Sitting of 18 November 1986

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

    Labour Statistics
    Mr. Dormandasked the Paymaster General what were the numbers of persons unemployed for one year and two years, respectively, at May 1979 and the numbers at the latest available date.
    The Parliamentary Under-Secretary of State for Employment (Mr. John Lee): On 5 April 1979, the closest date to May 1979 for which such an analysis is available, the numbers of unemployed registrants in the United Kingdom who had been unemployed for over one year and over two years respectively were 366,700 and 179,800. On 9 October 1986 the numbers of unemployed claimants were 1,341,000 and 844,500. Direct comparisons of unemployment by duration since 1979 are not possible because of changes in the way figures are collected.
    Mr. Dormand: Those figures are a disgrace and an affront to society. They demonstrate more clearly than anything why the Government's economic policies are an utter failure. When will the Government realise what a devastating effect long-term unemployment has on a family? Will the hon. Gentleman give an assurance that when he talks about a reduction in unemployment, whether in his statements or in his speeches, he will identify the reduction in the long-term unemployed?
    Mr. Lee: We are slowly winning the unemployment battle. The numbers are beginning to fall. In the latest quarter there was a fall of 7,000 in the number of long-term unemployed, compared with a rise of 25,000 a year ago.
    Unemployment will not be helped by the sort of suggestion made recently by the hon. Member for Kingston upon Hull, East (Mr. Prescott), Mr. 1 per cent., with his famous training levy. Nothing would make matters worse.
    Dame Jill Knight: Does my hon. Friend have figures for job vacancies during a similar period? Does he recognise that unless job vacancies are subtracted from the number of unemployed we cannot get a true picture of unemployment in Britain?
    Mr. Lee: My hon. Friend is absolutely right. In the vast majority of areas vacancies are on the increase. Indeed, the figures announced last week show that the overall number of national vacancies was the highest since 1979.
    Mr. Leadbitter: The Minister referred to the difficulties of making comparisons with 1979 because of the different
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    methods of calculating unemployment. Does he accept that the Government know very well the basis of those changes in the calculation? For reasonable methods of comparison, would it be possible for him to place that figure in the Official Report, taking into account the changes that have been made by the Government?
    Mr. Lee: A question on that matter will come later. The allegation that there have been 16 changes is misleading and exaggerated. Only six have a discernible effect, details of which were published in the Employment Gazette. Three were minor changes, two were changes in the method of compilation, four resulted from procedural changes for paying benefit and two were to correct inaccuracies.
    It is not surprising that the Opposition are becoming increasingly rattled, depressed and dispirited with the unemployment figures and the national opinion polls moving against them.
    Mr. Fallon: Will my hon. Friend confirm that unemployment in the north-east, for example, fell by 9,000 last month? Why do Opposition Members not recognise good news, or do they prefer high unemployment'?
    Mr. Lee: My hon. Friend is absolutely right.
    Ms. Richardson: Of the figures which the Minister gave in his initial reply, what percentage of women were unemployed at both dates? Will the Minister also give an estimate of the number of women who are unable to register because the Government want to remove them from the statistics but who are available for work?
    Mr. Lee: I regret that I do not have the figures on women, but about 600,000 jobs were lost in manufacturing during the period of the previous Labour Government.

    Restart Programme
    Mr. Pikeasked the Paymaster General if he will make a statement on the Restart programme.
    The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): The restart programme has been making good progress and by 9 October 366,451 people had already been interviewed. A worthwhile offer that might lead to employment had been made to about nine out of 10 of those interviewed.
    Mr. Pike: Will the Paymaster General accept that the programme is not leading to people getting real jobs and that the main purpose of the exercise is to reduce the unemployment figures by false means, which is resulting in many people losing the benefit to which they are legitimately entitled? Is that not a disgrace?
    Mr. Clarke: No. That is, first, a wholly unjustified allegation, and it is also a harmful one to make because it damages the morale of our staff who are seeking to help long-term unemployed people whom they invite for interview. It also tends to put off the long-term unemployed people from going in. When people are interviewed we offer advice on how to get into a job, training, subsidised self-employment, a job club or our new job training programme—all ways of helping longterm unemployed people back into the growing number of vacancies and jobs available in our economy.
    Mr. Alan Howarth: Will my right hon. and learned Friend accept that the restart scheme has been widely welcomed in Britain as evidencing the Government's

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    humanity and practical determination in their approach to the distressing and important problem of long-term unemployment? Will my right hon. and learned Friend clarify what proportion of those coming for interview have subsequently been placed in jobs?
    Mr. Clarke: We have no means of knowing exactly, and we never will unless we go in for a large-scale survey of everybody who has left the count. At the moment, 86,211 people have ceased to claim unemployment benefit and we trust that they are in work or in training or have been placed in some way. Unless we go out and pursue them all and have a full survey, we shall never know. It is quite wrong, as my hon. Friend says, to muddle all this up with the routine administrative work of checking on fraud and availability for work, which, obviously, we must continue with as well.
    Mr. Leighton: Does the Paymaster General recall telling the House on 28 October that each person would have an hour-long interview? Does he know that staff have been asked to conduct at least 45 interviews a week, and that that, with various emergencies, means that the average person has an interview lasting only 25 minutes? If they are sent to a job and do not get it—less than 1 per cent. in most areas get a job—that is the end; there is no follow-up interview. As a result, many of the staff are becoming cynical and are wondering whether their purpose is to police the benefit system and chase people off the register.
    Mr. Clarke: We are only providing an hour-long interview and have greatly increased the number of staff available to do that. That is the service that we are seeking to provide. We are also, in the few pilot areas, seeking to extend the service to those who have been unemployed for six months. We are offering them a range of opportunities from the many that I described a moment ago. The hon. Gentleman has no justification for his assertion that less than 1 per cent. are getting a job. It must be more than that, but without surveying them all we have no means of knowing exactly how many.

    New Workers Scheme
    Mr. Butterfillasked the Paymaster General whether he will estimate the contribution likely to be made in employment in tourism by the new workers scheme.
    The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): This information is not available. However, by the end of March 1987 some 13,000 young people will be supported in the wider industrial grouping including hotels and catering, a significant proportion of which will be in tourism-related jobs.
    Mr. Butterfill: I am most grateful to my hon. Friend for that information. Does he agree that tourism is a particularly appropriate industry for the new workers scheme, first, because it assists the industry in contributing as much as it does towards our balance of payments and, secondly, although traditionally wages for young people in the industry have been low, they lead to outstanding employment opportunities, as is evidenced in my constituency?
    Mr. Trippier: My hon. Friend is absolutely right. Career prospects in tourism are better now than ever
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    before. Given the dramatic growth in that sector during the past few years, the opportunities for young people are enormous.
    Mr. Willie W. Hamilton: Is the Minister aware that, as a result of the Government's legislation on wages councils, the wages of young workers in our hotels and elsewhere have been, or are about to be, cut by about £20 a week —[HON. MEMBERS: "Rubbish."] That is indeed the case. Will the Minister make inquiries and ensure that those young people are not exploited in such an obscene way by the industry?
    Mr. Trippier: What the hon. Gentleman says is pure hypothesis, and not fact. I should like to see details on those points. We took young people out of the purview of the wages councils in order to give them a better opportunity to get their feet on the first rung of the employment ladder. I am sure that that is what is happening right now.
    Mr. Steen: I recognise the importance of the new workers scheme, but is my hon. Friend aware that last summer thousands of jobs were going begging in my constituency in south Devon because young people and those on the unemployment register just would not take them? Many of those jobs were taken by people from European countries, although they should have been filled by our young people. Will my hon. Friend do something about that by next summer?
    Mr. Trippier: One of the difficulties for the tourism sector is that young people may from time to time get a little mixed up about the difference between service and servility. The Opposition do not help matters by rubbishing jobs in the tourist industry that are occupied by those young people.
    Mr. Prescott: I had a job in tourism, and I do not need the Minister's lecture.
    Mr. Trippier: That is why I am so surprised that the hon. Gentleman should take every opportunity to rubbish jobs in tourism. We are trying to correct that impression, and I have recently launched a video to that end which will be seen in 7,500 schools.

    Work Test
    Mr. Prescottasked the Paymaster General by what amount he expects the unemployment figures to fall as a result of the new availability for work test.
    Mr. Kenneth Clarke: The purpose of the new procedure for testing availability for work is to determine entitlement to benefit in line with long-standing law and following the recommendations of the Public Accounts Committee. It is not possible to forecast what the results of the new procedure will be, but it involves no change in the conditions governing eligibility for benefit.
    Mr. Prescott: Did not the pilot study on those schemes show that 20 times more people were being referred for suspension of benefit than happened before those interviews? Can the Minister confirm press reports about the Devon pilot scheme, to the effect that the adjudicator reviewing those suspensions reversed more than 70 per cent. of them? It confirms our view that the Department's obsessive zeal intimidates people into leaving the unemployment register. What steps will the Paymaster

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    General take to improve the situation, so that unemployed people, who have been found innocent of the charges laid against them, are not intimidated and made to feel like scroungers?
    Mr. Clarke: In the pilot areas between 3 and 4 per cent. of claimants did not pursue, or withdrew, their claims when they were asked to complete a questionnaire. Between 2 and 3 per cent. who continued with their claims were disallowed by the adjudicating authorities. However, the hon. Gentleman has touched on an extremely important safeguard: the final decision is taken by an independent adjudication officer, and there is a court of appeal. The only people who will lose their benefit as a result of that process are those who were never entitled to it according to the law and the rules laid down by the House.
    Mr. Ralph Howell: Does my right hon. and learned Friend accept that we shall never solve this problem until we offer work at work centres, as was designed by Beveridge in his original proposals? Will he give serious consideration to the introduction of a universal workfare scheme?
    Mr. Clarke: As I have said, we are offering work, training and so on to nine out of 10 of the long-term unemployed who come in and are interviewed. In addition, we are providing 250,000 places under the community programme. We are making great progress, and it is helping to produce the present reduction in the level of unemployment. I am not satisfied that we need to go on from that to some compulsory workfare scheme, although I continue to listen with interest to my hon. Friend's arguments.
    Mr. Hugh Brown: The Minister referred earlier to the relationship between staff morale and the implementation of policy. Does he think that the introduction of the new availability test has helped staff morale? Can he say how many offices have suffered some sort of disruption because of its introduction?
    Mr. Clarke: The pilot schemes were introduced with no trouble with staff or anyone else. We received no complaints from any of the hon. Members whom we told about the pilot schemes. We received no complaints from individuals until one of the trade unions involved, or a branch of it, in concert with the hon. Member for Dunfermline, East (Mr. Brown), tried to allege that with the introduction of the schemes we were suddenly pressurising the unemployed. I assume that when this nonsense has died down the morale of our officers will be restored and that they will carry on implementing Parliament's wish that we pay the benefit to all those who are justly entitled and stop paying it to those who are not available for work.
    Sir William Clark: As the question suggests that a reduction in unemployment is wanted, will my right hon. and learned Friend say whether, if a 1 per cent. levy on turnover were placed on employers, that would increase unemployment, or decrease it?
    Mr. Clarke: It is astonishing that an Opposition Front Bench spokesman can casually throw out at a by-election meeting a proposal that would mean a huge increase in employment costs. All the increases in employer's costs that the Opposition keep advocating will cost jobs, as will the minimum wage and a number of their other
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    propositions. I understand that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersely) is engaged in conversations with his hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). Perhaps we shall know whether £6 billion or some such sum would be imposed on British industry by the Opposition.

    MSC (Adult Training)
    Mr. Bruceasked the Paymaster General how much the Manpower Services Commission has spent on adult training during the current fiscal year: and how many adults have benefited from training funded by these grants.
    Mr. Trippier: At the end of September 1986 the Manpower Services Commission had spent some £90 million on adult training programmes and helped about 153,000 adults.
    Mr. Bruce: Will the Minister comment on the cut in training at offshore training centres because of the current difficulties? Will he acknowledge that although the oil price is depressed now, there is a long-term secure future for the industry, and that training should be maintained in spite of the current short-term difficulties.
    Mr. Trippier: I shall be happy to meet the hon. Gentleman and representatives from the industry if they would care to see me in the Department. The details of why the MSC has withdrawn a part of the training are extremely complex. If the hon. Gentleman would like to take up my offer, I would be delighted to honour it.
    Mr. Rowe: Does my hon. Friend agree that one of the slight shadows over the improving economy that we now enjoy is the growth of skill shortages? Does he accept that it is among adults, who are presently debarred in many instances from receiving assistance towards adult training because they have been trained already in another skill, that we should be working the hardest? Will he give an assurance that in the provision of adult training the emerging skill shortages will be given paramount importance?
    Mr. Trippier: I would dispute that there is a growth in the number of skill shortages. One of the reasons why we have spent so much money through the MSC on local training grants for employers is to meet the shortfall in skills training, together with the development and strengthening of skills training centres. In addition, there is the new initiative that we are taking from 1 April next year in the form of a national priorities skills scheme, which I hope will meet some of the concerns expressed by my hon. Friend.
    Mr. Sheerman: In view of the complacency of the Minister in response to this question on adult training, is it not about time that he had serious words with Geoffrey Holland, the director of the MSC? In a speech to the Institute of Personnel Management last week Geoffrey Holland talked about the need for a revolution in adult training and the inability to meet adult training needs in Britain. Are we talking about the same world as Geoffrey Holland? I remind the Minister that Geoffrey Holland is the senior civil servant in the MSC, who talked originally about shooting for 1 per cent. if we were to get on course in competing with our major industrial competitors in adult training. Is it not a fact that adult training has not

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    even been started by the Government, and all that we have seen are schemes to get people off the dole and off the figures?
    Mr. Trippier: The hon. Gentleman is misquoting Mr. Geoffrey Holland, and not only about the 1 per cent. Mr. Holland has never suggested that the 1 per cent. which the hon. Member for Kingston upon Hull, East (Mr. Prescott) mentioned should be levied on all firms. As my hon. Friend the Member for Croydon, South (Sir W. Clark) said, it would be an increasing burden on business, tantamount to about a 20 to 25 per cent. increase in the rate of corporation tax. The hon. Gentleman suggested that industry should look on training as an investment and not as a cost, and on that there is no difference of opinion between him and me.

    Job Release Scheme
    Mr. Harveyasked the Paymaster General what would be the current cost of reducing the age of qualifications of the job release scheme to 60 years; and how many jobs would be saved thereby.
    Mr. Lee: A reduction from 64 to 60 in the qualifying age for the job release scheme would in the first year create some 50,000 opportunities for replacement workers. This would cost about £132 million in the first year and a further £196 million in subsequent years.
    Mr. Harvey: In view of the cost effectiveness of reducing unemployment in this way and the great number of people seeking early retirement, will my hon. Friend therefore consider introducing this measure?
    Mr. Lee: The scheme is effective but it is also costly and although it is under constant review we have no present plans to change it.
    Mr. Janner: The Government are continuing relentlessly to fiddle the unemployment figures. Would it not be better to give men and women the right to retire voluntarily at 60? That would give to people who want it a dignified retirement and their jobs would become available for younger people who are desperate for work.
    Mr. Lee: I have nothing to add to my answer.
    Mr. Evans: In view of the popularity of this scheme with employers and employees, why do the Government not adopt a step-by-step approach by reducing the retirement age one year at a time? They could start by reducing it to at least the qualifying age of 63, which is what it was when the Government took office.
    Mr. Lee: That is always a possibility and an option. There have been seven changes in the age conditions since 1977. At present about 30,000 people are supported under the scheme, at a total cost of £111 million. It is an expensive scheme.

    Labour Statistics
    Mr. Evansasked the Paymaster General how many people are currently employed in manufacturing industries; and how many were employed in manufacturing in June 1979.
    Mr. Lee: In September 1986 there were 5,554,000 employees in employment and self-employed people in manufacturing industries in Great Britain. In June 1979 there were 7,267,000.
    Mr. Evans: Will the Minister acknowledge that as a result of the Government's policies nearly 2 million jobs in manufacturing industry have been lost since 1979? That is an absolute disgrace. Is it not time that the Government recognised that manufacturing industry is the lifeblood of Britain and started doing something about improving that sector instead of spending so much time fiddling the unemployment figures?
    Mr. Lee: The hon. Gentleman knows the situation full well. Employment in manufacturing industry has been falling for the last 20 years. We have about 23 per cent. of our working population in manufacturing, while in the United States it is only 19 per cent. May I refer the hon. Gentleman to the comments of his leader, which appeared in The Guardian on 1 November. The headline says: "Kinnock cools hopes for jobs in manufacturing." The article by John Carvel reports what the Leader of the Opposition told Welsh industrialists.
    He said:
    "the Labour party does not expect its plans to revive manufacturing industry to produce any substantial increase in manufacturing jobs."
    Mr. Roger King: Does my hon. Friend agree with the trade union movement that one way of establishing how successful British industry is to look not at the number of people employed in it, but at the number of robots used?
    Mr. Lee: My hon. Friend is right. One of the reasons for the reduction in manufacturing employment is clearly the increasing use of robotics and automation, and more especially the increase in efficiency that has been achieved during the lifetime of this Government.
    Mr. O'Brien: Does the Minister accept that a large part of the increase in the loss of jobs in manufacturing industry has been among people in my constituency and in the travel-to-work area which covers the Hemsworth and Wakefield constituencies? Unemployment is now bordering on 16 per cent. Will the Minister press for assisted area status for the travel-to-work area that covers my constituency and those of my hon. Friends so that something is done to improve manufacturing industry and reduce unemployment?
    Mr. Lee: I am conscious of the fact that there are depressingly high unemployment figures in a number of regions. I fully accept that. Particular area status is a matter not for the Department of Employment but for the Department of Trade and Industry and the Department of the Environment. I draw the hon. Gentleman's attention to the success of British Coal Enterprise. Recently its funds have been doubled to about £40 million, which has been beneficial in part in helping to create new jobs in areas such as the hon. Gentleman's.

    Restart Scheme
    Mr. Lawlerasked the Paymaster General what figure he has for the destination of people who have been on a restart scheme.
    Mr. Kenneth Clarke: We have no means of knowing how many of those who have had a restart interview, or have been on a restart course, subsequently find work, or go into training, self-employment or other opportunities.
    Mr. Lawler: My right hon. and learned Friend will be pleased to know of the success of the scheme in Bradford,

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    where more than 4,000 people have been interviewed, of whom 94 per cent. have been made a positive offer. As anyone who has ever visited one of these schemes will be aware, the greatest success must be in remotivating people who otherwise would become demoralised. Will my right hon. and learned Friend assure those who are working in the restart scheme that, given its success, the Government intend to extend it universally to those who have been unemployed for more than six months?
    Mr. Clarke: I agree with my hon. Friend. We are approaching and interviewing that body of people who have given up hope of getting work. Many of them believe that there is no chance of getting a job. They discover that we can offer them a range of opportunities. I am glad that the scheme is helping in Bradford. We are already piloting the possibility of extending the scheme to those who have been out of work for six months. If that is successful, we shall obviously look at the opportunities to extend it.
    Mr. Ernie Ross: The Paymaster General will know that Dundee is one of the areas selected for the MSC's new job training scheme. The experience of the 20 individuals who were interviewed last week is frightening and horrifying. Neither oral nor written information was available to the claimants who were interviewed, who were obviously anxious and keen to improve their employment prospects and to know whether they would be entitled to the benefits that they had previously received. The also wanted to know their position at the end of the six-month period. In fact, the whole scheme is a shambles. The people who have accepted those training places, perhaps because they are afraid of losing benefit, are anxious about their present eligibility for benefit, and their long-term future.
    Mr. Clarke: I am surprised to hear of that reaction. Obviously, we are just introducing and trying out this new scheme with the aim of giving a guaranteed training place to everyone under 25 who has been unemployed for longer than a certain time. I am sure that those people could benefit from the type of training courses which we have been putting together. The number of unemployed people under 25 is dropping steadily all the time. We think that giving more training is the key to getting even more of them back into work.
    Mr. Sackville: Does my right hon. and learned Friend agree that if Labour Members want to show real concern for the unemployed they should start encouraging the scheme instead of worrying about the electoral consequences for their party of any fall in unemployment?
    Mr. Clarke: I entirely agree. The Opposition are looking increasingly concerned. Some of them almost argue that if we do anything that actually gives someone a job that is a dastardly move to reduce the unemployment figures and weaken their chances of winning the election. I hope that they will stop calling our schemes tea and sympathy, because up and down the country the schemes are proving to be an extremely effective means of getting the long-term unemployed back into work.

    Labour Statistics
    Mr. Tinnasked the Paymaster General what the estimated effect has been on the unemployment figures as a result of the changes made in the method of counting since 1979.
    Mr. Kenneth Clarke: We have made only three changes in the method of counting, and two of those were to correct errors. It is impossible to estimate what the unemployment count would be today if these changes were reversed.
    Mr. Tinn: Does the right hon. and learned Gentleman realise that, on our reckoning, the number of changes is nearer 18? The effect of the changes is to reduce the numbers appearing on the register by nearly 500,000. Can the right hon. and learned Gentleman give corrected figures? Which changes, even those to which the right hon. and learned Gentleman can admit, have resulted in an increase, and which have resulted in a decrease, in the numbers on the register?
    Mr. Clarke: The hon. Gentleman is drawing from a highly publicised survey of all the administrative changes which, it is said, have been made in the implementation of the benefits system. The list, which gets up to 18, includes things such as a strike, which is hardly within the Government's control. In a system as complex as the national insurance system, it is obvious that one is always making changes, but it is impossible to work out what the upward and downward effects of most would be. The vast majority have no effect.
    The hon. Gentleman asked about changes made in the method of counting. There have been only three. Two of them corrected errors, one a Northern Irish mistake and another in this country, and the third, the only one to make any major change to the figures, was when we went over to registration at jobcentres in October 1982. That enabled us to computerise the count and gave us a more accurate and up-to-date record, which reduced the count by about 78,000. All the other estimates about what would be the effect of suddenly going back to the 1979 administrative change and bringing back errors and old rules are completely bogus. The people who put those claims forward have no way of knowing, for example, how many people would register at jobcentres in the unlikely event of our going back to that system.
    Mr. Holt: My right hon. and learned Friend might like to note that, whatever method of calculation was in operation, in the district shared by the hon. Member for Redcar (Mr. Tinn) and myself the number of young people unemployed could be reduced by 25, according to the Labour chairman of the employment committee on Langbaurgh, if it was not vetoed from doing so by the local trade union.
    Mr. Clarke: I am grateful to my hon. Friend. We have difficulties of that kind placed in the way of the youth training scheme by the last recalcitrant trade unions which take that view. We also have some school leavers still on the register. All those who leave school at the age of 16 are guaranteed a place on the youth training scheme. Therefore, they are unemployed only if they have chosen to be. Unfortunately, they are sometimes encouraged in that way by some of the remarks of Front Bench Opposition spokesmen.
    Mr. Prescott: Does the Paymaster General not accept the Library's calculation of the real levels of unemployment? It says that the real level is equivalent to 4·4 million. Does the Paymaster General not accept the statement of the research department, which calculates six changes to the figures? Two of those changes increase the unemployed

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    by 43,000 but the remaining changes reduce unemployment by nearly 400,000. Everybody accepts that the figures are reduced by nearly 500,000 on whatever assessment is used.
    Mr. Clarke: I have not heard the hon. Gentleman use the 4 million figure for some time, because he knows that it is arrived at by adding on all the people in training, all those on the community programme and adding on people who were not counted when the Labour Government were in office and who ought not to be counted becaue they are not unemployed. The six changes are administrative changes which have had some effect on the figure. I repeat that there is no way of calculating what the effect would be if we had that system today. It would be ridiculous suddenly to go to our officers and tell them to reverse every administrative change made in the national insurance system over the past six years and go back to every error that was made. What is worrying the Opposition is the fact that the number of people now workng in this country has increased by over 1 million since the last election. It has gone up by over 200,000 in the last full year alone. The figures are getting better, as the hon. Gentleman knows. That is why he is doing his best to knock them down.

    Tourism
    Mr. Coombsasked the Paymaster General when he next expects to meet the chairman of the English Tourist Board to discuss prospects for tourism in England.
    Mr. Trippier: I will be meeting Duncan Bluck, the chairman of the British Tourist Authority and the English Tourist Board on 10 December to discuss, among other issues, the prospects for tourism in England.
    Mr. Coombs: Will my hon. Friend raise with the chairman of the English Tourist Board the idea of a major new initiative in 1987 to encourage tourists to visit the English regions rather than staying in London? Does he agree that that would benefit the hard-pressed people of London as well as boosting employment prospects in other parts of England such as Wiltshire?
    Mr. Trippier: I certainly agree with the latter point made by my hon. Friend. I am anxious to come up with new initiatives in 1987. I must say that we have just launched a couple of new initiatives with the ETB where it has mounted a campaign with the four northern regional tourist boards to promote the north country rather than London and the south-east. In addition, there is a new off-season promotion featuring the west country and the heart of England. All that is very much in line with the new policy in the Department to encourage the dispersal of visitors to the regions.
    Mr. Wrigglesworth: Is the Minister aware that Stockton council is doing its best to promote tourism in the Teesside area, which, as the Minister will know, has the highest level of unemployment in Great Britain? Will he look sympathetically at proposals that the council have put forward for the development of the Preston park estate and museum which has the Stockton-Darlington railway running through it, which could become a major tourist area, creating jobs and income for the region?
    Mr. Trippier: I am anxious to look as sympathetically as possible on the project that is being put to the ETB at the moment. Certainly it falls within the guidelines of the
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    new tourism policy, in that we should be supporting major tourist attractions so that they can act as a honeypot to attract more wealth to those areas and increase jobs in tourism. I shall certainly look at the matter sympathetically.
    Mr. Gale: Further to the answer that my hon. Friend gave to my hon. Friend the Member for South Hams (Mr. Steen), when he meets the chairman of the ETB, will he discuss ways of promoting further career prospects in tourism in schools, so that young people are made further aware of the excellent prospects in that industry?
    Mr. Trippier: That is the most important point that could be made on this subject. That is the reason why last Friday I launched the video that is going to 7,500 secondary schools. We hope that it will be viewed by upwards of 1·6 million schoolchildren. Again, it is an attempt to attract them to tourism as a serious career.
    Mr. Loyden: Does the Minister accept that it is a fallacy to imagine that tourism can resolve the problem of unemployment to any extent, taking into account present unemployment in areas such as Merseyside? Is he aware that unemployment is rooted in the Government's economic policies? When they change, and when we get manufacturing industry back into operation, real, proper jobs will be available, but not until then.
    Mr. Trippier: I must say that the hon. Gentleman seems to be out of step with some of his colleagues in his own party in the Merseyside area, which will not come as a great shock to the rest of the House. I happened to be in Merseyside only yesterday. Several people there appreciate the development of tourism in the Merseyside area, particularly as a result of the development of the docks, the garden centre and the tall ships race, of which they are extremely proud. That has created more wealth in that area and more jobs.
    Mr. Maclean: When my hon. Friend meets the chairman of the ETB, will he stress the special problems faced by Cumbria, which is very keen to encourage tourists to the region, but has suffered enormously in the past couple of years through other problems caused by other industries outwith the control of the tourist operators?
    Mr. Trippier: I understand exactly the point that my hon. Friend is making. As a result of representations that he has made to me, and which I in turn have made to the ETB on his behalf, we have now managed to secure increased funding from the ETB for my hon. Friend's constituency and the surrounding area.

    Labour Statistics
    Mr. Simon Hughesasked the Paymaster General if he will list (a) the latest monthly figure for people registered as unemployed in the Greater London area, both as a total and as a percentage of the total number of people available for work and (b) comparable figures for the same month in 1981, 1976, 1971 and 1966.
    Mr. Lee: As the reply contains a statistical table I shall, with permission, arrange for it to be printed in the Official Report. Figures will be given showing the numbers of unemployed claimants and the unemployment percentage rate in the Greater London Area for October of 1976, 1981 and 1986.
    Mr. Hughes: I am grateful for the Minister's answer. Does he accept that the Greater London figures conceal a problem of a massive increase in unemployment in inner London, where the figures show that there are now over one quarter of a million out of work, which is the largest in any municipal area in the United Kingdom? Will the hon. Gentleman tell the House what initiatives will be developed other than the inner city action team and the docklands corporation to produce jobs in inner London for people resident in inner London in the foreseeable future? There is a crisis. What will the Minister do?
    Mr. Lee: While, sadly, unemployment has risen, I have to say to the hon. Gentleman that the Greater London rate is still below the national average. With regard to Government spending, about £210 million is going into Greater London in the current financial year from a mix of Government Departments. As the hon. Gentleman knows, Southwark is about to be upgraded to a programme authority area. In fact, there are 800 job vacancies in Southwark alone at present.
    Mr. Wilkinson: May I tell my hon. Friend that in west London it is hard to get skilled workers? For example, it is a real problem to fill vacancies at London airport, which have to be filled by foreigners. Would not at least a partial solution to that problem be a greater willingness on the part of unemployed people in central London to commute out against the tide to secure the employment available for them in the outer boroughs?
    Mr. Lee: Obviously, such commuting would make sense. Clearly, however, there are skill shortages, and it is a matter of matching those vacancies with the people available.
    Following is the table.
    Estimates of the numbers of unemployed claimants at regional level are available only from April 1974. Figures for 1976 to 1981 are estimates. The comparison is affected by the provisions of the 1983 Budget provisions, which meant that certain older men no longer need to sign on at unemployment benefit offices to claim national insurance credits or the longterm rate of supplementary benefit.

    Unemployed Claimants in the Greater London Area

    Number

    Unemployment percentage of employees and unemployed

    October 1976

    151,700

    3·9

    October 1981

    299,600

    7·3

    October 1986

    403,600

    10·4

    Community Programme
    Mr. Thurnhamasked the Paymaster General how many of those taking up employment from the community programme are currently in the same employment after 12 months; and if he will make a statement.
    Mr. Lee: The information requested is not available. However, the results of the lastest follow-up survey of former community programme participants shows that about 30 per cent. of former participants responding obtained a job or training immediately on leaving, and 37 per cent. were in employment or training 10 months after leaving the community programme. Fifty four per cent. had had at least one job during the 10-month period.
    Mr. Thurnham: In view of my hon. Friend's encouraging reply and his recent most welcome visit to
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    Bolton to see the success of the pilot job guarantee schemes, will he extend these schemes nationally and give priority on the community programme to those who have been out of work longest?
    Mr. Lee: I know how much thought and effort my hon. Friend gives to this whole area of long-term unemployment in his constituency—something that I was able to observe on my recent visit to Bolton. The advantages of participation in the community programme are available to all those who are eligible, including the long-term unemployed. Indeed, 30 per cent. of those on the community programme had previously been unemployed for more than 18 months. However, the community programme is only one of the many restart options, and others may be more relevant to the long-term unemployed.
    Ms. Clare Short: Does the Minister agree that when people have to wait a year or 18 months for a job, then for 12 months receive about £45 a week for a low-level job, and then 70 per cent. of them are returned to unemployment, that is not a success but a failure? The people want real, decently paid permanent jobs, not this kind of manipulation of the long-term unemployment figures.
    Mr. Lee: That is why the Government have created 1 million new jobs since 1983.

  PRIME MINISTER

    Engagements
    Mr. Lofthouseasked the Prime Minister if she will list her official engagements for Tuesday 18 November.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I attended the memorial service for Henry Moore and had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty The Queen.
    Mr. Lofthouse: If Mr. Peter Wright's memoirs confirm that Sir Roger Hollis was a spy, does the Prime Minister agree that her statement to the House in March 1981 was misleading? Or was it as Sir Robert Armstrong described yesterday and the right hon. Lady was just being economical with the truth?
    The Prime Minister: I stand by, and reaffirm, the statement that I made to the House on that subject. With regard to the case, the matter is sub judice.
    Mr. Tim Smith: Is my right hon. Friend aware that 105 David Owens and an encouragingly large number of David Steels have expressed an interest in the British Gas share issue? Does not that fact, together with the fact that 6 million people in all have expressed interest, show the popularity of the Government's programme to encourage wider share ownership?
    The Prime Minister: Yes. It is not only popular, it is the right policy, and we shall pursue it and other measures of privatisation.
    Mr. Kinnock: Against the background of the teachers' settlement negotiated last week, the National Confederation of Parent-Teacher Associations has this morning made a strong appeal to the Prime Minister and the Government to "accept and ratify" the proposed

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    agreement. May I therefore strongly urge the Prime Minister to announce now that the Government will "accept and ratify" that agreement to ensure a sustainable settlement that will work to the advantage of Britain's schoolchildren and the satisfaction of both parents and teachers?
    The Prime Minister: I understand that there is not yet a full signed agreement and that there is to be a further meeting tomorrow. My right hon. Friend the Secretary of State made quite clear the conditions under which the Government would pay the extra sums to finance the proposed 16·4 per cent. increase.
    Mr. Kinnock: The Prime Minister knows perfectly well that matters to be discussed tomorrow are issues of minor detail that do not affect the substance of the overall agreement. Will she tell us whether she will "accept and ratify" that agreement? Is it not obvious that, by her evasion of the majority view of parents and teachers, she is trying to pick a fight for political reasons best known to herself?
    The Prime Minister: My right hon. Friend the Secretary of State has made clear the conditions upon which the Government will pay the extra sum required to finance the 16.4 per cent. increase. Those conditions relate to duties and pay structure. Pay structure is crucial if we are to get top calibre teachers into the profession. [Interruption.] If the right hon. Gentleman is interested in my reply he might do me the courtesy of listening to it. Pay structure is critical for young people coming into teaching. They must know that there are good prospects of increases in pay and excellent prospects for head teachers. The proposal on offer from the Government would take average teachers' pay 10 per cent. in real terms above Houghton and 27 per cent. in real terms above what it was when Labour lost office in 1979.
    Mr. Kinnock: The Prime Minister cannot get away with that. As a former Secretary of State, does she not appreciate that to obtain teachers of high quality she must first attract them to the profession and then keep them there, which is why a decent basic rate and further prospects are included in the agreement?
    The Prime Minister: Structure is vital to attract young people of calibre into the profession. The right hon. Gentleman is hardly in a position to complain when our average offer is 27 per cent. in real terms above anything that the Labour Government managed to — [Interruption.]
    Sir John Biggs-Davisonasked the Prime Minister if she will list her official engagements for Tuesday 18 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Sir John Biggs-Davison: Will my right hon. Friend consider with her Cabinet colleagues today the publication of a White Paper about the totalitarian tendency's perversion of local government? Does she recall the words of the Labour deputy leader of the unlamented GLC about Left-wing councillors' prejudice against the police and the abuse of local government as a political ladder for the extreme Left?
    The Prime Minister: I am grateful to my hon. Friend. The details that he catalogues show how the present Labour party would behave in power. That is what it is like and what it would be like.
    Mr. Roy Jenkins: Does the Prime Minister now appreciate the increasing ludicrousness of the Government's posture before the Australian courts — which I am sure is not sub judice according to the rules of this House? As the Home Secretary who received the Trend report and believes in the strong probability of Sir Roger Hollis' innocence, and as an admirer of Sir Robert Armstrong, who served me in two capacities, I deplore the foolish mission on which the Government have sent Sir Robert. May I ask the Prime Minister whether there is any chance of her recovering a sense of proportion on this issue?
    The Prime Minister: With regard to the main object of the right hon. Gentleman's question, like all present and former members of the security service, Mr. Wright has a lifelong duty of confidentiality to the Crown. Unauthorised publication of his manuscript would violate that obligation. My right hon. and learned Friend the Attorney-General has accordingly applied to the Supreme Court of New South Wales for an injunction to prevent publication of the book. The right hon. Gentleman will be aware that proceedings have begun in the Supreme Court of New South Wales and the matter is therefore sub judice.
    Mr. Batiste: Will my right hon. Friend ensure that any settlement with the teachers includes provision to attract into the profession teachers of physics, mathematics and other subjects at present in all too short supply?
    The Prime Minister: That is the object of my right hon. Friend's pay structure — to ensure that teachers of subjects in which there are shortages have a pay structure that will attract them into the profession and take them up the ladder right to the top jobs.

    Westland plc.
    Mr. Dalyellasked the Prime Minister when she first became aware that the Solicitor-General had agreed to write to the then Secretary of State for Defence alleging material inaccuracies in his letter to the European Consortium.
    The Prime Minister: I refer the hon. Gentleman to the written answer that I gave him yesterday.
    Mr. Dalyell: In that case, why did the Attorney-General go to the lengths of threatening the Cabinet Secretary with action by the Director of Public Prosecutions and the police because the Prime Minister did not agree to the setting up of a leak inquiry and authorising it?
    The Prime Minister: I have nothing to add to the many answers that I have given in statements and debates from the Dispatch Box.
    Mr. Baldry: When the next general election eventually comes, will my right hon. Friend—
    Mr. Speaker: Order. This is a definitive question.
    Mr. Wilkinson: Does my right hon. Friend agree that the general public are more interested in the future of the European helicopter industry and those who work for it in Britain, especially at Westlands, than in who might have written what to whom and when?
    The Prime Minister: The future of the European helicopter industry is extremely important, as is the future of Westland, but I have nothing to add in regard to the point which was the subject of the previous question.
    Mr. Bell: In relation to the answer that the Prime Minister has given my hon. Friend the Member for Linlithgow (Mr. Dalyell), is she aware of the phrase of Aneurin Bevan—that he who fights and runs away lives to run away another day?
    The Prime Minister: What the hon. Gentleman does not like is the fact that he has had the answers.
    Mr. Butterfill: Does my right hon. Friend agree that, much as we seek to support President Alfonsin and the newly emergent democratic Government—
    Mr. Speaker: Order. That does not relate to this question, which is not an open question.
    Mr. Leadbitter: Will the right hon. Lady bear in mind that the submissions that the Cabinet Secretary, Sir Robert Armstrong, is making in Australia this week—
    Mr. Speaker: Order. That does not relate to this question either. I think that we should move on.

    Engagements
    Mr. Hickmetasked the Prime Minister if she will list her official engagements for Tuesday 18 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Hickmet: Will my right hon. Friend congratulate the British Steel Corporation on its excellent half-year results, which show a £68 million profit? Have we not transformed BSC into one of the most efficient and successful producers in Europe which is able to compete in world markets? Would it not be a disaster if we were to pursue the Labour party's policies and use the nationalised industries to employ more men? Do not the figures justify the chairman's view that BSC should be returned to the commercial sector and steelworkers and former steelworkers given the right to buy shares in it?
    The Prime Minister: I join my hon. Friend in congratulating those who work in steel on their profit record. When we came to office the taxpayer was having to pay hundreds of millions of pounds a year by way of subsidy; now, the British Steel Corporation is in profit and therefore contributing to the Exchequer. I agree that the Labour party's policy of compulsory overmanning in nationalised industries is utterly ridiculous. I also agree that we must consider whether in future we should privatise the steel industry.
    Mr. Foot: Reverting to the right hon. Lady's replies about Sir Roger Hollis, does she recall making a statement to the House on this matter in which the charges against Sir Roger were repudiated? That was accepted by the Government and, I think, the House at the time. If the Government have altered their opinion in any way, is it not the right hon. Lady's duty to come to the House and explain the facts? Is it not shameful that Sir Roger's reputation and his family should be treated in this way by the Government, who should be carrying out what the Prime Minister said to the House?
    The Prime Minister: The right hon. Gentleman cannot have heard what I said earlier. I stand by my earlier statement about Sir Roger Hollis.
    Mr. Robert Atkinsasked the Prime Minister if she will list her official engagements for Tuesday 18 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Atkins: Will my right hon. Friend take this opportunity to congratulate the work force at Leyland Vehicles on achieving the largest share of the United Kingdom truck market by making the best products at the right price with the right support and of the right design? Does she agree that if Leyland Trucks is to succeed in a market in which too many trucks are being sold worldwide, it and many other British companies will need a flexible and competitive financial package to help export deals, preferably to match those competitors, if not to better them?
    The Prime Minister: As my hon. Friend is aware, those who work in that industry have enjoyed enormous help from the taxpayer. I hope that they will make more products at the right price and will continue to get more sales, which will be very welcome. As my hon. Friend is aware, there is a considerable overhang of debt which the ECGD must tackle, and we must also bear that in mind.
    Mr. Ron Lewis: Now that the Prime Minister has re-engaged a member of the Billy Graham evangelistic team to her staff, can she say whether the teachings of Billy Graham are being adhered to—in other words, "never tell a lie and never bear a grudge against those who disagree with you"? Assuming that is accepted, can the right hon. Lady say how much longer her hon. Friends the Members for Aldershot (Mr. Critchley) and for Tiverton (Mr. Maxwell-Hyslop) must serve before they get their knighthoods?
    The Prime Minister: I congratulate the hon. Gentleman on the ingenuity of his question, the full impact of which is not lost on me.
    Mr. Speaker: Statement. I call the Prime Minister.
    Mr. Williams: On a point of order, Mr. Speaker.
    Mr. Speaker: Does it arise out of questions?
    Mr. Williams: Yes, Mr. Speaker. You will understand that we appreciate that the Prime Minister would not want to answer questions about the debacle that is being unveiled in the Australian courts. However, not once but twice this afternoon the right hon. Lady made a categorical statement that the proceedings in Australia are sub judice. If that suggestion is allowed to stand, it will, of course, create a block on further questions and discussions. Will you give a clear ruling that this afternoon the Prime Minister has not once but twice misled the House in stating that a case before an Australian court is sub judice in this House?
    Mr. Speaker: As I understand it, this case, which is taking place in an Australian court, is not sub judice under our rules. We now come to the statement by the Prime Minister.
    The Prime Minister: With permission, Mr. Speaker, I should like to make a statement on my visit to the United States—[Interruption.]—
    Mr. Speaker: Order. The Prime Minister is about to make a statement.
    Mr. Kinnock: On a point of order. Mr. Speaker. It is clear that inadvertently—and I am certain that was the case—the Prime Minister referred to the matter being heard in Australia as sub judice as it affects the proceedings of this House. The acknowledgement has been made that that is not the case. However, the Prime Minister's answers to questions influenced the direction of questions. I think that the Prime Minister would now want to avail herself of an early opportunity to say that the matter is not sub judice in this House so that the subject need not be raised in the same form again, thereby allowing questions to be raised.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen)rose— [Interruption.]
    Mr. Speaker: Order. I have called the Leader of the House.
    Mr. Biffen: Further to that point of order, Mr. Speaker. In making your judgment on this matter would you kindly take account of the fact that the United Kingdom Government are a party to the case in Australia and indicate how that relates to the sub judice rule?
    Mr. Speaker: I prepare myself very carefully for Question Time every day and for every eventuality, and I took that matter into account today.
    Mr. Williams: Further to that point of order, Mr. Speaker. I am grateful to you for a very helpful and clear ruling. Will you now indicate whether, in your experience, it is not the case, when an hon. Member has found that he or she has misled the House—even if inadvertently—that Member would normally make an apology to the House?
    The Prime Minister: Further to that point of order, Mr. Speaker. I made it clear in my answer that the Attorney-General has accordingly applied in the Supreme Court of New South Wales for an injunction to prevent the publication of the Wright book. You have ruled that the matter is not sub judice in this House, but I must submit that it would be most unwise— [Interruption.]
    Mr. Speaker: Order. This is an extremely important matter. [HON. MEMBERS: "Hear, hear".]
    The Prime Minister: It would be most unwise, indeed, rash of me as Prime Minister of the United Kingdom to comment on a case to which the Attorney-General is party in Australia. I would have thought that most people would understand that. If not, perhaps they would understand the comments of a previous Labour Prime Minister who said:
    "I shall adhere to the normal practice of not commenting on security matters." — [Official Report, 29 June 1978, Vol. 952, c. 631.]
    Mr. Kinnock: Further to that point of order, Mr. Speaker. It is easily seen that the Prime Minister's response does not satisfy the House. That places you in an invidious position, especially since your judgment was so unequivocal and clear. May I suggest that a period of further reflection is given to the matter because the alternative is obviously the continued distraction of the House on the matter when we have other serious business to transact? It will be necessary to give further attention to this, taking account of the matter of national security
    438
    raised by the Prime Minister, in order to discover whether that is the valid question under consideration or whether it is a more politically partisan question.
    Mr. Speaker: Order. I think that the Leader of the Opposition has made a wise judgment on this matter. The two matters are not connected, but they are relevant.
    Mr. Beith: Further to that point of order, Mr. Speaker. The position remains that a challenge has been issued to the Chair. The Prime Minister gave her interpretation and her assumption that the matter was sub judice. You gave your ruling and the Leader of the House then challenged that ruling in polite terms.
    Mr. Biffen indicated dissent.
    Mr. Beith: The Leader of the House effectively asked you to review your ruling. I see no reason why you should be asked to alter your ruling. Therefore, we cannot move forward until the Government make it clear that they accept your authority.
    Sir John Biggs-Davison: Further to that point of order, Mr. Speaker. You have ruled that the sub judice rule does not apply and we accept that absolutely — [Interruption.] But for the future, Her Majesty's Government of the United Kingdom are party to a case in a court before one of Her Majesty's Australian judges. How do Her Majesty's Government or any party to such a case obtain justice if the sub judice rule does not apply?
    Mr. Speaker: Order. We have a full day ahead of us and I hope that I can clear up the matter. I said to the House that under our rules the matter before a court in another country was not sub judice. Whether it is a matter of national security is a completlely different issue and a perfectly legitimate one to call in aid.
    Mr. Andrew Faulds rose—
    Mr. Skinner rose—
    Mr. Gow: Further to that point of order, Mr. Speaker. Would it not be for the convenience of the House if you could explain how it is that a matter before one of Her Majesty's judges in Australia in a case to which Her Majesty's Government are party is not sub judice under the rules of the House?
    Several Hon. Members rose—
    Mr. Speaker: Order. I shall take all the points of order together.
    Mr. Faulds: On a point of order—
    Mr. Speaker: I have not called the hon. Gentleman yet.
    Mr. Faulds: I was on my feet first.
    Mr. Speaker: Order. I decide the order in which I take these questions.
    Mr. Campbell-Savours: Further to that point of order, Mr. Speaker. I put it to you that the people of Australia are having reported to them our proceedings, and questions on the Order Paper, in detail. It is most important that the position is clarified, because today in Australia there are calls for the resignation of Sir Robert Armstrong in so far as yesterday he had to admit in a court of law in Australia that he deliberately misled the court by submitting in affidavits some days ago inaccurate information. I and my hon. Friends have pressed for a

    439
    statement on this matter from both the Attorney-General and the Prime Minister, but none has been made. I again ask that a statement be forthcoming. The people of Australia—
    Mr. Speaker: Order. Hon. Members cannot ask for statements through me.
    Mr. Hickmet: Further to that point of order, Mr. Speaker. I speak for Glanford and Scunthorpe, not for Australia. In considering the representations made by my hon. Friend the Member for Eastbourne (Mr. Gow), will you also consider the fact that, notwithstanding that this case is in front of one of Her Majesty's judges in Australia, it might finish up before the Privy Council?
    Mr. Faulds: I am most grateful to you, Sir. Further to that point of order. It is clear that you made a ruling that the matters in Australia were not sub judice as far as this House is concerned. We are not asking the Prime Minister to make a statement on those matters. We are asking her to withdraw the incorrect assertion that she made that these matters were sub judice, and she should be required by you, Sir, to do that.
    Mr. Skinner: Further to that point of order, Mr. Speaker. As I see it, the issue is relatively simple. In the past 10 minutes there have been a series of incidents in which you and one Member of Parliament, who happens to be the Prime Minister, have been in dispute. Normally, when a Member of Parliament challenges the authority of the Chair, he has either to withdraw or leave. Why is it that a Back-Bench Member of Parliament can be called upon to withdraw when he challenges the authority of the Chair, but the Prime Minister is allowed to get off the hook? This is a classic example of where you need to show your authority, Mr. Speaker, and if you fail to do so, do not expect any of us to have to how to the Chair.
    Mr. Speaker: Order. It is very unlike the hon. Gentleman to threaten me. The Prime Minister has not challenged what I have said.
    Mr. Campbell-Savours: She has.
    Mr. Speaker: Order. We have a heavy day in front of us. I think that we should have some quiet reflection on this matter.
    Mr. Campbell-Savours: Name her.
    Mr. Speaker: Order. We can return to this matter on another day.
    The Prime Minister: Further to that point of order, Mr. Speaker. I accept your ruling on sub judice as far as the House is concerned. Therefore, any questions can be
    440
    asked. I know of no rule which means that I am circumscribed in the way in which I answer questions and as you said, I can invoke security, and have done so.
    Several Hon. Members rose—
    Mr. Speaker: Order. I shall take one more question. Mr. Lofthouse.
    Mr. Lofthouse: Further to that point of order, Mr. Speaker. As one of the questioners whom the Prime Minister misled by her answer— [Interruption.]
    Mr. Speaker: Order. This seems to he an attempt to carry on Question Time.
    Mr. Lofthouse: As one of the questioners whom the Prime Minister misled— [HON. MEMBERS: "She did not mislead the hon. Gentleman."] —I should gladly accept an apology—or is the Prime Minister above this House and above you, Mr. Speaker?
    Mr. Speaker: Order. The Prime Minister has made her position very clear. I shall take one further point of order.
    Mr. Gow: Further to that point of order. Mr. Speaker. I wonder whether I could revert to, and add to a point of order that I put to you previously? It would be of assistance to the House if you could please explain to us why it is that proceedings in a case which is before one of Her Majesty's judges in Australia, a case to which Her Majesty's Government are a party, are not sub judice for the purposes of this House? May I make a further submission to you, Mr. Speaker?
    You have said, quite rightly; that this is a very important matter. We all know the basic reason for the existence of the sub judice rule. It exists so that no influence of an improper or outside kind shall be brought to bear upon the courts. — [HON. MEMBERS: "We know that.] That is the whole purpose of the sub judice rule. Even if it is correct, as you have said, that, in accordance with past precedent, a case of this kind—
    Mr. Winnick: Get to the point!
    Mr. Gow: —does not fall within the sub judice rule, would you be prepared to consider whether, in this particular case, the sub judice rule ought to apply?
    Mr. Speaker: Order. I carefully calculated that a question of this kind might arise today. Therefore, I was prepared with the answer that I gave. Australia is an independent country. I shall of course reflect carefully, as I always do in exchanges of this kind, upon whether the rulings that I have given are right. If I find that I was wrong, I shall gladly and certainly return to the House and make a further statement.

Prime Minister (Visit to Washington)
3.48 pm
The Prime Minister (Mrs. Margaret Thatcher): With permisssion, Mr. Speaker, I should like to make a statement on my visit to the United States on 14 and 15 November for talks with President Reagan at Camp David. I also had separate meetings with Vice-President Bush, Secretary of State Shultz and the Defence Secretary, Mr. Weinberger.
The main purpose of my visit was to discuss with the President issues of defence and of arms control, in the light of his meeting in Reykjavik with Mr. Gobachev. We agreed upon a statement of our views, and a copy has been placed in the Library of the House.
President Reagan and I agreed that priority should be given in the arms control negotiations to an INF agreement with restraints on shorter-range systems, to a 50 per cent. reduction in strategic offensive weapons and to a ban on chemical weapons, all to be subject to effective verification. We also reaffirmed the need for effective nuclear deterrence as a cornerstone of NATO's strategy.
The President explained that the United States would proceed with its own strategic modernisation programme, including Trident. He confirmed the United States' full support for the arrangements made to modernise Britain's independent nuclear deterrent with Trident.
We also discussed the situation in the middle east. I thanked the President for what the United States had done on Syria. We agreed on the need for fresh impetus to efforts to find a peaceful solution to the Arab-Israel conflict.
On Iran, we share the aim of bringing Iran back into better relations with the West and of bringing about an end to the Iran-Iraq war, without taking sides. The President reaffirmed that the United States does not pay ransom for hostages. That is our policy, too.
We discussed the situation in southern Africa, following the tragic death of President Machel. Both our Governments remain ready to contribute to stability and an end to violence in the area.
I explained to the President the reasons for our recent decision to establish an interim fisheries management and conservation zone round the Falklands; I told him that our preference remained a multilateral solution provided that the Argentine Government were prepared to cooperate.
This was a very useful visit. The agreed statement confirmed the Government's policies, which I set out in my speech in the debate on the Address, for achieving balanced reduction in nuclear and chemical weapons, while maintaining and modernising Britain's independent nuclear deterrent. That is a policy which is good for the NATO Alliance and good for Britain.
Mr. Neil Kinnock: During the Prime Minister's talks with President Reagan at the weekend, did she express her support for President Reagan's repeatedly stated objective of abolishing all strategic nuclear ballistic missiles within 10 years, or did she not tender such support? Why does the Prime Minister think that any United States President would continue to provide an 800 per cent. increase in British strategic nuclear missiles by supplying Trident when the United States of America was getting rid of such missiles? Will the Prime Minister
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explain why, if she wishes to remove disparities in the conventional balance in Europe, as we all do, she is diminishing conventional defence to buy Trident?
Did the Prime Minister associate her Government with the stated position of Chancellor Helmut Kohl that any future work on star wars must lie firmly within the narrow interpretation of the anti-ballistic missile treaty? Will the Prime Minister explain precisely what she meant when she said that star wars research should continue "up to feasibility"? Did the Prime Minister seek or receive any undertakings from President Reagan that the United States would continue to adhere to the provisions of the SALT II treaty?
On the other matters which the Prime Minister discussed with President Reagan, three weeks after rightly acting against Syria and rightly securing international cooperation because of its sponsorship of terrorism, is it not obvious that the Prime Minister severely discredits such efforts by so readily endorsing the President's trading with terrorism and his completely unconvincing explanation of his action? After Grenada, star wars, Libya and now arms for Iran, when will the Prime Minister realise that a special relationship is one thing, but sycophancy is another altogether?
The Prime Minister: As we said in our statement, priorities were set out for an intermediate nuclear forces agreement for a 50 per cent. cut over five years in United States and Soviet strategic offensive weapons and a ban on chemical weapons. We also made it clear that a nuclear deterrent is an essential part of the strategy of NATO. We made it clear that that is a very large programme and that we must tackle it. In the meantime, the modernisation of ballistic missiles must continue. Before there can be any further advance on the matters, there must be a system of effective verification. At the moment, despite the talks at Reykjavik, there has been no change in reality in the position.
With regard to diminishing conventional defence, the right hon. Gentleman must know that, if we took all the money on Trident, which is only 3 per cent. of our total defence budget, it would buy very few extra tanks, frigates or weapons and would not buy a fraction of the deterrence that the nuclear weapon buys. The right hon. Gentleman wants fundamentally to undermine Britain's defences by doing away with the independent nuclear deterrent, by discarding the American nuclear umbrella and by throwing out all American nuclear bases.
We did not discuss the provisions of the SALT II treaty on this occasion. They remain as before. They must be observed by both sides, and I hope that they will be observed by both sides. Difficulties will arise if both sides do not observe them and there are accusations against one side. That will mean that the provisions should be discussed in the relevant committee provided for in the anti-ballistic missile treaty.
With regard to Iran, may I point out—I know that the right hon. Gentleman never loses a chance to attack the President or the United States—that the President said in his broadcast, in which he set out the position:
"The United States has not made concessions to those who hold our people captive in Lebanon. And we will not."
He went on to say:
"The United States has not swapped boatloads or planeloads of American weapons for the return of American hostages."
He went on:

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"And we will not."
Sir Anthony Kershaw: Is my right hon. Friend aware of the sense of relief which will be felt by many that the United Kingdom's defence will continue to include the nuclear weapon, which is the only thing which will deter our only possible enemy, and without which we would return to the dangerous instability of the 1930s?
The Prime Minister: I agree with my hon. Friend. The nuclear deterrent has stopped both nuclear and conventional war. It has kept the peace, and that is the most important thing for the future — a peace with freedom and a peace with justice. To throw it away would be utterly futile and rash.
Dr. David Owen: Is it not an act of folly to tie a British independent nuclear deterrent to the very ballistic missile system for whose total elimination not only the United States President, but the chiefs of staff, have authorised the negotiators at Geneva to negotiate with the Soviet Union?
The Prime Minister: As the right hon. Gentleman is aware, the statement which the President agreed with me said that the United States will continue to go ahead with the modernisation of strategic nuclear weapons.
Dr. Owen: Of course they will.
The Prime Minister: That is absolutely vital. We shall continue to get Trident. [Interruption.] I know that the right hon. Gentleman thinks that cruise will be an alternative, but that is utterly wrong. We considered that when we went for Trident. The right hon. Gentleman does not like the fact that we shall modernise with Trident, that the United States will continue to modernise with Trident and that the position has not in fact changed since Reykjavik.
Mr. Cranley Onslow: May I congratulate my right hon. Friend on what her visit did to clarify the way forward on arms control and disarmament negotiations in the West? But when she hears the great know-all, the Leader of the Social Democratic party, trying to cast doubt on the readiness of the Americans to help us modernise our deterrent, does it ever strike her as odd that the right hon. Gentleman is so willing to think that the French will lend us their deterrent so long as we want to use it?
The Prime Minister: I think that the result of the visit to Washington was to clarify the position absolutely; to make it clear that Britain's independent nuclear deterrent will he modernised with Trident and that the United States will also modernise her strategic nuclear system with Trident. In the meantime, we shall continue, as a matter of priority, with the other things—negotiations on the INF agreement, on the 50 per cent. cuts over five years in the United States, provided, of course, that the Soviet Union will unlink the whole matter from SDI. The President was absolutely right to go ahead with SDI. I was asked, I think on a previous question, "What about research?". Research to me, in common-sense terms, means research up to feasibility.
Mr. J. Enoch Powell: Why, for the purposes of the Prime Minister's conference with the American President, was it necessary that officials of the Northern Ireland office should be kept on constant availability to supply emergency briefing?
The Prime Minister: If they were, it was not for me.
Mr. Michael Heseltine: Following the question to my right hon. Friend the Prime Minister from the right hon. Member for Plymouth, Devonport (Dr. Owen), does my right hon. Friend think that our independent deterrent is safer in the hands of our allies, the Americans, in preparing it, or in the hands of the Liberal party?
The Prime Minister: My right hon. Friend makes his own point very effectively. Opposition Members lose no chance of undermining our great ally, the United States, and take every chance of undermining Britain's defences, and, therefore, making us a possibly fellow-travelling nation.
Mr. Michael Foot: Did the Prime Minister have any discussions with the President on the desperately urgent question of stopping the proliferation of nuclear weapons and applying some ban on nuclear tests, or does she think that such a discussion would not go very well with her new well-found discovery of the advisability of selling weapons to terrorist states? If she agrees with the President of the United States on that subject, why does she think that the Secretary of State in the United States does not do the same?
The Prime Minister: The right hon. Gentleman also continues his usual policy of undermining our alliance with the United States. With regard to a comprehensive test ban, as the right hon. Gentleman knows, the question there is one of verification. Verification is absolutely crucial to any negotiations that we have with the Soviet Union on arms reduction. If we agreed without verification, we should be undermining the security, and therefore the freedom and justice, of Britain.
Sir Frederic Bennett: Although we all welcome the news that new attempts will be made to get rid of all medium-range nuclear weapons in Europe, on both sides, and subject to proper verification, can my right hon. Friend confirm that that process of reduction and ultimately, we hope, removal, will also apply to the so-called short-range nuclear weapons? The Soviets now have a clear superiority of 9:1, and many of those so-called short-range weapons can reach and destroy substantial parts of the United Kingdom.
The Prime Minister: Yes, that was part of the statement that we made. A zero-zero agreement on intermediate nuclear forces would be subject to effective verification and to strict control of the missiles replaced in the far east on Russian soil and in the United States. We are talking of about 100 missiles each. It would also be subject to negotiating at the same time on shorter-range systems. As my hon. Friend has said, the Soviet Union has an enormous preponderance of them, and a far greater number than NATO has. As my hon. Friend also pointed out, Britain is within their range, so that would have to be part of the INF negotiations.
Mr. Eric S. Heffer: Is the Prime Minister aware that some of us think that she skated far too quickly over the question of the United States giving arms to Iran? Can she tell us what exactly was said about that? Did the right hon. Lady make it clear that British people feel that no one should be selling or giving arms to Iran, which has a worse human rights record than any other nation in the world at present?
The Prime Minister: This country's policy on weapons to either Iran or Iraq has been set out. I make it clear that it is that

"(i) We should maintain our consistent refusal to supply any lethal equipment to either side;

(ii) Subject to that overriding consideration, we should attempt to fulfil existing contracts and obligations;

(iii) We should not, in future, approve orders for any defence equipment which, in our view, would significantly enhance the capability of either side to prolong or exacerbate the conflict;

(iv) In line with this policy, we should continue to scrutinise rigorously all applications for export licences for the supply of defence equipment to Iran and Iraq." —[Official Report, 29 October 1985; Vol. 84, c. 450.]

