of alternatives for intermediate and high-level waste. However, I cannot guarantee that much more money will be spent on research into the principal route for low-level waste. Work is continuing on investigating different methods of deep disposal.
  Mr. Edward Leigh: This is important. Can my hon. Friend say whether the Government have set their mind definitely against the prospect of dealing with low-level waste in the same way as the Swedes do? If they have, that would be very encouraging to our constituents.
  Mr. Waldegrave: I cannot give my hon. Friend as much comfort as that. The Government have taken the view, having done a great deal of research on low-level waste as experienced around the world, and having looked at the geology in this country, that there is a feasible route, but it is for NIREX to say that it will follow that route and to offer a particular facility at a particular place. Nothing that I say tonight pre-empts the decision of the planning inquiry that, in spite of that, no such facilities or no such place may ultimately be found.
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  We believe in the concept of a shallow disposal site. We have some support from the Select Committee on that and from the hon. Member for Copeland in his speech last week. That design concept looks hopeful and worth proceeding with, if a proper design can be produced and a proper place can be found for it.
  One of the requirements in the assessment principles pubished by my Department is that any proposal should include an "environmental assessment" of the consequences of that proposal. This will require the developer to show that he has followed a rational procedure for site identification, and will therefore cover alternative sites. All this material will be available for examination at a public inquiry.
  The Environment Select Committee criticised, and I believe rightly, successive Governments for not making more rapid progress in the identification and development of sites for the disposal of radioactive waste.
  The Radioactive Waste Management Advisory Committee, under the chairmanship of Professor Paul Matthews, rebuked us—a dangerous thing to do in these days of privileged debates—and said that sometimes politics had interfered in the rational procedure for the national interest. We all have a responsibility. I do not think that any hon. Member would delight in that responsibility, but we have responsibility—whatever our views—for the long-term nuclear programme. We must take a responsible view about the disposal of waste. It is not a happy responsibility. It is not easy and it is not popular, but it is an inescapable responsiblity. I ask the House to recognise this responsibility, to reject the prayer and to let the order issue.
  11.13 pm
  Mr. Austin Mitchell: Debating this issue so soon after the shabby, inadequate reply which the Department of the Environment gave to the Select Committee seems to show that the Government are in too much of a rush for the health of democracy. In reply to the Committee's excellent report, the Government put up a pathetic pretence of considering the issues while ignoring the Committee's basic recommendations.
  The report hung together as a whole and should have been treated as whole. The recommendations interlocked. It was unrealistic and unreasonable to take out 13 of the 43 recommendations, to deal shabbily and inadequately with them and to accept only one. The Government called that considering the report and replying to it. That reply has now been foisted on the back of a block vote based on the Government's majority, without any consideration. They call that a policy. It is an apology for a policy, and as a result a serious blow will be struck at areas such as mine and at three other areas which are mentioned in the order.
  It is clear that the Government are proceeding at speed to get on with their real priority, which is to push on with the semblance of a nuclear dumping programme. It is a steamroller approach—the tactic of those who recognise a weak and inadequate case which cannot be justified intellectually, which has not been thought through, and which will not stand up to examination. That means that it must be foisted through by means of a brute majority, and quickly, so that the issue is over and done with and out of the way. There is no need to function in that fashion. The Government are behaving in an unforgivable fashion. The Drigg facility—this was made clear in an answer to

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  one of my parliamentary questions—will be available until the year 2010. It will not be full until that year if compacting is introduced in 1987. The problem will not arise until the next century, so why is there a rush to deal with it now? Why are the Government acting with such speed, and why is blight being foisted on areas such as my constituency?
  In his evidence to the Select Committee, Lord Marshall said,
  "We do not see urgency attached to this matter".
  Against that background, why are the Government acting so quickly? To do so is an affront to the Select Committee, which addressed itself to the first full and detailed consideration of the issue. Surely it deserved a full and detailed reply from the Government if it was to be done justice. The Select Committee's report has been treated shabbily.
  No strategy or planning has been evident on the Government's part. Instead, there seems to have been a process of improvisation and an opting for a cheap and nasty system of disposal, which is to be pushed through by means of the Government's majority in this place. That is an undemocratic approach, and my constituency and other areas will suffer the consequences.
  In their response to the representations that have been received from my constituency, the Minister and his ministerial colleagues have insulted the intelligence of my electors and others. I said to my electorate, "It is important at this juncture to take the democractic approach and to write, to persuade and to put arguments to the Minister. He is a reasonable man and he will listen. If we can convince him that there is no case for that which the Government propose, our representations will have some effect. So write, sign petitions, go through the democratic processes and make representations, and a reasonable Minister will listen."
  The letters poured in, but they were not answered before the special development order was laid. The Minister was sent letters urging him to think again and not to blight the area, but he did not have the decency to reply to them before rushing in the order. Petitions have poured in. I shall be presenting later tonight, with the full support of the hon. Member for Brigg and Cleethorpes (Mr. Brown)—it is only an accident that I am presenting the petition and not he—a petition from Humberside that is supported by 155,000 signatures. In effect, the petition states, "Do not inflict this on our area."
  Unfortunately, the Minister has not listened. There is a weight of opinion and reaction which has been demonstrated in the Chamber, but the Minister is adopting a steamroller-like, ill-considered and over-speedy approach. If he forces that upon the people, we know what their response will be. If he ignores the representations that are made democratically in letters and petitions, there will be a violent reaction later, and if that happens, he will be responsible. He has not listened to the arguments and he has not considered the case that has been put in opposition to the Government's approach.
  I advised my constituents to organise deputations and to put the argument to the Minister. The deputations have flocked to him, but he has not even been willing to hear or see some of them. I asked him to receive a deputation of Humberside Members—the request was made well before the process of consultation was under way—but
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  my request was not granted. Without seeing that deputation of hon. Members, he has rushed in a special development order.
  I asked him to receive a deputation from Britain Against Nuclear Dumping, but there was no accommodation, no acceptance and no reply. It is true, however, that the Minister has seen some deputations and that junior Ministers have seen others. They have acted as rubber cushions to absorb the arguments rather than as relays to the Minister. They cannot have listened to the arguments, which were extremely well put by the delegations. Ministers have not listened and the deputations have been fobbed off.
  We were advancing four arguments in the letters, deputations and petitions, all of them powerful. First, we argued that there was no need to rush into a decision at this stage. We said that if the Government were to carry conviction, to demonstrate that they had a considered programme, to show that they had a plan and to make it clear that they had thought the matter through, they must take time to present the arguments to show that they had considered the issues from scratch, to demonstrate that they were not going for the cheap-and-nasty option, to make it clear that they would not foist on Humberside an option that has not been accepted by most other countries with nuclear waste—an option that has been used only by the United States, where it has produced problems, and in France, which is not known for the democracy of its planning and other organisational decisions—and to show that they had chosen the sites on the basis of a full consideration of the alternatives. In fact they chose these sites not because they were the best sites but because they were owned by the Government or NIREX partners. That was why our site was chosen. The Minister admitted that to me when he said:
  "I understand that ownership was a factor in NIREX's choice of sites insofar as it seemed likely to affect availability." —[Official Report, 29 February 1986; Vol. 92, c. 506.]
  That was why that site was chosen. They chose that site to avoid another fiasco like that at Billingham when ICI pulled out in the face of local pressure. The Government have chosen sites that they can obtain because they own them, not because they are the best sites. We have had this site foisted on us simply because there is a site owned by the Central Electricity Generating Board in the area. That is hardly democratic. The Government did not consider looking for the best site and they did not consider the matter rationally. They did not consider the alternatives. They should not have rushed into this.
  Our second argument was a warning. We warned that it would be a setback if there was a site in our area. It would be a setback to house prices and to the prospects of development for the area. This area is struggling for development and it does not have the advantages of full development area status and the financial benefits that flow from that. We do not want the image that is associated with nuclear dumping. That would not be attractive for an area that deals with food production. It would not be a great asset for us. The Minister agreed with that when he met the deputation and he accepted that it would not be a good selling point and would not lead to the establishment of food factories in Grimsby.
  Mr. Martin Flannery: There is another aspect to this issue which my hon. Friend might consider. People who would have gone to that area

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  are now reconsidering going near it. I spoke earlier this evening to the deputy general secretary of the National Union of Teachers who told me that around Sellafield they are finding great difficulty in filling teaching posts—especially posts for scientific study—because people who would have gone there no longer want to go to areas where there is nuclear power or nuclear waste.
  Mr. Mitchell: The Minister appears to be willing to attach the mark of Waldegrave to my area and give us the stigmata. The function that is proposed for my area will not aid us in our struggle to attract food industries, to present the area as a food town or as a suitable site for the development of food industries. What advantage will there be in having the site in our area?
  The Minister ignored that and the third argument. The fact is that the blight begins with the order. The blight does not begin with the planning process or with the final decision. The association between the areas of nuclear dumping is contained in the special development order. We pleaded desperately with the Minister to take us out of the list of sites and not to inflict such a blight on us in a casual and cack-handed manner. Other areas have made similar pleas to the Minister. However, he has not listened to any of the arguments. That is absolutely abhorrent. I feel betrayed.
  Most of the people I took to talk to the Minister have also been betrayed because their arguments were not heeded. The Minister is presenting us with his smooth, bland apologetic face, but he has not listened to the arguments. The list that has been presented tonight is the same list that NIREX shoved into the Minister's hand in January. It is unchanged and there has been no consideration of it. Not one dot or comma has been altered. That is sickening.
  The next argument is simple. The site is not suitable for various reasons. There are gas caves, and chemical and oil industries in the surrounding area. This area gave the country the tragedy of Flixborough and the mess at Barnetby where there was a serious oil spillage recently. Does the Minister really mean to inflict nuclear traffic, transport and dumping on such an area? That is simply not acceptable
  The Minister has not listened to the arguments. The consultation that he made so much of was an absolute farce. The deputations were robbed. The Minister should at least have had the decency to pay their train fares from and back to Grimsby and reimburse the money that those people spent coming to London to make their points for him and his colleagues to ignore. He has not considered the alternatives or questioned whether NIREX has chosen the best site. He has not fulfilled his responsibility.
  The Minister has simply put his signature on the NIREX list, and it is inconceivable that he could have listened to any of the arguments. His mind has been closed throughout, which is tragic for him and for us. The Department of the Environment has a greater responsibility to the environment and the people who live there than to act as the political arm of NIREX, because NIREX is the public relations arm of the nuclear industry, and we do not trust the nuclear industry. If the Department responsible for our environment is to taint itself with those associations and act as a rubber stamp for NIREX, it will forfeit all credibility and responsibility for the area. What confidence can people have in that Department? What trust can they have in a Department that has behaved in
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  that way? What trust can they have in the reasonableness of the democratic procedures in which they are asked to participate when the Minister behaves in this way and rushes in so quickly to foist this on us.
  Why has the Minister behaved so stupidly and so criminally towards my area? Why do so at a time when the Russian tragedy at Chernobyl has highlighted anxiety in the country? Why rush into this when an election is approaching? This is a disasterous issue to be stirring before an election. Why behave so stupidly and unfairly? Why answer the arguments that have been put seriously by my constituents with what amount to half truths`.' It has been said that there are half truths, lies and ministerial replies. The letters that my constituents received after the decision was taken and the order was published were half-baked apologies for the truth and insults to their intelligence.
  For the Minister to give the impression in those letters that all that will be dumped on the site is bandages and crutches thrown away by people suddenly rejuvenated by radium treatment is a distortion of the truth. The bulk of the material will come from nuclear power production and from reprocessing. Even if it does not come directly to those sites, we shall simply be making available sites to take material that used to go to Drigg, so that Drigg can absorb the waste from reprocessing plants. It is not about medical treatment, but about the power programme and reprocessing.
  Why is the Minister behaving like this now? Is there a conspiracy? Is the nuclear industry getting its way again—that public relations mafia which gets its way all too often? I do not believe so. The Minister's speech tonight has given us the clue. It is dull, pedantic duty. He has a sense of duty which leads him to impose this on us. He is not thinking, questioning that sense of duty or examining the arguments, but plodding on with it in this way. A man with that sense of duty, in charge of a majority that can force through anything in the House, is a man who should be watched, for he is dangerous. He does not need to weigh the matter for himself and fulfil his responsibility to examine the issues, because his sense of duty drives him on.
  That sense of duty compels the Minister to have a policy. Several years ago, the Flowers report said that the Government had to have a policy for nuclear waste and that we had to solve the waste problem before we could expand the nuclear power programme. The nuclear industry wants the Government to solve the waste problem, because otherwise the industry will drown in its waste. The Government want to expand the nuclear power programme. That is what is behind it. It is not the stations we have, but the stations for which we are making way. The Government will lie low for a bit and keep quiet until the embarrassment of Chernobyl dies down, but that is their intention. They also want to expand the reprocessing operation, as though that was an appropriate destiny for an overcrowded country such as Britain—to become the wash house of the nuclear world. That is what we are hiring ourselves out to be. It is to make room for that sort of waste that our areas have to be blighted.
  Those pressures produce the waste problem. The Government feel that they cannot go ahead with either of those programmes until the waste problem is solved. Humberside and the other areas must take the

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  consequences, and the consequences begin tonight. The blight on house prices and development prospects begins here. That is why we are fighting to defend our areas.
  The Minister is turning people against the nuclear power programme and producing the sort of emotions that we saw earlier. I was a doubtful supporter of that programme until all this came along. I was forced to ask whether I want the nuclear power programme at this expense. My decision is not particularly important, but that is the intellectual process that I went through and the same thing is happening to thousands of people in my constituency and in all the other affected areas. They are thinking it through and deciding that the game is not worth the candle. The Minister is producing a rising tide of anger and hostility to the nuclear industry and the nuclear power programme.
  The Select Committee issued a serious report, but it has been ignored by the Government. The report brings out the
  "not in my backyard" problem and says:
  "we also believe that there are ways of reassuring local people that their area has been chosen as the result of a systematic and rational process."
  Has it? Can the Minister put his hand on his heart and tell
  me that South Killingholme has been chosen as the result of a "systematic and rational process"? I will give way to him if he wishes to intervene.
  Mr. Frank Cook: He is not even awake.
  Mr. Mitchell: No.
  The report says:
  "People need to know that choice of their area is not simply the result of some quirk or quite extraneous reason such as site ownership."
  The Minister has told me that it is as a result of site ownership.
  The processes have been bad, the methods are uncertain, the disposal system is wrong—we should examine alternatives such as those used by countries that are more responsible in their treatment of nuclear waste—and we are approaching the problem from the wrong end. We should be looking at the wider issues first. The Minister says that transport, communication and all the other local problems will be considered by the planning inquiry. But the odds at an inquiry will be loaded against the local authorities, because they will have to fight with one hand tied behind their back—because of the restrictions on their spending—against NIREX, which has a budget of £800,000 a year for distorting publicity, and against the Government who are in conspiracy with NIREX.
  I hope that hon. Members in the affected areas will show their courage and independence and will serve their constituents by voting against the order. I do not question their integrity, courage and conviction; they should be on the side of sense and right. However, there may be some hon. Members who are considering doing my area down and saying. "There but for the grace of God go I. Hard Cheddar Humberside." I say to them, "You are next. Our fight is your fight. We are fighting for everybody in this matter. Do not use your votes to steamroller this on to us, to foist on us a programme which the Government have not thought through and which they cannot justify." They are proceeding in a half-baked fashion and I ask hon. Members not to use their votes to foist the result on us.
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  Hon. Members should ask themselves whether it is necessary to do it now, to do it in this undemocratic fashion and at this speed. Have the Government behaved fairly and democratically and have they listened to the arguments and considered the matter?
  Hon. Members should realise that it is our turn now, but it will be their turn next, because it may well be that at the end of the day none of these four sites will be suitable. A pointless search will blight us, but we do not know whether the sites will be suitable. The Government may land in their constituencies which may be eligible for the next site. Once one site has been obtained, others will become necessary as the programme expands and as the Government achieve their ambition of turning Britain into the dirty laundry centre of the nuclear world. Once they do that, other sites will become necessary.
  I hope that hon. Members will bear in mind that if the Government get away with this here, they can get away with it in other constituencies. I am fighting for my area. It is not Homes and Gardens country and the Minister knows that because he has been there. It is not even his kind of country, Tatler country or Country Life country, but it is our country and we are proud of it. We will not have nuclear waste there. We abhor the manner in which the Minister is proceeding. I would rather build Jerusalem in Humberside's green and pleasant land and I certainly will not allow it to become a dump. We are not allowed to build Jerusalem under this Government, but we can fight to keep out the detritus of their nuclear policy.
  Several Hon. Members rose——
  Mr. Deputy Speaker (Sir Paul Dean): Order. Many hon. Members wish to speak and I appeal for brief contributions. We have less than two hours to go.
  11.38 pm
  Mr. Norman Miscampbell: I shall be brief because I know that other hon. Members have much more urgent reasons for speaking than I have. I was a member of the Select Committee on the Environment. I say to the hon. Member for Great Grimsby (Mr. Mitchell) that I do not view the response we have had so far from the Government to be in any way shabby. Intermediate waste has been removed from the order. It would have been shabby if the Government had made an instant response to something that all Governments have agonised over the years. I have no doubt that when the time comes we will get a proper response.
  I know that the Minister has already said that he does not agree with the point, but I say that sites similar to the ones in the order can easily accommodate low-level waste. Technically, there is not the remotest problem about getting rid of low-level waste. Our Committee, representative of the whole spectrum of views in the House, agreed on that. The Committee said that things needed to be done. First, it did not want a low-level waste depository to contain intermediate-level waste. That has been accepted. It wanted proper verification of what was going into the depository and it wanted incineration to reduce the bulk. Above all, it wanted compaction. If those things are done, low-level waste can be contained in an area much smaller than we have envisaged so far.
  In addition to the sites we are looking at, we should also look at sites similar to the one that Sweden is considering. There ought to be the option of burying low-level waste

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  not in a deep depository and certainly not in a shallow land depository, but in a moderately deep depository. I accept that to do that is to throw money down the drain, but unless we begin to move in that direction we will not take public opinion with us. The Government should not make a mistake about the difficulty of convincing people. In some ways we have heard that reflected in the debate. It has been said that we can discuss, discuss and discuss, but that we cannot get across the fact that low-level waste is not a problem. If that is the case, we must meet the difficulty head on. If we want a stable nuclear industry in this country, the one way to achieve it is to satisfy public opinion.
  All four sites will get my support, because I am confident that any one of them will probably be satisfactory. I would feel much happier if we were looking at the possibility of an underground site—perhaps at expense that is unnecessary—because because in the end that may be the salvation of our industry. Public opinion will not allow it to continue unless we take steps that are probably unnecessary.
  It is no use asking NIREX because it will tell the truth—I say that after six months of investigation—and say that these sites, or similar sites, will be fine; but that is not the point. We must satisfy public opinion, so the Government would be well advised to take that step.
  11.41 pm
  Mr. Simon Hughes: My colleagues and I will support the prayer and oppose the Government. We do so, regretting the fact that the new Secretary of State does not have the courtesy to be here on such an important and sensitive matter for which he has now taken responsibility on behalf of the Government. If this shows the new caring face of the Conservative party after its election defeats, it will not do much good.
  As the Minister and all hon. Members rightly agree, the issue before us is how and where we dispose of our radioactive waste in the future. As the Minister properly said, this is an inescapable problem. Our views may differ substantially on how we can increase or decrease the amount of nuclear waste—either through the nuclear power programme or through reprocessing—but we still face the problem, we must be responsible, we must face up to the options and we must take decisions.
  Given that we have high, intermediate and low-level waste, we must plan responsibly for its disposal and storage. The preliminary question that follows—which the Minister dealt with inadequately—relates to the time scale. What is the deadline by which we must take this decision? Our task has been made easier by the fact that now we are talking only about low-level waste, and I acknowledge that concession by the Government.
  Originally the Government were going to propose land storage for intermediate and low-level waste, but now they are talking only about low-level waste. We welcome that. That retreat from the brink may indicate the vulnerability of their position. They realise that their original argument would have been impossible to win, while this one is merely extraordinarily difficult even though its consequences are more limited. But there is still no general scientific agreement about the different categories of waste. There is still no unanimity on where the boundaries between the low and intermediate levels end or begin, and it is clear that there is work still to be done in that regard.
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  The evidence as to the timetable within which we must make the decision is to be found in both the Select Committee's report and the Government's response to it. I am talking about the completed report, not the now infamous draft. Paragraph 63 of the report states:
  "the Drigg disposal site is likely to be full some time at the beginning of the next century, if another site is not found and if reprocessing continues."
  The paragraph also says that the volume of about 500,000 cubic metres by the year 2000 which is containable at Drigg can be reduced significantly by various compacting techniques. In their response the Government accept that in paragraph 13, where they say:
  "Assuming that available techniques for compaction are used by 1987, and that it is possible to develop the whole of the existing site, Drigg would be full by about 2010 in the absence of any alternative facility."
  So we have 24 years. The only argument that the Government put counter to the time that is clearly available is that it would be prudent to start now. Of course it is prudent. The question is: is it prudent to start going down only one route, or would it be more prudent to contemplate all the options logically at the same time? The latter is our argument and it is supported by the evidence of other countries, as well as the expert evidence given to the Government.
  Many hon. Members, including my hon. Friends and myself, though appreciating the concern of hon. Members who rightly have a prior duty to their constituents, would say that the argument "not in my back yard" should not be the one most often advanced. Clearly the waste will have to go somewhere. We cannot make national policy from a collection of "not in my back yard" responses. The problem is that the Government have forced such a response. First, it was Billingham for intermediate-level waste. There was a retreat from that because of ICI's retraction of its support, massive public concern and general concern about that not having been a well-thought-out plan. Elstow remained on the table, and since then other sites have been named. We cannot proceed with a "take it or leave it" option of four sites without having been asked to decide on the principle of how to store or dispose of the waste. We are not being asked that question tonight.
  What is the position about future disposal options? The Select Committee, in paragraph 83, said that investigations were still at a very early stage. Even though he says that we may disagree about the amount of research that may be needed, I hope that the Minister accepts that there is not in Britain, and has not been, any proper research programme to examine coherently, and in an adequately financed way, the range of options. We should have such a programme. Other countries have managed to develop such programmes. For example, Canada has done so from the beginning of the decade and has reached a conclusion as a result of that considered approach. Therefore, we need to research all the options of near-surface land disposal, deep-facility land disposal suggested by the hon. and learned Member for Blackpool, North (Mr. Miscampbell) as the other option to be considered now, and sea bed disposal.
  The Select Committee took a clear view. I anticipate that at the end of all the debate the Government will have shown themselves to have been misguided in going down the route they have chosen, because there is general agreement in the House that a deep disposal option is likely to be the most satisfactory for all forms of waste and is

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  most likely to alleviate the anxieties of people who otherwise will have a low-level, near-surface disposal facility in their neighbourhood.
  We could avoid all those concerns if we considered the best options as Sweden and other countries are doing. Not only is it misguided to come down in favour of proceeding down one route only—near-surface disposal facility investigation—but there is no evidence at the moment to prove that that is the best option in any event. The Select Committee, in paragraph 99, clearly said:
  "The poor state of research in the UK means that it is impossible at this stage for us to recommend any disposal option with total confidence."
  We should be able to make a recommendation with total confidence if we are to dispose of nuclear waste near people, and we should wait until we can do that before we mike the decision.
  There are objections to near-surface facilities, and the Select Committee made it clear what they are: experience abroad and anxieties at home. Evidence and anxieties have led many countries to opt for the deep underground disposal option. Only France and the United States now have near-surface disposal programmes. Germany, Sweden, Switzerland, Belgium, Canada and Finland have opted for deep geological disposal of all waste. That has not been considered here, and it should have been.
  Clearly there are understandable fears. They have been dealt with at Billingham, but they remain in Elstow, South Killingholme, Fulbeck and Bradwell. The Select Committee said that the feelings of the people at Elstow in Bedfordshire were based on reasonable scientific doubt. It is the same elsewhere. We should seek political consensus. We can allay those fears. That would be a responsible attitude. In addition, there are strong site specific objections. Bradwell is arguably wholly unsuitable on account of its geology, neighbouring facilities, position near the coast and the fact that it is a site of special scientific interest. On analytical evidence, criticisms similarly apply to some other sites. There are strong arguments why those specific sites are inappropriate. Therefore, to choose the "take it or leave it, these are the sites" option is clearly misguided.
  It is also foolish to follow that road because no site criteria have been laid down. I ask the Minister to reconsider the Select Committee's recommendation that there should be site criteria, although his Department rejected this in its response. The Select Committee was in no doubt about that. In paragraph 280 it states:
  "We therefore recommend that site selection criteria should be established in advance and published for each type of waste disposal route likely to be developed. Thereafter, the Department of the Environment should ensure that any possible future disposal site identified by NIREX should satisfy the site selection criteria for that disposal option."
  The Department of the Environment is then undertaking a review. It should complete the review, establish the criteria and then we can make a judgment. People are not being convinced by the alternative procedure. A letter was sent to my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) from a person living six miles from the proposed site at Fulbeck. It reads:
  "I live about six miles away from … Fulbeck and am therefore sufficiently removed from the area to take an objective view … Because the issue is of such importance … there have been various meetings in the area at which speakers from
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  NIREX have put their case. I have listened to this with great interest and even more so, because it could provide jobs for between 200 and 300 people …
  However, I have also heard with even greater interest … the case not only against Fulbeck as a possible site on geological, hydrological and environmental grounds, but also about the thinking of choosing inland sites at all as possible areas to dump any sort of nuclear waste.
  I have noted the undisguised reluctance of anyone from NIREX to state positively why or how Fulbeck or the other three sites were chosen and have been saddened and angered to see their indifference and patronising manner to many of the local villagers, who are extremely worried about their future and the safety of their families."
  The Association of County Councils has expressed a related view. It believes that the procedure that the Government propose removes the possibility of full consultation on the Select Committee's report and completely bypasses democratic planning participation by local government in the local areas in question. The Liberal party and many other people—we are not exclusive about this—who care about local government reassert that local people and local elected representatives have a right to participate in such decisions and that they should not be retained in the House for their conclusion.
  It would not be so bad if NIREX had any element of democratic accountability, but clearly it is an industry-biased body with no participation by people with environmental concerns or local government interests. So NIREX, which has a vested interest and is unaccountable, has put forward four proposals, and the Government have come to the House and said that that is what they want us to accept. The steamroller method that we are discussing is unacceptable. The Government must go back to the drawing board. We should look at all the options, not just one. We should treat the subject, on research needs, concerns, local government, the people and Parliament seriously.
  I received a note of a telephone message from the leader of the alliance group on Bedfordshire county council, which said:
  "Hope your resolve does not weaken."
  Our resolve not only has not weakened so far, but, whatever happens tonight, it will not weaken. We shall go on until we persuade the Government of the folly of the course that they have taken.
  11.56 pm
  Mr. Nicholas Lyell (Mid-Bedfordshire): I speak for Elstow, in mid-Bedfordshire, in the heart of the county of Bedfordshire, which has had the threat of a shallow land burial nuclear waste dump hanging over it for longer than any other site.
  I want to make my position on the NIREX proposals clear: I oppose them. I am amazed at the suggestion that a 300-acre shallow land burial site should be placed in the heart of a crowded inland county such as Bedfordshire, scarcely a mile from the nearest villages. There are five villages—Elstow, of which we have all heard, Stewartby, Houghton Conquest, Kempston and Wilshamstead—all within a mile or two of the site. The great town of Bedford, represented by my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) and myself, is within a maximum of three miles, and its nearest border is scarcely a mile from the site. I cannot believe that that is the right place for such a nuclear waste dump.
  I say that with some confidence because no other country in Europe has followed anything like such a

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  course. The only comparable site in Europe is in northern France, at Centre de la Manche. It is important to note that that site depends not on absolute containment, but, to a significant extent, on fail-safe drainage through to the sea. It is not even a site that is based on clay. It relies on placing the nuclear waste in drums, and if there should be an escape it flows down to the sea through monitored drains and is washed away by the tide.
  However much experts may hope that an inland site such as Elstow will be safe, or however much they may even believe it to be safe, no one who is conscious of Murphy's law—what can go wrong will go wrong—could ignore the risk that at some point, in an area as large as 300 acres, over the decades and centuries the drums containing the waste will break down, the concrete will disintegrate, and the water bearing radionuclides will escape and find a pathway to man.
  Those facts combine with the blighting effects of the development on the area, and the waste—an important issue for Bedfordshire—of a large amount of important brick-making clay, which has the capacity to burn itself. That is why Fletton bricks are the cheapest in the world. It is a great mistake that such a valuable mineral resource should be lost to the nation and the local industry.
  Mr. John Carlisle: My hon. and learned Friend has referred to the blighting effects in the area that he represents. Does he acknowledge that my constituency of Luton, North and the constituency of my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) are also blighted by the proposal, and that the opposition in those constituencies is just as strong as it is in his own?
  Mr. Lyell: I notice that my hon. Friends from those areas are present. The blight not only affects their constituencies but it spreads across beyond Sandy to south-west Cambridgeshire. Great anxiety is expressed as far afield as Milton Keynes and the constituency of my hon. Friend the Member for Luton, South (Mr. Bright) who is not present tonight because he is abroad.
  The problem with nuclear waste has to be solved. I have always made it clear that I support the nuclear industry. We need nuclear power not only to provide 20 per cent. of our electricity but to keep our children and grandchildren warm. Even if we were to close down the power stations today, which I would oppose, we would still be faced with the problems of existing nuclear waste. I support the Government in their attempt to tackle the problem.
  Mr. D. N. Campbell-Savours: May I take the hon. and learned Gentleman back to his words on blight? I have spent half my life living within 27 miles of Windscale, and I know of no property anywhere in west Cumbria that is blighted to the degree that the hon. and learned Gentleman suggests. Yet he referred to hon. Members with constituencies adjacent to his within 50 miles and even as far away as Milton Keynes, and suggested that their constituencies would be blighted. Is he not exaggerating the case?
  Mr. Lyell: The hon. Gentleman often makes sensible interventions, but, on this occasion, I do not think his intervention was up to his usual standard. As the hon. Member for Copeland (Dr. Cunningham) points out constantly, about 6,000 people rely on Sellafield for a job.
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  It is hardly surprising that those people would look at the matter rather differently from those in a constituency which is simply getting the dumped waste and very few jobs.
  The problem must be solved. So far, it has not been tackled in the right way. Initially, NIREX—mistakenly, in my view—sought to name only two sites—one at Billingham for intermediate level nuclear waste and one at Elstow for low and, at that time, short life intermediate level waste. We all know that the site at Billingham was cancelled, as the hon. Member for South Shields (Dr. Clark) made clear at the beginning of his speech, on political rather than technical grounds.
  The site was cancelled because public pressure, which I well understand, frightened away ICI. When ICI was frightened away, the nuclear industry no longer had the opportunity to make use of some underground caverns so large that one could drive a London bus 300 miles through them without retracing one's tracks. That was probably, geologically, one of the best sites in Europe. That is important, because the political aspect is as strong in my constituency and those of my hon. Friends and other objectors as it is in Billingham. When I go on to develop practical, alternative solutions, I hope that my right hon. and hon. Friends will bear that point in mind.
  Mr. Frank Cook: I caution the hon. and learned Gentleman. He should not allow his enthusiasm to run away with his eloquence. ICI was never frightened off. There are not 300 miles of roadway under the ground capable of taking a London bus. That is not the best site in Europe. The proposals were turned down because of the good sense of the community and of the Department. Thai was quite a misrepresentation by the hon. and learned Gentleman.
  Mr. Lyell: I can at least agree that there was strong political pressure. I shall take the opportunity later to talk to the hon. Gentleman in more detail about the size of the caverns.
  When Elstow was suggested as a site, I immediately asked the Government to conduct a proper comparative survey of alternative sites, including—bearing in mind Centre de la Manche in northern France—coastal sites. To be fair to my right hon. and hon. Friends, they listened. My hon. Friend the Minister for Environment, Countryside and Local Government emphasised that, although it was for NIREX to propose sites, it was for the Department of the Environment to judge them. I hope that we never lose sight of that. It is not for the Department to put forward proposals and railroad them through. I do not believe that it is doing so, but I emphasise that it is vital, if the House allows this procedure, that we do not get on to tramlines.
  In due course, in January 1985, the Government announced that they had ordered NIREX to bring forward at least two further sites for comparison. In fact, three further sites, including two coastal sites, have come forward. At the same time, it was emphasised—this was vital—that other methods were to be considered also. It was pointed out, fairly, that in comparing several sites it was not reasonable to expect every site to go through a preliminary planning inquiry simply to ascertain whether a drilling rig and other investigatory material could be put on it. I have never understood how it was sensible or

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  logical to go through what would have been the charade of such a planning inquiry simply to enable investigatory procedure to take place.
  In so far as the use of the special development order has caused the Government to move from the untenable position of simply plumping for one site to a proper comparative survey, I support them. I recognise that in some senses I am speaking of what is a gain for Bedfordshire, and I am pleased when we make such a gain for Bedfordshire. I am sure that other hon. Members understand that.
  If the House allows this SDO to proceed, we must not simply go to sleep and leave it to NIREX. We must continue wider investigations into all the alternatives. It is clear from the reaction in the House, which I understand and support, that it will be hard to gain the public acceptance for disposal of nuclear waste that we must gain, even for a coastal site. I ask my right hon. and hon. Friends to consider more carefully the altenatives, especially the deep-mined or sub-sea manifold-type solution.
  The best practical environmental options put forward to the Government showed the costing of a deep-mined site. Such a site is acceptable as necessary for all intermediate-level waste. The costing of a deep-mine site is £2,500 a cu m—a horrendous amount. A fully engineered shallow land burial site—the Rolls-Royce solution for the Elstow, Fulbeck, Bradwell or South Killingholme sites—is said to be £615 a cu m, and that is horrendous enough.
  The sub-sea manifold-type solution, which uses proven North Sea oil techniques and upon which I believe very responsible papers have been brought forward by Dr. Wheeler and others, is costed at about £410 per cu m. that is less than any of the other proposed solutions, even the preferred solution for the disposal of low-level waste. Therefore, I call on the Government not simply to leave it to NIREX but to do the following.
  First, they should analyse carefully the true scale of the problems with which we are faced. The figures that I produced last week in my speech—they were the Government's own figures—indicate that the total volume of low-level waste relevant to the four sites whose future we are debating is only about 63,000 cu m when it has been compacted. It is 191,000 cu m divided by a minimum of three, bringing it down to about 63,000 cu m. That is less than a quarter of the amount that is to be placed in Drigg in the years up to 2030. It will be noticed that I have modified my figures. That is because in answer to one of my questions the Government modified their parliamentary answer from a fifth to a quarter. But that is still less than a quarter of the amount that is to go to Drigg.
  Only one qualification needs to be made. That figure does not include the low-level waste from the decommissioning of Magnox reactors. However, I believe that I am on fairly firm ground when I say that a decision has not yet been made about exactly when or how to decommission, or about whether it would be sensible to remove low-level waste from the decommissioned sites when the highly radioactive cores are to be left on site in any event.
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  Secondly, I ask the Government to study carefully compaction and incineration systems. Thereby the volume of waste could be reduced by significantly more than the factor of three to which I have just referred.
  Thirdly I ask the Government to set up a system properly to monitor all nuclear waste. At the moment we do not really know which parts of low-level waste are significantly dangerous and which parts of it are perfectly harmless. Monitoring will not only enhance public confidence but will probably show that large quantities of allegedly radioactive waste are completely harmless and can and should go on to a council tip. The BPO study says that a great deal of merely suspected material is to go to these sites. That is nonsense.
  Fourthly, there should be serious and urgent thought about how to deal with intermediate-level waste. About 200,000 cu m of such waste will have to be buried deep. To add a small amount of low-level waste to that, at marginal cost, is likely to bring down even further the figures I have given.
  Fifthly, the Government should look searchingly at the comparative costings. I have already dealt with that aspect and the fact that the sub-sea manifold solution may be cheaper.
  Finally, the Government should ensure that Parliament, local authorities and the public are kept fully and fairly informed about the progress of the investigations and of the consideration that is being given to the available methods of disposal.
  A crowded county is not the place for this type of waste. It is doubtful whether shallow land burial is the right solution. There are alternatives. I approve of the fact that we are tackling the problem, but I hope that we shall tackle it in a broader and more open-minded way.
  12.14 am
  Mr. Frank Cook: Fortunately, we are discussing this evening the disposal of low-level irradiated materials. They are similar to those to which I referred when I complained about the deposit of some of these materials in a domestic repository in the village of Cowpen Bewley, in my constituency. That material still reposes there, and is strictly monitored by the Northumbrian water authority to ensure that the drainage mentioned by the hon. and learned Member for Mid-Bedfordshire (Mr. Lyell) does not occur.
  There is a tale of incompetence, inconsistency, dishonesty, treachery and, I fear, incest to relate. I refer to the incompetence of NIREX, which entered the fray with a very badly prepared brief. It proceeded to bombard the unwitting electorate with a blizzard of bland assurances which included everything from granny's alarm clock, two cigarettes a year, the risk of crossing the road, and closing the window at night to tanker loads of chlorine. I suppose that if someone was crossing the road to obtain two cigarettes and closed the window with a tanker load of chlorine to make sure that the building he left was secure, granny's clock might get very alarmed, but NIREX almost told such childish and puerile stories to try to convince the electorate that its proposals were acceptable. Sadly, such a patronising attitude was bound to antagonise rather than placate an anxious public.
  Moreover, NIREX was also responsible for the inconsistency. The definitions of the types of radwaste were changed with monotonous regularity. Two and a half years ago NIREX started with three categories: high,

