Sitting of 22 May 1986

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

    GREAT YARMOUTH OUTER HARBOUR BILL
    Order for Third Reading read.
    Queen's consent, on behalf of the Crown, signified.
    Read the Third time, and passed.

    TEIGNMOUTH QUAY COMPANY BILL (By Order)
      SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL (By Order)
        BEXLEY LONDON BOROUGH COUNCIL BILL (By Order)

          SHOREHAM PORT AUTHORITY BILL (By Order)
          Orders for Second reading read.
          To be read a Second time upon Thursday 5 June.

    MILFORD HAVEN PORT AUTHORITY BILL (By Order)
    Order read for resuming adjourned debate on Question [18 February], That the Bill be now read a Second time.
    Debate to be resumed, on Thursday 5 June.

    BRITISH RAILWAYS (STANSTED) BILL (By Order)
    Order read for resuming adjourned debate on Question [24 February], That the Bill be now read a Second time.
    Debate to be resumed, on Tuesday 3 June at Seven o' clock.

    HARWICH PARKESTON QUAY BILL (By Order)
    Order read for resuming adjourned debate on Question [28 April] That the Bill be now read a Second time.
    Debate to be resumed, onTuesday3 June at Seven o' clock.

Oral Answers to Questions
  HOME DEPARTMENT

    Criminal Statistics
    Mr. Clellandasked the Secretary of State for the Home Department in which police force districts in England and Wales there has been a reduction in the total number of crimes since 1978.
    Mr. Jim Callaghanasked the Secretary of State for the Home Department what has been the increase since 1978 in the number of victims of offences of violence against the person.
    Mr. Gouldasked the Secretary of State for the Home Department how many crimes in England and Wales in 1985 were not cleared up.
    Mr. Boyesasked the Secretary of State for the Home Department if he wilt publish in the Official Report the police force districts in England and Wales in which the total number of crimes has risen by (a) less than 25 per cent., (b) less than 33 per cent. and (c) more than 50 per cent. since 1978.
    The Secretary of State for the Home Department (Mr. Douglas Hurd): Crime throughout the country has been rising for more than 30 years. Recorded crime has increased in all police force areas since 1978, and I shall publish in the Official Report a table showing the percentage increase in each force area between 1978 and 1985. The number of offences of violence against the person recorded by the police in England and Wales in 1985 was approximately 122,000; 40 per cent. more than the number recorded in 1978. This compares with an increase of 42 per cent. in offences of violence against the person between 1973 and 1978. It is not possible to provide a figure for the number of offences recorded in a year which are not later cleared up, because some offences are recorded and cleared up in different years. but the difference between the number of notifiable offences reorded by the police and the number of offences cleared up in 1985 was 2·2 million.
    Mr. Clelland: In the run up to the last two general elections the Conservative party promised the people of this country security in their homes and safety on their streets. As the Home Secretary has just informed the House that things are substantially worse than when the Conservative party came to office, may we have an assurance that similar false promises will not be made at the next general election?
    Mr. Hurd: The Labour party will not get very far if it tries to persuade people that crime was invented in 1979. The number of recorded crimes has been increasing steadily for 30 years. When we came to office we found a demoralised and under-strength police force, a grossly neglected prison service and courts that had inadequate powers. In all those areas, as we have shown again this week, we have steadily strengthened the public's defences against crime.
    Mr. Jim Callaghan: In 1979 the Conservative party came to office on a policy of law and order. In the light of the disturbing facts about violent crime that the Secretary of State has just given the House, what practical measures will he take to allay the fears of the public, and of old-age pensioners in particular, who are now virtual prisoners in their own homes in inner city areas? What does the right hon. Gentleman intend to do?
    Mr. Hurd: Hardly a week goes by without us making an announcement or taking measures directed towards that end. This week's announcement is that, once again, we are launching a substantial expansion of the police forces in England and Wales in order to provide better protection for the public.
    Mr. Gould: As two thirds of all reported crimes have not been cleared up, may we not conclude that the police, through no fault of their own, are unable to keep pace with the rising tide of crime? Does the Home Secretary admit that the belated and inadequate increase in police resources that has recently been announced merely serves to emphasise the seven wasted years under this Government in the battle against crime?
    Mr. Hurd: When we took office we acted at once to remedy the gross deficiencies in the strength of the police service, and there was a long period of police expansion. Now, after a pause and following a thorough study of the proven needs of the police forces, we have announced a new programme.
    If the hon. Gentleman is saying that the Opposition would do more for the police, he must accept that if they continue to say that they will give priority to everything, they will, in fact, give priority to nothing.
    Mr. Boyes: Does the Home Secretary's reply not show categorically that Tory policies are not working? Does it not also show that the Government can offer neither hope nor solutions to those living in deprived areas? The Prime Minister may go to the two dozen or so people who voted Conservative in Scotland and utter the words "care" and "caring" 15 times in her speech, but the citizens of this land know that she does not mean it. They are looking towards a Labour victory at the next election, so that the next Labour Government can make the streets and people's homes safer places.
    Mr. Hurd: No electorate in its senses, having looked at Labour's past record and at the attitude of so many Labour Members to the police today, would support the Opposition if the priority of the electorate were greater protection against crime.
    Mr. Lyell: In addition to strengthening police manpower, increasing and improving police powers and increasing the powers of the courts, do not the public have a role to play in combating crime? Have not our neighbourhood watch schemes, which have been greatly expanded, worked so well in London that last year burglaries fell by 11 per cent.?
    Mr. Hurd: That is certainly true in some parts of the country. The House will be pleased to note that burglaries across England and Wales fell by 3 per cent. last year. There are now 9,500 neighbourhood watch schemes—twice the number of a year ago—and they are playing an important part in crime prevention.
    Mrs. Virginia Bottomley: Although we all regret the increase in crimes, especially crimes of violence, will my right hon. Friend applaud the work done by victim support schemes, such as the one in Waverley, which have given practical and realistic help to the victims of crime?
    Mr. Hurd: Victim support schemes are becoming increasingly important. I am delighted that the Government are able to give substantial help to the National Association of Victims Support Schemes and that, for the first time, we are now also able to give some help to local schemes.
    Mr. Gale: Is my right hon. Friend aware that the recently announced increases in police manning will be welcomed by all those with a genuine interest in the reduction of crime? Is he further aware that there has been a dramatic decrease in the incidence of drink-related crimes in Scotland during the past 10 years since Scotland changed its licensing laws? Will he confer a similar benefit on the people of England and Wales?
    Mr. Hurd: I think that that is another question. I made the Government's views of principle known to the House earlier this week. I believe that the case for a reform of the licensing laws has been established. Timing is a different matter.
    Mr. Alex Carlile: We should all welcome the increases in police manpower announced recently by the Home Secretary, but does he not accept that grudging reality is rather different from the rhetoric of the Prime Minister at last year's Tory party conference? Why has the Home Secretary not accepted the views of Sir Kenneth Newman on the need to increase police manpower in London?
    Mr. Hurd: The Metropolitan police, the Police Federation and many others would like a greater increase. At the beginning of last autumn we set in hand two thorough reviews—one for the Metropolitan police and the other for the forces outside London. It was as a result of those reviews of need — precisely the criterion that my right hon. Friend the Prime Minister laid down—that we made our careful announcement this week. We look forward to increases in the operational strength of police officers of 2,600 outside London and 1,800 in London.
    Sir John Farr: The House must agree that it is important to increase the number of police officers and, if possible, restore the bobby on the beat in those areas where he has disappeared, but does my right hon. Friend agree that it is equally important to equip the police with the latest most scientific and modern anti-crime devices available?
    Mr. Hurd: I agree. I know that my hon. Friend has an interest in some of those projects. I hope shortly to receive the conclusions of the Commissioner of Police of the Metropolis about the equipment needs of his force. We have had some proposals from him already. As soon as I receive the considered report we shall move to take decisions as quickly as possible.
    Mr. Dubs: Despite the Home Secretary's fine words, is it not true that over the past seven years the Government have utterly failed on law and order? Although the Home Secretary has paid lip-service to crime prevention methods, the Government have done nothing about methods for preventing crime. Is that not one of the reasons why the crime wave is out of control?
    Mr. Hurd: That was an amazing statement by the hon. Gentleman, who is usually careful in putting forward matters. The fact of the matter is that under my predecessor, and now, we are giving increasing prominence to crime prevention, as witnessed by the seminar held at No. 10 Downing street in January. That was a thoroughly practical effort, which we are now following up, designed to ensure that the different professions and interests understand what they can do in practice to make our homes, streets and places of work safer. If Opposition Members, instead of conniving and going along with their thoroughly destructive attitudes towards the police, would join in the crime prevention effort, place by place, the cause would be greatly advanced.

    News International Plant, Wapping
    Mr. Adleyasked the Secretary of State for the Home Department what representations he has received concerning the establishment of an inquiry into the latest incidents at Wapping; and if he will make a statement.
    Mr. Hurd: My hon. Friend has written to me to suggest an inquiry into the conduct of demonstrators at

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    Wapping. I have also received representations from right hon. and hon. Labour Members for an inquiry into police action. I do not consider than an inquiry would be the right way forward. Those who have been charged with criminal offences are being dealt with by the courts. The way forward lies in sensible co-operation between the police and responsible trade unionists to reduce disorder and prevent violence, which only the trouble-makers want.
    Mr. Adley: I thank my right hon. Friend for that reply and for his letter. Is it not clear that many of those who went to Wapping went there prepared for and intending to commit acts of violence, and acts of violence against the police, yet, when the police defended themselves, they were immediately accused of brutality? Did my right hon. Friend notice that within minutes almost of the events taking place, Labour Members, including an Opposition Front-Bench spokesman, were falling over themselves to attack the police and accuse them of brutailty? Does that not make a mockery of the new-found role of the right hon. Member for Manchester, Gorton (Mr. Kaufman), who seeks to paint himself as the spokesman of the party of law and order—an attitude that is more appropriate to the Whitehall theatre than to the Palace of Westminster?
    Mr. Hurd: It is extremely worrying that so many leading members of the Labour party, inside and outside the House, especially in London and Manchester, should take every opportunity, without proper investigation, to blacken and swipe at the police. What we are trying to do in Wapping, which is becoming a thoroughly dangerous situation, is to try to persuade the print unions, which have a dispute with Mr. Murdoch, to exercise their rights of peaceful picketing and demonstration in such a way that they do not attract to the scene the trouble-makers to whom my hon. Friend referred. I hope that it will be possible for them to pursue their dispute, if that is what they want, without attracting violence to it.
    Mr. Tony Banks: Is the Home Secretary aware that Murdoch is nothing more than a cheap little crook who, through his actions, has caused the social disruption and economic distress among printers that we are witnessing in Wapping? Is the right hon. Gentleman also aware that the difference between Labour and Conservative Members is that Labour Members who went there came back and told the truth about what they saw, as opposed to the blind prejudice and ignorance of Conservative Members? Will the Home Secretary hold an inquiry, because Labour Members have nothing to hide?
    Mr. Hurd: The hon. Gentleman does not even try to hide the fact that he and a number of his London colleagues—though not all—immediately assume that when there is any trouble the police are at fault. He has a long record in that regard, and yields only to his former leader on the GLC. Parliament has provided means, through the independent Police Complaints Authority, for a thorough investigation, supervised by the independent authority, into any complaints that may be made against police operations. That is the proper remedy for any genuine complaints.
    Mr. Marlow: Would not an inquiry possibly be of great benefit, because it might also prove that not only are there Militant Labour Members of the House, anti-police councillors such as Bernie Grant and pro-terrorist prospective parliamentary candidates such as Ken
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    Livingstone in the Labour party, but, indeed, that Socialists are involved in organising violence in our capital city against our police force?
    Mr. Hurd: We do not need an inquiry to establish those facts, because those concerned repeatedly condemn themselves out of their own mouths. What is inadequate is the response of the Leader of the Opposition, who thinks that it is enough to give an occasional gentle rap over the knuckles, when it should be made clear that the people taking this line will not be supported in their efforts to be elected to this House on the next occasion. —[Interruption.]
    Several Hon. Members rose——
    Mr. Speaker: Order. Let us keep the temperature down.
    Mr. Soley: Would not the Home Secretary be behaving a little more responsibly if he took this opportunity to remind many of the hotheads on his own Bank Benches that many police officers, including senior police officers, are also deeply disturbed about the way in which events got out of control on 3 May? Indeed, his own Minister has taken up some of the suggestions made by the Opposition that are necessary to deal with this problem. Does he agree that the very small minority of people who were shown on the police video to be throwing things came from Right-wing parties, as shown in the advertisement in National Front News? Would it not be all important if the Government stopped using the police to deal with the industrial consequences of their economic failure in many industrial relations disputes throughout the country?
    Mr. Hurd: I cannot agree with the hon. Gentleman's last point. As he knows, the Commissioner of Police of the Metropolis has absolute operational independence and, therefore, it is not for my hon. Friends or for me to give him instructions as to how he should conduct his duties and responsibility for protecting those who wish to work in a particular place. I agree with the hon. Gentleman's first point. Every sensible person, as well as the police, is concerned at the pattern that has developed at Wapping, and that is why I have spoken about it several times in the last few weeks. I certainly give credit to those Opposition Members who have been seeking to throw light, rather than darkness, on the situation and who have been helping to establish some contact — not yet quite sufficient—between the police and the print unions. As I indicated in my main answer, I believe it is down that path that a solution to the policing side of this problem can be found.

    Police Priorities
    Mr. Hoyleasked the Secretary of State for the Home Department whether his Department has carried out any research into differences in perceptions of police priorities between the police and the general public; and if he will make a statement.
    The Minister of State, Home Office (Mr. Giles Shaw): The Home Office has carried out or funded a good deal of research into public attitudes to the police, and the wishes of the public appear to be broadly in line with police priorities.
    Mr. Hoyle: Is the Minister aware that independent surveys, including the one by Merseyside council, have shown that there is a different concept in the minds of the

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    public as to what they would like from the police and what they are given by the police authorities, particularly chief constables? Does he agree that if we are to conquer the fight against crime we must have the collaboration, co-operation and confidence of the public in the police? Despite what he said about having carried out surveys, will he look again at this matter to discover what the public really want from the police?
    Mr. Shaw: I accept what the hon. Gentleman says. If he looks at the studies that were done in Merseyside and in the constituency of his hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), he will see that the public are most concerned about immediate emergency response, crime investigation and deterrent presence on the streets. Those are the three priorities that they have in common with the police. Where I part company from the hon. Gentleman is in the belief that locally substituted so-called police watch committees can produce anything of worth in the fight against crime, and the sort of rubbish that is produced in the Greater Manchester area is a disgrace which I trust the right hon. Member for Manchester, Gorton (Mr. Kaufman) will get rid of.
    Mr. Forman: Are not police priorities already set out, at any rate in the Metropolitan area, with admirable clarity in the various divisional and district plans? Are not those a good way for senior police officers to consult, and take soundings from, the local population and to respond to concerns about such vital problems as vandalism and hooliganism?
    Mr. Shaw: My hon. Friend is right. He will be aware that the Commissioner of Police of the Metropolis, in designing his force goal for 1986–88, took into account a wide range of opinion polls as well as the needs of the police. In his goal he sets out the reduction of criminal opportunity, the enhanced detection of specific criminal offences and enhanced support for the victims of crime. I am sure that everybody would concur with those attitudes.
    Mr. Madden: Will the Minister confirm that the priority to recruit more regular police from ethnic minorities remains a high priority in his Department? In this context, will he confirm that his Department will support the expansion of the police cadet force in West Yorkshire, which is seen as an important way to recruit more young people from the ethnic minorities into the regular police?
    Mr. Shaw: On the latter part of the hon. Gentleman's question, I am very much interested in that suggestion. However, cadet forces are extremely costly and the police authority in West Yorkshire must take a view on that proposal.
    As to the first part of his question, I assure the hon. Gentleman that chief constables all over the country, as well as in the Metropolitan police area, are doing everything that they can to increase ethnic recruitment. The Metropolitan police had a recent exercise, as a result of which 139 applications were received, which was encouraging, but in the end few applicants decided to press on. I hope that they can be encouraged to do so.
    Mr. Patrick Thompson: Does my hon. Friend agree that nothing has done more damage to the public perception of the police than the attitude of many Labour councils? Does he also agree with the perception of many
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    of my constituents in Norwich that the police are burdened too much by administrative paperwork? Is he aware that many of my constituents, particularly when vandalism occurs on housing estates, would like a greater police presence there and available when required?
    Mr. Shaw: Yes, and there is much room for improvement in the recruiting of police in Norfolk, where the police authority has for some time allowed a substantial range of vacancies to exist. I trust that they will now be filled.
    Mr. Maclennan: Does the Minister agree that it is the perception of the public that children should enjoy the benefit of police coming into schools to explain dangers to them? Will the Government accept the amendment that has been carried in the other place to enable that to be ensured?
    Mr. Shaw: I am sure that the answer to the last part of the hon. Gentleman's question is not for me, but in regard to the objective that he seeks he must be right. Surely every education authority should welcome police presence in schools to deal with the many pressures with which young people are faced.
    Mr. Hayes: Now that the Labour party is somewhat humourously masquerading as the party of law and order, will my hon. Friend ensure that as many members of the public as possible go into Labour party committee rooms, where they will see a poster on the walls of most of them saying, "It is far better to break the law than to be poor"? Will that not show the public the perceptions of the Labour party towards the police?
    Mr. Shaw: My hon. Friend is right. There is far too much paranoia about the way in which the Labour party seems to view the police. The police are the custodians of the law, and everybody in government and in opposition should support that concept.

    Child Abduction
    Dr. Godmanasked the Secretary of State for the Home Department if he will discuss with chief constables and the Commissioner of Police of the Metropolis the co-ordination of police intelligence and information in crimes involving the abduction of children.
    Mr. Giles Shaw: In December 1982, following the Byford report on the case of the Yorkshire ripper, procedures were introduced to ensure the fullest police co-operation and co-ordination of activity in the investigation of apparently linked major offences, including cases of child abduction. These procedures use specially developed and compatible force computer systems to store and analyse information. We are satisfied that they meet operational requirements.
    Dr. Godman: With regard to part II of the Child Abduction Act 1984, is the Minister satisfied that close regard is paid by English police authorities to Scottish court orders? Does he agree that this is especially important at English airports and seaports?
    Mr. Shaw: I fully understand the hon. Gentleman's point. I should like further details of individual cases where he thinks that that is not being correctly done. I assure him that the procedures are being tightened up and that police forces now have compatible systems of communication to enable this to happen quickly.
    Mr. Peter Bruinvels: The number of children who go missing each year is a matter of great concern. More than 20,000 children went missing in 1984, many of whom were abducted. Should not my hon. Friend promote a missing persons register for children, to include details of the circumstances in which they went missing or were abducted, so that the circumstances of the crime can be compared and a crime pattern analysis unit developed along the lines of the one that is working so well at Hendon?
    Mr. Shaw: I am well aware of my hon. Friend's substantial interest in this subject. However, I have explained to him that it is unnecessary for police national computer systems to be altered to provide adequate data for proper crime pattern analysis. I remind him that in 1984 there were 99 cases of child abduction, of which 71 per cent. were cleared up quite quickly.

    Firearms and Crossbows
    Mr. Kilroy-Silkasked the Secretary of State for the Home Department if he will state for each year since 1978 the number of crimes in England and Wales involving the use of (a) any firearm, (b) a shotgun and (c) a crossbow.
    Mr. Giles Shaw: In 1984 a total of 8,376 notifiable offences were recorded by the police in which firearms were reported to have been used. Of these, 994 involved the use of a shotgun. Figures for earlier years are given in the criminal statistics published annually. Information on the use of crossbows in crime is not recorded centrally.
    Mr. Kilroy-Silk: Does the Minister accept that both the police and the public are legitimately concerned about the increase in the number of violent crimes in which weapons are used, but that the Police Federation's proposal that life sentences should be imposed for the carrying of firearms rather than, as is now the case, for their use would reduce the incentive for criminals to escape without using them and that in that sense it would be counter-productive? Would it not be far better to impose on the buying and keeping of shotguns restrictions similar to those that are currently applied to the buying and keeping of firearms?
    Mr. Shaw: On the latter point, I understand the hon. Gentleman's concern. There is disquiet, because it is thought that there is a substantial difference between the security requirements that govern both categories of firearms. However, he will be aware that the correct policy is to balance the requirements of the legitimate users of shotguns and the requirements of safe keeping, which should not inhibit their use. As to the hon. Gentleman's first point, he will be aware that substantial changes are being made to the sentencing policy for these offences. He will also be aware that in relation to the Criminal Justice Bill, which is shortly to come before the House, there is a proposal that those who carry firearms in furtherance of crime should be subject to a maximum life penalty.
    Mr. Thurnham: When serious crimes are committed by children under the age of 14, will my hon. Friend consider strengthening the powers of the magistrates' courts and also lowering the age of discretion so that they can be dealt with?
    Mr. Shaw: I appreciate that this is a complicated matter. My hon. Friend is quite right when he says that
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    many crimes are now committed by young people, The average age of male criminal offenders is 15. Therefore it is important to examine what should be the correct penalty. However, I do not believe that it would be right to make the sweeping change that my hon Friend suggests.
    Mr. Andrew F. Bennett: Will the Minister explain why we allow the manufacture, import or sale of crossbows in this country, particularly in view of the increasing number of crimes that are being committed with them and the number of injuries that have been caused to livestock? Surely we should simply ban crossbows, which cannot be justified.
    Mr. Shaw: There is a substantial difference between the attitude towards this problem of Opposition Members and that of the Government and the Conservative party. Many people are engaged in perfectly legitimate sporting activities which could include the use of crossbows. Provided that sporting facilities are available, with proper membership of properly organised clubs, crossbows can be used in perfect safety. The law relating to the abuse of weapons in a public place is satisfactory.
    Mr. Stanbrook: Should we not consider the mandatory imposition of a sentence of imprisonment for the illegal carrying of firearms, a sentence to be served consecutively in any event where another sentence has been imposed?
    Mr. Shaw: I take note of my hon. Friend's request, and that matter will surely be discussed.
    Mr. Soley: Is this not yet another example of the Government failing to put their money where their mouth is on crime prevention? Is it not a fact that the Minister has already turned down a suggestion from me that we set up a proper committee in the Home Office to look at the needs and duties of legitimate users and balance them with the needs of new legislation on shotguns, crossbows and pistols? Have they not turned it down without even considering it or the implications for police officers and for the public? Why will the Government not treat the matter seriously and set up a committee at the proper level in the Home Office to make recommendations for the House to consider?
    Mr. Shaw: We are indeed discussing the problem of crossbows, their distribution and their sale with the trades concerned. As we did in the case of martial arts weapons I trust that we shall achieve a level of control over distribution that will prevent them falling into illicit hands. If the hon. Gentleman represents the party of freedom and fairness, I assume that when it comes to major public order offences it is the freedom to throw bricks and the fairness is that they are all regulation size.
    Sir John Farr: Does my hon. Friend accept that the vast majority, if not all, of these crimes were committed with illegally held firearms? Handguns are now coming into use to an increasing extent. Will he confirm that the ordinary law-abiding firearms owner in Great Britain is in no way involved?
    Mr. Shaw: I can tell my hon. Friend that there are 820,000 certificate holders of shotguns. I am confident that all those will use their weapons correctly and will seek to keep them in a safe place. I remind my hon. Friend and

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    the House that there are a substantial number of uncertificated shotguns in circulation, many of which are imported.
    Mr. Alex Carlile: Is the Minister aware that crossbows and other deadly weapons can now be bought all too easily by anybody through mail order advertisements in a magazine called "Survival Weaponry and Techniques", which disgracefully W. H. Smith is selling all over the country? What will he do about it?
    Mr. Shaw: The absolute number of crossbows in circulation is extremely small. The absolute number of incidents involving injury in relation to crossbows is extremely small. I have already set in hand an investigation as to what more can be done. In relation to the law governing abuse of weapons in public places, criminal offences would be committed.

    Civil Defence
    Mr. Leighasked the Secretary of State for the Home Department if emergency planning officers were asked to take any action in response to the Chernobyl nuclear incident.
    Mr. Giles Shaw: Our information is not yet complete, but we know that several local authorities had to take specific action and a number had to respond to inquiries.
    Mr. Leigh: Did those emergency planning officers who were employed by nuclear-free authorities have any more success in reducing the effects on their population of radiation from Chernobyl than their colleagues in Conservative areas who over the years have been given the resources to make provision for their populations? Did the radiation from Chernobyl part, as the waters of the Red sea, round nuclear-free cities? Is not the Labour party imposing a cruel hoax on the British people by pretending that self-indulgent unilateral motions on nuclear freedom are any substitute for proper civil defence?
    Mr. Shaw: My hon. Friend has clearly kicked the Labour party where it hurts in relation to nuclear-free zones. He will be aware that the nuclear-free zone is a public hoax which has no relationship whatever to the proper protection of our citizens in time of emergency in peace or in war.
    Mr. Campbell Savours: Is the Minister aware that, while the people of west Cumberland are committed to the future of nuclear power, there is some concern there as to what might happen if an emergency arises from Sellafield. Can he give an absolute assurance that the planning programmes to ensure the fullest security of that part of west Cumberland are in place, that there are no deficiencies and that the Government are perfectly satisfied with the arrangement that exists?
    Mr. Shaw: I understand fully the concern expressed by the hon. Member for Workington (Mr. Campbell-Savours). I can assure him that as a result of all the aspects of the Chernobyl incident there will be a complete review of the precautions and the plans that should be made. In relation to my responsibility in the Home Department for civil defence emergencies, I have already written to my right hon. Friend the Secretary of State for the Environment asking that we participate in such discussions.

    Visitors (Overstaying)
    Mr. Proctorasked the Secretary of State for the Home Department what further steps he proposes to take to prevent visitors to the United Kingdom overstaying their period of leave; and if he will make a statement.
    The Minister of State, Home Office (Mr. David Waddington): We have no proposals for major changes in our present arrangements which place the weight of identifying likely overstayers on the judgment of immigration officers at the ports of entry. My right hon. Friend announced to the House on 26 March that he has authorised increased resources for this year. I can assure my hon. Friend that we shall continue to pursue with vigour our selective investigations into apparent overstaying after entry.
    Mr. Proctor: Will my hon. and learned Friend confirm that in a recent letter to me he indicated that 5 per cent. of the visitors from the New Commonwealth and Pakistan who were checked into the country were not subsequently checked out? If that percentage were spread over the millions of visitors from the New Commonwealth and Pakistan last year, it would lead to the number of overstayers being about 50,000. What further action will my hon. and learned Friend take in yew of that figure?
    Mr. Waddington: I do not think that my hon. Friend is explaining correctly the purport of my letter. What I was saying in the letter was that we put on to the computer people who enter and who are in certain categories. Certain categories of people who enter are supposed to be checked out. As no fewer than 40 million people go through our embarkation controls every year, it is not surprising that often people who have left the country have not been registered as having left. That is a very different kettle of fish.
    Mr. Tony Lloyd: I am grateful to the Minister for putting his hon. Friend in his place, but will he accept that the real problem with immigration control is that far too high a number of people who are refused visas would be perfectly legitimate visitors to Britain?
    Mr. Waddington: Most visitors to Britain, and certainly visitors from the Indian subcontinent, do not require visas anyhow. What the hon. Gentleman is talking about is the fact that some people are refused entry when they present themselves at our ports of entry. The truth is that the whole system of control depends on the skill of immigration officers and on their ability to distinguish in the great majority of cases between bona fide visitors, who can be relied upon to leave when they say they are going, and others who cannot be relied upon to leave. All the evidence tends to prove that our immigration officers are very skilful in identifying those who cannot be trusted to leave.
    Mr. Budgen: When my hon. and learned Friend next makes a statement on the subject, will he please comment on the recent report of the Home Affairs Select Committee, which shows that very substantial fraud is still being perpetrated by those who attempt to enter the country from both India and Bangladesh?
    Mr. Waddington: I have read the report, and its conclusions are very important. I hope that all hon.

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    Members will pay heed to what is said. There is, or course, no doubt that there is a great deal of fraud. It is right that that should be reflected in the report.
    Mr. Janner: Does the Minister accept that the real problem at Heathrow is not those who are let in who should not be, but to those who are held up who should not be? These are genuine, decent visitors coming to see their families and friends, many of them in my constituency? Does the Minister accept that many of them are still harassed, persecuted, held up and treated with a lack of decency or compassion instead of being given the proper welcome that they should have?
    Mr. Waddington: I am sorry that the hon. and learned Gentleman should have put his question in that way. He should be emphasising that 99·8 per cent. of those who present themselves at our controls at Heathrow are admitted with no trouble and that 99 per cent. of all visitors from the Indian subcontinent who present themselves at the controls are admitted without any trouble. The hon. and learned Gentleman does no service to anyone by trying to paint a picture of genuine visitors to Britain having trouble entering our country. That is not the true picture.
    Mr. Marlow: Does my hon. and learned Friend agree that one of the greatest civil liberties is the civil liberty of the vast majority of the population of this country who do not want visitors to come to this country to abuse our systems and take advantage of our generosity when they have no right to do so?
    Mr. Waddington: I am sure that my hon. Friend will agree that there should be a sensible, humane and efficient system of control. We have always taken the view in this country that it is better to have firm control at ports of entry than to have an all-pervasive system of after-entry control. I do not think that Opposition Members should cavil at people being questioned at Heathrow. If we have a softer line at Heathrow, we shall finish up with a much fiercer system of after-entry controls, which people will not like.
    Mr. Dubs: A few minutes ago the Minister said that there was a "great deal of fraud" at the points of entry to this country. That is an unwarranted slur on the many honest people who come here. What evidence does the Minister have for that claim?
    Mr. Waddington: I did not say anything of the kind. My recollection is that the Select Committee report relates to control in the Indian subcontinent. The report concludes that there is a great deal of fraud, and that has been demonstrated on many occasions. The hon. Gentleman has been to the Indian subcontinent and knows that many people come along every year—and this is one of the strange phenomena involved in the matter—who admit that they have not told the truth on a previous application and who wish to make a new application in which they intend to come clean.

  PRIME MINISTER

    Engagements
    Mr. Hirstasked the Prime Minister if she will list her official engagements for Thursday 22 May.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had
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    meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Hirst: Does my right hon. Friend recall that when she spoke last year of her determination to reduce inflation to 3 per cent. this spring her claim was ridiculed by the Opposition, who said that that could not be done ? Does she therefore agree that last Fridays's announcement that inflation is down to 3 per cent. and falling is welcome news, especially for savers, the elderly and business? Does she also agree that the present low level of inflation is in marked contrast to the appalling levels which followed Labour's last spending spree?
    The Prime Minister: Yes, that is a remarkable achievement and is greatly to the credit of my right hon. Friend the Chancellor of the Exchequer. It is also of particular benefit to pensioners, who can be certain that their savings will not be plundered as they were during the lifetime of the last Labour Government.
    Mr. Healey: Mr. Speaker, you will recognise that I am in an unfamiliar position. My right hon. Friend the Leader of the Opposition is elsewhere making certain that the next opinion poll gives the Labour party an even bigger lead.
    Will the Prime Minister get in touch immediately with her right hon. Friend the Secretary of State for Defence in Brussels and instruct him not to agree to new American chemical weapons as the NATO force goal and to make it absolutely clear that Her Majesty's Government will under no circumstances accept the deployment of such weapons in Britain as that would represent a major escalation of the arms race and be even less acceptable to the British people than the use of F-111 bombers for the attack on Tripoli?
    The Prime Minister: I notice that the opinion polls said yesterday that the Centre Right parties would lose in Holland. I notice that the result yesterday was a convincing victory.
    As the right hon. Gentleman is aware, the United Kingdom has received no request from the United States for the deployment of chemical weapons. If any such request were made we would have to consider it under all the circumstances of the time. Britain has manufactured no chemical weapons, and the United States has manufactured none since the 1960s. The culprit is the Soviet Union. I wish that the right hon. Gentleman would concentrate his efforts on criticising the Soviet Union instead of doing everything to reduce Britain's capacity to deter it.
    Mr. Healey: Is the right hon. Lady aware that the extreme Right party in Holland, which is the equivalent of her party in Britain, lost heavily in the election, but that the Dutch Government had the courage to make it clear that they oppose the acceptance of new American chemical weapons as a NATO force goal and are completely opposed to the deployment of such weapons in Europe?
    The Prime Minister: Holland decided to accept cruise weapons. In fact, the party that was for cruise weapons—[Interruption.] Will the right hon. Gentleman never criticise the Soviet Union for stockpiling such weapons? Is he always concerned to give aid and comfort to it and to make certain that we have nothing to deter it in its use of them?
    Sir Peter Blaker: Does it not require rather difficult mental gymnastics to believe in deterrence in relation to nuclear weapons and not in relation to chemical weapons?
    The Prime Minister: Yes, Mr. Speaker. It also shows the unwisdom of unilateral disarmament. We unilaterally disarmed with our chemical weapons many years ago. Far from following suit, the Soviet Union still stockpiles and increases the production of its chemical weapons.
    Dr. Owen: Does not the case for Britain retaining its nuclear capacity and for NATO having nuclear weapons mean that we can denounce the folly of the Soviet Union in stockpiling chemical weapons and that Britain should have no truck whatever with the deployment or stockpiling of chemical weapons by the United States as part of its NATO force levels?
    The Prime Minister: If we were asked to deploy them we should have to look at the request at the time and have regard to proper defence and deterrence. It would be folly to tell the Soviet Union now what our answer would be. I notice that the right hon. Gentleman embroils himself in that folly.
    Mr. Terlezki: In view of the all-party visit to Moscow this weekend, will my right hon. Friend send a message to Mr. Gorbachev telling him to get rid of 300,000 tonnes of chemical weapons, because he is the guilty one who is stockpiling and using those weapons? Will she also ask Mr. Gorbachev to tell the delegation the truth about what happened during the nuclear disaster at Chernobyl in the Ukraine, to ensure that all the other nuclear power stations in the Soviet Union do not go the same way as the one at Chernobyl?
    The Prime Minister: The delegation is under the leadership of my right hon. Friend the Lord President, who will carry my views to Mr. Gorbachev. It will be saying something about how strongly we feel about chemical weapons and the fact that, even under our chairmanship, the disarmament negotiations are not getting anywhere, and the fact that the Soviet Union is still stockpiling them. With regard to Chernobyl, I think that we are making headway under the auspices of the International Atomic Energy Agency and I hope and believe that we shall get the full facts and be able to profit from what we learn.
    Mr. Wallaceasked the Prime Minister if she will list her official engagements for Thursday 22 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wallace: This year Britain has the chairmanship of the chemical weapons disarmament committee at Geneva. Does the Prime Minister not think that it is unworthy of our chairmanship for us to agree to the further American production of binary chemical weapons? Will she give us some hope by telling us, instead of agreeing to the proposition, what steps she proposes to take during the period of British chairmanship to get a treaty to rid the world of these weapons?
    The Prime Minister: No such request has been received. I do not know how we would deal with it if it were received. We would have to look at the request in the light of all the circumstances at the time. I have made that perfectly clear. We shall have our own proposals in the chemical weapons negotiations, and we have been pursuing proposals for challenge inspection anywhere. Of
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    course, the Soviet Union would not agree to that. Again the fault rests with the Soviet Union for continuing to manufacture and stockpile chemical weapons, and the censure should be on the Soviet Union.
    Mr. Yeoasked the Prime Minister if she will list her official engagements for Thursday 22 May.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Yeo: Is my right hon. Friend aware that a large number of people believe that the need to improve the quality of public services is as great as, and possibly even greater than the need to make further cuts in the basic rate of income tax? In the light of this will she apply any additional resources that are generated by economic growth in pursuit of both those objectives rather than in the exclusive pursuit of one of them?
    The Prime Minister: We have strict priorities within total constraints. Everyone must live within constraints, otherwise, whether individuals, Governments or businesses, they will soon be in difficulty. By having strict priorities we have been able substantially to improve the resources devoted to the Health Service and to pensions. That must be done under overall constraints and priorities. Many people who receive below average earnings are asking for increased pay because they think that their net take-home pay is too low. The way to increase the net take-home pay of such people without adding to industrial costs is to reduce the standard rate of income tax.
    Mr. James Hamiltonasked the Prime Minister if she will list her official engagements for Thursday 22 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hamilton: At the Tory party conference in Perth last Friday the Prime Minister declared that she would set about slaying the dragon of unemployment. Will she remain conscious of the fact that in Scotland 380,000 people are unemployed? After the shipbuilding and British Rail redundancies that figure will be considerably increased. Will the Prime Minister accept the advice of some of her senior Back Benchers and change her policy? More important, will she flex her muscles and get the British Steel Corporation to spend the £90 million that is urgently required to save Ravenscraig and Motherwell?
    The Prime Minister: As the hon. Gentleman is aware, I have replied to questions about shipbuilding on a number of occasions. The acid test is how many orders we can get in a world where there are very few orders to be had because there is so much surplus tonnage still swinging on the buoys. There are surplus ships to the tune of 42 million tonnes, and that is equal to the output of all the world's shipyards for two years. The hon. Gentleman asked about Ravenscraig. He is aware that it is being kept in commission during the lifetime at least of the current corporate plan of the British Steel Corporation. On the general problem of unemployment,
    "the only answer to the economic problems which have dogged Britain ever since the war is to improve the performance of our manufacturing industry. That means higher productivity, better design, more vigorous salesmanship, more reliable delivery and servicing."
    That is what the right hon. Member for Leeds, East (Mr. Healey) said on 4 February 1977.
    Sir David Price: In the light of that reply, has my right hon. Friend received a message that came out of yesterday's debate on shipbuilding, that the whole House requires action against the Japanese, who speak the language of free trade and practice protectionism? In conjunction with our European colleagues, will she put an act together to defeat this current yellow peril, which has destroyed industry after industry in Britain?
    The Prime Minister: Regarding my hon. Friend's comments on the Japanese in relation to shipbuilding, he may be thinking of the nuclear vessel order which went to the Japanese. I believe that that matter has already been referred to the European Commission on the ground that the price was such that it may amount to dumping. Regarding the fact that Japanese markets are not as open as ours, we have already made our views known vigorously. That is a reason for wanting to hold GATT negotiations as soon as possible.
    Mr. Eadieasked the Prime Minister if she will list her official engagements for Thursday 22 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Eadie: Does the Prime Minister recall the answer that she gave on Tuesday about the National Coal Board's refusal to re-employ 40 victimised miners who went to a tribunal, which recommended that they be reinstated? Does she recall that her reply was that NCB activities were governed by an Act of Parliament? Is she aware that the NCB is in breach of that Act of Parliament in relation to those victimised miners? Will she instruct her Attorney-General to investigate the matter and report back to the House?
    The Prime Minister: If the hon. Gentleman has anything like that to say, he should say it to the appropriate quarters. The management of the NCB on detailed decisions—the hon. Gentleman knows this because he operates the legislation——
    Mr. Eadie: It is in a parliamentary Act.
    The Prime Minister: If the hon. Gentleman will listen, I shall answer his question. The management is not for the House, but for the NCB.
    Later—
    Mr. Pavitt: On a point of order, Mr. Speaker.
    Mr. Speaker: Does it arise out of questions?
    Mr. Pavitt: Yes, Sir. In answer to questions, Mr. Speaker, you will have heard the Prime Minister state that when the Inter-Parliamentary Union delegation goes to the Soviet Union the Lord President of the Council will convey her views to Mr. Gorbachev. Mr. Speaker, you are the custodian of the traditions of this House and for 100 years it has been the tradition that the Inter-parliamentary Union is Parliament, and is different from the Government. Therefore, this is an infringement of an old tradition. Is there anything that you can do to protect the independence of both the IPU and the Commonwealth Parliamentary Association in these circumstances?
    Mr. Speaker: As President of the British branch, I have sent a message to my opposite number in the Soviet Union.
    Mr. FauldsFurther to that point of order——
    Mr. Speaker: Order. We have rather a lot of business before us.
    Mr. Faulds: Very briefly. I am a member of the executive of the IPU. You, Mr. Speaker, and the other members of the IPU will know that on a foreign visit it is essential to differentiate between the views of the IPU and the views of the Government. It is a fact, which now, unfortunately, perhaps cannot be corrected, that the Prime Minister was totally incorrect to put that reading on the visit to Moscow.
    Mr. Speaker: I have no knowledge of other messages which may be sent by other people.

Ministerial Statements
3.31 pm
Mr. John Prescott: On a point of order, Mr. Speaker. I wish to raise a point of order on a statement which the Paymaster General is to make this afternoon to the House on a White Paper called "Building Businesses—Not Barriers", and which was made in the other place at 11.30 am.
You will recall the concern expressed on both sides of the House about unelected Secretaries of State in the other place making statements. To deal with that difficulty our procedure has undoubtedly been for statements to be made at the same time in both Houses of Parliament. Today the practice of issuing statements at the same time after Question Time has been broken. Today the statement was given by the Secretary of State for Employment in another place after its Question Time on the last day of the sitting at 11.30 am. Despite the Opposition's protests that that would mean that the elected Members of this House would learn of the contents of that statement through the media—a practice deplored by both sides of the House—the Government insisted on making the statement, and gave the justification that the rules of the other place required it.
Apart from the fact that the statement could have been given in both Houses at another time, the Secretary of State for Employment, in making a statement to the other place, has clearly given a calculated snub to the rights of the elected Members of this House.
It now becomes clear that a second statement is to be made in the other place at 3.30 pm, so it would have been possible for two statements to be made simultaneously in both Houses. Therefore, I ask you, Mr. Speaker, to rule that this Government decision is a calculated snub to the democratically elected rights of Members of this House, and I ask for your protection.
Mr. Speaker: I have allowed the hon. Gentleman to make that point, but I am not responsible for what goes on in another place.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Further to that point of order, Mr. Speaker. It may be helpful if I offer a few words of explanation. The deregulation statement today is an important announcement, which I am sure the House will wish to have before the spring Adjournment. To do that, we had to have an announcement on the last sitting day of the other place. That means that it sits at a different time, and earlier than this place. It is an unusual and extremely rare occurrence. I recognise that this causes genuine difficulties. Perhaps we could discuss this through the usual channels here and in another place to seek to ensure that it does not occur again.
Mr. Denis Healey: On the point which has just been made by the Leader of the House, I understand that the House of Lords is hearing a Government statement now at 3.30 pm. The point which my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) made is that it would have been perfectly possible for both statements to be made, as normal, at the same time. I hope the Leader of the House will return to that matter. On the business statement, could I ask the right hon. Gentleman to note that at a time—[HON. MEMBERS: "We have not heard it yet"] Very well.
Later—
Mr. Alan Williams: May I follow up the point made by the Leader of the House? With your good offices, Mr. Speaker, I ask the Leader of the House to convey the feelings of this House that it is quite unacceptable that the Commons should have a secondhand statement and dog-eared answers. We bitterly resent the fact that this House is losing out because of yet another struggle between two publicity-mad Cabinet Ministers, both of whom are jostling to get their statements out first so that they may be first in front of the television cameras.
Mr. Biffen: There is a serious problem here; I accept that at once. I hope that the matter can be resolved by proper consideration through the usual channels. I do not think that the somewhat over-generous rhetoric which the right hon. Gentleman has just used will enable that to be done. In answer to the specific point about the statement on the Calcutt report, to be made shortly by my right hon. Friend the Minister for the Armed Forces and which will be subsequently repeated in the House of Lords, that is not strictly analagous with the statement which was made by a departmental Minister who sits in the House of Lords, and which is then followed by a statement in this place. There is a problem which can be resolved by proper and measured considerations through the usual channels, and I hope we may proceed in a constructive sense.
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Ron Leighton: On a point of order, Mr. Speaker.
Mr. Speaker: Order. Points of order take time out of business questions. I think that many of these questions could be raised with the Leader of the House at business questions, because they are patently not matters for me.
Mr. Leighton: On a point of order, Mr. Speaker.
Mr. Speaker: Well, I will take it, but it must be a matter for me.
Mr. Leighton: On a point of order, Mr. Speaker. Are you aware that, today, I heard Lord Young in an interview on "The World at One" with Sir Robin Day discussing his statement in another place before we had it in this House? I ask you, Mr. Speaker, is that right and proper?
Mr. Speaker: I heard it, too. I share the views that have been expressed and I also listened with care to what the Leader of the House said about them. I do not think I can say any more.
Mr. Campbell-Savours rose——
Mr. Speaker: Well, I will try.
Mr. Campbell-Savours: On a point of order, Mr. Speaker. Is not the truth — we all know what has happened—that the Secretary of State for Employment insisted on making a statement himself this morning?
Mr. Speaker: Order.
Mr. Campbell-Savours rose——
Mr. Speaker: Order. I have no idea.

Business of the House
Mr. Denis Healey: May I ask the Leader of the House to state the business for the first week after the recess?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for the first week after the recess will be as follows:
TUESDAY 3 JUNE—Opposition day (14th allotted day). There will be a debate on an Opposition motion entitled "Government Economic Policies and the Level of Unemployment".
Motion on the Channel Tunnel Bill (Procedure).
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
WEDNESDAY 4 JUNE—Remaining stages of the Building Societies Bill.
Motion on the Education (Assisted Places) (Amendment) Regulations.
THURSDAY 5 JUNE—Second Reading of the Channel Tunnel Bill followed by a motion for committal to a Select Committee.
FRIDAY 6 JUNE—Private Members' motions.
Mr. Healey: I ask the Leader of the House to note that at a time when the Government's own figures show that their economic policies have brought growth to a halt in Britain, and when one industry after another is announcing massive redundancies, the Government have not been willing to defend their policies and the Opposition have had to compel them to do so by using one of their Supply days to debate unemployment and economic policy as soon as we return after the recess.
Secondly, as the Chancellor of the Exchequer yesterday refused to give a penny more for our education system at the very moment when the new Secretary of State for Education and Science was promising it more resources, can the Leader of the House ensure that the Government make an early statement on whether they will make more money available for educational building, books and equipment to restore a system which Her Majesty's inspectors, in their report which appeared yesterday, have found to be in near-terminal decline?
Thirdly, can the right hon. Gentleman tell us when the terms of the motion for committal of the Channel Tunnel Bill will be available to the House? Can he assure us that there will be ample time for petitioning?
Fourthly, can the right hon. Gentleman tell us when the Government will be making a statement on the report of the Top Salaries Review Body?
Finally, as the present policies of Her Majesty's Government on South Africa are robbing that unhappy country of what may be its last chance of peaceful progress and threatening to destroy the unity of the Commonwealth, can he assure the House that it will have an opportunity to debate these matters before the recess, and especially before the critical meeting of Commonwealth Prime Ministers at the beginning of August?
Mr. Biffen: I shall take the points of the right hon. Member for Leeds, East (Mr. Healey) in reverse order. I recognise that there is great interest in having a foreign affairs debate as soon as possible after returning from the recess.
Mr. Healey: South Africa.
Mr. Biffen: Such a debate will certainly be able to encompass South Africa. I take note of the right hon. Gentleman's comment about the Commonwealth Prime Ministers' meeting.
As is customary, my right hon. Friend the Prime Minister will be answering a question later this afternoon on the Top Salaries Review Body's report. Further copies of a letter from my right hon. Friend the Chancellor of the Exchequer to all Members about the Government's response to the report will be made available through the Whips offices and the Vote Office.
Mr. Bowen Wells: When?
Mr. Biffen: Later this afternoon.
I understand the interest in the procedures relating to the Channel Tunnel Bill and I can confirm that both the motions on procedure and committal will be tabled later this afternoon. The Government will allow a generous amount of time for them to be debated. I believe that when the terms are seen, they will be judged to be fair in respect of petitioning.
The right hon. Member for Leeds, East asked also about education policy. I am sure that he will join me in congratulating my right hon. Friend the Member for Mole Valley (Mr. Baker) on his appointment to the important Department of Education and Science. I can assure the right hon. Gentleman that he will not be disappointed. My right hon. Friend is one of nature's communicators. He has a good story to tell and he will be anxious to use the facilities of the House as appropriate. The right hon. Gentleman was obviously looking back nostalgically to the days when he was Chancellor of the Exchequer. But I do not for one moment believe that the latest statistics from the Central Statistical Office about the rate of growth in the economy vindicate his lurid phraseology. I assure the right hon. Gentleman that we shall be deploying similar arguments in the debate planned for Tuesday 3 June.
Mr. Healey: I shall resist the temptation to follow the right hon. Gentleman——
Mr. Speaker: Order. Even the Leader of the Opposition may normally ask only one question. But does the right hon. Gentleman wish to raise a point of explanation?
Mr. Healey: I have two questions to ask about what the Leader of the House just said.
Mr. Speaker: Order. I am very sorry, but the right hon. Gentleman is not in order.
Mr. Nicholas Soames: As we have a new Secretary of State for the Environment, whose views on that subject appear to be somewhat ambiguous following the Channel tunnel planning application, will my right hon. Friend the Leader of the House give an assurance that there will be an early debate on the green belt? In that way those of us who are greatly concerned will have an opportunity to elucidate our views.
Mr. Biffen: I have known my right hon. Friend the Secretary of State for the Environment for many years, and ambiguity is the last characteristic that I would ascribe to him. But I shall, of course, draw his attention to the interest expressed in having a debate on the green belt. I can say only that it will not take place during the week chat we return.
Mrs. Ann Clwyd: Has the Leader of the House seen early-day motion 873, bearing the signatures of 122 hon. Members, which deplores the production, possession and use of chemical weapons?
[That this House deplores the production, possession and use of deadly chemical weapons; and calls on Britain to reject United States plans for their further production, which will be ratified at a meeting of the North Atlantic Treaty Organisation Defence Ministers in Brussels on 22nd May.]
Will the right hon. Gentleman bear in mind the fact that, of the countries involved today in Brussels in the decision-making process in NATO, this country alone has had no full-scale debate on the matter in its national Parliament? Will he redress that imbalance, so that we can show that the majority of people in this country are opposed to any decision to deploy chemical weapons here, or in any European country?
Mr. Biffen: I have indeed studied early-day motion 873. I am sure that the hon. Lady will appreciate that the merits of the topic were considered during Prime Minister's Question Time. I cannot very helpfully add to that. However, we should be having a debate on the defence White Paper soon, and that might be an appropriate occasion for her to make her arguments.
Mr. Jonathan Aitken: As we are now to have two late-night, and perhaps all-night, sittings on 3 and 5 June so that the Government can try to pull the Channel Tunnel Bill out of the quicksands of confusion into which it has sunk, will my right hon. Friend consider softening that preliminary skirmish in the long war of attrition that will accompany the legislation, by allowing greater latitude to individual petitioners and by making some concessions to them that will give them adequate time to put their petitions before the House?
Mr. Biffen: I note what my hon. Friend says, but I think that I might be allowed to observe that gentle threats of all-night sittings are hardly the most obvious tactic to win friends and earn sympathy. Nevertheless, I realise that my hon. Friend speaks with great feeling and with genuine constituency interests. I take account of what he said. The motions are of course amendable, so my hon. Friend may consider that possibility.
Mr. Jack Ashley: Is the Leader of the House aware that a group of very angry ex-service men who claim that they were disabled through negligence, and a group of parents of dead ex-service men who claim that they were killed through negligence, went to see the Secretary of State for Defence, together with hon. Members from both sides of the House? They were given a hearing, but they have not now heard a word from the Ministry of Defence in 13 weeks. They rightly feel that they have been treated with contempt by the Secretary of State. Will the Leader of the House have a quiet word with him and tell him that those people are getting very angry and that they deserve an answer?
Mr. Biffen: The right hon. Gentleman has raised that point with me before. I recognise its force, but he will realise that my right hon. Friend the Secretary of State for Defence is the last person whom one would wisely accuse of being contemptuous of the sufferings and misfortunes of others. It could well be that the delay is due to the fact
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that the matter is receiving very measured consideration. But I shall certainly make those representations for the right hon. Gentleman.
Mr. James Hill: Does not my right hon. Friend agree that there is need for a debate on a matter that is worrying many hon. Members on both sides of the House — the infiltration of Militant Tendency into local government affairs? It is especially worrying in my constituency in Southampton where, at the last election, several Militant Tendency candidates took key positions on various committees—[Interruption.]
Mr. Speaker: Order. The hon. Gentleman must ask a question about the business for next week.
Mr. Hill: May I ask my right hon. Friend whether it is possible to have a debate on that very important matter next week?
Mr. Biffen: There might be some difficulty in establishing any ministerial responsibility for these affairs—but that responsibility exists must clearly be evident from the occurrences of the last few days. I would have thought that we were doing quite well from the public recognition of the dangers of militancy, without necessarily having to debate it here.
Mr. Robert Kilroy-Silk: Does the right hon. Gentleman recall that we debated the industrial dispute in the prison service while negotiations were being conducted? Would it not now be sensible to have a further debate, so that the House can actually hear about the agreement reached between the Home Secretary and the Prison Officers Association and also about the Government's proposals to reduce the appalling levels of overcrowding that impose considerable burdens on both inmates and staff? Would it not at least be a courtesy to the House if the Home Secretary made an oral statement about the conclusion of the dispute?
Mr. Biffen: The hon. Gentleman raises a problem relating not merely to prison staff but to conditions in prisons generally. I shall certainly draw the attention of my right hon. Friend the Home Secretary to the hon. Gentleman's request for a statement.
Mr. Timothy Wood: I noted my right hon. Friend's response about the Top Salaries Review Body. Will the response that will be given later this afternoon be set in the context of alterations in salaries for people lower down the particular trees and the importance of setting those salaries in the context of moderation of salaries and wages generally?
Mr. Biffen: Within a few moments, my hon. Friend will have before him the full text of a reply by my right hon. Friend the Prime Minister and also a letter from my right hon. Friend the Chancellor of the Exchequer. Any attempt on my part to summarise them would be imprudent.
Mr. Simon Hughes: May I endorse the call for a debate early after the recess on the problems of southern Africa in particular, as opposed to foreign affairs in general?
If, on Tuesday, the motion on procedure in relation to the Channel Tunnel Bill results in a defeat for the move to short-circuit the normal procedures, may I take it that

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we will not proceed hastily to a debate on Thursday but will be allowed a proper amount of time to proceed at the normal speed?
Will it be possible to have an early debate on the problems of the victims of the Abbeystead pumping house disaster two years ago tomorrow, who have still not been compensated although others who suffered bereavement subsequently have received compensation from the Government?
Mr. Biffen: If the Government are defeated on Tuesday, we will have to reconsider the wishes of the House.
I shall certainly study the other points that the hon. Gentleman raised. However, on his point about a debate on southern Africa, I recognise that that will be a matter of continuing interest and we will have to see how matters stand when the House returns after the recess.
Mr. Jerry Hayes: Although I accept that it will not be easy to tempt my right hon. Friend into another debate on the press, does he accept that the real discourtesy this morning was not the fact that the other House had a statement but that the press had advance notice of what was in that statement? Is it not rather rich that Ministers can come to the Dispatch Box, as they did only a few days ago about university grants, and say rather grandly, "The House will have the full figures in the Library tomorrow," when we all know full well that we will see them before they are placed in the Library? Would it not be a good idea to discuss this matter openly?
Mr. Biffen: There is some merit in that, but there is also a considerable amount of difficulty.
Mr. Speaker: Yes, well … [Laughter.]
Mr. Joseph Ashton: Is the Leader of the House aware that there was a great deal of discontent last night because many hon. Members could not get the call to speak in two controversial debates — that of the shipbuilding industry and that of nuclear waste — because the debates were crammed into three hours? Why is it necessary to steamroller business through the House when there is a small amount of legislation before Committees which will he debated by the House? Is it because the Government intend to rise before the royal wedding, much earlier than usual, to get themselves on television? Will the Leader of the House arrange to deny that rumour by fixing up an important debate on shipbuilding and unemployment on the day of the royal wedding so we can see which is the most important business of the House?
Mr. Biffen: I understand that even now, and especially in Scotland, there is interest in what time we shall recess within the period from the end of June to mid-August. I can only say that there is one date which is fixed in my diary and that is the date of the Oswestry agricultural show. As the hon. Gentleman knows, there are real difficulties in trying to manage business when there are so many demands and topics to be discussed. I would say, mildly, in self-defence, that there is a good reason for not having had a statement yesterday.
Mr. Harry Greenway: Does my right hon. Friend accept that the procedures relating to Select Committees are in urgent need of fresh attention following this week's debate? Can we have an early debate on that?
Mr. Biffen: I think I would like time for the bruises to heal before we have a further debate.
Mr. Robert Parry: In the light of the recent written reply by the Home Secretary concerning the possible use of CS canisters and plastic bullets in England, will a statement be made in the near future and will there be a debate on that important matter, bearing in mind the fact that a number of innocent children and women in Northern Ireland have already been killed by plastic bullets?
Mr. Biffen: As the hon. Gentleman will know, that has been considered by the House from time to time. I shall draw the attention of my right hon. Friends the Home Secretary and the Secretary of State for Northern Ireland to the interest that he now shows.
Mr. Roger Gale: Following the points made so correctly by the hon. Member for Thane', South (Mr. Aitken), I too have noticed that a debate on the Channel Tunnel Bill (Procedure) on 3 June is to be followed, with the presumed success of that debate, by a further debate on the Second Reading on 5 June. Far be it for me to suggest that the business of 3 June might carry over to 5 June, but will my right hon. Friend assure the House that he will use his considerable powers to ensure that not only the voices of the big battalions but the voices of the ordinary people of north-east Kent are heard during the petitioning procedures?
Mr. Biffen: I take note of the point. Indeed, it will be part of the more general debates that will take place on the week we return. I quite understand the point my hon. Friend has made.
Mr. Allen McKay: The Leader of the House will recall that last week I asked him for a debate on British Coal. In view of the fact that 4,000 jobs will be lost in Yorkshire, 2,000 of which are in my constituency which already has a 25 per cent. male unemployment rate, is it not time that we had that debate? Is it not time that we looked at the direction of British Coal before it is too late, before it is completely decimated, and we run into the problems that existed in the 1960s?
Mr. Biffen: I understand the point that the hon. Gentleman makes. He made it all the more effectively by virtue of the temperate way that he presented it. I shall refer it to my right hon. Friend the Secretary of State for Energy. The hon. Gentleman might like to bear it in mind that unemployment could be relevant to the debate which we shall have on 3 June.
Mr. Anthony Beaumont-Dark: In view of the growing system, which is more time-honoured than honourable, whereby tame questions are put down to which explosive answers are given—one sees an example in today's reply to Written Question 234 on the Top Salaries Review Body—is it not time that the House debated whether such questions and statements are to be at the behest of Government or the main Opposition parties? If a statement is made on a contentious matter, it is not honourable and proper for democracy if such a statement is given in answer to some lame question.
Mr. Peter Bruinvels: I am not lame.
Mr. Beaumont-Dark: I was not suggesting that my hon. Friend the Member for Leicester, East was lame. said that the question was lame. Could not we have debates

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on these matters which affect many people in this country? Let us debate what we think should be statements and what should be questions so that we can deal with the problem of slipping in a question just before the bank holiday so as to ensure a little less trouble.
Mr. Biffen: For someone as generous as my hon. Friend, I thought that it was quite unnecessary for him to cast such aspersions——
Mr. Beaumont-Dark: I did say that he was not lame.
Mr. Biffen: He just left the impression, which was not easy to break, that it was coded language. However, a long-standing tradition that has applied to Governments of both major parties is that these announcements are made in a form that has now become customary. Perhaps my hon. Friend should consider the answer before judging whether it is that explosive.
Mr. Greville Janner: I thank the Leader of the House for changing his mind and for personally asking the Ministry of Defence to investigate the circumstances in which British prisoners of war died after interrogation by Dr. Kurt Waldheim's German army group. Can we have an assurance that the inquiry will be carried out swiftly, that there will be a statement to the House thereafter, and that Waldheim's part in the interrogation by this army unit will not be ignored? Is the right hon. Gentleman aware of the Prime Minister's answer to me that a number of documents are missing from the Public Records Office that are believed to refer to Dr. Waldheim and this unit? Will he assure the House that he will look at these documents to ensure that there is no cover-up — as there has been by other Governments, including the Yugoslav Government—as I am sure that Her Majesty's Government would not wish to be accused in these circumstances?
Mr. Biffen: I do not accept many of the implications that the hon. and learned Gentleman makes, but I shall happily draw all his points to the attention of my right hon. Friend the Secretary of State for Defence.
Mr. James Couchman: In view of the continuing state of lawlessness in Northern Ireland, and in particular the disgraceful antics of the Labour party aspirant to this place from Brent, East — Mr. Ken Livingstone—when he sought to persuade the Dutch not to return two convicted terrorists to Ireland, will my right hon. Friend arrange for an early debate on security in the Province?
Mr. Biffen: The problems of the Province should properly be a constant charge upon consideration in this House, and I shall draw the attention of my right hon. Friend the Secretary of State for Northern Ireland to the suggestion that we might have an early debate.
Mr. Andrew F. Bennett: Does the Leader of the House recall the debate on the quorum for the Committee to consider the Felixstowe Dock and Railway Bill? The Chairman of Ways and Means gave an undertaking that he would seek to set up a Committee of Inquiry into the private Bill procedures. Has the right hon. Gentleman also seen the article in The Daily Telegraph which suggested that the Department of Transport was vetoing that inquiry? Surely he has a duty to uphold the
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Chair at all times, and he ought to be facilitating the placing on the Order Paper as soon as possible of a motion relating to the inquiry, so that it can go ahead, and he should not allow the Department of Transport to prejudge the outcome.
Mr. Biffen: The plans for setting up a Committee are well advanced——
Mr. Bennett: When?
Mr. Biffen: I hope to be able to satisfy the hon. Gentleman's anxieties before very long. I have not seen the article in The Daily Telegraph, but if its contents are as alleged, quite frankly it is moonshine.
Mr. Eric Forth (Mid-Worcestershire): My right hon. Friend is well known for the interest that he takes in European political matters. He will have noticed the excellent election results in the Netherlands yesterday, when a determined and responsible Government were rewarded by recognition by their electorate and returned for yet another term of office. Will he give the House an early opportunity to debate the relevance of the Netherlands election results to politics in this country and allow us to draw the obvious conclusions?
Mr. Biffen: As ever, that is a most enticing proposition, but I must say in a somewhat sour fashion that a limited amount of Government time is available. However, my hon. Friend is one of the best free shooters on the Back Benches, and I am sure that he can find some way of raising the matter.
Mr. Robert N. Wareing: As it is still the Government's intention to cut mortgage interest payment benefits for the poorest people in our society, is not it time that we had an early debate so that the Government can explain to my constituents who are one-parent families, disabled and unemployed, what role they see for them in their property owning democracy?
Mr. Biffen: There might be some merit in having a debate, if only to enable that rather strong presentation of the Government's position to be put into a much more accurate context. But just now I cannot see the likelihood of a debate being available because of the pressures of so much Government legislative business.
Mr. Peter Bruinvels: When we have a debate on political indoctrination in our schools — examples of which were given so ably in another place earlier this week, led by Baroness Cox—can we also look at the difficulty of getting the police into our schools to talk about crime prevention and not breaking the law?
Can I also draw my right hon. Friend's attention to Question 43 on Thursday 8 May in which I asked the Prime Minister when she expected to receive the report of the Top Salaries Review Body? Written Question 234, which stands in my name today, was not planted, but is a follow-up to that original question.
Mr. Biffen: That is the most withering rejoinder that I have heard for some time. As to my hon. Friend's other point, the decisions taken by another place will have to come back to be considered here, and I very much hope that he will then have a chance to make the point that he has made with great persuasiveness.
Mr. Tam Dalyell: On Friday 6 June, who among nature's communicators on the Government Front

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Bench will be responding to the temperate motion on the conduct of the Prime Minister? Would not it be helpful to whoever does so to know whether the Prime Minister intends to ask for a retraction from The Observer newspaper and from Mr. Linklater and Mr. Leigh about their allegations on pages 142 and 143 of their book that the Prime Minister's stated knowledge about the selectively leaked letter from a Law Officer to a Minister of the Crown in fact existed a good deal earlier than she told the House?
Mr. Biffen: I would like the hon. Gentleman to go into the recess with a certain anxiety and anticipation. Therefore, I do not propose to tell him who will be handling that debate. But as is said in the best military terms, the response will be appropriate to the challenge. As for the hon. Gentleman's other points, I shall make sure that they are made available to the person who will be handling the debate.
Sir Kenneth Lewis: I realise that all of us, other than my hon. Friend the Member for Leicester, East (Mr. Bruinvels), will have to contain ourselves in patience and await the result of the Government's comments on the report of the Top Salaries Review Body. But I cannot believe that the combination of even the Prime Minister and the Chancellor of the Exchequer means that my right hon. Friend does not know what is in the answer to my hon. Friend's question. After all these years, will he admit to being a convert to incomes policy, even if it is only in the public sector, and could not outside industry follow the same lead?
Mr. Biffen: I have heard some mischievous questions in my time, hut that one clearly invites me to imply that a reasonable interpretation of the correspondence to which my hon. Friend referred is that it represents a statutory incomes policy. My hon. Friend must be responsible for his own interpretation, and should not try to plant it upon me.

Business (Deregulation)
4.9 pm
The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): With permission, Mr. Speaker, I should like to make a statement on Government action to relieve the burden of unnecessary regulation. We are publishing today a White Paper entitled "Building Businesses — Not Barriers". It contains a balanced series of new proposals for reducing the administrative and legislative burdens on business as well as a report on the progress made in furthering the proposals made in the last White Paper on this subject, "Lifting the Burden".
The White Paper reflects our firm belief that only by removing barriers to business will enterprise flourish and the essential creation of wealth and jobs follow. It presents a balanced programme that recognises that Government have a role in providing legal protection for workers, consumers and the general public, as well as protecting the environment and our quality of life. However, it also recognises that unnecessary regulations act as an inhibition to business growth and job creation.
In the White Paper, the Government have maintained these protections while still taking a series of significant steps forward in giving business the freedom to grow.
There are nearly 80 new proposals in "Building Businesses — Not Barriers". First, the work of the enterprise and deregulation task force, liaising with deregulation teams in Departments, will ensure that there is a proper analysis of the effects of proposed new rules and regulations on businesses.
We shall modernise the use classes order to allow a somewhat wider range of changes in the use of buildings or land to take place without planning permission. We shall permit businesses with planning permission for two or more alternative uses to change between these without the need for further planning applications. I stress that we do not propose to change the law on working from home.
We shall be setting up a major review of value added tax and small businesses, considering such issues as accounting for VAT on a cash basis rather than using invoices, and an instalment system for VAT payments.
We are introducing a more personal approach by civil servants in their dealings with business, so that responsibility will be linked to individual, named officials. We shall be reducing the duplication of visits by Government officials. PAYE and national insurance inspectors are now co-ordinating their visits to companies and we are introducing a pilot scheme to co-ordinate visits by Inland Revenue and Customs and Excise officials.
These are just a small sample of the efforts being made throughout every Government Department and agency to cut red tape and improve communications. Our proposals are carefully measured. None cross the fine dividing line between liberty and licence.
As well as concentrating on reducing domestic burdens, the White Paper also reports on progress towards cutting the bureaucracy imposed by EEC regulations and directives. Following an initiative made by the Prime Minister, a task force has been established within the European Commission to scrutinise all future proposals that might affect business, so that the costs of compliance can be minimised.