Mr. Nicholas Soames: What steps do my right hon. Friend and the President intend to take to give a fresh impetus to resolving the Arab-Israeli dispute?
The Prime Minister: We had some discussion of that. Many of us are very worried that there appears to be a gap at present in the negotiating stance. We think it important that, some time during the coming year, the impetus should be renewed in order to try to obtain negotiations between King Hussein and representatives of the Palestinians and the Israeli Government, against the background of an international group of people, as we have tried to do in the past. The difficulty arises in trying to obtain proper representatives of the Palestinian people. So far, we have not succeeded, but I imagine that efforts will be renewed.
Dr. Norman A. Godman: Did the President make any criticism, however mild, of the reckless decision to impose a fisheries zone round the Falklands, or did he offer his support to the Government over their foolish decision?
The Prime Minister: As I explained to the President, the decision was absolutely justified.
Dr. Godman: What did he say?
The Prime Minister: Since April 1985, we have tried to negotiate a multilateral fishing agreement.
Dr. Godman: What did he say?
The Prime Minister: We have not succeeded, because Argentina would not co-operate through the Food and Agriculture Organisation. I therefore explained to the President that when Argentina made bilateral agreements over waters that affected us, we had no option but to declare a 150-mile conservation zone. I think that perhaps for the first time the President understood the precise position. I also pointed out that it was Argentina that, within 200 miles of the Falklands, had shot at a Taiwanese fishing boat and killed some of those on board.
Sir John Biggs-Davison: Was there any discussion of the dollar fund for Ireland? Does the President know of the deep resentment felt over this, in Northern Ireland because of its link with the Anglo-Irish agreement?
The Prime Minister: No, that matter was not discussed at all; nor were Irish matters really on the agenda for that meeting.
Mr. Andrew Faulds: Did the Prime Minister consider, while she was in the United States, that General Vernon Walters, on his visit to London to disseminate the President's disinformation campaign
446
about Libyan activities, was actually lying to her? Has the possibility not crossed the Prime Minister's mind that the President, as regards hostages and Iran, was probably treating her likewise?
The Prime Minister: No, I reject what the hon. Gentleman has said. Many Opposition Members take every opportunity to try to find fault with the Americans.
Mr. Faulds: Was Vernon Walters lying?
The Prime Minister: I should make it absolutely clear that the Americans are our most important allies in NATO. Under President Reagan, the Alliance has gained in strength and, therefore, Britain and NATO's members have gained in security. By their attitude, Opposition Members do everything that they can to undermine Britain's fundamental security.
Sir Anthony Grant: When my right hon. Friend and the President discussed the consequences of the withdrawal of United States bases and of the unilateral abandonment of the British nuclear deterrent, did they also consider the consequences of the threatened resignation from any future Labour Government of the right hon. Member for Leeds, East (Mr. Healey)?
The Prime Minister: I did not go into that detailed matter. I think that the President, and indeed many members of the Alliance, are aware that the Opposition's present policy would fundamentally undermine not only Britain's security but NATO. That shows that they would never be fit to govern Britain.
Mr. A. J. Beith: How is it an act of friendship to our ally, the United States, to support the President on a venture that was not only wrong but was not supported either by some of the key members of his Administration or by the majority of the American people? Is that the sort of subservience that the Prime Minister expects from the President over the Falklands negotiations issue, or does she expect him to adopt a better view of the latest Argentine Government initiative than the Minister in the other place who, earlier this afternoon, said that it was just old wine in new bottles?
The Prime Minister: I have made our fisheries policy clear with regard to the Falklands. May I make our policy on sovereignty absolutely clear? We are not going to negotiate the sovereignty of the Falklands. I understand that Liberal Members, and perhaps SDP Members—although I am not quite sure about them—are prepared to negotiate sovereignty, but we are not. Perhaps that meets the hon. Gentleman's point.
Mr. Robert Adley: Is it not a major plank of Soviet propaganda to seek to equate the stationing of nuclear weapons and bases in eastern Europe with their stationing in western Europe? Does my right hon. Friend agree that that is a fundamental bit of disinformation, and that until countries such as East Germany or Czechoslovakia have the same opportunities as are found in democracies such as Britain or West Germany to choose whether they want allied bases stationed in their countries, she should remain extremely wary of such unfortunate comparisons?
The Prime Minister: With regard to the INF negotiations, we are talking about zero-zero in Europe with, subject to effective verification, 100 SS20s in the far

447
east of the Soviet Union and 100 missiles in the United States. It is therefore a global agreement. As I have said time and again, it will have to be subject to effective verification, and obtaining that will not be easy.
Mr. Merlyn Rees: When the Prime Minister met Mr. Shultz, did he express support for the President's policy?
The Prime Minister: I had a long talk with Mr. Shultz, and I think that the right hon. Gentleman will know that he has made a long speech. I think that Mr. Shultz understood our position perfectly. He was at Camp David, and he agreed with the statement which was put out.
Sir John Farr: Notwithstanding the view of the Leader of the Opposition, which on defence seems to come straight from Moscow, I ask my right hon. Friend to reaffirm that she made it clear to the President of the United States that there was no question of our surrendering or discussing the sovereignty of the Falkland Islands, or the surrounding 150-mile zone?
The Prime Minister: At that time I think that the proposal had not been made, but I shall make our position clear now. It used to be the position on both sides of the House — this was before certain leaders of the Opposition parties met Mr. Alfonsin—that the wishes of the Falkland Islanders were paramount and that self-determination was the policy. The wishes of the Falkland Islanders were paramount. I understand from what the Leader of the Opposition said when he met Mr. Alfonsin, and what he said at a press conference, that that is not his policy, and that it is the interests of the Falkland Islanders, interests determined not by the islanders but by other Governments. We stand by the policy that the wishes of the Falkland Islanders are paramount, and we have no intention of negotiating the sovereignty of the Falkland Islands with the Argentines.
Mr. Allen McKay: May I return to the supply of arms to Iran? Will the Prime Minister assure the House and those outside that the armaments supplied are not those that could be used against British seamen in the Gulf? Have the Government any intention of reviewing instructions that are given to the seamen who sail the Gulf?
The Prime Minister: We are watching that extremely carefully because obviously, if need be, those seamen will have to be protected. The position on the supply of armaments either to Iran or Iraq is as I set out in detail. I was reading from a statement made to the House by my right hon. and learned Friend the Foreign Secretary in answer to a question on 29 October 1985. That is still the policy.
Several Hon. Members rose—
Mr. Speaker: Order. I must take into account the fact that we have a heavy day in front of us. I shall call two more Members from each side of the House and then we must move on.
Mr. David Ashby: Did my right hon. Friend explain to the American President the Government's abhorrence of the Iranian regime, especially its mass executions of the Bahai people? Did she explain also to President Reagan that we would not allow Land Rover to export to Iraq?
The Prime Minister: We share my hon. Friend's views on human rights in Iran. As he knows, we frequently make statements about them. As my hon. Friend knows as well, we have diplomatic representation in Iran to follow up these matters and to let us know about them.
What was the second part of my hon. Friend's question?
Mr. Ashby: About Land Rover exporting to Iraq.
the Prime Minister: That would fall within the fourth criterion to which I have referred. As far as I am aware, we have not yet received any request for an export licence.
Mr. D. E. Thomas: The Prime Minister has mentioned verification about six times. Does she accept that it would be scientifically feasible to verify the exploding of nuclear devices for the test purposes to a low level of yield? Will she therefore tell the House what aspect of verification she is still concerned about?
The Prime Minister: No, I do not accept—I have answered in detail questions on this matter in the House —that we can absolutely verify testing sufficiently for a full comprehensive test ban treaty. I believe that it can be done sufficiently, however, for two minor treaties that have yet to be ratified by the United States.
Mr. Nigel Forman: Is my right hon. Friend aware that those of us on the Government Benches who are increasingly concerned about the present and prospective military imbalance within Europe were relieved to learn that one result of her talks in Washington was to confirm that, while supporting the idea of 50 per cent. cuts in strategic missiles by 1991, she is now attaching what I 'might call the French condition to further cuts, which is that the Soviet Union should make disproportionate and naturally just reductions in its conventional superior forces in Europe before we would agree to go beyond that point?
The Prime Minister: Yes, the statement read:
"reductions in nuclear weapons would increase the importance of eliminating conventional disparities. Nuclear weapons cannot be dealt with in isolation, given the need for stable overall balance at all times."
I stress again to my hon. Friend that the discussions at Reykjavik have not altered so far the position on the ground. I believe that the programme of priorities which I have set out would take a long time to complete. The first step would be to see whether these matters could he verified effectively.
Mr. James Lamond: Is the Prime Minister aware that in seeking to convince us against all logic that the way towards peace between Iraq and Iran is to send arms to one side, and the way towards world peace is to arm ourselves to the teeth, in the meantime increasing our nuclear weaponry as much as we can, she has convinced the British people that her protestations about being a multilateral disarmer are just so much nonsense, and that she is only a rubber stamp for the President of the United States?
The Prime Minister: The hon. Gentleman is talking nonsense, and he knows it. The hon. Gentleman's policy is for Britain to give up her weapons unilaterally and for the Soviet Union to keep its. That may be his policy, but it is not ours.

NEW MEMBERS
The following Member took and subscribed the Oath: George Howarth Esq., for Knowsley, North.

Arts Council (Budget)
4.18 pm
Mr. Tony Banks: On a point of order, Mr. Speaker. I do not want to delay the House very long. We have just had an important statement, but some statements these days are of the "small fire in a chip pan" variety. Yesterday, an important announcement was made by way of a planted written question on the Arts Council's budget, something which has become a regular practice with the Government. The Arts Council's budget will suffer a real cut in terms of the money that it is to receive from the Government. I asked whether this issue could be the subject of a private notice question today—
Mr Speaker: Order. I hope that the hon. Gentleman will not disclose discussions about private notice questions.
Mr. Banks: I wish merely to mention that, Mr. Speaker, because I wanted—
Mr. Speaker: Order.
Mr. Banks: In that case, Mr. Speaker, I do not want to mention that.
Would you not state, Mr. Speaker, that it is wrong for the Government to make an important announcement that interests many thousands, which we read about in the newspapers today in which aroused a great deal of interest, by means of a planted written question so as to dodge their responsibility to defend the decision that has been made at the Dispatch Box'? Surely, Mr. Speaker, you must say that it is a practice that you do not condone.
Mr. Speaker: I do not recognise this planted question issue. I do not give reasons for turning down private notice questions, but if the hon. Gentleman reads the answer to which he has referred, he will see that it concerns the Arts Council's budget for 1987–88. It would seem that there is reasonable time to discuss these matters before then.
Mr. Andrew Faulds: Further to that point of order, may I simply, to save time, say, "Ditto, ditto," to everything my hon. Friend has said?
Mr. Speaker: I shall say, "Ditto, ditto," too.

BILL PRESENTED
  NORFOLK AND SUFFOLK BROADS
  Mr. Secretary Ridley, supported by Mr. Secretary Hurd, Mr. Michael Jopling, Mr. Kenneth Clarke, Mr. John MacGregor, Mr. Secretary Channon, Mr. Secretary Moore and Mr. William Waldegrave, presented a Bill to establish an authority to be known as the Broads Authority; to make provision with respect to its powers; to make provision with respect to the area commonly known as the Broads and with respect to the Great Yarmouth Port and Haven and its Commissioners; to provide for the making of grants to the Authority by the Secretary of State; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 6].

WELSH AFFAIRS
Ordered,
That the matter of the Queen's Speech and its effect on Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Portillo.]

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House I shall put together the six motions to approve the statutory instruments.
Ordered,

Statutory Instruments, &c.
  TRAFFIC WARDENS
  That the draft Functions of Traffic Wardens (Scotland) Amendment Order 1986 be referred to a Standing Committee on Statutory Instruments, &c.
  JUDGES (SCOTLAND)
  That the draft Maximum Number of Judges (Scotland) Order 1986 be referred to a Standing Committee on Statutory Instruments, &c.
  FOOD PROTECTION
  That the Food Protection (Emergency Prohibitions) (No. 8) (Amendment No. 6) Order 1986 (S.I., 1986, No. 1900) be referred to a Standing Committee on Statutory Instruments, &c.
  BUILDING STANDARDS (SCOTLAND)
  That the Building Standards (Scotland) Amendment Regulations 1986 (S.I., 1986, No. 1278) be referred to a Standing Committee on Statutory Instruments, &c.
  NEW TOWNS
  That the New Towns (Suspension of Loan Repayment) Order 1986 (S.I., 1986, No. 1436) be referred to a Standing Committee on Statutory Instruments, &c.

  CIVIL AVIATION AUTHORITY
  That the Civil Aviation Authority (Economic Regulation ofAirports) Regulations 1986 (S.I., 1986, No. 1544) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Portillo.]
  Question agreed to.

  EUROPEAN COMMUNITY DOCUMENTS
  Mr. Speaker: With the leave of the House I shall put together the two motions relating to European Community documents.
  Ordered,

  MOTORCYCLE NOISE
  That European Community Documents Nos. 9184/84 and 6766/85 on motorcycle noise be referred to a Standing Committee on European Community Documents

  DOMESTIC APPLIANCES (NOISE)
  That European Community Documents Nos. 4293/82 and 10998/83 on noise emitted by domestic appliances be referred to a Standing Committee on European Community Documents.—[Mr. Portillo]
  Question agreed to.

Orders of the Day
  Debate on the Address

    FIFTH DAY
    Order read for resuming adjourned debate on Question [12 November]:
    That an humble Address be presented to Her Majesty, as follows: Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. Rippon]:—
    Question again proposed.

    Industry and Employment
    Mr. Speaker: Before we start this debate I must tell the House that a large number of right hon. and hon. Gentlemen have indicated a wish to take part in this the fifth day of the Debate on the Address. I have no authority to limit speeches to 10 minutes—
    Mr. Tony Banks: Shame.
    Mr. Speaker:—during this debate. I hope that not too many people will be disappointed. May I be allowed to continue to say that if hon Members are economical in their speeches it will be possible to call many more or them. I must tell the House that I have selected the amendment in the name of the Leader of the Opposition.
    4.23 pm
    Mr. John Smith: I beg to move, at the end of the Question, to add:
    "But humbly regret that the Gracious Speech contains no credible strategy for securing a continual reduction in unemployment or for strengthening and modernising manufacturing industry and recapturing home and foreign markets for British goods."
    Today we debate the crucial and fundamental issues of employment and industry. Despite the Government's blatant attempts to cook the figures by means of 18 different alterations in the collection and presentation of unemployment statistics, as we all know unemployment is frighteningly high. The real figure is in excess of 4 million, whatever the Government's cooked statistics present. Of that total, a frightening number are under the age of 25. Some 1·25 million of them are on the dole and 1·3 million are classed as being in long-term unemployment. For many of them the prospect of any employment in future must look bleak.
    The cost of unemployment to the nation is £22 billion. That is a frightening commitment in terms of public expenditure, let alone in terms of the human misery that these figures reveal. In the northern part of Britain, too many of our communities have been devastated by the unemployment which has come to visit them since the Government took office.
    I wish to concentrate on the problems that beset manufacturing industry. Since 1979, 20 per cent. of our manufacturing industry has disappeared. I doubt if there is any period in our economic history during which there has been such a wholesale reduction in the industry which sustains the productive capacity of Britain.

    453
    Despite the Government's windfall of North sea oil which none of our principal competitors in western Europe — with the exception of Norway — have had, despite the enormous revenue benefits that that has brought and the support it has provided for balance of trade and the balance of payments, we have seen a steady economic deterioration in manufacturing industry since 1979. The most frightening aspect of that—there is not a word about it in the speeches by Ministers or a single reference to it in the Gracious Speech—is the alarming deficit in the balance of trade on manufactured goods. In the first nine months of this year, that deficit was just under £4 billion— £3,997 million, to be precise.
    Since the industrial revolution and up until 1982, Britain was always in surplus in the balance of trade on manufactured goods. We slipped into deficit under this Government in 1983 and have continued downwards ever since. Unless there is some dramatic change in the figures for the last quarter of this year — there can be no reasonable expectation of such a dramatic change—the outturn figures for 1986 will show Britain in deficit to the extent of £5 billion on manufactured goods.
    Mr. Phillip Oppenheim: Could the right hon. and learned Gentleman tell the House the trend of the figures in our manufacturing trade balance during the years of the last Labour Government? Was the balance in our favour, and was it falling or rising?
    Mr. Smith: If the hon. Gentleman had listened a little more carefully, he would have saved himself the trouble of putting that question, because, throughout the whole of the period in which the Labour Government were in office, we had a surplus in the balance of trade on manufactured goods. Perhaps I could be generous about the matter. Throughout the term of office of all previous Governments we were in surplus on that balance of trade.
    Mr. Oppenheim: Was the balance rising or falling?
    Mr. Smith: The hon. Gentleman may have misunderstood the point that I am trying to make, but it is simple and clear. We went into deficit under this Government for the first time in our history and the position is getting worse and the trend is towards a deficit of £5 billion in 1986. Perhaps for once the Secretary of State for Trade and Industry will address himself to this matter because the country needs to know the Government's policy about the balance of trade on manufactured goods. What is the strategy for returning us to a surplus? What is the Government's attitude to that? The Prime Minister constantly tells us that exports are rising, but she never tells us that imports are rising faster than at any time in our history.
    Mr. Kenneth Hind: Will the right hon. and learned Gentleman kindly explain to the House and to the people in the north-west and in Avon how, in his intention to build up the manufacturing export base of Britain, the commitment of the Labour party to abolish all the export organisations attached to the Ministry of Defence and its military advisers, which produced £2.8 billion-worth of exports in 1985 and more in 1986, will help industry and employment?
    Mr. Smith: I can explain that quite simply. The Labour party's non-nuclear defence policy will be of far greater
    454
    assistance to British industry than the policy pursued by the Government, too much of which has to do with assisting industries in other countries rather than in this country.
    Perhaps I could return to my main point. Have the Government any strategy for reversing the balance of trade in manufactured goods, or will we continue until, in 1990, as the economic department of Lloyd's bank predicts, we will have a balance of trade deficit in manufactured goods of over £13 billion? There will not be much in the way of economic manoeuvre then, whichever Government are in power; and that is what will happen if present policies continue. I hope that the Secretary of State will address himself to this matter, because the Government must face this problem.
    The other serious problem that faces Britain and which is shown by the pattern of industrial development and unemployment is the north-south gap. Many of the areas that were once the powerhouses of British industry are in frightening decline. A most revealing document on this matter is the regional development fund submission by the Government to the EEC. The Government have wriggled a lot in seeking to explain away this document, but in terms of Community law the Government were obliged to submit such a document. The document clearly said that the Government did not think that there would be a reduction in unemployment below 3 million by 1990. Clearly, there are no plans in the Government's strategy to effect any reduction in unemployment between now and 1990—a long period.
    What is interesting above all is what the Government said in the document about various parts of Britain. On the west midlands, they predicted an increase in the working population and a fall in the number of jobs available and concluded:
    "These features suggest little prospect of an improvement in the region's basic unemployment problem in the period between now and the end of this decade."
    The people of the west midlands have been told to expect no solutions from the Government.
    The document says:
    "Continuing restraints on public expenditure … curtail the resources which central, local and public sector authorities have available to undertake development programmes or take advantage of significant infrastructure development opportunities. This in turn limits employment arising from construction programmes and major capital projects."
    That is correct. Every year, requests for a modest public works programme by Labour Members, people involved in other parts of the economy and even the CBI have been turned down flat by the Government, although they know perfectly well that the easiest, most effective way of getting some of the 400,000 unemployed building workers back to work is through a public works programme. Such a programme would put those building workers back to work improving houses, modernising the inner cities and improving the down-at-heel public infrastructure which afflicts so many communities.
    On the northern region, the Government's report states:
    "The most important problem facing the area is unemployment. The present high levels of unemployment are unacceptable, but the situation will not improve until a number of other more fundamental problems are resolved."
    The document details those fundamental problems:
    "weak economic infrastructure, lack of investment, an excess of unskilled and shortage of skills, environmental dereliction and social deprivation in education and health particularly."

    455
    On Scotland, the prospects for Strathclyde are described as follows:
    "Overall therefore, there appears to be little possibility of sufficient expansion in the economy to reduce unemployment significantly in the next few years."
    The prediction for Yorkshire and Humberside is:
    "Future employment prospects are not encouraging. Employment levels are unlikely to rise in the short or medium term".
    On Wales, the comment is:
    "The overall economic activity rate in Wales is lower than any other region of Great Britain and is expected to remain so during the period that this programme covers."
    That is until 1990. On the north-west, the description of Greater Merseyside is:
    "Prospects for reducing unemployment are frighteningly bleak — there are only approximately 4,100 unfilled vacancies in the sub-region."
    Mr. Cecil Franks: Will the right hon. and learned Gentleman refer to the Labour party's manifesto and the Labour party conference decisions? I remind him what will happen in Cumbria, where 16,000 jobs will disappear at Sellafield and 9,000 will disappear in Barrow because of the cancellation of Trident. What does the right hon. and learned Gentleman propose to put in their place?
    Mr. Smith: It is not surprising that the hon. Gentleman wants to distract attention from the Gracious Speech; nor is it surprising that he should wish to distract attention from the European regional development fund, about which I thought he would ask me. His misconstruction of the Labour party's manifesto commitments is patently absurd and I shall not waste my time bandying words with him on that.
    The document submitted by the Government to the EEC displays a frightening picture of the reality of life in Britain today, especially the difference between the north and the south. What was the Government's answer? The Chancellor of the Duchy of Lancaster told us, when he was in a different capacity, that the unemployed of the north had to get on their bicycles and move to the south. We have seen that happen, with unemployed people from the north moving down to areas of relative prosperity. In many cases they find jobs fairly easily, but then they run into the housing problem. Even if the husband and wife both work, they discover that, even with the maximum mortgage they can get, the amount they have will be probably 15,000 below the lowest house price in the area. Therefore, they must either commute between their families in the north and their work in the south—to the destruction of family life and at enormous expense —or retreat, disillusioned and defeated, back to the communities from which they came.
    Would it not make much more sense if we sought, for once, to have a regional industrial policy that brought work to the areas where people were willing, able and anxious to work and where we had used high expenditure to build up communities, instead of forcing people to tramp all over the country like industrial gipsies looking for employment wherever it can be found and unable to sustain it because of the circumstances which I have mentioned?
    Mr. Richard Hickmet: Will the right hon. and learned Gentleman give way?
    Mr. Smith: No. Hon. Members cannot accuse me of not giving way, because I have given way three times during
    456
    my short opening remarks. [Interruption.] Conservative Members cannot distract me with their continual chatter. They should listen to some of the points which I have made and to the criticism of their policy.
    Today, in regard to one of our most important industries, crucial decisions will be taken in the Council of Ministers. I hope that the Secretary of State for Trade arid Industry will tell us the Government's plans for the shipbuilding industry. As he knows, with the EEC phasing out existing schemes for support by the end of this year and deciding what type of intervention will start on I January 1987, a crucial decision must be taken.
    The right hon. Gentleman well knows the rapid decline in Britain's merchant shipbuilding industry. The number of employees in the industry is down to 5,000 or 6,000. It is crucial that the Government fight for a proper support system. An independent report obtained for the European Commission by A and P Appledore suggested that the level of support should be 36 per cent. The EEC's proposal is for 26 per cent. I hope that the Government will fight for an increase towards the level of 36 per cent. If they do not, there can be little confidence that the British merchant shipbuilding industry will survive. Indeed, British Shipbuilders' chairman has used those terms.
    We must decide—this goes for other countries in the Community as well as for the United Kingdom — whether we will surrender the shipbuilding industry to far east competition or whether we will maintain it so that it is there when the upturn in orders comes in the 1990s. I cannot believe that any Government would decide that a trading nation such as Britsin should not have a merchant shipbuilding capacity, when so many of our goods go round the world in British ships.
    There is the twin problem also of the catastrophic decline in the British merchant shipping fleet since the Conservative party came to office. As my hon. Friend the Member for Dunfermline, East (Mr. Brown) pointed out recently in a letter to the Secretary of State.
    "Without a tougher Government bargaining position, Britain laces the prospect of conducting our trade and protecting our defences in ships built in Japan or Taiwan, repaired in Korea, crewed in Panama, and flying the flag of Liberia".
    I hope that we never reach that stage, but the position is as crucial as that. I hope that the Secretary of State will clearly set out his commitment.
    Mr. Don Dixon: Is my right hon. and learned Friend aware that the EEC Commission, acting on a report by the Court of Auditors, has decided to stop the allocation of non-quota regional development funds, which are designated for shipbuilding areas, because certain funds have been misappropriated by the Government?
    Mr. Smith: My hon. Friend has properly drawn attention to another serious matter. The Government have not been committed to the British shipbuilding industry but they have the opportunity today in the European Community to make that commitment clear. I hope that the result will be that the Government will play their part with other countries in saving the EEC's shipbuilding industry from extinction.
    Mr. Hickmet rose—
    Mr. Smith: I am not giving way to the hon. Gentleman at this moment.

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    Another industry of crucial importance, about which the Government are extremely shifty when they make any statements to the House, is the motor vehicle industry. We know the tangled tale of the Government's policies towards the British motor vehicle industry which was played out during the earlier part of the year. They attempted to get rid of British Leyland and Land Rover to General Motors. We know of the ignominious retreat of the Government from that policy. Perhaps even worse, we know about the surreptitious plot to sell the Austin Rover group to the Ford Motor Company, which might have been known to some of the directors of Austin Rover but was certainly not known to most of the senior management in the company. I am glad to say that the Government were forced to retreat in rapid disorder from that sordid position as well.
    The trouble now is that they have lapsed into inactivity. I suspect that, because of fear of electoral consequences, the Government will not move to do any more damage to the British motor vehicle industry between now and the next general election.
    Mr. Robert Atkins rose—
    Mr. Smith: I will not give way.
    It is not enough for the Government to have no policy towards the British motor vehicle industry. What is needed, especially for Austin Rover, is a strong commitment by the Government to see the company through to success. Other Governments give that support to their motor industry. It is high time our Government gave that support to our industry. The Government's objective is to privatise the Austin Rover group rather than see it through to success. We fear that in order to assist that process they will reduce the volume of production from above 400,000 down to what they might regard as a profitable niche at about 200,000. That would involve substantial job losses, the closure of plants and a further retreat of one of our important engineering industries. Let us never forget that it is not just the industry which is at stakes it is all the component supplying firms as well. They are an important part of the economy notably in the west midlands, but of many other parts of the industrial structure of the United Kingdom.
    Mr. Robert Atkins rose—
    Mr. Smith: I hope that the Secretary of State can say without equivocation that the Government stand solidly behind the motor vehicle industry. That is the view of the Opposition: I wish it was shared by the Government.
    The other area in which I believe the Government are in danger of going badly wrong is in connection with the steel industry. The notion floated recently in a letter by the Prime Minister to the hon. Member for Glanford and Scunthorpe (Mr. Hickmet) was that the Government intended, after the next election, to privatise the British Steel Corporation. Of course, there are two elements to that policy. In order to create the profits that would be a necessary prelude to privatisation, the danger is that there would be substantial cutting of existing steel plant as it presently exists. That would be bad enough. The notion that a long-lead, long-term strategic industry such as the British steel industry should be surrendered to the short-term perspectives of the City of London strikes me as
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    absurd. One of the crucial issues at the next election for people in the steel communities and the industrial areas of this country will be to realise that, if they elect a Conservative Government, the British Steel Corporation will be privatised. I think that they will be able to weigh that up very easily for themselves. If I may say to the hon. Member for Glanford and Scunthorpe, it was not wise to get the Prime Minister to write that letter to him.
    Mr. Hickmet: I am grateful to the right hon. and learned Gentleman for advising me on my election campaign. It was under Government ownership, as a nationalised industry, that 120,000 steel workers lost their jobs. It was because of the interference of Government in the way in which that industry operated that the British Steel Corporation got into that appalling mess. Before the right hon. and learned Gentleman laughs too much, he will recall that that happened because his Government shelved the Beswick report. Now, the hon. Member for Kingston upon Hull, East (Mr. Prescott) wants to double the work force and reduce it to penury again. Return it to the commercial sector, and run it properly.
    Mr. Smith: I could hardly accuse the hon. Gentleman of making a precise point. That was a rambling intervention. It was interesting that he did not attempt to justify privatisation. I hope that he is not expecting Opposition Members to accept responsibility for policies towards the steel industry, which has been run by this Government since 1979. The hon. Gentleman should make up his mind. He is sometimes telling us how successful the steel industry is and claiming that if that is true it must be a success that is accorded to the public sector, as well as any deficiencies that are accorded to the public sector. The hon. Gentleman should get his act straight before he meets his own electorate.
    The only hope for the British steel industry—
    Mr. Richard Holt rose—
    Mr. Smith: I think that I have given way more than most people would in a speech of this kind.
    Mr. Holt: It is on the steel industry.
    Mr. Smith: I do not care how often the hon. Gentleman mentions the steel industry, I am not giving way. He knows the rules perfectly well. Conservative Members know that I have already given way far more than people normally do in a speech of this kind. I think that they are insatiable on this matter.
    Crucial decisions have to be made on aerospace. To be fair to the Government, they did support the A320 programme.
    Mr. Roger King: Privatised.
    Mr. Smith: It was privatised, but it cannot fund Airbus on the private markets. That is the point that the hon. Gentleman should grasp. When British Aerospace was privatised, the Government said, "That is marvellous. We do not need to worry about it any more, it is a burden off the back of the Government." However, on the first major international project it is looking for assistance from the Government because it says that the private market and private ownership cannot face up to the responsibilities of being involved in Airbus. That does not seem to be a good case for the privatisation of British Aerospace.
    Mr. Michael Heseltine: rose—
    Mr. Smith: Please note—I am giving way to the right hon. Gentleman.
    Mr. Heseltine: Perhaps the right hon. and learned Gentleman could remind the House what it was that persuaded the previous Labour Government to pull out of Airbus.
    Mr. Smith: I think that mistakes have been made in the past. Indeed, the right hon. Gentleman might have made a few fairly recently. One thing is clear: there will be no future for British civil aerospace unless the Airbus project goes ahead. I would have preferred the right hon. Gentleman to say he supports the case I am making instead of trying to make cheap party political points. The right hon. Gentleman, who espouses the view of the national interest, which sometimes differs from the Government Front Bench, could be usefully employed in supporting some of these projects during his temporary idleness on the Back Benches. I hope that Conservative Members will join in pressing the Government to support the Airbus project, especially the A330 and A340 submissions which are about to go to the Government, if they have not already arrived. There will be no future for civil aviation unless the Airbus project is supported.
    Mr. James Callaghan: My right hon. and learned Friend is making a powerful speech. In the interests of accuracy, would he remind the House that it was the Labour Government in 1978 who negotiated our way into the Airbus project when there was a great deal of competition and a desire by some other nations to exclude us? The right hon. Member for Henley (Mr. Heseltine) knows that perfectly well.
    Mr. Smith: I am grateful to my right hon. Friend for putting the record straight about the period when he was responsible for handling these matters.
    The important question, which Conservative Members do not seem to wish to engage in, is, what the Government are going to do about the project now? If they come out of Airbus or do not give British Aerospace the support which will allow it to continue as a full member of Airbus, there are other people who will want to join the consortium instead of British Aerospace. I hope that it might be possible for Conservative Members, now and again, to glimpse the national interest and, when they see it, to support it.
    Another industry of great importance to this country is information technology. We are again seeing Britian slip behind. A substantial part of our deficit in the balance of trade in manufactured goods comes from that so-called sunrise industry. The figures for recent years show a pathetic record. In 1979, the deficit in the office and data processing trade was £227 million. Last year it had risen to £670 million. In electronics engineering, the deficit in 1979 was £164 million and in 1985 it was over £1,000 million. And that is in one of the newer industrial areas, making up a substantial part of the deficit in our balance of trade in manufactured goods. It is not simply a case of some decline in the older industries; it is affecting the whole of our industrial structure.
    One of the National Economic Development Office's reports, chaired by Professor Ashworth — an excellent report compiled by leaders of business, trade unions, independent experts and Government servants—marked out a strategy for information technology. It is lying
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    gathering dust on a shelf in the Department of Trade and Industry. No action has been taken to correct the serious deficiencies in our national policy.
    The Ashworth report says:
    "A sunrise industry … is being eclipsed before it has even risen … in the new industrial revolution we are failing to the point where we cannot maintain key technologies … on present trends we will not have an independent broad based IT industry by the end of the decade."
    Those are chilling words for anyone who cares about Britain's industrial future.
    But have the Government any strategy whatsoever for the information technology industry? None at all. That is because they do not believe in industrial strategies. They do not believe in planning for the success of Britain's industry in this competitive world in which we struggle to make a living. There was a short period when the Government seemed to espouse the sunrise industries, when the present Secretary of State for Education and Science had a role to play in the Department of Trade and Industry, but that was a mere flickering, arid it disappeared. The Government have sunk into slumber again on this crucial part of our industrial future.
    One of the reasons why, in all those areas of industrial activity that are selected for discussion today, there is no strategy, no driving force to make the necessary changes, is partly that there has been a decline in the role of the Department of Trade and Industry. It has now been marginalised almost into insignificance. Such initiatives as the Government take, such as the Urban Development Corporation programme, come from the Department of the Environment. Other initiatives may come from time to time from the Department of Employment, but never is there a spark of anything from the Department of Trade and Industry.
    Secretaries of State have come and gone in bewildering succession. Sometimes I feel like a force for order and stability in the House when I look at the number of people flitting back and forth, who temporarily hold the seats in the Department of Trade and Industry. It is not just that the Government think so little of the Department as not to man it properly and intelligently, but the notion of having a powerhouse Department of Trade and Industry — a policy that any intelligent Government would follow—runs contrary to the Government's strategy for British industry, which is non-intervention, non-involvement.
    In our successful competitor countries, there has been plenty of Government leadership and involvement, but that is not to happen here. That is why the expenditure of selective assistance to industry has halved since 1979. Our regional industrial policy is in tatters. Unemployment has mushroomed in all those areas, as the Government have withdrawn their responsibility for the economic health of those areas. Even worse, the expenditure is planned to halve yet again a few years ahead.
    There is no reference to those problems in manufacturing industry, of regional decline and of rising unemployment in the Queen's Speech or the autumn statement. The Secretary of State did not fight for another halfpenny from the Government for any programme that his Department had in mind because the Department, under his leadership, has no programme in mind for attacking the problems of manufacturing industry.
    However, the Government must now know, as the whole House knows, that unless we build up our

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    manufacturing industry, not only will we not be able to create the wealth that alone will sustain a civilised society, but we shall not be able to pay our way in the world. We shall not be able to turn round the catastrophe in the balance of trade in manufactured goods. What is the Government's attitude to that? The Government are complacent. They hardly seem to know that the problem exists. In the Prime Minister's own contribution to the debate on 12 November, she took refuge in the selective use of statistics, and said that things were fine because "manufacturing investment grew by 5·5 per cent. in 1985." What the right hon. Lady did not tell us was that at this stage investment is 17·1 per cent. less than in 1979. What is the point of going 5 per cent. forward if one remains 17 per cent. behind?
    The right hon. Lady also drew attention to the fact that
    "Manufacturing export volumes are at record levels."—[Official Report, 12 November 1986; vol. 105, c. 17.]
    She did not say that imports are going through the roof and that since 1979 manufacturing import share of British markets has gone up by 30 per cent. What an increase in the penetration of our market by our competitors since the Government came to office. That is why we have drawn attention to that matter in our amendment. We believe that the time is overdue for Britain to have an industrial strategy and to make sure that the investment is available for British industry and that there is sufficient expenditure on research and development, which is crucial to the new products and processes upon which we may make our living in decades ahead. That is why education and training are of fundamental and vital importance to the rebuilding of our industrial structure.
    None of that will happen under the present Government. In the past seven years, we have seen a sad and debilitating decline in British manufacturing industry associated with the steepest rise in unemployment in our history and the sharpest deceleration in the health of the economies of the older industrial areas. Now this country is deeply divided, socially, politically, industrially and economically. Those are the results of the foolish, free market policies of Government non-intervention, and the decision to turn our back on the crucial wealth-creating part of our society—our manufacturing industry.
    Meanwhile, we in the Labour party are clear on two things. First, we must wage war on unemployment. That is why the Labour party is committed, in the first two years of government, to reducing unemployment by 1 million, as a step along the road to getting back to a society in which the Government take responsibility for employment. I thought that the problem had been solved in 1944, but here we are in 1986 still asking the Government to accept that basic responsibility. It is one that we gladly accept and will discharge.
    Secondly, the rebuilding of manufacturing industry will be one of the crucial tasks for the Labour Government. Without the policies that Labour proposes, that industrial recovery will not occur. I am glad that the day when the policies will change and when the Government will change is only months, not years, ahead.
    4.58 pm
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): Once again — we have heard it often — the right hon. And
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    learned Member for Monklands, East (Mr. Smith) has given the House his usual doom-laden and depressing account of the condition of British industry as he sees it. Once again, his description bears little resemblance to reality. It is not surprising, with his party in that condition. It is a characteristic of his party that no matter how good the news may be, no matter how much progress is being made, Labour Members will always paint the worst possible picture, and portray the situation in the worst possible light. They revel in it.
    I am happy to tell the House that the position of British industry today bears no resemblance to that described by the right hon. and learned Gentleman. In fact, the outlook and prospects for British industry are better than they have been for many years. We are now in our sixth successive year of steady growth. [Laughter.] It is a laughing matter to Labour Members. Over the past three years, our growth has averaged around 3 per cent., combined with low inflation—a combination that has not been achieved for a generation, and certainly has not been achieved under a Labour Government. As a result, investment is at record levels. Company profits rose by 20 per cent. last year alone, and company profitability is at its highest for over 20 years. I am not sure whether the Labour party still derides profit. Sometimes its policies seem to be designed to ensure that no company ever makes a profit again.
    Ms. Clare Short: Will the right hon. Gentleman give way?
    Mr. Channon: I am only at the beginning of my speech —the opposite of a peroration.
    Ms. Short rose—
    Mr. Channon: Very well.
    Ms. Short: I am grateful to the right hon. Gentleman for giving way. I represent a constituency in the west midlands, the heartland of Britain's manufacturing sector. In the central core of Birmingham, 300,000 people are living with 30 per cent. unemployment. That is the biggest collection of poverty in the whole of western Europe, and is the effect of the decline in Britain's manufacturing industries. The Minister cannot pretend that that picture is acceptable or tolerable.
    Mr. Channon: I will deal in detail with the points made by the hon. Lady and by the right hon. and learned Member for Monklands, East. I will explain to the House that the picture of industry upon which the right hon. and learned Gentleman concentrated, very understandably, is a travesty of the truth.
    No one denies that there are serious unemployment problems; that is common ground in the House and is understood and appreciated by everyone. My right hon. and learned Friend the Paymaster General and Minister for Employment will say more about that —indeed, he said more on that subject during Question Time today and in a recent debate.
    I remind the House that the number of vacancies now stands at its highest level for seven years and the fall in the unemployment register over the past three months is the greatest for 13 years. That is the good news, which the Opposition are unprepared to accept.
    In the past, the Labour party has always been opposed to profits, but greater profits lead to greater investment and that leads to more jobs. On that front the outlook for industry is good. The right hon. and learned Gentleman

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    devoted most of his speech to the manufacturing sector, and said that manufacturing industry is in almost terminal decline. That is simply not true. As a proportion of our national output, manufacturing output has declined. However, it has also done that in France, West Germany, the United States of America, Japan and almost any developed economy one could care to name.
    Although this may come as an amazing shock to the Opposition, that decline did not start on 3 May 1979. It has been taking place for many years, including the years when the Labour party was in office. My hon. Friend the Member for Amber Valley (Mr. Oppenheim) stressed that point in this intervention. The only contribution that the Labour party made was to exacerbate the problems of manufacturing by standing in the way of change and by attempting to prevent the adaptation of our economy. Manufacturing industry was burdened with yesterday's methods, yesterday's techniques and yesterday's products while our competitors all over the world were producing goods more cheaply, quickly and efficiently.
    It is impossible to stand in the way of change if we want to see a prosperous productive economy—an economy which is constantly changing. I believe that we have to encourage and assist that process and not try to prevent it. As a result, manufacturing industry has been adapting and growing. Since the end of the recession in 1981, output has risen by 13 per cent. While, in common with most other industrial countries, there was a slight pause earlier this year, there are now clearly signs of a resumption in growth with manufacturing output up 1 per cent. in the last quarter and forecast to grow by a further 4 per cent. next year.
    In addition—and we did not hear a word from the right hon. and learned Gentleman about manufacturing efficiency—productivity is up by more than 30 per cent. since the end of 1980. That is an average of 5 per cent. a year over five years. During the lifetime of this Government, it has grown by an average of 3·5 per cent. a year—a growth record second only to Japan and four times as fast as under the Labour Government.
    Let there be no doubt that the basis for continued expansion has been laid with buoyant profitability now at its highest level since 1973; rising investment which has risen 30 per cent. since its trough in 1983 and buoyant exports up by 18 per cent. since 1979 to record levels. Of course, manufacturing remains a vital contributor to the country's wealth. I cannot imagine a healthy and prosperous British economy without a thriving manufacturing sector.
    Mr. John Smith: If things are progressing so splendidly, why is there a £5 billion deficit in the balance of trade on manufactured goods?
    Mr. Channon: I am coming to that. I am telling the House the position in manufacturing. It is no more and no less important than any other sector. It now accounts for only one fifth of gross domestic product and one quarter of employment. The Opposition seem to think that the other four fifths and three quarters are irrelevant or worthless. That attitude is simplistic and wrongheaded.
    Mr. John Swith: I did not suggest that.
    Mr. Channon: The right hon. and learned Gentleman spoke for 35 minutes without mentioning anything else. I am entitled to assume that he is prepared to concentrate
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    only on that one sector of the economy. It is a very important sector, but it is not the only sector. He ignores the contribution to our economy and national wealth of millions of people who are doing worthwhile and productive jobs.
    The Government's policy should be to help both sectors of the economy succeed by creating a climate in which enterprise and business can flourish. The key to that is competitiveness in both cost and non-cost factors. Inflation has been brought under control — although, not surprisingly, we did not hear much about inflation from the right hon. and learned Gentleman.
    Since mid-1983, inflation has averaged below 5 per cent. and in the past year industry's fuel and raw material costs have actually fallen. The one cloud on the horizon is unit labour costs, which in the past year have risen much faster in Britain than in our major competitor countries. The implications for competitiveness are obvious. High pay settlements must not be allowed to swamp the effects of productivity improvements. Rather, we need to take the benefit of those improvements in more competitive prices, leading to higher sales, higher output and more jobs. That is the message for all kinds of industry and the message that should go out from both sides of the House, although it does not seem to.
    Mr. William Cash: Does my right hon. Friend, who has published an extremely interesting and worthwhile pamphlet on quality in British industry, accept that the quality of production is infinitely more important than many Opposition Members give it credit for? Furthermore, the Opposition's continual ranting on about the volume of production will be of no use to this country unless we produce goods of comparable quality with other places abroad.
    Mr. Channon: I entirely agree with my hon. Friend. Quality and design are crucial aspects of British industry and I shall say a word about them in a few moments.
    The most effective and productive way to create wealth is through the operation of a free market, and every Conservative Member knows that to be the case. No matter how clever the bureaucrat or how sophisticated the Whitehall computer, they will never match the power of the market in ensuring that the goods that are produced are those that people actually want to buy. We have to extend the scope of the market, make sure that it works efficiently and make good any defects in its mechanism.
    That has to be done by bringing the disciplines of the market into public purchasing, by encouraging wider share ownership and by privatisation — which Opposition Members hate so much. Privatisation proves beyond doubt the power of private enterprise in a competitive free market. In company after company privatisation has resulted in an enormous leap in efficiency, performance, attitudes and involvement. Some 350,000 employees now have a stake in their companies and millions of British people have also bought shares. That is true public ownership.
    Mr. John Smith: No it is not.
    Mr. Channon: Is it not true public ownership for the people to own shares in their companies? The Labour party wants public ownership to be the pseudo-social ownership espoused by them—their new fancy word for renationalisation. That will disfranchise millions of ordinary people who have bought shares—
    Mr. John Prescott: And sold them.
    Mr. Channon: Yes, but a great many have kept their shares. Under a Labour Government, there would be a return to Government interference, inefficiency, bad service and losses funded by the taxpayer.
    Mr. Hickmet: Did my right hon. Friend notice the ludicrous proposal made by the hon. Member for Kingston upon Hull, East (Mr. Prescott) that we should use nationalised industries to increase employment? In fact, he said that in certain industries employment would be doubled. What effect does my right hon. Friend think that would have upon the efficiency of the coal industry, the British Steel Corporation, or the shipbuilding industry? The hon. Member for Kingston upon Hull, East was interviewed by the BBC on those matters.
    Mr. Channon: The proposal of the hon. Member for Kingston upon Hull, East (Mr. Prescott) would clearly have a disastrous effect. I have learnt one lesson which I hope that my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) has also learnt—
    Mr. Prescott: He is paid to lie.
    Mr. Hickmet: On a point of order, Mr. Deputy Speaker. The hon. Member for Kingston upon Hull, East (Mr. Prescott) has said that I am paid to lie. In my respectful submission, that comment should be withdrawn.
    Mr. Deputy Speaker (Sir Paul Dean): If the hon. Member used that phrase, I am sure that he will wish to withdraw it.
    Mr. Prescott: I clearly did use that phrase, Mr. Deputy Speaker, in reference to the hon. Member making a dishonest statement about what I said. I was referring to the man being briefed to make untrue statements, but I will withdraw the statement that he told a lie.
    Mr. Channon: I will return to the facts of privatisation. I have another quotation from the hon. Member for Kingston upon Hull, North—
    Mr. Prescott: Kingston upon Hull, East — the Minister must not blame my hon. Friend.
    Mr. Channon: No, the hon. Member for Kingston upon Hull, North (Mr. McNamara) is far too sensible. I meant the hon. Member for Kingston upon Hull, East.
    The facts of privatisation speak for themselves to everyone within and outside the House except the Opposition. We do not hear much from the Opposition about the performance of Jaguar. That company has increased its turnover three times, turning a loss of £30 million in 1981 into a profit of more than £120 million in 1985 and creating 1,500 new jobs. Had it remained in state ownership under a Labour Government, those 1,500 people might still be on the dole. The profits of Cable and Wireless are up fourfold and those of the National Freight Consortium, with 17,000 shareholders, are up sixfold since privatisation. British Aerospace has also done pretty well. It would not have done so well under the right hon. and learned Member for Monklands, East. Profits are now up to £80 million in that flourishing company under private ownership.
    Those are the reasons why we are determined to press ahead with our privatisation programme — because it
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    works. I am delighted to reaffirm that in the course of next year British Airways, the British Airports Authority and Rolls-Royce will also take their rightful places in the private sector.
    Mr. Franks: Before my right hon. Friend leaves the subject of privatisation, will he comment on the privatisation of Vickers Shipbuilding and Engineering Ltd., when 82 per cent. of the local work force bought shares, paying £1 per share in March for shares which now stand at £1·60, whereas Labour proposes to renationalise and give them worthless pieces of paper?
    Mr. Prescott: That is another dishonest statement.
    Mr. Channon: My hon. Friend is entirely right to point out the great success of VSEL, which has had an extremely important effect on employment in his area compared with the disastrous proposals that the Labour party would put into operation if it won a general election.
    I shall now deal with the public sector, because it is not only in the private sector that things have to be changed. The right hon. and learned Member for Monklands, East criticised the fall in expenditure by the Department. I will tell him why that expenditure has fallen. In 1979, we had to provide more than £1 billion of taxpayers' money in external finance for expensive and inefficient DTI-sponsored nationalised industry. This year the figure will be £89 million compared with £1·2 billion — less than one twentieth, in real terms, of the amount that we had to find when we came to office.
    After losing hundreds of millions of pounds per year in the 1970s, as my hon. Friend the Member for Glanford and Scunthorpe has pointed out, the British Steel Corporation made its first overall profit last year. Last week it announced a profit of nearly £70 million in the first half of this year. That is good news not just for the taxpayer, who had to finance the earlier losses, but for those who work in the industry. Steel producers throughout Europe and elsewhere have been engaged in a fight for survival. BSC has shown that it is a survivor. Its recovery still has a good way to go, but the Government's approach and the corporation's willingness to make that effort have given the work force a more promising future than it has had for a good many years. I very much doubt whether my hon. Friend the Member for Glanford and Scunthorpe needs any lessons in electoral strategy from the right hon. and learned Member for Monklands, East.
    As well as in the nationalised and privatised sector, the Government have a role to play in the private sector in helping to improve both manufacturing and service industries by improving the working of the market. One way of doing that in which my right hon. and learned Friend the Paymaster General has been especially engaged is by getting Government off the backs of business and allowing firms to get on with the job rather than having a plethora of red tape and controls.
    Mr. Prescott: Such as training.
    Mr. Channon: I look forward to debating that with the hon. Gentleman. Although Government must avoid burdening business with unnecessary regulation, there are, of course, areas in which the Government have a duty to set and enforce the rules. One example is the financial services industry.
    No regulatory system can entirely stamp out malpractice or fraud, but we are determined that there

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    should be vigorous enforcement of the Financial Services Act and I am confident that this will provide a sound statutory framework for self-regulation. Recent events have shown that it can operate rapidly and effectively, as can the Government. On the evening of Thursday 13 November we received a report from the stock exchange on its initial conclusions in a particular case. We considered that report and on Friday 14 November I brought into force the relevant provisions of the Act on insider dealing. I appointed inspectors on Saturday 15 November. That shows the seriousness with which we regard our commitment to enforcement and our determination, in particular, to tackle insider dealing with all the powers available to us under the Financial Services Act.
    The United Kingdom continues to consolidate its position as one of the three main financial centres of the world. The merger between the stock exchange and the International Securities Regulatory Organisation is to be welcomed as a major step in ensuring that Britain keeps its place in that sector. If markets are to operate successfully, they must be both efficient and orderly. Consumers, whether of goods or of services, must be sure that they will not be ripped off. As we are debating the Queen's Speech as well as the Opposition amendment, I should briefly inform the House that tomorrow in another place we shall be introducing a consumer protection Bill.
    The new legislation will significantly improve consumer protection in terms of product safety, price claims and bargain offers. It implements a Community directive on product liability and will ensure that consumers can secure compensation for personal injuries caused by defective products without, as at present, having to show that the producer was negligent. The Bill will also require suppliers to ensure the safety of all consumer goods, not just those covered by specific safety regulations. It will give consumers greater protection from misleading price indications such as bargain offers when there has been no real price reduction and hidden extras are added to the quoted price.
    The Bill will protect consumers from particular abuses but will also ease trade within the Community through harmonised product liability laws. I believe that it will also provide a powerful impetus to manufacturers to improve the quality of their goods—my hon. Friend the Member for Stafford (Mr. Cash) stressed the importance of this—as the concept of safety in the Bill will encourage them to make greater use of standards.
    Mr. Ken Eastham: Will the Minister give way?
    Mr. Channon: We shall no doubt have many months of debate on this, but I will give way if the hon. Gentleman wishes.
    Mr. Eastham: In considering the various protections advocated by the Government, will the Minister also consider the various aspects of protection for workers? One thinks especially of health and safety in factories in view of the considerable reduction in the number of inspectors. That is a great deficiency in an area that cannot be ignored.
    Mr. Channon: The Bill will improve safety for workers in factories in some respects. If the hon. Gentleman will be good enough to await publication of the Bill, we can
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    deal with those matters in detail in later debates. As is the custom, however, I thought that in courtesy I should inform the House of the introduction of that legislation.
    The right hon. and learned Member for Monklands, East wants me to deal with the question of trade. Under the Conservative Government we have had six years of trading surplus. Of course, we shall move into a temporary deficit next year. That is because the price of oil has dropped. It would be astonishing if that did not have a temporary effect on the balance of payments. My right hon. Friend the Chancellor set out the effect of that extremely clearly in his autumn statement. I have every confidence that we shall soon move back into surplus when the exchange rate and everything else has adapted to deal with the new circumstances. I have no qualms about the future course of the balance of payments. We must consider the balance of payments as a whole — manufacturing, oil, services and everything else.
    I have tried very hard to increase our trading opportunities in the Community by completion of the internal market, which would be of major benefit to British industry, and, with my colleagues in other countries, by trying to launch a new round of trade negotiations at the General Agreement on Tariffs and Trade ministerial meeting in Uruguay. That is a major step to advance the prospects of world trade.
    It is common ground that we need better access for exports of British goods and services. A genuine opening of markets to British goods in the newly industrialising countries, agreed rules for liberalising world trade and services, new rules for resolving disputes more quickly and satisfactorily, lower tariffs and better curbs to inhibit trade in counterfeit goods are important issues to people outside the House, whatever hon. Members may say.
    Mr. Robert Atkins: I welcome my hon. Friend's generalised case, but we agree that import controls are no answer. Indeed, they are counter-productive. Leyland Vehicles has done everything that is required of it in terms of competitiveness, design and providing support—all the things that my right hon. Friend mentioned—but it is still up against predatory financing in Europe, the Third world and the far east, which makes it extremely difficult for that company to compete, although its product is perfectly adequate, if not good for the market. Will my right hon. Friend turn his attention to that—I know that he has in the past—and develop a policy which encourages support for our export contractors abroad?
    Mr. Channon: I certainly will. We are especially anxious to try to help our exporters obtain major public business abroad. We now have a soft loan facility, and the consequential increase in the aid and trade provision budget will enable the amount of ATP-supported business to be doubled from £250 million to £500 million by 1989. Business worth £300 million in China and worth very nearly £150 million in Indonesia can be financed from the soft loan facility. My hon. Friend the Member for South Ribble (Mr. Atkins) has been very active pursuing the interests of companies in his constituency. I hope that the soft loan facility will put British companies in a strong position to win major business in those important markets.
    Mr. Bruce Milian: Soft loans and ATP are of some significance to the shipbuilding industry, and discussions about that industry and support for it are

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    going on in the EEC. Will the right hon. Gentleman say something about that as the industry is in a critical condition?
    Mr. Channon: I am glad that the right hon. Gentleman has raised that subject. I quite understand his anxiety about the Commission's proposals, which are being debated today by the Industry Council. I cannot comment on what is going on as matters might well be moving fast, but we accept that there is a need for movement from the Commission's original approach. We well understand the view of the House and believe that the 26 per cent. should be increased. The exact figure to which it should be increased will have to be considered. No doubt the right hon. Gentleman will table questions, or opportunities will be found to keep him informed. If he cares to table a question today or tomorrow, I am sure that my hon. Friend the Minister of State, Department of Trade and Industry, will be delighted to tell him the latest information.
    Mr. John Smith rose—
    Mr. Channon: I have dealt with a great many of the issues raised by the right hon. and learned Gentleman, but I shall give way.
    Mr. Smith: I had not realised that the Secretary of State had dealt with the balance of trade question. It is alarming that there is likely to be a £5 billion deficit in the balance of trade in manufactured goods by the end of 1986. What does the right hon. Gentleman think about that and what action will the Government take to correct it?
    Mr. Channon: The right hon. and learned Gentleman always concentrates on one aspect of our trade and fails to relate it to the others. He knows very well, as my right hon. Friend the Chancellor made it quite clear in his autumn statement, what the likely outturn of the balance of payments next year will be—a small deficit.
    Mr. Prescott: One and a half billion pounds.
    Mr. Channon: Yes, £1·5 billion—after years of being billions of pounds in surplus. That is a record of which the Labour party should be jealous. I am sure that we shall return to surplus when the adaptation has taken place. It is ridiculous for hon. Members to imagine that the price of oil can slip from $35 a barrel to $8 a barrel without having any effect on the balance of payments of an oil producing country. The right hon. and learned Gentleman knows the arguments — he simply chooses not to put them to the House.
    Mr. Hickmet rose—
    Mr. Channon: I must not give way to my hon. Friend. He has already had one or two goes today.
    Since the Labour party had the Department of Trade and Industry under its control, we have indeed switched our expenditure. We have increased expenditure on science and technology support to £415 million—three times as much in cash terms and twice as much in real terms as when we came to office. That is a real re-ordering of priorities in the Department—away from loss-making nationalised industries to helping British industry. Science
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    and technology support represents an increasing proportion of my Department's budget—nearly one third this year, as opposed to a mere 6 per cent. when Labour left office.
    The re-ordering of priorities has enabled us to fund programmes that did not exist in 1979, such as information technology awareness in schools, the Alvey programme into advanced information technology, international collaboration in Europe and the EUREKA project. All have been done because we have been able to alter our priorities and spend more on them and to waste less propping up nationalised industries, unlike the Labour party.
    Mr. Prescott: Eureka!
    Mr. Channon: Yes, indeed, EUREKA. The hon. Member laughs at EUREKA. If we are to prosper, we must have more collaboration with Europe, not less. I find it astonishing that Opposition Members should find that laughable.
    We must have more foreign investment in Britain. Opposition Members are always difficult about that too. Support for inward investment since 1979 has created some 180,000 jobs, and we are now the third location in Europe for internationally mobile investment. We attract more than one third of all American and Japanese non-oil investment into the Community. That is good news for Britain.
    Mr. Prescott: Why?
    Mr. Channon: Inward investment creates jobs. Ford, for example, invested more than £1·5 billion in the United Kingdom during the past seven years, and provides jobs for some 50,000 people, and the hon. Member laughs.
    The Government's policies are designed to help industry improve its competitiveness and win orders at home and abroad. Last week, the Confederation of British Industry published its manifesto. It also contained policy recommendations—
    Mr. Prescott: Bare knuckles.
    Mr. Channon: Not at all. It is articulating what the overwhelming mass of British business and everybody else believes. Everybody is in step except the Labour party, which believes that a return to profligate spending, high taxation, rampant inflation, state interference and militant trade unionism would not be a disaster for the country.
    Mr. Prescott: What about training?
    Mr. Channon: We hear the same old story over and again from the Labour party. The ad-men will dress it up. I expect that they will have a little brochure with a red rose on it. It will look very nice. There will be a few comfortable sounding euphemisms such as "social ownership" instead of renationalisation, but no amount of packaging will disguise it. Those policies would put us back at the bottom of the European league, which is where we were when Labour was last in office.
    Every day, the Labour party seems to unveil another ludicrous proposal which would add to the costs and burdens on British industry. We had the great treat of the hon. Member for Knowsley, North (Mr. Howarth) arriving here this afternoon. Only last week, the hon. Member for Kingston upon Hull, East was at it again. On Monday, he announced his plan for a I per cent. levy on companies' turnover to finance industrial training. I am all

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    in favour of industrial training — [Interruption.] The Opposition also laugh at that. Investment in people is vital if companies are to succeed, and I am constantly urging companies to devote more resources to training. Many companies such as Jaguar and British Airways already are, but an indiscriminate tax on turnover that falls on every company irrespective of size or profit and loss is economic lunacy.
    Mr. Prescott rose—
    Mr. Channon: I am longing to give way to the hon. Gentleman. It would cost ICI more than £100 million, and it might cost the existence of many smaller companies. The only guaranteed result would be a loss of jobs. Now I give way to the hon. Gentleman.
    Mr. Prescott: I shall deal with training in detail when I reply. However, is the Secretary of State aware that Mr. Holland, a director of the MSC, has been looking at training and he recommended that a levy should be imposed collectively, in the region of 2 per cent. of turnover? He is a person with a great knowledge of training. Therefore, before dismissing the idea that 1 per cent. should he a minimum levy, the Government should look at what others are recommending.
    Mr. Channon: Then may I take it that that remains Labour party policy? I was not clear from the intervention of the right hon. Member for, Sparkbrook (Mr. Hattersley) whether it was or not. Perhaps the hon. Gentleman will let us know.
    Mr. Prescott: It is certainly the Labour party's policy to implement training levies and grants to deal with the collapse of training in industry. I said at Knowsley, North that we had not yet decided on the percentage—[HON. MEMBERS: "Oh."] I said that I believed that 1 per cent. was a minimum because according to the Manpower Services Commission most of our competitors are spending between 2 per cent. and 3 per cent. of turnover on training. Britain is lamentably behind in the training of its labour force.
    Mr. Channon: We are making very good progress. One per cent. is now a minimum, and the hon. Gentleman quotes with approbation those who suggest 2 per cent. Are Opposition Members carrying the right hon. Member for Sparkbrook with them?
    Mr. Prescott: Yes.
    Mr. Channon: Really? It is noticeable that the right hon. Gentleman is not here, because he said:
    "The idea that there should be a 1 per cent. levy is not policy, it wasn't described as policy by John, and I can't imagine that it's going to be policy".
    That is what the Opposition said on Friday, yet the hon. Member for Kingston upon Hull, East says something quite different today.
    Mr. Prescott: The Secretary of State must accept what I said at Knowsley—that in my view 1 per cent. should be the minimum levy. I also made it clear that the Labour party had not made a decision about what the level should be. That is on the tapes and can be seen. In fact, I believe that the tapes were sent for, and they confirm that position.
    Mr. Channon: It is very nice to know that it will be at least 1 per cent., because British industry can learn. As I have said, that sort of levy would cost ICI more than £100
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    million. Just think what it will cost other companies that are not making profits. Anyone who is a spokesman on employment, who puts forward such a ridiculous suggestion and who describes himself as interested in employment is talking nonsense.
    Luckily, such crackpot schemes will not be put into practice. This Government's policies have helped to create the climate in which business is now flourishing. Prospects for the future are now brighter than for many years, and I urge the House to reject this ridiculous amendment.
    5.33 pm
    Mr. Ian Wrigglesworth: Nothing that the Secretary of State said will be any consolation whatever to the 3 million unemployed who still remain in the country today, and we have every prospect of them still remaining unemployed for the next three or four years if the Government continue their policies.
    It is a pity that in his description of the Government's record the Secretary of State did not quote the figures from 1979. Almost all the figures that he chose came from either 1983 or 1981 whereas, as the House will know, most of the disasters, particularly in manufacturing industry, took place from 1979 to 1981 when there was a high exchange rate, high interest rates and when companies were being made bankrupt and people were being made redundant throughout the country.
    If one looks at almost any of the indicators that the Secretary of State mentioned, one finds that we are only just getting back to the 1979 levels of output in most areas of the economy. It is a great pity that the Secretary of State did not dwell more on the two fundamental problems that are facing the country.
    The first is our competitiveness. Although he mentioned that, he did not go into adequate detail about how badly we are doing compared with our major overseas competitors or how the Government propose to deal with the problem. Secondly, the right hon. Gentleman did not deal with the fundamental question in the minds of all Opposition Members — the disastrous decline in manufacturing industry, which is inevitably giving rise to the vast balance of payments problems associated with manufactured goods.
    In fact, the balance of payments surplus and the benefits of North sea oil have masked the decline in the manufacturing sector. Indeed, they have done worse, because the Government have allowed them to undermine the manufacturing sector of British industry. The Secretary of State is quite wrong if he thinks that Opposition Members are not concerned with the service sector or the financial services sector. He need only listen to the speeches of the members and leaders of the CBI to realise that there is no future for the financial services sector in this country or for the rest of the service sector without a more substantial manufacturing sector than we have today. If we are to redress the balance of payments problems that are coming fast down the track, we shall have to do something about the manufacturing sector.
    The Secretary of State brushed off—as though it was only a minor problem on the horizon—the £1·5 billion deficit in our balance of payments in the forthcoming year. The alliance flagged this up in its budget proposals published in March, and the Secretary of State is incredibly complacent if he thinks that it is a mere blip on the horizon that does not signal a major problem facing our economy and industry.