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  intermediate and low. Those categories were them changed to high, high-level intermediate, low-level intermediate and low. Persistent questioning about where one couuld draw the line of distinction between those different classifications led only to more confusing explanations. We do not hear about the "high" anymore. That has been shelved and forgotten until NIREX has solved its problems. In addition, "high-level intermediate" seems to have disappeared from the scene. Now we have simply low level and the category that we are discussing tonight, "very low-level" waste.
  I come to the dishonesty of NIREX, which has manifested itself in the way that it has moved its goal posts. I do not object to people moving goal posts, so long as that movement is consistent and in one direction. That allows us a fall-back position, and we may know exactly where the next questionable area will arise, but the goal posts have been moved not only from side to side, but to and fro and up and down. We have been thrust into a game of almost three dimensional chess. NIREX has done that with the changes in the design facilities. They have gone through such a mangle of modification that the Advertising Standards Authority was compelled to rebuke NIREX for giving the public misleading information.
  Moreover, NIREX has been dishonest in describing the type of facility and the method of management. It has also been dishonest in describing the means of transport. When it staged its display of a geriatric Deltic-diesel running at about 75 miles per hour into a fuel flask, it stressed that barrier wagons would be used on each flask, but one went into Seaton power station in the constituency bordering mine a fortnight ago without a barrier wagon. I am not accusing British Rail of breaking any regulations. According to its rules, it acted perfectly safely, but I accuse the CEGB and BNFL of misleading the public by making such statements.
  Treachery is a strong word to use, but only 48 hours ago, in a Committee Room off the main corridor, and only 18 months after NIREX had accepted the Ministerial instruction about Billingham, it was still referring to Billingham's suitability as a site for the disposal of such waste. Such action leads some people to think that perhaps the whole exercise tonight might be no more than a charade or an elaborate hoax to con a gullible electorate into thinking that democratic processes really work. They could be no more than circus hoops for ministerial lapdogs to leap at and through and to land, just as adroitly as before, on the predetermined site at Bedford.
  We have heard how unsuitable Bradwell, Fulbeck and South Killingholme are. When it is realised how suitable is transport to Bedford, and how the clay content is so suitable at Bedford, reasons for rejecting the other three sites will be found. This could be no more than an elaborate con job.
  On the question of incest and NIREX, I have to point out that NIREX was begat by BNFL and the UKAEA in a menage a quatre, with the CEGB in the most unsavoury degree of kindred with the SEGB. The patriarch of this inbred household was the Department of the Environment itself. In other words, it is totally introvert, totally introspective and totally incestuous. Until that constitution receives an infusion of new and healthier blood, the animal is doomed to premature death from incipient blindness.
  Let us try to remove some of the blindness and take away the blinkers. What should be done? I refer specifically to all kinds of radioactive waste, not
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  particularly to the low-level waste to which the order refers. The volume of such stuff is not necessary. We are dealing with it in the wrong way. We should nor be creating it in the way that we are, to start with. We should stop recycling it by crushing the Magnox cassettes into a crumbled swarf. I suspect that the reason why we do that is that we do not have the technical expertise to remove the cassette without breaking it. Perhaps our research should be in that direction.
  If we were able to manipulate the cassettes and to store them in dry conditions above water, with circulated air correctly filtered and at the right temperature, there would be no need to look at them again. We would then be able to contain the volume of the stuff to about one thirtieth of what we create at present.
  Some Magnox stations have had their licence extended by more than 50 per cent. of their design life. We are told reliably, since Chernobyl, that some which are currently operating would not be granted a licence today. So why do we not decommission them? Why do we not use the existing buildings as stores or dry silos? Why can we not pack drums and cassettes in them? Why can we not pack them right up to the ceiling, seal them, and put our radiation signs on them? We could even build our pathetic Stonehenges of recognition, as suggested this week in the feeble competition in the United States, and build concrete monoliths on top so that people recognise them in 1,000 years' time.
  Talking of monoliths, I remind the House that a NIREX spokesman compared some of the means of disposing of this stuff underground with monolithic structures which he said could be created in such a manner that they would outlast creation itself. That idea did not last long, because it was pointed out just how fragile and friable concrete can become in certain circumstances. He soon plugged for the salt mine-type disposal, so that the salt crystals have a self-filling, backfill role to play. That is an example of how NIREX mislead the public.
  Putting the waste in the very buildings that created it and sealing them would at least contain the problem to the sites that are already blighted by the creation of the stuff. Why should we spread our filth all around the kingdom? By disposing of it in a way that would keep it dry, corrosion would be prevented. It would be kept cool and it would be possible to monitor it. That would enable us and our successors to learn if all was not well with the insidious legacy that we decided to bequeath to our offspring, and enable them to redeem it and package it safely.
  We do not clean our kitchens by collecting the dross under the mats, so why should we treat the country like a collection of mats? Having changed the rules of consultation once from those promised originally, the Minister should listen again as he listened before, but sadly not for long enough. He should learn from the old soldiers' adage, "Keep your enemy where you can see him and within your sights." If the Government will not do that, and if they are intent on dumping the waste, dump it in Dulwich.
  12.25 am
  Sir Bernard Braine: A brief from NIREX about its proposed investigation of four named sites reached me, and presumably other hon. Members, only yesterday. Had it been sent a month ago, it would have been a brief about investigating four sites for the

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  disposal of intermediate nuclear waste. That is not the position now; the order refers only to low-level waste. Our protests in the past two debates have evidently borne fruit, and for that we must be truly thankful.
  I invite the House to examine the proposal to include the site at Bradwell in Essex, which is within the constituency of my right hon. Friend the Government Chief Whip and not far from my own. I hope to show that its inclusion throws considerable doubt upon the whole procedure. The brief, at paragraph 18, states:
  "Before NIREX can marshall the particular arguments to support the development of a repository, it must acquire detailed information on the geology and hydrogeology necessary for the design and assessment of a repository. The Secretary of State for the Environment asked NIREX to name three or more sites for investigation so that comparisons can be made."
  That sounds eminently reasonable, but in paragraph 20, under the heading
  "How will NIREX Choose its Preferred Site?",
  the brief states:
  "Throughout the investigatory stage, NIREX will consult a wide range of bodies whose expertise or interests will contribute to the design and assessment work. Such consultations will take a variety of forms: in some cases they are required by legislation, in others they are a matter of common sense and courtesy."
  I shall have something to say about the common sense and courtesy displayed thus far by NIREX.
  Paragraph 25 of the brief, under the heading "Why These Sites?", reads:
  "The four sites chosen for detailed investigation were identified following a painstaking site selection process, starting with areas of search defined by geological considerations (recognising the value of clay environment for its ability to retard and inhibit the movement of radionuclides to man)."
  It then refers to various criteria.
  The first criterion is the geological nature of the site.Paragraph 26 asserts that Bradwell has
  "very good geology with up to 50 metres … of clay."
  That is all that it says on the subject of geology. The site has to satisfy a number of criteria, but Bradwell does not satisfy even one of the criteria laid down by NIREX. What is said about the geology of the area is complete nonsense. Either NIREX is incompetent because it has not studied the known facts or, worse, it has deliberately ignored them.
  I have a copy of a report drawn up by the environmental protection unit of the Institute of Geological Sciences at Harwell. This was published in June 1980 and has been available to NIREX, to the Government and to hon. Members ever since. The report describes work carried out for the Department of the Environment acting on behalf of the Secretaries of State for the Environment, for Wales, and for Scotland and the Commission of European Communities as part of its research programme into radioactive waste management. The report examines the suitability of the Bradwell site for the disposal of radioactive waste. I will quote from the report because it goes to the heart of the matter. Under the heading,
  "Potential for the disposal of radioactive waste",
  and referring to Bradwell, the report states:
  "The potential for the disposal of radioactive waste beneath Bradwell is poor. The London clay is only 50 metres thick and only 34 metres of this is true clay. The clay may be a partial hydraulic continuity with the chalk and this renders it unsuitable even for shallow burial of low-level, high-bulk radioactive waste. The clays of the Lower London Tertiaries are insufficiently developed to act as a containment formation. The chalk is a valuable public supply aquifer in the region to the west and for this reason must be considered unsuitable. The Upper
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  Greensand is a thin, confined aquifer offering no potential and even though the Gault offers low transport rates and a high sorption capacity, it is insufficiently developed to satisfy the low and medium level radioactive waste disposal criteria."
  Remember that those facts have been known since 1980. The report concludes:
  "There is little potential for the burial of radioactive waste beneath Bradwell … Shallow burial of low-level radioactive waste in London Clay is not feasible owing to its limited thickness and the proximity of the chalk aquifer which may be in partial hydraulic continuity with the clay."
  Despite the specialist jargon, we have here a clear statement from the most expert body that could have been summoned to carry out that task. I ask the House to contrast that report with the sentence or two in the brief that was sent to hon. Members only yesterday.
  Both versions of the facts cannot be correct. I invite the Government to have a close look at the report which I have quoted. That report is not, of course, the only document available that should be studied. I understand that a report, prepared by the Electro Watt Engineering consultancy at the request of NIREX, reaches similar conclusions to those in the Harwell report. I have not seen the consultancy report and I must not lead the House to believe that it will support the argument that I am advancing. However, I want to know whether the former Secretary of State for the Environment ever saw either of those reports. I want to know whether the present Secretary of State, in the brief time that he has had available after assuming office, has studied those reports. I take this opportunity to congratulate him on achieving his high office. I am sure that he will bring great flair and distinction to his office. However, I doubt whether he has seen these reports.
  Why has there been so much secrecy? Why do independent experts say one thing and NIREX something else? Perhaps the answer can be found in the arrogance and extraordinary failure of NIREX to provide even basic information to Essex county council, which, after all, is the planning authority. The House will recall that when we first debated this matter on 13 March, on behalf of my right hon. Friend the Member for Colchester, South and Maldon (Mr. Wakeham) and the Essex county council, I complained and asked that a proper request made by the council should be granted and that details of the borings carried out before the building of the Bradwell nuclear power station, which is adjacent to the Bradwell site, should be made available. That request was ignored.
  In April, I received a letter from my hon. Friend the Under-Secretary of State for Energy, which stated:
  "I am happy to say that CEGB have advised me that they have now sent to Essex County Council, via NIREX UK Ltd., copies of cross-sections of boreholes made for the foundations of Bradwell Power Station."
  By the time of our second debate on 13 May, the information had still not been supplied. The chief executive of the county council has informed me that it arrived only on Monday.
  Who are these people to defy Parliament? Who are they to mislead Ministers? The Minister told me in writing that the information had been passed to Essex county council, but he was misled. What right has anyone to deny a properly elected local authority basic information upon which it can form a judgment?
  We begin, therefore, knowing that NIREX has chosen in Bradwell a site which does not satisfy the geological criteria. Nor does it satisfy any of the other criteria. For many years, the area has been subjected to inundation from the sea. My hon. and learned Friend the Member for

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  Colchester, North (Sir A. Buck) will remember the east coast flood disaster of 1953 and how the entire coastline from Harwich to Canvey island in the Thames estuary was inundated by the sea. The area is liable to flooding, yet this is the site at which it is now proposed to store low-level nuclear waste. What nonsense.
  The road and rail communications do not satisfy the criteria laid down by NIREX. They are almost non-existent. As I have said previously — this would be laughable if it were not for its tragic implications—the site is adjacent to a fault line which, since the 17th century, has seen four earthquakes, the last in 1884. [Laughter.]—That is not a laughing matter. The last earthquake in England was in Essex and its epicentre was only four miles away from Bradwell. People were killed and buildings were destroyed.
  What can one say about the competence of experts who choose a site that does not satisfy even one of the criteria that they have laid down for selection?
  Dr. Michael Clark: Does my right hon. Friend agree that as Bradwell is patently unsuitable for the site of nuclear waste storage, those of us who live in Essex and who represent Essex constituencies have nothing to fear from the special development order? Sir Bernard Braine: There is something to be said for voting for the order and getting the investigation over as quickly as possible. However, the Minister told us that it will take many months, so people will be left in uncertainty for a long time. But I concede my hon. Friend's point. For Bradwell that may be the easiest way of disposing of this unpleasant business. However, the way in which this matter has been conducted so far does not inspire any confidence in NIREX or the industry.
  Sir Trevor Skeet: Does my right hon. Friend not see that four sites are locked into the procedure and that the Minister has said that if NIREX carries out its borings and finds that two or three of the sites are unsuitable, they will immediately be released? All the uncertainty and blight will be lifted. 'he most likely sites to be released are South Killingholme and Elstow.
  Sir Bernard Braine: I have great respect for my hon. Friend, but he is trying to make the best of a bad job. Having regard to Bradwell's known geological unsuitability, the site should never have been chosen in the first place.
  My colleagues from Essex will readily agree that, more than any other area in the kingdom, our county has been the repository of noxious and dangerous wastes. Indeed, 72 per cent. of the hazardous waste and 50 per cent. of the commercial waste deposited in Essex in recent years has come from outside the county. It has been the county council's policy to reduce the volume of waste, to regenerate derelict land in co-operation with the private sector and to promote employment and tourism, capitalising on the twin advantages of the M25 and our growing reputation as the gateway to Europe.
  The Bradwell proposal goes against everything that Essex county council, on behalf of our constituents, has sought to achieve. That Bradwell could become a repository for low-level nuclear waste runs counter to its policies. The chief executive told me today that all this is having a damaging effect on what the council is trying to achieve. From Colchester in the north to my constituency
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  in the Thames estuary people are worried. Yet the Bradwell proposal has been a non-starter from the beginning.
  I also find it astonishing that there has been no real study of alternative methods of storing either intermediate or low-level nuclear waste. It is not that there is no alternative. The speech of my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) will bear reading for days to come. He referred to the POWER system for nuclear waste disposal which makes use of proven offshore oil industry technology and which has been in use throughout the world for 20 years. It costs only about two thirds of that for land sites.
  What should we do? I can understand what my hon. Friend the Member for Rochford (Dr. Clark) said. There is a case for approving the special development order so that borings can proceed without delay. At least three of the communities might then be relieved of further anxiety. However, where it is clear, as it is at Bradwell, that the site should never have been chosen in the first place, we should then be agreeing to go through a charade, involving a waste of public money. For that reason I will find it difficult to vote for the order. If it is passed, and I expect it will be, I must ask the Government to insist on a study of the two expert reports I have mentioned and I must call for an explanation as to why these have so far been ignored.
  12.45 am
  Mr. Jeremy Corbyn: There is something slightly wrong with this debate, in that not only are we debating at 1 o'clock in the morning a serious matter of importance ultimately to every part of the country, but we are dealing with the consequences of having a nuclear power industry without dealing with the causes of nuclear waste.
  Conservative Members who have made passionate and effective speeches on behalf of their constituents against the deposition of nuclear waste in their constituencies should ask themselves a couple of questions. If they do not want it in their constituencies—and they obviously and patently do not—are they suggesting that it should go somewhere else, or will they view the matter logically and say that they are opposed to the nuclear power industry? If they do not do that, this debate will go on and on, because all our people say quite properly and correctly that they do not want nuclear waste.
  It may be that we are debating nuclear waste being dumped in a number of thinly populated rural areas, but as the sites are turned down one by one—and I am sure that they will be turned down by one means or another—other more densely populated places will be tried. No doubt there will be pressure once again for dumping at sea, and there will be problems as the dumping gets nearer to urban areas. Every night a nuclear waste train passes through my borough on its way from Bradwell. It passes through London and eventually it reaches Sellafield. The dangers of that are obvious.
  The use by the Government of a special development order is yet another consequence of the denial of democracy and the secrecry that surrounds the nuclear industry. Why are the Government not prepared to allow local planning authorities to discuss the NIREX proposals? It is because they know very well that in every case, and wherever this dumping is proposed and whoever is in control, the local authority and public opinion will ensure

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  that planning permission is refused. The consequence of a nuclear industry is that the Government take over the quite proper functions of local authorities in order to inflict this blight on our country.
  I ask those Conservative Members who have spoken so strongly against the order to think further about the consequences of dumping. They all represent local interests which oppose this dumping. Will they vote for the order, even though they are against it? They should think the thing through. If they are opposed to the order—and I am sure that many of them genuinely are—I hope that they will vote against it, and that their hon. Friends who support the order will take the view that unless they also are prepared to vote against it, we will be back here in a few months debating the same thing for a different part of the country.
  The dangers of nuclear power, and nuclear power itself, were debated a few weeks ago following the Chernobyl disaster, a disaster that could not happen, in the same way as the disaster at Windscale in 1957 or the Three Mile Island disaster could not happen. I appreciate that we are debating the sites for waste disposal, but we must also bear in mind where the material comes from in the first place.
  Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman must not talk about that. He must confine his remarks to what is contained in the order.
  Mr. Corbyn: I am speaking about what is in the order, Mr. Deputy Speaker. The order contained NIREX proposals for sites for the dumping of low-level radioactive waste. Those proposals are a denial of local democracy and are a step towards other dumping that could well take place, as other hon. Members have said. We talk about safety. I do not know how many hon. Members are scientifically trained. I am not in any sense a scientist, and I expect that 90 per cent. of hon. Members are in a similar position. However, we are all quite capable of understanding that the technology that exists to protect people from long-life, half-life or short-life radioactive waste is entirely fallible.
  It was originally proposed that this material should be put in unlined trenches. It was then proposed that it should be put in concrete-lined trenches. It was later proposed that perhaps it should be buried and that perhaps the higher-level waste should be vitrified. From time to time other proposals were dreamt up, but none of that technology has been known to exist for anything like the life time of the waste that it is supposed to protect and encase. This House has responsibility to face the consequences of voting for a nuclear policy if we cannot dispose of the waste that this industry creates.
  I accept that even if we closed all the nuclear power stations tomorrow — I wish that were the case—there would still be a problem of nuclear waste from power stations and other sources. Therefore, some proposals must be made for the safety of that waste. However, as hon. Members have pointed out, there is a problem in respect of every site that has been suggested. At Bradwell there is the problem of flooding and of the water table. The same problem exists at the Bedfordshire site, and the same problem will exist in respect of every other site.
  I hope that the House will think seriously about what we are discussing. We should think of the consequences of the nuclear accidents and leaks that have taken place.
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  We should reject the order and insist that local authorities should have an opportunity to hear local representations and to discuss the issue. We should reject the steamroller of central Government, which is very much the hallmark of the new Secretary of State for the Environment. We should look to a future that provides safety for our environment and people.
  There is no question but that cancer deaths have been caused by nuclear power and nuclear dumping. In my mind there is no question but that in the long term cancer deaths will result from the Chernobyl incident. Now is the time to take stock of the dangers of nuclear power, nuclear waste and nuclear dumping. We should reject the order and look to a future that protects our environment, instead of hobnobbing around the country destroying one area after another.
  12.52 am
  Mr. Douglas Hogg: This matter affects my constituents directly, and because of that I had thought of making many comments about what is proposed, but in view of the lateness of the hour I shall not do so. I am anxious that others of my right hon. and hon. Friends should have the opportunity to participate in the debate. I and they will therefore confine ourselves to about five or six minutes each. I very much hope that because of that the Minister will not assume that we are making any concession to what he proposes.
  I oppose the special development order and will vote against it, on both narrow and broad grounds. I shall deal first with the narrow grounds. I am against a special development order per se, because it bypasses the ordinary democratic procedures. Furthermore, it is an inappropriate way for us to regulate any form of planning development because conditions need to be imposed. A statutory instrument cannot be amended, and this House cannot therefore impose appropriate conditions on a development of this kind.
  I shall also oppose the SDO on a broader ground that falls into two parts. First, the road down which we are being asked to go is wrong. The argument against the choice of Fulbeck is very powerful. It has major drainage problems, it is subject to seismic disturbances, there are faults on the site, and the clay is not of adequate uniformity.
  I make those points simply to tell NIREX and the Secretary of State that we are aware of the relevant criteria. We know that Fulbeck does not match up to them, and any attempt to move the goal posts will be pounced on by us and denounced.
  My last point is also a broad one. I do not think for a moment that this system of disposing of nuclear waste is appropriate. I agree entirely with what was said by my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell). The nuclear industry is now more vulnerable that it has ever been. It would take very little for this country to become wholly hostile to it. One of the things that would make the country hostile would be a waste disposal policy that was unacceptable. This waste disposal policy is unacceptable to my constituents, and I believe that it is unacceptable to the community as a whole.
  In the course of the next 18 months we must make urgent and pressing inquiries into alternatives. I support everything that my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) said about the

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  alternatives and in particular about volumes and cost. My suspicion is that at the end of the day the differentials in cost between an acceptable and an unacceptable system are not great, but even if the distinction is great, that is a price that we will have to pay, first, for public confidence, secondly, for a continuation of the nuclear industry, and thirdly, for justice to my constituents.
  12.56 am
  Mr. Michael Brown: I also shall try to confine my remarks, since it does not seen that I shall have the luxury of having as much time as some other hon. Members have rightly taken. We should have had a much longer debate than the three hours that we finally secured.
  Every hon. Member who casts a vote tonight should stop and ask himself, "How would I vote if this special development order affected my constituency?". That is the question that all hon. Members have to ask themselves when they go through the Division Lobbies.
  Four hon. Members are faced with the problem, and they have been ably supported by hon. Members of all political parties representing their neighbouring constituencies. I want to place on record my thanks for the support given to me and my constituents by the hon. Member for Great Grimsby (Mr. Mitchell), by my hon. Friends the Members for Glanford and Scunthorpe (Mr. Hickmet) and for Gainsborough and Horncastle (Mr. Leigh).
  My constituency has had this hanging over its head for the past year. It is an industrial constituency with much unemployment. The proposed area has been chosen, as the hon. Member for Great Grimsby indicated, for no other reason than that it happens by pure chance to be owned by the Central Electricity Generating Board, a partner of NIREX. I want to emphasise the remarks that were made about the way in which NIREX has gone about its local public relations in my constituency, as in other constituencies
  The hon. Member for Southwark and Bermondsey (Mr. Hughes) drew attention to the insensitive approach that had been taken at public meetings. I agree with him, but I have news for him. It transpires that the first man from NIREX whom I met in my constituency is the prospective parliamentary Liberal candidate for the constituency of my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). I suggest that the Liberal party gets its act together and explains to its prospective candidates the policy that its spokesmen outlined this evening. I will not have Liberal candidates coming to my constituency wearing the NIREX hat and taking the NIREX stand.
  I come now to the position of the Opposition Front Bench spokesman, the hon. Member for Copeland (Dr. Cunningham). I have respect for the speech that he made the other day. It was an honourable speech, and I applaud him for that, but he made it clear that if he were Secretary of State he would probably recommend a shallow burial facility such as has been recommended by NIREX. I am sad about that, but I respect the manner in which he stated his view.
  There are alternatives. A blight is to be cast upon these constituencies. Just as I have a duty to oppose the possibility of a waste dump in my constituency, so also have I a duty to make sure that it is not foisted on the
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  constituencies of other hon. Members. For that reason I recognise the challenge that has been made to me in previous debates.
  One must address oneself to the whole question of the nuclear industry. As my hon. Friend the Member for Grantham (Mr. Hogg) said, if we are to secure public confidence in the future of the nuclear industry we must recognise that the way in which we dispose of nuclear waste, particularly the method proposed by NIREX, could kill its future.
  If it is Government policy to maintain the nuclear industry, they must recognise the intense strength of feeling on this issue. That feeling has literally spilled over into the Chamber this evening, but it is nothing compared with the strength of feeling that we see daily in our constituencies near the four sites and in the counties.
  I should like to place on record the courteous way in which my hon. Friend the Minister and his colleagues have received us. They say that they listen, and I am grateful for the fact that they have scrapped their plans on intermediate-level nuclear waste, which they say was a result of our representations, but that is not enough. All it has shown is that we are right in what we say. It has made our constituents even more determined to oppose this move. I tell my right hon. Friend the new Secretary for State that I shall make his life sheer misery until he tears up this order.
  1.1 am
  Mr. Richard Alexander: The Fulbeck site is within a few miles of my constituency boundary. so I am happy to support the remarks of my hon. Friend the Member for Grantham (Mr. Hogg). The site is within 10 miles of 125,000 people. At first I thought that one of NIREX's criteria would be to seek an area of low population. NIREX has broken the first criterion that it set out.
  I am sorry that the common denominator of the four sites is the fact that they are Government owned. It must be concluded that the Government looked for easy sites rather than the best. When I asked NIREX why it did not look at Scotland and Wales where there are far more remote areas than those being considered tonight, I was astonished to hear that the Department of the Environment had instructed that they were not to be considered. It is monstrous that NIREX is told that it must not consider the most appropriate and remote sites in the United Kingdom for a suitable spot.
  My constituents' fears are based on their experience of experts. Thirty years ago the experts told us that asbestos did no harm. Thirty years hence we are told that it does harm. Thirty years ago we were told that the sort of reactor at Chernobyl could be used in the United Kingdom. Are we not glad today that we did not follow that advice? We must not always listen to experts when we make our decisions.
  The experts do not appear to have noted that my area has a high water table. If nuclear waste is left in water one is exposing one's area to huge risks.
  Lincolnshire and the constituency of my hon. Friend the Member for Grantham form an area of considerable agricultural interest. Some 25 per cent. of the nation vegetables are grown there. Just suppose that the experts were wrong, and the water could get through. Just imagine then the horror of the vegetables being subject to radiation

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  without our knowledge. I accept that that is supposition, but we must be sure that this waste does not go in an area where the water table is so high.
  I do not wish to speak for too long, but I do not want it to be thought that, because I am curtailing my remarks, I have little more to add. However, I shall make two further points, one of which my hon. Friend the Member for Grantham mentioned. The area of Fulbeck is an area of considerable geological disturbance. We have earthquakes, and the geological map shows that the crust of the earth is not safe there. Dry Doddington church, near the Al, is on a slope as a result of disturbances. It cannot be right, however we think of nuclear waste, to put it in an area of geological disturbance.
  We must not be confused about the reactions of our constituents. They are not necessarily afraid of radiation. They are afraid of the unknown and of disruption to their lives, and these are natural and honourable fears for them. It would be wrong if I did not recognise that, or that the experts could make their lives a misery. On their behalf, I shall be voting against the order.
  1.7 am
  Sir Trevor Skeet: We are almost on the point of drawing stumps, but I feel that I should have the opportunity to say one or two things, although briefly because I know that one or two of my colleagues still wish to speak.
  The nuclear industry is on the point of collapse, and with it will go thousands of jobs, unless we are careful in our response to one chance accident in the Soviet Union. It could be said that, because of Flixborough, where 32 people were killed, we should have closed our entire chemical industry. That did not occur. The crisis in the Soviet Union is no reason why we should place our entire nuclear industry in jeopardy.
  The order is simple, and is only to allow an assessment of whether all or any of the land is suitable for the depositing of low level waste. It goes no further. It is being followed by a public inquiry into one of the sites that might be selected, or alternatively, all of them may be rejected. I said earlier that if, as my colleagues have said, the choice of sites in their constituencies is so absurd, they have nothing to fear.
  It is useful to be able to say, "Let the geological surveys go through. Let us trace the water table and find out precisely where it is and the movement of the flow." This may take a year, but then those sites that are unsuitable, such as Elstow, will be discharged, and discharged for ever, and those sites that are suitable will be included.
  It is worth bearing in mind—I have done a lot of work on this subject—that Bradwell has been storing waste for the past 15 years, has a nuclear power station, good geology with 50 m thickness of London clay and saline water with no local abstraction. It is not for me to judge the facts. All I am saying is that, when there are four sites, why should we say that none should be considered? I suggest that a public inquiry should be held at which the issues can be considered in depth.
  Sir Bernard Braine: On what basis does my hon. Friend allege that Bradwell has good geology, and from which document was he quoting? Was it the NIREX document?
  Sir Trevor Skeet: I can recommend the geological survey of that site. It is important that, when four sites are recommended, they should be examined cautiously. There should be a public inquiry lasting for about a year. We must be satisfied that people are given an opportunity to express their views fully. It is perfectly right for constituents to put forward their views, vigorously.
  1.11 am
  Mr. Edward Leigh: I shall vote against the order tonight, but not because I oppose the development of our nuclear industry; I do not. I believe that, in an increasingly energy-hungry world, nuclear power will provide man's only salvation. I shall vote against the motion, not because I doubt that disposing of nuclear waste can ever be safely accomplished; I do not. I believe that world-wide experience, especially that of Canada, West Germany and Sweden, proves that nuclear waste can be disposed of safely.
  I shall vote against the motion tonight because the only hope for a successful and progressive nuclear industry is to secure public confidence. It is said that the country cannot be governed on the NIMBY—"Not in my back yard"—principle. I agree.
  The objectors to the order are not similar to those few who object to the building of motorways. In this case, whole counties are saying "No"—over 100,000 people in the county of Humberside and over 12,000 in my small part of Lincolnshire. We cannot turn our backs on that volume of concern. Democracy must proceed by way of consent.
  At this late stage I beg the Government to approach the problem not in a spirit of bypassing normal planning procedures or of blighting four sites simply because they happen to be convenient, but in a spirit of developing a coherent nuclear strategy based on public confidence. Deep mining may be expensive. Destroying public confidence in the nuclear industry will be even more so.
  1.13 am
  Mr. Richard Hickmet: I shall vote against the order tonight because I believe that what the Government propose in pushing it through will do enormous damage to the nuclear industry. I represent a steel constituency. We need cheap energy. The country should have a balanced energy policy. Over 150,000 people in my part of the world object to the proposals of NIREX. If one casts aside such opposition and ignores those fears and worries, one builds up opposition to the nuclear industry as a whole.
  If my hon. Friend the Minister for Environment, Countryside and Local Government believes in the future of the nuclear industry, he must bear in mind the great fears that are felt as a result of NIREX's proposals about the waste disposal sites. We may be taking a decision which, in 20 years time, we will see as a watershed in the development of the nuclear industry. If we accept the order tonight and establish nuclear dust-bins in the constituency of the hon. Member for Brigg and Cleethorpes (Mr. Brown), we will be confining the nuclear industry itself to the dust-bin.
  1.14 am
  Dr. David Clark: By leave of the House, Mr. Deputy Speaker.

  497
  As I expected, this has been an emotional debate. It is interesting that only one Back Bencher could in any way be construed as supporting the Government's line, and I hope that will be reflected in the Division Lobbies.
  Some hon. Members rightly used their local, technical and geological knowledge to substantiate powerful cases not only against siting nuclear dumps in their areas but against the order. One theme has dominated the debate and been taken up by every hon. Member — public confidence. The Government must take that on board.
  I should like to raise some points that arose from the Minister's speech. How many sites will be considered before a public inquiry after the initial exploratory work has been undertaken? I think that many people understand that if the order is accepted, and if only one site is recommended after the exploratory work, only one site will be considered before a public inquiry, and the blight will be lifted from the other three sites. The Minister suggested, at a time of some turbulence and therefore may not have quite understood what he said, that more than one site would be considered.
  Will the Minister give an assurance about the type of low-level waste, especially non-alpha material, that will be dumped? I have already asked the hon. Gentleman for that assurance. The Environment Committee specified certain types of waste that should be dumped.
  I return to the debate's main theme of taking the public with us. Earlier—I think every hon. Member agrees—I praised the work of the Environment Committee. Much of the information in the debate has been drawn from the Committee's report. The Committee recognised the problem associated with public involvement. Paragraph 235 of the report states:
  "Effective public involvement in decision-making is one major key to unlocking the present stalemate in setting up waste disposal sites."
  Those wise words were written with due consideration after months of study. The Government are turning their back on them.
  Through the SDO, the Government are bypassing the normal planning procedure and stifling public debate. They are not doing a service to the general public or the nuclear industry. I hope that hon. Members will join us in the Division Lobby to vote against the order.
  1.18 am
  Mr. Waldegrave: By leave of the House, Mr. Deputy Speaker, I should like to respond first to the two points put by the hon. Member for South Shields (Dr. Clark). First, we are using the definition of low-level waste used in last year's report by the Radioactive Waste Management Advisory Committee. Secondly, if no site turns out to be suitable, no site will be considered before a public enquiry. I suppose that it is possible for NIREX to take more than one site, but the expectation is that it will take one or perhaps two sites. That is ultimately for NIREX.
  I was impressed by the discipline of my right hon. and hon. Friends in restricting the length of their speeches. They made powerful points. They had already been put to me and to my right hon. Friends, but it was right that they should be aired again tonight. I shall have to reply to some of the more detailed points by letter. Nevertheless, in the short period available before the end of this debate I shall try to deal with some of them.
  The hon. Member for Great Grimsby (Mr. Mitchell) said that there has been a great rush about this. A
  498
  justifiable criticism of Governments of both parties is not that they have been in a great rush but that they have delayed taking a decision. It is now 10 years since the Flowers report.
  Mr. Austin Mitchell: Is it not a rush that we are to vote tonight on this order?
  Mr. Waldegrave: Criticism would be much more justified if we were to listen to the siren voices on both sides of the House and seek reasons for delay. That would be the easy and the obvious course to take, but it would not be right.
  The hon. Member for Great Grimsby used the word "duty" as an insult. I did not insult him, because he is doing what he believes to be his duty towards his constituents. The only point at which the debate reached a low level was when he sought to insult me in a variety of ways for doing what I regard as my duty.
  My hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell) made the abolutely fair point that the Committee upon which he serves has said that no question of safety is involved if the design is correct and a proper place is found for the site. However, he then made a point that was taken up by a number of my hon. Friends, including my hon. Friends the Members for Grantham (Mr. Hogg), for Brigg and Cleethorpes (Mr. Brown) and for Gainsborough and Horncastle (Mr. Leigh). I was slightly disappointed to find that my hon. Friend. the Member for Gainsborough and Horncastle had altered his initial response. My hon. Friend the Member for Glanford and Scunthorpe (Mr. Hicktnet) also referred to the fact that, regardless of safety, it is worth spending more in order to buy confidence in the nuclear industry. I understand that argument, but the House has to consider the danger to the nuclear industry if it backs off yet again from taking the first step. Would that not do more ultimately to shake confidence in the nuclear industry?
  Many right hon. and hon. Members, including myself, believe that a nuclear industry is needed by this country and that, because of environmental problems, it will be needed even more in the next century. Therefore, the duty of the Department of the Environment is to seek safe waste disposal systems. We have to gather all the evidence we can about safe ways of dealing with low-level waste and then recommend to the House a reasonable way forward.
  The hon. Member for Southwark and Bermondsey (Mr. Hughes) accepts that it is prudent to act now, but he said that action should be taken on a wider front. We have narrowed the problem and made our task somewhat easier by saying that we shall deal only with low-level waste. There is now sufficient consensus to allow us to proceed along that route.
  The hon. Gentleman asked me a question that I was asked during my visits: why does not the Department of the Environment specify in detail the kind of sites that it wants? I understand that argument, but it contains dangers. My Department ultimately has to be the arbiter as to whether a particular site that the inspector may recommend is suitable. If the Department were to define what would be a suitable site, legitimate accusations would be levelled at it that an inside track was being offered to a particular type of site. That would narrow the nature of the inquiry.
  My hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) and several other hon. Members

  499
  asked whether we could continue for a longer time with Drigg. Drigg has a finite capacity. I am writing to my hon. and learned Friend. I have also answered questions from him about it and have given him our best assessment, based on the available figures. The advice that has been given to me is that, after a reasonable assessment of the amount of compaction and after a minimalist assessment of the nuclear programme — by which I mean no expansion—we shall still need a site after 2010. I think my hon. and learned Friend referred to that date, and I do not disagree with it.
  In view of the likely length of the inquiry and the time that it will take to build any facility that is agreed, it is prudent that we should begin, carefully and steadily, to go ahead. Indeed, care and steadiness in all our responses was the theme in the speech of my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet). It would be tragic for this country's future if we damaged the nuclear industry's long-term prospects because of the understandable passion that the subject arouses, particularly in the present climate.
  But care, steadiness and slowness have been the watchwords. Indeed, there has almost been too much slowness. My right hon. Friend the Member for Castle Point (Sir B. Braine) spoke about the geological report called, I believe, the Robbins report, that deals with the Essex site. I am advised that NIREX knows all about that. If any of the sites are wrong, as he and others argue, the sooner we investigate them, the better. Indeed, my hon. Friend the Member for Bedfordshire, North rightly made this point. The sooner those arguments are put to the test and settled, the better for all concerned and the better for the country. Other proposals would have to be brought forward in due course if none of the sites was suitable.
  Contrary to what some may think, hardly any hon. Members have argued tonight that there should be no disposal site. They have not even argued that there should be no shallow disposal site in the country. They have been arguing for the continuation of one existing disposal site, although it is not the most ideal site. That point has not really been made. Hon. Members have been arguing not against low-level waste, but against an additional low-level waste disposal site in another place.
  It was responsible of Opposition Members not to stand against the concept of low-level waste disposal if a properly designed facility can be found. If they vote against us, it will be because of the special development order. With all respect, that is a bit thick coming from a party that used an SDO itself. If it is necessary to have a debate in Parliament for the very same reason as before, that must be a slightly illogical argument.
  Dr. John Cunningham: Since the Minister mentioned the use of an SDO by the previous Labour Government in respect of the extensions to the BNFL site in my constituency, I should put the record straight. The planning authority agreed the application. It was then called in by the Minister, and he decided to operate the SDO procedure. In other words, the planning application went through the normal local government planning procedures. We are saying that that should happen in this case, but it is not being done.
  Mr. Waldegrave: I quite understand that the SDO procedure was used then to give the House a chance to debate the issue. The argument made about the time that
  500
  alleged blight might hang over a community is one justification for using the SDO tonight, and for holding this debate. Although I respect the anxieties of my right hon. and hon. Friends, I hope that the House will, in the face of an unpleasant, difficult but utterly necessary duty, which is laid on us all, take the first step towards the safe disposal of these wastes. That duty is laid on us regardless of our view of the nuclear industry and its future. Having listened to the arguments with respect, I hope that hon. Members will reject them. Otherwise our successors will be landed with an even worse problem.
  Question put:—
  The House divided: Ayes 166, Noes 244.

  Division No. 193]

  [1.30 am

  AYES

  Alexander, Richard

  Fatchett, Derek

  Alton, David

  Faulds, Andrew

  Anderson, Donald

  Fields, T. (L'pool Broad Gn)

  Archer, Rt Hon Peter

  Fisher, Mark

  Ashdown, Paddy

  Flannery, Martin

  Ashton, Joe

  Foot, Rt Hon Michael

  Atkinson, N. (Tottenham)

  Forrester, John

  Bagier, Gordon A. T.

  Foster, Derek

  Banks, Tony (Newham NW)

  Foulkes, George

  Barnett, Guy

  Fraser, J. (Norwood)

  Barron, Kevin

  Freeson, Rt Hon Reginald

  Beckett, Mrs Margaret

  George, Bruce

  Beith, A. J.

  Godman, Dr Norman

  Bell, Stuart

  Gould, Bryan

  Benn, Rt Hon Tony

  Hamilton, James (M'well N)

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

  Hancock, Michael

  Bermingham, Gerald

  Harrison, Rt Hon Walter

  Bidwell, Sydney

  Haynes, Frank

  Blair, Anthony

  Heffer, Eric S.

  Body, Sir Richard

  Hickmet, Richard

  Boyes, Roland

  Hogg, Hon Douglas (Gr'th'm)

  Brown, Gordon (D'f'mline E)

  Hogg, N. (C'nauld & Kilsyth)

  Brown, Hugh D. (Provan)

  Holland, Stuart (Vauxhall)

  Brown, M, (Brigg & Cl'thpes)

  Home Robertson, John

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

  Hoyle, Douglas

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

  Hughes, Roy (Newport East)

  Brown, Ron (E'burgh, Leith)

  Hughes, Simon (Southwark)

  Bruce, Malcolm

  John, Brynmor

  Buchan, Norman

  Jones, Barry (Alyn & Deeside)

  Caborn, Richard

  Kirkwood, Archy

  Callaghan, Jim (Heyw'd & M)

  Lamond, James

  Campbell, Ian

  Leadbitter, Ted

  Campbell-Savours, Dale

  Leigh, Edward (Gainsbor'gh)

  Canavan, Dennis

  Leighton, Ronald

  Carlile, Alexander (Montg'y)

  Lewis, Terence (Worsley)

  Clark, Dr David (S Shields)

  Litherland, Robert

  Clarke, Thomas

  Lloyd, Tony (Stretford)

  Clay, Robert

  McCartney, Hugh

  Clelland, David Gordon

  McDonald, Dr Oonagh

  Clwyd, Mrs Ann

  McKay, Allen (Penistone)

  Cocks, Rt Hon M. (Bristol S)

  McNamara, Kevin

  Cohen, Harry

  Madden, Max

  Cook, Frank (Stockton North)

  Marek, Dr John

  Cook, Robin F. (Livingston)

  Marshall, David (Shettleston)

  Corbyn, Jeremy

  Martin, Michael

  Crowther, Stan

  Maxton, John

  Cunliffe, Lawrence

  Maynard, Miss Joan

  Cunningham, Dr John

  Meacher, Michael

  Dalyell, Tarn

  Meadowcroft, Michael

  Davies, Rt Hon Denzil (L'lli)

  Michie, William

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

  Mikardo, Ian

  Deakins, Eric

  Millan, Rt Hon Bruce

  Dewar, Donald

  Mitchell, Austin (G't Grimsby)

  Dixon, Donald

  Morris, Rt Hon A. (W'shawe)

  Dobson, Frank

  Nellist, David

  Dormand, Jack

  O'Brien, William

  Dubs, Alfred

  O'Neill, Martin

  Duffy, A. E. P.