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At the same time as publishing "Building Businesses — Not Barriers" the Department of Employment has launched a booklet "Cutting Red Tape". It summarises the contents of the White Paper in a popular and easy-to-digest way.
There can be few more urgent tasks than to create the climate for growth of employment. The more people concentrate on running their businesses, free of unnecessary barriers, the better for jobs, and more jobs is our aim—one, I am sure, shared by both sides of the House. This White Paper will help jobs without losing any necessary protections for the public. I commend it to the House.
Mr. John Prescott: The Paymaster General's statement has a certain familiarity about it, not because it was made earlier in the other place, but because it very much follows the recommendations made in the previous White Paper on this subject, on which a statement was made on 16 July 1985. Much of the rhetoric in the Paymaster General's statement masked a further attack on the protection of employees, the reduction of controls on the employer and the continued processes heralded in the last statement, made on 16 July, on "Lifting the Burden". The motive of that White Paper, as the Paymaster General will no doubt accept, was to sacrifice the principles governing the green belt, health and safety, and industrial rights.
Is the Paymaster General aware that the phrases contained in his statement were exactly the same as those made on 16 July 1885 by the right hon. Member for Croydon, Central (Mr. Moore)? Does the Paymaster General realise that the words and phrases, lifted from column 171 of Hansard, include:
"enterprise to flourish … essential for the creation of jobs. … a central task force is being set up … Essential protection for workers, consumers and the general public … protect our quality of life … the balance between liberty and licence".—[Official Report, 16 July 1985; Vol. 83, c. 171.]
Was the same word processor used for the two statements? Remarkably, I found that on 16 July 1985, there were 80 proposals in the White Paper, as there are 80 proposals in this White Paper.
Will the Paymaster General recognise that many of the proposals in this White Paper are embodied in the first White Paper? A great deal of rhetoric has been employed in this statement about creating enterprise and jobs. How many jobs have been created since the last exercise in cutting red tape? It was suggested that 8,000 jobs would be created, but in reality, 4,000 jobs a week have been lost since that statement.
Is the Paymaster General aware that the survey conducted by his Department justifying measures in the White Paper clearly showed that the burden of VAT was the main consideration for small companies, but again, the White Paper offers only a promise of further reviews, the payment of VAT on HP terms and that civil servants will visit less often and be nicer? Does he accept that the real reason for this White Paper is yet another attack on the limited employment rights of workers, rights that are identified in the White Paper, and which are shown in the survey not to be a difficult problem for small businesses?
Can the Paymaster General honestly justify his belief that the measures in the White Paper will provide jobs? For example, what help will be provided by imposing a deposit
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of £25 on workers who go to an industrial tribunal, removing the rights of pregnant women to return to their companies, reducing the time off for trade union members to conduct trade union activities at the place of work, or removing unfair dismissal and redundancy rights for hundreds of thousands of workers in many companies?
Will the Paymaster General accept that the real purpose of this White Paper, masked in rhetoric to justify deregulation, is to cut employment rights and increase unemployment? As the House was reminded by the statements in the press today and yesterday, a further 20,000 bus workers are to go on the dole as a result of deregulation of the bus industry.
Mr. Clarke: I am disappointed that the hon. Member for Kingston upon Hull, East (Mr. Prescott) began by attacking these proposals for lifting various unnecessary administrative burdens on business as somehow an attack on workers' rights or a reduction of essential public control. The hon. Gentleman was a supporter of the Government who left office in 1979, leaving industry with its profits, its prices and its wage rates controlled, and under a huge burden of bureaucracy. That greatly weakened our industrial base as we went into the worst of industrial recessions. The White Paper's proposals are a series of modest steps that will get rid of unnecessary bureaucracy. The American experience, contrasted with the European experience, shows that that can only help in generating new jobs by leaving businesses more free to concentrate on the most essential tasks.
The hon. Gentleman mentioned various public policies that he said were threatened. The White Paper says that there is to be no change in policy on the green belt and the proposals made for town and country planning are modest and sensible, and allow greater flexibility for high tech companies in particular. It is made plain in the White Paper that there is no attack on the concept of health and safety at work and no intention to lower standards.
The hon. Gentleman rather dismisses the review of VAT, but it is to be a wide-ranging one, and I touched in my statement on some of the important matters that it will cover. It will also cover the operation of the new penalty system that is being introduced, after consultation, into the VAT system.
As to employment protection, the hon. Gentleman cites various measures that he says are an attack on working people. I do not think that it is easy to get indignant about the proposal that the legal entitlement for time off for trade unionists should be confined to those trade union matters that are relevant to the company where the official works.
The other changes will enable the labour market to be more flexible and they will make it easier for employers to offer different types of employment. They will also encourage the growth of part-time and short-time working and the other forms of employment that are growing, both in this economy and in every other modern economy.
I am sorry that the hon. Gentleman dislikes the fact that in this statement the same favourite phrases appear as appeared in the statement that was made by my right hon. Friend who is now the Secretary of State for Transport. However, it was made in 1985, not in 1885 when Lord Salisbury was Prime Minister. I am sure that my right hon. and noble Friend is glad to know that he is carrying on the same Tory tradition as existed then. Of course we are pursuing the same theme. That is because we are pursuing the same policies. We are deregulating in order to enable

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business men to concentrate on the essential task of building up their businesses. The fact that there were 80 proposals then and that there are a further 80 proposals now shows that we are maintaining a good rate of progress. They are the result of looking at the activities of all branches of government.
Mr. Prescott: But how many jobs have been created?
Mr. Clarke: For the first time in this country we are questioning the growth of administration and bureaucracy since the second world war. We are seeking to reduce it in the interests of enabling businesses to be more free to create new jobs.
Mr. David Howell: Will my right hon. and learned Friend accept that this White Paper, like the last one, is thoroughly constructive and is to be welcomed, and that it is entirely in line with the new pattern of work and the new employment landscape that the Opposition will not begin to understand and, when they do understand it, quite wrongly oppose? I accept that in both "Lifting the Burden" and this new White Paper questions are tackled about the position of the self-employed, but the widespread impression still exists that the Inland Revenue is hostile to the self-employed and to the growing army of people who wish to organise their affairs in that way. Will he look particularly at that matter and consider how it can be changed?
Does my right hon. and learned Friend also accept that the time has come when the Government might recommend to Members of this honourable House that they, too, might consider returning to the self-employed status that they once held in order that they may understand the problems that face the self-employed in this country?
Mr. Clarke: I am grateful to my right hon. Friend. The number of self-employed people is growing strongly. About 12 per cent. of those who are working in this country are now self-employed. That number is likely to increase, and it should increase if we follow the kind of developments that have taken place in successful modern economies elsewhere. We have already taken steps to help the self-employed. Probably the most significant step was the reduction in their national insurance contributions. The White Paper proposes that the issue of 714 certificates to those who legitimately require them to work in a self-employed capacity in the building industry should be speeded up. I am sure that my right hon. Friend the Chancellor of the Exchequer will seek to ensure that no hostility to legitimate self-employment prevails inside the Inland Revenue. I agree entirely with the general drift of my right hon. Friend's questions.
Mr. Ron Leighton: Does the Paymaster General not recognise that the more chatter we hear from him about deregulation the more unemployment increases every month? Furthermore, are not the rights of workers being reduced? They can appear before an industrial tribunal where their case is upheld, but, in the case of the miners who were dismissed, the National Coal Board still refused to reinstate them.
The main thing that is being deregulated is accountability to this House. The Paymaster General must realise that all this was dealt with elsewhere this morning. The noble Lord, Lord Young, dealt with all of this on radio. All the House of Commons is getting is the fag-end. The Paymaster General comes to the House as a messenger boy. Is that not an insult to the House of Commons?
Mr. Clarke: On the hon. Gentleman's first point, it is essential that we should have a good and effective system of employment protection law, but that does not mean that we should retain obsolete or over-complex provisions which deter employers from offering new employment to those whom they might otherwise engage. That is the general theme that runs through this package.
On the hon. Gentleman's second point, he knows that all Governments have Ministers in both Houses of Parliament. My right hon. and noble Friend and I have worked together on this package. We worked together also on the drafting of this statement. We have followed the ordinary practice of making the statement together on the same day in both Houses. It was to the surprise of my right hon. and noble Friend and me when we noticed that, because of our anxiety to make the statement before the recess, we were due to deliver it on a day when the rules of another place required my right hon. and noble Friend to make his statement in the morning but the rules of this place did not enable me to make it before 4 o'clock. We try to explain Government policy to both Houses in accordance with the positions that we hold, but I am afraid that the practice of both Houses does not enable my right hon. and noble Friend and me to guarantee that we can synchronise our watches and rise in both Chambers at the same time. As their Lordships are sitting earlier than this House today, their Lordships have the advantage over us.
Mr. Michael Grylls: Does my right hon. and learned Friend accept that it is clear that he and his right hon. and noble Friend have made real progress in slaying the dangerous dragon of red tape? Therefore it would be more sensible if, rather than criticising, the Opposition were to recognise that the reason this country has created jobs at a slower rate than in the United States is that we have been over-regulated. This deregulation programme is probably the single most constructive measure we can take to create new jobs at a faster rate.
Will my right hon. and learned Friend look at the deregulation units in the Departments and examine whether they could be a little more effective and act more quickly? Perhaps a junior Minister in my right hon. and learned Friend's Department could be made responsible for deregulation. The recent problem that we experienced when responsibility for family credits was laid upon businesses would not then arise. We might also avoid the somewhat farcial situation that has arisen over the working of the Data Protection Act 1984. The policy is working, but we should like it to work a little faster.
Mr. Clarke: I am grateful to my hon. Friend who, throughout his time as a Member of Parliament, has been urging this kind of policy on successive Governments. am glad to hear that he is pleased that it is now being implemented in successive White Papers. We intend to keep up the effort. The White Paper explains the new deregulation arrangements that have been established throughout Whitehall. We have reached this stage following the co-ordination that was carried out by my right hon. and noble Friend and me of the activities of various Departments. Junior Ministers in those Departments have been involved in the exercise. Indeed, they are responsible for the detailed proposals that are contained in the White Paper and for their execution. We

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have ensured that deregulation in high on the agenda in each Department in Whitehall. There are effective deregulation units in each Department.
Mr. Richard Wainwright: The two alliance parties welcome, so far as it goes, the Government's attempt to compensate for the hugely increased burdens on business because of high real interest rates and the extravagant unit labour costs that are due to the absence of an incomes policy. I commiserate with the Paymaster General. The statement, having been deferred from yesterday until today, when it could have been made simultaneously in both Houses yesterday, means that his right hon. and noble Friend asserted his complete leadership of the Department by delivering it four hours before the Paymaster General rose in this House.
Will the Paymaster General give an assurance that the scheme to co-ordinate visits from the Inland Revenue and Customs and Excise Departments will not decrease the honourable rule that no single Department should divulge to another Department answers that it has received from a citizen in respect of its departmental requirements?
As for the proposal that responsibility will be linked to individually named officials, before the Paymaster General proceeds down this very dangerous avenue in which his Government have already established a most unhappy precedent, will he and his right hon. and noble Friend read carefully the report of the Treasury and Civil Service Select Committee, which was published today, on relations between civil servants and Ministers? It lays down in firm, all-party terms the need for no repetition of the circumstances in which a young civil servant at the outset of her career was named in respect of a piece of behaviour for which she was in no way responsible.
Mr. Clarke: The hon. Gentleman began by expressing support, for which I am grateful, although he wrapped it up rather heavily thereafter. Of course my right hon. and noble Friend is the head of Department and Secretary of State for the Department. I assure the hon. Gentleman that, if he thinks that this was the result of any planning, it was at a remarkably late stage that my right hon. and noble Friend and I realised that the rules of our respective Houses would mean that the other place would act first in its discussion of this proposal.
I assure the hon. Gentleman that there will be no change in the existing rules on the confidentiality of information about individuals between Departments as a result of the White Paper. The proposal about named officials will not, of course, mean that there is any transfer of ultimate responsibilities. It is Ministers who will remain accountable to this House for the way in which policy is drawn up and executed. The intention is that we get away from the situation where a business man or an individual citizen can sometimes feel that he is dealing with a literally faceless bureaucracy and have no idea who is handling his problem in a particular Department. The result should be an improvement in the relationship between Departments and citizens to the advantage, I should have thought, of both officials and citizens.
Mr. Robin Maxwell-Hyslop: Does the White Paper herald the bringing under control of the Inland Revenue and Customs and Excise by the Minister's own Secretary of State, so that they do not in future issue
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practice directions or regulations that undercut what his Department is doing? This is very important. For instance, there is the change in the rule that, after a VAT inspector has certified accounts as being in accordance with his Department's requirements, a subsequent inspector can cancel that and say, "No, I don't agree with the previous inspector." It is very important that a Minister in his own Department should see in advance and approve all changes in the Inland Revenue practice directions and regulations that do not pass through this House, and similarly in the case of Customs and Excise. Has this now been arranged as a working process so that the Treasury and its subsidiaries do not undercut the valuable work done by his Department?
Mr. Clarke: It is my right hon. Friend the Chancellor of the Exchequer and the team of Treasury Ministers who are accountable for the Inland Revenue and Customs and Excise, and it is to them that the Inland Revenue and Customs and Excise report. I am glad to say, however, that liaison between my right hon. Friend the Chancellor and his team of Ministers and the team of Ministers in my Department is very good. In regard to our responsibilities for small business in particular, we ensure that, with our representations, the representations of my hon. Friend the Member for Rossendale and Darwen (Mr. Trippier), the Under-Secretary of State for Employment, who takes a close interest in these matters, are regularly put into the Treasury and taken into account when the Inland Revenue and Customs and Excise are considering the way in which they behave.
Mr. James Lamond: Is the Minister aware that what he referred to as bureaucratic regulations, particularly in regard to planning, have over a number of years often avoided rather unhappy situations? If he is trying to tell us today that change of use regulations, for example, have to be considerably modified or swept away, will he not remind himself of the cases that he, like all hon. Members, must have had, of the entrepreneur who has come along, spotted a redundant chapel and thought it would make a nice place for breaking up motor cars or boiling sheeps' heads? The people who live in the area, far from regarding change of use regulations as bureaucratic, see them as an important defence for them and their neighbours. Surely we must take that into consideration.
Mr. Clarke: I agree with the hon. Gentleman that we need an effective system of town and country planning control. I also agree that the present system has piled up over the years, often as the result of individual problems. I believe that it is important that we step back occasionally and make sure that the system as a whole corresponds to public needs but does not put unnecessary obstacles in the way of business expansion. The next stage, for instance, in the use classes order revision is to go out to consultation, again with a modified version of the proposals first put forward by the Property Advisory Group. I assure the hon. Gentleman that changes will be made only when we are satisfied that this can be done without damaging the legitimate interests of people living in residential areas who obviously do not want noxious businesses near where they live.
Mr. Henry Bellingham: While I welcome the White Paper as a positive step forward and

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applaud the Minister on his presentation, which compares very favourably with that of the hon. Member for Kingston upon Hull, East (Mr. Prescott), who shows yet again that he is out of date and out of touch, will my right hon. and learned Friend agree that it is not enough for the White Paper to talk in terms of officials giving their addresses and telephone numbers? What is needed is a complete change of attitude, so that all officials become more pro-business and more pro-entrepreneur.
Mr. Clarke: I am grateful to my hon. Friend. I agree with his point. I am sure that most officials would welcome pressure to adopt such an approach. A great deal of effort is being put into training officials in Departments such as Customs and Excise to make sure that they improve their relationships with the general public and understand the needs of small business when they are carrying out their essential tasks.
Mr. Tam Dalyell: May I ask a question that is not necessarily hostile? Has the question of responsibility of named civil servants been discussed with the Civil Service trade unions? Regarding his answer to the hon. Member for Colne Valley (Mr. Wainwright), is the Minister entirely happy that ultimate responsibility will still remain with Ministers because, once individuals are named, the fact is that, like it or not, responsibility sticks to them? In the circumstances, and in the light of the agony of the Ponting trial, is there not yet again an argument, if the Government are going to do this, for setting up some body to which a civil servant who is in difficulty can turn? As long as ultimately one has the Cabinet Secretary as head of the Civil Service, in real terms it is very difficult for a civil servant to appeal.
Mr. Clarke: When the hon. Gentleman asks questions that are necessarily hostile, he sometimes asks easier questions than the ones which are not necessarily hostile.
I do not believe that any formal consultation has been carried on on this proposal. We will obviously be interested in any views that the Civil Service unions have. I would expect that officials in the relevant parts of the Administration will probably welcome the changes that we are proposing. I assure the hon. Gentleman that there will be no weakening of the constitutional position, whereby the responsibility rests with the Minister answerable to this House. Policy responsibilities that are properly those of the Government and of Ministers will not be wished on to officials.
When the hon. Gentleman goes into the last matter, of course, he goes far outside my field and far outside the White Paper. I do not believe that the White Paper will present any difficulties between officials and Ministers of the kind that he describes.
Mr. Tim Smith: As small businesses regard the recording and collection of VAT as the major burden that they have to bear, does my right hon. and learned Friend accept that the proposal for a major review of VAT will be widely welcomed by small businesses? Can he make sure that it will include the proposition made by the National Federation of Self Employed and Small Businesses for the elimination of VAT between registered traders on credit transactions? If accepted, that could reduce the burden of those traders very substantially.
Mr. Clarke: I am grateful to my hon. Friend. I assure him that it will be a wide-ranging review and can certainly
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look at propositions put forward by the National Federation of Self Employed and Small Businesses, which is actively interested in this matter. It will probably not be completed before 1987, but we are already taking some steps, such as our efforts to raise the thresholds. We have already had some success, although we still have to lobby further in the European Community. In addition, we have introduced some relief on VAT payments for bad debts. This, too, has been of benefit to some small businesses.
Mr. Ken Eastham: Is it not a fact that, when the original consultation document' Lifting the Burden" was issued, it was highly speculative as to the people being consulted and, in the event, workers' groups and the trade unions were never consulted? Many people look on this as a possible cowboys' charter. We have seen reductions in the standard of planning and building reguslations and fire precautions. With regard to the emphasis on small companies, I remind the Minister that some of the greatest disasters have occurred in small firms. In 1981 at a small chemical firm in Stalybridge just outside Manchester, at which only 15 people worked, there was a fatality and half the town had to be evacuated. Are these the kind of standards that the Minister is encouraging?
Mr. Clarke: There is obviously an essential level of public safety and safety for people at work that nobody wishes to lower. The imposition of unnecessary or bureaucratic standards in industry is undoubtedly very inhibiting to business growth. The purpose of this exercise is to try to sort out the one without damaging the other—thatis, to sort out those parts of bureaucracy that can be relaxed without damaging essential public safeguards. I hope that more people in the trade union movement will come to realise that a constant demand for ever more regulations to increase, as they see it, the rights of those in work can sometimes lead to damage being done to the interests of those not in work if the result is to discourage business or employers from taking on new employees.
Mr. John Butterfill: Will my right hon. and learned Friend accept, in relation to the use classes order that many of the concerns arise not because of changes within, say, parts 3 to 10 on different types of shop or extensions to shops, but because of activities in residential areas that may be offensive to the residents? Will he bear that seriously in mind when considering the matter? Will he also bear in mind that some of the changes proposed within the residential connotation, such as the change of use from hotel or guest house to a rest home, will cause considerable difficulty in many resort towns in my constituency in particular?
May I congratulate my right hon. and learned Fiend on the proposals for redundant agricultural buildings? It is absurd that agricultural buildings of considerable architectural merit have in the past been allowed to fall into disrepair and decay simply because no alternative use could be found for them. Will he please encourage the Ministry of Agriculture, Fisheries and Food to reconsider its policy of insisting that agricultural land must remain agricultural land for ever when at times it could he better used for leisure or recreational purposes without damage to the countryside or the landscape?
On the point made by my right hon. Friend the Member for Guildford (Mr. Howell), may I urge my right hon. and

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learned Friend to consider the position of the self-employed whose businesses may fail and who may be unable to enjoy the benefits that would otherwise accrue to those unemployed?
Mr. Clarke: I am grateful to my hon. Friend. On the town and country planning points, it will be easier to make progress with changes that give greater flexibility in the use of business premises. I think that those can go ahead rapidly. It is necessary to take more care over changes that might affect residential areas. I am sure that that will be the principal aim of the further process of consultation that is envisaged before we come to conclusions on the use classes orders.
I am grateful for what my hon. Friend said about the use of former agricultural buildings. That would be a great advantage to rural areas. In continuing conversations with my right hon. Friend the Minister of Agriculture. I shall bear in mind what my hon. Friend said about the present arrangement for protecting agricultural land.
As for the self-employed, we give a great deal of support through the enterprise allowance scheme and through the small business service to those unemployed who wish to become self-employed. I agree that it is important to bring home to the self-employed the possible consequences of moving into self-employment, particularly if the business fails. Obviously all our efforts are designed to reduce the risk of business failure.
Mr. D. N. Campbell-Savours: Is not much of the document based on the mistaken premise that deregulation in the United States of America put several million people back to work during 1983, 1984 and 1985? Is not the real truth of the American success that its economy was reflated due to a very high budget deficit and PSBR, that they spent money to put people back to work and that they did not have to deregulate?
Mr. Clarke: I am not one of those who believe that any one cause can be identified for favourable or unfavourable movements in employment. This is not the occasion to debate the performance of the American economy over the last few years. Certainly there was an unintended increase in the American deficit, which had some effect on the economy. It involved a deficit that could not possibly be sustained by an economy of our size. An important element in the American experience has been the much more dynamic nature of their economy, the greater spirit of entrepreneurship which undoubtedly exists in America, and the fact that their experience of deregulation has enabled their most enterprising business men to make more rapid progress. In Massachusetts, where unemployment has collapsed from 11 per cent. or 12 per cent. five years ago to under 5 per cent. one of the elements was undoubtedly the fact that that is a much less regulated economy than the equivalent here or in western Europe.
Mr. Richard Holt: My right hon. and learned Friend has done a wonderful job in bringing this forward. One part that I heard with delight was the reference to the £25 deposit. I hope that he does not think that he can fob me and the rest of the business world off with that as the only thing that will help with industrial tribunals. We have twice been promised a thorough review of the activities and workings of industrial tribunals,
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particularly their legislation. The lawyers here may not agree, but I hope that my right hon. and learned Friend will have the courage to bring forward a review of legalisation.
Mr. Clarke: My hon. Friend has strong and clear views about the working of the industrial tribunal system, some of which I had the pleasure of listening to in the proceedings on the Wages Bill.
I am glad that we have given limited satisfaction to my hon. Friend by proposing for discussion a £25 fee. It has always been the aim of successive Governments to avoid unnecessary legalisms in the industrial tribunal system. We continue to have that aim. There are limits to how far one can go when a system which has been set up by statute decides on set awards of compensation. Anything we can do to avoid an increase in unnecessary legalism we shall continue to do.
Mr. Peter Pike: Can the Paymaster General state clearly how many people the proposals will put back to work and how far his Department is prepared to go in eroding the conditions of workers and the protection afforded to employees in order to solve the problems created by his Government?
Mr. Clarke: The hon. Gentleman knows that it is impossible to put exact figures on the extent to which particular actions of Government will help to create more jobs, or the extent to which they will damage job creation. I believe that the White Paper will make it easier for business to create jobs in the economy. To return to a more rigid system of controls and regulation favoured by the Labour party would have the perverse, though unintended, effect of actually reducing the prospects of more employment.
Mr. William Cash: Will my right hon. and learned Friend accept that in many respects the proposals follow the Small Business Bill introduced last Session? Will he accept further that there are in the proposals many interesting factors that have yet to be improved? It would be better in certain respects if we went for a package of deregulation and at the same time for a package which ensured that the legislation itself was reduced before coming into effect; in other words, we should have fewer regulations so that we do not have to deregulate afterwards.
Mr. Clarke: I happily acknowledge our indebtedness to my hon. Friend and others for the proposals which have arisen from the Small Business Bill and for their continued interest in the subject. It is a continuing process. Some of the proposals which I wish to implement will require legislation. The unit will continue to identify other areas where we can deregulate. The most important part of the proposals is that we will have a unit in the Department expressly charged with keeping an eye on what is emerging from the whole of Whitehall. In future no Department of Government can introduce fresh regulations without first considering their compliance cost for small business. It is the inexorable growth of more and more bureaucracy that the Government are trying to avoid.
Mr. James Couchman: Speaking for small business, may I point out to the Minister that the prospect of a co-ordinated visit by Her Majesty's inspector of taxes, the DHSS lady in regard to the national insurance contribution, and the water guard wishing to examine my

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VAT returns is daunting and is likely to precipitate my throwing in the towel, not to mention possibly causing an untimely by-election in Gillingham.
To be more serious, does my hon. and learned Friend accept that one of the biggest barriers to growth in the hotel, restaurant, catering and licensed trades is the outdated licensing law? Does he agree that paragraph 8.54 on liquor licensing hours is disappointing? Will he speak to his right hon. Friend the Home Secretary about getting earlier action than is presently promised?
Mr. Clarke: I know that no business man welcomes a visit of any kind from officials in those departments, not least because it consumes much time. One co-ordinated visit should be better than visits on successive days, which might occur. On the licensing laws, my right hon. Friend the Home Secretary made it clear earlier this week that the Government accept in principle the case for reform of the licensing laws. I have always believed that our licensing laws are archaic and much in need of reform. The Government will try to find out what consensus emerges for improvement and how soon it will be possible to bring proposals before the House.
Mr. Roger Gale: Those of us who are interested in the development of the tourist and leisure industries will be especially grateful for the support that my right hon. and learned Friend, his noble Friend and the deregulation unit have given to those industries. Needless to say, we hope very much, as my hon. Friend the Member for Gillingham (Mr. Couchman) has said, that that support will be carried through into action and that there will be a change in the licensing laws.
I draw my right hon. and learned Friend's attention to the point made by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill). Chapter 5.7 of the report deals with the use classes order. It states:
"The Department of the Environment will be publishing early next month a consultation document which sets out the Government's proposals in detail."
Is my right hon. and learned Friend aware that those of us involved with the tourist industry will be very concerned if consent is given for the conversion of small hotels and guest houses either to rest homes or to a return to the DHSS use that we saw two summers ago?
Mr. Clarke: I am grateful to my hon. Friend for his first point. It is interesting that hon. Members who take most interest in the development of the fast-growing sectors of the economy such as tourism and leisure have welcomed this document and the initiative. I believe that many new jobs will be created through the Government's approach to tourism and leisure. I understand what my hon. Friend says about the use classes order. There will be consultation over that matter and I am sure that my hon. Friend's point will be made very strongly to my right hon. Friend the Secretary of State for the Environment before any changes are made.
Mr. Eric Forth (Mid-Worcestershire): My right hon. and learned Friend will know by now that there is universal welcome from the Conservative Benches for the initiative that he is taking. However, will he tell the House whether he is satisfied about the progress that has been made in connection with the "Lifting the Burden" initiative adopted by' his Department last year'? Will he give the details of the progress that has been made? Does he believe that the same progress will be made, with the same speed, with the proposals that he has brought to the House today?
Mr. Clarke: Annex 1, appendix A, of the White Paper and, indeed, annex 1 generally, deals with a summary of the action on the proposals set out in "Lifting the Burden". I admit that one or two of the proposals have bitten the dust since "Lifting the Burden" was published. However, we have made progress with most of the proposals. The changes that have been made reflect the care that must be taken in sensitive areas such as health and safety, which hon. Members have mentioned today. This is a continuing process and our main anxiety is, as my hon. Friend would wish, that we should not lose the momentum behind the exercise.
Mr. James Hill: I see That planning appeals are to be speeded up. That will he appreciated. The document also states that planning controls will be reduced in some minor way. The whole idea of deregulation is to create job opportunities. Is my right hon. and learned Friend aware of a campaign that I have been fighting on behalf of the six freeports in the United Kingdom? We are desperately seeking deregulation in such ares as Customs and Excise taxes and imposts, and on VAT between customers within the freeports. The lack of deregulation in the freeports is causing difficulties and is not creating job vacancies. Is there anything in the White Paper which will give me hope when I speak to the manager of the Southampton freeport?
Mr. Clarke: In answer to my hon. Friend's point about planning appeals by inspectors, we have now managed to release the results of the efficiency scrutiny report that we carried out, and targets have been set to reduce the handling time of appeals. That is set out in paragraph 5.17 of the White Paper, and I am glad to see that my hon. Friend is making use of the clear, shorter document, and that that has enabled him to ask this question.
Freeports will be involved in the review of VAT. My hon. Friend will be reassured to know that the full White Paper expressly mentions that as a matter for investigation. The impact of VAT rules and the application of VAT on the development of freeports will be examined.
Mr. Peter Bruinvels: I welcome my right hon. and learned Friend's continued commitment to helping small businesses. I believe that "Building Businesses—Not Barriers" is a great success story that should be promoted throughout the country. Will my right hon. and learned Friend develop from annex 4 the question of wider competition in our postal services? Competition is healthy and small businesses can benefit from the alternatives that other fast letter carrier services can offer. In connection with the Registered Homes Act 1984 and the Nursing Homes and Mental Nursing Homes Regulations 1984, my right hon. and learned Friend will be aware of my anxiety that too many of these homes are springing up —rather like mushrooms — without proper controls. While I want controls to be reduced, will he reassure the House that no advantage will be taken of our old people when they need to be looked after?
Mr. Clarke: My hon. Friend will have noticed, as I have, that parts of the trade union and labour movements are still keener on the barriers than on the businesses when it comes to a choice between the two. I also approve of competition in the interests of the consumer, and I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for Trade and Industry, who has responsibility for the postal services.

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The Government legislated less than two years ago to improve the controls over new nursing homes, to ensure that the interests of the best and legitimate nursing homes were not damaged by the incursion into that area of homes which dropped below essential nursing and other standards. That shows that, when it is necessary to protect the public, the Government improve controls, so long as we are satisfied that they serve a serious purpose, and best protect elderly and sick people against exploitation in sub standard homes.
Mr. Anthony Steen: I welcome my right hon. and learned Friend's comments about licensing. Is he aware that there is a special problem about the 200 commercial vineyards? These need a special vineyard licence to allow them to offer tourists tastes of their wares throughout the day. At present, they must have an off licence and an on licence. If a visitor arrives during the off licence period, he cannot taste wine as he can anywhere else in Europe. Will my right hon. and learned Friend make a simple alteration to this excellent document to allow tourists to taste our splendid English wine whenever they choose to drop in at a vineyard?
Mr. Clarke: At present we are considering no fewer than 65 licensing systems, as is explained briefly in the Bill. We are certain to act promptly on the licensing requirement for public billiard halls. That dates back to social conditions, which have no relevance today. My hon. Friend has raised a pertinent point and he appears to have identified yet another of the idiocies of our liquor licensing system. We all hope that my right hon. Friend the Home Secretary will soon be able to crystalise his ideas over the licensing laws. We shall then have to see when we can get the legislative time to bring reforms forward.
Mr. John Evans: Is the Paymaster General aware that, when the Minister of State for the Armed Forces rises to make a statement to the House in a few minutes' time, the other place will interrupt its business so that a simultaneous statement can be made? is that not an excellent example, not only of the contempt that the Secretary of State for Employment has for this House, but of the contempt he has for the Paymaster General?
Is the Paymaster General also aware that his proposition that individuals should be charged £25 deposit for appealing to an industrial tribunal is yet another example of the way that the Government have steadily removed and eroded the rights of the ordinary citizen? The former Financial Secretary to the Treasury referred to about 80 new proposals when he presented the "Lifting the Burden" White Paper last year.
This year the Paymaster General mentioned nearly 80 new proposals. Can he clarify whether those 80 proposals
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are different proposals? If so, how many of last year's 80 proposals were carried into effect? Does he also recall that last year it was said that cutting red tape and ending form-filling would create some 8,000 jobs? Will he tell the House how many jobs were really created? Does he appreciate that the Opposition would welcome proposals from the Paymaster General or his noble Friend the Secretary of State for Employment which would begin to reduce the appalling dole queues rather than glossy documents, empty words and rhetoric?
Mr. Clarke: Like me, the hon. Gentleman has served time in the Whips Office. He also probably knows more about the procedures of this House than about the procedures in another place. The statement on "Building Businesses — Not Barriers" was made by Cabinet Ministers in each House. The Lords took the statement, made by the Secretary of State for Employment, at the time that they always take statements, after questions when sitting in the morning. The statement on defence matters will be made by my right hon. Friend the Minister of State for the Armed Forces who is sitting beside me. That statement will be repeated in the other place by a Minister who is not a Minister in that Department. The rules of the other place require the statement to be repeated. My right hon. Friend the Leader of the House has agreed that we shall look at all that, but the fact is that parliamentary procedure is responsible for where we are and it does not really feed the hon. Gentleman's main point.
On the £25 fee, the problem, which I hope the hon. Gentleman will accept, is that some cases which are going before industrial tribunals really should not be brought. At the moment, an individual can go to an industrial tribunal at no cost to himself and at the very least he will impose considerable costs on his employer simply by raising the complaint, and cause considerable public expenditure while ACAS and the tribunal system deal with it.
We have deliberately avoided anything that would cut people off from access to justice or be punitive in that way. The £25 fee will be returnable in most cases, but at least it might cause people to reflect before they casually make a complaint to an industrial tribunal, and thus leave tribunals freer to get on with the important cases that they have before them.
The part of the White Paper that relates to the hon. Gentleman's last point is only one of many policies in our Department. We are engaging in other inititatives which he and I will have many other opportunities to discuss. However, the fact is that since the spring of 1983 we have seen the creation of 985,000 — nearly 1 million — additional new jobs in the British economy. That has arisen because the British economy is expanding and because it is being made freer and more flexible in the operation of its labour market. That process must continue, and the White Paper is a small but important part of that.

Top Salaries Review Body
5.1 pm
Sir Kenneth Lewis: On a point of order, Mr. Speaker. We now have the copies of the pay review bodies' reports and my right hon. Friend the Chancellor's letter. I notice that a large number of public servants will get quite good rises, especially those in the medical field, as from 1 July, which happens to be my birthday. It looks as though my hon. Friends and myself will be the only people to be left out. Will my right hon. Friend the Chancellor put that right by sending another letter to say that, in view of the bounty that is coming on my birthday, there can be something for me and my hon. Friends?
Mr. Speaker: I hope that the hon. Gentleman has a very happy birthday on 1 July.

Cyprus Secrets Trial (Calcutt Report)
5.2 pm
The Minister of State for the Armed Forces (Mr. John Stanley): Following the acquittal last year of eight service men from 9 Signal Regiment in Cyprus who had been charged under the Official Secrets Acts, I announced in the House on 29 October that there was to be an independent inquiry into the way in which the service police carried out their investigations of the eight men originally accused. Mr. David Calcutt QC agreed to conduct this inquiry. The House was also told that it was the intention that, subject to the usual security considerations, Mr. Calcutt's report on his inquiry would be published. The report has been published today. Cmnd. 9781.
Mr. Calcutt has concluded that the service police investigations, which he acknowledged involved special difficulties due to their sensitivity and complexity, were undertaken without any animosity or towards the service men concerned, and that none of the service men were subjected to any violence or threats of violence, or any form of torture or inhuman or degrading treatment.
Mr. Calcutt has, however, concluded that the custody of the eight service men was, for part of the time, unlawful and that, even after the service men had been lawfully arrested on holding charges, their continued custody was at least improper. The interviews by the service police with each of the eight service men mostly took place during these periods of unlawful and improper custody.
In the light of Mr. Calcutt's conclusions as to the lawfulness of the custody of the service men, my right hon. Friend the Secretary of State for Defence has concluded that in the case of seven of them he is prepared to make an ex gratia payment. The seven service men concerned are Senior Aircraftmen Kriehn, Lightowler, Owen and Payne, Lance-Corporal Glass and Signalmen Hardman and Tuffy. On their application, my right hon. Friend will ask Mr. Michael Ogden QC, who acts as an independent assessor for my right hon. Friend the Home Secretary, to make an independent assessment of the amount of the award in each case.
As regards the eighth service man, Senior Aircraftman Jones, Mr. Calcutt considered, on his construction of Air Force rules of procedure, that his custody was unlawful. Although the facts adduced in evidence before both Mr. Calcutt and the trial judge were essentially the same, the submissions addressed to them by counsel were very different. Indeed, before the trial judge, Senior Aircraftman Jones's counsel did not contend that the custody was unlawful. When the trial judge considered the same provisions of the Air Force rules of procedure, he accepted that Jones's custody was lawful. In these circumstances, since the trial judge found that Senior Aircraftman Jones's detention was lawful, it would be inappropriate to offer an ex gratia payment in his case. It is of course always open to him to pursue his remedies in the courts, should he be so advised.
Mr. Calcutt has also concluded that, as the number of days spent in custody increased, so the pressure which was exerted on each of the service men gradually built up and crossed over from what was at first proper to what he could only regard as becoming improper, and that the pressures which were ultimately exerted on each of the service men were such that these were likely to render unreliable

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answers given or statements made by them. However, Mr. Calcutt also points out that the investigations carried out by the service police in Cyprus in February and March 1984 were difficult, sensitive and complex, and they would have created profound problems for anyone who was given the task of carrying them out. Mr. Calcutt concludes that, although he has pointed to some breaches of lawful and proper procedures, it would be unfair to be over-critical either of the investigating service police or of those who were advising them.
The Government fully recognise the difficult position in which the service investigators in the case were placed and that they were motivated solely by what they perceived to be their clear duty. The Government are also grateful to the service investigators for their full participation in Mr. Calcutt's inquiry, which was entirely of their own volition. I should also like to take this opportunity to make it quite clear that we continue to have full confidence in the integrity and professionalism of the royal military police and the RAF police who do difficult, complex and very important security work in many key defence areas.
Mr. Calcutt has recommended seven matters for further consideration. These are: the potential conflict between learning the nature, extent and full circumstances of any breach of security and bringing the offender to justice; the need to give at an early stage in an investigation clear guidance on the relative priority to be given to the counter-intelligence aspect and the criminal aspect of a security case; whether, in certain circumstances, the 48-hour maximum period allowed under current service procedures for suspects to be detained without charge should be capable of being extended; whether RAF Queen's regulation 1034 should be either annulled or amended; how far the rigid application of the "need to know" principle may have the effect of depriving a suspect of the protection which the law provides for him; the effect of classifying the routine documentation in security investigations; and whether investigations such as those leading up to the Cyprus trial should be conducted from the United Kingdom rather than overseas. The Government accept all Mr. Calcutt's recommendations for further consideration, and the House will be informed of the outcome of this further work.
As far as present practice is concerned, Mr. Calcutt acknowledges that the new code of practice for the treatment and questioning of persons by the service police has now been issued under the Police and Criminal Evidence Act 1984 and that this may at least go some way towards overcoming some of the shortcomings revealed by the inquiry. In addition, the House will wish to know that RAF Queen's regulation 1034, which provides for a form of custody short of arrest, has been suspended, and that further instructions are being issued to clarify and re-emphasise the safeguards for individuals under investigation.
Finally, I should like to express our gratitude to Mr. Calcutt for conducting his inquiry both speedily and with great thoroughness, and for producing a rigorously argued and most valuable report.
Mr. Kevin McNamara: The House owes a debt to Mr. Calcutt for this report. In the short time that we have had to glance at it, it is apparent
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that the House will understand why the new Parliamentary Secretary, whom I congratulate on his appointment, moved the motion in the Select Committee on the Armed Forces Bill that it conclude its business before Mr. Calcutt reported. Given the cold, cruel and measured tones of Mr. Calcutt when he does not consider himself to be overly critical, I would hate to be at the receiving end of his tongue when he is.
This is one of the most devastating and horrific statements that I have ever read. It is about what happened to people described by Mr. Calcutt in paragraph 5.47 in the following terms:
"With the exception of Lance Corporal Glass, who was in his early thirties, all of the servicemen were young and inexperienced. One minor matter apart, none of them had ever been in any form of trouble. They had no previous criminal convictions. They were all young men of good character. They were, however, junior in rank, and military discipline requires orders by those of a higher rank to be obeyed."
They were caught up in a web of intrigue and circumstance, of bullying and of improper treatment. If we had seen that in a weekend horror film we should have said, "That is good fiction." For this to have happened to those men is one of the worst indictments that could be made. We strongly welcome the decision to make ex gratia payments to them, but no sum of money can compensate them for what they have been through, for careers ruined and reputations blemished. Thank God they had the benefit of a British jury.
I have read the carefully constructed statement by the Minister and one has to bear in mind the background against which it was constructed. It says that we must pay attention to the difficult problems surrounding this sort of inquiry. That almost suggests that this is the first time such a thing has happened in Cyprus. We have already had one section I Cyprus spy trial, at the Old Bailey—the Mata Hari and Aircraftman Davies trial. The people who investigated for that trial were used for the second trial and the first trial collapsed around the ears of the prosecution. The Government then sought another occasion and again we had the Old Bailey, Cyprus, sex, blackmail, young men who did not know what was happening to them, and forced confessions. But again, thank God, we had a British jury. We saw the Ministry of Defence turned down by a British jury about Ponting, Davies and these eight men. In some ways we have things for which to be grateful.
Let us look at some of the things Mr. Calcutt said. In paragraph 4.197 he says:
"I am of the view that the service police did caution the suspects, as they assert, though whether it meant anything to the servicemen (and whether they realised that they need not answer questions) may be open to doubt."
In paragraph 4.198 he says:
"I am quite satisfied that none of the servicemen was subjected to any form of deep interrogation or to any inhuman treatment."
He further says in paragraph 4.199:
"I have no doubt that the service police interviewed the suspects in a firm and vigorous way. I believe that accounts of events were suggested to the various servicemen as being the truth, and that denials often resulted in relentless and aggressive questioning."
He says in paragraphs 4.202 and 4.203:
"Taken together, these coincidences and inconsistencies tend to support the view that the approach of the service police during the interviews was very far from simply being a matter of waiting for the servicemen themselves to volunteer information.
There was other evidence that the service police were willing to resort to threats during the interviews. Threats featured in the evidence of most of those who were interviewed by the service

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police. The threats mentioned both at the trial and the Inquiry were of a similar pattern; first, prolonged incarceration in the event of failure to co-operate; second, threats to involve a suspect as a major spy punishable by a long prison sentence if he did not admit to being a minor spy, which would only be punishable by a short sentence; and threats to involve the suspect's family or his home in the event of failure to co-operate."
Those are all classic interrogation procedures and all meant to build up pressure. Therefore, the question one must ask is, what was improper and what was proper? Where was the line to be drawn and at what point do pressures of this sort on young men so described become degrading treatment and be seen to be so?
There are other questions that have not been answered by Mr. Calcutt. First, who manufactured the evidence to which they were forced to confess? Secondly, why are no disciplinary procedures being instigated against the people involved in these investigations? Thirdly, are the people and the House not entitled to know about what happened at that base, what was going on? Why were so many of the men who served there purged from the regiment and transferred elsewhere? Fourthly, there is ministerial responsibility in this matter: why is someone in the Government not taking the proper course and thinking about resigning'?
Mr. Stanley: The extremely exaggerated and selective accounts of the Calcutt report given by the hon. Member for Kingston upon Hull, North (Mr. McNamara) do not constitute a balanced view of the report, which I have read from cover to cover. If the hon. Gentleman has not done so already, I hope that he will read the report from cover to cover, because it is only by doing that that one can be in a position to take a balanced view.
I am grateful to the hon. Gentleman for acknowledging the good work carried out by Mr. Calcutt. We endorse that acknowledgement. Mr. Calcutt has made a detailed and rigorous study in a remarkably short time and I am glad that the hon. Gentleman shares our views on that.
The view taken by the majority on the Select Committee on the Armed Forces Bill is fully vindicated by the Calcutt report. It is quite evident from the report that there is no question of the primary legislation on service discipline being called into question. It is quite apparent from Mr. Calcutt's recommendations that, if there are to be changes, they will be made to existing procedures and will almost certainly be made by administrative action, by amendment to Queen's regulations or by secondary legislation. If by chance there are to be amendments that require primary legislation, they are likely to be made in Home Office legislation to which the Ministry of Defence would be joined. It is quite evident from a careful reading of Mr. Calcutt's report that he does not call into question the primary legislation underpinning the services discipline Acts.
The hon. Gentleman said that the service men had been subjected to degrading treatment. I must make it quite clear to him and to the House that Mr. Calcutt's conclusion is quite to the contrary. I repeat what I said in my statement which reflects the conclusions of Mr. Calcutt. I said:
"none of the servicemen were subjected to any violence or threats of violence, or any form of torture or inhuman or degrading treatment."
That is Mr. Calcutt's conclusion.
The hon. Gentleman also spoke about disciplinary action and I should like to tell the House the conclusions that we have reached on that. As the House would expect, the question of disciplinary action against any of those
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involved in the custody decision, which has subsequently been held to be unlawful and improper, has been fully considered. As Mr. Calcutt's report shows, the unlawful custody arose principally through an initial interpretation of QR(RAF) 1034 which we are satisfied was given in good faith, but which was subsequently held to be unsound. As I said in my statement, that regulation has been suspended, but in these circumstances and in the absence of evidence of any culpable action or neglect on the part of any individual, it has been concluded that there are no proper grounds for disciplinary action on this score.
The question of disciplinary action against the service investigators has been considered carefully, and the conclusion of the service authorities is that there is no basis to take disciplinary action against any individuals for culpable action or neglect.
Several Hon. Members rose——
Mr. Speaker: Order. I am aware that this important report has been published. I ask hon. Members to ask questions rather than to indulge in debating points.
Sir Antony Buck: Both sides of the House have expressed gratitude to Mr. Calcutt for the thoroughness of the report and the speed with which he compiled it. We are also grateful to my right hon. Friend the Minister for coming to the House and making this statement. Will he hive in on two further points? When will we have an opportunity to debate the matter further? I presume we may do so during our debate on the White Paper, or during single service debates. Will he hive in on the recommendations contained in the final paragraph of the report, where Mr. Calcutt suggests that matters should be investigated from the United Kingdom rather than locally, if, unfortunately, there should ever be a repetition, and where he casts doubts on the efficacy of QR1034? I think the Minister said that it was to be suspended. Is it proposed to be abolished in due course'? Will the Minister clarify the position of the regulation?
Mr. Stanley: I am grateful to my hon. and learned Friend. Further debates are a matter for the usual channels, but, obviously, as the matter affects the armed services, if hon. Members wish to make comments on this when we have a debate on the defence White Paper, that would seem to be an opportunity. The single service debates provide a further opportunity. In addition, the Opposition have their own time.
On the specific recommendation that such inquiries should in future be conducted from the United Kingdom, as I said in my statement, that is one of the seven recommendations for further consideration which Mr. Calcutt has made, and we shall obviously address that one extremely carefully.
QR(RAF) 1034 is suspended. The question of its future must be seen in the context of some other matters that Mr. Calcutt has given us to consider. In view of the critic ism which has been made of that regulation, I am certain that, if it were to be restored in any shape or form, it would be in a way which would meet the criticisms made in the report.
Mr. Tam Dalyell: Is the Minister satisfied with the conduct of Flight Sergeant Sheehan? May I ask the Attorney-General to give a full answer to question No. 238 on the Order Paper today, particularly on the geographical limitations of Detective-Superintendent Eames?
Mr. Stanley: I am sure that my right hon. and learned Friend the Attorney-General has heard the hon. Gentleman's request. On the individual to whom the hon. Gentleman refers, I have already covered that matter in what I said in relation to service discipline against the service investigators.
Sir Anthony Meyer: Does my right hon. Friend accept that I would not wish to say anything at this point about SAC Owen, until I have had an opportunity to talk to him and to consider the matter further? Does my right hon. Friend accept that the most important sentence in the whole of this most impressive report is that which states:
"In our society, it is for Parliament and not for investigators, however genuinely and well motivated, to decide if and when, and in what circumstances, the interests of an individual should be subordinated to the interests of society as a whole."
Will he bear that wise maxim firmly in mind?
Mr. Stanley: Certainly the whole Government would fully endorse that extremely important maxim. In view of my hon. Friend's constituent, I should like to tell the House the position of each of the eight service men. As of today the position is as follows. Four service men, Lance Corporal Glass, Signalman Hardman, Signalman Tuffy and SAC Payne, have already left the services on completion of their engagements; and a fifth service man, SAC Lightowler, has already left the RAF prematurely at his own request. Extremely careful consideration has been given to the future of the remaining three service men, SAC Jones, SAC Owen, and SAC Kriehn. Today they are being advised that the Air Force Board is being recommended to consider their discharge from the RAF. The reasons for the recommendation are being given in writing to the service men. They are being advised that they may make representations to the Air Force Board, and use the redress of grievance procedure before the board comes to a final conclusion.
Mr. James Wallace: We on the alliance Bench wish to express our gratitude to Mr. Calcutt for what, at a brief glance, seems to be a thorough report, which will certainly merit study during the coming days. I do not think that Opposition Members on the Select Committee on the Armed Forces Bill were as convinced as the Minister and his whipped hon. Friends that there is nothing in the report which would have been a cause for proper study by the Committee.
While we acknowledge the ex gratia payments made to seven of the men involved, at first sight it appears petty and mean that, on the technicality that a point was not taken at the trial, no payment has been offered to SAC Jones. Will the Minister explain why he considers it inappropriate?
He has expressed his views on the lack of disciplinary charges brought against the men involved. While he has given an explanation about QR(RAF)1034, can he expand on why the commanding officers were given no discretion under rule 4 of the rules and regulations regarding commanding officers' discretion to hold men in close or open custody? Who refused to allow them discretion? Have disciplinary procedures been considered in respect of those senior officers? As the code of guidance, under the Police and Criminal Evidence Act 1984, provides for disciplinary proceedings against police officers who breach the code of guidance, in future will there be
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disciplinary procedure against service personnel who are in breach of any of the provisions of their codes of guidance?
Mr. Stanley: On the hon. Gentleman's last point, I can certainly assure him that if any member of the armed forces is responsible for a breach which represents culpability, he is liable to discipline under the services discipline Acts. On his point about the Select Committee, the majority of members of the Armed Forces Bill Select Committee pointed out that the issue was not whether the matter might be studied by it, but whether it raised questions for the primary legislation underpinning the services discipline Acts, which were before the Committee. The Committee, in coming to its majority conclusion, was mindful of the fact that it is open to the Defence Select Committee, which is a permanent Committee, to look on a more long-term basis at any of the aspects of service affairs raised by the Calcutt report.
SAC Jones's eligibility for an ex gratia payment was not decided on a technicality; as I said in my statement, it was the fact that the trial judge found SAC Jones's detention to be lawful. That is the basis on which we had to conclude that an ex gratia payment would not be appropriate in his case. I am aware of the background to the hon. Gentleman's question about rule 4. Obviously, it will be considered in the context of the wider recommendations that Mr. Calcutt has made.
Mr. Cyril D. Townsend: Will my right hon. Friend continue to make it clear inside and outside the House that the service police had abundant reason for thinking that a serious security breach had taken place? Is it not remarkable that, in such a meticulous report of 165 pages, so few recommendations for improvement are made, and that even they are couched in general terms?
Mr. Stanley: My hon. Friend makes two extremely important points. In considering the background to the Calcutt report and forming its views on it, the House must be mindful of what Mr. Calcutt says in the opening sentence of paragraph 5.2:
"I am satisfied that throughout the investigations the service police had reasonable — indeed abundant — grounds for believing that a breach of security had occurred in 9 Signal Regiment."
That is the fundamental backcloth to approaching the problem.
My hon. Friend's second point was extremely valid and reassuring. After the detailed and thorough investigation made by Mr. Calcutt, he has proposed seven recommendations, all of which are in the form of considerations for further study.
Mr. Patrick Nicholls: May I ask my right hon. Friend to clarify his attitude to the ex gratia payment to Senior Aircraftman Jones? The Minister bases his decision not to make such a payment on the fact that the trial judge was satisfied that this person's detention was lawful. But paragraph 5.30 of the Calcutt report states:
"My conclusion is that SAC Jones was lawfully arrested on 6 February but that the failure to charge him within 48 hours in accordance with rule 4 of the Rules of Procedure was a breach of that rule and rendered his continued detention until 8 March unlawful."
My right hon. Friend must agree that, if he is prepared to accept so many aspects of the Calcutt report, that point should be considered, too.
The most troubling and worrying aspect of the report is one which, in the interests of time, he did not mention:

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that the investigators, worthy and conscientious though they may have been, were apparently completely blind to their conflict of interest. Understandably, they wanted to find out what had happened in terms of the security breach. In their enthusiasm, they seem to have been completely unaware that they had to consider the rights of the people whom they were investigating.
Bearing that in mind, along with what the report states about unlawful detention, does my right hon. Friend accept that, in such cases, he should not rely on the legalities and be too strict in his interpretation of the criteria for ex gratia payments? This man was acquitted. For at least part of the time, he was detained unlawfully. It is clear from the face of the report that the investigators did not consider that the defendants also had rights. Is this not a case where, if all of the others are to be given ex gratia payments, Jones should he given one too?
Mr. Stanley: I do not believe that my hon. Friend is doing the investigators full justice—he will wish to read the report from cover to cover—when he says that they were unconcerned about the rights of those whom they were investigating. No possible construction of the Calcutt report bears that out.
I fully acknowledge, as is brought out carefully by Mr. Calcutt, that there was a conflict between the counter-intelligence requirements to establish the extent of any breach of security that had occurred, and the requirements to ensure a basis for successful criminal prosecution. Mr. Calcutt has drawn attention to the need to provide guidance to investigators on how to deal with that conflict. We shall consider it carefully. It would not be right to say that the service investigators ignored the individual rights of those whom they were investigating.
My hon. Friend mentioned Senior Aircraftman Jones' entitlement to an ex gratia payment. He will understand that there is a clear difference of legal opinion on this matter. He will understand that I and my right hon. Friend the Secretary of State for Defence have taken the most carefully considered advice that is available to us, which is that, in view of the decision of the trial judge that Senior Aircraftman Jones's detention was lawful, it would be wrong to make an ex gratia payment in his case.
Dr. Norman A. Godman: As someone who served his national service with the royal military police, I listened to the Minister with sadness and regret. I was trained to treat suspects humanely. The Minister said that, in this case, we are discussing the unlawful custody of the men. Paragraph 6.3 states that none of the service men was told of his right to legal advice. That is a scandal. In the light of this case, will the Minister bring to the attention of the commanding officers of military police and serving police units the importance of strict adherence to the code of practice on suspects' rights?
Mr. Stanley: I assure the hon. Gentleman that we are doing that. As I said in my statement, we are issuing further instructions to clarify and re-emphasise the safeguards for individuals under investigation. I assure him that we attach the highest priority to the strictest adherence to the codes of guidance issued under the Police and Criminal Evidence Act 1984.
Mr. Michael Marshall: Does my right hon. Friend accept that I have only just heard the
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recommendation for discharge in respect of Senior Aircraftman Wayne Kriehn'? My right hon. Friend has made, as he always does, a courteous effort to give advice on the matter. I must consider my position in the light of what he announced this afternoon.
Reverting to general principles, may I ask my right hon. Friend to accept that my constituent, Senior Aircraftman Kriehn, has suffered the grave injustice of unlawful detention, improper pressure, the failure, for the best part of a year, to give information to his family on the length of detention, and isolation from officers known to him? For many months, I and my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) referred to those matters in correspondence with the Minister. I mention this not because I wish to say, "I told you so," but because I wish the Minister to say whether he believes that this shows a problem in the system that does not seem to be covered by the recommendations.
There is no ministerial intervention or senior officer intervention in the present system; nor would there be in any future system. Will my right hon. Friend give careful consideration to that aspect, to prevent another such tragedy?
Mr. Stanley: I acknowledge that my hon. Friend has been sedulous in drawing our attention to the anxieties of his constituent, Senior Aircraftman Kriehn. As for the hardships that he suffered, I assure my hon. Friend that Mr. Ogden will make his assessment of the ex gratia payment against the background of the Calcutt report.
On ministerial and senior officer involvement, my hon. Friend will be aware that the ultimate responsibility for disciplinary matters for the three services lies with the service boards, on which are represented the most senior officers of the three services, and Ministers. He will understand that it would not be appropriate, remotely practical or desirable for Ministers to become involved in the detailed handling of individual cases. We fully accept the responsibility that lies ultimately on Ministers to ensure that the instructions, guidance, regulations and, indeed, the legislation which apply when suspects are being investigated by service policemen are of a standard that would be fully acceptable to the House and comparable with what applies in the civilian sector.
Dr. Keith Hampson: My right hon. Friend will accept that Mr. Calcutt stresses that the delicate line between proper and improper behaviour was crossed. Equally, Mr. Calcutt has no doubts that the investigation and the trial were justified, despite the claims made afterwards by the press and the Opposition that the trial and inquiry were a waste of time and public money. On the contrary, there was a major security leak from that base. In the light of all that has happened, is my right hon. Friend content that there will be no further breaches of security?
Mr. Stanley: No further legal proceedings under the Official Secrets Act 1911 have been taken or are under consideration in relation to this case. I also remind my hon. Friend that my right hon. Friend the Member for Henley (Mr. Heseltine), the previous Secretary of State for Defence, took immediate steps to consider 9 Signal Regiment and its security arrangements to ensure that changes were made which would rectify the weaknesses of security which may have emerged.

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My right hon. Friend the Prime Minister has asked the Security Commission to examine the security of this and other similar units. I believe that everything possible and everything that is reasonable has been done to try to learn security lessons from this case.
Mr. Kenneth Hind: Does my right hon. Friend agree that, with the exception of RAF regulation 1034, this report suggests that the new code of conduct for the interrogation of suspects under the Police and Criminal Evidence Act 1984, followed by the Armed Forces Bill, will deal with many of the problems which have arisen in this case such as the right to legal advice? The report totally vindicates the decision of the Select Committee on the Armed Forces Bill not to pursue inquiries until this matter had come before the House.
Mr. Stanley: I believe that my hon. Friend is correct about the decision of the Select Committee. I endorse what he has said. The changes to the codes of guidance under the Police and Criminal Evidence Act 1984 should do a certain amount to deal with the problems which have arisen in this case. We are anxious that fresh instructions should be issued to highlight the importance of making certain that clear priority is given to protecting the legal rights of individuals who are investigated.
Mr. David Ashby: Will my right hon. Friend reconsider the position of SAC Jones? There has been a manifest injustice in his case. The trial judge apparently ruled that the detention was lawful. By virtue of his acquittal, SAC Jones has no locus, no standing and no right of appeal, but Mr. Calcutt's report shows that the detention was unlawful. The matter was examined with great care by Mr. Calcutt. He was investigating as well as drawing conclusions. Mr. Calcutt clearly states that it was unlawful. Therefore, there is no justification for treating SAC Jones differently from the others. Justice ought to be seen to be done and, as a result of the inquiry, all the individuals should be treated equally.
Mr. Stanley: I am sure that my hon. Friend will acknowledge that Mr. Calcutt's report and inquiry do not constitute an appeal in a judicial sense. Mr. Calcutt and the trial judge made different legal interpretations. I assure my hon. Friend and others who have spoken on this point that, before this conclusion was reached, the most careful considerations had been given and the most careful advice taken.
Mr. McNamara: It seems to be common ground in the House that the case of SAC Jones should be looked at again. Despite the careful advice which has been given, I would be grateful if the Minister could say, having heard the opinions of hon. Members, that he will reconsider the case.
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The letters which were sent to the Minister by the hon. Members for Arundel (Mr. Marshall) and for Clwyd, North-West (Sir A. Meyer) raise an important issue. I understand that the Minister could not interfere in the judicial procedure, but, if the matter went to the Air Force Board, was no notice taken of the concern which had been expressed in letters to the Minister from constituency Members regarding what was happening to people who were under inquiry? May we know the grounds upon which three men, who were found not guilty by a jury and who wish to remain in Her Majesty's Armed Forces, are being recommended for dismissal? That almost suggests that, despite the trial, despite everything which has come up before and despite the verdict of the jury, the Ministry of Defence still thinks that those men were guilty.
Mr. Stanley: I can give the hon. Member the absolute assurance that, when any hon. Member writes to the Ministry and conveys a complaint on behalf of an individual service man, that complaint is carefully investigated. A careful report is made to Ministers before they reply to an hon. Member. I assure the hon. Gentleman that that is done in each and every case.
With regard to the grounds for dismissal of the remaining three senior aircraftmen still in the service, the hon. Gentleman, and, I hope, the whole House, will understand that it would be improper for me to say what those grounds are. The service men concerned are being informed of this in writing, and what use they make of that information is entirely up to them. It would not be right for me to indicate the grounds. I wish to make it clear that meticulous care has been taken to disregard any matters which were contested or disputed in the Official Secrets Act trial.

Cyprus Secrets Trial (Calcutt Report)
  BILL PRESENTED
    POLICE COMPLAINTS PROCEDURE (AMENDMENT) (No. 2)
    Mr. Peter Pike presented a Bill to amend the Police and Criminal Evidence Act 1984 to establish an entitlement for a complainant to have access to the report of the police on the substance of his or her complaint; to make further provision in relation to the complaints procedure; and for connected purposes. And the same was read the First time; and ordered to be read a Second time Friday 6 June and to be printed. [Bill 166.]

  EUROPEAN COMMUNITY DOCUMENTS
  Ordered,
  That European Community Document No. 4676/86, laying down definitions of fishing vessels' characteristics and measurements, be referred to a Standing Committee on European Community Documents.—[Mr. Maude.]

  Ordered,
  That the Patents, Designs and Marks Bill [Lords] be referred to a Second Reading Committee.—[Mr. Maude.]

Orders of the Day

  Sex Discrimination Bill [Lords]
  Order for Second Reading read.
  Mr. Speaker: Before I call the Paymaster General, I should announce to the House that I have selected the reasoned amendment in the name of the Leader of the Opposition.
  5.48 pm
  The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): I beg to move, That the Bill be now read a Second time.
  The Bill has two major purposes. First, it makes a number of amendments to the Sex Discrimination Act 1975 to bring it into line with European Community directives on equal treatment. Secondly, it removes sex discrimination in hours of work laid down in statutes which have for many years outlived their original purpose.
  The common thread in the various provisions is the Government's genuine commitment to promote equal opportunities in employment between men and women and, in particular, to eliminate all unreasonable discrimination on the grounds of sex. This commitment is consistent with our general aim of improving the flexibility of the labour market. The removal of barriers which hinder either men or women from making their full contribution to the economy will mark a significant step towards the achievement of greater efficiency, competitiveness and prosperity.
  The first two clauses stem from a judgment of the European Court of Justice which ruled that the Sex Discrimination Act 1975 did not fully comply with the European Community equal treatment directive. The judgment found the 1975 Act deficient on three counts, covering its exemption of private households and of small firms. Its application to collective agreements and the rules of undertakings and of independent occupations.
  Recognising that the judgment placed on us an obligation to amend the Act, we carried out an extensive consultative exercise last autumn to establish how this could be done in a manner best fitted to our national circumstances and practice. The Bill reflects the outcome of these consultations, in which we were especially grateful to the Equal Opportunities Commission, the Confederation of British Industry and the Trades Union Congress for their comments and the way in which they presented them, even if it was not possible to reach general agreement on all of the issues.
  Mr. Eric Forth (Mid-Worcestershire): I am most grateful to my right hon. and learned Friend for giving way so early in his speech.
  Bearing in mind what he said about there being an EEC obligation to introduce this legislation, and in view of the process of consultation that has been undertaken, will my right hon. and learned Friend say how far he is convinced that there is a legitimate role for the law in this area and what evidence he feels that there is of the success of previous efforts at law-making in trying to do away with different types of discrimination? How satisfied are he and the Government in this regard, or is this merely a matter of complying with a European Court ruling?
  Mr. Clarke: My hon. Friend raises wide issues and asks my opinion about how far the law is relevant to the subject of equal opportunities. The House accepted the principle that there was a role for the law in race relations and sex discrimination many years ago. We have the 1975 Act, and successive Governments have believed that they have complied with the equal treatment directive, which they have followed. The Bill would merely amend the law to comply with the judgment and ensure that we match its requirements more directly.
  I see that my hon. Friend is sceptical about the legal approach. I go along with him to the extent that the law cannot completely remove prejudice and unfairness in personal relations between people in any society, least of all in a free society such as ours, but I believe that the law has a useful role to play.
  When people can demonstrate that they are the victims of unfair discrimination which the bulk of society would say was unfair, it is right that there should be some form of legal machinery that gives them a remedy. We cannot change human nature, but the law has some role to play in protecting individuals in their workplace from the consequences of the worst aspects of human nature. That is what we are trying to do.
  Mr. Richard Holt: I am most grateful to my right hon. and learned Friend for giving way. It is not sexual prejudice or otherwise.
  Was the list of consultations that he gave complete or did he speak to the Institute of Personnel Management, chambers of commerce an others at the sharp end of the operation?
  Mr. Clarke: I named three of the larger and better known institutions. The Equal Opportunities Commission had to be consulted, and the CBI and the TUC are concerned with hours of work and the like. We consulted the Institute of Personnel Management and a wide range of other bodies. The ramifications of legislation such as this are such that I am sure that it will transpire that we have missed out some relevant body which we ought to have consulted. Whenever possible, however, we have consulted all those that are likely to be affected.
  I shall give the House a quick guide to the clauses. Clause 1 repeals section 6(3) of the 1975 Act, which exempts private households and businesss with five or fewer employees from the requirement not to discriminate in employment. The clause makes a new, more limited, exception for private households. This will protect an employer's freedom to choose a man or woman for a job which involves living or working in a private home where there could be quite reasonable objection to someone of the other sex having such physical or social contact with a person living in the home, or the knowledge of intimate details of such a person's life, which the job is likely to entail.
  This part of the Bill seeks to strike a balance between contrasting considerations which were clearly present in the judgment. The court concluded that the present general exemption for employment in private households was too wide, but acknowledged that the principle of respect for private life was fundamental and could be decisive for the treatment of certain kinds of private household employment. We have no wish to bring the law governing public employment relationships into people's private living arrangements. I am sure that the overwhelming

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  majority of public opinion and my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) would agree that people should be free to choose the sex of employees who will be closely involved in their home life. I hope that the wording of the clause, which has been improved in another place, safeguards that principle.
  Clause 1 also removes the exemption for firms with five or fewer employees. This is necessary to comply with the equal treatment directive. We agree, of course, that it is not in any way reasonable for such firms to practise sex discrimination. Discrimination is unfair and inefficient in a business of any size. We still question whether it is really appropriate to seek the objective of equal treatment by applying to all small firms a law designed to meet the circumstances of larger employers. The Labour party presumably recognised that when it included this exemption in the 1975 Act. Small firms play a vital part in the creation of wealth and new employment, and we want them to be able to concentrate on making their businesses grow with the minimum of rules and regulations. For that reason, we have proposed in the European Community that member states should have the power to exempt very small enterprises from national provisions implementing the equal treatment directive.
  We are anxious to give as much help as we can to small firms which will have to comply with the minutia of sex discrimination law for the first time, although I hope that they already comply with the spirit of it. Our Department will therefore give priority to issuing simplified explanatory guidance following the passage of the Bill, and we shall ensure that our small firms service can give informed advice.
  Before I leave clause 1, I should say that it has been improved in another place by the addition of a provision concerning partnerships. At present, it is unlawful for firms consisting of six or more partners to discriminate in the selection or treatment of partners. In future, the Sex Discrimination Act will apply to partnerships of all sizes. This is a logical extension of the clause which reflects women's marked entry into self-employment in the past few years. Between 1983 and 1985, the number of self-employed women in the United Kingdom rose by some 25 per cent.
  Clause 2 is also designed to bring our equality laws into line with European Community directives. It is concerned with contractual matters, and the House will have an opportunity to discuss its technicalities in Committee. The European Court judgment requires us to make void discriminatory provisions in collective agreements, internal rules of undertakings and rules governing the independent occupations and professions. The court accepted that our law partly implemented this aspect of the equal treatment directive through section 77 of the present Sex Discrimination Act. That section makes void discriminatory terms in contracts—which would include a legally binding collective agreement—but we need to make corresponding provision for agreements and rules which are not legally enforceable.
  Although the judgment concerned only the EC equal treatment directive, there is a parallel requirement in the equal pay directive. Clause 2 therefore amends section 77 of the Sex Discrimination Act to make void any term of a collective agreement, whether or not legally enforceable, and any rule made by an employer for his or her employees
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  or prospective employees in so far as it would result in a breach of either the Sex Discrimination Act or the Equal Pay Act 1970. The same applies to any rule made by an organisation of employers or workers, a professional or trade association or a body which confers qualifications. The voiding of discriminatory terms and rules will not impair employees' rights under their contracts of employment, which are specifically protected by the clause.
  As for the remaining clauses, perhaps I might quote the Bill's long title. It would
  "provide for the removal of certain restrictions applying to the working hours and other working conditions of women; and … repeal the Baking Industry (Hours of Work) Act 1954".
  Their origins, too, can be traced back to the Sex Discrimination Act 1975. In establishing the Equal Opportunities Commission, the Act included among its functions a duty to keep under review, in consultation with the Health and Safety Commission, provisions of health and safety at work legislation which require men and women to be treated differently. A prominent part of such legislation is that concerning hours of work.
  Following a review of the legislation, the EOC issued in 1979 its report entitled "Health and Safety Legislation: Should We Distinguish Between Men and Women?" As for hours of work legislation, its answer to the question that it had itself posed was a resounding no.
  The EOC's report went rather wider than hours of work legislation. It dealt, for example, with safeguards against exposure to lead and to radiation in the workplace where a woman's reproductive capacity or the safety of her unborn child might be put at risk. None of these areas is in any way touched upon by the Bill.
  I return to the issue of hours of work. Current legislation distinguishes between men and women in ways on which I shall elaborate shortly; how can this discrimination be removed? In the broadest possible terms, we face a choice. We can remove restriction altogether by repeal or we can extend the present legislation so that the restrictions continue to apply but to men and women alike.
  There have been six long years of consultations with interested parties following the EOC's report and so far no consensus on the best way forward can be reached, and there is little practical likelihood that it will. In particular, the views of employer and trade union representatives on the Health and Safety Commission could not be fully reconciled. No one has ever suggested in all the discussions that women, for some reason, are more susceptible than men to any adverse effects which might stem from night work or working long hours. Equally, no one suggests nowadays that women are in greater need of protection. The origin of the requirements that relate to the working hours of women must go back to a time when society widely believed that the weaker sex required greater protection. As I have said, that is no longer anyone's opinion, as far as we can judge from the consultations.
  There is no evidence that the existing restrictions are making any effective contribution to the health and safety of women working in factories or of men in baking. The restrictions did, however, clearly represent obstacles to women wishing to broaden their experience in pursuit of career opportunities, and just as clearly were an unnecessary complication for employers wishing to organise the hours of their work force to optimum effect.

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  The Government have decided that there must be a resolution of these issues. We cannot have discriminatory legislation on hours of work remaining on the statute book. The Government concluded last year that further consideration of the EOC's 1979 recommendations by the parties most affected would be unlikely to achieve consensus against the background of six years' continuing disagreement. The Government therefore decided upon repeal of the existing hours of work legislation.
  The Bill has reached this House from another place with this intention broadly intact, although it now contains further provisions, whose introduction was opposed by the Government in the other place and to which I shall return in a moment. It was also argued in another place that rather than repeal the existing legislation, we should give more sympathetic consideration to its extension to men. I should like to examine this contention now in a little more detail.
  The argument runs that long hours and, in particular, night working, can have a deleterious effect on workers' health, welfare and social well-being. It is therefore argued that it is the role of the legislator to protect the worker from his employer, and presumably often from himself, as it is not unusual for the worker to seek night work or overtime as a boost to earnings.
  Nobody — certainly not this Government — would dispute that excessively long hours of onerous night working might bring adverse effects. We do not believe, however, that the agreements entered into voluntarily between employers and their work forces on hours of work have this as their end result in the circumstances of today. We certainly see no point in extending to men the rigid restrictions which currently apply to women.
  The existing restrictions for women reflect the circumstances of the time of the legislation's introduction, when five 12-hour day or night shifts, or sometimes these hours spread over six-day working, were the norm, with significant overtime working in addition. This legislation dates from the mid-19th century, and as late as 1900 hours worked averaged almost 54 each week. But the overall average in 1985 was just over 40. In the present age of new technology, computer-controlled equipment tends to work longer each day, while those who tend it work shorter average hours, but need at the same time to operate more flexible working patterns. We are accordingly seeing the introduction into manufacturing industry of flexitime arrangements along the lines which have become familiar in white-collar employment.
  Information technology is changing the nature of work in the factory to something more closely akin to office work than the traditional production line grind. The flexible working arrangements necessary to encourage these developments, especially when based on a flexible working year, but even when based on a monthly or weekly cycle, would clearly be impeded by the existing rigid restrictions applying to women.
  Mr. John Evans: Is the right hon. and learned Gentleman aware that employees in the baking industry work longer hours than any other group of workers in our society apart from merchant navy seamen? The average working week in the baking industry is in excess of 60 hours. Does the right hon. and learned Gentleman expect repeal to increase or reduce those hours? Would it not have been better to allow the legislation to remain on the statute book, bearing in mind
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  that there is no demand for its repeal from major employers or the trade unions, and to extend the protection that it affords to women?
  Mr. Clarke: I assure the hon. Gentleman that I have first-hand experience of night working in the baking industry. Baking has always been a fairly nocturnal activity as people buy in the morning fresh bread that has been cooked for them the night before. As I understand it, however, modern technology and newer types of bread are rather reducing that practice. I do not claim typical experience, but between leaving school and going to university I worked for a couple of months as a night worker in a bakery. I did all sorts of unpleasant jobs, such as greasing tins in the middle of the night. My experience was as a worker in the industry. I opted deliberately for permanent night work and sought the maximum amount of overtime, and I think that many workers still do that
  Collective agreements already override the legislation in a large part of the baking industry, and I do not believe that we are still in a position in which it is necessary to protect bakery workers from exploitation, which was intended to be suppressed when the legislation was put on to the statute book. In practice and reality, the legislation is rather liked by trade unions in the industry. It tends to ensure that the industry remains unionised because there can be exemptions only as a result of collective agreements. It improves the bargaining position of the unions vis-à-vis the employers as they negotiate exemptions from the Act. I do not believe that we are protecting downtrodden workers in the baking industry, even though I do not base my argument on a 20-year-old recollection of those I worked alongside during the night and on overtime, when there was legislation to protect us.
  There is a gap between the legislation on women's working hours and some of the defences of it and what actually exists as a result of modern social conditions. I shall spell out the complexities of the restrictions on women's hours which are imposed by just one piece of legislation, the Factories Act 1961. Clause 4 provides for the repeal of the provisions, along with similar provisions in the Hours of Employment (Convention) Act 1936 and in the Mines and Quarries Act 1954. These restrictions currently cover only 1·5 million women, working mainly in manufacturing industry, out of a total of 9 million who are employed within the labour force. It seems that no one has thought it necessary to protect the remaining 7·5 million women by means of the present curious requirements.
  The 1·5 million women who are covered by the collection of legislation to which I have referred cannot work more than nine hours a day within an 11 -hour period of employment, subject to a maximum of 48 hours a week. They cannot start before 7 am or finish later than 8 pm, or 1 pm on Saturdays. Sunday working is prohibited. The maximum continuous spell of work is limited to four and a half hours, or five hours if a 10-minute break is allowed. Any employer with women and young people on his books must post a notice setting out the full schedule of their starting times, finishing times and intervals, which the legislation stipulates should apply to all alike.
  This is not the whole story. The legislation provides for some exceptions and variations. I have so far explained the detailed instructions applying to factories working a six-day week, but the permitted daily hours are somewhat extended for factories normally working a five-day week.

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  The legislation also allows for each factory the working of "overtime" — which is different from that normally regarded as overtime for payment purposes—during six hours in any week, not exceeding 100 hours during the calendar year and confined to 25 weeks during the year, as long as for each employee the total daily working hours do not exceed 10, and provided that the maximum period of employment does not exceed 12 hours in a day. Finishing times for overtime can be no later than 9 pm, but still 1 pm on Saturdays.
  There is provision for yet further extensions to the hours that may be worked by the making of regulations, providing that the Secretary of State is satisfied that work in any class of factory is
  "subject to seasonal or other special pressure".
  For instance, regulations permit the employment of women from 6 am if they work in a laundry, a milk or cheese factory, or are employed in bread, flour, confectionery or sausage manufacture.
  I have inflicted on the House this tedious recital of the legislation on the statute book because it clarifies the choice between whether we should repeal all of it if it applies to only 1·5 million out of 9 million working women, or whether we should apply it all to men involved in similar activities. I believe that repeal is obviously the answer.
  There is also provision enabling the Health and Safety Executive to permit an employer to run his factory on a shift basis. That is all prescribed in the legislation in a detailed way which obviously inhibits the flexibility of employers engaged in particular manufacturing processes. In this day and age it is quite absurd for the law to meddle in such a detailed and prescriptive manner in the arrangements which employers and employees need to agree for the running of any enterprise. We live in a world in which flexibility is increasingly at a premium. Indeed, the legislation avoids ultimate absurdity by making provisions under which the Health and Safety Executive can give special exemption orders from those detailed restrictions, renewable on an annual basis, to employers who argue increased efficiency in justification. The Health and Safety Executive has not in recent years refused such a request. In 1984–85, more than 4,000 special exemption orders were granted, covering more than 200,000 of the 1·5 million women in manufacturing. Almost half those exemption orders allowed some night working by women.
  Far from being an argument for retaining or extending the existing legislation, the "flexibility" provided by this exemption procedure if anything strengthens the case for repeal. Had there been anything to be gained by these restrictions, ready exemptions by the granting of such orders largely neutralised any effect the legislation might otherwise have had. We are left with a near-meaningless rigmarole of complex restrictions which may be lifted by invoking a bureaucratic procedure at the cost of the employer's, and incidentally the Health and Safety Executive's, time and energy, with no obvious benefit to anybody.
  Opposition Members will no doubt argue that, in spite of the dearth of prosecutions or other enforcement action, it is only the existence of the legislation which deters the rogue employer from transgressing or, where he applies
  576
  for a special exemption order, which persuades him to be reasonable in his requests. I quite frankly find that incredible.
  Mr. Evans: The Minister should wait until we have made our arguments before he starts replying to them.
  Mr. Clarke: I look forward to hearing those arguments, but the complexities I have described are impossible to defend. I am no longer even able to think of arguments that could be raised in defence of the present legislation.
  Clause 5 repeals the Baking Industry (Hours of Work) Act 1954.
  Mr. Ken Weetch: In Committee, do the Government intend to remove clause 3?
  Mr. Clarke: Yes. If I remember correctly, that clause was inserted into the Bill in the other place. It seeks to postpone the implementation of part of the legislation in the hope that a consensus might still emerge from the discussions. We will listen to any arguments put forward both on Second Reading and in Committee, but at present I believe that the clause represents the triumph of hope over experience, and will merely delay a desirable reform.
  But the House is impatiently waiting for me to return to the subject of the Baking Industry (Hours of Work) Act 1954. That Act, which regulates the hours which men may work within the baking industry and specifically excludes women from its provisions, would, with the repeal of the restrictions on women's hours of work envisaged by the Bill, regulate the work of men in bakeries while women's hours were totally unregulated. I hope that all hon. Members agree that that would clearly be ridiculous.
  Currently, exemptions may be given under the baking Act by the Secretary of State, which suspend the statutory restrictions on hours of work. These exemption orders in effect substitute regimes of hours of work forming parts of different collective agreements covering different employers and unions within the industry. The six collective agreements on the strength of which past Secretaries of State have granted exemptions over the years now set the hours of work of over two thirds of the industry.
  The Act was introduced initially not out of concern for the effects of shift patterns in the industry on the operatives' health or safety, but because of the long history of weaknesses in the industry's machinery for collective bargaining. It is the Government's view that this weakness is no longer apparent and that there is no longer any justification for trying to alter this industry's collective bargaining by statute, when in no other similar industry is this done. This Act was ripe for repeal, and the other repeals envisaged by the Bill make this the suitable and necessary occasion.
  The unions in the industry and the Equal Opportunities Commission, both in the 1979 report and during the recent consultations on the Bill's proposals, have argued for the Act's extension to women instead of its repeal. The Federation of Plant Bakers strongly favoured repeal while other employees' federations were generally supportive of this view. The Government have decided, for reasons that I have explained, in favour of repeal. Moreover, the extension to women of this outmoded legislation would be totally inconsistent with the need to avoid unnecessary and burdensome restrictions on enterprise—a subject that we have already touched on today.

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  I turn to those clauses that were introduced into the Bill in the other place after the Government had argued against them. I have already dealt with clause 3. As I said to the hon. Member for Ipswich (Mr. Weetch), it is far from clear to the Government that anything would be gained by yet further rounds of consultations on this issue when six years of that have resulted only in stalemate.
  Clause 7, on what is described as the "protection of existing conditions", incorporates the statutory restrictions that are to be repealed into the existing employee's contract of employment and ensures that dismissal for refusing to accept new hours of work would be treated by an industrial tribunal as automatically unfair. We understand why there may be concern for the transitional effects on employees for whom statutory restrictions would no longer apply. But we are not convinced that a complicated and far-reaching provision, that in some ways duplicates and in others expands upon other legislative protections, is necessary, or indeed justified, in these circumstances.
  There will be cases where the employee can rely on the implied term in the contract, which is already there, governing hours of work. Obviously employers and employees will need to discuss any suggestions about changes in the hours of work. But clause 7 would reduce the flexibility available to industry under the existing law. At this stage that seems to be quite unnecessary.
  Mr. Robert Rhodes James: It is of considerable concern that an amendment may be moved later that would make employment in women's colleges and schools contrary to the legislation, following a ruling of the European Court. That would mean discrimination against women in their employment. Is my right hon. and learned Friend aware that there is genuine concern about that? Can he give me—as I am sure that he will—a complete assurance that such fears are groundless?
  Mr. Clarke: With my right hon. Friend the Secretary of State for Education and Science, I am pursuing the implications of proposals that might be made for certain women's colleges and universities whose statutes presently prohibit them from advertising for men for academic posts. We shall have to consider that.
  I understand that there is alarm in some of the women's colleges that such a change would have an adverse effect on the character of the academic institutions. I shall continue to consider that point.
  At the moment, the Bill does not affect women's colleges. It is my desire that we pass this legislation in a way that actually improves and strengthens our law and protects us against unfair discrimination. It is also my desire that we should not be led into absurdity in so doing. I shall consider with sympathy the points made by both my hon. Friends and consult my right hon. Friend the Secretary of State for Education and Science who is interested in this matter. Indeed, it might well be part of his responsibility.
  Mr. Steve Norris: Will my right hon. and learned Friend note that interest in this matter is not confined to the younger universities but exists in older institutions than that represented by my hon. Friend the Member for Cambridge (Mr. Rhodes James)? This afternoon the principal of St. Hilda's college, Oxford, contacted me specifically to express her concern at the prospect of any such change. I am grateful for the
  578
  assurances that my right hon. and learned Friend has given. Will he ensure that any steps to alter the present position and take away the exemption provided by section 51 of the 1975 Act are taken only after the fullest consideration?
  Mr. Clarke: I appreciate that my hon. Friend, who represents an Oxford constituency, and my hon. Friend the Member for Cambridge (Mr. Rhodes James) have a close interest in this matter. The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) was lobbying me in the House last night. My right hon. Friend the Minister of State, Foreign and Commonwealth Office has raised this matter with me, as has my right hon. and learned Friend the Foreign Secretary. Indeed, my wife was educated at Newnham college, Cambridge. It is obvious that there is considerable, widespread and influential concern about this matter. Obviously we must consider it seriously. I assure my hon. Friends that we are consulting the principals of the colleges most concerned and will take no steps until that consultation is complete.
  Mr. Forth: I speak on behalf of liberated women who are not incarcerated in all-women colleges. My right hon. and learned Friend will be undermining the serious principles of equality of opportunity for liberated and confident women who can make their own way in the world if he allows the perpetuation of an anomaly which, if it were done by men, would be castigated and criticised by everybody. Will he give me an assurance that in considering representations from his friends and his right hon. and hon. Friends he will pay equal attention to the considerations of fairness and genuine equality and not allow this anomaly to be perpetuated?
  Mr. Clarke: I assure my hon. Friend that we will consult on the widest possible basis and listen to all views. I am absolutely certain that the merits of single-sex education versus co-education are outside my immediate sphere of responsibility, and I shall most emphatic ally put to my right hon. Friend the Secretary of State for Education and Science all the points that have been made.
  Mr. Evans: It is always nice to hear concern for women who apparently have such influential and high-powered friends. No doubt their case will be well heard. May I bring the House back to the position of women at a much lesser level? Does the right hon. and learned Gentleman accept that his announcement that the Government intend to remove clauses 3 and 7 is absolutely outrageous? Why is it that when the Government were trying to bribe their Back Benchers to get the Shops Bill through the House they promised that they would enshrine the rights of shopworkers in the legislation, while in this Bill they are apparently happy to remove the rights of hundreds of thousands, if not millions, of workers? Why does not the right hon. and learned Gentleman accept that clause 7 is a valuable protection for millions of workers?
  Mr. Clarke: I repeat that we will listen to the arguments. I do not think that we can establish a general principle that every time this House considers modest amendments to employment legislation it is necessary to enshrine in statutory form a rigid protection of the existing position for all existing employees. Indeed, it is not only protection for employees — clause 7 proposes a rigid statutory straitjacket, tighter than that which currently exists, on working conditions in industries.