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    For a start, it is an extremely modest forecast compared wth some of the other forecasts that have been made. The CBI put the deficit slightly higher at £1·6 billion; the London Business School forecast a deficit of £2·4 billion; and a number of City institutions, such as James Capel, talk of it being £3 billion or £3·5 billion.
    As the Secretary of State said, a deficit is inevitable given the fall in the price of oil, but the trouble is that we do not have the manufacturing capacity to fill the gap arising from the decline in the sale of manufactured goods. The Government must address themselves to this fundamental and long-term problem which will continue into the future. Over the next few months the country may enjoy a short-term consumer boom, but goodness me, the brakes will have to be slammed on hard immediately after the general election, because the confetti money of a consumer boom will do nothing to overcome the problem of the balance of payments to which the right hon. Gentleman referred. Indeed, it will make the problem worse, because 70 per cent. of that consumer expenditure goes into imports.
    The Government boost to public expenditure is long overdue. It is remarkable to look at the recent autumn statement, which was a full folder containing a sheaf of press releases. Why was it published when it was? The Chancellor of the Exchequer said that he was following precedent, but he was doing nothing of the sort. If my memory serves me correctly, last year's autumn statement was made on this very day—on the penultimate day of the debate on the Queen's Speech. It was accompanied by the printed tables that are now contained in the autumn statement that was rushed out last Wednesday.
    There is only one reason why the autumn statement was published in the form of a sheaf of press releases. It was an attempt to pre-empt the debate on the economy, which had been tabled as a motion for the Thursday of the week before the Queen's Speech, and an attempt to boost the Government's general election image by portraying them as being high spending.
    The Government have increased demand in the economy, but, as those balance of payments figures demonstrate, the demand is for microwaves, videos and other consumer goods which are flooding into the United Kingdom and creating jobs in Japan, America and Germany, but not in our manufacturing industry. Unless the Government are prepared to do something to overcome our lack of competitiveness, that tale will continue.
    The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): Do I take it that the hon. Gentleman is criticising the autumn statement? If so, which lines of expenditure would the alliance parties reduce, if they had the opportunity? In the light of reports his morning, is he still committed to the increase in borrowing of £3·5 billion on top of the present level to which I believe he committed himself at the SDP conference in the autumn?
    Mr. Wrigglesworth: Yes, we remain committed to the borrowing levels to which we were committed. Once again, we shall publish our Budget proposals in the run-up to next year's Budget so that hon. Gentlemen can see exactly
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    the figures that we propose. We have done that consistently for the past two or three years and have had no hesitation in doing so—unlike the Labour party.
    I shall come to the character of the demand that the Government are increasing in the economy shortly. But, first, the Government's forecast is that next year the level of unit labour costs will increase by only 2·5 per cent.— a decrease from 6 per cent. this year. I do not believe that and I do not think that anyone in industry believes it. How can that happen when pay increases at twice the rate of inflation are being agreed, when there is no sign of them moderating significantly and with all the prospects of greater pressure in the public sector for substantial pay increases? It is impossible for the Government to achieve that sort of target. It is sleight of hand to suggest that our unit labour costs will increase by only 2·5 per cent. in the forthcoming year. Competitiveness will not be improved, so the performance of our industry and commerce will be undermined.
    The Government forecast inflation of some 3·75 per cent., but that is not what most commentators are forecasting for the forthcoming year and the year thereafter. That is a good reason why we shall not have the general election in 1988 or in October 1987. All the signs of these deteriorating forces on the economic front will by then be clear to the electorate. The speech by the Secretary of State today and the recent speeches by the Prime Minister and her Ministers show clearly that the Government are cutting and running for an early election before the economic squalls blow extremely hard. That is clear, if one looks at the underlying position of the economy.
    We are now the 19th country in the world in terms of GDP per head of the population. We have been overtaken by Italy and we shall be overtaken by Spain in the early 1990s. We are gradually declining compared with other major countries and the events since the 1979 general election have only accelerated that trend. In three years' time we will still have an enormous quantity of unused capacity with more than 3 million people unemployed. Nothing that the Secretary of State has said today gives any reason to doubt that.
    Despite the Secretary of State's protestations, the autumn statement shows that the Government are fundamentally anti-industry. Of the £7·5 billion that the Chancellor of the Exchequer showered on the economy, the trade and industry budget showed a paltry £60 million increase which is intended for additional research and development. Obviously, that is welcome, but the new plans for the next three years project a fall in spending of one fifth in real terms, confirming the plans on spending set out in earlier White Papers for a massive turnround in regional expenditure and support for industry generally.
    One cannot recognise from the Secretary of State's description of Britain, the Britain of Newcastle, Glasgow, Liverpool, Sheffield or Teesside, where we have 22 per cent. unemployment. According to him, everything in the garden is rosy. There would be a hollow laugh from the people of Teeside if they heard his description of the economy. I see little hope of those people being satisfied in the near future by any substantial and sustained fall in unemployment.
    The Government must take much more clear and effective action to revive manufacturing competitiveness. There need not have been any absolute decline in our industrial base as a result of squandering North sea oil

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    revenues, which have almost exactly met the additional cost of unemployment. While some deterioration in manufacturing competitiveness was inevitable because of the consequences on the balance of payments and exchange rate, it need not have been to the extent of the turnround of more than £22·5 billion, which will have taken place in the decade 1978 to 1987, even on the Chancellor's figures for next year's deficit.
    The Government could have helped manufacturing industry and the whole business community, if they had followed the advice of the Confederation of British Industry and joined the exchange rate mechanism of the European monetary system. The Chancellor of the Exchequer, the Governor of the Bank of England and the Foreign Secretary are in favour of that, but only one person—the Prime Minister—is opposed to it. For some years the whole of manufacturing industry has been asking for that. Why has industry been asking for it, and why have we been advocating it? It would bring a greater degree of stability to the exchange rate and provide greater certainty for our industries which must sell overseas in difficult competitive circumstances. It would also help to reduce the premium that we must have on our interest rates, which are crippling large sections of manufacturing industry.
    Our interest rates are at record levels. They are 4 per cent. above the average level of interest rates in the European Community. We hear a great deal about our difficulty in competing with Japan because of interest rates, but never mind Japan—every British business has an overhead of 4 per cent. on its borrowings in competing in Europe.
    It would not necessarily be possible dramatically to reduce interest rates merely by joining the EMS. At times, we would have higher interest rates to protect the pound and we accept that. It is not an easy option, but it would bring about greater stability, not only in the British, but in the world monetary markets.
    Dr. Michael Clark: Will the hon. Gentleman estimate what interest rates might be if, God forbid, there were alliance control after the general election and an alliance Government borrowed a further £4 billion? How would that affect interest rates? Would the position be better or worse?
    Mr. Wrigglesworth: It is a bit rich for Conservative Members to lecture us on the lack of prudence in our budgeting because the proposals that we have published in our Budget statements in previous years are not much out of line with what the Government are doing now.
    This year, the Government have increased public spending by £7·5 billion. For six years, Ministers have been saying that that was not possible and that it would be dreadful to do so because it would lead to an enormous increase in inflation. Now all the targets and indicators on monetary policy have gone out of the window. A reason why many forecasts show that inflation will increase in the coming months and next year is—
    Dr. Michael Clark rose—
    Mr. Wrigglesworth: If the hon. Gentleman will listen to my response, he will have a reply. Inflation will increase because we have had a 140 per cent. increase in consumer credit in the past year. M3 and M0, the indicators of the money supply, have been racing ahead and that is why the
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    Chancellor has jettisoned them as indicators of monetary policy, and seems also to have jettisoned any hope of keeping control of the money supply or even looking at the monetary indicators, which he should do.
    Our proposals are still within the constraints that are necessary to be able to sustain the level of inflation that we have forecast in our published figures. Our public expenditure figures will be published in the run-up to the Budget next year, when we have done our assessment of the economy for 1987 in advance of the Budget, in the same way as the Government.
    Dr. Michael Clark: How will it affect interest rates?
    Mr. Wrigglesworth: It will not affect interest rags any more than the crowding out of selling British Telecom or British Gas shares, or any of the other means that the Government have used to reduce the requirement to sell gilts. If the hon. Gentleman is suggesting that by increasing public sector borrowing one thereby increases interest rates, where is the evidence of the Government's policy to demonstrate that that has happened? It has not happened. There is no reason why it should happen, provided that one is clear that we are maintaining the targets that we would have to maintain within the EMS and joining the exchange rate mechanism to be able to do so. I see no difficulty on that, and we have published all the figures that follow from the increased borrowing in our Budget statement, published in March this year.
    Dr. Michael Clark: The hon. Gentleman has not said that there will be no increase in interest rates, but I think that that is what he is trying to say. He mentioned the £7·5 billion increase in Government spending under this Administration — his figure. Is he saying that, in the event of the alliance having any authority after the next election, it will cut the extra £7·5 billion that the Government have recently brought in and replace it with £5 billion or £4 billion of extra spending, so that in that way, there will be no increase in the interest rate? In other words, will the alliance chop the amount that we are spending to keep interest rates stable?
    Mr. Wrigglesworth: No, I was not saying that. We shall carry on, as we have said that we shall, steadily and modestly increasing public expenditure over the lifetime of our Parliament. The Government have said that they want to increase public expenditure by 1·75 per cent. a year. We have said that we shall increase it at a rate of 2 per cent. a year. That means that in the fifth year, public expenditure will be increased by £10 billion. There is no reason why that scale of increase in expenditure should increase interest rates.
    As I said earlier — this is the reply to the hon. Member for Rochford (Dr. Clark)—if we join the EMS, over the long term there is no question that although at times it might have to lead to an increase in interest rates, we would be able to reduce the level of interest rates—which is our intention and hope—because we would not have to pay the sort of premium that the Government are paying because they lack the willingness to join the EMS.
    Mr. David Penhaligon: My hon. Friend and I regularly attend Treasury Question Time, which clearly the occupants of the Government Front Bench do not. Does my hon. Friend agree that the Chancellor no longer argues that he has to maintain the interest rate regime that he is imposing because of the Government's deficit, but

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    simply to defend the international value of the pound? There is little connection within limits, with the Government's debt requirement and the interest rate regime that is being imposed.
    Mr. Wrigglesworth: There is no doubt, as I said earlier, that the level of interest rate that industry is having to pay has been related to the market's assessment of the pound and the underlying performance of the British economy. That has led to us paying a 4 per cent. premium—that is, 4 per cent. above the average—on the interest rates of our European competitors. That is the judgment of the market on the weakness of the British economy. If there is any problem on the future of oil prices, there could be a grave problem, not only in this respect, but in others, for the British economy which have not yet surfaced. If the price of oil should either fall or not rise above its present level, there will be enormous pressures on the Government to change their economic stance.
    Mr. Kenneth Clarke: The hon. Member for Truro (Mr. Penhaligon) made a point to the hon. Member for Stockton, South (Mr. Wrigglesworth). I have in front of me reports of the Liberal party's annual conference, in which the hon. Gentleman took part, and the policy to which its members committed themselves. It says:
    "The necessary increase in public spending nationally would be £5 billion a year and would need the support of an incomes policy."
    Will the hon. Gentleman compare that with his statement of a £10 billion increase over five years, which he claims is a carefully considered and costed alliance policy? What is the position? Is none of it affected by the increase in spending announced in the autumn statement which, to my astonishment, the hon. Gentleman seemed to be criticising?
    Mr. Wrigglesworth: I am not criticising it. I was pointing out that the autumn statement shows that the Government seem to have learnt some lessons from the alliance, which we welcome. However, we are determined to keep a tight rein on public expenditure proposals that emanate from the alliance, which is why we are scrutinising all the proposals that alliance spokesmen and others are proposing to ensure that they are kept within reasonable constraints.
    Unlike either the Conservative party in opposition or the Labour party in opposition, we have had the honesty to produce not only all the public expenditure figures but all the figures on exchange rates, interest rates and all the other consequences of pursuing the policies that we think should be pursued. That led The Daily Telegraph among other papers to congratulate the alliance on producing "model Opposition economic statements". The right hon. and learned Gentleman cannot criticise us for trying to cover up the public expenditure proposals or the consequences of our proposals.
    The Government's approach to industry has been undermined by their unwillingness to declare a clear strategy for the manufacturing sector. We should like to see much more going into research and development and science budgets. I am pleased that the Secretary of State has been able to increase that this year. This is the seed corn for the future.
    A great deal more needs to be done by Government, working in partnership with industry. The Government
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    should not tell industry what to do, nor should they draw back and say that industry and business must get on and do their own thing and that Government have no role. The reality is that Governments must, and do, have a role in all our competitor countries. The phrase that we use to describe what we believe should be the right approach to business and industry is that the Government must work with the grain of the market. They must make up market deficiencies. The Government should do that by seeking to assist industry, but they should not tell industry what it should be doing. There are various ways in which one can do that, and I do not have time to go into all of them, but that is the approach that the Department of Trade and Industry should adopt towards industry to ensure that we overcome our lack of competitiveness and the great gaps in our manufacturing sector.
    The Government should be developing a comprehensive system of education and training that brings together all the services in existence. When the Government came into office they were violently antagonistic towards the training boards and decided that they would abolish them. They were the awful quangos that at that time were very much out of fashion on the Government Benches, although they are not so much out of fashion now. New ones have been set up on Teesside. Quangos are not so unpopular now as they used to be. The Government set out to abolish the industrial training boards, but those that are left are doing a very good job.
    The Manpower Services Commission, the technical colleges and various other bodies are involved in training and education. Their work needs to be dovetailed to provide a modular system of training so that gradually qualifications and certificates of qualification can be obtained which will be of value to people in their future careers. A youth training scheme that stands alone, with no qualification at the end of it, is no use. Young people need to take with them something which they can use as an aid to gaining further qualifications. The Government intend to move in this direction. I urge them to move rapidly in that direction so that at the end of two years young people will be provided with a certificate that will be of value to them throughout their working lives.
    Mr. Holt: Does the hon. Gentleman agree that we should start the process in the schools and not wait until young people enter training at 16? Does he agree that qualifications should be borne in mind before children leave school?
    Mr. Wrigglesworth: I agree with the hon. Gentleman that work done in schools must be relevant to the needs of industry.
    Mr. Holt rose—
    Mr. Wrigglesworth: We must ensure that a comprehensive system of training and education is built up that can be used on a modular basis, so that even those who are aged 30 or 40 can obtain modules or credits and build up qualifications should they want to change course and branch out in a new direction. That is vital to the longterm interests of British industry. The only way in which we can succeed against the competition from Japan, Hong, Kong, Taiwan, the United States, Germany and France is to build up high-level skills and qualifications and to increase industrial productivity.
    Mr. Holt: Will the hon. Gentleman give way?
    Mr. Wrigglesworth: No, I have already given way on many occasions.
    We agreed with the proposal to change the basis upon which regional aid is calculated, but the amount spent on the regions has been cut by half. The Government are planning further real cuts of the same magnitude by the end of the decade. When unemployment is at record levels on Teesside, Tyneside and in Scotland and Wales, the last thing that the Government should be doing is cutting regional aid. The Government must provide more regional aid.
    Apart from handouts from Whitehall and Westminster, enterprise could be encouraged in the regions by devolving all the work that is involved in developing economic and industrial activity. A powerful case can be made for establishing development agencies, similar to the Scottish Development Agency and the Highlands and Islands Development Board, in the north-east, the north-west, the midlands and the south-west. The regions understand their own problems and opportunities. Devolution to the people there would benefit the regions. Regional development agencies would do a far more effective job.
    Industry has been for far too long the political football of the Conservative party and the Labour party. Unless we are able to remove industry from the grip of this outdated, ideological battle which has taken place for far too long over the body of British industry, we shall never be able to provide an environment in which industry and business can thrive. Major areas of British industry — for example, steel, telecommunications and gas—have been the subject of party political debate for far too long. They are not the subject of party political debate in other countries. If such worthless and irrelevant dogma is injected into the debate about our industrial future, industry will never thrive as it should.
    The key to breaking the grip of these two old ideological dinosaurs who are fighting over the body of British industry is the introduction of proportional representation. Too many right hon. and hon. Members are willing to try to reform other institutions, but they are never willing to try to reform or to improve the way in which government works. Fundamental reform of this House of Commons is needed. Fundamental reform of the way in which government operates is also needed to make it more representative of the majority of industrialists and business people who have no time for the nonsense of party politics and for the grip that it has held for too long on industrial policy. The sooner radical change in the form of government takes place and the sooner politics is taken off the back of business, the sooner business will be able to thrive.
    Several hon. Members rose—
    Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House that Mr. Speaker has asked for brief speeches.
    6.7 pm
    Mr. Michael Heseltine: I am glad that the right hon. and learned Member for Monklands, East (Mr. Smith) is back in his place. Those of us who have studied industrial policy for some time were amused by his reference to the need for reappraisal of the airbus. I remember all too well that during the 1960s the then Labour Government pulled out of Airbus. In order to
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    protect its long-term technological base, Hawker Siddeley decided to invest private sector money in the project in order to keep Britain within the European consortium. However, Hawker Siddeley was nationalised for its pains by a subsequent Labour Government. That is an excellent example of the industrial and economic problems that have beset British industry.
    It is all very well for the Social Democratic party to refer naively to removing the industrial debate from the political spectrum. However, that is at the heart of our concepts of ownership, the private sector and the great divisions between the Socialist influence and the capitalist influence. It is naive to believe that there is any way in which these issues can be removed from public debate. The hon. Member for Stockton, South (Mr. Wrigglesworth) would have a great deal more credibility, as would his party, had we seen a little more of the steel to which he now refers when he was a member of a Government who were happy to nationalise industry and to inject all these uncertainties.
    Perhaps the most significant thing that happened last week was the overwhelming call by the Confederation of British Industry for the Government to adopt an industrial strategy. That our largest companies should have committed themselves to what only five years ago would have seemed an attitude of inconceivable intervention says something about the attitude of British industry to the position it now faces and to its realisation of the threat that is before it and against which it does not perceive that it can win, except in the concept of partnership with Government. It is fundamentally important that the leaders of British industry should have set a pace which demands a reappraisal of the view of Government towards their relationship with industry.
    We have all indulged — I as much as anyone — in party trading of statistics to suit the side of the House on which we sit. But the decline of Britain's industrial base is not measured in the lifetime of this Government or of the previous one. Britain's industrial base has been declining relatively for most of this century. If one considers the statistics that matter — the share of the world's manufactured trade which Britain enjoys — they show that relentlessly, regardless of which Government are in power and regardless of policies and economic regimes, there has been a persistent decline in our share of world trade in manufactures.
    I agree with many of the points made by my right hon. Friend the Secretary of State for Trade and Industry. The Government can claim great credit for the significant improvements in the effectiveness of our capitalist economy. The privatisation programme has moved an entire sector of the industrial economy back into the trading market place, where it can seek to secure for the nation new opportunities in a more competitive environment. The competitiveness and productivity gains were essential. They were forced upon us and the Government earn great credit for the courage with which they have stood up to the pressures and allowed the market place to impose disciplines upon us which we had long since avoided.
    I have no doubt that the incentives which have been introduced for the starting up of small businesses are one of the most significant long-term innovations for which the Government's industrial strategy is responsible. Would that, as a nation, 20 or 30 years ago, when world trade was

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    expanding and when the economies of the West were job-hungry, we had applied the same initiatives and energy to stimulating small industrial start-ups, and diversified our economy from industries which we protected and cosseted and sought to ensure did not face the increasing world problems.
    Low inflation is a hard-won prize. Who can doubt the agony of the Chancellor of the Exchequer as he sees all the sacrifices which the Government have imposed upon the economy to bring down inflation now being frittered away because the private sector is indulging in the traditional British disease of paying ourselves what we cannot afford? Pay settlements of 8 or 9 per cent. when inflation is running at 3 per cent. bear no relationship to the competitive thrust that the competition of tomorrow will impose upon us. The Government are entitled to explain to the nation vigorously that it is not their example but that of the private sector that is leading tomorrow's inflationary spiral.
    Who can seriously doubt, especially the Labour party which first began to raise the need to bring unions within the law of the land, that the Government's courage in doing that has been a watershed in industrial relations?
    Mr. Prescott: Nonsense.
    Mr. Heseltine: The hon. Gentleman says, "Nonsense," but he will remember that it was the document "In Place of Strife" that first published a Government view that the unions had to be brought within the climate to which the entire trading economy must be adapted.
    All those advances have revealed to me just how much further there is to go. Our competitors have not stood still while we have been making those advances. There is no realistic escape from the anxiety depicted by the Chancellor's recent forecast for the balance of trade next year. That, coupled with the fact that, for the fourth year in a row, real-term interest rates are at a record level, is the test of the judgment of the international money markets about the prospects of the British economy. One cannot escape from that. If we need to pay those rates of interest, someone is making a judgment about how we perform. That means that we must perform better and go further in the directions in which we have marched, and not go more slowly and backwards.
    I shall say something about some—not all and not even in order of priority—of the uncomfortable issues which must still be confronted. The process of reinvigorating and pushing forward our industrial excellence must start with Government. A far more significant role must be given to the Department of Trade and Industry. As someone who has served with great pride in two recent Conservative Administrations, I know beyond peradventure that the all-pervading influence in society which dominates public expenditure and political priorities is the ethos of the Treasury. In industrial terms, and oversimplifying the position, it is the ethos that would arise if the financial directors of an industrial company were put in charge. The books would be properly kept, but that is not a formula for flourishing enterprise.
    The Department of Trade and Industry should not he armed with powers to compel, direct or take over those who disagree with it. No capitalist economy operates in that way. Other capitalist economies ensure that owner, banker, manager and worker operate in a common
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    endeavour to make their companies excellent and their products competitive. There is an attitude of partnership within companies, but there is also an attitude of partnership between Government and the companies. There is no absolute way in which those objectives are achieved. No formula can be taken from one or other of our capitalist competitors. There is no precise measurement or common model, but there is a common theme which depends upon an instinct of national interest. In the creation of wealth, manufacturing interest requires medium to long-term stability, not short-term financial gains.
    The need to expose industry to the rigours of the market cannot be in question among Conservative Members. Japan, Germany and America are capitalist and competitive, but their capitalism exposes their companies to competition while at the same time using the resources and the influence of Government to enhance the market places to which those capitalist companies have access. Those Governments do not try to do the job of industrialists, nor do they pretend for one moment that industrialists can do their job without the help of Government. In Britain, we have failed, uniquely, to achieve an ethos where wealth creation through industry was a political priority, driving, not subsequent upon, other priorities. No capitalist economy can flourish unless the share owners, the managers and the workers in a company recognise a common purpose over the longer term in the company of which they are all partners.
    As long as the Treasury dominates the Government's relationship with the owners, the bankers and the institutions of the City of London on the one hand, and the Department of Trade and Industry conducts a separate disalogue with managers on the other, the single-mindedness that is achieved by other capitalist economies will be missing. The failure of communication is not simply that between owner and manager. The standard of communication within British companies between managers and workers is simply not up to that of our international competitors. We waste significant parts of our most precious national resource — our skilled workers—because they do not feel sufficiently involved in the long-term success of the companies for which they work. For as long as I can remember, the CBI has urged its members to improve the standard of communication between the managers and the workpeople. Our best companies are the equal of any in the world, but the standards of the average are inadequate and those of the worst are abysmal.
    I could not be more supportive of the procedures whereby we have brought the unions within the law of the land. It was an essential first step, but it was a negative step. It created an opportunity and I wish that the Government, in the Queen's Speech, had proposed a legally backed code of conduct and practice for the proper dialogue between managers and work people.
    In any dialogue between the Government and industry, we must come to grips— everybody has said it for as long as I can remember—with the separate cultures of the public and the private sectors. The training of civil servants and the interchange between the complementary public and private sectors is, frankly, woefully inadequate. We cannot leave the career management of civil servants as offshore islands of the Treasury and the Cabinet Office. That is one of the most vital parts of stimulating the relationship between the public and private sectors. All the

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    language that has gone on since Fulton is as though it had never been, because the culture separation today is as profound as it has been throughout the whole of that time. Until it changes, there will not be that sense of urgency within the public sector upon which the private sector depends.
    My next priority has to be the educational system. It is an extraordinary and indefensible phenomenon that 3·25 million people in our society are out of work, yet in industry there are jobs galore for people who do not have the skills to fill the jobs. It is no good the shadow spokesman telling us that that is something to do with the Government. Most of the people who lack the skills and training went through the educational system when the previous Government were in power. It simply debases the currency and urgency of the situation to try to pretend that that is something—
    Mr. Prescott rose—
    Mr. Heseltine: Forgive me. The hon. Member for Stockton, South (Mr. Wrigglesworth) kept the House for half an hour and I do not want to copy that example. The hon. Member for Kingston upon Hull, East (Mr. Prescott) will have one of the great privileges of half an hour of his own in which, if he wishes, to harangue the House at the end of the debate. I am sure that he will do it with his customary energy and, no doubt, his customary lack of intellectual commitment.
    The essence of the dilemma about the quality of our educational system is precisely the dilemma that my right hon. Friend the Secretary of State for Education and Science faces today. Where are the Opposition coming from? They talk about the need for an industrial strategy and training the youth and then undermine all the Government's arguments when they are trying to obtain an educational system that depends upon quality as opposed to the cash input. If ever there was an argument and an example of how throwing money at a public problem does not solve it, it is in the proposal to just spew large sums of additional cash over the educational system.
    We must be sure that authority is delegated to the headmasters and the headmistresses. We must make schools publish their standards and monitor those standards and push accountability back to local communities, including industrial communities. In other words, we must insist upon the educational system delivering the skills that industry needs, for which the jobs of tomorrow will be available.
    Mr. J. F. Pawsey: Before my right hon. Friend leaves that point, will he say a word about the comments of our right hon. Friend the Secretary of State for Education and Science on city technology colleges and the importance of bringing education into line with industry? Does he agree that the 20 CTCs that will be established are a positive step forward?
    Mr. Heseltine: I wholly support the CTCs. They are exactly rightly targeted and, if I may take a historic view, they will do something to undo the damage of the social engineering that took the grammar schools out of the city centres. [Interruption.] Not content to harangue us for half an hour at half past 9, the hon. Member for Kingston upon Hull, East is now haranguing us from a sedentary position. If I explain my reluctance to give way to the hon. Gentleman it is because in the end I am a democrat and
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    there are no Labour party supporters here but there are a large number of Conservatives. So much for the bleeding hearts that are so concerned about our unemployment. Where are they?
    When I listen to the Social Democrats—did I say Social Democrats? I withdraw the inaccuracy: Social Democrat, alone upon the Benches, supported by one member of the Liberal party—I know that the reality of the care and concern of the parties in opposition is to be seen, not in the devastation of British industry, about which they talk, but in the devastation of British democracy.
    If my party can conduct the debate in which we alone are apparently interested today, I wish to go on to the next subject which I believe needs a new thrust and initiative — the research and development programmes of the Government. Those programmes are scattered around Government Departments with no common set of disciplines or scrutiny. The Department of Trade and Industry—I believed this when I was Secretary of State for Defence—should be given a co-ordinating role to be sure that our scientific, technical and engineering resources in the public sector are not dissipated where there is no economic or industrial payback.
    It is of the highest priority where we have such limited resources, increasing though they may be, that there should be budgets and time scales and payback in order to be sure that the wealth-creating process is given the priority upon which we depend.
    We must also appraise the influences behind the disposition of the nation's savings. I want to mention just three, and I realise the political sensitivity of just one of them —mortgage tax relief, the tax-free income that is given to the pension funds and the privileges available to publicly quoted companies to buy up provincial businesses within a deferred tax regime.
    I do not believe that it would be right or fair to withdraw mortgage tax relief from those who currently enjoy it and there is a considerable argument for maintaining it, particularly for first-time buyers. But in the priorities of tomorrow, as we look ahead, I wonder whether there is a better use of public money in the industrial challenge that we face and whether we would not be right over a period to phase out that form of subsidy in order to have released to us the opportunities and the resources to deal with the wealth-creating imperatives that we confront.
    The fact is that our society does not operate within one free market economy. There are huge subsidies at work. The best part of £10 billion a year—one form of hidden subsidy after another presided over by the Treasury under all Governments—is redistributed in the way that I have outlined.
    That has the consequence of drawing the nation's savings south and of concentrating the investment of much of those savings in non-wealth-creating activities. The centralisation of power that is a consequence of such a process is debilitating to the strength of industrial, and therefore, of provincial Britain.
    We have—all Governments have—tried to counter those trends. We spent £600 million on regional policy. We spent £600 million on urban policy. But those subsidies are not commensurate to the scale of the subsidies which the Treasury provides, which have a countervailing effect.
    Finally, I want to address before the House the scale of the industrial challenge that we in Britain will face

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    tomorrow. High technology industries in the United States of America enjoy virtually total protection. They are supported at the frontiers of their capability by American taxpayers. The space, defence and strategic defence initiative programmes push America's capital excellence to the frontiers of human capability and skill and they are on a scale that Britain can never begin to contemplate equalling or matching.
    Behind the rigorously applied protection on which Congress insists, those companies are in a position then to move into the market places of the world and to compete, not just in military terms, but with all the civil adaptations which that initial taxpayer funding created.
    The Japanese economy is arguably even more protected than the American economy and it is much more heavily concentrated in the civil field. A study of how Japanese industrial excellence has penetrated American markets shows that it is, if anything, a bigger threat to the market places upon which our society depends.
    The sums of money provided by the taxpayers of those two countries push their industrial excellence to the uttermost extreme, which presents a daunting threat to the peoples of western Europe. We can only address those imbalances if Europe co-ordinates itself into a single market, with a single law and a single competitive base, and if we pool the scarce research resources that are available to us. I welcome the almost visionary plan that Lord Cockfield has masterminded. The need to implement that plan by 1992 must be at the forefront of our industrial strategy, and I welcome the commitment of my right hon. Friend the Secretary of State to it.
    In no way do I suggest that my list of priorities is exhaustive. Many more priorities could be added in our determination to provide a wealth-creating industrial ethos in this country. But I believe that that list addresses some of the central and long-standing difficulties that have beset our economy for decades, and not just during the lifetime of one Government or regime. The assumption that manufacturing industry faces a bleak futute or that tomorrow will be dominated by service employment is too simple. Someone will produce the things that we need. The danger is that it will be someone else.
    Several Hon. Members rose—
    Mr. Deputy Speaker: Order. I remind the House that overlong speeches are made only at the expense of the rights of other hon. Members.
    6.33 pm
    Mr. Ron Leighton: The House always pays great attention to the speeches of the right hon. Member for Henley (Mr. Heseltine), and did so again tonight. He may have made one or two partisan points, but perhaps that was done to ingratiate himself once again with his party. However, I hope to touch on some of his remarks.
    The hallmark of this Government, their chief product, and the memorial that they will leave behind as their legacy to the next, and for which they will be mainly remembered, is the relentless growth of mass unemployment. That is their main achievement and the main consequence of the Thatcher years. They will go down in history as the Government who crippled British manufacturing industry and brought chronic mass unemployment, quite
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    unnecessarily, back to this country, with all the waste, inequality, misery and hardship that that means. It is an appalling record of hopeless mismanagement and a crime against this country.
    In 1979, when unemployment was one third of its present level and had been steadily falling for two years, the Conservatives said that Labour was not working. Their election manifesto of that year promised more genuine new jobs, and the first Queen's Speech in 1979 did the same. That was the promise. Were ever a Government more mendacious? Was ever a prospectus more fraudulent? Has ever a failure been more utter and complete? Millions of our people have paid with their jobs for that failure. British manufacturing output is less now than it was seven years ago, in 1979, while every other industrialised country has raced ahead.
    Manufacturing investment is still 17 per cent. less than in 1979, and our manufacturing trade balance has moved from a surplus of £2·7 billion in 1979 to a deficit now of more than £7 billion. Instead of a leaner, fitter economy, we have been left with an emaciated skeleton. Vast areas of industrial Britain have been laid waste. It is the worst disaster that Britain has suffered in peacetime, and it is continually getting worse. There is no end to this carnage. Every day brings worse news. Thousands of manufacturing jobs are being added to the dole queues every month.
    At one time we were told by the Government's economic witch doctors that the way to end unemployment was to reduce inflation, that reducing inflation would be painful in the short term, but that it would provide the solution. We do not hear that now. Short-term pain has led only to long-term pain. Now that inflation is down, unemployment is at an all-time high—worse and longer lasting than in the 1930s. Even the fall in inflation owes little to Government policy. It is due to the fall in world commodity prices. Inflation has fallen everywhere, and much further in the other industrialised countries. Our inflation is still points ahead of theirs, with the loss of competitiveness that that means.
    Faced with this appalling record, and knowing that they must soon meet their maker at an election, the Government twist and wriggle. They fiddle the figures. They alter the way that statistics are compiled, massaging the figures downwards each time. That has been done 18 times since the Conservatives came to power. Perhaps it is legitimate to make some adjustments in the way that the figures are collected, but not every month, because they then lack all credibility or honesty, and make it impossible to obtain a clear picture of trends.
    Perhaps the Government think that if they keep on redefining the jobless they will redefine them out of existence by the next election. Certainly one group that will not lose their jobs are the statisticians, who constantly revise the figures downwards so that we are no longer comparing like with like. Another growth area involves the 1,500 extra staff taken on to put the unemployed through an inquisition by demanding to know whether, within 24 hours, they will get on their bikes, leave their home towns and accept poverty wages elsewhere. That is something of which the Paymaster General should be ashamed. Employment Ministers should be the champions of the unemployed, and their voice in Government. Instead, they are harassing, persecuting and hounding the unemployed. Hit squads of bounty hunters are being sent round the country to shake people off the register.

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    It is not the availability of the jobless for work that is the problem, but the availability of work for the jobless. The Government's view is that if the dole queues cannot be reduced by providing work, they will reduce them by fiddling the figures, and by intimidating and frightening people away from applying for benefit. To suggest that we have unemployment because the workshy will not walk round the corner to available work is to insult those whom the Government have injured.
    In my constituency, 3,342 people have been interviewed by Restart but only 24 have been placed in jobs. That is a fraction of 1 per cent. The Government's approach to unemployment is one of conjuring tricks, mirrors and sleight of hand to give the illusion that unemployment is falling. Apart from those bullied off the register, the other factors at present are the expansion of the community programme and the second year of YTS. As a result of them, the headline totals will be reduced. The only "jobs" being created at the moment, are part-time, low-paid jobs that do not offer employment protection, holiday pay, sick pay or pension rights, and that are mainly taken by women.
    Simultaneously, thousands of full-time jobs are still being destroyed month in, month out. Moreover, as many of those "jobs" are only for a few hours a week, sometimes in the evening, they are often second jobs, which results in double counting. The 1984 labour force survey revealed that 450,000 people had second jobs, and that 250,000 people were self-employed in second jobs. the survey showed that that practice was growing.
    The Government's wriggling reaches an extreme when, after all their failures, they try to take the subject off the agenda altogether. At the time of Beveridge, the then Government said that they accepted responsibility for the maintenance of a high and stable level of employment. That was the contract between Government and people in the post-war settlement. This Government have now reneged and given up on that. They say that it has nothing to do with them, that they are only the Government. They say that Governments have little influence and that everything is beyond their control, so we should not blame them. Of course, they did not say that at election time, but that is what they are saying now. Like Pontius Pilate they have washed their hands of the matter.
    That retreat is a terrible abdication. It is treason for democratic politicians. They say that Governments do not create jobs; customers do. But who is the customer for roads, drainage, or hospitals and the equipment that goes into them, or for schools and the furniture and books that go into them? It is the community collectively, with the Government as their agent. As the Government rein back public expenditure on those vital services, at the diktat of a bizarre monetarist dogma, they not only impoverish our society but cause unemployment. Spending is spending. It is grotesque nonsense to pretend that private spending is always meritorious and virtuous whilst public spending is not. Often, particularly when those essential services are provided publicly, the reverse is true.
    Here we can put our finger on one of the main ways in which the Government are causing unemployment. As all advanced industrialised countries become richer — this was the point made by the Secretary of State—the number of those employed in manufacturing gently floats downwards, while the number of those employed in the services, such as health, education and personal social services gently floats upwards. One process complements
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    and compensates for the other, maintaining an equilibrium of stable employment. That is what happened in Britain in the decade before 1979.
    From 1966 to 1974 employment in manufacturing decreased by 8 per cent., while it increased in personal services by 25 per cent. From 1974 to 1979 employment in manufacturing decreased by 8 per cent. while it increased by exactly 8 per cent. in personal services, but from 1979 to 1985 employment in manufacturing collapsed by 25 per cent. whereas in personal services it increased by only 1 per cent. Since 1979 there has been a violent collapse of employment in manufacturing with no adequate compensatory increase in services. We elect, rightly in my view, to provide these services publicly, and this makes them vulnerable to Government cuts. The Government have caused unemployment by engineering the collapse of British industry and by reining back expenditure on, and therefore employment in, our public services.
    The National Health Service is a good example. The Office of Health Economics sent us a booklet recently that gives us the facts. It tells us that in 1960 Britain was one of the nine largest spenders on health care, but we are now the smallest spender among the western developed countries in terms of percentage and of national wealth. The OHE tells us that over the past six years relative spending in the United Kingdom has fallen behind the OECD as well as the European average by as much as 25 per cent. annually. Countries such as the United States of America, Sweden, West Germany, the Netherlands and France all spend very much more than we do in absolute terms and as a percentage of gross domestic product.
    Further evidence comes from Eurostat, which is the statistical office of the EEC. It gives figures for what it terms social protection, which is social security, health provision, housing and social services. As a percentage of GDP, Britain is at the very bottom of the EEC league table. This means that the Government have unnaturally and perversely reduced the growth in employment that we would have had in these services. Their main effort now is the privatisation of auxiliary services, and this merely leads to fewer people being employed and dirty hospitals. This hostile and wrong-headed approach to our great public services deprives our people of the standards that they desire and is one of the causes of unemployment.
    My second point is directed to a subject to which the right hon. Member for Henley addressed himself. The other main area in which the Government's delinquency is causing unemployment is British industry. The Government adopt the same philosophy and accept no responsibility. They say that it is nothing to do with them and that everything is to be left to market forces. If large swathes of British industry disappear, they show no concern. Yet that lack of concern and inaction is responsible for the growth of unemployment. As the Government stood back, doubtless muttering monetarist catchphrases, 1·7 million jobs were lost in manufacturing between June 1979 and June 1983. A quarter of British manufacturing industry was destroyed in three years. That appalling fact alone would justify driving the Government from office.
    The collapse of manufacturing pushes the rest of the economy into decline. If fewer goods are made, less transport is needed to move them and less steel is needed, and so the list continues. As the Government stood back complacently, the healthy surplus in trade in manufactures which they inherited was transformed into a frightening

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    deficit, for the first time since the days of the Tudors. Only the foreign exchange that is earned by North sea oil temporarily disguises the disaster.
    I agree with the right hon. Member for Henley that unemployment cannot be tackled without an industrial policy, which is what the country is crying out for. The Government's blindness and ideological obstinacy is suicidal for Britain. Perhaps there are historical reasons for these attitudes. Perhaps business and politics have been kept at arm's length because the first industrial revolution that happened in Britain took place spontaneously, as it were, and was independent of Government support. At that time Governments were probably largely unaware of the changes that were taking place. Perhaps the tradition of non-intervention stems from that period.
    That is in sharp contrast to our industrial competitors such as Germany and France and, even more so now, Japan. In these countries, which were often seeking consciously to emulate Britain's industrialisation, there was Government involvement and initiative from the beginning. We might recall that Bismarck's Prussian railway system was publicly owned from the start. It used German-made rails and rolling stock that were ordered from the developing iron and steel industries of the Ruhr. A comprehensive system of vocational training was introduced and the banking system was developed to provide long-term finance to domestic industry.
    This has all been brought to a fine art in Japan, where there is no nonsense of a hands-off attitude. The MITI, the Ministry for International Trade and Industry, directs and guides industrial development and the assault on world markets like a military operation. When Japan decided to create a motor car industry, it produced 2 million cars in the first year. What is happening to the British motor industry by contrast? It was once a major world supplier, but we now buy over 60 per cent. of the motor cars for our domestic market from abroad. If we cannot make motor cars, what are we to make and how are we to earn our living? Hundreds of thousands of jobs have been lost in the motor industry, and many more have been lost because of the knock-on effects in the steel industry, in tyre producing plants and in the industry that produces and supplies spare parts.
    Mr. Andrew Rowe: Is it not a strange fact that fits ill with the hon. Gentleman's argument that Jaguar, now that it is a private company, is creating jobs, and that the motor car industry, which has been in public ownership for a long time and throughout the whole of the decline in employment, is struggling to emulate Jaguar's example?
    Mr. Leighton: I welcome Jaguar's success, but I think that the hon. Gentleman will find that the progress of Jaguar was dependent upon the injection of public money in the past. Jaguar was the successful part of Leyland and it was privatised.
    Do the Government care about what is happening to the motor car industry? Do they have a view? Do they accept any responsibility for whether we have a motor car industry? Are they willing to see it go the way of the motor cycle industry, the typewritter industry and others, and disappear altogether? Do they not realise that that attitude is the mother and father of unemployment?
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    I demand a Government who will take responsibility. Our domestic producer, Austin-Rover, has under 20 per cent. of our own market, and recently the Government tried to sell it off to the Americans. Can anyone imagine the American Government, or people allowing their motor car industry to fall into foreign and possibly hostile hands? No other country in the world would take that view. We must have a Government who take responsibility on behalf of the whole people, in the national interest, for employment and industry.
    There is a great divide between the modern Conservative and Labour parties. The Conservative party believes that unemployment is a force of nature like the weather, or the plagues of the middle ages, which Governments cannot and should not try to do anything about, but we are in politics because we believe that these forces must be brought under democratic control and subordinated to the needs of flesh and blood. That is the main purpose of democratic politics in modern times. I remind the House that the plagues were brought under control by collective effort. Likewise, it is possible to end the waste of lives and resources and bring an end to the social divisions that are caused by the plague of mass unemployment. All that would be possible if we willed it and showed the necessary imagination, intelligence and determination.
    This will be done when we have a Government who shoulder the responsibility gladly and make it their chief aim of policy, and subordinate all else to that end. It will be done by a Government who mobilise the energy of the people behind a proper industrial strategy which achieves the necessary investment and research and development and initiate a thorough-going training programme. We must have a Government who will create the wealth to fund the expansion of our great public services so that we can be proud, and not ashamed, of our schools, hospitals and social services, and the employment that they will create. Of course this can be done, and we should make a start now. We must lift the curse of unemployment from our people. If this Government, who now have the support of only a third of the electorate, are not willing to do that, they should make way for those who are.
    6.48 pm
    Mr. Esmond Bulmer: I believe that the Queen's Speech will be welcomed by industry because it is consistent and short of measures that it will have to assimilate. I believe also that industry welcomes the progress that has been made since 1979. Unlike the right hon. and learned Member for Monklands, East (Mr. Smith), it has not forgotten the winter of discontent. It has taken great satisfaction in the Government's success in controlling inflation and introducing a framework of industrial relations law that has done much to improve our competitiveness.
    If we are to be really competitive, we must abandon the annual fix, the wage round. If the Labour party were to bring itself to think more in terms of profit share and merit increases, and if it were really serious about creating new jobs, it would join us in going down that road.
    I believe that industry welcomes the Government's promotion of free trade and the success of the last GATT round. My right hon. Friend needs to be rather more robust in his approach to the Japanese. The position about

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    whisky is a crying scandal and the Government are under no illusions about how industry feels about the need to join the European monetary system.
    Industry welcomes the promotion of a free market, the abolition of pay, dividend and exchange controls, the privatisation programme, and the moves to wider share ownership. This evening, I should like to explore the limits that the Government are prepared to put on the operation of market forces. Marx described the drive to monopoly as the Achilles' heel of capitalism and we have seen a huge growth in takeovers. In 1983 they were worth £2·3 billion, in 1985 the figure was £7 billion and for the first six months of 1986 it is £8·4 billion. It is hardly healthy to see many large companies preferring to trade in other companies rather than developing their research programmes and producing new products.
    Those takeovers that produce the quickest returns are in the same product area, confer price leadership and lead to a rapid reduction in excess capacity. Some of these takeovers may fall foul of the Monopolies and Mergers Commission, but the majority will not because they are carried through for diversification. Usually, they involve a degree of asset stripping and sometimes they are an ego trip for individuals. Of course, some are desirable because they are sleeping giants which need to be stirred, but the analysis carried out by Professor Franks at the London Business School of nearly 3,000 companies involved in takeovers over 30 years, showed that, measured as a combination of share price movement and dividend payments, the return was lower than before.
    That is one of the criticisms that can be levelled, but another is what the fear of a takeover does to the management of companies, the extent to which it leads managements to cut research and development because they fear that if they make a sizeable investment the costs incurred will cause their profits to dip and that is when the bid will come in. That short-term problem must be addressed. The position will be made worse by the changes now occurring in the City of London. Clearly, many American hankers have creative ideas about how to break up a number of large companies and of course, the fees are enormous. Argyll had to pay £30 million for its effort to take over Distillers. If a large American tobacco company had wished to take over Distillers, could the Government, in the light of their experience with British Leyland, have stood hack?
    I wonder how far my right hon. Friend has thought about what he will do if in the coming months a series of British household names come under attack as a result of the massive new sums of money that will now flow into the City of London. We have some sort of failsafe mechanism for dealing with works of art, but as far as I can see we have no such mechanism for our major companies. It is hard to believe that either the French or the Japanese would allow a significant company to pass into foreign ownership. Another fear is that takeovers are often unhealthy in that they are too highly geared. The fear of the junk bond syndrome is real and it was the reason for my right hon. Friend referring the bid by John Elliott for Allied to the Monopolies and Mergers Commission.
    I have another fear about the mismatch between the power of the manufacturer and the retailer. Under British law, two manufacturers seen talking together and with 3 per cent. of the market could find themselves in real trouble, even though the retailer has 30 per cent. of the market. The concentration of buying power is forcing out
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    many medium-sized companies and if my right hon. Friend examines the figures he will see that such companies are disappearing at an alarming rate.
    The remedies do not all lie with Government. As David Walker of the Bank of England reminded the CBI conference, who is it that puts pressure on pension funds to perform? Often it is the company which complains that its future is in the hands of 25-year-old fund managers. Clearly, there is a need for companies to talk more often and more freely to their institutional shareholders and to establish that most elusive of goals, the sustainable growth rate. In Japan, lower returns are accepted because the Japanese put growth first and those low returns are accepted because there is no capital gains tax and the return comes in that way. I hope that my right hon. Friend the Chancellor of the Exchequer will consider that argument.
    The Government have accepted the need to look at these problems again and are engaged in a review of competition strategy. They will need to define the market, and I hope that they will accept the concept of regional monopoly. That is especially important when one considers the role of television, because television companies have monopolies. If a manufacturer wishes to produce a new product and sell it through two retailers with 30, 40 or 50 per cent. of the market and those retailers will not give clearance for such a new product, the product cannot be launched.
    On another level, some large companies might wish to compete on a continental or even a global basis and there are strong arguments for allowing them to grow to the point where they can compete in world markets. I think there is sympathy in Whitehall for this, but Brussels must not be forgotten and increasingly, competition strategy may be orchestrated from there.
    Large businesses can pose a substantial threat to small businesses. That has long been recognised in the United States where there is a system of law designed to
    "prevent powerful business combinations from driving out of business the small dealers and worthy men whose lives have been spent therein".
    That was how the Surpreme Court put it.
    I hope that, in his review of competition strategy, my right hon. Friend will consider some of the arguments put to him, especially those advanced by Dr. Anderman, a professor of law, who is an expert in American anti-trust legislation. His advice is that British competition policy should be reformed to include explicit support for small business. There should be more opportunities for individual firms affected by infringements of competition laws to take the initiative to enforce such laws by private actions, and the rules of competition should be more clearly defined.
    The Government will be wary of too close definition, which may prejudice the pragmatic approach. Having accepted that there is a case to be answered, let us hope that a way can be found through a difficult series of judgments that will facilitate the growth of companies that can play a global role, especially in the fast-growing market in the Pacific; that will provide companies with clearer guidelines on what will and what will not be permissible; that will define product and market areas more clearly; that will offer greater protection for small businesses from the abuse of power by larger companies; and that will recognise that market forces that are allowed to operate in a way that puts the short term above the long

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    term can be deeply destructive of our best interests. If my right hon. Friend can find his way through this minefield, he will deserve the thanks of us all.
    6.58 pm
    Mr. Ken Eastham: I found the speech by the hon. Member for Wyre Forest (Mr. Bulmer) extremely interesting and a little stimulating. He seemed to be expressing a panic felt in business circles because of firms being taken over. That is the sort of thing from which Opposition Members have suffered for several years, because we have seen many takeovers which resulted in people in industry losing their jobs. Now we are seeing a new dimension, because foreign money is coming into Britain and a new group of people are in panic in case they are displaced from their jobs in big business and management. I hope that hon. Members will take seriously the speeches made in the debate and some of the speeches that we make from time to time in which we make passionate appeals for consideration by the Government.
    I was employed in manufacturing. Few hon. Members come from manufacturing industries. By and large, we have solicitors, barristers, accountants, writers and journalists, but hon. Members who have worked in manufacturing are thin on the ground. One of my hon. Friends, who is the oldest Member in the House, often said to me that most hon. Members have never made a mousetrap in their lives. I understand his sentiments.
    I draw the attention of the House to a deputation on behalf of GEC Manchester which met hon. Members today in one of the upper Committee Rooms. I worked in manufacturing for that company when it employed 25,000 people, but it is now doubtful that even 4,000 people work there. That lobby told us that the final thrust of redundancies was about to take place. It seems to be the fag end of turbine manufacturing in GEC Manchester.
    I should not like the House to think that I am making a special plea only because of the position of GEC Manchester. It would be unfair not to recognise that the same crisis is occurring in NEI in the north-east. My hon. Friend the Member for Gateshead, East (Mr. Conlan) has raised the problems of the power industry in an Adjournment debate and my hon. Friend the Member for Jarrow (Mr. Dixon) has referred to it also. I cannot emphasise enough to Ministers that the power industry is facing a crisis because of a lack of orders. That problem is not due in any way to inefficiency, bad work or late deliveries. Indeed, the power companies have competed successfully abroad. But sometimes foreign orders dry up. If we are to continue to have a British power industry, it is essential that the Government assist.
    Mr. Nicholas Winterton: I hope that the hon. Gentleman will not be inconsistent. It is my understanding that both companies are involved in the construction of nuclear power stations. How would the hon. Gentleman equate his remarks about appealing for Government assistance with the fact that his party is apparently against the development and building of nuclear power stations, which feature prominently in the construction of both companies?
    Mr. Eastham: I am sorry that the hon. Gentleman misunderstands the power industry. I am thinking of turbines, and it does not matter whether the fuel is
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    conventional, fossil or nuclear. I hope that on this occasion we shall not deceive the House by going down that road. Electricity generation depends on large turbines and the heat source does not matter. I am addressing my remarks to the power industry—namely, the production of turbines. The Secretary of State made great reference to nationalised industries. I am referring to private companies—they are not failures—which face the same crises suffered by even the nationalised industries which people attack from time to time.
    Only a few years ago the Government said that they intended to set up a new power station every year for 10 years—10 new power stations.
    Mr. Bernard Conlan: Nuclear.
    Mr. Eastham: My hon. Friend says, "Nuclear." Whether nuclear or conventional, we have now had more than seven years of Conservative government and they have not yet placed one order for a power station.
    The Government have no excuse. All the experts recognise that in the 1990s we shall face an energy crisis. The present power stations will be decommissioned and replacements are required. It can take up to seven years to construct a new power station. It is imperative that this major decision be taken now. The Government cannot rely on the excuse that they are waiting for the outcome of the Sizewell inquiry. It is recognised that fossil fuel as well as nuclear power stations are to be built. I assure the House that the heat source chosen makes no difference—the power stations are still required, and the Government have a duty to the nation to place the orders for them now. It is a scandal, and even crazy, that Britain is importing energy from France. Cables supplying power equivalent to that produced by two power stations are bringing electricity from France. France runs its electricity generation system at a massive deficit. It appears that we are buying French electricity to offset some of France's losses and, possibly, to balance their trade. At the same time, we are destroying our power industry.
    It is crazy that Britain has the capacity, skill and resources to build power stations, but, even with that information staring the Government in the face, they still will not place orders for new power stations. The Government should place two orders this very week, not next year or after the general election. I may be wasting my time appealing to the Secretary of State. He may say that he is responsible for the Department of Trade and Industry and that employment is not his worry. But we are all responsible. The Cabinet is jointly responsible in the major issue of power generation.
    Power stations could he helped in other ways during this crisis — for example, in small measure through refurbishment. Rotors and blades are urgently needed in some power stations. Those are some aspects where deficiencies could be made up until some orders get rolling again. It is a tragedy that the deputation which I met should have to tell us that there is no future for them in the power industry.
    Mr. Peter Thurnham: As someone who has spent many years working in the turbine manufacturing industry, I obviously feel strongly about the hon. Gentleman's points. If he is dissatisfied with the way in which decisions are made in the electricity industry, as presently constituted, does he suggest that it would be better privatised?
    Mr. Eastham: I am nonplussed by those remarks. The two largest manufacturing companies involved in power generation in Britain are privately owned. I do not understand the question. The customer, in the main, is the Government. When we talk about power stations, we are talking about billions of pounds. Therefore, it cannot be left to a small company or some board to say that it is prepared to buy a power station. It is beyond that. The dimension and scale of a power station depends on a Government making the decision.
    I would be grateful if, for once, the Minister during his reply could find time at least to comment on the power industry and give some hope to the skilled men who are now losing their jobs through no fault of their own.
    The Secretary of State mentioned how the economy was picking up. He said that everything was rosy. However, he did not mention mass unemployment. Things are not rosy at all. Unemployment is creating poverty in the major cities on a scale that has not been seen since the industrial revolution. I have a document which refers to poverty in Manchester. It refers to an area adjacent to GEC Manchester at Trafford Park. I am not talking about Greater Manchester or the 10 districts, but about one small area.
    The document says:
    "unemployment has increased from 11 per cent. in 1978 to a staggering 24 per cent. in 1985 … half of all Manchester residents are having to live below the poverty line … In October 1985, 45,700 residents were unemployed, that's 25 per cent. of Manchester's workforce … 43 per cent. of those are under 20 years of age and 37 per cent. of those aged 20 to 24 are unemployed."
    In all honesty, the Minister cannot stand at the Dispatch Box and tell us that everything is rosy in Britain when one can see the misery, poverty and unemployment in the city that I represent. I know that my city is not alone. The problems are the same in the north-east, in Scotland and in Northern Ireland. It is one catalogue of events after another. I denounce and refuse to accept the statement that everything is so successful under this Government. In fact, it has been a disaster.
    I remember the debate about Westland helicopters earlier this year. Hon. Members spoke about the bright future during that debate. I was particularly interested and took part. I was involved because, being an engineer, I have a special concern for the men on the shop floor. Unfortunately, the debate seemed to dwell on the trouble and difficulties of the Prime Minister and the resignation of two Cabinet Ministers. Other than my speech, very few people even mentioned the Westland helicopter engineers.
    At that time, the management was soothing the workers and telling them that their jobs were assured. However, I can now tell the House on good authority that there are already serious closures in the experimental department. That means that there will be a loss of design capability. Until now, Britain has led the way in rotor head design for helicopters. We will not be the leaders if design and research are being cut. We will be dominated by America, as some of us felt at the time. It will be a screwdriver job. Westland will no longer have the initiative, drive and expertise to compete in the making of helicopters.
    The Government have their greedy eyes on Rolls-Royce. They are waiting like vultures to take over. I can assure the Minister and the House that it gives the workers of Rolls-Royce no confidence to think that the company may be privatised. The Government think that the solution to everything is selling off and privatising. We
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    should remind ourselves that Rolls-Royce was privately owned. It suddenly went into a crisis and had to be nationalised—not by a Labour Government but by a Conservative Government. Within a matter of days, that Government had to introduce legislation. They could not afford to allow the company to go under, so it was nationalised. It is now making handsome profits and is successful nobody can deny that. Because of that, the Government now think that it is timely to do the plunder job. They want to plunder the assets and take the profits, as if there was something clever about it. It is a disaster. I can assure the House that the work force recognises the dangers. If Rolls-Royce is privatised, hundreds, possibly thousands, of workers know that they will lose their jobs.
    I am a Member of the Select Committee on Employment. A month ago, we visited Japan. We learned much from that visit. Both sides of the Committee recognise the great difference in the attitude to man management. For instance, there was far less brutalisation. The management was concerned about the work force and wanted there to be jobs. The management wanted the workers to share in the prosperity. That is the sort of thing we do not see. If one wants any proof of that, there is adequate documentation of the visit and there are hon. Members in the Chamber who witnessed some of the interviews that took place. There is far more co-operation between the Japanese Government, management and work force. There is also higher investment and twice as much research. That is why Japan has been so successful.
    We went to a small company and spoke to a man who called himself a small employer. He employed 82 people. If Britain continues on its present course, that will soon be a big employer in this country. He told us that he could afford to buy a new robot which cost £250,000. He borrowed the money from the bank at a rate of interest of 4⅛ per cent. In Britain, the rate of interest would probably have been about 16 per cent. or 18 per cent. Is it any wonder that Britain cannot compete? The fact that we cannot compete with other countries is not due to a failure of the workers.
    When the Government have been in office for nearly eight years, it is a great tragedy that they have learnt no lessons whatsoever. They can send people abroad who come back with all the facts. They can go and see the successful companies and recognise how they were successful, but they still refuse to learn the lesson. Not much has been said about this. At the moment we are faced with the prospect of a massive balance of payments crisis. That crisis is looming now, and the Government know it. Unless they jump and run quick for a general election, that crisis will be on their shoulders. Only politicians and the economists recognise how serious the matter is, yet the Government, again, are still ignoring the lessons. They think that it is far more satisfactory to have people on the dole, producing nothing and earning nothing, rather than doing productive work.
    I conclude with a sincere and passionate plea. I wish that the Government would seriously take on board my remarks about the power industry. For goodness' sake, do not let us wait until after the Sizewell inquiry. The two new power stations could save the day. That is my plea.
    7.20 pm
    Sir Ian Gilmour: I entirely agree with the hon. Member for Manchester, Blackley (Mr. Eastham) that unemployment is still desperately