  Orme, Rt Hon Stanley

  Eadie, Alex

  Park, George

  Eastham, Ken

  Parry, Robert

  Evans, John (St. Helens N)

  Patchett, Terry

  Ewing, Harry

  Pendry, Tom

  501

  Penhaligon, David

  Stewart, Andrew (Sherwood)

  Pike, Peter

  Stott, Roger

  Powell, Raymond (Ogmore)

  Strang, Gavin

  Prescott, John

  Straw, Jack

  Randall, Stuart

  Tapsell, Sir Peter

  Raynsford, Nick

  Thomas, Dafydd (Merioneth)

  Redmond, Martin

  Thomas, Dr R, (Carmarthen)

  Rees, Rt Hon M. (Leeds S)

  Thompson, J. (Wansbeck)

  Richardson, Ms Jo

  Tinn, James

  Roberts, Ernest (Hackney N)

  Townend, John (Bridlington)

  Rogers, Allan

  Wall, Sir Patrick

  Rooker, J. W.

  Wallace, James

  Sedgemore, Brian

  Wardell, Gareth (Gower)

  Sheerman, Barry

  Wareing, Robert

  Shields, Mrs Elizabeth

  Welsh, Michael

  Short, Ms Clare (Ladywood)

  White, James

  Silkin, Rt Hon J.

  Williams, Rt Hon A.

  Skinner, Dennis

  Winnick, David

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

  Young, David (Bolton SE)

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

  Soley, Clive

  Tellers for the Ayes:

  Spearing, Nigel

  Mr. Ron Davies and Mr. John McWilliam.

  Steel, Rt Hon David

  NOES

  Aitken, Jonathan

  Dover, Den

  Alison, Rt Hon Michael

  Durant, Tony

  Ancram, Michael

  Dykes, Hugh

  Arnold, Tom

  Edwards, Rt Hon N. (P'broke)

  Ashby, David

  Eggar, Tim

  Atkinson, David (B'm'th E)

  Evennett, David

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

  Eyre, Sir Reginald

  Baker, Nicholas (Dorset N)

  Fallon, Michael

  Baldry, Tony

  Farr, Sir John

  Banks, Robert (Harrogate)

  Favell, Anthony

  Batiste, Spencer

  Fenner, Mrs Peggy

  Bellingham, Henry

  Fookes, Miss Janet

  Bendall, Vivian

  Forman, Nigel

  Benyon, William

  Forsyth, Michael (Stirling)

  Best, Keith

  Forth, Eric

  Bevan, David Gilroy

  Fowler, Rt Hon Norman

  Biffen, Rt Hon John

  Fox, Marcus

  Blackburn, John

  Franks, Cecil

  Blaker, Rt Hon Sir Peter

  Fraser, Peter (Angus East)

  Bonsor, Sir Nicholas

  Freeman, Roger

  Boscawen, Hon Robert

  Gale, Roger

  Bottomley, Peter

  Galley, Roy

  Bottomley, Mrs Virginia

  Gardiner, George (Reigate)

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

  Gardner, Sir Edward (Fylde)

  Bowden, Gerald (Dulwich)

  Garel-Jones, Tristan

  Brandon-Bravo, Martin

  Glyn, Dr Alan

  Brinton, Tim

  Gow, Ian

  Brittan, Rt Hon Leon

  Grant, Sir Anthony

  Brooke, Hon Peter

  Greenway, Harry

  Bruinvels, Peter

  Gregory, Conal

  Bryan, Sir Paul

  Griffiths, Peter (Portsm'th N)

  Buck, Sir Antony

  Grist, Ian

  Budgen, Nick

  Ground, Patrick

  Bulmer, Esmond

  Grylls, Michael

  Burt, Alistair

  Gummer, Rt Hon John S

  Butcher, John

  Hamilton, Hon A. (Epsom)

  Butler, Rt Hon Sir Adam

  Hamilton, Neil (Tatton)

  Butterfill, John

  Hampson, Dr Keith

  Carlisle, Kenneth (Lincoln)

  Hanley, Jeremy

  Carttiss, Michael

  Hannam, John

  Cash, William

  Hargreaves, Kenneth

  Channon, Rt Hon Paul

  Harris, David

  Chapman, Sydney

  Havers, Rt Hon Sir Michael

  Chope, Christopher

  Hawkins, Sir Paul (N'folk SW)

  Clark. Dr Michael (Rochford)

  Hawksley, Warren

  Clarke, Rt Hon K. (Rushcliffe)

  Hayes, J.

  Colvin, Michael

  Heathcoat-Amory, David

  Coombs, Simon

  Heddle, John

  Cope, John

  Heseltine, Rt Hon Michael

  Couchman, James

  Hill, James

  Cranborne, Viscount

  Hind, Kenneth

  Crouch, David

  Hirst, Michael

  Currie, Mrs Edwina

  Holland, Sir Philip (Gedling)

  Dorrell, Stephen

  Holt, Richard

  Douglas-Hamilton, Lord J.

  Howard, Michael

  502

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

  Onslow, Cranley

  Howell, Ralph (Norfolk, N)

  Oppenheim, Phillip

  Hubbard-Miles, Peter

  Ottaway, Richard

  Hunt, David (Wirral W)

  Page, Sir John (Harrow W)

  Hunt, John (Ravensbourne)

  Page, Richard (Herts SW)

  Hunter, Andrew

  Patten, Christopher (Bath)

  Jackson, Robert

  Patten, J. (Oxf W & Abgdn)

  Jessel, Toby

  Pawsey, James

  Johnson Smith, Sir Geoffrey

  Percival, Rt Hon Sir Ian

  Jones, Gwilym (Cardiff N)

  Pollock, Alexander

  Jones, Robert (Herts W)

  Porter, Barry

  Jopling, Rt Hon Michael

  Portillo, Michael

  Kellett-Bowman, Mrs Elaine

  Powell, William (Corby)

  Kershaw, Sir Anthony

  Powley, John

  Key, Robert

  Price, Sir David

  King, Roger (B'ham N'field)

  Proctor, K. Harvey

  Knight, Greg (Derby N)

  Raffan, Keith

  Knight, Dame Jill (Edgbaston)

  Raison, Rt Hon Timothy

  Knowles, Michael

  Rhys Williams, Sir Brandon

  Knox, David

  Ridley, Rt Hon Nicholas

  Lang, Ian

  Robinson, Mark (N'port W)

  Lawler, Geoffrey

  Rowe, Andrew

  Lawrence, Ivan

  Sainsbury, Hon Timothy

  Lawson, Rt Hon Nigel

  Shaw, Giles (Pudsey)

  Lee, John (Pendle)

  Shaw, Sir Michael (Scarb')

  Lester, Jim

  Shepherd, Colin (Hereford)

  Lightbown, David

  Silvester, Fred

  Lilley, Peter

  Sims, Roger

  Lloyd, Ian (Havant)

  Skeet, Sir Trevor

  Lloyd, Peter (Fareham)

  Smith, Sir Dudley (Warwick)

  Lord, Michael

  Smith, Tim (Beaconsfield)

  Lyell, Nicholas

  Soames, Hon Nicholas

  McCurley, Mrs Anna

  Spencer, Derek

  MacGregor, Rt Hon John

  Stanbrook, Ivor

  MacKay, Andrew (Berkshire)

  Steen, Anthony

  MacKay, John (Argyll & Bute)

  Stevens, Lewis (Nuneaton)

  Maclean, David John

  Stewart, Allan (Eastwood)

  McLoughlin, Patrick

  Stewart, Ian (Hertf'dshire N)

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

  Stradling Thomas, Sir John

  Major, John

  Sumberg, David

  Malins, Humfrey

  Taylor, John (Solihull)

  Maples, John

  Taylor, Teddy (S'end E)

  Marland, Paul

  Terlezki, Stefan

  Marlow, Antony

  Thompson, Donald (Calder V)

  Marshall, Michael (Arundel)

  Thompson, Patrick (N'ich N)

  Mates, Michael

  Thorne, Neil (Ilford S)

  Mather, Carol

  Thurnham, Peter

  Maude, Hon Francis

  Tracey, Richard

  Maxwell-Hyslop, Robin

  Trippier, David

  Mayhew, Sir Patrick

  Vaughan, Sir Gerard

  Mellor, David

  Viggers, Peter

  Merchant, Piers

  Wakeham, Rt Hon John

  Meyer, Sir Anthony

  Waldegrave, Hon William

  Miller, Hal (B'grove)

  Walden, George

  Mills, Iain (Meriden)

  Waller, Gary

  Miscampbell, Norman

  Ward, John

  Moate, Roger

  Watson, John

  Monro, Sir Hector

  Wheeler, John

  Morris, M. (N'hampton S)

  Wiggin, Jerry

  Morrison, Hon C. (Devizes)

  Wilkinson, John

  Morrison, Hon P. (Chester)

  Winterton, Mrs Ann

  Moynihan, Hon C.

  Winterton, Nicholas

  Murphy, Christopher

  Wolfson, Mark

  Neale, Gerrard

  Wood, Timothy

  Nelson, Anthony

  Yeo, Tim

  Neubert, Michael

  Newton, Tony

  Tellers for the Noes:

  Nicholls, Patrick

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

  Norris, Steven

  Question accordingly negatived.

  Radioactive Waste (Disposal)
    STATUTORY INSTRUMENTS, &c.
    Motion made, and Question put forthwith pursuant to Standing Order No. 79(s) (Standing Committees on Statutory Instruments, etc.)
    STATUTORY INSTRUMENTS, &c.

      INDUSTRIAL ORGANISATION AND DEVELOPMENT
      That the draft Cutlery and Stainless Steel Flatware Industry (Scientific Research Levy) (Abolition) Order 1986, which was laid before this House on 30th April, be approved. — [Mr. Maude.]
      Question agreed to.

    PETITIONS

      Social Security
      1.40 am
      Mr. Gareth Wardell: I beg to ask leave to present a petition which has been signed by 2,845 people, representing 5 per cent. of the electorate of Gower who are concerned that the measures arising out of the White Paper would be harmful to those 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.
      To lie upon the Table.

      Community Care
      1.42 am
      Mr. Jack Straw: I beg to ask leave to present a petition organised by the National Society for Mentally Handicapped People in Residential Care that has been signed by a grand total of 58,395 people. It expresses the concern of those humble petitioners about the operation of the so-called community care policies with reference to adult mentally ill and mentally handicapped people.
      The Petitioners pray that this Honourable House should halt the community care policy and reappraise the full range of provisions necessary for the overall care of mentally handicapped people by Royal Commission,
      504
      reverse the planned rundown and closure of hospital homes for mentally handicapped people and provide the means for them now to develop their own caring community with those suitable transformed to the proven, and successful village concept, thereby giving them their necessary place in the whole spectrum of care facilities for mentally handicapped people.
      To lie upon the Table.

  Nuclear Waste
  1.42 am
  Mr. Austin Mitchell: I beg to ask leave to present a petition from the county of Humberside. I present this petition as the representative of all the Humberside Members of all parties.
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, The Humble Petition of the People of Humberside.
  Sheweth—That United Kingdom NIREX Ltd are looking for sites for the storage or disposal of radioactive waste. It is known that sites in Humberside are among those being considered. It is also known that the Secretary of State for the Environment is proposing to make a Special Development Order granting planning permission for related exploration purposes. The under-signed are totally and absolutely opposed to these proposals because they believe that they could threaten public safety, that they would seriously diminish the area's economic and social development prospects and that radioactive waste should be stored or disposed of at the site of origin.
  Wherefore your Petitioners pray that your honourable House will under no circumstances approve the Special Development Order allowing preliminary site exploration or associated works in connection with the storage or disposal of radioactive waste in Humberside and will take all such other action within the powers of the House to prevent a national radioactive waste storage or disposal facility being established in Humberside.
  And your Petitioners, as in duty bound, will ever pray.
  The petition is signed by Mr. P. Wellings of County Hall Beverley. His signature is followed by 155,000 other signatures. That testifies to the overwhelming opposition that there is in the county of Humberside to the special development order that has been considered and accepted tonight and to any proposals to dump nuclear waste in Humberside.
  To lie upon the Table.

  South-West England (Development Assistance)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maude.]
  1.43 am
  Mr. Tony Speller: I have spoken on similar lines in the past on Ilfracombe harbour in February 1983, on regional aid for north Devon in November 1984, on the need for aid for Ilfracombe marina on 25 April 1985, and now today, a year later, on the ineligibility of north Devon and the south-west for access to the European regional development fund, which would be so vital to our area.
  North Devon lost assisted area status following the statement on 30 November 1984 by my hon. Friend the Financial Secretary to the Treasury, who was then Minister of State, Department of Trade and Industry. My hon. Friend mentioned the 35 per cent. of the country still covered by assisted area status, and said:
  "I do not think that it would make any sense to raise that percentage to 40 or 45 per cent." — [Official Report, 30 November 1984; Vol. 68, c. 949.]
  On that occasion, I voted against the Government, having several months earlier supported the enabling legislation nationally. Change is inevitable, but it should be logical change.
  The Minister of State referred several times in that statement to travel-to-work areas as the basis upon which development maps are built. I pay tribute to Devon county council, North Devon district council and the Ilfracombe and District Development Committee, all of which have worked hard towards regaining some form of assisted area status, and all of which support me this evening. I also pay tribute to the Ilfracombe Harbour Development Group and the Ilfracombe and District Hotel and Catering Association, which, together with our North Devon Manufacturers Association and the chambers of trade and commerce, have worked in their specific ways for growth and prosperity.
  When seeking more aid, it would be wrong not to mention some of our specific industries that have bucked the trend and expanded in hard times, hoping for profit as matters improve. Firms such as Sussmans, Shapland and Petter, Carpenters Workshop and many others, would be a credit to any other part of the country, but it is essential that we retain them in our area. I pay tribute to the work force of north Devon, from messenger to managing director and from shopkeeper to shop steward. Ours is an area where we work together in the common interest, with industrial disputes a rarity.
  In November 1984, when my hon. Friend the then Minister of State made his statement to the House, he told us in so many words that although times might be hard in the south-west, they were much harder in Merseyside, Scotland and the west midlands. As a result, the finite funds available were to be given to more industrially depressed areas than north Devon. It was no secret that the Government had made that choice, and it is nonsense to suggest that there was some Euro mystique about the decision or the percentages involved. Before the changes, about 28 per cent. of the United Kingdom population lived in a development or assisted area. Later, the figure was 35 per cent. Within those figures, some areas, like mine, had fallen out, and others, like that of my hon. Friend the
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  Minister of State, Department of Trade and Industry—my hon. Friend the Member for City of Chester (Mr. Morrison)—had the good fortune to fall within the new assisted areas. There was some illogicality here and there.
  I voted against the Government on the specific variation which removed most of the south-west from assisted area status, because that status is the key to our locked-out prosperity. Without such status, an area does not have access to European regional development fund grant aid. ERDF money helps the South-West water authority with reservoir construction, Devon county council with road construction and places such as Ilfracombe with much-needed harbour development schemes. With that pump-primping, many good things can happen. Without it, projects trickle out instead of coming flooding in. Less well known in the House, but equally important, is the fact that the Government direct Government business to firms in assisted areas. North Devon has lost out in that respect, despite being highly competitive in price and delivery.
  Today, we were visited by workers from Appledore shipyard and other shipyards. Appledore is in the constituency of my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills), who is sadly absent today due to ill health but who supports what I have to say about his constituency. Appledore shipyard has nearly 650 workers and is due to lose nearly 100 of them. A little help from the fund could have enabled work to come to the yard which, although not in my constituency, employs many of my constituents.
  I have set out the stall of north Devon at some length. It is an attractive stall full of saleable goods, but it lacks the investment essential for the stallholder to prosper. We are an area of small business and industry. I have mentioned Appledore. Only one other firm — the excellent and world-famous door specialist Shapland and Petter—employs over 600 people in my constituency or that of my hon. Friend the Member for Torridge and Devon, West. We are small business and what is big to us is small beer in the rest of the country.
  The unemployment figures show 3,000 out of work in Ilfracombe, but that conceals the fact that 49 per cent. of those aged between 16 and 24 are jobless. Half the young work force without work is as bad as anywhere in the country, yet Ilfracombe could mop up at least half that number if we were given the funds to develop the harbour on a coastline where there is no safe harbour:or north Somerset, north Cornwall and north Devon and nowhere for the south Wales sailors to sail to in safety when the Bristol channel weather is bad.
  Tourism is too often looked down on in the industrial world, but the West Country tourist board reported to us only last week that a mere £5,900 will produce a new full-time job in catering and tourism, and the holiday season could be extended, given investment in what could be called non-sun activities. Even in north Devon, the sun does not shine all day and every day.
  Since north Devon lost assisted area status, we have had virtually no inward investment, while along the M4 and M5 corridor areas are increasingly prosperous because of easy access to centres of population. In north Devon, our link road is still "pending". On 23 April I was told by the Under-Secretary of State for Transport that an answer on the inquiry on stage 2 would be given as soon as possible—that marvellous governmental phrase which means as little as possible. My hon. Friend the Minister of State, Department of Trade and Industry confirmed or. 13 May

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  that a review of regional policy will take place this year. That is the key to my argument. My part of the world is a great self-help area, but we cannot finance from sparse local resources the sort of job creation schemes that are needed.
  If the Government are to reconsider the assisted area status map, which provides access to ERDF funding—it is not always understood that unless an area has some form of status it does not have access to European funds—it will not be understood in my part of the world if we do not have that access. The prosperity of Bristol, nonsensically considered by Governments of all colours to be the head office of the south-west, improves the figures for Devon and Cornwall. In exactly the same way, the horrific unemployment figures of Ilfracombe were recently massaged into the bad, but not so dreadful, figures of Barnstaple.
  I suggest that my right hon. Friend the Secretary of State stops depending so much on the travel-to-work area. That is illogical in sparsely populated rural areas. He should base his thinking on the more logical criteria used by the Department of the Environment and the Development Commission. Those criteria include above average unemployment, an inadequate range of employment opportunities, an outward migration of working age people—neither of my grown children can find a job in my constituency—a population bias towards the eldery and poor access to services and facilities. Every one of those criteria is met in north Devon.
  Yet over the past few days, the tin industry in Cornwall, shipbuilding, ship repairing and the small boat businesses of Devon, and the problems of our major industries of agriculture and tourism all fill in the colour red for danger over the future prosperity of my part of the world.
  Circumstances change so quickly and drastically. In July last year, Ilfracombe's youth unemployment was 31 per cent. In January this year it was 50 per cent. In July last year, overall unemployment was 20 per cent. By January this year it was 33·5 per cent. Bideford has 30 per cent. unemployment and the Barnstable figure is 22 per cent.
  Earlier today, my right hon. Friend the Secretary of State for Trade and Industry made two valid points in the debate on the shipbuilding industry. He said that most shipbuilding areas have the advantage of being in an assisted area, with the access to funding that that brings. Secondly, my right hon. Friend said that a great deal of public money was to be spent through various agencies to help those made redundant from shipbuilding. He also said, in answer to an intervention from me, that it is not easy to alter the boundaries of the development area map. Appledore in north Devon is an efficient, highly productive, under cover, year-round yard. It should be included in a development area because every other shipyard is included in a development area. I suspect that during the review in November 1984, north Devon was probably one of the last areas to be excluded from any formal status. I trust that it will be one of the first back.
  Mr. Anthony Steen rose——
  Mr. Deputy Speaker (Mr. Harold Walker): Does the hon. Member for South Hams (Mr. Steen) have the consent of the hon. Member for Devon, North (Mr. Speller) and the Minister to speak?
  Mr. Speller: Yes, Mr. Deputy Speaker.
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): Yes, Mr. Deputy Speaker.
  1.56 am
  Mr. Anthony Steen: First, I pay tribute to my hon. Friend the Member for Devon North (Mr. Speller) for his customary robust and powerful speech on behalf of his constituents and, as important, the whole of Devon and Cornwall. He has done a great service by raising this important matter, even at this late hour.
  I should like to make two observations. First it is now well known that regional aid distorts. It persuades firms and businesses to go to areas to which they would not normally go. I speak as a former Merseyside Member of Parliament with experience of how harmful regional aid was to that area. It persuaded car manufacturers to come to Merseyside, but as soon as the economy went into reverse and they encountered problems, they immediately pulled out of the areas in which they had received regional aid. Firms in areas which qualify for regional aid pull out like that because they have the least money to lose. The concept of regional aid must be looked at carefully.
  My second point is that in areas like Devon and Cornwall rural deprivation is aggravated by regional aid, because it persuades people living in rural areas to search for work in urban areas which are declared assisted areas and receive funds from Europe to provide jobs. This deprives rural areas of jobs. Rural deprivation is aggravated by the placement of assisted areas in large urban conurbations.
  If the purpose of the regional fund is to give larger sums of money to smaller geographical areas that have been redrawn to make them smaller, that is a mistake. There is overwhelming evidence that the more public money we pour into declining areas, the more it accentuates and accelerates their decline. One must place public funds where there is a partnership with private funds, and that means not just in declining, ailing large industrial conurbations, but in areas of growth. The map should be redrawn so that aid is not concentrated in areas that are in decline, but is provided in areas that are growing or arresting the decline.
  In that context, my hon. Friend the Member for Devon, North has performed a great service, because he has pointed out that areas like his and mine in south Devon should be included. They are not large industrial conurbations at the end of their lives: they have a future and are areas of great growth. We need the help of Europe to make those areas grow faster and create more jobs. I should like to hear what the Minister has to say, and I know that the House will welcome him to the Dispatch Box and hope that he will be able to say some helpful and constructive things.
  1.59 am
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I should like to thank my hon. Friends the Members for Devon, North (Mr. Speller) and for South Hams (Mr. Steen) for bringing this subject before the House. It is a tribute to their tenacity that not only tonight but on previous occasions they have sought to defend their constituents' interests by seeking Adjournment debates.

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  I join my hon. Friend the Member for Devon, North in his commendation of the work force in the south-west of England in general and in his constituency in particular. That work force is noted for its moderation, diligence and excellent record as a wealth creator in services and manufacturing. My hon. Friend the Member for Devon, North graciously spoke about the support of my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) who is indisposed and cannot be here tonight. I am sure that he will read the Hansard report with interest. My hon. Friend the Member for South Hams and my hon. Friend the Member for Devon, North spoke eloquently about rural deprivation.
  Although this is not the sort of debate in which one should take issue with colleagues, I am sure that my hon. Friend the Member for South Hams will agree that most forms of regional aid — whether section 7 or development area assistance — involve just such a partnership. In other words, there is a minority percentage of money going in from the public sector which means a greater proportion of private sector spend. Where possible, we try to incorporate the idea of a partnership between the public and private sectors when it comes to the deployment of funds for the support of investment of one sort or another.
  I repeat my thanks and those of the House to my hon. Friends for presenting this opportunity of debating the important issue of the application of the ERDF to north Devon and the south-west of England generally.
  Under ERDF rules, assistance is normally available only for areas receiving domestic regional aid. We have rehearsed these arguments on previous occasions. The main areas in the United Kingdom that are eligible for ERDF are, therefore, the assisted areas. Thus it can be seen that eligibility for the ERDF reflects United Kingdom domestic regional priorities and this leads me to two main aspects underlying present ERDF eligibility in Devon and Cornwall.
  First, there is the assisted areas map. Changes in the assisted areas map announced in 1984 resulted, for the reasons that I stated earlier, in changes in ERDF eligibility for parts of north Devon and the south-west of England. Perhaps I could refer to the map review by saying a few words about travel-to-work areas—a core point raised by my hon. Friend the Member for Devon, North—and their importance to regional policy.
  The new assisted areas map reflected the most recently identified employment needs of the country, because the basis of the map was the new TTWAs. The assisted areas map is based on TTWAs because they are the closest available approximations to self-contained labour markets covering the whole country. We do not pretend that they are perfect, but they are the closest approximations. They are therefore the best available basis for nationwide comparison of relative need for employment opportunities.
  TTWAs are also the smallest areas for which the Department of Employment publishes rates of unemployment. Data on community patterns based on the latest census in 1981 became available in 1984 and formed the basis of a review of TTWA boundaries carried out by the Department of Employment. The procedure adopted in the review identified "job foci"—wards or groups of wards with concentration of employment—and then attached to these those wards with which there are strong commuter
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  flow links in order to meet the self-containment criteria of the percentage level of those both living and working in the area.
  As my hon. Friends are aware, the Government undertook a fundamental review of our regional policy in 1984. There was a wide measure of consultation with interested parties outside Government and nearly 500 submissions were received from organisations and individuals. As a very important element of that review, we amended the assisted areas map so that it should more closely reflect the areas of greatest need and changes in the pattern of employment since the previous review. Before deciding which areas should receive assisted area status, we looked at a variety of objective indicators.
  The parts of Great Britain that have suffered particularly severely from the effects of the recession are those which, as my hon. Friend the Member for Devon, North identified, have had a high dependence on traditional industry. We looked at industrial and occupational structures in order to assess in which areas this was most particularly a problem.
  I listened carefully to my hon. Friends and understand the arguments that they deployed as well as the development problems of their constituencies. No doubt those development problems may figure in some future consideration of a map, but I cannot say tonight when this review will take place.
  We also considered the levels of those economically active and growth in labour supply to gain an indication of the future size of labour markets. The final two criteria we considered were an urban indicator and distance from main markets, again factors to which my hon. Friends referred.
  My hon. Friend the Member for Devon, North will see from this that the designation of assisted areas was an issue which was given a great deal of careful thought. On the basis of the objective criteria that we considered, we could not justify continuing Devon and Cornwall's assisted area coverage at its previous level in preference to the relative needs of other parts of the country.
  Mr. Speller: I am grateful to my hon. Friend for giving way and also for his full description. I have a letter of 13 May, signed by my hon. Friend the Minister of State, which says that there will be a new review during This year. I just bring to the attention of my hon. Friend the Parliamentary Under-Secretary that, whether it be in tin or shipbuilding, there have been fundamental changes since the review two years ago.
  Mr. Butcher: I am coming to that point almost immediately. In those areas of Devon and Cornwall which remain assisted, since the introduction of the new policy offers of regional selective assistance of nearly £6 million have created 1,300 jobs, while regional development grants of £600,000 have created 217 jobs.
  I am fully aware of my hon. Friend's concern, which he has expressed on many occasions, but there is nothing that I can usefully add at this stage to what he has already heard. We are carrying out a review of the administration of regional policy with the objective of ensuring that the schemes operate with maximum effect and economy from the point of view of both user companies and staff operating them. As my hon. Friend will undoubtedly be aware, there are many other hon. Members who also claim

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  —many with vehemence—to have the most pressing case for their areas to be upgraded or reinstated as assisted areas.
  Mr. Steen: Perhaps my hon. Friend could feed in to his Department the point that I was trying to put across. The criteria for assisted area status might be considered as well. By concentrating on the rundown areas, one is pulling work away from areas which are not yet run down.
  Mr. Butcher: My hon. Friend made that point clearly in his concise speech. When in due course the policy is re-examined, that will be a factor for consideration and the same historical criteria that have been used on previous occasions may not necessarily be used. This may be the occasion when he and I should take issue on the so-called mature or declining areas and those which he believes are yet to go into decline unless something is done. Coming from an erstwhile urban environment, he will recognise that there are still urban parts of the country which look forward to an industrial renaissance, albeit very much with their own private sector and locally based initiatives being at the heart of it. We must entertain hopes that there will be such combustion in the so-called mature industrial areas.
  I must re-emphasise that, while we shall, of course, listen to all representations, it would have to be a very strong case indeed to justify adjustments which could have repercussions elsewhere and undermine the stability of the present assisted area map. Such stability is essential to the success of a policy intended as an incentive to private sector investment.
  I now turn to the second aspect of the related question on which I have already recently given my hon. Friend a parliamentary answer and on which I had an exchange recently in the House with the hon. Member for Dunfermline, East (Mr. Brown) That is the role of the European Commission in the decision about the working population coverage of the assisted areas map as a result of the 1984 regional policy review. I appreciate that this question has been the source of much concern recently in the south-west and so perhaps I could again take the opportunity of relating to the House the circumstances of our decision.
  As a Community member state we are under an obligation, under the provisions of articles 92 and 93 of the treaty of Rome, to obtain the approval of the Commission for any proposed changes in regional aid systems. If changes are implemented without Commission approval, the Commission may demand repayment of any aid granted illegally.
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  As a result of the last regional policy revision in 1984, the United Kingdom Government decided on various changes to our systems of regional aid. One of the main features was an increase in the assisted area coverage of the working population in Great Britain to 35 per cent. Before formal notification, the United Kingdom undertook informal discussions with the Commission on the proposed changes and, as a result, had good reason to believe that the Commission would not approve any map that went beyond 35 per cent. without undertaking a major appraisal of United Kingdom regional aid. That could easily have resulted in a decision by the Commission to force a cut to below 35 per cent. Bearing that and other considerations in mind, the United Kingdom Government decided to introduce an assisted areas map covering 35 per cent. of the working population of Great Britain. That was of course an increase from 27 per cent. at the outset of the review. It was officially notified to the Commission, which raised no objection.
  The legal obligation to obtain the Commission's approval would apply to any future changes in United Kingdom regional aids that the Government might wish to make. We have no reason to believe that the Commission's views on assisted area map coverage have since altered.
  As a consequence of the Government's decision in 1984 on the assisted areas map, those areas that lost assisted area status, because we did not feel they merited preferential treatment over the rest of the county, also lost eligibility for the ERDF. They did not lose assisted area status just because they were outside the 35 per cent. coverage. A number of other areas excluded from the map were worse off, in terms of the objective comparisons which were made, than some of the areas in Devon and Cornwall which lost assisted area status. Such areas would thus have had stronger uses for inclusion if coverage had been widened.
  This has been an unusual Adjournment debate because it has been justifiably introduced as a means of seeking to obtain clarification and, indeed, to exert pressure on behalf of constituents. In due course, the coverage and criteria of assisted area maps may be further considered. Whay my hon. Friends have said tonight will have to be referred to in such a course of action. However, I cannot say when that will happen. All I can do is thank them for their sense of timing and tenacity in defending their constituents' interests.
  Question accordingly agreed to.
  Adjourned accordingly at twelve minutes past Two o' clock.

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

Engineers Training Measures
Lord Butterworth: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what measures are being taken to meet the increasing demand for engineers.
Baroness Hooper: My Lords, government policies have increased the number of full-time and sandwich course students studying engineering in higher education from 59,000 in 1979–80 to 75,000 in 1983–84. Our most recent measure, the engineering and technology programme, announced in 1985, will add about a further 5,000 student places in engineering and technology on high quality degree courses by the end of the decade.
Lord Butterworth: My Lords, I should like to thank the Minister for that full reply, but, although the scheme to which she refers has provided additional places in special subjects like information technology and computing, it has recruited mostly from orthodox engineering courses and indeed from the polytechnics. May I ask whether the Government have any plan to tackle the problem of increasing the total number of engineers by tackling the problems in the schools?
Baroness Hooper: My Lords, there is a demographic factor in all this. The Government responded to earlier demands from industry and created more places, which it may now be difficult to fill. That is why the emphasis is switching to schools. The Government are aiming to increase the syllabus awareness of schools in order to encourage more pupils to follow courses that will lead to further education in engineering and science subjects.
Lord Tordoff: My Lords, are the Government aware that where we should be recruiting more engineers is from among women, and that it is in girls' schools that the pressure should be applied? There is a great lack in this country of women in engineering, and we compare badly with other countries.
Baroness Hooper: My Lords, in higher education only 8 per cent. of the engineering students in 1983 were women. Although it is a steadily increasing percentage, the figure speaks for itself. We feel that action to increase the number of women engineering undergraduates must begin in schools, and that perhaps relates back to the previous supplementary question. We need to increase the number of girls taking science subjects at A-level, and to do that we
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must increase the number of girls studying science up to the age of 16. The Government's policy statement, Science: 5 to 16, proposes that all pupils, including girls, should be properly introduced to science in primary school and should continue to study a broad programme of science throughout the first five years of secondary education.
Lord Avebury: My Lords, is the noble Baroness aware that there is a general move in engineering to change from a three-year to a four-year degree course, but that some universities, such as the University of Oxford, have been told that they cannot take any more students on the existing courses, and the only way they have managed to cope is by initiating new courses such as that which Oxford is planning in the combined engineering and computing school? If it is correct for engineers to be given a four-year degree course, does the noble Baroness not think that the provision of funds should be adjusted upwards accordingly?
Baroness Hooper: My Lords, the Government can only do their best to encourage universities to create more places. It is up to them how they use the funds provided by government in organising their courses. I recognise that there is an increase in longer courses, sandwich courses and the like in various universities throughout the country, many of which are proving extremely beneficial.
Lord Glenamara: My Lords, is the noble Baroness aware that what is happening on the ground has little relation to the rosy picture that she has painted? For example, is she aware that the national advisory body for the public sector of higher education has proposed a reduction in the engineering department of Newcastle-upon-Tyne Polytechnic, which is one of the biggest and most successful in the country? What does the noble Baroness have to say about that? Can she tell us what effect the savage cuts for Durham University and Newcastle University, announced today, will have on their engineering departments?
Baroness Hooper: My Lords, again I can only repeat what I said in my original reply. As far as government policies are concerned there has been an increase, and there is an intended increase, in the number of students on engineering courses. If individual universities choose to alter their courses as a result of that, it is up to the institution itself.
Lord Morris: My Lords, may I ask my noble friend whether Her Majesty's Government find themselves in any difficulty in preferring the promotion of one learned profession over another? Furthermore, can she tell me whether that learned profession has done anything to promote its own interests?
Baroness Hooper: My Lords, if my noble friend intended to ask what industry itself is doing, as I said the Government responded to its urgings that more student places be created in engineering, but a considerable responsibility rests on industry and commerce to ensure the success of those measures by signalling to young people that careers in engineering can be financially rewarding and stimulating. Other ways in which industry can help include the

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sponsorship of students to attract particularly the most able to appropriate courses; the supply of key executives as visiting lecturers: the provision of expensive, up-to-date equipment to higher education establishments on loan or as gifts; and the provision of opportunities for students to obtain industrial experience within academic programmes.
Lord Taylor of Blackburn: My Lords, is the noble Baroness the Minister aware of the oustanding work that has been carried out by the Engineering Council, which has taken the initiative of taking the subject of engineering to teachers and pupils in schools to inform them of the possibilities that there are for pupils to enter into an engineering career? If she is so aware, what help is she giving to the council?
Baroness Hooper: My Lords, the Government are aware of the initiative being taken by the Engineering Council. In particular, with this year being Industry Year, the Government are supporting the initiatives of the council and other organisations in a number of ways.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness say what will be the effect of today's statement about the funding of universities on the training of engineers in this country? Is she aware that there is a profound disquiet in Wales as a result of that statement? Is she further aware that the university colleges at Swansea, Cardiff and Bangor will have to deal with severe cuts as a result of today's statement? They have important engineering departments. What effect will the cuts have on those departments?
Baroness Hooper: My Lords, my understanding of the University Grants Committee letter, to which I assume the noble Lord is referring, is that in it there is a specific reference to the planned increase in engineering and technical numbers which it is intended should be maintained. I have noted the noble Lord's remarks about the various institutions in Wales.
Baroness Carnegy of Lour: My Lords, will the noble Baroness tell the House what is the level of success of the Engineering Industry Training Board's Insight Programme in persuading girls to undertake engineering degrees?
Baroness Hooper: My Lords, the Engineering Industry Training Board's Insight Programme sponsors nine or 10 residential courses at universities each summer to give girls studying mathematics and science in schools a chance to find out about engineering as a career. So far about 1,200 girls have attended those courses and 50 per cent. of that total have subsequently taken engineering degree courses. I believe that is a measure which is proving valuable.
Lord Rochester: My Lords, now that the Amalgamated Engineering Union has at last accepted that apprentice training should be carried out on the basis of standards to be achieved rather than time to be served, what plans do the Government have to build
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on that to meet industry's demands for engineering craftsmen and technicians?
Baroness Hooper: My Lords, I can only refer back, once again, to my original Answer, which explained the increase in courses and the engineering and technology programme announced last year which will add another 5,000 student places in engineering and technology.