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  Those clauses will have to be seriously considered in Committee. Obviously, we have been considering them since they were first introduced in another place. To be fair, I am telling the House today that our reaction to clauses 3 and 7 is unfavourable. To complete the hon. Gentleman's distress, I can tell him that our attitude is much the same to clause 8 on changing hours of work. That clause imposes on all employers proposing significant changes in hours a new statutory duty for the health, safety, welfare and interests of employees, especially those with domestic and family responsibilities. It also allows the Health and Safety Commission to issue a code of practice containing practical guidance on the entirety of that duty.
  As I said a few moments ago, the pattern of work that is emerging in today's more modern economy calls for ever-increasing flexibility in working arrangements. This country must not stick to a rigid nine-to-five, five-day week pattern of working in manufacturing or service industries. It is in the interests of both employers and employees to move to more flexible arrangements. There is tremendous growth in the amount of self-employment, part-time employment, short-term working, flexi-hours, varied shift systems and so on.
  When we consider in Committee the arguments about clause 8 we will have to address ourselves to the problem that, on the face of it, it appears to impose on any employer wanting to make a change in the hours of work a detailed statutory duty to inquire into the personal interests and circumstances of each and every employee before making those changes. I understand the motives that lay behind clause 8, but I am not satisfied that it is in the interests of women, men or British industry to introduce such a clause.
  Mr. Holt: Will my right hon. and learned Friend assure me that the implementation date of the Act will be as set out in the Bill? Notwithstanding the consultations between the Health and Safety Commission and the Equal Opportunities Commission, can my right hon. and learned Friend assure me that if they cannot get together and reach a conclusion as they have done with the Bill over a six-year period, any employer who makes substantial changes in the meantime will not be taken to an industrial tribunal and found automatically guilty simply because those two learned bodies have not reached a conclusion?
  Mr. Clarke: The lack of agreement is principally between the employers' representatives and the trade union representatives within the Health and Safety Commission. It is our intention to proceed as stated in the Bill. I realise that my hon. Friend believes that it is time to reach a decision on these matters, which continuing consultation is not likely to resolve. It is contrary to the spirit of all legislation to introduce new statutory procedures that employers must follow before they can make any substantial changes in hours of work. We will listen carefully to what is said in a debate on these three new clauses, and obviously these matters will be dealt with in Committee.
  To sum up on the repeals, the present legislation is discriminatory and sets obstacles in the way of womens' opportunities in manufacturing industry. For those women it can limit their access to shifts paying premium rates and, moreover, hamper them in gaining necessary experience on the way up the promotion ladder. If it offers them any
  580
  real protection at all, which I doubt, it is against ills that are singularly vaguely defined, and it does so with very inconclusive results. It imposes burdens on the employer which, in the circumstances, are unnecessary and unjustifiable and which hence should be lifted at the earliest sensible opportunity. It is our intention to do so.
  I wish to outline the major addition that the Government intend to make to the Bill in Committee. The House will know that the Government plan to take the opportunity presented by the Bill to give effect in our legislation to the judgment of the European Court of Justice issued on 26 February in the case of Marshall versus South-West Hampshire area health authority.
  The judgment stated that it was contrary to article 5(1) of the equal treatment directive for an employer to dismiss a woman solely because she had reached state pensionable age where that age was different for women and men. The court also ruled that the article could be relied upon as against a state authority acting in its capacity as an employer, and to that extent the judgment took effect immediately. The new clause that we shall table will mean that employers must change policies that currently oblige women to retire at an earlier age than men in similar circumstances.
  The Government have been concerned to take action as soon as possible following the judgment, to avoid the unsettling effects of uncertainty both for employers and employees. We accordingly carried out a rapid consultation exercise during April, receiving comments from some 90 interested organisations. I am glad to say that there was virtually unanimous support for our view that the judgment should be implemented in the Bill.
  It is clearly difficult, if not impossible, to contest the general principle that women should be entitled to work for as long as their male colleagues. I should like to pay a personal tribute to Miss Marshall for her determination in fighting her case and winning a place in the long history of the movement to establish equal rights for women. It is both fair and economically desirable that women who wish to go on exercising their skills and contributing to the economy should be able to do so to the same age as men.
  The change marks an important step forward. I urge employers to begin thinking now about any consequential changes they will need to make in their policies. At the same time, I must emphasise the limits of the amendment, in that it will not affect either occupational or state pensions—a question which was not affected by the Marshall judgment, as I explained in the House.
  The Government raised the possibility —I imagine hon. Members will refer to it in the debate—in their Green Paper on the reform of social security, issued in June 1985, of moving towards what we described as a decade of retirement in which both men and women could choose to retire between 60 and 70 with a higher or lower pension, depending on whether they retired earlier or later.
  There is a strong case for making this a longer term aim, as an effective means of establishing equal treatment between the sexes as well as for other reasons; but the cost implications could, of course, be very substantial as they would for any equalisation of state pension ages below the age of 64. We would certainly not wish to hold up action on the European Court's judgment — even if we were able to do so — until the major questions of future pensions provision were resolved.
  Mr. Neil Thorne: Will my right hon. and learned Friend confirm that that means that women who retire at 65 will receive a higher pension than men who retire at the same age?
  Mr. Clarke: That is the case, and it has always been the case. Anyone who defers his state retirement in this country gets an increment for each year by which he defers it. So long as we have different ages for state retirement, if both men and women remain working until they are 65 the woman will receive a higher pension. On an actuarial basis, she is likely to receive it for longer than her male colleague. In many people's opinion, the state pension system is discriminatory in favour of women. They tend to contribute less and receive their pensions for longer. They can receive a higher pension if they defer retirement. That is a long-standing policy, not touched on by the Bill. I am describing a way forward which would remove any discriminatory effects, and which was canvassed in the Green Paper. We cannot wait for that longer-term aim to be implemented before we act on the Marshall judgment.
  We shall also be tabling an amendment to section 47 of the Sex Discrimination Act 1975, which deals with the provision of single sex training. Under that section, training bodies may offer vocational courses or other encouragement to women only—or to men only—with a view to their entering work in which they are seriously under-represented, or to help them return to the labour market after a spell of domestic or family responsibilities.
  The main object of the Act is, of course, to eliminate discrimination on the grounds of sex and to promote equal opportunities between men and women. Discrimination in favour of one or the other is allowed only in exceptional circumstances. That is presumably why only the Manpower Services Commission, industrial training boards and training bodies designated for this purpose by the Secretary of State were empowered to run single-sex courses under section 47. I am sure that those who drew up the present Act were right to provide the filter of designation, ensuring that the section would not be abused to undermine the principle of equality then being introduced into law.
  However, the situation has changed markedly over the 10 years since the Act came into operation. In particular, much more attention is being given to training women for occupations associated with engineering and new technology, where extra talent is needed to alleviate skill shortages, together with a general public acceptance that such training is justified. This has led to a welcome increase over the past two years in the number of training bodies seeking designation, and there are now some 150 designated bodies compared with 46 at the end of 1983.
  We have looked at the situation carefully and concluded that there are no great advantages in retaining designation, and obvious benefits to training bodies in dispensing with the paper work involved in the designation process. Therefore, we intend to remove the need for persons to be designated to run these training courses, although the training would still have to conform to the strict requirements of section 47 in other respects. I must also emphasise that discrimination, including so-called positive discrimination, in recruitment of employees will remain unlawful.
  I have described one or two quite important matters which we shall be adding to the Bill in Committee and which I believe will have widespread support in the House.
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  I commend the Bill to the House as one which admirably combines two very desirable objectives—the furthering of equal opportunities and the removal of needless bureaucracy. The Bill will eliminate a number of legal loopholes in our sex discrimination law and bring us more closely into line with Community law. It should also make a modest contribution to labour market flexibility and the ability of business to respond to changed economic and social conditions.
  I ask the I louse to give the Bill a Second Reading.
  6.35 pm
  Ms. Jo Richardson: I beg to move,
  That this House welcomes the Government's acceptance of the European Community ruling that the Sex Discrimination Act should be strengthened to apply to small firms, private households, partnerships and collective agreements; but declines to give a Second Reading to a Bill which fails to apply the Act to collective agreements and which seeks to repeal the Baking Industry (Hours of Work) Act 1954 rather than extending protective legislation to women as well as men.
  The Paymaster General and Minister for Employment made a most interesting speech. As the hon. Member for St. Helens, North (Mr. John Evans) and I followed it, we saw that it was an exact repetition, word for word, of what Lord Young said in the House of Lords. Every now and again the right hon. and learned Gentleman diverted and threw in a bombshell, such as that he would remove—it is a disgraceful move—clauses 3, 7 and 8 from the Bill. Some good debates took place in the House of Lords on those clauses.
  The Bill, as the Paymaster General said at the beginning of his speech, needs to be considered and adjudged as two quite separate and, in a way, unrelated pieces of legislation. Clauses 1 and 2 have been forced on the Government by the European Court and the EEC equal treatment directive, when the Court found the United Kingdom's legislation on sex discrimination deficient in three areas— private households, small businesses and collective agreements. The EEC has urged the Government to act on those areas since 1983, when the Court made the ruling. It has taken three years for the Government to do something.
  The Government, with their consistent record of obstructing every practical and progressive measure towards promoting real and meaningful equality of opportunity for women, have been delaying ever since, until they found a way to use it as a camouflage for one of their top priority ideological commitments — to dismantle, bit by bit, all employment protection legislation and health and safety regulations, and to further weaken the rights of all workers against exploitation in a so-called free market economy.
  Clauses 4 and 5 of the Bill are a direct consequence of the Government's determination to turn back the clock to pre-Victorian conditions of employment for men and women. We must remember that the Government announced their intention to amend and repeal legislation governing women's hours and times of work in what I call the infamous "Lifting the Burden" White Paper — the same paper which lists, among its achievements, extending the qualifying period for unfair dismissal, exempting young people, reducing the scope of regulation of the wages councils and revoking over 300 individual health and safety regulations since 1980. Only this

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  afternoon we have seen the introduction of a further White Paper under the title of "Building Businesses — Not Barriers" which, broadly speaking, has the same theme.
  No court ruling on equal opportunities was needed to prod reluctant Tory Ministers into producing those so-called anti-discrimination measures. Clauses 4 and 5 are all their own work. It is true that they have tried to hide their true intentions behind the Equal Opportunities Commission report, published seven years ago, to which the right hon. and learned Gentleman referred, on the question of health and safety legislation which distinguishes between men and women. The commissioners were not in unanimous agreement on the report, and the Health and Safety Executive could not agree on implementation.
  However, even this flimsy cover has been blown by, among others, the chairperson of the Equal Opportunities Commission. She was appointed by the Government and sits on the Government side in the other place. She was forced into moving amendments and dividing the other place against the Government in an attempt to improve a seriously deficient Bill.
  I take this opportunity to congratulate those of their Lordships who took a serious interest in the Bill, not only on the changes that they have succeeded in making to it, albeit to be wrecked shortly, but on their thoughtful and sensitive approach to a complex and controversial issue. In distinct contrast to Conservative peers, they demonstrated a genuine commitment to the principle of repealing discriminatory legislation, and an understanding of, and support for, the need for legislation to protect the health, safety and welfare of all workers.
  Moreover, they showed an equal commitment to and understanding of the particular consideration that must be given to women in a society such as ours, that still fails to provide the economic and social environment that is a prerequisite of real equality for women. Important amendments were won in the other place, but are now to be lost — not without a fight, I warn the Paymaster General. Amendments affecting partnerships and applications for employment within the scope of the Sex Discrimination Act were accepted by the Government but others, such as protection against unfair dismissal provision for equal protection orders and a code of practice for employers, in clauses 3, 7 and 8, which were forced on the Government, are to be taken out. Even if those clauses were kept in the Bill, it would still have major deficiencies.
  We generally welcome clause 1, which brings private households, small businesses and partnerships within the scope of the Sex Discrimination Act. However, we have serious reservations about clause 1 (2)(ba)(ii). We support the provision in subsection (2)(ba)(i) for the freedom of women and men to choose a woman or a man for a job where the employee will be living in a private home, and where there is a real objection to someone of the opposite sex having:
  "the degree of physical or social contact with a person living in the home".
  However, we cannot and will not accept that the
  "knowledge of intimate details of such a person's life"
  should be allowed to determine the sex of the prospective employee.
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  The Government have given no clear explanation of the meaning of the words "intimate details" and no coherent reason for including this exemption. The EOC has already given warning that this lack of clarity could give rise to legal conflict, and has asked for subsection (2)(ba)(ii) to be deleted. We shall be tabling an amendment along those lines. I hope that between now and the beginning of the Committee, the Minister will look again at the debate in the other place carefully to see whether that should be done.
  We accept that trust and confidence are of vital importance when an employee can obtain information in the course of his or her work in the employer's house, but we do not accept that the sex of the employee is relevant in securing that trust and confidence.
  Clause 2 is similarly welcome in principle. It deals with discriminatory terms in collective agreements and any rule made by an employer or an organisation that discriminates against, or treats more favourably, any person employed by, or applying to join, the company. However, because the Government have again chosen to take minimal action —they have opted for voiding such terms and rules—we have serious reservations about the effectiveness of clause 2 as it stands.
  We should like an assurance from the Government that the section dealing with the rules of organisations will permit offices and posts to be held exclusively by women as part of an anti-discrimination or positive action policy. This is an extremely important measure that will help to give women some status and help them into better jobs.
  Mr. David Ashby: Do I understand that the hon. Lady is suggesting positive discrimination — in other words, discrimination against men?
  Ms. Richardson: I am suggesting an anti-discrimination, or a positive action policy, which it is important to have. The hon. Member is obviously shocked, but that does not surprise me. It is a shock when somebody challenges the power of men, who have positive discrimination the whole time. We are saying that women should have a bit of positive discrimination and action, and that is the line we intend to pursue in Committee.
  Mr. Forth: Not a chance.
  Ms. Richardson: Not with you lot over there.
  Secondly, we can see no justification for the abolition, through clause 6, of the Central Arbitration Committee's jurisdiction in respect of section 3 of the Equal Pay Act. We consider that this opportunity should have been used to review and strengthen the functions of the CAC, to involve it in the provisions of clause 2, especially with regard to the recently debated EEC 1986–90 programme of action for equal opportunity. Some Conservative Members may have participated in the rather disgraceful exhibition on the Conservative Benches last week. The programme of action announced the Commission's intentions to investigate the feasibility of drafting a directive that would provide for class action in equal pay for work of equal value rulings.
  Furthermore, clause 2 fails to provide for the removal of discriminatory items in collective agreements and rules, which means that they will remain unless or until they are removed by renegotiation or as a result of individual complaints and a successful decision in a court or tribunal.

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  Such a piecemeal approach will lead to inconsistencies and confusion for everybody concerned—the individuals, the employees, the employers and the trade unions. It will encourage an increase of unnecessary legislation and conflict, with at best patchy and at worse contradictory agreements and rules. The failure to provide a centrally recognised mechanism for arbitration and enforcement will be particularly problematic in indirect discrimination cases, which have always proved to be the most difficult disputes.
  Again I express my horror — that is not too exaggerated a word — over the announcement that the Government intend to delete clause 3. I had intended to say how much I welcomed the clause that was introduced in the other place by Lord Wedderburn of Charlton. My intention was to ask the Government what status is attached to the clause, but thanks to the timely intervention of my hon. Friend the Member for Ipswich (Mr. Weetch), who quickly managed to nail down the Paymaster General, we now know that it is to be deleted. That is outrageous, as is the removal of clauses 7 and 8.
  As the Government intend to repeal protective legislation, clauses 7 and 8 were designed to provide a different kind of protection by the laying down of standards and guidelines. I hope that the Paymaster General intends to listen in Committee to the arguments for the retention of the three clauses. They are extremely important. Without them, the Bill will be horrendous for many women.
  Mr. Kenneth Clarke: Of course we shall listen to the arguments. However, I ask the hon. Lady, who has expressed horror about the possible removal of clause 3, to reflect on the fact that all that has been achieved by clause 3 as it stands is that nothing can be done for at least a year and that another report should be published after further consultation with employers, trade unions and others. I am all in favour of consultation, but does the hon. Lady not accept that there have been six years of discussion and that a complete stalemate has obviously been reached? The only purpose, therefore, of clause 3 is to create futher delay, which I do not believe can be of enormous importance.
  Ms. Richardson: There has been a substantial reaction to the Bill from the Equal Opportunities Commission, the Trades Union Congress, the National Council for Civil Liberties and other organisations. Those who followed its passage through the other place warmly welcomed the inclusion of clause 3. We believe that the delay for which it provides will ensure that employers have guidelines to follow. Perhaps "horror" was too exaggerated a word, but it leapt to my lips because I was stunned by the announcement. Nevertheless, I am dismayed that the clause is to be deleted and that the curbing mechanism that is provided for in clause 3 will not be there to provide help for women in many organisations.
  Clause 4 repeals important terms and conditions that provide protection for women workers. That is the key to the Government's true purpose in introducing the Bill. The existing legislation guarantees meals and rest breaks, annual holidays and Sundays off. It prevents unreasonable periods of continuous employment and overtime and places healthy restrictions on the hours that are worked by women and on the amount of night work that they may do. I underline the word "healthy".
  Mr. Forth: Is the hon. Lady able to tell the House whether the Opposition have any real interest in equality, or whether they have any other idea in mind as to the treatment of men and women? It seems to me that the hon. Lady is much more interested in replacing one kind of discrimination with another instead of wanting true equality, to which I and, and I am sure, my right hon. and hon. Friends, are genuinely committed.
  Ms. Richardson: I have yet to see any semblance of commitment by Conservative Members to the principle of equality. I refer to those Conservative Members who sit mainly below the Gangway. In the face of pressure, the Government are not introducing genuine equality——
  Mr. Weetch: They are levelling down.
  Ms. Richardson: My hon. Friend is right. They are levelling down all the way.
  The existing legislation guarantees some semblance of decency that ought to be extended to men. Instead of levelling everybody down arid saying that their conditions of work should be rotten, the decent conditions that have been brought about by these restrictions should be extended to men. I would not oppose taking a rational look at the protective legislation. Valuable protection is provided against exploitation by unscrupulous employers, but it is dismissed by the Government and certain Conservative Members as outmoded and discriminatory.
  The Opposition ask for whom these regulations have become outmoded. Why should workers no longer have the right, by law, to refuse to be pressurised into doing double-day shifts and night work? They will have no right to refuse starting times before 7 o'clock in the morning or finishing times later than 9 o'clock at night, or to refuse spells of work lasting more than 4½ hours without a break, or overtime in excess of 54 hours a week.
  The Paymaster General referred to some of the points that I have just made, but he did so in what I thought was a slightly caustic and derisive manner, as though we should not really have to bother about them. Obviously he does not want there to be protection of this kind. However, any Government should try to build upon the experience of the working of this legislation and try to improve it so that it covers everybody.
  Clause 4 will affect all the firms that were covered by the previous legislation. They include organisations that do not provide the facilities that hon. Members expect to be provided for them when they are working unsocial hours. At certain times of the year we work very unsocial hours and we grumble about them. Although we may think that they are inadequate, some facilities are provided for us. I have been told that there are 30 catering points in this building. They are designed to serve the needs not only of Members of Parliament but of the staff who have to service Members of Parliament. We grumble and think that our conditions should be improved, yet we are denying even that right to women outside Parliament.
  Mr. Richard Holt: While she is discussing conditions in the House of Commons, will the hon. Lady say whether she is in favour of positive discrimination and of eliminating those rooms that are for ladies only? I should not wish that to happen.
  Ms. Richardson: When I first became a Member of Parliament in 1974 I walked down the corridors and came across door after door that was marked "Members Only".

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  I thought to myself, "Ah, I am a Member," walked in and found that it was a gentleman's lavatory. If there are three doors that are marked "Ladies Only", why not? I wish that there were better facilities for female staff. Most of them have to walk a very long way indeed to find a toilet. Hon. Members are protected to a certain extent, but if this clause is passed there will be no protection for those outside Parliament. We must also ask ourselves, discriminatory against whom? The answer must be obvious to everyone.
  The Government have turned their back on the logical course for a Government who genuinely wish to overcome the apparent inequality because a responsible, caring Government would have sought to draw up legislation that equally and fairly protects the health, safety and welfare of women and men at work.
  Existing statutory minima provide an essential safety net for workers in non-unionised workplaces, the very area where women tend to predominate in the work force. The existing requirement on employers to apply to the inspectorate for annual exemption has provided an important negotiating platform to obtain compensatory environmental and financial improvements for all the workers affected.
  Perhaps this provides an example of what the Government mean when they talk about lifting unnecessary burdens or lowering the barriers from employers. We believe that the abolition of such protection without statutory provision for a transitional period, which would have been provided in clause 3, and without statutory provision for equal protection for women and men, is a serious regressive step, especially in the current economic climate of mass unemployment and increasing poverty coupled with the general attacks upon employment and trade union rights that the Government have actively promoted.
  The Bill furthers a course that has as a priority objective the creation of an unprotected, unorganised, insecure work force that is open to equal exploitation in the sweatshops and the so-called entrepreneurial businesses that this Government promote in the hope that they will fill the vacuum that they have created in destroying our manufacturing industry by pursuing laissez-faire dogma. Clause 5 provides the last plank in the Government's equal exploitation platform.
  The Paymaster General gave a witty reminiscence of his time in the baking industry between student days and work. That was a very long time ago, and he was in a rather different situation in that he did not expect to work in that industry for the whole of his life.
  Mr. Evans: He was there only two months.
  Ms. Richardson: The bakers themselves do not want these restrictions to be removed. As my hon. Friend the Member for St. Helens, North well knows, bakers already work the longest hours of any group in the industrial sector.
  The Baking Industry (Hours of Work) Act 1954 was implemented after decades of conflict and dispute in the baking industry. The Equal Opportunities Commission and the bakers' union have both opposed the repeal and have called for the Act to be extended to women. We do no more at this stage than call upon the Government to follow their advice.
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  Before concluding, I wish to refer in passing to two or three points that the right hon. and learned Gentleman mentioned as additions that he will introduce to the Bill. I cannot think why they were not included when the Bill was printed for the House of Lords. It would have been interesting to have the benefit of their debates upon these quite difficult points that the Government will bring forward.
  First, we support the idea of equal treatment in retirement, which has great benefits for women who want to go on working and with respect to equalisation for men. I believe that both that and the decade for retirement has to be seen in the context of a consideration of the whole question of pensions. I know that some hon. Members say that retirement has nothing to do with pensions, but that is how people outside see it. They want to know that the pension for women at 60 is preserved. Men have been agitating for a long time—I know that it is costly—for their pension age to be brought down to 60. I understand that this is not something one can do in a flash.
  In order to deal rationally with the question of retirement the Government must consult—indeed, they probably have already done so or will do so — the Department of Health and Social Security about pensions provision and ensure that as a result of the differences there are no discrepancies and dilemmas.
  I am opposed to the removal of single-sex training courses. I did not even guess that the Paymaster General might be going to do that—or did I get this wrong?
  Mr. Kenneth Clarke: We are all in favour of single-sex training courses that comply with the terms of the Act providing training, usually exclusively, for women in occupations where there is a need to increase the supply. The only proposal that we make here is to remove the requirement for each one to be designated by the Secretary of State for Employment. It was intended as a protection against abuse, but it is now quite unnecessary paperwork. The legislation will make it easier to have courses designated as single-sex courses in suitable places. They will still have to comply with the legislation.
  Ms. Richardson: I am grateful and relieved that that is so. We shall, of course, consider this when the right hon. and learned Gentleman brings forward the legislation.
  May I remind the House that when the Sex Discrimination Bill was introduced in another place Lord Young described the existing legislation as restricting working women's employment opportunities. It is our view that the Bill will not improve women's employment opportunities at all and that it was never intended so to do. Indeed, it is our view that the end result of clauses 4 and 5—particularly without the protection of clause 3—and of clauses 7 and 8 will be to force many women out of the workplace while many who remain will increasingly face serious domestic difficulties.
  In the recent debate on the Shops Bill, Opposition Members and some Conservative Members showed that they understood the special significance of that legislation for women. I think that the effect on women was a powerful factor in the decision to throw out the Shops Bill. If the Government truly intended to provide for any improvement in women's access to employment, they would be laying a statutory duty upon local authorities to provide child care facilities, as the next Labour

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  Government will do; and real community care for disabled or elderly dependants, as the next Labour Government will do; and provide the resources for local authorities to meet those statutory requirements. They would be encouraging affordable improved public transport with higher staffing levels to ensure safe, secure travel, especially at night, instead of hiving off bus routes and starving the public sector of funds.
  If the Government had a real commitment to equality, they would be tackling all these things to make it easier to go out to work and in some senses to look to the removal of the protective legislation. Instead, against the background of mass unemployment, increased poverty and a decaying infrastructure that this Government have created, their proposals will lead to further inequality and less freedom of choice for women. They will increase the already too prevalent attitude and reality that women alone should carry the burdens of unpaid domestic work, caring and rearing and paid employment while the state and employers withdraw from any responsibility to provide the support services that are required.
  For many, the lack of protection and the burden created by the lack of support services will in the long run prove unbearable. I call on my right hon. and hon. Friends and on any other Members of the House who feel able to do so to support the Opposition amendment.
  7.9 pm
  Mrs. Elizabeth Shields: Thank you, Mr. Deputy Speaker, for giving me the opportunity to make my maiden speech.
  I should like first to pay tribute to the former hon. Member for Ryedale, the late Mr. John Spence. He was a modest, conscientious and well-known constituency Member. His sudden death came as a great shock to us all. I met him on several civic occasions, when he was unfailingly pleasant and courteous. He will be greatly missed in the constituency and I am sure that all hon. Members will join me in extending deepest sympathy to his wife and family. [HON. MEMBERS: "Hear, hear."]
  A fortnight ago the electorate of Ryedale bestowed on me the great honour of representing them here. For my part I have promised to do my utmost for all my constituents and to ensure that their major problems, which derive directly or indirectly from Government policies, are raised in Parliament.
  This Mother of Parliaments has seen many fine sons of all shades of political opinion grace this hallowed Chamber, not least, of course, those who have sat on the Liberal Benches. But the number of her daughters is far too few for the continuing health of the nation. A balance between the sexes is both desirable and necessary. I trust that in the not-too-distant future there will be a greater representation on all Benches of the House of the nationwide majority. I take special pride in being the first Liberal lady Member elected since 1951 and only the fifth in the history of my party, the last being the daughter of David Lloyd George. I believe that some of the values and sensitivity that women can bring to public life are unfortunately absent from politics today.
  By tradition new Members may say something about their own constituencies. Ryedale, stretching 60 miles from the market town of Easingwold in the west to Filey on the coast in the east, and 50 miles from the northern suburbs of York to the breathtaking beauty of our Yorkshire moors and dales, is one of the largest
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  constituencies in England. However, many people, including members of the press, have found Ryedale something of an enigma because there is no specific town or village of that name, although we have a river Rye. Ryedale's exact geographical location has therefore caused not a little puzzlement to the many interested parties who, for one reason or another, found it compelling to visit us in recent weeks. I should like to clear up one misconception: Ryedale, like Wensleydale, is a very attractive tourist area of north Yorkshire, but unlike Wensleydale, Ryedale is not a variety of cheese.
  Ryedale's greatest asset is its people who, with their genuine, innate warmth and friendliness, combined with the straightforward, outspoken way of calling a spade a spade, make this part of north Yorkshire the best place in which to live or take a holiday. Beautiful it certainly is, but many people of all ages throughout Ryedale have a housing problem. The Government's right-to-buy legislation has enabled council tenants in all three districts within the constituency to purchase their property, a measure with which I agree.
  However, Ryedale district council has a statutory responsibility to provide rented accommodation for specific groups of people. More than 2,000 are at present on the waiting list, of whom some 900 are in real need. Therefore, when housing stock is being sold off there is a need for new build to cope with the demand. The embargo on the spending of the district's own capital receipts—except for one fifth—hits unnecessarily hard at a council one of whose priorities is to provide decent, adequate housing for the elderly and indigent.
  Our rural communities will also suffer from the results of the Transport Act 1985 on bus services, in that village routes through Sheriff Hutton and Foston, Coxwold, Wass, Byland, Duggleby and the Barughs have not been tendered for. These sound rather quaint but the quaintness of the names belies the fact that real people live there. Even the main service from York through Malton to the coast will be severely curtailed in the evenings and on Sundays. I hope that before October, when the Act comes into force, more routes will be registered and the anticipated competition for less popular areas will materialise, but even the subsidies to be provided by the North Yorkshire county council will have disappeared by 1990. Many villages could then be totally cut off.
  I should like to draw attention to the fact that great concern is being expressed by residents at Filey, where the threatened removal of the local coastguard next year is causing considerable alarm. The population of Filey and its hinterland is increased many times to about 100,000 during the summer months as tourists flock into this popular resort. The great bay of Filey, eight miles round, is watched over by a special lookout at the coastguard station. As soon as any swimmer, or a boat or any of its occupants is in difficulty, takes very little time to go to the rescue.
  But if, as has been suggested, Filey's deceptively beautiful bay is deprived of its watchman, and the responsibility for the safety of the many children and adults who use it is delegated to Scarborough and Bridlington, each with its own stretch of coastline, I shall share with the people of Filey the fear of many tragic consequences. I feel sure that hon. Members on both sides of the House, especially those whose constituencies include part of our coastline or its innumerable islands situated offshore, will sympathise in this matter, which is

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  not political, but a question of human safety, and one in which monetary considerations must not be the overriding factor.
  But many people in my constituency are really worried —not so much for themselves and the present as for their children and their future. Ryedale has extensive rural areas with some 200 village communities, many of which support a local school. Sadly, several of these first-class village schools, such as Ganton, Reighton with Speeton and Flaxton, are under threat of closure. This is due to cuts in staff by 0·4 or 0·6 of a teacher, which effectively leaves the head teacher as the only responsible adult on the premises for two or even three days a week. Apart from the obvious safety risks, dedicated, well-qualified and trained primary teachers are thus being deprived of employment. This is a waste of a human resource—the most important resource that any country can have.
  As an educationist, I obviously have a special interest in all aspects of the system. The confusion over the introduction of the GCSE examination, the enforced early retirement of university teachers, the reduction by 20 per cent. in the real value of student grants since 1979 and the generally low ebb at which morale in the teaching profession is standing, show that a major reassessment of education policies is urgently required. Although a new Minister has now been appointed—I wish him well and hope that one of his priorities will be the GCSE—I remind hon. Members that it was a Liberal Government who introduced free education in 1870. It may take another Liberal Government to restore morale in the primary and secondary sectors and maintain standards in further and higher education.
  The Sex Discrimination Bill which is the subject of today's debate aims to amend the Sex Discrimination Act 1975 so that it comes into line with the European Community directives on the equal treatment of men and women. I hope that equality of opportunity will, as a result of the Bill, enable more women in the teaching profession to reach positions of seniority as deputies or heads of school. Too often, their inability to gain success in that way is not due to lack of qualifications, training, or experience, but simply to the fact of their sex.
  The Equal Opportunities Commission has argued that conditions of work should be good for men and women. The protection that has been afforded to men in the baking industry through the Baking Industry (Hours of Work) Act 1954 should now be afforded to women. Good conditions for all should be the objective. The Labour party amendment is addressed to that point, but my hon. Friends and I believe that it does not go far enough. In spite of the Bill's inadequacies in that respect, we believe that it is a useful measure. We intend to vote for it tonight and I hope to have the chance to amend the Bill in Committee.
  On 8 May, the people of Ryedale gave me the opportunity to become their voice in Parliament. Today, I have had the opportunity to make my first contribution. I thank the House for its attention and look forward to playing an active part in the debates that lie before us.
  7.21 pm
  Mr. Richard Holt: We have just heard an excellent maiden speech,. I think that the hon. Member for Ryedale (Mrs. Shields) began her speech well by paying tribute to our late colleague. We all knew Mr. John
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  Spence and liked him very much, and I think that his place in this House is now temporarily adorned by the hon. Lady.
  In a sense, I am also making a maiden speech. I am following a maiden speech and I have not done that before. I am also speaking in a debate on sex discrimination and I have definitely not done that before. Yesterday, I desperately wanted to speak in the debate on shipbuilding and was allocated four minutes in which to speak. Today, when I did not want to speak on sex discrimination, I have been allocated the rest of the evening. There must be a reason for that.
  Mr. Evans: Does that not speak volumes for the Tory party?
  Mr. Holt: The hon. Gentleman's intervention shows one of the fundamental differences between Conservative Members and Labour Members. Labour Members have no sense of humour and no sense of occasion. On an issue such as this, the hon. Gentleman is trying to bring in some petty party point.
  There is a more serious reason why I am speaking in this debate. For many years I have worked in personnel in factories. More specifically, in connection with clause 5, I am married to the baker's daughter. In that context, I have a little more experience than my right hon. and learned Friend the Paymaster General, who introduced the Bill.
  The underlying principle of the Bill is the Government's philosophy that we must seek equality. I found it destroying to listen to the hon. Member for Barking (Ms. Richardson) speaking from the Opposition Front Bench—not for equality but for discrimination in favour of ladies. That is the absolute negation of what the European Community has wanted, what the hon. Member for Ryedale said, and what the Government have set out to achieve.
  In all my years in personnel, I have found it strange when writing contracts of employment, when engaging people and dealing with such matters in factories where people did identical jobs—usually the ladies were better than the men—that we had to have legislation enshrined in the contracts in such a way as to destroy job opportunities and not to create them. Today we must all try, whatever our political stance, to improve job prospects and opportunities for those who are unfortunately unemployed.
  It is never easy for the Opposition to look across at the Government Benches and point a finger at the Tory party when it comes to sex discrimination. We have a lady Prime Minister.
  Mr. Evans: That is the problem.
  Mr. Holt: If the hon. Gentleman wants to make an intelligent contribution to the debate, I will happily give way to him. However, if he wants to continue shouting from a sedentary position, I would prevail upon you, Mr. Deputy Speaker, to tell him to shut up.
  Certain clauses in the Bill will be debated in Committee. I am happy to say that I will not be on the Committee because I have done my porridge for this year, last year, and the year before. However, I would like to consider the part that relates to the protection that is supposed to be enshrined in current legislation. All that protection is discriminatory. It is a change to refer to the

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  hon. Member for Barking as "the hon. Lady opposite speaking for the Labour party" as distinct from "the hon. Lady opposite" which would automatically have meant that she was speaking for the Labour party. We must now make the distinction, albeit for a short period, and we will enjoy making that distinction——
  Mr. David Penhaligon: I fancy my hon. Friend the Member for Ryedale's chances better than the hon. Gentleman's. She is 5:4 on.
  Mr. Holt: The hon. Gentleman should not tempt me.
  Restrictions on hours and starting and finishing times do not apply to 7·5 million working women in this country. Those women can drive buses, serve all night on their own and lonely in a hospital ward or they can spend all night entertaining people in strip shows. However, they cannot work on a Saturday or a Sunday in a factory legitimately producing manufactured goods so that we can sell those goods and improve job prospects. It is time that that arcane law was thrown out; the reform is long overdue. It is strange that the Labour party should want to oppose that. I was pleased to hear that the Liberal party will support the Bill in the Lobby this evening. That shows that the Labour party is out of touch with the realities of the workplace and the work force when it comes to creating job opportunities and removing this kind of petty restriction which has existed for far too long.
  To revert to my personal experiences in the baking trade, I first met my wife shortly after her father had died leaving the family business to his widow. She was quite able to go into the bakery at all hours of the day and night as the proprietor, unprotected by unnecessary legislation, to work and make bread, to knead the dough. But she could not have employed another lady to share her labours instead of other men, because she would have been restricted by unnecessary and outmoded legislation. We should remember that it is not rare for a lady suddenly to find herself at the head of a business on the death of her husband.
  However. the Labour party wants to perpetuate that legislation. Indeed, it wants to extend it so that the baking hours even now worked by men would be curtailed so that we would not have that lovely home-made fresh bread that comes only from the small baker, not the large multiples. If we stick with the family baker, we shall have our fresh bread, but we should help by voting for the Bill this evening. This is the sort of positive discrimination that we want — positive decisions to remove ridiculous old-fashioned out-dated legislation.
  I shall not speak all night, despite the encouragement from the Government Front Bench and colleagues elsewhere. Like the hon. Member for Ryedale, I too represent a constituency in that part of the world. My constituency is 20 miles north of Ryedale in the north Yorkshire moors, and it is a beautiful part of the country. I look forward to seeing the hon. Member for Ryedale, here during the period that she graces us. That time will, I am sure, be like the life of a butterfly —short and beautiful.
  However, one of the things that I can guarantee is that the hon. Lady will be in a different position from many of us. Whereas we shall labour for hours and hope to be called, she will shortly be a Front Bench spokesman for something because that is the way the portfolios go round in the Liberal party. If she is a Front Bench spokesman for
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  the ladies, I hope that she will continue to support the Government in this type of legislation, making the ladies' lot in the world better.
  7.31 pm
  Mr. Ken Weetch: I cannot emulate the entertainment value of the speech by the hon. Member for Langbaurgh (Mr. Holt), which I followed carefully.
  The Bill is a mess. Three of its clauses are at variance with the rest. There are conflicts of principle. A few minutes ago the Paymaster General announced that the Bill will undergo major surgery in Committee. It will undergo more than major surgery, because three of the clauses will disappear. That will be a massacre. Therefore, the Bill is completely unsatisfactory in its conception.
  The Bill has its roots in the fact that the Sex Discrimination Act 1975 falls short of meeting European obligations in a number of respects. That is particularly so with regard to access to employment, vocational training, promotion and working conditions.
  The House should welcome parts of the Bill 'while expressing some sharp reservations about the consequences of some parts for women workers. Even without the three clauses that the Government intend to remove, we still have two Bills because there are two distinct principles. One is to conform with the European directive which was based on a court case brought by the Commission, and the second is to embrace regulation more intensively in some areas of industrial working conditions.
  We are debating whether we can agree in principle with the basic objects of the legislation as put by the Government. I agree with some of the Government's basic aims, but they will not be achieved by the Bill.
  I welcome the Government's acceptance of the EC ruling that the Sex Discrimination Act should he strengthened so that equal opportunities are promoted between men and women. Labour Members would certainly support that. Secondly, I can sympathise with any move to remove outdated legislative burdens which decrease efficiency and competitiveness. Those are two sound objectives.
  However, I regret that the Government accepted the EEC ruling with bad grace. If one reads carefully the proceedings of the debate in the other place on the Bill, one sees that the Government embraced the EEC ruling with some reluctance. In fact, Lord Young, in arguing his case in the other place, said categorically that he was accepting it because he had to, not because he had any great agreement with the principle.
  It is disappointing to learn that the Government are only accepting the EEC ruling in extending the 1975 Act to small firms, private households, partnerships and collective agreements. We are disappointed that the Government are doing that with some reluctance. One can sum up the Government's position in a sentence. They are grasping the legal obligation to the EEC and its framework, but they are in no way embracing the spirit in which the reform has been proposed.
  I listened carefully to the Paymaster General. He said, first, that there is some confused thinking among Opposition Members. I would say to him that there is a lot of confused thinking behind the Bill.
  It is possible to take three approaches. It is possible to scrap all regulations so that everybody is made equal in that nobody is protected. The second approach, the one

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  traditionally made by the Factory Acts in Britain, is to consider certain special categories of people such as women and children, make regulations to protect them, and then level up the regulations so that they protect men as well. The third approach, which is broadly the one that I would favour, is to say that there are special areas of employment in Britain where women need protection. I have no hesitation in saying that.
  Therefore, I disagree to some extent with the Equal Opportunities Commission's argument that deregulation would be a good way to make everybody equal. The Equal Opportunities Commission's report of 1979 argued that there should be deregulation but that there should be a code of practice as a safety net so that when the Bill became law its disadvantages would be limited.
  The Bill is unsatisfactory. It involves some complex thinking. Industrial and factory legislation and conditions of work have always been a complex legislative area. I have substantial reservations about the Bill and those reservations are shared by the TUC and by unions such as the Confederation of Health Service Employees. Some 80 per cent. of the members of that union are female and view the Bill with critical interest. My reservations are about clauses 4, 5 and 6 because they deal specifically with removing restrictions on the number of hours that women can work in certain industries, especially the baking industry. Clause 4 would allow women in factories to be freely employed at night, on Sundays, on shift work, and between overtime starting and finishing times. The clause would also remove restrictions on the hours, including hours at night, during which women may work in mines and quarries.
  Let us come to the brass tacks of the argument. One either believes that there should be protection for women in certain industries such as mines or quarries and in industries where conditions are difficult and pay is low, or one does not. I commend the Government for their honesty. They say there should not be protection and that is because they are proposing to deregulate and saying that that is the path to equality. There is a substantial disadvantage in that approach. I take the traditional view of factory legislation. Certain categories of people should be protected by legislation and when one sets up a demolition exercise to sweep a lot of it away, one will have attendant disadvantages.
  Mr. Holt: Perhaps the hon. Gentleman could tell us how many members of COHSE work in factories that are covered by current legislation?
  Mr. Weetch: The hon. Member for Langbaurgh (Mr. Holt) must take a narrow view of people's interests. There is no reason why people in one occupation cannot have sympathy for people in another. That is a sympathetic view of life, but obviously the hon. Gentleman does not hold such a view. It is commendable that people who work in the public sector have some thought for people who work in more difficult industries in which people have to labour for long hours and low pay. There ought to be more sympathetic consideration between occupational groups.
  We must be careful before we play fast and loose with the legislative protection that women have at work. Factory legislation has taken a long time to accumulate and immense efforts by all sorts of social groups and the trade union movement have gone into it. I am doubtful about the
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  basic proposition advanced by the Government. I note the argument used by Lord Young in the other place and it brings me to my second point. I shall paraphrase what the noble Lord said:
  "This Bill will mean that women will have access to often higher paid nightwork, shift jobs and better promotion prospects. All these things may widen women's job marketability, and make them available for a wider range of work."
  I will believe that when I see it.
  Mr. Timothy Wood: A number of women in my constituency have written to me requesting precisely this change. They object to the present restraints and want to see the change in this Bill enacted.
  Mr. Weetch: One has to set one person's experience against the experience of another. I have had letters expressing the opposite view. I ask the hon. Member for Stevenage (Mr. Wood): has there been any systematic study in Britain to show that if this legislation is passed women could expect to have a significantly better deal because of wider market opportunities? The argument underlying the Bill says that there are lots of opportunities for women and that women are waiting in the wings and will better themselves as a result of this legislation. That argument has not been subjected to systematic study. I certainly know of no research body that has reached that conclusion. It may well be that things will alter at the margin here and there, but in the wider sense the Bill is not a significant step.
  How convincing is this talk of wider scope which will occur in practice and give women more opportunities for jobs, higher wages and better conditions? I am advised by people who have a lot of experience in industries which I shall presently name and which would be altered in a substantial way by this legislation, that the case is not proven. There are few good jobs restricted to men for which women are likely to be substituted if this legislation goes through and if protective legislation is abandoned. That is because the industries to which much of the discussion has been directed are in textiles and baking and in other industries where wages are low and where the protection given to women is likely to be put into total jeopardy because of deregulation.
  Clauses 4. 5 and 6 are not necessarily in the Bill to make it comply with European directives. That is quite a separate principle. We are talking about the principle of deregulation as opposed to the principle that arises from compliance with the European Court case and the directive. They are totally separate things and need to be separately argued. The Government are set on a course of quite widespread and wholesale deregulation, even though there is no practical value in that. They are motivated purely by ideological considerations and about arguing for its own sake. That is not an allegation: it is a substantive fact.
  If we are not careful, the legislation that protects certain vulnerable groups will go the same way as wages councils and other instruments of welfare. This notion of the Government stems from unregulated free enterprise rather than from any notion of social advance. That is why there is a substantial set of arguments against this legislation. An unjustified parallel has been drawn between night work in public services and night work in factories. In the public services, nights are already worked by women, but to transfer that principle and say that it applies to factories and mines and quarries as well, does not stand up in a

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  practical sense. Factory legislation and the whole notion of industrial welfare has been built up case by case. That is why I firmly believe that clause 3 should remain.
  It is all very well for the Paymaster General to stand at the Dispatch Box and read out some of the complications of the legislation. Welfare legislation across the board is complicated because it has grown up organically to meet special considerations. There is no escaping that. To sweep it all away and say that it is simpler to do that, and therefore much better, is an argument which will not stand up.
  Factory work is different. It is often associated with working on machinery and being constantly vigilant to avoid industrial injury. There is a great danger that women will be open to risks arising from a combination of a lack of regulation of the hours at the place of work, particularly at night.
  I do not shrink from saying that I take the traditional view of factory and industrial legislation. It has been built up over a long period, has been hammered out by collective bargaining, and put into legislation because people have considered that to be the constructive, detailed way forward. We should think long and hard before we put that legislation under the hammer in the cause of deregulation.
  I do not wish to say much more because there is a danger of straying into Committee-type material. The principle of large parts of the Bill is that in order to give women greater opportunities and to put them on all fours with men, it is necessary to make inroads into industrial welfare legislation. The two things do not go together. It is a logical fallacy. One can have one without the other. For that reason the legislation is misconceived in principle. It is misleading because no more jobs will be available in areas where women traditionally have not been able to compete, and conditions for women at work will worsen in terms of health and safety.
  If I am selected to serve on the Committee I shall resist strongly the removal of clause 3, which is the traditional approach to factory welfare legislation, which we should retain. The matter was debated at great length in the other place. It was an interesting debate and some perceptive points were made. The clause was won on a hard-fought amendment, and we shall see a great deal of hard debate in Committee. I hope that the Government's attempts will be resisted, and that they fail. I shall certainly be part of the opposition.
  The Opposition's amendment provides the correct approach. We welcome certain aspects of the Bill, and reject others because we believe that they are wrong in principle. But that must be argued in Committee. At this stage the argument is essentially between substantial deregulation and saving what beneficial general factory legislation we can. The Opposition are right. The Government are seeking the lowest common denominator, whereas the Opposition are seeking the highest common factor in industrial welfare. I believe that we shall have much support in the country.
  7.54 pm
  Mr. David Ashby: I join others in congratulating the hon. Member for Ryedale (Mrs. Shields) on an excellent maiden speech. It is strange that during this debate she should remind us that she is the first lady hon. Member on the Liberal Benches since 1951, and only the fifth or sixth in the history of the Liberal
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  party. I feel sure that she will persuade her party that there should be a little less discrimination and a few more candidates of her sex. That is an act of positive discrimination that one expects from time to time in politics.
  The hon. Lady has said that she comes from a beautiful area, which I know, and that it has a coastline. As I represent an area which includes Ashby-de-la-Zouch, which is the furthest point from the sea in whichever direction one goes, I envy her. I certainly enjoy the coast, and especially boating. She mentioned lifeboats and having once been rescued by a lifeboat I know how valuable and important that service is. She said that the Liberal party hoped to restore teachers' morale. but as someone who is in education, I can assure her that Conservative Members do not intend to wait to the year 2086 for that. We look for a restoration of teachers' morale in the near future.
  As is so often the case, I follow the hon. Member for Ipswich (Mr. Weetch). When I refer to him as an hon. Gentleman it has great meaning because he is in every way a gentleman. He does not deny that his approach to the Bill is the old-fashioned approach of a gentleman towards a lady. He feels that women need the protection of legislation, and speaks of protection for women. But I often wonder whether he is talking of protection from women. He rather reminds me of the story, which we all know, of the boy scout and the blind lady. The boy scout insists on leading her across a road, despite her wish not to cross the road but to continue on her way. I often wonder whether that is not the case with the protectionists' approach to legislation, and whether in this day and age women want that protection.
  The Conservative party and I believe that women feel that they do not require the protection that was there formerly. Heaven forbid that we shall see women down the mines and in the quarries. I know that in my constituency, which includes many mines, the local National Union of Mineworkers and possibly the Union of Democratic Mineworkers would throw up their hands in horror at a woman at the pit face. I know that last century they used to work there and that many of us would dislike it, but at the end of the day that would be the choice.
  Some women enjoy the sort of work that was formerly very much the province of men—for example, repairing cars. The numbers of girls who are taking courses in engineering and car repairs is amazing. One sees them covered in grease as only young men would have been previously. One sees that they enjoy every minute of it and have a thorough knowledge of the engines.
  It is a changing world, and one to which we must accommodate ourselves. I am anxious to get used to the changing world. I have a 17-year-old daughter. She, like many other young women, wants to get somewhere in life and achieve something. They do not want only to be wives. I used the wrong phrase; to be a wife is honourable, decent and nice. I am not saying that to be a wife and mother is in any way a lesser job. It is as major a job as any other, but many women do not wish to go down only that path. That is their choice. Educational opportunities are open to them now that were not available previously, and they wish to take full advantage of them.
  I do not know whether I welcome the legislation, because I am never happy with legislation that forces people to change their views and attitudes—we have had a series of such Bills over the years and it is a great

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  pity that they have been necessary. I recognise that such Bills resulted in changes being made, but I wonder whether they created change or followed change. Many of the changes occurred before the legislation. I imagine that a great many women work the sort of hours that the Bill is proposing, but no complaint has been made. They are ahead of the legislation.
  As a free trader, I believe in a meritocracy. It is never right or proper to discriminate on any ground whether it be race, sex or colour. Those barriers have been broken down and will continue to be broken down because of the great social changes that have taken place in Britain, especially since the war. It is now accepted that a woman has a right to work equal to her husband's.
  Much home life is shared jointly between husbands and wives. I shall not name the hon. Members who have working wives. I telephone them and ask them what they are doing and they say, "I am looking after the baby. This is my bisque night, my night off. My wife is doing something else." The changes have already taken place. To some extent some legislation shuts the stable door after the horse has bolted.
  The problem with discrimination is that it is difficult to prove. It is often subtle and, in evidential terms, negligible. One cannot put one's finger on it or demonstrate it. It is not written down in black and white. It is subtle and difficult to deal with. I am always worried about passing legislation that is unenforceable. I welcome the legislation because the freeing of the restrictions would free much of what is unenforceable.
  Ms. Richardson: The hon. Gentleman said that some of the discrimination was so subtle that he could not put his finger on it, but some of it is very unsubtle, such as the fact that three quarters of women work for just over two thirds of man's pay. Does the hon. Gentleman agree that that is an unsubtle way of confirming women in their dependent position?
  Mr. Ashby: I repeat that I believe in a meritocracy. That answers the question of the hon. Member for Barking (Ms. Richardson), because it shows that I agree with her. I believe in equal work for equal pay. I am by profession a lawyer. There are many women members of the Bar, and there has been no discrimination since women came to the Bar, although obviously it existed previously in terms of equal pay for equal value and equal work. The fee for defending someone is set; whether one is a man or a woman, one gets that fee. I have worked for a considerable time in a profession that is completely undiscriminatory in that sense. It has been like that since I had the honour to be called to the Bar about 23 years ago.
  Mr. Stephen Dorrell: Does my hon. Friend agree that the fact that the pay for male and female barristers is in balance owes nothing at all to any statutory obligation on the part of clients to pay the same to a male as to a female, but owes everything to the excellence of the people concerned? It is not an obligation imposed by law, but something that emerges by concensus.
  Mr. Ashby: It goes further than that. It owes itself to the excellence of the clerk who negotiates the best fee for his barrister, whether a man or a woman. I agree that we have never required legislation to have equality at the Bar,
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  and it is much better that it should be so. The changes that are taking place, the social and economic shifts and the other ordinary things that have happened have had a greater effect and will ultimately provide greater and total equality between the sexes at the workplace.
  In other professions, too, no legislation has been required to give complete equality. In most Government Departments, there has been no real need for specific legislation to provide equality. There is equality in the medical profession, and no legislation was needed to provide it.
  The area in which most discrimination arises is the most difficult for which to legislate. That worries me because it is totally wrong; indeed, it is monstrous. That discrimination occurs in small and medium-sized businesses. Often, larger businesses are ready and willing to take on women. In smaller and medium-sized businesses, one seldom finds female production managers, sales managers, sales directors or production directors. In such businesses, women are relegated to the job of secretary, or to the boring, repetitious jobs at the machine end, doing one process after another at a machine. I do not suggest that such jobs are not necessary and vital. Indeed, some women work in areas where decisions are made, and can show their full value.
  I accept that women are different. Thank goodness that I can discriminate between men and women. Women have a special place. There are some things that women do much better than men. People say that women are often more perceptive than men. Women, in a subtle way, can often tell better than men whether someone is telling the truth. In business, there are areas where women are sometimes better than men.
  Women have something valuable to give to medium and smaller-size businesses. Some women have a great deal of business acumen and they have succeeded at business management schools and universities. When they reach the next stage, getting a job, they often turn to large businesses. I would like to see far more women in small businesses? It is an area where they could give much. An increased number of women university graduates in business studies would lead to a better quality of managerial staff. Much of the country's wealth can be made in small businesses and they would profit from the better managerial quality that women offer.
  Mr. Dorrell: Does my hon. Friend also agree that one of the interesting phenomena of the last few years is that there has not only been a big expansion in the small business sector but a willingness on the part of women to set up their own small businesses? Women's participation in the small business sector is one of the interesting new social phenomena of the past few years.
  Mr. Ashby: I am grateful to my hon. Friend for mentioning that. He is absolutely right. The problem is that, so often, women feel that they have to set up their own businesses to give full expression to their abilities. That is sad because there is a great place for women in small businesses. I do not mean the smallest of businesses but those which employ between 200 or 400 employees. Often, it is only the large businesses which have the courage and perspicacity to employ women of calibre and ability in managerial positions.
  When we consider schools we appreciate the problems and subtle discriminations that occur. We have often said

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  that the quality of school leavers, especially males, is bad, but what is happening in our schools is not understood. A few years ago the male school leaver, who did not have great managerial ability and who did not aspire to a managerial position, would leave and take a job in a factory or another labouring job. Now, the male school leaver aspires towards managerial jobs even though he may not have the ability for such a job. The boys stay on longer and look for a better job. I do not blame them for doing so but they often look for a job which is beyond their ability.
  Girls tend to leave school at a younger age than boys and take the jobs that the young men would have taken some years ago. That is subtle discrimination. Employers may say that they get young men of 19 coming from school, who cannot read or write properly. The girls come to the employers at the age of 16 or 17 and they can read and write and are very bright indeed. The girls are leaving school earlier than boys yet they may have a good deal of ability and could stay on for higher education and achieve more.
  Mr. Gerald Bermingham: Does the hon. Gentleman agree that the fact that people leave school unable to read or write has nothing to do with sex discrimination? It depends on the money which is put into their educational facilities. If the money is not put in, the pupils do not get the right educational opportunities.
  Mr. Ashby: No, I do not agree. Thank goodness, we are all individuals and everyone is different. One could pour millions of pounds into the education of some individuals but they would never read or write properly because they do not want to. Such people do not aspire to managerial work but they are given hopes beyond their abilities and expectations. That is not a fair reflection on the teachers. Many teachers spend a great deal of time trying to get people to read and write but at the end of the day they have no success.
  A careers master told me that one out of every 10 young school leavers cannot be placed in a job. He said that one could pick that person out at the age of 12 or 13. Such children are given a great deal of care. At the end of the day, they do not wish to stay at school, they are not interested in work and they leave unable to read or write, despite the efforts of teachers. Employers are not terribly happy to have such people and they would positively discriminate in favour of the better educated person.
  It would be an unfair reflection on the excellent school in my constituency to suggest that the staff were bad teachers to allow that one person to go through school and to leave without being able to read or write adequately. The teachers have tried all they can but they have not been successful.
  Mrs. Shields: With great respect to the hon. Gentleman, I have come recently from the teaching profession and I know that practically no child leaves the school in which I was teaching without being able to read or write, and that applies to boys as well as girls.
  We need teachers to cope with those who are slower learners. We need to have special remedial departments. In recent years, with falling rolls, the school numbers have been cut but, instead of giving the schools the opportunity to have smaller classes and to give more attention to the individual child, they have been faced with staff cuts. Over the past three years at my school, five members of
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  staff have had to go. If those staff had been retained those who are slower learners would have had more attention and would have been properly looked after. It is a great shame that, 20 years ago, the Conservatives were encouraging married women to take a two-year course to go into teaching so that there could be smaller classes but now that we have smaller classes they say we must get rid of the teachers.
  Mr. Ashby: I do not know what the special situation is with regard to the hon. Lady's education authority—[HON. MEMBERS]:"It applies to all". Since the Conservatives came to power in 1979 the average numbers in schools have consistently dropped. That suggests that the pupil-teacher ratio has dropped and that suggests that more teachers are available than before. That is a statistical fact although I accept that, as with all statistics, there are some areas to which it does not apply.
  The hon. Lady said that practically no children left her school unable to read or write adequately. I noted that she said "practically", as that is my experience of the school about which I was talking.
  Mrs. Shields: I am talking about one in 10 years.
  Mr. Ashby: I am afraid that I come across far greater numbers than that in London, not in my constituency. We know about the special problems in the Inner London education authority and its failures. I have seen inspectors' reports which speak of its failures. That shows how badly a Labour-controlled authority can run education. I lay the blame entirely at the door of the Labour party. It has been party political and it is unable to run London's schooling properly.
  I have mentioned women's hours of work and the need to free them to enable them to work the hours that they want. Many factories work flexi-hours in my constituency and others work split shifts. The latter have been of great benefit and work extremely well. The factories work day and night. The women are grateful and I have found nothing but happiness at how they are working. I recommend that system.
  My right hon. and learned Friend spoke of retirement pensions and what will happen in view of the recent decision of the European Court of Justice. It is monstrously unfair that women should not be entitled to choose their retirement date in parity with men. That is a long-overdue development. I would welcome greater flexibility and parity. I am aware that that would be extremely expensive, but I hope that we shall work towards it. It will take time, but it is a goal worth aiming for.
  Mr. Dorrell: I entirely agree that the signs that changes in retirement law may be written into the Bill in Committee brings into the debate something of enormous importance to all of our constituents. Would my hon. Friend like to give his views about a compulsory retirement age? The Bill is concerned with giving women greater access to work. It seems to me the principle of a compulsory retirement age, whether 60 or 65, is something that the House may wish to consider in much greater detail than it has so far.
  Mr. Ashby: I agree with my hon. Friend. The principle of a compulsory retirement age is difficult. Thank goodness we did not have a compulsory retirement age in 1940. Judges now have to retire at 72, but those who

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  started service before the compulsory retirement age was introduced were able to go on. Lord Denning retired only recently, aged 80. He was an exceptional judge and highly regarded by all. Nobody would have wanted to suggest —even if they had dared to—that he should have retired at 75. At that age, he was still going strong. His judgments were exceptionally lucid, good and highly regarded by the profession. He is an example of why a compulsory retirement age may be bad. On the other hand, he may be exceptional.
  There is a time, however, when we all have to pack up and give way to a younger man. My hon. Friend the Member for Langbaurgh (Mr. Holt) said that he spoke for only four minutes yesterday on the shipbuilding industry and had not expected to speak again today. I rather wish that I had spoken on the shipbuilding industry. Nevertheless, I am speaking here today. I feel that I have reached my compulsory retirement time and I must thank the House for listening to me with such attention.
  8.26 pm
  Mr. Tony Lloyd: I join other hon. Members in congratulating the hon. Member for Ryedale (Mrs. Shields) on her maiden speech. I am sure that it was a portent of things to come. She could not have made it on a more appropriate subject than the Sex Discrimination Bill, if this Bill has anything to do with sex discrimination.
  The hon. Member for Leicestershire, North-West (Mr. Ashby) is also to be congratulated on filling so many words with so few ideas. I was intrigued by the notion that the legal profession. of all professions, is free from discrimination. I wait with interest to see hordes of female High Court judges.
  Discrimination against women in employment is not best looked for among the relatively privileged. The hon. Gentleman must accept that there is privilege in the legal profession. Women are represented significantly at the lower end of the market. They tend to do the low-paid jobs which are now difficult to find or have simply disappeared. In Greater Manchester, a significant proportion of women in work receive low pay. The House should address the problem of sex discrimination at the place of work and in other parts of society but it has failed to do so with this tawdry Bill.
  The hon. Gentleman talked about the boy scout and the blind old lady. If the old lady is the Prime Minister and the boy scout is the Paymaster General, who has a reputation for liberalism, it is obvious that the boy scout has been unable to have any impact on the old lady in the context of the Bill. That which is good in the Bill has been forced on the Government. The Government have been goaded unwillingly into introducing changes by the powers of external courts.
  Clauses 1 and 2, which have been given a cautious welcome by my right hon. and hon. Friends, are the direct result of the European courts and their clear disapproval of existing United Kingdom legislation. We have been slow in amending our law since the decisions of the courts but at least we are now putting our domestic legislation into some sort of order. A recent decision in the case of Miss Marshall gave her the right to remain at work. The decision was greeted with great pleasure by many health workers in my constituency, but it took a court decision on that issue to force the Government to change the law.
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  The only other good parts of the Bill are those that the Paymaster General has told us he intends to remove from it. These are the provisions that offer some protection for those who will suffer the most direct impact. The measures that the Government propose to take are those that will at best do little to remove discrimination. At worst, they will do active harm to individuals at their place of work in various industries.
  There is great fear about the effect of clause 5 when the Bill is enacted. It threatens the repeal of the Baking Industry (Hours of Work) Act, 1954. The Bakers, Food and Allied Workers Union is greatly concerned about the results of the clause when it becomes a section. It took that union about 110 years to get an Act on the statute book to protect its members and others, and in relative terms it has enjoyed the protection of an effective piece of legislation for a short time—about 30 years.
  The Government pray in aid the views of two employers federations, which say that legislation is not needed and has no impact. If that is so, why remove it from the statute book? Employers have said that they do not think that there will be any major changes, so why are we getting rid of current legislation? Is it part of a legislative tidying-up process? If it is, it is hardly worth wasting the time of the House on the exercise.
  Others are far more fearful of the consequences of that which the Government propose, including the bakers union. Some on the employers' side have estimated that about 2,000 jobs may be lost in baking as a result of the repeal. That is a considerable number of jobs, especially as the losses will occur in part in communities which are often hard pressed because of the loss of jobs in other industries. The hon. Member for Lewisham, East (Mr. Moynihan) looks quizzical. If he does not accept my arguments, I shall be glad to send him some of the documentation which is in my possession. There is great fear about the loss of employment opportunities.
  I am sure that the Paymaster General recognises that there are voices of experience in the baking industry. I concede that the two months which the right hon. and learned Gentleman spent in the industry is longer than the experience which I can claim, but perhaps he will be modest enough to concede that changes have taken place and that the industry may be somewhat different now from what it was when he was working within it. Some have been locked into it for 40 years whereas the right hon. and learned Gentleman experienced it for but two months before moving off to new and certainly more rewarding pastures.
  The baking industry ranks third in the table of industries with long working hours. The hours of those employed within it are exceeded only by merchant seamen and those engaged in the road transport industry. The bakers union can quote working weeks that sometimes exceed 60 hours. We know that there are agreements which take parts of the industry from the control of the current legislation, and it is feared that the unsocial hours and conditions that existed in the industry prior to the introduction of the present legislation will return once the Bill is enacted. That fear is only right and proper. It is a valid fear that individuals and groups of employees in the baking industry will suffer harshly once the Bill is enacted.
  We know that shift workers are compensated by shift premiums, which make up in part for having to work shifts as opposed to regular days. Shift working is generally an extemely unsocial activity. It disrupts lifestyles and causes

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  unique strains, especially to an individual's social life. There are direct effects on those who work shifts, especially when they grow older. The argument that current legislation offers real protection should not be dismissed or pooh-poohed. The Government's case has not been proven. It is said that the lifting of the so-called burden will not do any damage, but that is not an adequate reason by any stretch of the imagination for repealing legislation which is genuinely popular among those in the baking industry.
  It is felt by bakers and by some employers that the 1954 Act raises the average standard and protects better employers from unfair competition from the worst. It is important in any industry to prevent the worst employers driving down the standards of the average and the good, and we have not had an adequate response from the Government to that argument.
  The same arguments apply to the impact of clause 4. There is not much to recommend that which is set out within it. The great principle of the avoidance of sex discrimination has allowed the Government to slip in provisions which will have a direct impact upon young workers, and I think that even Conservative Members will accept that the young have suffered severely as a result of the Government's recent legislative changes. In various ways they have seen their working rights eroded, and there is to be a further erosion of their rights in the interests, so we are told, of the avoidance of sex discrimination.
  The Equal Opportunities Commission, which was prayed in aid in another place, was constructive in its approach to the problem when it recommended an equalisation of legislative controls. It did not urge that controls should be scrapped. It would have been possible for us to consider that in another light. It is sad that the removal of sex discrimination should be used as a guise for crude attacks and an attempt to manipulate the minimal protections that apply in the baking industry and some other industries where, because of relatively weak trade unions or the absence of unions, individual employees have little protection against unscrupulous employers.
  The Paymaster General told us of the Government's intention to remove clause 3. It is remarkable that a clause that was inserted in another place with the intention of strengthening the Bill — in reality, it could do little damage to it — is to be deleted, especially if the Government are sincere in their view of what the Bill will do. However, the clause is to be removed because it offends the ideological drive of the Government in their attack upon employees in their places of work. They are not prepared to give the minimal amount of time that clause 3 would provide to allow for adequate and meaningful consultations to take place.
  The Minister says that he thinks that it is merely a matter of further delay. Yet the Government delayed for six years before implementing the recommendations of the EOC. They sat on the recommendations and kicked them around for six years, hoping that they would quietly go away. They were suddenly forced into action by the need to introduce legislation following some reverses in the European Court. At best, it is therefore specious for them to say that a delay of a few more months would massively damage the legislation.
  I turn to single-sex training. We wait to see the wording of the regulations, but the Minister said that a marginal change was being made, which made no real impact. I am no exponent of the European Community, but the
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  Government refused money from the EC's social fund for single-sex training on the ground that it was discriminatory. Moreover, that happened in the not-too-distant past. We must be suspicious of any attempt to weaken the controls, and that is why I shall watch carefully to see whether the legislation gives protection that guarantees that single-sex training can be used only to enhance the rights of those who have been traditionally discriminated against on the ground of sex in certain areas of employment and training.
  It is important to recognise the concept of positive discrimination. Positive discrimination should apply not only to the failure to allow for equality between the sexes but to racial discrimination and so on. Positive discrimination has a role to play in all those areas. Arty erosion of that principle through allowing single sex training to be diluted and used wrongly should be deplored.
  There is nothing really to commend the Bill to us. It is of rather dubious parentage. Many of its better features will no doubt be pruned back to ensure that any beneficial aspects left in the Bill as a result of consideration in the other place are not allowed to frustrate the Government's intentions. For that reason, I shall certainly join my right hon. and hon. Friends in voting against the Bill.
  8.42 pm
  Mr. Timothy Wood: I join with others in congratulating the hon. Member for Ryedale (Mrs. Shields) on her most excellent maiden speech. I was largely brought up in Nidderdale, so I, too, know the beauties of the north Yorkshire countryside. Having lived for the past 20 years in the south of England, I very much miss the grandeur of the north Yorkshire moors and the beauties of the seascape near Filey. It is a most attractive part of the world, and I envy her representing such a beautiful area.
  One can sympathise with many of the principles underlying the desire for equal opportunities, but I sometimes wonder whether our legislation achieves what we have in mind. Curiously enough, I remember twice being aware of obvious sex discrimination and both times it was in favour of women. On the first occasion, I was a school governor. Although by law there should be no discrimination, by the time that I was involved in the selection process for a deputy head teacher, the only remaining application forms came from women. It was rightly thought that as there were two male deputy heads, it was appropriate that the next, at least, should be female. It was not made too public, but that discrimination occurred.
  On the second occasion, I was involved in a voluntary group where the tendency was for many more males to take an interest in joining. There can be no doubt that discrimination in favour of women took place in the vetting of applications to join that group. Thus, it is sometimes advantageous to women to discriminate.
  Unless we are careful, the way in which we deal with equal opportunities and sex discrimination may lead us into rather bizarre situations. I must confess that I have considerable reservations about the provisions in the Bill relating to employment in private homes. The limitations on choice for employment in private homes are far too strict. The examples given in speeches in the other place reveal the incredible difficulties that could arise. It is quite unreasonable to limit choice in that way when it conies to

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  employing one or two people in a private home. When the Bill is considered in detail, I hope that more thought will be given to the precise wording.
  There is a case for changing the position affecting small firms, but I wonder whether the new provisions will markedly benefit women. In a small firm of two or three people, a prejudiced employer who has to employ a man or woman whom he does not wish to employ may make his life miserable until he chooses to leave. It may not be possible to afford any legislative protection against that. I am well aware that some small firms prefer to employ women. I know of some small firms doing minor electronic work that rightly or wrongly believe—far be it for me to judge—that women do the repetitive work involved more satisfactorily than their male counterparts. They may be right. I wonder whether it is sensible to impose constraints on such small firms that will be difficult to enforce in reality.
  I have considerable sympathy with the hon. Member for Ipswich (Mr. Weetch) on hours of work. However, I have received a petition from many women working for a large organisation in my constituency who want the restraints on hours of working to be removed because they are prejudicial to their interests and they want more freedom. I accept that that implies the possible freedom to exploit. but perhaps such exploitation is mutual. Therefore, while I have some reservations about the advantages of change, I accept the general proposition for it.
  My right hon. and learned Friend said that legislation would be introduced in Committee to deal with compulsory retirement ages. That is highly desirable and I believe that it will be the most important item in the Bill. One paradox in our distinction in ages of retirement is that they were originally introduced about 40 years ago to provide protection for women. Today, women—quite reasonably in some instances — feel that it is not a protection but an inhibition of their rights and freedoms. I hope that there will be equality of treatment in both retirement ages and pensions so that men and women can retire at the appropirate age for them.
  The Bill has a considerable amount to offer, and when it is amended in Committee it will have even more to offer.
  8.52 pm
  Mr. Gerald Bermingham: The Government have once again been forced to legislate because they have lost in the European Court. It is a habit of British Governments to lose in the European Court, and having done so they run screaming to the House, protesting all the way, to legislate to rectify all their unfair actions. They have lost over mental health, over housing and now over sex discrimination. No doubt in the not too distant future they will lose again and again.
  There is one thing wrong with British legislation—it forgets that human beings are people. It does not matter whether they are black, white, Catholic, Protestant, male or female—they are all equal. We seem to forget that, so once again we have lost.
  Although the Bill contains some good bits, it also contains some awful bits. The Government do not realise that when bathing a new baby, when they want to throw away the water they may throw the baby out with it. In this case, the baby is the baking industry, and I shall discuss that in more detail later.
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  I am a lawyer, and during the past 20 years an increasing number of women have entered the profession. That is especially true of the Law Society, which is rather more advanced in its attitudes than the Bar, and I have experience of both. Those women have brought to the profession an excellence that is second to none. Law Society examination figures show that at least 50 per cent. of new entrants passing exams are women. Anyone in legal practice knows the way in which women have developed techniques that are of great assistance to the public. Therefore, I am pleased that one good part of the Bill is the removal of restrictions on small businesses and partnerships. — My experience is that the careers of women have been blocked, especially in professional practices, by the failure of older male partners to take them into partnership, which should be the logical development of their careers. The removal of restrictions can only be to the betterment of the profession and, ultimately, will enhance the quality of service to the public. After all, the profession exists to serve the public. I am sure that many right hon. and hon. Members would agree that the quality of the profession has been enhanced during the past few years by the increasing number of women and the quality of service that they provide.
  The most appalling part of the Bill relates to the baking industry. It is almost discriminatory against men because it takes away a protection for male employees. I know that some large companies would welcome the removal of restrictions so that their factories can churn through the night, the dough can flow and the bread can roll out of the ovens. It does not really matter how long people work through the night. In a civilised society, do we want to condemn people to work all night?
  Mr. Gerald Malone: Hear, hear.
  Mr. Bermingham: The hon. Gentleman obviously agrees with me. Sometimes when I think about this House I wonder why we are condemned to work all night and why a little civilistation does not creep in occasionally. Perhaps when we have legislated for other sectors we will legislate to amend our working practices to have reasonable hours of work.
  In 1954 an enlightened piece of legislation was introduced that placed a number of restrictions on the baking industry. For example, it provided that at night bakeries no one should work between 6 pm and 6 am for more than 26 weeks in a year, or for more than four consecutive weeks during those 26 weeks. The result was that families were not destroyed because the husband had to work all night. There must be a time for families to be together. That was a very sensible piece of legislation, which perhaps did not go far enough.
  The matter was considered as recently as 1976, when a report of the Equal Opportunities Commission on health and safety legislation considered whether we should distinguish between men and women.
  When night work and the number of hours which one can work in an industry are restricted, the people, male or female, who work in the industry are protected. Clause 5 takes away that sensible social protection. Why should we take it away? Those who work in the industry, and who will have to work much longer hours, do not want the clause. Why should we add it to a Bill which, on the face of it, is quite sensible?
  The Bill provides a sense of equality regarding retirement. I am sure that all hon. Members have had

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  correspondence from female constituents — I have received correspondence from those who work in the gas industry, and others—saying that they do not want to retire at 60. Some women who are fit and healthy want to work longer, and they want freedom of choice. I agree with the hon. Member for Stevenage (Mr. Wood) that the Bill is enhanced by that provision.
  Why should we add clause 5 to the Bill? Clause 5 devalues the Bill, because it takes away the protection that has existed in the baking industry for 32 years. The Government have decided to take away a measure which protects the employees of that industry. The Government have been forced into this legislation. Instead of introducing something worthwhile, they have added a stupid clause. Perhaps they will see sense.
  9 pm
  Mr. John Evans: I join other hon. Members who have paid tribute to the maiden speech of the hon. Member for Ryedale (Mrs. Shields). I compliment her on the remarks she made. It was entirely appropriate that she should make her maiden speech on the Sex Discrimination Bill. I endorse her comment that the House has had many noble sons of this land but not enough daughters. The truth is that the House has hardly any daughters of this land. I hope that, as the years roll by, that will be put right as more women take their place in the House.
  The hon. Lady said that she was the first Liberal women Member of Parliament since 1951. I gently remind her that the hon. Lady who was a Liberal Member in 1951, Lady Megan Lloyd George, subsequently joined the Labour party and sat for many years in the House as a distinguished Labour Member. The hon. Lady said that she has an enormous knowledge of her constituency. I am sure that that will stand her in good stead in future in the comments and speeches she will make in the House about her constituency and constituents.
  I was a little puzzled at the lion. Lady's remarks at the end of her speech, although I do not blame her for that. She was only carrying out the usual muddled instructions of the leadership of her party. Apparently, the Liberal party has decided that Labour's reasoned amendment does not go far enough. Therefore, it intends to vote against it. I find that rather odd. I should have thought that if the Liberal party thought the amendment did not go far enough, it would have supported it and sought, in Committee, to amend it and stiffen our opposition to the Bill. If the Liberals follow their usual track record, we shall see very little of them when we are in Committee.
  Mr. Malcolm Bruce rose——
  Mr. John Evans: If the hon. Gentleman wishes to intervene, I shall give way to him.
  The Sex Discrimination Act 1975 was a landmark in the political and industrial life of our society. It sought to eradicate generations, even centuries, of discrimination and unequal status suffered by women. That unequal status touched almost every aspect of our society and was probably at its heaviest and worst in employment and economic activity. No one can deny that far too many women were relegated to the unskilled and most menial work and, for their pains, received less remuneration than unskilled men doing similar work. Very few women were promoted to positions of authority over men, or even to
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  equality with them. Far too few young girls were offered apprenticeships in many of the craft industries. The position has changed somewhat over the past few years. As a sponsored member of the AUEW, I am proud of the fact that a number of young women have served apprenticeships and are craftsmen in our union. They enjoy all the facilities of our great union.
  The 1975 Act is not perfect. No one ever claimed that it was, but it was a massive step forward in changing attitudes, especially among men, and it laid down an excellent framework which I expected that successive governments would improve and build on as the years went by and attitudes improved, especially among employers and men.
  I certainly expected that, following the election of Britain's first woman Prime Minister in 1979, the cause of women's rights would receive a massive boost. However, as we have all learnt — and as women in particular have learned to their bitter cost—not only is this Prime Minister not remotely interested in promoting women's rights, but she has also presided over a Government who have constantly reduced and undermined the very modest gains that women have made since the passage of the Sex Discrimination Act and the Employment Protection Act.
  In that context, it is interesting to note the White Paper that the Paymaster General introduced today; I draw particular attention to paragraph 7.6 which relates to employment law. Here again we see that the Government are intent on further diminishing the rights of women who have given birth to a child and could return to a job within 29 weeks, except if the firm that she worked for had fewer than five employees. The Government now intend to change this limit to fewer than 10. That is another example of how this Government are constantly seeking to reduce the limited rights that women have obtained—and this on the selfsame day as the Second Reading of the Sex Discrimination Bill.
  However, when the Government announced their intention to introduce a new Sex Discrimination Bill to fulfil their obligations under the EEC equal treatment directive, all our hopes were renewed that this woman-led Government would at last do something positive to improve the quality of life for working women. We should have known better. As soon as the original Bill was presented in the other place. we saw with dismay that the Government were seizing the opportunity to introduce a deregulation measure to level standards and protection downwards rather than grasping the opportunity to level standards upwards.
  In fact, this Bill has the potential to allow even more exploitation than it seeks to remove, while masquerading as a reform of benefit to men and women. In its original form, it was selective and niggardly in its concessions to the Government's obligations to the EEC equal treatment directive and the need to improve the Sex Discrimination Act after 11 years of operation.
  Apart from the amendments made to the Sex Discrimination Act in line with the EEC recommendations, the Bill's idea of equality is to bring everyone down to the same level. It seeks to find the lowest common denominator instead of the highest common multiple. It is not rash to say that the Government sought to use the original Act to further their free market philosophy in terms of working practices and conditions. Indeed, when the Bill was first presented in the other place. it made the

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  Government appear naive—that is a charitable view—foolish, indifferent or cruelly calculating, depending on one's political perspective, when one considers how much it would have left employers and employees to do to resolve differences over hours, conditions and work practices after the Bill had removed previous safeguards.
  These points are worth making because the Bill as printed, although by no means perfect, was much improved, thanks to the success of several Lords amendments. I intend to make several points about each clause and to ask several questions to clarify the Government's intentions in relation to the Lords amendments.
  Clauses 1 and 2 deal specifically with the objections found in the EEC equal treatment directive. We welcome that. The first is the way in which the Sex Discrimination Act 1975 exempted small firms of five or fewer employees from its provisions as well as employment in households. The clauses do so by removing the exemption for small firms and private households from section 6(3) of the Sex Discrimination Act and by extending section 7(2) to say exactly in what circumstances a man or woman can be considered for employment in a private household. There are few objections to this, although the other place had to force the Government to bring in an amendment to extend the removal of the exemption from small firms to firms with partners as well. Even here, the Secretary of State objected that small firms already had enough on their plates, as he put it, without having to consider legislation to cover discrimination.
  Secondly, clause 2 amends section 77 of the Sex Discrimination Act 1975. Section 77 made a contract or part of it void if it contravened the terms of the Act— that is, if it were discriminatory. Clause 2 extends this provision to cover the terms of collective agreements, those with trade unions for example, rules made by employers, other than employment contracts or agreements for entering or dealing with a professional or trade association or authority that confers qualifications.
  The clause also amends section 77 to make such agreements or rules void where the effective contract of employment is set out in such a way as to contravene the Equal Pay Act 1970. In effect, this repeals section 3, which had provided for such eventualities to be resolved by reference to the Secretary of State or a Government body. Clause 6 actually repeals it.
  There is also a provision to ensure that employers do not get round this simply by removing all rights for men and women — for instance, instead of providing equal holiday pay, the company could take away everybody's holiday pay. That would be a rough form of equal treatment. This clause was further strengthened by a Government amendment, following Opposition objections, to extend it to applicants as well as existing employees, as provided for in the Sex Discrimination Act.
  On the surface, this all seemed quite good and reasonable, but a major bone of contention arose from the repeal of section 3 of the Equal Pay Act, which could mean that there would be no machinery for enforcement. The Government argued that, whereas previously disagreements arising from contracts, rules or agreements hingeing on the Equal Pay Act could be referred to the Secretary of State or the Central Arbitration Committee, and individual
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  agreements drawn up accordingly, now such dealings will simply be void where they infringe the terms of the Equal Pay Act.
  Presumably, the Government, somewhat naively—to put it at its kindest — assumed that employers and employees would come to some agreement simply because the force of the law is supposed to be behind the latter. Unfortunately, all the evidence, particularly in relation to wages council awards, blows something of a hole in that theory. Unless the employees are reasonably organised in trade unions, the evidence is that they will lose.
  Why will the Government not introduce machinery to make the provisions of clause 2 enforceable? We shall be pressing the Government on that point in Committee, but I should be grateful if the Minister would deal with it tonight. The Government also point out that the reference to industrial tribunals will still be available, but tribunals were not set up for such a purpose — the Central Arbritration Committee was. Many employees find it difficult, time-consuming, expensive and often detrimental to their job prospects if they appeal to a job tribunal as well.
  Additionally, we have the new proposition, in today's White Paper, that the employees have to find £25 if they wish to appear before a tribunal. However, if the Government think that the tribunals are a likely and suitable option, they must be assuming that such disagreements will arise. In the circumstances, why not retain the option of arbitration by the CAC?
  In its response to the Bill, the Equal Opportunities Commission, in its briefing document of May 1986, said that the Government's approach
  "relies on a combination of collective bargaining and individual litigation. This will be uncertain and random. The discriminatory provision will not be removed and there is no power to enforce renegotiation of the agreement."
  The Opposition agree with that. In 1980, the Equal Opportunities Commission recommended that the Equal Pay Act should be amended
  "to enable any discriminatory provision, whether direct or indirect, in a collective agreement, pay structure or wages regulation order to be referred to the CAC which should have the power to amend all discriminatory provisions therein."
  The Government have not taken the opportunity to incorporate anything of that nature in the Bill.
  Clause 3 was inserted in the Bill by the Opposition in the other place. It was designed to stifle, or at least to delay, the implementation of clauses 4 and 5 which seek to remove all restrictions on the employment of women in industry by amending or repealing the Hours of Employment (Conventions) Act 1936, the Mines and Quarries Act 1954, the Baking Industry (Hours of Work) Act 1984 and the Factories Act 1961.
  As for the Mines and Quarries Act, on Sunday I visited the marvellous exhibition at Wigan pier, "The Way we were in 1900". Many of those who saw photographs and descriptions in that exhibition of working conditions for women in industry, particularly in the mining industry, were shocked at the revelations. I am not suggesting for a moment that those conditions will ever return, but I remind the House, in particular the Government, that the battle to remove such onerous conditions on women was fought manfully for many years not only by women but by men, particularly in the trade union movement.
  I agree with the powerful speech of my hon. Friend the Member for Ipswich (Mr. Weetch) who said that women have the right to be protected in certain industrial