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    serious, but I should like to begin by being the first speaker in the debate to congratulate the Government on the recent fall in unemployment. This is the first occasion in the past five or six years, when I have been making speeches on the economy, that unemployment is not higher than it was the previous time that I spoke.
    Dr. Norman A. Godman: May I correct the right hon. Gentleman in one regard? Unemployment in Scotland continues to grow, and that was acknowledged by the Secretary of State for Scotland in a speech that he made in my constituency but two weeks ago.
    Sir Ian Gilmour: I am sorry to hear that. In fact, I did know it, but I was talking about the overall figure. The hon. Gentleman will agree that it has gone down.
    Some critics have claimed that the recent fall in unemployment is the result of the Government fiddling the figures again. The hon. Member for Newham, North-East (Mr. Leighton) said that today. I do not believe that such claims are true. Many of the new jobs may not be so-called "real jobs", but I have always advocated an extension of the special employment schemes, so I am far from complaining about that. People employed in youth training and other special schemes are doing useful jobs for the community and themselves.
    I have always thought that market forces would need much help from the Government, and they are now beginning to get it. I also welcome the Government's change of heart over demand management, otherwise known as reflation. I would not use the term "U-turn" because that would he indelicate, but clearly there has been a change. As with unemployment, I have always believed that market forces would need help if adequate overall growth were to be achieved. There are now reasonable signs that the Government are set to adopt a more expansionary fiscal stance.
    Again, as over the unemployment figures, there are those who believe that the change in policy represents a mere electoral conversion and that the Government will revert to their previous policy after the election. I do not believe that at all. I am sure that it is not true, but if it were, it would constitute a strong argument for more frequent elections. More frequent elections would be a great benefit to the Labour party because it could fight an election on its present crazy defence policy and so on, get beaten, start again, and possibly hope to get something better. However, I do not believe that more frequent elections would help the alliance because it already changes its policies more than once a year, so more frequent elections would not make any difference.
    While I welcome the Government's new flexibility, I am, like a number of my right hon. and hon. Friends, worried by the continued absence of an overall economic strategy. We all know that for growth to be enough to bring down unemployment and to be sustainable in the long term, it has to be more than the growth in productivity and there has to be balance between the various components of demand. Investment, particularly in manufacturing industry, must rise at least as fast as output, and exports must rise as fast as imports. As we know, that has not happened since 1979. Overall growth
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    has been so slow as to cause a rise in unemployment of about 2 million. The component parts of that growth have been disturbingly unbalanced.
    Practically all the rise in domestic demand since 1979 has taken the form of public and personal consumption, particularly consumption of consumer durables, which has risen no less than 30 per cent. on the strength of the credit explosion. Yet output of manufactures, even after its recent welcome rise, which my right hon. Friend the Secretary of State spoke about today, is still 4 or 5 per cent. lower than in 1979. So, more than the entire rise since 1979 in British demand for manufactured goods has come from imports, which have risen by nearly 40 per cent. As if that were not enough, investment in manufactures, so crucial if we are to be able to build for the future, is currently falling. In the third quarter of this year it was no less than 22 per cent. lower than in 1979.
    The very high level of interest rates must have been partly responsible for that fall in investment. If I can make a short digression: it has become rather difficult to characterise the Government's monetary policy or to know exactly or even approximately what it is. Once upon a time, monetary policy was measured by the growth of the so-called monetary aggregates. By that criterion, monetary policy has been extremely expansionary as most of the monetary aggregates have been going up by between 12 and 20 per cent. over the past year. That does not—except to one or two people — herald a large rise in inflation. The huge growth in the money supply is simply the consequence of a huge increase in lending, mainly to households. In the year to June 1986 net lending to the personal sector reached a staggering total of £29·3 billion. a sum equal to some 12 per cent. of total personal disposable income, and 26 per cent. up on the previous year.
    It is a remarkable paradox that, by the monetarist criterion, monetary policy has been extremely slack, while by the interest rate criterion, monetary policy has been extremely tight. So, if we take everything together, the effect of monetary policy on the increased demand has been almost wholly perverse, stimulating consumption and restricting investment.
    Meanwhile the balance of trade in manufactures has deteriorated by over £10 billion, driving the current account into substantial deficit in the third quarter of 1986. It is structural deteriorations of that sort that should now be a cause for very serious concern. I am afraid that I do not think that the Government's attitude to the situation is defensible. Dangerous and deeply entrenched structural declines require strategic thinking and planning.
    The Treasury is now forecasting a current account deficit of about £1·5 billion next year, although that is only a little more than occurred in the third quarter of 1986 taken by itself. Many independent forecasters think that it will be more than that, and I am inclined to agree with them. But even if the deficit is only £1·5 billion next year, it will be a great deal larger the following year. The prospect at present is that it will continue to get progressively larger in following years, at least so long as the growth of output continues. Of course, if it does not continue, there will be a large increase in unemployment again. The decline in oil production and the trends in trade in manufactures will ensure, by one route or another, that we enter a new era of economic decline possibly combined with renewed inflation. That was the conclusion of the Aldington report a year ago, which has not been

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    adequately answered either by the Chancellor of the Exchequer or by the Treasury in their evidence or reply to the Select Committee.
    There have been several suggestions on how the situation should be dealt with. I have put forward some before, but that would be another speech, which I shall not make now. What is needed is such support for British manufacturing industry, whatever form it takes, to enable —or force—it to be competitive in world markets.
    There is, therefore, a great deal of consolation for the Opposition and the alliance in the fact that they are going to lose the next election. There will be a nasty crisis in the next Parliament and the opposition parties can count themselves lucky that not they but my right hon. Friends will he dealing with it. It will be a difficult and unpleasant task. Instead of waiting for that crisis to arrive, I hope that my right hon. Friends are taking steps to prevent it. Unfortunately, there are no signs of them doing that at present, but I hope that before long we will see such signs.
    7.30 pm
    Mr. James Lamond: This has been an extremely interesting debate. I wish first strongly to associate myself with the remarks made by my hon. Friend the Member for Manchester, Blackley (Mr. Eastham), and especially those about the turbine manufacturing industry. Like my hon. Friend, I was an engineer before I came to this House. I am honoured to say that I am sponsored by the Amalgamated Engineering Union Technical, Administrative and Supervisory Section. Many hundreds of our members are involved in the turbine industry. As the Government procrastinate month after month and year after year, they should remember that, when the day comes when they decide to place the orders or instruct the orders to be placed, the skills and ability to manufacture the turbines may have disappeared. They cannot be retained for ever if no orders come in to sustain them.
    Another interesting contribution to the debate came from the right hon. Member for Henley (Mr. Heseltine), who told us about his views—some of which differed fairly radically from the points made by the Secretary of State. Getting a little away from the subject of today's debate, the right hon. Gentleman spoke about mortgage interest tax relief. It was interesting to note that he believes that that is, perhaps, taking far too big a proportion of the amount of money available for public spending. Although the right hon. Gentleman was careful to hedge around what he proposed should be done, I wonder whether he put this and the other views that he expressed this afternoon in Cabinet? We shall never know. It would be interesting to know whether the Cabinet seriously discussed his point about mortgage interest tax relief and whether and why it rejected his proposal.
    I want to remind the House of the time, some years ago now, when there was a Labour Government and the Prime Minister was Leader of the Opposition. I clearly recall her attacks on the Labour Government. She suggested that anything the Labour Government did to try to increase employment was not creating real jobs. She used to cry for real jobs. In fact, she used to call out, "Not real jobs," from a sedentary position when we were doing our best to create employment.
    I do not know exactly what the hon. Lady meant by "real jobs". However, I cannot believe that, if she were sitting on the Opposition Benches today, she would have
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    allowed the many different schemes put forward by this Government, in an attempt to mop up young people off the unemployment register through the Restart programmes and so on, to come within her definition of real jobs. Nor can the Opposition accept the Government's cry now that all that they can do is create an environment in which jobs can be created by industry. The right hon. Lady placed the blame for unemployment fairly and squarely on the shoulders of the Labour Government. Those of us who have been Members for some time can remember the campaign of 1979 and the well-known posters—which have already been referred to — which stated that "Labour isn't working". The posters claimed "Labour isn't working", not "Industry isn't working". Apparently the Government were at fault if there was unemployment then, but now the Government wash their hands and say that they can do very little about unemployment.
    I do not want to detain the House for very long. It is only a week or so since I spoke about unemployment in my constituency. The employed and unemployed people in Oldham do not recognise the Britain that was described so touchingly by the Secretary of State today. He said that everything in the garden was lovely—investment was increasing; employment was increasing and new businesses were starting up all over the place. That was the picture that the Secretary of State painted.
    Mr. Nicholas Winterton indicated assent.
    Mr. Lamond: I am astonished that an hon. Member from the north-west who is deeply involved in the textile industry should be nodding and suggesting that, for once, he supports his own Front Bench. I cannot believe that the hon. Gentleman thinks that that is the picture in the north-west.
    In my area we rely heavily on manufacturing industry, but the number of people unemployed is increasing all the time. The number of job vacancies is something like one for every 24 people who are unemployed. It is not a matter of these people lying in bed all day, not looking for work or having to be sent for and asked if they are making a real effort to find work. Of course those people want work, but there is no work in that area.
    The Minister attempted to defend the questionnaire, which urges the unemployed to move, as a simple effort to comply with the law as it has always stood. The problem is how can the law and the regulations be applied. Are they applied with compassion or absolutely ruthlessly?
    In order to drive down the number of people registered as unemployed—not the number of unemployed but the number registered as unemployed, which is different — and so to save the face of the chairman of the Conservative party who I think has a position in Government—
    Mr. Kenneth Clarke: My right hon. Friend is the Chancellor of the Duchy of Lancaster.
    Mr. Lamond: Yes, he is the Chancellor of the Duchy of Lancaster. I am sure that he is well paid for that job, although I do not know how much time he devotes to it.
    However, the Government are trying to save the right hon. Gentleman's face because he said that if unemployment is not below 3 million by the next election, the Tory Government are not worth re-electing. Of course, we agree with him. Even if unemployment is below

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    3 million, the Conservative Government are not worth reelecting. In order to reach that figure, the Government have applied the new questionnaire absolutely ruthlessly.
    Let us suppose that one of my constituents wishes to move to London. I have met such people and I have tried to help them get jobs as bus drivers and so on, but the Minister's Department does not help. The Department denied my constituents a grant to move to London and allowed it only after I had made representations.
    However, putting that aside, let us assume that one of my constituents has found a job and has received assistance to get to London. Can anyone imagine how difficult it is to find rented council accommodation in London? If my constituent wanted to buy even the most modest accommodation, can any hon. Member believe that he would find somewhere to house his wife or family within 10 miles of London for under £75,000? That would be pretty difficult. My constituent's home in Oldham—which might be quite comfortable—may be valued at £25,000. If he sells his home and buys one at £75,000, he will have an enormous mortgage around his neck.
    It is economically impossible for my constituents to move even if there are jobs available in London. My constituents do not understand where is the wonderful booming Britain that Ministers continually describe.
    Efforts are being made in Oldham to provide more work in the area. The Secretary of State for the Environment made an extraordinary attack on local authorities in yesterday's debate. He seemed to think that every Labour councillor in the land was some kind of devil, albeit a democratically elected devil, determined to drive all employers out of the local authority area. That is completely untrue. Oldham metropolitan borough has made great efforts through its industrial development unit to attract industry to the area. Of course there has been an enormous rundown in manufacturing industry. The textile industry has been almost ground into the dust. I do not suggest that that process began in 1979, because it began many years earlier, but with the limited resources available the local council has done its best to encourage new industry in the area.
    My hon. Friend the Member for Blackley cited the example of Rolls-Royce, which was saved for the nation by a nationalisation measure pushed through the House, as I recall, in a matter of hours. A large firm in Oldham — Ferranti — was also in dire financial trouble and would have gone to the wall with the loss of 5,000 jobs in and around Oldham, not to mention the impact on other areas of high unemployment, but for the intervention of the National Enterprise Board. I wonder how many Conservative Members remember the NEB.
    Mr. Eric Forth: The what?
    Mr. Lamond: The hon. Gentleman may not wish to recall it, but the 5,000 employees of Ferranti in Oldham are happy to recall it, because without the intervention of the NEB in taking up the shareholding and providing the necessary cash flow to save the firm, their jobs would have disappeared. Having been given a breathing space and, in my view, better management, that firm has gone from strength to strength. It is now expanding and those jobs are much more secure. The Conservative Government, of course, abolished the NEB and sold the shares at a profit. Without the intervention of the NEB, unemployment in
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    my constituency would be far worse today. The Minister should remember that any Government can intervene positively to assist employment in areas such as Oldham.
    Oldham council has also intervened positively and successfully. A multi-million pound scheme is now almost finalised for the installation of a new print plant on a site in the Hollinwood area vacated by Ferranti when it moved out of heavy engineering. Oldham council has succeeded in attracting new industry. Instead of attacking local government on every possible occasion, as exemplified by the attitude of the Secretary of State for the Environment who is supposed to be responsible for encouraging local government, the Government should recognise the great value to be obtained in assisting local government to bring new industry to these areas.
    The new plant at Hollinwood is not an isolated example. The success of the Labour-controlled council in Oldham—Labour has a substantial majority with 43 councillors out of 60—was used by the Tories in a party political broadcast as an example of how effective local government could be in attracting new industry to an area. Labour councillors in Oldham are determined to ensure that as many jobs as possible come to Oldham, but they are struggling against the odds. Council leader John Battye has said:
    "like other local authorities in Mrs. Thatcher's Britain, Oldham has had to learn to be commercially hard-nosed about such deals—"
    with firms attracted into the area—
    "since there is precious little practical assistance from Whitehall these days."
    The Minister should take that to heart and examine closely how he can encourage local authorities to be his agents in attracting industry to their areas, especially to areas such as Oldham which have been hit so hard by the decline of manufacturing industry. Many thousands of people in Oldham are out of work—three times as many as when the Government came to office.
    I shall not go into all the things that the Secretary of State forgot to mention in his rosy picture. For some reason, the highest interest rates ever are now being inflicted on this country. I shall not dwell on that, although it must surely be a measure of the outside world's confidence in Britain and its economy, save to say that people look to the Government, whether it be a Labour or a Conservative Government, to do something to bring work to areas so badly hit. There was nothing in the Queen's Speech to deal with that matter, which is of prime importance. It is the first priority of those in Oldham who are unemployed and it is of considerable concern to those who still have jobs because they know that the threat hangs over their heads, too.
    7.46 pm
    Mr. Nicholas Winterton: I am happy to follow the hon. Member for Oldham, Central and Royton (Mr. Lamond) as we have a common interest in one of the six largest employers in this country—the textile and clothing industry. I commend the hon. Gentleman and his colleague the hon. Member for Manchester, Blackley (Mr. Eastham) on the robust case that they put to the Government urging them to recognise the problems currently facing the power industry and to take certain action. That action should perhaps have been urged on the electricity generating authorities rather than on the Government, but both hon. Members made a powerful case.

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    I was sad that the hon. Member for Oldham, Central and Royton was not with me this morning when I attended the annual convention of the British Clothing Industry Association or at the lunch at which my right hon. Friend the Secretary of State for Energy was the principal guest. I shall not refer in detail to my right hon. Friend's speech, but it took up many of the poets raised on both sides of the House in this important debate on employment and manufacturing industry about the essential necessity—I use the two words deliberately — of ensuring a meaningful future for our manufacturing industry. All the other sectors of the economy — services, banking, tourism or whatever — basically serve an industry that makes something and their whole future and raison d'être must be based on a thriving and in the future, I hope, an expanding rather than contracting manufacturing base.
    Mr. Norman Sussman, chairman of the British Clothing Industry Association, was not so pessimistic as the Opposition about the problems of industry. He believes that British industry probably now has a better chance than ever before to compete in the world arena. He went on to stress, however, that the Government have a role to play in this. They cannot just sit back passively when almost every other country, developed or developing, is prepared to back its own manufacturing industry in a far more positive way than have successive British Governments.
    In the United States, Japan and recently developed countries such as the Republic of China — Taiwan —where Governments practise private enterprise, often epitomise it—if they can buy from their native industry, they will do so, and no country does that with more venom and determination than Japan, with whom we have a ridiculous imbalance in trade.
    I also visited Japan in the autumn. I know what incentives, encouragement and help the Japanese give their industry in so many devious but well planned ways. We have to play these people at their own game if we are to survive. It is no use my right hon. and learned Friend the Paymaster General saying that they have come to invest in the north-east and perhaps at Swindon with the Honda plant—that is a Trojan horse. It is primarily for their own interests. They know that, sometime in the future, somebody will put up the shutters and say of the imbalance, "Enough, no more. We will import no more Japanese products."
    The Japanese play the game very well. They have established manufacturing plants here, but they are for the benefit of Japan. Some of the schemes have been entered into as partnerships, but those who read how Japan enters partnership arrangements know that, although they might start as the minor partner, they end up as the major one. They will screw their host country into the ground for the benefit of Japan, the Japanese people and the Japanese economy.
    The Government should beware of Japanese investment in Britain. We have a duty to safeguard our manufacturing base. There are many things that I could say, but I should like to take as my text some remarks made during an excellent address by Dr. James McFarlane, the Director-General of the Engineering Employers Federation, to a meeting of the all-party group for engineering development in the Palace during the summer. He said:
    "The nations who win economic battles are those who organise themselves to do so. Like military battles, they can't
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    be left to chance. Dad's Army would have been no match for the Panzer divisions, whatever we thought at the time. Luckily the barrier of the Channel saved us from putting Dad to the test. But there are no harriers to the inflow of trade."
    Some people might ask what is so special about British manufacturing and what is the difference between it and tourism, banking or service industries. What is special is the time scale which, for manufacturing, is utterly different from that for retail, banking, travel and tourism, and trading in the City.
    Perhaps I might divert to comment on what my hon. Friend the Member for Wyre Forest (Mr. Buttner) said. Unfortunately, he is no longer in his place, but he spoke of problems that face the City. It is obscene that the banking system — primarily the merchant banks — is prepared to fund massive takeovers which will not produce one extra product or one extra job, but will make the reputation of one or two people and make one or two people and organisations, which are already wealthy, even wealthier. That money should be directed by a responsible and constructive City into the country's manufacturing base.
    What is the difference between manufacturing and retail, tourism and banking? Manufacturing cannot make an immediate and substantial return. It appears that the people who produce company reports today are more concerned with the bottom line at the end of each year than about any long-term strategy which will benefit the company, its management and their employees, many of whom are skilled.
    Is it not ridiculous that we should have had takeover bids for Distillers, Allied-Lyons, Wedgwood and now Simon Engineering up in the north-west? It is quite wrong that the City should make a quick and ready buck and not be prepared to put money into the country's manufacturing base.
    I am a pragmatic, traditional Tory. Unlike Opposition Members, perhaps, I come from a business background where we produced something. What is more, I have been responsible for paying the wages at the end of the week — a very sobering experience. If my right hon. and learned Friend the Paymaster General, others on the Front Bench and their advisers had had similar experience—it is unfortunate that many of them have had none—their attitude to manufacturing industry would be far more realistic.
    Mr. Franks: If, as my hon. Friend says, he has experience of paying wages at the end of the week, presumably he has had the experience of earning a profit. If he deemed it necessary to earn a profit, what was the difference between his business and big business?
    Mr. Winterton: My hon. Friend intervened cogently earlier. I am afraid that, with hindsight, he may regret his latest intervention. He cannot have been following the logic of my argument. Of course I believe in profit. He should bear it in mind that Vickers at Barrow cannot make a profit immediately after an investment to guarantee the City and the people who have invested in it an immediate and hefty return. People are now making much more money from the quick buck by taking money in and out of the country when the exchange rate fluctuates. It seems wrong that money should be spent on that rather than on manufacturing industry.
    The Government have achieved a great deal in regard to inflation. I am sorry that my right hon. Friend the

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    Secretary of State for Trade and Industry did not mention the problems experienced by industry because of interest rates. Interest rates in Britain are abnormally high, extremely damaging to industry and a disincentive to invest. The hon. Member for Blackley, who has been to Japan with the Employment Select Committee, said that he met there a business man who was able to borrow £250,000 at an interest rate of 4·5 per cent. If such a facility was available to British industries, there would be a dash to the banks and investment, would result which would stimulate the economy in many areas of industrial activity and, in due course, lead to a substantial number of people being taken on. Surely that is what we want.
    Sir Kenneth Lewis: I am intrigued at the support that my hon. Friend is giving the Front Bench. Does he believe that, to get interest rates down, it is time to go into the snake in Europe? That would bring them down.
    Mr. Winterton: My hon. Friend's many years in this place have given him experience that I envy. I am instinctively opposed to our entering the European monetary system. To a certain extent, I leave the decision to those who know a lot more than me. The Confederation of British Industry appears to be shifting, but my right hon. Friend the Chancellor and the Government are the best people to make the decision.
    My job is not just to be supportive of the Front Bench. It is to stand up and say what I believe, bearing in mind my experience and contacts. I have consistently been a strong advocate of manufacturing industry. I do not like being told that the clothing industry has an import penetration amounting to 32 per cent. or that the textile industry is faced with even greater import penetration. In the motor car industry about 57 per cent. of our market is imported, whereas for motor cycles the figure is 79 per cent. or even higher. Even in the clock industry there is 85 per cent. import penetration, and in leather goods the figure is as high as 63 per cent.
    Those are only some of the statistics that I could quote. I do not like to see such a development because it is unhealthy for the economic prosperity of our country. In addition, it will not help to generate employment or to reduce unemployment, to which my right hon. and learned Friend the Paymaster General and Minister for Employment is so dedicated.
    There are ways in which Government can help without stirring up inflation. Several hon. Members have said that insufficient attention is paid to research and development. That was one of the points that Norman Sussman made in his chairman's address to the British Clothing Industry Association convention today. He said that the Government should assist industry by making contributions towards increasingly important research and development costs.
    My right hon. and learned Friend may say that the Government are already doing so, but as my right hon. Friend the Member for Henley (Mr. Heseltine) said, it is no longer appropriate for one employer or company to stand alone facing international competition. We must follow the example of other countries and have a partnership between private industry and Government.
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    I congratulate the Government on making £100,000 available to the British Fashion Council. That should be warmly welcomed. It is a wise spending of taxpayers' money that can be used to extremely good effect.
    The Government should look again at the reintroduction of capital allowances. That would be welcomed by the British manufacturing industry. Reductions in corporation tax do not equate with the capital allowances that manufacturers were able to claim, and they were of great benefit. I heard that again this morning from at least half a dozen of the largest textile and clothing employers in the country. Therefore, these matters should have Government support and should be considered.
    I have spoken longer than I intended, but I feel so passionately about British manufacturing industry that I am prepared to speak out time and again from the Government Benches to say that Members with manufacturing background and experience believe that the Government will neglect our future manufacturing base at their peril.
    8.3 pm
    Mrs. Renee Short: The hon. Member for Macclesfield (Mr. Winterton) has entertained and instructed the House with a lively and forthright speech. The Government Front Bench probably did not like it, but the Opposition did. The hon. Gentleman's time on the Select Committee seems to have had some effect on him.
    There were also two notable speeches from two other Conservative Members who are no longer present—the right hon. Member for Henley (Mr. Heseltine) and the right hon. Member for Chesham and Amersham (Sir I. Gilmour). Things are certainly moving on the Government Benches.
    According to the unemployment unit, the real level of unemployment, based on evidence before the Ministry indulged in the 17 massaging operations, would be 3·9 million — more than 500,000 higher than the present admitted figures. So much for the recent fall in unemployment, and so much for the boasting of the Minister for Employment and the Secretary of State for Trade and Industry.
    The reality is that unemployment is rising, as many of my hon. Friends have said. It is rising in the north, and even in Northern Ireland where is stands at 20 per cent. of the working population. Even on the basis of the massaged official figures, 40 per cent. of the unemployed—1·3 million—have been out of work for more than a year, more than one third of them for more than three years. The figures show that more than 1·25 million young people below the age of 25 are unemployed, that under this Government unemployment has risen by more than 2 million and that there is no sign of a substantial reduction in these figures under this Government. That is the reality that we face today.
    In the west midlands, a further 125,000 job losses are expected in the next five years if this Government are returned at the next election. That is in addition to the enormous number of job losses that we have experienced so far. In Wolverhampton, 23,000 people are out of work, among them nearly 9,000 who are under 25. Many of them are young people who have never known what it is to have a job since they left school. What a recipe for social unrest. That has been the case not only in Wolverhampton but in

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    other large cities, including London. What sort of heritage is that for the Government to provide for our young people?
    The greatest disaster that befell British industry under this Government has been the fate of manufacturing employment, which has fallen by 25 per cent. Even the CBI forecasts further cuts in manufacturing. It is clear that the hon. Member for Macclesfield has been listening to the CBI.
    The Government's claim that employment has risen by 1 million in the last two years is based on a fallacy. In fact, the number of full-time jobs has fallen. The Government's claim is based on the rise in part-time work and self-employment, but those figures can only be guessed at, and as we know to our cost self-employment does not last for very long.
    Industrial production is stagnant and is actually no higher than it was in 1979. Manufacturing output is still 7·5 per cent. lower than in 1979, and manufacturing investment is still 17 per cent. lower than it was at the same time. Those figures reveal the serious situation that is now facing manufacturing industry, and they account for the very high level of unemployment.
    In 1979, the Labour Government had had five years of desperate struggle behind them, due to unfavourable trade balances and restrictions imposed by financial stringency without any of the assistance from oil reserves that this Government have had—which they have squandered to the tune of £53 billion since they took office.
    The most damaging part of the present situation is not the increased rate of bankruptcies, which are twice as high as in 1979, or the rate of company liquidations, which are more than three times as high, but the fact that our manufacturing trade balance went into deficit in 1983 for the first time ever, and is still in deficit, while manufactured imports have increased their share of the British market since 1979.
    The Government boast about cuts in income tax, but the burden of taxation as a whole has increased by 6 per cent. of GNP since 1979. At the same time, public assets are being sold off at an alarming rate, and well below their real value, to meet the demands of this wasteful Administration.
    Our industries, particularly manufacturing and construction, which are in competition not only with western Europe and America but with the great potential of the far east, are dependent for survival on three principal factors. The first is the application of up-to-date scientific knowledge and experience. That is a sine qua non for industry today. The second is having a reservoir of trained, well-educated, experienced manpower. That is also important. The third is the need for trust and co-operation between management and work force, but we do not have much of that at the present time. It is with deep regret that I must say that none of those requirements have been fulfilled to any appreciable extent uner the Government.
    We have a record of 26 Nobel prize winners in the past 30 years for scientific achievement. Japan, which everybody praises for its industrial development, has only four. There is a lesson for us to learn from that. We have the Nobel prize winners, as we should, but Japan has the industrial development and a great increase in the standard of living. Japan also has an enormous political influence in the far east and south-east Asia because it has
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    many more engineers and it has them where it matters —in the decision-making positions in industry. We do not have engineers and scientists in those jobs.
    The same applies to Germany. I have yet to come across a German engineering company of any size — even a small one—where the majority of the board of directors, including the managing director, are not qualified engineers. Again there is a plain lesson for us to learn. In the United Kingdom the high flyers, even in science degree courses, tend to gravitate towards the City, where they can earn many times their salary expectations in industry.
    In the other place an excellent Select Committee report on overseas trade published a year ago stated that labour productivity of comparable firms in West Germany was no less than 63 per cent. higher than in Britain because of our lower technical expertise, our lack of adequate education and our lack of adequate training for the work force. Have the Government taken any notice of that report? Of course not.
    In October 1982 NEDO reported that Japan produced over four times as many engineers per head of the population as Britain. Moreover, Japan maintains a continuous flow of engineers and scientists from industry back into the universities for periods of one to two years, mainly to update their expertise and knowledge, without any loss of career prospects. That is important. Why do we not do that? Perhaps the Minister will tell us.
    In all our major European competitor countries there is a legal obligation for companies to include on the board a proportion of representatives of the work force. Not only has that resulted in a great improvement in industrial relations and in the identification of the work force with their industry, but in production and industrial methods. Why do we not do that? Perhaps the Minister will tell us.
    The next Labour Government will have to face up to the need for greatly increased investment in higher education, particularly in engineering. Ways must be found specifically to improve the social and financial standing of engineers and scientists in society, to change the climate of opinion in our industrial companies—at present a mere 5 per cent. of directors have any engineering training and expertise — and to ensure that their management structure includes a majority of technically trained, experienced people at the decision-making level on the boards of directors and management boards. That is the sort of partnership—and the Government are talking about partnership—that we should encourage in industry today. I hope that the Minister will tell us how he will achieve that.
    8.13 pm
    Mr. Cecil Franks: During the debate there has been much talk of the need for greater public expenditure and frequent reference to the north-south divide.
    The north-south divide exists for real. One cannot be a Member of Parliament for the north or be born in the north without being aware of the real differences in standards of living and attitudes between the north and he south. One question that has not been addressed or, indeed, asked, is why the divide should exist. There is no logic in it. The divide certainly does not exist because of a failure in public expenditure. Public expenditure has not solved the problem in the city of Liverpool. Indeed, during my years in local government 30 miles down the road from Liverpool, in Manchester and Salford, local authority

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    colleagues of all parties and I used to look with envy and then anger at the sums going into the city of Liverpool and Merseyside, and at how they were wasted. If throwing money at a problem solved it, today Liverpool and Merseyside would be the most prosperous areas of the United Kingdom.
    It is not the quantity of money that counts, but the quality of the targeting and administration of the funds. I listened to the hon. Member for Oldham, Central and Royton (Mr. Lamond) and it is tempting to pick up the gauntlet that he threw down because I take a completely different view from him of the utter waste and squandering of funds in local government. The only difference between local government and any other nationalised industry—local government is a nationalised industry—is that with major nationalised industries, such as British Coal and British Steel, we are dealing with one company, whereas with local government we are dealing with 135 different nationalised companies, each of which is run its own way—inefficiently and incompetently.
    I want to talk about the practice rather than the theory and to ask various questions which during the past 12 months I have been asking different Opposition spokesmen, but without success. I shall talk about the effect of industry and economic theory in south Cumbria.
    South Cumbria has no special status, but it has a work force and a management which take a pride in what they do—that pride did not exist on Merseyside—and unions which take a realistic attitude. I invite the House to compare that with what happened in Merseyside and Birkenhead where the work force was hell-bent on destroying its industries and jobs, until a change in attitude and direction eventually brought security of employment and jobs.
    What alternatives do the Opposition parties offer my area? Both Front Bench spokesmen and Back Bench Members have talked about how they will create jobs. Let me tell them how they will destroy jobs, if they do what they say they intend to do. They say that they will cancel Trident, so immediately 9,000 jobs will be lost. They say that they will phase out Sellafield, which is 40 miles up the road from Barrow, so immediately 16,000 jobs will be lost in the constituency of Copeland together with 50,000 jobs throughout the country.
    The right hon. and learned Member for Monklands, East (Mr. Smith) talked about the trade deficit. Will he add to his figure the £12 billion-worth of firm orders currently enjoyed by British Nuclear Fuels, £4 billion of which are export orders? Do Opposition Members realise that the largest exporter from the United Kingdom to Japan is British Nuclear Fuels? When they and the hon. Member for Stockton, South (Mr. Wrigglesworth) speak about the trade deficit, they should add £2 billion for the loss of profits earned by the nuclear processing industry.
    I posed this question to the right hon. Member for Llanelli (Mr. Davies) in the defence debate last summer, and I posed it again this afternoon to the right hon. and learned Member for Monklands, East. What will replace the 25,000 jobs that will be destroyed over a weekend if the Labour party has a chance? It is not just the 25,000 jobs immediately but the knock-on effect. There are thousands of other jobs in shops, cafes and restaurants and in the small businesses that supply both Vickers and Sellafield. The Labour party will create an industrial desert in west
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    Cumbria because it has nothing to put in place of these jobs. When it talks about creating jobs, it should look at the other side of the equation.
    An explanation was forthcoming during the defence debate, which was endorsed at the Labour party conference. It is that a Labour Government will build hunter-killers. I presume that the right hon. Member for Llanelli knows what a hunter-killer is, as he is a spokesman for defence matters. I am not sure that the spokesmen for the Labour party on trade and industry matters know. Allow me to inform them. A hunter-killer submarine is a floating nuclear power station. The single reactor in a hunter-killer can provide sufficient electricity for a town of 50,000 people. The Labour party is saying that it will close Sellafield and destroy the jobs that go with it and the local economy because it believes that nuclear energy is inherently dangerous but, 40 miles down the road, to keep a different audience happy, it will build 15 small nuclear power stations.
    Mr. Prescott: I addressed Sellafield workers a couple of weeks ago. Even with any phasing-out proposals for nuclear energy, Sellafield will clearly be there by the end of this century.
    Mr. Franks: I listen in amazement to a responsible political party that would have the public believe that nuclear energy per se is dangerous but then says, "Don't worry. Even though it's dangerous, we shall take 20 years to phase it out." The Labour party must make up its mind on this issue. I clearly recognise, as do other Conservative Members, the inherent difficulty of trying to square a circle and to circle a square as the Labour party is trying to do.
    Not content with destroying the jobs in Barrow and Cumbria, for good measure, we have the 19th century concept of which the Labour party cannot rid itself. The Government have privatised the shipyards in Barrow with the result that 11,500 out of 12,500 employees have invested their own money in their jobs. The Labour party proposes to renationalise the industry, as though bureaucrats and civil servants can run a business better than a business man. Surely the Opposition have been down that road so many times in the past that sooner or later they will realise that state control of industry is a recipe for the destruction of jobs and high taxation. High taxation has a direct correlation to high unemployment. The two go hand in hand and one cannot ask the general public to believe that state control and state management is anything other than the road to inefficiency and incompetence.
    My hon. Friend the Member for Macclesfield (Mr. Winterton) made an important point: profit must be earned. Without profits, there are no jobs. He asked why we have such market penetration in the motor car, motorcycle and clothing industries. Is not the answer self-evident? The person who really matters—the consumer who will spend his money—does not buy a Japanese car just because he wants to but because he recognises that the Japanese product is better than the British product. Instead of featherbedding weak and incompetent management and instead of giving in to 19th century work practices and 19th century restrictions— [Interruption.] — Opposition parties ask that incompetent British management should be featherbedded by import restrictions and protection as though, by cosseting British industry, one will improve by one iota our industry. That is the direct route to destroy jobs. [Interruption.]

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    I always gauge the effectiveness of what I am saying by whether the Opposition attack my policies or my person. The more that they attack me personally, the more satisfied I am that my points are getting home.
    Mr. Tony Favell: Will my hon. Friend say a few words about how well protectionism has worked in eastern Europe?
    Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member for Barrow and Furness (Mr. Franks) must continue his speech on the amendment.
    Mr. Franks: It is tempting to go down that route and speak about protectionism in eastern Europe and the loss of liberty there and to go into the loss of liberty in any European country that claims to be socialist—
    Mr. Deputy Speaker: Order. The hon. Gentleman must address his remarks to the amendment.
    Mr. Franks: I apologise, Mr. Deputy Speaker. I was trying to deal with the intervention from my hon. Friend the Member for Stockport (Mr. Favell).
    What is the role of public expenditure? It is to supplement the private sector, not to complement or compete with it. It is there in a supportive role, to fill a gap, to build a hospital when one is needed or a by-pass when one is needed. It is not there to be in competition with the private sector, which has its own role to play. We hear calls for Government to spend more money. There is no such thing as Government money—it is taxpayers' money, the money of us all. The taxpayer is the consumer and without the consumer, without someone to buy products, all the words in the world and all the taxpayers' money is wasted. Without a consumer there is no producer. That is the fundamental lesson that the Opposition refuse to understand, but which the Government, happily, have taken on board.
    8.28 pm
    Mr. Richard Caborn: I shall try to keep to the amendment, Mr. Deputy Speaker. I thank you for calling me to speak about this part of the Queen's Speech, concerning industry and employment. I say that because I now represent the constituency with the highest youth unemployment rate in the country, and that is according to Hansard, 3 November 1986, column 394. The unemployment of young people under 25 years of age in April 1986 was 4,281, which represents 42 per cent. of total unemployment in the city. I hope that the hon. Member for Barrow and Furness (Mr. Franks) believes that those people have a lot of liberty.
    That is only part of the serious situation in Sheffield, where nearly 2,000 young people have not had a job since leaving school. Unemployment in my constituency stands at 10,500—some 26 per cent., and that is on the Government's figures. In fact, if one calculates the figures before the 17 changes that the Government have introduced to massage the unemployment statistics, the more likely figure is 30 per cent., with well over 12,000 people unemployed.
    The increase in long-term unemployment is horrific. Nearly 3,500 people in Sheffield have been unemployed for more than two years. Last Thursday I asked the careers office in Sheffield how many people were unemployed. I was told that 5,718 young people were unemployed and, that 4,753 young people were on the youth training scheme. That adds up to 10,471 young people who are
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    chasing 17 vacancies. It shows the extent of the human misery in Sheffield, Central, and that kind of human misery is experienced in many of our inner cities.
    Twelve thousand of my constituents are not, like some Back Benchers, playing at being unemployed for a week in order to gain cheap publicity. Unemployment is a disease, which cannot be understood by pretending to be unemployed. Many young people have never had a job since they left school. The pressures that are experienced by those who have been unemployed for more than two years cannot be appreciated by a Conservative Back Bencher who hops into unemployment for one week of so-called experience. It is a disgrace that he should try to obtain such cheap publicity and then walk off and make a television programme for a large sum of money.
    My hon. Friends have already said that the Queen's Speech offers nothing to my constituents. Furthermore, it provides no assistance to industry and very little assistance to local authorities that have to deal with the day-to-day problems of unemployment and its knock-on effect. The programme outlined in the Queen's Speech is an insult. No effort has been made to bridge the divide between the north and the south and the employed and the unemployed. The only growth has been the growth of the human scrapheap. The result of the programme outlined in the Queen's Speech will be that unemployment will become even worse.
    Towards the end of 1985 the Archbishop of Canterbury's commission produced its report "Faith in the City". It dealt in depth with the crisis and it called on the Government to take a series of special measures to alleviate some of the problems and to regenerate the inner cities in terms of both their social fabric and their industrial base. The Government's response was lukewarm. Indeed, certain prominent members of the Government were critical of that report. The Government's actions have been the very opposite of those advocated in "Faith in the City".
    The local authority in Sheffield has tried to grapple with many of the unemployment problems. It has tried to develop co-operatives and to have a partnership with industry. It has enjoyed limited success, but what has the Secretary of State for the Environment done? He has rate-capped Sheffield and has also reduced the amount that it can spend by £70 million. That shows the commitment of this Government to a city which has the worst record of youth unemployment in the country.
    On 7 November 1986, the president of the Sheffield chamber of commerce delivered a speech at the annual dinner of the chamber of commerce. The Sheffield chamber of commerce has been used many times in this House by Conservative Members to discredit local authorities, in particular Sheffield. However, the president said:
    "The city council is only too aware that rates can continue to increase and it is actively seeking a solution. Some ideas are now being considered, which I am certain would not have made first place in the past. I would like to make one thing quite clear. No-one—and I mean no-one—could manage this city on a rate-capped level of £258 million. It is no use arguing that if certain actions had been taken in the past, things would have been significantly different. Is that not true of most situations? Would not some industries, or companies, or football teams be more successful today, or even be still in business, if they had taken a different decision in the past? The benefit of hindsight is available only after the event."
    The president began his speech by saying:

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    "It has become almost customary over the past few years for the gentlemen of the press to use this evening to collect some 'knocking' copy against the city council. This evening, gentlemen of the press, I am sorry, but you are going to be disappointed. Since the start of our respective years of office, the Lord Mayor and I have agreed that no useful purpose could possibly be served by haranguing each other".
    That is in stark contrast to statements that were made yesterday from the Dispatch Box. Furthermore, deplorable statements were made by the chairman of the Tory party at a dinner last night. The right hon. Gentleman seems now to be so paranoiac, bitter and twisted that he could not even run a whelk stall successfully.
    This Government are universally condemned because of their vindictive, dogmatic and uncaring approach to cities such as Sheffield. If the Government do not rethink their policy, thousands of people could be thrown on to the human scrap heap in Sheffield, at great financial cost. Already the cost to the Exchequer of unemployment in Sheffield, Central is about £67 million a year.
    Moreover, there has been deregulation of transport. At one time Sheffield had one of the most efficient transport networks in the country. However, fares have been increased by 300 per cent. and a further increase is in the pipeline. Furthermore, 2,000 transport workers have been made redundant. That is the state of play today, but the outlook is even worse. There is to be a further expenditure cut of 23 per cent. in 1987–88 and there is to be yet another cut of 20 per cent. in 1988–89. That will result in a further loss of services and more redundancies. Concessionary fares may also be put in jeopardy.
    The impact of this policy on the vehicle building industry is unbelievable. Indeed, it may have dealt a mortal blow to the bus manufacturing industry in the United Kingdom. Who will gain from that? Conservative Members have shed many crocodile tears. Those who have taken advantage of deregulation by providing minibuses are continental companies. Few of the vehicles have been manufactured in the United Kingdom. Furthermore, those who benefited from the deregulation of coaches were manufacturers of coaches on the continent. Deregulation has not benefited United Kingdom manufacturers. The effect of deregulation on employment in south Yorkshire has been devastating. Voluntary organisations have had to curtail many of their activities. Deregulation has dealt a mortal blow to the social fabric of the city. For what purpose? Was it to prove a dogma or an outdated economic theory, or was it to reinforce the belief that one is never wrong?
    The Prime Minister has tried to formulate industrial policy on her feet, which is not unusual, or by writing letters to Back Benchers — for example, to the hon. Member for Glanford and Scunthorpe (Mr. Hickmet), about the privatisation of the steel industry. I warn the House that if the Government privatise the steel industry in the manner outlined in that letter, it could sound the death knoll of the steel industry. Every other European steel industry is going in the opposite direction. They are going for economy of scale. To anyone who knows anything about the steel industry, the argument that steel workers will be asked to invest their redundancy money to buy shares in ludicrous.
    I conclude by quoting part of the report "Faith in the City" commissioned by the Archbishop of Canterbury:
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    "It is not charity when the powerful help the poor … it is justice."
    That is what the British people are asking of the Government. There is no mention of that in the Queen's Speech.
    8.40 pm
    Mr. Charles Morrison: After the difficulties and gloom of the recession years, it is encouraging that some of the indicators are beginning to point in the right direction. I have no doubt that they will be helped along by the autumn statement of the Chancellor of the Exchequer. What pleased me more than anything else about his statement was the increase in capital expenditure of about £1 billion. I have been asking for that for some years. I welcome the Chancellor's action, as it will create much-needed infrastructural improvement and will push down the already falling unemployment figures a little further.
    There is some cause for quiet satisfaction about the way in which some things are going, but it is not yet time to throw our hats in the air. Although we are doing better, other countries do likewise. As we have heard, manufacturing output has reached its highest level for six years, but it is still well behind the figure for 1979 and 1980. If we take the 1980 index for manufacturing output as 100, France has reached 98—but it has mostly had a Labour Government—West Germany has reached 110, the United States has reached 119·4, Japan has reached 122·3 and Britain has reached 105·6. There is an improvement, but it is nothing like enough.
    On the plus side, since 1980, productivity has increased by 28 per cent. Even so, against that background, it is not surprising that employment in manufacturing is still falling, that import penetration is still growing and that the United Kingdom's share of world trade is still falling. Some believe that what we lose on the swings of manufacturing we regain on the roundabout of service industry. That is seriously to misjudge the position. Granted that service industry is responsible for 60 per cent. of the gross domestic product and manufacturing for only 20 per cent.; granted also that manufacturing employs only about 5·5 million people; but another 20 million people depend upon it in one way or another. Furthermore, such is the relationship in exports that a 1 per cent. fall in manufacturing exports requires a 3 per cent. rise in services to compensate.
    No one in his senses would wish to detract from the achievements of the service industries—most notably the City of London—but, relatively, manufacturing industry remains far more important. This seems to have been recognised in other countries much more than in Britain.
    Today, we have been reminded that manufacturing output as a proportion of gross domestic product has fallen in most advanced countries. The figures from the report of the House of Lords Select Committee on External Relations, Trade and Industry show that, in 1984, in the United Kingdom, manufacturing production was lower by 4·3 per cent. than it was in 1975, whereas in Japan it was 61·4 per cent. higher, in the United States it was 41·6 per cent. higher, in West Germany it was 16 per cent. higher, in Italy it was 22·1 per cent. higher and in the Netherlands it was 22·7 per cent. higher. Those figures show that, although manufacturing industry has fallen as a proportion of gross domestic product, it is only in Britain

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    that manufacturing industry has fallen in absolute terms. That is a frightening thought, which must be kept constantly in the Government's mind.
    The present state of the United Kingdom's manufacturing industry can be summed up as being much more efficient than in 1979, more productive, healthier, more realistic and more determined, but its great weakness is that there is not enough of it. What can we do to expand and develop it? There is no easy answer, but I should like to make some comments on education, attitudes and strategy, which to some extent are complementary to the remarks made earlier by my right hon. Friend the Member for Henley (Mr. Heseltine).
    On education, we must create a better qualified, better educated and more highly skilled labour force. I welcome the announcement of the city technology colleges, the two-year youth training scheme and other training initiatives, but we must recognise what is happening in other countries. For example, only 53 per cent. of our 17-year-olds are still being educated. In the United States, the figure is 87 per cent., in West Germany it is 89 per cent. and in Japan it is 94 per cent. I realise that the concept of apprenticeships may have changed, but 10 years ago in the United Kingdom there were 100,000 apprentices. Now there are 40,000. Ten years ago in West Germany, there were 500,000 apprentices. Today, there are 600,000. Much more must be done in skill training and retraining. As a prerequisite, much more must be done to interest people in skill training. Even with the current high unemployment, skill shortages exist, especially in the south of England.
    On attitudes, manufacturing industry must be given much more respect as the most important creator of wealth. If it is, it will attract more young men and women of ability. The City of London exists to manage wealth. Tourism is a characteristic of the expenditure of wealth. Service industries, to a considerable extent, would not exist without manufacturing industry to service. Those who mine, those who till the soil — they have been too successful —and above all those who turn raw materials into finished products are most responsible for the creation of wealth. Thus, they should be treated as an elite. We are not doing so to the extent that we should.
    In Britain, also, we must learn to accept that we live in a small country. From Los Angeles to San Francisco is 350 miles. From New York to Washington is 237 miles. In each case, the latter city is considered local to the former. From Dover to Carlisle or the Scottish border is a mere 392 miles. From London to Sheffield is 160 miles. Yet in each case, we treat the latter city as though it was in a different hemisphere, despite good rail, road and air communications.
    It is worth noting that the attitude in Britain is not held by incoming investors. I know of two Hong Kong Chinese clothing firms that have established factories in Britain in the past year—one in Liverpool and one just outside Newcastle upon Tyne. Those companies were established in those parts of the United Kingdom because the companies, the management in Hong Kong, having made the decision to set up business in Britain, looked first and foremost at where there was spare labour. Not surprisingly, they found that in the north and they went there. It was that consideration, not grants, which led those businesses to make those decisions.
    A major mental effort is needed by United Kingdom business men and investors in new industries to accept that
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    the British Isles are small, so there is an overwhelming argument in favour of development where there is a large pool of unemployed people and a manufacturing tradition. What is more, that must be done because there simply is not enough space to go on using up more and more land in the south.
    But Government must give a lead, and here I come, last but most importantly, to industrial strategy. My right hon. Friend the Member for Henley referred to the views of the CBI. The director general of the Engineering Employers Federation recently wrote:
    "British industry needs consistent understanding and support if it is to succeed in the hard and unforgiving markets of the world."
    The Government must constantly remember that in the harsh world free trade and competition may well be the theory, but worldwide too much trade is not free and too much competition is not fair. Hence, a developing partnership between industry and the Department of Trade and Industry is of immense and fundamental importance if British industry is to compete effectively. I was also very pleased to hear my right hon. Friend arguing again for an enhanced status for the Department of Trade and Industry.
    My right hon. Friend the Secretary of State for Trade and Industry was encouraging today. May he have continued success in his endeavours to create a climate in which industry and business can prosper. Only if he succeeds can we guarantee a healthy balance of payments, falling unemployment, inner-city redevelopment and greater national prosperity.
    8.52 pm
    Mr. Don Dixon: The Labour party's amendment refers to the lack of a Government
    "strategy for securing a continued reduction in unemployment."
    My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) was correct to refer to the famous—or infamous—remark by the chairman of the Tory party as Secretary of State for Employment when he suggested that the unemployed get on their bikes. What the right hon. Gentleman forgot was that when people who are made redundant move to an area for a job, usually the last in are the first out. My constituents have experienced that. People from regions such as mine find themselves in the midlands, or wherever they have gone for work, out of work and hundreds of miles from their friends and families. That is what happens when the Government try to turn us into a nation of industrial nomads.
    The right hon. Gentleman also forgot that the young and active tend to move away from the community. They do not take the old people's homes, community centres, libraries or schools with them. They are left to be paid for by the community and there is nothing in the Queen's Speech to say that the £400 million which the Government have taken away from the five metropolitan districts in Tyne and Wear in rate support grant is to he repaid.
    There is nothing in the Gracious Speech to help the 7,945 unemployed in my constituency. That is the Government figure. The unemployment unit figure is 9,428 people unemployed.
    In reply to my Adjournment debate last week on unemployment in my constituency, the Minister referred to jobclubs. I do not know whether that is a Government strategy to create jobs. The only jobs that they create are for the people in them.