Balance of Payments: Current Account
2.46 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions they draw from the latest figures issued regarding the United Kingdom current account balance of payments.
Lord Brabazon of Tara: My Lords, in the first quarter of this year the current account showed a surplus of nearly £1 billion. The figures for March which showed a current account deficit of £538 million were disappointing, but are not indicative of the underlying position, which continues to be one of overall surplus.
Lord Dean of Beswick: My Lords, taking those figures as an indication of the economic barometer, is the noble Lord the Minister aware that the figures issued by the Government today show that over the first quarter, apart from an increase in oil production of 5 per cent. (the highest oil production we have ever had) the economy grew by 0.4 per cent. and manufacturing output fell by 1 per cent? Is that not a dangerous trend? Does it not indicate that the Government, even with the fall in oil prices, are allowing an increase to balance their books? Is that not a dangerous way to run the economy when the manufacturing base is still falling while service industries are increasing?
Lord Brabazon of Tara: My Lords, with regard to the production figures which the noble Lord mentions, the figure issued today is obviously disappointing. We are still, however, looking for an overall balance of trade surplus for the year of some £3 billion. As regards manufacturing industry, exports of manufactured goods last year were at a record level in terms of both volume and value. Of course, imports have grown more than exports. Half of the deterioration in the balance of manufactures in the first quarter reflects trade in erratic items such as aircraft and precious stones. They should not be taken as entirely indicative of the trend.
Lord Thorneycroft: My Lords, will the noble Lord the Minister include among his conclusions maintaining a determination to resist all pressure from opposition parties to depart dramatically from Her Majesty's Government's economic policies, which would only have the most disastrous results upon our current balance of payments?
Lord Brabazon of Tara: My Lords, I entirely agree with my noble friend.
Lord Williams of Elvel: My Lords, is the noble Lord aware that on a comparison of first quarter 1986 with first quarter 1985 the trade deficit on manufactured goods worsened by 26 per cent. to an all-time record of £1.43 billion; the volume of exports of manufactured goods dropped by 2.5 per cent; the trade balance on semi-manufactures went from surplus into deficit; manufacturing output fell by 1 per cent; and manufacturing productivity showed no improvement? Are those the results the noble Lord, Lord Young of Graffham, had in mind when he said to your Lordships on 20th March:
"The economy has taken the unprecedented collapse of the oil price in its stride".—[Official Report, 20/3/86; col. 1048.]
Lord Brabazon of Tara: My Lords, the noble Lord has obviously done his homework on the figures. I have done my homework on the figures as well. I cannot argue with them. The figures are in the Printed Paper Office of your Lordships' House for all your Lordships to see. As I said in my original Answer, the first quarter figures for this year should not be taken as indicative of the overall position. We are still predicting a current account surplus of £3 billion to £3·5 billion for the year as a whole.
Lord Parry: My Lords, as the contribution of the service sector and particularly the tourism side of the economy was phenomenal last year and as it is likely to fall in the current year, is the noble Lord concerned that there will be a gross imbalance in the economy?
Lord Brabazon of Tara: My Lords, I do not agree that the contribution from the tourist sector will fall this year. I do not have the actual figures with me. I understand, however, that we are predicting a further small increase in tourism this coming year.
Lord Molloy: My Lords, bearing in mind the point made by the noble Lord, Lord Thorneycroft, that this Government's policies would appear to be very good for the nation, can the Minister say at what period and under what government since the end of the last war has there been a more disastrous situation than we face today? Will he give a clear answer to that real and valid question?
Lord Brabazon of Tara: My Lords, I have to tell the noble Lord that the trend in the balance of payments in manufactured goods has been getting worse for the last 20 to 30 years.
Lord Gisborough: My Lords, does my noble friend not agree that so long as the rise in wages exceeds the rise in inflation this will make the situation much worse? What extra will be done to try to keep wages in proportion?
Lord Brabazon of Tara: My Lords, my noble friend makes a valid point. I do not wish, however, to become involved in an economic debate this afternoon. I have given an answer to the Question on the Order Paper which relates to the current account balance of payments.
Lord Ezra: My Lords, would the noble Lord not agree that, in the long run, we need to restore a positive balance in our visible trade exports apart from oil? Will he indicate, therefore, whether he considers that present policies will lead to that desirable result?
Lord Brabazon of Tara: Yes, my Lords, I agree that we should like to see a positive trade in current account in visibles. It is inevitable that part of the revenues from oil, the surplus on services and money from increased manufactured exports will be spent on imports. Some of these imports are in intermediate goods to fuel growth, on capital goods to invest for the future and on consumer goods to increase freedom of choice. This is what trade is about.
Lord Boyd-Carpenter: My Lords, will my noble friend invite the attention of the noble Lord, Lord Molloy, in answer to his question, to the occasion in 1977 when the Labour Government so mishandled our affairs it was necessary to bring in the IMF to bail us out?
Lord Brabazon of Tara: My Lords my noble friend is, of course, quite right. That is certainly not going to happen under this Government.
Lord Hatch of Lusby: My Lords, do not the figures that the noble Lord has given for the deficit in March, plus the evidence given by many noble Lords who have already spoken, relating to the fall in the output of manufacturing over the past year show how ridiculous it was when the Chancellor and, following him, the noble Lord, Lord Young, claimed that we had easily weathered the fall in oil prices and sought to dismiss the findings of your Lordships' Select Committee on Overseas Trade?
Lord Brabazon of Tara: My Lords, I think that I have heard that speech before. I repeat that last year exports of manufactured goods, by both volume and value, were at an all-time record. We expect that to be improved upon this year.
Lord Dean of Beswick: My Lords, would the Minister not agree that it is clear, from all the figures bandied about today, that a further fall in the price of oil of the dimension mentioned by my noble friend and colleague Lord Williams would be absolutely disastrous for our economy?
Lord Brabazon of Tara: My Lords, the fall in the price of oil has advantages for the economy as well as disadvantages for the balance of trade, obviously. It makes our manufactured goods more competitive in a world market that should also benefit from the fall in the price of oil. The March figures showed a surplus in oil of £400 million. We predict that that surplus will probably be maintained for this year.

Crime Proceeds: Court Powers
2.55 p.m.
Lord Rodney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have any proposals to extend the principle of confiscation of assets to crimes other than those associated with drugs.
Viscount Davidson: My Lords, the Government intend to strengthen the powers of the courts to deprive offenders of the proceeds of their offences. In the White Paper setting out the plans for criminal justice legislation, we have invited comments on the extent to which the powers contained in the Drug Trafficking Offences Bill might be applied to other types of profitable crime.
Lord Rodney: My Lords, I thank my noble friend for that Answer. Can he advise the House what other types of crime might be made subject to the same sequestration conditions as drug trafficking?
Viscount Davidson: My Lords, this is a matter for consideration. Certain types of offence, such as serious crime and other types of organised crime, are obvious candidates.
Lord Mishcon: My Lords, does the noble Viscount recognise that when the Government brought the drug legislation before the House it was on the basis that it was a very exceptional measure to deal with a very exceptional situation? Will the Government exercise the greatest care before taking as precendents the extraordinary powers given under that legislation? Will they certainly stop short of the powers in that legislation that deal with banks, enforced disclosure and protection for banks?
Viscount Davidson: My Lords, I recall very clearly the discussions that took place last week on the Report stage of the Drug Trafficking Offences Bill and the very firm views expressed by the noble Lord, Lord Mishcon. All I can say is that in considering whether it would be appropriate to extend this provision more widely we shall take full account of these and other comments made during the passage of the Bill.
Lord Denning: My Lords, is it not the case that the huge proceeds of bank robberies and airport robberies are spirited abroad almost at once and that, to use an expressive Americanism, they are laundered through the banks so as to make them apparently clean and are then brought back by the rogues and put into the hands of apparently innocent people? Is it not time that legislation was introduced to freeze those proceeds, to prevent the rogues from making use of them and to confiscate them? Was there not two years ago an inquiry by a very strong committee chaired by a High Court judge, Sir Derek Hodgson, and sponsored by the Howard League for Penal Reform, that went into this great question in full detail and produced a report entitled The Profits of Crime and their Recovery? Does not that report cover the proceeds of drug trafficking and also the proceeds of bank robberies, airport robberies and the like and suggest how those rogues can be prevented from getting all those profits?
Viscount Davidson: My Lords, the Government have indicated at various points during the passage of the Drug Trafficking Offences Bill that they will be considering the extension of similar powers with appropriate modifications to other profitable offences, such as organised crime and serious fraud, later in the life of the present Parliament. Such wider legislation would fulfil a commitment given by Mr. Brittan when Home Secretary in a speech to the London Diplomatic Association in December 1983 and would also accord with the views expressed by the Hodgson Committee in its report, which the noble and learned Lord, Lord Denning mentioned, entitled The Profits of Crime and their Recovery, which recommended confiscation powers which would apply to profitable crime generally.

Venice Declaration and Arab-Israeli Dispute
3 p.m.
Lord Chelwood: 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 the Venice Declaration now has the support of all EC countries; what reservations the USA still has; and whether the Prime Minister will urge the Israeli Government to accept it as an essential first step before negotiations to end the Arab-Israeli dispute can begin.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we and our European Community partners fully support the principles of the Venice Declaration and consistently urge the parties to the Arab-Israeli dispute to build on them. The United States Government have not accepted the Palestinian right to self-determination.
Lord Chelwood: My Lords, will the Government take full advantage of our presidency of the European Council to try to breathe some badly needed new life into the Venice Declaration, which we inspired during an earlier presidency? At the same time may I ask my noble friend whether she is aware of the point of view that the West seems to have been less than even handed in demanding major concessions from the PLO in advance of international negotiations while making no such demands of Israel?
Baroness Young: My Lords, the Venice Declaration, to which my noble friend has referred, set out fundamental and balanced principles for a just settlement. We believe that these principles are still valid and that there would be nothing to be gained from a new statement at this time. Of course, in co-operation with our European partners we are reviewing the prospects for new steps forward and we are in close touch with the parties.
Lord Cledwyn of Penrhos: My Lords, while I fully support the principles of the Venice Declaration, may I ask the noble Baroness whether she would agree that there is very little likelihood of a permanent settlement in the Middle East unless the great powers sit around

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a table and come to some agreement about it? Is it not the case that in the Geneva-Conference, towards the end of last year, there was talk of setting up some mechanism between the great powers and others to discuss this possibility? Can she say whether any progress has been made, and whether it was that to which she was referring in her reply?
Baroness Young: No, my Lords; in my answer to my noble friend I was referring to the point as to whether or not there should be another, as it were, Venice Declaration. However, we believe that those principles still hold good and that they are the basis on which a settlement would be formed.
The point that the noble Lord, Lord Cledwyn, has raised is a separate one. So far as the United States is concerned, we believe that its role is indispensable. It has special ties with both sides. We keep in touch with the United States' thinking on these matters and share the same broad aims. But the fact is that there are differences, for example, on the question of Palestinian self-determination.
Lord Gladwyn: My Lords, while I agree with what the noble Lord, Lord Cledwyn, has said, may I ask whether the Government agree that there is unfortunately no chance of the Israeli Government accepting anything like the Venice proposals as a basis for negotiation unless the United States Government are prepared to exercise some pressure on the Israeli Government? If experience is any guide, that is the last thing that I should think we might expect them to do.
Baroness Young: My Lords, there is much in what the noble Lord says. He will note what I have said about the attitude of the United States in these negotiations.
Lord Molloy: My Lords, with reference to her first Answer to the noble Lord, Lord Chelwood, may I ask the noble Baroness to whom our Government made representations vis-à-vis the Venice Declaration and when was that last done? Will she agree that Britain's name is still good in the Middle East, and that there are many Israeli and Arab groups who fervently believe that the Venice Declaration is, as the noble Lord, Lord Chelwood, said, a vital first step to restoring a valid peace?
Baroness Young: Yes, my Lords; we stand by the Venice Declaration. But it depends on the attitudes of the parties concerned.
Lord Mayhew: My Lords, while I appreciate her original Answer, may I ask the noble Baroness whether she agrees that there is a sad contrast between the positive part played by Britain in the Middle East at the time of the Venice Declaration, when the noble Lord, Lord Carrington, was Foreign Secretary and the negative and one-sided action of the Government in supporting a clumsy reprisal raid by the United States of America?
Baroness Young: My Lords, I think that the second point made by the noble Lord is completely wide of the mark. However, as he will be aware, my right honourable friend the Prime Minister is to visit Israel
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shortly and will be looking forward in her talks with Mr. Peres and his colleagues to a discussion on a wide range of bilateral and international issues, including the problems of the Middle East.
Lord Jenkins of Putney: My Lords, is it not the case that while many of us at the time of the Venice Declaration—which was originally in 1980, or even earlier—felt that the balance of right in this matter was on the Israeli side, events over the period are moving us towards finding that the cause of the delay and failure to agree is not to be found on that side? In these circumstances will it not be appropriate for the Government to make fresh representations to the United States Government?
Baroness Young: My Lords, we keep in close contact with the United States. We have made our views quite clear, and my right honourable friend the Prime Minister discussed the Middle East with President Reagan in Tokyo.

Business
The Earl of Swinton: My Lords, with the leave of the House I should like to say a brief word about the length of speeches in this afternoon's debate standing in the name of the noble Baroness, Lady Nicol, to which your Lordships have agreed to apply a five-hour time limit. On the principle that the mover is allowed approximately 20 minutes and that the Minister should rise to reply not less than 25 minutes before the scheduled end of the debate, all other speeches should be limited to a strict upper limit of 18 minutes. If any noble Lord were to speak at greater length be would be doing so at the expense of other speakers in the debate.

The Water Industry
3.7 p.m.
Baroness Nicol Baroness Nicol rose to call attention to the case for large-scale investment in the water industry, and to the implications of privatisation for pollution control, environmental protection and consumer interests; and to move for Papers.
The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. Your Lordships will notice that the Motion falls into two parts. The first part refers to the case for large-scale investment in the water industry. We believe that the need for large-scale investment can be identified and calculated, and that it is essential and urgent whether or not the industry is privatised. If the Minister does not accept this case he will have to demolish a heavy weight of expert opinion in various reports and statements currently available. If he accepts the case, then we ask him to tell us in his reply how he sees the need being met, first in the existing situation and, second, in what is for the time being the hypothetical situation of the industry being privatised.
There is still much work to be done in determining the extent of repairs and replacements to assets, especially those underground. The Institution of Civil Engineers, in the Second Report of the Infrastructure Planning Group published in April this year—it is

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quite new—draws attention to the fact, as does the National Economic Development Office in its report, the Nation's Infrastructure, Water, published in March this year. Some major surveys are in progress, and the use of new technology should lead to a more accurate picture being built up in a reasonable time provided that the water authorities can be persuaded to press ahead. However, even the most optimistic observers do not expect an improved estimate to emerge at the end of this survey. There is general agreement that investment must be increased. Capital spending in the last few years has been depressed by the Government's financial constraints in pursuit of a lower PSBR, and although 69 per cent. of the authorities' annual planned expenditure is devoted to preservation, restoration and improvements of their assets, it is thought more is needed.
The National Economic Development Office report, on page 3, paragraph 2.7, says:
"The main areas where more investment is needed are in the rehabilitation of water mains and sewers; the replacement of outworn plant and equipment in pumping stations and in treatment works, the aesthetic aspects of water quality and the improvement of surface water quality; sea outfalls; and flood prevention; coastal and sea defences".
It is quite a long shopping list; but I would add to that list the need to find alternative means of sewage sludge disposal. We shall be under continuing pressure from the European Community to produce and finally to eliminate our present cheaper practice of dumping at sea, and land-based alternatives will need considerable capital investment. Those cannot be quantified because they depend on a number of variables which cannot be decided at the moment, but certainly investment will be needed.
Even in advance of the results of some of the water authorities' surveys, there appears to be little argument about the deplorable state of our sewers. Collapses each year are at the rate of 16 per 1,000 kilometres. The state of water mains is even worse. Bursts average 216 per 1,000 kilometres per annum, and if we stop to think what that means in terms of disruption to traffic and to all our lives, it really becomes quite a serious problem.
It is estimated that one-third of all mains are badly corroded, leading not only to structural failure but to poor water quality. The loss of treated water through leakages is estimated at 25 per cent., and that is after treatment, which makes it a very expensive loss indeed.
The Government's White Paper draws attention to the fact that about half of our 141,000 miles of sewers are post-war, and the Government seem to take some comfort from that fact. However, there is an added hazard: many of the newer mains are thinner-walled and will require replacement or relining after a shorter period than that which we have come to rely on in the past. The Water Research Centre is quoted as saying that the present £60 million per annum spent on mains should be increased by £10 million to allow for more relining alone. The Chartered Institute of Public Finance and Accountancy calculates that at present capital works are not being replaced as fast as they wear out. So the problem, bad though it is, is likely to become worse. Major investment is also needed to bring treatment plant and technology up to standard.
The standard of our bathing beaches is now below that of many European countries, and far too many of our rivers are still heavily polluted. At paragraph 31 the White Paper admits that past improvements have not been sustained in the past two years. At the end of 1983 water authorities submitted estimates to the Department of the Environment of the annual investment needed to maintain or achieve various levels of service. The minimum total for just keeping pace was somewhere between £675 million and £725 million per annum. The maximum—and, my Lords, this maximum on the list which they drew up covered many items which almost all of us in this House would consider essentials and not desirable options—was £1,100 million. In addition to that, there is the Ministry of Agriculture, Fisheries and Food requirement of £64 million per annum for sea defences, coastal protection and land drainage, making a total of £1,164 million per annum.
We believe that comprehensive surveys throughout the industry are essential, to be followed by strategic repair and renewal programmes. The NEDO Report makes the practical point that the health of the support industries, with expertise in all these fields, requires long-term investment strategies if the expertise is to continue to be available when needed. I am sure that we would all want to see stability in these industries, which is being undermined at the moment.
This ties in well with the Water Research Centre's view, expressed in its sewer rehabilitation manual, that costs could be reduced by planning phased upgrading to prevent crisis replacement. In other words, we do not wait until the sewers fall in; we have a phased replacement programme, which seems to be common sense from the point of view of the industry and from the point of view of the consumer.
We believe that greater financial flexibility could be given to existing authorities to manage their own affairs without the need to privatise, with all the complicated control procedures which are now being contemplated. At this point I should like to mention the second Green Paper which the Government issued on water and sewerage law. This does not strictly fall within the terms of today's Motion and therefore I do not propose to speak about it. However, I thought that I should mention it as being a most useful document which I think bears debate in the future. I look forward to the day when we can discuss the possibility of taking up some of its proposals. However, as I say, it does not really refer to today's Motion.
I turn now to the second part of today's Motion. The three areas that we identify are pollution control, environmental conservation and consumer protection. These are the areas of responsibility most at risk in the proposed privatisation. The authorities are responsible for maintaining drinking water standards. They also control abstractions of water for industrial and other purposes, and discharges, including their own; and they have specific duties for environmental protection and for the care of wildlife.
There is a widespread feeling that these functions are properly the role of public bodies and should not be in the hands of private companies. That the Government themselves recognise this fact is implicit in the complicated system of controls and supervision which

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they have put forward for discussion, and I shall return to that in a moment.
Given the new companies' need to give top priority to making profits, there is likely to be some difficulty with their role as conservationists. To give just one example, recreational use of water can be in direct conflict with the needs of waterfowl and other wildlife. I know that my noble friend Lord Graham will have more to say about the recreational side of the water authorities' responsibilities, so I do not propose to dwell on it.
I hope that the Nature Conservancy Council will be listened to when safeguards are being worked out. The Royal Society for Nature Conservation is concerned about the recreational issue, and is emphatic that conservation duties should be a statutory obligation on the water service public limited companies, with provision for consultation with conservation bodies on drainage operations. This is something which so far has not been mentioned in the Green Paper, and I hope that the Government will come round to it.
I have heard from a number of organisations which, while quite properly not taking a view on privatisation, are concerned that any legislation on conservation matters should be firm and simple. I do not think that any of us here would argue about that.
I turn now to the Green Paper itself: The Water Environment: the Next Steps. It is an interesting document even though it seems to pose more problems than it solves. The first page sets out the rough shape and scope of the new controls. If noble Lords will bear with me, I should like to read them, on the assumption that not everyone will have read the document. These are the responsibilities which will have to be covered by other means if the water industry is privatised. In Section 1 at paragraph 1.2 (c) it says:
"Financing and co-ordination of flood protection and land drainage will become the responsibility of special bodies which will have close links with the water authorities."
Sub-paragraph (d) states:
"A Director General of Water Services will be appointed to regulate the main services of WSPLCs through a licensing system. Licences will specify price and service standard controls for the utility services, and can include other requirements, giving them legal force."
Sub-paragraph (e) says:
"The Director General will appoint committees to represent the interests of customers of each WSPLC."
Finally, sub-paragraph (f) says:
"There will be new and strong safeguards for the water environment. Existing "statutory duties relating to recreation, conservation, navigation and fisheries will continue."
Fair enough, my Lords; the Government seem to be about to take care of everything.
In Section 2 the Secretary of State is given specific powers to require water services plcs to maintain various activities, including some powers to establish inquiries. I wonder whether these various proposals are in line with the new freedom expected by the water services plcs, or whether the whole complicated exercise is an admission by the Government that these areas simply cannot be privatised.
I am afraid that there will be a number of questions for the Minister on this document. But it is, after all, a consultation document, and I hope he will have
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some answers for us. For example, at paragraph 1.5 we see that the Government are giving increasing attention to protection of the marine environment. We welcome this, but does it mean that government finance is to be available, or will the tougher standards which are to be imposed be imposed on the water services plcs for them to finance? Even if the various regulatory systems can be made to work, they represent yet another movement of authority from the regions to London, and this cannot be good for the consumer.
And what of the cost of these regulatory systems? At paragraph 2.13 the Green Paper refers to the establishment of "a small inspectorate"; small in relation to what? What is the estimated cost of this small inspectorate? Are we to pay twice for the same work, through charges to the plcs and through taxes to the Department of the Environment? How much duplication does the Minister envisage?
Even with the Government's reservations, the powers to be given to the water services plcs are formidable. In their issuing of licences and consents they will be able to control the activities of other private companies in an unprecedented way. There is no evidence that this will be acceptable to those other companies. Indeed, the chairman of the CBI's Water Panel, Mr. A. R. Guy, in a letter to the Financial Times on 29th January of this year draws attention to this point, among many others, and I have received many similar comments from a variety of different sources, all expressing the same anxiety.
I give just one example of one of the proposed powers at paragraph 5.11 of the Green Paper. It says:
"the Government considers that it may be desirable … to facilitate designation of protection zones for major water sources on a standard and simplified basis. The two main features will be:

(a) a power to designate areas without individual local inquiries; and

(b) the application of common regulatory regimes, including a requirement for the consent of the WSPLC to specified activities".

We welcome the idea of protection zones, but we do not consider that such a dramatic power—and it is a dramatic power—should be given to any private company.
All the subjects I have mentioned in one way or another impinge on consumer interests, especially the powers of the director general's committees and the other questions on costs. My noble friend Lord Gallacher will wish to enlarge on these issues and so I shall leave him to deal with them. We do, however, welcome the Government's statement at paragraph 1.7(c) about the public's need to have adequate access to information. This is a point that we have pushed in much legislation in the past, and I am glad that the Government are to take a positive line in this case.
But the image of the new water services plcs will necessarily be of an aggressive, marketing, profit-seeking body working in the interests of its shareholders rather than in the interests of its consumers. It will be no different from any other large, profit-making concern, except of course that it will not have any competition, which may make some difference. To suggest that these companies can keep a role as public watchdogs on the notoriously unprofitable areas of environmental protection and conservation simply does not make sense.
The Water Authorities Association and some individual water authorities themselves are resisting the Government's proposal to separate land drainage and flood protection from the water services plcs. If the Government yield to this pressure, they may find that antagonism from many responsible organisations to the proposed privatisation becomes a reality.
In fact, on the whole question there are so many conflicting interests that there is great danger of doing lasting damage to what, after all, is a successful system, even if it has been under financed. If you are to change a successful system, you should be expected to prove the need.
Would it not be in the long-term interest of the consumer that this natural monopoly of an essential commodity should remain in public hands? Freedom to manage finance in a realistic way could be given to water authorities without the need to privatise. The whole exercise reminds me of Edward Lear's Jumblies. Your Lordships' will recall that,
"their heads were green and their hands were blue and they went to sea in a sieve".
This flotation is about as seaworthy as a sieve. The Jumblies came back from their trip, but not for 20 years. I predict that if this unpopular privatisation is pursued, our Government of Jumblies will be away for at least that long. My Lords, I beg to move for Papers.
3.27 p.m.
The Minister of State, Department of the Environment (Lord Elton): My Lords, the noble Baroness, Lady Nicol, in a speech of characteristic charm and restraint has drawn your Lodships' attention to a number of aspects of the water industry, but it is privatisation that stands behind the whole of this debate, and indeed stood at the end of her speech; and to privatisation no doubt a great many of your Lordships will return throughout the interesting four-and-a-half hours that lie ahead of us.
I shall not speak for long at this stage. The time for me to answer the debate, and indeed the noble Baroness, is at the end of it, not the beginning. But I think I ought to place before your Lordships, before we go any further, just a few observations about privatisation so as to make things clear.
The first observation is this. The privatisation of the water industry is not something to be seen on its own. It is not a single event. It is part of a series; and it is as part of a series that it can best be understood and most fairly judged; because that series—that programme—of privatisation is a central part of what this Government are about.
Let me remind your Lordships that when our party came to power in 1979 there were no fewer than 1,500,000 people working in state-owned industries. Those industries accounted for about one-tenth of the retail price index, one-seventh of total investment in the economy, and about 10 per cent. of the GDP in 1979. By the end of next year our programme will have almost halved the nationalised industries' share of GDP.
The philosophy that brought such a very large slice of the private economic activity of this country into the hands of the state is, of course, well known to your
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Lordships because it is, or certainly was, the philosophy of the party opposite. Central to its objectives was the wish that the wealth of the nation should be in the ownership of the nation, which, being translated, means that every elector should get a slice of the action. Nationalisation was intended to achieve that objective.
My Lords, that is exceedingly neat in theory, but it proved disastrously complicated in practice. Anyone may be able to prove ownership to the intellectual elector by philosophic reasoning, but you cannot convince the average elector of it by practical demonstration. By that I mean that even if he knows he owns the power stations or British Airways, he does not feel as though he does. In that, nationalisation was not successful.
Another central objective of nationalisation, as I understand it, was to place those essential businesses under political control. In that, nationalisation was successful. So, in this new sector of British industry, businesses no longer had individual shareholders whose direct interest in their performance was commercial. Instead, they were given one corporate owner whose ultimate objectives were political even when they were expressed in financial terms. I have to make this clear at the outset because it explains both why nationalisation so often does not work and why the Conservative Party has been determined and is determined, to dismantle it over the years in order to restore efficiency and wellbeing to much that is humdrum, inefficient and unproductive in the economy.
The noble Baroness said that we must prove the need. This is the crying need of this country right across industry and the economy. It is possible that noble Lords opposite may feel that what I have so far said can all be safely brushed aside as mere Tory dogma.
Noble Lords: Hear, hear!
Lord Elton: My Lords, I welcome that confirmation. I hoped that I should get it. A dogma of course is a theory of which you disapprove and which has not been successfully tested in practice. But your Lordships will agree that a safe test of this particular dogma would be simply to privatise a part of nationalised industry and see what happens. My Lords, we have done it! We have done it 17 times. And what we are talking about is, as a result, not dogma but established fact. Privatisation of any industry, which is what we now propose for the water industry, generates success far beyond whatever that industry achieved when it was in the dead hand of the state. That is so by any criteria. I see that the noble Lord opposite is burning to rise. I do not recall whether his name is down to speak but maybe he is going to leap into the "gap" if it is not. He will then have plenty of time to marshal his ammunition to demolish what I am about to say. But it had better be pretty good because it seems to me that what I have said stands by any criteria.
Is your criterion profit? The profits of British Aerospace have increased three-fold in five years and those of National Freight seven-fold. Is it production? Jaguar made 14,000 cars in 1979; they made 38,500

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cars in 1985. Is it value to the customer? Between 1980 and 1983, after liberalisation of the licensing requirements, 700 new, long-distance coach services were introduced and fares fell by 40 per cent. in real terms. Is it customer satisfaction? In 1981 a survey of Jaguar's American customers showed that only 20 per cent. of them were satisfied with the car they had bought only 35 days after they had bought it. By 1984 that figure was 90 per cent. Is it the involvement of the members of an industrial concern in its success? To date, more than one-third of a million employees have obtained shares through privatisation of the companies in which they work. Or is it the criterion of the involvement not of the workers but of the public—that sense of ownership that nationalisation itself was intended to bring about? Let me remind your Lordships that British Telecom is now owned by 1,700,000 private shareholders and they know that they own it because they get a slice of the action.
Your Lordships may say—and the noble Lord, Lord Williams, certainly will say—that I have chosen examples to fit my case. Of course I have. Who would not? I have chosen from a wealth of others that prove to our ample satisfaction that privatisation brings new life to old industries to the benefit of all concerned. Some noble Lords may feel that water is too important to be left to private companies. In that they will be in sympathy with the noble Baroness, Lady Nicol. Water is essential to life. The purity of what we drink is essential to health. But is not food essential to life? Is not the purity of what we eat essential to our health? Yet not one of those that I have heard has for a moment suggested that private enterprise is not perfectly able to supply food. The state certainly sets standards and safeguards for the food industry. And so it will with water. But every day, with every meal, with every mouthful, except at the most unfortunate dinner parties, we prove that private industry is a fit provider of the essentials of life and we do so without a moment's anxiety. When we privatise water, we shall nevertheless take the opportunity actually to strengthen our control of certain quality objectives and the machinery for representing consumer interests and investigating consumer complaints. I shall return to that when I reply to this debate.
Some noble Lords may say, nonetheless, that water is too integral to the environment to leave it in the control of private enterprise. We are deeply aware of this aspect of public concern and deeply committed to the protection of standards. I must not anticipate this debate; but your Lordships will have seen, and the noble Baroness has helpfully quoted from, the consultation paper called The Water Environment: The Next Steps. It was published in April and we asked for comments by 27th June. Chapter 8 summarises our proposals. I shall listen with close interest not only as I have done to the noble Baroness but to the comments of all noble Lords, and they will be taken into consideration with the other views expressed during the consultation. But no one who has read this document can still believe that we will leave the environmental aspects of water policy to chance. The pollution control and environmental protection referred to in the Motion now before us are at the very heart of our proposals.
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Noble Lords will wish to protect actual consumers as well as their environment and we recognise the need for safeguards against monopoly abuse. We shall therefore set up a regulatory regime headed by the Director General of Water Services. He will police the licences under which the water companies will be appointed. These will set standards for service as well as limits on charges. He will also set up new consumer consultative committees, one for each company, to deal with consumer affairs and investigate specific complaints.
The first item in the catalogue of concern which the noble Baroness has put before us in her Motion is neither the environment nor the consumer. It is "the case for large-scale investment" in the industry. Indeed, there is such a case. I freely admit it and it seems to me to contribute notably to the case for privatisation. Your Lordships are probably aware that the highest level of real-terms expenditure on the industry was as far back as 1975–76, and that by 1980–81 it had declined—under whose supervision I will not say—to £653 million at the same prices. By 1986–87, the increase of about 35 per cent. will have taken us back to £891 million.
In cash terms, we have provided those amounts for the industry in the current year rising to £990 million in 1988–89, as I said a moment ago. This will maintain the real-terms increase in the capital investment in the industry. That is not a shoddy record: £990 million is a great deal of money. Some of your Lordships think it should be larger—the noble Baroness, I think, included. But even at its present level, it is not the sort of money that the Chancellor finds in his back pocket when he hangs up his suit at the end of a busy day. It is serious money that has to be found from government resources, a purse constantly drained by every aspect of government activity and constantly replenished from the taxpayers' pocket. The Government do not have unlimited money under this administration. They have only what they can borrow and what they can take from the taxpayer. There is very little else. Out of that money, they have to pay for all their activities and for everything that people want of them. As long as the water industry is nationalised, the money to pay for it has to come from that strictly limited amount, and it is competing for it with all those other uses.
Money spent on water cannot be spent on education; it cannot be spent on health. That is what the Institution of Civil Engineers meant in paragraph 31 of the second report of their infrastructure planning group, to which the noble Baroness referred. They said:
"Water authorities are currently vulnerable to government decision on capital expenditure despite recognition by all concerned that stability and longer term planning are paramount."
The role of government is also recognised in paragraph 11 of the Civil Engineering ECD's report on water to which the noble Baroness also referred.
It must be wrong that the water industry should be dependent for its capital resources upon the success—notable though it has lately been—of my right honourable friend the Secretary of State fighting his corner in the annual Cabinet battle about public expenditure, capital allowances or cash. That is why I said that the capital needs of the industry, to which the

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noble Baroness so ably draws our attention, contribute notably to the case for privatisation. Privatisation, under the careful regulation which we propose, which will protect both the environment from pollution and the customer from exploitation is not a dangerous exercise. It will give the industry access to new money under the discipline of the market. The provision of water by a company under careful regulation is nothing new. There are now 28 statutory companies supplying water to 25 per cent. of the population in England and Wales. That is about 12 million people. There is nothing frightening about company water. One in four of us are drinking it already.
3.40 p.m.
Lord Ezra: My Lords, I should like to congratulate the noble Lord, Lord Elton, on the stirring party political speech that he has just made. It seems to me that it is not a realistic response to the very moderate and positive Motion proposed by the noble Baroness, Lady Nicol. I should like to keep to the Motion and say that the Benches from which I speak take a very objective view of what should be publicly and privately owned. However, I do not believe that this is the Second Reading of the Government's Bill yet to be published on the privatisation of the water industry; it is a Motion directed to a consideration of the requirement for capital investment in the water industry, and it expresses some concern about what might happen to the environmental, pollution and consumer considerations under possible privatisation. I should like to speak strictly to the Motion.
First, I think that it is necessary for us to pay tribute to the great achievements in the British water industry. Indeed, I do not need to look any further than the Government's White Paper in which they refer to the positive consequences of the 1973 Water Act and the way in which the water industry of the country has been organised so as to take into account all aspects of the production, use and environmental impact of water. I am delighted that that is something to which on all sides of the House we can adhere. The problem is whether the future of the British water industry really is in the direction that the Government have in mind or whether it lies in the direction of consolidating what already exists.
Let us take the question of investment. The noble Lord, Lord Elton, has told us very eloquently that of course the Government's purse is not unlimited. But there is the question of the vital needs of the infrastructure. When one looks at some of the reports that have been produced on the subject—and a number have been mentioned in the course of the speech of the noble Baroness, Lady Nicol—one finds that not only the professional bodies but also the water authorities themselves are very concerned at the limitation on investment so far; so let us leave aside for the moment all questions of possible privatisation. They will take some time, anyway. One has the legislative process to be gone through. Let us look at investment for its own sake at the present time.
What do we need to do about the water industry of Britain? We have an exceptionally good system, but we have an inadequate supply of capital to refurbish and to maintain the physical assets. That seems to be
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common ground. In the report of the Institution of Civil Engineers, the NEDC report and, indeed, in the White Paper itself, it is implied that there is inadequate financing of the water industry at present. It is suggested that, if it were privatised, it would all be resolved. I am saying that we cannot wait until then. Let us resolve the matter now. If the industry is to be privatised, at least let it be done in a form in which it is working totally successfully and adequately, and let it not be starved of the necessary finance.
Let us make sure that such items as are referred to in the NEDC report are attended to. These include the corrosion of water mains in many parts of the country, the sewerage collapses in many parts of the country, pollution in numerous rivers and estuaries—there is a whole host of purely physical matters that need to be attended to. I should have thought that it would be common ground between us in this noble House that these should be dealt with without delay. The question of whether this industry ultimately is to be publicly or privately owned seems to me to be irrelevant to the question of whether it should be adequately capitalised, whether the maintenance and performance of the industry with the good system now established should be persevered in.
Therefore the first point that I should like to put to the noble Lord who will reply to the debate is: what plans have the Government in mind to put right the numerous matters of a physical nature that need to be corrected in the water industry which is based on such an effective system but is now lacking in the necessary capital investment to make it work properly?
The second part of the noble Baroness's speech related to the possible impact of privatisation on the questions of pollution and environmental control and consumers' interests. Here I believe that there is a problem. Under the existing arrangements the water authorities are both operating and regulating it. This has worked pretty well. But they are publicly-owned monopolies, so the public can take some comfort from the fact that they are owned by the public, under government control.
If these bodies are to be transferred into private companies, the question then arises whether there should not be a division of functions and whether the supply of water and sewerage services should be regarded as the commercial part of the operation but the environmental and pollution responsibilities should be regarded as the continuing public part of the operation. The fact that the Government have already decided that drainage and flood prevention should be withdrawn from water authorities in the event of their being privatised seems to support this view.
I would put it to the noble Lord that they cannot have it both ways. If we are to have a water system in this country which includes not only the supply of water and sewerage services but also control of the environmental and pollution aspects, then it seems to me that that sort of organisation properly lies in the public sector. But, if it is decided to convert this into the private sector, then there should be a division of these responsibilities and the environmental and pollution aspects as well as the land drainage and flood prevention aspects should be kept in public hands and the commercial supply of water and sewerage should

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be in private hands, if that is the Government's wish and desire. I do not see that the existing totally integrated water supply system which, as the Government's own White Paper has shown, has attracted a great deal of attention throughout the world, can be privatised exactly as it stands.
We all know that those who serve in the water industry would be totally opposed to a division of their functions. From the correspondence received by those of us who are participating in this debate it is perfectly clear that the prime objective of those serving in the industry is to maintain the integrity of the industry. They are saying that if it is the Government's wish to privatise, let it be privatised in toto. But I am saying, looking at it as objectively as possible, that I do not believe these objectives are consistent. There has to be a division between the public responsibilities of environment pollution, flood prevention and drainage control, on the one hand, and the supply of water and sewerage services, on the other. Therefore I am particularly grateful to the noble Baroness, Lady Nicol, for having given us the opportunity, in advance of debating the Bill yet to be published, to air some of these views.
The Government at the moment are in a consultancy phase over this project. We therefore have the opportunity today to express our opinions, and I put it to them urgently that there are two things to be done. First, we have to make absolutely sure that the physical aspects of our otherwise admirable water industry are properly provided for by adequate financing and that the Government should not wait until there is a change in their status. Secondly, they should look very carefully yet again at the public and private aspects of possible privatisation.
3.52 p.m.
Lord Gallacher: My Lords, looking at the document Cmnd. 9734, Privatisation of the Water Authorities in England and Wales, although it is officially a White Paper, one ponders really as to what the status of the document is. Beyond the normal concept of a White Paper, it reads in part like a company prospectus. It certainly is a document highly motivated in terms of advertising. Further, I think that in the White Paper the Government are seeking very hard to convince themselves that they are doing the right thing. I must say that on a sober reading of the document, and even after listening to the spirited speech by the noble Lord the Minister this afternoon, I am far from convinced that they are doing the right thing.
Broadly speaking, so far as the consumers are concerned, the document seeks to assure them that they will be better off if they buy from Her Majesty's Government regional water authorities in England and Wales, which they already own, even at one stage removed. The cost of servicing share capital as a result of the issue, the cost of servicing borrowing by water supply plcs is not even mentioned briefly in the document. I think we are indebted to the noble Lord, Lord Ezra, for mentioning the arrears of capital maintenance which will face water supply plcs if the Government do not, in the interim period between now and privatisation, expend a great deal more money on essential functions.
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One asks oneself, having in a sense dual nationality, if it is so advantageous to privatise, why have the Scots been left out of this scheme? The Scots have a built-in sense of being disadvantaged—sometimes real and sometimes imaginery—but I am not aware that the fiery cross has been lit in Scotland over this issue. They also have a reputation for being canny with their money, and I think it is that aspect of their character which has dominated their thinking so far as the privatisation of water is concerned.
If we may look briefly at what happened when gas was nationalised, which took place under a Labour administration, we see that that happened only after a public inquiry, which decided that gas supply was a natural monopoly, and the Labour Government proceeded to create a public corporation. They paid compensation to the 300 municipalities whose undertakings became part of the nationalised corporation: a mere £2 million for severance. The Government of the day justified their action on the basis that what they were doing was transferring from one public authority to another. This is not the case so far as water is concerned.
The document which this Government have published concedes that water authorities are natural monopolies whose services are essential to public health; and so the proposition before us is that there should be one company per region in England and Wales, not several. And so we have the concept of water supply plcs.
The profit motive is preferred in the document to statutory undertakings. The Minister had a great deal to say about the fact that we are already supplied in large measure by statutory undertakings in England and Wales. He claimed (I think with some measure of justification) that those statutory undertakings do a useful job for consumers. I also believe that if the Government had proposed to do what they want to do on the basis of extending the ownership by statutory undertakings, there would have been more sympathy in the country at large for what they are doing than there is for preferring the profit motive.
There are to be safeguards to prevent overcharging and low service standards; but one must inevitably ask when talking of safeguards of this kind: to whom will public limited companies owe a superior duty—to shareholders or to customers? There is a phrase in the paper which intrigued me greatly, which speaks of the managers of the plcs being driven by the normal commercial motivation of the private sector. That leads me to think that the managers, quite properly, will owe a superior duty to the shareholders of their company. Indeed, it would be remarkable if they did not.
We are pursuing also, if the legislation follows the pattern mapped out in the White Paper, the same kind of scheme as the Government created for the privatisation of British Telecom and the proposed privatisation of British Gas. The water supply plcs are to operate under licence, regulated by the newly-created office of Director General of Water Services. It is mentioned that a licensing period might be of the order of 25 years, which is the same as for gas and British Telecom. It is also suggested that there might be a formula for prices which may have an initial validity