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  conditions. I speak from knowledge of industries such as shipbuilding. ship repairing and steel. Many jobs in those industries can be done by women, but I do not intend to be patronising when I say that I should not like my wife, mother or daughter to have to do certain jobs in those industries. It is essential to retain protection for women in certain areas of industry.
  Clause 3 would have retained protection for women until the Government had carried out consultations on the feasibility and desirability of their intentions. They would have been unable to produce a draft report for at least six months and a final report for at least 12 months from the date of Royal Assent. After consultations, the Secretary of State could have made, by statutory instrument, an equal protection order to amend various Acts in order to guarantee equal conditions for men and women at a more considered level than that which would be achieved simply by repealing those Acts, or part of them.
  After the consultation procedure and producing a report the Secretary of State could have repealed the provisions of the Baking Industry (Hours of Work) Act 1954, or the recommendations of the Equal Opportunities Commission or the Health and Safety Commission and made an equal protection order to cover the provisions that had been repealed. The intention of clause 3 was not just to cause delay. It was a positive and beneficial clause. Any intelligent Secretary of State would have welcomed its provisions.
  Clause 4 provides for the repeal of certain provisions in the Hours of Employment (Conventions) Act 1936, the Mines and Quarries Act 1954 and the Factories Act 1961 as they relate to restrictions upon women's hours of work. They are all subject to clause 7. Clause 4 will make it possible for women to be employed at all hours of the day and night, all week and in shifts starting and finishing at any time.
  If I may put in a personal point here, in the light of the bus deregulation that is about to affect society, women who will not voluntarily move to the new hours but may often find that they are forced into working them will suddenly find that there is no public transport to take them to their homes. The Paymaster General may smile, but he knows as well as I do that that is a prospect facing many areas, particularly the more rural areas of the country.
  The Opposition see the Bill as, at the very best, a wasted opportunity to balance the requirements of industry with women's needs and family commitments and to level up conditions of work with those of men instead of simply tearing down existing restrictions on women's working practices. At worst, it is an attempt to remove the protection that many women enjoy in their working conditions and leave the field open for exploitation by certain employers.
  The Government apparently argue that so many exemptions have already been made to these provisions that they might as well be repealed. However, the exemptions are not the majority. It should not have been beyond the Government's capabilities to study which industries had made these applications, what their requirements were regarding women's working conditions and how women employees had fared in achieving levelling up.
  The Government have argued that the gap in strict definitions of women's working hours and conditions will best be filled by negotiations between employees' trade unions and employers. Unfortunately—I hope that the
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  truth comes home to them—women have a relatively poor record regarding trade union organisation. Clause 3 would have given the Health and Safety Commission and the Equal Opportunities Commission an effective voice in the operation of clauses 4 and 5, particularly in relation to the protection of women workers.
  Clause 5 repeals the Baking Industry (Hours of Work) Act 1954, so removing the restrictions on the hours of work of men in the industry. An anomaly had grown up, in that, while male operatives were still prevented from working certain hours of the night—for their protection, according to the principles of the 1954 Act—exempcions to the Factories Act 1961 had breached those regulations for women. In theory, women can work longer hours in this industry than men. The same argument applies here, however. No strong body of opinion suggests that the 1954 Act is no longer necessary. The opportunity should have been taken to extend to women the protection currently afforded to men in the industry or some combination thereof, perhaps following consultation as under clause 3. This was the argument of the Equal Opportunities Commission.
  As the result of the Government's unwillingness to countenance anything but wholesale repeal of existing protection for workers, the Opposition in the other place carried an amendment to protect existing rights of employees—clause 7. This of course is another clause that is to be removed in Committee by the Government.
  As I have argued, while removal of existing restrictions on women's freedom to work certain hours removes an element of discrimination. it also removes certain protections previously employed. This applies especially to men in bakeries if the 1954 Act is repealed. In addition, simple repeal would fail to ensure that women continue to have control of the hours that they work to fulfil their domestic commitments. Clause 7, if it were retained, would ensure that employees continued to benefit from existing legislation, despite clauses 4 and 5, unless they agree otherwise in writing. They would also be protected from dismissal for refusing to work hours not countenanced before the Bill was drafted. In an earlier intervention, I pointed out that even under the Shops Bill the Government were willing to accept a clause protecting the rights of shop workers to refuse to work on Sundays without being sacked as a consequence.
  The Government also argue that the removal of restrictions under clauses 4 and 5 will not lead to any wholesale changes in working hours and conditions. If that is the case, why bother to repeal the provision? Why not simply continue to allow exemptions where they are deemed necessary for the sake of the industry concerned, so long as workers' rights are protected?
  Clause 8, another clause for the chop, arose from an Opposition amendment for the same motives. Assuming that clauses 4 and 5 are passed and carried into effect, clause 8 would have put on an employer the onus
  "to consider the health, safety, welfare and interests of those employees (particularly employees with domestic and family responsibilities) and to make appropriate provision for their health, safety and welfare having regard to the nature and size of his business."
  The clause would have empowered the HSC to draft a code of practice to enable it to fulfil its duties more efficiently.
  The adherence of employers to such a code could have been taken into consideration if and when he or she was taken to an industrial tribunal by employees. Under the

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  code, the employer's duties would have been separate and additional to his or her duties under the Health and Safety at Work etc. Act 1974. The code would have fulfilled a long-standing demand of the Equal Opportunities Commission for a safeguard to be attached to the removal of restrictions on hours of work provisions of the legislation which they saw as being out-dated.
  Once again, the Government opposed the amendment, although the code might at least have resolved problems and disagreements resulting from deregulation. The Government also complained that the HSC had no experience of accommodating the domestic arrangements of workers. The Secretary of State argued that it was not the responsibility of the employer to accommodate the workers in that way. Those arguments, especially the latter, can be taken with a pinch of salt, given the economic climate. Many people are willing to take any job, often in desperation. The measures outlined were designed to prevent precisely such exploitation after deregulation.
  Although we welcome the Secretary of State's announcement about the pension rights of women, following the judgment in the European Court of Justice, we do not think that it goes far enough. The view of the Equal Opportunities Commission is correct. Although it welcomed the Government's proposal to give women the right to retire at the same age as men, the EOC warned that the Government's failure to tackle the wider problems caused by unequal state pension ages would only add to the confusion and the frustration faced by men and women over retirement.
  The significant words of the EOC are:
  "the Commission believes that a similar amendment will be needed to the Equal Pay Act to keep it in line with the amended SDA. The EOC also welcomes the proposal to give both sexes the right to claim unfair dismissal up to the age of 65, when no normal retirement age is in operation. … However, the Marshall ruling highlights once more the need to equalise the State pension age for men and women. Many men now stop work before 65 and find discrimination and hardship in not being able to claim State pension until they reach 65. The new proposals are likely to make the position worse. For example, a woman between the age of 60 and 64 will not have to pay national insurance contributions and her eventual State pension will be increased for each year that she works over the age of 60. A man will not have this option."
  One would have thought that the Government would have taken the opportunity of a Sex Discrimination Bill to put that anomaly right.
  The proposal to amend section 47 of the Sex Discrimination Act 1975, is also mentioned in paragraph 7.7 of the new White Paper "Building Businesses—Not Barriers". Given the nature of everything else in the White Paper, we will consider carefully whatever amendment the Government table in Committee to see precisely what they are driving at.
  The Bill as drafted was originally a bad Bill because of its likely effects for the work force. Those effects would have been mitigated as it was amended. However the Government, by announcing that they will remove clauses 3, 7 and 8—proposals which the Opposition will fight in Committee—have made this Bill as bad as it was when first printed.
  We believe that the Government should scrap these plans for deregulation and proceed along the lines of consultation and worker protection embodied in the Lords
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  amendments and the EEC directive. That is why we have tabled our reasoned amendment, which declines to give this inadequate and unsatisfactory Bill a Second Reading. I urge the House to vote for our amendment tonight.
  9.30 pm
  The Parliamentary Under-Secretary of State for Employment (Mr. Ian Lang): When my right hon. and learned Friend the Paymaster General and Minister for Employment opened the debate he said that the Sex Discrimination Bill was a further step towards equality of opportunity for men and women. During our wide-ranging debate today it has become clear that there are differences of opinion about some of the detailed provisions of the Bill. I look forward to interesting discussions on these when we consider certain parts of the Bill in Committee.
  It is my pleasant duty to welcome the hon. Member for Ryedale (Mrs. Shields). She succeeds the late and sadly missed Mr. John Spence who served, as the hon. Lady said, with distinction in this House. From 1970 he represented the constituents of Sheffield, Heeley, then of Thirsk and Malton and latterly of Ryedale. For 13 years he was a member of the Chairmen's Panel and he was a member and latterly a Chairman of the Select Committee on Agriculture. If the hon. Lady matches her predecessor's dedication to the interests of her constituents, she will do well. She has already demonstrated a knowledge of her constituency and its problems. Her fluency in presenting that case does her credit. The House will look forward to hearing from her again.
  I must begin by taking exception to the Opposition amendment. The amendment tries to hinder the Government from fulfilling our country's international obligations and especially our duty under the treaty to implement EC directives. The first two clauses remedy loopholes which the European Court of Justice found in the Labour Government's Sex Discrimination Act 1975. The Opposition introduced that Act and it has proved itself perishable in the extreme.
  Since the Bill was published, the European Court has issued another ruling. This refers to retirement and it requires another amendment to the legislation. The Government have acted with great speed to implement the latest judgment. We issued a consultative document within five weeks of the court's ruling and we expect to have tabled a new clause to the Bill within four months of the ruling. The hon. Member for St. Helens, South (Mr. Bermingham) must realise that it is not this Government's record at the European Court that is bad. Rather it is the durability and adequacy of the previous Labour Government's legislation that is bad.
  The Opposition's motion is not accurate.
  Mr. Bermingham: Does the Minister not agree that our track record before the European Court of Justice is appalling? It does not matter which Government introduced which piece of legislation. Some of the pre-1964 legislation has been successfully challenged; some of the 1970–74 legislation has been challenged and there are several cases pending against post-1979 legislation. That is all Tory Government legislation. Does he not agree that when we lose we ought to lose a little more gracefully than we have in the past, especially during the past four years?
  Mr. Lang: The hon. Gentleman should recognise the speed with which we have reacted to the European Court's ruling. That was a ruling on the inadequacy of legislation passed by the Labour Government.
  The Opposition motion is not accurate. It states that we have failed to apply the Sex Discrimination Act 1975 to collective agreements. That is not so. A copy of the Bill was sent to the European Commission when it was published so that they could see how we were planning to implement the judgment. We have not been asked to make any changes.
  The Government accepted a number of proposals put forward for improving the Bill from another place. For example, there is the improvement which provides for provision in partnerships put forward by the chairman of the Equal Opportunities Commission.
  The hon. Member for Ipswich (Mr. Weetch) accused the Government of yielding to European judgments with bad grace. However, that is evidence of the Government's flexibility in that matter. Contrary to what the hon. Gentleman said, the court ruling did not cover partnerships. That was an improvement to the Bill which my right hon. and noble Friend the Secretary of State for Employment accepted in another place when it was put forward by Lady Platt. My hon. and noble Friend also made it clear that he opposed discrimination in any size of firm but recognised that small firms do not always have the administrative resources to deal with complex legislation.
  The scope of the private homes provision, to which the hon. Member for Barking (Ms. Richardson) referred, has been clarified following expressions of concern that the original wording was imprecise and could lead to unnecessary litigation. I know that some hon. Members are deeply concerned over what they see as an intrusion by the Bill into private life, but I can assure the House that the Government, and indeed the EC, consider that the principle of respect for private life is fundamental. It will still be possible to choose an employee of a particular sex in circumstances where the job holder would be involved in the household's private life; for example, where the job is to give nursing care or companionship to a member of the family.
  Clause 2 has also been improved in another place to provide that discriminatory rules by an employer in respect of applicants for jobs will be void.
  There was another interesting debate on equal opportunities in the House last Wednesday. The Government asked the House to take note of three EC proposals on equal opportunities which we regard favourably and to endorse the Government's commitment to the principal of equal treatment. Again, the Opposition put down a quite inaccurate amendment referring to lack of commitment to the principle of equal treatment on the part of the Government, and in particular our so-called obstruction of equal pay for work of equal value. The Government were able to describe the array of provision we have made in all aspects of equal opportunities, in particular our record on getting women into jobs and on improving vocational training opportunities. We also pointed out that we had implemented the European Court ruling on equal pay for work of equal value, which resulted from a gap in the original Labour Government's Equal Pay Act 1970. The Opposition also attempted to criticise the Government for their failure to extend invalid care
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  allowance to married women, which again was discrimination introduced by the previous Labour Administration.
  The Opposition's amendment says that the Bill fails to act on collective agreements. The equal treatment directive requires that any provisions contrary to the principle of equal treatment which are included in collective agreements, individual contracts of employment, internal rules of undertakings or in rules governing the independent occupations and professions, shall be or may be declared null and void or may be amended.
  The Government argued before the court that that requirement is already met in relation to collective agreements under United Kingdom law and they argued that on two main grounds. First, "void" must. in the Government's view, mean of no legal effect. Where a collective agreement is not legally binding, as is the case with the vast majority of collective agreements in the United Kingdom, none of its provisions, whether discriminatory or not, is of legal effect. Where exceptionally a collective agreement is made legally binding, section 77 of the Sex' Discrimination Act makes void any term in it which will involve those carrying it out in an act of unlawful sex discrimination.
  The court was satisfied that section 77 of the Sex Discrimination Act dealt adequately with legally binding collective agreements but ruled that the directive covers all collective agreements and that there should be corresponding provision for non-binding agreements. Discrimination arises when collective agreements includes single sex terms such as separate provisions for men and women or provisions applicable to one sex only. That is why the Government are proposing in the Bill to amend the Sex Discrimination Act so as to formally void discriminatory terms in present and future collective agreements, whether the terms occur in the same agreements or different agreements between the same parties. It is not thought that there are many such terms in existence today or that they are likely to be negotiated in future.
  Therefore, I cannot agree that the clause on collective agreements will not work satisfactorily. Of course we hope that very few discriminatory collective agreements have been entered into. But in so far as they have, the offending terms will be void, and it is in the interests of the parties to negotiate a new non-discrimatory term to fill the void. Until they do, every employee who suffers discrimination as a result of the original term will be able to complain to an industrial tribunal under existing provisions and possibly be awarded compensation or back pay. No sensible negotiators will want to live in such an uncertain situation. But the Bill ensures that the delay in renegotiation will have no adverse effect on the employment contract of an individual employee.
  I imagine that there may be interesting discussions in Committee about the need for the Central Arbitration Committee to be involved in enforcement of the provisions of clause 2. I do not want to anticipate those, but must say that having listened carefully to the points put forward by some hon. Members today I am not convinced that such an enforcement mechanism is necessary. We are convinced that we have implemented the European Court judgment and equally convinced that victims of sex discrimination have effective redress through our industrial tribunal system.

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  We do not need a new system of enforcement for sex discrimination cases, and the European court ruling did not suggest this. Its judgment was essentially a technical one and we are implementing it with this Bill. The court accepted that section 77 of the Sex Discrimination Act 1975 implemented the directive in relation to legally binding collective agreements, but held that the lack of corresponding provision for non-binding agreements meant that the directive was not fully implemented. In our view, the court saw a formal voiding provision as an important presentational measure which would set the tone for collective agreements and filter through to practical results on the ground. This change implements the court's judgment, and the Government do not see the need to establish a special enforcement procedure beyond what is required of us.
  My right hon. and learned Friend the Paymaster General said at the start of the debate that we wanted to hear the views of the House on the three substantial additions made to this Bill in another place. We have listened to the arguments put forward, but we are still not convinced that the additional clauses are necessary.
  The hon. Member for Ipswich spoke about clause 3 which was introduced by an amendment tabled by Lord Wedderburn in the other place. In practice, it will impose further delays before the existing discriminatory restrictions on hours of work can be removed. If the Health and Safety Commission or the Equal Opportunites Commission were so minded, it could prevent the Secretary of State simply repealing legislation under clause 9(3) and force him to follow the procedure set out in the new clause.
  This procedure involves a time lapse of at least a year during which a lot must happen. The Secretary of State must conduct extensive consultations with employers and trade unions and he must seek the views of the Health and Safety Commission and the Equal Opportunities Commission. He must also publish a draft report of interim proposals, and nothing can happen until a final report is published setting out the proposals for amendments. After all this, the Secretary of State may finally make an equal protection order amending any of the relevant enactments or may carry forward the necessary repeals. It is not clear to us what purpose this further delay would serve. The issue has been discussed for six years, ever since the Equal Opportunities Commission recommended the repeal of the restrictions affecting women in 1979.
  Before 1979, the Equal Opportunities Commission had consulted widely and given the whole matter careful consideration. In 1979 the Health and Safety Commission was asked to consider the EOCs proposals on women's hours but has been unable to reach a consensus on how this discriminatory legislation can be reformed. That is why the Government have decided to act now. Further consultation is unlikely to achieve any greater degree of consensus than now exists. Indeed, it is more likely that at the end of the further consultation period that this new procedure would require, the Secretary of State would be no further on than he is now. He would still have to take decisions weighing in the balance the same arguments that the Government have taken into account.
  We are not convinced of the case for keeping clause 7, introduced in another place by an amendment tabled by the noble Lord McCarthy. The clause aims to limit the
  620
  discretion of industrial tribunals by giving new absolute rights to employees who, at the date of the commencement of the Bill, are subject to the restrictions on working hours and other working conditions which are removed by the Bill. The so-called protection provided by this new clause is to a great extent implicit in existing employment protection legislation, and we wonder whether Opposition fears are not out of all proportion to the size of the problem that this clause is meant to remedy.
  The repeal of these hours of work restrictions will not lead to the wholesale imposition of dramatic changes in working hours. A manufacturer will only alter hours if he has the orders to justify it or if circumstances demand it. He is not likely to incur the additional costs that longer or unsocial hours usually involve without good reason, and is certainly unlikely to do so without fully consulting his work force.
  Another difficulty stems from the uncertainties of the employer confronted by the new clause. What exactly does it require of him? If he lets things ride, then presumably his employees will continue to have their conditions dictated by the restrictions, and he must continue to shoulder the bureaucratic burden of record keeping, posting notices and so on. If he attempts to rid himself of this burden, he must secure the agreement of each of his workers, but they are unlikely to give this until they know precisely what they are letting themselves in for. Either way, the employer is stuck with the burden. As his work force turns over, new employees will be taken on and will accept employment on the terms that he offers.
  Mr. Bermingham: Does the Minister not agree that in a society which has between 4 million and 5 million people looking for work, often the employers are in a better bargaining position to enforce changes of hours? Therefore, the employee will be in a worse position, because he will know that 10 or 15 people want his job and that one of them will get it if he seeks to stand up for his existing rights.
  Mr. Lang: That is certainly not how we see the picture, nor does the evidence bear out the hon. Gentleman's case.
  The employer ends up with a two-tier work force, some restricted, others not. That will create major administrative costs and will lead to greater inflexibility with all the negative effects that that may have on job creation. Nor is it clear how the rights given by the new clause would sit with the current systems of exemptions that employers have. Employees who are now working at times which would be prohibited, were it not for the special exemption order, will no doubt have those very restrictions incorporated into their contract of employment. The new clause thereafter allows more of the flexibility which the present far from perfect system offers.
  In some ways the most worrying of the three new clauses is clause 8, introduced by Lady Platt's amendment in another place. The all-encompassing nature of the new clause on all employers, not just those who are at present subject to the hours of work legislation—which is the subject of the Bill—makes its implications all the more profound. My Department has always encouraged employers to consider the welfare and interests of their employees in the furtherance of good industrial relations.
  We go much further than encouragement when considering people's health and safety. The Health and Safety at Work etc. Act 1974 puts all employers under a

  621
  general duty to ensure the health, safety and welfare at work of all employees. But this amendment goes beyond that. It imposes as a new statutory requirement on an employer the duty to consider the interests of employees and, in particular, the interests of his employees with domestic and family responsibilities where changes in working hours are contemplated. It would be his duty to consider the health, safety and welfare of his employees, not only at work, but elsewhere.
  There is no evidence to suggest that there is any need to place an inflexible statutory obligation on employers, requiring an approach which, to all intents and purposes, most adopt already. To do so would impose a burden on employers which, even if the duty were clear cut, would put further strain on the willingness of enterprise to expand and create jobs. That point has been impressed on us by several different employers federations since the clause was introduced in another place. For all those reasons, we remain unconvinced that the three clauses are necessary, but we shall give further thought to what has been said today before Committee stage, and we look forward to contributions from hon. Members in Committee.
  Today we published a White Paper on deregulation. As it makes clear, the rights of people in employment must be balanced against the needs of those who are unemployed. I say that particularly to the hon. Members for Barking and for St. Helens, South, who referred to this publication. We believe that too-strict regulation of part-time work and return to work after giving birth works to the detriment of unemployed women, especially the one third of unemployed women who are seeking part-time jobs. In any event, only one twelfth of women exercise their right to return to work after maternity leave. Some small firms will continue to be able to accommodate that in future, but keeping a job open can be highly disruptive and expensive for a small firm. We do not want to discourage them from creating jobs or from offering jobs to women.
  When the Bill is passed there will be no qualifying period in terms of size, hours or years for complaints under the Equal Pay Act 1970 or the Sex Discrimination Act 1975 by women who have won cases under the Sex Discrimination Act where they were dismissed for reasons associated with pregnancy when a man in ill health would not have been dismissed. The White Paper will contribute to a balance between job protection and job creation.
  During the debate some hon. Members have argued that of all the restrictions on women's hours, one in particular continues to be needed, and that is the restriction on women's night work. They have been at pains to stress that, although night work may be necessary in certain limited circumstances, it is nevertheless bad for all employees, women and men alike. For that reason, they would have us believe that, far from removing restrictions on women's hours, we should extend legislative controls to men.
  Yet an objective assessment of the available evidence does not justify the dogmatic statement that all night work is harmful. In reality, the evidence on the effects of night work and long hours is inconclusive. In 1978, Dr. J. Harrington conducted a critical review of the major references, including the work reported on by the ILO report, "Night Work", relating to shift work and health for the Employment Medical Advisory Service of the Health and Safety Executive. He concluded that the evidence of any major effect on health was slim. Since the publication
  622
  of this report there has been no new evidence to change its conclusions. Certainly there is no evidence to suggest that the effects on health are different for women than for men.
  We must not lose sight of the vital role played by the Health and Safety at Work etc. Act 1974. This comprehensive Act which outlines the new approach for regulating health, safety and welfare in the work place, recommended by the Robens committee, has now taken centre stage, leaving the older legislation such as the Factories Act 1961 and the Mine and Quarries Act 1954 to play subsidiary roles. The Health and Safety at Work etc. Act imposes on employers a general duty to ensure, as far as reasonably practicable, the health, safety and welfare of all employees at work.
  I cannot emphasise strongly enough that the repeals which we envisaged would not have discharged employers from their responsibilities to consider the effects on employees of hours of work, including any changes even had the Bill emerged unchanged from another place.
  Some claim that the repeals in clauses 4 and 5 of the Bill originate exclusively from our wish to remove the burden on business. They claim that, in our eyes, the removal of discrimination is very much by the way. That view misrepresents our position. We are committed to removing discrimination so that women enjoy the same opportunities as men. We are committed to erasing the out-of-date view of women enshrined in this legislation —the paternalistic view that women are not capable of deciding for themselves the hours they are prepared to work. We believe it is high time that women shed. this somewhat second-class status. Women in factories deserve and want the same freedom of choice on hours as the men whom they work alongside. Surely there is no justification nowadays for different treatment regarding the hours that men and women work.
  As well as distinguishing between men and women, the restrictions also mean that women are treated differently according to where they work. Today there are more than 9 million working women. Of those, some 7·5 million work where there are no legislative restrictions on the hours worked. This includes jobs in hospitals, in the police, hotels, catering and in the entertainment industry. With such work there are, inevitably, unsocial hours.
  Mr. Evans: Low-paid jobs.
  Mr. Lang: The other 1·5 million women work in manufacturing where there are statutory controls on the hours worked. The hon. Member for St. Helens, North (Mr. Evans) mutters, from a sedentary position, about low pay. He ought to be aware—I have told him on several occasions from the Dispatch Box—that the average pay for men has risen substantially above the rate of Inflation in the past seven years but the average pay of women has risen by substantially more. The gap is closing considerably.
  Mr. Evans: Will the Minister concede that, notwithstanding that what he says may be true, the average wage of women, particularly in the industries that he has mentioned is still substantially below men and that such jobs are officially classified as low-paid jobs?
  Mr. Lang: The average wages for women are indeed lower than the average wages for men, but that is because they tend to do different jobs which are in themselves inherently lower paid than those for men.

  623
  I repeat to the hon. Gentleman, yet again, that as we have escaped the controls of the Labour Government's wage control policy and the distortions that that created, the wages of women have substantially advanced and the divergence between the advance of women's wages and men's wages has been very much to the credit of the Government.
  We have also been accused of over-emphasising the need for deregulation. It is claimed that we are obsessed with that principle, even at the expense of removing protection from what some see as vulnerable sectors of the work force. The restrictions on women's working hours do encumber those employers who have to run their businesses under such controls. The system of enforcement is bureaucratic in the extreme. It requires employers to keep numerous records, post forms and notices which need continuous updating to show any minor changes.
  The system of exemption imposes another burden. Some 200,000 women work at times which would be prohibitive but for the existence of special exemption orders. Of that figure, some 80,000 are working at some time during the night. The restrictions have little practical effect and the paper chase involved in obtaining an exemption is just the sort of red tape which should be cut away. It achieves nothing positive and only hampers the employer and costs the taxpayer money to administer.
  Much of today's debate has hinged on the baking industry. I was interested to learn of the talents not only of my right hon. and learned Friend the Paymaster General but also my hon. Friend the Member for Langbaurgh (Mr. Holt) who demonstrated considerable skills and knowledge of the industry.
  We have heard arguments pressing us to extend the coverage of the Baking Industry (Hours of Work) Act 1954 to include women instead of repealing it. We believe, however, that extension would be nonsense. It has been argued that repeal will remove a valuable protection for health and safety of the industry but the Act originated not so much on grounds of health and safety as to resolve longstanding problems that the industry had experienced in reaching sensible and workable agreements on hours of work. There is no observable evidence that the Act's provisions have in any way improved the health and safety of bakery workers; nor is there any evidence that its repeal will have a detrimental effect. More than two thirds of the industry's work force is now covered by the terms of collective agreements which bring exemption from the provisions of the Act.
  The hon. Member for St. Helens, North spoke of workers in the baking industry working for 60 hours a week. That figure is simply not accurate. We have received representations from the Bakers, Food and Allied Workers Union saying that the average working week in the bread, flour and confectionery sector is 49·9 hours. Even if the hon. Gentleman's figure were correct, it would tend to prove that the 1954 Act has served not to protect the interests of bakery workers. There are at least four other sectors of manual wages for which the average weekly working hours, including overtime, are higher than those in the bread and confectionery industry.
  There is no reason to believe that, without the underpinning given to the collective agreements by the Act, employers will seek to impose substantially different
  624
  hours of work. In our consultations with employers, the Federation of Bakers assured us that there was no prospect of the sort of job losses that the bakers' union fears. There is simply not the level of overmanning in the industry which such numbers would imply. It seems to us pointless to extend the Act to cover women. On the contrary, we believe that the Act is largely redundant and ripe for repeal.
  My hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) welcomed what the Government have done—and the fact that they have done it quickly—as a result of the Helen Marshall case concerning state and occupational pensions. I appreciate that the House is eager for progress towards equality in state and occupational retirement pensions. The European Court of Justice ruling in the Marshall case did not affect either. Even if it had, no Government could have produced a workable legislative solution on so complex a subject in the space of a few weeks, as we have done with the immediate issues raised in that case.
  Hon. Members who were in the House last Wednesday evening will know that a draft EC directive on equal treatment in occupational social security schemes is under discussion in Europe and likely to be adopted soon if certain amendments favoured by the United Kingdom and other member states are made.
  As for our proposal to abolish the requirement for training bodies to obtain designation under section 47 of the Sex Discrimination Act 1975, some anxiety has been expressed that this will open the floodgates to training for women only and therefore deny men opportunities to train for the work of their choice. Section 47 also allows the provision of training for men only in work in which they are under-represented. It is true that all the bodies designated so far have applied to us with women's training in mind. That is no doubt because traditionally male jobs are often more skilled and higher paid, and women are more likely to aspire to them than men are to, say, typing.
  Some people feel that this past discrimination should be overcome by insisting that a quota of jobs should be reserved for women. We do not accept that. Jobs should be filled only on grounds of merit, not of sex. Nevertheless, if women are to have the opportunity to compete for jobs and contribute to the economy on equal terms, they may need special training.
  The Government want there to be an economy in which firms, large and small, can expand and thereby win extra business and create new jobs. To this end, we are already winning the battle against inflation. If we are to exploit our successes, we must free enterprise. Unnecessary restrictions and regulations are a positive hindrance to a firm's ability to make the most of its opportunities and therefore create jobs. We must ensure that we create the right environment in which enterprise can thrive and prosper. I believe that the Government's record on freeing past discrimination about women's right to work has been creditable and to our advantage.
  It is just over 10 years since the Equal Pay and Sex Discrimination Acts came into force. We do not claim that this second Sex Discrimination Bill will be as far-reaching as the first, but it is another step forward on the road to genuine equality of opportunity between the sexes and I believe that we should all welcome its introduction to the House. I urge my right hon. and hon. Friends to reject the Opposition amendment and to support the Bill's Second Reading.
  Question put, That the amendment be made: —
  The House divided: Ayes 68, Noes 155.

  Division No. 194]

  [10 pm

  AYES

  Archer, Rt Hon Peter

  Litherland, Robert

  Atkinson, N. (Tottenham)

  Lloyd, Tony (Stretford)

  Benn, Rt Hon Tony

  McDonald, Dr Oonagh

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

  McKelvey, William

  Bermingham, Gerald

  McNamara, Kevin

  Boothroyd, Miss Betty

  McTaggart, Robert

  Boyes, Roland

  McWilliam, John

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

  Maynard, Miss Joan

  Buchan, Norman

  Mikardo, Ian

  Campbell-Savours, Dale

  Millan, Rt Hon Bruce

  Clarke, Thomas

  Morris, Rt Hon J. (Aberavon)

  Clay, Robert

  Nellist, David

  Clelland, David Gordon

  O'Neill, Martin

  Clwyd, Mrs Ann

  Patchett, Terry

  Cocks, Rt Hon M. (Bristol S)

  Pike, Peter

  Cook, Frank (Stockton North)

  Prescott, John

  Corbett, Robin

  Raynsford, Nick

  Corbyn, Jeremy

  Richardson, Ms Jo

  Cunningham, Dr John

  Roberts, Allan (Bootle)

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

  Roberts, Ernest (Hackney N)

  Deakins, Eric

  Rooker, J. W.

  Dewar, Donald

  Ross, Ernest (Dundee W)

  Dormand, Jack

  Sedgemore, Brian

  Dubs, Alfred

  Skinner, Dennis

  Dunwoody, Hon Mrs G.

  Snape, Peter

  Evans, John (St. Helens N)

  Soley, Clive

  Fields, T. (L'pool Broad Gn)

  Spearing, Nigel

  Foster, Derek

  Straw, Jack

  Heffer, Eric S.

  Tinn, James

  Hogg, N. (C'nauld & Kilsyth)

  Wareing, Robert

  Holland, Stuart (Vauxhall)

  Weetch, Ken

  Hoyle, Douglas

  Young, David (Bolton SE)

  Hughes, Robert (Aberdeen N)

  Janner, Hon Greville

  Tellers for the Ayes:

  Lamond, James

  Mr. Allen McKay and Mr. Mark Fisher.

  Leighton, Ronald

  NOES

  Aitken, Jonathan

  Galley, Roy

  Alton, David

  Gardiner, George (Reigate)

  Arnold, Tom

  Garel-Jones, Tristan

  Ashby, David

  Glyn, Dr Alan

  Beaumont-Dark, Anthony

  Griffiths, Peter (Portsm'th N)

  Beith, A. J.

  Ground, Patrick

  Bellingham, Henry

  Gummer, Rt Hon John S

  Best, Keith

  Hamilton, Hon A. (Epsom)

  Bevan, David Gilroy

  Hamilton, Neil (Tatton)

  Blaker, Rt Hon Sir Peter

  Hampson, Dr Keith

  Boscawen, Hon Robert

  Hancock, Michael

  Bottomley, Peter

  Hanley, Jeremy

  Bottomley, Mrs Virginia

  Hargreaves, Kenneth

  Bowden, Gerald (Dulwich)

  Harris, David

  Bruinvels, Peter

  Harvey, Robert

  Buck, Sir Antony

  Hawkins, C. (High Peak)

  Butterfill, John

  Hawkins, Sir Paul (N'folk SW)

  Carlisle, Kenneth (Lincoln)

  Hawksley, Warren

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

  Hayes, J.

  Carttiss, Michael

  Heathcoat-Amory, David

  Clarke, Rt Hon K. (Rushcliffe)

  Hind, Kenneth

  Clegg, Sir Walter

  Hogg, Hon Douglas (Gr'th'm)

  Coombs, Simon

  Holt, Richard

  Cormack, Patrick

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

  Crouch, David

  Hubbard-Miles, Peter

  Dorrell, Stephen

  Hughes, Simon (Southwark)

  Douglas-Hamilton, Lord J.

  Hunt, John (Ravensbourne)

  Durant, Tony

  Jessel, Toby

  Eyre, Sir Reginald

  Johnston, Sir Russell

  Favell, Anthony

  Jones, Gwilym (Cardiff N)

  Fookes, Miss Janet

  Jones, Robert (Herts W)

  Forth, Eric

  Kennedy, Charles

  Franks, Cecil

  Key, Robert

  Freeman, Roger

  King, Roger (B'ham N'field)

  Freud, Clement

  King, Rt Hon Tom

  Gale, Roger

  Kirkwood, Archy

  626

  Knight, Dame Jill (Edgbaston)

  Silvester, Fred

  Knowles, Michael

  Smith, Tim (Beaconsfield)

  Lang, Ian

  Speed, Keith

  Latham, Michael

  Speller, Tony

  Lawrence, Ivan

  Spencer, Derek

  Leigh, Edward (Gainsbor'gh)

  Spicer, Michael (S Worcs)

  Lord, Michael

  Stanbrook, Ivor

  Luce, Rt Hon Richard

  Stanley, Rt Hon John

  Lyell, Nicholas

  Steel, Rt Hon David

  Mac Kay, Andrew (Berkshire)

  Steen, Anthony

  Major, John

  Stern, Michael

  Malins, Humfrey

  Stevens, Lewis (Nuneaton)

  Malone, Gerald

  Stewart, Allan (Eastwood)

  Marlow, Antony

  Sumberg, David

  Mather, Carol

  Taylor, John (Solihull)

  Maude, Hon Francis

  Temple-Morris, Peter

  Maxwell-Hyslop, Robin

  Terlezki, Stefan

  Mayhew, Sir Patrick

  Thomas, Rt Hon Peter

  Meadowcroft, Michael

  Thompson, Donald (Calder V)

  Miller, Hal (B'grove)

  Thompson, Patrick (N'ich N)

  Mills, lain (Meriden)

  Thorne, Neil (Ilford S)

  Moate, Roger

  Townend, John (Bridlington)

  Moynihan, Hon C.

  Tracey, Richard

  Murphy, Christopher

  Twinn, Dr Ian

  Nelson, Anthony

  van Straubenzee, Sir W.

  Newton, Tony

  Waddington, David

  Normanton, Tom

  Wakeham, Rt Hon John

  Ottaway, Richard

  Waldegrave, Hon William

  Owen, Rt Hon Dr David

  Walden, George

  Patten, J. (Oxf W & Abgdn)

  Wallace, James

  Percival, Rt Hon Sir Ian

  Waller, Gary

  Portillo, Michael

  Ward, John

  Powell, William (Corby)

  Watts, John

  Powley, John

  Wells, Bowen (Hertford)

  Price, Sir David

  Wells, Sir John (Maidstone)

  Raffan, Keith

  Wheeler, John

  Rhodes James, Robert

  Wolfson, Mark

  Rowe, Andrew

  Wood, Timothy

  Sainsbury, Hon Timothy

  Yeo, Tim

  Sayeed, Jonathan

  Shaw, Sir Michael (Scarb')

  Tellers for the Noes:

  Shelton, William (Streatham)

  Mr. Michael Neubert and Mr. Peter Lloyd.

  Shepherd, Colin (Hereford)

  Shields, Mrs Elizabeth

  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).

  SEX DISCRIMINATION BILL [Lords] [Money]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Sex Discrimination Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of any increase which is attributable to so much of that Act as relates to retirement or unfair dismissal in the sums payable out of money so provided under any other Act.—[Mr. Sainsbury.]

  SEX DISCRIMINATION BILL [Lords] [Money]
    STATUTORY INSTRUMENTS, &c

      CUSTOMS AND EXCISE
      Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &c.)
      That the Customs Duties (ECSC) (Quota and Other Reliefs) (Amendment) Order 1986 (S.I., 1986, No. 787), dated 1st May 1986, a copy of which was laid before this House on 1st May, be approved.

      627
      That the Customs Duties (ECSC) (No. 2) (Amendment No. 3) Order 1986 (S.I., 1986, No. 813), dated 8th May 1986, a copy of which was laid before this House on 8th May, be approved. —[Mr. Sainsbury.]
      Question agreed to.

      LAND REGISTRATION BILL, [Lords]
      Order for Second Reading read.
      Motion made, and Question put forthwith, pursuant to Standing Order No. 69(6) (Second Reading Committees). That the Bill be now read a Second time.
      Question agreed to.
      Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

  DHSS Offices (North-West)
  Motion made, and Question proposed, That this House do now adjourn. —[Mr. Sainsbury.]
  10.12 pm
  Mr. Terry FieldsL: The topic of this Adjournment debate is the staffing in the Department of Health and Social Security offices in the north-west. However, the argument could equally apply throughout the country, although I shall confine my remarks to the north-west. I am sure that the workers and claimants at those offices wish me to express my gratitude to you, Mr. Speaker, for selecting this debate, as opposed to the lottery that takes place in the Lobby.
  The debate has been prompted by, first, workers in DHSS offices and members of the Civil and Public Services Association, both regional and national. I was fortunate to attend the CPSA conference a fortnight ago, when I was able to discuss the problems at the DHSS offices with some of its representatives. Secondly, and perhaps more tragically, it is prompted by the continuous and increasing pressure on my constituents and those of other hon. Members ——
  Mr. Douglas Hogg: Where are they?
  Mr. Fields: Exactly. It is opportune that we should discuss this matter, given the Fowler review that went through the House only last week, and which is now on its way to another place. However, the importance of the issue goes far beyond that piece of legislation. It involves recent history at DHSS offices and the seriousness of the crisis in them which demands immediate action by the Government. That may appear a vain hope, given the Government's record in other areas of legislation, but the issue must be aired and highlighted so that we can expose and warn of the calamity facing claimants and DHSS employees alike.
  The DHSS offices in the north-west are living on borrowed time. While unemployment has tripled during the past five years and claims for social security benefit have mushroomed, the staff numbers have been ruthlessly cut. One in four — that is, 25 per cent. — of social security claimants are being paid too little. That was shown in a study done only 18 months ago. An even larger proportion of people face long delays in receiving payments. Members of the CPSA employed in the offices have suffered because of cuts in jobs and have been the victims of the Department's crisis management. Massive abuse of overtime has taken place to cover up staff deficiencies in those offices.
  While the problem centres on the north-west it has implications nationally, to a greater or lesser degree. Statistics that hide the human misery that exists on both sides of the DHSS counter, but especially that of the customer, nevertheless underline the scale of the problem. I shall cite a few statistics. In the Breckfield road office of the DHSS, which is in my constituency, people must queue for an average of two and a half to three hours a week to receive attention at the supplementary benefit reception. The reception frequently remains open until 5.45 pm, which is well beyond its closing time. Overtime has been worked solidly in that office since October 1974. There is a high staff turnover — 32 per cent. — which causes problems. Staff are unable to tackle the demands for unemployment benefit and other benefits. There has

  629
  been a diminution in the service that can be provided to the public. Since July 1985, 1,600 supplementary benefit clerical visits have been abandoned.
  One cannot even get through to the office on the telephone. As a Member of Parliament representing thousands of people in the area, I cannot even make contact with DHSS offices. I cannot make contact with the Breckfield road office because of the crisis there with problems in the working routine. Frequently, members of staff take a day s sick leave because of the pressure place on them. On average, there is a backlog of 400 cases for supplementary benefit.
  Let us consider the number of hours of overtime worked in the Huyton office and in offices in other parts of Merseyside. In 1983–84, 2,235 hours of overtime were worked. In the six months April to September 1985, 12,950 hours of overtime were worked. That increased overtime kept the offices afloat. Without it, the offices would have gone under. The claims are piling up. One has only to visit some of those offices to see their needs and the amount of work outstanding.
  A massive increase in supplementary benefit work load has been put on the backs of DHSS workers. The inadequacy of staffing arrangements has led to serious problems in the offices.
  The nonsense of the Department's complementing system is clear. I shall compare offices in the Merseyside area with those in Cheshire — the St. Helens and Warrington offices. Since May 1980, the St. Helens office has had an increase of 9,098 supplementary benefit claims which has been accompanied by an inadequate increase of 15 staff. Warrington has had a greater increase—that is 9,237—of additional claims in the same period and has had a cut of four staff.
  One might think that the problem is peculiar to the north-west; it is not. Even the offices which are on the doorstep of the House of Commons, such as Bloomsbury, Westminster, Chelsea, and Kensington, have a high staff turnover. I am told that Bloomsbury has an 80 per cent. staff turnover. Instead of trainees receiving the requisite 13 weeks' training. they are given only two weeks' training. They are then asked to shore up a crumbling system which is causing problems inside and outside the offices. When 50 people go inside the Bloomsbury office, the office closes and no further people are dealt with. People go along to that office at 7 o'clock in the morning and queue up outside, in all sorts of weather, to have their claims dealt with. A similar picture applies nationally.
  The unions have campaigned for more staff. They were told by management and the Department that the system for establishing the needs of their offices was unscientific and should not be considered with any seriousness. They have been told that on the complementing system 2,000 jobs are already in post, over and above the needs of the Department. How is that figure arrived at? Management says that the unscientific way in which these numbers are computerised is absolutely wrong, but two major disputes have created a backlog within the DHSS system, and these distort the statistics that management and the Department use. The major disputes referred to are in Newcastle and Washington in the north-east.
  Secondly, there has been no updated complementary review since 1980 or 1981, or no firm base to commence the calculation. Therefore, if management and the Department are accusing the unions of wrong analysis, the same argument applies to them.
  630
  At local office level there is also inadequate validation of statistics because of pressure, fewer workers and the work load with which the reduced number of staff is expected to deal. Unrecorded work is carried out because of the pressure of the increased number of claimants, and there is lack of training in the offices to which I am referring because of stretched resources. A high turnover is adding to the problem.
  A management report, which confirms what the workers are saying, underlines and adds to the confusion that is now occurring in the DHSS. The management report on the inadequacies of the system and the way in which the numbers are computed says that misrepresentation of, or lack of attention to, instructions is a major contributory factor in the inaccuracies of statistics; that instructions were contained in several different codes that were sometimes confused and contradictory; that codes were not widely available to all staff concerned:, that peripheral sections were often forgotten; and that staff were inadequately trained in statistics. Therefore, the fault lies with both management and the Department for not allowing the time or the manpower to deal with the problems affecting those in the DHSS offices.
  Overtime worked in the Department is an absolute scandal. On the one hand the Government tell the Prison Officers Association that it must cut overtime because it is a restrictive practice, while in DHSS offices they are advocating overtime to cover up staff deficiencies. Such deficiencies are clearly shown by the use of casual workers in DHSS offices. In the north-west region, the number of casuals employed in the period ending 17 December 1985 amounted, on management's figures, to 16,062 man days in the red, and overtime amounted to 73,694 man days in the red. Massive overspending is taking place in respect of overtime and casual workers, as a result of which the lack of full-time workers is being masked. Thee should be more permanent jobs in those offices, not to put bottoms on seats but to deal with the backlog of work—current work and the increasing work brought about directly by the policies of this Government who are creating unemployment at every turn.
  I am aware—and the Minister will no doubt point out—that nationally it has been agreed that 5,000 jobs should be introduced into the DHSS. But this is only an interim measure, and on analysis it is not the true figure. As I have already said, 2,000 of those jobs are already in post, although the Department claims that they are supposedly in addition to complement.
  Of the remaining figure, 500 have already been designated — according to reports, with a ring fence around them — to deal with fraud in the DHSS. In reality, we are, therefore, talking about only 2,500 jobs nationally.
  However, it has been calculated that the north-west needs 2,100 jobs. Therefore, the number proposed by the Department will in no way match up to the needs of the claimants and those already working in the industry. This is based on direct experience at the sharp end of things, not on fanciful, dreamt-up and inaccurate figures conditioned by Treasury restrictions on the DHSS. Workers and management have assessed the needs in the Department and feel that 15,000 jobs are required to cope with the situation, and they have proved the need for these people. The amount of overtime and casual work being done is outrageous.

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  The Fowler review will not be reported for another 18 months, and on current analysis that review, given the background that I have set out, will not match the needs of the DHSS and the claimants. A decent level of manpower in the Department can be arrived at only by a working out and analysing of the problem by the departmental managers and the trade unions representing the workers, not by anticipating or forecasting.
  To date, there has been good will from the staff, but it has been undermined by the crisis of management. I am informed by those representing the workers that good will will cease soon if management continues to exercise discipline in a macho way, and to cut back on various practices.
  The Fowler review has prompted the enrolment of 20,000 casual workers to deal with the interim arrangements, but as the situation becomes more critical because of the Government's policy, the 15,000 necessary extra jobs in the Department seem impossible to achieve. This has been exacerbated by two upratings in the recent past, and by the chaos and further pressure on the reduced numbers working in the offices. We are told that technology is coming in, but both workers and claimants in the offices feel that this removes the personal approach in dealing with what are often complex matters, about which the general public is not aware.
  Workers in the industry are on extremely low rates of pay and on average their take-home pay is between £80 and £85 a week. The annual salary starts at £2,898 and if one works for 20 years, one's salary can rise to about £7,000 a year. Such low pay, coupled with ill health because of the demands of the work, is putting pressure on the workers, who want action.
  Claimants are feeling the effect as well. They are not getting that to which they are entitled, and are suffering because they are those least able to look after themselves. Nobody willingly goes along, cap in hand, to the DHSS asking for a handout, having to be means-tested before getting that to which he is entitled. The effect on claimants is catastrophic for families, particularly in my area. The Government and the system that they represent are creating the bad situation and punishing the people who fall into it for crimes of which they are not guilty. That is another factor that underlines my point.
  Have the Government anticipated in their review of the DHSS system the fact that already staffing does not match up to the 4 million unemployed, and that that number will increase, with the expected loss of work in shipyards, British Rail and other industries? How do the Government think that the offices will cope with an increasingly bad situation, in which there is no hope for British industry, more and more redundancies, and more people coming into the offices?
  On behalf of the people whom I represent I warn the Government of two things. First, there has been a build-up of opposition to the Fowler review, and the cuts in benefits that will result. Secondly, not only are the workers in the offices distressed about this, but pensions organisations, young persons, one-parent families, the unemployed, students and the trade unions in general are beginning to mount a campaign in opposition to the Government and the Fowler cuts, which will affect them, their families and lifestyles.
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  If this problem is not tackled, the trade unions that represent those who work in DHSS offices will respond on behalf of the overworked, underpaid and, in some cases, abused members, and will defend the health and well-being of those whom they represent by resorting to a call for industrial action. The workers have had more than enough. Their health is suffering because of an insufficient number of staff to deal with the increasing workload. That will force the Government to act in the interests of the claimants.
  I am not precipitating this action. I am merely explaining the position. I do not know whether the Parliamentary Under-Secretary of State visits many DHSS offices, but he ought to visit the Merseyside area and the north-west. He would see that piles of claims are not being dealt with, which means that those who rely upon DHSS finance just to exist are suffering extreme deprivation and poverty.
  Last year there were 200 strikes in DHSS offices, but this year it will not be the so-called militant areas that will take industrial action. Moderate areas — Wales, the south-west—and places such as Woking will be taking industrial action. The call for industrial action is coming from people in Surrey, Hampshire and Lewes on the south coast. They are demanding that the unions should do something about the crisis. The CPSA has a 10:1 majority in favour of industrial action. It accepts the interim 5,000 jobs—or the 2,500 jobs, to be perfectly honest, given the fiddling that is already going on. However, it is prepared to struggle on behalf of its members.
  I warn the Government that my constituents, those in other constituencies in the north-west, the claimants and the trade unions are demanding that the Government should act before a complete breakdown occurs within the system and in society in general. Unless the Government accept their responsibilities, industrial action will have a most damaging effect on those who rely upon social security benefit.
  10.32 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): The hon. Member for Liverpool, Broadgreen (Mr. Fields) has raised important matters in this Adjournment debate, and I am glad that he has done so.
  During his speech he made some contentious remarks with which he would not expect me to agree, and I do not. However, I hope he will permit me to say that I congratulate him upon the moderate and reasonable way in which he put his case. He touched on many matters that are of concern to him, to my hon. Friend the Minister for Social Security and to me. He referred to his concern about staffing levels in local offices of the DHSS and, understandably, he concentrated his remarks on the offices in the north-west with which he is most familiar.
  The hon. Gentleman may be surprised to hear that I agree with some of his remarks. He and I agree that the Government must obtain and sustain a modern, effective and efficient social security system. That objective is at the root of many of the Government's policies. It was at the root of the social security reviews that resulted in the Social Security Bill which received its Third Reading earlier this week.
  We regard the delivery to the public of an efficient, effective and, above all, modern social security system as a critical part of the Department's plans for the next few

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  years. That is why we have embarked on the largest computerisation programme that western Europe has ever seen. The reform of benefits must be matched by the modernisation of operations. We are making quick progress with our strategic plan to computerise social security operations. By doing so, we aim to increase efficiency, to reduce administrative costs and, above all. to provide a better service to the hon. Gentleman's constituents and to the constituents of every right hon. and hon. Member. Better conditions for the staff and a better service for the public underlie the great structural changes that we are seeking to make in the operations of the systems.
  Contrary to what the hon. Gentleman implied — although I am not sure that he said it directly—it is my experience, having spent a lot of time visiting local offices up and down the country, that by and large staff seemed to welcome increased computerisation because they see it as the door to a better service to the public, to which they as well as we are committed.
  In the general realm of providing a better service, we are currently examining the national and regional organisation staff complement and the means of distributing that complement to every local office. It involves an in-depth review of a large sample of local offices to study the manpower requirements. This is being done in about 20 per cent. of all our local offices.
  I wish to make one point relating to the social security review at the outset. I understand that there are legitimate points of political controversy in the social security review about which the hon. Gentleman and I would not agree. However, there is one point on which we might agree. Whatever levels of benefits and other contentious matters may be attached to that review, the structure of the changes in the social security system that we propose has been broadly welcomed not only by both sides of the House but by trade unions and by the staff. That is a great advance if we are in the business of improving the service to the public and the conditions of service of the staff.
  Mr. Terry Fields: The Minister mentioned the review of 20 per cent. of offices. Does he not realise that the use of computers takes away the personal aspect in dealing with people's claims? Can he give the assurance that, when the review is undertaken, the CPSA and other representative bodies will be brought in to make an analysis, because they are at the sharp end? A thorough job must be done because the figures do not match the needs.
  Mr. Major: When the hon. Gentleman talks of personal service, he overlooks one important point. The most important expectation of a man or woman arriving at the counter in a DHSS office is to receive a response to the request being made and the assistance that is needed. One of the great difficulties at present is that, without a modern computerised system, it is frequently not possible to track down the case papers and give an answer or deal with the client's needs and claims as swiftly as possible. Computerisation, far from being impersonal, it is the key to providing the standard of service that both the hon. Gentleman and I would wish to see become available to the public. I am bound to say to the hon. Gentleman that in my judgment that is the overwhelming view not only of the politicians and administrators but of the staff who work in the local offices, to whom I have spoken in recent months.
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  The hon. Gentleman spoke of the staffing level and rather disparagingly, if I may say so, of the increase in complement. He is correct that there is an increase in complement of 5,000 staff in the local officers. These were given recently in two stages. The first was in February and the second was announced by my right hon. Friend the Secretary of State in early March. Of that complement, the north-western region has received 661 posts, which is a substantial share of the increase. The hon. Gentleman mentioned Breckfield in his constituency and some of the difficulties there. Before October 1985 the complement was 134. The October 1985 figure was 142. The proposed allocation for 1986–87 is 164 posts, an increase of 30 posts in a period of six months before we have completed the in-depth complement review that is in hand. We recognise the special circumstances that exist in some inner London and inner city areas. The hon. Gentleman's constituency may have similar pressures. We have sought to reflect that in the increase in staff complement by 5,000.
  I hope that the hon. Gentleman may to a degree be reassured about the in-depth complement review that is under way and that we hope will produce results early next year. The 5,000 staff are "on account" of that complement review. Although the hon. Gentleman may not regard that as sufficient, I hope that he will at least acknowledge that it is a significant indication of the Government's determination to support the delivery of benefits through local offices.
  The size of that substantial increase was not just plucked out of the air, nor has the distribution of the additional staff been accomplished without a recognition of the problems faced by particular types of local office in particular localities. Both decisions were based on firsthand assessment. They were not just guesses, although inevitably, pending the results of the complement review. there must be elements of judgment at this stage.
  The hon. Gentleman touched on the fact that a great deal has often been made of the increased workloads with which local offices have had to deal. Of course the hon. Gentleman is correct in saying that in some parts of the social security system there has been a substantial increase in workloads. I would not deny that for a second. But it is also true—and the hon. Gentleman did not mention this — that there have been reductions in workloads elsewhere, notably the equivalent of 3,342 posts following the introduction of statutory sick pay and 2,445 post following the introduction of the housing benefit scheme. To obtain a true picture of the work/staff ratio, the hon. Gentleman and everyone else who wishes to have a true bill in these matters must take into account those changes as well.
  I and my colleagues remain absolutely committed to matching staff to workloads. We have put that on record before, and I am happy to reaffirm it to the hon. Gentleman this evening. The injection of 5,000 staff is only the culmination of several increases in recent months — an extra 3,800 staff to offset the effects of the Newcastle strike, an extra 1,900 staff through the normal operation of the complementing system mainly directed towards the increased supplementary benefit work that the hon. Gentleman mentioned, and an extra 733 staff to match increased workloads.
  I shall come to a premature conclusion because we are running out of time. Many of the problems were due in no small part to the extraordinary complexities of the present

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  social security system. Those complexities will be alleviated significantly by the changes to be brought about by the Social Security Bill which had its Third Reading in the House earlier this week. I hope that the hon. Gentleman will welcome that.
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eighteen minutes to Eleven o'clock.

PRIME MINISTER
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Preamble
The House met at eleven of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Sheffield): The LORD CHANCELLOR on the Woolsack.
The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, before the commencement of business, I take the opportunity to inform the House that, with the approval of Her Majesty the Queen, I have accepted an invitation from the President of the Portuguese Parliament to attend a conference of European Speakers to be held in Lisbon on 6th and 7th June. Accordingly, I trust that the House will agree to grant me leave of absence for Thursday 5th June and Friday 6th June.

Computers and Personal Data: Safeguards
Lord Gridley: 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 safeguards are now available to any individual concerned about the storage on computers of personal data.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, the safeguards my noble friend has in mind are contained in the Data Protection Act 1984. In particular, when the Act comes fully into force in November 1987 individuals will have a right of access to data about themselves which are covered by the Act.
Lord Gridley: My Lords, I thank my noble friend the Minister for that Answer. I wish to refer in particular to the provisions of Part Section 5(1), of the Data Protection Act 1984, which prohibits unregistered computer users from holding personal data. Has my noble friend seen the report of 22nd April in the Financial Times which claimed that, of the 300,000 computer users in this country, only one-tenth had registered by about the middle of April? If the closing date for registration is 11th May, will not those unregistered computer users, if any of them are in operation, be committing an offence under the Act?
Lord Glenarthur: My Lords, I do not think that they will be committing an offence under the Act. I understand that to date about 130,000 applications for registration have been received. That compares, as my noble friend has said, with the registrar's first estimate of about 300,000 being involved. Applications are still arriving in substantial numbers.
Lord Bruce of Donington: My Lords, the figures given by the noble Lord, Lord Gridley, even
386
supplemented by those that the noble Lord the Minister was kind enough to give to the House this morning, still leave an unsatisfactory position. Will the noble Lord inform the House what steps the Government intend to take to monitor progress on this matter carefully, and will he also give a brief outline to the House of the means by which they intend to enforce the provisions of the Act?
Lord Glenarthur: My Lords, as the noble Lord will be aware, that legislation was complex and dealt with an extremely complex matter, as I remember from first-hand experience having had to deal with it. It is early days. To enable the Registrar of Data Users to be fully prepared and to give data users time to prepare and adapt their records so that they can deal with requests from data subjects, the introduction of the right of access to data has been delayed until November 1987. I hope that that will help.
Lord Elwyn-Jones: My Lords, has the staffing if the registrar's office been completed?
Lord Glenarthur: My Lords, it has not been finalised. There will be about 50 staff. I understand that there are some additional people there at the moment taking part in the necessary transitional work.

British National Space Centre
11.5 a.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made in setting up a British National Space Centre since its creation was announced in January 1985.
Lord Brabazon of Tara: My Lords, the British National Space Centre was formed in November 1985 with Mr Roy Gibson as its first director-general. The BNSC's main task has been to prepare a national space plan which takes into account the interests of the various users of space. This will be considered by Ministers in the summer together with proposals on the future status, funding and staffing of the BNSC.
The BNSC is assuming the space-related research and development functions of the Department of Trade and Industry, the Science and Engineering Research Council, the Natural Environment Research Council and, where possible, the Ministry of Defence, and is acting as a focus for British space policy.
Lord Orr-Ewing: My Lords, will my noble friend tell us how many people the new agency currently employs, and, in particular, how many are fully qualified engineers? Is it not a fact that the British are the prime contractors in every European communications satellite? Should we not give our achievements rather more publicity to try to match the publicity which the French receive for their more modest ones?
Lord Brabazon of Tara: My Lords, the British National Space Centre's policy and programme centre is located in London. It has about 40 staff drawn from the Department of Trade and Industry, the Ministry of Defence and the other two bodies that I mentioned. Its technology arm is based on the RAE at Farnborough and the Rutherford Appleby Laboratory at Chilton. It can draw on the equivalent of about 240 full-time staff. Future staffing arrangements will be considered by Ministers in the summer.
Regarding the United Kingdom's achievements in communications satellites, yes, my noble friend is correct. After the United States, we are the world leaders in that field. British firms have led both consortia which bid for the £100 million order for the second generation of INMAR satellites. Yes, I think that we should make more noise about our achievements. I hope that this morning's Question will help to do that.
Lord Bruce of Donington: My Lords, will the noble Lord give an undertaking to the House that at the earliest possible opportunity he will make known the organisation of the British National Space Centre? Is he aware that within another context, in a much more advanced stage, of course, certain shortcomings have been revealed in the organisation of NASA, a similar body in the United States? Is he aware that it is most important that in the early stages the organisational structure of the new body is made thoroughly clear and open to discussion? Will he pay attention to that?
Lord Brabazon of Tara: My Lords, certainly I shall pay attention to that. As I said in my original Answer, Ministers are considering the plan and will report this summer. The director-general is responsible to my right honourable friend the Minister of State for Information Technology, and he will therefore be responsible to Parliament for that centre's actions.
Lord Orr-Ewing: My Lords, will my noble friend tell us about the funding of the new agency? How much extra is committed to it, and from where does it draw its funds? Does it come within the DTI Vote, or from where does it come?
Lord Brabazon of Tara: My Lords, that is one of the matters that is being considered. As I said in my original Answer about the centre's future funding, at present the Government are spending about £100 million a year on space science and civil space research and development. About three-quarters of that is through the European Space Agency.

Nuclear Plants: International Safety Standards
11.8 a.m.
Lord Taylor of Gryfe: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made by the International Atomic Energy Authority or other international organisations to secure the acceptance of international safety
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standards in nuclear power plants, following the events at Chernobyl in the Soviet Union, and whether early agreement can be reached to ensure immediate notification when such disasters occur.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, the board of governors of the International Atomic Energy Agency met on 21st May to consider the possibility of further action by the Agency in the field of nuclear safety. I hope that it will be possible to progress speedily to agreeing on measures on the prompt reporting of any nuclear incidents causing cross-border radioactive releases.
Lord Taylor of Gryfe: My Lords, I thank the Minister for that reply. Is he aware that Dr. Blix, the head of the International Atomic Energy Authority, stated this week, as reported in the Financial Times:
"We are not responsible for safety. This is the business of member states"?
He went on to say that lessons would be learnt from the disaster but he did not believe that it would be possible to establish a permanent body to control nuclear safety worldwide. Is that comment not deeply disappointing? May I have an assurance from the Government that they will continue to press all international agencies, including the World Health Organisation, the United Nations and the International Atomic Energy Authority to ensure that something is done in that connection?
Lord Gray of Contin: My Lords, the Government, as were their predecessors, are very proud of the safety record that we have achieved in this country. We are confident of the efficiency of the safety systems at United Kingdom reactors. We would, of course, be prepared to explain these if requested to do so by an international body. Any international safety inspectorate could operate only on the basis of internationally agreed safety standards. These have yet to be established.
Lord Renton: My Lords, is it not clear that whether international precautions are successful or not and whatever the World Health Organisation may do or fail to do, the nuclear disaster—that is no exaggeration—in Russia points to the need for local authorities in this country greatly to improve their peacetime arrangements for the protection of their people against fall-out?
Lord Gray of Contin: My Lords, my noble friend has hit on a very important point. Of course, it is now for local authorities to consider very carefully what precautions they have taken so far as civil defence, for example, is concerned, and to satisfy themselves that what they have done is adequate, and, if not, to try to improve it.
Lord Strabolgi: My Lords—
Lord Thorneycroft: My Lords—
Lord Strabolgi: My Lords, I think—if I may say so with deference to the noble Lord—it is the turn of the Opposition. Will the Government now review their policy towards the PWR?
Lord Gray of Contin: My Lords, that is rather wide of the Question. Indeed, it would be quite wrong for me to make any comment on PWR after the very intensive inquiry which has taken place and until we have had the opportunity of hearing the conclusions of the report.
Lord Thorneycroft: My Lords, will my noble friend consider whether the almost daily announcement of what appear to be rather trivial incidents in nuclear power stations is really very helpful to the objectives that the noble Lord, Lord Taylor, properly has in mind?
Lord Gray of Contin: My Lords, a set of guidelines was announced by my honourable friend the Parliamentary Under-Secretary of State for Energy at that time which became known as the Moore guidelines. More recently, because of public concern, my right honourable friend the Secretary of State for the Environment has said in another place that he has given instructions within his department that Ministers should be told of all incidents involving release of radioactivity, however small, so that they can decide whether they are sufficiently important to be made public. I would agree with my noble friend that there is a tendency within the media to highlight incidents connected with the nuclear industry to a very much greater extent than seems to be the practice in connection with other industries.
Lord Stoddart of Swindon: My Lords, will the noble Lord agree that the Three Mile Island incident was a warning and that the Chernobyl accident was a further very serious warning to the world of the dangers of nuclear fission? Have the British Government taken due note of the statement made by Mr. Gorbachev on 14th May to the effect that we now need an international regime on safe development of nuclear power to be created on the basis of due co-operation of all nations dealing with nuclear power engineering? Does the noble Lord agree that that was a useful statement and that it should be followed up? Will he also ask the delegation led by the noble Viscount, Lord Whitelaw, that is visiting Russia, to take up this matter in their discussions with Soviet officials and Soviet Ministers during their week in Moscow, starting, I believe, tomorrow?
Lord Gray of Contin: My Lords, I shall certainly pass on the noble Lord's suggestion to my noble friend. I think I would have been more convinced by Mr. Gorbachev's suggestion had he and his Government been more forthcoming in the very early stages about what actually happened. This was not, one might say, leading from the front. However, any suggestion of that sort coming from Mr. Gorbachev obviously must be taken seriously. We are as anxious as our partners in the West that the dangers of nuclear power shall be readily observed by everyone and the necessary action taken to prevent accidents. We should like to see all countries adopt safety standards comparable with our own.
Viscount St. Davids: My Lords, is this not a grim and, one would hope, rather stimulating comment to
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all those local authorities that have refused to take any civil defence precautions on the grounds that they have declared themselves to be nuclear-free zones?
Lord Gray of Contin: My Lords, I have little doubt that the local authorities concerned and indeed those who live in the areas for which they are responsible will have taken very much to heart the fact that civil defence cannot be ignored.
Lord Dean of Beswick: My Lords, does the Minister not agree that unless the suggestion made by the noble Lord, Lord Taylor of Gryfe, that this problem should be dealt with on an international basis is adopted, recent incidents will only lend weight to the argument of those people who are already shouting over here about the possibility of ceasing almost immediately to use nuclear energy for peaceful purposes? Is it not a fact that if we did opt out prematurely but our competitors in nuclear energy did not, we might well lose out for all time because we would never keep up with the technology required to make nuclear installations safer anyway?
Lord Gray of Contin: My Lords, I have already made clear, as I am sure the noble Lord will appreciate, that the Government will continue to seek for the safest possible standards to be observed in the further development of the nuclear industry.
The Duke of Portland: My Lords, does my noble friend recall that at the international atomic energy conference in 1984 Dr. Hans Blix launched a proposal that negotiations should take place to develop international nuclear standards of safety? This proposal was not accepted. Are Her Majesty's Government prepared to press at the next meeting of the international agency for the conclusion of an international agreement on safety standards for all future reactors?
Lord Gray of Contin: My Lords, I am, of course, very much aware of my noble friend's great interest in this subject. I agree with my noble friend that there is a widespread belief that the establishment of international nuclear safety standards would be of value. But choosing the correct approach is a complex task that may take some time. I can, however, give my noble friend the assurance that we shall actively participate in international discussions on this subject.
Lord Cledwyn of Penrhos: My Lords, in his reply to the supplementary question of my noble friend Lord Stoddart, the noble Lord referred to the lack of information immediately following the Chernobyl disaster. This was, of course, criticised here and elsewhere. Is it not the case that within a few days, when the Soviet Government realised what had, in fact, happened, communications improved immediately? Would he not agree that the present situation between the Soviet Government, our own Government and others is now more satisfactory on this issue than it has been at any previous time? Would he agree, in fact, that relations on this matter between the Soviet Government and Western Governments are now good?
Lord Gray of Contin: My Lords, I must correct the noble Lord. My recollection of the situation was that it was only after the Swedish authorities as a result of their very effective monitoring had questioned what had happened within the Soviet Union with regard to this very major accident that the information became as free-flowing as it ultimately did. However, I would certainly agree with the noble Lord that the situation between the Soviets and this country with regard to exchange of information on nuclear power seems to be improving. We wholeheartedly welcome this.
We shall certainly do all we can to try to ensure that there is a free exchange of information which, hopefully, will avoid such a tragedy in the future.
Lord Kennet: My Lords, will the Government bear in mind that there are still 27 reactors of the same type working in the Soviet Union and that when the Soviet Government have concluded their inquiry they may find that the disaster was due to inadequate electronic control of the reactor? If that is the case there will be an argument for permitting the export to the Soviet Union of more advanced Western reactors. That will raise some interesting questions about what is of the greater benefit to mankind.
Lord Gray of Contin: My Lords, the noble Lord has raised a very interesting point, which I am sure will be followed up. I myself visited the Soviet Union in 1979 with a trade mission. As I recall there were many British companies who were only too anxious to export to the Soviet Union. I suspect that this is still the case but it is a particularly difficult market to penetrate.
Lord Morris: My Lords, in response to the supplementary question of the noble Lord, Lord Taylor of Gryfe, my noble friend referred to the importance of early warning on nuclear incidents across borders. Is it not of equal importance that any serious nuclear incident be reported in case nationals of other countries are affected within the country in which the incident occurred?
Lord Gray of Contin: My Lords, my noble friend is correct. Certainly with regard to our nuclear industry in this country we are extremely willing to make incidents known. I think that it was my noble friend who suggested a little earlier that some of the incidents were so trivial that it was hardly worth making them known. But certainly with regard to any serious matter we would not hesitate to make information available.
Lord Taylor of Gryfe: My Lords, has the attention of the Minister been drawn to the report in yesterday's Financial Times to the effect that an engineer from Babcock visited Chernobyl seven years ago and reported on the total inadequacy of the safety arrangements at Chernobyl?
Does this not demonstrate the complete inadequacy of the arrangements for safety when such a report was not taken up by the International Atomic Energy Authority or anyone else? May I assure the noble Lord that if his noble friend the Leader of the House places this matter on his agenda in the course of his visit to
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Moscow this week he will have the overwhelming encouragement and support of all Members of this House and the British public?
Lord Gray of Contin: My Lords, I have taken careful note of what the noble Lord has suggested. I have already said that I shall draw the attention of my noble friend to the views expressed in this House. I am sure that he will take due note.

Metropolitan Police: Establishment
11.25 a.m.
Lord Mishcon: 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 why the Metropolitan Police Commissioner is to be allowed to recruit only 1,200 extra police over a period of three years as against the 3,000 which he has publicly stated he requires if the metropolis is to be adequately policed.
Lord Glenarthur: My Lords, as my right honourable friend has announced, the force is to receive an increase in its establishment of up to 1,200 over the next four years, on top of the increase of 50 for drugs work agreed in principle last October. Increases of up to 600 in the civil staff ceiling should release at least 400 officers for operational duty; 200 more will be released by the commissioner's reorganisation. Altogether, therefore, he can expect increases of up to 1,850 in his operational strength.
This follows a review to establish the proven need for additional manpower, and the commissioner's own assessment was examined on that basis.
Lord Mishcon: My Lords, in thanking the noble Lord the Minister for that reply, and indeed for his Answer to a Written Question by his noble friend Lord Gainford, which by coincidence appears in today's Official Report, may I tell him that the quite frequent use of the word "civilianisation" in that Written Answer constitutes to lovers of the English language an arrestable offence?
Does the noble Lord the Minister recollect the resounding promise made by his right honourable friend the Prime Minister at the last Conservative Party Conference that what the police needed they were going to get? Bearing in mind that the Metropolitan Police Commissioner has said that he needs 3,000 recruits adequately to police the metropolis, as I said in my original Question, will he indicate to the House what the position is? Is the commissioner wholly irresponsible in asking for that immediately and only getting about 10 per cent. of his demand, or is his right honourable friend the Prime Minister a breaker of promises?
Lord Glenarthur: My Lords, my right honourable friend the Prime Minister is certainly not a breaker of promises. What my right honourable friend the Prime Minister promised was that the police would get extra

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manpower if it were needed; and after that it was made perfectly plain that the extent of the need was to be established.
Obviously, one cannot go into an open commitment about this kind of thing. It was important to establish precisely what the need was to which my right honourable friend had referred. That has been done by the reviews of police manpower. The Prime Minister did not make any specific promises about numbers. The reviews have been conducted.
Lord Inglewood: My Lords, with regard to the increase in paperwork which has resulted from the extra work following the Police and Criminal Evidence Act which we passed last year, may I ask this question? Can my noble friend give us some idea as to how far the extra work is to be absorbed by the police stations all over the country?
Lord Glenarthur: My Lords, I cannot give my noble friend details about paperwork. I am aware from my own visits that, certainly over the transition period before implementation of the Police and Criminal Evidence Act measures, there has been some increase. However, I believe that will not last for ever. I note the position and will pass on the comments of my noble friend.
Lord Mellish: My Lords, can the Minister say whether present establishment figures for the Metropolitan Police have been realised? In other words, is there a difference between what they are entitled to have and the actual numbers?
Second, what effort will be made to ensure that ethnic minority police are recruited? Is there any specific idea as to the numbers involved?
Lord Glenarthur: My Lords, with regard to the latter part of the supplementary question of the noble Lord, we certainly wish to improve the ethnic recruiting to the police service. I do not have the figures with me but I shall let the noble Lord know the position. With regard to the establishment of the Metropolitan Police today, it is not up to establishment.
Lord Mellish: My Lords, by how many?
Lord Glenarthur: My Lords, I do not have the precise figures in front of me but I shall endeavour to let the noble Lord know. One of the problems of bringing more people into the Metropolitan Police in the way that the noble Lord, Lord Mishcon, suggested, is that the training facilities are already fully occupied and it would not be possible to bring them forward in the way that he suggested.
Lord Boyd-Carpenter: My Lords, can my noble friend confirm whether or not the noble Lord, Lord Mishcon, is right in saying that the Commissioner has asked for 3,000? If that is right, what are the Government's grounds for refusing that number?
Lord Glenarthur: My Lords, I think that it is true that not only the Metropolitan Police but other forces would like to have more police all the time. The fact is that these demands have to be measured by the
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amount of resources that are available. As I have indicated, with regard to the Metropolitan Police some of the jobs that are at present being done by police officers can more effectively be done by civilians.
Lord Boothby: My Lords, may I ask the noble Lord whether he is aware that the Answer he has given today flatly contradicts the answer to an almost precisely similar question put by myself to him about a month ago, to which he replied that they had broadly satisfied the requests by the Commissioner of Police for an increase of officers in the Metropolitan Police Force?
Do the Government think that this is the moment to cut his force when the commissioner has begged for an extra 3,000 police, at a time when the crime rate in London is higher and the number of police lower than that of any comparable metropolitan force in the whole of Western Europe? Is he further aware that this country is becoming, gradually but steadily, a legend for drug addiction and violence? Our footballers are banned from the countries of Europe. What sort of example does he think the Government are giving in refusing two or three times the request of the Commissioner of Police, who is ultimately responsible, for a very moderate increase in the number of officers in the Metropolitan Police?
Lord Glenarthur: My Lords, I note the noble Lord's remarks. He has, I think, to bear in mind, as I am sure others will as well, that the number of police has been increased enormously since this Government came in compared with the period between 1974 and 1979, a time which also saw some quite substantial increases in serious problems of rising crime, public disorder and terrorist incidents, when the strength of the police rose by only some 1,800 officers. Since 1979 the Metropolitan Police Force has increased by some 4,559 and we are now adding more. I realise the serious concern which lies behind the noble Lord's question, but we are doing a great deal to meet it.
Lord Leatherland: My Lords, concerning the answer which the noble Lord has just given, does he want us to draw the conclusion that since the present Government came into power we have become a more criminal nation?
Lord Glenarthur: No, my Lords, that would be a totally wrong assumption. The increase in crime over the last 30 years or so has been more or less steady. Nowadays, we have much more reporting of crime and much more effective policing. That leads to an increase in numbers.
Lord Harris of Greenwich: My Lords, is the noble Lord aware that not only is the commissioner getting only a fraction of what he has asked for in terms of increased manpower (to answer the question of the noble Lord, Lord Boyd-Carpenter) but he is having to wait four years in order to get them? Would the noble Lord not accept that many of us regard what he has announced as wholly unsatisfactory, and would he also accept that what he says about resources in police training establishments is frankly untrue? Is he aware that on that point there are resources available in

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training establishments outside the Metropolitan Police district which have been used in the past when it was necessary to train more policemen who are going to be recruited into the Metropolitan Police? Finally, is he aware that the savage cut-backs in overtime instituted by the present Government have reduced the net manpower in the Metropolitan Police in effective terms by over 300 men?
Lord Glenarthur: My Lords, so far as the last point is concerned, we started with a very low number of police, as I indicated in answering an earlier question. So far as recruiting up to the new establishment immediately is concerned, the Metropolitan Police cannot do so and we have had to phase the increases. They plan to take on the extra 300 police officers and 150 civil staff approved for this financial year by April of next year. For the following three years they plan to be able to increase strength by 300 police officers and 150 civil staff each year. The noble Lord referred to training establishments. I understand that the information I gave was correct; but so far as training establishments in the provinces are concerned, I do not have details with me. However, I shall certainly look into that matter.
Lord Orr-Ewing: My Lords, would my noble friend draw the commissioner's attention to the advantage of now recruiting more special constables? Is it not sad that the strength of our special constabulary has fallen to but 25 per cent. of what it was five years ago? Would the special constables not only build a bridge of understanding between the police and local communities but also help to off-load some of the responsibilities which police officers could well share with the special reservists?
Lord Glenarthur: My Lords, I quite agree with my noble friend that special constables can play a most useful role. Certainly the numbers did drop dramatically, but I believe they are now improving. I believe I gave the details in answer to a Question asked not long ago.
Lord Inglewood: My Lords, can my noble friend give us an idea of the cost of an efficient police service? We have had a number of increases over recent years; no doubt there will be more to come. I think it is right that we should know what sort of figure is involved.
Lord Glenarthur: My Lords, what I can tell my noble friend is that the 1986–87 costs of increases will be met from within existing budgets, but that the total Metropolitan Police increases, plus provincial police increases for 1986–87—£38 million for police and some £7 million for civilians—will be taken care of through public expenditure costs by 1989–90.
Lord Morris: My Lords, would my noble friend agree that what the police want is not necessarily the same as what they need?
Lord Glenarthur: My Lords, I think that is absolutely right. That is why both the provincial police
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forces and the Metropolitan Police have asked for more. Of course they would like more, but they are getting a very great deal of help.
Lord Mishcon: My Lords, would the noble Lord the Minister put this matter in the correct perspective? Is it not correct that the Commissioner of the Metropolitan Police, for whom on all sides of this House there is tremendous respect and an appreciation of the burden he bears, has said, with all the responsibility of his office, that he needs 3,000 recruits immediately in order to carry out his task? Is the noble Lord the Minister saying that the Government know better than he does and that merely to supply 10 per cent. of what he has asked for this year (and indeed, if I may correct the noble Lord, Lord Harris, getting only 1,200 out of 3,000 after four years) means the Government are then saying that they take responsibly the promises of the Prime Minister and their own loudly-acclaimed policy in regard to law and order?
Lord Glenarthur: My Lords, with respect to the noble Lord, a member of a party which did not do nearly as much in the years that it was in office in the 1970s, to indicate that this Government are not recruiting adequately for the police is, with respect, something that I would not have expected of him. The fact is that we have made substantial increases in policing and done a great deal to improve the effectiveness of the police. We are now continuing to do so. As I said, it is quite understandable for either the commissioner, for whom we all have enormous respect, or provincial chief officers of police to ask for more, because of course the more police they have, the more effectively they can undertake their work, but each demand for extra manpower has to be scrutinised carefully on the basis of need and cost. That is what we have done. That is why we have increased the numbers.
Lord Glenamara: My Lords, why are the Government so reluctant to appoint a few more thousand police at a time when we have 3¼ million people unemployed? Whoever is recruited to the police and whatever jobs they are doing now, the numbers will ultimately be reflected in a similar drop in the number of unemployed. Do the Government not want to reduce unemployment? Here is an opportunity to reduce it by a few thousand. Why this reluctance?
Lord Glenarthur: My Lords, those who scrutinise police needs do so with great care and they are thoroughly professional. Her Majesty's Chief Inspector of Constabulary is one of those concerned. It is no good simply throwing money and unorganised resources into policing. It has to be properly scrutinised. That is why the need was assessed and established by my right honourable friend. That is why the increased numbers have been announced.
Lord Mellish: My Lords, will the noble Lord the Minister clear up one important point so far as I am concerned? I understand that the Metropolitan Police are several hundred people below establishment. If and when it is agreed that they can increase their

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establishment to this other figure, whatever it is—and I agree with my noble friend Lord Mishcon that it ought to be nearer 3.000, but let us assume that it is 1,200—would that be over and above the figure which it has been agreed should be their present establishment?
Lord Glenarthur: My Lords, yes, that figure is above the establishment figure, which they have not yet reached.
Lord Harris of Greenwich: My Lords, perhaps I may just ask one last question. Is the noble Lord aware that he used the position of the Chief Inspector of Constabulary in his evaluation of Metropolitan manpower needs in order to justify his position? Is he aware that the Inspectorate of Constabulary has no role whatever in relation to the Metropolitan Police?
Lord Glenarthur: My Lords, if I said that in relation to the Metropolitan Police, I apologise to the noble Lord. As he will be aware, it does of course have a responsibility to the provincial police forces.