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    I do not know whether the Minister realises what it is like to be one of the long-term unemployed. Since the Government took office long-term unemployment in my constituency has increased fourfold, from 900 to almost 3,600.
    What does the Minister think happens when someone who has been out of work for two or three years has a little envelope dropped through his postbox inviting him to go down to the jobclub? I go down to the jobclub and the interviewer says, "Look here, Dixon, they tell me that you have been out of work for a considerable time. What do you do?" I say, "Well, I am a ship's carpenter. I have worked in the shipbuilding industry." The interviewer says, "Well, I am sorry, you will appreciate that the shipbuilding industry has run down. There is no shipbuilding on the south side of the Tyne." In the whole constituency of Jarrow only five men are involved in shipbuilding. Hawthorn Leslie's, which employed almost 3,000 people in 1979, is now closed. Palmers is on care and maintenance. Mercantile dry dock, which employed almost 400, is now closed.
    "I am sorry, Mr. Dixon," the interviewer says, "but shipbuilding is definitely out. Is there anything else that you can do?" I say, "Well, I bought a plot of land and built my own house." The interviewer says, "Oh well, there you are, you will appreciate that the local authority which, five or six years ago was building 700 houses a year, built only 46 last year and is building 25 this year."
    The housing investment programme allocation to the local authority which was £14·3 million when this Government were elected is down to £5·3 million. To keep up with 1979 value, it would have had to be almost £27 million. So the local authority are getting only one sixth of the amount of money that it was getting in 1979 to build and maintain its housing stock. So it is no good expecting a job in house building.
    The interviewer asks, "Is there anything else, Mr. Dixon, you can possibly do?" I say. "When I was in the army and I used to be put on jankers I would be sent to the officers' quarters and told to cut grass with a pair of scissors." The interviewer says, "We may be able to help you with something there. We may be able to send you down to the local authority and it may have some grass cutting job for you." I say, "But I read in the paper the other week that because of the cuts in the rate support grant the local authority is paying gardeners off, so how on earth could it employ me, a ship's gardener, to cut grass?"
    That is the Government's idea of artificial jobs. The local authority pays off experienced gardeners and then we go along and, under the Manpower Services Commission, people who are trained to build ships or houses are given money. That is what the jobclubs are for. That is what we are talking about. Do not let us have this academic nonsense when we talk about unemployment.
    The problem is that some Conservative Members have never seen a pair of overalls, let alone worn them, yet they talk about unemployment. The hon. Member for Macclesfield (Mr. Winterton) talked about paying men. Certainly we want to pay men. People want to be employed. They want to go out and earn a living for their families. That is what this is about. The majority of people about whom I am talking are not percentages or statistics, they are wage earners and bread winners — one-parent
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    families and married people who want to earn to support their families. That is what we should be addressing ourselves to in the House.
    Other hon. Members want to speak, so I do not want to take up too much of the debate today. But when hon. Members debate unemployment in the House, I wish that they would talk about people, not about figures, percentages and statistics.
    9 pm
    Mr. Robert Harvey: Three and a half years ago, I was elected for Clwyd, South-West, a constituency where the unemployment rate stood at about 18 per cent. At that election, like other Conservative party candidates up and down the country, I said that, contrary to the claims of the Opposition parties, inflation, which affects the climate of industrial investment and which had been brought down from 15 per cent. to 5 per cent., would not rise again as soon as the election was over. In fact, it has remained at 5 per cent. or lower for all of those years.
    Like other candidates, I claimed that economic growth, which was about 2 per cent. that year, would continue to be maintained. In fact, it has been higher since then, with growth last year exceeding that of any other western country, even that of the United States. That is a remarkable recovery by any standards. I claimed, along with other Conservative candidates up and down the country, that the Government would stand up to extremist union minorities that sought to railroad their members into unwanted strikes, and from the miners' strike onwards that has been the case.
    This Government have delivered. The story of this Government has been one of constant, uninterrupted, solid, even dull achievement, based on sound finance, while never ceasing to increase Government spending in the areas where it really matters, such as the NHS and education. Yet there was one area in which I felt that achievement was missing. I refer to the decline in manufacturing industry and the level of unemployment, which was running at more than 3 million. I believed that the unemployment figure was unlikely to fall unless special action was taken to bring it down. I believed that we were facing something unique, and quite different from anything that had gone before — something that the economists have no name for, although I shall try to give it one: jobless growth. Never in any previous period of such sustained growth in British history has unemployment failed to fall as it has this time. As the economy has recovered and expanded, the level of joblessness has stayed—until very recently—exactly where it was. Indeed, I welcome the fall in the latest figures.
    The answer of the Labour and alliance parties has been to say that we should expand the economy still faster. If the present level of expansion is failing to generate jobs, there is no reason why a much faster rate should be expected to do so. Moreover, much faster economic expansion, on the scale advocated by the Opposition, would destroy the sound foundations for our present level of economic growth. No, that is not the answer.
    What is the cause of the problem of jobless growth? Of course demographic factors have in part been responsible. Of course the number of part-time jobs has grown encouragingly and dramatically. Of course the high level of wage settlements has continued to price workers out of

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    jobs. Yet all of those things, even together, do not explain how unemployment can stay above 3 million after five years of economic growth.
    I am passionately convinced that unemployment has failed to fall because we are witnessing a modern industrial revolution. The new high-tech industries that are replacing the old are creating more wealth but employing fewer people. That must be welcomed. The opportunities for a more leisured and prosperous society are huge, and in the long run new service industries should reduce the level of unemployment. But in the short term, there are hundreds and thousands of victims of this process, unskilled and semi-skilled people being shaken out of the traditional industries. They had to be shaken out of them, because there was no future for them. [interruption.] Those people are now stranded in the twilight zone of idleness that is the lot of the unemployed. It is interesting that the Opposition should find the lot of the unemployed so amusing.
    Thus the Government had to get to grips with an entirely new problem. I have long felt that the Government should be prepared moderately to relax the fight against inflation in an attempt to help the unskilled and semi-skilled, who would otherwise have no hope of a job. This time last year in the House I urged the Government to embark on a carefully targeted programme of job creation through investment in public and private housing. I also believed that they should concentrate on a skills programme to help workers adapt to the new technological revolution.
    Finally, it seemed right that, if there is to be more wealth and less work in society, that work should be shared more equally by encouraging a shorter working week, early retirement, job sharing, and so on, for those who want it, within the proper economic constraints. I still urge the Government to embark on a long-term review of the impact of new technology on working patterns, and to introduce a reduction in the age of qualification for the job release scheme to 60, so that those who seek earlier retirement can take it, and in so doing—as we heard earlier today — create 50,000 jobs at a cost of £132 million. That is surely one of the most cost-effective methods of cutting dole queues while assisting those who have done arduous jobs all their working lives.
    I have, however, long been deeply critical of the view that tax cuts, however desirable they may be in themselves, are a cure for unemployment. After all, the standard rate of income tax has fallen by 4p in the pound since 1979, but unemployment has not fallen. For that reason, I was unable to vote for the 1p reduction in the standard rate that was a feature of last year's Budget. By contrast, after the autumn statement I could not but warmly commend my right hon. Friend the Chancellor of the Exchequer on the realism and courage that he had shown. That my right hon. Friend is not the monetarist dogmatist, as he has for so long been portrayed by the Opposition, is obvious from the way in which he has allowed M3 to rise by 18 per cent. this year. Some may criticise that as irresponsible but the Opposition cannot possibly consider 18 per cent. too little.
    The Conservative party is not one that is given to dogma. Above all, it is pragmatic. If one approach is not yielding results, the party has always had the courage and common sense to learn from experience. Without abandoning his absolutely correct goal of keeping inflation under control and retaining international confidence in the economy, the Chancellor of the Exchequer has used the money that the success of his
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    policies has made available to seek to reduce the present unacceptable level of unemployment through spending on local authorities and education and, above all, a massive increase in spending on housing. That is an act of political courage and responsibility and is not to be confused with the sort of binge that is being urged by the Opposition, which is to increase spending by £26 billion.
    My right hon. Friend the Chancellor of the Exchequer has not stolen the Labour party's clothes, because they are at least six times too big. Nor has he indulged in a pre-election spending spree of the sort with which we are all too familiar under previous Labour Governments. The difference is that the Labour party usually spends money that it does not have while the Government are spending money that they do have. With the public sector borrowing requirement still running at only £7 billion and with Government spending as a proportion of gross domestic product continuing to fall, there is no danger of inflation as a result of these measures. The money that is being spent has been earned and will not have to he paid for in future.
    Over the past seven years our economy has been one of the most consistently strong performers in the western world. The only charge that can be levelled against the Government is that of erring on the side of caution, and that charge can no longer be levelled after the autumn statement. The great tradition of the Conservative party is to let those who want to better themselves and get ahead do so, and enrich all of society in the process, while helping those who cannot help themselves. That is what the Government have done and I hope that when the House comes to debate the autumn statement the Opposition will have the good sense and honour to support the economic measures that are wise and bold and with which they surely cannot disagree.
    9.8 pm
    Mr. John Prescott: The hon. Member for Clwyd, South-West (Mr. Harvey) reflected a great deal of what has been said in the debate, and I mean the whistling in the wind and the rhetoric about the success of the Government's policies that have come from Conservative Members. At the same time, Conservative Members have expressed extreme concern about unemployment and the decline in manufacturing.
    Earlier in the debate there were many more hon. Members in the Chamber than there are now. The right hon. Member for Henley (Mr. Heseltine) referred to the number of Conservative Members present and said that it illustrated their great concern. That concern lasted only until the end of his speech, when he left the Chamber not to return again, taking his cohorts with him.
    Most of the evidence that has been adduced by hon. Members on both sides of the House is that many of the indices of the economy are reflecting the crisis that we are witnessing in the balance of payments, real interest rates and the investment level in manufacturing, which is below that which prevailed in 1979, and not success. Many areas of the economy show the decline over which the Government have presided.
    One of the constant themes of the debate has been the decline of manufacturing industry. The hon. Member for Devizes (Mr. Morrison) said, correctly, that, while it is true that manufacturing is declining in most developed countries, it has not declined in any of them at the absolute rate at which it has declined in Britain. That is one of the

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    strategic facts about the basic British economy to which any Government must address their attention. When the oil money runs out, that will create real problems, because we will still have to finance an economy on this scale and we will also have the ever-increasing problem of the balance of payments.
    It was suggested that the Government may be running into an economic crisis. I did not hear the speech of the right hon. Member for Chesham and Amersham (Sir I. Gilmour) but I understand that he said that perhaps the Opposition would not like to inherit the problems that are coming. That is true, but I am afraid it is the lot of Labour Governments in the post-war period to inherit the problems of Tory Governments. That is true of whatever period one cares to select. We have constantly had to deal with that sort of problem.
    Little has been said about unemployment, and I was amazed that at Question Time the Paymaster General found it difficult to say whether he could make an assessment of the real figures of unemployment. For him to doubt that an assessment could be made is flying in the face of evidence. The claim last week that unemployment had dropped by 20,000 was welcome, although the drop had more to do with the fiddling of the community programme schemes, the availability interviews and the Restart programmes. Given that there was a reduction of 20,000, that was over the 90 months during which the Government have been in power, because in 81 of those months unemployment increased at that rate each month. The Chancellor of the Duchy of Lancaster said in a speech that 600,000 jobs would he lost if a Labour Government were elected. More jobs than that have been lost each year over the time that the Government have been in office.
    Mr. Thurnham: Will the hon. Gentleman give way?
    Mr. Prescott: No, I do not have enough time.
    For the Chancellor of the Duchy to suggest that that might be the cost of installing a Labour Government is hypocrisy. Perhaps I could give the Paymaster General a list showing 18 changes that have been made to the unemployment figures. I do not want to deploy that argument again, but officially I shall give him the list and perhaps he will write to me if he thinks the figures are wrong. They show the adjustments that the Government have made since they came to power. I shall not dwell further on that, except to say that, if one looks at a House of Commons Library paper about unemployment and the adjustments and changes that have been made, one sees that there have been nine large changes. Two of them increased unemployment by 43,000 and the others decreased it by 380,000. That is a considerable difference.
    The House of Commons Library is much respected by all hon. Members and the research by the people there is generally accepted. They have prepared a document about unemployment and perhaps the Paymaster General will look at it to see whether he accepts that the level of unemployment is considerably greater, quite apart from the schemes, than the level given officially by the Government.
    I have looked at statistical changes by the Government and in four Government Departments a survey carried out by the Library found that since 1979 the Government have made 100 adjustments to the statistical data. The
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    Government have not only been fiddling the unemployment figures; they have been fiddling figures in a number of Departments. Perhaps we could take as an indicator the number of people who are employed and see how many people are employed now and how many were employed in 1979. The figure has fallen from 22·6 million to 21 million. That is a fall of over 1·5 million in the number of people in work. That shows the scale of the decline since 1979 and the reality of unemployment.
    The Minister denied that there was intimidation at the work activity interviews or restarts and said that they were not designed to remove people from the unemployment figures. However, more and more evidence shows that that is not true. We all receive many letters about intimidation. He did not chose to deny today that in the Devon area 70 per cent. of people referred to the adjudicator were restored to benefit. That must show that the amount of interviewing in the early stages is intimidating people in order to remove them from the list. The adjudications show that. The Paymaster General claims that as one of the successes of his system, but the fact that 70 per cent. of people are being taken off at first interview shows that his Department should look much more carefully at the way in which interviews are being conducted.
    I have before me a report in the Yorkshire Post of 13 August 1986 about a women who was refused a place on the community programme scheme because she was not registered as unemployed and was therefore not eligible for benefit. A top civil servant, Mr. Fodgen, appeared before the tribunal and according to the article,
    "admitted that this had the effect of reducing unemployment figures, and that this had been a factor in the decision of Ministers to change the criteria."
    That was said before a tribunal by an under-secretary in the Department of Employment.
    I do not know whether the Paymaster General is going to rush to the Dispatch Box to give an answer similar to that which he gave when we gave him evidence of an official who had told people, "You must get 30 thrown off the list to earn the money to pay for your wages." He was referring to the "bounty hunters". The Paymaster General disowned that official, saying that the official had had no authority to make such a statement. The right hon. and learned Gentleman was right, but I hope that he corrected that attitude among officials. Yet here there is a top civil servant from his Department appearing before the tribunal and saying that the Government's policy is to use the community programme to reduce the unemployment figures. I give way to the Paymaster General.
    Mr. Kenneth Clarke: I am grateful to the hon. Gentleman for giving way, because, for reasons of time, I was not going to intervene. On his first point, one of the main reasons why benefit is withdrawn from people is that they have failed to attend an interview about their employment. That is a long-standing rule. As the regulations now stand, a person has to fail to attend two interviews before benefit is disallowed. But half those people do attend an interview and are reinstated. That is, in part, the reason for the figures from Devon and everywhere else.
    Ms. Clare Short: That comes before the cases go to the adjudicator.
    Mr. Clarke: I have not seen the Devon figures. Half those whose benefits are suspended for failure to attend an

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    interview get their benefit back, either because it is reinstated by the adjudicator or because they turn up at an interview. I shall have a look at the Devon figures.
    On the hon. Gentleman's second point, we have chosen to make the community programme available to those who receive benefit because that is the best test of those in greatest need of the work experience available under the community programme. Of course it has an effect also on the unemployment statistics. But we are talking about the 3 million unemployed, and the hon. Gentleman can hardly object to the fact that we concentrate the community programme on those whose conditions we constantly debate in the House.
    Mr. Prescott: I think that the Paymaster General has not denied what the civil servant said. It was one of the criteria used by the right hon. and learned Gentleman. He should be aware, with respect to what he said about the adjudicator, that these are cases that have been suspended and have arrived at the adjudicator. Seventy per cent. of them have had their benefits restored. The right hon. and learned Gentleman needs to bear that point in mind.
    I am concerned about another matter. The right hon. and learned Gentleman says that he has not seen the Devon figures in the press, as I did. It is about time he demanded the figures from all the trial areas to find out what is going on in those areas. I hope that tonight he has learnt the lesson and that he will go to the trial areas to see whether victimisation is occurring at interviews.
    The Government make great claims about 1 million jobs, but they have created part-time, self-employed work. For example, part-time employment has increased considerably. That is a major part of the jobs involved. It would be fair to see what has happened to full-time equivalents in work. Under the Labour Administration, the number increased by nearly 100,000. Under this Government, it decreased by 1·5 million. That is another reality of the change in the market.
    The Government make great claims about the self-employed and say that they are concerned about the figures. Under the Labour Administration, the number increased by 342,000. Under this Administration, it increased by five times as much to 1·5 million. The reality is that the definition of employment is based on a 5 per cent. survey. It is a simple projection based on surveys, not a definition. The Paymaster General says that he cannot get a figure to find out the number created by the adjustments in the unemployment figures, but it does not stop him fiddling the self-employed figures which are based on a 5 per cent. survey and not on a count of the number of self-employed. We very much resent the double dealing by the Government which is exposed in these figures.
    The Government are now claiming that there are more vacancies than before. The vacancy level is equivalent to the level of 1979. That is claimed as a success by the Government. They usually use, not 1979, but 1983. That is what they keep referring to. They do not go back to 1979. There are a couple of interesting points about those vacancies. First, in 1979, unemployment was one third of what it is now. To compare vacancy rates is hardly the same in that situation. Secondly, the proportions of vacancies provided by community programmes in 1980 was 2·5 per cent. It has now reached nearly 15 per cent. The Government are offering those part-time low-paid, skivvy jobs on community schemes, calling them vacancies
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    and then saying that vacancies are at a record level. Not only do they fiddle the unemployment and employment figures but they are now fiddling the vacancy levels by providing community programme schemes. That is the record of the Government. That is the record that nobody has time to listen to when they explain the position on unemployment.
    That kind of argument would have fitted Goebbels well. In an article in The Guardian the Chancellor of the Duchy of Lancaster said that Labour's policy would cost 850,000 jobs. Nearly as many as that have been lost every year since the Government took office. I looked at the justification for that. Apparently, 600,000 of those jobs would be lost by the implementation of a minimum wage. I do not know what is the evidence for that. Nobody has provided any evidence. The assumption is that £120 will be paid, which is the minimum common decency rate under the Council of Europe. As we point out, there are 1 million full-time workers who are paid less than £80 a week and there are 3 million full-time workers who are paid less than £100 a week. One has to make a judgment as to whether to pay £80, £90 or £100. That judgment has not been made by the Labour party. One cannot assess the cost or the jobs lost. It is fiddled, as they fiddled the cost of Labour's programme.
    It is claimed that 150,000 jobs will be lost as a result of sanctions on South Africa. Where is the evidence for that? Where is the justification and the research? The hon. Member for Barrow and Furness (Mr. Franks) — he made many remarks about hon. Members not being present and he is not in the Chamber now—said that 100,000 jobs would be lost because of our nuclear energy programme. He said that Sellafield would close overnight. We believe in phasing out nuclear energy. However, if anybody believes that we can phase out nuclear energy before the next century he is living in cloud cuckoo land. Anybody knowing the technical problems involved in phasing out nuclear energy, no matter how one plans to go about it, knows that it is extremely difficult to implement and to start the reprocessing for which Sellafield is needed. We hear election rhetoric. People are trying to scare those in jobs in the nuclear industry. Again we hear the typical Goebbels slander that we heard from the right hon. Member for Chingford (Mr. Tebbit) about the BBC. He is now getting ready for the election. Whatever the argument, clearly there is no substance.
    One theme that has come through in the debate, which apparently caused controversy—I am shocked that it should cause controversy—is that for decades Britain has not trained enough of its people. Labour Governments and Tory Governments have not trained enough members of the labour force. There is no doubt about that. If we look back to the debates of 1964 when the Tories established the industrial training boards, the analysis then about the shortage of every type of skill, traditional and modern, and in information technology is the same today. In fact, it is considerably worse now because the Government have abolished 16 of the industrial training boards. They have got rid of the levy system and the Manpower Services Commission has closed 29 of its skill training centres.
    The hon. Member for Devizes spoke about the scale of apprenticeship decline in this country and about our training compared to our competitors'. He rehearsed the arguments on training, competition and competence that are to be found in documents that have been produced for

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    us all to read. The reality of training in Britain is that we have never done enough. We are certainly doing less now and we are even short in some of the basic trades—
    Mr. Thurnham rose—
    Mr. Prescott: Sit down.
    We are short of workers in some of the basic trades such as bricklayers, plasterers and all those involved in housing building programmes. In the construction industry, there has been a collapse in the number of apprenticeships from 65,000 to 49,000, and that industry maintains the levy system. [Interruption.] Those apprentices have been replaced with cheap YTS labour. So in the construction industry there are many semi-skilled people who cannot get work. We do not have the bricklayers or plasterers to provide the skills. That is what we are desperately short of. If anyone is in any doubt, he should look in a jobcentre, at the little notice that says, "We want a bricklayer, not a time-served bricklayer. None of the YTS or community scheme 12-month jobs. We do not want them. We do not want to pay for training." Industry has never wanted to pay for training. Even in engineering—
    Mr. Thurnham: Will the hon. Gentleman give way?
    Mr. Prescott: Sit down.
    Even in engineering, 24,000 apprenticeships have been reduced to 9,000. There has been a loss of 150,000 apprenticeships in engineering and manufacturing. Even the Butcher report for the Department of Trade and Industry said that we are desperately short of people for modern information technology, computers—all those sort of things. The Government's own report says that.
    The reality is that our industry has always seen training as a cost. It has never wanted willingly to put money into investment on training. There are some good exceptions, such as Rolls-Royce and Jaguar. It is interesting to note that Jaguar spends 1 per cent. of its turnover on training, not such an astounding figure, but one that the Minister always claims. Jaguar has not been destroyed by setting that figure. According to the Secretary of State, it is a success symbol. Why? Because it puts in sufficient investment, it gets the productivity. That is at the heart of what we are talking about—not wages in relation to productivity, but how much we put into investment and improve design and productivity.
    People suggest that if British industry paid a I per cent. levy, that would be destructive of British industry. The fact that it is not spending 1 per cent. is destructive.
    A comparison has been done on how much the British spend on training as a proportion of their turnover. We spend 0·15 of 1 per cent. on training, which is the equivalent of £2 billion, according to the Manpower Services Commission. Most of our competitors —Germany, Japan, the United States and others—spend 3 per cent., which is about £30 billion compared to our £2 billion. The result is the difference in skills and apprenticeships, training, and competition. The hon. Member for Devizes catalogued some of those differences.
    The public sector is no better. It has been ditching training and apprenticeships as fast as the private sector. All the nationalised industries have been doing it in their desperate desire to get the return on capital to show that they are profitable in the short term while not investing.
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    The public sector has been just as bad. The Government have put pressure on the figures so that it ditches investment and treats training as a cost, not as an investment. We have found constantly that the public sector has done those things.
    Let me make it clear that there will be a radical training programme which meets our needs. It will have to be financed by levies, grants and some form of industrial boards and organisations. Those will be the means by which we finance the training programme. If industry abroad does it and British management will not, what alternative is there for the Government? There is only one. The Government believed that if one gave the money back to industry, it would invest. The Government have given £30 billion back in corporation tax, but it was not put into investment or training. It was put into a massive outflow of capital abroad, to invest in the countries of our competitors.
    We are not prepared to tolerate Britain being turned into a semi-skilled skivvy nation. We have to train our people. We have to pay for them. One thing is for sure: industry should carry its fair share of those costs just as its competitors do. Believe me, industry will carry its fair share and its costs of that training. [HON. MEMBERS: "Oh."] Yes.
    I shall tell the House something else. In all the industrial training boards before, there were so many exemptions from paying the levy that 75 per cent. of companies got out of paying it. We cannot tolerate that.
    We all have to pay a fair share towards training. If industry will not do it, the Government are the only body that can deal with that strategic decision. If the 1 per cent. turnover shakes people, let me tell them that it was Mr. Geoffrey Holland, the director of the Manpower Services Commission, who in a paper to the commission made it clear that he thought that it should be about 2 per cent. of turnover. A Labour Government would do something about training.
    During the debate on the Queen's Speech, some hon. Members claimed that the expansion of public expenditure was welcome. The proposed public expenditure is a bit of a fraud. The proposed £8 billion is to deal with over-expenditure. In reality, that is not a great deal of money, but it is a figure that stands out. It just covers the overexpansion in a number of local authority budgets. As the right hon. Member for Henley said at the time of the 1983 election, "Spend, spend, spend".
    Some £400 million has been put aside for housing. We know that the requirement is for some £20 billion and that local authorities have about £6 billion in their accounts from capital receipts. Talk of £400 million is, therefore, an insult when there are 500,000 building workers unemployed and when 2,000 houses a week fewer are being built now than under the Labour Administration. It clearly makes sense to put the resources, people and demand together to create jobs.
    Hull has devised a plan to build 1,000 houses. It is possible for local authorities to enter into a housing programme, undertake proper training and so meet the training needs to provide the skills needed in those housing programmes. A total of 5,000 jobs would be created over a five-year period at a cost of £66 million a year. That is a properly costed figure. We can make a judgment about whether we are prepared to finance that programme, but that order of expenditure can begin to produce jobs. Let us make no mistake about that.

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    Local authorities can and have created a considerable number of jobs. The Secretary of State for the Environment sneered at local authorities that do a very good job fighting to maintain services and jobs against a hostile Government, who have taken £20 billion off local authorities in rate support grant and then produce the kind of schemes described by the Paymaster General when he went to Southwark and offered it £8 million for the task force scheme, which is intended to co-ordinate jobs.
    My hon. Friend the Member for Newham, North East (Mr. Leighton) recently asked how many things had been done under the new task force. He was told that 31 projects had been initiated. Interestingly enough, one in three of them are training projects, which again reveals the failure in training. About £1·3 million has been spent since February — not a large amount. It is approximately £40,000 for each project. I am sure that most of the projects have been well used. One is a feasibility project for a shop selling ethnic culture items in Leeds. I am sure that there is a need for such a project, but it is hardly the kind of housing programme or jobs that we need to get people in our inner cities back in employment.
    I have many examples of similar projects, such as a feasibility study to set up a nursery in Leeds. That is great, but Leeds needs more jobs than can be provided in a nursery. There is a feasibility study for a co-operative shop on the Gloucester Grove estate in north Peckham. I do not doubt that there is a need for such projects, but they are peripheral and marginal to the problems in the inner cities.
    If the Government want a policy for local authorities to create jobs such as that envisaged through the task force, they should ask the local authorities to provide alternatives. Indeed, Southwark has sent the right hon. and learned Gentleman a plan that would create 5,600 new jobs at a cost of £135 million, costed in capital and revenue, at an average cost of £9,000. Of these, 20 per cent. are in housing and 20 per cent. in social services.
    Do not think that jobs in the social services are not needed. There was a demonstration today by COHSE about mental health welfare. This caring Government are throwing patients out of mental hospitals into the community to be cared for, yet they do not give any money to local authorities to look after them. That is the kind of community care that exists. When Southwark talks about providing jobs in mental health care or in caring for old people, it means real jobs meeting real need with real money. That is the alternative course that a Government can take.
    The Labour party offers that alternative — not the skivvy community schemes of the Tory Government. We have an alternative for providing real jobs through local authorities, nationalised industries and the regeneration of our industrial base. Given that chance, we will return Britain to work in a positive way.
    9.34 pm
    The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): Last month saw the third successive fall in the seasonally adjusted level of unemployment and we have seen the largest three-month fall in the figures since 1973. At one point, I almost thought I heard grudging approval of that from the hon. Member for Kingston upon Hull, East (Mr. Prescott), but like most of his Back Bench colleagues he has responded to three months' encouraging news by trying to denigrate and discredit the figures which show that desirable trend.
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    The hon. Gentleman said that he did not want to debate the figures and I certainly do not wish to go through that whole debate again. At Question Time today I answered every question on the Order Paper about the figures and I answered in full. I will enter into correspondence with the hon. Gentleman, who is still in a complete muddle about the figures. So far as we can tell, the "Devon figures" to which he refers relate to an experiment being carried out at Newton Abbot in relation to availability for work and quarterly attendance for benefit. So far as we know, no one has ever been deprived of benefit as a result of that experiment, but I will happily deal with all those matters in correspondence with the hon. Gentleman and put the information in the Library.
    The hon. Gentleman cannot undermine the encouraging trend which so worries Labour and Liberal Members, because total unemployment has indeed begun to fall. I will discuss availability testing, which has caused so much fuss, on another occasion, but that had not even come into effect nationally when the last figures for the quarter were produced for October. We have the highest level of vacancies since 1979 — more than 200,000 — and the figure is still rising. That is not affected by any of the changes, either. There is also an increase in the number of people employed.
    Mr. Prescott: That is the community programme.
    Mr. Clarke: The number employed has increased by more than a million since the last general election and by more than 200,000 in the last full year. The seasonally adjusted figures that we use for vacancies do not include the community programme. Time and again the hon. Member for Kingston upon Hull, East makes rash assertions on the spur of the moment which do not stand up to examination.
    Total employment has now been rising for 13 successive quarters. That steady increase is the best that we have seen for a generation in this country. Of course, we need to do better than that. I agree with my right hon. Friend the Member for Henley (Mr. Heseltine) and my hon. Friend the Member for Wyre Forest (Mr. Bulmer) that unit costs are still too high and that we must break some of the had traditions of British wage bargaining to accelerate the growth of new jobs.
    Mr. Dave Nellist rose—
    Mr. Clarke: That does not mean a low wage economy. We want a high wage, high productivity, high performance economy but the high productivity and performance must come before the high wages to keep unit costs in line with profits.
    Mr. Nellist: Will the Minister give way?
    Mr. Clarke: I know that the hon. Gentleman was unlucky in not being called in the debate, but I am afraid that I must press on.
    I wish to address myself to the problem underlying all that has been said about employment today. Unemployment is too high. That is why I take comfort in the trend now being established, which the Government seek to maintain and accelerate. When people try to analyse the problem and make speeches of the kind that we have heard from the Opposition today, they seem to forget that a total of 3 million unemployed, which is where we are, represents a high level of flow into and out of employment. It is not a standing army of 3 million people

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    who are out of work all the time. Last month, for example, 521,400 people left the ranks of the unemployed while 434,800 joined those ranks. The difference produced an encouraging 95,743 fall in the headline total. Most of the people who had become unemployed for the first time were, willingly or unwillingly, between jobs. Half of them will have found jobs within three months and eight out of 10 will have found a new job within one year. That is why we concentrate on the long-term unemployed.
    When considering how the economy is performing and trying to understand why the Government are emphasising the long-term unemployed in their unemployment policies, we should be aware that about 88 to 89 per cent. of our labour force is in work at any given time. Some hon. Members have deprecated the fact that people in work are getting better off all of the time. About 11 to 12 per cent. —at the moment 11·7 per cent.—are out of work, but many are willingly or unwillingly between jobs. It is the more than I million long-term unemployed — 4·9 per cent. of the work force—who are the social problem to whom we should address ourselves, and about whom the hon. Member for Jarrow (Mr. Dixon) made an entertaining, but slightly inaccurate, speech.
    It is the core of long-term unemployed people who are suffering the hardship of being unable to share the rising living standards which the vast majority of the rest of the population are beginning to enjoy. That is why we have made the long-term unemployed the target of our effort. They have replaced, as our first priority, the young unemployed.
    Mr. Laurie Pavitt rose—
    Mr. Clarke: I shall not give way. They have replaced the young unemployed as our number one priority because youth unemployment is now steadily improving. The number of under-25s out of work has gone down by more than 60,000 during the past year. The rate for the under-25s has dropped, although it is still too high, to under 19 per cent., which is well below the European Community average. With the youth training scheme and other efforts, we are experiencing a steady drop in unemployment among the under-20s — about 20 per cent. during the past three years.
    Now that the economy is growing and the country is getting wealthier, we must not develop a society in which a large core of workers prosper in the labour market while on the periphery there are people who have been allowed to drop out of the labour market altogether. That is where the package of policies that we call restart fit in.
    Opposition Members, who express concern about this long-term unemployed group of people who are at risk of dropping out of the labour market altogether, should consider what they say and the effect of their actions when they denigrate the restart programme and the attempt to help the long-term unemployed.
    It is almost wicked to attack restart, because it demoralises the staff whom we have taken on to help the long-term unemployed, and it puts off those whom we are trying to help. We are tackling the problem of long-term unemployment because the growth in employment and vacancies is making it steadily easier to give them positive assistance. Opposition Members have not even bothered to visit their jobcentres and to get in touch with people to find out the difference between the various proposals.
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    The hon. Member for Jarrow, whose constituency I know well—I have considerable concern for unemployment there — made an entertaining and witty speech about what he called "these job clerks", who he thought were the sum of the restart programme and were giving no help. He was led astray by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) who has said that jobclubs are places where young people get together and talk about employment.
    Jobclubs are the beginning of what we are doing. They are an idea that we imported from America. Long-term unemployed people are brought together each day and apply for at least 10 jobs a day. They have the skilled support of somebody in the jobcentre and receive the support of free correspondence, free telephones and advice.
    I first came across these jobclubs when they were being tried out in the north-east — in Durham and Middlesbrough. We are now spreading them very rapidly. The hon. Member for Jarrow dismissed all his and said that we should talk about people rather than statistics. I have with me a press notice issued today by the Sunderland jobclub, which is not far from the hon. Gentleman's locality. That club has now been operating for 15 months and out of 145 people who went along, 105 have now got jobs—[HON. MEMBERS: "Hear, hear."] They celebrated their century with a man who got a job as a heavy goods vehicle driver. It is utter rubbish to say that these are skivvy jobs. they are real jobs.
    Labour Members must realise that as the economy expands— [Interruption.] The Opposition do not want to listen because they are seeking to discredit the figures and the schemes that they have inaccurately described.
    There is a mismatch between the long-term unemployed seeking the work and the jobs that are increasingly available in the economy. Often there is a combination of people on the one hand who have given up looking for work, who are not good at searching for it or who lack essential skills and, on the other, of employers who cannot find workers. Not all such employers are poujadistes or hard-liners. There is a genuine difficulty in the system. That is why we have introduced our restart programme, which offers jobs, work experience, training and subsidised self-employment. It is having considerable success.
    On top of the £3 billion worth of employment and training schemes in the Department, we have only recently announced an extension of jobclubs to 1,000 throughout the country. We shall extend restart in pilot areas for those who have been out of work for six months or more, and we are piloting the new job training scheme which will guarantee a training place to every long-term unemployed person under the age of 25.
    Mr. Leighton rose—
    Mr. Nellist: I am here as well.
    Mr. Clarke: I give way to the hon. Member for Newham, North-East (Mr. Leighton).
    Mr. Leighton: I am grateful to the Paymaster General. We are listening to him closely, and I agree that we should all visit our local jobcentres. I have visited mine and have discovered that of more than 3,200 people interviewed, only 24 have got jobs.
    Mr. Clarke: That is a grotesque and deliberate underestimate of what has been produced. The hon.

    531
    Gentleman has mentioned the figures for those who have been referred directly from the interview to a job. Such numbers are quite small because we are talking about people who have been out of work for 12 months whom the interviewer has fixed up with a job. The hon. Gentleman knows that he must add all those who have gone on to the community programme, work experience, training, the enterprise allowance scheme and restart advice sessions. He also knows that most of those who attend restart courses do not report back. We do not know where the people who have come off the register have got jobs or training. However, the hon. Gentleman is taking the narrowest and most inaccurate figure that he can find in an attempt to denigrate what we have done.
    We undertook a preliminary survey in the pilot areas because we wanted to know what was happening. I have not relied on the results too heavily, but we chased up those who had gone off the register since our first pilots and scarcely believed the results ourselves. When asked why they had stopped claiming benefits, 60 per cent. replied that they had got a job. We shall follow that survey up to see whether that is so.
    This placing of people through the employment services into the economy—which Labour and Liberal Members spend most of their time trying to denigrate — flows from the success of the mainstream economy, which has been expanding for six successive years and is beginning to absorb back into our labour market all those with skills and training as well as an increasing number of young people and long-term unemployed. Within that macroeconomic policy on which all, in the end, depends, is the growth that my right hon. Friend the Secretary of State describes.
    Many hon. Members — largely Conservative Members, including my right hon. Friend the Member for Henley and my hon. Friends the Members for Macclesfield (Mr. Winterton) and for Devizes (Mr. Morrison), but also the right hon. and learned Member for Monklands, East (Mr. Smith) — concentrated particularly on the key role of the manufacturing sector in our economy. They pressed that we should give proper priority to it. I wholly agree with all those who stressed the importance of continuing to restore the strength of the manufacturing sector of our economy. It must play a key role in our recovery. It is essential that the efficient production of manufactured goods contributes to the country's wealth.
    As my right hon. Friend the Member for Henley said, one is talking about reversing a position which began, not in 1979—he measured it in terms of the loss of our share of world trade — but at the beginning of this century. This debate has taken place in the Chamber on and off for a long time, and my right hon. Friend the Secretary of State addressed himself to that. We do not throw our hats in the air, but it is encouraging that, since 1981, to use the yardstick of my right hon. Friend the Member for Henley, manufacturing industry has successfully held its share of world trade. We are seeing an increase in manufacturing output and manufacturing investment. and, obviously, we must sustain that.
    I do not get excited about whether we use the term industry or strategy. I am somewhat biased against the words "industrial strategy" because when I was in opposition in the late 1970s I had to shadow the so-called
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    industrial strategy of our predecessors, which was the most profligate and senseless strewing around of Industry Act money to every sector of the economy.
    We shall observe the contents of the strategy put forward by my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour), and where we agree with them we shall adopt them. Although we see a continued strengthening of our manufacturing base, that in itself will not be an answer to our employment problems. No one must misunderstand that. We are fully committed to the manufacturing sector, but, as the Leader of the Opposition conceded in a speech only two weeks ago, we cannot look to the manufacturing sector to be the major source of new employment. [Interruption.] The proportion of people working in manufacturing has been falling in every modern economy for years and it will continue to fall even if output, wealth and earnings are maintained. That is happening here and in other developed countries.
    We must not simplify the matter. We want to maintain manufacturing employment, but we must look to areas where quicker growth can be expected in a modern economy. That includes the service sector, high technology industries, more personalised products, less mass production, more small and medium-sized business, greater self-employment, and more people working part-term and on short-time contracts. We must develop a flexible, modern labour market. That is the type of labour market that we shall have in the 1990s, if we are successful. The Opposition resist it and say that it is not producing real jobs. They mean that it is not producing unionised jobs in traditional heavy industry, on which their power base depends. That is history, and is not to do with the Conservative party, or the Government. It is economic development which is very much against them.
    I agree completely with all those who placed emphasis on training and education, which are the key background to a recovery in manufacturing and every other sector of the economy. We have devoted enormous effort to that. My hon. Friend the Member for Langbaurgh (Mr. Holt) talked about schools and, the TVEI, and said that an increase in technical and vocational education was essential. YTS is the achievement of the Government. I agree with the hon. Member for Stockton, South (Mr. Wrigglesworth) that we must achieve a two-year YTS scheme which gives a definite step towards a useful qualification. We must also consider adult training. We are developing open learning. I must say to my hon. Friend the Member for Devizes that the decline in apprenticeships is due to a decline in traditional training. Modern training is the sort that we must develop. We are introducing the new job training scheme. We are spending £270 million a year on adult training, helping 250,000 people, but I agree that we must continue to exhort British industry to do more, as the best and most profitable industry does.
    However, the hon. Member for Kingston upon Hull, East reiterated, with a certain grim intensity, that his method of boosting training is to bring back levies—at least 1 per cent. — and, he implied, without the exemptions that were available in the 1970s for those who carried out the training. The hon. Gentleman cited Geoffrey Holland, who has made speeches as I and my right hon. Friend the Secretary of State have, saying that British industry does not invest a high enough proportion of its turnover in training. Geoffrey Holland is not in favour of levies.
    Mr. Prescott: Yes he is.
    Mr. Clarke: No he is not. It is no good the hon. Member making policy on his feet in a by-election in Knowsley, getting himself in a mess and citing in support an authoritative person who does not agree with him. I was in the Conservative Government that introduced levies and grants. I was in the Conservative Government that abolished levies and grants and most of the training boards because they did not work. The effect of what the hon. Member is proposing is not that Jaguar will be allowed to carry on spending its 1 per cent. on training but that the Government or an agency will collect at least 1 per cent. from each company and perhaps redistribute some of it back. That is a £6 billion exercise in bureaucracy, as the last one became, and the money will not go to training. We all know that Mrs. Barbara Castle gave us the Humber bridge to win Kingston upon Hull, North. Knowsley, North was never worth £6 billion. The hon. Gentleman should not make promises like that, but he does it all the time.
    When we had a debate in March, the hon. Gentleman and his colleagues, the right hon. and learned Member for Monklands, East and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), were stuck to find a policy that lives up to the daft claim that the Labour party knows how to take I million people off the unemployment list, and something turns up every week as they try to justify that claim. In March, the hon. Gentleman promised a detailed policy within 12 months, but we have not got it.
    Mr. Prescott: It is not a year yet.
    Mr. Clarke: Only four months are left.
    The hon. Gentleman is sticking to levies — he has given up nationalised industries, and the postmen will not deliver the letters in pairs — and has turned to local authorities. Two weeks ago he went to Southwark, a council with which I am trying to work. I go to north Peckham more often than he does, and I am trying to get Southwark to co-operate in MSC programmes and trying to get work experience and training there. We have given Southwark partnership authority status and have put money into the estate about which the hon. Gentleman talked. He wanted a shop, and we have put in £1 million to refurbish the blasted buildings!
    Southwark is now a source of the hon. Member's policy. It has produced a detailed plan which it says will create 6,000 jobs in two years, at a cost of £9,000 each. The hon. Gentleman became lyrical and said that it was an ambitious programme that is very realistic. He said that under Labour, local authorities will be the engines of growth in our economy, and that the Southwark document was the best thing that had happened on the employment front for a long time. He endorsed that again today. Of those 6,000 jobs, about 4,500 will be in the council. It even includes a bigger personnel department to cope with the other new jobs in other departments. The council says:
    "The new wage earners will have £28·5 million to spend in Southwark's shops, creating more private sector jobs."
    There would not be any shops left after Southwark had put up the rates.
    This is nonsense policy. We have a policy of growth and recovery and we are steering the unemployed back into jobs. The trend is going against the hon. Gentleman. I ask the House to reject the amendment.
    Question put, That the amendment be made:—
    The House divided: Ayes 197, Noes 348.

    Division No.1]

    [10 pm

    AYES

    Abse, Leo

    Garrett, W. E.

    Adams, Allen (Paisley N)

    Gilbert, Rt Hon Dr John

    Alton, David

    Godman, Dr Norman

    Anderson, Donald

    Golding, Mrs Llin

    Archer, Rt Hon Peter

    Gould, Bryan

    Ashley, Rt Hon Jack

    Gourlay, Harry

    Ashton, Joe

    Hamilton, James (M'well N)

    Atkinson, N. (Tottenham)

    Hamilton, W. W. (Fife Central)

    Bagier, Gordon A. T.

    Hancock, Michael

    Banks, Tony (Newham NW)

    Hardy, Peter

    Barnett, Guy

    Harrison, Rt Hon Walter

    Barron, Kevin

    Hart, Rt Hon Dame Judith

    Beckett, Mrs Margaret

    Healey, Rt Hon Denis

    Beith, A. J.

    Heffer, Eric S.

    Bell, Stuart

    Home Robertson, John

    Benn, Rt Hon Tony

    Howarth, George (Knowsley, N)

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

    Howell, Rt Hon D. (S'heath)

    Bermingham, Gerald

    Howells, Geraint

    Bidwell, Sydney

    Hughes, Dr Mark (Durham)

    Blair, Anthony

    Hughes, Roy (Newport East)

    Boothroyd, Miss Betty

    Hughes, Sean (Knowsley S)

    Boyes, Roland

    Hughes, Simon (Southwark)

    Bray, Dr Jeremy

    Janner, Hon Greville

    Brown, Hugh D. (Provan)

    Jenkins, Rt Hon Roy (Hillh'd)

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

    John, Brynmor

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

    Jones, Barry (Alyn & Deeside)

    Brown, Ron (E'burgh, Leith)

    Kinnock, Rt Hon Neil

    Bruce, Malcolm

    Kirkwood, Archy

    Buchan, Norman

    Lambie, David

    Caborn, Richard

    Lamond, James

    Callaghan, Rt Hon J.

    Leadbitter, Ted

    Callaghan, Jim (Heyw'd & M)

    Leighton, Ronald

    Campbell, Ian

    Lewis, Ron (Carlisle)

    Campbell-Savours, Dale

    Lewis, Terence (Worsley)

    Canavan, Dennis

    Litherland, Robert

    Carlile, Alexander (Montg'y)

    Livsey, Richard

    Carter-Jones, Lewis

    Lloyd, Tony (Stretford)

    Clark, Dr David (S Shields)

    Lofthouse, Geoffrey

    Clarke, Thomas

    Loyden, Edward

    Clay, Robert

    McCartney, Hugh

    Clelland, David Gordon

    McDonald, Dr Oonagh

    Clwyd, Mrs Ann

    McGuire, Michael

    Cocks, Rt Hon M. (Bristol S)

    McKay, Allen (Penistone)

    Cohen, Harry

    McKelvey, William

    Coleman, Donald

    MacKenzie, Rt Hon Gregor

    Conlan, Bernard

    Maclennan, Robert

    Corbyn, Jeremy

    McNamara, Kevin

    Craigen, J. M.

    McTaggart, Robert

    Cunliffe, Lawrence

    McWilliam, John

    Cunningham, Dr John

    Madden, Max

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

    Marek, Dr John

    Deakins, Eric

    Marshall, David (Shettleston)

    Dewar, Donald

    Martin, Michael

    Dixon, Donald

    Mason, Rt Hon Roy

    Dobson, Frank

    Maxton, John

    Dormand, Jack

    Maynard, Miss Joan

    Douglas, Dick

    Meacher, Michael

    Duffy, A. E. P.

    Meadowcroft, Michael

    Dunwoody, Hon Mrs G.

    Michie, William

    Eadie, Alex

    Mikardo, Ian

    Eastham, Ken

    Millan, Rt Hon Bruce

    Evans, John (St. Helens N)

    Morris, Rt Hon A. (W'shawe)

    Fatchett, Derek

    Nellist, David

    Faulds, Andrew

    Oakes, Rt Hon Gordon

    Field, Frank (Birkenhead)

    O'Brien, William

    Fields, T. (L'pool Broad Gn)

    O'Neill, Martin

    Fisher, Mark

    Owen, Rt Hon Dr David

    Flannery, Martin

    Park, George

    Foot, Rt Hon Michael

    Parry, Robert

    Forrester, John

    Patchett, Terry

    Foster, Derek

    Pavitt, Laurie

    Fraser, J. (Norwood)

    Pendry, Tom

    Freeson, Rt Hon Reginald

    Penhaligon, David

    Freud, Clement

    Pike, Peter

    535

    Powell, Raymond (Ogmore)

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

    Prescott, John

    Spearing, Nigel

    Radice, Giles

    Steel, Rt Hon David

    Randall, Stuart

    Stewart, Rt Hon D. (W Isles)

    Raynsford, Nick

    Stott, Roger

    Redmond, Martin

    Strang, Gavin

    Rees, Rt Hon M. (Leeds S)

    Thomas, Dr R. (Carmarthen)

    Richardson, Ms Jo

    Thorne, Stan (Preston)

    Roberts, Ernest (Hackney N)

    Tinn, James

    Robertson, George

    Torney, Tom

    Robinson. G. (Coventry NW)

    Wainwright, R,

    Rogers, Allan

    Wallace, James

    Rooker, J. W.

    Wardell, Gareth (Gower)

    Ross, Ernest (Dundee W)

    Wareing, Robert

    Ross, Stephen (Isle of Wight)

    Welsh, Michael

    Rowlands, Ted

    White, James

    Ryman, John

    Wigley, Dafydd

    Sedgemore, Brian

    Williams, Rt Hon A.

    Sheerman, Barry

    Wilson, Gordon

    Sheldon, Rt Hon R.

    Winnick, David

    Shields, Mrs Elizabeth

    Woodall, Alec

    Shore, Rt Hon Peter

    Wrigglesworth, Ian

    Short, Ms Clare (Ladywood)

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

    Tellers for the Ayes:

    Silkin, Rt Hon J.

    Mr. Chris Smith and

    Skinner, Dennis

    Ron Davies.

    NOES

    Adley, Robert

    Carttiss, Michael

    Aitken, Jonathan

    Cash, William

    Alexander Richard

    Chalker, Mrs Lynda

    Alison, Rt Hon Michael

    Channon, Rt Hon Paul

    Amery, Rt Hon Julian

    Chapman, Sydney

    Amess, David

    Chope, Christopher

    Ancram, Michael

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

    Arnold, Tom

    Clark, Dr Michael (Rochford)

    Ashby, David

    Clark, Sir W. (Croydon S)

    Aspinwall, Jack

    Clarke, Rt Hon K. (Rushcliffe)

    Atkins, Rt Hon Sir H.

    Clegg, Sir Walter

    Atkins, Robert (South Ribble)

    Cockeram, Eric

    Atkinson, David (B'm'th E)

    Colvin, Michael

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

    Conway, Derek

    Baker, Nicholas (Dorset N)

    Coombs, Simon

    Baldry, Tony

    Cope, John

    Banks, Robert (Harrogate)

    Cormack, Patrick

    Batiste, Spencer

    Corrie, John

    Beaumont-Dark, Anthony

    Cranborne, Viscount

    Bellingham, Henry

    Critchley, Julian

    Bendall, Vivian

    Crouch, David

    Benyon, William

    Currie, Mrs Edwina

    Bevan, David Gilroy

    Dickens, Geoffrey

    Biffen, Rt Hon John

    Dorrell, Stephen

    Biggs-Davison, Sir John

    Douglas-Hamilton, Lord J.

    Blackburn, John

    Dover, Den

    Body, Sir Richard

    du Cann, Rt Hon Sir Edward

    Bonsor, Sir Nicholas

    Dunn, Robert

    Bottomley, Peter

    Dykes, Hugh

    Bottomley, Mrs Virginia

    Edwards, Rt Hon N. (P'broke)

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

    Eggar, Tim

    Bowden, Gerald (Dulwich)

    Emery, Sir Peter

    Boyson, Dr Rhodes

    Evennett, David

    Braine, Rt Hon Sir Bernard

    Fairbairn, Nicholas

    Brandon-Bravo, Martin

    Fallon, Michael

    Bright, Graham

    Farr, Sir John

    Brinton, Tim

    Favell, Anthony

    Brittan, Rt Hon Leon

    Fenner, Dame Peggy

    Brooke, Hon Peter

    Finsberg, Sir Geoffrey

    Brown, M. (Brigg & Cl'thpes)

    Fletcher, Alexander

    Browne, John

    Fookes, Miss Janet

    Bruinvels, Peter

    Forman, Nigel

    Bryan, Sir Paul

    Forsyth, Michael (Stirling)

    Buchanan-Smith, Rt Hon A.

    Forth, Eric

    Budgen, Nick

    Fox, Sir Marcus

    Bulmer, Esmond

    Franks, Cecil

    Burt, Alistair

    Fraser, Peter (Angus East)

    Butler, Rt Hon Sir Adam

    Freeman, Roger

    Butterfill, John

    Fry, Peter

    Carlisle, John (Luton N)

    Gale, Roger

    Carlisle, Kenneth (Lincoln)

    Galley, Roy

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

    Gardiner, George (Reigate)

    536

    Gardner, Sir Edward (Fylde)

    Lester, Jim

    Garel-Jones, Tristan

    Lewis, Sir Kenneth (Stamf'd)

    Gilmour, Rt Hon Sir Ian

    Lightbown, David

    Glyn, Dr Alan

    Lilley, Peter

    Goodhart, Sir Philip

    Lloyd, Sir Ian (Havant)

    Goodlad, Alastair

    Lloyd, Peter (Fareham)

    Gorst, John

    Lord, Michael

    Gow, Ian

    Luce, Rt Hon Richard

    Gower, Sir Raymond

    Lyell, Nicholas

    Grant, Sir Anthony

    McCrindle, Robert

    Greenway, Harry

    McCurley, Mrs Anna

    Gregory, Conal

    Macfarlane, Neil

    Griffiths, Sir Eldon

    MacKay, Andrew (Berkshire)

    Griffiths, Peter (Portsm'th N)

    MacKay, John (Argyll & Bute)

    Grist, Ian

    Maclean, David John

    Ground, Patrick

    McLoughlin, Patrick

    Hamilton, Hon A. (Epsom)

    McNair-Wilson, M. (N'bury)

    Hamilton, Neil (Tatton)

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

    Hanley, Jeremy

    Madel, David

    Hannam, John

    Major, John

    Hargreaves, Kenneth

    Malins, Humfrey

    Harris, David

    Malone, Gerald

    Harvey, Robert

    Maples, John

    Haselhurst, Alan

    Marland, Paul

    Havers, Rt Hon Sir Michael

    Marlow, Antony

    Hawkins, Sir Paul (N'folk SW)

    Marshall, Michael (Arundel)

    Hawksley, Warren

    Mates, Michael

    Hayes, J.

    Mather, Carol

    Hayhoe, Rt Hon Barney

    Maude, Hon Francis

    Hayward, Robert

    Mayhew, Sir Patrick

    Heath, Rt Hon Edward

    Mellor, David

    Heathcoat-Amory, David

    Merchant, Piers

    Heddle, John

    Meyer, Sir Anthony

    Henderson, Barry

    Miller, Hal (B'grove)

    Heseltine, Rt Hon Michael

    Mills, Iain (Meriden)

    Hickmet, Richard

    Mills, Sir Peter (West Devon)

    Hicks, Robert

    Mitchell, David (Hants NW)

    Higgins, Rt Hon Terence L.

    Moate, Roger

    Hind, Kenneth

    Monro, Sir Hector

    Hirst, Michael

    Montgomery, Sir Fergus

    Hogg, Hon Douglas (Gr'th'm)

    Moore, Rt Hon John

    Holland, Sir Philip (Gedling)

    Morrison, Hon C. (Devizes)

    Holt, Richard

    Morrison, Hon P. (Chester)

    Hordern, Sir Peter

    Moynihan, Hon C.

    Howard, Michael

    Mudd, David

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

    Neale, Gerrard

    Howarth, Gerald (Cannock)

    Nelson, Anthony

    Howe, Rt Hon Sir Geoffrey

    Neubert, Michael

    Howell, Rt Hon D. (G'ldford)

    Nicholls, Patrick

    Howell, Ralph (Norfolk, N)

    Normanton, Tom

    Hubbard-Miles, Peter

    Norris, Steven

    Hunt, David (Wirral W)

    Onslow, Cranley

    Hunt, John (Ravensbourne)

    Oppenheim, Phillip

    Hunter, Andrew

    Ottaway, Richard

    Hurd, Rt Hon Douglas

    Page, Richard (Herts SW)

    Irving, Charles

    Patten, Christopher (Bath)

    Jackson, Robert

    Patten, J. (Oxf W & Abgdn)

    Jenkin, Rt Hon Patrick

    Pattie, Geoffrey

    Jessel, Toby

    Pawsey, James

    Johnson Smith, Sir Geoffrey

    Peacock, Mrs Elizabeth

    Jones, Gwilym (Cardiff N)

    Percival, Rt Hon Sir Ian

    Jones, Robert (Herts W)

    Pollock, Alexander

    Joseph, Rt Hon Sir Keith

    Portillo, Michael

    Kellett-Bowman, Mrs Elaine

    Powell, William (Corby)

    Kershaw, Sir Anthony

    Powley, John

    Key, Robert

    Prentice, Rt Hon Reg

    King, Roger (B'ham N'field)

    Price, Sir David

    King, Rt Hon Tom

    Prior, Rt Hon James

    Knight, Greg (Derby N)

    Pym, Rt Hon Francis

    Knight, Dame Jill (Edgbaston)

    Raffan, Keith

    Knowles, Michael

    Raison, Rt Hon Timothy

    Knox, David

    Rathbone, Tim

    Lamont, Rt Hon Norman

    Rees, Rt Hon Peter (Dover)

    Lang, Ian

    Renton, Tim

    Latham, Michael

    Rhodes James, Robert

    Lawler, Geoffrey

    Rhys Williams, Sir Brandon

    Lawrence, Ivan

    Ridley, Rt Hon Nicholas

    Lawson, Rt Hon Nigel

    Ridsdale, Sir Julian

    Lee, John (Pendle)

    Rifkind, Rt Hon Malcolm

    Lennox-Boyd, Hon Mark

    Rippon, Rt Hon Geoffrey

    537

    Roberts, Wyn (Conwy)

    Thompson, Donald (Calder V)

    Robinson, Mark (N'port W)

    Thompson, Patrick (N'ich N)

    Roe, Mrs Marion

    Thome, Neil (Ilford S)

    Rossi, Sir Hugh

    Thornton, Malcolm

    Rost, Peter

    Thurnham, Peter

    Rowe, Andrew

    Townend, John (Bridlington)

    Rumbold, Mrs Angela

    Townsend, Cyril D. (B'heath)

    Ryder, Richard

    Tracey, Richard

    Sackville, Hon Thomas

    Trippier, David

    Sainsbury, Hon Timothy

    Trotter, Neville

    St. John-Stevas, Rt Hon N.

    Twinn, Dr Ian

    Sayeed, Jonathan

    van Straubenzee, Sir W.

    Shaw, Sir Michael (Scarb')

    Vaughan, Sir Gerard

    Shelton, William (Streatham)

    Viggers, Peter

    Shepherd, Colin (Hereford)

    Waddington, David

    Shepherd, Richard (Aldridge)

    Wakeham, Rt Hon John

    Shersby, Michael

    Waldegrave, Hon William

    Silvester, Fred

    Walden, George

    Sims, Roger

    Walker, Rt Hon P. (W'cester)

    Skeet, Sir Trevor

    Wall, Sir Patrick

    Smith, Tim (Beaconsfield)

    Waller, Gary

    Soames, Hon Nicholas

    Walters, Dennis

    Speed, Keith

    Ward, John

    Speller, Tony

    Wardle, C. (Bexhill)

    Spencer, Derek

    Watson, John

    Spicer, Jim (Dorset W)

    Watts, John

    Spicer, Michael (S Worcs)

    Wells, Sir John (Maidstone)

    Squire, Robin

    Wheeler, John

    Stanbrook, Ivor

    Whitfield, John

    Stanley, Rt Hon John

    Whitney, Raymond

    Steen, Anthony

    Wiggin, Jerry

    Stern, Michael

    Wilkinson, John

    Stevens, Lewis (Nuneaton)

    Winterton, Mrs Ann

    Stewart, Allan (Eastwood)

    Winterton, Nicholas

    Stewart, Andrew (Sherwood)

    Wolfson, Mark

    Stewart, Ian (Hertf'dshire N)

    Wood, Timothy

    Sumberg, David

    Yeo, Tim

    Tapsell, Sir Peter

    Young, Sir George (Acton)

    Taylor, John (Solihull)

    Younger, Rt Hon George

    Taylor, Teddy (S'end E)

    Tebbit, Rt Hon Norman

    Tellers for the Noes:

    Temple-Morris, Peter

    Mr. Robert Boscawen and

    Thatcher, Rt Hon Mrs M.

    Mr. Tony Durant.

    Question accordingly negatived.
    Debate to be resumed tomorrow.

    WELSH GRAND COMMITTEE
    Ordered,
    That, during the proceedings on the matter of the Queen's Speech and its effect on Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet; and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee has considered the matter for two hours at that sitting.—[Mr. Cope.]

Mr. Mordechai Vanunu
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Portillo.]
10.14 pm
Mr. Dennis Walters: The case that I raise tonight concerning Mordechai Vanunu is mysterious and disturbing. It merits being discussed in the House, as it touches on important issues affecting the law of this country. I believe that there should be a full investigation into all the circumstances surrounding Mr. Vanunu's arrival, stay in and departure from the United Kingdom. There is understandable and widespread public concern about this matter, which has been reflected in Parliament and in the press. My right hon. Friend the Home Secretary should now set up an investigation as a matter of urgency.
Mordechai Vanunu is an Israeli citizen who, having left his country, eventually came to London and while here, produced damaging revelations about the secret development by Israel of a nuclear strike capability, which were published in The Sunday Times on 5 October. Although the information was already known in so-called well-informed circles, the extent of the programme at Dimona came as somewhat of a surprise. In any event, it all came as a complete surprise to the general public.
Some time between 30 September and 5 October, Mr. Vanunu disappeared from his hotel, and from that moment on nothing more was heard of him or from him, either by his journalistic contacts in London or by his friends in Australia. There was a spate of rumours suggesting that he had been kidnapped and spirited back to Israel. Several stories to that effect appeared in the press. I tabled questions to the Foreign and Home Secretaries, as did several of my hon. Friends and other hon. Members. The replies that we received were negative and, on the whole, uninformative: their essence being that there was no evidence to suggest that Mr. Vanunu had been abducted against his will or that he was in Israel.
At that time, the Israeli authorities were consistently denying any knowledge of Mr. Vanunu's whereabouts. Those authorities were lying, because unexpectedly, on 9 November, they announced that Mr. Vanunu was in prison in Israel, and, as it happened, he had been in prison there when they were issuing their categorical denials about him.
There were two obvious motives for the Israelis wanting to capture Mr. Vanunu and to take him back to Israel. The first was in order to punish him for what he had done, which the Israelis looked upon as an act of treachery; the second was to prevent him from continuing to publicise the damaging information about Israel's nuclear weapons programme. It was the kind of publicity that could only harm the "peace-loving image", spread with remarkable success by Israeli propaganda, in spite of being at variance with the facts.
Naturally, the possession by Israel of a nuclear bomb, Israel not being a signatory of the non-proliferation treaty, was a matter of great public interest and concern. Although it has been mooted in certain quarters that Mr. Vanunu was an Israeli agent and that the pupose of his revelations about the extent of Israel's nuclear capacity was to frighten Arab and other states in the area, these suggestions seem far fetched and improbable.
My hon. and learned Friend the Minister of State will be aware that Zionist terrorism goes back a long way in

539
time and that violence and violation of international law are not alien to the present Israeli leadership. More recently—since the late 1960s—there have been at least 10 assassinations, or attempted assassinations, in Europe of leading Palestinians which have been claimed by Israeli avenger squads and organised by Mossad.
One of the most elaborate incidents was in Norway in June 1973, when 10 Mossad agents were sent to track down a Palestinian, Mr. Ali Hassam Salameh. The squad was supervised by General Zamir, who had gone to Oslo for the purpose. The agents struck in Lilliehammer, where a man and a woman shot down their suspect as he walked along a road. It was the wrong man; the victim was a Moroccan waiter. Several members of the avenger squad were arrested, hut Zamir and his aides escaped.
A very recent example was the kidnapping of Mr. Dikko, the Nigerian politician who was eventually discovered in a crate at Stansted airport with an Israeli agent sitting beside him holding a hypodermic needle.
In these circumstances Her Majesty's Government should not be too complacent about the assurances that they receive from the Israeli Government, and in this respect I was disappointed with what my hon. Friend the Minister of State, Foreign and Commonwealth Office, had to say on the subject when he replied to the foreign affairs debate last Friday.
We know that Mordechai Vanunu was met by an "Insight" reporter at Sydney airport to bring him back to London on 11 September. He remained in London, staying at different hotels for several weeks. He was in England on 23 September when he spoke to representatives of The Sunday Times at Wapping and maintained contact with the newspaper during the following week. In one of his last calls he said that he was frightened of being kidnapped. Some time after that he disappeared. We know now that he is in an Israeli prison.
There are several ways in which Mordechai Vanunu could have found himself in an Israeli prison, but one that can be ruled out is that he reached there of his own free will. It follows logically that he must have been abducted, and almost without doubt by Israeli agents.
Mr. Ivan Lawrence: My hon. Friend seems to rule out any voluntary leaving. Is he aware that the "Insight" team of The Sunday Times has examined this matter and last week produced an article asking:
"How was Mordechai Vanunu, the man who gave The Sunday Times the secrets of Israel's nuclear arsenal, spirited 3,000 miles from London to a top security prison south of Tel Aviv?"
It answered the question by stating that, after its investigation, the
"assumption must be that Vanunu was somehow lured offshore by 'Cindy'."
I am as concerned as he is about any illegality that might take place on British soil. The "Insight" team is Vanunu's sponsor and has investigated the matter. It concluded that he went because he was lured by some girl and that no blame attaches to the British authorities. Why does my hon. Friend—who is a Conservative Member—seek to make mischief not only for the Israeli Government but for the British Government?
Mr. Walters: That intervention by my hon. and learned Friend was rather long. [AN HON. MEMBER: "But very much to the point."] It was not to the point, because there have been several speculative theories and this is one of them.
Mr. Michael Carttiss: It was the "Insight" team.
Mr. Walters: The "Insight" team has put forward several speculative stories, and this is one of them. I am sure that my hon. and learned Friend the Minister will wish to repudiate once again the offensive slur that our security services connived at Mr. Vanunu's removal. I do not intend to pursue the various hypotheses explored in the press, because it does not seem a profitable way for me to proceed in this debate.
The Home Secretary should immediately set up an investigation with the aim of trying to discover what happened to Mr. Vanunu in London and how he left Britain. At the same time, Her Majesty's Government should firmly press the Israeli Government to come clean and reveal how Mr. Vanunu was taken from his hotel in London to a top security prison in Israel where he is now being held.
Mr. Anthony Beaumont-Dark: There is an easy way for the Israeli Government to allay our fears. Could they not agree that an international jurist should interview Mr. Vanunu to find out how he left Britain and how he arrived in Israel? If the Israelis have nothing to fear, they should not be afraid of someone with an international reputation.interviewing Mr. Vanunu on this very point.
Mr. Walters: My hon. Friend, who has also taken a interest in this case, makes an interesting suggestion and no doubt my hon. Friend the Minister will deal with it. I shall now return to the point that I was making.
We know that Mr. Vanunu is now being held in an Israeli prison and that the Israelis know what happened, without any inquiry or investigation being necessary. The facts should be ascertained and we should not tolerate being fobbed off by patronising and dismissive statements.
It is for the British Government and, if necessary, for the British courts, to decide what constitutes a violation of British law. Her Majesty's Government should not tamely accept that the Israeli Government can simply inform us that our law has not been broken. There is a strong feeling of outrage among the British public at what may have occurred, and that feeling should not be underestimated. If a kidnapping or a conspiracy to kidnap has been carried out by agents of a foreign power on British soil we are entitled to know about it and to be satisfied that appropriate action will follow.
10.28 pm
The Minister of State, Home Office (Mr. David Waddington): My hon. Friend the Member for West bury (Mr. Walters) has raised a topic that has attracted considerable interest in this House and in the press. The matter was discussed here only last Friday in the debate on the Address. I welcome this further opportunity to separate fact from speculation, even though in the short time that has elapsed since then there is little new to add.
Mr. Mordechai Vanunu is an Israeli citizen who claims to have been employed as a nuclear technician at Israel's Dimona nuclear plant. The circumstances of how he came into contact with The Sunday Times, the nature of his contract with that newspaper and the contents of his story as published, are not matters for the Government and I have no comment to make on those aspects.
I shall deal first with Mr. Vanunu's presence in this country and police inquiries about his disappearance. He

541
arrived here on 12 September 1986 and then for over two weeks stayed in and around London under arrangements made by The Sunday Times. He was last seen on the morning of Tuesday 30 September when he checked out of the Mountbatten hotel in St. Martin's lane and, according to the staff in the hotel, there was nothing unusual about his departure. But The Sunday Times says that he telephoned that morning and told the telephonist who answered that he was "frightened" and was going "to the country". At that stage, the police were unaware of any concern about Mr. Vanunu, and it was not until 8 October that The Sunday Times reported his disappearance—that is, eight days after he had last been seen at the Mountbatten hotel and three days after the newspaper's article on 5 October. There was no evidence that Mr. Vanunu had been abducted or that any crime had been committed. The police listed him as a missing person and the inquiries made thereafter were as a result of that missing person report. They have not at any stage been in possession of evidence of any crime connected with this case. I shall come back to that aspect later.
The immigration service has no record of Mr. Vanunu having left the United Kingdom under his own name since 30 September 1986. There has been speculation in the newspapers and elsewhere that the absence of any such record, taken with information that Mr. Vanunu is in Israel, gives grounds for suspicion. I must make it clear that the absence of any record of departure proves nothing. Checks on persons leaving the country are selective. No attempt is made to record names of all those leaving, and I remind the House that it was not until eight days after Mr. Vanunu was last seen that he was first reported missing.
The inquiries made by the police are, of course, a matter for them. There is no doubt that they would investigate thoroughly any evidence of crime made known to them, and it was for that reason that I said on 3 November, in reply to a question by my hon. Friend the Member for Northampton, North (Mr. Marlow), that anyone having evidence that an offence had been committed should inform the police.
Mr. Beaumont-Dark: My hon. and learned Friend's comments are somewhat disturbing. The Home Office seems to be certain about when Mr. Vanunu came to this country, but my hon. and learned Friend calmly says that, once people are here, the Home Office does not know whether they have gone or whether people come and go. Is he actually saying that we solemnly mark the people who come here in and then do not care a damn whether they have left or how they have gone? How many people are here who should not be here? Why bother to mark them in if we cannot bother to mark them out?
Mr. Waddington: We know the date on which Mr. Vanunu entered this country because he did so in the company of someone from The Sunday Times who can give evidence to that effect. It would be quite impossible for us to record the departure from this country of everyone who enters. In fact, 35 million people leave this country every year. No country with that sort of traffic of persons in and out could possibly record the arrival and departure of everyone. Just as we have no record of Mr. Vanunu's departure, I doubt very much that we have any
542
record of his arrival. We do not have to look at any record of his arrival because we know the date, for the reasons I have mentioned.
Mr. Keith Speed: My hon. and learned Friend has just said that he doubts whether there is any record of Mr. Vanunu's arrival. If I understand correctly, any non-EEC citizen flying to this country has to fill in a card on the aircraft. What is the point of everybody doing that if the cards are not used and there is no record?
Mr. Waddington: In this country we have always operated a system of recording those who enter on a selective basis. If we were to record on the computer everyone who entered, not only would the computer be overloaded, but the task of analysing the records that were kept would be ridiculous and out of proportion to the exercise to be carried. What has always happened is that one records entries on a computer on a selective basis, recording those whose entry it is considered should be recorded because there might be some likelihood of their not departing at the appropriate time. However, as I have said, that does not arise in this case because we know when this man arrived for a different reason.
The Foreign and Commonwealth Office had written in similar terms on 31 October to the editor of The Sunday Times. The fact is that no evidence pointing to any offence having been committed has been made available to the police, and no such evidence has been revealed by their own inquiries.
I refer to inquiries made by the Government. As is clear from what I have already said, nothing is known to us about Mr. Vanunu's movements from the time he checked out of his hotel on 30 September until the Israeli Government confirmed on 9 November that he was in Israel. In the early stages after the reporting of his disappearance there was much speculation that Mr. Vanunu had been kidnapped in the United Kingdom, or enticed to leave this country and then taken to Israel. Those reports were, however, entirely speculative and, until about 20 October, we had no reason to think that Mr. Vanunu was in Israel, and no other evidence to suggest that the Israeli authorities were in any way involved.
It was on about 20 October that press reports appeared to the effect that Mr. Vanunu had been remanded in custody after being brought before a court in Jerusalem. An Israeli police spokesman denied those reports, but the Foreign and Commonwealth Office emphasised to the Israeli ambassador in London the need to clarify the position. It was apparently as a result of this that on 9 November a statement was made by the Israeli Government to the effect that Mr. Vanunu was under lawful detention in their country. The statement specifically denied that he was kidnapped on British soil
Mr. Walters: Does my hon. and learned Friend not find it surprising that the Israeli authorities continued to deny knowledge of the whereabouts of Mr. Vanunu when he was in an Israeli gaol and then made an announcement on 9 November? Does that not make it appear that they were being both deceitful and dishonest?
Mr. Waddington: I said that an Israeli police spokesman denied the reports that he was in custody but when the Israeli Government were approached by the Foreign and Commonwealth Office they then made the statement. The statement specifically denied that he was kidnapped on British soil.