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of five years. It is suggested, too, that the Director General of Water Services can make changes so far as prices are concerned by agreement with the licensee. If such changes are proposed and not agreed, the possibility of a reference to the Monopolies and Mergers Commission is canvassed in the document. That, again, is the same as was proposed for gas and British Telecom. Therefore, the Monopolies and Mergers Commission, which was conceived to discharge an entirely different function, is to be burdened with what I think could prove to be a well nigh impossible task of sitting in judgment in cases of this kind.
Because of the Green Paper Paying for Local Government rateable value is not now considered to be a suitable basis for charging domestic ratepayers and the Government have been obliged in the paper on water to look at the alternatives by way of charging for water supply. So the concept of metering for domestic consumers is mentioned in the document. I think it is quite an ominous reference, because it is said that not merely should the plcs perhaps assist with the installation cost of meters but that this initial capital cost may be justified by reason of the fact that, once metered, the demand for water will be considerably lower and consequently future capital investment, as a result of lower demand, can be correspondingly less. That sounds to me like ominous news for low-income groups in this country.
Turning to the 1973 Water Act, which was, of course, the work of a Conservative administration, that Act made no provision for consumer machinery. Although there were criticisms of the absence of consumer machinery at the time, I think on the whole the situation was bearable because the authorities created and constituted under the 1973 Act had a very liberal representation of local government members as part of them, and as these people were elected their existence was known and, in consequence, their capacity to safeguard the interests of consumers could, I think, be taken for granted.
Incidentally, the role of local authorities following privatisation is an aspect about which I think we should hear more from the Minister, because it seems to me that in the planning area alone local authorities are likely to be vitally interested in the activities of water supply plcs, and, if there is to be no special provision for the interests of local authorities in legislation, perhaps the Minister may care to tell us whether they might even be allowed to become shareholders in order, as it were, to hold a watching brief on behalf of their ratepayers.
In 1983 the character of the controlling authorities of water undertakings was completely transformed. They became smaller bodies, like regional gas or regional electricity undertakings, and, of course, these small bodies were then obliged to operate to targets set for them by Her Majesty's Government. Consumer machinery was established and members were chosen by regional water authorities themselves to represent consumer interests, after consultation with bodies such as the CBI and the National Farmers' Union. Two types of consumer committee are in existence for each of the existing regions. There is the divisional
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consultative committee and the regional consumer and recreation committee.
There is, I must say, and was at the material time in 1983, some criticism about the narrow basis of consultation which the existing regional water authorities undertook in connection with appointments to the consumer committees which they created. Thus, I think it is fair to say that one cannot form an objective judgment as to the value of the consumer machinery which was created in 1983, although the White Paper assumes that as they exist they must be good, they must be doing a useful job and that everybody must be aware of that fact and of their continuing existence.
On privatisation, I think it is absolutely fundamental that powerful regional consultative committees are created with the necessary resources to undertake the job which they will have to do on behalf of consumers. They are to report direct to the Director General of Water Services with the right of complaint to him. I believe that their reports should also be made public and laid before Parliament, just as the water supply public limited companies themselves will have to make returns to Government under existing company law.
I also ask myself why the Director General of Water Services should be given the task of appointing members to regional consultative committees on privatisation. It would seem to me that this also ought to be a function of government just as it will be for the national Gas Consumers' Council.
About their existence and operating activities, I should like to ask the Minister when he replies whether the regional consumer committees will be able to engage independent financial consultants to guide them on pricing and service matters following privatisation. I think this is a very important facility which they will need, having regard to disparities in the comparative strengths of water supply public limited companies—a point which has already been touched on.
How, for example, can one compare the results and resources of the Thames water supply PLC with one in, say, the north-west of England where it is understood major arrears of capital investment are facing the company on privatisation, because it has not been done prior to this date?
I ask whether regional consumer consultative committees will have a right of direct access to the boards of the water supply plcs in whose areas they are operating. Will maximum publicity be given to their existence, and what form will that publicity take? I mention this because, as has already been said, little knowledge is available so far about the existing consumer machinery. Also, I think it is important that the chairmen of these bodies, however appointed, should be allowed to meet collectively once or twice a year for an exchange of experiences, so that they can, in fact, inform each other of the activities of their committees.
So far as owner-occupiers of older properties are concerned, I think that these people will be in the hands of water supply plcs to a very marked degree, quite apart from charges. For example, in the matter of escapes of water—and I have had recent personal

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experience of this—although one could call in an outside plumber, the fact that the escape is between the company's mains and one's house, leads one automatically to say, "We must bring in the water board to have a look at this." To the extent that one does this as a sensible precaution, then one is virtually bound once the fault has been diagnosed to authorise the water authority to undertake the work and accept their billing for it. And, as I know from further recent experience, it is even difficult for water authorities to give a reliable estimate for this type of work until they have actually seen what the job entails.
There is also, so far as all domestic water consumers are concerned, the problem of cut-offs for non- or delayed payment of accounts. This could cause acute hardship—more so even than with gas and electricity, because there are alternatives available in such circumstances. There is no other source of supply available so far as a cut-off of water is concerned. I wonder whether, as one of the revenue-raising devices, our old friend the standing charge might be introduced by water authorities in order to make them slightly more profitable.
So far as the overall role of the Director General of Water Services is concerned, in looking at the comparative levels of service I find this an almost impossible function for any single man to discharge. The circumstances of these bodies will vary considerably and, consequently, I think that meaningful comparisons as between one region and another will be virtually impossible to make, especially, as has already been pointed out, given the degree of difference in the areas they are serving, the problems they are facing and the kind of capital expenditure which they either undertake or decline to undertake, as the case may be.
So, from the consumer angle I think that the proposals are defective. I think that the machinery so far postulated for the protection of consumers is, on the whole, inadequate. Therefore, I hope that if the Government feel that they must introduce legislation, serious thought will be given to this, because undoubtedly water users could be placed at risk.
4.8 p.m.
Lord Sherfield: My Lords, this is not the first time in recent months that we have debated the need for investment in the water industry and the implications of privatisation; nor, I am sure, will it be the last. We are grateful to the noble Baroness for giving us the opportunity this afternoon to take another canter round the course.
As some of your Lordships may know, my short-lived knowledge of this subject is derived from an inquiry by the Select Committee on Science and Technology of which I took the chair. The message of this inquiry was very clear. The infrastructure of the water industry was in bad shape. It had suffered from many years of neglect. The reorganisation of the industry in 1973 brought to light some of these deficiencies for the first time and a start had been made on putting them right. But the failures in sewers and water mains were sufficiently common for the water authorities to rely largely on a policy of crisis maintenance. It is a policy that should not be allowed
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to continue. Crisis maintenance needs to be replaced by preventive maintenance. More needs to be spent in the short term in order to prevent failures and repair bills that go beyond the industry's means.
I should like briefly to remind noble Lords of some of the Select Committee's comments. First, on sewers, the policy for sewerage repair has, as I have just said, been one of crisis maintenance. When a sewer fails it has to be mended. Too many failures have taken place in the worst trouble spots such as Manchester for any other policy to be adopted. Only very recently have preventive measures begun and these are on a small scale. Expenditure on preventive renovation during 1981–82 was only £8 million and some of this was spent in association with collapses. At 1982 prices we calculated that in that year expenditure on sewer maintenance should have been £310 million whereas actual expenditure was running at £205 million. The Select Committee found enough evidence to believe that there was a significant risk of decay in the sewerage system getting beyond the water authorities' control.
Secondly, on water supply, annual maintenance expenditure at 1982 prices ought to have been £140 million but was in fact only £90 million in that year. The committee concluded that the deterioration of iron water mains was worrying, with the possibility that the high failure of pipes in corrosive environments was likely to go even higher. Although the urgency of action on water mains was judged to be less than in the case of sewers, the water supply system had the same need for preventive maintenance, and all the water industry's underground assets required additional capital expenditure now—or perhaps I should have said "then"—to forestall greater expenditure in the more distant future. I imagine that the people of Leeds who were without water for several days earlier this year as a result of a burst water main would support this point of view.
I am aware, of course, that the figures given for 1985–86 in pages 36 and 37 of the White Paper are substantially greater than this. The noble Baroness, Lady Nicol, has mentioned the civil engineering Little Neddy report on the infrastructure of the water industry published in March this year. Interestingly enough, that committee reversed the Select Committee's priorities and suggested that the water mains were a cause for greater concern than the sewers. The report pointed out that capital investment had risen by 30 per cent. above its 1980 level. The noble Lord, Lord Elton, gave the figures and I need not repeat them. But investment had fallen by half between 1974 and 1980, and we have still not returned to the pre-1974 level. This does not suggest to me that the challenge of preventive maintenance has yet been met.
There are, I feel sure, exceptions. For example, I notice that the Severn-Trent Water Authority has just published a five-year capital works programme which should go far to remedy the situation in that area. But in this connection the Neddy report said:
"While many authorities are tackling the problem with a systematic programme over the next few years for assets in key areas, others have still to develop a strategy on time and scale of operations".

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So even without a reorganisation of the water authorities the situation is not very reassuring. Will privatisation increase the likelihood that the problem will be more actively tackled? I doubt it. In the first place, I wonder whether there will be much incentive to invest in the water supply PLCs in some areas of the country, particularly the North. These investors will be letting themselves in for some rather high bills. In the second place, privatisation may well disturb the newly-emerging programmes for systematic spending on infrastructure, about which I have just given one example.
While I support the principle of privatisation in general—I am certainly not going to debate that with the noble Lord this afternoon—it does not seem to me that privatisation sits very well with water. I am aware that privatisation has been welcomed by several water authority chairmen and that the Government have found support in the industry, subject to some reservations, to one of which the noble Baroness, Lady Nicol, referred. But the concerns and reservations which were expressed by myself and, with far greater authority, by the noble Lord, Lord Nugent of Guildford, in the debate on his Unstarred Question on 5th April last, have not been dissipated by the White Paper.
The Government accept the case for river basin management. That has been so successful since its introduction by the Water Act 1973 that no government are likely to change it. We are therefore bound to have single suppliers of water. The White Paper recognises that,
"the water authorities are for the most part natural monopolies. The work required to create their infrastructure makes it more essential for the services to be provided by one company than by several".
I think that the noble Lord, Lord Gallacher, referred to that also. Since the chief merits of private enterprise lie in competition, it is not clear to me what advantage is to be gained by the creation of a private monopoly in place of a public monoply. Is there much room for competition other than in the capital market? There is every need for strong authorities capable of planning and maintaining a pure water supply, disposing of foul water and preventing pollution; that is, preventing pollution both from their own operations and from the operations of others. After all, many of their functions are essentially public sector responsibilities.
I now come finally to my greatest concern about privatisation. It is the question of research and development. The consultative Green Paper did not mention this at all. The White Paper gives it two sentences. It says, first, that the water supply PLCs,
"like other private technology-based organisations"—
whatever that may mean—
"will need a sound research and development capability";
and, secondly, that the operating licence will require,
"water supply public limited companies to carry out or obtain adequate research and development for their responsibilities".
That is not much said, especially as basic and strategic research are usually the first casualties of a reorganisation, a trading fund, and the like. Moreover, the two sentences are tacked on, apparently as an afterthought, at the end of a sentence about the terms of the operating licence being enforceable in the courts and about the revoking of licences in such
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circumstances. But how will the licence require these companies to carry out or obtain adequate research and development? How do you judge what is adequate? Who is the judge of what is adequate? What sanctions are there if the research and development is not adequate? It is almost inconceivable that an operating licence would be revoked for this reason alone, and with licences lasting 25 years or more the result could be quite serious before any change would be made.
When I raised this question in the debate on the Unstarred Question of the noble Lord, Lord Nugent, to which I have already referred, the noble Lord replying for the Government said that privatisation need not have any effect on research. That, so far as I remember, was all that he did say. I am not too concerned about applied research and development. Any company with its profit and shareholders' interests at heart ought to be aware of the importance of research and development and its scope to improve profits, though I wish that hope was realised by more companies in British manufacturing industry. But what about research in support of the public interest that the water authorities now carry out? What about large research programmes that are conducted by water authorities jointly? What about research within a long timeframe, especially that relating to underground engineering?
If precedent is any guide, then we are likely to see the squeezing out of strategic research. So what is required is a person or a body with the responsibility of ensuring that strategic research for the water industry is undertaken. Is that to be a function of government or of the already overburdened director general? In our report in 1982 we recommended that the Department of the Environment should assume responsibility for ensuring the existence of a long-term research strategy in the water industry that would take into account the needs of not only that industry but also of other interests affected by the water industry's activities. The Government agreed. They said that they would be prepared to take an overview of what might be required, and they set up a long-term research requirements committee for that purpose. That was an excellent development.
Where do we stand now? First, I have heard a suggestion that the long-term research requirements committee will be disbanded when it reports. I hope that that is a false rumour, for the Government's responsibility cannot suddenly terminate. Secondly, how do the Government intend to take their overview of research requirements when the water industry is made up of private companies? Thirdly, how is the continuation of the Water Research Centre, for which I have the highest regard, to be ensured? That centre is doing excellent work on all aspects of the water industry's functions. Secession from it by big water undertakings or even the threat of secession could cripple the centre.
In the Select Committee report, we went so far as to recommend that membership of the centre should be compulsory. For reasons that I understand, that recommendation was rejected. However, at that time the Government gave a strong indication that while the centre should earn the subscriptions of its members, the water authorities were expected to keep

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up their membership. The Government said that as a last resort they were prepared to use the power in Section 24 of the Water Act 1973 to direct a water authority on its arrangements for research, including subscribing or otherwise financially contributing to the Water Research Centre. That reserve must obviously be maintained, but an assurance is needed that it will be.
I should be grateful to the Minister if he will explain whether the Government still accept their responsibility for strategic research, and, if so, whether they will ensure the continued membership of the Water Research Centre by water authorities, whether or not they are privatised. I was not satisfied with the assurances given me by the noble Lord, Lord Skelmersdale, which I quoted earlier. I feel reasonably certain that privatisation would harm the water industry's research efforts significantly, and that this is one of the implications of privatisation for pollution control, environmental protection and consumer interests, that we cannot afford to overlook.
4.25 p.m.
Lord Elliott of Morpeth: My Lords, having knowledge of the Water Research Centre, I should like to support very much the comments that the noble Lord, Lord Sherfield, has just made. I would with him express the hope that research and development in the water industry will be continued post-privatisation at the level at which it has been done in the past. The centre is very valuable and I hope that it can be maintained.
In considering the implications of the second half of the Motion, concerning the effects of privatisation for the environment in general, my particular experience of the water industry may be of some interest. The noble Baroness, in her excellent and comprehensive speech, suggested that control of water should not be in the hands of the private sector. Perhaps this is an appropriate moment for your Lordships to appreciate that as well as the 10 regional water authorities that we have had until now, and still have at this moment, we have also 28 private water companies. Between them they supply no less than one-quarter of the population of England and Wales.
Those private water companies are, as the noble Lord, Lord Gallacher, pointed out, statutory companies. They are required to return excess profits to the consumer and they have dividend control. But they are private companies. They raise their money on the market, and have no difficulty in doing so—which may be of interest to your Lordships. I believe that they are highly regarded by their consumers, with whom they have excellent relations. That close contact with consumers means that environmental matters automatically have a high priority with the private companies.
I declare a personal interest in that I am the chairman of one of those 28 private companies. I am chairman at this time of the Newcastle and Gateshead Water Company, which has the very best of relations with its customers—at least, it does to the best of my knowledge, and I sincerely hope that it has. It is a big company that supplies water to the whole of the city of Newcastle, to the whole of Gateshead, and to the
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whole of the county of Northumberland, with the exception of Tynemouth.
I also have the honour to be at this time the president of the Water Company's Association, and through that contact I am aware of the similar concern that all the companies have for the environment and for customers in their particular areas. I am very pleased to note that in the Government's present proposals due regard is to be taken of the water companies and that, as stated in the Green Paper, further discussions are to take place on their future role.
In her speech the noble Baroness quite rightly raised the question, as did other noble Lords, of capital works and sewers. Sewers do not of course come into the orbit of the private water companies. It is true to say that a certain number of the sewers in this country are in need of renovation, but half of them have been renewed since the end of the last world war and less than a quarter are pre-1914. However, I agree with the noble Baroness that there is need for a national survey and an absolutely sound assessment of the needs of that requirement. The noble Baroness said that we should not wait until the sewers fall in, and I am sure that is right.
If I may say a final word about the water companies, their record in maintaining mains as against sewers is an excellent one, and they have not waited until the mains have either fallen in or have got into a bad condition. The water companies have been very good stewards of the water mains in their areas of supply. I welcome this opportunity of commending them for that.
The overriding control of pollution until now—and until we have a new Act of Parliament—has been the responsibility of the regional water authorities. I suggest to noble Lords who have referred today to future control in this sphere that presumably it will be with the director general, but environmental control these days is surely very much a matter of EC directives. In consequence, the Secretary of State is required to achieve certain standards, and will do so. In paragraph 2.13 the consultative document makes clear, as I see it, that a broad control will be established through regulations, statutory codes and conditions of operating licences which will be issued by the director general. In his opening speech my noble friend enlarged, I thought quite adequately, on this point.
It will be for the Secretary of State to support the new plcs in their role as pollution control authorities. The document further states that an important new development will be the establishment of a small inspectorate within the Department of the Environment. The noble Baroness, Lady Nicol, in her opening speech, rightly asked about the cost of this. That is an aspect to which we should turn our attention. I suggest that this inspectorate should not be too small, if I may say that to my noble friend. Water undertakings of all kinds, private and regional water authorities, have known—granted, to a lessening degree—the problem of discharges of undesirable pollution of various kinds into rivers above the extraction point of the water undertaking concerned. It must be very much in the public interest to have an assurance that control in this sphere will continue to be adequate, and be seen to be

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adequate. I believe there will be considerable public concern here.
The 1983 Act established consumer consultative committees on which, again, the noble Lord, Lord Gallacher, spoke. These were established on a divisional basis, and in my experience as chairman of a private water authority they have worked well. I share with the noble Lord. Lord Gallacher, the hope that the new, bigger proposed regional consultative committees will work as well. The proposal to have these bigger bodies means that they could be stronger. On the other hand, again there is the possibility of big not being beautiful. I very much hope that we shall know a continuance of consumers feeling that they have adequate and easy machinery for complaint. Those of us in the water industry have often said, in one part of it or another, that the consumers are the cornerstone of the water industry and that the consumers must come first.
Finally, I believe that the present proposal for the water industry will not destroy the system of integrated river basin management, which was the main outcome of the 1973 Act. I join with the noble Lord, Lord Ezra, in paying tribute to that Act and to the outcome of it. The system has worked very well, and I hope it will continue to work. It has worked in the past with authorities and companies working in harmony and it has been a model greatly admired in many parts of the world.
With adequate safeguards I am satisfied that the proposed legislation will mean not only the continuance of an efficient industry, but also an improved one. Every industry must go forward and I believe that this proposal to privatise the water industry means that the industry will go forward. As the noble Lord, Lord Ezra, said, it is part of the policy of the present Government to reduce the public sector, to reduce the borrowing requirement and in due course release resources for schools, hospitals and the support of those in society least able to help themselves.
4.34 p.m.
Baroness White: My Lords, I am sure we are all very glad to hear from the noble Lord, Lord Elliott of Morpeth, who is a specialist in the activities of the statutory water companies and a doughty champion on their behalf, though I think he will agree that a recent report on the Southern Regional Authority was not altogether complimentary to the statutory companies in that area.
Although we have two distinguished noble Lords from the opposite Benches still to speak I do not think that the Minister can feel that he is overwhelmed by the enthusiastic regiment of supporters behind him. However, there is one speaker from the opposite Benches whom we all miss today: the noble Lord, Lord Nugent of Guildford, to whom the noble Lord, Lord Sherfield, has already referred. I am sure we all sympathise with his need for surgical treatment which has caused him to stay away today. I understand that, happily, he is making a good recovery.
One has only to read the debate of 22nd April last year, referred to by the noble Lord, Lord Sherfield, to
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recognise how much relieved the Government Front Bench must be by his enforced absence. The noble Lord, Lord Nugent, is far too loyal a party member to embarrass his colleagues more than he can help, but his complete opposition to the privatisation proposals for water was fully stated in that debate; although he indicated also with great clarity that in other directions he favours private ownership. I have good reason to believe that the views of the noble Lord, Lord Nugent, have not been changed by the various White and Green Papers or the financial guesswork which have been issued over the past few weeks. These papers refer only to England and Wales and I noted, as did my noble friend Lord Gallacher, that the Scots are not clamouring to climb on this bandwagon. My notes read, "They are a canny race".
Improvements in organisation in England and Wales in the water industry are no doubt possible, and certain changes in financial arrangements with the Government undoubtedly could be advantageous. However, the listing in the White Paper of the supposed 11 advantages of private ownership are, to anyone familiar with the water industry, little more than a series of non sequiturs. I have here, as other noble Lords may have, the recent summary by the Association of Chief Technical Officers of local authorities. They say categorically that,
"Nine of the 11 benefits listed by the Government as benefits from privatisation could be achieved within the existing framework".
That, of course, is true. By far the best analysis that I have seen of the White Paper summary prospectus—which I suppose is what we should call it—is the analysis published on 25th April by the Chartered Institute of Public Finance and Accountancy—well known to anyone familiar with local government as CIPFA. This analysis faithfully pinpoints the fallacies underlying the sales talk contained in the White Paper. I strongly recommend it to your Lordships. I have no doubt that a copy can be obtained in the Library. It analyses, one by one, all the 11 suggested advantages of private ownership for the water industry.
Because of my well-known Welsh interests I am particularly concerned with points (iv) and (v). Point (iv) concerns the suggestion that,
"financial markets will be able to compare the performance of individual water authorities against each other and against other sections of the economy. This will provide the financial spur to improved performance".
Point (v) reads:
"a system of economic regulation will be designed to ensure that the benefits of greater efficiency are systematically passed on to customers in the form of lower prices and better service than would otherwise have occurred".
The comment of CIPFA on the first point is:
"The implication of the White Paper could well be that the privatised authorities in the regions with the problems and largest commitments (e.g. North West, Welsh) could pay more for their money than those more favourably placed. (e.g. Thames). This in turn could well be aggravated by the application of a uniform prices increase regulator, as is proposed."
But this is the real point of its comment:
"Differences in conditions as between regions is always likely to be a much greater factor than any assessment of performance efficiency. Comparison with 'other sections of the economy' is almost meaningless except in the context of dividend records".

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How true that is. Even someone who is an enthusiast for privatisation, Mr. Bill Harper, the chief executive of Thames Water, recently is on the record as saying:
"The elegant simplicity of the Littlechild report"—
that is the report on financial prognostications—
"is not going to be achieved easily because water authorities will start at different positions".
Of course they will; and they will continue for any foreseeable future in different positions, because nature has decreed that to be so. There is no equality; there is no possibility of estimating relative efficiency without taking fully into account the entirely different physical conditions under which the 10 water authorities will of natural necessity have to operate. Therefore, this is just bogus.
Then we turn to the economic regulator, and again I quote from the CIPFA analysis:
"It must be obvious that a crude (economic) regulator of the kind proposed must mean that those water companies on the sunny side of the average will enjoy a permission to increase their charges more than they need to, this leading perhaps to moderating the 'stimulus to efficiency' and the payment of uncovenanted dividend increases. Those on the shady side would not be able to make ends meet and the conservation of profits for capital expenditure would suffer in consequence".
Those two comments indicate the fallacies that underlie some of what might appear to be convincing advantages of private ownership contained in the White Paper issued by the Government.
As I say, I am naturally particularly interested in the fate of the Welsh Water Authority. Most of us in Wales have been pleased to learn that the present constraint on our exports to England of bulk water supplies, which demands at present a no-profit basis, is likely to be lifted. But, my Lords, there should not be too many illusions about this. In past years it could have been of great benefit to Welsh water had that constraint not been there. But with the present superabundance of water in some areas, strongly influenced by the recent massive decline in industrial demand, this concession is much less significant than it would have been some years ago. It will nevertheless probably not be much welcomed in Birmingham or Liverpool (to which we export), even though those cities, like London, are built over aquifers, where the underground water table is now rising so rapidly—in parts of London by as much as a metre a year—that the stability of structures with deep foundations is causing concern. I mention that en passant.
But to return to the White Paper, in my view there is nothing in it which justifies switching, largely for ideological reasons, to the hopelessly cumbersome and costly regulatory schemes which privatisation of the industry would make necessary. One of the reasons, of course, for the Government espousing privatisation of water is simply that the Chancellor hopes to skim off a tidy sum in the once-for-all sale of the most basic of our public services.
Lord Graham of Edmonton: That is right, my Lords.
Baroness White: Of course it is right, my Lords. That is obvious, is it not? But it is manifestly inadequate to justify the highly centralised, extremely bureaucratic structure which is to be imposed on the water industry in three tiers—the private companies
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themselves, the Department of the Environment and the director general, as referred to by my noble friend Lord Gallacher. I can only assume that the Government have been in direct communication with The Almighty and have engaged the Archangel Gabriel, because nobody else would be adequate for the job.
The present organisation of the industry is on the whole a good one. The Government have decided—and I think that we are all satisfied with this—that the river-basin structure adopted in the 1973 Act is to be retained. That is operationally absolutely right, but surely it may prove to be financially constricting. The system does not lend itself to the happy take-over situation envisaged by Mr. Littlechild. But, as has already been mentioned, the Government nevertheless intend to dissociate land drainage and flood control from management of the total water cycle. One can only suppose that that is due to differences of view—shall I put it?—between the Department of the Environment and the Ministry of Agriculture, Fisheries and Food.
Looking at it from the point of view of water management, it is a completely irrational division. It has arisen hitherto largely for historic reasons. Certainly there are ways in which the present land drainage system might well be modified or reorganised, including its financial provisions. But the water authorities are united in being deeply disturbed by the Government's intention in this direction. All of us who are known to be interested in this matter have been asked to stress that there is unanimity among the water authorities that this is an undesirable division and that it has arisen for reasons other than concern for the management in its totality of the water cycle.
As I say, on the whole the present organisation is a good one. In my view the managerial weakness of the 1973 Act was corrected by the Water Act of 1983. I am sure that the change from representative to managerial boards was sound and should be supported. But what are we now being offered? It is a complex structure of major and minor private companies—I am sure that the noble Lord, Lord Elliott, will not mind my calling the statutory companies minor in this context—with the tiers of regulation and administration superimposed, as I said, by the director general and by the Department of the Environment.
If those supervisors are to exercise their responsibilities effectively, then, as the noble Lord, Lord Nugent, foresaw a year ago, they are bound to be more expensive than the existing structure because,
"of the large element of duplication involved"—
and I use his words. Much of what is suggested in the Green Paper on the environment is desirable in itself, but one does not need privatisation of the industry to achieve it, any more than one needs privatisation to carry out the interesting and important proposals in the paper on sewerage law referred to by my noble friend Lady Nicol. There is no need to privatise to carry out those ideas.
Under privatisation adequate control and monitoring would need staff, laboratory resources and testing resources far in excess of what would need to be engaged in a straightfoward departmental-water

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authority relationship. There is no avoiding that. The suggestion made by Mr. John Patten, the Minister in the Department of the Environment, that under the proposed privatisation only some four or five departmental inspectors would be required is regarded in the industry with complete incredulity. I have a number of friends in many parts of the water industry and I can assure your Lordships that they are staggered by a Minister making such an unrealistic suggestion.
The Secretary of State for the Environment proposes to assume a whole range of new responsibilities, including the taking on of the tricky exercise of setting environmental quality objectives and standards for every river in the country. I should expect the noble Lord, Lord Nathan, perhaps to elaborate on that aspect of the matter. Having been myself from the beginning of our relationshop with the European Community in Brussels in this field, with its most complex requirements for pollution control and water quality, I can assure your Lordships that while the system which we operate in this country is defensible in broad principle—that is to say, that one should take account of the receiving element as well as the discharges that flow into it—it can be highly arbitrary in operation. It is regarded with deep suspicion by the European Community which almost daily is becoming more environmentally conscious.
If the department is to assess quality, to monitor performance, to establish protection zones and to undertake all the other duties that it proposes, not only will it assume a vast network of detailed responsibilities, but all those activities will inevitably make any investor think twice. The combined efforts at control of the director general and the Department of the Environment would I suggest make investors think not twice but thrice; I certainly should.
There are too many points which cry out for mention for anyone to cover in one afternoon, but I must summarise a few more. How can one justify private companies controlling the activities of other private companies hitherto controlled by statute? How can private companies be allowed to exercise the by-law making powers of a public authority? What is the relationship of a private company to a major customer (another private company) who it may have to discipline and possibly fine heavily for breaches of discharge consents or other activities? Will that be entirely an objective exercise? One has to ponder.
Those are serious matters in any democratic system of government. They are hardly touched upon in official pronouncements. With so much else for the Government to do, even in narrow party terms, it is foolish obstinacy for them to persist in clinging to such an inappropriate candidate for early privatisation.
The noble Lord, Lord Elton, disappointed me this afternooon. He fell well below his customary standards by copy-catting Mr. John Moore, the Financial Secretary to the Treasury, in his references to the food industry. That was unworthy of him. If there is one characteristic of the water supply industry which is obvious to every member of the House, it is that it is a natural monopoly. If there is anything characteristic of the food industry it is that it is one of
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the most competitive in any economy. I hope that we hear no more of that.
Lord Elton: My Lords—
Baroness White: In a moment. I am irresistibly reminded of G. K. Chesterton's advice to the late Lord Birkenhead, "Chuck it, Smith."
Does the noble Lord still want to get up?
Lord Elton: My Lords, I do not see why not, although the noble Baroness is in rumbustious form. I am sure that she will forgive me if I just make the point that the comparison between food and water is a comparison not between their organisation but between the degree of essentialness that they have. The point to which the noble Baroness was addressing herself, if it was the same as mine, was the safety of the commodity supplied. The large number of suppliers makes control more difficult.
Baroness White: My Lords, I was not; I was taking it, as would anyone else who heard it, as the characteristics of the two activities in the two sectors. I was not comparing it with the atmosphere, for instance, which I am sure the Government would try to privatise if they were able.
The noble Lord, Lord Elton, defends the Government's proposals—but he would, would he not? I can only say that I believe that he and his colleagues misread the mind of the electorate. I have not been able to find anyone who is enthusiastic about the privatisation of the water supply industry except, possibly, some of the top brass in the existing water authorities who know that under privatisation they would receive increased salaries and perquisites of office. That is just human nature. I do not blame them for it. It is just the normal calculation of probabilities. I do not believe that people will rush enthusiastically to buy water shares as they did, for example, with British Telecom. I suggest that the Government should think again.
4.55 p.m.
Lord Nathan: My Lords, I think that at this hour I should resist the temptation put in my way by the noble Baroness, Lady White, to speak at length on environmental quality objectives and standards. However, perhaps I may be permitted to make a passing reference to them. I should like to confine my remarks to a short point raised, perhaps incidentally by the noble Baroness, that public sector responsibilities, presently exercised by the water authorities, are to be transferred subject, it is true, to certain safeguards, to private companies established for the purpose of making a profit.
That is what raises a difficulty for me. One must envisage either the continuance of water authorities under their present arrangements, responsible for river basin management, which I think has worked rather well, or the separation of the water supply and perhaps the supply of sewerage services from the other functions of pollution control and environmental concerns, very much on the lines indicated in the speech of the noble Lord, Lord Ezra.

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We are in a dilemma. I do not believe that we can satisfactorily foresee a situation in which the public sector responsibilities of water authorities are conducted by private companies constituted for the purpose of making profit. Those public sector responsibilities may be briefly indicated under these heads: first, the regulatory power; secondly, their relationship to the planning and land use development procedures; and, thirdly, the development of infrastructure.
In a purely national context reference is made to the regulatory functions of water authorities in paragraph 4.4 of the consultation paper; the Government appear to have satisfied themselves that existing safeguards against abuse with regard to the effluent discharge consent system are sufficient. The main headings under which those safeguards fall are set out in the Green Paper.
It is true that if an applicant for a consent to discharge believes that the consent granted by the authority is too stringent, he can appeal. Under this proposal, as where a planning application is made to a local authority, there is no safeguard against consent conditions being set too leniently; that is to say, the application is accepted and there is no appeal against that. It may be said in the present case that there are procedures under which public interest bodies can examine applications, which have to be published, and that they may apply to the Secretary of State to call in the application so that it would be determined by him.
First, that will become very much more difficult if the proposal to eliminate the requirement of publication in the Official Gazette is adopted, because it would be much more difficult for public interest bodies, with a nationwide coverage, to follow all the applications involved.
Secondly, it is not easy—it requires a great deal of attention—to know which are the important applications. They need not be large. They need not be novel. They could, however, be of substantial public importance. It has to be remembered that once a consent is granted, it cannot be amended during a certain period without payment of compensation. It is, therefore, an important matter. If consent has been granted, that is more or less, that. There is also concern as to the possibility of abuse of power by the water supply plc. It is obviously possible that the applicant for a discharge consent may be a competitor of a substantial shareholder or indeed of a director of the WSPLC.
There is, too, the question of enforcement. Proposals are from time to time made by Government, admirable in themselves, but no adequate provision is made for a system or finance for implementation and enforcement. Reference has already been made to the small inspectorate in the department. This reference to a small inspectorate gives me no confidence that there will be adequate supervision and enforcement. Reading the proposals, it seems to me that the department will have a great deal to do. It will have to monitor and supervise discharge consents granted by the water supply plcs. It will have to monitor and grant consents required by the WSPLCs themselves, particularly in their capacity as sewage disposal authorities. It will have to hear
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appeals from WSPLCs, and it will be involved in the establishment of environmental objectives and standards on a national basis as indicated in the consultation document. So there is a lot to be done. In relation to the establishment of these objectives and standards, practically nothing has so far been done in estuaries and coastal waters. The five-yearly reviews envisaged for the objectives and modifications of the standards are bound also to absorb much manpower.
The first matter that requires review is the position of water supply plcs as regulatory bodies, the enforcement of regulations and proper supervision, all of which will involve manpower and money. This is, I believe, not adequately dealt with in the consultative document. In the light of what I have said about the water supply plcs acting as regulatory bodies in the national context, it will not be surprising that I much doubt whether a private company, which a WSPLC will be, can constitute a "competent authority" for the purpose of authorising discharges under EC directives. There are quite a number of these. I am unaware of any case in which a private body has been accepted, or indeed where the suggestion has been made that it should be accepted, as a "competent authority for this purpose.
A related matter that has caused me some concern arose from my experience of working on the eleventh report of the Royal Commission of Environmental Pollution of which I have had the privilege for some time of being a member. To ensure protection of its water resources a water authority must be intimately concerned in many aspects of development and planning. For instance, if an application is being made for a licence for a landfill waste disposal site, it is essential that the water authority consider its implications. In many cases it will also be concerned with industrial development or the modification of industrial use because of the risk of escape of polluting substances to surface or groundwater. So these private water supply plcs will be intimately concerned in planning procedures. These planning procedures involve an element of political consideration. There is a balance to be struck between the needs in the public interest of having industry established and the obvious desirability of having purity of water supplies. If there was not that dilemma, we would not be having this debate today. They will, therefore, be involved in that sense in exercising a judgment, essentially an administrative and a political judgment.
There is a further point that has caused me, and I know others, some concern that may seem a little removed from what I have been saying. The WSPLCs will be providing mains water and sewerage facilities which are part of the public infrastructure. Where these are placed tends to influence housing and other development. Here again, there could well be a conflict between the public responsibility of the WSPLCs and the interests of private developers who could be shareholders or on the boards of the WSPLCs. There again, the whole question of the establishment and planning of our infrastructure is in point. In consequence, there are a number of important areas in which a WSPLC can become involved in a conflict of interest between its public duty and the potential private interests of itself or its shareholders.