Private Notice Question Procedure
11.42 a.m.
Lord Hatch of Lusby: My Lords, based on the Companion to Standing Orders in the absence of the noble Viscount the Leader of the House, perhaps I may ask the Deputy Leader of the House and the House itself to allow me to put an issue to them. Last night, based on the rules of the Companion I put down the following Private Notice Question to the noble Viscount the Leader of the House:
"To ask Her Majesty's Government, in view of President Botha's threat to repeat South Africa's aggression against Commonwealth states, what actions they propose to take during the next I0 days in conjunction with other members of the Commonwealth to deter the South African Government from further breaches of international law."
The Companion guides us to base any Private Notice Question on urgency. I have received a note this morning from the noble Viscount the Leader of the House that he does not consider that this Question is of sufficient urgency for an immediate answer.
Last night President Botha threatened to renew his attacks against Commonwealth states. Already this week Commonwealth lives have been lost through the aggression of a foreign power. This is now a further threat to further loss of life among our fellow Commonwealth citizens. Is that not an urgent matter for this House? Secondly, the decisions of Her Majesty's Government over the next few days will determine the future British role in the Commonwealth and in all probability the continued existence of the Commonwealth itself. Is this not a matter of urgency?
Thirdly, during the next 10 days Parliament will not be in Session. Therefore, is there not an urgent need for the Government to put their proposals and their decisions before Parliament in order to protect Commonwealth citizens during the next 10 days? Is not the direct further threat to Commonwealth lives a matter of urgency for this House and for Parliament itself?
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the noble Lord, Lord Hatch, did indeed kindly give notice of this Question late yesterday afternoon. My noble friend the Leader of the House and I took the view that the Question was not of sufficient urgency to justify an immediate reply.
Lord Bottomley: My Lords, I deeply respect the views of the noble Viscount the Leader of the House; but I feel that on this occasion this decision is wrong. It is an urgent matter upon which to give some notice, particularly to the Commonwealth as a whole, about the British Government's attitude to the statements by Mr. Botha, the Prime Minister of South Africa. Will the noble Lord not reconsider the matter?
Lord Belstead: My Lords, the Question of the noble Lord, Lord Hatch, relates of course to a hypothetical situation. It relates to possible action on the part of the South African Government against unspecified targets and at no specified time. This is of course a matter for your Lordships' House, but I really do not believe that the procedure of the Private Notice Question is the appropriate vehicle for the noble Lord on this occasion.
Lord Boyd-Carpenter: My Lords, as he is acting Leader of the House, can my noble friend indicate whether it is in accordance with the rules and practice of the House to challenge in this way the decision, right or wrong, of the Leader of the House on a Private Notice Question?
Lord Belstead: My Lords, the Companion to Standing Orders makes it perfectly clear that in the first instance it is a matter for the Leader of the House to decide whether a Question is of sufficient urgency to justify an immediate reply. Hence my original answer. Ultimately this is a matter for the general sense of the House. I must say that, despite the point which has been put to me, I think that the general sense of the House on this matter would be that we ought to proceed to other business.

Business
The Earl of Swinton: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Trefgarne will, with the leave of the House, repeat a Statement that is being made in another place on the Calcutt Inquiry Report.

Business: Reduction of Regulatory Controls
11.45 a.m.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, with the leave of the House, I should like to make a Statement on Government action to relieve business of the burden of unnecessary regulation.

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"We are publishing today a White Paper Building Businesses—Not Barriers (Cmnd. 9794). It contains a balanced series of new proposals for reducing the administrative and legislative burdens on business as well as a report on the progress made in furthering the proposals made in the last White Paper on this subject Lifting The Burden (Cmnd. 9571).
"The White Paper reflects our firm belief that only by removing barriers to business will enterprise flourish and the essential creation of wealth and jobs follow.
"It presents a balanced programme which recognises that government have a role in providing legal protection for workers, consumers and the general public, as well as protecting the environment and our quality of life. However, it also recognises that unnecessary regulations act as an inhibition to business growth and job creation.
"In this White Paper the Government have maintained these protections while still taking a series of significant steps forward in giving business the freedom to grow.
"There are nearly 80 new proposals in Building Businesses—Not Barriers. First of all, the work of the enterprise and deregulation task force, liaising with deregulation teams in government departments, will ensure that there is a proper analysis of the effects of proposed rules and regulations on businesses.
"We will modernise the use classes order to allow a somewhat wider range of changes in the use of buildings or land to take place without planning permission. We will permit businesses with planning permission for two or more alternative uses to change between these without the need for further planning applications. But I stress that we do not propose to change the law on working from home.
"We will be setting up a major review on VAT and small businesses, considering such issues as accounting for VAT on a cash basis rather than using invoices, and an instalment system for VAT payments. We are introducing a more personal approach by civil servants in their dealings with business so that responsibility will be linked to individual named officials.
"We will be reducing the duplication of visits by government officials. PAYE and national insurance inspectors are now co-ordinating their visits to companies and we are introducing a pilot scheme to co-ordinate visits by Inland Revenue and Customs and Excise officials.
"These are just a small sample of the efforts being made throughout every government department and agency to cut red tape and improve communications. Our proposals are carefully measured. None crosses the fine dividing line between liberty and licence.
"As well as concentrating on reducing domestic burdens the White Paper also reports on progress towards cutting the bureaucracy imposed by EEC regulations and directives. Following an initiative made by the Prime Minister, a task force has been established within the European Commission to
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scrutinise all future proposals that might affect business so that the costs of compliance can be minimised.
"At the same time as publishing Building Businesses—Not Barriers the Department of Employment has launched a booklet Cutting Red Tape. It summarises the contents of the White Paper in a popular and easy to digest way.
"My Lords, there can be few more urgent tasks than to create the climate for growth of employment. The more people concentrate on running their businesses, free of unnecessary barriers, the better for jobs. And more jobs is indeed our aim—one I am sure shared by all parts of your Lordships' House. This White Paper will help jobs without losing any necessary protections. I commend it to your Lordships' attention."
My Lords, that is the Statement.
Lord Bruce of Donington: My Lords, we on this side are most grateful to the noble Lord for having made the Statement this morning. We shall read with great interest the White Paper to which it refers. One part of the noble Lord's Statement gives me, and I think will give the country, some cause for concern. The noble Lord said:
"The White Paper reflects our firm belief that only by removing barriers to business will enterprise flourish and the essential creation of wealth and jobs follow".
For the past seven years we have been told that it is the economic and fiscal policies of the Government that will create jobs. In fact, the noble Lord will recall that it was the Chancellor of the Exchequer, no less, in introducing his Budget last year, who gave that Budget the most attractive and seductive title of "A Budget for Jobs": since when unemployment, even after the gentle massage which the noble Lord applies to the figures from time to time in his inimitable style, has gone up by over 200,000. Not really a very good budget for jobs.
The idea that the public mind can be diverted from what is now becoming its firm belief, that it is in fact the economic and fiscal policies of the Government which are responsible for unemployment—and indeed its growing impact—by what must be regarded as a pale cosmetic in relation to the Government's achievements, to which the noble Lord from time to time refers with such glowing pride, will I think be mistaken.
If he reads the Financial Times today he will find that the Financial Times itself, in giving publicity to the publication today by the National Institute of Economic Research, still puts its finger on the pulse by saying that both interest rates and exchange rates are too high. That is the real thing that is damaging British industry and damaging its prospects.
Nobody on this side of the House would wish there to be unnecessary regulation or unnecessary legislation. Indeed, a good deal of this has accumulated during the past seven years at the instance of the Government themselves, some of it not always very effective, as, for example, the regulations—with which the House is well familiar, and with which I personally have dealt with at this

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Box—relating to the clothing safety regulations that still remain to be effectively enforced. Nonetheless, it is quite true that if small businesses can have their burden of unnecessary regulation eased and be given a freedom that does not impinge on other people's freedoms, then we for our part would welcome it.
The noble Lord has referred to a number of relaxations of planning regulations, a matter to which we on this side will give our close attention. He has also mentioned what he described as an easing of the VAT position, which he will recall was the principal cause of disquiet among small businesses according to the sample produced in his original paper.
My Lords, what about the Inland Revenue? Is the noble Lord aware that there is much evidence—the existing White Paper and Cutting Red Tape make no mention of it, although they deal with other aspects of Inland Revenue activity—that the existing attitude of the Inland Revenue to small businesses is progressively becoming more and more oppressive? If he will make more detailed inquiries of the accountancy profession (and I have already provided him with some detail) he will know precisely to what I refer.
The fact of the matter is that the Inland Revenue departments and the VAT Customs and Excise authority, following the publication of the Keith Report, have been given toughening-up instructions. Will the noble Lord ensure that these toughening-up instructions, to which I have referred more than once and about which in the case of the Inland Revenue I have provided details to him, are dealt with?
The Statement refers to a major review on VAT and small businesses. This is encouraging. We have had so many reviews now that there must be increased employment in Her Majesty's Stationery Office. We have had White Paper after White Paper on the subject. It is no good for the noble Lord to try to get away with it by saying that all we really have to do to increase jobs is to ease a few regulations here and a few regulations there. The indictment is against the Government on their economic and financial policies. This is where the problem lies. Unless those are altered speedily there will be no decrease in the appalling unemployment figures.
Finally, we note that a more personal approach by civil servants in their dealings with business is anticipated. We trust that that includes members of the Inland Revenue staff and members of the Customs and Excise staff. He will perhaps enlighten the House as to how many small businesses he consulted before he proposed to have visits from both the Inland Revenue and the Customs and Excise at the same time. From my knowledge of small businesses, that is the last thing that small businesses are going to welcome.
We welcome the idea that red tape should be cut. All governments impose a certain amount of it. A tremendous amount of red tape will in fact be created by the eventual passage of the Gas Bill through this House. An enormous amount of red tape was involved as a result of the Telecommunications Bill, and so on. Perhaps in the final analysis the noble Lord might decide to lessen very substantially indeed the volume of legislation and the regulations that flow naturally from it.
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As I have said, we shall give the noble Lord's White Paper the most careful examination. Many of my noble friends who are involved in the various aspects of it will return to it from time to time. But in the meantime, and with the greatest kindness to the noble Lord, whose geniality is most agreeable to us, we must say that this latest idea is nothing more than a pale cosmetic.
12 noon
Baroness Seear: My Lords, we on these Benches also wish to thank the Secretary of State for giving us this Statement this morning. Far be it for me to attempt to imitate the inimitable style of the noble Lord, Lord Bruce; but I would agree with him that the noble Lord the Minister doth protest too much on behalf of small businesses when he claims, as he appears to be claiming, that the development in small businesses and the changes he proposes are going to be a major contribution to an improvement in the employment position.
There are many other matters to which we on these Benches have referred so often that are, in our view, of much greater importance in reducing the number of unemployed. That said, however, we must welcome attempts to get small businesses—which, as we have so often said, are far too small a part of the total economy of this country—moving. To the extent that these burdens on them are holding back this desirable development, then we would give it a welcome. I do not know whether the noble Lord the Secretary of State has today or perhaps yesterday received some papers which I sent him which well illustrate the kind of tangle into which small businesses get in attempting to get off the ground, because of the complexity of regulations and the delay. In so far also as the Civil Service is busy unravelling knots in red tape which it has itself tied up we can only be delighted that this performance is under way; it is long overdue.
The noble Lord says that he wants a more personal approach between civil servants and small businesses. I am not absolutely convinced that the devil you know is always better than the devil you do not know, but there will no doubt be some cases in which personal contact will lead to a considerable improvement in personal relationships and, what is more important, in the speed in which problems arising can be dealt with. It is that which causes a great deal of difficulty to small businesses; the difficulty in getting a straight answer to what they see as a straight question. When one is dealing with people who do not have the support of experts of one kind or another that are available to the large undertakings, simplicity of language and speed in dealing with questions is of paramount importance.
Of course we welcome the simplification of planning regulations. Anybody who has been involved in planning regulations has reason to recognise that they are often a great deal too complex and far too long drawn out in the problems involved in getting a final settlement. However, in my view it is not good enough to assume that all these changes can be made without problems arising in connection with them. The noble Lord said in the Statement that,
"our proposals are carefully measured".
By whom have they been measured and in what way? What criteria are being applied? After all, in removing

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burdens—as they are seen to be in the eyes of the Secretary of State—he may be removing desirable protections from the point of view of consumers, of the general public and of employees. All these partners in the matter have to be taken into account. In his enthusiasm for small businesses we need to be assured that the Secretary of State is equally aware of the interests of these other groups, and we should like to know that this measurement that has taken place has not been done by people who are already so devoted to the development of small businesses that they brush off on one side these other considerations.
Some of the protective legislation in the past has followed very careful investigation by expert people from the Factory Inspectorate and from health and safety and other areas. To what extent and how much have the experts in the problems arising in protection of employees and the environment come into the consideration and the measurement, as it says here, of the consequences?
With that, I should also like to say that I have only just had this document put into my hand. It is due to be released only at 11 o'clock today. I feel, judging from the Statement we have been given, that there are probably matters in it to which the House would like to give greater attention at a later time. The sweeping away of unnecessary protection is desirable, but we want to be assured that these other interests are taken into account. I should welcome the opportunity of a small debate at a later stage on the proposals which have been put forward.
Lord Young of Graffham: My Lords, in the comparatively short time in which I have been in your Lordships' House I have become used to the style and manner of the noble Lord, Lord Bruce of Donington, and I am able to strip away from his style, accept the content and realise from what he says today that he welcomes this White Paper as long as it does not impinge on others. I assure him it does not. I take the main thrust of his remarks as a general welcome to taking away unnecessary regulations. Where, alas! I cannot agree with the noble Lord is in his statement that he thinks this is just something new that we have dreamt up. If the noble Lord and all in your Lordships' House would care to turn to the first annex of the White Paper you will see there a long list of the 80 steps which our last White Paper brought out and what we have done in the meantime. The second chapter covers the next 80 steps on where we are going in the future. I also ask the noble Lord and all in your Lordships' House to read just the first paragraph or two of the White Paper.
If we compare the United States and Europe we are looking at two labour markets of comparable size. Europe has some 250 million and the United States some 220 million. If we look again we find that in the last 10 years Europe has lost 2 million jobs. The United States on the other hand has gained 22 million new jobs. We see the debate in the United States is very much "Where are we going to get the people to fill the jobs between now and the end of the decade?" While in Europe we are all familiar that the debate is the future of work, the importance of leisure and even early retirement. In the United States of America we
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find that individuals are free; large companies as they get larger become controlled. In Europe we find the exact opposite: we find that bureaucracy controls the individual whereas the multinational is left free.
It is moving in that direction to allow the spirit of enterprise to rise to create and to promote the creation of new jobs that this whole process is directed. And with what success? If we look at this country within the last three years, where 1 million new jobs have come into being, and we compare it with the rest of Europe, which has not followed us as yet (although they are now doing so), we see that we are creating more jobs than any other country in Europe; indeed, at times more than all put together.
Before any Member of your Lordships' House should worry about who should measure these values, may I say that in almost all instances they are the results of detailed consultations. Your Lordships will see that we went out to consult whether the audit on small firms should be taken away or not. The opinion, some 200 representations, was equally divided. We decided that we would maintain the audit on small firms. We are exploring the limits, while complying with the European Community directives, to which we can lighten the burden on the audits to which the small firms are subject.
On planning, we have been out for consultation for the last year on changes in the use classes order—which I should remind all in your Lordships' House came into being in 1947, based on the industrial classifications of the 1870s. The world has moved on. We must look at it now. It will be easier to get high tech. users; it will be easier to change between one class of light industry or perhaps offices. It will allow the promotion of new forms of industry. These are carefully measured. We are moving forward one step at a time.
Although the noble Lord opposite may say that no small firm would like a visit from both the VAT man and the tax man at the same time, I can assure all in your Lordships' House that he would like it even less if they came on succeeding days. What we are trying to do is to ensure that we do not bother small firms or large firms unnecessarily.
This is an essential strand in the economic policy of the nation and this Government. It is essential because what we must do is allow the spirit of enterprise to grow. It is essential because all these matters have an effect on jobs. Indeed, I am reminded that the English Tourist Board only recently said that the relaxation of licensing law which is covered in this matter will allow the creation of 20,000 more jobs to arise. It is those measures that all on this side of the House are determined to proceed with in the interests of the growth of employment.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that many of us very much welcome the general approach of the White Paper and indeed of his own Statement? The only reservations that some of us have about them is that we should like to see them go a good deal further. In particular, will my noble friend deal with the point made by the noble Baroness, Lady Seear, about the still restrictive effects of local planning restrictions? Will he deal specifically with what in my

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own experience is one of the major troubles with them; that is, the slowness of local authority planning procedures—the need, for example, to have to wait for a meeting, possibly once every two months, of a local planning committee for some quite small matter which needs planning permission? Would he consider further the exemption of developments of this kind, in certain areas at any rate, from local planning control?
Secondly, is my noble friend aware that it is with a certain surprise that I find myself in complete agreement with the noble Lord, Lord Bruce of Donington, on one point? It concerns the point which he very well made of the apparent zeal of the Inland Revenue to push and, indeed, to hunt small businesses. There seems to be (and I do not know whether it is on instructions from above) a move to press small businesses for information, and for papers that they probably do not have, about their activities in order to ensure early tax demands. I appreciate the difficulties of dealing with the Inland Revenue, but would my noble friend give an indication that inside the Government someone perhaps may give the Board of Inland Revenue a broad hint that this kind of thing does not help?
Lord Young of Graffham: My Lords, I am grateful to my noble friend. The White Paper refers to the fact that the Department of the Environment will be going out within a very short period for formal consultation on the changes which are planned to be made on the use classes orders. These are technical in nature. The noble Lord will also see in the White Paper the Government's determination, over a period of a year or two, to halve the time taken on planning appeals; and that we are vitally concerned that, with safety, we reduce the time taken in order to get essential planning permission through in the interests of the growth of employment.
I am aware of what my noble friend tells me about the alleged attitude of the Inland Revenue. I shall certainly draw that to the attention of my right honourable friend the Chancellor of the Exchequer, whose primary responsibility it is. But we must be careful to distinguish between excessive bureaucracy (which is my concern), the desire for the Revenue to collect their proper taxes and undue zeal. I hope that the first two are correct. The third is something against which we shall have to take care.
Lord Graham of Edmonton: My Lords, will the noble Lord the Minister accept that if these changes really do reduce the burdens on small businessmen they will certainly receive a welcome from me? Would he bear in mind that up to now there has been an intolerable burden, often a stupid burden, carried by small businesses, particularly in having to carry out regulations from the DHSS? We want the burdens to be lifted, not shifted from the Government on to small businesses. Can the Minister also say something about how sanguine he might be, at a time when local councils are under great pressures to reduce staff and to reduce costs, that in relaxing planning applications there may be a danger of getting a proliferation of such non-conforming industry types as the use of industrial sewing machines and the carrying on of car sales and repairs in residential areas, which will certainly not be what is wanted by the people who live there?
Lord Young of Graffham: My Lords, I am very grateful for the support of the White Paper shown by the noble Lord, Lord Graham of Edmonton. Of course, it is important in the interests of many people that we lighten the burden on individuals. But we must lighten it with safety. As far as the planning changes are concerned, I think that the noble Lord will see that the proposals do not contemplate any of the changes about which he was anxious. Residential property will be kept for residential use; and we have said that there is to be no change in the law regarding the right to work at home. People have a right to work at home so long as they do not change the residential character of their abode and so long as they do not annoy their neighbours.
Lord Alport: My Lords, may I ask my noble friend whether there is any estimate of the number of additional jobs which will be provided as a result of the implementation of the proposals in the White Paper?
Lord Young of Graffham: My Lords, this is part of a continuing process. Within the White Paper, on the inside cover, my noble friend will find that, for the very first time, the objectives of the Department of Employment are there printed. I have the honour to lead a department which for many years past, I suspect, saw as its primary function either sponsoring trade unions or sponsoring the rights of members of trade unions. What is printed there clearly says that the work of the Department of Employment is to encourage the development of an enterprise economy and to reduce unemployment through more businesses, more self-employment and greater wealth creation, all leading to more jobs. This is part of that process. I should not like anyone in your Lordships' House to think that Government are so all-knowing that they can determine to a fine degree of exactitude the number of jobs created or lost by any decision of Government. Enterprise is not like that; employment is not like that. What Government have to do is get out of the way of the people so that the people can create the jobs.
Lord Stoddart of Swindon: My Lords, the noble Lord has evaded his noble friend's question. Indeed, he has not answered the question at all. I should like to ask him the same question in a different way. Exactly what relevance does his Statement have to employment? He boasted earlier that a million jobs had been created. Would he not agree that 90 per cent. of those jobs were part-time, low-paid and mainly for women, and that 250,000 jobs for men (for, if you like, the main breadwinners) have been lost during that period?
Does the noble Lord not realise that over the past fortnight we have had massive redundancies announced? Just to mention a few, in shipbuilding there have been 3,500; in the railways, 5,200; in British Caledonian Airways, 800; in Kodak, 900; and in Boots, 800. How many new jobs will the proposals in this Statement create? I think that the House is entitled to know that. Will the noble Lord say how reducing the health and safety protection for thousands of workers can assist in employment except at the expense of creating more dangerous and less healthy working conditions? Will he also say how

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taking away the rights of workers in respect of unfair dismissal will help? These matters are all in the White Paper. Will he also say—
Noble Lords: Order!
Lord Stoddart of Swindon: My Lords, this is in order. These are matters which are in the White Paper and about which we are entitled to ask questions. How will the removal of protection from workers in respect of unfair dismissal help unless it is to give more power to employers to sack workers unfairly? I think that these are questions which should be answered, because this Statement and the White Paper are quite irrelevant to the real needs of creating proper jobs and getting rid of 3,250,000 unemployed in this country.
Lord Young of Graffham: My Lords, the only irrelevance demonstrated this morning is the irrelevance of those sitting opposite me who insist on looking backwards and who cannot look forwards. The loss of employment in shipbuilding is regrettable. The world is passing on. The demand for ships has disappeared, not only in this country but all over the world; but that is another matter. On railways, of course, it is regrettable that we have had to have a loss of railway jobs this week. Perhaps those opposite would advise the National Union of Railwaymen and ASLEF that if they stopped doing such things as blacking the transfer of some newspapers and prohibiting the transfer of some newspapers by rail they would find that the railways themselves would not lose jobs as a result of more and more freight traffic being transferred from railway to the roads. In looking forward to the creation of the jobs for tomorrow, we have to create the conditions in which those jobs will flourish. It is of no use looking back: we have to look forward. It is of no use wishing the world were as it used to be: what we have to do is prepare it for what it will be tomorrow.
Lord Stoddart of Swindon: My Lords, if I may, let me say to the noble Lord that we are not looking backwards. We are looking forward to the day when the number of people unemployed in this country, three and a quarter million, is reduced.
Baroness Seear: My Lords, does the noble Lord not agree that the range of questions which has come up in response to the Statement underlines my request that there should be at the proper time a debate on this White Paper?
Lord Young of Graffham: My Lords, I am sure that all in your Lordships' House would agree that this has become a little too deregulated.

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

Airports Bill
12.21 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 14 [Transfer schemes]:
The Earl of Dudley The Earl of Dudley moved Amendment No. 34:
Page 13, line 5, at end insert—
("( ) When a company formed in accordance with section 12 and operated in accordance with a transfer scheme approved by the Secretary of State, in accordance with section 14, imposes additional costs to be met by the principal councils, the Secretary of State shall take whatever steps are necessary to ensure that the net costs to be met from the councils' rate funds are offset by government grant.")
The noble Earl said: I should like to thank the noble Earl, Lord Caithness, for drawing my attention to the printing error in Hansard which wrongly reported that my amendment had not been moved last week. I understand that this error will be put right in the next edition. The noble Earl also established with the authorities who regulate these matters that my amendment had not been scuppered. I am extremely grateful to him for this, because I hope to persuade your Lordships that this amendment is a necessary and important one. I am grateful to the noble Earl for having been more vigilant than I.
The amendment is to Clause 14, in that part of the Bill where the Government intend that local authority airports with an annual turnover in excess of £1 million should become company law companies, with the shares held (initially at least) by their local authority owners. The Government have enough support for the broad objectives of the Bill to enable it to become law. There is no concerted opposition and there is some support from those who are most affected by it, if the seven West Midlands district councils and Birmingham airport, with whose encouragement I move this amendment, hold representative views.
However, there are strong objections to some methods proposed by the Government to bring about changes in airport status and there are very real fears about their consequences. One of the major areas of disagreement concerns what should be done about existing airport liabilities, including, for Birmingham and other airports, debt incurred to fund development schemes with monies borrowed from banks and other institutions and guaranteed by local authorities. Airport debt is a charge on annual airport revenue,

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and where that is inadequate the charge becomes a charge on the rates, for want of any other source of funds.
There are also annual and accumulated losses at airports which have been operating well below capacity. The noble Earl, Lord Caithness, said on 15th May 1986, at col. 1356:
"It is a matter of fact that some airports need a subsidy from their parent authorities—regrettable, but we recognise that for some this may be necessary for some time."
That remark would not look well on an airport company prospectus. We must recognise, as I am sure the Minister now recognises, that for most local authority airports, to privatise is not a commercial proposition. The facts speak for themselves. Of the 17, or maybe 18, local authority airports caught by the Bill, only six (or one-third) are profitable. Led by Manchester, they earn a combined annual profit of about £18 million on a capital investment of almost exactly £150 million. And while some may say, given future growth, that a return of 12 per cent. is not unsatisfactory, those figures should be viewed with caution. Airport assets transferred to the new companies at a true and fair valuation may prove more valuable and the return lower. Also, depreciation will be charged against profits in the future.
Although I cannot, as can some noble Lords on the opposite Benches, speak for Manchester, I think your Lordships may be interested to know that I understand that at Manchester, where in the last few days the corporation have pre-empted the Government by turning the airport into a company, the valuation on transfer has turned out to be some 50 per cent. higher than the previous figure. As a result of this and the effect of depreciation, a substantial profit is likely to be turned into a small loss. Birmingham and Southend are at break-even, and the remaining nine or ten airports make a combined loss of £4,500,000, of which Liverpool contributes £3 million.
Your Lordships may now be thinking: what has all this got to do with my amendment? The answer is that it has a very great deal to do with it. But for the incongruous nature of local authority airports, compelling the Secretary of State to apply cosmetics as if he were a cross between @Estee Lauder or Helena Rubenstein, my amendment would be unnecessary. The noble Earl, Lord Caithness, also said that it is the Government's intention, when the local authority airport companies are set up, that they will be viable enterprises. He said at col. 1356:
"We do not foresee the situation where we are creating an entity purely for it to go down."
The Minister's problem can be very simply expressed: how to convert an airport burdened with debt, operating below capacity and requiring for some time a subsidy from its parent authority into a viable entity? The Minister need not yet be concerned with the Stock Exchange, but he must have regard to the Companies Act and to the need for the company to conform to company law.
His preferred solution, as expressed in another place, is to leave debt of a loss-making airport with local authorities. By transferring assets to the company and liabilities to the local authority, he will give the company a rosier complexion though not necessarily a
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more assured future. The noble Earl, Lord Caithness, confirmed this last week when he said at col. 1375:
"… in some cases we believe that it will be necessary to leave a large proportion of debt with the controlling authority in order to establish a company with a chance of viability. When there is no chance of viability, then we shall be suggesting that the companies should be set up without any burden of debt, which would only increase the requirement for subsidy."
The noble Earl justified this policy by adding:
"The present level of debt attributable to airport undertakings reflects past decisions of the controlling authorities."
12.30 p.m.
I am sure the noble Earl did not mean it, but his remarks could have been construed as dissociating the Government from airport history and implying that local authorities took wrong decisions to invest in regional airports. As regards Birmingham Airport, investment in new terminal buildings was properly made by the late West Midlands County Council, with Government assistance, to take care of foreseeable passenger growth and future airline requirements. This was the justifiable cause of the present level of debt of about £30 million, in the national as well as the regional interest, and serviced until now by the airport from revenue or reserves. None of that debt has fallen as yet on local authorities.
Local authorities have expressed their concern to the Minister about his intentions, but the fact is they do not yet know how much of the debt will be transferred to the company and how much to themselves. They explained to the Minister that to transfer assets to the company without liabilities will deprive them of revenue previously available to service debt. Credited to the company's account, it will be subject to depreciation and may be subject to taxation. Dividends are an unknown and unquantifiable factor. If all debt were tranferred it would add from 1.64 pence in the pound for West Midlands ratepayers up to 15 pence in the pound, I understand, for Luton ratepayers—an increase in the latter case of 60 per cent.
The Minister is not obliged by the Bill to reveal his intentions before the Bill becomes law, so if my amendment were accepted it would protect councils and ratepayers from a hypothetical situation. It deals with a situation where the Secretary of State, after consultations with the council, chooses to disregard the council's scheme and substitutes his own, transferring, as allowed by Clause 14 (4)(b), property and rights to the company and leaving liabilities with the council. Whether or not the liabilities and their cost arise from past decisions of councils—and I believe that in most instances those decisions were quite properly taken—they will now fall on ratepayers as a consequence of the Government's policy to take steps towards privatisation of local authority airports and from the Minister's decision to leave part or all of the debt with the local authority. I think he who calls the tune should at least part pay the piper.
My amendment would require the Secretary of State to consult with his right honourable colleague at the Department of the Environment to determine ways and means whereby the cost to councils of servicing airport debt might qualify and be assessed as grant related expenditure. There ought to be a factor in the

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assessment that picks up these debt charges. The effect of accepting my amendment would be that about 34 per cent. of the cost to Birmingham and other West Midlands councils would be met by Government grant.
As I have said, these regional airports bring benefits to the whole nation by affording easier and more rapid access to exporting regions or popular tourist areas. It is right and equitable that some part of their cost should be borne nationally by the taxpayer as well as locally by the ratepayer. I beg to move.
Lord Underhill: On behalf of the Labour Opposition, may I indicate our support for the amendment moved by the noble Earl, Lord Dudley. I can be very brief because I think the noble Earl has delivered a formidable case which the Government should accept and on which they should act accordingly, bearing in mind the points that have been emphasised.
First, it is the Secretary of State who directs the local authority to form a plc. He will direct it under Clause 12, to which reference is made in the amendment. It is the Secretary of State who has full authority as to the nature of the scheme. He can approve the scheme; he can change it; he can modify it just as he thinks fit. The noble Earl has indicated that if, as a result of the scheme, additional costs fall upon the principal councils concerned, common sense suggests that the position of the rate support grant ought to be dealt with at the appropriate time. There should be no difficulty in that case because the former Secretary is now at the Deparment of the Environment and he can talk to himself, because he made these proposals; he knows what is in them. They aim to ensure that any expenses, any additional costs that the councils have to incur, particularly as a result of servicing debts and the other matters to which the noble Earl referred, should be taken into consideration when the Secretary of State for the Environment makes his next rate support orders.
If I may make one final point in addition to the very strong points made by the noble Earl, other examples were given in the debate on the Second Reading. Therefore, this is not just dealing with Birmingham Airport, as the noble Earl has stressed; it deals with the problems of quite a number of local authority airports transfer schemes which will be set up as a result of directives of the Secretary of State. Therefore we give the amendment our full support.
Lord Tordoff: May I, too, join in supporting this amendment and congratulating the noble Earl on the way in which he has presented it to your Lordships' Committee. I was slightly rebuked by him at an earlier stage, I thought, for raising some of the matters which he has raised on this amendment, when I mentioned matters relating to Luton on some of the earlier amendments. Of course, he was quite right. Nevertheless, I am unrepentant on that because I think it has given the noble Earl, Lord Caithness, an opportunity to think a little more about the general problem which is now so well focused in this particular amendment.
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If I may reiterate a few points without going into detail on the Luton case which I made at the last sitting of your Lordships' Committee, as the noble Earl, Lord Dudley, rightly said, those past decisions were very properly made. They were made in many cases with the support of the Government, and they were made with the intention of investing in the infrastructure of the local regions.
I was tempted this morning to bid fond farewell to the Secretary of State for Transport but, as the noble Lord, Lord Underhill, has reminded us, he is not quite out of our hair yet so far as transport matters are concerned in relation to this particular amendment, so I suppose it is "Be nice to Secretary Ridley day" again, and I hope he is listening more in his new job than he was in the last one. Nevertheless, let us welcome the new Secretary of State for Transport and hope he will do better.
This is a serious matter for all local authorities who are caught in a sort of Morton's Fork here. Under financial pressure from the Bill they are being asked to make certain decisions; but at the same time, if they take that step, they will find themselves saddled with debts which were properly assumed in earlier stages but without any of the benefits that accrue from that investment. In view of the fact that some of the points that we are now discussing were discussed at an earlier stage, I hope that the Minister can give us some assurance today that the department is able to indicate some changes, if not now perhaps at a later stage of the Bill.
I have to say at this stage that, regrettably, I cannot be present when the House receives the report of this Committee because I shall be out of the country on a visit by the Science and Technology Select Committee of your Lordships' House looking at transport matters. It is unfortunate that these two things clash, but I think it is important that the Select Committee members take evidence, and in this case we have to go to Germany to look at evidence provided on research and development in service transport in that country. So I am afraid that, the usual channels having failed to take account of it, I shall regrettably be absent, but I hope that this will not be seen as any discourtesy. Once again, I commend this amendment to your Lordships' Committee.
Lord Dean of Beswick: I wish to speak only very briefly on this amendment, because in moving it the noble Earl, Lord Dudley, made an absolutely first-class case of the reasons for it. But the clause and the amendment are really about the impact of the financial consequences of this Bill on local authorities. I think your Lordships will recall—and I hope the Minister does—that during the last proceedings in your Lordships' Committee on this Bill I made a rather pre-emptive point that is relevant today.
If local authorities have to bear the full financial consequences of this Bill—a Bill that is not of their making and that has been forced on them—without any consideration whatsoever, it may well be, though I have not seen the figures, that some of them, if they have to find the money from their rate or block support grant, will be put into a position where they could be rate surcharged. The ratepayers of those areas will then suffer a financial penalty through no fault of

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their own and through no fault of the people whom they have elected.
Finally, I fully realise that the Bill before us was started by the right honourable Nicholas Ridley, who was then Secretary of State for Transport and who in the last 24 hours has taken the new portfolio of Secretary of State for the Environment. I shall be gladly surprised if he is sympathetic to the local authorities in this matter, bearing in mind his past performances as Secretary of State for Transport, because he is an out-and-out dedicated apostle and disciple of cutting public expenditure. But, having taken that into account, I hope, when he sees the full consequences of this Bill to the finances of the local authorities concerned, that he may on this occasion have a change of heart and decide to find the money, or ask the Government to find the money, for a decision which is of his making and not of the making of the people who are having to accept it. Having said that, I fully support the amendment.
The Earl of Caithness: Our discussion today continues somewhat that of last Thursday and, in particular, our debates on Amendments Nos. 23, 24 and 28. During our discussion on those amendments, I explained to the Committee why I believed it would not be appropriate for the Government to compensate authorities for the costs that were under discussion at the time. I recognise, however, the very sincere argument put so ably by my noble friend Lord Dudley, that some local authorities would face financial problems if we left all of the outstanding airport debt with local authorities, rather than transferring it to the airport company. I believe that this debt will be short-term but, none the less, a real problem. But in the long-term our aim, and the philosophy behind this Bill, is to improve the lot of the ratepayer and to improve the lot of the local airports. I am happy to give an assurance to the Committee that in considering local authorities' proposals for the transfer of property rights and liabilities, we will adopt a very flexible approach.
While wishing if possible to establish airport companies which are viable, or which have every prospect of early viability—an objective which I believe is fully understood by the Committee—we will certainly take account of the financial implications for transferor authorities, if debt is left with local authorities. This may not be a problem with some airports, but I recognise that there is a problem with others; notably, Birmingham, about which my noble friend Lord Dudley has talked, and Luton, which was mentioned on the previous day in Committee by the noble Lord, Lord Tordoff.
It is a sadness to the House that the noble Lord, Lord Tordoff, will not be here on Report. I was particularly grateful to him for his contribution to our discussion, and his arguments put forward at cols. 1372–74 of Hansard for 15th May have been read with great care by the department. We have already discussed this matter within the department. I discussed it with my right honourable friend the then Secretary of State for Transport, and I think it is a long time since a Secretary of State for the Environment will have known so much about airports at such a crucial time. I also talked at length yesterday with my
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honourable friend the Minister for Aviation and the officials concerning the whole of Part 11 of this Bill.
We realise the problems that may be entailed and we are looking at these seriously. We are taking account of what all noble Lords throughout the Committee have said and are saying today. The arguments put forward by my noble friend Lord Dudley will be of enormous benefit to us in our discussions. I would therefore ask him on this amendment and on future amendments please not to press them because we are discussing them very seriously within the department. We should like to take all the arguments into consideration in the discussions, and I can assure my noble friend that we will consider very carefully what has been said. In fact, I can go further and say that the Government's advisers have already been up to Birmingham Airport to discuss with the local authorities the particular problems of Birmingham. They have come back alive and well and fully understand the problems of Birmingham, so we are making progress. I hope that I have given sufficient reassurance to my noble friend that this matter is under serious consideration.
12.45 p.m.
Lord Tordoff: Before the noble Earl responds to that appeal, may I first thank the Minister for what he said and, secondly, say how grateful people on all sides of the Committee will be for the clear signs of movement that are now emerging from the Government on this point? I hope that it will not be seen as carping if I merely say at this stage that this is a big step forward, but, obviously local authorities need fairly quick reassurance in order to look to their future finances. The sooner that the Government are able to give clear guidelines as to the steps they intend to take in this direction the more helpful it will be to those local authorities who are having difficulties in balancing their budgets anyway.
The Earl of Caithness: I apologise to your Lordships. I meant to say that we will be sending out guidance in the not too distant future. We have delayed sending out that guidance particularly to take account of what was said in Committee last week and will be said today. It will go out. I hope to have something to report to the House at Report stage as I gave a commitment on Part I of the Bill. I hope that that is helpful to the noble Lord, Lord Tordoff.
The Earl of Dudley: I should like to take up one point that the noble Earl made. I am a little puzzled at his claim that if the debt were left with the local authority it would be short-term. I cannot understand how he works that out. If it was transferred to the airport company, I could well understand that with possible growth in passenger terminal throughout and with other prospects of improved capacity which face the airports, the debt might be recoverable. But if it is left with the local authority it is there for ever and their chances of getting it back from the airport are, as I see it, very slender. This is another reason why I think that to contemplate leaving a large part of the debt with a local authority is totally inequitable. There is no chance of recovery. Dividends may be payable but this cannot be sure, and it is not sure to what extent they will be payable, or to what extent they would help

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towards removing the considerable burden of existing debt.
That said, I must say that we are receiving encouraging noises from the noble Earl and I hope that the very valid points that have been made on all sides of the Committee in support of the arguments that have been put forward, both on this and on other amendments, are striking home and that we may expect some response, if not during the Committee stage then at least on Report. In those circumstances, I am sure that it would be the wish of the Committee for me not to press the amendment further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Public airport companies and their controlling authorities]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 35:
Page 13, line 25, at end insert—
("(4) For the purposes of the Local Government Superannuation Regulations 1986 the status of a company which has been a public airport company shall not be affected by any change in ownership by virtue of which the company ceases to be a subsidiary or an associated company of a principal council or principal councils.")
The noble Lord said: In rising to move this amendment, I recognise that to some extent I am going to anticipate a discussion that may take place on Clause 26 but it is important that we establish now the ground rules for that discussion. This amendment is by way of a probing amendment to see what are the Government's intentions. We are dealing here with employees of airports who will, as the Bill is enacted and as vesting day comes, become employees of a public airport company. They will therefore transfer from being local authority employees to being employees of a company. The question that arises in our minds, quite apart from their other status and the other conditions of employment that they may have, concerns particularly the superannuation provisions that are to be made for those employees.
There is a substantial difference between local government superannuation provisions and those provisions which are normal in a public limited company. The problem falls into two sections. The first—and I refer briefly to Clause 26(1)(a)—is where there is,
"any transfer of property, rights and liabilities under Section 14(7)"—
that is to say, when there is vesting of the airport in a public company. The second part of the problem occurs when there is a disposal of the shares in that public airport company to third parties. It is normal practice in the Inland Revenue to recognise that a subsidiary will be part of a group for the purposes of a superannuation scheme. We would hope that at least at the first stage the employees of the now public airport company would remain within the local authority superannuation scheme, given that the public airport company at that point is a subsidiary.
The second part of the problem is more serious because it is normally Inland Revenue practice not to allow companies that are associated—not controlled;
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not subsidiaries—to be part of the same pension group as another company. In other words, if company X owns only 30 per cent. of company Y, it is not practice in the Revenue to allow company Y to be part of company X's group for the purpose of the pension scheme. Our worry is that in transferring employees on vesting the Government are proposing not only to transfer them to subsidiaries where it will be legitimate for the pension scheme to form part of the local government pension scheme of which they are already members, but that on disposal of the majority interest in the public airport company that arrangement will cease.
I recognise that in Clause 26 as presently drafted the Secretary of State is to be given a power. I shall not read out the whole of the clause; I simply skip a line or two if I may, and read as follows:
"The Secretary of State may provide by regulations for the payment … of pensions".
There is of course a major difference between the Secretary of State's providing for compensation for pension entitlements and the Secretary of State paying pensions. There are two major differences. The first is in tax terms. Compensation for pension entitlements is normally regarded by the Revenue as a taxable item in the hands of the recipient. In other words, if I were to leave the employment of company X I might get compensation for my lost pension rights but that would be taxable in my hands, whereas the continuing pension when it came would be taxable only at the point it was paid under Schedule E.
The second problem is that the compensation the Secretary of State may wish to provide to the employees is bound to be something in the nature of a guess about what their eventual pension entitlements might have been had they remained members of the local authority scheme. We are asking the noble Earl, Lord Caithness, to give us an assurance that when the Secretary of State exercises his powers under Clause 26 he will not simply give compensation of a taxable nature to those people who are outside the grouping for revenue purposes of the local authority but will undertake to continue the pension arrangements just as though those employees had remained members of the local government superannuation scheme which they formerly enjoyed.
This is in the nature of a probing amendment. It is, I am afraid, somewhat technical. I have had to trespass on discussions that your Lordships will no doubt wish to have on Clause 26, but this is for us an extremely important point because we do not wish to see local authority employees deprived of what they would normally expect to be their pension rights just because they have been transferred to a public airport company. I beg to move.
Lord Tordoff: Although my name was not put to this amendment by some inadvertence, nevertheless the principle lying behind it has my support. Those noble Lords who were around for the Transport Bill will remember that I spent a considerable amount of time on precisely the problem relating to the transfer of people from existing public authorities into private companies.
The Government must recognise that although they keep on saying that they are not in any way forcing

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local authorities to put their airports into the private sector, there is nevertheless considerable financial pressure for them to do so in relation to whether they own 51 per cent., or less, of the company. Since that pressure is there and is being exerted by the Government, it seems to me that once again the Government have a moral responsibility to ensure that the pension rights of people who are being transferred from one position to another as a result of the Government's will should not be the ones to suffer.
Whether this amendment is technically correct, or whether it absolutely achieves the purpose that it is intended to achieve, I would not know. The Government will doubtless advise us, and they will doubtless advise us that it does not. Nevertheless, the principle lying behind it is an important one. People need an assurance that their expectations, to which they have had every right to look forward, in terms of future pensions are not going to be undermined by a decision of Parliament. There is once again a strong moral responsibility on the Government to ensure the safety of the pensions of existing employees.
1 p.m.
The Earl of Caithness: The proposed amendment, which would effectively require that employees of airport companies remain within the local government superannuation scheme even if the local authority concerned sells it to a private sector buyer, is, I have to tell the Committee, fraught with problems. Perhaps the best example is that the LGSS receives favourable tax treatment on its investment income from the US tax authorities—that is, on such investment in the US. If it were to be a requirement of our legislation that an airport company should remain within the LGSS even if and when it becomes a private sector company, then we could expect the privileged status of the LGSS in relation to its US investments to be prejudiced.
It is also very likely that the requirement would be prejudicial to the interests of the local authority vendor. That point was raised by the noble Lord, Lord Tordoff. Either the authority would need to remain responsible for the pensions increase element of airport company superannuation—that is, the index-linked element—with consequent continued commitments, or the company would have to contract to take on such commitments, with a consequent effect on the sale price.
We have already made provision in Clause 26, as noble Lords will realise, for regulations to be made for compensation to be paid to employees in the event of any loss or diminution of pension rights consequent, inter alia, upon a disposal of a principal council's interest. We believe that that provides ample protection for the rights of employees.
To answer specifically a point made by the noble Lord, Lord Williams, if more than 50 per cent. of a public airport company is sold by its local authority owners then it would be a matter for negotiation with the LGSS as to whether the company already enjoying admitted status could continue. We understand that there would be no bar on that happening. The noble Lord asked also about Clause 26. It adopts the provision already made in the Transport Act in relation to pensions for staff transferred to bus companies. Again, that was a point made by the noble
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Lord, Lord Tordoff. I remember well discussing pensions with him a year back. We are not aware of any tax problems that will arise out of the way in which that provision is drafted in the Bill, but we shall of course happily look at that point.
Having thought about this matter quite a lot, I may be happy to accept the amendment on condition that the Labour Party will proudly proclaim that it was at its instigation that the ensuing difficulties arose and that it was because of its actions that not only will local authority pensioners suffer but all the other members of the LGSS will suffer losses. On the other hand, this Government have a duty to protect their interests, and I should like to carry that duty forward by resisting this amendment.
Lord Williams of Elvel: I have to be grateful to the noble Earl, Lord Caithness, for his response, even though it seemed to turn slightly into a party political exchange at the end. We will leave that aside. I wonder whether the noble Earl would address himself to the point that I was trying to make, although perhaps not very clearly, that under Clause 26, if it is accepted as drafted, the Secretary of State will have the right to grant not just compensation but also pensions. That is an important part of the text.
Will the noble Earl reply to the point I made: that if the Government were to accept that the Secretary of State has an ongoing duty to provide pensions not dissimilar to those that local authority employees are at present enjoying, then that would serve the purpose of our amendment? I acknowledge all that the noble Earl has said about the amendment, but, as was said by the noble Lord, Lord Tordoff, we are not claiming that it is Holy Writ. However, there is a very important principle here, and I should like the Committee to spend a little more time on it. I wonder whether the noble Earl would respond.
Lord Tordoff: Before the noble Earl does respond, I may say that his opening remark was a curious one, when he commented that the amendment was fraught with difficulties. It is not the duty of the Opposition to sort out the Government's difficulties. The difficulties are a consequence of the Bill, and it is up to the Government to sort them out. We on this side of the Committee try our best, but the Government have much more expertise at their fingertips. If the Government accept that there is a real problem here, then it is largely in their hands to find a way of getting round it.
The Earl of Caithness: I believe that I have heard that argument before from the noble Lord, Lord Tordoff.
Lord Boyd-Carpenter: And my noble friend will hear it again!
The Earl of Caithness: In response to the noble Lord, Lord Williams of Elvel, I may say that the flexibility created by Clause 26 is better than the rather stricter regime of his amendment. I believe that it might be better if I were to seek a little more advice on this matter and were to return to it when we come to discuss Clause 26. If the noble Lord is happy that I

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should make a further comment when we reach Clause 26, then that might be the best way of dealing with the matter.
Lord Underhill: Before my noble friend responds to that suggestion, perhaps I may ask the noble Earl to seek advice also on two further points: first, the deeming option that was discussed during our consideration of the Transport Bill; secondly, the question of the admitted body status, to which I shall be referring when we reach Clause 26.
The Earl of Caithness: I hope I shall be fully prepared to counter the arguments of the noble Lord.
Lord Williams of Elvel: I am very grateful to the noble Earl for spending more time on this matter. In the light of what he has said, I am happy to withdraw the amendment on the understanding that when we come to discuss Clause 26 the noble Earl will be fully briefed about the full consequences, including the taxation consequences, to the individual of compensation payments that may be made under Clause 26 and the Secretary of State's powers therein. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clause 16 [Control over constitution and activities of public airport companies.]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 36:
Page 13, line 28, after ("ensure") insert (" (a) ")
The noble Lord said: This is a relatively simple amendment. Under Clause 16 at least three directors of the company, or at least one-quarter of their number, whichever may be less, shall be full-time employees of the company, suitably qualified to be directors of the company by virtue of their experience in airport management. That provision is intended to ensure that the company has access to adequate operational and financial expertise and to other areas of expertise.
The amendment is intended to ensure that in addition to those directors there will be a director who is able to act as a representative of the employees in the airport. It expresses our view that the presence of such a person on the board would bring to the board relevant and useful experience, and would assist in maintaining good labour relations. A link with those who have a very important investment in the success of the airport is something to which we look forward, and we hope that the Government will do so, too.
Those who are working in the airport and who are employed there directly have an investment in it that is not purely a cash investment that can be moved if the rate of return is low. Their investment is their whole income and their whole future security. To the employees, the success of the airport means security for themselves, for their families, and in many cases for the entire community in which they live. If there could be an arrangement so that employees could be represented in the same way as management is
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represented—and we are asking for only one such employee representative—then we believe that would greatly increase the efficient functioning of the airport. We believe also that it would lead to an acceptance by those employed there that their future is closely, understandably and sympathetically acknowledged by management to be wrapped up in the success of the airport. I beg to move.
Lord Boyd-Carpenter: Although the noble Lord, Lord Carmichael, did not say so, I take it that he was speaking also to Amendment No. 37, which is the substantive amendment. The noble Lord did not say that, but we should have it on the record. In speaking to the amendment, I believe that he blurred a little the precise meaning of it. He said that it would be useful to have on the board of these companies an individual with experience of the problems of the employees. That is indeed such an obvious statement that I do not think one needs to waste any time on it. I think your Lordships would all agree with that.
But that is not what the amendment says; it says he should be on as a representative of the employees. We therefore come back to the point we discussed earlier on this Bill and other Bills about the whole doctrine of directors who are representative of one section or one interest. I have never yet myself heard the answer to the objection to that—that once someone is a director of a company he has, under the Companies Act, a general responsibility for the wellbeing of the company, a general responsibility for all concerned in it which can be enforced upon him by law: indeed, by a great deal of law under the almost annual Companies Acts that, for some reason or other, we have been passing in recent years.
Here you come straight up against the problem that if one director is a representative of one particular interest, however important, what is he to do if there is a clash between that interest which he is said to represent and the other interests and the general wellbeing of the company? This, I think, is the snag in the amendment.
Lord Williams of Elvel: The noble Lord, Lord Boyd- Carpenter, is quite right that we had this discussion at an earlier stage in Committee, and I agree fully with what the noble Lord has said about the responsibility of directors.There is no question of trying to change the companies legislation or in any way to obviate it.
Nevertheless, it is true that in many public companies today there are directors who are representative of certain interests, not necessarily the employees. Some of the financial institutions, for instance, who have large shareholdings, require a director to go on the board of a public company in order to represent their interests. That does not seem to me to be necessarily very wicked or difficult. Indeed, the directors who represent those interests accept fully their responsibilities as directors of public companies under the companies legislation. Nevertheless, they are entitled in board meetings to put forward a view which is that of a special interest. If the financial institutions, banks, pension funds and others can do that, it does not seem to me that it will be a problem if employees do it. But maybe the noble Lord has different views.
Lord Boyd-Carpenter: I think that uncharacteristically the noble Lord, Lord Willaims of Elvel, has not thought this out. Of course he is right in saying that on the board of large companies there are people who are concerned with other interests, particularly those of large investors in the company, and they can be said colloquially to represent the interests of that company on that board. Of course that is so. But the difference is that here it is proposed that there should be directors with a statutory responsibility for the representation of one particular interest. There is no such statutory provision in respect of the kind of representation to which he was referring.
The difficulty here is that, as he said, those who sit on the boards of large companies and are concerned with other interests have to, and do, attempt to discharge their duties without qualification, without limitation as directors of that company and perform their duties under the Companies Act.
What is proposed here is quite different. It is proposed that there should be a director with a statutory responsibility for one particular interest and if it is a statutory responsibility it might be one day for somebody to seek to enforce on that man the law, the conflicting law I would guess, between the Companies Acts and this particular measure. I hope therefore that the noble Lord will not persist in this amendment, which is totally different from the kind of representation he was talking about.
1.15 p.m.
The Earl of Caithness: I have to come down on the side of my noble friend Lord Boyd-Carpenter. I think he is absolutely right in this matter. Indeed, if it is a consolation to the noble Lord, Lord Carmichael of Kelvingrove and Lord Williams of Elvel, there is nothing in the legislation that would inhibit the appointment of employee representatives or indeed financial interest representatives.
However, we believe that the decision whether or not to do so would be taken by the local authority shareholders with their detailed knowledge of the circumstances of the airport and with the potential value of the appointment for the best interests of the company in consideration. The noble Lord, Lord Williams of Elvel, knows better than I do why some of the financial directors are appointed. It is for the benefit of the company at the time. It should not, we believe, be written onto the face of the Bill, because in that way it conflicts, as my noble friend Lord Boyd-Carpenter says, with the Companies Act. Therefore I feel that we must oppose this amendment.
Lord Carmichael of Kelvingrove: Obviously I am disappointed, though I remember the discussion which took place some time ago on this very point of representation. What I think people find difficult to understand is that of all the people who may be appointed to a board or selected for a board, only those representing the workers may have difficulty in genuinely representing the prosperity of the company.
I just do not believe, with great respect to the noble Lord, Lord Boyd-Carpenter, nor does the great British public believe that when a bank has members appointed to a board of a company they are all solely
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concerned with the profits of that company. Obviously that is a very important part of their interest, but whenever matters become difficult and whenever there is a conflict of interest I would very much doubt (and I do not think those who are perhaps much less knowledgeable than the noble Lord, Lord Boyd-Carpenter, really believe either) that the banks go in without a great deal of concern about protecting their own rights.
I agree that the wording of this amendment is very difficult. The Minister said that there was nothing to prevent an employee being appointed to the board of the company. I wonder whether he would give consideration, when we come to the Report stage to a slightly amended amendment. If we cut it off at the third line of the amendment, at "company", Amendment 37 would read:
"that at least one of the directors of the company is a full-time employee of the company who is suitably qualified to act as a director of the company".
That would leave out the question of a representative of the company. If that were on the face of the Bill it would give encouragement. It would still leave the board the freedom to decide who would be there and who would not be directly a representative, and I think that would perhaps answer to some extent the noble Lord, Lord Boyd-Carpenter.
I am quite sure that a company does not say to Barclays Bank or to Nat-West, "Yes, we will have somebody on the board but it must be so-and-so". I am sure the person is sent along as a representative—or perhaps it is done in another way. But it is as a direct representative. We are not asking for that. We are merely asking whether, if I withdraw this amendment, the Minister will agree at least to look at the possibility of having on the face of the Bill that there should be an employee of the company.
Lord Tordoff: Before the noble Lord sits down, I think I must say at this stage that on these Benches we have considerable sympathy for the underlying feeling behind this amendment and the need to encourage employees to take part in the overall strategy of the companies for which they work. Certainly my party has a long history of thought and policy in this area. But I believe that trying to amend this Bill in a piecemeal fashion is not really the way to come at it. I think that the noble Lord, even with the suggestion he has just made, is not really getting away from what is an important objection raised by the noble Lord, Lord Boyd-Carpenter. I think we have to await a proper Bill dealing with employee participation, employee shareholding and all the rest of the matters which can only come some time after the next election.
Lord Harris of Greenwich: I too, having listened to the discussion, share the scepticism of my noble friend Lord Tordoff. I speak as a non-enthusiast for this Bill, which is another piece of doctrinaire legislation which in my view has very little merit. However, on the actual proposal now before us it seemed to me that the noble Lord, Lord Carmichael, did not deal with the point of substance made by the noble Lord, Lord Boyd-Carpenter, which is this: it is perfectly right to say that banks are sometimes represented on the

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boards of companies, as are many other investment institutions, but they do not have a statutory position. The problem would appear to be that on the basis of the amended amendment, if I may so describe it, suggested by the noble Lord, Lord Carmichael, it is as objectionable in reality as the first form of words because it still leads to the creation of a special situation for the employees in this small area of economic activity.
If it is thought right at some stage in the future to do this I do not think that the most sensible way of proceeding is to say that there will be a special arrangement entirely peculiar to airports and for no apparent or philosophical reason. Therefore, although I have great sympathy with the idea of close relationships between employees and management it does not seem to me that in this area it is right to make a special legislative provision which I believe raises a number of substantial problems.
The Earl of Caithness: It would be quite wrong of me to say to the Committee that I will not look at this matter again. Of course I will if the noble Lord, Lord Carmichael, wishes me to do so. However, I fear that my answer will be exactly the same as I have already given, and encapsulated by the noble Lord, Lord Harris, that it will be as objectionable to us in its amended form as it is now. I cannot, therefore, hold out any hope to the noble Lord. I will look at it, but my argument will be exactly the same and we shall be in the same position on Report as we are now.
Lord Carmichael of Kelvingrove: I thank the noble Earl at least for his honesty on the way he will approach this matter. I do not think it is a good message to go from such a gathering as this to people employed in the airports industry that they, of all people, will have no right on the face of the Bill to be represented. It is fine to say that we must wait until there is major legislation that will do the whole job, but I do not believe that it would be too difficult to make a slight start in this Bill.
We already have on the face of the Bill that there must be management representatives on the board. We are merely asking that there should be some allowance for employee representatives. As I said, I do not think it is a good message to go out from this Committee on such a Bill at a time when the airport industry is, I hope, ready to "take off" even more than it has been in the past. However, with those remarks and assuring the Minister that we will almost certainly return to the issue on Report, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 37 not moved.]
Clause 16 agreed to.
Clause 17 [Disabilities of directors of public airport companies]:
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): We now come to Amendment No. 38. Perhaps I should mention to your Lordships that if this were to be agreed to I would not be able to call Amendment No. 39.
Lord Underhill Lord Underhill moved Amendment No. 38:
Page 14, line 32, leave out subsection (2).
The noble Lord said: I had intended to speak not only to Amendment No. 38 but to Amendments Nos. 39 and 40 as I believe they all go together. This is a very important series of amendments which deals with the position of local authority members who become directors of an airport company.
Clause 17(2) imposes on elected members who are directors of an airport company constraints in the consideration of airport matters at council meetings. From my reading of the clause and of the notes on clauses it seems to me that these constraints apply equally to paid directors and unpaid directors. If I am wrong no doubt the noble Earl will correct me. The subsection prevents an elected member-director from taking part in discussions or voting upon any matter relating to a contract, or proposed contract, with the local authority, but the Bill enables such a member to take part in other airport matters.
There are similar provisions in Section 74 of the Transport Act 1985 but that Act imposes even more severe restraints. It prevents an elected member-director from discussing or voting on any matter relating to a public transport company. But, having said that the Transport Act is more severe, I think there is one essential difference between that Act and this Bill. The 1985 Transport Act enables the Secretary of State to issue dispensations from the provisions to which I have referred. In fact, I understand that the Secretary of State has issued a dispensation which enables elected member-directors of public transport companies to take part in discussions, although voting is still debarred.
I see no reason why, as the Secretary of State has power to give dispensation under the Transport Act, it should be excluded from this present Bill. Both measures relate to companies set up by a local authority. One happens to relate to transport undertakings and the other relates to an airport undertaking. Circular 4/85, issued by the department, relating to the provisions of the Transport Act explains:
"Members wishing in exceptional circumstances to vote on any matter or speak on a matter excluded from dispensation … may apply to the Secretary of State for Transport, or in Wales, to the Secretary of State for Wales, for a particular dispensation".
It is permissive. It goes on to say how the application should be made. However, there is absolutely no provision for a similar dispensation in the Airports Bill. I must ask the Minister: why is there this difference? Why is this provision not in the Bill?
In Standing Committee in the other place the Under-Secretary of State for Scotland, Mr. Michael Ancram, said on 6th March—I am paraphrasing from cols. 411 and 412—that he had listened carefully to the arguments put forward and should like an opportunity to consider them to see whether the Government could move some way in the direction suggested. That seems to suggest that an amendment on these lines made the government representative feel that there was something that needed to be looked at. Unfortunately, on Report in the other place, on 9th April—and I quote from col. 293—the same Minister, Mr. Michael Ancram, said:

425
"I appreciate that I undertook in Committee that the Government would consider whether we could move towards providing a path for the Secretary of State to issue exemptions from the provisions of Clause 17(2). We gave very careful consideration to that matter. Having listened carefully to the arguments in Committee and to the arguments put forward by the hon. Gentleman tonight, I do not think, on balance, that the potential benefits outweigh the dangers of enhanced liability to conflicts of interest. It is for that reason that we do not propose to amend the clause."
I must ask the obvious question: why are there conflicts of interest where an airport company is concerned but no conflicts of interest where a local authority transport undertaking is concerned? I ask the Minister to bear in mind that the amendment that I propose is not at all mandatory; it still leaves it permissive for the Secretary of State but he has the power to issue a dispensation should he so desire. I beg to move.
The Earl of Caithness: As the noble Lord, Lord Underhill, said, Clause 17 will provide a rather more liberal regime than its counterpart in the Transport Act 1985. It is for that reason I have dubbed this amendment the "Oliver" amendment—having given the Labour Party something they say "Please, sir, can we have some more?"
The clause will allow members of principal councils who are also airport directors to take part in consideration or discussions of matters relating to their airports other than matters of contracts, or proposed contracts, between the airport company and the council. This was done quite deliberately to allow the maximum informed discussion on airport matters. Amendment No. 38 would remove any restriction on councillor-directors discussing or voting on any airport matter, including contracts between council and airport.
Amendment No. 40 would allow the discretion of the Secretary of State to extend this liberal régime further in specific cases, or indeed more generally if he were persuaded that this would be justified. Amendment No. 39 would remove the prohibition on a councillor director voting on matters relating to the airport other than matters concerning contracts between the airport company and a principal council. The overwhelming consideration, of course, must be that conflicts of interest of airport directors who are councillors should be avoided, and the highest standards in the conduct of public business must be maintained.
1.30 p.m.
Perhaps I may give an example of where such a conflict of interest can arise. It may arise when discussion is taking place as to whether the airport company should continue to obtain services from local authority shareholders or go out to tender. What would a person who is caught in this position do? I believe that that question was answered for us by the noble Lord, Lord Dean of Beswick. Referring to a different but analogous situation, he said:
"I had to protect what I saw as my priority, the interests of the ratepayers".[Official Report, 15/5/86; col. 1327.]
The noble Lord might have been right or he might have been wrong, and I am not commenting on that. I am commenting on the clear principle that it must be
426
at arm's length. In this situation faced with the ratepayers and the council on one side and the future of the airport, the airport staff, the passengers and the region on the other, we believe that it is better to avoid a potential conflict such as I have mentioned.
There is a balance between maintaining such standards and the potential benefits which could stem from further relaxation for which the noble Lord, Lord Underhill, has argued. We believe that we have gone as far as is prudent and consistent with establishing as far as possible an arm's length relationship between the new public airports company and the local authorities.
Replying to the noble Lord, Lord Underhill, on a point of detail, I can tell him that subsection (1), referring to disqualification, applies only to paid directors, and that subsection (2), which concerns the prohibition on voting or speaking, applies to both paid and unpaid directors.
Lord Tordoff: Is it not a strange argument to say that one set of directors who presumably are representing outside private shareholding, do not have a conflict of interest, whereas directors who are operating on behalf of the other shareholding, namely, the municipal sector in many cases, are deemed to have a conflict of interest? Why should that be so? Is it simply that people who work for local authorities are less trustworthy than people who work in the private sector? If not, where does the distinction lie?
The Earl of Caithness: The distinction lies in our belief that it is better for the airports and the future of the airport industry to be at arm's length from the council. Therefore, with the local authorities still retaining a majority or a 100 per cent. shareholding, the more arm's length it is the better, because there will be conflicts of interest and it is best to avoid any possibility of that by the Bill as it now stands.
Lord Tordoff: Do not the directors who are operating on behalf of the local authority have a duty to their shareholders? Their shareholders in this case are the ratepayers.
The Earl of Caithness: Yes, but they also have the other duty of the council, and that is the conflict that we are trying to avoid.
Lord Underhill: I just cannot understand the argument put forward by the noble Earl. At least, I can understand what he is saying, but I cannot understand why he adopts that point of view. He referred to the position in going to tender. What about the local authority transport undertaking which, under the Act, is compelled to go to tender? Yet there is a dispensation which the Secretary of State can give in the case of transport. Frankly, it is nonsense for the Government to say that what is good under the Transport Bill—which does just the same thing as is suggested under the Airports Bill, with the arm's length position and, the conflict of interest—should be viewed entirely differently in this Bill. I know that it is Thursday and 1.30 p.m. but why are the Government not prepared to look at this matter again? I believe there is a conflict between the two Bills and it is a conflict of principle that I cannot understand. So

427
unless the Minister will give an assurance that he will look carefully at this point and possibly ensure that something is brought forward which may reconcile the two Bills, I shall seek the opinion of the Committee.
Lord Boyd-Carpenter: Before my noble friend replies, with respect I should like to remind the noble Lord, Lord Underhill, that we are not here concerned with whether the Transport Bill is right or wrong; we are concerned with getting this Bill right. If the noble Lord is still convinced of the validity of his amendment, he must really go so far as to suggest that in the situation that is contemplated under the clause it would be proper or permissible for directors who are members of the council to take part. That is the issue. With great respect, I believe it is quite irrelevant as to whether the Government have got it right or wrong in a previous Bill.
Lord Harris of Greenwich: With great respect to the noble Lord, Lord Boyd-Carpenter, with whom I agreed in his last speech, I am afraid that on this occasion I must part company with him. If the same administration is responsible for two pieces of legislation, then in those two pieces of legislation they can treat such a matter entirely differently, but they must satisfy your Lordships that there are rational grounds for dealing with the matter wholly differently.
The noble Earl has not even begun to satisfy that test. I very much hope that he will look at this matter again. There is no great issue of privatisation or anything of that sort involved. Most of us, indeed all of us, I am sure, want to ensure the highest standard of conduct in local government. Having said that, I think that the noble Earl really must do rather better than he has done so far.
The Earl of Caithness: I am sorry I have not come up to the high standards that the noble Lord, Lord Harris, requires of me. I think that we have looked at this matter very seriously in the past. Indeed, as the noble Lord, Lord Underhill, said, my honourable friend Mr. Ancram in another place took it away and looked at it at that stage. I think it would be wrong to mislead the Committee and say that I could come back with something at Report stage. As I said to the noble Lord, Lord Carmichael, I shall of course look at this point, as I look at every amendment and every discussion that we have; but the reason that the Bill is phrased in its present terms is because we took on board the points that the noble Lords, Lord Underhill and Lord Tordoff, made on the Transport Bill and therefore we extended the provision to make it more liberal than the Transport Act, and, as a consequence, deleted the dispensation. I do not think that I can go any further at this stage.
Lord Underhill: I am grateful to the noble Earl for his honest account of how he would treat this matter if we were to withdraw the amendment. Obviously we shall not get any further if we withdraw the amendment. Bearing in mind that this measure applies equally to unpaid directors—people who are serving as a public duty, and the Government will not even say that they will withdraw this provision
428
regarding unpaid directors—and that at the end of the day it is permissive whether the Secretary of State gives a dispensation or not, I must ask the Committee to give its view on this matter.
1.39 p.m.
On Question, Whether the said amendment (No. 38) shall be agreed to?
Their Lordships divided: Contents, 60; Not-Contents, 66.

DIVISION NO. 1

CONTENTS

Amherst, E.

John-Mackie, L.

Beswick, L.

Kagan, L.

Boston of Faversham, L.

Kearton, L.

Bottomley, L.

Kilmarnock, L.

Bruce of Donington, L.

Lovell-Davis, L.

Caradon, L.

McNair, L.

Carmichael of Kelvingrove, L.

Mais, L.

David, B.

Masham of Ilton, B.

Dean of Beswick, L.

Monkswell, L.

Donaldson of Kingsbridge, L.

Nicol, B.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L.

Ennals, L.

Ritchie of Dundee, L.

Ewart-Biggs, B.

Roberthall, L.

Falkland, V.

Rochester, L.

Foot, L.

Russell of Liverpool, L.

Gallacher, L.

Seear, B.

Galpern, L.

Sefton of Garston, L.

Graham of Edmonton, L. [Teller.]

Serota, B.

Shepherd, L.

Grey, E.

Stedman, B.

Hanworth, V.

Stewart of Fulham, L.

Harris of Greenwich, L. [Teller.]

Stoddart of Swindon, L.

Tordoff, L.

Hatch of Lusby, L.

Underhill, L.

Hill of Luton, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

White, B.

Howie of Troon, L.

Wigoder, L.

Hughes, L.

Williams of Elvel, L.

Irving of Dartford, L.

Winchilsea and Nottingham, E.

Jacques, L.

Jeger, B.

Winterbottom, L.

Jenkins of Putney, L.

NOT-CONTENTS

Auckland, L.

Hylton-Foster, B.

Belhaven and Stenton, L.

Inglewood, L.

Belstead, L.

Ironside, L.

Bessborough, E.

Kimball, L.

Boyd-Carpenter, L.

Lane-Fox, B.

Brabazon of Tara, L.

Lauderdale, E.

Brougham and Vaux, L.

Layton, L.

Butterworth, L.

Lindsey and Abingdon, E.

Caithness, E.

Liverpool, E.

Campbell of Alloway, L.

Long, V. [Teller.]

Chelwood, L.

Lothian, M.

Cork and Orrery, E.

Mancroft, L.

Cottesloe, L.

Marley, L.

Craigavon, V.

Mersey, V.

Cromartie, E.

Milverton, L.

Davidson, V.

Monk Bretton, L.

De Freyne, L.

Morris, L.

Drumalbyn, L.

Mountevans, L.

Dudley, E.

Murton of Lindisfarne, L.

Elton, L.

Napier and Ettrick, L.

Fortescue, E.

Orkney, E.

Gainford, L.

Portland, D.

Glanusk, L.

Renwick, L.

Glenarthur, L.

Rodney, L.

Gray of Contin, L.

Rugby, L.

Hailsham of Saint Marylebone, L.

Saint Brides, L.

St. Davids, V.

Hooper, B.

Shaughnessy, L.

429

Skelmersdale, L.

Vivian, L.

Swansea, L.

Whitelaw, V.

Swinton, E. [Teller.]

Wise, L.

Teviot, L.

Young, B.

Trefgarne, L.

Young of Graffham, L.

Vaux of Harrowden, L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 41 not moved.]
Clause 17 agreed to.
1.47 p.m.
Clause 18 [Prohibition on employment by public airport company of officers etc. of controlling authority]:
Lord Tordoff Lord Tordoff moved Amendment No. 42:
Page 15, line 40, after ("as") insert ("company secretary or as").
The noble Lord said: With all due respect to the Chair, should we not go on record as not moving Amendments Nos. 39 and 40?
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): I think that it is correct that they fall automatically because the Division on Amendment No. 38 was lost. I presumed that they would not be moved.
[Amendments Nos. 39 and 40 not moved.]
Lord Tordoff: I think that that is the way we normally proceed. The clause to which Amendment No. 42 relates is a curious one. It states:
"No person who is a full-time officer or employee of a principal council shall hold any office or employment under an associated company except as a director."
The amendment seeks to put in the words: "company secretary or as". That has been described in certain quarters as a "Roger Taylor" amendment because it seems to be directed at the Manchester Town Clerk who has just become secretary of the new Manchester Airport PLC. Under the clause, he would be in a somewhat difficult position.
In Standing Committee in another place, it appeared that the Government justified the clause merely on the basis of the concern felt by Ministers that full-time officers of the local authority would experience a conflict of interest between the company and the local authority. Despite repeated requests for evidence of that, no evidence was adduced to support that proposition. If there is a conflict with local authority officers' existing responsibilities when being, for example, company secretary (which does not entitle any vote at board meetings) why is there thought to be no conflict when that officer can become a director of the company and vote? It is accepted that a director has legal duties to observe, but those are not fundamentally different from those owed by a company secretary, nor those associated with an officer's profession where it is an already well-established rule that an officer cannot act for more than one party if a conflict is apparent. The department has consistently expressed disquiet at what has happened in Manchester but it has failed to produce any real evidence to justify this concern. Indeed, the evidence surely shows to the contrary.
430
Moreover, there are structures involving officers with dual responsibilities that have been created with the full support of other departments of state, the Department of the Environment, the Department of Trade and Industry, and others. Perhaps the Government should be asked to say why the Department of Transport and its former Secretary of State take a different line. It would be interesting to see, now that the right honourable gentleman has moved to the Department of the Environment, whether he still takes the same view that he took yesterday.
The Government cannot have it both ways. They cannot pretend that they are establishing independent airport companies under Clause 16 and at the same time insist on controlling those activities as if they were an integral part of local government. The most damaging consequences of the Bill will fall upon smaller airports. Expertise developed over many years in town halls up and down the country will be lost, to the detriment of airport companies. For many airport companies, it is difficult to see how such a loss can be made good in a cost-effective manner. To have to employ such expertise from outside would be very difficult for them. The local authorities strongly support the amendment and believe that officers should be allowed to be appointed as secretaries as well as directors of the companies. I beg to move.
The Earl of Caithness: We have tried to establish a clear arm's length relationship between the public airport companies and their local authority shareholders, as the noble Lord, Lord Tordoff, has acknowledged. Various provisions in the Bill are directed towards this important objective. We have recognised that a company's interests and those of the local authority owners may not always coincide; for example, on the provision of services to public airport companies by local authorities. We believe that the company secretary and, indeed, any of the other employees of the airport companies should always put the company's interest first. They should not be subject to conflicts of interest or put in a position where, however honourably they act, they would be open to suspicion that they had favoured one particular authority against another or against an outside interest, not because of the company's interest but because of the interest of the local authority that employs them. That is the situation that we are trying to avoid. It comes back to the argument that I have just made: we want to create an arm's length independent company with the minimum of conflict of interest.
Lord Dean of Beswick: Does the Minister not understand that his reply is not very convincing to those of us who have seen the development of these airports over the years? I speak specifically about Manchester. Historically, the airport has been run by a committee of Manchester corporation. Although there was an airport director, the person who serviced the airport was the town clerk or an officer appointed by him. The local authorities will, in my opinion, wish to retain the majority shares in any of the companies that are formed. I see nothing odd in the majority of the shareholders in a company wishing to say who

431
should act on behalf of that company as the company secretary.
To illustrate further the Manchester situation, I recall saying last week that the airport became a partnership between the county and the city council. I believe that I was right in saying that the chairmanship fluctuated on a 12-month basis. It is also right, I believe, that the joint airport committee was serviced on an alternative basis by an officer of the city council or an officer from the now defunct Greater Manchester council. I believe that the Minister and the Government are frightened of something that is not really there. They should accept the amendment or certainly look at it in close detail before rejecting it.
Lord Carmichael of Kelvingrove: The noble Lord, Lord Tordoff, said that this had become known as the Roger Taylor amendment. While, undoubtedly, Mr. Taylor has been a great driving force in the development of Manchester airport, there is a big principle involved here. The principle, as I see it, is that the Government are speaking with two voices when they say that they want to establish an arm's length relationship between the local authorities and the airports. This is explained in Clause 16. However, we shall soon be discussing Clause 20 where the Government are treating airports as part of local authorities, especially in terms of finance. They are making very difficult any separation, when the activities of the companies formed to run the airports will be treated as an absolutely integral part of local government in terms of financial liability and of capital expenditure. It seems that there is a great inconsistency here. It is not just a question of Manchester airport, which is perhaps an outstanding example. There is a principle involving airports not so large as Manchester. I hope that the Minister will take on board this contradiction and give the matter more consideration.
The Earl of Caithness: With regard to the last point made by the noble Lord, Lord Carmichael, I do not believe that there is any difference in our thought. I do not wish to pre-empt discussion on Clause 20, but as soon as a local authority has sold 51 per cent. or more, the airport will not be subject to local government finance. We shall, however, be going into that matter in detail. The consistency is there to create an arm's length company. Should the local authority shareholders then decide to sell 51 per cent. or more, the airport comes outside local government finance control. That is an entirely logical sequence.
Lord Dean of Beswick: The Government are not being consistent in their approach on the basis that 51 per cent. of the holding shall literally determine who the secretary will be. There are some spin-offs from local government reorganisation and the dissolution of counties which mean that 51 per cent. of some substantial financial holdings have become the responsibility of chairmen of residuary bodies. That 51 per cent. formerly held by counties is now held by the districts. But no such condition is being applied at present by the outgoing Secretary of State. He is allowing the private sector that has 49 per cent. almost
432
to determine what happens. I believe that there should be some consistency. I do not wish to name a particular case, but it is an outstanding one. It is a case that will become, in the near future. I believe, a focal point of disagreement between the Government and a major local authority.
Lord Tordoff: I am grateful for the support given to the amendment. It does not seem to me that the Minister has answered the point, particularly the point concerning smaller airports. We have this curious situation where full-time officers can be directors but cannot be company secretaries. We are talking about professional people. We are talking about people who are used to handling conflicts of interest. The town clerks of our great cities are constantly faced with conflicts of interest as councils move from one form of political control to another. They are highly professional people who, more than anyone else, are capable of handling the sort of conflict of interest that the Government are worried about. As I said before, the Government produce no evidence whatsoever of the problems that might accrue under this. I do not feel that I can do other than ask the House to decide.
2 p.m.
On Question, Whether the said amendment (No. 42) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 67.