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On 10 November our ambassador in Tel Aviv was instructed to seek clarification from the Israeli Government as to how Mr. Vanunu came to be in Israel. The Government replied on 13 November in a formal statement, the terms of which were referred to by my hon. Friend the Member for Mid-Sussex (Mr. Renton) in the debate on Friday 14 November. The statement said that Mr. Vanunu left Britain of his own volition and through normal departure procedures, and that his departure involved no violation of British law.
Our ambassador also spoke to Mr. Vanunu's lawyer and asked him whether he could say how Mr. Vanunu left the United Kingdom. The lawyer responded by saying that he could not comment without permission from the Israeli authorities.
I understand that the Israeli Government also referred in its statement of 13 November to constraints resulting from the fact that criminal charges are pending in Israel. We recognise that this may impose some limitations on what the Israeli authorities can say about the case against Mr. Vanunu. Nevertheless, I certainly regard it as unsatisfactory that the Israeli authorities have declined to give any explanation of the circumstances, or even the date of his arrival in Israel.
Mr. Nicholas Soames: In view of the quite deplorable behaviour of the Israeli Government over the Dikko affair, will my hon. and learned Friend be a little less mealy-mouthed about their behaviour in this respect?
Mr. Waddington: I do not think that I can be accused of being mealy-mouthed, because all that I have done so far is record the facts. I have recorded the approach to the Israeli Government and the reply received from them. I have also said that I regard it as unsatisfactory that the Israeli authorities have declined to give any explanation of the circumstances or even the date of Mr. Vanunu's arrival in Israel. I do not call that being mealy-mouthed.
Mr. Robert Adley: Will my hon. and learned Friend give way?
Mr. Waddington: I must get on.
For example, we do not know whether it is true, as reported in the press, but denied by an Israeli police spokesman at the time, that Mr. Vanunu appeared in court on 20 October. It is difficult to see how a statement on such a matter could prejudice legal proceedings in Israel. But we note what the Israeli Government have said, and I am sure that the House will expect that when any sub judice constraints are removed, the Israeli Government will make the position clear.
I thought it right to set out the facts as known to us, and our inquiries of the Israeli Government, before coming to the main point raised by my hon. Friend the Member for Westbury in his speech. He is pressing for a full investigation of the circumstances surrounding Mr. Vanunu's arrival, stay and departure from this country. I share my hon. Friend's concern about this strange case,
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but I am bound to say that I do not see what useful purpose would be served by any special formal type of inquiry, if that is what my hon. Friend has in mind.
Mr. Toby Jessel: Will my hon. and learned Friend give way?
Mr. Waddington: Not for the moment, because I must watch the clock. I shall give way in a few moments if possible.
Most recent speculation has concentrated on the possibility of Mr. Vanunu having been taken to Israel after being abducted somewhere outside the United Kingdom's jurisdiction, and I cannot see how it would be productive for the British Government to try to inquire into such a possibility, of which there is in any case no specific evidence. In relation to things happening outside United Kingdom jurisdiction, such an inquiry would have no powers, and no locus: it would be an empty gesture. If on the other hand—I believe this is what my hon. Friend the Member for Westbury is after—it is suggested that the primary purpose of such an inquiry would he to look into things that might have happened within United Kingdom jurisdiction, surely such an inquiry would merely risk causing confusion. The investigation of criminal offences in this country is a matter not for the Government but for the police. The police have already conducted some inquiries into the case, and I know that they will continue to follow up anything else that may need to be investigated in connection with it. If they were to find evidence of crime having been committed here, whether in the form of a substantive offence, or a conspiracy to commit an offence elsewhere in circumstances that gave rise to an offence under our law, any further action would be a matter for the prosecuting authorities, not for the Government.
Mr. Jessel: Is it not rather surprising that my hon. Friend the Member for Westbury (Mr. Walters) said that there was a strong sense of public outrage on this case, because in my constituency, which is exceptionally articulate, I have not had a single letter on it yet?
Mr. Waddington: The honourable House ought to be grateful to my hon. Friend the Member for Westbury for raising the matter on the Adjournment because undoubtedly it has been canvassed at great length in the press. It is right that I should have the opportunity to try to clear up some matters.
I understand my hon. Friend's concern. The statement that the Israeli Government made on 13 November shows that they know of the circumstances of Mr. Vanunu's departure from this country, and it appears that they have accepted responsibility for the circumstances of his return to Israel. Their silence on how he returned only prolongs speculation, and I hope, as my hon. Friend does, that they will put an end to that speculation, which is damaging to their interests, as soon as possible.
Question put and agreed to.
Adjourned accordingly at sixteen minutes to Eleven o'clock.

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

Dyslexic Children: Education
Lord Ritchie of Dundee: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are considering carrying out any research with the object of discovering what proportion of school under-achievement is traceable to dyslexia.
Baroness Hooper: My Lords, it is the Government's view that the needs of dyslexic children be considered within the broader framework of children with special educational needs and so the Government have no plans to carry out the research referred to in the Question.
Lord Ritchie of Dundee: My Lords, I thank the Minister for her reply. Does she agree that the 40 per cent. under achievement rate that we hear of in our schools is a matter of grave concern; that it seems likely that the root cause in a large number of these cases is a deficiency in the basic skills of English, and that in a number of such cases a neurologically based reading disability is a cause? In those circumstances, would not an investigation of this sort be profitable?
Baroness Hooper: My Lords, the Government are aware of the problem and are concerned about it. They have already funded research in the general field of specific learning requirements; for example, the Warnock Report published in May 1978 identified a number of areas where further research was considered necessary. The Department of Education and Science subsequently funded a programme of four research projects. Details of the findings were published by the department following a seminar on those projects. The Government are aware, are concerned and are following through the matter.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister whether Her Majesty's Government and the Department of Education and Science regard dyslexia as a separate condition and do not just include it with an enormous number of other conditions? My impression is that it is not recognised as a separate condition and difficulty.
Baroness Hooper: My Lords, the Government recognise the existence of dyslexia. A number of committees have advised successive Secretaries of State for Education and Science on the subject. They include the Tizard Committee and, as I said, the Warnock Committee. In the light of their findings, the Government take the view there are children of at least average ability who have severe or long-term
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difficulties in one or more areas of reading, writing or numeracy. The difficulty is that there are apparently a number of causes of dyslexia. The problem must be tackled on a broad base.
Lord Molloy: My Lords, is the noble Baroness aware that men and women in schools and within the Department of Education and Science who specialise in trying to tackle dyslexia are of the opinion that there is an increase in the number of children who suffer from dyslexia, which is disturbing, and that there is an urgent need not merely to halt the increase but to try to start curing dyslexia? That is why they are asking that more money should be made available and a special department set up within the Department of Education and Science, or some medical department, to liaise in order to try to reduce the incidence of dyslexia and then to find a cure for it.
Baroness Hooper: My Lords, I am not aware of the increase to which the noble Lord refers. Under the Education Act 1981, local education authorities and school governors are required to identify children who have or who may have special educational needs, including those with special learning difficulties.
Lord Taylor of Blackburn: My Lords, is the Minister aware that in many primary and junior schools the pupil teacher ratio is 30:1, and that it is impossible to diagnose dyslexia until the children are aged 11 or over? That is a great drawback. Will the Minister ask her colleagues in the Department of Education and Science whether they are prepared to look again at the pupil teacher ratio and to bring down the number so that these children may be diagnosed earlier?
Baroness Hooper: My Lords, this matter, with many others, is obviously kept under review. The difficulties of teacher diagnosis are understood. Parents also have a duty. That is why under Section 9 of the Education Act 1981 a parent who feels that his or her child is in difficulty has the right to ask the local education authority to carry out an assessment of the child's needs. The local education authority must comply with that request unless it finds that it is in any way unreasonable. It is clearly a case where there must be co-ordination between parents, governors and teachers.
Lord Glenamara: My Lords, does the noble Baroness not recognise that there is a special difficulty here? A great many educationists do not recognise the existence of a malady called dyslexia. Is there not a particular need for the kind of research suggested by the noble Lord, Lord Ritchie, if only to convince educationists that there is such a thing as dyslexia? Is this not the kind of research that could have been undertaken by the Schools Council, and were not the Government very foolish and ill-advised to abolish it?
Baroness Hooper: My Lords, the Government are obviously in contact with the specialised organisations on this specific subject, particularly voluntary organisations such as the British Dyslexia Association, which is the umbrella organisation for all the local associations working in this field. So, within the general framework of special educational needs,

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supported, I believe, by the British Dyslexia Association, the Government are carrying out research and trying very hard to get their priorities right.

Falkland Islands: Fishery Discussions
2.43 p.m.
Lord Kennet: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what caused the breakdown of their attempts to get a multilateral fisheries arrangement round the Falkland Islands through the FAO, and what was the role of the Soviet Union and Bulgaria in those discussions.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, far from having broken down, negotiations have not yet begun. The delay in the publication of the FAO's technical study of the South-West Atlantic fishery compelled the Government to declare an interim conservation zone around the Falklands in order to protect fish stocks in the 1987 fishing season. The Soviet Union and Bulgaria have provided the FAO secretariat with some statistical information on the fishery.
Lord Kennet: My Lords, I am grateful to the noble Lord for that helpful and, on the whole, optimistic reply. In asking my supplementary, I hope that the noble Lord will not tell me that I am going too wide. This morning I applied to the Leader of the House for leave to ask a Private Notice Question and was told that the matter was not of sufficient urgency or public interest. The supplementary is this: yesterday the Government of Argentina made a proposal to this country that it would finally declare a cessation of hostilities in return for the withdrawal of a zone. The question is: What zone is it that they want us to abandon? Is it the 150-mile Falkland Islands military protection zone? Is it the 150-mile interim fisheries conservation and management zone? Or is it both?
Lord Trefgarne: My Lords, I suspect that the noble Lord's Private Notice Question, had he been allowed to ask it, would have borne a striking resemblance to the supplementary that we have now heard. Be that as it may, I do not wish to duck the question that the noble Lord has put. If he asks me for a short comment on the declaration made by Argentina yesterday, I would say that it smelt of old wine in new bottles.
Lord Shackleton: My Lords, while recognising the tolerance of your Lordships for questions that go far beyond the scope of the Question on the Order Paper, may I return to that Question? Is it not a fact, and can the noble Lord confirm, that the Government made every effort to talk to the Argentine and bring it into discussions, pursuing the multinational system which many of us thought would not work because of the attitude of the Argentine? Is it not a fact that the Argentine itself had declared and had sought to enforce claims in Falklands waters without any
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discussions with Her Majesty's Government? Is it not correct to say that it is only the belated action of the Government that has brought the Argentine to produce what appears to be a new proposal but, in fact, is the old one that we have heard so often before?
Lord Trefgarne: My Lords, the noble Lord is quite right in what he says in the latter part of his supplementary. I emphasise that the interim fisheries protection zone that we have declared around the Falkland Islands is, indeed, interim. We would much prefer a multilateral solution to the problem. If a multilateral solution is to emerge, we shall hasten to reconsider our position.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that his response to the supplementary question of the noble Lord, Lord Kennet, was offensive and unhelpful? Is he aware that here may be the opportunity for constructive bilateral talks with the Argentine on a matter that affects the future of the islands and is very close to the interests of this noble House? Will the noble Lord say whether or not Her Majesty's Government are giving careful consideration to what President Alfonsin said? Or is the noble Lord saying that the Government have dismissed what he said out of hand? Furthermore, would the noble Lord not agree that this may well help towards achieving the kind of multilateral settlement in relation to fishing rights that the Government themselves have said they wish to see?
Lord Trefgarne: My Lords, if the noble Lord is asking me to comment further upon the declaration made by President Alfonsin—yesterday, I think—I would say that it seems to me that there is no fundamental change in the Argentinian position, or even any detailed change in the Argentinian position, which is that it requires, first and foremost, to discuss the sovereignty of the Falkland Islands, added to which it appears to have prejudged the outcome of such discussions. That is not a position that the British Government can accept.
Lord Cledwyn of Penrhos: My Lords, is it not the case that the word "sovereignty" was not mentioned by President Alfonsin? Is not the approach by President Alfonsin the most constructive made by the Argentine Government since the Berne talks fell two years ago? Should it not be the duty of Her Majesty's Government in all the circumstances to seek to achieve constructive talks? Is it not also the case that the Government of the United States support such talks?
Lord Trefgarne: My Lords, if it is the position of the Argentine Government that talks may now proceed in a number of detailed matters, then the United Kingdom will be very willing to take part in such talks. What we cannot agree to do is to discuss sovereignty with the Argentinians. That is a position we have repeatedly made clear on a number of occasions. Of course the position was different in February 1982, but then the Argentinians, in the midst of those negotiations, chose to invade the Falkland Islands.
Lord Avebury: My Lords, was the issue confined to the matter of the exclusion zone? Was the statement not offering to declare an end to hostilities on one condition, and one condition only: that the zone which was mentioned by my noble friend Lord Kennet—whether it be the 150-mile military exclusion zone or the 150-mile fisheries zone—be abandoned by the United Kingdom Government? From where does the noble Lord the Minister get his reference to sovereignty? If there were no reference to sovereignty in President Alfonsin's statement, does it mean that the Government are now prepared to accept this offer to put an end to hostilities, to discuss the ending of the exclusion zone and all these other matters which are covered in the Question?
Lord Trefgarne: My Lords, in the past the Argentinians have made it clear that "all aspects"—as they call it—of the Falkland Islands problem include sovereignty, and all aspects of the Falkland Islands problem are apparently what they now wish to negotiate.
Whether or not we can raise the Falkland Islands protection zone—and I believe it is that to which they are now referring, which was a point raised by the noble Lord, Lord Kennet, earlier—will of course depend inter alia upon an Argentinian declaration about the cessation of hostilities, but will also depend upon other matters. We shall have to be satisfied that the threat to the Falkland Islands has indeed gone away.
Lord Molloy: My Lords, is the noble Lord not aware that their present government had nothing to do with the invasion, with the dramatic loss of lives of both our countrymen and theirs? That is a matter that has always to be borne in mind. It does not matter how crass or witty the reply involved. It is not witty to those who gave their lives or to those who remained, and the relatives of those who gave their lives. Can the Government not at least try to find out the situation, as this is now a beginning, by saying, "On all other occasions you have mentioned sovereignty. This time you have not. Can we now make a beginning so that we shall possibly, and we all hope probably, never have another confrontation of force again"?
Lord Trefgarne: My Lords, I cannot think that the Argentinians are under any misapprehension about the British Government's position. It has been made clear to them time and time again. Indeed, on one occasion two years ago we went to Berne to open negotiations with the Argentinians and a formula had been agreed which would have dealt with the sovereignty position with regard to those negotiations. The Argentinians torpedoed those negotiations in the first breath.
Lord Gladwyn: My Lords, if I am right in thinking that the Soviet Union does not recognise the recently proclaimed fisheries protection zone, are we to assume that in the event of violation of that zone by Soviet trawlers it will result in a confrontation between us and the Soviet Union?
Lord Trefgarne: My Lords, I understand that the Soviet Union have made it clear that they will respect the British position as far as the fisheries protection zone goes.
Lord Shackleton: My Lords, may I ask the noble Lord: have the Government had any direct communication from the Argentine Government?
Lord Trefgarne: My Lords, I understand that the declaration which was the subject of the supplementary question of the noble Lord, Lord Kennet, was conveyed to the British Government.
Lord Kennet: My Lords, will the noble Lord recognise that he is digging his feet in on behalf of the Government? Will he admit that there may be dangers here? Will he distinguish, please, between several factors about which he might be digging his feet in? Is the noble Lord aware that if he is digging his feet in about the issue of no early transfer of sovereignty he will have those of us on these Benches with him? Is he further aware that if he is digging his feet in about there being no discussion of any modification of sovereignty, such as shared sovereignty, or a sovereignty pooled through a United Nations trusteeship under Article 83 of the Charter, he will not have those of us on these Benches with him, and that he may indeed be assisting in a process of running this country into an extremely isolated and dangerous situation?
Lord Trefgarne: My Lords, the noble Lord opened his remarks by saying that I was digging my feet in on behalf of the British Government. Not so, my Lords. I am "digging in", if those are the right words, on behalf of the people of the Falkland Islands.
Lady Saltoun of Albernethy: My Lords, if we are prepared to discuss the sovereignty of the Falkland Islands with Argentina, why did we bother to fight the Falklands war?
Lord Trefgarne: My Lords, that is a question which the noble Lady may care to address to other Members of your Lordships' House.
Lord Glenamara: My Lords, in all his replies today the noble Lord has not addressed himself to the terms of the latest note. The latest note proposed the ending of the exclusion zone—or whatever it is called—and in return, the end of formal hostilities. That was the proposal. Does this not at least form the basis for discussion?
Lord Trefgarne: My Lords, the Government have always said that they would be prepared to consider the lifting of the protection zone in appropriate circumstances. The principal circumstance is of course that the threat to the Falkland Islands has disappeared.
A noble Lord: My Lords, the noble Lord is not answering the question.

Falkland Islands Conservation Zone: EC Reaction
2.57. p.m.
Lord Kennet: 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 is the attitude of the other members of the European Community to the fisheries conservation and management zone recently declared around the Falkland Islands.
Lord Trefgarne: My Lords, there have been no formal statements by the governments of members of the European Community on the Government's decision to declare a Falkland Islands conservation zone.
Lord Kennet: My Lords, what is the position of the Government about the evidently less than formal declaration which was on the air waves this morning that the Prime Minister of Spain has said he will not recognise the zone, given the fact that Spain has the European Community's biggest fishing fleet and already has a vast share of the multi-million pound fish take from around there?
Lord Trefgarne: My Lords, I am told that press reports are innacurate and exaggerated. It is in the interests of Spain's important fishing industry to participate in an orderly and controlled fishery.
Lord Tordoff: My Lords, I wonder whether the noble Lord can answer the original Question, which is what is the attitude of our friends in the Community, not what forms of statements they made?
Lord Trefgarne: My Lords, we have been in regular touch with the Commission and our partners. My right honourable and learned friend the Foreign Secretary sent a personal message to his European Community colleagues and to the fisheries Commissioner on 29th October. I think that is probably the answer to the questions of the noble Lord.
Lord Tordoff: My Lords, with all due respect to the noble Lord the Minister, those are the questions that have been asked. We are trying to find out what the answers are.
Lord Trefgarne: My Lords, as I said earlier there has been no formal response.
Lord Mackie of Benshie: My Lords, can the noble Lord tell us what the informal responses have been?
Lord Trefgarne: My Lords, as the noble Lord will be aware we do not normally discuss the informal communications about which I think the noble Lord is asking.
Lord Cledwyn of Penrhos: My Lords, the Ministers have made plain from the start that their objective is a multilateral fisheries arrangement in the Falklands.
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Can the noble Lord say whether that still remains the Government's policy? How do they now propose to achieve it?
Lord Trefgarne: My Lords, yes. As I said earlier in answer to a supplementary question from the noble Lord, Lord Shackleton, the Government would very much prefer a multilateral solution to this problem. Indeed, if such a multilateral solution would emerge we would hasten to reconsider our position about the particular arrangements that we have recently put in place. We shall continue to co-operate with the FAO as they think fit.
Lord Kennet: My Lords, may I ask one more supplementary question which I think even the noble Lord will find well within the original Question. Given that this new fisheries management zone has obvious merits, why did the Government not impose it, first, immediately after the war was over; secondly, immediately world fishing around there had assumed dangerous proportions of many hundreds of thousands of tonnes a year; or, thirdly, after Argentina signed its strange bilateral agreements with the Soviet Union and Bulgaria? Why wait until now?
Lord Trefgarne: My Lords, once the fishing season is over the pressure is off to make any arrangements of the kind to which the noble Lord referred. At the outset of the last fishing season we were still hopeful that the multilateral approach would have succeeded. Afterwards it became clear that it would not. Therefore, we have now put our unilateral regime in place in time for the next fishing season.
Lord Morris: My Lords, will my noble friend the Minister draw some comfort from the certainty that the more the Liberal-SDP Alliance and the party opposite are determined to tinker with the very responsible position which Her Majesty's Government have taken with regard to this issue, the more they will pay for it when the electorate comes to vote?
Lord Trefgarne: My Lords, I do not think that that is a question on which I need to elaborate.

Drugs: Control of Illicit Production
3 p.m.
Lord Rodney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further action they plan to reduce the production of cocaine and heroin in South America and Pakistan.
Baroness Hooper: My Lords, we remain committed to supporting the efforts of the UN Fund for Drug Abuse Control and those of all producing countries in eliminating the illicit production of heroin and cocaine. In Pakistan, we have pledged £3.4 million to long-term crop substitution projects since 1984 and have provided law enforcement assistance to the government in a number of specified areas. In South

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America we have announced expenditure of over £1 million on bilateral and United Nations projects designed to improve drugs law enforcement.
Lord Rodney: My Lords, I should like to thank my noble friend for that encouraging reply. Is my noble friend aware that the United Nations Commission on Narcotic Drugs decided that a draft convention should be drawn up by August this year and be open for comment? Can my noble friend tell the House where that matter stands at the moment?
Baroness Hooper: My Lords, yes indeed. The United Kingdom played an important role in the discussions which led to agreement on the elements to be included in the new convention, in particular in discussions in February in Vienna. It continues to contribute to drafting and to negotiations. We are currently working to see an early conclusion to the negotiation of the convention, and we intend to resume at next year's session of the United Nations Commission on Narcotic Drugs.
Lord Mishcon: My Lords, in the recent report which was given by the noble Baroness's right honourable friend, much emphasis was placed on a plan for poppy eradication in the Dir district of Pakistan. Can the noble Baroness tell the House whether or not that plan has been successful, and can she also indicate how many liaison officers have been placed in Pakistan and South America?
Baroness Hooper: My Lords, perhaps I may answer the last question first. In this context I believe that I am supposed to answer only one question at a time. There are United Kingdom drugs liaison officers stationed in South America, the Caribbean and in other parts of the world. The United Kingdom Government have agreed to provide the governments of South America with such other help as they are able to provide. In terms of security and personal risk to the individuals involved in this programme, it is impossible for me to give details on numbers and placements of the officers.
Lord Boyd-Carpenter: My Lords, are not the poppies to which reference has been made and from which this drug is produced white poppies?
Baroness Hooper: My Lords, I believe so.
Lord Mishcon: My Lords, perhaps I may ask a serious question after a rather facetious one on an important matter. If the noble Baroness does not have information about this plan, which, as I said, was emphasised in the report on the Dir district, would she be kind enough to write to me about it? However, if she does have the information, perhaps she can give it to the House.
Baroness Hooper: My Lords, I have a considerable amount of information about the programme in Pakistan, and it is difficult to extract the parts that are particularly relevant to the noble Lord's question. Perhaps I may write in detail to the noble Lord; but suffice it to say that action is being taken and progress is being made along the lines of the report.
Lord Aylestone: My Lords, are the Government satisfied that they are getting full and complete cooperation from the countries in South America, such as Colombia, Bolivia and others? Is it their view that those countries are doing everything possible to stop this terrible trade?
Baroness Hooper: Yes, my Lords. In fact, following the visit of my right honourable friend the Minister of State at the Home Office in September this year, the projects in South America have taken a quite specific form. In Bolivia, Ecuador and Colombia the projects in which United Kingdom investment is involved are receiving close co-operation from the countries concerned.
Lord Dean of Beswick: My Lords, is the Minister not aware that the taking and selling of hard drugs and the new phenomenon of AIDS are perhaps the two most damaging facets against life as we know it at present? Will the noble Baroness plead with the Government to keep the situation consistently under observation, bearing in mind that the situation as we know it may unfortunately deteriorate further?
Baroness Hooper: My Lords, in trying to answer the noble Lord's supplementary question within the terms of the original Question, I should emphasise that support for international action to curb illicit drug production is a key element in the Government's strategy for reducing the supply of drugs. We take every suitable opportunity to raise the subject bilaterally and in multilateral fora.

Business
3.6 p.m.
Viscount Davidson: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is being made in another place on the Prime Minister's visit to the United States of America.

Address in Reply to Her Majesty's Most Gracious Speech
Debate resumed on the Motion moved on Wednesday last by Lord Mowbray and Stourton—namely, That a humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".
3.7 p.m.
The Minister of State, Home Office (The Earl of Caithness): My Lords, first, I should like to add my congratulations to my noble friends Lord Mowbray and Stourton and Lord Arran, the proposer and seconder of the gracious Speech, for the most excellent speeches which they made last week. They both have

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wide and deep knowledge of the subject, particularly my noble friend Lord Mowbray and Stourton, who has set us on the right track for the debate on the gracious Speech.
I reopen this debate and outline our programme for the new Session today concentrating on home affairs and the environment. I hope your Lordships will forgive me if, in the limited time available, I am unable to cover everything that I might on such a wide topic for debate.
We look forward to hearing the views of your Lordships' House—in both the contributions of my noble friends behind me and those of noble Lords opposite. In particular, I am sure that the whole House will look forward with eager anticipation, as I do, to the maiden speech of the noble Lord, Lord Bonham-Carter, who gave such great service to this country in times of war and who, in subsequent years, has made a notable contribution. I know that my noble friend Lord Skelmersdale will answer as many as possible of the points raised by your Lordships during the course of our debate.
The new Local Government Bill will make local authorities expose a number of their activities to competition. Those activities will include those proposed in our February 1985 consultation paper—refuse collection, street cleansing, catering, vehicle maintenance, building cleaning and ground maintenance. We also hope to include one or two other services, such as leisure management and waste disposal.
Authorities which continue to carry out the activities themselves will be required to reach financial targets, and persistent failure to do so may ultimately result in the Secretary of State removing their power to carry them out in-house.
Authorities will be required to invite competitive tenders from the private sector for the provision of these services. Failure to comply, or unfair competition designed to protect the in-house operations, may again result in sanctions, possibly including complete closures of the operation.
The purpose of this part of the Bill is to help remove waste and inefficiency in the provision of services; prevent local authorities from engaging in anti-competitive practices; provide opportunities for the private sector to break open the in-house monopoly on service provision; and give ratepayers everywhere the same relief from funding over-priced services as is presently enjoyed by the ratepayers of Wandsworth, Merton and other progressive councils.
We shall also outlaw non-commercial contract conditions which are carried out under the name of contract compliance. Authorities which introduce irrelevant considerations of this sort distort fair competition and disregard their duty to obtain value for money for ratepayers. They also use the contractual process as a wholly inappropriate vehicle for political posturing.
We shall be introducing a short Bill to end the current practice of grant recycling. Under the present rate support grant system, most authorities lose grant as they increase spending. Any grant underclaimed as
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a result is recirculated to all authorities on a common rate poundage. This system has several disadvantages. Individual authorities have no certainty as to their grant entitlements because these depend not only on their own spending decisions but on those of all other authorities. The Government can only provide estimates of the likely amounts available from recycling at a date which is too late to ensure that authorities take the extra grant into account when setting their budgets and rates, and finally the grant is recycled to high and low spenders alike.
The removal of this practice will give local authorities much greater certainty as to their grant entitlements. It will increase authorities' accountability to their ratepayers as these entitlements will more clearly depend on authorities' spending decisions. It will provide a greater incentive to authorities to maximise grant by keeping spending down and it will end the incongruous system whereby excessively high spending authorities can gain on the swings what they lose on the roundabouts.
The Government have been increasingly concerned at the volume of complaints from people living in privately-owned blocks of flats about the management of the buildings in which they have their homes. A committee chaired by Mr. Edward Nugee QC looked into these problems, and we propose to introduce legislation to implement the main thrust of its findings so as to strengthen the rights of flat-dwellers. This will provide: a procedure for asking a court to appoint a receiver and manager where the block has been neglected; a right of first refusal where the landlord wishes to sell; a right in leasehold blocks to apply to a court for the purchase of the block where the ground landlord has failed in his duties; tighter control over service charge funds and insurance; and a right to be consulted about the appointment of managing agents. These measures should improve the position of many flat-dwellers who suffer at the hands of bad or indifferent landlords.
Orders to establish four new urban development corporations will be laid during the forthcoming Session. The first of these will be based on Trafford Park in Greater Manchester. The others will be in the Black Country, on Teesside and on the banks of the Tyne and the Wear. The precise areas and other details are currently the subject of further study and consultation. This is a bold step to tackle large areas of derelict and disused land. It will extend the approach already so successful on Merseyside and in the docklands of London.
We have today introduced a Bill in another place to establish a new statutory authority for the Norfolk and Suffolk Broads. This will provide a durable statutory basis for the future management of the land and water space of the Broads which we believe is essential if the continuing deterioration in the ecology of the area is to be reversed. The new authority will not only take over the functions of the existing Broads Authority but will also assume the navigation management functions of the Great Yarmouth Port and Haven Commissioners over most of the Broads' rivers system. The Bill will thus bring the management of the land and water areas of the broads for the first time under the control of a single body. The Bill will give it a status similar to that of a national park—grant-aided on the same

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basis—but with additional features to suit the special circumstances of this unique area.
We will be introducing tomorrow before your Lordships' House a Consumer Protection Bill. The Bill will significantly improve protection for consumers on product safety, price claims and bargain offers. On product liability the legislation, which implements a European Community directive, will ensure that consumers will be able to secure compensation for personal injuries caused by defective products without, as at present, having to prove that the producer is negligent. The Bill will also require suppliers to ensure that all consumer goods are safe, not just those that are covered by specific safety regulations. This will fill an important gap in our consumer safety regime and facilitate quick and effective enforcement. Finally, the legislation will give consumers greater protection from misleading price indications; for example, bargain offers where there has been no real price reduction, and hidden extras added on to the quoted price.
We will be introducing a Bill to provide for a third Dartford crossing, and legislation will come before your Lordships for the construction of the Channel tunnel. The Bills will provide for both crossings to be built and operated by the private sector, creating jobs and bringing enormous benefits to the traveller at no cost to the taxpayer—splendid examples of private enterprise working for the public good. The Pilotage Bill was introduced in your Lordships' House on 13th November. It will result in a long-overdue reform to meet modern pilotage requirements, make our ports more competitive and reduce costs to our hard-pressed shipping industry.
Your Lordships will not need reminding of the unfair and unsatisfactory nature of the domestic rates system. The Green Paper Paying for Local Government, published in January, proposed a concrete and workable alternative—a flat-rate community charge payable by all adults over the age of 18. The Government have considered very carefully all the comments made on those provisions in the Green Paper which affect Scotland and we are now ready to introduce a Bill embodying our proposals for Scotland.
The system which the Bill introduces will have three cardinal virtues—accountability, simplicity and fairness. It will improve local authority accountability. It will greatly simplify the local taxation system by providing for a flat-rate bill for every resident. And it will greatly improve the fairness of the system by sweeping away the injustice whereby a single person may have to meet the same local taxation bill as a family with several working adults living next door. Help will of course continue to be available for those on low incomes who might otherwise find it difficult to meet the full charge. The Bill will also contain proposals for the freezing and index-linking of non-domestic rates, so that businesses in Scotland will no longer have to face the uncertainty of rate bills which vary widely and unpredictably; and it will make the grant system simpler and easier to understand.
In Scotland, the present arrangements for warrant sales of a debtor's goods have long been regarded as causing unnecessary suffering and distress. A Bill will
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be introduced to abolish the most resented aspects, particularly the forced sale in a debtor's own home, and the advertisements for the sale which publicly identify the debtor. The Bill aims to create a more humane system of debt enforcement in Scotland but one which will still be effective in obtaining payment from those who can, but will not, pay their debts. In addition, the Bill will set up new systems for arresting earnings, bring in new court orders giving debtors time to pay their debts, and tighten up the control and discipline of sheriff officers and messengers-at-arms.
Last Session saw the enactment of the Law Reform (Parent and Child) (Scotland) Act 1986, giving effect to the report of the Scottish Law Commission on illegitimacy. My noble and learned friend the Lord Chancellor introduced last Thursday a Family Law Reform Bill which will make similar provision for England and Wales, giving effect to the two reports of the English Law Commission on the same subject.
One fifth of the children born in England and Wales last year were illegitimate. The Bill aims to remove, so far as possible, the legal disadvantages from which they still suffer, and to give them as normal a family life as possible by allowing their fathers to apply to the courts for the grant of a wide range of rights which a married father automatically acquires. When deciding whether or not to grant such an order the court will naturally have to the forefront of its mind the welfare of the child, but the views of the mother will also play a significant part. This Bill, once enacted, will significantly improve the lot of the very many children who, through no fault of their own, are born illegitimate.
The Government also intend to introduce a Bill to achieve a more effective use of existing fire service resources in securing precautions against fire, and to improve the safety of spectators at sports events. The present statutory arrangements for regulating fire precautions- in Great Britain are contained in the Fire Precautions Act 1971. One of the key provisions of the new Bill will be an amendment to the 1971 Act to allow fire authorities to exempt certain low-risk premises from the requirement to have a fire certificate. Exemption will reduce the burden on the occupiers of premises and, equally important, safety standards will be improved by permitting fire services resources to be devoted to higher risk premises. Other premises will be brought under better and more appropriate safety controls and there will be regular reinspection programmes.
Your Lordships will not need to be reminded of the tragic events of 11th May 1985 at the Valley Parade ground, Bradford, as a result of which 56 people lost their lives. The recommendations of the Committee of Inquiry set up under the chairmanship of Mr. Justice Popplewell were considered in a consultative document issued in June, and form the basis of our other proposals. The Bill will introduce a new system of safety certification at grounds not designated under the Safety of Sports Grounds Act 1975 but which have covered accommodation in stands for 500 or more spectators; it will give local authorities powers to issue prohibition notices to restrict the use of spectator accommodation where there is a serious threat to safety; and it will extend entertainments licensing

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legislation to cover the use of certain indoor premises for sporting events.
The Bill's proposals will reduce substantially the risk to spectators attending all major sporting events. We may hope that we shall never again witness a tragedy of the kind which took place in Bradford. The proposals on fire safety in the Bill should be welcomed by enforcement authorities and the business community alike, and will ensure the maintenance of high standards of fire precautions.
Finally, I turn to what many will consider to be the major piece of legislation which we are to consider in the coming months, the Criminal Justice Bill, which was introduced in another place by my right honourable friend the Home Secretary on 13th November. Its main provisions equip the courts to deal more effectively with the large-scale criminal; bring the victim to the forefront of the criminal justice system and maintain and strengthen the integrity of the jury system.
The Bill seeks to ensure that big-time criminals will no longer serve their sentence knowing that the proceeds of their crimes await them on their release. We propose to extend to all highly profitable crimes the power to order confiscation of the proceeds of offences which was introduced for drug trafficking offences by last Sessions's Drug Trafficking Offences Act. That Act was an exceptional measure and was justified by the threat caused by the drugs menace. So the new more general powers are not so extensive. They will apply only to offences from which proceeds of at least £10,000 have been made. The court will be empowered, rather than required, to make an order. The power to confiscate will relate only to the proceeds of offences charged or taken into consideration for sentencing purposes. Unlike the Drug Trafficking Act, there will be no assumption that the offender's assets are the proceeds of crime. Once a confiscation order has been made, any of the defendant's available assets can be realised to satisfy the amount imposed, and if he refuses to give up known assets he can be sentenced to prison in default—for long periods—in addition to the term imposed as a penalty for his offences.
Major criminals will also find it more difficult to find a refuge abroad because of the proposals in the Bill to overhaul our extradition law. These will enable us to ratify the European convention on extradition, and thereby make a substantial step forward in coordinating the response to major crime. To do this the Bill abolishes the overriding requirement that any foreign government requesting extradition should show a prima facie case against the defendant under United Kingdom law. The prima facie requirement represents a considerable impediment to extradition from the United Kingdom for countries outside the common law tradition. Our concern is with other Western European countries where there is no doubt about the integrity of the criminal justice system. Moreover, we frequently have to establish a prima facie case in foreign courts which are unfamiliar with the concept. We have as a result failed to extradite some very serious offenders from abroad, while at the same time creating here a haven for others wanted abroad. The Bill will give us the powers to remove the
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prima facie requirement selectively; new treaties may waive it, but ad hoc arrangements and existing treaties will continue to contain it.
The committee of the noble and learned Lord, Lord Roskill, reported a year ago on the need to deal effectively with the large-scale fraud. As your Lordships will know, my right honourable friend has decided not to take up, for the moment at least, the committee's proposal that a special tribunal should be established to try serious frauds. But the Bill acts on almost all the other recommendations. A new serious fraud office, bringing together powers and expertise from various departments, will be set up to investigate and prosecute the most serious cases. There will be streamlined court procedures in serious and complex fraud cases to allow such cases to be transferred by the prosecutor direct to the Crown Court and to allow for preparatory hearings to identify the agreed facts and the points at issue before the trial proper begins. The rules of evidence will be changed in criminal cases generally to allow the readier admission of business documents and to enable the courts to commission evidence from abroad or to hear evidence from witnesses abroad by video.
These changes, and in particular the new preparatory hearings, should ease the task of the jury in understanding the complex evidence which is frequently at issue in fraud cases. The Bill also contains measures applying to all cases to make juries more properly representative of the community. First, it abolishes the peremptory challenge of jurors by the defence. It seems wrong in principle for jurors to be removed without reason being given, and the Bill is the culmination of the progressive reduction over the years in the number of challenges allowed. The concern that has been expressed about the potential of peremptory challenge for distorting the composition of the jury—particularly where large numbers of defendants are involved—should not go unanswered. We believe that the abolition of peremptory challenge is now long overdue and will serve to strengthen public confidence in juries. So will the extension from 65 to 70 of the upper age limit for jury service, which allows some 2¼ million more citizens the chance to serve.
The Government are showing, with hard cash, their commitment to improving the lot of the victim. As was announced in the Chancellor's Autumn Statement, we are making an extra £114 million available for the criminal injuries compensation scheme over the next three years. We have also set aside £9 million over the same period to assist local victim support schemes. We have supported the National Association of Victim Support Schemes since its inception in 1979 and our grant to it has trebled in the past three years.
The Bill will take our concern further. Two measures are of particular significance. Courts are to be required to give reasons for not making a compensation order in any case where they have power to do so. And the criminal injuries compensation scheme will be put on a statutory basis, so for the first time victims of violent crime will be entitled to compensation as of right.
I have inevitably skimmed the surface of a large and complex piece of legislation, the details of which we look forward to debating in your Lordships' House. Its

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relevance to the Government's strategy on crime will be clear. There are other parts of our programme and initiatives we plan to take that I have not had time to mention.
We cannot rely on legislation, or just on the criminal justice services, to tackle crime effectively. The Government are playing their part. We have increased spending on the police in real terms by 36 per cent. to some £3 billion: spending on prison building has more than doubled; the number of staff in the prison service has risen by a fifth and the number of probation personnel by more than a quarter. Throughout the country individual citizens, who might previously have thought there was nothing they could do to help prevent crime, are also becoming involved: in neighbourhood watch schemes (of which there are now more than 15,000); in victim support schemes; in crime prevention panels and in police and community consultative groups. This public involvement is absolutely essential.
All I have outlined will, I trust, show that this Government are maintaining their resolve in making this a strong, secure, decent and fair society.
3.28 p.m.
Lord Elwyn-Jones: My Lords, I begin by joining the noble Earl, Lord Caithness, in welcoming the presence among us of the noble Lord, Lord Bonham-Carter, an old colleague in another place, whose contributions there indicated that he will add to the value of this House in the course of our pending debates. We welcome him warmly.
I shall not follow the noble Earl in his courageous endeavour to cover so much ground. With regard to his initial incantation against local authorities, I shall leave that to my noble friend Lord Underhill to cope with. I shall concentrate on what has indeed been described by the noble Earl as the most important piece of legislation that we can expect; namely, the Criminal Justice Bill. I shall concentrate, as I suspect will many of the speakers on the long list, on that theme and on the theme of law and order.
As to that, I should like to begin with some no doubt carefully chosen words which read as follows:
"A Government that cannot protect its own citizens from attack in the streets of its towns and cities, that cannot protect property from damage or homes from intrusion, has failed to face up to the basic duties of government".
Those are not my words. They are the words of the noble Viscount, Lord Whitelaw, speaking in another place ten years ago. I remember the occasion well. What is happening now in the streets of our towns and cities unhappily is far, far worse. Figures which were published by the Metropolitan Police last Friday and recorded in last Friday's issue of The Times showed,
"Muggings in London rose by 17 per cent. and sexual offences by 10 per cent. during the first nine months of this year".
The force recorded 573,000 notifiable offences, an increase of 34,000 over the equivalent period last year. Almost all categories of crime increased during this period, including robbery, which was up by 12 per cent. That is the London scene.
Our country as a whole is suffering from the worst crime wave it has ever known. In 1985, 4,073,853
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serious crimes were committed. Violent crime, burglaries, vandalism and criminal damage, alas, have all increased substantially. Riots in and out of our prisons must be added to the sombre picture. The increase in crime is accompanied by increasing fear of crime. Our people are becoming afraid of going out at night. They are fearful—and, in view of what has been happening, rightly so—of letting their children out of their sight.
In spite of the best and dedicated efforts of the police, they cannot cope with crime of those dimensions. The increase in crime is indeed not the only cause for concern. The situation is made worse because of the amount of crime while the detection and conviction rates have substantially decreased. Yet, greater probability of arrest and conviction is surely the most likely way to deter the criminal. In 1985, nearly two out of every three criminals got away with their crimes. Five out of seven burglars escaped with their loot.
One matter which was brought to my notice this morning is the ready availability of dangerous knives. Flick knives are dealt with already by the law, but I was told this morning by a doctor working in the East End of London that some gangs of youths now carry dagger-like knives, some 18 inches long, as part of their macho image. They are readily available on sale in shops, particularly, I am told, at cigarette shops. I wonder why.
In response, decent youths who would otherwise not have such knives have felt it necessary to carry them for self-defence. A dangerous cycle is being created. I have no doubt that the police will do their best to cope with the situation. The problems in the field of crime are inevitably worse in the heart and centre of several of our great cities. In February last year, the Prince of Wales said:
"The desperate plight of the Inner City areas is well known with the cycle of economic decline leading to physical deterioration and countless social problems. It is only when you visit these areas … that you begin to wonder how it is possible that people are able to live in such inhuman conditions".
Indeed, what has been happening in recent years has shown that we are not immune from serious civil disorder, riots and public tumult. America has had the same experience. As President Johnson said in the report of the Advisory Commission on Civil Disorders in 1968:
"The only genuine, long-range solution for what has happened lies in an attack—mounted at every level—upon the conditions that breed despair and violence. All of us know what the conditions are—ignorance, discrimination, slums, poverty, disease, not enough jobs. We should attack these conditions because there is simply no other way to achieve a decent and orderly society in America".
The noble and learned Lord, Lord Scarman, in his report on the Brixton riots, agreed with those words of President Johnson when he said that they are,
"as true of Britain today as they have been proved by subsequent events to be true of America".
This is particularly so bearing in mind the volume of unemployment in our country. The social consequences of unemployment, especially among the young, were underlined—I am sure that he will not mind my quoting him upon this—by a speech of the noble Viscount, Lord Whitelaw, in a debate which we had in the House of Commons, again some years ago

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(in 1978) when the levels of unemployment were only half what they are here today. He said:
"Let no one have any doubt about the danger that has been created in terms of crimes of all sorts, violence and vandalism. If boys and girls do not obtain jobs when they leave school, they feel that society has no need of them. If they feel that, they do not see any reason why they should take part in that society and comply with its rules. That is what is happening, and wherever we sit in this House, that is what we have to recognise".
What I ask is whether the measures that are now proposed by the Government in this critical situation go anywhere near to deal with the problems that have to be faced. The disturbing conclusions of the report of the Archbishop of Canterbury's Commission on Urban Priority Areas suggests that nothing like enough has been, or is being done.
It is becoming evident that existing priorities will have to be re-examined if crime is really going to be tackled. Local authorities are making their own investigations and proposals in conditions of difficulty, and it is good that, for instance, the involvement of the Society of Local Authority Chief Executives, with NACRO, in a seminar for chief executives on crime prevention showed that many in local government have wished to make a contribution to crime prevention. The joint initiative of the Home Office and the Manpower Services Commission to involve unemployed people in crime prevention activities through the community programme and the establishment by the Home Office of five experimental local schemes to co-ordinate crime prevention efforts are, I concede readily, worthwhile developments.
However, they do not begin with the scale and gravity of the problems that we face. As was said by the chief probation officer of the West Midlands recently:
"Of course it is sensible for people to lock their doors and their cars; and it is important to prevent drugs coming into the country.
"But if we disregard more difficult, more long-term dimensions, we stand every chance of simply defending ourselves in the short-term, and doing nothing to relieve the stresses, personal and social, which may lie behind a crime."
Sir Kenneth Newman, the Commissioner of the Metropolitan Police, has stated recently:
"the volume of reported crime is an indicator of the health of society generally".
Report after report of commissions like that of the Archbishop of Canterbury and the Commission for Racial Equality have shown that crime on its present scale has its roots in the nature of our present society in which, according to the Child Poverty Action Group, one-third of the nation's children live in poverty or on its margins.
I now turn to the Criminal Justice Bill, which apparently—it is the great adornment of the Queen's Speech—is to be the centre of the Government's legislative programme in 1987–88. I gather from press reports that the Bill is to go to another place first because it is less likely to be amended there than in your Lordships' House. We shall see. In my view the Bill makes little response to the grave crime scene that I have mentioned. It makes no difference that is detectable to the run of the mill crimes that affect people most—the burglaries, the muggings, vandalism, petty theft and so on.
We welcome, of course, many of its proposals, like those that have been mentioned to tackle fraud, which
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is causing so much damage to individuals and to society. We will examine in detail these and other proposals, like those to make reliable documentary evidence more readily available in criminal proceedings, and other changes in the rules of evidence.
Especial and, I know, sympathetic care will be given by the House to the proposal for evidence to be taken from children by video in respect of certain assaults and sexual offences. Our society has almost suddenly become aware of the extent to which our children are lacking protection and of the need to give them more help and support. In this connection, I broadly welcome the Family Law Reform Bill to which the noble Earl, Lord Caithness, referred, but I share the regret expressed by the Family Courts Campaign—and it may well be that we shall hear more of that from the noble Baroness—that the social need to reform family jurisdiction and to have a family court is not provided for in the Bill.
The proposals to reduce the log-jams in our Crown Courts by requiring various classes of case to be dealt with summarily will, like so much in the Bill, need careful study, as will the proposals for dealing with sentences thought to be disproportionately lenient. They raise important questions of principle that will no doubt be dealt with at length in due course. I welcome the intention to take further steps to recover ill-gotten gains from fraudsters and criminals. I welcome also the provisions placing the existing non-statutory criminal injuries compensation scheme on a statutory basis.
There are many other provisions in this mixed bag of piecemeal proposals that will, I fear, give the House yet another potential summer, if not of discontent, of prolonged labour, to which we have recently become very accustomed. Perhaps the worst fault in the Bill's proposals is that they will do little or nothing to tackle another blot on our society, namely, the gross overcrowding of our prisons and the treatment of many of our prisoners. On 11th April this year—I take the figure from the report of the all-party Penal Affairs Group—46,687 people were in prison in England and Wales. I understand from the noble Lord, Lord Donaldson, that he, with his knowledge as President of NACRO, will be dealing in some detail with the crime consequences that result from that gross overcrowding.
The United Kingdom now sends more people to prison both in absolute numbers and relative to its population than any other major West European country. It also has a higher average daily prison population than any other West European country except Turkey.
This country's excessive use of custody is also shown by the fact that our readiness to gaol offenders has indeed increased over the last decade. The proportion of adult males convicted of indictable offences in England and Wales who were imprisoned rose from 15 per cent. in 1974 to 20 per cent. in 1984 and 1985. Fewer than one in five of those who have been sent to prison have committed crimes involving violence, sex or robbery, crimes for which the public would expect terms of imprisonment, and lengthy ones at that. Of the 92,810 sentenced offenders entering custody in 1984, only about 14,000 or 16 per cent. Had

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committed those crimes. Therefore, as to the illusion that the prisons are full of those who deserve every day of their punishment because of the wicked, violent crimes they have committed, I am afraid that is not the picture.
A saddening feature of the prison scene is that 58 per cent. of male offenders and 39 per cent. of females leaving penal establishments are back before the courts within two years. Reoffending rates are higher for young offenders, two-thirds of whom are reconvicted within two years of release. Alas, one of the claimed purposes of prison, rehabilitation, just is not happening. How can it happen in the conditions that prevail in the prisons, despite the best efforts of those who are there looking after the inmates?
Despite that factual picture, the Bill's sentencing provisions will increase rather than reduce the use of custody, yet time and again prison and borstal governors and members of their branch of the Civil Service have drawn attention to the gravity of the position. A letter from Mr. Norman Brown, the governor of Strangeway Prisons, Manchester, was published in the Daily Telegraph not many years ago. He said:
"We just cannot go on locking men and women up, many for 23 hours a day. Why do the warnings continually given by the prison service go ignored? … Is it not time that the necessary legislation be introduced to reduce our prison population and restore the morale of the prison staff, allowing us to operate a system with decent standards and dignity, or must we go on being ignored by Parliament and the courts while they carry on talking about overcrowding for yet another 30 years?"
That is a cri de coeur from a man in the front line in facing these consequences. The consequences are shaming; the consequences are dangerous.
In 1910, that distinguished former Home Secretary, Sir Winston Churchill, said this in another place:
"The mood and temper of the public with regard to the treatment of crime and criminals is one of the unfailing tests of the civilisation of any country. A calm, dispassionate recognition of the rights of the accused, and even of the convicted criminal against the state; a constant heart searching by all charged with the duty of punishment towards the discovery of creative and regenerative processes; unfailing faith that there is a treasure, if you can only find it, in the heart of every man. These are the symbols which mark and measure the stored up strength of a nation … proof of the living virtue in it."
Our duty is to enhance and not to imperil that living virtue.

Prime Minister's US Visit
3.52 p.m.
The Lord President of the Council (Viscount Whitelaw): My Lords, with the leave of the House, I shall now repeat a Statement on the Prime Minister's recent visit to the United States, which is being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on my visit to the United States on 14th and 15th November for talks with President Reagan at Camp David. I also had separate meetings with Vice-President Bush, Secretary of State Shultz and the Defence Secretary, Mr. Weinberger.
"The main purpose of my visit was to discuss with the President issues of defence and of arms control,
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in the light of his meeting in Reykjavik with Mr. Gorbachev. We agreed upon a statement of our views. A copy has been placed in the Library of the House.
"President Reagan and I agreed that priority should be given in the arms control negotiations to an INF agreement with restraints on shorter-range systems, to a 50 per cent. reduction in strategic offensive weapons and to a ban on chemical weapons, all to be subject to effective verification. We also reaffirmed the need for effective nuclear deterrence as a cornerstone of NATO's strategy. The President explained that the United States would proceed with its own strategic modernisation programme, including Trident. He confirmed the United States full support for the arrangements made to modernise Britain's independent nuclear deterrent with Trident.
"We also discussed the situation in the Middle East. I thanked the President for what the United States had done on Syria. We agreed on the need for fresh impetus to efforts to find a peaceful solution to the Arab/Israel conflict.
"On Iran, we share the aim of bringing Iran back into better relations with the West and of bringing about an end to the Iran/Iraq war, without taking sides. The President reaffirmed that the United States does not pay ransom for hostages. That is our policy too.
"We discussed the situation in southern Africa, following the tragic death of President Machel. Both our governments remain ready to contribute to stability and an end to violence in the area.
"I explained to the President the reasons for our recent decision to establish an interim fisheries management and conservation zone round the Falklands. I told him that our preference remained a multilateral solution, provided that the Argentine Government was prepared to co-operate.
"Mr. Speaker, this was a very useful visit. The agreed statement confirmed the Government's policies, which I set out in my speech in the Debate on the Address, for achieving balanced reductions in nuclear and chemical weapons while maintaining and modernising Britain's independent nuclear deterrent. That is a policy which is good for the NATO Alliance and good for Britain."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Viscount for repeating the Statement. It raises a number of vital issues, especially as international negotiations on nuclear disarmament are at a crucial point. I shall ask some brief questions on the salient issues.
First, to what extent is the agreement to purchase Trident an absolute and binding contract? Will it be carried out even if the United States and Russia agree to abolish all long-range ballistic missiles? Can the noble Viscount say how this is to be accommodated by President Reagan's proposal to eliminate all ballistic missiles within 10 years? Was this discussed and, if so, with what result, because this certainly was not clear in the communiqué?

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Can the noble Viscount say how Trident fits into our NATO commitments? Does it in any way come under the NATO umbrella? Did the Prime Minister discuss this latest development with NATO? She says in the Statement that it is "good for the NATO Alliance". Finally on this point, can the noble Viscount say whether there is any change in the cost of Trident as a result of the confirmation of the agreement?
Secondly, in view of the uncertainty about the strategic defence initiative, especially in the United States itself, why did the Prime Minister commit herself so firmly to it? What range of research do Her Majesty's Government regard as being within the terms of the ABM treaty, and does it go beyond laboratory research? The Prime Minister has used the words "up to feasibility". Can the noble Viscount say precisely what that means?
We note with interest the Prime Minister's account of her discussion with the President about Iran and Iraq and the agreement not to take sides. We note she said that the President said that the United States—and I use the words in the Statement—
"does not pay ransom for hostages".
But as it is now conceded by the President that the United States sold arms to Iran, although Mr. Shultz knew nothing about it, did not the Prime Minister make her disagreement with this policy plain to him as being totally against our policy on international terrorism? There is an extremely important point here and I hope the noble Viscount will be able to deal with it clearly.
In conclusion, is it true to say on the question of the Falklands, to which the Statement refers, that the President indicated his support for early British talks with the Argentine Government on the Falklands in regard to fisheries and other general problems?
4 p.m.
Lord Kennet: My Lords, we, too, thank the noble Viscount the leader of the House for repeating the Statement. The section on disarmament in the Statement contains no mention of conventional weapons reductions although the agreed statement between the Prime Minister and the President, of which there is a copy in the Library, does contain such a mention.
The Soviet Union has proposed conventional reductions to go along with nuclear reductions no less than three times this year, and indeed it is perfectly clear that to undertake nuclear disarmament without conventional disarmament would be extremely unsafe for Europe. So my question is: why was this crucial point omitted from the Statement to the House when apparently it was agreed with the President and is good news indeed?
Secondly, further to the question of the noble Lord, Lord Cledwyn, on SDI, in using the word "feasibility" the Prime Minister is reported to have said that she agreed that SDI equipment could be tested "to feasibility", or "up to feasibility", or "short of feasibility", or some other such words. What does that mean? It suggests at first hearing that the Government may be weakening on the stand they have always taken so far; namely, that the ABM treaty should be
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strengthened. If the ABM treaty is to be read in such a way as to permit testing of an SDI system to feasibility, that is a notable weakening. What has happened to strengthening? Can the Leader of the House please set our minds at rest?
On arms to Iran, nobody wants to prolong this shameful episode longer than we need, but we cannot but note that the President affirmed that the United States does not pay ransom for hostages. So what, in the Government's opinion, were those arms shipments for, if not ransom for hostages? Why were they concealed by the President from his own Secretary of State, his own Secretary of Defense and his own Congress? Is it true that they were sent in a Danish ship out of the Italian port of Talamone: that is, by a NATO ship out of a NATO port in the European NATO area?
On the southern Africa part of the communiqué, I think no comment or question is possible. That shows the complete division between the United States, which is now committed to meaningful sanctions, and Britain which refuses to be so committed.
Lastly, on Argentina, although we had a bit of a go at this just now at Question Time, can the noble Viscount confirm that the President saw President Alfonsin of Argentina almost as soon as the door had closed on our Prime Minister? Can he show that the Government are, at least, aware of the danger that we may lose a great deal by swimming against the tide of world opinion, simply by refusing to distinguish between an outright hand-over to Argentina of sovereignty over the Falklands, which of course we must continue to refuse, and on the other hand a discussion of forms of shared or pooled sovereignty, with or without the United Nations, against which there cannot forever be a final objection?
Viscount Whitelaw: My Lords, I am grateful to the noble Lord, Lord Cledwyn, and the noble Lord, Lord Kennet, for their reception of the Statement. The noble Lord, Lord Cledwyn, first asked me several questions about Trident. I think I should first say that the agreement on Trident is set out perfectly plainly in the Statement. Of course, our position so far as Trident is concerned remains that it is part of the NATO strategy; it has been put before our nuclear allies earlier and it is perfectly clearly part of our particular strategy. It is accepted by the United States Government as such, as well as by our NATO allies. That remains the position.
I know of no change in the cost of Trident. All I do know is that Trident is regarded by those who are expert in these matters—and the noble and gallant Lord, Lord Lewin, made this perfectly clear in the debate in this House last week—as by far the cheapest method of prolonging Britain's nuclear deterrent. The noble and gallant Lord made that clear with all his authority as Chief of the Defence Staff at the time.
So far as the question of research on SDI is concerned, the noble Lord, Lord Cledwyn, and the noble Lord, Lord Kennet, asked me to put a gloss on my right honourable friend's Statement of what she means by "up to feasibility". Do they really expect me to come to your Lordships' House and try to put a gloss on my right honourable friend's Statement? If my right honourable friend says "up to feasibility", it is up

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to feasibility so far as I am concerned, and I do not know what else I am expected to say. So I shall not say anything at all, which seems to be the obvious answer to that question.
As regards the Iran hostages, the President made it perfectly clear that he stood absolutely firmly by the policy against hostages, so far as terrorism is concerned, and firmly by our policy that we do not treat for hostages with terrorists. He made that perfectly clear. The Prime Minister accepted the President's statement, as he had made it to the American public, and regards that as a matter for him and for the American Administration and not for this country.
Both noble Lords asked me about the Falklands. First, our position on the fisheries was made perfectly clear and it was made clear again by my noble friend the Minister of State at Question Time this afternoon. Yes, of course—to answer the noble Lord, Lord Kennet—the Prime Minister has noted the discussions between President Alfonsin and the United States President. Our position remains as it has been hitherto. Of course we wish to improve our relations with Argentina. We have made our position as to how we should do so perfectly clear, and we stand by that.
Lord Hatch of Lusby: My Lords, unlike the noble Lord, Lord Kennet, I believe that there is something to be asked regarding that section of the Statement which includes discussions on southern Africa. According to the Statement, the Prime Minister and the President discussed how to contribute to stability in southern Africa. In view of the fact that the American Congress has taken a fundamentally different view from this Government over the way of bringing stability to southern Africa in relation to sanctions, can the noble Viscount tell the House what was the subject of those discussions, how the President and the Prime Minister reconciled their opposing views and what they intend to do in joint action to bring greater stability to southern Africa, as is suggested in the Statement?
Viscount Whitelaw: My Lords, in answer to the noble Lord, I do not think that my right honourable friend and the President had any need to reconcile their differing views, because, after all, they shared a very clear position of agreement. First, both governments totally abhor apartheid. Both governments wish to see further progress made by the South African Government and will take steps to that end. Both governments are taking steps to that end. We certainly are taking steps, together with our European allies, and these have been set out very plainly. The Americans have made perfectly clear their position and what steps they are taking, and that remains the position.
Lord Thorneycroft: My Lords, will my noble friend convey to the Prime Minister our congratulations from this side of the House on so successful a mission on such important matters, and in particular on obtaining assurances which make clear that the keeping of a credible, effective nuclear deterrent lies plain before us?
Viscount Whitelaw: My Lords, I am very grateful to my noble friend Lord Thorneycroft for what he has said. Once more, he has helped me, as he has helped me so often in my political career, and I am most grateful to him for the very important facts that he has expressed.
Lord Cledwyn of Penrhos: My Lords, I wonder whether the noble Viscount will forgive me for intervening very briefly again and asking him whether he can give us a definition of what "up to feasibility" means? How far beyond laboratory research would Her Majesty's Government be prepared to support the United States? That really is the point, and it is fairly central to any hope of an agreement on the limitation of nuclear weapons. Can he say whether Her Majesty's Government would support practical research beyond the laboratory? Is that what "up to feasibility" means?
Viscount Whitelaw: My Lords, the noble Lord may continue to press me as hard as he likes, but I am not going to depart from the terms of the Statement. It would be quite wrong of me to do so. I should have thought that "up to feasibility" was a perfectly clear statement and I stand by it.
Lord Gladwyn: My Lords, I should like, if I may, to put one or two short questions to the noble Viscount. We welcome the fact that agreement was reached that priority should be given in the arms control negotiations to an INF agreement on the terms suggested. But do the Government think it at all probable that Mr. Gorbachev, for his part, will agree to such a solution in the absence of any modification of the present United States policy on research and deployment of star wars? Secondly, if effective nuclear deterrence is "a cornerstone of NATO" would not any zero/zero solution in regard to ballistic missiles, which was apparently contemplated in Reykjavik, if put to effect cause this cornerstone of NATO to disappear?
Lastly, does the President's full support for the British Trident programme necessarily bind his successor, and does it even bind the present Congress? Are we certain that would be the case!
Viscount Whitelaw: My Lords, in answer to the last point of the noble Lord, Lord Gladwyn, clearly the Statement binds the President. Whether anyone in politics—in this country, in America or anywhere else—can bind their successors over a period of time, is a question which Lord Gladwyn knows a good deal more about than I do. I should have thought that all that could have been expected was achieved. I agree with my noble friend Lord Thorneycroft that a great deal was achieved in getting the President's clear agreement with the position as it stands today. I should have thought that was very important indeed to this country. I do not think that anyone can slide away from that important factor.
As for the question of what Mr. Gorbachev's view might be in various circumstances, with the best will in the world I do not think it is for me to speculate on what view Mr. Gorbachev might have under particular circumstances.