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There are other areas of conflict of interest that are worrying. So far as I am aware, a water authority under present arrangements has control over the exploitation of ground water resources without restriction. There must be a tendency for a private, profit-orientated body to seek to exploit these resources, particularly towards the end of its licence period, which, it is suggested, should be 25 years. It would be more sensible, perhaps, to do that from a commercial point of view than to build a reservoir. This is, of course, a serious matter, as the water table would be lowered. It is an area that might have to be subject again to ministerial control or control by the proposed director general. There are an enormous number of areas in which one can see that control will have to be imposed.
Having referred to matters that cause me concern, I should like to conclude by referring to some excellent proposals contained in the Green Paper that do not appear to depend for their virtue or implementation on any change in the constitution of the water authorities. The establishment of environmental objectives and standards on a statutory basis is much to be welcomed. I hope that it may be possible to achieve this within a fairly short time, notwithstanding the work involved. It is well known, as the noble Baroness, Lady White, has said, that the other members of the Community prefer to control discharges by emission standards. They regard environmental quality objectives and standards as a soft option. The absence of objectives and standards puts us in an impossible position in discussion on these matters with our partners in the EC.
The careful consideration given to water source protection zones and the proposals made to amend the existing law seem to me to represent a major advance in water pollution control policy. I accept that there are certain matters requiring careful consideration with regard to the implementation of water source protection zones as proposed in the consultation paper, but I believe the idea to be an excellent one and I hope that it will be implemented.
There are many other proposals of a quite minor character that likewise represent a movement in the right direction. I hope, therefore, that whatever the outcome of the debate on the privatisation of the water industry, these excellent ideas will be pursued and adopted.
5.8 p.m.
Lord Selsdon: My Lords, I have often wondered in your Lordships' House why we continue to draw this division between the words "private" and "public". To me, it seems to be a question of either something being in public ownership or owned by the public. Personally, I would prefer the latter, which some people define as privatisation. I would not wish in my contribution today to enter into this form of argument or debate. I want to talk about the water industry as a whole and to say, by way of declaration of interest, that I have always had a great affection for this industry because it gave me my first job. In those days of advanced technology, I was in a drawing office taking quantities off for sewerage systems. We were
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trying to produce new pipes and systems for distribution of water and drainage.
We produced the first pitch fibre pipes made of pitch and pulp, and for some strange reason, second- and fourth-hand copies of the News of the World—which was always the paper most appropriate for turning into sewerage pipes. At the time we produced PVC pipes, and I had the difficult job, being young and therefore disposable or expendable, of having to try to sell these new fangled products to the most difficult people in the world to sell things to—the water authorities.
The quality of people in those sectors was such that if one won an order for one's product it was immediately accepted world-wide as being in the forefront of technology. It was an uphill battle. There was no way one could charm them. One could not take them out to lunch. One had to persuade them on pure technology. One had men who were dressed in clean uniforms with white gloves who, if one was involved in painting a pumping station, would run their fingers behind the pipes and use mirrors to make sure that everything was conducted to a high standard. I would say that our water industry had people of the highest standard and quality of any industry in this country and in the world.
Since then, what has happened? Water is the basis of our society. We waste it, squander it and take it for granted. We do not expect to pay for it because it is there. We do not even organise it properly. Sometimes the lack of it creates a drought. There may be a flood on the same day in different parts of the country. But throughout we have to accept that in the days of our Victorian ancestors they recognised the importance of water in the maintenance of health, of raising standards and quality of life. We have failed to invest in the water and sewerage industries. More than that, this failure of investment and perhaps our retrenchment from the outside world, has led to a decline in the private sector. Companies which made their livelihood supplying the water and sewerage industries went into bankruptcy. Many of the products disappeared. Today, therefore, it is probably impossible for us from our own manufacturers to build a complete sewerage system.
I came into this as a trader at one time. I should declare an interest once more. I am chairman of an organisation called British Wastewater Ltd, a company formed to revitalise an industry by winning contracts for water and sewerage overseas. I therefore have a commercial interest. We have only £100. Our first contract is revitalising Cairo. It is only £2,000 million. We shall be building a pumping station the size of the Albert Hall which will pump the equivalent of a third of the Thames in volume every day. It will save 30,000 lives a year. We shall be building under Cairo a tunnel five metres wide with modern technology in extremely difficult soft slurry conditions. That technology is British. But, as I have mentioned before, we found that many of the products we wanted had to come from abroad, that our technology was decadent and decaying.
In promoting ourselves, one of our great assets was to take people down the sewers of London and let them see the pumping stations, but to say openly, "Look what British technology can do without being

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updated. It is archaic and old-fashioned, designed for ever, and it works". But the people who make it work are those in that sector—whether one calls it the public or private sector. I can tell noble Lords that they would like to get on with their job. Many of them find successive governments a pain in the neck because they will not give them the resources they need because factors above the ground have a greater political charisma, whether it be defence at one level or health or education at another.
Coming as I do from these Benches, I feel sad that my own Government have failed to cut their expenditure as they promised they would. I think that it is slightly unwise in that they have failed to explain where they are spending their money. However, if they were pragmatic they would say that in terms of priority they would give other areas preference over water and sewerage; and many of us feel that health and education should be of higher priority than even rebuilding the sewers.
It is true that if we were to modernise our water and sewerage systems we should need to spend not less than £1,000 million a year for a minimum of six years: that is, £400 million on water and £600 million on sewerage. Our industry and our manufacturers naturally cry out for increased government expenditure that will give them yet another public client which always pays its bills. They are saying that without it they cannot survive; the pumpmakers will go. But what has happened is that within the industry sector many of the smaller businesses that fell by the wayside have been revitalised by management buyouts. They have effectively been privatised from their big bureaucratic fathers who were not particularly interested in them anyway. Many of the businesses are now being revived, often on the back of overseas contracts.
It is right and proper that on all sides of this House we should encourage increased spending in this sector, not solely because we need it—because frankly the standards are still higher than those of many countries—but because it is an area where we are still supreme and we have a lot to offer the world and much that we can do to help revitalise a sector of the industry before it is lost for ever.
I commented once recently that we do not make tower cranes any more. We do not and cannot produce the glazed bricks that are needed to line a sewerage tunnel if we use glazed bricks. The production of those ceased years ago. There are many areas that are fading. But if one asks, "Will the Government spend £1,000 million a year on water and sewerage and cut something else?", then I would say that that would be doubtful.
One therefore comes to that other sector of our economy. Within a private sector organisation or structure there is no doubt at all that the water industry could fund its total expansion with no problem. Noble Lords have seen the issues that have been capable of being launched in this country at this time. The funding mechanisms are there. It would seem much more appropriate that the future of this sector was funded within the private sector mechanism rather than relying upon queuing within a system which might affect PSBR, or might be deemed to be inflationary. We can finance it; of that I have no doubt.
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Furthermore, I have no doubt of the genuine interest of people investing in and participating in the water industry. Many of us forget that these great institutions—whether it be the Thames Water Authority, controlling everything along the Thames and up the Lee Valley—or others, are not simply managing water and sewerage. They own land and assets that can be developed. They are moving into the recreational area. I have chaired a government body, and for many years I had a permanent argument about why we had to call a gravel pit a wet mineral working. In fact, if we did not call it a wet mineral working it did not qualify under an Act for some form of government grant or allowance.
If I may turn to Wales, the Welsh may sell water to England but they are selling water to Saudi Arabia as back cargoes in oil tankers. The possibilities of the development of certain areas of other activities within the water authorities—the land or recreational development—are considerable.
Baroness White: My Lords, I am sorry to intervene, but the noble Lord provoked me. The noble Lord will agree that they are doing this under the present system. They are not so constrained as the Government would have us suppose. Roy Watts could line the whole of the Thames from Oxford to Greenwich with luxury houseboats and cabin cruisers. There is nothing to stop him.
Lord Selsdon: My Lords, I am sorry that the noble Baroness raised this matter. It is difficult for me to deal with it in the Saudi Arabia context. I have reason to believe that it would be more effectively achieved within the private sector. Perhaps we may discuss this at a later date. I am not saying that it is because Saudi Arabia prefers to deal with the private sector, but in dealing with some of these countries there is need for a certain elasticity of mind which is often denied to the public sector because of the words "public accountability" and certain restrictions.
Many of the people from these authorities are very great people, as the noble Baroness knows. There is the trading element which comes from these authorities. However, I was moving on to say that they have an opportunity of developing into outside areas. They own vast assets which have not been properly utilised. Perhaps I may draw attention to the success of enterprise zones. London Docklands are not so far away from here. Effectively, £1 million of public expenditure a week is generating £7 million of private expenditure in the development because of the freedom that the private sector has. I accept the views of noble Lords that it is difficult to provide controls, and that, of all the bodies it may be that water is the most difficult to privatise.
However, within this field the potential is very great indeed. If anyone could prove to me that a government would be willing to make the kind of investment that is needed in this sector, and sacrifice other sectors, I would accept it. I do not foresee a compromise, but rather that the Government will not be able to privatise all the authorities at the same time, for reasons that we know. We can say that perhaps £5 billion will be raised. That £5 billion would almost

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certainly not be ploughed back by government into this sector. It would be consumed in other areas.
However, within some authorities at a very early date it would be possible to revitalise systems with private finance raised on the markets without any need to increase the rate or the cost of water to the consumer. We are talking here not of loans but of genuine investment. In many countries of the world I have noted that where there is a successful authority—whether it be called a public utility or a private corporation—if the economic reasons for it being set up in the first place still remain, it is possible to run it without the need for Government subvention.
The subject of R & D has been raised. The best way of obtaining research and development in this area is by the placing of an order for products which solve a problem, where the updating comes from the private sector. It is regrettable that the level of research by private sector companies into new products and new technologies is as low as it is, but demand-led investment is often the best way of achieving it. For example, in our project in Cairo we found that as soon as we went out into the world to ask for products which we could not make, very quickly British companies came forward with alternative proposals. Very quickly they imported the technology that had gone abroad, and the demand-led activites created investment and new R & D.
I emphasise once more that it is impossible to demonstrate that this Government, or any government of the day, would, from their own resources or from borrowed resources, fund the level of investment needed in these industries; it would be seen that they have left it too long. If they could fund it now, I would perhaps change my views; but as I see it, the sooner we move towards the privatisation of those industries which can stand on their own feet without government intervention and government resources, the quicker we shall see the revitalisation of the water industry and the water and sewerage systems which we so badly need.
5.23 p.m.
Lord Sefton of Garston: My Lords, I am of course not aware where the noble Lord, Lord Selsdon, is employed but if I was the chairman of his company and I heard that speech, I would immediately promote him and offer him double the salary. From that point of view I thought that it was an excellent speech. However, from another point of view it was completely and utterly weak.
We have spoken about the private sector being able to operate the water industry more effectively. I have no doubt that the median for measuring that would be the net effect on the company at the end of its operations. However, if the noble Lord suggested to his employer that the company should invest money to such an extent that it cost £1,500 to supply water to every dwelling, and that the only return they were ever likely to receive would be £34 per year, I do not think that his employer would regard him very favourably, because at the end of the day that company would be carrying a deficit.
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That illustrates the fundamental difference between us. The noble Lord was somewhat puzzled about the difference between ownership by the public and private enterprise. It is quite simple. The noble Lord, the Minister, sidetracked me by saying that this has been done 17 times. The noble Lord was boasting; in fact, he was doing more than that, he was being dogmatic about the usefulness of private enterprise. I see that the noble Lord the Minister nods his head in agreement. I do not mind the noble Lord boasting about that being done 17 times. Perhaps I may put a scenario to him. There is an organisation in this part of the world called Ford of Europe. It is a very effective organisation. It is so effective that it can lend and earn interest for its parent company in the United States of America, that hot-bed of capitalism; it can earn £99 interest a year on the money that it borrows from Ford of Europe. That is a very good achievement from a capitalist point of view. Are they very interested in Britain? At the first opportunity to go for cheap labour in Spain, they went. Now if you buy a Ford car you will be lucky if it is British; you will be lucky if it is made in Britain.
If one looks at the pattern of private enterprise in this country one finds exactly the same thing. Worse still, the Stock Exchange will laud them highly and will put money into their shares. I was in the building trade; I was a plumber and I almost started talking about plumbing. But all the while I had this nagging thought in my head: are the 17 privatisations of benefit to this nation? There was a time in the building trade where it you used a screw and a hinge, or you bolted a gutter together, the screw and the bolt were made by a firm called GKN. That company exported nuts and bolts all over the world. You cannot buy a British nut and bolt, one which is made here, because it is more profitable for the same company to buy them in from countries where cheap labour obtains. That is private enterprise and I have no doubt that the noble Lord, Lord Elton, would praise that to the rooftops. That is his dogmatism. If we could persuade every company in Great Britain to be more profitable on the basis of employing cheap labour and exploiting cheap labour elsewhere in the world, it would be hailed on the Stock Exchange and by most people on the other side of the House as a success story.
I do not think that is a success story. I am sorry to have to disagree with the dogmatism of the noble Lord, Lord Elton. It is not good. It is particularly not good when we talk about the supply of a basic need for ordinary people. One of the rules in the privatisation of water will be a simply one; it will be that you pay for the water you use, and you will pay for it at the market rate. You will pay for it according to the type of property you live in, because quite clearly there cannot be a means of paying for water on the basis of each individual in the house. Therefore, it will be paid for according to the type of property. Important matters are dealt with on the basis of simple premises. Even on the basis of a simple premise that one should not penalise a large family against a small family in relation to the supply of a basic need such as water (because obviously a larger family will need more water), does that mean that this House agrees that the larger families should pay rather than is the case now, that the community as a whole subsidises that large

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family because ultimately the children of that large family will benefit this nation. Therefore, a communal service is written into the water industry.
On a previous occasion I cited a case in the Welsh hills where for many years they tried to manage without the supply of water. Finally, the local authority stepped in because it was imbued with the sense of service to people and it provided a water supply. No doubt in some way the company of the noble Lord, Lord Selsdon, would have benefited by the provision of the new plastic pipes which took the water up those hills. I have also no doubt that the introduction of those plastic pipes improved the supply. That is not a credit to the private company; it is a credit to the local authority which paid for the installation of those pipes and provided the service.
The noble Lord then said that we are rather inclined to take the supply of water for granted—that it is always there. I have heard that argument before and it has been retold over and over again for over 150 years. I come from Liverpool. They employed the first medical officer of health because of the bad conditions in the town. Liverpool had one of the first municipal water supplies from a place called Lake Vyrnwy, which they piped to Liverpool. However, they did not supply water to the people because at that time the city fathers said that they could not install a tap in a working man's house because he would leave it running. Regardless of the convenience of having a tap, they said that the people would leave the taps running and waste water. Therefore, the water supply was taken to the docks. They then advertised the Mersey Docks and Harbour Board as the one place in the United Kingdom which could provide a copious supply of clean fresh water for all the ships—for which fresh water was vital—and thus encouraged trade to come to Liverpool. We are not talking about a situation 100 years ago. I am not that old. I was the leader of Liverpool City Council. One of my first jobs was to introduce water into houses that had not got it up until then. The tap was still outside serving six houses. Do not talk to me about privatising water supplies. It will be the most damnable thing out.
Let me refer again to Lake Vyrnwy. That was a marvellous undertaking. We brought the water down by pipeline—a mistake—from Lake Vyrnwy 85 miles to Liverpool. We had a clean, copious supply. It was a mistake because Lake Vyrnwy could have been used to regulate the water level in rivers between Lake Vyrnwy and Liverpool and it was not, and we lost that chance.
We learnt our lesson. The last major water undertaking carried out in this country was carried out by Liverpool City Council, and I am proud to have been the leader at that time. This time we did not make the same mistake. We constructed a new reservoir at the top of Tryweryn and brought the water down by river to Chester, and that did two things. It provided us with the necessary supply of water for the future in Liverpool for industrial and housing development, and it also regulated the water levels. It is not just flooding that matters: water levels are important to an agricultural community.
If the Government are proposing that that should be taken out of the hands of the privateers, as I like to call
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them, and placed in a public authority, what do you do in a situation where a river provides not only flood control and the right level of water but also pros ides a supply of drinking water to a town? There you evidently have the mix of the two responsibilities. On that basis you never will get private enterprise doing what is rightfully done inside the public sector.
This Government must have the record for turning about on their own important basic policy decisions, compared with any other government in history. There was local government; the health service; water; local government reorganisation. All of those this Government's colleagues—and some of them are still sitting on the Government Benches—carried out. And now they want to scrap the lot. They are not making any inquiries as to whether or not the proposals they made for water reorganisation and local government reorganisation were successful. No; do not bother with that. Their dogmatic attitude tells them that if they say something, it is right; and they go ahead on that basis.
I was the chairman of the finance committee of the North-West Water Authority, and that is the most important committee there is on it. At the same time I was the chairman of Merseyside County Council, and before that I had been the leader of Liverpool City Council. One of the problems that disturbed me was how to decide priorities in an area such as Merseyside, with all the suffering and deprivation. How do you decide priorities against water? For instance, in order to conjure up good public relations the water authority decided to spend a lot of money improving the River Mersey. To my knowledge—and I have lived there for 70 years—nobody ever died from falling in the River Mersey. Nevertheless, facilities were improved for sport and recreation, attempts were made to clean up the river, and in the year I am thinking of they spent £2 million. This was just after the reorganisation.
In that year people died in Liverpool through hypothermia, because we did not have enough money to provide them with the heat and fuel that they needed. That is a basic statement of what happened. But what we had done was create a vested interest in the sanctity of the North-West Water Authority, so it was not their job to consider the question of hypothermia in Merseyside. Of course it was not. It was their job to support the retention of the North-West Water Authority.
Just because I oppose the North-West Water Authority does not mean that I cannot put a word in for them. They are paying interest of £125 million a year on investments up to date. Some of it is for outworn, outdated sewers in Manchester and Liverpool in the main. They are already approaching £200 million a year in investments. I asked them for a writing-off of these debts. Unless they get it they cannot possibly go ahead with the investment that is needed in the North-West. That does not come from me; it comes from an organisation which I consider is anathema to anybody interested in the real priorities inside our community.
Is private enterprise going to put in that kind of investment, or are we going to have a situation where this Government are going to write off those debts, start the necessary large-scale investment to restore health to the water service, and then flog it off to the

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private sector? Of course we are going to have the latter; and let us not mince words.
I was once asked, "What is the difference if a place becomes nationalised as opposed to being privatised; or the other way about?" I said, "I don't know". But it seems to me that one of the major differences when a nationalised industry becomes privatised is that the people in charge of it suddenly have their salaries doubled. I am making no bones about it. An examination of the salary structure in all those organisations will bear that out, and it will get worse.
When we were discussing the Transport Bill in this House I made the point that the mistake the Government were making was that right throughout their history, since 1979, they led themselves into the hands of the bureaucrats. Transport in London under the present system is beginning to reveal itself as a complete failure. Anybody who now motors through London, seeing the congestion build up because of the cutting down of buses and the encouragement of private cars to go on the road in London, can see that.
All the other measures that the Government have brought out for privatisation lead simply to the point of view that you go into a sector where it is sacred to be profitable. I have heard government spokesmen on those Benches and in the other place boasting that if you can make money, then you are entitled to draw £50,000, £60,000 or £70,000 a year when other members of our community are on the dole—boasting that it is right.
Why do they say it is right? They say it because they are the only words that the City of London (which makes nothing and has never produced an ounce of wealth in its whole creation but has exploited money and investment) know for success. What we are fundamentally discussing in these privatisation measures (and let us not wrap it up) is whether or not the community itself should control its own affairs, or whether slowly but surely there is going to be a drain away from responsibility inside the community. If this Government have their way, ultimately they will place everything in the hands of private enterprise, and the only sacred thing there will be is turning a fast buck.
I have news for the Government, and for anybody else who lives in the affluent South-East. A fortnight ago, before the municipal elections, in spite of the difficulties of the Labour Party in Liverpool, in spite of the problems that that city was facing because of the extreme views held by certain individuals in that city—and some people thought that the electorate would throw them out—I said, "Don't be surprised if once again, through our ordinary, normal democratic machinery, those same people are returned to power". And they were.
That should be taken as a warning. If sapping the community's wealth in order to improve the pockets of some private individuals—and that is what this is about—goes on, sooner or later that small disturbance in Liverpool is going to spread, and some of the ordinary people in this land are going to say, "Enough is enough, and to hell with that kind of government".
5.40 p.m.
Lord Williams of Elvel: My Lords, I must first apologise that I have certain time constraints and I may not be here in order to hear the winding-up speeches. I hope to be able to do so but I may be in time trouble. May I also resist the temptation that the noble Lord, Lord Elton, offered me of responding to his challenge to reply to the brief which was clearly written by the Conservative Central Office.
Lord Elton: My Lords, I would happily exonerate the noble Lord from that duty if he would be kind enough to reply to the speech which came immediately before.
Lord Williams of Elvel: My Lords, I am very happy to refer the noble Lord to the debate that we had, the eccnomic debate, on 9th April (in col. 255) when I replied to the same Conservative Central Office brief which was then read out by the noble Lord, Lord Brabazon of Tara; and on 10th April (at cols. 353 and 354) when I replied to the same Central Office brief which was read by the noble Lord, Lord Gray of Contin; and to the Airports Bill Committee stage where the noble Earl, Lord Caithness, read out the same Conservative Central Office brief. I replied to that. If the noble Lord will kindly read those copies of the Official Report he will see the replies that I had to make at those points.
One specific company that the noble Lord mentioned was Jaguar. I must say that out of all this rubbish I will just pick that one particular company; because if he asked the Conservative Central Office researchers to do their homework, they will find (as I said on 9th April, in col. 255) that in fact the turnround in profits in Jaguar and the turnround in efficiency in Jaguar came well before privatisation rather than after privatisation. I think that that can be established by the facts. Nevertheless, the Central Office brief ignores what the Conservative manifesto in 1983 said, because whatever the merits of privatising a trading company which is trading and competing in the market I think that the Conservative manifesto of 1983 said clearly that they, the Conservative Party, were not going into the business of privatising public monopolies. We said this at the time of the Gas Bill and we are saying it again because this is a clear contravention of what the Conservative Party put forward at that time.
Nevertheless, leaving all that aside, I have read through the White Paper on water privatisation; I read through the report produced by Professor Littlechild; I read through the monopolies report on the Southern Water Authority published in February 1986, and I have the advantage over some noble Lords, I think, of being able to refer to old Price Commission reports on the Thames Water Authority and on the Welsh Water Authority which were completed in the late 1970s.
I should like to address that part of this Motion which was so ably moved by my noble friend Lady Nicol which refers to the implications of privatisation for consumer interests. It seems to me that there are three serious questions which have to be asked. The first is this. Are the water authorities really trading, commercial operations and, as such, fit for listing on the Stock Exchange; or are they community services

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providing basic requirements for a civilised society on a monopoly basis? Secondly, is there any form of economic regulation that makes sense if these authorities are in the private sector? And, thirdly, is there any chance at all of competition playing a role in consumer protection?
I will take those questions in that order. I do not think it is of any use the noble Lord referring us to the statutory water companies, because the statutory water companies of course have divided control. If the noble Lord is proposing that the new WS PLC should have dividend control he is going slightly outside the remit of the White Paper. I do not think, from the shake of his head, that he is in fact suggesting this; so that we can regard the statutory water companies—as indeed does Professor Littlechild—as being not a good model for privatisation.
But to be a commercial operation you have to be in a position to set out proper accounts so that the consumer can understand two very basic things: the price of the product and the cost of the product. These have to be very clearly spelt out. The price of the product in the case of the water authorities which the Government are proposing to privatise is commented upon by Professor Littlechild, who reports in Table 1 of his document that two-thirds of the turnover of the Severn-Trent Water Authority and 57 per cent. of the turnover of the North-West Water Authority are in unmeasured water supply and in unmeasured sewerage. In other words, there is no identifiable price for the product: it is based on rateable values or whatever other alternative there may be.
The White Paper tell us:
"Most domestic customers still choose to be charged for water services on the basis of rateable value".
That expression "choose" seems to be something of a cheek, if I may say do; because those of us who live in separate dwellings are invited as domestic customers to pay if we want to be metered. It is not a question of our choosing one way or the other and of the water authority paying. We may choose to spend a few hundred pounds getting ourselves metered if we are lucky enough to be in that position, but it is not really a true choice. Until there is full metering, no clear commercial price of water can be established either for metered customers or for non-metered customers; because you have to divide the allocation between metered customers and non-metered customers and if you are on rateable value on one side and on metering on another side the distortions between the two are bound to be evident.
When we get to sewerage the position is even more complex. The same table that I quoted from Professor Littlechild's report says that just over half of the turnover of the Severn-Trent Water Authority is in sewerage and just under half of the North-West Water Authority turnover also is in sewerage. I cannot conceive—and maybe the noble Lord can help us out on this—how you can arrive at a proper way of pricing the product, if I may put it like that with due fastidiousness towards your Lordships, when we come to sewerage of this nature. The cost of the product is even more difficult to determine. In the case of the Southern Water Authority the Monopolies and Mergers Commission calculated that 25 per cent. of the water
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fed into the system never reaches the consumer. It is known as unaccounted-for water. How you allocate unaccounted-for water between different classes of consumer in different volumes I have no idea; nor do I believe that anybody else has any idea.
But worse is to come. We all know that the water authorities are essentially a very capital intensive series of businesses. When an industry is capital intensive, depreciation of the assets of that business—which are, after all, a vital cost in replacing the assets—form a high proportion of the cost of the final product. Any water authority must know the value of its assets, where its assets are and the active life of those assets in order that it can set a fair depreciation policy which will allow it to substitute those assets with new assets as they run out.
The Price Commission report on the Thames Water Authority clearly illustrated the problem. Seventy per cent. of the assets of the Thames Water Authority were underground in sewerage and water mains. The programme of inspection which the Thames Water Authority had embarked upon in the late '70s was due to be completed by the mid-1990s, at which point, the report said, the authority will have sufficient information to establish appropriate lives for its underground assets. Depreciation in the Thames Water Authority accounted at that time for approximately 16 per cent. of the total expenditure of the authority. I do not know what the figure is now but I should be very surprised if it were very different from that.
It seems to me that if you are talking about a very large element in the cost of an authority's depreciation of the assets, it has to be right. It has to be right to protect the consumer who wishes to know what the real profits of the authority are, because if the authority does what the Thames Water Authority used to do in the 1970s, which was simply to charge depreciation plus a "guestimate" for what it thought was necessary in order to replace its assets, this will not be good enough either for the consumer or, if I may say so, for The Stock Exchange should these authorities come to be floated.
I do not see how these difficulties can be got over. It may be that the noble Lord, Lord Elton, can help us. I have read nothing in any of the White Papers or reports that convinces me otherwise. Indeed, Professor Littlechild confirms my view when he writes on page 5 of the report:
"Consumers will demand a more comprehensive and permanent scheme of regulation than would be appropriate in any other private or privatised industry."
This is exactly what he was getting at, that these are not commercial operations, and one cannot say fairer than the learned Professor Littlechild.
The Government, in their White Paper, recommend the well-tried formula for regulation of price control through the mechanism of RPI minus X. Of course, RPI has been seriously undermined recently by the Institute of Fiscal Studies, which has criticised the whole basis on which the retail price index has been made up. It comes to the conclusion—it is a very authoritative report that I hope the Government will study with care—that between 1974 and 1982 the poorest 10 per cent. of households faced price increases on average 8 per cent. higher than those

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faced by the richest 10 per cent.; in other words, the weightings in the RPI are biased against the poorest households in the country. I leave aside the question of how much that has saved the Government in terms of uprating benefits to the poorest households, but it seems to me that if we start basing a price control formula on the RPI we are basing it on a very suspect indicator.
But what about X? Professor Littlechild goes into some detail about X, and he gives the game away. He says:
"Periodic revisions of X should be based on industry efficiency yardsticks."
If there is an industry yardstick, why have the RPI at all? Why not have just X? Why not have a price control with which others are perfectly familiar? The noble Lord, Lord Boyd-Carpenter, were he in his place, with his great knowledge of the cement manufacturing industry, will have been perfectly familiar with this over the years. Why not have just X? It is much easier to operate a price control that is related to the industry in question than it is to operate a price control that is related to some arbitrary indicator that is suspect and then feed in something to do with the industry.
My last question is: what are the possibilities for competition in protection for the consumer? The learned Professor Littlechild, in chapter 5, goes to some lengths—he is getting a bit desperate at this point—to say that the real competition will be in the capital market between water authorities. He says:
"The stock market sharpens the drive to efficiency".
Capital requirements will have to be competed for by the different water authorities. They will be competing with other sources of capital for their funds.
I think that Professor Littlechild needs to take a look at the capital markets to see how they operate in practice. He could do no better than to take a trip to New York and see how Consolidated Edison, which is the New York utility producing electricity for New York, was able to raise funds in the New York stock market without any problem whatsoever, although it was making extraordinary losses, because of one basic fact: investors knew that Consolidated Edison would never go bankrupt.
This is going to be the case with water supply plcs, or whatever they may be: they will not be allowed to go bankrupt. Therefore, this is a very clear case where one can raise fixed interest debt on the assets, raise preference shares as utilities in the United States do, and probably even raise money in ordinary shares on the assumption that this is not risk capital competing with one's latest business expansion scheme or whatever, it is simply investment in a solid asset-based company that will have a monopoly and will never be allowed to go bankrupt.
As to the threat of takeover—something that will be very important in increasing the efficiency of the water supply plcs—Professor Littlechild says:
"The threat of takeover thus has a particularly important role to play in the water industry".
He goes on, with some doubt, to say:
"Who might be interested in taking over a water authority?"
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The learned professor puts forward a very interesting question here, and he comes up with the solution that foreign water companies might be interested in acquiring a UK water authority, as he says,
"to gain valuable experience and expertise in bidding for international contracts".
We are starting here to enter the world of complete fantasy. I am not going to be vulgar and mention the thought that the Ukraine water authority might be an interested party in taking over one of the water authorities in the United Kingdom, but I go on to chapter 4 of the Littlechild Report, which is entitled "The Scope for Competition". Water services plcs can offer services across water authority boundaries. Professor Littlechild says:
"Consumers will be better served and protected if they have the right to invite supply from neighbouring authorities."
As to the other services that water service plcs could go in for, he says:
"They could even move into plumbing".
In this fantasy world that we have, I am bound to say that in reading the report, although I was much enjoying the richly comic vein in which I thought it was written, I did, I am afraid, doze off. I had in front of me a map of the water authorities showing clearly the incursion (and my old friend Lady White will know what I mean) of the Severn Trent Water Authority into Welsh territory—an invasion that has taken it to the very foothills of the magic mountain of Plinlimon. My task was clear: it was to revive the old glory of the once proud princedom of the Welsh March, the princedom of Elvel, and lead our competitive plumbers into attack against the English who had so treacherously breached King Offa's Dyke. It is at that point that I must have woken up because I realised that the competitive plumbers of the Severn Trent Water Authority would no doubt be led by my noble friends Lady Fisher of Rednal and Lord Graham of Edmonton, and I felt that the task was perhaps for another day.
It just goes to show what rubbish this all is. You can believe in this policy only if you are in a dream; indeed, if you live in a dream. The noble Lord, Lord Elton, was perfectly clear about the purpose of the policy. It has nothing to do with whether or not the water authorities are commercial operations; it has to do with the government requirement for cash. He was quite clear about that, and that is perfectly all right—we understand that. But I very much hope (because he is an intelligent and honourable noble Lord, if I may say so, and I have known him a great number of years) that he will reconsider this whole policy, because he must know that this is meretricious rubbish. If he and the Government go ahead with this policy, then I warn them that we shall fight, and we shall fight to the end because we know that, in this case above all other privatisation cases, our position is intellectually and logically sustainable and their position is wrong.
6 p.m.
Lord Craigton: My Lords, the noble Lord, Lord Williams, spent several minutes making fun of or talking about the Littlechild Report. However, in reading it with great interest, I do not take that as being government policy: it is a guide to what our thinking

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should be. It seemed to me rather a waste of time, as the noble Lord, Lord Williams, seemed to do, to blame the Government for what is in the Littlechild Report. Nor do I blame the noble Baroness, Lady White, who said that our Benches were very empty. Why is that, my Lords? It is because so many of us agree with the Government's proposals.
I start off as a conservationist. The principles of the privatisation legislation are just what we are looking for. They provide an opportunity to consolidate and extend the considerable environmental gains achieved in the water industry's field in recent years. No control will be lost. The fixing of policy objectives and priorities and their review from time to time will remain with Ministers, who are answerable to Parliament. Quality standards will be reviewed from time to time.
The legislation gives Ministers powers, subject to parliamentary approval, to ensure that environmental policies are implemented and that at all times the Government will be kept fully informed. The operating licence includes environmental conditions, backed up by regulations and statutory codes, all regulated by the Director General of Water Services, supported by his inspectorate. Having listened to the speeches today, I am not at all sure how big that inspectorate should be in order adequately to do their job.
The director general will be a powerful figure indeed. He will fix the level of charges for the individual water supply plcs and he will fix the extent of support for environmental services from the charges on water and sewage. There seems to me some danger in the director general becoming too distant from Ministers and Parliament. It seems an unwise suggestion that he should appoint his consultative committee. That committee should surely be appointed by Ministers and should include those concerned with, as well as those responsible for, environmental matters.
Environmental interests and needs are growing. I realise that in the vast turnover of the water companies the environmental costs are now less than 2 per cent. But it is important that powers should be enacted, when the Act is passed, to strike the correct figure at any time, whatever that correct figure for environmental costs should be. It should not be a cost which is limited by any fixed figure at all.
On a different point, I am unhappy that regulations for discharge consent should no longer be advertised in the London Gazette. Minor local proposals can involve important and perhaps contentious matters of policy and be of national interest. If the Gazette is cut out (and I can see the reason for it) at the very least interested organisations should be on a mailing list held by the water supply company, who are bound to supply the information in good time—on payment, of course.
I note that consideration will be given to amending and widening Section 31(4) of the 1974 Control of Pollution Act, which refers to regulations to prevent polluting matter from entering water. This is a subject that must also be the concern of the Health and Safety Executive. The noble Lord, Lord Melchett, referred the other day in this House to the bulls which, after
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lengthy debate, were permitted by your Lordships to occupy a field with a public footpath in it. They were subsequently turned out of the field by the officials of the Health and Safety Executive. We do not want that sort of thing to happen over a pollution matter; so an amendment to Section 31(4) to prevent this conflict of interests may be desirable. As I say, as a conservationist, I welcome the proposal. Not only will all statutory duties continue, but opportunity will be taken to strengthen and widen conservation protection measures.
In this measure we shall also have the opportunity to face up to the many cases of capital spending which is long overdue, of which the noble Baroness, Lady Nicol, gave us so many examples. In the parts of the country that are affected, this is a matter of considerable concern. I quote from my local paper, and I can assure your Lordships that the article is not inspired by me. The Windsor Express on 9th May had a big headline:
"Put Homes on Mains Drainage—Demand."
The article reads:
"Wraysbury people could lose their last hopes of being put on mains drainage before the next century if immediate action is not taken.
This was the warning from Councillor Harry Parker at last week's meeting of Windsor and Maidenhead Council.
'I make no apologies for bringing up again the question of the 2,600 homes in this borough who are not on mains drainage,' he said.
'I have no doubt that the Thames Water Authority will be privatised but nothing in the White Paper about it suggests that any attempt will be made to solve this problem if it is.'"
My Lords, that is five miles from London Airport. My home—and I declare an interest—is one of the 2,600 homes referred to. This is but one example of a national problem that can no longer be ignored, as so many speakers have said. I do not quarrel with a uniform rate of charges, RPI minus X, which allows some provision for the cost of capital works within the charges and profits of the water supply plcs. However, I believe the Government will find that, without some extra balancing factor, some companies will be unable sensibly to afford to do some of the work that really should be done.
I suggest there are two ways out. When capital works clearly cannot be done through the RPI formula, the cost of such works, if manageable, should be charged additional to the formula which a water supply plc can levy on its users. This would meet many of the overdue needs and would be fair to all concerned.
However, there is also work to be done that neither the supply company nor its customers can reasonably be expected to meet: such work as cleaning up the Mersey and the alleviation of some of the enormous flooding risks in London. The need for such works can probably be justified better on environmental than on customer service grounds. Through past neglect or changed circumstances, they have become a national responsibility.
Paragraph 12.7 of the Littlechild Report, which has some very good stuff in it, points to what well might be the answer. The cost of such work done on environmental grounds should be met by Government subsidy. I add my own words: it should be Government subsidy tailored in time and amount to what the nation can reasonably afford.

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Finally, I refer to the promise in paragraph 19 of the White Paper. It is very short:
"The catchment-based structure of the water industry has worked well in practice. It has been recognised throughout the world as being a good and cost-effective model for other countries to follow. It is the main reason why the Government intends to retain the structure of the water authorities essentially as they stand in the transfer to private ownership."
In relation to land drainage and flood protection, this promise is not kept. As I see it, the plan is to return to the pre-1974 situation, when separate bodies dealing with land-drainage functions did the work and were paid by the county. Now the proposal is that there should be 10 quangos, contracting out work, perhaps with the water companies. Policy and decisions will be in the hands of the quangos. There is no guidance on how they will be financed. This proposal erodes the advantage of unified river basin management, now so successful and world acclaimed. My Lords, why make this major change? Can we really treat seriously the reason given in paragraph 46 of the White Paper? It reads:
"Their non-commercial nature would make it difficult to vest them in private sector bodies having no commercial incentive to carry out works desirable in the public interest."
What is so different or special about land drainage in the public interest? The privatisation proposals are full of ultimate government control in conservation and other fields. Why should the Secretary of State take out the land drainage problems? I suggest that MAFF should retain the same domination over land drainge and flood prevention as the DoE has over environmental matters. The noble Lord, Lord Ezra, made the same point. The DoE should be in exactly the same position on environmental matters as MAFF should be in over land drainage and flood prevention.
The cost of land drainage could be met as an addition to the normal bill for services which already meet water, sewerage and conservation. The White Paper speaks of a cost of £100 million, but an added cost of £2 or £3 a year to the millions of consumers would meet this. The taxpayer would save this, would save the cost of the 10 quangos and would save the cost of the staff to make the scheme work—a scheme which, if it proceeds as is presently proposed, would seriously undermine the proper functioning of the privatisation of Britain's splendid water industry.
6.12 p.m.
Lord Graham of Edmonton: My Lords, I have enjoyed listening to the debate, which has been stimulating. I have been very impressed by the manner in which—perhaps sometimes by accident—we have covered almost all the questions that could be asked at this stage. I want to begin, as others have done, by expressing gratitude to the noble Baroness, Lady Nicol, not only for initiating the debate, but also for the splendid way in which she laid down the markers. The Minister may very well have been able to anticipate them by the words that form the Motion; nevertheless, that will provide him with a further opportunity of commenting later.
I have heard all the speakers, and there are one or two to whom I should like to draw attention. I was deeply impressed by the speech of the noble Lord,
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Lord Selsdon, because it showed enormous knowledge and experience of the subject that I would not even begin to claim, even though at the end of it his underlying philosophy towards it was different from mine. I certainly want to record how impressed I was by the ease and the fluency with which he was able to deal with the subject.
Of course, he had the perfect follow-on speech—perhaps by an accident of timing; I do not know—from my noble friend Lord Sefton, who spoke with a different kind of depth and knowledge but also with passion and emotion, not from the business point of view, although he has business experience in the subject, but from the point of view of the way it affects ordinary people and consumers, particularly those who live on his beloved Merseyside.
The debate has been mainly about privatisation or the change from a publicly-owned and controlled water system to a privately-owned one. I do not want to deal with the basic principle, which was covered in the speeches not only from this side of the House, but also from the noble Lord, Lord Ezra, and others. I was certainly grateful to my noble friend Lord Gallacher for putting to the Minister what I intend to put, which is that it is not so much a matter of doctrine as a matter of the consequences and effects, given that privatisation or change will come. I am certain that it will not be possible for the Minister to reply to all the points made, but there will be time for him to do so later, because we are in this consultative process.
My noble friend Lord Gallacher most effectively dealt with the damage to consumers' interests. I want to look at some of the spin-offs, particularly in the fields of recreation, sport and conservation. When we look at the column in this report headed "Recreational Activities at Reservoirs in England and Wales in 1985", we immediately begin to see that we are not talking simply in terms of turning on the tap and getting water. As those with some knowledge of business know, there are not only the interests of consumers to be considered. There is an enormous industry—and it is right to call it an industry—attached to water which is concerned not only with drinking but also with using water.
I have no statistics about the members of the public who use water for their activities, but I know that the Lee Valley regional park—I had the privilege of being a founder member of that almost 20 years ago—provides an enourmous benefit for the people of my community. Last year 3½ million people visited this one water-related public amenity. Literally millions of our people look upon water not merely as something to drink, but also as something to use.
I want to ask the Minister whether, in looking at values, the Government have really considered the impact upon the kind of uses that I am going to mention. I have here a list of reservoirs, and paragraph (d) of this report refers to,
"the need for financing and charging systems to allocate costs effectively to those whose actions give rise to those costs".
This point was made by my noble friend Lord Gallacher.
We are really getting down to the nitty-gritty. If you are using water to drink or for sport and recreation, there will be a subtle change in the emphasis. The