DIVISION NO. 2

CONTENTS

Amherst, E.

John-Mackie, L.

Banks, L.

Kagan, L.

Beswick, L.

Kearton, L.

Bottomley, L.

Kilmarnock, L.

Caradon, L.

Llewelyn-Davies of Hastoe, B.

Carmichael of Kelvingrove, L.

Lloyd of Hampstead, L.

David, B.

Lovell-Davis, L.

Dean of Beswick, L.

McNair, L.

Donaldson of Kingsbridge, L.

Mais, L.

Elwyn-Jones, L.

Monkswell, L.

Ennals, L.

Nicol, B.

Ewart-Biggs, B.

Paget of Northampton, L.

Foot, L.

Ponsonby of Shulbrede, L.

Gallacher, L.

Roberthall, L.

Galpern, L.

Rochester, L.

Graham of Edmonton, L. [Teller.]

Seear, B.

Sefton of Garston, L.

Hacking, L.

Serota, B.

Hanworth, V.

Shepherd, L.

Harris of Greenwich, L.

Stedman, B.

Hatch of Lusby, L.

Stewart of Fulham, L.

Hill of Luton, L.

Stoddart of Swindon, L.

Howie of Troon, L.

Tordoff, L. [Teller.]

Hughes, L.

Underhill, L.

Hunt, L.

Wells-Pestell, L.

Irving of Dartford, L.

White, B.

Jacques, L.

Wigoder, L.

Jeger, B.

Williams of Elvel, L.

Jenkins of Putney, L.

Ypres, E.

NOT-CONTENTS

Auckland, L.

Buckmaster, V.

Belhaven and Stenton, L.

Butterworth, L.

Belstead, L.

Caithness, E.

Bessborough, E.

Campbell of Alloway, L.

Boyd-Carpenter, L.

Chelwood, L.

Brabazon of Tara, L.

Cork and Orrery, E.

Brougham and Vaux, L.

Cottesloe, L.

433

Cromartie, E.

Mancroft, L.

Cullen of Ashbourne, L.

Marley, L.

Davidson, V.

Masham of Ilton, B.

De Freyne, L.

Mersey, V.

Drumalbyn, L.

Milverton, L.

Dudley, E.

Monk Bretton, L.

Elliot of Harwood, B.

Morris, L.

Elton, L.

Mountevans, L.

Fortescue, E.

Murton of Lindisfarne, L.

Gainford, L.

Napier and Ettrick, L.

Glanusk, L.

O'Brien of Lothbury, L.

Glenarthur, L.

Orkney, E.

Gray of Contin, L.

Pender, L.

Grey of Naunton, L.

Renwick, L.

Hailsham of Saint Marylebone, L.

Rodney, L.

Rugby, L.

Hooper, B.

St. Davids, V.

Hylton-Foster, B.

Skelmersdale, L.

Ironside, L.

Somers, L.

Kimball, L.

Swinton, E. [Teller.]

Lane-Fox, B.

Teviot, L.

Lauderdale, E.

Trefgarne, L.

Layton, L.

Vaux of Harrowden, L.

Lindsey and Abingdon, E.

Vivian, L.

Liverpool, E.

Whitelaw, V.

Long, V. [Teller.]

Young, B.

Lothian, M.

Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.
2.9 p.m.
Clause 18 agreed to.
Clause 19 agreed to.
Clause 20 [Local authority financial controls in England and Wales]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 43:
Page 16, line 44, leave out from beginning to end of line 13 on page 17 and insert—

("(a) any amount—

(i) being an advance of a capital nature made to a public airport company or a subsidiary of a public airport company by the controlling authority of that company, or

(ii) raised by the issue of any securities by a public airport company or a subsidiary of a public airport company to the controlling authority of that company shall be treated as prescribed expenditure of the controlling authority of that company, and

(b) any amount repaid by a public airport company or a subsidiary of the public airport company in respect of any such advance as is mentioned in paragraph (a)(i) shall be treated as a capital receipt of the controlling authority of that company in accordance with subsection (2), but

(c) no expenditure incurred or amount received by the authority for the purposes of or in connection with a public airport company other than such expenditure or receipts as are mentioned in paragraphs (a) and (b) shall be treated as prescribed expenditure or capital receipts of the authority:

Provided that a public airport company shall not borrow or raise any amounts other than as mentioned in paragraph (a) without the consent of the Secretary of State who shall exercise the power of giving consent to any borrowing in the national interest.")
The noble Lord said: Clause 20 of this Bill goes to the very heart of the local authorities concerned with the Government's proposals. As has been pointed out in discussion on the previous amendment, we are dealing with companies which are still majority owned by the parent local authority. Obviously, if and when such a company becomes minority owned then Clause 20 no longer applies. As at present drafted the clause provides for the imposition of detailed capital expenditure controls over the investment programmes
434
of airport companies. These controls, which will be in effect similar to those employed throughout local government, will subsist as long as that majority shareholding is held by the local authority.
The clause as at present drafted raises three major issues. The first is the impact of the clause on the activities of airport companies. The second is the general principle of central government control over the activities of local authority-owned airport companies. The third is the question or responsibilities of outside directors of those airport companies, should there be any.
At the present time it is open to local authorities to establish corporate structures outside the expenditure controls imposed by Government. The Department of Environment recently issued a consultation document on capital expenditure confirming that position, and I quote from it:
"Such companies have freedom, subject to their Articles of Association, to borrow from the financial market without any offsetting reduction in the block grant approval of their controlling authority, even where that authority guarantees the borrowing of such companies."
Clause 20(1)(a) now provides for advances to airport companies, whether originating from the public or the private sector, to be regarded as prescribed expenditure of the controlling authority. This represents a very significant shift in Government thinking. The Government, in the recent consultation paper, made it clear how such control would be exercised. While there will be no control over the extent to which airport companies may draw on their own resources to finance investment, there will be strict control over external finance. The Government will issue to the controlling authority—not the airport company—approvals for borrowings, and the airport allocation will be within a single transport allocation. The Government will decide on the total resources available for capital allocations in respect of external capital finance for airport companies and that decision will be taken in the light of local authority bids and a general assessment of the industry's prospects for generating investment funds at a reasonable level of dividends. The practical effects of what the Government propose are that airport capital expenditure will be subsumed in the overall local authority capital expenditure process.
The transport block within which airport allocations will be subsumed has been substantially reduced in the last few years. There is nothing to suggest that airport allocations will be given more favourable treatment in the future. Furthermore, the Government will be able to use their powers to restrict capital expenditure approvals to force the divestment by local authorities of airport companies. If they are in need of funds and the only way they can get funds is to sell new shares on to the market, that is what they would have to do and the consultation document is, I think, quite clear on that.
The Government, I am sure, will justify the case for controlling expenditure in this manner on the grounds that so long as these airport companies are controlled by local authorities expenditure will rank against the public sector borrowing requirement and therefore must be controlled. It is not my intention today to enter into a debate with the noble Earl about the

435
accounting procedures of the public sector borrowing requirement, although at another time and another place perhaps we can get into that. The point is that no such control is exercised over the appropriate corporate structures now, so the control proposed under the present Clause 20 as drafted is stronger than anything that happens now.
2.15 p.m.
Our amendments are designed to achieve the following objectives. We wish to introduce some realistic dimension to the Government's thinking. We wish to ease significantly the level of controls which Clause 20 represents, and unless major companies have almost complete freedom to compete on the open market for funds then company formation really has no relevance at all, for airport companies must be freed from the straitjacket of central government control on their borrowing.
The third objective is that we wish to give the directors of airport companies, exercising their proper responsibilities under the companies legislation which we have been discussing earlier, the power to perform those duties of making sure that their own company, of which they are directors, remains solvent; and surely it must be the duty of directors—and indeed it is laid down in the companies legislation that it is the duty of directors—to ensure that that is the case. If the borrowing of the company of which a person is a director is controlled by an outside force, like central Government, it may be that this distracts from the possibility of the director himself fulfilling his statutory duties under the legislation.
The Secretary of State, we recognise, will not wish to give up all control over the activities of airport companies when they are still majority controlled by local authorities, so in these circumstances we propose that for advances made to companies other than by a local authority, which we accept is prescribed expenditure and should be subject to control in the usual manner, then the Secretary of State should be asked for his consent to such expenditure. He could then exercise his powers to consent to such borrowings in the national interest in exactly the same way as is provided for in Clause 9(1) in connection with the BAA company when it is wholly owned by the Government. We believe this would ensure consistency in approach.
The amendment we propose would not affect other clauses in Part II. The Government would be able to insist on what it regards as contentious issues of company formation, including executive directors, officer appointments and disposal of shares.et cetera. The amendments to Clause 20 which we are putting forward are designed to do no more than assist the employment of private capital in airports in the interests of their future development and to allow the directors of airport companies to fulfil their obligations under statute. I beg to move.
Lord Dean of Beswick: I beg to support the amendment so well moved by my friend and colleague on the Front Bench, Lord Williams, because I think this is one of the most important clauses of the Bill. In
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fact, it is a clause which, if it goes through unamended, will severely restrict the capacity of those airports to develop as free-standing organisations. It is, in fact, a blatant attempt to force local authorities eventually to come to the point where they will have to divest themselves of 51 per cent. of the shares that they own. In other words, I think it is a backdoor and rather blatant attempt to force privatisation on the local authority airports. so I wish to support this Amendment No. 43.
Clause 20 goes right to the very heart of my concern with Part II of the Bill. It demonstrates just how confused the Government's position is in relation to the regional airports. On the one hand the Government advocate the creation of independent airport companies in order to free day-to-day management of airports from, as the Government say, local politics. Yet on the other, through provisions like Clause 20, they wish to create mechanisms enabling absolute control to be exercised by central government over the companies. Nothing highlights this confusion more than the Government's attitude to Manchester Airport plc.
On 22nd June 1984 the then Secretary of State for Transport made a statement in the other place about the future structures of regional airports. He said that the Government favoured the creation of company structures to assume responsibility for the control, management and operation of airports. The Secretary of State identified a number of advantages arising from this policy. For instance:
"the introduction of private capital … sharper management … transparency of subsidy … Company Act accounts".
He hoped that:
"… local authorities will come to recognise these advantages and introduce schemes for involving private capital voluntarily".
The Secretary of State confirmed that share ownership could rest with local authorities. He also expressed the hope that those authorities affected by the then proposed abolition of the metropolitan county councils would take the opportunity of: "establishing an airport company at this stage"; in other words, before any legislation was introduced.
This statement was examined in detail by all the local authorites in the Greater Manchester area. They had to come to terms with the abolition of the Greater Manchester Council, which had owned and controlled Manchester Airport jointly with the City of Manchester. The local authorities—controlled by all parties—took the view that change should be swift. They did not favour two massive reorganisations in a period of 12 months—one because of abolition and the other because of the likely introduction of legislation. They also agreed that the change should be effective. They acknowledged that the airport, the region's most prized asset, was going to make enormous demands for resources over the next few years. As Europe's fastest growing airport, it is clear that another terminal and other projects costing at that time upwards of £250 million could not easily be funded through traditional local and central government structures. The need for the employment of increasing sums of private capital was therefore recognised and vital.
The Secretary of State's invitation appealed to the local authorities. They saw the advantages of creating

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an independent company structure bringing all the advantages the Secretary of State identified in his statement to the other place in June 1984, to which I have already referred. They therefore began work in the summer of 1985. Finally, they agreed the proposals which came into effect on 1st April this year. Manchester Airport plc is now in existence.
The company is an independent one. It satisfied the test of law. Indeed in this respect it satisfies the Department of Transport. On 16th April 1986 the department wrote to the company secretary indicating that:
"The transfer of the airport to a limited company means that the airport's capital expenditure is no longer subject to control under Part VIII of the Local Government, Planning and Land Act 1980."
This statement confirmed what the local authorities always knew of course: it was perfectly possible in law to establish independent company structures with all the shares held by local authorities. The local authorities did not find a loophole in the law; the Department of the Environment have always accepted that it was possible and indeed proper for this to be done. As the department's recent consultation paper on capital expenditure points out:
"Companies have freedom subject to their Articles of Association to borrow from the open market without any offsetting in the block grant approval of their controlling authority, even where that authority guarantees the borrowing of such companies."
Clause 20 moves the goalposts. The effect of the provisions is to control absolutely the expenditure of the airport company as though it was a local authority, or more specifically treat the expenditure of the airport company as though it was the expenditure of the controlling authority. The Government maintain that Clause 20 already reflects concessions. No longer will any control be exercised over the application of funds generated by trading organisations. That may well be true for local government structures, but for independent company structures it is abundently clear that the clause represents a new and additional control. Its effect will be to control the expenditure of Manchester Airport plc which, on the Department of Transport's own admission, is now operating with complete freedom on the money market.
Noble Lords should ask themselves how a Conservative Government, given their commitment to enterprise and private capital and a reduction in central government control, can rationalise these principles with a desire to control the expenditure of corporate structures like Manchester. I personally find the position unbelievable, as are the Government's arguments justifying the controls. If control is necessary because of the public sector borrowing requirement why is no control exercised now? It is not as though the Government's concern with the PSBR is a recent phenomenon—it has been an absolute pre-occupation of the Government since 1979. I think the answers are simple. Up to now the Government have adopted a logical position and accepted that an independent corporate structure should not be constrained. The more private resources such a structure obtains, the better. Now, however, the Government have changed their mind. They have decided that privatisation may not be achieved as quickly as they would like if Clause 20 did not exist in its present form. As a result, and notwithstanding the
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Government's commitments about share ownership, they have decided to change the rules so that the employment of private capital should now relate to who owns the shares.
I maintain that the Government's position is untenable. Indeed it becomes ludicrous when one compares the controls outlined in Clause 20, to the ones outlined in Clause 9, when the BAA holding company is wholly owned by the Government. Control for the BAA simply consists of a "nod and a wink" from the Secretary of State, depending on his view at the time. That is my practical interpretation of the Secretary of State's duty to exercise his power of consent in the national interest. For the regional airports control takes something of a different form. As previous speakers have explained, their allocations will be subsumed in the transport block grant. They will need to compete with highway authorities for funds. As the Government have ominously pointed out:
"Airport allocations will be a reflection on the total amount of resources available".
It is vital that Clause 20 is amended to introduce some degree of realism into the Government's proposals. Many of us may differ about particular clauses in the Bill, and indeed Members of the Committee may have some reservations about some aspects of the Manchester company, But I cannot conceive that we should oppose the principle of an independent structure having complete freedom to operate on the open market. If that is to be denied to the regional airports, I think that we should all ask ourselves why we are being asked to establish companies at all.
The amendment, while not going all the way in which I and certain other people should like (it still gives the Secretary of State control, but in the same way as control will be exercised over the BAA) is nonetheless a major improvement. I sincerely hope that noble Lords, with their tradition of objective assessment, may consider supporting it.
In my opening remarks I said that this was one of the most vital clauses in the Airports Bill. A short time ago there was a discussion involving the noble and learned Lord, Lord Denning, as to what a "free-standing company" meant, and I think that the noble Lord, Lord Boyd-Carpenter, was involved in that discussion. What we are asking for in this amendment is that the new companies to be set up by the local authorities to run the airports that were originally owned by them should be allowed to operate in a free and appropriate manner to attract capital where they can, on the basis of how they run their business. Any attempt to enforce this type of legislation on them would certainly be detrimental to the future of those airports and give them an uncertainty in the future that is not advantageous to anybody.
2.30 p.m.
Viscount Hanworth: This amendment is a little difficult to understand on the face of it, but we have had two speakers who have explained it at some length, and I should like to do so more briefly. The main point is that local airports that could obtain private capital from outside are, by the Bill, prevented from doing so. This is because such capital will be

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counted against the local authority's budget. Why are the Government trying to do this? The answer is simple. They want such airports to be independent, but this is an underhand way of trying to do that and I do not think it is in anyone's interests. It was said of a sportsman, "He shoots anything that moves", and I fear that this Government have got into a state where they try to privatise anything which trades.
Not long ago the Government talked about greater delegation to local authorities. In view of the present situation I agree with them that this is undesirable, but I have in mind to try to put forward a Motion eventually to see what we can do to reform our local government so that it represents the people's wishes, and so that it can be given the greater authority that it rightly should have.
This amendment seeks to prevent the Government from once again trying, by underhand means, to prevent the local airports until they are much larger—which is provided for in the Bill—from getting capital from outside.
The Earl of Caithness: The main purpose of this amendment, as so ably put by the noble Lord, Lord Williams of Elvel, is to allow public airport companies to obtain private capital without that financing counting against the controlling authority's capital allocation. Instead, the company would have to obtain specific borrowing consent from the Secretary of State.
I think it would be helpful if I explained the way that the controls on local authority capital expenditure will affect public airport companies. In doing so I hope that I shall not enter into the debate that the noble Lord, Lord Williams of Elvel, rightly refused to enter into at this stage of our proceedings. First, there will be no control over capital expenditure by the companies themselves. The only controls will be over external finance for capital expenditure. Capital finance from the controlling authorities will be subject to control under existing legislation, the Local Government, Planning and Land Act 1980.
Clause 20 of the present Bill brings private capital within the same controls. There will, however, be no control over the extent to which airport companies finance capital expenditure from their own resources. The overall regime, therefore, will resemble that which applies to public corporations, with which the companies are classed in the national accounts.
Some of your Lordships have asked why private capital for airport companies should count as expenditure by the controlling authority. If I can, I shall try to explain this reasoning. So long as the companies are subject to local authority control, then capital finance from any external source, whether from the authority itself or from private sources, counts against the public sector borrowing requirement. Local authorities enjoy the same creditworthiness as central government because of their taxing powers and government controls on their borrowing. An investor in an airport company controlled by a local authority will know that the authority stands behind it in the same way as the Government stand behind a public corporation. Therefore, the present clause provides that private
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capital counts against the controlling authority's capital allocation in the same way as any loan which it might make to the company.
The amendment would replace an overall constraint on external capital finance for the company bearing on the controlling authority, with a requirement on the company itself to obtain specific approval every time it wishes to raise private capital for investment. In my view that would be a much heavier constraint than that envisaged in the Bill. I cannot see that it would bring any advantage to the companies. The Government, as they have done before, will certainly take account of the needs of the airport companies when setting capital allocations for the controlling authorities. The way for an authority to enable a company to escape the controls on local authority capital expenditure—what the noble Lord, Lord Williams, called the "straitjacket" in his terms—is to remove the need by transferring control to the private sector. The way we have specifically devised in this Bill is to sell 51 per cent., so that the local authority can retain a minority interest if and when it, at its discretion, wishes to sell some shares.
The amendment would also enable controlling authorities to incur capital expenditure in connection with airport companies without that expenditure counting against their capital expenditure allocations. I am not sure what sort of expenditure is envisaged, but I can see no reason why, if an authority chooses to incur capital expenditure in connection with an airport company, it should receive special treatment.
The noble Lord, Lord Williams of Elvel, referred to the Review of Local Authority Capital Expenditure Control Systems in England and Wales, the consultation document of February of this year. He rightly pointed the Committee in the direction of paragraphs 28 and 29, which encapsulate some of the points referring to companies having freedom. But the review document also goes on to say:
"Authorities should not have an incentive to set up companies simply as a means of circumventing public expenditure control.
"The present exclusion of expenditure by companies from capital controls does not sit well with the way in which it is treated under public expenditure definitions. Companies owned and controlled by local authorities affect public expenditure in two ways. For non-trading companies capital spending undertaken by the company counts as public expenditure. For trading companies like airports it is total external finance that counts. The new control system will need to reflect this".
Clause 20 reflects that aim. It will establish control over the total external capital finance of public airport companies.
The noble Lord, 'Lord Dean of Beswick, said that Manchester did not set up a company in order to thwart the Government's proposals and the Government's control on total finance. I recognise that; it was not their aim. But it highlights the fact that this is a possibility that we must seek to restrict in future, because it seems to me entirely logical when you are setting up a public airport company, which will be of a similar status to something like a nationalised industry or a corporation, that it should be under this same financial control. I see no discrepancy whatsoever in the Government's thinking on this matter. In fact, I see quite the opposite; I see it as totally illogical.
Lord Dean of Beswick: May I raise one point with the Minister before we go any further with the amendment? The Minister will recall that during my previous speech on this amendment I referred to the fact that it must be quantified if Manchester airport is to develop on behalf of the region and is accepted as the major regional airport outside the South-East. The figure quoted for the third terminal and all the support services for that at this time is £225 million. The city of Manchester holds just over half the shares in the airport and the other districts have the other half. I think it is fair to assume that Manchester would need to raise capital of about £115 million to develop that facet at the airport, based on today's prices. It must be borne in mind that since 1979 the city of Manchester, which is a very deprived area and is accepted as such by everybody, has lost £400 million in rate support grant.
When the Minister opened his address on this amendment he referred to the fact that local authorities will be given the opportunity to make use of their own resources. Does he really believe that a city such as Manchester, with all the problems it has and the massive cuts in finances it has had, could find this type of money out of the Government's allocations without some other things being affected? In other words it would be putting a stranglehold on further development unless—as has already been said by the two previous speakers from the Benches on this side in support of the amendment—it is a deliberate attempt by the Government to force on local authorities privatisation that they do not want.
The Earl of Caithness: I think the noble Lord, Lord Dean of Beswick, in that recent additional short speech has highlighted what a good thing this Bill is. We are making public airport companies so that they can go to the market to seek private finance. He has quoted figures from Manchester. The fact that the company will still be local-authority owned does not in any way prevent it from seeking private capital. But it is entirely illogical, for the reasons I stated earlier, that so long as the local authority retains a controlling interest in a public airport company such finance should be taken in the overall context of local government finance which, as the noble Lord, Lord Williams, and other Members of the Committee know better than I, is a complicated minefield in its own right.
Lord Dean of Beswick: I am sorry to rise again, but does the Minister really expect local authorities to accept that guarantee in view of the fact that when another policy was implemented by this present Government (the sale of council houses) local authorities were given a guarantee that the resources from the sales would be made available to them? In fact, the overwhelming majority of the money is being withheld. Does the Minister really expect the local authorities to believe the undertakings that the Government are giving on this issue?
The Earl of Caithness: It would be wrong for me to go wider than discussing airports. I know that under this Government and the financial restraints that were
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needed when we came into office in 1979 (and are still needed) Manchester has become the fastest growing airport in Europe without restrictions on funds: in fact, with positive encouragement from central government. The noble Lord's argument just does not bear this out.
Lord Williams of Elvel: We have had a fairly extensive debate on this amendment. The noble Earl, Lord Caithness, has explained to us in considerable detail and with a certain elegance the meaning of Clause 20 as it is at present drafted and the meaning of the amendment I have moved. What I am afraid he has failed to do, if I may say so with the greatest respect, is to address himself to the arguments that I put forward, particularly in respect of the straitjacket and of including borrowing, which at present is not part of the PSBR, into the PSBR and putting a control on that; and also the argument that the directors of the companies concerned will have to ensure that the company is solvent and if their borrowing powers are to be subjected to outside interference then they may have difficulty in living up to that.
I do not think that I want to engage in a lengthy debate because I feel there is a serious division of opinion between the two sides. I think that the noble Earl—I see him nodding—agrees with me on that and I therefore ask the Committee to express its opinion in the usual manner.
2.45 p.m.
On Question, Whether the said amendment (No. 43) shall be agreed to?
Their Lordships divided: Contents, 59; Not-Contents, 81.

DIVISION NO. 3

CONTENTS

Amherst, E.

Kagan, L.

Banks, L.

Kearton, L.

Bottomley, L.

Kilmarnock, L.

Briginshaw, L.

Llewelyn-Davies of Hastoe, B.

Brockway, L.

Lovell-Davis, L.

Caradon, L.

McCarthy, L.

Carmichael of Kelvingrove, L.

McIntosh of Haringey, L.

David, B.

McNair, L.

Dean of Beswick, L.

Mais, L.

Donaldson of Kingsbridge, L.

Monkswell, L.

Elwyn-Jones, L.

Murray of Epping Forest, L.

Ennals, L.

Nicol, B.

Ewart-Biggs, B.

Ponsonby of Shulbrede, L. [Teller.]

Ezra, L.

Falkender, B.

Rochester, L.

Foot, L.

Seear, B.

Gallacher, L.

Sefton of Garston, L.

Gladwyn, L.

Shepherd, L.

Graham of Edmonton, L.

Stallard, L.

Hanworth, V.

Stedman, B.

Harris of Greenwich, L.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stoddart of Swindon, L.

Houghton of Sowerby, L.

Tordoff, L. [Teller.]

Howie of Troon, L.

Underhill, L.

Hughes, L.

Wells-Pestell, L.

Hunt, L.

White, B.

Irving of Dartford, L.

Wigoder, L.

Jeger, B.

Williams of Elvel, L.

Jenkins of Putney, L.

Winstanley, L.

John-Mackie, L.

Ypres, E.

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NOT-CONTENTS

Auckland, L.

Layton, L.

Belhaven and Stenton, L.

Lindsey and Abingdon, E.

Belstead, L.

Liverpool, E.

Bessborough, E.

Lloyd of Hampstead, L.

Boyd-Carpenter, L.

Long, V.

Brabazon of Tara, L. [Teller.]

Lothian, M.

Brougham and Vaux, L.

Mancroft, L.

Bruce-Gardyne, L.

Margadale, L.

Butterworth, L.

Marley, L.

Caithness, E.

Merrivale, L.

Campbell of Alloway, L.

Mersey, V.

Cork and Orrery, E.

Milverton, L.

Cottesloe, L.

Molson, L.

Cromartie, E.

Monk Bretton, L.

Cullen of Ashbourne, L.

Morris, L.

Davidson, V.

Mountevans, L.

De Freyne, L.

Moyne, L.

Drumalbyn, L.

Murton of Lindisfarne, L.

Dudley, E.

Napier and Ettrick, L.

Dundee, E.

O'Brien of Lothbury, L.

Elliot of Harwood, B.

Orkney, E.

Elton, L.

Orr-Ewing, L.

Fortescue, E.

Pender, L.

Gardner of Parkes, B.

Portland, D.

Geddes, L.

Renwick, L.

Glanusk, L.

Rodney, L.

Glenarthur, L.

Rugby, L.

Gray of Contin, L.

St. Davids, V.

Grey of Naunton, L.

Skelmersdale, L.

Gridley, L.

Somers, L.

Hacking, L.

Stamp, L.

Hailsham of Saint Marylebone, L.

Swinton, E. [Teller.]

Teviot, L.

Harvington, L.

Thurlow, L.

Hooper, B.

Trefgarne, L.

Hylton-Foster, B.

Trumpington, B.

Ironside, L.

Vaux of Harrowden, L.

Kimball, L.

Vickers, B.

Lane-Fox, B.

Vivian, L.

Lauderdale, E.

Whitelaw, V.

Lawrence, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
2.54 p.m.
Clause 20 agreed to.
Clause 21 agreed to.
Clause 22 [Provision of services for public airport companies]:
The Earl of Dundee The Earl of Dundee moved Amendment No. 43ZA:
Page 18, line 21, at end insert—
("(3) Where a principal council have entered into an agreement under this section, the accounts of that council shall include a separate account in respect of that agreement and—

(a) In England and Wales, section 24 of the Local Government Finance Act 1982 (rights of inspection) shall apply in relation to any such separate account as it applies to any statement of accounts prepared by the council pursuant to regulations under section 23 of that Act; and

(b) in Scotland, sections 101 and 105 of the Local Government (Scotland) Act 1973 (rights of inspection and regulations as to accounts) shall have effect as if any reference to an abstract of the accounts of an authority included a reference to any such separate account.").

The noble Earl said: Clause 22 of the Bill sensibly empowers principal councils to provide a limited range of specialised functions, administrative, professional or technical, to their associated public airport companies. Such services, if provided, have to be on payment of proper commercial charges. This arrangement must be sensible because it may well be
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more economic and effective, particularly in the case of smaller airports, for these services (for example, computer services, legal and architectural services) to continue to be provided by the parent body in the initial stages of an airport company's establishment. This flexibility, however, is limited to the services specified and will be a matter for the management of the company to decide.
But it is surely desirable that the details of any agreement between a principal council and the associated company for the provision of services should be transparent and open for all to see. In that way, it will become clear to a potential competitor for the provision of such services that an opportunity could arise to tender itself for that service when next the contract came round for renewal. This not only keeps on its toes the local authority department providing the service, but also helps to ensure that the public and the ratepayer get good value for money.
The matter was attended to in another place and the Government then indicated that they would be prepared to accept an amendment along these lines. The amendment I am proposing simply requires a principal council to include in its accounts a separate account relating to any service agreed to be provided under the provisions of Clause 22 and ensures that the public have a right to inspect any such account. I commend it to your Lordships. I beg to move.
The Earl of Caithness: My noble friend is absolutely right in saying that we considered the possibility of putting down an amendment on this matter. I think that he has raised a very valid point and I am grateful to him for putting down this amendment. I am happy to accept it on behalf of the Government and would recommend it to the Committee as being a sensible and logical amendment. I should like to say, having accepted the principle of it and the amendment, that I shall look closely at the wording to check that it agrees with parliamentary counsel which, as, the noble Lord, Lord Underhill, will understand, is the ruling voice on matters such as this.
On Question, amendment agreed to.
Clause 22, as amended, agreed to.
Clause 23 [Financial backing for establishment and operations of public airport companies]:
The Earl of Dudley The Earl of Dudley moved Amendment No. 43A:
Page 19, line 15, at end insert—
("( ) If as a result of the operation of a public airport company established in accordance with section 14, the principal councils incur additional expenditure as a consequence of servicing debt related to airport assets transferred to the public airport company, or as a consequence of the provision of financial assistance under subsection (6), the Secretary of State shall ensure that those principal councils do not suffer any loss of rate support grant as a result of this additional expenditure.")
The noble Earl said: I have been so impressed by the reception given by the noble Earl to the amendment of the noble Earl, Lord Dundee, that I hope that his benevolence and good humour will extend to my Amendment. No. 43A, which differs in two important respects from my previous Amendment, No. 34. While the amendment that I withdrew required that additional expenditure incurred by a local authority to

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service airport debt should qualify for central government grant, this amendment requires only that such expenditure be not counted at all, thereby excluding it from categories of expenditure which suffer penalty of loss of grant by their effect in lowering the level of grant.
There are precedents for such an excluded category in the Transport Act 1985. For the purpose of supplying working capital for transport companies, the Secretary of State excluded that category of expenditure from those suffering grant loss. I ask that this procedure be adopted in this Bill. Secondly, my amendment requires that where a council incurs additional expenditure under Clause 23(6)—providing financial assistance by way of grants, loans or guarantees for a loss-making company in which it is a shareholder—this expenditure be also excluded from grant assessment and should not attract the penalty of grant loss.
3 p.m.
Let me make it clear that in both instances the council will be required to service the debt in full. No grant will be forthcoming. All the amendment requires is that this additional expenditure, whether past or future, consequent upon the Secretary of State's decision to make the council responsible for servicing the airport debt should not have the effect of penalising the council by lowering the overall level of grant.
I cannot exaggerate how great a store the West Midlands local authorities set by the success of this amendment, and I am convinced that other local authorities share their views. They feel—I think with some justification—that the financial effect upon them of Clauses 14 and 23 of this Bill was not shown in proper perspective in another place. There the Minister said that if none of the debt is put on to the airport company the present situation will not be changed. With the passage of time and the consultations that have taken place since March, the noble Earl might now be invited to express the point the Minister was making in a different way. It is true that where a council is responsible for servicing debt today, whether directly or by way of guarantee, legal responsibility remains unchanged if the Secretary of State leaves debt with the local authority; but the practical effects will be very different.
The airport has achieved company status. It is, in conformity with the Government's wishes, at arm's length from the council. It has a chairman and board of directors; it has articles of association. It is subject to company law and raises depreciation charges in the accounts; it is subject to company taxation and may or may not pay dividends. The council has no legal claim on revenues to offset debt charges. It has no recourse but to recover them in the rates, and the cost of so doing over the West Midlands alone would be over £6 million, if they suffer grant loss as a result of the Bill. It seems to me wholly unjust that, faced with this new and wholly unprecedented situation, councils and ratepayers must suffer the added burden of loss of grant, boosting the rates still further in the West Midlands by three quarters of a penny in the pound.
If your Lordships are satisfied that this is a proper and equitable consequence of this Bill, clearly you will
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find the noble Earl's arguments in reply to my amendment wholly convincing. But if not, I would invite your Lordships to support my amendment and provide council and ratepayers with its protection. It does not seem unreasonable that I ask the noble Earl to give to the Committee today meaningful assurances in respect of this amendment and in respect of the specific point of grant-related expenditure. I beg to move.
The Earl of Caithness: I am grateful to my noble friend Lord Dudley for continuing our discussion on the philosophy of finances in regard to Part 11 of this Bill and also for his very clear exposition of the reasons behind the amendment.
This amendment would require the Government to guarantee authorities against any loss of rate support as a result of the establishment of public airport companies. That could be done by altering the definition of total expenditure for rate support grant purposes so that a particular category was excluded in calculating an authority's grant entitlement. The difficulty would be in identifying the extra expenditure resulting from the establishment of the new companies. To do that, we would need to know what the authorities would have spent in the quite hypothetical circumstances of continuing to operate the airports directly. That seems to me very difficult, if not impossible, and there is therefore a fundamental practical objection to this amendment.
Even if the amount could be identified there would be other overriding objections. The decision to subsidise a loss-making airport company is a matter for the controlling authority or authorities. That decision should be made on the basis of the cost of sustaining that company as a going concern, which is reflected in the amount set aside for depreciation. For profitable companies the need to provide for depreciation might reduce the scope for drawing a dividend, but it would also reduce the need to borrow in the future. It would increase the amount available for distribution in the longer term and will add to the value of the authority's equity stake. Therefore, even if it were possible it would still be undesirable to exclude additional expenditure resulting from the creation of airport companies from the definition used in calculating authorities' rate support grant entitlement. It is still public expenditure and, as the Committee will know, in our view it should definitely be subject to control.
Having said that, I should like to remind my noble friend and the Committee of the assurances that I gave to your Lordships in respect of Amendment No. 34: we are looking at the whole of the financial aspects of Part II again. I thought it wise to state the Government's view at this stage so that it may be recorded in the Official Report. I will, however, take my noble friend's amendment away and look at it again, along with the rest of the points that I am looking at with regard to Part II.
Lord Carmichael of Kelvingrove: I think we should be grateful that the Minister has promised to take this away and look at it. Every time I hear more discussion on this part of the Bill, I get more and more confused. As I read the amendment of the noble Earl, Lord

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Dudley, it seemed to me he was merely talking about servicing debt related to airport assets already transferred to the public airport company. Therefore I found it difficult to understand exactly what was behind the Minister's saying it would need to be part of rate support grant expenditure and how it would be difficult to separate it out. I think it is very important that the Minister should take this away and look at it again. I believe there is great confusion between the use of the words, "arm's length" and yet "keeping such control all the time" and so on. This becomes very confusing and therefore we must look carefully at this again at Report stage to see whether the Minister has been able to effect any improvement in this section.
Lord Tordoff: Before the noble Earl replies, I, like the noble Lord, Lord Carmichael, was a little worried about what the noble Earl said in respect of the inability of the Government to separate the amount out. It seems to me that there is a distinguishable amount, which will be there on vesting day, or whatever the term may be, and the servicing of that debt will go on for some considerable time. Therefore it is possible to calculate what the cost of servicing that debt will be. It is not, I should have thought, a debt which will increase beyond that moment. That seemed to me to be inherent not only in the amendment but in the way it was moved by the noble Earl.
I am glad that the noble Earl the Minister added his paragraph at the end, because I thought he had gone back to his pre-Committee-stage stance here. I am glad that he said what he did in regard to this point and certainly I think it is very proper that it should be subsumed within the considerations of all the other matters he referred to earlier. On the question of the inability to distinguish what the debt is, I should have thought it was quite simple.
The Earl of Caithness: I am grateful for the contributions made by the noble Lords, Lord Carmichael and Lord Tordoff. I think that it serves to highlight that we are doing the right thing by listening and then taking away matters for further consideration. On this particular matter I do not think there could be found any fault on our part. I thought it was wise to put our thoughts on the record at this stage.
The Earl of Dudley: I am sorry if I did not make it clear enough for the noble Lord, Lord Carmichael, to appreciate that of course the concession I was asking for in this amendment would apply to the cost of the powers given to councils under Clause 23, and in tact would relate to the future as well as to the past.
However, having said that, I find it difficult to understand why, if it was possible to create a mechanism to distinguish the working capital required for transport undertakings from other expenditure of the council, it should not be possible to create a similar mechanism in respect of airports. I feel that it is a reasonable request to ask the noble Earl to say something on that matter because, after all, I have said in my speech on the amendment that there is a precedent here, and if there is a precedent it should be possible for it to be repeated.
The Earl of Caithness: I should like to take this away and look at it because of the relationship and interplay in the whole thing. I do not think that it would be useful for me to comment on a precedent without going back and looking at it in the office. I am sorry if that is not as helpful as my noble friend would like, but I think it is the right thing to do at this stage.
The Earl of Dudley: In view of those assurances from the noble Earl—and I will ask him to follow them up, because the matter is one of very great interest and concern to the councils who have encouraged me to speak to this amendment—I feel that it is the wish of the Committee that we should ask him to look again at this amendment. In those circumstances, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 44:
After Clause 23, insert the following new clause:
("Avoidance of restrictions on transfer of securities of public airport company.
.—(1) Any provision to which this section applies shall be void in so far as it operates—

(a) to preclude the holder of any securities of a public airport company from disposing of those securities, or

(b) to require the holder of any such securities to dispose of those securities to particular persons or to particular classes of persons, or

(c) to preclude the holder of any such securities from disposing of those securities except at a particular time or at particular times.

(2) This section applies to any provision relating to any securities of a public airport company and contained in—

(a) the memorandum or articles of association of the company or any other instrument purporting to regulate to any extent the respective rights and liabilities of the members of the company.

(b) any resolution of the company, or

(c) any instrument issued by the company and embodying terms and conditions on which any such securities are to be held by persons for the time being holding them.").

The noble Earl said: I beg to move Amendment No. 44. Perhaps it might be for the convenience of the Committee if we discussed Amendments Nos. 45 and 46 at the same time, because they are all interrelated. At this stage, and in order to avoid confusion, may I make it clear that this amendment is intended to replace the existing Clause 24 in the Bill. Clause 24 (which would make void any restrictions on the transfer of public airport company securities) was designed to ensure that the government's policy that local authority shareholders or any other shareholders in a public airport company should be free, if they so wished, to dispose of their securities to the private sector would not be frustrated.
As I explained in our discussions on 15th May on Amendments Nos. 3 and 4, and the related group, the Government are considering the need for and the feasibility of imposing certain restrictions on the ownership of shares in the BAA. I can assure the Committee that discussions have already taken place since our debate on 15th May, and I can confirm to the Committee that I will be able to come back before Report stage, or my right honourable friend the Secretary of State will certainly let our thoughts be known. The type of restrictions which have been put forward for consideration are, for instance, a

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restriction on the number of shares which may be held by any one airline or by any one shareholder. Restrictions of this sort do not prevent or impede the disposal to the private sector of shares and do not run counter to the policy I have described.
As your Lordships know, and as I have just said, we have not finalised our thoughts yet on whether to impose share ownership restrictions in respect of the BAA or, if so, what sort of restrictions. But it would clearly be wrong if such restrictions were permissible for BAA airports but because of Clause 24 could not be imposed in respect of airports owned by local authorities. We therefore propose the new clause standing in my name. The effect is to define specifically the restrictions which cannot be introduced into articles of association or agreements. The amendment would render void any provision, however expressed, which has the effect of preventing the holder of public airport company securities from disposing of these securities; any restriction which would require the holder of such securities to dispose of them to particular persons or class of persons; and any restriction as to the time at which those securities may be disposed of.
However, it is not our aim to invalidate restrictions or requirements that could well arise in a normal contract for sale of securities, for example, an agreement binding the seller to transfer the securities to the buyer on a certain date if certain obligations are satisfied. Therefore the second subsection provides that restriction and requirements such as I have described shall be void only if they are imposed as a term or condition of the holding of security, or by the memorandum or articles of association of the company, or otherwise by members of the company. I hope I have made our thoughts clear to the Committee, and I beg to move the amendment.
3.15 p.m.
Lord Williams of Elvel: The new clause which has been moved by the noble Earl, Lord Caithness, seems in some rather interesting respects to be weaker than the original Clause 24 which I believe it is going to replace. If I may quote from Notes on Clauses on the original Clause 24, they say:
"It is possible that some principal councils will seek to retain ownership of a related public airport company within its own control or within the control of the other principal councils within a composite authority. It may seek to do this by restrictions written into the Company's Articles or Memorandum, or by agreements within the composite authority or in other ways."
The expression "or in other ways", which is a very wide expression, seems to have been left out of the new clause that the noble Earl is now putting foward.
The effect of this new clause—and I am not talking at all controversially; I am trying to help the noble Earl to achieve what he wants—could, it seems to me, be avoided quite simply by a local authority that wished to act in the manner that Notes on Clauses suggest some local authorities might act. The mechanism would be perfectly simple. It arranges for a bank to lend it some money and it gives the securities that it has in the airport company as security on charge to that bank. The beneficial ownership of those shares remains with the local authority, but the local authority cannot dispose of those shares because they
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serve as collateral to the bank loan. That is all normal banking practice. But the nominal ownership of those shares in the company register would be in the name of the bank, thus preventing the local authority in all cases from getting rid of those shares.
It seems to me that that is a loophole in this clause which the noble Earl might wish to look at, because if it is true that certain local authorities are going to behave in the manner that Notes on Clauses suggest, then I believe that the effect of the new Clause 24 could be easily avoided by that method. But I would be glad to be told by the noble Earl that I am wrong.
If I may speak to our Amendments Nos. 45 and 46, we believe that in the disposal of the shares of a public airport company preference should be given to those who have made sacrifices over the years to build up the assets of the airport in question. We believe that the ratepayers are the people who have made those sacrifices and it is they, if airports need or want to sell shares, who should be given the opportunity of continuing to share in that success. I believe it would fit in with the Government's vision of a share-owning democracy and would in principle be no different from the sort of mechanisms that the Government have introduced in other flotations.
It seems to me that there is a matter of some importance here. In our view, it would be a great mistake to dissociate public airport companies from the locality and the local interests where airports are. We believe that that local interest, the identification with a region or a town, could best be preserved if the ratepayers were given a chance to invest in the public airport company if the local authority decides it wishes to dispose of its shares. That is the thrust of the two amendments that we are putting forward, and I hope very much that the noble Earl will recognise the force of the points and have a look at them.
Lord Boyd-Carpenter: My noble friend made an oblique reference in his remarks a moment ago to the statement which he has promised to make to noble Lords about the Government's proposals for securing that, in the case of the BAA, control does not pass either to foreign interests or excessively to airline interests. I wonder whether he could take that statement a little further. It would help some of us if he could give some indication now as to when he is likely to be in a position to make that statement. It obviously cannot be before the Recess, but perhaps he can give us at least some broad indication of when it is likely to be made.
Secondly, and at the same time—this is very relevant to the amendment—I was not at all clear whether it was the Government's intention that that protection to be provided in respect of shares in the BAA should also be applied to the airports covered by this amendment—the ex-local authority ones.
The Earl of Caithness: If I may first reply to my noble friend Lord Boyd-Carpenter, I hope that my right honourable friend the Secretary of State will make this statement in the week prior to Report. I understand that Report is to be on 10th June and therefore the statement will be made in the week commencing 2nd June; I hope in the early part of the

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week. The second point of my noble friend was that the whole purpose of the amendment is to permit the same restrictions on share ownership that we propose to impose on the BAA to be imposed on the local authority. That is the whole thrust of the amendment because, as the Bill is currently drafted, there would be an inequitable situation.
I have some sympathy with the amendments of the noble Lord, Lord Williams, Nos. 45 and 46; in fact, I thoroughly approve of them. But why stop at the ratepayers?
Lord Williams of Elvel: Because they made the sacrifices.
The Earl of Caithness: The noble Lord said that they made the sacrifices. They will receive the benefit and they have received the benefit. Manchester is the fastest growing airport in Europe, thanks to this Government, and our help to other regional airports such as Newcastle has been well received. I should not like to limit it to the ratepayer. I should dearly like the ratepayer to take up shares, but I think it should be made much wider. I believe that the Government's thrust on that is not so different from that of noble Lords opposite. But I am glad that they are coming along with our way of thinking on wider public share ownership. If they can come all the way with us and open the whole thing up, I am sure it will be to the benefit of everybody.
Lord Williams of Elvel: Every hour or so we get a party political blast from the noble Earl, Lord Caithness. It would very much help the Committee if the noble Earl could just take time out when the hour comes round. We could then get on with discussing the clauses in detail. I wonder whether the noble Earl has a response to what I hope were some very helpful comments that I made on his new clause. On our amendments, if the noble Earl cannot come with us on these we shall not move them.
The Earl of Caithness: May I just answer the noble Lord, Lord Williams? I shall in future try to resist the odd dig, but I think it just helps to encourage noble Lords along. With regard to the specific point, I understand that his concern is taken care of under subsection (2)(a). But I shall look at it, because I think he made an important point. I shall take a special interest in what he said and see whether there is any loophole here that needs to be blocked.
On Question, amendment agreed to.
[Amendments Nos. 45 and 46 not moved.]
Clause 24 disagreed to.
Clause 25 agreed to.
Clause 26 [Compensation for loss or diminution of pension rights]:
Lord Underhill Lord Underhill moved Amendment No. 46A:
Page 19, line 33, leave out ("may") and insert ("shall").
The noble Lord said: It may be for the convenience of the Committee if I also discuss Amendments Nos. 46B, 46C, 46D, 46E, 46F, 46G and 46H as they all
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deal with the same matter. Clause 26 as it stands in the Bill was inserted by the Government at Report stage in the Commons. I have read carefully the report of that debate and it seems that most attention was given to the BAA and very little to the position of local authority airport employees. But even Clause 26 as now inserted does no more than enable the Secretary of State to pay compensation to those who suffer loss or diminution of pension rights in consequence of this Bill.
The clause does not provide enabling power whereby existing employees could remain subject to local government superannuation after privatisation, nor does it provide the necessary framework for a pension scheme which might be applied to new employees. All the clause does is enable the Secretary of State to pay compensation if he is so minded. There is no provision for that to be mandatory. There are considerable advantages in the present local government superannuation scheme and personnel involved should not suffer because of the transfer to a plc. We have repeatedly made the point that it is a great tragedy if parliamentary action should lead to hardship being suffered by the employees concerned.
I raised two points when we were dealing with an earlier amendment, and ideally the Government should be seeking to ensure that the airport plc employees be given admitted body status for the purpose of the local government superannuation scheme. If that were done, it would allow not only transferred employees but also new employees to be within that scheme. Admitted body status must be agreed by the airport company, it must be agreed by the local authority in control of the airport and it must also be agreed by the local authority in control of the superannuation scheme.
That is much preferable, as noble Lords will see, to the deeming option to which reference was made during the debates on the Transport Act 1985, but there is no provision at all in the Bill for either scheme. All we have is the scheme for compensation. Therefore, dealing with the Bill as it stands, this group of amendments seeks to make sure that the Secretary of State provides regulations and removes the discretion for him to do so. At the same time, it attempts to improve upon the compensation provisions.
The deletion of paragraph (b) of subsection (2) is in order to remove the powers of the Secretary of State to make exceptions or to apply conditions as to who is entitled to compensation. The new subsection to replace the existing subsection (4) seeks to ensure that if compensation is to be paid then it should be no less favourable than the compensation rights which currently apply in local government, including the updating of those rights. The changes to subsection (5) seek to fix the date from which these rights will apply—that is, at Royal Assent—and remove the Secretary of State's discretion in this area.
While this group of amendments seeks to improve the present Bill considerably, we should like to know whether the Government will give serious consideration to the admitted body status, or failing that, even to the deeming option, though obviously the admitted body status is most desirable. I beg to move.
3.30 p.m.
Lord Tordoff: Perhaps I may offer my support to this series of amendments. When we were talking about Amendment No. 35 and the question of pensions was being discussed, the noble Earl the Minister relied rather heavily on this amendment and said that the Government had chosen this mechanism to carry out their responsibilities and to carry out the responsibilities of Parliament and of the country towards those people who were put in a position in which they might suffer diminution of pension rights.
We have made the case many times now for the need to do that. If the Government then rely on this clause in the Bill to carry out that obligation, not only on their own behalf but on behalf of all of us as ratepayers and taxpayers in this country, then it must be an obligation on the Secretary of State and should not be permissive.
The Earl of Caithness: I am grateful to the noble Lord, Lord Underhill, for explaining his amendments to the Committee. Perhaps it will be helpful if I start by offering a little background to Clause 26. The clause was added to the Bill at Report stage in another place largely in response to requests from Opposition Members in Committee. It follows very closely the corresponding Section 74 of the Transport Act. It deals with compensation for loss or diminution of pension rights, a sensitive issue to which the Government have given much thought, but, I am glad to say, one which we believe is unlikely to be an issue of substance. Nevertheless we have prepared for it.
Most if not all principal councils will, we believe, make arrangements for the continued membership by their employees of the local government superannuation scheme. The noble Lord, Lord Underhill, mentioned the two methods by which membership could be continued. First, the employees could be deemed to belong; and, secondly, the company may negotiate full membership, which is admission agreement or admitted body status, the words used by the noble Lord, Lord Underhill.
The noble Lord rightly pointed out to the Committee that if the admission agreement is negotiated a new employee will be able to benefit from the advantages of the scheme but he would not be able to benefit if the deeming option was chosen. As we understand the situation at the moment, most councils will favour the admission agreement, but it must be a matter for them, the companies and the trustees of the scheme themselves to finalise their thoughts on that.
It is unlikely therefore that the pension compensation regulations need to be made by virtue of schemes for the transfer of assets to airport companies. However, it is just possible—though I very much doubt it—that some authority or company will decide that it would not be in its interests for employees to remain in membership of the LGSS. If an airport company passed out of public ownership following a disposal of shares under Clause 19(2), its employees could no longer continue membership. It is for those circumstances that we decided to include Clause 26.
I now turn to the proposed amendments. Their combined effect would extend unacceptably the provisions of the clause. First, they would make it
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mandatory on my right honourable friend the Secretary of State to make regulations. As I have pointed out, that may well not be necessary. My right honourable friend made clear in another place that he would not hesitate to use the power if necessary. However, I am sure noble Lords will agree with me that it would be wasteful to make them if they are not necessary. Then the amendments would remove my right honourable friend's ability to tailor the regulations to classes of persons or circumstances. That would reduce flexibility. That is hardly conducive to the most effective use of public money and is possibly detrimental to the interests of some of the people the clause is designed to help.
The amendment to remove the options in subsection (3) is unnecessary because my right honourable friend is able to include both options if he deems it appropriate, and in the draft regulations prepared and circulated under the Transport Act he has indeed done so. The proposed Amendment No. 46F, which would require that compensation under any regulations should be at least as favourable as that under the Compensation for Premature Retirement Regulations 1982, is, I have to tell the noble Lord, Lord Underhill, quite unacceptable. The 1982 regulations, which deal with compensation for persons who retire early and thus lose their earnings earlier than expected, are quite irrelevant to the benefits that should be paid under any regulations to compensate for loss or diminution of pension rights. The underlying concepts are quite different, as I think the Committee will understand.
Likewise, the deletion of subsection (4)—Amendment No. 46G—is unacceptable. The Government believe it would be totally wrong for employees to be eligible for more than one form of statutory compensation out of the public purse. Any regulation under Clause 26 would be designed to secure adequate compensation from these provisions alone, so their particular problem is already catered for.
Finally, there is the proposal in subsection (5) to substitute the date of the Act for the date specified by my right honourable friend. I was rather surprised by this amendment. I cannot believe that noble Lords opposite are serious on this matter. That proposal would be detrimental to the interests of the employees themselves because the date they propose would be earlier than the date the Secretary of State will specify. Therefore some of them could suffer real harm under this amendment.
I have to tell the noble Lord, Lord Underhill, and the noble Lord, Lord Tordoff, that none of the amendments, some of which could be directly detrimental to employee interests, can be accepted by the Government, and I hope that with the explanation I have given the noble Lord, Lord Underhill, will be able to withdraw this set of amendments.
Lord Tordoff: Just before the noble Earl decides to do what he may well decide to do, perhaps I may say this. It seems to me that in the first subsection of Clause 26 there are two remaining "mays". I should have thought that that would give the Secretary of State quite a lot of flexibility even if the first "may" is

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changed to "shall". It certainly does not make it a very rigid clause, even if you change the first "may" to "shall".
The Earl of Caithness: That may be the case; I shall look into it.
Lord Underhill: I am grateful to the noble Earl for the first part of his remarks, in which he expressed the view that most local authorities would be prepared to adopt the admitted body status. I hope that means that the department will be sending out guidance notes which will put favourably the position on admitted body status and in effect recommend it to the local authorities. It would be extremely helpful if that were done. I am grateful that the noble Earl is nodding his head vigorously. I am very pleased to note that that will be in the official record.
On the question of Clause 26(4), the noble Earl says that the provision is for adequate compensation, whereas we say that the compensation should be no less favourable than that which applies in local government at present. There can be a lot of legal arguments as to what is adequate. The Secretary of State could determine what he thinks is adequate, whereas the amendment which I propose says that we should be no less favourable than the compensation rights which currently apply in local government. Therefore there was a great principle in that amendment.
On the question of the date on which this should come into effect, the noble Earl says that some persons could suffer real harm. That would not be the case if the Government accepted my amendments. There would be real harm done only if the Government were to leave it entirely to the Secretary of State to determine what he shall do on the question of adequate compensation and not adopt the type of compensation that we have in mind.
In this Bill, and in this clause in particular, far too much is left to the Secretary of State. I am grateful for the point that was made by the noble Lord, Lord Tordoff. In the first amendment we were seeking that the Secretary of State shall provide regulations. It is not good enough for the noble Earl to say that the problem may never arise and so there is no need to make compensation. We ought to have a regulation made in case the situation does arise. That is why we wanted to make it compulsory on the Secretary of State.
However, as I have said, the first part of the noble Lord's response was extremely helpful. At this hour I do not propose to seek the view of the Committee, but I shall seek further advice because the position of the employees is of outstanding importance. We shall also read very carefully what the noble Earl has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 46B to 46H not moved.]
Clause 26 agreed to.
Clause 27 agreed to.
Clause 28 [Directions to airport operators in the interests of national security etc.]:
3.45 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 47:
Page 22, line 11, leave out from ("security") to end of line 13 and insert—
("(2A) The Secretary of State may give to the appropriate person in relation to any airport a direction requiring that person (according to the circumstances of the case)—

(a) to do, or not to do, in connection with any operational activities relating to the airport a particular thing specified in the direction, or

(b) to secure that a particular thing specified in the direction is done or not done in connection with any such activities,

if the Secretary of State considers it necessary or expedient to give such a direction in order to discharge or facilitate the discharge of any international obligation of the United Kingdom.
(2B) In subsection (2A)—
"the appropriate person", in relation to an airport, means—

(a) the airport operator; or

(b) an associated company of the airport operator; and

"operational activities", in relation to an airport, means any activities—

(a) which are carried on wholly or mainly for the benefit of users of the airport, or

(b) the revenues from which are wholly or mainly attributable to payments by such users;

but the Secretary of State may by order make such modifications of the definition of "operational activities" as he thinks necessary or expedient having regard to any international obligation of the United Kingdom.")
The noble Earl said: In moving this amendment I should like to speak at the same time, with the leave of the Committee, to Amendments Nos. 48,49, 50 and 101. This set of amendments expands that part of Clause 28(2) that deals with directions to airport operators to discharge or facilitate the discharge of the United Kingdom's international obligations. The problem that the amendments are designed to resolve appears in Part IV of the Bill. So while I apologise at this stage for having to explain the amendment at some length now, I assure noble Lords that what they are about to suffer will ease their burden when the Committee later reaches Amendments Nos. 89, 103 and 105. I can also assure noble Lords that the amendments are not as formidable as they look.
The Committee will know that there are several international agreements relating to airports to which the United Kingdom is a party, and I am sure that no one here would argue with the need for the Government to have some means of ensuring the discharge of their responsibilities under those agreements. Perhaps the best-known of our obligations is that an airport's commercial activities should contribute towards meeting airport costs. One of the potential uses of the power of direction would be to ensure that that practice continued to the extent required.
It is conceivable that in the future the structure of airport business may change so that separate companies operate the aeronautical and commercial sides of the business. In a case where an airport operator who was managing only the aeronautical side of the business, such as runways, had no control over the operator of the commercial activities—for example, if the commercial operator was a separate subsidiary of a common holding company—then

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clearly a power of direction over just the airport operator might be insufficient to secure the discharge of our international obligations. It would be wrong for an airport group to continue to receive all the benefits of those commercial activities without being bound by the obligations that go with the whole business of operating international airports.
I should stress that there is nothing intrinsically wrong with the type of restructuring of an airport's business that I have described. If such a restructuring did occur, then I expect that appropriate arrangements would be made to ensure that the obligations on charges would be met. But if the power of direction is to be an effective long stop, which is indeed what it is intended to be, and if we are to be certain that the Government can fulfil their responsibilities even in extreme cases, then the mechanism to achieve that must be in place.
The amendment therefore extends the power of direction to an airport operator's associated company—defined in another Government amendment to which we will come later—to include a holding company, a subsidiary of the airport operator, or a subsidiary of a common holding company. That means that the direction can be given at the most appropriate level and to the most appropriate person.
However, without anything further, that would make the powers extremely and unacceptably wide. A holding company or an associate of the airport operator might carry on activities totally unrelated to the airport in question or to airports generally. A power of direction relating to international obligations in the civil aviation field that could extend to unconnected business activities cannot be justified. The amendment therefore limits the power to "operational activities"; that is, to those activities provided wholly or mainly for the benefit of airlines and their passengers, and whose revenues are wholly or mainly attributable to payments by airlines and their passengers.
That means that if an associated company runs a wine bar at the airport for the use of air passengers, it would be covered by the direction-making power, but the wine bar the associated company might run in Leicester Square would not be. Nor would it be right—as I am sure the noble Lord, Lord Carmichael, would agree—to take a direction-making power over a wine bar run by the associated company on Sauchiehall Street. Nor would the noble Lord, Lord Tordoff, like such a power over the Piccadilly Plaza at Manchester. The limitation seems to the Government to be both reasonable and right.
The third main feature of the substantive amendment in this group is the power to amend the definition by order, subject to negative resolution of both Houses of Parliament. Again, because we cannot foresee the future, there must be some way of catering for possible changes in our international obligations. The power to amend the definition, either to encompass more within its scope, or less, means that the power of direction can always extend as far as our international obligations require, whatever the future might bring.
I apologise for having spoken at some length about the problem that this amendment is designed to solve.
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The same problem—that is, a situation where the airport operator does not manage the whole of an airport's business—arises again in Part IV of the Bill. There are further rather lengthy amendments to deal with it, to which we will come later. But so far as Clause 28 is concerned, I am sure that the Committee will agree, first, that the Government must be able to fulfil their international responsibilities, whatever the operational and management structure of an airport, and, secondly, that their powers of direction should be wide enough, but no wider than is absolutely necessary, to achieve that aim both now and in the future. The amendment does all those things and I commend it to the Committee. I beg to move.
Lord Underhill: We were quite prepared to accept the general principle in the original Clause 28. Obviously we would give support to any steps that were required to ensure security at airports. I am pleased that the Government have brought forward this amendment and am grateful for the explanation that the noble Earl has given to justify it. Frankly, this matter is something that the Opposition should themselves have noticed, and I am pleased for once to commend the noble Earl for having made this differentiation between operational activities and commercial activities that are outside the airport's control.
The Committee may have noticed that we shall be raising the whole question of payment of compensation for the steps to be taken when we reach Amendment No. 95. Therefore, I shall say nothing about that matter at this stage. However, I have one question to ask the noble Earl. I understand that at present security is arranged in-house by the BAA with their own security strength. Will the noble Earl give an assurance that, in the event of privatisation, there will be no question whatsoever of engaging private security companies to do that work but that it will be left to the BAA's in-house security force, working closely with the police, as it does at the present moment?
The Earl of Caithness: In regard to that direct question I cannot give the assurance the noble Lord requires because security is so important that it must be done in the most efficient and the best way, and I think it is something which should be left to the airports concerned. I fully take the noble Lord's point about it, but I believe that this is a matter in regard to which they must use their best resources or the best powers which they have available to make certain that this is carried out. For that reason, I cannot give the assurance the noble Lord would like.
Lord Underhill: While I appreciate why the noble Earl cannot give an assurance at this stage, it is not just a matter for the airport authority. Surely the question of security is a matter for the Government. The Government ought to ensure that this job is carried out effectively, and if they are satisfied that the BAA inside personnel do the job effectively now, working with the local police, surely that situation should continue. It is not just a matter to be left to the new company to decide whether or not they will engage outside security companies. Surely, it is a Government responsibility to ensure that security is adequate, and proper, safeguarding every possible eventuality.
Lord Boyd-Carpenter: I do not think there is anything in what my noble friend on the Front Bench has said that is inconsistent with the suggestion of the noble Lord, Lord Underhill, that this is a Government responsibility. But if the Government are to exercise that responsibility, it seems quite wrong to tie it in advance as to the particular method, or indeed particular personnel by which that responsibility might be discharged. I would have thought that my noble friend is right to say that he must keep a free hand. The Government would accept their responsibility, but the mechanism or personnel through whom it is discharged are a matter for their decision at the time on the merits of that particular matter.
I rose, however, to ask a totally different question about my noble friend's amendment. Does the power which the Government are taking under this amendment or under the clause as amended extend to enabling them to direct that slots be found in the schedule of arrivals or departures at the airport of any particular aircraft or the aircraft of any particular company or any particular nationality? Is it intended that the Government should say that, in accordance with our international obligations, Spanish or, if you like, Libyan aircraft should be allowed in? If so, is it intended to have the power sufficiently detailed to be able not only to demand that a slot be found for them, but to direct that a slot be found at a particular time? As my noble friend knows very well, commercially, arrival and take-off times are of very great importance to airlines. I would be interested to know whether the Government feel it necessary to take the power to intervene or to be able to intervene to dictate that to the airport concerned.
The Earl of Caithness: I am grateful to my noble friend for his comments, particularly the first part to his speech relating to security. As the Committee will know, the airports are acting under the Aviation Security Act 1982 which was, not so long ago, discussed in terms by your Lordships' House.
With regard to my noble friend's second point, as he knows, we shall be discussing slot allocation at a later stage of the Bill, not far distant now. I understand that he is theoretically right; it has to be in accordance with our international obligations. But I might be able to give my noble friend a more detailed reply when we come to discuss slot allocations.
Lord Boyd-Carpenter: My noble friend says "theoretically right". Which way? What I asked was whether the Government, under this amendment—I am not talking about what we come to later—are or are not taking power to lay down what slots should be allocated.
The Earl of Caithness: Could I write to my noble friend on that detailed point?
Lord Maude of Stratford-upon-Avon: I do not wish to appear to niggle or be unduly pedantic, but I am not very happy about this word "thing" in paragraphs (a) and (b). "Doing a thing" is not a phrase that I have met before in legislation and it seems to me to be particularly vague. Would it not be better if it were
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amended to read "to take, or not to take … a particular action"? That is quite clear and seems fairly conventional. "Doing a thing" seems to me a very odd legislative phrase.
The Earl of Caithness: I think at this stage I shall have to rush to Parliamentary Counsel for advice. I think the point which my noble friend makes is well taken.
Lord Tordoff: I believe the "thing" used to be the Viking equivalent of a "moot".
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 48:
Page 22, line 15, leave out ("or (2)") and insert (", (2) or (2A)").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 49:
Page 22, line 20, leave out ("(2)(b)") and insert ("(2A)").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 50:
Page 22, line 43, leave out ("airport operator") and insert ("person").
On Question, amendment agreed to.
Clause 28, as amended, agreed to.
Clause 29 [Traffic distribution rules]:
Lord Underhill Lord Underhill moved Amendment No. 51:
Page 23, line 38, after first ("operators") insert ("and the bodies representing staff employed at such locations who appear to be likely to be affected by the rules").
The noble Lord said: It might be convenient to the Committee to take Amendment No. 61 with Amendment No. 51. Speaking first to Amendment No. 51, it is self-explanatory.
In this clause and in subsection (4)(a), we have airport operators who appear to be likely to be affected by the rules. Then, in subsection (4)(b) we have operators of aircraft who appear to be likely to be affected by the rules. We are suggeting in the amendment that the traffic distribution rules should at the same time be made available to those members of staff who are likely to be affected by these rules.
I should mention that in Amendment No. 61 we are suggesting that the staff at the airports should also be made aware of the changes in the rules since the users of air transport services will be notified. We feel that it is only correct that the operators whose lives could be very considerably affected by the change of the air traffic distribution rules should also be notified; not consulted but notified. I beg to move.
The Earl of Caithness: The first of these amendments would give the CAA a duty to consult employees' representative organisations at airports before advising the Secretary of State on traffic distribution rules. The second, as the noble Lord, Lord Carmichael, has just pointed out to us, would require the CAA to have regard to airport staff interests in giving advice under Clauses 29 to 31 or in preparing a scheme to allocate capacity under Clause 31.