Address in Reply to Her Majesty's Most Gracious Speech
Debate resumed.
4.12 p.m.
Lord Wigoder: My Lords, I hope your Lordships will now think that it is "up to feasibility" to return to the debate on the gracious Speech. I follow with pleasure the observations of the noble and learned Lord, Lord Elwyn-Jones, first in saying how much I look forward to the maiden speech of my noble and very old friend Lord Bonham-Carter. I follow him, secondly, in devoting most of my attention, as he did, to the profound questions of law and order that face us at this time and the issue of whether the Criminal Justice Bill will contribute materially, and if so in what direction, to the resolution of those questions. I agree with the noble Earl, Lord Caithness, and the noble and learned Lord, Lord Elwyn-Jones, that the Criminal Justice Bill is certainly the most important feature of the new Parliament, apart perhaps from the likely date of dissolution.
In looking at the issues of law and order, I hope that your Lordships might agree that we are really looking at two quite separate matters. There are, first, the long term problems and, secondly, the short term problems or how we can deal as a matter of immediate legislation with the situation as it is today. That situation has been set out again only too clearly by the noble and learned Lord: a rise in crime and particularly in juvenile delinquency; a rise in violent crime; and a rise in mindless hooliganism. Those are features of our society today, and for one moment it is perhaps worth looking at long term solutions to those problems. That involves analysing the causes of the conditions which we face.
The first matter that I draw to your Lordships' attention is that we have very little evidence as to the cause of the recent rise in crime. There is a great deal of anecdotal information and very little more. There are those who talk about the decline in the authority of the family, the decline in discipline at our schools (when children are at school) or the decline in the influence of the Church. There are those who talk about the effects of showing violence on television and those who talk about the circumstances in which many youngsters have to spend their lives in squalor, in bad housing, in deprived inner cities and out of a job. There are those who talk about the effects of alcohol, and, more and more, about the ever-increasing effects of the vicious traffic in drugs. There are those who even talk about the example given to our young people by the fact that violence has apparently become an accepted part of our international relations.
These are all long term factors, some of which no doubt have some effect on crime as we see it in our society today. I should like to suggest for your Lordships' consideration that it might be worth a serious analysis of precisely what are the causes of crime and precisely what weight is to be attached to each of the factors. It may take a generation or more, but we can then settle down seriously to see how we can deal with and resolve those factors. That involves considerations far outside the scope of any
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observations I should think of making to your Lordships this afternoon.
I should perhaps very respectfully put forward a suggestion that there is material in this problem for the setting up of a Royal Commission that would consider for the first time exactly what the factors are with which we are dealing. If the Government were not willing to set up a Royal Commission, there would be material here for a Select Committee of your Lordships' House, which is very well qualified to deal with problems of this nature. I believe that it is possible, if we set about a serious analysis of these various factors, that we might go some way towards a long-term solution.
So far as short-term solutions are concerned, one looks immediately at the role of the police as the first factor. One must accept the platitude that if it were not for the police, our society would relapse into a state of violent anarchy very quickly indeed. This leads inevitably to the immediate conclusion that the police must be fully equipped with the latest modern technology to deal with crime. That does not necessarily mean taking them off the beat, where they can play a very useful role, but it means a scientific approach to their problems. It also means that once the Government are satisfied that the existing numbers of the police force are being deployed efficiently, they should listen sympathetically to requests by the commissioner and other senior police officers for an increase in the number of police officers. I believe that that is a top priority if we are to deal in the short term with crime, and particularly with crime taking place on our streets.
I also believe it is up to all of us to build up the position and status of the police in our society. I know perfectly well, as all your Lordships do, that there are far too many cases in which individual police officers fall below the standards which we expect of them. Where that happens, it is right that that should be exposed publicly and that those individual police officers should be dealt with with the full rigour of the law. However, that should take place, I suggest, with regret and not with rejoicing.
One of the features that I have found most appalling in recent years is that police bashing appears to have become a major growth industry. It can do nothing but harm. I believe it is up to all of us, in your Lordships' House and outside, who hold any position of the slightest influence or status in our society, to make quite sure that the role of the police is at all times made perfectly clear to all our friends and neighbours as being a dangerous role and one requiring the maximum of support from every decent-minded citizen of this country.
Other short-term measures apart from strengthening the role of the police can be considered. Some of them are contained in the Criminal Justice Bill. First, there is a question of whether we can improve our criminal process so as to make our methods of trial more efficient. There are many proposals to that end in the Bill. I think many of them will meet with widespread support, such as the proposals, for example, to deal in substance with major fraud cases. I am delighted that the Government have decided, for the time being at least, not to accept the proposal of the Roskill

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Commission that juries might be abolished in some of those major fraud cases. But that decision, which is perhaps a quite brave one in the circumstances, involves us all in supporting the Government where we can properly do so in such proposals as they are making to ensure that if fraud trials continue to be tried by jury those trials are made as simple and as intelligible as possible for the jury to deal with.
I find acceptable most of the proposals to simplify fraud trials but I have one major reservation, which is the proposal that the committal of a serious fraud case by the magistrates' court can be avoided altogether in the future on the say-so of a civil servant, be he the Director of Public Prosecutions or a commissioner of excise or of inland revenue, without any right of appeal to the courts. I hope very much that that proposal will not survive its passage through both Houses.
The Government are right, as the Roskill Commission was right, to stress the importance of effective pre-trial procedures, particularly in fraud cases. The proposal now is that the defence in the serious fraud cases should be required to give an outline of its case at that stage. That matter will have to be considered very seriously. It is possible that in a serious, complicated fraud case there is much to be said for that suggestion. After all, one ought to get beyond the stage at which serious fraud trials become a complicated game with their own little rules and procedures between the prosecution and the defence. There is something to be said for trying to get down, if we can, to the real issues so that a jury can fully understand them.
There are many proposals to make evidence, particularly documentary evidence, more easily obtainable, subject to proper safeguards. I have no doubt that that is acceptable. There is the interesting proposal, to which the noble and learned Lord, Lord Elwyn-Jones, referred, that the evidence of children might be taken live on video rather than have the child actually in the courtroom. Again, I can see no objection to that provided it is done live and provided of course, as I assume (though it is not entirely clear from the Bill) that the defence has an adequate and proper opportunity to cross-examine the witness.
There is the proposal, which again I think is designed to improve our trial process, that peremptory challenge by the defence should be abolished. Clearly, this will give rise to some trouble. I have no doubt that many people will feel that it is unfair that a right which has existed for so long, although it has been whittled down over and over again, should be abolished in this way. They will be able to put forward a practical argument to the effect that if it is abolished it will instead merely leave the defence to start challenging for cause, showing to the judge a cause why a particular juror should not serve, and that that may take a great deal of time and prove to be very expensive and inconvenient. There is bound to be opposition to the Government's proposal and I well understand it and sympathise with it.
For myself, I should marginally prefer a different approach. I accept that trial by jury involves as its essence nowadays trial by a random section of the population, and provided we can make sure that the jury is chosen on an entirely random basis it is not right that either the defence or the prosecution should
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proceed to tamper with the composition of the jury. I can understand the Government saying that the defence should lose its right, but I should be grateful if when the noble Lord comes to reply he can say why the prosecution should not also lose its right. We can then deal with it on a parity so that neither side has an advantage over the other.
At the present moment, the defence has the right to challenge up to three people; the prosecution has the right to challenge as many as it likes. It is not called peremptory challenge, but it comes to exactly the same thing. I should have thought that there is something to be said for abolishing the right on both sides and holding the scales equal in order to secure a balanced jury. That would have two desirable practical consequences. First, it would eliminate the extreme embarrassment which any juror must feel when he goes into a jury box and is promptly challenged out of it by either the prosecution or the defence as though he has some nasty contagious disease.
Secondly, I think it would avoid the present problem where, if a trial involves many defendants and therefore there might in theory be a very large number of challenges, literally several hundred jurors are required to come to court on the first day of the trial in order that there may be a pool available from which the 12 may in due course be chosen. That, again, seems to be a great waste and causes a great deal of inconvenience.
The other matter that I propose to raise just for a moment or two as regards the short-term way of dealing with crime is the question of sentence. I know there is a belief that the longer the sentence, the less crime there will be. I doubt very much whether that is supportable on the evidence. I know of course that the longer the sentence the greater the number of years that that particular defendant will be out of the way in prison and will not be able to commit further offences. That is self-evident. But I am doubtful whether it has any effect in reducing the overall volume of crime and I doubt very much whether any evidence has ever been produced to support it.
There are proposals in the Criminal Justice Bill relating to sentence. There are only two about which I shall venture to comment at the moment. One is the new power to confiscate the assets of criminals apart from drug traffickers. Again, the noble and learned Lord referred to this matter. Provided it is made quite clear that the onus of proof in those proceedings is on the prosecution and not on the defence, as it was in the Drug Trafficking Offences Act which we passed last Session, I think that would be a perfectly sensible course. But I add this thought. If one is going to set about tracing the proceeds of crime in the way and with the detail that is required in order to comply with this Bill, that in itself will involve very skilled work by a substantial number of police officers. That will increase the burden on the police force and is perhaps an added reason that the Government should be sympathetic to requests by senior police officers for an increase in their establishment.
The other matter that relates to sentence is the question of whether the prosecution should have a right of appeal against sentence. We fought that in your Lordships' House, and we won. I am glad to see that we have really seen the end of it, because although

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there is a suggestion in some of the comments that that power is being resuscitated in this Bill, I do not myself see it that way. The only effect of Clause 29, which deals with this matter, is to say that if it appears to the Attorney-General that a sentence passed by the Crown Court on a trial on indictment raises a question of public importance, he may, with the leave of the court, refer the case to them to obtain their opinion on the principles which should be observed in sentencing in similar cases in the future.
That is not giving anybody the right of appeal against sentence. I hope that that power can be operated without the pillorying of the judge who happened to pass a sentence which may differ from that which is thought otherwise appropriate. That would serve only to bring justice totally into disrepute. I know, too, that the Court of Appeal will recognise that every case differs on its merits and that it is quite impossible on one set of facts to say in terms that one sentence is wrong in that way.
Those are perhaps more than enough comments for this stage in a debate on the gracious Speech. We look forward to the passage of this Bill through another place and its arrival, no doubt late next July, in your Lordships' House. We hope then to make it into an implement which will help us to cope with the rising tide of crime in this country.
4.29 p.m.
The Lord Bishop of Birmingham: My Lords, I thank those noble Lords who have already made distinguished contributions to this debate and I, too, should like to say how much I look forward to the maiden speech of the noble Lord, Lord Bonham-Carter. I should like also to join the good wishes of those who sit on this Bench to those already expressed by noble Lords.
I should like now to invite your Lordships' attention to some matters that we have not yet considered this afternoon. These relate to family and personal matters and I wish to speak mostly from an ethical point of view. I warmly welcome the Government's decision further to reform family law in England and Wales. Naturally, the details of the Family Law Reform Bill, lately introduced into this House, need careful scrutiny and examination, but the idea of reform in this area is surely to be welcomed.
In matters of family law a nice balance must be kept. On the one hand, the family as an institution needs public support and strengthening by law, especially when it is subject to massive stresses and strains. On the other hand, we must see that justice is done to those people who, through no fault of their own, suffer from legal disadvantages such as those relating to illegitimacy. There is a vast increase in such children—an increase of all but 100 per cent. in 10 years. To me it is an astonishing thought that in these days of cheap or free contraception 126,000 children were born illegitimate last year—as the noble Earl, Lord Caithness, has already told us, all but one-in-five of all live births. Further, there is evidence to suggest that there is a growing number of couples in committed relationships who choose not to get married.
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It seems unfair that the father of an illegitimate child should always be unable to share with the child's mother in parental rights and duties, including rights of custody and guardianship. It seems right, too, that he should be able to apply, if necessary, for legal custody or for access. Previously the father of an illegitimate child has been almost a non-person under the law, subject to affiliation proceedings but without rights in the care and upbringing of his own child. I welcome the chance to put that right. I also welcome the provisions that will give an illegitimate child similar rights of succession to property as has a child of married parents. The principle of putting the welfare of the child first is, surely, to be supported.
At the same time, I believe that is is important to affirm the overriding value of the family itself as an institution rather than to concentrate totally on the children. For this reason I regret that the Bill, despite the words used in its printed explanation, seems to be able to dispense with the distinction in law between legitimate and illegitimate children without substituting an alternative such as "marital" and "non-marital". To this extent, I fear that the Bill may actually weaken family life, as I fear that some recent measures may have done. I refer to the Matrimonial and Family Proceedings Act which seems to have increased the number of divorces among those recently married.
As I have said, I welcome this new Family Law Reform Bill in principle, but I hope that Her Majesty's Government might see fit to balance the Bill by taking some positive action to support the legitimate family. I refer to tax advantages for couples remaining unmarried. Only last week I heard of a couple with children who are not married because both partners, being unmarried, can claim mortgage relief on their house. If cohabiting couples can be denied welfare benefits, could not unmarried couples who are both employed have some tax benefits removed? If not, it looks like one law for the poor and another for the rest.
Consideration of the family leads me to consider an intimate matter which did not find a mention in the gracious Speech. I had hoped that it would include a reference to the promotion or protection of public health in this country. I was glad to hear about the maintenance of a subtantial aid programme overseas, but sorry not to hear of a substantial AIDS programme in this country—though naturally the committee chaired by the noble Viscount the Lord President of the Council will be warmly welcomed by all. I understand that this week there is to be a debate on this matter in another place, and that a Question will be asked on the subject in your Lordships' House tomorrow. I hope that we shall hear that sufficient resources are being devoted both to research and to widespread screening, as well as to publicity.
The Board for Social Responsibility for the Church of England will be publishing later this month some guidelines for the pastoral care of those who suffer from AIDS. However, I should like now to address myself not so much to care as to prevention, where Government action seems to be urgently needed. I am sure that I do not need to remind your Lordships of the catastrophe which AIDS is already causing on the continent where it originated—I mean in such African countries as Zaire and Zambia, where there are few

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facilities for sterilising needles for injection, inadequate medical care and little medical technology.
However, even in a country like the United States, with all its "safer sex" campaigns and its technological expertise, this illness, which is incurable, continues to spread alarmingly. There are 1.5 million people who are thought to be infected with the virus; 18,000 are expected to die by the end of this year, with 150,000 deaths within five years. Of course, we have no means whatever of knowing how many people already infected by this virus may later develop the illness. If they do, they will die from it. In this country the number is still small—just over 500 deaths to date compared with, say, 6,000 a year killed on our roads However, unless something is done we are going to have an AIDS explosion. We are now at the stage that the United States was five years ago.
The groups at risk from this killer disease show three different means of transmission: by blood to blood innoculation; by materno-foetal transmission and by sexual transmission, both homosexual and heterosexual. As regards blood innoculation, unless the virus mutates suffcient steps now seem to have been taken to protect both those receiving blood transfusions and haemophiliacs receiving factor 8 or factor 9.
Intravenous drug abusers who share needles and syringes contaminated by infected blood present special problems. A moral question arises over the provision of free sterilised needles. It seems to condone illegal acts and to encourage drug abuse. However, I do not think that is a valid moral objection. Only a person who is already hooked on drugs is likely to seek a free sterilised needle; and precisely because he or she is hooked, that is not increasing drug addiction but helping to save lives.
As for materno-foetal transmission, we must accept that, as for other sex related illnesses such as syphilis, AIDS can be transmitted in the womb and the only way to stop this is to prevent women from being infected by AIDS and, if that fails, to strongly discourage women who are so infected from having children.
AIDS is mostly transmitted sexually and, so far in this country, mostly through homosexual relations; although in Africa AIDS is predominantly a heterosexual illness and it might become so in this country, too. One of the problems to which the Government committee must address itself concerns explicit information about sexual transmission, homosexual or heterosexual. It is said that it offends against good taste. Good taste, we all agree, is a good thing, but it is not really a sufficient reason for dying.
It is said that there should be a campaign for safer sex with the provision of free condoms. It is not always realised that condoms are already obtainable free from family planning clinics by men and women, although some district health authorities restrict the numbers issued to an individual per month or at a time. General practitioners do not prescribe or issue sheaths and it seems undesirable that they should do so. Since condoms are already issued free, the question of whether it is ethical hardly arises. Such a practice should not be stopped, least of all at a time when we are faced with an AIDS epidemic.
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What, however, is seldom stated, is that condoms are only 85 per cent. effective when used as a contraceptive and, similarly so, when used as a protective against AIDS. The huge increase in illegitimate births to which I have already alluded does not suggest that they are popular. In any case, the American campaign for safer sex has been a failure.
Compulsory screening for all and subsequent apartheid for those who have antibodies to the virus is unthinkable. The only safe way is personal chastity. I was sorry to hear that a Minister for Health had recently called that old-fashioned. Chastity is never old-fashioned, but always contemporary. In the words of my dictionary, to be chaste means to abstain from all immoral sexual intercourse. It applies before marriage, it applies within marriage; it applies outside marriage, and if homosexuals think it right, it applies to an exclusive and lifelong relationship with one partner.
AIDS is a killer disease. At the moment it is incurable and always ends in death. We hope that a cure will be found, but, if it is, it is at the least five years on. After all, antiviral chemotherapy is still in its infancy. If this country returned to biblical restraints on sexual behaviour, the mortal danger of AIDS would vanish overnight. The moral law is not true because it is found in the Bible; it is found in the Bible because it is true.
Human beings have evolved in such a way that pairing and bonding are part of our nature, and promiscuity is contrary to it. Unchastity is against the natural law and, because of that, we must expect that our bodies, no less than ourselves, are ill adapted to it, hence the doubling of rates of cervical cancer among young women in the past decade and hence the prospect of a catastrophic spread of AIDS. The Church has perhaps been too reticent in recent years about shouting loud for chastity. If so, fear of death may succeed where quiet moral persuasion has failed.
I am sorry, as I said, that matters of health did not appear in the gracious Speech from the Throne. I hope that nonetheless the Government, in their official warnings against AIDS, will make it crystal clear that there is one safe way and one safe way only of avoiding AIDS which holds good for all. It is through living chaste lives of sexual restraint, and exclusive loyalty to a single partner.
4.44 p.m.
Lord Bonham-Carter: My Lords, I crave your indulgence and your Lordships' patience this evening on this the first occasion that I have had the opportunity to address this House. I say patience because I suspect that some of your Lordships may have reached that position of political development so well described by the late Lord Boothby when he said that he had reached the point in his political career in which the only speeches to which he could listen were his own. I ask your Lordships to be patient while I listen to myself.
I, on the other hand, have listened with attention, admiration and gratitude to the words which a series of noble Lords have addressed to us already. I must thank the noble Earl, Lord Caithness, whose courtesy and competence have aroused my admiration. I thank

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the noble and learned Lord, Lord Elwyn-Jones, whose sunny presence, humour and wisdom, of which we are the fortunate beneficiaries, are an asset to any assembly. I should also like to thank my noble old friend, if that is a possible expression—Lord Wigoder for his kind words of welcome and the right reverend Prelate the Bishop of Birmingham, who I hope will forgive me if on this occasion I do not follow his interesting and important discussion on AIDS, as I should like to do in other circumstances.
As has been said by many noble Lords, the most important element in the gracious Speech last week was the Criminal Justice Bill. Without commenting, as other noble Lords have, on the contents of that Bill, I should like to say that, no matter how admirable the principles underlying a Bill of this kind, the way in which the law administered and put into practice is just as important.
There is no section of the population of this country to which that general proposition applies with more acute importance than to the ethnic minority group. I say that because of the evidence collected in an important report published by the National Association for the Care and Resettlement of Offenders, which confirms and adds to successive studies by PEP and the Policy Studies Institute. That report demonstrates that members of ethnic minority groups are arrested more frequently, bailed more rarely, and sentenced more heavily than the rest of the population.
In the light of the evidence collected, it is difficult to resist the conclusion that members of minority groups are the victims of discrimination and that the criminal justice system, taken as a whole, is not immune from discriminatory practices. That is hardly surprising. In every area of our society which has been examined, evidence of substantial racial discrimination has been discovered. The same now appears to be true of the criminal justice system. Moreover, that will be no surprise to members of the ethnic minority groups—the person wearing the shoe knows where it pinches. Of those surveyed, 38 per cent. of West Indians and 9 per cent. of Asians agreed, thought or believed that they were treated worse by the courts than whites.
Perceptions are important. The question to which the NACRO report addressed itself is whether those perceptions are true or false. Its findings may surprise some judges, some of our magistrates and some of our probation officers. The report states:
"The provision of fair and non-discriminatory treatment to black offenders and victims of crime appeared to be a low priority for most of the agencies for whom it should be a central concern—some did not even seem to be aware that it was an issue at all".
Much of the evidence comes from the Prison Department, because, alone of those agencies, the prison service monitors its activities properly and can provide information about the numbers, length of sentence, ethnic origin and so on of the inmates of our prisons. Some of the figures published in June 1986 were that the total prison pupulation of young male offenders was 10,000, of whom 1,200 were from ethnic minorities. If the proportion of the prison population were the same for black and white the figures would be 590 and not 1,200. There was a total
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of 26,000 sentenced adult males, of whom 3,000 were from the minority groups. There was a total of 903 sentenced adult women, of whom 146 were from the minority groups.
The disproportion is even greater among those who have not been convicted and not sentenced—that is, those who have not been bailed. Sixteen per cent. of untried men under 21, 15 per cent, of untried males and 23 per cent. of untried women are from the ethnic minority groups and overwhelmingly from the African or Afro-Caribbean population.
Finally, the Prison Department gives the following information about sentencing and location. A higher proportion of black prisoners were serving long sentences—18 per cent. of those sentenced to four years or more compared to under 8 per cent. of those serving less than 18 months. The proportion of black women in Holloway is 27·5 per cent. These figures are formidable. They must be, it seems to me, a source of concern.
The figures draw attention to the extreme importance of monitoring. It is devoutly to be hoped that the other agencies within the criminal justice system will follow the Prison Department's example, so that at least we know what is happening.
Were there time, it would be interesting to speculate on the reasons and causes that led us into this situation. Meanwhile, the figures that I have quoted appear to reflect discriminatory decisions at every stage in the criminal justice process from arrest to sentencing.
There is another dimension to the whole matter that I do not think we can afford to neglect. That is the minorities as victims of crime. The Metropolitan Police collect information about the proportion of victims of crime who are from various ethnic groups. In 1984, 15·1 per cent. of victims of robbery and 16·5 per cent. of victims of assault were either Afro-Caribbean or Asian. In 1985, this percentage had increased to 18·1 per cent. Not only are these figures disproportionate to the percentage of the population as a whole but, perhaps more seriously, they are increasing.
The same is true of racial attacks, on which the Home Office undertook the first survey in 1981. The number of racial attacks reported to the police has increased from 1,276 cases in 1983 to 1,945 cases in 1985. Given these facts, it should not surprise anyone that the ethnic minorities have little respect for the criminal justice system, for those who enforce the law, and those who, as they see it, fail to protect them from assault, harassment and so on. The Home Office survey found that Asians were 50 times more likely and West Indians 36 times more likely to be victims of attack than white people. The frequency of these attacks and the concern that they inevitably and naturally generate is something that the report describes as not a matter of opinion but a matter of fact.
The PSI report of 1984 checked the Home Office figures and concluded that they were in no sense an exaggeration. In these circumstances, black people have developed a frightening lack of faith in the ability or the will of the police to protect them. Forty per cent. of West Indian men and 50 per cent. of West Indian

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women stated that it was definitely not true that the police could protect them from racialist violence. If attitudes and beliefs such as this become entrenched, it is exceedingly dangerous for the fabric of the whole of our society.
It is, of course, true to say, as the police constantly say, that they have to deal with the symptoms of profound social problems. It is of course true and it is of course desirable that we tackle those profound social problems, which are also profoundly intractable, as soon as we can. But we cannot wait until that day before we deal with the symptoms. The wounds have to be bound up. If you look through the recommendations in the NACRO report, whether they are directed at the courts, at the probation or social services, at the voluntary sector, or elsewhere, the same proposals come forward again and again: monitor your own performance as far as the ethnic minorities are concerned; adopt an open and public equal opportunities policy; and recruit more members of the minority groups into your service, whether it is the probation service, the prison service, or the Law Society. All involved in the criminal justice process should undergo some training in race relations.
Some progress is being made, most especially in the Prison Department. Not only, as we have seen, does it carry out a proper monitoring exercise, but Circular Instruction 32/1986, published recently, is a model of its kind. It includes a policy statement. It provides for monitoring and assessing race relations in all the establishments. It provides a check list for assisting in this process. And it sets out a chain of command within prisons for implementing the Prison Department's race relations policy.
I have tried to present your Lordships with a few crude facts—facts which cannot but cause us concern. The heart of democracy lies in the belief that, before the courts, all are treated equally whatever their class, race, sex or colour. I echo the words of the noble and learned Lord, Lord Scarman:
"People say we should be confident that we have the best judges in the world, the fairest courts and legislation, and a good criminal law. None of that matters at all if we cannot retain public confidence in the rule of law, if we cannot regain public confidence in the police, the legal profession and the courts".
I do not believe that in this situation, as in most political situations, there are easy answers or that there are any easy solutions. What I do believe is that we can handle this matter better and more humanely than we have done to date. This will require determination, patience and a willingness to listen and face up to the facts that confront us. It does not seem to me an immodest aim. It does not seem to me an aim inappropriate to politicians. It is one I commend to your Lordships.
4.58 p.m.
Lord Beloff: My Lords, it is indeed a privilege to someone born when the noble Lord's grandfather was Prime Minister to be the first to congratulate him on his speech. Remembering also the distinguished services of his mother, one might say that in his person the distinction in your Lordships' House between the hereditary and the life element is somewhat obscured. However, in the times in which we live, it may not be the distinction of the noble Lord's ancestry but the
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talents of the noble Lord's niece which are most likely to make the name of Bonham-Carter resound in the public ear. That said, it is difficult, even on an occasion like this, when congratulations are in order, to be totally certain that the noble Lord has kept in his maiden speech to the prescription that it should be non-controversial. Nevertheless, the House is, I believe, grateful to the noble Lord for taking the occasion of his maiden speech to give us his thoughts on a matter of great public importance on which he has more experience than most of your Lordships.
I would not follow him along that path except perhaps to make two points. First, while I think it is very important that there should be public confidence in the fairness of our judicial, police and penal systems, I am not sure that the statistics of differential conviction in themselves are evidence that this impartiality is absent. It could be—I do not say that it is—answered that if more people from a certain group are convicted of a certain offence it is because in that group that offence, for one reason or another, is more prevalent. If we are to talk about the lack of impartiality in our institutions, I think we must have evidence more cogent than that before we accept the widespread indictment which was contained in the speech of the noble Lord.
Secondly, I think that the noble Lord is undoubtedly right, and nothing is more shaming to this country, to emphasise the growth of attacks on racial minorities by others—called racial assaults in brief. That these exist is a shame. That their numbers are rising is a shame. But again we are dealing with difficult social situations in which it seems to me—indeed the noble Lord gave us some reason for believing that he also feels this—that one essential factor is that the ethnic minorities play a more active role in the various organisations and institutions concerned.
In particular—and I believe that experience in the United States would bear this out—until we have in the police force and in the services ancillary to the police a proper representation of the ethnic minorities, that confidence which we should like to see will not be captured easily. The noble Lord, Lord Carmichael of Kelvingrove, in another debate recently, asked why there are so few members of the ethnic minorities in the police force. One reason must surely be that some of the leaders, or the self-styled leaders, of the ethnic minorities, have condemned the police, have attacked the police, and have suggested that it would be very improper, almost a case of race treason, for a member of an ethnic minority to seek a career in the police force. One must take into account the activities of some people who—although they claim to have as their objective the bettering of the status of the racial minorities, an objective that we all share—are objectively making that situation worse.
There are very grave issues which the noble Lord has raised in this remarkable maiden speech. I think that the whole House would wish to congratulate him, and I hope not merely to utter the normal conventional phrase that we would hope to see him more than once, indeed often in the future, but also that occasions will arise, particularly in the course of a Session which does not seem to be legislatively overburdened, to discuss in greater detail with him the very important issues that he has raised for us this afternoon.

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I was proposing to look at another aspect of some instruments of local government other than their contribution, or lack of contribution, to racial harmony. That is in connection with one Bill which will come before us which will make an important change in the methods by which the remuneration of teachers is fixed. It may seem a little remote from these great considerations. It is important because it is only a stage in a process by which the organisation of education in this country is being changed, and will be changed, possibly very radically indeed. It seems to me that there has been a notable failure on the part of some, although by no means all, local authorities to take seriously their obligations to education rather than to seek in their powers over education the possibility of pursuing other political or social ends.
We have heard from the right reverend Prelate his views about the dangers of AIDS. It is perhaps curious that at the same time there are some local education authorities who believe that the praising of homosexuality should be an important part of the educational process. There seems to be a contradiction here. One wonders whether the feelings in favour of the family as the basic social unit, which the right reverend Prelate has commended to us, are very much uppermost in the minds of some of those who have pursued this kind of propaganda.
However, I wish this afternoon to take a rather special point about educational reorganisation. It is I think the fact that education authorities have tended to meddle. The example I have given is an example only of meddling where schools are concerned. We shall have to look also at their role in higher education, particularly in relation to the polytechnics. Although these originally were largely the outcome of local initiative, they now play a national role and in many cases take students from as far and as wide as do the universities. Yet there are now very considerable complaints from the polytechnics of interference in their internal affairs by local authorities, which lead them to believe, as I myself do, that the time has probably come to emancipate the polytechnics, to give them charters, and to make them fully responsible, as are universities, for their own discipline and curricula and the monitoring of their own performance.
Some of the instances are as follows. There has been the unwillingness of a local authority to allow the disciplining of students who have taken part in actions against outside speakers. I do not know how this will be affected by the Act which we passed in the last Session. No doubt the noble Lord, Lord Harris of Greenwich, already knows this fact, but a number of polytechnics have been prevented from ordering certain newspapers for their libraries. There has been refusal to allow polytechnics to advertise vacancies on their staff in certain newspapers; the prohibiting of polytechnic libraries from acquiring books from countries whose regime this particular authority dislikes; and the going over the heads of the directors of polytechnics to deal directly with staff and students.
Not perhaps in this Session, over which hangs the spectre of a general election, but with an eye to action in the future—hopefully by agreement, because the performance of polytechnics is so vital to our
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industrial health that it should concern members of all political parties—here there seems to me to be a clear case for looking at whether this section of education can be preserved from meddling. If local authorities can also be persuaded not to meddle in matters of sex and race, so much the better.
5.10 p.m.
The Earl of Longford: My Lords, it is a pleasure to follow the last two speakers, not to mention their eloquent predecessors. When I was young and the noble Lord, Lord Beloff, was still younger, he was an ardent champion of Left wing causes, and I was a Conservative! At any rate, I think that over the years our contribution has been well-balanced. It was also a special pleasure to hear the wonderful maiden speech of the noble Lord, Lord Bonham-Carter. The trouble is that every maiden speech here is described as remarkable, so it is rather difficult to find the words which distinguish the noble Lord's speech from others. I at least venture to say that his mother, who I knew very well, and his grandfather, who I did not know but of course admired as a student of history, would have been proud of him this afternoon. Certainly the subject on which he spoke is one on which I venture to think he has done more work than anyone else in this House.
My noble and learned friend Lord Elwyn-Jones, dealt so thoroughly with the Criminal Justice Bill that it only needs me to add one further thought. I certainly welcome anything that is being foreshadowed to improve the treatment of the victims of crime; that is better late than never. I first introduced that subject to this House in 1962, and in 1978 the noble Lord, Lord Mishcon, made an outstanding maiden speech. We were back debating the same subject the following year. Therefore do not let us become unduly eulogistic about the Government, but let us at least say that there is more joy over one sinner who repenteth than over all the rest. I know that the right reverend Prelate would agree, although he will correct my version of the quotation. We give credit to the Government to that extent.
The other day I was speaking in what I suppose would be called a penal discussion before the Cambridge Law Society. One of my colleagues on the panel was Mr. Bartell the chairman of the Prison Officers' Association, who was a very forceful speaker. Certainly my noble friends Lord Mishcon and Lord Graham, would know him exceptionally well. He came out unequivocally on his own behalf, and on behalf of the association, in favour of penal reform. Later on during the discussion a Conservative QC on our panel, an MP, with some connection with the Home Office, ironically remarked that it was surprising to say the least that the chairman of the Prison Officers' Association and an old-time penal reformer like myself should be saying the same sort of thing at a time when the public were moving away from that position. I suppose that this eminent Conservative thought that he had made some sort of debating point. That is what was said, and in a sense I want to dwell on that question this afternoon. I shall return to the question of public opinion before I close these few remarks.

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I should like to dwell for a moment on the views of the Prison Officers' Association, which were not always so close to those of penal reformers. We are all familiar with the splendid work for penal reform done by bodies such as NACRO, which has as its chairman the noble Lord, Lord Donaldson of Kingsbridge, and, going still further back, the Howard League, and others. The director of NACRO said in the NACRO annual report:
"The last twenty years have seen a slow, steady and relentless deterioration in prison conditions".
A great deal of attention should be paid to that. The trouble about penal reform is that people are inclined to say, "They would say that, wouldn't they?"; one assumes that anyone to do with penal reform would say that kind of thing. However, as regards the prison officers, I beg the Minister to ask the Government to pay even more attention than when these longstanding prison reformers issued these grave warnings.
I should like to quote one or two sentences from the annual report of the Prison Officers' Association:
"Over the last 11 months there have been 1,700 reported incidents, 1,108 staff have been assaulted by prisoners and 631 prisoners have been assaulted by prisoners. This year alone 2 prisoners have been murdered … Last year 683 prisoners escaped or absconded".
Still quoting from the annual report of the Prison Officers' Association, the point I want to bring home is that:
"The living conditions of prisoners create intolerable working conditions for prison officers".
I should like to repeat that:
"The living conditions of prisoners create intolerable working conditions for prison officers".
In the past some people have been inclined to think of there being some sort of conflict between the interest of prisoners and prison officers, but of course matters should never have been looked at in that light. Now there is no excuse for looking at it in that light. I am sorry to say that today prison officers are very sharp in their criticisms of what is called the Home Office. I regret that I must point out that the criticism must be levelled at Ministers. To some extent no doubt the Ministers are dependent on their officials but the responsibility is theirs. The prison officers also say that the Home Office answer to the enormous problems confronting prison staff is to tell prison officers that they are inefficient, manipulators of the taxpayers' purse and full of restrictive practices. The prison officers—who, after all, are ordinary average citizens engaged in this public work—are saying that the Home Office is being extremely unfair to them. Therefore, in addition to their criticism of conditions in the prisons, they are extremely critical of the Home Office and, by implication, of Home Office Ministers. I do not want to exacerbate this, but I am bound to say I can understand it. The Home Office are very much in the dock.
The prison officers reach a striking conclusion and they say that there needs to be "minimum enforceable standards for prisons". I am going to ask the Minister—and I have given him notice of this—whether he has anything to say on that particular point. Minimum enforceable standards have been demanded for a long time by the various penal reform organisations and by many others, and there is a
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widespread impression that those minimum standards were actually promised, or at any rate an undertaking was given to try to achieve them, some years ago, in the time in office of the noble Viscount, Lord Whitelaw. Therefore, I am going to ask the Minister explicitly, having given him notice, whether the Government are still trying to achieve these minimum enforceable standards. The prison officers say that if these basic minimum standards were legally enforceable it would prevent overcrowding, reduce tension, and create a climate in which the prisons can begin the task they are supposed to achieve—that a prisoner leaves a prison a better person than when he entered.
Those are the convictions of these gentlemen who devote their lives to the difficult task of controlling prisoners. They are not just the views of some old-fashioned penal reformer like myself. They coincide with my views, but I am not asking the noble Lord to accept them as coming from me.
What is the next conclusion? I am afraid there is only one conclusion that can be reached, and it is that there ought to be far fewer people in prisons. Fewer people should he sent to prison, and when they are sent there they should be kept there for a shorter period. The noble and learned Lord, Lord Elwyn-Jones, has explained how poor our record is in this respect. Our record in this matter is disgraceful compared with those of other countries, and I need not repeat the facts he gave.
However, I am, in a sentence, asking the noble Lord to agree that if these standards are going to be enforced there is only one way of doing that, which is to reduce the number in prisons. In practice, that can only be done by the use of alternative remedies. There are plenty of us in this House who have advocated alternative remedies and spelt out that case in some detail, so I shall not dwell on it further now; but that is the inexorable logic. There is a terrible crisis in the prisons. There are far too many people in prisons, and the only way out is to reduce the number of prisoners. The only way of achieving that is by the much greater use than at present of alternative remedies.
Before I close I should like to deal with one aspect of this problem. It may be said, whether publicly or in conclave, that the public would not stand for it; that the public want more severe penalties not more humane treatment. That may be said. We know that that was the policy which was introduced by Mr. Leon Brittan when Home Secretary three years ago in response to what he thought was—and which may well have been—the attitude of the Conservative conference.
However, I ask noble Lords to just pause for a moment on this question of public opinion in regard to prisoners. Can we all agree that public opinion in regard to prisoners is very much influenced by the tabloid press? Can we all agree that the attitude of the tabloid press towards prisoners is quite deplorable? Once we agree with that, the question arises: how far are we going to pander to an opinion whipped up in that way and exploited for commercial reasons?
I shall take only one example, from the Daily Express last week. I suppose that there is hardly anybody in this House who has not at least on one occasion in his life enjoyed the Daily Express. If I say

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that, I suppose that that will be reported tomorrow, but what I am going to say now may not be reported. Particularly when it comes to dealing with well-known prisoners their attitude is totally without scruple. It is unbelievably vicious. That is what I say about the Daily Express, but you could say much worse things about the Sun if you were in the mood for it. That is how public opinion, at a time of great anxiety and a huge increase in crime, is exploited by the tabloid press. I ask the noble Lord and the Government how far they intend to pander to an opinion created in that lamentable fashion.
I do not envy the right honourable gentleman Mr. Hurd, his task. I remember what was said of President Wilson:
"He stood for human decency. He stood weakly for human decency, but he stood where it was an honour to stand".
I hope and believe that it will be said of the right honourable gentleman Mr. Hurd. I certainly wish him well in the great struggle ahead of him.
5.25 p.m.
Baroness Burton of Coventry: My Lords, in any debate which covers home affairs and the environment it is obvious that we must touch on a great many subjects, some seemingly of much greater importance than others. Having listened today to the speeches on the Criminal Justice Bill, on penal reform, and on law and order, I realise that what I want to talk about, although I shall be brief, may seem not as important to the public as those particular matters.
I should like first of all to say something about the speech of the noble Lord, Lord Bonham-Carter. I listened to the noble Lord, Lord Beloff, saying that he would be acclaimed not for his ancestry but for himself, and I heard the noble Earl, Lord Longford, mention his mother. I should like to pay a tribute to Lady Violet Bonham-Carter. The moment I hear the words "Bonham-Carter" my mind goes back to her.
Going back over the years I can remember sitting and listening to her. She was witty, factual, and devastating. One listened with real joy, particularly because one was not only listening to a good woman speaker but really and truly to one of the best speakers in this country. If Lord Bonhan-Carter, good though he was today, is ever a patch on Lady Violet, we shall all think a great deal of him. I hope he will take that as a compliment, because it is meant as one.
I am going back to the opening remarks of the noble Earl, Lord Caithness, when he spoke on consumer protection, and when he mentioned the words "bargain offers". I have not got the dates in front of me, but it must be going back 15 to 20 years when we discussed the subject of bargain offers in this House. I remember, because the Labour Party were then the Government and I was not popular for the remarks that I had to make. I am not going to make any further remarks on the subject today, but wait for the Bill. I hope that this time we shall perhaps get somewhere on the matter of bargain offers.
Although it may not rank as importantly as the Criminal Justice Bill it is entirely a non-party matter, and I think that I shall carry the whole House with me, and obviously the Government, when I say that over
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the years it has become more and more obvious that recognition of consumer interests should be enhanced for the benefit of both consumer and industry alike. I say "enhanced" and not "recognised" because words of recognition have never been lacking. What has been lacking has been the implementation.
I felt that today particularly we might have a new threshold from which we could take off. Not only the gracious Speech but the British presidency of the European Community I think together present an opportunity to make real progress.
The House will recall the debate that we had on 10th October, initiated by the noble Lord, Lord Seebohm, and spoken to by so many members experienced in European consumer affairs. Out of that debate there emerged for me one major factor. It was stated by the noble Baroness, Lady Serota, in her speech and emphasised time and time again in the report of the Select Committee dealing with consumer protection policy in the European Communities, which was chaired by the noble Baroness. I should like to say in passing that this report gave much valuable and appreciated information to consumer and industry alike.
If I may paraphrase and put into my own words this feeling, it was that progress had been all too slow; that consumer protection measures had been on the agenda for many years, being shelved repeatedly by the member states. Indeed, noble Lords will recall that on 30th July last year after much effort we in this House managed to extract a statement on the EEC directive dealing with product liability. This directive was adopted on 25th July 1985 and it took 10 years to achieve. On 23rd January this year we learned that the EEC directive on doorstep selling was adopted by the Council of Ministers on 20th December 1985. From a note in my files I was reminded that a draft directive on this matter was ready in 1978. I want to suggest that if we are serious, this is no way to continue. We have an opportunity to do something about it in these presidential six months. I want to suggest that a fundamental change of approach is necessary.
The Consumers' Consultative Committee, the officially recognised body for consumer consultation in the EEC, has been described as "an excellent idea working badly" or as "something of a disaster". Whichever is correct, it needs reforming and it needs strengthening. I want to know whether in these six months of European presidency the Government are really doing something about it because without such action consumer interests in the European Community will never be accorded adequate recognition and consideration. That is the first question I want to ask.
I come now nearer home. I have been in this House for 25 years. Much of that time has been spent on consumer affairs. I hope the House will note that I say "consumer affairs" and not "consumer protection". Progress has been very slow. Can the Government at last offer something better? In the gracious Speech mention is made of the fact that,
"Measures will be proposed to strengthen the law on consumer protection".
Obviously this will be debated in due course—in fact in the near future. But what shall we find in the details and how much is the consumer really being offered?

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I want to ask one question in advance which concerns the good faith of the Government. This question obviously precedes First Reading, which I believe is set down for tomorrow. The House may recall that on more than one occasion I have raised the matter of the resale of electricity by landlords. The Director General of Fair Trading in a report upheld complaints of considerable abuse by some landlords and recommended action. Almost a year ago, on 5th December, the noble Lord, Lord Gray of Contin, told the House, at col. 1403 of Hansard:
"The Government expect to deal with the question of overcharging by landlords, not by making it a separate offence but as part of the proposed new legislation on misleading price indications announced … [on] 4th March to this House".
On 27th February this year the Minister of State for Energy said in Standing Committee on the Gas Bill:
"It might be helpful if I describe the action that the Government propose to take over the recommendations of the Director General of Fair Trading on the resale of electricity. The Director General discovered clear evidence of abuse in overcharging for electricity. As a result an order requiring that the price charged for electricity by landlords should be clearly set out in an itemised statement and that the landlord must be responsible for stating the maximum price. Failure to comply with the order, or charging a different price from that shown on the statement, would give grounds for prosecution by a trading standards officer".
On 11th June last, at col. 269 of Hansard the noble Lord, Lord Brabazon, referred to a new consumer goods and service Bill. Such a Bill would provide additional enforcement on the resale of electricity should this become necessary. Over the years we have been put off or sidetracked many times when asking specific questions of the Government. That is why, in advance of any discussions on the measure proposed in the gracious Speech, I am asking for evidence of good faith. Does the proposed Bill include proposals to deal with this specific problem and when might we expect consumers to benefit from provisions made?
I have given notice to the Minister of the two questions raised today: namely, the position of the Consumers' Consultative Committee of the European Community (and what the Government propose to do about it) and the resale of electricity; so that the House might reasonably expect an answer I hope that the reply to both questions will provide evidence of good faith towards the consumer and indicate a real step forward in the area of consumer affairs.
5.36 p.m.
Lady Saltoun of Abernethy: My Lords, although I was not born when the grandfather of the noble Lord, Lord Bonham-Carter, was Prime Minister, and although I did not have the honour of knowing his very distinguished mother, I did know his brother in the far off days of our youth. I should therefore very much like to join other noble Lords in congratulating him on his maiden speech. I am not sure that I agreed with every word he said, but I admired the way he said it.
We have been presented with our annual menu of Bills, of which, as usual, some appear to be of great urgency and others less so. But one thing has not figured on that menu: something far too important to be one of the other measures to be laid before us. I refer to legislation to control embryo research, in vitro fertilisation, and so on, which was called for by the Warnock Committee whose report was published in
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July 1984. For the third year running we have waited in vain for mention of some such legislation, and every year we are told: "No, not this year". This is a far more important matter than many that Parliament has spent, and will spend, time on. It is perhaps the most important matter that we shall ever have to legislate about. It is literally a matter of life and death. It was already a matter of urgency when the Warnock Committee was set up in 1982. I know it is difficult—it is perhaps the most difficult thing that we shall ever have to legislate upon—but it will not get any easier by being pushed to the bottom of the Government's pending box. This bogeyman will not go away because we close our eyes and pretend that he is not there. The Government should get on with it before scientific developments overtake the Warnock Report and make it obsolete. This will happen quite soon. Indeed, it is already beginning to happen.
Among the more important Bills that we are promised—and one to which the noble Earl, Lord Caithness, did not actually refer—is one to repeal the Remuneration of Teachers Act 1965. I very much hope that it will introduce not only some form of central funding of education, but, at the same time, some form of broad-based national curriculum for schools, bearing in mind the recommendations of the CBI's Vision 2010 Committee (of which, incidentally, my son-in-law is chairman) as set forth in the interim report entitled Open to the Future which was presented at the CBI conference last week. This is extremely relevant in the context of unemployment among other things. At the same time, I hope, too, that very much tighter control will be kept over the moral content of sex education in schools. This is supposedly a Christian country. At least I suppose it to be and I believe that Christian standards should colour what is taught in our schools. Apart from the wickedness of corrupting the minds of children, whether deliberately or by default, the threat of an epidemic of AIDS makes this of vital importance. I was very glad to hear the right reverend Prelate the Bishop of Birmingham speak out clearly on the subject because it, too, is a matter of life and death.
5.40 p.m.
Viscount Eccles: My Lords, I hope that I shall meet with your Lordships' approval if I talk about education, because this is the subject of which I have had some experience. Mr. Baker's proposal to pull out the concertina of the teachers' salaries and link pay with conditions of work is the best news that has come from the Department of Education for a very long time. Sad to say, the reputation of the maintained schools at this moment is very low and in contrast to those high hopes that we entertained at the time of the 1944 Education Act. At that time, we thought that everything was set fair and the main reason was that that measure was an all-party measure. Rab Butler and Chuter Ede had the full support of both Houses of Parliament. The first Ministers of Education, Ellen Wilkinson and George Tomlinson, put the Act into practice with no political bias. Florence Horsbrugh and I followed their example. We worked in complete partnership with the local authorities and the NUT. Sir William Alexander, as he was then, and Sir Ronald Gould, general secretary of the NUT, were our firm and constant allies.