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be-all and end-all of your ability to use water will not be the need to drink it or to enjoy it in the community, but your ability to pay. That may be seen by Members opposite to be right and proper; if you cannot afford to pay for the water, you do not drink it. If you have a need of water for hygiene or recreation, you have a choice. You do not really need it if you cannot pay for it. The only way you will get it is to pay for it.
The Minister must satisfy the House, but, more importantly, those outside, that he understands that when there is a change in the ownership of water he will take on board some of the fears which have been expressed to me and others. I believe that when the shareholders are not Great Britain Ltd., but those who own the shares after there has been a flotation, their prime or only concern will be whether the industry pays, because that is why they will be putting their money into it. They will ask: Do we get an adequate reward? Is this the best place to put our capital?
If at the end of the day the only consideration of those who become shareholders in the various plcs is not whether the public interest is being served but whether "my" interest is being served, if the only criterion is not whether it is good for the people to extend the use of recreation, to protect the environment, to look after the habitats of birds and to make sure that SSSIs are protected, but "Does it pay?" and "Do we get an adequate return?", I say to the Minister, who I know is sympathetic in these matters, that we shall have to have some answers. If to avoid this damage management arrangements have to be made, who will pay for them? Will it be the Nature Conservancy Council? If the conservancy council pays to stop this exploitation of water, who pays for the Nature Conservancy Council—the public and the taxpayer?
I was very impressed by the remarks of the noble Lord, Lord Nathan, who raised in general the same point that I am going to make. Let us consider those who manage water (the shareholders in a water authority) and those who wish to exploit—I do not use that word in a pejorative manner—the possibilities of eating into the green belt. Perhaps there is a synthesis of interest between the shareholders in a development company and the shareholders in a water undertaking—and we all know that at times they will be the same people. We need to be very concerned—the noble Lord, Lord Nathan, raised this as a question to be taken seriously—where that which should not be a conflict of interest can perhaps, not accidentally but deliberately, be seen to be unhealthy and unwholesome from the public's point of view.
When we see the absence of independent regulatory bodies, when we see the absence of someone who can guarantee the standard of the quality of water, when we see the power to license and prosecute being put in the hands of private companies, I am sure that noble Lords opposite, including the Minister, must feel some unease, especially if what we believe is likely to be the outcome turns out to be the case.
I should like to ask the Minister to consider, if not now, then later when he reads the debate, the concerns of bodies such as the Royal Society for the Protection of Birds. The society tells me that it is fearful that the safeguards which are required to protect the environment
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will be inadequate. It recognises the power and the organisational ability of lobbies which have massive sums of money behind them. We are talking about people who want to develop privately owned new towns. We know that a series of initiatives and public inquiries are going on at this time. Against those we are talking about what are essentially voluntary—not amateur—bodies, relying upon millions of people paying small sums of money. The Minister must satisfy us that those interests are protected.
In the White Paper the Director General of Water Services has a dual role. It is,
"to safeguard the interests of the customers and ensure at the same time that the companies have every incentive to perform well in the interests of their shareholders".
I repeat that, ultimately, it is what is good for "my" shareholding that counts, not what is good for the environment in which my shareholding is held. The Minister must satisfy us that he has taken that point on board.
The Nature Conservancy Council has drawn my attention to the fact that at present it has conservation duties laid upon it. I want the Minister to spend some time—perhaps not tonight—satisfying those outside that he believes he will be able to be insistent. The noble Lord, Lord Craigton, was fulsome in his belief that the Minister would be able to insist on the new structure being every bit as good—certainly we should not want it to be less—if not better in preserving and conserving all of the interests which he holds and I share. I want the Minister to tell us how he will be able to make a private company spend its money in a better way than we as public servants have been able to ensure when we have had the duty in the past to fund public authorities.
I want to congratulate bodies such as that for the Lee Valley regional park. One would not have thought in the past that we should be thinking in terms of privatising water. Bodies such as the Lee Valley regional park, which is a public body, are entitled to ask, "Are we next?" The Minister cannot say; the manifesto has not been written. If the criterion is that anything that can be done by public enterprise can be better done by private enterprise, everybody is entitled to ask, "Are we next?" I can tell the Minister—and I speak with no direct brief for the Lee Valley regional park—that it has done a marvellous job under changes of boards and changes of governments. It is a marvellous concept, but only because it has long-term vision.
It was started 25 years ago. There are other bodies like the Lee Valley regional park. How will corn parable bodies be set up in other parts of the country to do the kind of things that we want done? There is such desire by government and by private capital. I am not one of those who says that there is not an opportunity to marry private capital with public need and for profits to be made. I want the Minister to tell us that bodies such as Lee Valley regional park will be able to look forward to a satisfactory life and that they will not have to face the fear of privatisation.
There is 50 per cent. more water in the Lee Valley regional park than in the Norfolk Broads; and yet 25 years ago much of that water was unused. The noble

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Lord, Lord Gallacher, and the noble Baronesses, Lady Nicol and Lady David, and I, know the Lee Valley well and can remember when it was a collection of glass houses and worked-out gravel pits. It has been put together by people with imagination. They have turned something which, if not derelict, was outworn and outmoded into a living, vibrant public water resource. I know because I live there, and from time to time I enjoy myself at Pickett's Lock, Broxbourne Lido and other places.
I want the Minister to tell the House that he has a faith as great as I have in the public sector's ability to do many of the things in the recreation field which can be done only if they are underwritten by public money. I want to see a steady growth in the exploitation of the uses of water for recreation and conservation, and I want to see public access fully maintained. I want the Minister to say something on that matter for the public outside. We want to hear from the Minister how he believes that can happen with these enormous vested interests, one of the aims of which is to make money, while other people enjoy the heritage of our water resources.
Many of us remain to be convinced that water privatisation will not lead to damage of a serious kind to the freedom of water authorities to serve the interests of the consumer, the countryside, and the nation. I simply say to the Minister that tonight he has the opportunity to reduce the alarm felt by not only many Members of your Lordships' House but also many organisations outside. The Minister will understand that I am not stimulated for party purposes by Members on this side of the House who have expressed their views on this crucial matter. If he can take that opportunity, he will do us all a good service.
6.30 p.m.
Baroness David: My Lords, we have had a very interesting and well-informed debate. It has also been a lively one. I believe that the Opposition was totally justified in devoting one it its debating days to this very important subject. We had hoped that the White Paper would be debated in Government time, but it was not. Perhaps it is not hard to see why.
The White Paper has not received a very warm welcome except from the noble Lord, Lord Selsdon. It received a fairly tepid welcome from the two other noble Lords who spoke from the Tory Benches, and it had a very critical reception from everybody else who has spoken. If the noble Lord the Minister says that one would expect the Labour Party to be critical, then I would mention the very critical speeches from the Cross-Benches.
The case for greater investment in the infrastructure has been very well made by my noble friend Lady Nicol and by many other noble Lords who have spoken, as it was in the report on water of the Select Committee for Science and Technology way back in December 1982. It is very satisfactory that the noble Lord, Lord Sherfield, who was the chairman of that committee, has spoken today.
The first two recommendations of that committee were, first, that a sense of urgency should be introduced into tackling sewer dereliction; secondly,
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that the National Water Council's call for additional investment in sewer renovation and renewal should be acted upon. The Minister has, as expected, told the House that capital expenditure is planned to rise from £798 million in 1984–85 to £1,024 million in 1988–89, those figures being in cash terms. But the water authorities' 1985 plans bid for an increase of about 10 per cent. over those figures at the end of that period.
The Civil Engineering EDC, in its report the Nation's Infrastructure, Water, that has been mentioned by many speakers, and which is an extremely interesting document, while accepting that the increased level of investment will remedy some of the serious deficiencies in levels of service, states that progress is expected to be slow, and that:
"Flooding from sewers is likely to remain a serious problem in many areas while improvements in rivers, estuarial waters and coastline quality are expected to be very long term. Improvements planned for the aesthetic quality of drinking water in the medium term will still leave serious problems in some regions".
It is perhaps significant that in the Green Paper entitled The Water Environment: The Next Steps there is no deadline set for the extension of environmental quality objectives to estuarial, coastal and underground waters.
The strict financial control that the Government have exercised over the capital spending of the water authorities, and the obligations put onto them to increase their charges well beyond the rate of inflation in order to help them pay off their debts, have prevented the authorities from improving their sewers and water mains in the way in which many of them wished. There can be little doubt that the reason why some chairmen are now more willing to accept privatisation is that because, in the words of the White Paper, the authorities will be free of Government intervention and day-to-day management, and they will be protected from fluctuating political pressures. Also, they will be released from the constraints of financing that public ownership imposes.
It is not public ownership that imposes those constraints: it is the Government. If the Government were willing to write off the water authority debts, as they may possibly do before privatisation, and free the authorities from Treasury economies, then I guess that the chairmen and boards would be very happy to carry on as they now are.
Research has enabled great advances to be made in the use of modern techniqiues for finding out the condition of the infrastructure, and it has helped to discover new ways of replacing or repairing unsatisfactory sewers and mains. The Select Committee recommendation that the industry should spend more on research, about which the noble Lord, Lord Sherfield, has already spoken, including subscriptions to the Water Research Centre, is as relevant today as it was in 1982. I hope that the Minister will tell the House what is to be the future of the Water Research Centre and how it will be funded if privatisation becomes a reality.
I turn to the second part of the Motion. My noble friends Lord Gallacher and Lord Williams have dealt so admirably with the effect of privatisation upon the consumer that I shall say nothing on that score, except to endorse all that they have said and express my own

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fear that the consumer will probably face higher charges and a less satisfactory service. That is particularly so if metering is forced upon them, because then the poor, the old, big families and perhaps food business proprietors will economise on their use of water with, no doubt, very deleterious effects on health.
The Littlechild Report suggests that the willingness of shareholders to discipline slack managers in the plcs will be a key to their efficiency, but one commentator says how much better it would be if those shareholders were, in significant numbers, the populace who drink, bath, fish and flush. We know from experience of British Telecom that it is very unlikely that there will be significant numbers of those shareholders. Between only 2 per cent. and 3 per cent. of the population own shares in British Telecom, and the cost of the service to the domestic consumer has risen very substantially. That is not a good omen for the water industry. It is hard to believe that the proposed consultative committees organised on a regional rather than on a divisional basis, as they are now, could be close enough to the consumer to be of much use. Who will the members be, and how will the director general appoint them?
Perhaps the greatest anxieties have been expressed about what will be the effect of privatisation upon the environment and pollution control. I ask the Minister whether there is a firm commitment by the Government to require WSPLCs to give effect to EC directives and to national environmental policies. It has been suggested that the green document entitled The Water Environment: The Next Steps was produced because of the wish to diffuse environmental opposition to the White Paper and to placate the growing green vote. I suspect that is probably true.
Nevertheless, there are some encouraging statements in it, as the noble Lord, Lord Nathan, said. In paragraph 2.1 it states that the Government are concerned that the arrangements for safeguarding the environment and for promoting amenity should be consolidated and strengthened. It is important that the Secretary of State should have overall responsibility for the water environment, as paragraph 2.5 says.
Chapter 3 relates almost entirely to water quality. The protection of the water environment, referred to briefly in paragraph 3.11, is dealt with in section 7. Some good points are made there, but nowhere is the duty of Ministers for good conservation practice clearly stated. We should like to hear the Minister give some comfort there.
The Nature Conservancy Council has produced some preliminary notes on the document and says that its initial impression is that the proposals contained in the consultation paper could be considerably improved upon. The council goes on to comment:
"The NCC has for a number of years expressed dissatisfaction with the NWC River Quality Classification which the Secretary of State proposes to make statutory. We would like to see 'conservation' included as a water quality objective alongside drinking water, fisheries and amenity. For Class 1 rivers this would require tighter standards for nitrates, phosphates and suspended solids".
The Environment Data Services Report claims that the plans for control of river and drinking water quality under privatisation run directly counter to a
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high-level review of environmental policy by the Central Policy Planning Unit of the DoE. As the Minister knows, I asked his office if I could see this review, but was told that it was confidential. However, it has been leaked and I want to ask the Minister if it is correct that it recommends a new public water control inspectorate. What one suspects is that that planning unit thought the same as the noble Lords, Lord Ezra and Lord Nathan, that if the water supply side should be a private concern, then the regulatory function should be entirely separate from it. I wonder whether that is what that planning unit said.
The review is said to warn the Government that water pollution issues are likely to become more contentious in future, and it voices concern at recent cuts in river quality monitoring by the water authorities. The White Paper passes over in one brief sentence the recent reversal of the improvement in river quality which is causing much concern to environmentalists. The ENDS Report 133 says that one authority—Thames—has
"hacked its biological and chemical sampling of rivers to ribbons"
in recent years. The frequency with which it monitors its own sewage effluents is the lowest in the country—five times lower, in fact, than that in the best authorities—and Thames is the authority that is likely to be sold off first.
Unless the WSPLCs have some additional powers specifically to put aside funds for conservation activities in their own schemes and for landowners who wish to see conservation-orientated schemes on their land adjacent to water courses, conservation in the widest sense will not be achieved. How much of the plcs' budgets will have to be spent on maintaining and improving the water environment? What we want is a further commitment from the Government that there really is to be consolidation and strengthening; that conservation is to be part of the whole thinking and not just a frill added on. The fact remains that the good things in the Green Paper could perfectly well be done now, with Government good will, and that privatisation would probably make the doing of them much more difficult.
I want to say a few words on national parks. The water authorities own 40,000 acres of scenic land, rivers and lakes: 10 per cent. in the Peak District National Park; 7 per cent. of the Lake District; 5 per cent. of Dartmoor; often whole river basins or extensive upland water catchment areas of critical importance for wildlife, landscape and informal recreation. As public bodies, the water authorities demonstrate the obligations they have to society as a whole in adopting land-use policies which benefit other users and interests. Privatisation could jeopardise all that. Private companies will be under pressure to generate income from all their activities and land holdings, perhaps by changing the use of the land: for example, by conversion to more intensive agriculture or by promoting income-generating recreation activities which might contradict nature and landscape conservation objectives. They might sell extensive areas of land.
The biggest threat comes from forestry which is now seen as the most viable alternative to hill farming in the uplands. The consultation paper makes one

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cursory reference to these issues, in paragraph 7.13. Assurances on the safeguarding of conservation and recreation values in the extensive water authority land in the national parks are urgently needed. I was slightly alarmed by some of the comments made by the noble Lord, Lord Selsdon, about the use of land and the ideas for expansion of recreation which I thought might not be very much liked by the national parks boards.
I should like to say something of the local authorities' reaction to all these matters. There is, naturally, resentment that assets which were taken from them after the passing of the 1973 Act should be sold off to raise money for the Government. This would reverse the trend from 1870 onwards with, first, the Gas and Waterworks Facilities Act and then the Local Government Acts of 1882, 1888 and 1894 which resulted in public utility undertakings increasingly being taken into municipal ownership. Joseph Chamberlain is constantly being quoted because of his insistence on keeping such fundamental services under municipal control because of the health hazards involved. Would that modern Tories felt the same! But in 1971 the Central Advisory Water Committee recommended the development of a comprehensive water management plan for each river basin and that was put into effect with the 1973 Water Act.
The principle of integrated river basin management has worked well. That is retained and that is good. But the 1973 Act left locally elected representatives in a majority on the boards, together with appointees of the Ministers. Then, with the 1983 Water Act that representation was abolished altogether. So, it is not surprising that local authorities are a bit sour and the already poor relationship between central and local government cannot be made better by all this.
The ACC policy committee last week resolved to express its grave concern at the Government's proposals for the privatisation of the water industry. It formally noted:

"(a) that the supply, disposal and pricing of a vital commodity is to be placed in the hands of monopoly commercial organisations, and that local authorities are to be excluded from the minimal consultation procedures proposed;

(b) that pollution control and enforcement will be placed in the hands of organisations that would profit from low standards".

Therefore, the policy committee opposed the privatisation of water. The report continues:
"Considering the report on proposed changes to water and sewerage law, the Committee resolved to note with particular concern that there is to be no requirement for WSPLCs to consult with local authorities on the environmental effect of sewerage schemes, nor to publish reports on the impact of major projects. The Committee also noted with particular concern that the existing rights of Highway Authorities to surface water drainage are to be removed, leading to additional burdens of bureaucracy and potential costs for member counties, especially in rural areas".
I hope the Minister will be able to give some reassurance to the ACC when he replies.
The concerns of the ADC are no less, although different. The district councils would like a return to the pre-1973 situation when they were responsible in their own right for sewerage. It was unlikely that this would happen but they expected that they would continue to have the presumptive right to act as
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sewerage agents which they had under Section 15 of the 1973 Act, and which was confirmed in the 1983 Act. This right is to be taken from them and there is resentment and anxiety about that. As they pointed out in their response to the discussion paper last year, there are vital public health considerations.
Besides the engineering skills required, an organisation responsible for sewerage would need access to public health expertise and to local knowledge and records now located with district councils. Environmental health officers employed by the districts are invaluable where public health is concerned. It is they who will be called in when things go wrong under a new regime. They will have greater difficulties in resolving problems. Dealing with private companies can be very complicated. Potable water supplies will have to be monitored. I ask the Minister: what powers will the environmental health officers have?
The noble Lord, Lord Sandford, president of the ADC, is not speaking today, but he asked whether the point could be made when speaking of the district councils that if the WSPLCs decide to withdraw sewerage agencies from the districts they should be compensated for the cost of capital equipment which they had to buy: for instance, the cost of workshops, vehicles, and so on. There would also be redundancies among staff and the cost of those redundancies should not have to be borne by ratepayers. I rather like the idea put forward by my noble friend Lord Gallacher that perhaps local authorities could become shareholders in the plcs.
Are there any really good and sound reasons for a further reorganisation of the water industry? We have been given no evidence to prove the case and comparisons with other countries are not helpful. Are the Government wise to take on this big and disruptive piece of legislation in what may be the last Session of this Parliament? The Bill, if introduced, according to Mr. John Patten will be an enormous one of about 100 clauses. Apart from those parts dealing with the water and sewerage law, it will be highly controversial and cannot help but have a stormy passage, taking up a great deal of parliamentary time. It would be most unlikely that more than one authority—Thames—could be sold off before the next election.
We had powerful speeches in this House on 22nd April last year when the discussion document was debated, as has already been mentioned by various noble Lords. The opposition of the noble Lord, Lord Nugent (and I regret his absence as much as anybody), has also been mentioned. Although he is not a general opponent of privatisation, he is in the case of water, and he referred to it as a dogma.
The noble Lord, Lord Molson, who was here earlier but who unfortunately was not speaking, took part in the same debate. He referred to the Secretary of State saying at the Conservative Party conference that he considered that the burden of proof in favour of change was on those who advocated it. The noble Lord said:
"If he applies that criterion to the discussion paper on water authority privatisation he will proceed no further in this matter. The only argument I detect in the whole document in favour of privatisation is the statement … 'Privatisation is a key element in the Government's overall strategy'. I take leave to say again … that

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the policy of this Government is too much influenced by doctrinaire dogma and too little by the old-fashioned Conservative pragmatic view that if something is working well, leave it alone".
That was in col. 984 of the Official Report of 22nd April last year.
I wish that the Government had listened to the voices of their own supporters. The noble Lord, Lord Elton, himself, in speaking earlier in the debate, referred to this as being one in a series of privatisations. I think that showed that it is part of Conservative doctrine and dogma just to go ahead with privatisation because that is what they say they believe in. It is dogma that is making the Government try to get rid of the water industry.
Even the Government grant that not everything can be privatised. Land drainage, flood and sea defences will be hived off, thus taking something from the integrated river-basin management which we all agree works well—and the noble Lord, Lord Craigton, made that point. There will be the cost of the public bodies to run those organisations, the cost of the director general and his staff and the cost of the small inspectorate—perhaps not so small if the request of the noble Lord, Lord Elliott, is listened to. The noble Lord, Lord Nathan, was also critical of the ability of a small inspectorate to do the job.
Have all those things been budgeted for? Has a balance sheet been drawn up? The talk is that the assets of the water authorities are £27 billion but that the sales might realise £8 billion. The noble Lord, Lord Selsdon, mentioned £5 billion. I suppose that selling off cheap is the only way that the Government think they will get bidders. Buying shares in WSPLCs I should not have thought was an attractive proposition. I do not see that sale being a winner. "I would not be among the potential investors", said Mr. Len Hill, chairman of the South-West Water Authority and also chairman of the Water Authorities Association.
The Labour Party is firmly committed to returning the water industry to public ownership as a matter of priority. I hope that this debate will be considered as part of the consultative process and that it may have some influence on Government thinking and perhaps persuade them that it is not right that water, which everyone needs and must use, and on which the nation's health depends, should be handed over to private ownership. Water is different.
6.53 p.m.
Lord Elton: My Lords, I can undertake at the outset of my reply to this debate, which I give by leave as my second intervention, that it will affect Her Majesty's Government's thinking. Whether it will affect it in the way that some noble contributors to our exchanges would wish is another matter. It has been a valuable and instructive debate, and I should like to thank the noble Baroness, Lady Nicol, for providing the occasion for it. With other noble Lords and noble Baronesses, I regret that my noble friend Lord Nugent of Guildford could not be with us today for reasons of health, and with them wish him a speedy recovery. In spite of the view that noble Baronesses opposite attribute to him, I am happy to say that I sent him a card saying "I wish you were here"!
I shall try in the 25 minutes or so allotted to me to respond to as many of the interventions as I can, but
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I have already discarded a large number of answers to substantive points that noble Lords and noble Baronesses have made. I hope that they will bear with me if they have to wait for the post for some of the quite important questions that they have asked to be answered. I undertake that the letters that I send will be put in the Library as well as in the letter-box.
I shall not be writing to the noble Lord, Lord Gallacher, about either his dual nationality or the different approach of the Scots. On the former, I can only congratulate him; on the latter, I can say that our different future is, as so often is the case across the Border, dictated by our different pasts. For historical reasons, I am advised, water supply, as well as sewerage services are in Scotland provided by local authorities. They do not therefore lend themselves to privatisation in the same way as in England.
I might have started with an apology for even asking to speak twice in this debate, despite its importance, but as I am facing no fewer than two spokesmen from the Opposition Front Bench and, I understand, three speeches (though the last one I trust will be somewhat short) I felt that I had to put myself in a good position with the House. I think I ought also at the start to deal with at least one point made by the noble Lord. Lord Williams, although he is not here to hear my reply and cannot therefore expect me to deal with some of the other points. He intended to damage my party rather than myself, I think. He said that in our 1983 manifesto the Conservative Party said that we would not privatise public utility monopolies. I turn to page 17 of the manifesto to read:
"Merely to replace state monopolies by private ones would be to waste an historic opportunity, so we will take steps to ensure that these new firms do not exploit their powerful positions to the detriment of consumers or their competitors".
That seems to be entirely consistent with the speech that I made at the opening and the policy that I am advancing and not consistent with the criticism of the noble Lord.
In my opening remarks I explained to your Lordships in terms which are familiar because they are good why the Government believe in privatisation and the benefits that we expect generally to flow from it. I have said, and I repeat, that it is not right for water to have to compete for a share of the finite sum of government spending power with other such essential services as education or health. (I now launch into the first and I fear unsuccessful experiment in a new system of filing my supplementary remarks—but it has worked!) That is the constraint that limits the speed at which we can modernise water plant; and that, I must remind the noble Lord, Lord Ezra, is the constraint of which he complains.
We have ever since 1981–82 increased our real terms capital spend on the industry, but the constraint remains and only privatisation will remove it. I know that it has been suggested that we could at a stroke of policy remove government constraint on public expenditure. If we were to do it across the whole of public expenditure, that would be an act of policy entirely against not only the tradition of the party that I represent but the interests of the nation. The noble Baroness, Lady David, in her concluding speech advanced a candidate, but I am surprised that it should be water rather than health and social security. She

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will find herself at once in conflict with the noble Lord, Lord Sefton of Garston, who clearly has exactly the opposite view and holds it with some passion.
Privatisation will take the water industry out of that artificial constraint and unfortunate competition and put it under the natural constraint and competition of the market. My noble friend Lord Selsdon so ably deployed the arguments about the constraint of public expenditure that I need spend no longer on them.
If I may now move to the noble Lord, Lord Sefton of Garston, he gave us a fascinating and challenging insight into the politics both of water and of Merseyside. I must resist the temptation of tilting with him on the well-trampled field of our respective parties' dogma. But although at times I fear that I lost the thread that he was following, he made one vital connection by however intricate a route. It was this—and this is a point that I have already sought to make twice. Where cash is wanted by government, at whatever level, for remedies, for instance, for hypothermia and for policies connected with water, those two purposes are in competition with each other. I hope that he may, therefore, in the cool of the night consider the advantage of taking water, as we propose, right out of that competition. That is the upside of a policy on which I well understand he is more familiar with the downside.
Lord Sefton of Garston: My Lords—
Lord Elton: My Lords, if I yield to the noble Lord I shall have to yield to all the others. I shall be over time. I intend no discourtesy, but if it also conceals my ignorance or incompetence I have no complaint.
The commercial motivation of the new companies will be to make a profit for their shareholders, and we shall therefore so arrange things that the size of the profit will depend upon the efficiency of their operation. That means avoiding two principal dangers. The first is the danger that they will exploit their customers. That danger has been clearly seen and will be carefully prevented. As we have provided for telecommunications and we are providing in the gas legislation, the water services will be regulated by an independent director general, answerable to Parliament but independent of government. His principal duty will be to safeguard the interests of customers and, at the same time, to ensure that the water service companies have the means and incentive to perform well from the point of view of their shareholders. He will operate on each water service company through a licence. The licence will limit the price increases in the light of those companies' financial needs. It will be part of his task to see that they are not staying in business by letting standards slide.
The water authorities' consumer consultative arrangements are at present organised by each authority separately and they do not have any direct link to the Government or any other national body. Our intention is that when the authorities are privatised the director general should be responsible for establishing them and should maintain and use them to help him protect the ordinary consumer.
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In reply to the question of the noble Lord, Lord Gallacher, I can say that under the arrangements that we propose the Secretary of State will be responsible for environmental and public health matters connected with the water industry and the director general will be responsible for protecting consumers by policing the licences under which the water service public limited companies will operate. It is therefore right that the director general rather than the Secretary of State should appoint the consumer committees which will be reporting to him.
We propose that the director general and the regional consumer committees should have complementary roles. The director general's office will provide the committees with their staff and act as a general resource at national level. In their turn, the committees and their local staff will provide the director general with information at a local level. By working in that way, they will provide strong and cost-effective means of safeguarding consumer interests.
We propose that there should be a single regional consumer committee for each of the new companies. They will be able to take a view of the whole range of each of the companies' activities, and since those are regionally limited it is appropriate that the consumer committees should have a regional structure. But I see nothing against the chairman, the chairman and secretary, or whatever is suggested, from time to time coming together nationally, as the noble Lord suggested, to pool their experience and share their wisdom.
The noble Lord, Lord Sherfield, was interested in, among other things, the Water Research Centre which has slipped into this part of my speech, I think perhaps out of sequence. The noble Lord will be aware that the water authorities have, and I am sure he has recognised that the water supply companies will have, duties to do research. There is no statutory guarantee at the moment that the Water Research Centre will continue but its future is being considered by the members and of course by the authorities which support it by their subscriptions. I shall certainly take to my right honourable friend the noble Lord's concern on that point so that he will take due notice of it at the appropriate time.
As privatisation approaches, the Government will review the charges already set or proposed by the existing authorities. Those will provide the starting point for the new companies. Embodied in the licence will be the formula to be applied to those prices for the purpose of keeping them in line with changing circumstances. That formula will be based on the retail prices index, as suggested by Professor Littlechild in his report, which I regard as valuable.
The exact terms of the formula are still to be decided. They were summed up, I think, in the term "minus X" earlier in the debate. It is a term which interested the noble Lord, Lord Williams. I was interested in his view of the validity of the retail prices index as a reference point, but whatever his reservations it seems to me, at first glance at least, that to discard it and rely merely on "X", as he suggested, removes the connection between the new companies and actual costs at a vital point. That cannot be right. I may have misunderstood him, but I do not expect to

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agree with him, whatever he meant, because of the tone of the rest of his speech.
The Government's present close involvement with the financing of the water industry puts them in a good position to determine the appropriate level of charges. The intention, whatever the formula, will be to establish a settled mechanism. The director general will be able to vary it but we do not intend that he should do so frequently. The duration of the licence is not yet decided, but your Lordships will see from the White Paper that we intend that it shall be for a substantial time. The example that we have in mind, as the noble Lord, Lord Gallacher, said, is British Telecom. Its licence is valid for 25 years. A long duration will ensure that new investors have a clear interest in maintaining their capital equipment to a high standard.
As to the basis of charging, the noble Lord is right. We favour an experimental introduction of metering. It is reasonable at least to think that it might be fair because it shows what the people and companies use. We need to be convinced of its practicality from experience, and therefore we have in mind an experiment and not a commitment. I do not accept that that constitutes a threat to the less well off. Water companies and authorities already cut off supplies in extreme cases when they cannot obtain their money. It is a cumbersome and expensive procedure which is not popular with them, as I said when I made my original statement. I think that I recall saying that whereas there are 18 million households supplied there were only 3,500 cut-offs over the past year which I make out as one in 5,000.
We are and will remain aware of the conditions in the capital market to which we shall be going. The spring of 1986, or the summer if one can so recognise it, is not the time to say what those conditions will be in autumn 1987. We do not necessarily intend to put all 10 companies on the market at once. The rate of flotation will depend upon the circumstances at the time and the outcome will of course reflect the differing condition of different water authorities' capital plant, to which the noble Lord, Lord Sherfield, referred so cogently.
I said that there were two dangers against which we must guard when introducing commercial motivation. The first was the exploitation of the customer and I have dealt, at least transiently, with that; although I shall have to write to many noble Lords about it and no doubt we shall return to the subject. The second (and it is one which your Lordships take seriously) is the danger that the new companies will skimp or neglect their environmental duties, that they will become the polluters rather than the preservers of our natural habitat.
Your Lordships will wish me to devote some care to explaining what we have in mind and I am happy to do so. What we propose will not only preserve the whole panoply of existing safeguards and standards; it will add to them. As is clear from the Green Paper, which the noble Baroness, Lady David, in an uncharacteristically unfair gesture dismissed as a frill—
Baroness David: My Lords, that is unfair. I said that there were some things in the Green Paper which were
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welcome. I said that we did not wish to see conservation treated not as part of the whole thinking but instead as a frill. That is different from what the noble Lord said.
Lord Elton: My Lords, I am grateful to the noble Baroness. In water, one expects both spills and frills. I am afraid that I was wrong. I can confirm for a start that Her Majesty's Government are committed to regulate to bring in European Community as well as national government policies.
I gratefully acknowledge the recognition of the noble Lord, Lord Nathan, of the advance that much of this represents, even if he was at pains to separate it from the philosophy of privatisation. The Secretary of State will provide for the assessment from time to time of the availability and quality of natural waters, and it will be he who sets the quality objectives and standards to which natural waters must be maintained or improved. Ministers will have a power, subject to parliamentary procedure, to require water companies to implement specific national and EC environmental policies. They will also have power to prescribe precautions or establish protection zones for avoiding water pollution. That is contained in a passage of the Green Paper read out by the noble Baroness, Lady Nicol, at the beginning of the debate. There is power also to establish local inquiries on any matter relevant to maintaining the quality of natural waters and to require water companies to provide information on environmental protection matters.
We also intend them to have effective powers to impose requirements of a general character on water companies as to their environmental duties. Those will include the duty of monitoring natural waters and sampling discharges as well as requirements on the way that they enforce pollution control legislation and operate emergency procedures. We intend to set up a small inspectorate within the department and the Welsh Office to monitor the company's own performance as abstracters and dischargers and to provide guidance.
The noble Baroness, Lady Nicol, asked how much duplication we intended as a result of not including the inspectorate within the plcs. I think that I recall correctly what she said. My own view is that while a good deal of self-regulation is appropriate in bodies under such a degree of restraint in their conduct, nonetheless one can only have absolute assurance if there is an independent inspectorate. Indeed, some of the comments about how these companies would conduct themselves towards other companies, towards planning authorities and towards developers suggest that a number of your Lordships do not think that they should be left entirely on their honour, as it were. I am not at the moment in a position to anticipate the exact size of the inspectorate. It is a Green Paper that we are speaking from. But it is intended that it should be lean rather than fat. Most of the expenditure questions that arise cease, therefore, to be as relevant as they might have been when the noble Baroness asked them. I shall, however, write to her.
Under this system, the Secretary of State will set statutory quality objectives and standards for natural waters as a firm basis for national policies. This is a large task. We shall establish them first for rivers and

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thereafter for estuaries, coastal and underground waters. Water companies will be required to assess effluent discharges consent applications in the light of objectives and standards, and the Secretary of State will take them into account in matters for his decision. He will have power to review the objectives at intervals of not less than five years. More frequent reviews would involve policy difficulties for those operating under them. There will be provision at that stage, as at so many stages, for public consultation. We intend that those objectives and standards will themselves be made public by registers or by other means. That is the answer to another question.
I understand the anxieties of some of your Lordships about entrusting the regulation of discharges to a profit-making company that is itself a discharger. But if your Lordships consider the regime under which they will have that responsibility, you can be reassured. There are four principal safeguards. The first is a framework of national policy to guide individual decisions. The second is the Secretary of State's powers to give consent to the company's own discharge and to withhold it, and indeed to call in any application for his own determination, which will continue. The third is the right of appeal to the Secretary of State, which will be preserved. The fourth is that the public will be given access to information through registers.
Moreover, existing categories of exemption for discharge consent controls will be withdrawn. This will ensure that all discharges of environmental importance are subject to control. I hope that your Lordships are beginning to see that this is an increment on the protection that we already have. We shall also take the opportunity to simplify and to streamline current controls. We propose that the Secretary of State shall have power to prescribe substances which, if discharged to land, require consent. We are all beginning to realise how such material percolates through to water.
We also consider that Section 46(1) to (3) of the Control of Pollution Act should be replaced with a power for the Secretary of State to vary or revoke a consent where aquatic flora and fauna are at risk and that all consent applications should be advertised by the applicant, though not necessarily in the London Gazette. I can put it no more definitively. However, looking at my noble friend Lord Craigton, I should perhaps leap down the page to say that he asked us to amend Section 31(4) and (5) of the same Act. In developing our proposals for water protection zones, we shall be reviewing this area of legislation. I shall ensure that my noble friend's opinions are taken into account during that process.
Your Lordships are aware that pollution from occasional spillages and other incidents has been rising steadily. Effective preventive measures are needed and the provisions of the Control of Pollution Act implemented last year provide a basis for that. In particular, effective measures are needed to protect water sources including rivers used for water extraction, aquifers and reservoir gathering grounds. We are considering amending the powers in Section 31(5), as I have just told my noble friend.
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At this point, I should refer to a matter raised by the noble Lord, Lord Ezra, and my noble friend Lord Craigton. Both prefer—they are indeed not alone—that the services of land drainage and flood protection should be left together with the other services provided by the water companies. I do not believe that noble Lords can dismiss entirely the fact that those works are extremely expensive or that they generate no income at all. That means that the water companies will not be able, and cannot be expected, to raise money on the market for that purpose. It makes sense to involve them, we agree; but not, we think, as the responsible body. That is why we propose that they should be involved as contractors to the responsible bodies which will have access to the appropriate but necessarily limited funds. Whether or not the responsible bodies use the water companies as contractors, we intend that they shall work in a regime that takes the fullest possible account of the need to preserve the unified system of river basin management and also be subject to all the environmental considerations to which I have referred.
I think that I must draw to a conclusion. I shall therefore not continue with what many of your Lordships will, I hope, have read in the Green Paper. The rest, as so eloquently advertised from both sides of the Table, will, I am sure, be instantly read as soon as your Lordships go home. I shall merely pick up one or two remaining points for which there is barely time.
The noble Baroness, Lady Nicol, was concerned that conservation obligations and regulations should be statutory. She hoped, in particular, that the Nature Conservancy Council would be listened to. I am happy to reassure her. The Government have already said that they propose to publish a code of practice with statutory force. In our Green Paper, we indicated that we would be inviting the help of the NCC and the Countryside Commission in preparing the code. I can therefore satisfy the noble Baroness on both those points. I cannot satisfy the noble Baroness's noble friend about the paper from the Central Policy Planning Unit that was quoted. It is, as she rightly said, an internal working document which Ministers are considering at the moment. She must form her own judgment of her source as to whether or not she knows what the content is.
I can best conclude by saying that I am not abashed, though I think I am flattered, by the vehemence of some of your Lordships' attacks upon me. Sometimes I have felt that your Lordships have been in danger of being too nice. That was certainly not the case this afternoon. I name no names as I look round the Chamber. I can say, however, that I believe that what we propose takes water out of an inappropriate area of competition for limited funds with benefits in policy areas that the noble Lord, Lord Sefton of Garston—I am sure that he will write to me about this—will acknowledge.
We do not see the sense in the Secretary of State competing for funds for other subjects in this way. We believe that under the eye of the Secretary of State and the director general the water authorities will deliver a better service to the customer who will be better heard by the consumer consultative arrangements that we propose; that they will use their money more efficiently under the eye of the investors; that they will

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be more aware of and responsive to their responsibilities to the natural environment which we all wish to inherit and enjoy; and that the result of this operation—whether one calls its origin "dogma" or "philosophy"—will be of great benefit to the community and to the economy. Finally, to say that the money goes to the Government means that it goes to the taxpayer and the country.
I am grateful to your Lordships for the patience with which you have listened to me for the second time, and for the eloquence and the experience which you have contributed to this debate. I shall answer many more questions by post shortly.
Baroness Nicol: My Lords, let me set the Minister's mind at rest immediately; there will not be a third Front Bench speech. I should like to thank the noble Lord for his reply and to say simply that in the last few minutes he has made it obvious to me that there is a long way to go in this debate and that there will be another opportunity—I should like to think that there will not be, but I fear that there will—in the autumn, to consider this matter.
May I thank all those noble Lords who have taken part in the debate. We have had an interesting and well-informed discussion. I am grateful for the care which has been put into it. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Housing (Multiple Occupation) Bill [H.L.]
7.22 p.m.
Baroness Vickers: 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.—(Baroness Vickers.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD CULLEN OF ASHBOURNE in the Chair.]
Clause 1 [Duty of local authority to carry out periodic housing inspections]:
Lord Kilbracken Lord Kilbracken moved Amendment No. 1:
Page 1, line 15, leave out ("after which") and insert ("and").
The noble Lord said: This amendment is a paving amendment for the next one. With the leave of the Committee I intend to speak to both. I should like to begin by saying that I fully support this Bill. My aim in putting down these two amendments is to make it somewhat stronger.
Under the principal Act a periodic inspection of the district has to be undertaken by the local authority from time to time to decide what action to take with regard to its obligations regarding houses in multiple occupancy. The purpose of this clause of the Bill is to ensure that such an inspection takes place in each district within 18 months of the Bill receiving the Royal Assent and then once every three years thereafter. I am completely in favour of that proposal.
However, as the Bill stands at present, although the local authority has to prepare a written statement of strategy for dealing with the conditions found, no deadline is set by which that statement of strategy has to be completed and made available to the public. Clearly it is necessary that a change should be made. I have said that it should take place within nine months of the expiry of the 18-month period. Nine months is the period of human gestation. I therefore thought that was perhaps appropriate, but I am open to other suggestions on that matter. My amendment would ensure that the report was published within that period. I beg to move.
Baroness Vickers: I am very grateful to the noble Lord for putting down his amendment. It is reasonable and helpful, and it would add clarity to the Bill. I have great pleasure in accepting it.
On Question, amendment agreed to.
Lord Kilbracken Lord Kilbracken moved Amendment No. 2:
Page 1, line 17, after ("found") insert ("within nine months of the completion of any such inspection").
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Duty of local housing authority to require certain standards]:
Lord Kilbracken Lord Kilbracken moved Amendment No. 3:
Page 2, line 7, leave out ("the local housing authority") and insert ("it").
The noble Lord said: The two remaining amendments are purely drafting amendments. If Clause 2 of the Bill goes through in its present form, the principal Act, when it is amended, will read:
"the local housing authority shall, unless the local housing authority exercises its powers",
and so on. That seems to me to be unintentionally repetitious and the amendment that I have put down will remove that repetition. I beg to move.
Baroness Vickers: I should like to accept this amendment, too.
Lord Kilbracken: I omitted to say earlier that I was grateful to the noble Baroness for accepting my amendment. I was grateful, and I am grateful again in this case.
On Question, amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 [Complaints by persons living in houses in multiple occupation]:
Lord Kilbracken Lord Kilbracken moved Amendment No. 4:
Page 2, line 23, leave out ("be had") and insert ("follow").
The noble Lord said: I found a little difficulty in understanding this clause when I first read it. I realised that my difficulty arose from the use of the word "had" in line 23. I do not think in a normal usage of the language that we talk about "having" certain proceedings. It would be very much clearer, instead of saying "shall be had", simply to say "shall follow". I hope that the noble Baroness will show the same favour to this amendment. I beg to move.
Baroness Vickers: I have had the pleasure of discussing this amendment previously with the noble Lord, and I should like to accept it.
Lord Kilbracken: I am grateful to the noble Baroness.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
Remaining clause agreed to.
House resumed: Bill reported with the amendments.