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These are two of four amendments—the others are Amendments Nos. 52 and 58—to Part III which seek to write wider consultation onto the face of the Bill. I genuinely appreciate the motives which have prompted these amendments: Part III contains important powers to regulate, where necessary, the use of airports. It would be unthinkable for those powers to be exercised wihout prior consultation among those most directly involved. But while I appreciate the good intentions which underlie these amendments I nonetheless hope to convince noble Lords opposite that there is no need for them. I am sure that the CAA, before carrying out its duties under Part III, will wish to consult a variety of interests. It would not be constrained by the lists of those who may be consulted in those clauses because neither list is exhaustive. Indeed, I would fully expect the CAA to consult many bodies not provided for in the Bill. But to list them all on the face of the Bill would overburden the legislation quite unnecessarily.
4 p.m.
The lists of bodies and organisations whom the CAA may consult under Clauses 29 and 31, and whom my right honourable friend may consult under Clause 30, are not exhaustive; neither are they intended to be. On the contrary, the lists of possible consultees in Part III can perhaps best be viewed as indicating a minimum level of consultation. The scale of consultation which we have in mind here is perhaps best evidenced by the CAA's current review of air traffic distribution in the London area, where the CAA consulted over 300 bodies covering a wide range of interests. Included among consultees were the TUC and the National Joint Council for Civil Air Transport: a joint management/union forum. That consultation was undertaken without legislative direction but still provided for the sort of trade union involvement which Amendment No. 51 seeks.
Turning specifically to Amendment No. 61 I do understand the noble Lords' concern to ensure that the interests of airport employees are taken into account by the CAA. I think they will agree, however, that those interests are best served by creating the conditions within which the airports industry can flourish. It is, of course, the whole purpose of the Bill to secure just those conditions. That purpose is made manifest in Part III by Clause 32(3)(a) which requires the CAA to have regard to,
"the need to secure the sound development of civil aviation in the United Kingdom"
in exercising its Part III functions. Through that sound development, explicitly mentioned on the face of the Bill, the interests of airport employees will best be served.
So while I genuinely appreciate the motives which have given rise to the amendments, as I have made clear, I feel that the ends they seek to achieve are already catered for in the Bill. I hope that with that explanation the noble Lord, Lord Carmichael, will see fit not to press the amendment.
Lord Carmichael of Kelvingrove: I thank the Minister for his explanation. I am always concerned when a Minister tells me that a list is not exhaustive. I have always understood, in parliamentary terms, that
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when names were given and organisations were named in an Act it meant that anyone not named was not likely to be consulted or that there was no imposition on the Minister to consult them. Therefore, while I accept that any wise Minister will consult widely it seems to me that such an important body as the employees at an airport could be completely ignored. There is no obligation at all, whereas many other groups of people, such as the airport operators and aircraft operators, must be consulted.
I should have thought that it would be only a very small step to include the staff. Everyone else involved in the actual physical organisation and running of the airport is going to be involved except the staff. It is unfortunate that the Minister does not see this. However, I hope that his good words will at least make it likely that future Ministers will ensure that the CAA, whether by nudges, winks or whatever, will definitely look at the role of the workers' representatives at airports and inform them of any changes, or likely changes.
Lord Boyd-Carpenter: Before the amendment is withdrawn I should like, from some past experience of the CAA, to say to the noble Lord, Lord Carmichael. that he need have no apprehensions. The CAA is regularly in the closest touch with the whole of the industry, airline and airports together, and takes the closest account of the views of the different sections. There is no need for any alarm.
While I am on my feet may I say to my noble friend, with great humility, that I was horrified to hear him using the horrible expression "consultee" I suppose it is now the Whitehall word.
The Earl of Caithness: The world moves on, and even Whitehall is affected by it.
Lord Carmichael of Kelvingrove: I should, of course, have noticed and remembered that the noble Lord, Lord Boyd-Carpenter, was a distinguished chairman of the CAA. I am sure that under his guidance there would be no question as to the width of consultation. However, everyone is not as punctilious as the noble Lord, Lord Boyd-Carpenter, and that is one of the reasons why we wished to have this on the face of the Bill. With that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Underhill Lord Underhill moved Amendment No. 52:
Page 23, line 39, at end insert—
(" (d) any local authority or authorities who appear to the Secretary of State to be affected by operations at the airports, and
(e) the relevant Airport Consultative Committee.").
The noble Lord said: In replying to the previous amendment the noble Earl referred to Amendments Nos. 52 and 58 as if they were unnecessary. Amendment No. 52 relates to the traffic distribution rules and, here again, I accept entirely what the noble Lord, Lord Boyd-Carpenter, says about the way the CAA usually carries out its consultation. But the Secretary of State is given power to make the relevant traffic distribution rules, and the Bill actually provides that he shall consult the CAA. The Bill then provides

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that the CAA, in turn, must consult airport operators who appear likely to be affected, operators of aircraft who are likely to be affected and organisations representing airport or aircraft operators. If I accepted exactly what we have been told it is sheer common sense that the CAA would consult those bodies, yet it is in the Bill because it is felt that it should be in statute.
Amendment No. 52 seeks to add to that "any local authority" which might be affected by the traffic distribution rules and also "the relevant Airport Consultative Committee". It is strange that there is no reference in the Bill, as far as I can see, to airport consultative committees. I presume that there is no suggestion that they will no longer continue to be in existence, because they are important organisations representing a wide variety of people involved in airport matters.
While I am on my feet, perhaps I should speak to Amendment No. 58, because this deals with the Secretary of State's power to limit aircraft movements at certain airports. Again, it is laid down that before making such an order he shall consult the CAA. However, it is also provided in the Bill that he must consult the airport operator affected, the operators of aircraft and organisations representing such operators. That is laid down in the Bill, and also that "any local authority" must be consulted. Yet, strangely enough, in Clause 29, covering traffic distribution rules, there is no reference to consulting the local authorities that may be affected. Therefore, in one clause it is considered desirable to write that into the Bill but in another clause there is no reference to local authorities being consulted by the CAA. There must be some Government reason why it is mandatory on the CAA to consult local authorities under Clause 30 but not mandatory to do so under Clause 29.
Moreover, in neither Clause 29 nor Clause 30 is there any reference to consultation with the airport consultative committee; nor is there any reference throughout the Bill, as far as I can see—and I am open to correction—to the position of airport consultative committees. It will not be sufficient to be told that, of course, they will still continue. If they are still continuing, why not say in the Bill that they shall be consulted by the CAA? It is as much common sense that they should be consulted as it is to write into the Bill that airport operators and airline operators shall be consulted. It is surely common sense that they must be consulted, regarding both traffic distribution rules and the limitation of traffic movement. Therefore the proposal to include these other bodies seems as much common sense as to consult the Government bodies, and in one way it makes even more sense because in the one case they provide for the local authority to be consulted by the CAA and in the other case there is no reference at all to the local authority. I beg to move.
Lord Monk Bretton: I feel that this is not really a party political matter and I should like to say a few words in support of Amendments Nos. 52 and 58, to which I put my name.
First, I see consultation with local interests as a most important aspect of the task of taking account of environmental matters. In fact I think it is very
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difficult to fulfil this objective without consulting local authorities. Amendments Nos. 52 and 58 were sponsored originally by the local authorities around Gatwick and Heathrow and they are now supported more widely by the Association of County Councils.
This amendment provides that, preparatory to advising the Secretary of State on making traffic distribution rules, the CAA should consult local authorities and airport consultative committees. The Bill leaves out these bodies, though it provides very fully for consultation with the airport and airline interests only. The making of traffic distribution rules appears as a very important part of policy making.
Perhaps I may say a word first about the local authorities. I emphasise that it is they who represent local residents, and it is the local residents who suffer the environmental consequences of airports, particularly noise, which are such a big factor when airports are developed. It is they also who have to cope with such matters as housebuilding and infrastructure problems, road traffic generation and so forth. There is no doubt that at the moment their feeling is that they very much want to reinforce their contacts on these matters with the CAA and, through the CAA, with the Secretary of State. They feel that the Bill is leaving them out. They want in particular to emphasise that in their view being on an airport consultative committee is not a substitute for being able to have direct consultation.
I know that the local authorities have very much welcomed recognition of the value of consultation in connection with air traffic movement limits at Stansted, and the Government amendment to Clause 30 in another place which gave effect to this. They are therefore very anxious that the principle that this established should be extended to discussion of traffic distribution rules which appear to them as such an important instrument of development policy.
As this is a double-barrelled amendment and concerns the consultative committees too, I should like to say something about the Gatwick committee, about which I know a little. I understand that it is quite definite that the British Airports Authority at Gatwick infinitely prefers to have an airport consultative committee than to attempt to do without one. It has found this body to be a very valuable and useful sounding board in the past and it has helped to resolve a considerable number of difficult questions. Nevertheless, at the moment it appears that it is the British Airports Authority who appoints this committee.
This raises the question of whether there should be any mandatory appointees in the future because at the moment it is entirely up to the British Airports Authority, or that part of the set-up that will be denationalised. It may be that my noble friend can comment on this aspect. I believe that the Secretary of State should preserve some powers in that area and I should like to throw in that thought at this stage.
I understand that the repeal of the Airports Authority Act 1975 constitutes a change in the formal position of these consultative committees. They will continue to operate only under Section 35 of the Civil Aviation Act 1982. As I understand it, that means that consultation in the future will only be about

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organisation and administration at the airport of the committee and not about policy matters, including what I think are two immediately very important subjects, that is, noise and the air traffic distribution rules in the London area. There is considerable concern about these matters.
In practice the Gatwick committee is concerned about the Civil Aviation Authority's representative who has been present at meetings when policy matters such as noise have been discussed. The committee wants to be quite sure that the Civil Aviation Authority's representative continues to attend. It does not quite see under what constitutional rule he is entitled to attend and wants to ensure that he is present. It is felt to be most important that a respresentative from the CAA should continue to attend. Those are the main points that I should like to put to my noble friend.
4.15 p.m.
Lord Tordoff: Perhaps I may reinforce just a couple of points that have been made in this debate. Certainly I agree entirely on the subject of local authorities and I am considerably concerned about the consultative committees. My concern arises from the change of status of BAA. There is no doubt that the relationship between BAA and the consultative committees has been very good and that they have consulted on a wide range of matters. I do not think that any of us who know the senior management of BAA have any doubt that there will be any immediate change in that position. Nevertheless faces change and attitudes change. The fact is that we are facing a situation in which there is a nationalised industry that is moving into the public sector. Clearly there must be a difference in the relationship that exists between a nationalised industry and a consultative committee and one that exists between a public limited company and a consultative committee.
I think that this is something that needs to be written on to the face of the Bill. I hope that when he comes to take up his new seat, the Secretary of State, having listened to the discussions in this Chamber, will realise that this is not just a piece of nit-picking but a very serious belief that consultative committees should continue to give the helpful support that they have done in the past. I very much hope that the Government will accept these amendments.
The Earl of Bessborough: I should very much like to support my noble friend Lord Monk Bretton especially on his point about the consultative committees. As I understand it, consultative committees for the major international airports of Heathrow and Gatwick have effectively contributed to air policy issues in a way that is way beyond the limitations of the management or administration of their respective airports. For example, as has already been mentioned, they were consulted by the Civil Aviation Authority on air traffic distribution in the London area and are currently considering the consultation document on noise disturbance at night near both airports.
I see that the Secretary of State intends issuing guidelines on the formation and running of consultative committees. However, it seems to me that
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without any statutory backing that will leave the choice open to the BAA, as a limited company responsible to its shareholders, rather than to the Secretary of State or the public. It may well seek to reduce the committees to mere talking shops, which I do not think they are at present. That is why I support the amendment.
Lord Monkswell: I support the amendment. I should like to mention two things which I do not think have been highlighted so far. The first is the implications for the local authority, in terms of the local transport network which feeds the airports involved. Let us think of the consumers, in particular the business user, for example; he may want to fly from Manchester to Hamburg. He applies to his local travel agent or his firm's transport department and says, "Book me a flight to Hamburg." It will probably book him from Manchester to London and then from London on to Hamburg. The operator and the airport will accept that as good business and think no more about it. The businessman will also accept it, though he will probably bellyache about the fact that he has to transfer flights at another airport. That is the type of thing that the local authority may pick up. It can identify the amount of usage in the areas in which the businessmen are travelling and highlight the need for direct interconnecting flights between business centres. The same sort of point applies to tourism.
It may not be appreciated in London that Chester in the North-West and Stratford-upon-Avon in the Midlands are two of the places most highly visited by American tourists; I think they come second and third after one of the London attractions. For an American tourist "doing" England it makes sense to go to Manchester, progress southwards and leave from Heathrow rather than to be flown into Heathrow, do a tour and return to Heathrow to be flown out again.
Those are factors which local authorities affected can identify and highlight to the CAA and which may not be identified and highlighted by the airport operators or the companies operating the flights.
I hope that the Government will accept the amendment with the view that it will help them obtain a sensible distribution of traffic, not only locally within regions but, who knows, perhaps nationally also.
Lord Boyd-Carpenter: With great respect to the noble Lord, Lord Monkswell, I doubt whether local authorities have much of a role to play in deciding the air travellers' needs. The splendid tourist areas that he mentioned are located at considerable distances from airports. The local authorities have little direct knowledge of the air transport industry and I doubt whether they can make much of a contribution from the air travellers' point of view. The contribution that they can and do make, sometimes with great and excessive emphasis, concerns the anti-aviation approach of nearby residents—complaints about noise and so on. I accept completely that it is necessary that they should be consulted, but we are deluding ourselves if we think they have any contribution to make from the air travellers' point of view.
If there is to be consultation about air travellers, the airline users' committee is the body which is expert in

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these matters. It is an extremely well informed and active body. It was once presided over by my noble friend Lady Trumpington. Your Lordships may infer from that alone that it was a highly effective and highly articulate body. I am sure that is the body which will be consulted. It works closely with the CAA.
I do not share the enthusiasm of my noble friend Lord Monk Bretton for airport consultative committees. My experience is that they took a rather narrow view of problems, that their membership was restricted, obviously, to certain interests, and that the part they played was not especially helpful or influential. I imagine the fact that they are not included in the Bill means that it is not being assumed by the Government that they will continue in respect of all airports. It is a matter for the new bodies in charge of the airports to consider. If, as my noble friend said, an airport finds a consultative committee helpful, it will no doubt set one up. It is free so to do. It may be as well to follow the prudent line which the Government appear to be taking and not to assume at this stage that all of them will continue.
Lord Tordoff: While I do not dissent from what the noble Lord, Lord Boyd-Carpenter, said in response to the noble Lord, Lord Monkswell, I feel that he is, perhaps, being a little unfair on the local authorities by suggesting that their only input is likely to be negative. I agree that on questions of noise and transport problems relating to an airport it may seem to be negative, but the local authorities are also served by ratepayers who are airport employees. A wise local authority would take that into consideration when balancing the pros and cons of an airport in its area.
I was interested to hear what the noble Lord said about the consultative committees. It rather blew the whistle on the Government's attitude. We are frightened that the consultative committees will somehow wither away and will not be there in the future if they are not written on the face of the Bill.
The Earl of Caithness: We have had an extremely useful debate on these important amendments. I am grateful to all noble Lords who have taken part. I am grateful to my noble friend Lord Boyd-Carpenter, with his great experience of the CAA, for his contribution. He told the Committee—a point perhaps missed by the noble Lord, Lord Tordoff—that if a consultative committee is useful, the airport will wish to set one up. I shall return to that point later.
Clause 29(4) sets out the consultation arrangements which shall apply before my right honourable friend the Secretary of State can make traffic distribution rules. He must first consult the CAA, which may then canvass opinion from a wide variety of civil aviation interests. As I said when we considered Amendments Nos. 51 and 61, I naturally appreciate noble Lords' reasons for seeking to expand, in the Bill, the range of interests from which the CAA may seek views before giving advice under Part III. It is nice for me to have my noble friend Lord Monk Bretton speaking because about two-and-a-half years ago he and I were arguing the case on the agricultural Bill (then before your Lordships' House) on consultation when it came to
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rent reviews. Having sat beside him arguing the point, I know how he feels about this matter.
As I have already sought to explain, the lists of those who could potentially be consulted—I hope that by using that phraseology I have avoided upsetting my noble friend Lord Boyd-Carpenter by otherwise saying "consultee"—such as those in Clause 29(4) are not intended to be exhaustive. We envisage the CAA consulting widely, as has been the case with its consultation on its current review of air traffic distribution in the London area. The CAA has consulted 322 different bodies and organisations, including all the airport consultative committees in the London area, each of which has local authority representation, and a variety of environmental interests. That consultation has been held not once, but twice.
The Committee may well find that the ample consultation that has been undertaken by the CAA is just the example we need to show that it considers this matter very seriously and will continue to discharge its obligations with vigour. If the list of organisations which the CAA may consult under subsection (4) was to be extended in the way that the noble Lord, Lord Underhill, has argued, it would be difficult not to include in the list very many more bodies and organisations that could claim to have an interest. If we then reached agreement in this Chamber on a list of at least 322 bodies, I am sure that there would be a 323rd body that felt that it should have been included. It might just be the body that needed to be consulted. There is the requisite flexibility in the Bill as it now stands. To list for consultation all those who have a claim would be to overburden the Bill enormously. I am sure that this is not what the Committee wants.
Turning to Amendment No. 58, the lists in this part of the Bill are not exhaustive either. My right honourable friend the Secretary of State will naturally want to consult widely before setting an ATM limit. I am sure that he will want to have the considered views of the local airport consultative committee. But if all the organisations were to be listed, we would, again, have a very overburdened piece of legislation.
There is a second reason for arguing against the noble Lord, Lord Underhill, on this amendment. As spelt out in Clause 73, an ATM limit order can be made only following the affirmative resolution procedure of each House of Parliament. There will thus be ample opportunity for a variety of views to be made known to the Government before an ATM limit for an airport is set. The ATM limits are therefore essentially a planning tool and the local authorities have inter alia planning responsibilities. So it makes sense for local authorities, with their planning role, to be consulted about a planning related matter, in this case the ATM limits. But traffic distribution rules are about the use of capacity in an airport system and have minimal non-aviation planning implications.
My noble friend Lord Monk Bretton referred to the important use of consultative committees, and I said earlier that I would come back to this. The provisions of Section 35 of the Civil Aviation Act 1982, under which the BAA airports after privatisation will be under a requirement as to consultation, are virtually identical to those in the Airports Authority Act 1975 under which the BAA airports operate now. I do not

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see any reason why the present successful arrangements should not continue. I think that their continuation would mean great advantages for the system.
The noble Lord, Lord Monkswell, mentioned business users. As my noble friend Lord Boyd-Carpenter will know, the CAA, in giving advice—in this case under Part III of the Bill—has to have regard to the reasonable interests of users. The CAA has to advise on traffic distribution rules, ATM limits and stock allocation schemes.
I come back, however, to my principal argument. There are very many worthy bodies and interests that will be consulted, but to write them all on to the face of the Bill and to expand the Bill in these areas that we have been discussing would lead to a very overburdened Bill. It would also lead to a feeling that those who are not listed on the face of the Bill will not be consulted. That is something that we have sought to avoid—
Lord Monkswell: Before the noble Earl sits down, I am a little curious as to the attitude of the Government. Having listed three groups of people to be consulted, they then say that it would be unfair on others if the list was extended. There seems to be some divergence of view here. Either you want a list of those who should be consulted or you feel that wide consultation should take place. To circumscribe it and to refuse, effectively, the views of Members of the Committee who suggest other worthy groups that should be consulted seems to be neither flesh nor fowl. I wonder how the Government would react if one were to suggest taking a different view of the list, and that rather than listing any groups at all there should be words written into the Bill to the effect that the Secretary of State shall consult as he sees fit. That would effectively nullify any possibility of some groups being identified and others not being identified. Perhaps the Minister will respond to that point.
The Earl of Caithness: The noble Lord, Lord Monkswell, is using the argument that I used at one stage of an agriculture Bill. I was persuaded by my noble friend Lord Belsted that I was wrong to take that view. My noble friend Lord Belstead was absolutely right. There should be, on the face of the Bill, a requisite number of people to be consulted. That is the minimum consultation. However, to expand the list any further could lead us into severe difficulties.
Lord Underhill: The noble Earl is making heavy weather of this, and I cannot understand why. It is common sense that airport operators and airline operators must be consulted when you are dealing with traffic distribution rules or the allocation of air transport movements. They are written on the face of the Bill. My amendment, Amendment No. 52 to Clause 29, refers to,
"any local authority or authorities who appear to the Secretary of State to be affected by operations at the airports".
Those are precisely the words that the Bill includes under Clause 30 dealing with air transport movements at certain airports. The Government have found it advantageous to put those exact words into Clause 30. But for some strange reason they feel that I am being
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very naughty for wanting to include the same words in Clause 29, which deals with the important question of traffic distribution rules.
Surely the local authority in the area would have some views about traffic distribution. It is a vitally important matter. To suggest that I want to open the field and that we might get 322 bodies applying is not even making a good political argument. It may be a debating argument, but it does not hold water. All that I have asked is that the local authorities concerned should be considered not by the Secretary of State but by the CAA when it seeks to give advice to the Secretary of State, which is what the Bill says the CAA must do.
We also want, in both Clause 29 and Clause 30, the consultative committees to be taken into consideration. I accept that the noble Lord, Lord Boyd-Carpenter, knows far more about the operation of the CAA than I do. But he was a little critical of the work of the consultative committees. Yet the GatwickAirport consultative committee tells me that the present chairman of the airports authority says that he will wish to continue with the airport consultative committee. So there must be some value in it. Why cannot we put those bodies into the Bill? We shall have to give careful consideration to what the noble Earl has said, particularly at this time of the afternoon. I hope he realises, however, that the Association of County Councils gives full support to both these amendments to Clause 29 and Clause 30. The association believes it essential that the authorities should be consulted.
We shall keep in mind what the noble Earl has said. I hope that he will consider what has been said by various noble Lords. We are not asking for a limitless list. We are asking for a commonsense list. This is accepted in part already by the Government under their own provision in Clause 30. Meanwhile. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 53:
Page 23, line 41, leave out subsection (5) and insert—
("(5) Where—

(a) the subject-matter of any particular rules made by the Secretary of State under this section is a matter in relation to which the CAA has given advice to the Secretary of State (whether before or after the passing of this Act), and

(b) those rules are so made not later than five years after the giving of that advice,

the requirements of subsection (4) shall be taken to have been satisfied with respect to those rules.").
The noble Earl said: I beg to move Amendment No. 53, which is designed to ensure that where traffic distribution rules are warranted they can be implemented with appropriate flexibility as the circumstances at the time demand. Both my right honourable friend the then Secretary of State, and my honourable friend the Minister for Aviation, in another place have stressed the Government's assurance that traffic distribution rules will not be introduced prematurely or unnecessarily. I too stressed this at Second Reading. This amendment underpins and guarantees the effectiveness of that undertaking. As Clause 29 stands, the Secretary of State would have to introduce traffic distribution rules

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quite soon after receipt of advice from the CAA if he were to avoid the need for unnecessary consultation anew on the same issue. Amendment No. 53 will give the CAA's advice a five-year endurance.
The clause currently provides for rules to be introduced progressively—as and when they are needed—only by reference to dates or circumstances specified in the rules at the time they are made. So my right honourable friend, following advice from the CAA could, say, make a rule in one year which was due to take effect three years later. But if, after three years, it became clear that the rule would not be needed for another couple of years, my right honourable friend would be faced with the choice of either allowing the rule to be implemented, notwithstanding that it was premature, or of revoking the rule. If the rule were to be revoked then my right honourable friend would have to seek anew the advice of the CAA on the same matter so that the rule could be made again—this time for introduction in, say, two years' time. The requirement to seek the CAA's advice anew is not only unnecessary but could be costly too, given that the CAA would have to consult the civil aviation industry again in order to discharge its own duties under the clause. I am sure that none of us here would want to condone such an unnecessary burden.
This amendment is designed to remedy the risk of inflexibility in the way in which traffic distribution rules are made. It provides for the CAA's advice to have an endurance of five years. So rules will not have to be nailed irrevocably to a particular date or circumstance, but will be available throughout the five-year endurance of the CAA's advice for implementation only as and when needed. I should add that the existence of a five-year "shelf life" for the CAA's advice will in no way preclude further consultations by the Secretary of State if he thinks they are desirable.
This amendment will allow the traffic distribution rule provisions of Clause 29 to be operated in a measured and flexible manner; I commend it to the Committee and I invite your Lordships' agreement. I beg to move.
4.45 p.m.
Lord Carmichael of Kelvingrove: While thanking the Minister for the explanation of the amendment, as I see it the effect is to give the Secretary of State even wider powers than he presently enjoys under the Bill. Under the amendment, provided that the Secretary of State makes rules under the same subject matter which has been made the subject of consultation by the CAA, then the consultation requirements will be satisfied. That may have been five years before the consultation was carried out. This means that the Secretary of State himself can determine, without reference to anyone, detailed rules in response to the CAA's current exercise.
We are concerned that after the Secretary of State has obtained recommendations from the CAA, or after he has consulted the CAA, he does not need to go back to them for a period of five years. Having regard to the concern which has been quite rightly expressed with the provisions of Clause 30 the local authorities
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believe that an extension of the Secretary of State's powers is both undesirable and unnecessary.
The amendment underlines the importance that we attach to the next one, Amendment No. 54. It might have been better to have taken them together. That will at least ensure some parliamentary scrutiny over the exercise of the Secretary of State's powers. The importance of that is that if one has a gap of five years circumstances may have changed considerably. Therefore there should be necessity for the Secretary of State to come back and obtain additional authority from Parliament so that there will be at least a voice explaining that the world has changed since the CAA first made the recommendations to allow the Secretary of State to make the rules.
Obviously, we do not oppose the amendment, but we hope that the Minister will give favourable consideration to the next amendment that my noble friend will be moving.
On Question, amendment agreed to.
Lord Underhill Lord Underhill moved Amendment No. 54:
Page 24, line 14, at end insert—
(" (7) The power to make rules under this section shall be exercisable by statutory instrument.
(8) Any statutory instrument containing traffic distribution rules shall be subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Lord said: My noble friend referred to the fact that Amendment No. 54 was linked with the previous one. This also relates to the question of traffic distribution rules. As I said previously, it gives the Secretary of State power to make these rules.
The amendment seeks to ensure that there is adequate parliamentary scrutiny; and that the traffic distribution rules shall be by statutory instrument. We recognise that it would be going too far to suggest that these should be by affirmative resolution of both Houses. We are therefore saying that any such statutory instrument shall be subject to the negative procedure: that is, by annulment if any Member, of another place or of your Lordships' House, considers it desirable.
I notice that it was debated in Committee in the other place and the Under-Secretary of State for Scotland, Mr. Michael Ancram, on 11th March, in Standing Committee, at col. 505, said something which I thought was completely amazing. I quote:
"Parliament gave the White Paper its approval, and in doing so gave an implicit endorsement to the feeling that, following enactment of the Bill, traffic distribution rules could be made without further reference to Parliament".
Surely this is introducing another procedure: that where one has a White Paper covering a vast number of subjects, which Parliament accepts, it does not mean that it accepts every line or proposal of the White Paper. Otherwise we are suggesting that the White Paper is a Bill. I hope that the noble Earl will not repeat that in his reply today, but that he will deal with this amendment solely on its merits; that is, that traffic distribution rules should be exercisable by statutory instrument and that they should be subject not to affirmative resolution but to the negative procedure of annulment. I beg to move.
The Earl of Caithness: I take this amendment on its merits and will deal with it as such. I hope to give the noble Lord, Lord Underhill, three very convincing reasons why I, regrettably from his point of view, cannot accept it. First, the essence of traffic distribution rules is that they should apply when and where they are needed. Although the Government have yet to make any decisions on such rules there is a clear possibility, if rules are to be effective, that they must operate at a detailed level. Clause 29 indeed provides for detailed rules in the references to "any class or description of air traffic". The quite detailed level of discernment in traffic distribution rules which Clause 29 envisages is simply, we believe, not appropriate for a statutory instrument. So that while I appreciate the motives of the noble Lord, I must tell him that a statutory instrument would be the wrong vehicle for enacting the rules made under this clause.
My second reason is that Clause 29(2) sets out that the CAA is to perform its air transport licensing functions so as to secure compliance with traffic distribution rules. In this sense, therefore, traffic distribution rules can be viewed in the context of a power of direction: the rules will provide a licensing framework for the CAA. I hope that the noble Lord, Lord Underhill, will agree that it would be inappropriate to enshrine that framework in secondary legislation, which is what his amendment would do.
My third reason lies in the very nature of the traffic distribution rule provisions. Clause 29 is quite explicit: it permits the Secretary of State to make a traffic distribution rule only where he has first sought the advice of the CAA or where the CAA have already given him appropriate advice, and when the CAA are asked for their advice they are required, by the terms of Clause 29(4), to consult such of the following as they consider appropriate: affected aircraft and airport operators, and their representative organisations. That list, wide though it is drawn, is not exhaustive, as we have discussed at length earlier this afternoon. We envisage with some confidence that the CAA will canvas views from an even broader constituency. Indeed, one need look no further than the consultation list for the CAA's current review of London area traffic distribution to see the depth and breadth of the authority's consultation. The CAA have consulted 322 different bodies including 48 UK airlines, 154 foreign airlines, the three London scheduling committees, IATA, 35 airports, the airport consultative committees, local chambers of commerce, the trade union movement, the CBI, planning organisations, a variety of environmental and noise abatement groups. The list is long and I could go on for a long time, but I shall not weary the Committee with it further. The point I am seeking to make is that the traffic distribution rules, where they are warranted, will be founded on the widely acknowledged experience and expertise of the CAA, complemented by the views expressed direct to the authority from as wide a spectrum of civil aviation interests as one might care to imagine. I have to tell the Committee that the Government would need to hear, I think, a more substantial case before they could be convinced that it would be right for Parliament to have a further, separate and overarching mechanism for
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consultation direct, given the searching and exhaustive consultation which would have preceded it.
I nonetheless appreciate the motives prompting the noble Lord's amendment but I hope that I have convinced him that the amendment is inappropriate and that the secondary legislation is not the appropriate vehicle for his amendment.
Lord Underhill: The noble Lord stressed the degree of consultation on London air traffic distribution. That surely is one of the difficulties. Bodies outside the South-East have complained bitterly that the consultation process has been on London air traffic distribution and not on the whole question of air traffic distribution and problems throughout the whole of the United Kingdom.
It must be recognised that when air traffic distribution rules are laid down they are going to affect quite a number of areas. That is why we wanted to use a statutory instrument and not take the time of Parliament with discussion and resolution, so that, if there is any difficulty or any problem, it could be dealt with by annulment. However, I shall read carefully what the noble Lord said, but I believe the amendment was a very sensible one for extra-parliamentary scrutiny and administration. I beg leave to withdraw the amendment at this stage.
The Earl of Caithness: Before the noble Lord begs leave to withdraw it, perhaps I may clarify one point that he mentioned when he said it was felt that the consultation which the CAA have just undertaken concerning the London distribution in the South-East did not involve the rest of the country. The reason for that was that the remit was strictly limited to London and it would have been inappropriate therefore for them to have looked at air traffic distribution throughout the country. However, notwithstanding that, they sought to consult very widely, as I have explained, and I think that all the points I have heard subsequent to the publication of the draft report only confirm that the CAA consulted everybody beforehand.
Amendment, by leave, withdrawn.
Clause 29, as amended, agreed to.
Clause 30 [Power to limit aircraft movements at certain airports]:
Lord Tordoff Lord Tordoff moved Amendment No. 55:
Page 24, leave out lines 15 to 18 and insert—
("(1) The Secretary of State shall make an order for all designated airports, which does either or both of the following things, namely—").
The noble Lord said: It may be convenient for the Committee to consider Amendment No. 56 along with Amendment No. 55. Let me say again, as the noble Lord, Lord Underhill, said earlier about another amendment, that this amendment has the support of the Association of County Councils. It is essentially a probing amendment and I have a suspicion that it will not be terribly popular in many directions, but I think it is an important amendment nevertheless.
Air transport movements have been a bone of contention for some considerable time but the purpose of this amendment is to lay a duty on the Secretary of State to make ATMs for all designated airports. In

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1979, the then Mr. Ian Glidewell, in his inspector's report on Terminal 4 at Heathrow, said:
"I also think it most important that the number of ATMs at Heathrow should be limited … such a limitation is, in my view, vital to ensure that noise from aircraft at Heathrow should decline as BAA and Government expect".
Moreover, he said:
"from time to time consideration should be given to reducing the limit as the increasing size of aircraft reduces the number of ATMs needed to carry [say] 38m passengers per annum".
He did in fact at that stage recommend 260,000 ATMs and in December of 1979 the then Secretary of State set a limit of 275,000 in order to use the facilities of the airport efficiently. There is no doubt that at that time the purpose of setting those ATMs was to keep a check on noise and give reassurance to local residents when the question of Terminal 4 was being considered.
However, when at a later stage we come to Stansted, the ATMs were set there for reasons which were quite different in that they were to be used to facilitate the controlled expansion of the developing airport in such a way as to avoid the local infrastructure being overused, which was an indication given by Mr. Michael Spicer at the Third Reading in another place. Indeed, this was confirmed by the noble Earl, Lord Caithness, at the Second Reading in your Lordships' House when he said that the purpose of an ATM would be to control growth and usage of an airport in such a way that the local infrastructure was not swamped.
So we have two reasons that have been used in the past. Originally, ATMs were designed to reduce environmental noise pollution and they are now being used sometimes to control capacity on airports that are presently underused; in other words, to control the growth of those airports. It seems to me that the first of those is the more important, but nevertheless the second is valid as well and the Government have obviously changed their mind on what the use of ATMs should be.
They are tending to ignore the use as an environmental control now and it is my belief that that should be brought back. It is therefore in my view inconsistent only to use ATMs on those airports which are substantially underused. As I said, the people living in the vicinity of airports throughout the country have a right to have some reassurance and some idea of what the level of throughput at airports is going to be in the future. It seems to me that ATMs are the way to set those standards. I beg to move.
5 p.m.
Lord Monk Bretton: I must confess to being somewhat ambivalent about this particular amendment. However, I felt that I must say a few words because I am well aware of the interest generated around Heathrow and Gatwick. Evidently the Government now intend to regulate traffic by means of traffic distribution rules, and there is a school of thought—perhaps it is an outmoded school of thought but I think we ought to hear about it while this matter is being debated—that traffic distribution rules are not as precise a method of control as ATMs.
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There is a strong feeling that you cannot adequately deal with environmental problems and injurious effects without a sufficiently effective method. Of course, it is noted by those around Heathrow in particular and also Gatwick that Stansted is nevertheless to have an air traffic movement limit, and there is a strong feeling that this air traffic limit is the most effective planning tool. They are thinking that what is sauce for the goose is sauce for the gander.
I also believe that the amendment would make it easier for the Secretary of State because it unties his hands. If he needed to apply ATM limits, it would leave him free to apply them anywhere and either to increase or reduce them. I think it is true that it would free his hands. I should be most interested in what my noble friend the Minister has to say.
Lord Boyd-Carpenter: I am not at all ambivalent as regards this amendment; I am entirely against it. With enormous respect to the noble Lord, Lord Tordoff, it seems to me to exemplify one of the approaches to civil aviation problems which has done and can still do a great deal of harm to one of our most successful and growth-potential industries. I appreciate—indeed at one time I lived with representations about it—the feelings of people living near airports about airport noise, and this is a reality which cannot be brushed aside.
However, what surprises me is the way in which environmental enthusiasts concentrate all their attack on aircraft noise and appear to be entirely insensitive to all the other forms of noise which afflict us in our civilisation. For example, many people live close alongside mainline railways. So far as I know, no one has ever suggested stopping those trains at night or limiting the number of trains that may operate. Other people sometimes live in villages through which main roads pass, and enormous lorries lumber through in the middle of the night. Apparently no one suggests stopping them, though the case for stopping them is economically—and I should have thought environmentally—a great deal stronger than that of limiting aircraft movements. It is the rather curious mental approach that some people seem to adopt to pick out aircraft noise as the one environmental hazard which must be very strictly restrained.
The other side of the medal is that civil aviation is one of our success stories. The British industry has grown and is growing. We are the second civil aviation power in the free world. We earn a great deal of money directly and even more indirectly through tourism and through attracting business traffic to our cities. In that way between them the airlines, with their own earnings from tourism and business traffic, are probably the biggest contributors to our balance of payments.
Civil aviation really does matter. I find it a little difficult to understand why some people seem so enthusiastic for restricting and restraining its growth. My own house in London is on the direct line of approach when aircraft at Heathrow are landing towards the West; but one becomes used to the noise. Of course, it is a fact which must be faced that the great majority of houses near Heathrow have been built, bought and occupied since the airport was started and the people concerned came there for, in many cases, the very good reason that they had excellent, well-paid

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work. Indeed I would sometimes remind some environmentalists, perhaps particularly in West Sussex, that if a major civil airport is introduced into an area, you generate more good, high-paid, regular, stable employment than by taking almost any other step. When noble Lords are concerned, as we all are, about the question of unemployment in this country, we ought to hesitate before imposing any unnecessary handicaps on civil aviation, which is one of our success stories, one of our generators of wealth and one of our givers of employment.
Therefore, I am wholly against the proposal to have further resrictions by ATMs. I admit that I do not wholly understand subsection (2), which appears to contemplate introducing an ATM in the place where I would think there is the least case for it, where the airport is not fully occupied anyhow, No doubt my noble friend the Minister will be able to explain this apparent paradox. However, I hope that he will firmly resist the pressures for increased restriction of this kind.
Perhaps I may conclude, particularly as the Minister is present, by saying how much I regret, and how much so many people who care for British civil aviation regret, the disastrous decision of the former Secretary of State to revoke the licence given by the Civil Aviation Authority for the Heathrow-Gatwick helicopter service. That will do a great deal of damage to British civil aviation and it was a wholly unnecessary action. I can only hope that the new Secretary of State will have more sense.
The Earl of Caithness: I shall not comment on the last point, and I hope that the Committee will understand the reasons why I shall not comment.
Amendments Nos. 55 and 56 would compel the Secretary of State to set ATM limits at most, if not all, our major airports. That is, I have to say, diametrically opposed to the policy intention which underlines the ATM limit provisions of the Bill. The Government see ATM limits solely in the context of a planning tool, to secure the controlled expansion of use of a developing airport in such a way as to cushion the local impact, so that local infrastructure and resources are not overstretched by uncontrolled growth. That is certainly the case for Stansted—the only airport for which my right honourable friend, the then Secretary of State, currently had plans for an ATM limit.
The Government gave careful consideration to the use of ATM limits when we were setting out our broad policy intentions in the White Paper on Airports Policy. We concluded, in the light of the recommendations made by the inspector at the airports inquiries, that it would have been wrong to have proceeded with an ATM limit for Heathrow. In fact, this was a point raised by the noble Lord, Lord Underhill, as a result of an earlier inquiry and report into Terminal 4. However, I have to tell the Committee that there was wider, more reliable and more up-to-date evidence at the inquiry on Stansted and Terminal 5, and Mr. Eyre, the inspector, said that the imposition of the limit would, in his view, have no perceptible impact on the noise climate at the airport. The Government agreed with Mr. Eyre, the independent inspector. We feel that there are better ways to control and alleviate aircraft noise.
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I was interested in the remarks of my noble friend Lord Boyd-Carpenter about people who tend to castigate our airports. I have listened throughout the debate on local authority airports to the benefits that they can bring to regions and how important they are to regions. Then to put ATM limits on them would, in our view, be quite inappropriate. There are better ways of tackling such problems. One of the ways I could suggest to the Committee is at source, by having quieter aircraft and quieter take-off and landing procedures.
We have found on balance that there is no justification on environmental or other grounds for an artificial limit on movements at the country's airports. The real constraint at Heathrow is already there; it is the capacity of the runway system. I know that the scheduling committee can testify to that. As to the possibility of a second runway at Gatwick, I shall not be drawn into that, if my noble friend will excuse me on this occasion.
Lord Boyd-Carpenter: Will my noble friend allow me? I did not fall into the temptation of suggesting it on this occasion, but as he has taken it upon himself to introduce the subject, I shall say to him that that would be a sensible thing to do.
The Earl of Caithness: My noble friend Lord Trefgarne is beside me. He took part in the discussions, and so I think it would be wrong for me to comment further. The fact that passenger growth at busy airports can ultimately be limited by runway capacity is explicitly recognised in the Bill in Clause 30(2) which restricts the application of the ATM limit clause in line with the policy intention to those airports with substantially underused runways. This seems entirely logical. There can surely be no point in setting an ATM limit at an airport the runway capacity of which is already substantially saturated, unless of course the intention is to reduce rather than cap usage, and that would create chaos because services would have to be cut to meet the reduced level of usage demanded by the limit.
I was a little unclear of the reason behind the amendment of the noble Lord, Lord Tordoff, particularly as there was no definition of the word "designated". However, I am comforted in that the noble Lord, Lord Underhill, had an amendment that seemed not to be understood by the Committee. I seemed to be the only person in the Committee who did not understand the amendment of my noble friend Lord Dudley, and the noble Lord, Lord Carmichael, put his name to an amendment which changed his 1968 transport policy. Now the noble Lord, Lord Tordoff—one of the perhaps four main people taking part in the consideration of the Bill on a regular basis—has produced an amendment that I find obscure, and so we are all square on that front. To come back to the main point which has now been explained, we believe that to put an ATM limit on all the airports would be contrary to our policy and would not be beneficial.
Lord Tordoff: I thank the Minister for replying in that way in some detail. I have a vision of the noble Lord, Lord Boyd-Carpenter, making exactly that

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speech in the early part of the 19th century, when people were complaining about the dark, satanic mills, and saying, "But really, the people who live around them deserve all they get. And they get jobs out of it." We have moved on a little from that point, and it is a pity that he should take such a cavalier attitude to the environment.
The problem is not simply about noise. It is about the whole impact on the environment around airports in terms of road and rail capacity to deal with passenger and freight movements that will be created. It may well be in the interests of the community living around the airport that in certain cases the number of movements should be reduced, which does not necessarily mean that the number of passengers or the amount of freight will be reduced as larger and quieter aircraft come into use.
I accept the use of ATMs, as the noble Lord, Lord Boyd-Carpenter, does not, on airports which are not up to capacity. It seems to me to be a sensible way of regulating the growth of those within the needs of the local community. I cannot see why this logic does not apply to other airports as well. Nevertheless, as I said, this is a probing amendment. It has revealed the Government's attitude to the environment around airports. Bearing that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 56 not moved.]
Viscount Davidson: My Lords, I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

The Calcutt Report
5.15 p.m.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, with your Lordships' permission I should like to repeat a Statement being made in another place by my right honourable friend the Minister of State for the Armed Forces about the Calcutt Report. The Statement is as follows:
"Following the acquittal last year of eight servicemen from 9 Signal Regiment in Cyprus who had been charged under the Official Secrets Acts, I announced in the House on 29th October that there was to be an independent inquiry into the way in which the service police carried out their investigations of the eight men originally accused. Mr. David Calcutt, QC, agreed to conduct this inquiry. The House was also told that it was the intention that, subject to the usual security considerations, Mr. Calcutt's report on his inquiry would be published. The report has been published today—Cmnd. 9781.
"Mr. Calcutt has concluded that the service police investigations, which he acknowledged involved special difficulties due to their sensitivity and complexity, were undertaken without any animosity
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or ill-will towards the servicemen concerned, and that none of the servicemen were subjected to any violence or threats of violence, or any form of torture or inhuman or degrading treatment.
"Mr. Calcutt has, however, concluded that the custody of the eight servicemen was, for part of the time, unlawful and that even after the servicemen had been lawfully arrested on holding charges their continued custody was at least improper. The interviews by the service police with each of the eight servicemen mostly took place during these periods of unlawful and improper custody.
"In the light of Mr. Calcutt's conclusions as to the lawfulness of the custody of the servicemen, my right honourable friend the Secretary of State for Defence has concluded that in the case of seven of them he is prepared to make an ex gratia payment. The seven servicemen concerned are Senior Aircraftmen Kriehn, Lightowler, Owen and Payne, Lance Corporal Glass and Signalmen Hardman and Tuffy. On their application, my right honourable friend will ask Mr. Michael Ogden QC, who acts as an independent assessor for my right honourable friend the Home Secretary, to make an independent assessment of the amount of the award in each case.
"As regards the eighth serviceman, Senior Aircraftman Jones, Mr. Calcutt considered on his construction of air force rules of procedure that his custody was unlawful. Although the facts adduced in evidence before both Mr. Calcutt and the trial judge were essentially the same, the submissions addressed to them by counsel were very different. Indeed, before the trial judge, Senior Aicraftman Jones's counsel did not contend that the custody was unlawful. When the trial judge considered the same provisions of the air force rules of procedure, he accepted that Jones's custody was lawful. In these circumstances, since the trial judge found that Senior Aircraftman Jones's detention was lawful, it would be inappropriate to offer an ex gratia payment in his case. It is of course always open to him to pursue his remedies in the courts, should he be so advised.
"Mr. Calcutt has also concluded that, as the number of days spent in custody increased, so the pressure which was exerted on each of the servicemen gradually built up and crossed over, from what was at first proper to what he could only regard as becoming improper, and that the pressures which were ultimately exerted on each of the servicemen were such that these were likely to render unreliable answers given or statements made by them. However, Mr. Calcutt also points out that the investigations carried out by the service police in Cyprus in February and March 1984 were difficult, sensitive and complex, and they would have created profound problems for anyone who was given the task of carrying them out. Mr. Calcutt concludes that though he has pointed to some breaches of lawful and proper procedures, it would be unfair to be overcritical either of the investigating service police or of those who were advising them.
"The Government fully recognise the difficult position in which the service investigators in the case were placed and that they were motivated solely by

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what they perceived to be their clear duty. The Government are also grateful to the service investigators for their full participation in Mr. Calcutt's inquiry which was entirely of their own volition. I should also like to take this opportunity to make it quite clear that we continue to have full confidence in the integrity and professionalism of the Royal Military Police and the RAF Police who do difficult, complex and very important security work in many key defence areas.
"Mr. Calcutt has recommended seven matters for further consideration. These are:
the potential conflict between learning the nature, extent and full circumstances of any breach of security and bringing the offender to justice;
the need to give at an early stage in an investigation clear guidance on the relative priority to be given to the counter-intelligence aspect and the criminal aspect of a security case;
whether, in certain circumstances, the 48-hour maximum period allowed under current service procedures for suspects to be detained without charge should be capable of being extended;
whether RAF Queens Regulation 1034 should be either annulled or amended;
how far the rigid application of the need to know principle may have the effect of depriving a suspect of the protection which the law provides for him;
the effect of classifying the routine documentation in security investigations; and
whether investigations such as those leading up to the Cyprus trial should be conducted from the UK rather than overseas.
"The Government accept all of Mr. Calcutt's recommendations for further consideration and the House will be informed of the outcome of this further work.
"As far as present practice is concerned, Mr. Calcutt acknowledges that the new code of practice for the treatment and questioning of persons by the service police has now been issued under the Police and Criminal Evidence Act 1984 and that this may at least go some way towards overcoming some of the shortcomings revealed by the inquiry. In addition, the House will wish to know that RAF Queens Regulation 1034, that provides for a form of custody short of arrest, has been suspended, and that further instructions are being issued to clarify and re-emphasise the safeguards for individuals under investigation.
"Finally, I should like to express our gratitude to Mr. Calcutt for conducting his inquiry both speedily and with great thoroughness, and for producing a rigorously argued and most valuable report."
My Lords, that concludes the Statement.
Lord Graham of Edmonton: My Lords, perhaps I may first congratulate the noble Lord, Lord Trefgarne, on a step up in the pecking order in the Ministry of Defence. I do not know whether any money is involved or whether it carries anything, but even if it
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carries increased status and prestige I think the noble Lord, Lord Trefgarne, deserves the congratulations of the House.
I begin by reminding the House that the background to this inquiry and this Statement was the longest secrets trial, a show trial, and the most expensive trial that we have seen in this country for many a long day. I repeat the phrase "show trial" because of particular purposes. At the end of the day we are being told that there was no animosity, no ill will, no violence, no threats of violence, no torture, no inhuman or degrading treatment. We are told that the interrogators are not to blame, that they are blameless; yet the RAF men, we are told, were held in custody for unlawful periods. In that time the interrogations took place during what the statement calls,
"periods of unlawful and improper custody".
Who was to blame for those periods of improper custody? We have the right to know. Will the Minister tell the House who was to blame? Can we be told the department, the section or the individual? If this is not to be a whitewash and there has been some dereliction from duty, the House is entitled to know who is to blame.
I draw the attention of the House to what I think is a conflict that the Minister should help the House to reconcile. In paragraph 2 of the Statement we are told that none of the servicemen was subjected to any violence, threats of violence or any form of torture, inhumane or degrading treatment. In paragraph 6 we then have Mr. Calcutt concluding that as the number of days spent in custody increased, so the pressure which was exerted on each of the servicemen gradually built up and crossed over from what was at first proper to what he could only regard as becoming improper, and that the pressures which were ultimately exerted on each of the servicemen were such that they were likely to render unreliable answers given or statements made by them.
I suggest to the Minister that he needs to satisfy the House as to precisely what Mr. Calcutt meant about the cross-over point. When were matters proper and when did they become improper? I think the House can imagine a situation in which tension mounts, pressure increases; and we need to ask quite frankly how much of the evidence produced at the end of the day was manufactured.
We then need to ask the Minister whether he recalls that during the passage of the Armed Forces Bill in another place, and as recently as Monday of this week in your Lordships' Chamber, we have rested our treatment of service personnel in matters of discipline as far as possible on the same basis as that enjoyed in civilian life. Can the Minister say that he is satisfied that this equality of treatment has existed in the case of the interrogations that we are now discussing? Is the Minister satisfied that the lessons to be learned from this experience have been appreciated by the senior officers in the interrogation services and that appropriate changes in training and procedures have been instituted? Is the Minister satisfied that the RAF Provost Marshal branch and the Army Special Investigation branch have searched their experiences elsewhere so as to be certain that there are no comparable cases which call for an investigation, even if it is an internal one?

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Some of the difficulties surrounding this highly unsatisfactory episode have resulted from, at the very least, imperfect communications between the MoD and the Special Branch where security is concerned. Has the Minister anything to tell us on the steps that have been taken to improve this communication?
Has the Minister reflected on the fact that this case was the third within 12 months when prosecutions brought under the Official Secrets Act led to acquittals at the Old Bailey? Has he caused any inquiry to be made within the MoD among those there who caused those prosecutions to proceed? Who initiated the proceedings that brought these men to trial in the first instance?
If it is discovered that the RAF Provost Marshal branch of the Army Special Investigations branch did not use lawful and proper procedures, what actions will be taken against them—not words but actions? Finally, what steps have been taken to ensure that such a costly type of trial, in both financial terms and terms of human suffering, can never be repeated?
5.30 p.m.
Lord Wigoder: My Lords, among the not unlimited range of matters in which noble Lords on this side of the House have complete confidence in the Prime Minister is that she has complete confidence in the noble Lord, Lord Trefgarne. We should, therefore, like to add our congratulations and best wishes. I should like also to echo what the noble Lord, Lord Trefgarne, said in thanking Mr. Calcutt for this report, which has been extremely rapid, given the problems, very clear, very well argued and I believe extremely well balanced.
He faced at the outset the very difficult problem that an experienced trial judge had found, after lengthy argument, that in relation to the four defendants with whom he was dealing at that moment he was satisfied that their statements were voluntary. Eventually the jury came to the conclusion that they were not sure that the statements were true. The two judgments are not conflicting, but it is not easy to steer the right course between them. That was a problem that must have faced Mr. Calcutt and that he must have found very troublesome.
His principal findings are those stressed in paragraph 5: beginning in 5.3 that there was no wickedness on the part of the interrogators; in 5.4 that there was no violence; in 5.5 that there were no methods used of deep interrogation; in 5.6. that there was no inhuman treatment; and in 5.18 that the investigators had proper regard for the health and welfare of their prisoners.
Those findings—and they were very clearly supported by the evidence in front of Mr. Calcutt—contrast strangely with the hysterical headlines in the press at the time that the acquittals took place. I hope that with their customary sense of responsibility, when the press are now reporting the findings of the Calcutt Report they will perhaps apologise for some of those misleading headlines some months ago.
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The real problem in terms of this interrogation, as Mr. Calcutt points out, was that the authorities were faced with a dichotomy as to whether their urgent task was to seal what appeared to be a serious breach of security or whether their urgent task was to attempt to investigate who was responsible, to arrest them and prosecute them. That is a problem; and Mr. Calcutt again has made some suggestions as to how that might be resolved in future. Perhaps I may ask the noble Lord, Lord Trefgarne, whether he is able yet to answer the question that was raised when the Calcutt Inquiry was announced some months ago. Are the Government now satisfied that there was in fact a serious breach of security in Cyprus, irrespective of who it was that was responsible?
No one, I think, could call the Calcutt Inquiry a whitewash. He finds much to criticise. In paragraph 5.25 he criticises the inadequate records of the investigation; he criticises, in 5.40, the amending of the delay reports; and he criticises, in 5.50, the pressure that repeated interviews amounted to until they came to verge upon and indeed to go over the line and become improper in that repetition. Then he finds in paragraph 5.30 and onwards—and this of course is very serious—that there was what amounted to unlawful detention and the improper use of holding charges. These are all serious matters and Mr. Calcutt and the Government have, I think, faced up to them.
So far as I understand Mr. Calcutt's report, in all of the eight cases he comes to the conclusion that the detention was unlawful. He takes the view that in the case of Jones the original arrest may have been lawful, whereas in the case of the other seven defendants the original arrest was unlawful because the evidence, I think, did not support it at that time. The Government are now announcing compensation to the seven who were unlawfully detained and unlawfully arrested on the grounds that they were unlawfully detained, but not to the eighth man, Jones, who was also unlawfully detained although he may have been lawfully arrested.
It is not for me to hazard a guess as to whether the seven are a little fortunate or the eighth is a little unfortunate, but it seems to me that the distinction is perhaps not really justified by the Government in the light of Mr. Calcutt's findings. The awards, the ex gratia payments, are being made because of the fact of unlawful detention. Mr. Calcutt has found that that is so in respect of each of the eight and I would therefore ask the noble Lord whether he would consider looking again at the case of the eighth man with those observations in mind.
The last observation that I wish to make is this. We shall never know in the last resort whether it was the defendants who were brainwashed in this case as a result of repeated interrogations. Perhaps I may be allowed to comment that sometimes jurors can be brainwashed. They can be brainwashed when repeated allegations are made day after day over a trial lasting some five months. One of the matters which perhaps the Government ought to look at is the quite inordinate length of this trial. I support entirely the jury system but I wonder whether, within the limits of the jury system, it is not possible to take steps to ensure that in future we do not have trials of this length and complexity.
Lord Trefgarne: My Lords, I am grateful to both noble Lords for their response and for their kind words about me personally. The noble Lord, Lord Graham—and I shall deal with as many of his points as I can—asked who was to blame. I think that the Statement made clear that we do not seek to apportion blame in this situation. I think that the principal difficulty arose from the ambiguity of the Queen's regulation to which I referred in the course of the Statement. There was undoubtedly room for more than one respectable interpretation of that Queen's regulation. That is why, as the Statement says, it has been withdrawn for the time being, and will be reissued if necessary after due consideration.
The noble Lord went on to ask about the point where Mr. Calcutt says that the pressures changed from proper to improper during the course of the detention of these men. Mr.Calcutt was not specific as to when he thought that happened but the noble Lord, I think, will be aware that at the trial of the young men concerned it was decided not to take account of evidence which arose after a certain point during the investigation. The noble Lord also asked about the alignment of civil and military procedures. Again, as the Statement indicates—and I recognise that the noble Lord has not had very long to study it—we are bringing in certain procedures following the Police and Criminal Evidence Act which I hope will mean, and certainly are intended to mean, that civil and military procedures are being further aligned in this area.
The noble Lord asked me who it was in the Ministry of Defence who authorised these prosecutions. Nobody in the Ministry of Defence authorised these prosecutions. Prosecutions are not for Ministers or for the Ministry of Defence; they are for the Law Officers of the Crown and it is they and they alone who take decisions in this matter.
Turning to the remarks of the noble Lord, Lord Wigoder, he asked about the breach of security. It is a fact that at the time we were pretty certain that a major breach of security had occurred. I must tell the noble Lord that nothing that has happened since that time has caused us to change that view. The noble Lord also asked about why we had distinguished between the case of Aircraftman Jones and the others in the Statement. The Statement goes into some detail on that point and I hope that the noble Lord will agree that it would perhaps not be appropriate for me at this moment to go further than that.
Lord Campbell of Alloway: My Lords, will my noble friend the Minister think it right, in view of the considerable adverse publicity given in the press and in the media at the time, to advert to paragraph 5.24 of the report, which says:
"My conclusion is that there are no grounds for criticising the Scots Guards in the way they handled the custody arrangements".
Would it not be perhaps also right that, if these proceedings are reported, it should be made plain that those serious allegations were unfounded and were found to be unfounded by Mr. Calcutt? May I also give my congratulations to my noble friend the Minister on his elevation?
Lord Trefgarne: My Lords, I am grateful to the noble Lord for his kind personal words. It is indeed the
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case that Mr. Calcutt found those particular early findings to which the noble Lord, Lord Wigoder, referred in detail and which are recited in the Statement, and the Government are very naturally content with those.
Lord Elwyn-Jones: My Lords, perhaps I may exceptionally begin by commending the Government first of all on the decision to invite Mr. David Calcutt to conduct this inquiry, and Mr. Calcutt himself on the care he has taken to produce a report which, I confess, I had only a brief opportunity of looking at before this matter was raised in the House. It seems to me that the outstanding feature about which I should like to ask the Minister in this whole story is that at no time were these men told that they were entitled to legal advice and assistance.
It is not quite clear at what point they got any legal representation from non-lawyers in the force. The Police and Criminal Evidence Act had not come into existence but I hope it is now being applied. There was no requirement perhaps in military law that they should be informed; but in a matter of such gravity it is really quite astonishing that that was not brought to their attention. Is there any explanation of that? May I also ask to what extent did the commanding officers of these men in the Royal Air Force or indeed in the Army have any supervisory interest in or control over these matters? I do not know whether these questions can be answered at this point of time.
May I say that I also congratulate the noble Lord on his new appointment: it is good to see a fellow countryman so quickly recognised and accorded the advancement he deserves. May I ask the noble Lord: is the code of practice now being applied in the services one that has come into being under the Police and Criminal Evidence Act? The noble Lord has informed the House that it is intended, and perhaps he will tell us whether steps have been taken already, to make the code applicable in appropriate terms to the armed forces.
Finally, if I may, I should like to add a further commendation to the Government on announcing now, already, a decision to make ex gratia payments to the men concerned who have been wrongly treated? May I venture a word of caution? One or two observations that have been made during the course of our short discussion this afternoon must not be allowed to compromise the fact that these men were all acquitted and found not guilty. No review of the matters ought to be allowed to diminish the importance of that fact, for their own purposes.
Lord Trefgarne: My Lords, I am grateful to the noble and learned Lord for that intervention and also for his personal words. The noble and learned Lord asked specifically about the availability of advice to the young men concerned. I do not think I can do other than remind your Lordships that this was an inquiry of the greatest difficulty. It was clear to the investigators that a major breach of security had occurred and they clearly saw it as their duty to conduct themselves in the light of that belief. Indeed, it was because of that belief that the "need to know" principle was applied to a considerable extent to those who were responsible for their custody and for other

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matters relating to these young men. That is one of the matters upon which Mr. Calcutt has made a recommendation and it is clearly one that we shall have to consider very carefully. I think that was the essence of the difficulty on which the noble and learned Lord has put his finger. I hope he accepts that our undertaking to look at that particular aspect of the matter will clear up most of the difficulties he has referred to.
Lord Monkswell: My Lords, I, too, should like to congratulate the Minister on his promotion and to thank him for his Statement this afternoon. I should like to reiterate a couple of points that have been made already by previous speakers, and also to raise two others. The first is that it would appear the Government are somewhat hypocritical in their attitude to law-breaking, in the sense that normally their attitude to breaking the law is to throw people in gaol—the prison population is evidence of that—and yet here we have evidence that criminal acts have been committed and nobody is even being brought to trial, let alone punished. The second point concerns the apparent unfairness of the treatment to be accorded to the eighth defendant, who will not receive an ex gratia payment at this time.
The third point I should like to raise is that all this evidence, the result of this report, comes to us as the result of an acquittal in an official secrets trial. Given that our system of justice in this country should be not only fair but seen to be fair, it raises the question about previous official secrets trials and whether in any previous cases there have been unlawful acts committed prior to those by the authorities.
Finally, to reiterate the point made by the previous speaker, I think we must be very clear—and I hope the Minister can reiterate it from the Government Front Bench—that these persons charged under the Official Secrets Act were found innocent. Unfortunately, this afternoon there have been a couple of innuendoes (I put it no more strongly than that) that some guilt may attach. I hope the Minister will take the opportunity to refute that possibility.
Lord Trefgarne: My Lords, I am not sure that your Lordships would want to regard this afternoon as an opportunity for a review of the Official Secrets Act. There are of course a number of views held on that matter and I do not propose to make a contribution to such a discussion this afternoon: nor could I add to the view of the court, which of course was that the defendants were not guilty.
The Earl of Kinnoull: My Lords, I should first like to add my warm congratulations to my noble friend on his elevation to his new post; and may I at the same time ask a very simple question? The question is: what will be the future of the men concerned in this matter?
Lord Trefgarne: My Lords, I can tell my noble friend that four of the servicemen concerned, Lance Corporal Glass, Signalman Hardman, Signalman Tuffy and Senior Aircraftman Payne have already left the services on completion of their engagements. None asked for his engagement to be extended. A fifth
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serviceman, Senior Aircraftman Lightowler, has already left the Royal Air Force prematurely at his own request. Extremely careful consideration has been given to the future of the remaining three servicemen: Senior Aircraftmen Jones, Owen and Kriehn. These three servicemen are being advised today that the Air Force Board is being recommended to consider their discharge from the Royal Air Force. The reasons for that recommendation are being given in writing to the servicemen, and they are also being advised that they may make representations to the Air Force Board and use the redress of grievance procedure before the board comes to a final conclusion.
Lord Morris: My Lords, may I put two further queries to my noble friend? Am I right in recalling that some six months ago when the Statement was made announcing this inquiry a certain concern was expressed that the terms of reference of the inquiry should include the stage at which the Special Branch were brought in to assist the military authorities in their investigations? May I ask my noble friend, bearing that in mind, whether I am right in believing that at the stage of the Special Branch investigations into this matter, considerable pressure was bought to bear on some of the accused not to diverge from the stories they had previously given to the investigating military authorities?
Lord Trefgarne: My Lords, I am not sure that I am able to make any useful contribution to the details of the investigation of this matter, now so long ago. As for the contribution of the Metropolitan Police Special Branch, they are not of course within the purview of the Ministry of Defence. In any event, so far as I know, no complaints were made concerning their aspect of the matter.

Airports Bill
5.49 p.m.
House again in Committee on Clause 30.
[Amendments Nos. 57 and 58 not moved.]
Clause 30 agreed to.
Clause 31 agreed to.
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 59:
After Clause 31, insert the following new clause:
("Provision of airport capacity.
—(1) The Secretary of State may, if he considers it appropriate to do so to ensure the timely provision of sufficient airport capacity invite organisations other than the airport owner to provide facilities.
(2) Before making any invitation to an organisation other than the airport owner to provide facilities at a particular airport the Secretary of State must first invite the airport owner to make arrangements for the timely provision of those facilities.
(3) Following an invitation to the airport owner under subsection (2), the Secretary of State shall decide whether the response of the airport owner appears likely to ensure the provision of those facilities that he considers appropriate. If the Secretary of State considers the response of the airport owner inadequate or unlikely to fulfil his requirements in meeting the need for additional airport facilities, he may then issue an invitation to other organisations in accordance with subsection (1).
(4) In the event that the Secretary of State issues an invitation to other organisations in accordance with subsection (1), he shall require the airport owner to ensure that access to essential airport facilities from those facilities provided as a result of that invitation, as the Secretary of State thinks fit.
(5) Airport developments applied for under this section shall be subject to the same planning regulations as apply to any airport development.").
The noble Earl said: I was hoping that my noble friend would make a powerful oration in moving this amendment, but I will do my best to describe to the Committee exactly why this amendment has arisen.
My noble friend Lord Boyd-Carpenter lighted up enthusiasm for civil aviation just before the Statement, when he recalled that civil aviation in Britain was, as I think he called it, the second power in the world.
Lord Boyd-Carpenter: In the free world.
The Earl of Kinnoull: "In the free world", and one of the biggest contributors to our balance of payments. I would add to that by saying that I think we are lucky with the general framework of civil aviation. I think the Civil Aviation Authority does an extremely good job, and my noble friend distinguished himself as the first chairman of that body. I recall that he introduced the first flight of the sky train service.
Another large part of our civil aviation is the British Airports Authority. Again, I would like to offer my congratulations to that body, ably led by Sir Norman Payne for many years, for the work they have done to provide facilities. They have had a number of frustrations in getting those facilities: difficulties in getting governments to decide on the third London airport, and difficulties in getting planning authorities to accept the second terminals, third terminals or fourth terminals at airports which were already established international airports.
The keynote to the future of any successful aviation policy is the word "capacity". One sees the increasing competition within Europe from the airports of Paris, of Schiphol and of Frankfurt. One sees the trends in these airports; how they aim to provide capacity, try to take away traffic directed into Britain and to encourage traffic from America to come to those airports. One sees the strong argument that we should have the word "capacity" largely before us.
The Committee will remember that capacity was a key duty placed on the British Airports Authority under Section 2 of the Act at the time when it first came into operation. It was with some astonishment, when this Bill was first published, that we saw that there was no duty of capacity laid down on the successor operators of airports, be it the British Airports Authority in its new form or any of the regional airports. What is perhaps more significant is that there were no reserve powers of the Secretary of State to call upon these operators of airports to require that capacity would be provided.
This argument about capacity is not new to the Government or to my noble friend. It was raised in another place in Committee, on Report and, I suspect, on Third Reading, but I have not reached that stage yet. It started with a request which one must recognise comes from the operators, particularly at Heathrow and Gatwick, that there should be a reserve power given to the Secretary of State, who could invite outside contractors without reference to existing owners of airports to provide facilities because an owner had not provided it. This was accepted during the stages as being far too fierce, and what we have
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before us today is an amendment which I would simply say is a reserve power to give to the Secretary of State. He already has two other reserve powers under the Bill: the reserve power on international relations and the reserve power on national security. What we are asking is that he should have a reserve power to provide for capacity if he deems it to be in the national interest.
That is the key to this amendment. We are seeking a reserve power to be used, I suspect, very rarely. It would give the Secretary of State that vital locus standi and responsibility to keep the civil aviation and the civil airport policy on an international level and capacity. I beg to move.
The Earl of Dundee: I apologise to your Lordships' Committee for not being present when this amendment began. In regard to the provision of airport capacity, while the Bill contains certain incentives and safeguards, there is at present no guarantee that supply will meet demand. The intention of this amendment is to provide such a guarantee without conflicting with other important considerations.
In what way do existing incentives and safeguards not go far enough? Since the BAA's major source of future profits derives from traffic growth, clearly a good economic incentive already exists to provide capacity corresponding to that growth. However, there is always a long lead time between commitment to an airport development and its completion. That can sometimes be about ten years. This. together with the unpredictable nature of demand, means that for the airport owner there will always be some risk that additional capacity could be provided too early. To reduce that risk, the airport owner might well then decide that shareholders' interests would be better served by not planning to provide additional capacity until demand would undoubtedly exceed existing facilities.
Although in a different context, the point was made in your Lordships' Committee on this Bill last week that in the short term it can often be more profitable not to expand and develop since new capital does not have to be raised as a result. But if an airport owner did proceed in this way it would not necessarily be acting at all irresponsibily, since under the Bill one's first duty is to the shareholders. In so far as commercial activity of airports may on occasion be more profitable than traffic activity, conceivably this could lead to airport related land being used for profitable but non-essential airport activities. Yet if we consider that economic incentives which follow from privatisation are inadequate in themselves to ensure the timely provision of capacity, these economic incentives are nevertheless backed up in the Bill by the powers of the CAA as economic regulator.
The CAA has a duty to perform its regulatory functions so as to encourage investment in new facilities in time to satisfy anticipated demand. But when we look at how these powers would be exercised under the Bill it is evident that they are insufficient to ensure that adequate capacity is provided. The BAA prices will be monitored to show a reasonable profit whether or not it provides additional capacity. It is therefore difficult to see what incentives it will be able

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to receive for providing capacity, or what penalties could be imposed if it did not.
If it could obtain a higher financial return by investing in projects not airport capacity related, it would be difficult for the airport management to recommend major capital investment in terminals if it could achieve a higher return elsewhere, such as by building supermarkets. On the other hand, the Bill does contain a further safeguard through the planning process, and any proposed change of use of airport land for non-airport purposes would need planning permission, and no doubt the likelihood of such land being needed for aviation purposes would always be taken into account.
However, regarding such protection as can ever be afforded by the planning process, there is no safeguard to guarantee the preferences of local planning authorities. These authorities may well prefer supermarkets to terminals if past experience in obtaining planning permission for terminals is anything to go by. Planning approvals might then be easier to obtain for non-airport activities.
6 p.m.
I come now to the contents of this amendment. It gives reserve powers to the Secretary of State to ensure that sufficient airport capacity is provided in time. If he exercises these powers the Secretary of State is required to give the airport owner first refusal to provide the capacity. Only when the airport owner does not take up this option or when the response is inadequate can the Secretary of State invite another organisation to provide the capacity. If that happens, then the Secretary of State will require the airport owner to ensure that access is given to essential airport facilities from these facilities provided by the other organisation. All developments applied for are of course subject to the usual planning regulations.
It should be asked, however, what risks and inconveniences, if any, might follow from this and similar amendments. First, it might be feared that the commercial value of an airport company would suffer if outside pressure can be put on the owner to provide capacity which otherwise would not have been judged by the company as desirable. This fear would certainly be justified if either the owner was pressurised into development against its will or else did not have first refusal. In the circumstances and conversely the value of the company surely could instead be expected to benefit. This is so because insofar as there might have been a conflict between attending to the interests of British aviation and attending to those of the shareholders the owner can be relieved by the amendment of obligations towards British aviation and hence relieved of the corresponding commercial investments.
Then there is the separate concern that more than one owner of different airport facilities would lead to inefficiency and poor co-ordination and management at the airport. But in all cases following from this amendment the second ownership would be confined to terminals and their facilities. It would not extend to the land and to the runways. That would always remain with the airport owner. Nevertheless, efficiency
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might still be assumed to suffer in spite of the way in which the second ownership was delimited. Indeed, if no examples already existed of the successful practice of airport facilities owned by more than one organisation, then certainly confidence in the proposition could not, at least initially, be expected to be very great. On the other hand, since such patterns of ownership have in fact already proved to be most successful in the United States airports, there are surely good grounds for believing that they would also be successful here in the United Kingdom.
Another concern could well be that this type of amendment puts too great a burden on the Secretary of State. Does he know better than the airport owner about capacity, and can he really be the best judge in this matter? And in spite of the nature of this amendment, which gives choice and which avoids a conflict with commercial considerations, it cannot be denied that, indirectly at least, the Secretary of State is enabled by it to be coercive. Against that, however, it should be observed that we would accept that this indirect measure of coercion is to be applied to a privatised monopoly as distinct from small businesses or individual interests. Equally, we would acknowledge that a Secretary of State from whichever department is well accustomed to his duty of exercising reserve powers, and in this Bill the Secretary of State has already been given reserve powers in other contexts. Indeed, it has been said that, regardless of what may be his politics or his department, it does not do to leave the Secretary of State too much out in the cold. This only encourages him to persuade his Cabinet colleagues to get things back to what they used to be and thus to reinstate our old friend—the status quo ante.
Regarding the probable impact of this and similar amendments, the impact would surely be not so much on the number of competitive terminals built, which number would always be fairly few, but far more to increase the initiative of the owner. Thus there would be a greater chance that the owner himself provides capacity in a timely manner, and the owner would be all the more encouraged to explore joint ventures with outside developers. Such ventures are of course beneficial to the airport owner who thereby reduces both the risk and the capital expenditure while still retaining a significant element of control.
My noble friend the Minister may well wish to consider a different amendment or amendments from that which is currently proposed in order to cover certain aspects which quite possibly have been overlooked. However, I hope my noble friend will agree that the existing draft of the Bill, while containing some safeguards and incentives to ensure the provision of capacity, does not go as far as it should; hence the need for some amendment along the lines proposed.
The Earl of Caithness: This new clause seeks to allow organisations independent of airport owners to provide extra terminal capacity. Such a provision is, I believe, most unlikely to be necessary, and I also believe that it would be counter-productive. My noble friends have made two claims on its behalf.
First, let me take the proposition that independent operation would encourage competition; Let us

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suppose that Heathrow's terminals were in competition with one another. How could Terminal One, which was designed to cater for domestic and short-haul European traffic, compete with Terminal Three, which was designed for intercontinental traffic? The facilities at one could not cope satisfactorily with the type of traffic handled by the other. So all new terminals would have to be designed as multi-purpose buildings. This would be an inefficient and impractical way to proceed. Specialised dedicated terminals can provide a better service to the consumer, at a better price.
When considering competition at airports, one must assess the effect on competition between airlines. It is essential for this reason that airports offer a non-discriminatory service to all who wish to use them. It is likely that the organisations who would wish to develop new terminals would be major airlines. If a terminal occupying the only vacant site at Heathrow was occupied exclusively by one airline only this could disadvantage all other airlines—either by ensuring that that airline had the capacity to expand, or by taking out so much traffic from other terminals that the remaining users would have to face increased charges.
Secondly, I turn to the question of the efficient provision of adequate capacity—a point majored on by my noble friend Lord Kinnoull. We have already recognised this need in the Bill. Clause 36(2) places a duty on the CAA to use its powers as economic regulator in order to encourage investment in new facilities in time to meet demand. Airport revenues, and therefore profitability, are strongly linked to passenger throughput and passengers do not make purchases, boosting commercial income, in heavily congested surroundings. Airport operators' future profitability will depend crucially on their investing in new facilities in good time. I cannot conceive that private sector airport operators will fail to meet demand.
I consider that inefficient provision of capacity would be more likely if we were to move to a system of independent terminals. If some airlines were to own their own terminals, they would not be asked to move to fill gaps in capacity in other terminals. Thus we could see overcrowding in one terminal, while another would be deserted for much of the day. There would be demands for the premature development of large lumps of terminal capacity for individual airlines irrespective of runway capacity, increasing the cost for all other airport users as a result. The solution which this amendment seeks to offer is to place on the Secretary of State the onus of deciding when and where the facilities should be provided.
Although it is not clear from the terms of the proposed new clause, I presume it is not intended that an independent terminal operator is to be given the right to construct a terminal on the operator's land against his will. This is presumably intended only to apply where there happens to be suitable land conveniently situated next to an airport where an independent operator could build a terminal. But here I come to what I believe is my crunch argument. The unavoidable fact remains that the nub of this amendment, the feature without which it would not work, takes away the normal rights of ownership. Its essential element gives the Secretary of State the power
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to interfere with an airport operator's use of his own property, possibly against the airport operator's own commercial and managerial judgment. I would suggest to both my noble friends Lord Kinnoull and Lord Dundee that that is a very dangerous path down which to go.
This interventionist role for the Secretary of State is entirely contrary to the whole concept of a private sector aviation industry freed as far as possible from government control. Of course the Bill in no way precludes joint ventures between airport operators and others to develop new terminals. I see such developments by mutual agreement as a promising way ahead for private sector airport operators, but the introduction of a system of independent terminal operators forcing airport operators against their will to allow terminal developers access to the runways and other key facilities which are the property of the airport operator, or rather its shareholders, would benefit only the largest one or two airlines. It would not promote effective competition within airports but would probably hinder airline competition.
My noble friend Lord Dundee mentioned the experience of the United States airports, but I have received very different reports. Where there was space in the past there is now no longer space, and they are finding that the system operated in our airports is a much more effective use of space.
In conclusion, I feel a little like my noble friend Lord Boyd-Carpenter felt earlier in our discussions. He felt that he was almost lulled into accepting the amendments put so ably by my noble friends Lord Kinnoull and Lord Dundee. Their persuasive arguments—and I must thank both my noble friends for coming to see me about this beforehand—very nearly lulled me into accepting them, but I find they are completely objectionable on the feature of interfering with the normal rights of land ownership. I hope that the Committee will reject the amendments.
The Earl of Kinnoull: I was hoping that my noble friend would intervene. I presume that he possibly agrees with the principle of the amendment but does not wish to discourage the Government from the course they are currently adopting. I noticed earlier that my noble friend was quite stringent in the decision of the Secretary of State over the helicopters. I share his view on that. I am sorry that I cannot get him to spring to his feet to give a view which I think the Committee would appreciate.
Lord Boyd-Carpenter: If my noble friend will allow me, most of my noble friends are only too anxious that I should not spring to my feet. My noble friend Lord Kinnoull is being very original in suggesting the contrary, but on this occasion I am afraid that even his advocacy will not succeed, because I do not happen to agree with his amendment.
The Earl of Kinnoull: In that case perhaps we should have an intervention fee. We are discussing a serious principle of the Bill and I am surprised that noble Lords opposite have not come in on this. The principle that I put forward to the Committee and which my noble friend put forward much more forcibly and with a much better prepared argument—
Lord Underhill: Neither I nor my noble friend intervened because we wanted to hear the Minister, and basically we were satisfied with what the Minister said.
Lord Tordoff: While this is going around, I did not intervene because when I came into the Chamber and looked at the annunciator I saw that I was moving the amendment, and so I felt I did not need to bother.
The Earl of Kinnoull: I therefore now have one supporter in the Committee.
I should like to thank my noble friend for saying that we moved previous amendments eloquently. In fact, this is the first amendment that I have moved. My noble friend is much more eloquent, and I shall allow him to decide and to advise the Committee which way he wishes to take this amendment. I should like to take up two points with my noble friend who replied. His final words were that the principle of the amendment was "completely objectionable". He used, first, the example which he had apparently received about the United States airports. The whole Committee will be interested to know about that, because I do not know and the information I have is completely different from that which he gave. I do not doubt that he has good evidence, but I think he should tell the Committe exactly what is the evidence, and where it came from, because it is material to this argument.
My noble friend also said it was objectionable because it would be against the principal policy of a private company having freedom. It is a private company which is a very strange party indeed. It has on the one hand compulsory purchase powers, which I am sure is right; but on the other hand its directors have a clear duty to shareholders. When my noble friend says that he could not envisage any time when the company could not perform what it should perform, then I should like to put to him an example of where I believe the company could do so.
One could take it that we might have the most terrible world recession in two years' time, that interest rates in Britain go up to 30 per cent., and that the City would lend hardly any money at all. One could take it that at that time, for some reason or another, it was felt that there should be more capacity on a long-lead investment. How would the directors of the company view that situation? They would on the one hand, rightly, have the national interests to consider; on the other hand, they would, rightly, have the interests of their shareholders to consider. The balance would have to come down in favour of the shareholders.
The Civil Aviation Authority would have the slightly blunt instrument of its economic regulator that it could use. But that regulator cannot be used more often than every five years; I believe that is the term. So the authority could flap its wings, and Members of Parliament could assail the Secretary of State, but he would simply say, "I have no locus standi". It is very material that in a recent statement when the Government announced the final package, so far as they were concerned, for invesment in Stansted, that it was specifically stated that it was the last occasion on which the Government would be standing at the Dispatch box to give the Ho use the information that
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they had approved and funded, I suppose, the long-term investment of Stansted. When this Bill goes through, British Airports as a private company will be responsible.
Stansted is a remarkable airport. I remember 25 years ago when it almost went through, and when Lord Dilhorne moved an amendment that did not allow the runway to be accepted. At that stage it was abandoned, as the Committee will remember, for many years, and then it came back again. When one looks at Stansted now and at the vital role that it needs to play in the future, in the full capacity of the London international airport, then I believe one could argue whether the private investor would have been able to withstand the period of lead time that was required for the slow development of Stansted.
Much more important is Heathrow. My noble friend particularly identified the terminal capacity aspect, and criticised the possible use of a fifth terminal and how it would work. Frankly, I do not imagine that British Airways would accept his argument, and after all they are experts in this operational field. When it comes to the question of Terminal 5, which could be a very vital decision in the foreseeable future, then although it is a matter of planning (I accept that entirely), it is also a matter of national interest and the vital capacity of Heathrow. It would be very sad, if that issue arose and there was no power whatsoever for the Secretary of State to examine and discuss with the new company the possibility and the national need for Terminal 5. I hope that my noble friend will reply to one or two of the points that I have just made.
The Earl of Dundee: I am grateful to all noble Lords for their remarks, and particularly to my noble friend Lord Kinnoull. Clearly, the aspects that have to be addressed in connection with this amendment have many relevant consequences for companies and customers, and have many management consequences arising from two owners rather than one. There are also the consequences of Government intervention if the Secretary of State were to have reserve powers. If it can be agreed to a greater extent what those consequences really will be, or will not be, then there could be corresponding progress with the revised wording of any similar amendments. In the spirit of optimism that such progress can be made, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 [Matters to be taken into account by CAA]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 60:
Page 27, line 40, leave out paragraph (a) and insert—
("(a) the need to secure the sound development of the civil air transport industry in all parts of the United Kingdom;").
The noble Lord said: Despite the length of time that we have been sitting (because in normal circumstances it would now be about 10 o'clock), I hope that the Committee will indulge me. This amendment is one that we consider to be particularly important, and while I shall do my best not to use any unnecessary

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language or phraseology, it is an amendment that should be presented with a certain amount of clarity. Part III of the Bill empowers the Secretary of State first of all to make rules governing the distribution of air traffic between airports serving the same areas, to impose limits on the number of aircraft using airports and to introduce a scheme for the allocation of capacity at an airport affected by limits on aircraft movements.
The local authority airports understand and accept the objectives behind the Government's proposals. As the demand for scarce capacity at the London airports increases, the need for rationalisation becomes all the greater. But the local authorities consider that these issues should not be looked at solely from London's point of view. They believe that they are of considerable significance for the regional airports, particularly in the longer term. The present pattern of air services and the near absolute dominance of the whole British scene by the London airports does not really adequately reflect the true pattern of the origin and destination of passengers. There are many figures available, but I will quote only one set of figures to the Committee: 91 per cent. of UK residents travelled through the London system in 1984 to go abroad, yet only around 60 per cent. of these passengers actually originated in the south-east planning regions. Even the Government acknowledge that too many regional passengers are forced to use the London airports. This is in the White Paper, paragraph 12.11. It is therefore important that regional feeder services should not be looked as simply from the point of view of supporting Heathrow or Gatwick interlinking operations.
There is also the question of the importance of these air operations to the regional airports and the regional areas themselves. Regional interests are realistic. They fully understand that it would be wholly wrong to force passengers to use airports they do not want to use. The problem, however, is that it is happening now to thousands of regional passengers: they are being forced to use the London airports, which they may not need to use. In their view, there are objectives which can be pursued. One such objective relates to tourism. Over 33 per cent. of London's future demand is attributed to inward tourism. The available scope to encourage greater use of gateway airports like those in Scotland—and we are doing as much as we can in Scotland in this respect—and Manchester is considerable, particularly given the incidence of repeat visits to the country. This point is underlined by the recent House of Commons Select Committee report.
The CAA has pointed out in its latest report that such policies would run counter to the nation's international obligations. But if these obligations mean that London's airports must be stretched to breaking point, that London as a centre must continue to be over-full with tourists, some of whom in any event want to travel to other parts of the country, then these obligations must be reviewed.
It is in the interests of foreign as well as the United Kingdom Governments to do this; and, equally, if foreign Governments wish to see their airline interests protected at Heathrow they themselves must come to terms with the desirability of exploiting market opportunities in the regions. It is the duty of the Government to ensure that this long-term objective is
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pursued. The CAA chooses to interpret the existing duty in Clause 32(3)(a)f as though the existing state of affairs—that is, the regional airports being forced to use London airports in their feeder service and to bring all their passengers down there—is satisfactory. Of course, looking at the country as a whole, many do not believe that is the case. Only a better defined duty making clear the promotion of civil aviation in all parts of the country will ensure that the perspective is a national one and is not limited solely to London.
I tried to say at the beginning that the regional airports do not think it can be done overnight. They do not believe that it is something people can be ordered to do. They believe that the Civil Aviation Authority should recognise that a bursting point will come in London and that there is plenty of space and desire—and the evidence is there—for expansion over the years, and for taking the powers to expand over the years the role of the regional airports. I beg to move.
Viscount Davidson: I have to tell the noble Lord, Lord Carmichael of Kelvingrove, that I have found some difficulty in discerning the precise point of this amendment.
Clause 32(3)(a) requires the CAA, in undertaking its functions in Part III of the Bill, to have regard, among other things, to,
"the need to secure the sound development of civil aviation in the United Kindom".
The amendment would substitute "civil air transport industry" for "civil aviation" and "all parts of the United Kingdom" for the words "United Kingdom".
The Bill specifically includes the words "civil aviation" in order to indicate that a wide range of civil aviation interests might be addressed in the CAA's exercise of its duties under Part III of the Bill. The words "civil aviation" cover both airlines and airports. The amendment is more restrictive. In much the same way the words "United Kingdom" are necessarily inclusive of "all parts of the United Kingdom".
The White Paper outlined our commitment to develop regional airports. We have done this in a number of ways. Since 1979 the Government have approved unprecedented levels of capital expenditure totalling about £222 million at local authority airports, and we expect to approve further capital expenditure for expansion and improvement where this is justified against the criteria of demand and return on capital. We have effectively deregulated domestic fares. We have been active within the EC in seeking to liberalise inter-regional air services, and in the wider international arena we have taken every opportunity to stress the importance of regional services.
To see the practical benefits your Lordships need look no further than Manchester, where we have approved a total of over £49 million for improvements. Manchester now offers scheduled services to over 35 foreign destinations, about half of which were introduced in 1985. A number of new routes have already started this spring, and we confidently expect this trend to continue. There is no doubt that this Government will continue to do all they can for regional airports. In view of what I have said, I hope the noble Lord will withdraw his amendment.
Lord Carmichael of Kelvingrove: It is my intention to withdraw the amendment—not that I think it is not an important amendment, but because it is an amendment I hope to bring back at a later stage and perhaps clear up some of the points that I felt the Minister misinterpreted.
One of the aspects that is perhaps not quite understood by those who are domiciled all the time in the South is this question of the "United Kingdom". It can be used by people in the South-East of England to mean the whole of Britain. This is the problem felt by people in Manchester, the North-East and Scotland. To insert "in all parts of the United Kingdom" may sound purely semantic, but it means just a little more than civil aviation "in the United Kingdom".
I shall look at the Minister's reply because I know that he took a great deal of care to point out where he disagreed with my submission, and I reserve the right to raise this matter again on Report if necessary. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 61 not moved.]
6.30 p.m.
Lord Underhill Lord Underhill moved Amendment No. 62:
Page 27, line 42, at end insert—
("( ) the reasonable interests of persons resident near the airport;
( ) the need to minimise the environmental consequences, in particular the impact on the community of aircraft noise and surface transport;")
The noble Lord said: Although this is not on the grouping arrangements, I wonder whether it will be agreeable to the Committee if I not only move Amendment No. 62 but also speak to Amendment No. 68 under Clause 37, because the same principle of environmental considerations arises. In view of the fact that we have already been discussing this Bill for six hours, I shall make my remarks very brief. I really want to know whether the Government accept that the question of environmental consequences should be considered.
Amendment No. 62 deals with the question of matters to which the CAA "shall have regard" when they are dealing with traffic distribution rules and the allocation of capacity at airports. In Clause 32, two matters to which the CAA shall have regard are:

"(b) the reasonable interests of users of air transport services; and

(c) such policy considerations as the Secretary of State may notify to the CAA".