Surrogacy Arrangements (Amendment) Bill [H.L.]
7.30 p.m.
Report received.
Clause 1 (Surrogacy arrangements to be void):
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 1:
Page 1, line 5, leave out from second ("is") to ("whether") in line 6 and insert ("unlawful").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 1. This is the same amendment as was moved at the Committee stage by my noble and learned friend Lord Denning. It makes surrogacy arrangements illegal and unlawful, and not merely void and unenforceable. My noble friend Lord Halsbury was kind enough to say that anything that my noble and learned friend suggested was agreeable to him. Those were not his words, and nor would I hold him to them if they were. However, at any rate he viewed the amendment benevolently.
The noble Lord, Lord Ennals, is obviously less than fully enchanted with this Bill, but I do not think that he would have an objection to a legal technical amendment if it might be an improvement, as I venture to think this is. The noble Baroness. Lady Trumpington, quite rightly pointed out that, as the clause stands at present, unamended, it is probably unnecessary. It probably does no more than declare the existing law on the breach of a surrogacy arrangement; in other words, that such an arrangement is unenforceable. However, I have a feeling that the noble Baroness may have left the impression that the amendment itself was without any real practical effect. I think that it was probably on that basis that my noble and learned friend Lord Denning withdrew the amendment.
I was not altogether happy with that result, and I wanted to bring it back to your Lordships to get your Lordships' decision on the matter. The law draws a number of distinctions between an agreement which is void and unenforceable, on the one hand, and an agreement which is unlawful, on the other. So far as this amendment is concerned, the only relevant difference relates to the recovery of money that might be paid as part payment under a surrogacy arrangement. My noble and learned friend Lord Denning, with his matchless capacity for lucid exposition of legal principles, explained the point in Committee, so I shall merely summarise the two leading cases, one on each side, which illustrate the difference between the two conceptions of "unlawful" and "unenforceable".
On the one hand, there was the prostitute who hired a carriage in order that she could publicly display her charms with a view to custom, and she paid a sum for the hire of that carriage. The hirers then repented of the bargain and called it off, and the prostitute tried to recover the money that she had paid in advance. Such an agreement is an illegal agreement, and it was held that she could not therefore recover the money that she had paid. That is one case.
The other case is the marriage-broking contract, where a woman paid a marriage broker a deposit, an advance payement, in consideration of him finding her a husband, the balance to be paid when the husband was found and the marriage took place. In fact, that agreement came to nothing and the woman then tried to recover the advance payment that she had made. It was held that she could do so because a marriagebroking contract is unenforceable but is not unlawful.
Applying that to a surrogacy agreement, my noble and learned friend gave a number of examples, as indeed are given in the Warnock Report and as were given by my noble friend Lord Halsbury. However, a very typical one would be as follows. Mrs. A enters into an agreement with Miss B that Miss B shall bear a child to be handed over to Mrs. A. She pays, say, £1,000 in advance, the balance of, say, another £1,000 to be paid when the child is handed over. As has so frequently happened, Miss B repents of the bargain once she has borne the child. The question then arises: can Mrs. A recover from Miss B the £1,000 that she has paid in advance?
If the agreement is unenforceable, as it is under the Bill as it stands, she can recover because the case is similar to the marriage-broking contract. However, if it is an unlawful agreement Mrs. A cannot recover the £1,000 paid in advance because it is an unlawful agreement, like the hire of the prostitute's carriage. In my respectful submission it would be wrong to allow the recovery of the sum paid in advance. After all, Miss B had been persuaded to go through all the discomfort and nausea of bearing the child, and it would seem to be utterly wrong, even if she has repented of the bargain, that she should now be forced to reimburse Mrs. A for the money paid in advance, most of which one would have thought had probably been expended during the pregnancy and the confinement.
The point is: is the advance payment to be recoverable? In my respectful submission the answer is "No", and this amendment has that effect. The noble Baroness was quite correct in saying that as the Bill is framed at the moment it has no further effect than the present law. However, this amendment is an important one. It has that material effect which I have ventured to lay before your Lordships, and therefore I beg to move.
Lord Ennals: My Lords, the noble and learned Lord, Lord Simon of Glaisdale, was kind enough to mention my name. I want just briefly to state the position that I hold. It is a personal position, and of course this is not an issue on which one is speaking on behalf of one's party. He is right—and I congratulate him—that he is making this clause clearer, but in fact to me it makes it more unacceptable.

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I have two objections to what is intended by this part of the Bill, as I said on Second Reading. First, I do not believe that we are at a stage in our thinking when we should declare unlawful any particular act of surrogacy, because I do not believe that it is necessarily wrong. I do not want to see the door at this stage totally closed, which would be the consequence of the amendment proposed by the noble and learned Lord, Lord Simon of Glaisdale.
Secondly, as I said on Second Reading, it is my view that in your Lordships' House, or in another place, we shall receive a Bill from this Government or the next which will seek to implement the recommendations of the Warnock Committee, or to implement part of them; or at least a major Bill which will be commensurate with the major report which has come to be known as the Warnock Report. I am not in favour of Bills like this which deal with small aspects of what is an extremely important problem and issue.
Having said that I recognise that this improves the Bill, if that is the purpose of the amendment, I have to say that I do not agree with it, and I promise noble Lords that on any further amendments today at Report stage I shall not intervene. But I think I should at Third Reading set out with perhaps greater clarity and greater preparation the reasons why I think we should be unwise to proceed with this measure.
Lord Winstanley: My Lords, just for the sake of clarity and for the record may I make it clear that for once—I shall not say only for once—the position of the Front Bench spokesman on these Benches is precisely the same as that of the noble Lord, Lord Ennals, the Front Bench spokesman on the Official Opposition Benches? I leave it at that. I agreed with every word he said.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, having heard the noble and learned Lord, Lord Simon of Glaisdale, this evening it is my sincere wish to clear up any misunderstanding and to restate the Government's position. Of course I understand the noble and learned Lord's wish to see this amendment made to the Bill to make clear beyond doubt that no payments made in respect of a surrogacy contract can ever be recovered.
I had intended to convey that the Government's attitude to the provision in Clause 1 which this amendment seeks to tighten up was that the provision itself was probably unnecessary because my legal advice is that agreements to hand over a child are already unenforceable by virtue of Section 85(2) of the Children Act 1985. As the noble and learned Lord has made very clear, there is a real difference between making contracts void and unenforceable, as Clause 1 of the Bill seeks to do, and unlawful, as this amendment proposes. Making surrogacy contracts unlawful has the effect of making any payments which may have been made irrevocable.
Although the Government are neutral both to Clause 1 and the amendment to it, I should like to point out what some of the consequences of this amendment would be. It would, for example, prevent
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the surrogate mother entering into an agreement with the commissioning parents for payment of the expenses or loss of income she had incurred during the pregnancy when they had changed their minds about the arrangement. Equally, it would in all circumstances prevent the commissioning parents recovering sums from the surrogate mother if the latter decided to keep the child. I am sure the circumstances in which successful actions for recovery could be brought would be rare, but the House ought to think carefully before it removes that possibility, however remote.
With regard to the noble and learned Lord's example of Miss A and Miss B, I was fascinated listening to his exposition of the need to make provision in the Bill to prevent the recovery of advance payments. We shall have to consider this argument carefully, but the amendment, I submit, cuts both ways.
7.45 p.m.
The Earl of Halsbury: My Lords, if the noble Baroness sticks to her attitude of benevolent neutrality on these matters, who am I to adopt a different posture? Personally I should like to strengthen the Bill, and I know that I speak for those who would like to strengthen the Bill. I know that the noble Lord, Lord Ennals, takes a different view of the situation from the view I take. He will have a full opportunity to divide against the Bill at Third Reading, or on the Motion that the Bill do now pass.
I hope that this Report stage can go through without a Division as the hour is late and the House is thin. If my noble and learned friend Lord Simon of Glaisdale wants to stick to his amendment, I hope that the noble Lord, Lord Ennals, will pick up the gauntlet at Report stage.
Lord Simon of Glaisdale: My Lords, I have moved the amendment already. If I left that unclear, I repeat that I beg to move the amendment. As I am on my feet, I ask your Lordships' leave to speak again to thank those of your Lordships who have spoken in this debate. Even though I know that the two noble Lords on my right do not like the Bill generally, I am grateful to them for saying that they will not disapprove of a provision which makes the Bill clearer.
On Question, amendment agreed to.
Clause 3 [Amendment of the Surrogacy Arrangements Act 1985]:
Lord Swinfen Lord Swinfen moved Amendment No. 1A:
Page 1, line 12, leave out ("and 2") and insert (", 2 and 4").
The noble Lord said: My Lords, this is a drafting amendment which is consequential on the House having accepted my Amendment No. 10 at Committee stage. I beg to move.
On Question, amendment agreed to.
Schedule 1 [Amendments to the Surrogacy Arrangements Act 1985]:
Lord Swinfen Lord Swinfen moved Amendment No. 2:
Page 3, line 11, at end insert—
(" . In section 4 of that Act ("offences") after subsection (1) insert—
"(1A) If it appears to the Secretary of State that there has been a change in the value of money since the last occasion when the sum specified in paragraph (a) above was fixed, he may by order substitute for that sum for the time being specified in that provision such other sum as appears to him justified by the change.
(1B) An order made under subsection (1A) above—

(a) shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament; and

(b) shall not affect the punishment for an offence committed before that order comes into force.".").

The noble Lord said: My Lords, this is not a drafting amendment. At Commitee stage your Lordships were good enough to allow me to amend the Bill to change the penalty from Level 5 to £20,000. There is a useful method whereby the levels can be altered in line with inflation as necessary from time to time. If we do not put this amendment into the Bill, once the Bill has become law, to amend the penalty either upwards or downwards would need fresh legislation which could take up considerable time in both Houses of Parliament.
This amendment would allow the Secretary of State, if he saw fit, to lay before the House an order which the House would have to approve—and indeed the other place as well—so that there could be any necessary change in the size of fines which may at some time in the future be made ridiculously low if inflation were to gallop away again, or in many years' time if inflation goes on at a nice slow rate such as that at which it is now moving as compared with two years ago. I beg to move.
The Earl of Halsbury: My Lords, as the promoter of this Bill I should be happy to accept this amendment unless I am advised by the noble Baroness who is speaking for the Government that she sees an objection to it.
On Question, amendment agreed to.
Schedule 2 [Sections 1 and 2 of the Surrogacy Arrangements Act 1985, as amended by this Act]:
The Earl of Halsbury The Earl of Halsbury moved Amendment No. 3:
Page 4, line 27, after ("it") insert (", or in respect of any other act performed by him in relation to the surrogacy arrangement,").
The noble Earl said: My Lords, by leave of the House, I should like to speak also to Amendments Nos. 4, 5, 6 and 7 in moving this amendment, Amendment No. 3. They are all consequential upon the Committee stage preceding this Report stage. Amendments Nos. 3 and 4 are consequential upon the Committee stage Amendment No. 8, and Amendments Nos. 5, 6 and 7 are consequential upon Amendment No. 9 at the Committee stage. As I explained at Second Reading, the Keeling Schedule (that is, Schedule 2) merely fills in the Bill for when it becomes an Act. This is merely to amend the appearance of the Bill in Schedule 2 by incorporating what
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your Lordships have already agreed at the Committee stage. I beg to move.
On Question, amendment agreed to.
The Earl of Halsbury The Earl of Halsbury moved Amendments Nos. 4 to 7:
Page 4, line 30, at end insert ("or in respect of any other Act performed by him in relation to the surrogacy arrangement.").
Page 4, line 35, at end insert (", or in respect of any other act performed by him in relation to the surrogacy arrangement.").
Page 4, line 40, after ("act") insert (", or in respect of any other act performed by him in relation to the surrogacy arrangement,").
Page 4, line 42, at end insert ("or in respect of any other act performed by him in relation to the surrogacy arrangement.").
The noble Earl said: My Lords, I beg to move these amendments en bloc.
On Question, amendments agreed to.
Lord Swinfen Lord Swinfen moved Amendment No. 8:
Page 6, line 7, at end insert—
("Offences.
4.—(1) A person guilty of an offence under this Act shall be liable on summary conviction—

(a) in the case of an offence under section 2 to a fine not exceeding £20,000 or to imprisonment for a term not exceeding 3 months or both;

(b) in the case of an offence under section 3 to a fine not exceeding level 5 on the standard scale.

In this subsection "the standard scale" has the meaning given by section 75 of the Criminal Justice Act 1982.").
The noble Lord said: My Lords, this amendment is also consequential upon the amendment passed at Committee stage and is again an amendment to the Keeling Schedule. I beg to move.
On Question, amendment agreed to.
Lord Swinfen Lord Swinfen moved amendment No. 9:
Page 6, line 7, at end insert—
("1A) If it appears to the Secretary of State that there has been a change in the value of money since the last occasion when the sum specified in paragraph (a) above was fixed, he may by order substitute for that sum for the time being specified in that provision such other sum as appears to him justified by the change.
(1B) An order made under subsection (1A) above—

(a) shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament; and

(b) shall not affect the punishment for an offence committed before that order comes into force.".").

The noble Lord said: My Lords, this amendment is consequential on Amendment No. 2, which the House has just accepted. I beg to move.
On Question, amendment agreed to.
Lord Swinfen Lord Swinfen moved Amendment No. 10:
Page 6, line 7, at end insert—
("(2) No proceedings for an offence under this Act shall be instituted—

(a) in England and Wales, except by or with the consent of the Director of Public Prosecutions; and

(b) in Northern Ireland, except by or with the consent of the Director of Public Prosecutions for Northern Ireland.

(3) Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he as well as the body corporate is guilty of the

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offence and is liable to be proceeded against and punished accordingly.
(4) Where the affairs of a body corporate are managed by its members, subsection (3) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(5) In any proceedings for an offence under section 2 of this Act, proof of things done or of words written, spoken or published (whether or not in the presence of any party to the proceedings) by any person taking part in the management or control of a body of persons or of any of the activities of the body, or by any person doing any of the acts mentioned in subsection (1)(a) to (c) of that section on behalf of the body, shall be admissible as evidence of the activities of the body.
(6) In relation to an offence under this Act, section 127(1) of the Magistrates' Courts Act 1980 (information must be laid within six months of commission of offence), section 331(1) of the Criminal Procedure (Scotland) Act 1975 (proceedings must be commenced within that time) and Article 19(1) of the Magistrates' Courts (Northern Ireland) Order 1981 (complaint must be made within that time) shall have effect as if for the reference to six months there were substituted a reference to two years.").
The noble Lord said: My Lords, this, again, is an addition to the Keeling Schedule which makes the rewrite of the original Bill clear to anyone who needs to read it. I beg to move.
On Question, amendment agreed to.

Bed and Breakfast Payments: 1985 Regulations
7.55 p.m.
Lord Banks Lord Banks rose to ask Her Majesty's Government whether they are satisfied with the effects of the Supplementary Benefit (Requirements and Resources) Miscellaneous (No. 2) Regulations 1985 on the ability of the homeless to secure and pay for bed and breakfast accommodation.
The noble Lord said: My Lords, I beg to ask the Unstarred Question which stands in my name on the Order Paper. I should like first to apologise to those noble Lords who put their names down to speak when this Unstarred Question was last on the Order Paper a fortnight ago for the fact that, owing to the late hour at which it was due to come on, I was obliged to withdraw it. I should like to thank those noble Lords who have put down their names to speak on it tonight.
April 29th 1986 marked the first anniversary of the introduction of new limits on the amounts of board and lodging supplementary benefit payments. It therefore seems to be a suitable time to monitor how the regulations are working out in practice, particularly as there have been some disturbing reports as to what is happening. The House will recall that the Government were worried by the considerable increase in the cost of board and lodging payments, and they claimed that a major factor was abuse of the system, with unscrupulous landlords exploiting and even advertising for supplementary benefit recipients.
It seemed to some of us that the principal cause was not so much rising prices by landlords but a very considerable increase in the number of those seeking such accommodation—a fact which we attributed to other government policies. But if the prices charged by landlords were a contributory factor, it seemed unfair to penalise the supplementary benefit recipients. The new regulations, firstly, took away the right of appeal
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against DHSS board and lodging limits; secondly, board and lodging limits were to be decided centrally by the Secretary of State; and, thirdly, the limits themselves were reduced by as much as £40 a week in some cases. For example, the Paddington DHSS office limit was reduced from £110 a week to £70 a week.
It was clearly the Government's belief that with reduced supplementary benefit limits the prices charged would come down. But what has happened in fact? A survey was carried out in London in December 1985 by a number of charities concerned with the problems of the homeless, including Shelter and CHAR. It was published under the title, It's the Limit. That survey revealed that in London average hotel prices rose by 20 per cent. between 1984 and 1985 in spite of the new limits. Of course, up to April 1985 each of the 50 DHSS offices in the London area had set their own board and lodging limits in the light of local conditions. But after that there was one limit for the whole of the area, and that was £70 a week for full board.
There are now virtually no hotels in London which offer full board, so this sum reduces to £48·30 per week for bed and breakfast. But the average price of a single room rose from £71·17 per week in 1984 to £85·34 in 1985. Those are the figures revealed by the survey. So that is an average price of £85·34 against the DHSS limit of £48·30 a week. A double room was £58·85 per head in 1984 and rose to £69·24 in 1985. The DHSS bed and breakfast allowance is £39·55 per head in those circumstances.
The number of hotels in London which claimants can afford has dropped by at least two-thirds. For a single room it was found that the number of hotels had dropped from 170 to 60 and for a double room from 206 to 44—that is to say, the lower figure was the number of hotels where it was possible to find a room within the limit set by the DHSS—and two-thirds of the hotels which were within the DHSS price limits had no vacancies. That is the position in London as it was revealed by that survey. And, of course, we know that conditions in these hotels are often appalling, which is one of the reasons why the Housing (Multiple Occupation) Bill introduced by the noble Baroness, Lady Vickers, is so important. I should like to ask whether the Department of Health and Social Security has studied that report and has any comments to make upon it. It would appear from it and from other sources in other parts of the country that prices have not come down but have continued to increase. I should like to ask the noble Baroness who is to reply whether she would agree that in this respect the Government policy has failed. The number of hotels within reach of supplementary benefit recipients would appear to have declined dramatically. Would the noble Baroness agree that that is so?
The number of vacancies in these hotels is very limited, some two-thirds of those within reach of people on supplementary benefit having no vacancies. Would the Government consider, first, having the DHSS limit on board and lodging payments settled by DHSS officers with reference to local costs and, secondly, the right of appeal against limits being reinstated?
Does not the noble Baroness agree that there must be new legislation to improve hotel conditions and that there is a case for price controls linked to hotel conditions? Would she agree that there must be increased investment in housing for rent to enable as many people as possible to find their own homes to live in? Can the noble Baroness explain the basis on which current rent limits are arrived at?
There is in addition, of course, concern about the effect of the board and lodging limit on those in residential care. This is perhaps strictly beyond the scope of the Question, but any information on that position that the noble Baroness may be able to give or make available would be welcome. In particular, I wonder whether the noble Baroness can explain what are the consequences of the decision against the DHSS in the case of the 19-year-old blind Birkenhead lady who was in residential care and refused attendance allowance.
The young unemployed are forced to move on from their accommodation after a fixed period. I understand that the numbers affected by this are about 50,000. I wonder whether that is the right figure. Clearly, the conditions that I have already described about prices and vacancies make this continual movement a very difficult and desperate process. Can the Government give any report on how this continual movement around is working out in practice and say whether it has led, as the Social Security Advisory Committee feared that it would, to the creation of a class of homeless and rootless young person?
Overall the evidence available to me suggests that the Government claims have not been achieved. I wonder whether the noble Baroness has some solid evidence to the contrary.
8.4 p.m.
The Lord Bishop of Sheffield: My Lords, I look forward to hearing the noble Baroness's Answer, and in particular I am anxious to know the reasons that lie behind this hostility towards board and lodging accommodation for the young unemployed. I favour regulations that prevent exploitation of this most vulnerable class. I favour regulations that encourage people to stay at home. For most people there is no better place to be. Yet there are three reasons why it is inevitably desirable that many of these young people leave home. I find it difficult not to believe that when they do, board and lodging accommodation for many of them is the best thing for them. They need to leave home to find work.
I come from south Yorkshire. I leave the diocese for the moment so that I can pray for your Lordships, and every day I hear of new tranches of unemployment in Doncaster, in the south Yorkshire coalfield; it goes back a long way. There is never going to be work for the population of that area again. There is no reason why people should bring work there in great quantities. It is inevitable that people should move away. For older people, because of housing, it is almost impossible.
When I move away from the north and find myself with people of the better sort in the more prosperous areas, they always turn on me almost savagely and say,
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"Why don't they move?" and give me many stories of those who make abundant attempts to get people to work for them. I say that there is no housing, and they do not believe me. I say that there is no accommodation, and they do not believe me. But we know that it is true.
It seems to me that the effect of these regulations has been to make less accommodation available for those seeking work and to make it harder for them to establish themselves in an area where they might find work and in due course find a husband or wife and set up a new home and a new life in an area more prosperous than the one that they have left.
It is well known that the home life of many of these young people is very unhappy and unsatisfactory. To say that they should simply go back home where there is no home for them to go to does not seem to me a kindness, if I dare use that word, to people who are in so many ways the innocent victims of things that have gone wrong in society.
I suppose it is worth saying that for some people leaving home is a necessary part of growing up. The evidence suggests that many of those in board and lodging accommodation are the most vulnerable of our young people, the least able to look after themselves; yet they must learn to look after themselves, and the motherly—in the best circumstances—atmosphere of that sort of accommodation is exactly what is needed for them.
I hope that somehow or other these regulations can be so examined, so interpreted and so used as to increase the availability of this sort of accommodation for these people rather than making it a rather harassed area where they are moved from pillar to post. They are the people least able to cope with this uncertainty and these changes.
8.7 p.m.
Lord McNair: My Lords, we have had the usual masterly Question from my noble friend Lord Banks, whose grasp of this subject never fails to astonish me. For me it has been a pleasure to listen to the right reverend Prelate. I have not had that pleasure before, and I shall look forward to a repeat of the experience whenever possible.
Perhaps I may be allowed two or three minutes to bring out one of two questions concerning refugees. In the category of refugees, of course, I include asylum seekers who have not yet been granted the status of refugees. The noble Baroness will remember that those whose job is to try to help refugees to re-settle in this country expressed their concern when these regulations were first introduced. They asked that the legislation should include a clear exemption for refugees. The answer was that this was not necessary since exemption for those on a programme of resettlement was intended to cover refugees. There were difficulties about that ruling.
Since then the office of the chief adjudication officer has produced clear guidance with regard to refugees, and I understand that the department is considering the inclusion of refugees and asylum seekers in the list of possible exemptions in the notification letter that local DHSS offices are sending out. This is good as far as it goes. In default of any amendment of the

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legislation, however, there will always be a danger of some refugees being driven into the sort of nomadic existence that makes re-settlement and self-rehabilitation virtually impossible. Unfortunately not all these people—most of them young—have the necessary confidence or knowledge to seek the best advice or to recognise it as such when it is offered to them.
One persistent cause for concern is the sheer cost of board and lodging accommodation in London, of which my noble friend spoke earlier. Most of these asylum seekers have very good reasons for wishing to stay in London. They want to be near their advice centers; they want to be within reach of the Home Office for their interviews; they need to be somewhere with good language teaching facilities; and naturally, if possible, they like to be near other members of their own communities.
However, research carried out by the British Refugee Council suggests that it is next to impossible to find rooms in London within the financial limits available. That is another point which was touched on by my noble friend. One of the results of this is that many refugees have to spend longer periods in detention than would otherwise be the case. Some have to share rooms with total strangers and in many cases the hotel charges have to be met partly out of the allowances intended for food, travel and other purposes.
I can perhaps save the House a little time by simply asking the noble Baroness whether she will examine the report made to her honourable friend Mr. Newton by the British Refugee Council on 25th April. There she will find, in addition to the points that I have raised, the worry that council has about its hostels. There is a reference to the extraordinary anomaly under which a claimant gets no accommodation allowance in respect of his or her children if they are under the age of 11. If the noble Baroness will address herself to those problems with her usual generosity of heart she will win the gratitude of a number of people who, having found conditions intolerable in the lands of their birth, have paid us the compliment of trying to resettle themselves in this country.
8.13 p.m.
Viscount Buckmaster: My Lords, I am sure the House is extremely grateful to the noble Lord, Lord Banks, for raising this very important Question. The noble Lord spoke about accommodation in hotels, and the noble Lord, Lord McNair, also touched on that. I think myself it is really quite appalling how many of those hotels go on raising their prices in the face of the reduced ceiling payable by the DHSS. One point which the noble Lord did not raise but which I think I can myself raise, having heard a great deal about it, is how some of those hotels are profiteering by cramming into rooms which are designed for two or three people (perhaps even for one person) four or five people, according to the size of the room. I think that is quite appalling.
However, I should like to devote most of my short speech this evening to supporting what the noble Lord, Lord McNair, has said. He and I are both connected with the British Refugee Council and we support each
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other when these matters are raised. I fully endorse what he said about the problems face by refugees, and I will not repeat anything that he said in his very impressive speech.
If I may, I should like to inject a personal element, because I am myself concerned with refugees. I have taken one or two of them under my wing and I know how extraordinarily sensitive and vulnerable they are, particularly when they come to this country for the first time. One of them I know has lost all his close relations in Uganda. I ask your Lordships to imagine the feelings of a man like that. One can only imagine how distressing and disturbing it must be for him to be in a situation where he is forced to move on every few weeks or so and where he is unable to get accommodation of the type he would like, because of the problems which have already been raised.
I should like particularly to mention the problems faced by the excellent hostel which is run by the British Refugee Council in London. It is known as the Langtry Walk Hostel. It is very near South Hampstead station. I went there the other day and was greatly impressed by the quality of the accommodation provided and, more important still, by the quality of the staff. They have there at Langtry Walk a fairly high ratio of staff to residents, and several of those come from ethnic minorities.
There are now some 65 residents in temporary accommodation—it is a hostel which provides only temporary accommodation until the refugees can be settled—and the average length of stay is about six or seven months. As I say, they now have something like 65 residents from 17 nationalities, the largest national groups being from Sri Lanka, Ethiopia, Eritrea and Afghanistan. It is quite remarkable how the refugees who come to that hostel are shown how to live in London, how they are given support and encouragement, how arrangements are made for their education and so on.
However, the point I want to make is that, as a result of the reduction in the board and lodging ceilings, the hostel is now suffering an overall reduction of roughly 38 per cent. in its income and it has a deficit of £20,000. To some extent this stems partly from arrears in DHSS payments, but the situation is serious because whereas, as your Lordships know, the London limit for payments is £70 per week, the hostel normally likes to work on a figure of £ 100 to 105 per head. So there is a very serious shortfall there. Indeed, the British Refugee Council have even thought it may be necessary to close that hostel. If they do not, they may have seriously to reduce the standard of accommodation and other services which they provide for the refugees. I ask the noble Baroness who is to reply to bear this point particularly in mind, and I hope that we may have a sympathetic answer from her.
8.19 p.m.
Baroness Jeger: My Lords, we are all greatly indebted to the noble Lord, Lord Banks, for bringing this very important Question before your Lordships tonight. I have to ask several questions, and I hope that the noble Baroness the Minister will be able to help us in some of the difficulties.

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One of those is that the Government apparently are proposing to make some changes in social security help for people who have mortgages. In 1985—I am quite prepared to be told that my figures are wrong—more than 16,000 homes were repossessed for default in the payment of mortgages. As I work among homeless families, I find that 10 per cent. of them are in that situation because they have been put out through failure to pay their mortgages. When we look at homelessness we must look at its causes, and a basic cause is the failure of people to keep up their mortgage payments. The whole situation is absolutely stupid when the Government are talking about home ownership, but are not assisting people to keep up the necessary payments.
The question of fraud in regard to bed and breakfast accommodation has been raised by the Government. There were an alleged 600 claimants in Euston not living at the address that was given. There was a lot of publicity about all those people who were not being fair in their claims, but I then found that there were only 10 prosecutions in that area. I was also informed that the survey of claimants was made by telephone only. Therefore, it is not absolutely true to say that the figures given were correct. I must ask the Minister whether the Government have any figures for homeless people. Anybody walking from here to Victoria or Waterloo can find people sleeping rough. I wonder whether anyone has counted them, because this is connected with the Question of the noble Lord, Lord Banks.
I do not often read the National Westminster Bank Quarterly Review, but I happened to look at it the other day. Nobody could say that that is a Labour document, but it stated:
"Publicly provided housing is the most run-down sector of the nation's infrastructure. Spending on improving local authority housing needs to be boosted by at least £1 billion a year to prevent a housing crisis. In addition, new council house construction has fallen below demand in recent years".
The Policy Studies Institute has estimated that £1 billion a year needs to be spent on building new council homes. It seems to be conceded that the root cause of the problem is the inclusion of capital spending in the public sector borrowing requirement. Economically viable capital projects should be financed through borrowing. We shall never be able to deal with the question of board and lodging, and the misery of people living in rotten conditions, unless we have more housing.
One noble Lord referred, in particular, to the question of refugees. I must ask the Minister whether it would be possible to have an automatic exemption for refugees, instead of making it possible for them to appeal. People who come here for all sorts of reasons, and who do not speak the language very well, may not find their position easy. There may be a case for making refugees automatically exempt from all the constraints here.
I should also like to ask the noble Baroness whether there could be some exemption for people who have difficulties—perhaps because of their state of mental health. I know she has said that there ought to be particular help for claimants, but what is not clear is whether help could be given to people who may not be
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well enough to make their own applications. When we were discussing this subject some time ago she said that there would be a review of the handicapped, refugees and other special people. Do we yet have the results of that review? If not, when can we expect them? It will help us to look further into these difficulties. The noble Baroness knows that the Social Security Advisory Committee is not happy about the situation.
I have in front of me a copy of Hansard for 21st October 1985, in which the noble Baroness states at col. 863:
"The result of those exercises will be considered carefully when they are completed in about six months' time, before the full review of all the limits is made next year".
I am not very good at arithmetic, but six months' time after 21st October 1985 seems to be about now and so I should like to ask the noble Baroness whether she can give us any information about that review.
8.28 p.m.
Baroness Trumpington: My Lords, I have listened with great interest to the points made with his usual clarity by the noble Lord, Lord Banks, and by the other noble Lords who have spoken in this short debate. The noble Lord, Lord Banks, is a most patient man. The last time he spoke he asked me a great many questions and I think he said I was doing better than usual because I had answered two of his nine questions. I hope to do better this evening.
Before I try to answer the points that have been raised, I should set out briefly the background to the changes which we made last year for paying supplementary benefit to boarders. The changes had three main aims—and I repeat them advisedly—which were: to control rapidly-escalating expenditure; to help curb undoubted abuse; and to target expenditure more precisely on those in real need. We were also concerned that with the easy availability of high boarder payments the benefit system was artificially stimulating the provision of expensive and inappropriate boarder accommodation.
As noble Lords may be aware, we are currently reviewing the limits for all types of supplementary benefit board and lodging allowances including those to people in homes and hostels. It is expected that the outcome of the review will be announced shortly. In reaching decisions we are taking careful account of the department's own general monitoring, information from local offices, as well as survey information and representations submitted by interested bodies. Social Security Ministers have also met many of the main interest groups.
I have had helpful and informative discussions about the concerns of the British Refugee Council with its chairman Sir Arthur Peterson and the noble Lord, Lord Ennals. Many of the points raised then have been reinforced by the noble Lord, Lord McNair, today. I was grateful to the noble Lord for recognising that I share his interest in and sympathy for the problems which may affect refugees. We shall of course take into account all the points made in this debate. Perhaps I may just for one moment speak on the concerns of the British Refugee Council. I was asked to examine the reports submitted by the BRC and my honourable

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friend the Minister for Social Security was asked to do the same.
My discussions with the British Refugee Council touched on a wide range of points concerning boarders and other parts of the supplementary benefit scheme. I understand the concern of the BRC about finding suitable accommodation for refugees. I know it feels that the revised limits have made the position more difficult in central London, although I would question whether the board and breakfast is the right course to be followed. We also discussed improvements in the notifications which go to claimants so that refugees and their advisers would more easily recognise themselves as exempt from the time restrictions. This is something we have taken on board. Recently in correspondence the BRC has raised the question of financial support for its hostel at Langtree Walk. We shall of course take account of what it has said. I also note that it is considering other options for attracting additional funding. I shall, as requested by the noble Lord, Lord McNair, examine the report submitted to my right honourable friend.
The latest figures for December 1984 demonstrate that the action we took was absolutely necessary. The figures show that the numbers, charges and payments were increasing at a considerably faster rate than was previously estimated at the time we decided to act. Despite the initial action of freezing limits, expenditure on ordinary boarders and people in hostels rose to some £500 million in 1984 compared with £278 million in 1983. This represents a massive increase of nearly 80 per cent. over one year—while the number of claimants grew by 50,000 or 45 per cent. over the same period. In fact, in two years the caseload very nearly doubled while expenditure very nearly trebled.
It is clear that the then prevailing systems allowed financial limits of payments to be forced up and led to the growth of a significant element in the market aimed at social security claimants—for whom many proprietors advertised. No responsible government could allow spending to expand in this totally uncontrolled way.
The noble Lord, Lord Banks, referred to the basis on which limits were set. In determining limits in 1985 we took account of a range of factors including information on cost and limits. We paid particular attention to what is a reasonable amount for supplementary benefit to pay, having regard to equity between those in and out of work. We shall have regard to the same type of considerations this year.
Apart from the review of limits, we established extensive arrangements to monitor the effects of the changes. We expect to publish shortly a monitoring report summarising our findings. Perhaps I may pick out some of the main findings relevant to this debate.
At the time of the original changes more than half of the total ordinary boarders had charges within the revised financial limits, and a further 13 per cent. had charges within £5 of the revised limits. A similar picture emerged in London. In Greater London some 8,500 claimants had charges within the revised limits, and in some 30 local offices serving some 18 inner London boroughs more than half had charges within the revised limits, and a further 10 per cent. had
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charges within £10 of the limit. At an early stage there were positive signs of reductions in charges by landlords in all parts of the country to come broadly in line with the revised limits. In virtually all areas there was a reasonable supply of private households offering lodgings within the revised financial limits.
Information from local offices does not show any general increase in the numbers sharing rooms, something which I believe has been confirmed by the pressure groups in London, or any general decline in the supply of accommodation attributable to the revised limits, although there were some areas, most notably in inner London, where there was some pressure on the supply of bed and breakfast hotel accommodation. The changes had a significant effect on boarder claims. There was a sharp decline in the number of new and repeat unemployed boarder claims following both the April and November changes, compared with an increase in claims when the time restrictions were withdrawn. And our monitoring information suggests a significant decline in caseload in the light of the April 1985 changes.
The noble Lord, Lord Banks, asked about residential care limits and the position of a claimant in Birkenhead. We are reviewing the limits for residential care in nursing homes and hope to complete our review shortly. On the question of the lady in Birkenhead, I understand that the chief adjudication officer has issued revised guidance which will assist the lady in question. It is a very complex matter and I should prefer to write to the noble Lord on the subject.
Noble Lords have drawn on survey material from voluntary and other groups. Where that material has been made available to the department, it will be considered as part of the current review. The monitoring by outside organisations provides findings which amplify those of the department. One particularly useful feature of voluntary bodies' findings on individual claimants is that although the numbers are generally small, these claimants can be expected to include many who experience difficulties with the new rules, since the sample is drawn from claimants presenting themselves to various statutory and voluntary bodies for advice and assistance. The "Its a limit" survey of hotel charges in London provides useful information, although it does not—and could not—take account of the full range of accommodation available to claimants. It too will be considered in conjunction with the department's own findings.
The noble Baroness, Lady Jeger, asked about homelessness statistics. Official statistics indicate that local authorities accepted responsibility under the homelessness legislation for securing accommodation for 93,980 homeless households between January and December 1985. The reasons for homelessness reflect both social and economic factors. Eighteen per cent. of those accepted by authorities were made homeless by marital disputes; 41 per cent. because parents, relatives or friends could no longer accommodate them, and 14 per cent. because of mortgage default or rent arrears. A more detailed set of statistics is in the Library.
The noble Baroness asked also about the proposals for a change in the payments of mortgage interest. The reasons for those reforms are, first, to reduce inequity.

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Help with mortgage interest is not available to low income families in work. That is plainly unfair. Secondly, to share responsibility more widely. The Government encourage home ownership through tax relief, discount sales of rented homes, and the right-to-buy schemes. Taxpayers should not have to underwrite those forms of support from the first day on benefit to the extent that they do now. However, and as the noble Baroness will know, the proposals are with the Social Security Advisory Committee for consultation and the Government will listen carefully to what that committee says.
The other matter about which the noble Baroness spoke was fraud. There is a new initiative to fight fraud. Some 180 of the 500 additional fraud staff will be distributed between 50 and 60 local DHSS offices across the country with known problems associated with claims from residents of board and lodging establishments. The units will vary in size according to the scope of the problem in a particular area.
In summary, our monitoring shows that action was required. Before I finish that sentence, perhaps I may turn to the point raised by the noble Lord, Lord Banks, concerning the increase in homeless young people and
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about them turning into a class of homeless and rootless persons. There is no evidence that the rules have led to that situation. Monitoring shows that most people affected by those changes stayed in the same area, and often in the same accommodation, and made alternative arrangements to claim benefit as householders or non-householders.
With regard to the mentally ill, the noble Baroness, Lady Jeger, has heard me say in this House several times before that people should help those leaving mental hospitals who have any accommodation problems. I have a feeling that what has become known as the Tom Clarke Bill should help with that problem, on account of the assessments that will be made.
If I may finish on this note, our measures were effective and protection arrangements, which were widely applied, were of assistance. We remain committed to curbing waste and abuse. We shall continue to ensure a proper balance in the social security system between the needs of the individual and fairness to the taxpayer.
House adjourned at seventeen minutes before nine o'clock.

  WILTON PARK
  WILTON PARK
  COMMONWEALTH DEVELOPMENT CORPORATION: 1985 REPORT AND ACCOUNTS
  COMMONWEALTH DEVELOPMENT CORPORATION: 1985 REPORT AND ACCOUNTS
  MAY DAY PUBLIC HOLIDAY
  MAY DAY PUBLIC HOLIDAY
  RADIOACTIVE CONTENT OF FOODSTUFFS: MEASUREMENT
  RADIOACTIVE CONTENT OF FOODSTUFFS: MEASUREMENT
  STATEMENTS ON DEFENCE ESTIMATES: USE OF ACRONYMS
  STATEMENTS ON DEFENCE ESTIMATES: USE OF ACRONYMS
  GAS CONSUMERS AND FINAL NOTICES OF ACCOUNT
  GAS CONSUMERS AND FINAL NOTICES OF ACCOUNT