The purpose of my amendment is to include among the matters to which they shall have regard:
"the reasonable interests of persons resident near the airport; [and]
the need to minimise the environmental consequences".
The Committee will note that it is not concerned merely with the question of aircraft noise but also with the impact of surface transport.
Amendment No. 68 relates to Clause 37, and in that clause there are four matters (which I shall not trouble to read out to the Committee) that are to be considered by the CAA when carrying out its functions as set out in Part IV of the Bill. We think that again one of the considerations should be this question of environ
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mental consequences, and the amendment has much the same wording as Amendment No. 62.
The Association of County Councils supports both these amendments. I recall that only a short while ago the noble Lord, Lord Boyd-Carpenter, referred to the question of the Gatwick-Heathrow helicopter service. I have somewhat the same views as he has on the cancellation of that service. However, perhaps I may paraphrase what the Under-Secretary of State, Mr. Michael Spicer, said in Standing Committee in another place on 13th May. He said that his right honourable friend the Secretary of State had to weigh up environmental considerations along with economic benefits; in other words, the Secretary of State has to take these matters into consideration. It seems to me that the CAA also ought to take environmental considerations into account as in both the amendment to Clause 37, to which I have referred, and this amendment. I beg to move.
Lord Boyd-Carpenter: The noble Lord, Lord Underhill, has raised an interesting issue, but I am a little puzzled by the first part of his amendment. What,
"the reasonable interests of persons resident near the airport"
are likely to be raises very interesting questions.
On the one hand, the maximum development of the airport will mean the maximum of good employment and good business for those living near. On the other hand, of course, it will mean more noise. The expression is really ambiguous. It depends whether you are concerned with economic interests. I know that the noble Lord, Lord Tordoff, will say that one is going back to the early 19th century and to people working in appalling conditions, which he seems to think attracts me; but in all seriousness (and being a little more serious than the noble Lord, Lord Tordoff on this issue), the experience of those who have seen what has happened around Gatwick is that the development of an airport means that it becomes one of the most powerful economic benefactors of any area.
Only about 18 months ago I opened a housing development near Gatwick which had been necessitated solely by the fact that there were so many jobs that there had not been sufficient accommodation to house the people who had been sucked in to fill those jobs. If one looks closely at this amendment, it seems that "the reasonable interests of persons resident near the airport" could well be construed as referring to the maximum use of the airport. On the other hand, it may be looked at as an environmental question. I suggest that the first half of the amendment is ambiguous and should be rejected on those grounds.
With regard to the second part of the amendment—
"the need to minimise the environmental consequences, in particular the impact on the community of aircraft noise"—
I can assure the noble Lord that the CAA is extremely concerned with these matters. He may recall that it was the CAA which insisted on a steady reduction in aircraft noise and eliminated the use at major airports of old-fashioned aircraft which, although economically still excellent, were somewhat noisy. The CAA has been grappling with that problem for years and does not need an amendment to remind it of it.

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I should have thought that your Lordships would accept that when one notices, as I have noticed with great pleasure, that Mr. Christopher Tugendhat is taking over as the authority's chairman early next month. Some of your Lordships knew him in another place and others knew him as a European Commissioner. The idea that Mr. Tugendhat would not concern himself with the general impact of noise is preposterous. I appreciate the amendment's good intentions, but I think that the first part is ambiguous and the second unnecessary.
Lord Tordoff: I wholeheartedly endorse what the noble Lord, Lord Boyd-Carpenter, said about Mr. Christopher Tugendhat, having spent the early part of my working life working for his father—but that is another long story. The noble Lord has put his finger on things in relation to,
"the reasonable interests of persons resident near the airport".
He pointed out, as I suggested earlier, that there are a variety of interests. It is the balancing of those interests which is necessary. That is why it is necessary to put that point in the Bill.
The point I wish to make—which has not been made here or to any great extent in another place—in relation to this amendment concerns the whole subject of night flying. I worry, as I know many people do, that pressure for night flying will come, especially at Heathrow, as the Government move towards the liberalisation of international air routes, which one greatly supports. As more bilateral agreements are made, the greater the pressure will become.
Similarly, the need to interline international airlines and still preserve the rights of regional services flying into London will put great pressure on Heathrow. One fears that the pressure will increase steadily for an extension of hours at Heathrow and for night flying. That is why when we move from a nationalised industry to a privatised industry—a privatised monopoly in this case—we must take extra care to ensure that the needs of the environment and the people living around the airport are preserved. That is why, in principle, I support the amendment.
Lord Monk Bretton: I am rather concerned about this matter because Clause 32 catalogues matters to be taken into account by the CAA with reference to its actions under Clauses 29, 30 and 31. It goes into some detail, but leaves out environmental matters. I am not sure what the noble Lord, Lord Underhill, will do with the amendment which is, of course, in his name. He may wish to revise it and bring it back. I attach more importance to those environmental matters—and I am sure the Committee understands what I mean—evidently than does my noble friend Lord Boyd-Carpenter. Clauses 29 and 31 are important from an environmental point of view and hence my support for the amendment.
If one is defining such matters in Clause 32, one must define them all. If one is not defining them, it may be that all is well and good, and that we go back to the provisions of Section 5 of the Civil Aviation Act 1982. I should, however, like to be sure about the situation because these environmental factors are of great importance and must be taken into account in
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airport policy. They involve a great deal of money. Having noted the rapid growth at one moment at Second Reading of a somewhat unholy alliance between my noble friend Lord Boyd-Carpenter and the noble Baroness, Lady Burton of Coventry, I was afraid that they would be building the second runway at Gatwick as soon as possible if we did not look out. For those reasons, I felt that it was important to speak to this amendment. I still believe that we should not lose sight of the principle that underlies it.
The Earl of Caithness: The amendment seeks to add to those matters to which the CAA must have regard in undertaking its functions under Part III of the Bill. The amendment would specifically write into the legislation the need for the CAA to look to the interests of people who live near airports. Indeed, my noble friend Lord Boyd-Carpenter has highlighted some of the wide range of interests that might have to be taken into account if this amendment were written into the Bill and the general environmental impact of airport operations.
The matters that the CAA must take into account in giving advice under Part III of the Bill are set out in Clause 32, which requires the CAA to have regard to,
"such policy considerations as the Secretary of State may notify to the CAA for the purposes of this section".
That provides for the Secretary of State to set out for the CAA policy issues that he thinks are germane to its formulation of advice.
The Government's policy towards the environmental impact of airports is crystal clear. In the White Paper on airports policy, my right honourable friend the then Secretary of State stated at paragraph 3.1 that airports policy should be directed to a number of objectives, one of which was,
"to minimise the impact of airports on the environment generally; and to ensure that land use planning and conservation policies take fully into account both the development needs arising from airports and the environmental consequences".
I need hardly add that the White Paper set out a number of other policy intentions that could also be reflected in a notification under Clause 32(3)(c). But to spell out on the face of the Bill those various issues as matters to which the CAA must have regard would be to overburden the legislation—an argument that we have heard previously this afternoon.
The Government have made clear that they regard aircraft noise as one of the most objectionable effects of airport development and are anxious that nuisance should be avoided so far as practicable and reasonable. We believe firmly that the most effective measure for reducing noise disturbance is, as I said earlier, to reduce aircraft noise at source in the aircraft itself. Clause 32(3)(c) provides the mechanism through which the Government can ensure that the CAA is given appropriate notice of policy relating to the impact of airports on the surrouding area for its advice under Part III of the Bill.
My noble friend Lord Monk Bretton said that we should not lose sight of the environmental issues. I hope that I have convinced him that we have not lost sight of them and do not intend to lose sight of them. I would, however, go back to my argument about spelling all this out on the face of the Bill. We are bound to leave out the very first issue that comes up

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after the Bill, as we hope, is enacted. The noble Lord, Lord Tordoff, will know that the provisions of this Bill have no connection with, nor is it intended that they should affect, current arrangements for, and controls on, night flying. I can tell the noble Lord and the Committee that all these matters are under review at present. I shall therefore pass on to my right honourable friend and to my honourable friend the Minister for Aviation the points that the noble Lord made on that specific issue.
6.45 p.m.
The Earl of Cork and Orrery: I do not know whether any Members of the Committee have had the experience of going shopping either on their own account or with their wives with a shopping list and finding that the list is incomplete. That is probably worse than having no list at all. To arrive home with some vital purchase missing because it was not put on the list can be disastrous. We have a kind of shopping list in Clause 32 of matters that shall be attended to on behalf of the public. The amendment proposes to put in two more. If noble Lords decline to put those two in we shall end up with an incomplete list with the implication that those matters are not required. I have in mind in particular the reference to aircraft noise and surface transport.
It is vitally important that these matters should be attended to by the Secretary of State and anyone else concerned. There is too little mention in our debates of these subjects of surface transport. My noble friend the Minister has been talking of the disturbance caused by aircraft noise. We are all familiar with that. We are less familiar with the idea—we may be familiar with the fact—of the disturbance that air traffic causes on the ground. By far the greater part of the pollution caused by an airport of the vaster size—and they are getting bigger all the time—is the generation of traffic, the construction of roads to carry that traffic and the damage done to buildings. It would be a great lacuna in the Bill if this amendent were omitted, and a great mistake. I support the amendment.
The Earl of Caithness: I am happy to tell my noble friend that I went shopping for my family last weekend. We had a fairly comprehensive list. When I staggered home rather tired on Friday evening I added one or two more items. Yet when I reached the shop I found something that was badly needed was not on the list. I return to my point that I do not think we can make a comprehensive list. I hope that I have covered the point sufficiently for my noble friend to realise that our right honourable friend the Secretary of State will take these matters into account—there is the necessary provision for him to give the instructions to the CAA—and that we shall not lose sight of these and many other matters.
Lord Underhill: I am very pleased that in the past few minutes reference has been made to surface transport, which is included in my amendment. For brevity's sake I made no reference to it, but it is a very important consideration. I am a little astounded that whenever we want to put in extra qualifications the noble Earl says that we are overburdening the
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legislation. I said that I would also cover Amendment No. 68. We already have four matters to which the CAA must pay attention. It appears that if the Government want to put in four matters, that is all right; but when I want to add two more to make four under Clause 32 that is all wrong: that is overburdening the legislation.
However, I have what I wanted: the view of the noble Earl on the environmental matters. That will enable us to take a very careful look at this for the Report stage. I agree with those noble Lords who have supported this amendment that we ought to make sure that environmental factors are considered. It is not sufficient to say that the Secretary of State will do this, because 24 hours ago the Secretary of State was changed. One never knows: the Secretary of State may change again. We therefore want to be certain that it is provided in the Bill and that we are not just relying on the assurance of the Secretary of State. We shall keep that in mind for the Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 agreed to.
Clause 33 agreed to.
Lord Underhill Lord Underhill moved Amendment No. 63:
After Clause 33, insert the following new clause:
("Limitation of air traffic control officers' hours of work.
—(1) The Secretary of State shall, after consultation with appropriate employer bodies and organisations, representing air traffic control officers, introduce regulations in respect of the hours of work of air traffic control officers and related conditions of service, the approval of the regulations to be by affirmative resolution of both Houses of Parliament.
(2) The regulations referred to in subsection (1) shall limit the number of operation hours air traffic control officers may work (in any 24 hour period) and define the periods for such related matters including—

(a) length of duty;

(b) fatigue relief;

(c) meal breaks;

(d) between duties;

(e) circumstances under which air traffic control officers will be permitted to undertake standby and emergency duties,

and shall provide that the Secretary of State shall revoke the licence of any airport authority who fails to observe the above limits.
(3) The Secretary of State, on receipt of information confirming that the hours of work of an air traffic control officer exceed the limit as specified by regulation or that the minimum periods referred to in subsection (2) are being exceeded, shall give notice to the Airport Authority to comply with regulations within a specified period.").
The noble Lord said: I shall be extremely brief, not because this amendment is unimportant but because of the time factor. This is a very important consideration. The amendment attempts to ensure that the Secretary of State, after consultation with the bodies concerned, will ensure that there are proper hours of work laid down for air traffic controllers. Other conditions also are laid down. I am informed that similar restrictions apply to air traffic controllers in many countries overseas. These people are fully qualified and are licensed by the CAA. This relates to the whole question of safety and security. I think everyone will agree that if air traffic controllers are working excessive hours, this can be a danger for civil air traffic. I have a set speech in front of me which I

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shall not give, because what I should really like to know is whether the Government appreciate, perhaps not the wording of my amendment, but that consideration should be given to laying down some limitation of air traffic controllers' hours. I beg to move.
Lord Tordoff: I should like to give my full support to the principle behind this amendment. It seems to me we go to a lot of trouble to regulate airline pilots' hours and we really ought to go to similar lengths for air traffic control officers. The fact is that they perform a vitally important task—and in some cases a more important task than airline pilots, if I may say so. There seems to be a gap in the legislation. I am sure the Minister will say that there are all sorts of regulations and controls over this and that the Civil Aviation Authority checks these things on a regular basis; but the information that I have is that the number of spot checks which take place are perhaps inadequate. When this was put to the CAA they said that several spot checks have been carried out during the past three years but that the exact number is not readily available; suffice to say that spot checks are made. Frankly, that does not convince me and I hope that it does not convince Members of the Committee. It is a serious matter.Inflight International magazine carries an interesting quote this morning by a Mr. Miller of the American National Safety Transportation Board. He is a former accident inspector of that Board and he says:
"If you need an accident to know you have a problem, then you are part of the problem".
I ask the Government to take that quotation seriously in looking at this important part of civil aviation.
Lord Boyd-Carpenter: There is no doubt that air traffic controllers must not be made to work excessive hours. The safety aspects of this are too obvious to need stressing. Those of the Committee—and I think there are many of them—who have been in the control tower either at LATCC or at a major airport, have been deeply impressed by the way these people handle little dots on a screen, moving rapidly and apparently very close together at very high speeds, and carrying with them anything up to 500 people in the aircraft they represent. This is obviously a most important safety aspect.
As I think the Committee knows, the main air traffic control systems in this country are run by and controlled by the Civil Aviation Authority itself. National Air Traffic Control Service, which also handles RAF traffic control, is integrated with the Civil Aviation Authority and controlled by it, and therefore there is a very strict control indeed over the hours that can be worked by these controllers. The only ones who are really outside this are the local aerodrome controllers at some aerodromes, since aerodrome owners are free either to employ Civil Aviation NATCS controllers or their own controllers.
But equally, as the Civil Aviation Authority licenses airports (among other things on the ground of safety), pretty strict supervision is also kept on the hours of work put in by the controllers. Therefore, while there is undoubtedly a theoretical case for a statutory limit, I very much doubt whether there is any practical need for it because this does seem to me a matter which is
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very carefully looked after by the expert body, which is after all responsible generally for air safety. Indeed, it might well be argued—I do not know what my noble friend the Minister will say—that once you start laying down statutory hours, you introduce a rigidity and an inflexibility into the system which may not be very helpful or even conducive to safety.
The flexibility of the present system, properly supervised by NATCS, seems to be one of the more satisfactory parts of our system, and on the old basis that where it is not necessary to change, it is necessary not to change, I would express some doubts as to whether there is a need to do this. However, it is a perfectly respectable point to be raised and I shall be interested, as will noble Lords generally, to hear what the Minister says.
The Earl of Caithness: I should like to join with the three noble Lords who have spoken, and I agree with them that we are discussing very important considerations. At this stage I should like to pay a tribute to the air traffic controllers. I went specifically not only to West Drayton and Heathrow but to some of the regional airports to look at what they do, and I was very impressed by the work that they put in to keep our skies safe.
Turning to the amendment, although there are no statutory limits on controllers' hours, we believe that the present arrangements are sufficient to ensure that the high standards of air traffic control are maintained in this country. The privatisation of the BAA or any other airport will make no difference to this. The Civil Aviation Authority Inspectorate of Air Traffic Control Services checks every airport's air traffic controllers each year. It recommends the appropriate complement of controllers in the light of the volume and complexity of traffic handled. Although airports need not comply with the recommendations, they invariably do so. The inspectorate also carried out inspections between annual checks—the spot checks to which the noble Lord, Lord Tordoff, referred.
This new clause would provide my right honourable friend with the power to revoke an airport's licence where an airport authority fails to observe regulations setting out air traffic controllers' working hours. This clause leaves my right honourable friend with no choice but to revoke a licence in such circumstances, and we believe that that is a solution which is a trifle draconian.
The CAA already has adequate powers. If the CAA judged that an aerodrome was unsafe because air traffic control staff were working over-long hours, it would be able to suspend the aerodrome's licence and, if necessary, revoke it. Many airports and aerodromes in the UK see very little traffic, yet this clause would require controllers' hours to be regulated at every airport in the country, large and small. The hours a controller works reflect the volume of traffic at his airport. A controller at a busy international airport may work only 35 to 40 conditioned hours, whereas a controller on a North Sea oil rig may work 55 to 60 conditioned hours.
There is indeed no evidence to suggest that controller-fatigue has ever played a part in an accident in this country, and that testifies to the adequacy of the existing arrangements for ensuring the safety of the

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UK air traffic control services. We do not believe that to regulate the hours of air traffic control staff, the length of their meal breaks and such other matters will enhance safety. Indeed there is a danger of substituting an inflexible and mechanical regime for the present system of checks and inspections which can respond far more readily to changing patterns of demand at an airport—the very flexibility to which my noble friend Lord Boyd-Carpenter has just drawn our attention.
Nevertheless, as I said right at the beginning, I share noble Lords' concern for safety. The CAA understands the complexities of air traffic control systems and has sufficient powers to ensure that they are safe. We should not seek to supplant the authority with the regulations envisaged under this new clause. We believe that that would be a retrograde step.
7 p.m.
Lord Underhill: In trying to assist the Committee there is sometimes danger in being very brief in one's introduction of an amendment. I am very pleased that everyone who has spoken has praised the work of air traffic controllers, and I believe that that sentiment is echoed by all noble Lords in the Committee.
I should stress that I am advised in this matter—as I think are other noble Lords—by those who represent the air traffic controllers. They are the Institution of Professional Civil Servants, who represent over 90 per cent. of the air traffic control staff employed by the CAA, and also NALGO who represent the great majority of air traffic control staff at municipal airports. It is the people on the ground who do the job who have asked that we should press this on the Government, because they are worried that the operation of the Airports Bill may lead to certain things happening which may necessitate them experiencing a limitation on hours of work and matters of that kind.
I appreciate what the noble Earl has said. We shall seek further advice from the two bodies who have advised us on this matter. They believe it is desirable that such matters should be given attention, not so much in their interests as members of the staff, but in the interests of air safety. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 34 [Interpretation of Part IV]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 64:
Page 28, line 27, at end insert—
(" "operational activities" has the same meaning as it has for the time being in section 28(2A);").
The noble Earl said: I beg to move Amendment No. 64, and with the leave of the Committee speak to Amendments Nos. 82 and 83. The definition of "operational activities" which was included in government Amendment No. 47 to Clause 28 expresses clearly the extent of the airport-related business. This definition is also relevant in the context of Clause 41, which deals with the scope of the MMC's five-yearly review of designated airport businesses.
The present wording—
"Activities … the revenues from which and the costs of which are taken into account in fixing airport charges"—
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attempts to get the same thought across, but does it less well. We will shortly be coming to another group of government amendments which seek to bring the airport-related parts of an associated company's business within the scope of economic regulation.
The proposed insertion of "operational activities" has several merits. It encapsulates the scope of the airport-related business and therefore what is being regulated under the Bill, and it is applicable whoever carries on those activities. It does not alter either the scope or the intention of what is in the Bill already but simply makes it clearer, and provides for consistency with what your Lordships have agreed to on Clause 28. I beg to move.
On Question, amendment agreed to.
Viscount Davidson Viscount Davidson moved Amendment No. 65:
Page 28, line 30, leave out ("by the airport operator").
The noble Viscount said: For the convenience of the Committee I should like also to speak to Amendments Nos. 77, 78, 79, 80, 81 and 84. The purpose of this rather complex set of amendments is to facilitate the imposition of conditions regulating the conduct of an airport operator where airport activities are carried out by persons other than the airport operator under franchise.
As many noble Lords are aware, many activities at airports are carried out by franchisees, concessionaires, etc.—that is, persons granted rights to carry out such activities—rather than by the airport operator. Where this is the case, economic regulation works through conditions imposed on the airport operator if his actions have, in unreasonably limiting the number of franchisees, resulted in monopoly abuse.
We have become aware, however, that the Bill might not quite achieve this intention. It is possible that an airport operator—perhaps for good commercial reasons—might wish to hand over the granting of franchises for various activities at his airport to another company. This intermediate company might then grant franchises to other companies. The Bill does not cater for the above situation, because it is drafted in terms of the provision of services and facilities by the airport operator's franchisee, whereas in the scenario I have described the airport operator's franchisee would not himself be providing such services. In addition, where there is an intermediary company it would not be the course of conduct of the airport operator which unreasonably limited the number of franchisees; so again the Bill as drafted could not fully meet our objectives.
I will not go too closely into the detail of these amendments, but their effect is to ensure that regulatory conditions imposed on the airport operator can target on a monopoly abuse of his making no matter how many links there are in the chain of franchises. I hope, therefore, that the Committee will agree to this amendment, and I beg to move.
On Question, amendment agreed to.
Viscount Davidson Viscount Davidson moved Amendment No. 66:
Page 29, leave out lines 1 to 4.
The noble Viscount said: With this amendment it will be for the convenience of the Committee if I speak

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at the same time to Amendment No. 98. These are purely technical amendments. The term "user" is presently defined in Part IV of the Bill because it occurs only in that part. Now that noble Lords have agreed to amendments to Clause 28, widening the powers of my right honourable friend the Secretary of State to give directions, the term "user" also arises in Part III of the Bill in the definition of "operational activities". It is therefore necessary to move the definition from Part IV to the general interpretation clause at the end of the Bill. The meaning of the definition is unchanged. I beg to move.
On Question, amendment agreed to.
Clause 34, as amended, agreed to.
Clause 35 [Airports subject to economic regulation: requirement for permission to levy airport charges]:
[Amendment No. 67 not moved.]
Clause 35 agreed to.
Clause 36 agreed to.
Clause 37 [Imposition of conditions by CAA]:
[Amendment No. 68 not moved.]
Clause 37 agreed to.
Clause 38 [Mandatory conditions in case of designated airports]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 69:
Page 33, line 41, leave out ("aggregate").
The noble Lord said: Perhaps it would be for the convenience of the Committee if Amendments Nos. 70 and 71 were taken with Amendment No. 69. The importance of Clause 38 cannot be overstated. It represents the core of the proposals contained in Part IV of the Bill, with particular reference to the identification and control of unfair pricing policies or inadequate accounting practices. Any inadequacies in Clause 38 only underline the ineffectiveness of Part IV. This is an important point considering the fact that the Committee at an earlier stage rejected amendments to Clause 1 which would have prevented the subsidy to Stansted airport.
The purpose of the amendment is to try to make clear that the costs of each of the airports in the London area are totally clear and open; in other words, that there are no hidden subsidies, intentional or unintentional. The removal of the word "aggregate" would mean that the accountancy practice would need to be considerably improved so that there was a clear indication of what the costs were.
Briefly I could say, for example, that at present among Heathrow, Gatwick and Stansted, it is difficult to find out exactly what the costs of air traffic control are for each of the airports. There appears to be some subsuming of the single costs in the costs of all of them and there is an inaccurate division, a not very scientific division, of the apportionment of the costs. The figures for centrally-based staff of the three London airports were given in various reports. The Monopolies and Mergers Commission dealt at some length with the whole question of centrally-based staff serving London airports. Out of a total of 292 full-time staff, 75 were centrally office based. Only nine full-time equivalents
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were employed at Stansted. Once again the extent to which these services are properly costed could be lost in the type of aggregate information to be provided.
The plea is that the information should be much more full. I am sure that the good airport operators would wish to know what their costs actually were. The purpose of the amendment in leaving out the word "aggregate" is so that there will be no dispute and no hidden costs and that we shall know exactly what the basic costs of the services are. I beg to move.
The Earl of Caithness: These amendments seek to expand upon the transparency provisions of Clause 38; yet clause 38(2)(a) already requires a much greater degree of transparency of accounts than is required by the Companies Act. Few private sector companies would provide such a detailed breakdown of income and expenditure. I believe that a requirement on an airport operator to publish the even more detailed information demanded by these amendments in its published accounts is an undue burden on a private sector company.
I am the more persuaded that these amendments would be inappropriate by the knowledge that the CAA, as regulator, will be able to require for its own use much more detailed information under Clause 64. This will ensure that the appropriate degree of information is available to those who need it to ensure, for example, that costs are controlled or that any other abuses are avoided. I hope that I have persuaded the noble Lord, Lord Carmichael, on this that already we have gone further than the Companies Act and that to go much further, bearing in mind the back-up power of the CAA, would palpably be wrong.
Lord Carmichael of Kelvingrove: I thank the Minister for his reply. It is a reply that I should like to look at and have expert advice on. I realise the incredible difficulty of trying to apportion the services about which I have spoken. I will take the issue as far as it goes in good faith and will make a point of investigating it with some people who are knowledgeable in the field. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 70 and 71 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 72:
Page 34, line 10, leave out ("filed") and insert ("delivered to the registrar of companies").
The noble Earl said: I beg to move Amendment No. 72 and with the leave of the Committee I shall speak also to Amendments Nos. 73, 96 and 107. These are technical amendments designed to put beyond doubt that the requirements for accounting transparency set out in Clause 38 apply to the publicly available accounts of the airport operator. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 73:
Page 34, line 14 leave out ("filed by him") and insert ("delivered to the registrar of companies").
On Question, amendment agreed to.
Lord Underhill Lord Underhill moved Amendment No. 74:
Page 34, line 19, after ("the") insert ("minimum and").
The noble Lord said: As the Bill is at the moment, Clause 38(3) enables the CAA to impose a maximum

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amount of airport charges to be levied at airports. It may well be, following the Government's logic on various matters, that a maximum ceiling in the case of regional airports will appear reasonable, particularly as the Government are concerned that any local monopolies enjoyed by any local airports are not exploited. It would appear that the provisions of Clause 38(3) would achieve this.
I would put the point that the position is not quite so simple when we come to the London airports. We find in that context that local authorities do not see much advantage in the CAA being able to stipulate only maximum charges at London. There is no question of minimum charges being referred to in this particular subsection. It would appear that there would be nothing to prevent the new British Airports Authority employing charges below the level imposed by the CAA and which bear little resemblance to the actual cost.
The existing charges structure employed at Stansted, for instance, compared with an assessment of what charges should be if costs were taken into account, clearly demonstrates the position. I have been given the following figures. If one takes a B-747, the existing charge at peak periods is £1,422. I am advised that on cost-based principles it should be no less than £5,533. One could take similar examples with other aircraft. It would appear that we should not have just a maximum charge laid down, but that there should be a minimum charge put in also. That is the purpose of the two amendments. I am speaking to Amendments Nos. 74 and 75.
Lord Boyd-Carpenter: I hope that the Committee will reject this amendment. My recollection of the level of charges, particularly at the London airports, is that they have very often been the subject matter of complaint by foreign as well as British airlines that they were too high. It could be very curious, I think, to come in and insert a minimum. In any event, in these days, when we are still only just succeeding in our battle against inflation, the imposition of minimum charges for almost anything seems to be a very questionable idea indeed. I hope my noble friend will reject it.
7.15 p.m.
The Earl of Caithness: These amendments are aimed at ensuring that the price formula at designated airports sets minimum charges as well as maximum charges, presumably with the intention of preventing predatory pricing. However, as the Committee knows, the Government support this very intention. The dangers of very low or below-cost charging have been recognised in the Bill, and, indeed, Clause 39 allows the CAA to impose conditions to deal with predatory pricing. We believe this is the best way to prevent or remedy such specific abuses—that is, to target on them when they occur.
On the other hand, I have to say that the method implied by these amendments by means of a price formula such as the RPI minus X variety would be an inappropriate tool for preventing predation. Specific abuses need specific remedies, and that is what the Bill provides. Indeed, your Lordships will have seen that
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the Bill's provisions against predatory pricing were considerably strengthened in another place as a result of what was said. Therefore, I hope the noble Lord will not seek to press these amendments.
Lord Underhill: At this late hour I would not seek to press them, but I still believe that the principle of our amendments is correct. I will look carefully at what the noble Earl has said and consider whether or not we should bring something similar forward again at a later stage. We believe that the provisions in the Bill are not adequate at present to meet the purpose we have in mind. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 75 not moved.]
Clause 38, as amended, agreed to,
Clause 39 [Discretionary conditions]:
[Amendment No. 76 not moved.]
Viscount Davidson Viscount Davidson moved Amendments Nos. 77 to 81:
Page 36, line 14, after ("activities") insert ("carried on by him").
Page 36, line 20, leave out from ("rights") to ("of") in line 23 and insert ("by virtue of which relevant activities may be carried on at the airport by any other person or persons,").
Page 36, line 32, leave out ("by the airport operator").
Page 36, line 33, at end insert—("or which has resulted in the adoption by any other person of a practice that does any of those things;").
Page 36, line 36, after ("activities") insert ("carried on by him").
The noble Viscount said: I have already spoken to Amendments Nos. 77 to 81, which are consequential. I now beg to move them en bloc.
On Question, amendments agreed to.
Clause 39, as amended, agreed to.
Clause 40 agreed to.
Clause 41 [References to Commission in relation to imposition or modification of conditions]:
Viscount Davidson Viscount Davidson moved Amendments Nos. 82 to 84:
Page 39, line 9, after ("any") insert ("operational").
Page 39, line 10, leave out from beginning to ("or") in line 12 and insert ("and relating to the airport,").
Page 39, line 13, leave out from ("right") to end of line 17 and insert ("by virtue of which any operational activities relating to the airport may be carried on by any other person or persons,").
The noble Viscount said: These amendments are also consequential, and I beg to move them en bloc.
On Question, amendments agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 85:
Page 40, line 9, after ("Commission") insert—(" (a) ").
The noble Earl said: With the leave of the Committee, I should like to move Amendment No. 85 and speak to Amendment No. 86 at the same time. These amendments fulfil a Government commitment made on Report stage in another place. They provide that where the Monopolies and Mergers Commission is called upon to investigate any matter relating to the granting of franchises or concessions for airport-related activities, it must have regard to the reasonable interests of those franchisees or concessionaires. This

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is in addition to the CAA's objectives in Clause 37, to which the MMC is already obliged to have regard. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 86:
Page 40, line 11, at end insert ("and
(b) in the case of a matter relating to the granting of a right by virtue of which any operational activities relating to an airport may be carried on by any person or persons, shall in addition have regard to the following objective, namely the furtherance of the reasonable interests of persons granted such rights.").
The noble Earl said: I have just spoken to this amendment. I beg to move it formally.
On Question, amendment agreed to.
Clause 41, as amended, agreed to.
Clause 42 agreed to.
Clause 43 [Reports on references]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 87:
Page 43, line 12, leave out from beginning to ("and") and insert (", the operator concerned and the appropriate trade unions, and shall publish the report;").
The noble Lord said: The request I am making in this amendment is, I think, a very brief and simple one. It is merely asking that a copy of any report sent to the CAA be sent to the Secretary of State and to the airport operator concerned and to the appropriate trade unions; and also—perhaps most important of all—that the report should be published. I think it is self-explanatory, and I hope the Minister will consider it is a simple enough request to grant. I beg to move.
The Earl of Caithness: I was not clear what was desired to be achieved by the amendment, with due respect to the noble Lord, Lord Carmichael of Kelvingrove. As drafted, Clause 43 requires publication of an MMC report but first gives the opportunity to the Secretary of State to require excisions from the report on grounds of public interest or commercial confidentiality. This is a standard procedure for all MMC reports.
This amendment would remove that possibility. It would result in the publication of commercially confidential information not only about airport operators but about airlines and airport franchisees as well. I do not believe that such indiscriminate disclosure would make for effective regulation. It would merely create an atmosphere of suspicion and non-cooperation between the regulator and regulated which would not be in anyone's best interests. I fear that we should be heading into tricky ground if we accepted that amendment.
Lord Carmichael of Kelvingrove: I am most grateful to the Minister for that explanation because it does seem to have cleared up a point which concerned me, that it seemed on the surface that a report should be sent to the operator, to the trade unions concerned, and published. I certainly can see the point that there may very well be information given in the report which should only really be seen by the Secretary of State and by the operator concerned so that each of
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them can make their observations before full publication. I think that is fair enough, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 43 agreed to.
Clauses 44 and 45 agreed to.
Clause 46 [Breach of conditions: investigation of complaints and making of compliance orders]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 88:
Page 46, line 14, at end insert ("in the United Kingdom")
The noble Earl said: This is largely a technical amendment, which claims to bring Clause 46 into line with Clause 39, which deals with this question of conditions imposed by the CAA. I beg to move.
On Question, amendment agreed to.
Clause 46, as amended, agreed to.
Clauses 47 to 50 agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 89:
After Clause 50, insert the following new clause:
("Application of Part IV to associated companies of airport operators.
Schedule (Application of Part IV to associated companies of airport operators) shall have effect with respect to the application of the preceding provisions of this Part to associated companies of airport operators.")
The noble Earl said: I beg to move Amendment No. 89 and, at the same time and with the leave of the Committee, to speak to Amendments No. 103 and 105. Your Lordships will recall that, in moving the Government Amendment No. 47 to Clause 28, I described the problems that might arise if an airport business was restructured so that an associated company of the airport operator carried out the commercial activities while the airport operator himself remained responsible for airside activities—runways and landing charges. The same problem arises in Part IV of the Bill.
Economic regulation of airports, as provided for in Part IV, works by requiring an airport operator to hold a permission to levy airport charges: monopoly abuses can then be prevented and remedied by the imposition of conditions on that permission. This works when the airport operator carries out all the airport-related activities himself, or where he grants a right—a franchise or concession—to some other person to conduct those activities.
However, if an associated company carried on the commercial activities, this link—the granting of a right—might not necessarily exist. For example, a holding company might restructure the business with two separate subsidiaries. In such cases, monopoly abuses by the associate could not be remedied by the imposition of conditions on the airport operator, since he would have no direct way of complying with them and not necessarily any means of securing compliance by the associate. This means that the activities of the associated company would effectively fall outside economic regulation, while the airport group continued to receive the benefits of the profits from the commercial side of the business—itself a substantial monopoly.
I hope that it will be evident to the Committee that this is a gap that needs to be plugged. I will not take up

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your Lordships' time by going through the new schedule in detail. It looks fairly substantial, but I can assure the Committee that it is necessary to plug the gap which I have mentioned. I beg to move.
On Question, amendment agreed to.
Clauses 51 to 54 agreed to.
The Earl of Dundee The Earl of Dundee moved Amendment No. 89A:
After Clause 54, insert the following new clause:
("Disposal of compulsorily acquired land.
—(1) This section applies to the disposal of any land—

(a) which was acquired compulsorily by a relevant airport operator or any predecessor in title of his under section 54(1) or any other enactment; and

(b) which, at the time of the disposal, forms part of an airport or is attached to an airport and administered with it as a single unit or has, at any time since the date of its acquisition, formed part of an airport or been so attached and administered.

(2) A relevant airport operator shall not dispose of any land to which this section applies, or any interest or right in or over such land, within the period of 25 years beginning with the date of its acquisition as mentioned in subsection (1), unless—

(a) the disposal is for the purposes of the provision of any of the services and facilities associated with the operation of an airport; or

(b) the disposal is of a leasehold interest in the land for a term of less than 7 years; or

(c) the Secretary of State consents to the disposal.

(3) Any consent of the Secretary of State under this section may be given subject to such conditions as he thinks fit.").
The noble Earl said: As the Committee will be aware, Clause 54 of the Airports Bill empowers the Secretary of State to authorise relevant airport operators to acquire land compulsorily for purposes connected with the performance of their functions. This will ensure that present powers of compulsory purchase for operators of such airports will continue.
The new clause which I am proposing would secure that where a relevant airport operator had acquired land in this way and subsequently decided to dispose of it, he would need the consent of the Secretary of State. The purpose of that would be to enable the Secretary of State to apply the Crichel Down rules. Those are the rules which govern the disposal of compulsorily acquired land by government departments. Their most important requirement is that first refusal on purchase would go to the person from whom the land was originally acquired. The draft amendment would apply to the disposal of any land compulsorily acquired within the previous 25 years, regardless of whether it had been acquired under this Bill or under any other enactment.
Two exemptions would seem to be appropriate from the requirement for the consent of the Secretary of State: first, where the disposal is for the purpose of another airport-related use—for example, the sale of land to airlines for the purpose of aircraft maintenance—where the original case for compulsory purchase would still apply and the land could not be regarded as surplus to requirements; and, secondly, where the disposal is of a leasehold interest of less than seven years. Such leases are often granted for airport-related purposes but there may also be circumstances in which the airport operator has acquired land compulsorily but some of the land is not needed immediately for the proposed development. Pending
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completion of the development, the airport operator may allow the land to continue to be used for non-airport purposes; for example, as farmland. In such cases the land would still ultimately be needed by the airport operator and it would be unnecessarily bureaucratic to require the consent of the Secretary of State to each lease.
The Committee may be aware that this provision is broadly precedented in telecommunications and is proposed for the gas supply industry, though in those cases the consent of the regulator rather than of the Secretary of State is required to any disposal. It could be argued that the consenting authority should be the CAA, but this seems to fit ill with its other functions under the Bill in respect of economic regulation in wider aviation matters. It therefore seems right that responsibility for planning and related matters should remain with the Secretary of State.
I hope that the Committee will be able to support this amendment. The application of the Crichel Down rules will ensure that where compulsorily acquired land becomes surplus to requirements the former owners will be able to purchase it at the current market value as determined by the district valuer. It is also an essential safeguard on the exercise of compulsory purchase powers by private companies. I beg to move.
The Earl of Caithness: I can be very brief on this amendment. I am most grateful to my noble friend Lord Dundee. I have pleasure in accepting the amendment on behalf of the Government and I commend it to the Committee.
On Question, amendment agreed to.
Clauses 55 to 61 agreed to.
7.30 p.m.
Lord Mountevans Lord Mountevans moved Amendment No. 89B:
After Clause 61, insert the following new clause:
("Extension of Shops (Airports) Act 1972.
. Section 1 of the Shops (Airports) Act 1962 (exemption of traders at certain airports from restrictions under Part I of the Shops Act 1950 on hours of closing) shall have effect in relation to the provisions of Part IV of the Shops Act 1950 (Sunday trading) as well as in relation to the provisions of Part I of that Act; and accordingly, in subsection (1) of that section, after "hours of closing)" there shall be inserted "and of Part IV of that Act (which relates to Sunday trading)".").
The noble Lord said: The Shops (Airports) Act 1962 exempts shops at designated airports, which must be airports with substantial international traffic, from the restrictions on opening hours in the Shops Act 1950. This amendment extends that exemption to include the 1950 Act restrictions on Sunday trading. This will mean that shops within airport terminals will be able to trade normally on a Sunday. I hasten to say that I am not seeking to reopen the Shops Bill debate. I am putting forward a limited amendment to deal with the anomalies which could be faced by the air traveller at a United Kingdom airport on a Sunday.
At present the law on this subject is unsatisfactory. It can cause great inconvenience to air travellers. Perhaps I may instance some of the anomalies. At duty-free and tax-free shops, of the three items usually bought by passengers intoxicating liquor and tobacco may be bought on Sundays but the sale of perfumes is prohibited. Other popular luxury goods such as electrical goods, cameras and fountain pens may not

517
be bought; nor may jewellery; but a cigarette lighter or a cigarette case is exempt from the present prohibition. No clothing may be sold.
The other main retail shops at airports are bookstalls and gift shops, which are usually found both in the departure lounges and on main concourses. The main range of goods sold in these shops are souvenirs, gifts and toys, all of which are prohibited items. Under the present law, items often forgotten in the packing and bought at the last minute by departing passengers are, for example, razors, toothbrushes, toothpaste, suntan lotion, sunglasses and film for the camera, which I have already explained may not be bought though the picture for the forgotten passport may be. Other distress products such as aspirins, travel sickness pills or plaster, which are usually stocked in these shops, may not be sold, but should there be a specialist dispensing chemist those products may be bought together with prescription medicines.
The other products usually stocked by chemists, such as soaps, make-up and shampoos, may not be sold. Newspapers, periodicals and magazines may be freely bought on a Sunday. But books may only be sold at bookstalls at airports approved by the Secretary of State. Stationery may also be bought at these bookstalls but the sale of the biro or pen necessary to write on the stationery is prohibited. There are a number of other anomalies.
There are also a number of services supplied at airports which are of benefit to the incoming passenger as well as to the departing passenger. These include banks, bureaux de change, car-hire desks and hotel booking desks. Those may also be prohibited from trading on Sundays. The legal position is far from clear. Thus though the post office, which is exempted from the Sunday trading prohibition, may remain open, it seems likely that the banks may have to close. In that case, only those passengers with a post office Giro account would be able to withdraw money on a Sunday.
The air traveller is not at the moment inconvenienced because local authorities have not been enforcing the existing law. But in the light of the demise of the Shops Bill I think one can reasonably expect that enforcement to be tightened up. That will produce a somewhat ridiculous situation. In my own context of the tourism business, what impression of Britain would be gained by the airborne foreign tourist, whose first and last view of Britain is of an airport, if he found the anomalies that I have already described? It seems to me that some amendment is necessary.
During our debates on the Sunday trading Bill the opposition was based on the slogan "Keep Sundays special". I do not really believe that anything within this amendment affects the special nature of Sunday, not least because if you have gone through the hassle of going out to an international airport with a view to enjoying the hassle of going on an international flight, your Sunday has already been, if I may say so, despecialised. Under this amendment only shops ordinarily used by air travellers at the designated airports would be affected. In effect, this would mean shops within terminals. An airport terminal is already a hive of economic activity on a Sunday. In fact, in many instances Sunday is the busiest day of the week.
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This amendment, which will allow shops to sell their full range of goods, will not cause any extra disturbance.
I do not believe either that this would create any opportunities for shops on the airport perimeter, because those will after all be intended for customers and not airline passengers. Employees of airport shops already frequently work on Sundays. though in many instances they may be conspiring to break the law. This amendment will not materially change their position. It would in fact make it easier for them to generate the very considerable revenues which those shops contribute, not least to our balance of payments.
I think it has become clear to all of us during the days we have spent on this Bill that airports are seven-day-a-week businesses that operate in a unique and geographically distinct market. The amendment tries to make sense of the present confused legislation, and I ask the Committee to support it.
Lord Carmichael of Kelvingrove: I can see the problem that the noble Lord, Lord Mountevans, has, We do not have quite the same problem in Scotland. I remind the Committee that when Sunday opening was debated, this side of the Chamber made a totally free vote, except in terms of those who were employed on the premises that would be open on a Sunday. I myself very much take the view that airport shops should be open but that there should be protection for the shop assistants and others who have to work in them for perhaps rather long hours. In general, I support Amendment No. 89B, with the proviso that if it is carried, we could introduce at a later stage some protection for the employees.
The Earl of Caithness: This amendment relates to a small part of the laws on Sunday trading. The idea that a right reverend Prelate might head off to some enchanted isle without his suntan lotion or aspirin fills me with horror. Seriously, I do not consider that the amendment conflicts in any way with the decision taken in another place on the question of Sunday trading as a whole. The short speech of the noble Lord, Lord Carmichael of Kelvingrove, in which he raised the point concerning protection for employees, would possibly turn this into a debate on Sunday shopping, which it certainly is not and which we would seek to avoid.
There was widespread recognition in the debate in another place on the Shops Bill that some aspects of the law were in need of reform. I believe that this is one such aspect. I welcome the amendment of the noble Lord, Lord Mountevans. I am happy to accept it on behalf of the Government and recommend it to the Committee.
On Question, amendment agreed to.
Clause 62 agreed to.
Lord Kings Norton Lord Kings Norton had given notice of his intention to move Amendment No. 90:
After Clause 62, insert the following new clause:
("Services and facilities at airports.
—(1) It shall be the duty of the airport operator to provide at each airport of which he is the operator such services and facilities (not being air navigation services) as are necessary or desirable for its operation having regard to the development of air transport, and to efficiency, safety and economy of operation.
(2) The services and facilities generally to be considered necessary and desirable shall include—

(a) terminal buildings (including passenger handling, baggage, check-in, toilet, security and immigration facilities);

(b) aircraft parking and manoeuvring areas (including runways, turn-offs, taxiways, aprons and stands);

(c) maintenance facilites (including hangars, engine run-up bays and compass swinging locations);

(d) cargo handling facilities;

(e) car parks;

(f) restaurants; and

(g) roads and accessways to all services and facilities.

(3) In making provision for such services and facilities as are necessary and desirable, the airport operator shall take account of the reasonable requirements of users, shall give users reasonable notice of such services and facilities as he provides or intends to provide and shall afford users a reasonable opportunity to express their views on such services and facilities.
(4) The Secretary of State may, on receiving representation in writing from a user of an airport on the services and facilities provided or to be provided by the airport operator or the lack of any such services or facilities, uphold or dismiss the representation, or require additional services or facilities to be provided, or require the amendment of such services or such facilities as are provided.").
The Earl of Kinnoull: On behalf of my noble friend Lord Kings Norton, I should like to move his Amendment No. 90 and speak also to my Amendment No. 91. The Committee is getting a little thin at this early hour but I am sure that enthusiasm has not waned at all and that we will have a very good discussion on the point that I wish to raise.
The amendment basically seeks to impose on the new company a duty to provide facilities. We had a valuable discussion under a previous amendment on whether or not the Government would seek to reserve a power under this Bill in cases of what they deemed to be the national interest. One could say that this is another opportunity for the Government to ensure that under the Bill companies will have a responsibility to the users of airports, and particularly to the operators of airports, to make certain that an airport has not only the capacity but also the facilities to meet their needs.
In another place a bold picture was painted by an honourable friend of mine, who stated that if the British Airports Authority, in its new role as a private commercial company, took a wholly commercial view of making as much money as it could for its shareholders, then one could have the situation where, subject to planning, the company could apply for a hypermarket within the airport. Perhaps that is an extreme case, when one thinks of the good record of the British Airports Authority to date. Nevertheless they do not have a duty to provide services under this Bill and there is no action of reserved power for the Minister to intervene if it is felt that in the national interest services are not coming on as quickly as they should for the benefit of aviation.
I personally take the view that to have neither of these safeguards is indeed a dangerous course because one is dealing with monopoly companies. Monopoly companies are not ordinary commercial companies, they are very special companies that Parliament is bringing into force. I suspect my noble friend may argue that it is impossible to lay down a duty on a private commercial company coming into force which might damage its commercial interests. I must say I find that an unacceptable argument, because we have
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already seen, when other companies have been privatised, notably British Telecom, that powers have been laid down, duties have been laid down on those companies, in particular British Telecom, that in that instance they had to provide, whether they wished to or not, their machinery for another commercial company called Mercury. I cannot believe that that is in their best commercial interests, but nevertheless they undertook that duty, as they quite rightly should, in the interests of the consumer. That was a quite proper duty which was not in any way in the commercial interests of British Telecom.
I hope my noble friend will therefore remember this and that he will also remember that, although we have not seen the Bill yet, we had a good discussion yesterday on water. Although I did not take part I think the noble Baroness took part in it very effectively. At the wind-up I listened and it struck me that, very rightly, the Government were going to impose many duties on the new bodies, for example, Thames Water, to make certain that the consumer got the correct services to which he was entitled. There is a second example of this monopoly situation where the Government are rightly seeing that a duty should be imposed. So what I am suggesting tonight is not without precedent; it is not without sense and I think it is very important.
Sir Peter Masefield recently wrote a letter to The Times, and I should like to quote a very short extract from it to my noble friend. It was on 15th April this year. He said:
"… as a former chairman of the British Airports Authority … there is one, serious, omission from its requirement of the new body in the private sector.
No objectives are set and no duties required of the projected company."
Then he went on to say that his board—and he was one of the instigators, since he was the first chairman of the British Airports Authority—actually set objectives which they announced in their first annual report. Their objectives were:

1. To provide at the airports under its control adequate capacity to meet the requirements of civil air traffic.

2. To achieve and to monitor a balance between profitability and good service consonant with the obligation of the board to pay its way".

I think those were very fine objectives, which the British Airports Authority has carried out extremely well. I would only hope that objectives and a duty could be laid upon the successor company because I think it is extremely important to do so. I beg to move.
7.45 p.m.
Lord Tordoff: I have considerable sympathy for the ideas that lie behind both these amendments, and I am not quite sure which I prefer, to be honest. There is a genuine problem, I think, when the Government are transferring a public monopoly to a private monopoly, to see that the consumer gets a fair deal.
I think the difficulty of these amendments lies not so much in British airports authorities but in terms of the other airports where it may be difficult to fulfil the details of the amendments. I have a feeling that there might be better ways of approaching the problem. Nevertheless, I think there is a problem and it is one to which the Government should bend their mind.

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If people have a monopoly franchise on offer it is not necessarily in the interests of the ultimate consumer that they should exercise it to the full. I should have thought that the Government did believe in competition (and, I must remind the Government, we on these Benches also believe in competition) as part of the protection for consumers, but there is likely to be little or no competition at the larger airports. Although one may say that the public sector company has maintained a reasonable level of pricing, I know that the public at large feel that in the duty free shops, for example, they are being regularly ripped off. That may or may not he true but that is an image which persists. It is because there is little or no competition in those areas. Such competition as exists is for tenders which is inclined to push up the price almost to the ultimate. So there is a real danger that the Government must consider in dealing with these amendments. As I said, I do not necessarily subscribe to the wording of the amendments, but there is an important principle behind them.
Lord Carmichael of Kelvingrove: May I briefly add to the words of the noble Lord, Lord Tordoff. I too have great sympathy for the amendment, and particularly appreciate the explicit way it was moved by the noble Earl, Lord Kinnoull. It is a long and demanding amendment and the Government will want time to look at it with some care. I am sure they will want to give an opinion on the amendment, and until we hear that opinion and perhaps the view that the Government will bring it back slightly amended after discussions with the noble Lord, Lord Kings Norton, and the noble Earl, Lord Kinnoull, I give general agreement and support to the amendment. It is so complicated that I am sure the Minister being what he is with the people he has behind him, will find one or two reasons for not accepting the amendment in total. However, I hope he is willing to accept it in principle.
Lord Brougham and Vaux: I arrived in the Chamber just after my noble friend moved the amendment, but I have great sympathy with it and I reserve judgment until we have heard the reply of my noble friend the Minister.
The Earl of Caithness: It is always pleasant to welcome a new voice into the Committee's proceedings, even though at a late hour in our discussions. It is good to have my noble friend on board joining in the Committee's proceedings, but I hope I can convince him to get off board in his support for the amendment.
These new clauses bravely attempt to impose a duty on airports to provide sufficient airport capacity and associated services and facilities. I have some sympathy with my noble friend's concern in tabling such amendments, but I have to tell him that I do not consider such a duty to be either necessary or, even more important, perhaps, practicable. I shall try to explain why.
Looking first at the practicability of the duty, its fulfilment may well not be within an airport operator's power. He may be unable to obtain planning permission for a development which is necessary or desirable. Indeed, if my noble friend Lord Boyd-Carpenter were here he would say that a second runway at Gatwick is necessary and desirable but that
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there is no chance of getting planning permission at the moment. Or the operator may be unable to attract sufficient investment capital to finance such a facility. How is a breach of this duty to be judged? It is not clear who is to judge what is "necessary and desirable". It would be impossible to ask a court to make an objective judgment on these tests.
Subsection (4) of Amendment No. 90 and subsection (3) of Amendment No. 91 seek to involve the Secretary of State as arbiter, but this is entirely contrary to the spirit of the Bill, which seeks to reduce government control over the airport industry rather than to retain a direct interventionist role in the commercial affairs of an airport company and its relations with its customers.
Fortunately, I do not believe that there is any need for such an unenforceable duty. This is because I believe that airport operators will have a commercial incentive to provide the necessary facilities. Revenue at airports, and hence profitability, is directly linked to the throughput of passengers and these economic incentives—and there are others which I could mention if I had more time and the Committee would permit me—are further reinforced by the powers of the CAA as economic regulator.
The CAA has a duty to perform its regulatory functions so as to encourage investment in new facilities in time to satisfy expected demand. This would be a key factor, for example, when setting the price regulation formula at designated airports. The interests of users and the efficient, economic and profitable operation of airports are its other main objectives as specified in Clause 37 of the Bill.
Yet a further safeguard is provided by the planning process. Any proposed change of use of airport land for non-airport purposes would require planning permission, ensuring that the likelihood of such land being needed for aviation purposes would be taken into account.
The new clauses also refer to safety. Safety will continue to be regulated through the aerodrome licensing system adminstered by the CAA, but in any case it is clearly in the interests of the airport operators to demonstrate to airlines and to their customers that safety facilities are impeccable. We have seen the need for that in the recent past.
In summary we believe that a statutory duty to provide airport facilities is unnecessary and that if such a duty were imposed it would be unworkable. Economic incentives reinforced by the role of the CAA will have the effect which my noble friend is seeking. I support his move but the situation that he seeks is, we believe, already catered for in the Bill and I hope that my noble friend will be persuaded by my arguments.
The Earl of Kinnoull: I should first like to thank all members of the Committee who have spoken on this amendment and indeed all those who spoke in favour of it in principle—and one is talking about principle and not about the wording of the amendment. I started by being hopeful at my noble friend's reply when he talked about having sympathy, but as he went on I felt that he was less and less sympathetic until eventually he seemed to take the view that he had knocked the arguments on the head. To be quite honest I do not

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think that he did—and I am not being rude to my noble friend, who is a very able spokesman and Minister of the Government. But I really think he should not say that it is not practicable. It is very practicable.
It would in fact mean that if, for some reason, there were a body or a company—and I believe there are 40 companies that could be set up under this Bill—which for some reason was not providing the services, there is nothing that the Government or Members of Parliament could do. There is no reserve power at all and no duty laid down. Frankly, I think that it is a monstrous situation and perhaps it is impracticable on that account. But one cannot say that the principle is not practicable. In fact it is. Probably what would happen would be that an operator at the airport would seek the court's advice, and test whether or not the company, the management or the board, was carrying out its duty or whether there was a gross dereliction of duty. There is no safeguard at all at the moment. If there is a gross dereliction of duty, what is wrong with going to the courts? We do so in regard to other legislation. It is a protection possessed by every individual. So, to be quite frank with my noble friend, I do not think it is an impracticable suggestion.
My noble friend said that basically we must rely on the commercial incentive. I am not knocking these companies, because I think that they will do a wonderful job and with a free range they will do a superb job. Nevertheless one has a cautious Scottish spirit—and my noble friend is a good Scot and I am surprised that he does not have this cautious Scottish spirit as well.
One other comment made by my noble friend was that if my noble friend Lord Boyd-Carpenter had been present he would have cited the case of the second runway. That is easy to accomplish. All one needs to say is "duty subject to planning". There is no problem about that, and so it is not really an argument.
I hope the Committee will bear with me, because I feel strongly about this matter. It is not the time to test the will of the Committee; I probably would not even obtain a quorum. I shall reserve my position. My noble friend has many friends. They are not visible, but they are probably here in spirit. I reserve my position on capacity and duty. I am mindful of Sir Peter Masefield's letter. I hope that my noble friend is prepared to discuss the principles of the amendment before the Bill's next stage. I shall be grateful if he will say that he will do that, before I withdraw the amendment.
The Earl of Caithness: I am happy to see any noble Lord to discuss the Bill, and I should certainly welcome seeing my noble friend again.
The Earl of Kinnoull: With that kind assurance I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 91 not moved.]
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 91 A:
After Clause 62, insert the following new clause:
("Service contracts.
. All public airport companies owned and run by a local authority and all airports owned and run by the Civil Aviation
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Authority shall have a duty to contract to purchase services on terms which secure maximum benefit for the airport, its users and the taxpayer.").
The noble Earl, said: I believe that this amendment will commend itself to my noble friend; I think that he is nodding his head. The amendment relates to local authority and CAA airports which provide shops, transport, food or other facilities. I am badly briefed, because I should be able to quote examples, but there are cases of where local authority airports do not put services out to tender. They merely say that the local authority can supply the food or whatever it may be.
I have tabled the amendment because it has been put to me that users would obtain a better deal if there were fair competition in the provision of services. It seems sensible—and I do not think it too harsh—that airport services should be subject to proper competitive tendering. With that brief introduction I beg to move.
Lord Tordoff: This proposal again touches on what I was saying previously about obtaining value for money for the consumer, which is something which I should like to see. I worry slightly about the words:
"maximum benefit for the airport, its users and the taxpayer".
Those points may be in conflict because it is difficult to maximise all three at the same time. The use of the word "optimum" may make the amendment rather better. Having made that slightly quibbling suggestion, I support the principle of the amendment.
Lord Carmichael of Kelvingrove: I do not like to doubt the sagacity or intentions of the noble Earl, Lord Kinnoull. If he were concerned about service contracts with regard to the letting of premises and franchises, I should see the point of the amendment. As I said during the debate on Sunday trading, I am keen to try to defend the employees of such organisations. Unfortunately, many service contracts have a bad reputation with regard to wages, hours of work, the provision for sickness, pensions and such matters. If the noble Earl had included "maximum benefit," or, as the noble Lord, Lord Tordoff, suggested, "optimum benefit",
"for the airport, its users and the taxpayer and its employees",
I would have been only too pleased to agree with the amendment. I cannot, however, agree with its terms. My knowledge of many contract services is that this is part-time work frequently involving people doing two jobs who are willing to accept conditions that should not be acceptable in a civilised society. I am sorry, but I cannot support the words used in the amendment.
8 p.m.
The Earl of Caithness: One of our main reasons for restructuring local authority airports is that we believe that under the present regime airports often pay too much for the services that they obtain from local authorities. One of the consequences of making the airports into Companies Act companies is that the directors will be bound to act in the best interests of the company. I emphasise "in the best interests of the company," not the shareholders. This is a point about which my noble friend Lord Boyd-Carpenter spoke at some length earlier.

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When the airport company decides that it wishes to secure services from an external source, then I would expect it normally to go out to tender so that it could be certain that it was getting the best terms available.
As regards local authority airports, if we had not included Clause 22 in the Bill, parent authorities would not have been able to provide any services to public airport companies. That is because of the Local Authorities (Goods and Services) Act 1970 which would prevent local authorities providing any services to public airport companies unless we included specific provision in this Bill.
We included Clause 22 because we thought that there might be some services such as managing the payroll, which will be on the local authority's computer, and legal services where it might—not necessarily, but might—be more cost-effective for the airport company to continue to obtain services from the local authorities who will be its shareholders.
I sympathise entirely with my noble friend. I believe that we are on the same track. But, for the reasons that I have given relating to the necessary parts of the Bill which we have had to include in order to pursue our policy, I hope that he will see fit to withdraw the amendment.
The Earl of Kinnoull: I am grateful to my noble friend for his reply and for the qualified support that I have received. If it was a question of seeing the amendment agreed to, I would of course accept "optimum" instead of "maximum". That improves the amendment. My noble friend is I think saying that the principle of the amendment is covered in the Bill. I wonder whether I am right in saying that.
The Earl of Caithness: Yes.
The Earl of Kinnoull: I am right in saying that. I should like to examine the matter in more detail between now and the next stage of the Bill and perhaps, if necessary, have a word with my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 63 agreed to.
Clause 64 [Furnishing of information etc. to CAA]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 92:
Page 64, line 10, leave out ("an airport operator") and insert ("any person").
The noble Earl said: With the leave of the Committee, I should also like to speak to Amendment No. 93. As the Bill stands, the CAA is empowered to obtain information only from airport operators. The safeguard is that the CAA must reasonably require that information for the performance of its functions under the Bill. However, given that there is the possibility of persons other than the airport operator carrying out operational activities at an airport—the associated companies' point that we have already discussed in the context of other Government amendments—it is clear that the CAA might well need information from others in order to carry out its functions. Since there is no way of knowing how airport operations might be structured in the future, it would be inappropriate to define too closely the classes of persons from whom the CAA might need to require
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information. The amendment therefore allows it to obtain information from any person. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 93:
Page 64, line 22, at end insert—
("(1A) A person shall not by virtue of subsection (1) be compelled—

(a) to produce any documents which he could not be compelled to produce in civil proceedings before the High Court or (in Scotland) the Court of Session, or

(b) in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in such proceedings.")

On Question, amendment agreed to.
Clause 64, as amended, agreed to.
Clauses 65 to 70 agreed to.
Clause 71 [Directions etc.]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 94:
Page 69, line 30, at end insert—
("(2A) Any determination made by the Secretary of State under this Act shall be notified by him to such persons appearing to him to be likely to be affected by it as he considers appropriate.")
The noble Earl said: This amendment ensures that the Secretary of State must notify all appropriate persons before exercising his powers under the Bill to make determinations. I hope that this will be acceptable to the Committee. I beg to move.
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 95:
Page 69, line 32, at end insert—
("(4) The Secretary of State may make grants to any airport operator for the purpose of defraying or contributing towards any losses or expenses they may sustain by reason of compliance with any directions given under sections 28 and 61 of this Act.
(5) There shall be paid out of monies provided by Parliament any sums required by the Secretary of State for making grants under this section.")
The noble Lord said: I can be quite brief on this because I am sure that it is such a matter of natural justice that the Government will accept it on the nod. I remind the Committee that in Clauses 28 and 61 the Bill gives the Secretary of State the power to demand certain things of the airport authorities in the interests of national security and foreign relations and to direct them to provide facilities and accommodation exclusively for use of persons designated by the Secretary of State. But it does not say who will pay for this. Since it clearly should not be a matter for the normal airport user through his airport charges, and since the only other people who have any input into it are the government, compensation has clearly to be paid by the government. It is unreasonable that airport operators, and indirectly the airlines and their passengers, should be burdened with the additional costs. Certainly investments at airports should not be put at risk by the government giving directions which are expected to be financed by airport operators when any such directions could result in a loss of income to the shareholders. This is perhaps the most self-evident amendment in the whole of the day's proceedings. I beg to move.
The Earl of Caithness: I hope that the Committee will bear with me if I take a little longer than one would hope at this stage because this is an important point that the noble Lord, Lord Tordoff, has raised. If the Committee were at an earlier hour in its discussions, I know that other noble Lords would wish to join in the debate.
The power of direction under Clause 28 is heavily circumscribed by the circumstances in which a direction can be given. Directions cannot be given entirely at the Secretary of State's discretion; on the contrary, a direction can be given only in pursuance of three specific interests: national security, international relations and our international obligations to other countries. I can assure the Committee that the Government will not take these powers of direction lightly; they will be used responsibly and, I envisage, sparingly. The Government are not, after all, in the business of handing out directions unnecessarily—quite the opposite. Directions will be given only when they are judged to be "necessary or expedient" in accord with the national interests which I have already mentioned.
I naturally accept that circumstances could arise in which compliance with a direction places a burden of cost on the airport operator concerned. This is something which the Government would naturally want to bear in mind when considering giving a direction; and the airport operator who, under Clause 28 must be consulted before any direction is given, would have ample opportunity to make his views known to the Secretary of State. However, I think that airport operators themselves accept that one cannot sensibly divorce the operation of an airport from its national security and international relations dimensions. I do not think it is unreasonable that an airport operator should bear the cost of complying with a direction given on those kinds of grounds as part of the wider responsibilities which go with running an airport.
Turning to Clause 61, the purpose here is to place the present informal arrangements for handling VIPs on a statutory basis. Clause 61 will enable the Government to ensure that separate and secure facilities are available at the nation's major international airports for the use of members of the Royal Family and the reception of visiting heads of state, foreign dignitaries and other distinguished persons.
At present there are over 13,000 VIP movements each year, mainly through Heathrow Airport. The facilities at Heathrow and Gatwick airports are, in the main, expected to be adequate to meet the need for the foreseeable future. But, as air travel increases and these airports reach their capacity, additional facilities may be necessary elsewhere. It is important that these facilities are maintained at the standard appropriate to the status of the persons using them.
Amendment No. 95, moved by the noble Lord, Lord Tordoff, would give the Secretary of State powers to compensate airport operators for the cost of complying with a direction given under Clause 61. I can tell the Committee that the Government intend to continue to meet the additional operating costs which an airport operator incurs in running VIP facilities on behalf of the Government.
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I hope therefore that the noble Lord, having listened to my argument, which I know he has, will withdraw his amendment.
Lord Tordoff: I am astonished! I am really astonished! Here are the Government demanding facilities that should be placed at the Government's disposal and not prepared to pay for them. It strikes me as being so simple. To say that the Government have the intention of paying for these things out of the goodness of their heart is one thing. If that is the case, why are they not prepared to have it on the face of the Bill? It is a terrible temptation to divide the Committee on such a simple premise, and I wonder whether the noble Lord cannot give some second thoughts to what he has just said.
The Earl of Caithness: I think that, as we are going to be without the very able services of the noble Lord, Lord Tordoff, at a later stage—at Report stage—I would hope we might find time to discuss this before he leaves for other parliamentary business, and I should certainly like to consider this matter with him.
Lord Williams of Elvel: I certainly hope that the noble Lord does not think that this is a personal crusade of the noble Lord, Lord Tordoff, and that others of us, as he said, would be interested in joining the debate were it not so late. Certainly it is not simply Lord Tordoff's personal crusade but something we are all interested in.
The Earl of Caithness: I brought the noble Lord, Lord Williams, to his feet; I hoped I might. I should very much like to discuss this with all those interested in this amendment. That was hidden within what I said to the noble Lord, Lord Tordoff, but I would certainly welcome discussion with the noble Lords opposite as well.
Lord Carmichael of Kelvingrove: As a point of information, are there any charges made for the VIP lounges, for instance? I understand that in certain circumstances there is a charge made and I wonder if, having gone that far, we could not get a bit more information from the Minister. If it is true, the Minister could give us a bit more information concerning, for instance, how much he thinks it costs at different airports.
The Earl of Caithness: I do not have that information readily to hand but I can repeat what I said earlier, which is that the Government will continue to meet the additional operating costs of running VIP facilities on behalf of the Government.
The Earl of Dundee: I should simply like to support this amendment. It certainly seems right that compensation should occur as proposed. For there to be no compensation may not be wrong as a matter of principle, but surely it also puts an unfair burden on airport operators, passengers and shareholders.
Lord Tordoff: I am grateful to both the noble Lord, Lord Williams, and the noble Earl, Lord Dundee, for joining in at this stage. I realise that they held back before because of the time situation and, like me, they

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presumably expected a straightforward and favourable reply from the Government.
I do hope that the noble Earl can find some way of assisting the Committee at a later stage on this matter because, as I say, it is perfectly straightforward. The Government make a demand: they ought to pay for it. On the strength of his offer to discuss this with me and others, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 71, as amended, agreed to.
Clause 72 agreed to.
Clause 73 [General interpretation]:
8.15 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 96:
Page 70, line 30, at end insert—
(" "the registrar of companies" has the same meaning as in the Companies Act 1985;").
The noble Earl said: This is a consequential amendment. I beg to move.
On Question, amendment agreed to.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 97:
Page 70, leave out lines 36 and 37.
The noble Lord said: I beg to move Amendment No. 97. This amendment brings forward a very important point that appears in Part II of the Bill. In the Bill as drafted the Government have produced what is certainly a novel animal in terms of corporate structure, which is a public limited company controlled by a local authority. The Government wish to call this a subsidiary under the Companies Act definition. Yet the Government also wish to impose restrictions on the composition of the board and, much more importantly, as we have been discussing this afternoon, capital expenditure controls under the Local Government, Planning and Land Act 1980.
Following the definition of a subsidiary in the Companies Act, it is normally referred to as a company being part of a group and a company where more than 50 per cent. of the voting shares are owned by another company, or where that other company controls the composition of the board of directors. It is a very odd concept to have a local authority in the position of a holding company. I think that the Government have tried very hard to fit company law concepts round what they are attempting to do, and I think they ought to be aware that in my view the attempt has not been entirely successful.
The object of this amendment is to remove the company law definition of "subsidiary". It would not have a wrecking effect on the Bill. It would simply mean that, where the term "subsidiary" was used in Part II, and principally in Clause 15, the ordinary legal criteria would be employed to judge whether the particular airport company was in fact controlled by the local authority rather than under the Companies Act definition. It is obviously equitable, in the light of the restrictions that the Government are attempting to impose on these so-called subsidiaries, that the factual test should be applied rather than an arbitrary one borrowed from the companies legislation, which is not really adapted to this form of hybrid animal. I beg to move.
The Earl of Caithness: If the definition of "subsidiary" in Clause 73 was deleted from the Bill, it would create doubt as to what was or was not a subsidiary. So the matter might well go to the courts, which might come to much the same conclusion; and, if so, the amendment would thus be of little effect. However, we think that the definition puts the matter beyond doubt.
As the noble Lord, Lord Williams of Elvel, said, the most significant references to "subsidiary" in the Bill are in Part II, which we wish to apply to any airports run by subsidiaries of local authorities, even if not formed under Clause 12. As was made clear in another place, the Government wish to ensure that the provisions of Part II of the Bill apply to any airport company—such as Manchester Airport plc—established by local authorities before Part II of the Bill comes into force. For that reason we believe that it is necessary to have "subsidiary" in the list of definitions in the place in the Bill in which it is now.
Lord Williams of Elvel: I am grateful to the noble Earl for his reponse. I accept that for avoidance of doubt there has to be some definition of "subsidiary". What I say is that this whole question of what the status of public airport companies really is, and what impositions the Government are entitled to exert on them, are matters to which we shall return on Report because they are fundamental to Part II of the Bill. In the light of this discussion, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Davidson Viscount Davidson moved Amendment No. 98:
Page 70, line 39, at end insert—
(" "user", in relation to an airport, means—

(a) a person for whom any services or facilities falling within the definition of "relevant activities" in section 34(1) are provided at the airport, or

(b) a person using any of the air transport services operating from the airport.").

The noble Viscount said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 99:
Page 71, line 2, after ("whole") insert ("or any part").
The noble Earl said: I beg to move Amendment No. 99, and with the leave of the Committee I shall speak also to Amendment No. 100. Both are technical amendments. I can go into detail should any noble Lord require me to do so. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 100:
Page 71, line 5, after ("for") insert ("the whole or").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 101:
Page 71, line 6, at end insert—
("(4) For the purposes of this Act a body corporate shall be treated as an associated company of an airport operator if either that body or the airport operator is a body corporate of which the other is a subsidiary or if both of them are subsidiaries of one and the same body corporate.").
The noble Earl said: This amendment is consequential. I spoke to it with Amendment No. 47. I beg to move.
On Question, amendment agreed to.
Clause 73, as amended, agreed to.
[Amendment No. 102 not moved.]
Clause 74 agreed to.
Clause 75 [Short title, commencement and extent]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 103:
Page 72, line 19, at end insert ("(including Schedule (Application of Part IV to associated companies of airport operators))").
The noble Earl said: I spoke to this amendment with Amendment No. 89. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 104:
Page 72, line 24, after ("1 to 4") insert ("and 6").
The noble Earl said: I beg to move Amendment No. 104, and with the leave of the Committee I shall speak also to Amendment No. 106. These are purely technical amendments and I hope that noble Lords will support them. I beg to move
On Question, amendment agreed to.
Clause 75, as amended, agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 105:
Before Schedule 1, insert the following new schedule:
("APPLICATION OF PART IV TO ASSOCIATED COMPANIES OF AIRPORT OPERATORS
Preliminary
1. This Schedule has effect for the purpose of authorising or requiring the imposition by the CAA in relation to an airport of conditions under section 39(2) or 44(2) in respect of a course of conduct pursued by an associated company of the airport operator; and in this Schedule any such conditions are referred to as "subsidiary conditions".
Section 37
2. Section 37(1) and (4) shall apply to any subsidiary conditions for the time being in force in relation to an airport as if—

(a) references to the airport operator were references to the associated company of the airport operator that pursued the course of conduct in respect of which the conditions were imposed, and

(b) references to any such conditions as are mentioned in section 37(1) were references to any such conditions as are mentioned above.

Section 39
3. In section 39—

(a) in subsections (2), (3)(a) and (b) and (6), references to the airport operator shall be construed as including references to an associated company of the airport operator, and

(b) in relation to such a company—

(i) the reference in subsection (2) to subsection (3) shall be construed as a reference to subsection (3)(a) and (b) (as modified by paragraph (a) above), and

(ii) the reference in subsection (6) to subsection (3)(a), (b) or (c) shall be construed as a reference to subsection (3)(a) or (b) (as so modified).

Section 40
4. In section 40(2) and (3)—

(a) references to an airport operator shall be construed as including references to an associated company of an airport operator, and

(b) in relation to such a company, references to any provision of section 39 shall be construed as references to that provision as modified by paragraph 3 above.

Section 41
5.—(1) Where an associated company of the airport operator in the case of any airport either carries on operational activities relating to the airport or is entitled to grant rights by virtue of which any such activities may be carried on by other persons, section 41(2) shall have effect in relation to any reference under section 41(1) with respect to the airport with the insertion after paragraph (a) of the following paragraph—
"(aa) whether any associated company of the airport operator has, at any time during the relevant period pursued—

(i) in relation to any operational activities carried on by the company and relating to the airport, or

(ii) in relation to the granting of a right by virtue of which any operational activities relating to the airport may be carried on by any other person or persons,

a course of conduct which has operated or might be expected to operate against the public interest; and".
(2) In section 41(3), as it applies in relation to an associated company of an airport operator in accordance with paragraph 3 above, the reference to the airport operator shall be construed as a reference to the associated company in question.
Section 42
6.—(1) In relation to any reference to which paragraph 5(1) above applies, section 42(1)(a) shall have effect with the insertion at the end of sub-paragraph (ii) of "and any course of conduct which, in its opinion, has been pursued by an associated company of the airport operator in relation to any of the matters specified in subsection (2)(aa) of that section and has operated, or might be expected to operate, against the public interest,".
(2) In section 42(4) the reference to the airport operator concerned shall—

(a) in the case of a reference or variation under section 41 relating only to a course of conduct pursued by an associated company of an airport operator, be construed as a reference to that company, and

(b) in the case of a reference or variation under that section relating to courses of conduct pursued by an airport operator and such a company respectively, be construed as a reference to both the airport operator and the company.

Section 43
7.—(1) In section 43(3) the reference to an airport operator shall, in the case of a reference under section 41 relating wholly or in part to a course of conduct pursued by an associated company of an airport operator, be construed as, or as including, a reference to any such company (as the case may require).
(2) In section 43(6) the reference to the airport operator concerned shall be construed as mentioned in paragraph 6(2) above according to the nature of the reference under section 41.
Section 46
8.—(1) In section 46(1)(a) the reference to the airport operator in relation to an airport shall be construed as including a reference to an associated company of the airport operator.
(2) Section 46(3), (5), (6) and (7) shall have effect in relation to any complaint against an associated company of an airport operator made by virtue of sub-paragraph (1) above as if any reference to an airport operator or to the airport operator concerned were a reference to any such company or to the company against which the complaint is made (as the case may require).
Section 47
9.—(1) In section 47(1) and (9) any reference to an airport operator shall be construed as including a reference to an associated company of an airport operator.
(2) Where the permission for the time being in force in respect of an airport is revoked under section 47(9) (as it applies in accordance with sub-paragraph (1) above) by reason of an associated company's contravention of a compliance order, then (notwithstanding section 36(4)) a permission shall not again be granted under this Part in respect of that airport unless it appears to the CAA that, if the CAA were to impose in relation to the airport any condition corresponding to the one whose breach gave rise to the making of the compliance order, that condition would be complied with by the person (whether the airport operator or an associated company of the airport operator) to whose activities any such condition would relate.
(3) In this paragraph "compliance order" and "contravention" shall be construed in accordance with section 47(11).
Section 48
10.—(1) Section 48(5) shall apply in relation to any subsidiary conditions as if—

(a) references to the airport operator concerned were references to the associated company of the airport operator that pursued the course of conduct in respect of which the conditions were imposed; and

(b) the reference to section 39(3)(a), (b) or (c) were a reference to section 39(3)(a) or (b) (as modified by paragraph 3(a) above).

(2) Section 48(7) shall apply in relation to any subsidiary conditions as if the reference to the airport operator were a reference to the associated company mentioned in sub-paragraph (1)(a) above.").
The noble Earl said: I spoke to Amendment No. 105 with Amendment No. 89. It is consequential. I beg to move.
On Question, amendment agreed to.
Schedules 1 and 2 agreed to.
Schedule 3 [Consequential amendments]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 106:
Page 76, line 24, at end insert—
("LOCAL GOVERNMENT ACT 1985
6. In section 40(3) (airports), for "to 33, 35, 37(3), (4) and (5), 60(3)(0)" substitute ", 31, 35".").
The noble Earl said: This is consequential to Amendment No. 104 which has already been agreed by the Committee. I beg to move.
On Question, amendment agreed to.
Schedule 3, as amended, agreed to.
Schedule 4 [Transitional provisions]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 107:
Page 78, line 40, leave out ("filed") and insert ("delivered to the registrar of companies")
The noble Earl said: This is consequential on Amendment No. 72. I beg to move.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Remaining schedule agreed to.
House resumed: Bill reported with the amendments.

Social Security Bill
Brought from the Commons; read a first time, and to be printed.
Plymouth City Council Bill [H.L.]
The Queen's consent signified; Bill reported from the Unopposed Bill Committee with amendments.
West Glamorgan Bill [H.L.]
The Queen's consent signified; Bill reported from the Unopposed Bill Committee with amendments.

Great Yarmouth Outer Harbour Bill
Brought from the Commons; read a first time, and referred to the Examiners.
House adjourned for the Spring Bank Holiday Recess at twenty-eight minutes past eight o'clock.

  HILL FARMING ADVISORY COMMITTEE: MEMBERSHIP
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  ST. JAMES'S PARK: FOUNTAINS
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  COOLSCAR LIMESTONE QUARRY: EXTENSION APPLICATIONS