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We believed that within a generation it would be possible to raise the standards in the maintained schools to a level where, on academic grounds, parents would have little or no reason to send their children to private schools. Were I still Minister of Education, that would still be my aim. Good progress was made until the mid-1960s, when the all-party approach was abandoned. Then politics forced big changes in the structure of the secondary schools and began to infiltrate staffrooms and education committees. Inevitably, that aggravated the diffculties of adjusting what was going on in the schools to the great wave of permissive morals, to the influx of immigrant children and to the demands of a society in the grip of a technological revolution. Nothing like enough was done to improve teacher training or the old, out-of-date curriculum. Throwing together large masses of children of mixed ability, to be taught in many cases by inexperienced teachers, did great harm to the less able children. We know that there was some very good teaching in the top forms of the comprehensives, but what happened to the lower range of ability was a very high price to pay for a political experiment in social engineering.
All that is water over the dam. A child who has been bady educated cannot go back to school. Now, we have a Secretary of State who is not afraid to identify and deal with the major causes of the decline in standards. He gives me hope that the gap can be significantly narrowed between the poor results obtained in many maintained schools and the kind of education which the modern parent wants for his or her child. Every year, that gap worries more parents and they send their children to private schools. That is understandable, but not a development that one wishes to see as an alternative to raising the standards in the maintained schools.
Mr. Baker is going to give parents opportunities to advise teachers and I am sure they will co-operate, though I am bound to say that 30 years ago, when I called for more parent-teacher associations, the teachers objected loudly and strongly. Parents, they said, were a menace. They ought to be kept as far away as possible from the schools. My noble friend Lord Home of the Hirsel tells me that the headmaster of Eton expressed exactly the same view. Anyway, I think that things have changed. More parents are taking a close and intelligent interest in their children's education and one hopes that men and women of all political and religious persuasions will come forward to serve on the governing bodies. The extra governors will be a great help but there is no getting round the fact that the major responsibility for the decline in standards rests with the teachers themselves, especially in the core subjects—not with all the teachers, not with half of the teachers, but with a sizeable fraction.
That this is the situation is borne out by some astonishing figures. When I first went to the Ministry of Education in 1954, 6,375,000 children were being taught by 235,000 teachers; that is, 27 children to one teacher. In 1984, 8,600,000 children were being taught by 415,000 teachers; that is, between 17 and 18 to one. What a difference between those two figures! And what have we got to show for it? I do not have comparable figures showing the numbers of those
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employed in the education departments of the local authorities but I have the figures for the expenditure on administration and inspection. The total for all the LEAs in England and Wales in 1955 was £16 million; for the year 1986–87, it is estimated to be £347 million.
The disappointing results implied by this great increase in staff lie at the root of the Secretary of State's problem. To give your Lordships one example, I was told not long ago that half the teachers in the primary schools who teach mathematics had not themselves got an O-level in that subject. How can 200,000 additional teachers and administrators have failed to produce a significant rise in standards? The answer is quite simple. It is a very old lesson which we have forgotten. It is this. A child learns more from one good teacher in a leaky shed than from two incompetent teachers in the best of classrooms.
The reaction of the NUT to Mr. Baker's proposals shows that they would like to put quantity in front of quality; that is, they go against the great lesson of education. They are always talking about class sizes when they ought to be talking about stricter conditions of entry and much better training. Fortunately, there are still many devoted teachers in the schools. The trouble is with the others. Their lack of skills and their unprofessional conduct dismay the public and deprive the children. Until a way is found to retrain or replace these incompetent teachers, a substantial rise in standards will be very difficult to achieve.
In a sense there is overmanning in schools today, but it does not mean that there are thousands and thousands of jobs that have to go for ever, as in coal or steel—quite the reverse. As the age of technology unfolds, teachers of high quality will be wanted in great numbers, provided of course that they really are up to the job. In the future, governments, no matter who they are, will have to select, train and reward these teachers to a standard a good deal higher than has been normal in the past 20 years. If that does not happen, not only will the children be poorly educated but the teachers themselves cannot expect to be recognised as a profession.
Mr. Baker is clearly aware of this danger. When he proposes to give head teachers better pay and more authority, he is taking a very important step towards an increased status for all teachers. I say that because a profession that does not have enough good-looking plums at the top of the tree is not going to keep highly qualified newcomers on the lower branches for very long. It is regrettable but it is not surprising that some unions are objecting to Mr. Baker's decision to pull the concertina of salaries out so far. They would like the money to be distributed more evenly to all the teachers on their books, competent or incompetent. To accede to that demand would perpetuate or increase the unsatisfactory performance in many schools. No one knows better than the experienced teachers themselves that throwing money at everybody will not raise standards.
I wonder whether the authorities and the unions realise how rapidly public concern is growing about the quality of British education; and so it should grow, for our schools, colleges and universities are the fundamental source of national well being. If our young people are not well taught how to use their

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hands and their brains, if they cannot acquire the knowledge to compete with their contemporaries in other countries, what place will Britain hold in the world and how are we going to earn enough to look after the elderly and our less fortunate citizens? When I say "compete in the rest of the world", I mean not just in industry but also in ideas, in art, in scholarship and in moral standards. We have come rather suddenly to realise how old-fashioned and under-equipped the education service is; that is, if we wish to keep abreast of our neighbours. A long-term plan is essential in order to make our schools as good as any on either side of the Atlantic.
My experience leads me to realise that major reforms in education take longer to plan, to put through Parliament and to carry out than the number of years for which any political party is likely to stay in office. It follows that, unless the government and opposition parties agree on the broad lines of advance, as we did in 1944, there can be no steady progress in the schools; and that is exactly what the schools want—steady progress.
This brings me to my final point, which is about the most controversial part of Mr. Baker's proposals. Whether they are accepted or imposed, the result will be some shift in the pattern of power in the education service. The local authorities and the unions will lose some power. They have brought that on themselvs by their failure to agree and by intolerable interference by some local authorities with the conduct of the schools.
On the other hand, teachers, governing bodies and the Secretary of State will gain some power. That shift is essential in the best interests of British education. If it is opposed there will be conflict. That conflict will be expressed by dislocation in schools. We cannot know who will come out of it the winners, but we do know for certain who will be the losers: the losers will be the children, as they have been in the past two years.
Parliament is therefore faced with a very serious and potentially damaging situation. I have no doubt that the right course is to put the children and their education in front of the interests of any one or more of the parties in this negotiation. My conclusion is that, if we want British education to underpin the future of our country, we have to do two things: first, take party politics out of education, and then put into education resources in personnel and money on a scale not yet contemplated. Therefore, Mr. Baker's proposals should have all-party support.
5.57 p.m.
Lord Carmichael of Kelvingrove: My Lords, I hope to speak very briefly in the debate on the gracious Speech partly because so much has already been said here, in another place and by skilled commentators in the newspapers, on radio and on television.
I think it is staggering that, at a time such as this, no reference is made in the Speech to unemployment, which is surely the most important among the many failings of the present Government. Sadly, however, I noticed a phrase in the Speech which said,
"firm monetary and fiscal policies will continue to restrain inflation and foster the conditions necessary for further sustained economic growth.".
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When I read that, as I said, I was saddened. I was slightly cheered by reading The Scotsman newspaper and its wry comment on this phrase. The leader said:
"This (statement) may be notably optimistic, but it is the same jolly message that the Tories have been sending out since 1979.".
I can assure the House that in Scotland, where the policies have bitten deeper and harder, The Scotsman was really expressing the general national reaction to the gracious Speech and to the continual optimistic promises of the Government.
I believe the Government are seen, not just in Scotland but in the whole of Britain, to be a government concerned very largely, if not primarily, with the South-East of England. I do not want to develop this theme but I believe it is a gravely mistaken policy. Not only are we getting two parts of Britain—the North and the South—but within the South-East (as has been mentioned in some of the speeches we have had already today and notably in the maiden speech made by the noble Lord, Lord Bonham-Carter) quite clearly the tensions in the South-East, because of so much population and so much strain, are beginning to show. I really believe that the Government in the gracious Speech show no sign that they are aware of the real state of the nation or, if they are aware, they have made no attempt to address the underlying problems.
I want to deal primarily with the Scottish aspects of the gracious Speech and since there is very little in it involving Scotland—though what is there is of some importance—I hope to be very brief. From the Scottish point of view, we have only a few Bills so far. The enforcement of debt reform is long overdue, but it is extremely complicated and will need to be treated very much as an all-party matter. We must get an all-party and a bi-partisan solution to this. Warrant sales are an appalling thing. The way the law works in Scotland at present is that if someone is unable to pay a debt ultimately the bottom line is that sheriffs' officers can go along to the house and actually pin notices outside and on the lamposts outside; they can go along to the house and put labels on the things in the house that can be sold off by auction in order to raise the money for the debt, with the family there, or standing outside, wondering whether they will have a house to go back into.
Over the years it has been a very difficult problem: the ultimate enforcement of a debt. I accept that; but over the years we have been able to say that certain items of furniture should not be removed from the house. Nevertheless, a pathetically small amount is raised by these sales, partly because the neighbours do not go. Everyone is horrified at the idea of being seen near such a appalling situation. Therefore it is the rather unscrupulous dealers who come along and offer ridiculously low sums for the furniture. So I hope that we can get some cohesion and understanding into this Bill to try to solve this dreadful human problem.
The Criminal Justice Bill, I believe, was a recommendation of the Law Commission and it is also something that we can welcome. The noble Lord, Lord Bonham-Carter, in his maiden speech referred to the fact that he was chairman of NACRO. Perhaps I should declare my interest and say that I am the chairman in Scotland of SACRO, which is the Scottish Association for the Care and Resettlement of

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Offenders. It is a much newer organisation than NACRO. It is also a much smaller organisation, not merely because of the size of Scotland as against England but also because of its relative newness and its structure.
In the past few weeks in Scotland we have had great problems, as your Lordships may have seen on television and read about in the newspapers. Over a long period we have really had a crisis, taken together. There have been the suicides at Glenochile prison for young offenders, where they are given short, sharp, shock treatment, which I hope people will not still believe is an answer to anything serious. There have been the problems in Edinburgh prison where there was the sit-in a fortnight ago, and of course there have been the problems at Peterhead, where we had another sit-in last week.
All this adds up to the fact that we are in a serious state in Scottish prisons. I think that is now generally recognised by prison officers, the police and everyone involved in the penal system. Unfortunately, there was no mention made in the gracious Speech referring to the problem of crime in Scotland. I am sorry to see that we almost head the European league in this respect. I think that only Turkey has a higher proportion of its population in gaol at any one time than we have in Scotland. No one in the field of criminal justice and in prison believes we have seen the worst of the problems in Scottish prisons. May I urge the Government even at this late stage—perhaps the real problem at Peterhead and at Edinburgh came too late for inclusion in the Speech—to make a serious attempt at a fundamental re-examination of the prison system. I believe this is absolutely vital.
The main legislation for Scotland contained in the gracious Speech, and one which we will be dealing with some time in the New Year, is the question of the community charge, or the "poll tax". It is worth mentioning that Scotland is being used as an experimental area. In many ways I do not object to that. I think we have a good size of population; we have our own law and our own administration, and there are many things Scotland could be used for. I am sad that this is one of the things it is going to be used for. I believe it is a Bill brought out because of the necessity for the Government to appear to be doing something and perhaps in order to reinforce some of what they believe to be their own areas in Scotland, which electorally are rapidly drifting away from them.
The "poll tax", as it will always be known, will be introduced in a fortnight, I believe, and I understand that the Ministers have assured us that a full Bill will be introduced. It will not be just an enabling Bill, which would be quite wrong. Of course we welcome the fact that we are to have a full Bill and we shall await its publication with considerable interest.
I should like to deal with the three main points that were mentioned by the noble Earl, Lord Caithness, when he spoke about the Bill being designed for fairness, accountability and simplicity. I should like to look at those points as quickly as I can. As regards fairness, there can be no relationship in this Bill with the ability to pay, which I would have thought was one of the important measures of fairness. The poor will
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pay much more, and the better off will pay much less. I have lots and lots of figures that I could give your Lordships, but I am sure you would find them boring. I should just like to give a couple of examples from my own city of Glasgow. In Glasgow, out of 72 wards eight will pay less than at present, and they will pay less ranging from 7 per cent. less to a massive 29 per cent. less. A total of £4 million will be reduced from these eight wards alone. Your Lordships can imagine that these are the most comfortable wards in the city where, by and large, people live because they have enough money to take a bigger house than they specifically need. Therefore our present rating system, which is based on a notional rental, at present gives them a higher rateable value.
Then there are 44 wards in the city which will pay more. This ranges from 7 per cent. more to a quite incredible 48 per cent. more. Coming from one of the poorer wards, which happens to be in my old constituency, a total of £16 million will be taken from the poorest people in the community and a total of £4 million will be given to the better-off people in the community.
Then we come to the question of accountability. Superficially this is an appealing argument, until we examine it closely. I do not know how you can improve and strengthen local democracy when about 80 per cent. of the spending will be decided by central government—because the Government will decide on the commercial rates and they will put a limit on them for the whole of Scotland. So that will be taken out of the control of the local authority and any flexibility must be provided by the community charge. This will be the only charge available for the local authority to make its dispositions, particularly if there is the need to meet a shortfall in the rate support grant.
The Confederation of Scottish Local Authorities (CoSLA) have given some quite dramatic figures of what will happen if the increase in local government spending is to be met by the community charge. If the increase in any one year was 6 per cent., but rate support grant would support only 3 per cent. of that, the other 3 per cent. which would come from the community charge would be borne by only a very small section of the community, and the ratepayers would be paying something like 18 per cent. more to meet the 3 per cent. shortfall. That is because only ratepayers would be available for the community charge. How this can be called community accountability, or stretched to any definition of fairness, is beyond me.
My last point on accountability concerns the position of a family. Under the Bill, as we have been told so far, the husband and wife will be mutually liable for the payment of each other's community charge. I am quite aware that the language I am using may be unfamiliar to many of your Lordships. We in Scotland have been living with it slightly longer, but I assure noble Lords that by the end of next year we shall all be familiar with it. But we look forward to seeing how the Bill is handled and who will be responsible for the younger members of the family who refuse to pay. Shall we have warrant sales to force a young son to pay part of the community charge? If we do not get some change in the other Bill about which I was speaking, will someone have to decide what belongs to his father

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or to somebody else in the house? It is a Bill which bristles with difficulties, and accountability is not something which we shall get from it.
Finally, and most importantly, may I deal with the question of simplicity? One thing that this Bill is not is simple. The subject bristles with complications. As soon as the register is produced, there will be movement, as those of us who have fought in elections will know, and in any year 25 per cent. of people could move. People do not move merely from one street to another; they go out of the area. Many will even come south. Theoretically, young people may be living at home, but they may move down south for six or seven months' work. Would they need to prove that they had been away for so long, although their home was in Edinburgh, Glasgow, Aberdeen or Dundee? This is a problem which will be very difficult to straighten out. There is also the other question of multiple occupancy which, speaking as someone who represented a seat with a great deal of multiple occupancy, I know is a real headache for anyone trying to make sense of the electoral register.
There is opposition, or very serious doubt, about this Bill from just about everyone concerned with Scottish local government. The Society of Chief Executives of Local Authorities, CoSLA, the Law Society of Scotland, the single homeless, the Scottish Council of Voluntary Organisations, the messengers at Arms—who will chase up the defaulters—and sheriffs' officers, the Institute of Public Finance and Accountancy and a whole lot more are concerned about it. I have a strong feeling that, although the Government have promised that this is a final Bill, this will be one of those Bills with which we in this House have become very familiar, in which amendments of a fundamental nature will be inserted at every stage right up until our Third Reading. It will be very largely legislation "on the hoof", because I do not believe that the Government have thought it out fully. It is born out of expediency, caused by the Government's cutback of grant to local authorities and by some of the anomalies which showed up after the last rating revaluation. I seriously believe that the Bill has not been thought out thoroughly and it will not do the job, as the Government hope, of strengthening their precarious hold on some of the constituencies in Scotland. But we look forward to its coming out in a fortnight and reaching your Lordships' House early in the New Year.
Baroness Carnegy of Lour: My Lords, before the noble Lord sits down, may I ask him if he would tell the House whether he thinks that the present rating system in Scotland should continue, or could continue, and whether the figures that he has given about the amounts that will have to be raised from different wards in Glasgow can possibly be known, until it is known what will be the level of rate support grant in a given year?
Lord Carmichael of Kelvingrove: My Lords, may I deal first with the second point of the noble Baroness? The assumption was made by local authorities—not just in Glasgow, but in Edinburgh as well—and they had to work on existing figures which would not vary a great deal. They assumed that roughly the same
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amount would be required to run the services as is being spent at present and they divided that by the population who would be liable to pay rates. It is a comparison. But I imagine, whether the amount is up or down, that it will be roughly the same ratio of the poor wards to the better-off wards.
On the other point, I am not sure that I like the idea of the rating system which we have discussed so fully. It is also important to know that the Government looked at the poll tax in, I think, 1983 and discarded it as being quite impossible and impracticable. That is why I believe that this Bill has come about through expediency, but one has to look much more closely at the subject. I have no easy solution, but one thing which has made the situation much worse is the quite horrific clawback that the Government have made in grants to Scottish local authorities.
6.17 p.m.
Lord Mackie of Benshie: My Lords, I should like to start by congratulating my noble friend Lord Bonham-Carter on his maiden speech and I assure him that his next speech will be followed with immense interest, if not with the same amount of acquiescence.
I should like to speak a little about Scotland. I was surprised that, when the noble Lord, Lord Carmichael of Kelvingrove, said that Scotland was a very neat little entity with 5 million people and its own legal system, he did not mention that the answer to its problems is that is should run its own affairs. I thought that the Labour Party was keen on that, but they forgot about it very quickly. I should support them if they would produce in their projected Bill proportional representation. But that would not suit them, because the object of their exercise is to continue Labour dominance in Scotland.
It will be fascinating when we come to the question of rates, which is mentioned in the gracious Speech. Are we to do it on the electoral register? I have a crooked mind and I keep thinking of a family with three sons, all working and due to pay the community charge or the poll tax. They will certainly say to mum and dad, "We will pay you half of it to leave us off the register." There are all sorts of fiddles that could be worked and I should not be surprised if the poll tax resulted in fewer people paying towards local government. The subject bristles with difficulties. The noble Lord, Lord Carmichael, mentioned some of them, and all of us who have been candidates know the difficulties of the register. Or perhaps the Government are thinking of a King Herod-like census, with all the people in their homes on a particular day and a large group will go along and count them, so they will be liable on that day. On that day, I believe, the hills of Scotland will be covered with tents, whatever the weather.
If I may say so, I do think it is rubbish and what we should have is a local income tax. It is fair and it works in other countries. I cannot understand—or rather, I hope I do not understand—why the Government have discarded it, because as it stands what is proposed is certainly not just. As the noble Lord, Lord Carmichael, has said, it will result in the better off paying less of some of the local taxes and the worse off paying more. I think it is a bad Bill. I did not believe

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that even this Government were capable of coming to such a wrong solution.
The other part of the gracious Speech which interests me is the further reform of the CAP. I understand that agriculture, if the Minister agrees, may come into our discussions today, because it is not considered altogether to belong under economic affairs. If he does not so consider, I shall still speak about it.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale): My Lords, the noble Lord may consider that it is an industry.
Lord Mackie of Benshie: My Lords, I see. The reform of the CAP is enormously important and I know that obviously the Government play only a part—although it is a very important part, particularly during our presidency—in the reform which is so badly needed. If the advice of the EC Committee of this House had been followed seven years ago, then it is possible that a gradual policy might have worked. However, we are now in an incredible situation. Perhaps I may give a few figures. We have 1½ million-tonnes of butter. That is almost incredible. We have 1.1 million tonnes of milk powder; we have 650,000 tonnes of beef in store, and that is an intervention store and not the normal carry-over. We have a budget for support of products produced for export and so on of £13 billion and, if we go on at the present rate, according to the distinguished journalist, Brian Gardner, it could rise by another £8 billion per annum. There is an urgent need to do something. Even if VAT goes up from 1.4 to 1.6 per cent. of our contribution, it still will not be enough to handle the increase in surpluses which we have.
Consumers are not doing too badly, in that in 1980 it cost them 19.2p in every pound for food and in 1985 that was down to 16.3p in every pound of disposable income. One would think that that was working quite well, but the farmers' income has been dropping steadily in the last 10 years. Of course, everyone points to some farmer running about in a Rolls Royce, but there are rich farmers and there are poor farmers. I am in the poor farmer class. The fact is that income has been steadily dropping and, if one looks at the world scene, farmers are going bankrupt in enormous numbers in the United States. Looking at our own scene, on the east coast of Scotland last year, due to an appalling harvest, very heavy losses indeed were sustained in the arable areas. The temporary improvement this year will not overcome the appalling financial disasters of last year.
Something has to be done to keep the industry going and to keep that CAP going. Since the CAP started when we joined the Community, we have in fact raised production in agriculture so much in this country that we are saving £2 billion a year in imports. That is very important to us at a time when oil prices are falling and when our manufacturers are, for the first time in our history, in deficit as against imports. We must therefore do something to keep up agriculture and to keep up the environment and the countryside. I fear that we are talking a great deal about this but not a
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great deal is happening. The cost of storage and of export would provide an enormous sum to keep the population in the hills and to keep the countryside in general occupied. Farming must be the mainstay of any countryside as far as can be seen into the future.
The question then arises of how we shall do it. Certainly if prices are cut so savagely that half the farmers in the country go bust you would then get an eventual reduction in the amount produced. However, it would take a long time and I do think we must come to some scheme to set aside produce. The Government have produced a scheme, which I should like to hear more about, in which they would pay farmers who are growing grain on unsuitable land to stop for perhaps five years. They speak of figures of £76 an acre. I should like to see that set out in more detail because I think that is the sort of thing we ought to be doing. If one simply puts a quota on every farmer, then one gets a totally false structure and people on good land stop growing grain and other crops when they should be pursuing that efficiently while we use other land such as the Grade 3, Grade 4 and hill land for its proper job, which is probably the production of stock.
We are also talking about trees, and we have heard from the Government what a good thing the tree can be. I should like to hear from the Government about this, because we need a definite scheme. At the moment the whole of forestry planting in the private sector, which the Government are encouraging, is dependent on a tax advantage. It is true that a rich man who is paying 60 per cent. tax can along with the subsidies plant trees and grow them for about a quarter of the cost. Therefore that is encouraging for tree planting but it is very often done in very unsuitable areas and done to the detriment of the countryside. It certainly has not produced any rise in the population, because of its very nature, which means that all the work is done by mobile gangs. I think the Government must produce a scheme whereby farmers in the upland areas and the poorer land areas turn, like their Scandinavian counterparts, actually to planting and looking after trees.
The NFU have produced quite a good scheme with a simple basis. If we are going to save money (and it is a very large amount of money) which is spent on promoting cereals, then that should be spent on trees. One must give a generous planting grant and then, on the security of the trees, give the farmer a loan each year to give him an income. If he does not handle the trees well, then the Forestry Commission must step in and take over the security. That scheme needs a lot of working out but I think it is the only way we shall get the sort of social planting which makes a useful contribution.
We must take about 10 per cent. of the land out of production if we are going to get back to a stable position without incredible surpluses in this country. It must be used in some way. It must not be put into other simple agricultural crops; otherwise there will be a surplus in some other area. A serious attempt needs to be made to provide a basis for alternative crops and particularly for trees. We need trees. We import £4½ billion-worth every year and certainly 90 per cent. of our requirements. My noble kinsman will be more familiar than I am with these figures.

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Let us take a look at the world position. There is no solution to surpluses there. In fact the position is made infinitely worse. There are large surpluses in the United States. They are being put on the world market at a price which makes it a tremendous temptation for any developing country, if it can, to pay, say, £40 a tonne for barley and neglect its own producers. This leads to great social ills in those countries. So there is no solution so far as I can see in trying to feed the hungry two-thirds of the world. They have to be helped to grow their own food, for both financial and social reasons.
We have to tackle the problem of surpluses. They will get worse, because our scientists are constantly producing new ideas. They are producing new wheats and new helps to beef and pig production. We shall have the same kind of multiplication of production we have had in the past 20 years in the next 20 years. We need bold and practical steps, and I hope that the Minister will be able to tell us that the Government are serious in their attempts to control the very dangerous situation in agriculture.
6.32 p.m.
The Countess of Mar: My Lords, in her most gracious Speech, Her Majesty announced that the Government will maintain firm control on public expenditure. This is an excellent objective. None of us likes to think that our rates and taxes are being squandered. However, I must express my feelings of despair and indeed of anger at the effects the present government policies have upon those who are dependent for their incomes on rates and taxes.
I know that I am not alone. The unemployed, the elderly, the sick, the low paid, those who work in the caring professions with such dedication, are all minority groups with little political muscle. They are now seeing the other side of those 1979 election promises of a return to Victorian values. Thrift has resulted in a fall in the inflation rate. Good; but what happens when thrift becomes meanness? We are now hearing a call for a return to Victorian sexual morality. The dictionary definition of "moral" is the distinction between right and wrong. Is it right that we should allow the lessons learnt from the great Victorian reformers to be pushed aside, that even the basic Christian concept of compassion should be rejected in our urge to worship Mammon?
Only the most insensitive of people can be blind and deaf to the effect the harsh words of some politicians have upon those who dedicate their lives to caring for others, to the callous disregard for those who cannot get on their bikes or stand on their own feet. Morale among the unemployed, and those who work in the medical, teaching and social services professions has never been lower. I am sorry that the noble Viscount, Lord Eccles, is not here because I agreed with a great deal of what he had to say about education—not quite everything but most of it.
For the past four years I, together with the husbands and wives of several hundred members of the teaching profession, have had to watch at first hand the effects of this Government's policy on local authority expenditure and education. To see an experienced, highly qualified and able teacher, dedicated to the
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children he teaches no matter what their ability, broken is in itself heartbreaking. I have watched the screw steadily being turned into the wood, waited for it to crack the plank, and now must pick up the pieces. To know that their paymasters have no comprehension of the pressure under which teachers are expected to teach exasperates me.
We have, in recent months, heard a lot about conditions. What about filthy classrooms in rapidly deteriorating buildings? What about classrooms overcrowded with children who, through little fault of the teachers, have no motivation to learn? What about the social changes since we were at school? What of the proliferation of new training courses teachers have been expected to embrace with little time or thought given to training the teachers, and paltry sums offered for funding? No. my Lords, all we hear is that those activities to which teachers have willingly and voluntarily given their time for years past are to become terms of their contracts. It is hardly surprising that premature retirements from the profession have increased five-fold since 1979; that so few graduates want to become teachers and that young men and women are leaving the profession as soon as an alternative means of earning a living presents itself. Teachers have been sitting on a powder keg for years. Perhaps now it is time someone else took it over.
I shall now turn to the National Health Service. I have given the Minister prior warning of some of the points I wish to raise, and I look forward to his reply. I have always believed that one of the most important attributes of good government is credibility. The pronouncements of various members of this Government to the effect that the National Health Service is safe in their hands are barely credible to those who work in the service or are on waiting lists. A tight ship is an efficient ship, but it must be well equipped and well maintained and have a happy crew if it is to serve the purpose for which it was built.
When we read and hear of wards having to be closed, of hospitals having to share life-saving equipment, of staff shortages and low morale among the staff who remain in our hospitals, can we really say that the National Health Service is efficient? It has been seriously underfunded for several years. The figures produced by the DHSS and used by Ministers to prove that this Government are spending more on hospital and community services bear no relationship to the 0.8 per cent., nil, 0.1 per cent. and 0.4 per cent. real growth of the past four years. We have to accept that the NHS is labour-intensive and that staff must be paid.
In order to make a reasoned judgment of this Government's contribution to the growth of the service we must know the proportion of funding which goes towards wages and salaries, capital expenditure and price inflation. It has been calculated that a growth of at least 2 per cent. per annum over and above those items is necessary if the additional needs of an ageing population, advanced medical procedures and higher patient expectations are to be provided for. It is no good our boasting about the advances in open-heart surgery if we cannot cope with potentially disabling but less prestigious hernia and varicose vein operations; and why should elderly people suffer years of acute pain while they wait for hip replacements? We

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have rightly been proud of our ability to extend life, but what is the point if the quality of life is substandard?
I live in the catchment area of Worcester and District Health Authority. Worcester Royal Infirmary, the main hospital in the district, is split into three sites in different parts of the city. Two of the buildings are very old and require a lot of maintenance. Along with many other districts, it has for years been considered to be relatively efficient, and therefore is less able to make the savings demanded. Recent pay awards have made considerable inroads into its revenue budget, and as a result it has accumulated a deficit of £2½ million in the past three years.
District health authorities have been strongly urged to follow national and regional priorities for transferring mentally ill and mentally sub-normal patients to the community. The closure of a mental hospital in the district held the promise of some £350,000 per annum to be allocated to acute services, but this money has been withdrawn. Some capital has been made available to accommodate the mentally ill, but with no revenue allocation the services cannot be provided unless drastic cuts are made in the provision of acute services: medicines, surgery, obstetrics and gynaecology.
Last week I received a letter from an orthopaedic consultant based on this hospital. It says:
"Dear Sir/Madam
I regret to inform you that because it is necessary to make financial savings in the Worcester district, elective orthopaedic surgery is no longer carried out. The limited facilities available to us are entirely devoted to accident cases and emergencies.
It is unlikely that there will be any change in this situation in the foreseeable future. Should there be any deterioration in your condition please inform your GP who will have to contact me direct to discuss whether your case warrants emergency admission. However, the criteria for admission under this category is for seriously ill patients who have a life-threatening condition etc.
I am very sorry to have to write to you in these terms, but this is a matter which is entirely beyond my control.
If you wish to complain about this deplorable situation. I would be grateful if you could contact the Hospital Administration or your MP".
I am fortunate in that I am able to speak here.
Two weeks ago in this House a Question was asked by the noble Lord, Lord Campbell of Croy, about the number of hip operations performed in recent years. The noble Lord, Lord Orr-Ewing, asked the Minister, very pertinently, why in this age of computer technology the DHSS could provide figures only to 1984. Does the department know what is happening now in 1986? This consultant's waiting list in 1985 was 223 patients. It is now 300 patients—an increase of almost 30 per cent. in the past 12 months. Of the 300 patients, 49 are awaiting hip replacement surgery.
In the past ten years, admissions of elderly patients for fractured necks of femurs has doubled; and because they are frail and many live alone they are having to stay in hospital for relatively long periods. In the past they might have been discharged to a nursing home to convalesce, but since the DHSS has imposed a limit on the fees that they will pay this outlet is no longer available. In this consultant's ward lies a young lady who suffered serious head injuries in February. She has recovered physically, but because of brain
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damage incurred at the time of her accident she needs constant nursing care. She cannot go home. The nearest small hospital to her home is having to advertise abroad for staff and cannot take her; and local nursing homes will not take her because in their estimation the cost of caring for her would exceed the DHSS allowance. So there she lies, occupying a bed in an acute ward where the consultant has calculated that he could have done 25 hip operations if there had been somewhere for her to go.
There are no facilities for the young chronically sick in this part of the county, and I know of a number of cases where ageing parents are struggling with young, chronically sick patients against all the odds. The administrators and staff are having to make some extremely painful decisions. Do they change the two small hospitals in Evesham and Malvern, where at present 100 surgical operations a year are performed, to GP hospitals and thus extend the waiting list? Do they close the special clinic despite the theat of AIDS and the increased incidence of sexually transmitted diseases; or do they close the intensive therapy unit located in the same building as the casualty department and risk the lives of patients by transferring them across the city to the other branch with an intensive therapy unit?
In order to maintain the existing service in Worcester, an additional £2 million is required within the next few months. May I ask the Minister whether any of the £300 million allocated to the National Health Service in England by the Chancellor of the Exchequer in his Autumn Statement will find its way to this and other hospitals in a similar predicament; and if so, how much?
I recently received a distressing letter from a man aged 58 who suffers from ankylosing spondylitis—a disabling stiffening of the spine. He had been admitted to a Bristol hospital for major abdominal surgery. His operation was on a Thursday. He was discharged the following Saturday; that is, two days later. He lives alone and has to rely upon neighbours to help when he cannot get out. At the request of the neighbours his general practitioner called to see him on the Monday and gave him tranquillisers to make sure he stayed in bed. I had another letter from a London widower. His wife was suffering from a heart complaint. For four days her GP tried to get her admitted to hospital for treatment. This was in June, not in the middle of the winter epidemic season. She was taken to two different hospitals on separate occasions, only to be turned away because the bed had been taken. She died on the day she was eventually admitted.
I know from other correspondence that I have received that these are not isolated cases. Hospital staff are not to blame. They can only work within the guidelines issued and the funds available. How can these people feel safe in our hands? Perhaps I may ask the Minister whether the Government really mean, in their drive for efficiency, that people should be treated like that.
As a result of the economies in hospitals, general practitioners are having to cope with the brunt of ever-extending waiting lists, with premature discharge of patients from hospital, and with the mentally ill and the mentally disabled for whom no proper accommo-

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dation or back-up services have been provided. As well as that, they have to give moral support to the unemployed and badly housed who have no one else to whom they can turn.
It would be so refreshing if we could, just once in a while, hear someone in government say a heartfelt "thank you" and "I am sorry": a "thank you" to the teachers, doctors, nurses, social workers and policemen who, by their good will and dedication, keep their services going despite poor working conditions and financial stringency; a "sorry" to the low paid, the unemployed, the sick and the elderly for our failure to care for them as we should.
I often wonder why these people should be so criticised and cajoled when we never hear a word against the financiers and industrialists. For decades they have failed to invest in and modernise our manufacturing industry; failed in courage to back our inventors, scientists and engineers; and, worst of all, failed society in their personal quest for riches. Like it or not, this Government, together with all governments since the last war, have taken on many of the responsibilities of the immediate family, the extended family and the paternalist employer. There will always be people who need help to stand on their own feet, and others who never will be able to stand on their own feet. We collectively, through our Government, have a duty to ensure that those people have an acceptable standard of living and quality of life. They cannot afford the fees for independent schools, or BUPA, or to buy their own homes.
Finally, I ask the Minister whether there is anybody in this Government who takes an overall view of cause and result. Does nobody see that if the DHSS puts too low a figure on nursing home allowances, hospital beds will be occupied unnecessarily; that if people are made to live in substandard housing they will suffer more sickness; that if schools are not properly funded, children cannot learn? Does anyone work out the longterm cost to society from unemployment, lack of funding for maintenance of houses, roads and sewers; of a failure to educate a whole generation of children, or to keep the population occupied, healthy and well-nourished? What are those costs?
6.46 p.m.
Baroness Faithfull: My Lords, many people concerned with the lives of children will welcome the statement in the gracious Speech that family law reform is to be introduced. The noble and learned Lord who sits on the Woolsack has shown his deep concern for children. Already children have been safeguarded by the Child Abduction and Custody Act which was passed in the last Parliamentary year. That Act was followed by the Family Law Act, part one, which also dealt with the custody of children. We have also passed the Law Reform (Parent and Child) (Scotland) Act which was introduced by my noble friend Lord Selkirk and accepted by the noble and learned Lord the Lord Chancellor. Therefore, we know that the noble and learned Lord and his department have a deep interest in children.
The gracious Speech concluded with the words:
"Other measures will be laid before you."
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Can we hope that the setting up of family courts will fall into that category? There are 670,000 petitions and applications on domestic issues in any one year. They involve approximately 2 million people. One family court would replace the present three-tier system of High Court, county courts and magistrates' courts.
The Family Courts Campaign, of which I am privileged to be the chairman, has the support of 45 statutory and voluntary organisations. They are wide ranging and include such organisations as the Catholic Child Welfare Society, the Solicitors' Family Law Association, the Mothers' Union, the National Childrens Bureau, the Law Society, many individuals and those studying law at universities. The British Agencies for Adoption and Fostering has just published positive recommendations.
At the Conservative Party conference this year, the Women's National Committee, and others, under the chairmanship of Miss Emma Nicholson, by a large majority voted for the setting up of family courts. The Finer Committee, in a report 12 years ago, in 1974, recommended family courts. The present Lord Chancellor's department is to be congratulated for bringing out a departmental review on domestic jurisdiction. Alas, it was a disappointing document which (dare I say so?) misunderstood and bypassed the main issues and never dealt with the whole question of resources. Could it be that the Treasury was fearful of the expense? If they were accepted and implemented, the Family Courts Campaign recommendations would lead to savings of possibly £60 million. The conciliation service might save £40 million by preventing children going into care.
A family court would provide consistent justice for families, and by its emphasis on inquisitorial rather than adversarial methods facilitate the responsibility and involvement of families themselves in the solution of their problems.
Part of the family court concept, while being judicial, must encompass a conciliation and welfare service. A practice directive was issued by Registrar Tickle with the consensus of the noble and learned Lord the Lord Chancellor and the president of the Family Division. Solicitors are encouraged to use the conciliation service. There are already 30 to 40 units in the country. More are being set up. Their work needs to be standardised at a high professional level. That involves training and lectures and the issue of guidance. That is being done by the National Family Conciliation Service. The growth of the conciliation service is the envy of European countries but, alas, the Treasury through the Lord Chancellor's Department, has not seen its way clear to support the council adequately. I have two questions for my noble friend the Minister. I have given him notice of them. When can the country expect a Bill setting up the family courts?
Lord Elwyn-Jones: Hear, hear!
Baroness Faithfull: My Lords, I hoped that I would hear that. Secondly, would it not be a positive, generous and cost effective act to support the National Family Conciliation Service by giving it resources?

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I started by saying that the noble and learned Lord on the Woolsack has shown interest in and deep feeling for children. From all the speeches that have been made, I can say that if we were to think more carefully and have a better strategy for our children and families, many of the people who are in prison would not be there. I therefore press the Government to set up family courts.
6.53 p.m.
Lord Fitt: My Lords, many Members of the House consider that the major piece of legislation that we shall have to deal with in this Session will be the Criminal Justice Bill. I consider that to be so. I therefore think it appropriate once again to put on record my serious objections to what has happened under our criminal law in relation to the Maguire family, sentenced in 1976, and now free after spending many years in prison.
My honest belief, and that of many eminent persons, is that that family was completely innocent of the charges of which it was convicted. There have been many relevant television programmes since the last time I spoke in the House. In particular, there was one last Sunday evening on Channel 4 involving a panel of eminent judicial minds. They were all of one opinion—that there had been a grave miscarriage of justice in that case.
Since then, I have had occasion to go to the Library and find the report to the Government of the Select Committee on Home Affairs in the Session 1981–82 (Cmnd. No. 421). A Conservative Government were in power then. The committee had a Conservative majority. It considered cases where there had been a possible serious or non-serious, if there can be such a thing, miscarriage of justice.
The conclusions contained in that report lead me to believe that there is absolutely nothing to prevent the Home Secretary from having a further review of such cases which have caused so much concern throughout these islands. Paragraph 9 of the report states:
"Pressure and publicity. It is only natural that concern about the investigation of possible miscarriages of justice should be felt most deeply when the occasional notorious case is brought forcibly to the public attention by the newspapers, television or the publication of a book such as 10 Rillington Place'. Such publicity may in turn spring from the determination of a Member of Parliament or an organisation such as Justice to achieve the reversal of a judicial decision which their own examination of the evidence has shown to be open to question".
In the 10 Rillington Place case, through the insistence of a Member of Parliament over a number of years, there were two judicial hearings and it was found that there had been a grave miscarriage of justice and that Timothy Evans had been wrongly hanged. He was posthumously found not guilty.
There is something wrong with our judicial system if it has to depend upon the persistence of a Member of Parliament, someone's whim to write a book or the whim of a television producer to take an interest in a case, before justice can be seen to be done. That happened in the Rillington Place case. It is now happening in the case of Annie Maguire and her family, who have wrongly served many years in prison.
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Justice and the Criminal Bar Association gave evidence to the committee. Paragraph 10 of the report of that Tory-dominated committee states:
"Both Justice and the CBA suggested that the chances of a petition ultimately being 'successful' might sometimes depend less on its intrinsic merits than on the amount of external support and publicity that it was able to attract. 'In practice (the Home Office) decision to act may depend on the amount of pressure that is brought to bear on the Home Secretary by people of influence'."
It is a sad commentary on our judicial system that someone must take an interest in a case and organise publicity before anything is done, and that there are no means of obtaining justice other than by the intervention of some of those well-intentioned people. That has happened again in the Maguire case. I repeat:
"'In practice (the Home Office) decision to act may depend on the amount of pressure that is brought to bear on the Home Secretary by people of influence',"
What does "people of influence" mean?
I have repeatedly spoken about the Maguire case in this House and in another place. There are 210 Members of Parliament, many of them loyal Conservatives and Government supporters, who signed an Early-Day Motion during the last Session of Parliament. It has to be renewed in this Session. They range from Sir Edward du Cann and Winston Churchill to Former Secretaries of State for Northern Ireland who have shown an interest. Many of the most rabid, and I say that inoffensively, loyal, Right-wing Conservative suporters have signed their names to that Early-Day Motion asking for a review of this case.
In this House, my noble friends on the Front Bench and the eminent judicial figures of the noble and learned Lords, Lord Scarman and Lord Devlin, in letters to the press, have expressed their doubt about these convictions. A former Home Secretary, Mr. Roy Jenkins, and another who has held that post, Mr. Merlyn Rees, have both recently expressed grave and serious doubts about the validity of the convictions. So who does the Home Secretary regard as people of influence?
I did not have much association with the case of the Guildford bombing. But someone with whom I have only recently become acquainted, a man, I believe, of great patriotism and great integrity—I refer to Mr. Robert Kee—has researched and gone into every aspect of that case. He is totally convinced of the innocence of the Guildford bombers. So why do we persist with the stonewall attitude of the Home Secretary saying that the number of people of influence is insufficient, and that there is nothing for him to consider that had not been heard at the original court hearing or in the Court of Appeal?
I believe that the report of this committee indicates that if the Home Secretary has the will, there is nothing to prevent him, legally or otherwise, from looking into the case. If there is anything that prevents this happening—I do not believe that there is—serious consideration should be given to bringing forward legislation to enable the Home Secretary to take a different stand. In another place, an Early-Day Motion asks the Government to make some additional provision in the Criminal Justice Bill when all the legal processes, including the Court of Appeal, have been gone through. Paragraph 20 of the report to which I have referred says:

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"The genuine desire of Home Office officials to detect and correct miscarriages of justice emerged very strongly from their evidence to us and was acknowledged by all our witnesses. We do feel however that they are hampered in carrying out this task both by the tradition of excessive secrecy within the Home Office and by the severe restrictions placed, by convention rather than law, on the Home Secretary's power to intervene where the normal judicial processes may have produced a wrong result".
I agree, too, and feel that most noble Lords would also agree with the sentiments expressed in the next paragraph. Paragraph 21 states:
"We do not consider it tolerable that, where genuine unease continues to exist about the outcome of a particular case in spite of its dismissal by the Court of Appeal, an individual should be deprived of all further remedy".
If no means exist under present legislation, then, as the Early-Day Motion in another place asks, the Government should seriously consider some other system whereby, when all the legal processes have been gone through, a review body, consisting perhaps of an eminent legal figure as chairman and lay assessors, would go into every aspect when it is clear that the public conscience is concerned over convictions.
The Earl of Longford: My Lords, I agree entirely with the noble Lord. Can he say, for the benefit of myself and others, what exactly the Home Secretary is saying about all this at the moment?
Lord Fitt: My Lords, the Home Secretary has said that he cannot interfere unless there is new evidence, unless there are further considerations of substance, and unless there are material new facts. It has been proved in previous cases that, sometimes, it is impossible to get further new facts. There were no new facts in respect of 10 Rillington Place, but it was only following the execution of Timothy Evans that the conscience of the country, following the coverage given to the case on radio and television and in newspaper articles, forced the Home Secretary at that time to set up a commission which eventually found that the hanged person was innocent.
In the Confait case, as a result of the diligence of my colleague Mr. Christopher Price, a Member of Parliament at the time, who threw all his resources into the inquiries, the Home Secretary eventually decided to set up a review body under Sir Henry Fisher. It was found that people had been wrongly convicted. So the Home Office will act when there is considerable public pressure by eminent people.
I do not believe that our judicial processes should stand or fall upon the interest or otherwise shown by people who are concerned about a particular case. It is a mercy to God that in 1974, 1975 and 1976 the death penalty was not still in existence in this country. I recall the state of hysteria that rightly existed in Ireland and in this country at that time as a result of the murderous campaign undertaken by the IRA. There were occasions when I felt hysterical in my opposition to the IRA. It was understandable that people in this country should also feel hysterical. However, if the death penalty had been available, there is no doubt in my mind that these people would have been hanged. We would not be talking about people who have served many years in prison, and about some who are still in prison; we would be talking about posthumous pardons. I have no doubt that in respect of the
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Maguire case, certainly, all those who have had their lives wrecked by serving so many years in prison will be found to have been not guilty.
I see the noble Lord, Lord Monson. I do not believe for a single second that the noble Lord has any doubts about his criticism or condemnation of IRA activities. Yet he, in this House only last week felt it right to express his doubt over these convictions. Noble Lords of all parties in this House and honourable Members of all parties in another place have now taken a stand. We gain additional names day by day and hour by hour in our attempts to force the Home Secretary to review the case. I have absolutely no doubt about the outcome.
I had never previously gone into all the aspects or circumstances of the Guildford case. But the events of Guildford are indelibly linked to the Maguire case. It was one of those convicted in respect of Guildford who mentioned the name of the innocent Annie Maguire in the first place. So those two cases can be reviewed in tandem. Many doubts have been expressed from another source about the Birmingham bombers. I have had no serious connection with inquiries into the Birmingham case. But, if I believe what I have read and seen on television, there is serious doubt attached also to that case.
I know that, if I were an Englishman, I should be asking who of those in gaol is guilty. It is strange now to be told that those sentenced for the Guildford bombing are innocent, that the Maguire family, who allegedly had nitro-glycerine on their hands, are innocent, and that those convicted of the Birmingham bombings are innocent. I can quite understand the doubts in the minds of people living in this country. I have had occasion, because of my unremitting opposition to the IRA, to associate with the police more than I should normally have done. One Special Branch officer with whom I was very friendly and whom I shall not name—he is a very patriotic, loyal police officer—asked me, "What happens if you find the Maguire family innocent? Don't think it will open up a whole can of worms?" That was his view, and that is the view of the establishment in this country.
The people who were in charge of the convictions, both in the Guildford case and in the subsequent case of Annie Maguire, were eminent judicial men. There are judicial reputations at stake. It would be very hard for those persons at this late stage to say, "We have been proven wrong in the attitude and the decisions which we took on those occasions". That should not prevent us from inquiring into this gross miscarriage of justice which has ensured that many people were wrongfully sent to prison. As I have already said, had it not been by the grace of God that we had abolished our death penalty we would be talking now about corpses.
During Question Time last week I said to the Minister who will be replying this evening that this is a case which will not go away, no matter how persistent and tenaciously the Home Secretary tries to make it go away. A grave injustice has been done, and until this miscarriage of justice—which was so blatant—is seen to be rectified, then the British people would have reason not to have the confidence in their own judicial system that normally they would expect to have.
7.11 p.m.
Lord Donaldson of Kingsbridge: My Lords, the noble Lord, Lord Fitt, knows me well enough not to mind if I do not follow him in his rather elaborate exposition of alleged miscarriages of justice. I have not studied any of them. I do not know whether he is right or wrong. Everybody is terrified of miscarriages of justice. I shall say only this to the noble Lord. I believe that we have less miscarriages of justice under our system than under most others. I think that his argument has been a very powerful one against capital punishment.
Having said that, I hope he will allow me to return to my main theme tonight, which is to follow the noble and learned Lord, Lord Elwyn-Jones, my noble friend Lord Wigoder and the noble Earl, Lord Longford, on the question of law and order. I wish to deal with one particular element in law and order. It is not in any sense a party argument. The difficulty is that if one criticises what is happening one must in a sense criticise the government who are responsible for it. However, that is not my intention. My intention is to criticise what we have.
There are three factors in law and order. The first is the police job of detection and arrest; the second is the court's job of trial and sentence; and the third is the prison and probation officers' job of prison and subsequent release. It is about that that I want to talk. First, let me repeat, in I think slightly different terms, some of the figures which the noble and learned Lord gave. The increase in crime is regular, steady and frightening. It is also showing an element of more serious crime within it the whole time. In 1966–20 years ago—the indictable offences known to the police were just under 2 million. Last year—which is just on 20 years later—it was just over three and a half million. That is an increase in the order of 75 per cent. In the last ten years the number of people serving long sentences—that is, over ten years or life—has gone up from 1,618 in 1976 to 2,622 in 1985, which is very much the same proportional rise.
The law therefore has to deal with more people and also more dangerous people. Inevitably the whole apparatus of law and order is put under strain by this development. It is no good expecting the situation to get radically better. I think that on the police and the court side it has become slightly worse but is being held. But on the prison side, the prison arrangements have, quite frankly, failed to stand up to the pressures put upon them. That is what I want to look at for a few moments.
When I first began going round prisons—at the behest, I may say, of the noble Earl, Lord Longford—talking to prisoners, prison officers and governors, in 1959, I was especially shocked by one thing: the overcrowding. This seemed to lead directly or indirectly to all the other things which were wrong, of which there were plenty. In my opinion, until this problem is removed, there can be no progress in facing the difficult task of containing in a civilised way and for long periods discontented, bitter and often dangerous men. The problem has been getting worse year by year for 20 years and the figures leave no doubt about it.
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In 1966 the average prison population was approximately 33,000, and the certified normal accommodation—that means the number of proper places within prison—was 31,274, which was 5 per cent. less. There was a factor of 5 per cent. overcrowding. It was that which I thought so distressing when I first went round the prisons. Now in 1985 the certified normal accommodation has been increased by something like 9,000 through new building but the prison population has increased to 46,000 and more, which gives an overcrowding factor of 14 per cent., nearly three times as much as 20 years ago. That is a dreadful situation, make no mistake about it. The fact that, in spite of quite a large prison building programme, overcrowding is three times as bad today is a very worrying matter.
The evils of overcrowding are particularly revealed through doubling up in cells in old-fashioned prisons. In 1966 there were 5,541 prisoners two or three to a cell. Twenty years later there were 17,148 two or three to a cell—again a three-times increase. In each case of course these cells were designed in Victorian times for a single person. The Minister made a comment after visiting Leeds Prison which he will not quickly be allowed to forget. I shall come to his assistance and agree that any governor will say that it is a useful to have some dormitory cells as some prisoners prefer company to privacy. But it must not be forgotten that almost all the doubling up takes place in the old Victorian local prisons, which have no integrated sanitation, so the use of the pot in the presence of others becomes a regular indignity. We were told this year by Sir Brian Cubban that the new building programme will not have eliminated "slopping out" by the time it is completed in 1991, and will leave between 10,000 and 20,000 prisoners still subject to this disgusting and degrading routine. Sir James Hennessy, the courageous and outspoken Chief Inspector of Prisons, in his 1984 report on one prison says the last word:
"The stench of urine and excrement pervades the prison … so awful is this procedure that many prisoners become constipated."
This has not only been going on for 20 years and getting worse, but it is planned that it should continue for at least another ten years for nearly half those in prison. I do not see how we can accept this situation.
"Slopping out" is not the only evil associated with overcrowding. Overcrowding invariably involves staff shortages, staff overwork and staff-prisoner tensions. We see on the tape tonight that in the Scottish riots there was only one prison officer to four dangerous men in the prison; that is ridiculous. The Prison Reform Trust Paper on the recent riots makes this very clear.
Twenty years ago the way out of the cell was through the workshops for 30 hours a week; today that is down to 19 hours. Today in this country more people are locked up in the cells for 23 hours a day than there have ever been.
I shall not go on with this miserable story; I have only touched on the edge of the problem. However, I repeat, until we can deal with overcrowding, we can make no valid progress in dealing with the appalling difficulties which will remain and which could then be squarely tackled. It is not the fault of the noble Lord,

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the Home Secretary, the prison service or previous Home Secretaries. It is the fault of the British public, who would rather not know. I think it is time they were made to know. There are no votes in prison reform, but the time has come when we must really get together and try to put things right.
The overcrowding could be solved by a judicious mixture of sending fewer people to prison, giving shorter sentences in non-violent cases, and a careful but nonetheless bold exercise of executive release. Ministers are always frightened of treading on the toes of the judiciary, but I do not think most members of the judiciary know what they are condemning their customers to, and if they did I believe they would think twice. I think that most judges and many magistrates have a very perfunctory acquaintance with the realities of prison life, where drugs are rapidly replacing tobacco as the barons' stock-in-trade, and where something like a reverse morality holds sway. The most important, and probably the only, way to counter this is through good staff-inmate relations: overcrowding and staff shortages make those increasingly difficult to establish.
I believe that if the Home Secretary could present the judiciary with a well thought-out plan to eliminate overcrowding within three years, they would consent to some temporary abrogation of their splendid independence in order to achieve such an end. However, this has never been properly thought out. There has been no independent official inquiry since the May Report in 1979. The abolition by this Government of the Standing Advisory Commission on the Penal System means that there is no outside monitoring of what goes on.
I want to set the scene for an all-party assault on this murky area of our system of justice. I formally offer the Home Secretary the full support of the Alliance Parties, and I know that the noble and learned Lord, Lord Elwyn-Jones, will say the same for Labour. I have no doubt that we can count on vigorous support from the Cross-Benches, including, I believe and hope, many of the learned judges. I beg the Home Secretary, to accept the advice of the Home Affairs Select Committee of 1981 and set up a national policy committee, or the advice of my noble friend Lord Wigoder and set up a Royal Commission or a Select Committee of this House, and as its first task ask it to find ways to end the overcrowding of the prison system within, say, three years. I ask no questions and I expect no answers tonight, though I hope to have a chance to debate the question later on this Session. The fact that I have been saying this for 25 years may bore my audience, but it has not reduced the strength of my case.
I do ask the noble Lord the Minister to try to persuade his right honourable friend to listen to my plea and to act accordingly.
7.25 p.m.
The Earl of Perth: My Lords, I have listened to many of the speakers in today's debate on the Queen's Speech and most of them, very properly, have within home affairs talked on such matters as law and order, health or education. I was particularly glad to hear the speech of the noble Viscount, Lord Eccles, on
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education and his plea for an all-party approach, which seems to me a very right plea. I also heard the noble Lady, Lady Saltoun, speaking about the need for legislation for the Warnock Report. I can only say that I fully support her.
However, I had expected the noble Lord, Lord Donaldson, perhaps to speak on the environment. I was wrong. I recall that the debate tonight on the Queen's Speech is not only on home affairs but also takes in the word "environment". It is on this matter that I wish to speak for a short while. I particularly want to draw attention to the planning procedures which today are followed in regard to listed buildings, particularly Grade 1 or Grade 2 starred buildings. We should remember that these are some of the great and historic houses in the country.
As an example, I shall quote the story of St. John's Lodge, which, as many of your Lordships will know, is in Regent's Park, and the saga and in the end the failure to get planning permission for it to go ahead. I personally was deeply involved in the final stages of the saga on behalf of the Crown Estates, and I take the example because it really shows that something is wrong. As some of your Lordships will know, Mr. Frederick Koch is an American with great good will to this country. Indeed, he made the munificent gift a short while ago of setting up at Stratford-upon-Avon the new Shakespeare Theatre. Then he had the idea that he would like to set up a gallery and a library of the Victoriana which he has collected. He happened to wish to choose St. John's Lodge as the ideal location for this, and sought the necessary planning permission. For over two years, he and his architectural advisers tried to satisfy Westminster city planning authorities and their vociferous allies, the amenity societies, on the plans to restore and rearrange the interior of St. John's Lodge.
By the time I came into the battle its lines were clearly drawn. On the one side were the planning authorities, who were opposed to virtually any change of any kind. I think that they are developing, or have developed, a new doctrine in relation to conservation, which is that in relation to these listed buildings, the interiors are sacrosanct—there should be no change. They should show the history of the building, the whims and ideas of previous owners, and this is something which should be respected, whether what was done was good, bad, or indifferent.
In the case of St. John's Lodge, the Marquess of Bute, the great Victorian builder, had lived there for the last years of his life. He, in his wisdom—and it would not be allowed now—had removed the central staircase in the central hall, and his artist/decorator had, in its place, put some very mediocre paintings, except for the ceiling. Mr. Koch wished to put back a staircase where there had been one before, partly to help the circulation upstairs when visitors had gone through the magnificent rooms of Barry and Burton, which he was going to restore in a splendid way. After much further lobbying and debate, Westminster City Council finally gave their approval, in principle. However, the officials has the last word, for they said: "Yes, but nine different things will have to be fulfilled before we can give you the final word".

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These nine things included detailed drawings, detailed new specifications, costing let us say another £150,000, and not being judged upon for another three to six months. Even then the officials could be persuaded. They had said that it would then be open to comment by the public on the latest plans, which of course meant the amenity societies. It looked as though Mr. Koch, at best, on the decision of Westminster Council would not know where he stood for nine months to a year. Remember, he has already been trying for two years.
Then the Royal Fine Arts Commission got into the act. They welcomed Mr. Koch's proposed generosity, but no, no staircase. Finally we come to English Heritage. English Heritage is made up of people who have real power under present planning legislation. They can say yes or no, and it is either yes or no. They have, as it were, the power of life and death. Their London committee—which is formed out of the rump (and I emphasise the word "rump") of the GLC—recommended to the full committee that Mr. Koch's plan should be turned down. Happily the full committee, under the chairmanship of the noble Lord, Lord Montagu, decided otherwise. But there was a rider, just as there had been a rider in the case of Westminster Ciy Council. A delegation was to see Mr. Koch and his architects and try to persuade him even then not to make any changes in the decoration in the central hall.
I was present at that meeting, and I wish all your Lordships could have heard the long lecture that the officials gave to Mr. Koch. He had had enough, and after two years—nearly three—of striving he was at the end of his patience. It was not only a question of being at the end of his patience. There had been unwarranted attacks on him personally in the media, and false stories of what he planned to do, and there lay ahead, if all that had gone before was to happen, again public comment, again the prospect of vilification and misrepresentation.
I have gone into this in detail for one reason. I want to stress the point that the officials have power to spin things out in relation to planning procedures almost indefinitely. The Department of the Environment cannot intervene (and I in no way criticise them for that) because they are the final court of appeal if the person who is seeking planning permission has the stamina to go so far that in the end there is an appeal and an inquiry. As things stand today, the Department of the Environment cannot act.
Is there a way round? It is that which I want to develop. What changes can be made to short circuit these interminable procedures? I have talked to the Department of the Environment and they are looking into things, and for that I am grateful. In no way do I criticise them for what they have done. I criticise, and most strongly, the officials who enjoy such powers of delay whatever the wishes of their masters. I cannot help but recall the series "Yes Minister", which many of your Lordships will have seen on television. It is exactly the same thing in relation to planning. I am not alone in saying this. Let me quote an extact from Michael Manser's article in The Times. He said:
"The absolute authority of historic building officers to tell owners which buildings must be preserved and how and to what degree
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without regard to cost has to stop. Power without culpability is extremely dangerous and can and does breed tyrants."
There are many other people who feel the same way. I am sure many of your Lordships will have read Bernard Levin two days ago in The Times when he told the story of the willow tree and how the house came down but the willow tree had to stand.
What do I suggest? I suggest that if the person who is seeking planning permission finds, after a reasonable time, that things really are intolerable, that he has been unfairly bogged down by red tape and so forth, then he should be able to refer the matter to an ombudsman, as in many other cases is allowed today. Whether it is the present ombudsman or an extension of his office I do not know; but never mind, it would be for the ombudsman at that time to look into the case and decide either that he will try to hurry things up or, if he judged that the whole thing was unfair, refer it immediately to the Department of the Environment for them to be able to take action and not have to wait for the appeal. I think that something along those lines might help a great deal.
It is clear that at the start we should have to feel our way, and perhaps what I am suggesting should apply only to the listed buildings of the first and second grades; but a start has to be made against this interminable delay, unfairness and unreasonableness. My story of St. John's Lodge may after all have a happy ending. As some of your Lordships will know, Mr. Koch has bought Sutton Place and he intends to put the great collection in Sutton Place for the enjoyment of visitors and scholars.
Let us remember that Sutton Place has been residential to date, and so inevitably, if it is open for visitors and the public to see, we shall find that planning permission is needed for certain changes. My only hope is that in this instance the planners will be more reasonable and no longer obstructive, and that a doctrine of no change, with everything being sacrosanct whether it is good or bad, in a house such as Sutton Place will no longer be persisted in, and that officials will treat things pragmatically. If, in addition, something like my suggestion for an ombudsman is accepted by the Government, then the story of St. John's Lodge will not have been in vain.
7.39 p.m.
Viscount Massereene and Ferrard: My Lords, I am also going to speak on the environment, but I am going to speak on the natural environment and not the architectural environment. Your Lordships may have read an article in the Telegraph, I think of last Thursday, which was called, "There is Money in Trees", and that I made a few observations in that article. But I want to speak on what to my mind is becoming a serious threat to the ecological system of various parts of Scotland. I refer to the blanket planting of the sitka spruce.
I have always been pro-trees and pro-Forestry Commission. I have done quite a bit of planting myself from an early age, and I have planted many thousands of trees with my own hands. But today we are affected by rather a phenomenon. I am not going to talk about the Forestry Commission, and I have nothing against the Forestry Commission, but we are now getting

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syndicates based on London. They are organised by chartered accountants and various people like that. There are one or two firms. There is one that I am not too happy about called Fountain Forestry. These syndicates approach people who know nothing about the land and have no interest in the land, but they have plenty of money. However, there is no harm in that. They are told by these syndicates that if they produce so many thousands of pounds, say £200,000 or £300,000, the syndicate will make them a fortune. That is quite right, but it is not good for Scotland. Fountain Forestry in particular, as I have experience of it, is backed by the Genesis pop group. I do not object to that although I am not a pop fan. They have bought up a large part of South Mull which is on my southern boundary.
They plant the land with sitka spruce which is a foreign tree brought into this country at the turn of the century. From the point of view of growing pulpwood it produces the heaviest crop of timber per acre on poor soil in a high rainfall area then any other tree in the United Kingdom. But when large masses of sitka are planted, they destroy the natural environment. All the rare birds go—the falcons, the eagles, the harriers, the birds of the moor and the open hill go. Nothing grows under sitka spruce because it is a densely growing tree especially when it is planted by man. The ground under sitka becomes bare earth.
People will say that four or five hundred years ago the majority of the highlands were afforested. But it was afforested by the indigenous timber of Scotland such as Scots pine, the oak, the ash, the birch and the alder which were good for the land. The Scots pine always has a good cover under it. The broad leafed trees were food for all the animals and birds. There were plently of birds living in the hardwood forests and in the Scots pine. That was quite different, but now the super abundance of sitka spruce that has been planted is destroying and will destroy some of the finest natural environment not only in Europe but I could almost say in the world.
As an example there are the blanket bog sites in Caithness and Sutherland. I am sorry that the noble Earl, Lord Caithness, is not here. I know he does not live in Caithness but perhaps he knows this, I do not know. The same thing is happening in the North West of Scotland on one or two sites.
What is unhealthy is that I doubt whether any of these people who put money into these syndicates have seen the land they own. They know nothing about the land and do not know the people. When we talk of absentee landlords, these are the worst types of absentee landlord that have ever existed in this country.
Another rather unsatisfactory point about this is rather embarrassing. I shall not give any names because I feel that parliamentary privilege is a privilege which one should not abuse. If a man were to invest, let us say, £150,000 in buying one of these plots which the forestry syndicate will plant for him, he will make money. It will not cost him £150,000 because of the subsidy. If he pays a 60 per cent. rate of tax, he will receive £70,000 back or he might get more. There is one lady, whom I will not name (I think she is a little muddled, but I shall come to that afterwards) who has
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bought an area of land through the syndicate and I understand she will receive about £500,000—half a million—through tax relief and subsidy on the land she is having planted for her. I do not think I am exaggerating. I do not know whether she has been to see her land or not. But what I cannot understand is that this same lady is the chairman of an organisation which is trying to cut down on public spending in this country. I cannot remember what the organisation is called. It seems an extraordinary thing to do, I think she has her priorities muddled up a little because on the one hand she is taking great advantage of the Inland Revenue, and on the other she is trying to save money for the Inland Revenue. I do not understand her reasoning.
Sitka spruce is the tree that does the most harm. It has to be grown in a high rainfall so it is grown a lot on the West coast of Scotland. A halt must be called to it somehow because if the process continues of this blanket planting of Sitka spruce the whole system will destroy the most beautiful part of Britain and one of the most beautiful parts of Europe.
The other problem relates to acidity. These trees are planted on acid land and in a high rainfall area. That produces acidity. If hills are planted above a river the acidity is increased in that river especially when it rains. After it has grown to about 20 feet the canopy is so thick that if the rainfall is say, 100 inches, only about 30 per cent. of that will get through, so the acidity will not be as bad. But if it is grown in an area where the rainfall is not so high—it is capable of growing in an area of low rainfall—it is then too dry and the rivers become dry also. That ruins the fishing and one is caught between the devil and the deep blue sea because it increases the acidity while it is young and once the canopy is full the acidity probably will not be so bad.
I have a salmon farm in the Isle of Mull. I do not own it; I am the landlord. There is a public company there which breeds salmon. The fish are reasonably free from acidity, for they come from a big loch which is surrounded by broad-leafed trees. But one has to be very careful over the acidity. There is one loch on the island, a very big loch, where trees have been planted on the north shore and all the fish have now left and have gone to the south shore where there is no planting. That shows that the sitka spruce produces acidity. But I shall not go on any longer about that, and I hope that I have not given your Lordships too much of a lecture on sitka spruce.
As to pop groups, one young man from "Genesis" went there for a day or two some four or five years ago. He seemed very pleasant, but he had not got a clue. I have nothing against pop groups, but I think that these people who put the money into these big syndicates do not really understand the harm they are doing to the environment. I only wish that someone would tell them about it. But it is not perhaps in the interests of their advisers (who presumably are in it to make as much money as possible and who do not care a damn about the environment) to do so.
I do not know what can be done about this. It is a problem. I do not know whether perhaps the grants should be reduced; but you cannot do that to certain people without doing it to others. And you cannot

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differentiate. But I should like to give the warning that if this blanket planting continues on the west coast the natural environment and everything that goes with it will be destroyed.
7.52 p.m.
The Viscount of Falkland: My Lords, I rise to talk on a subject which I think is ignored in this country, and therefore I am not surprised that it did not form part of the gracious Speech. I think that it is not going to be ignored for much longer. I refer to the alarming increase in alcohol consumption among the young and the attendant social problems connected with it. Indeed, in my remarks I will cover increased consumption generally and the harm that that does, and shall produce some statistics in the hope that I shall not bore your Lordships too much. Really, it is the young which concern me because I think that this is a growing trend. We have seen it in other countries; it goes hand in hand with youth culture. The increased consumption of alcohol (with the health problems and the crime problems that that has brought) is something that has had to be dealt with in other Western European countries, where youth culture has developed over the past 20 years.
I think it is worth looking at some of the statistics before one examines what government have done and what government should be doing. The facts are that since the 1960s, which is not a long period of time, consumption overall has effectively doubled in this country and the real price of alcohol has halved; so that its availability and its price are such as to encourage drinking. The statistics show us that the people most harmed by this increase are those young people between the ages of 15 and 24.
In a recent BBC programme—where I could detect no bias—there were alarming instances of children much below this age group in deprived areas who were consuming alcohol with quite alarming results. In some cases there were children as young as nine years old and, certainly, from nine to 15 who were not only drinking alcohol which they were getting quite readily, but combining the consumption of alcohol with anything else they could lay their hands on to produce what is called, in current terminology, a state of being "bombed out". "Bombed out", in effect, means losing your sensibility. This is quite apart from the health effects on children, effects which are really quite drastic. Your Lordships will bear with me if I give you some of the health effects which have been reported in recent studies around the country.
Intoxication is the problem. I always thought, at the beginning of the 1960s, when I was young—and I am not all that old—that people who had alcohol-related illnesses had addictions and were to be pitied; and that this was something that one should beware of. But the nature of the harm has now moved with the shift to the young. It is not addiction that we are concerned with (as is the case with drugs) but with the immediate effects of intoxication, which is induced by increasing amounts of alcohol which are more readily available.
As the market grows—and the market has grown—the youth of this country and of other countries has been the target for all kinds of selling. It
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is a ready market and those who sell and those who purvey alcohol are naturally aiming towards these customers. Health is a great problem and in Scotland—where, perhaps, not surprisingly, they have paid more attention to the consumption of alcohol over the past 10 years following the liberalisation of their licensing laws—they tell us in studies that 80 per cent. of teenage drinkers have suffered serious adverse consequences as a result of excessive alcohol consumption. Over a one-year period in this country, 1,000 children under 15 were admitted to hospital with acute intoxication. They were admitted for emergency treatment and in some cases into intensive care. This is a terrifying figure: 1,000 children does not sound too many, but 1,000 children under 15 is an eye-opener.
Then awareness is a problem. In the future, I think we must address our minds to increasing this awareness. Awareness is something which I think was referred to by the noble Lord, Lord Ennals, when speaking in your Lordships' House about the dangers of smoking. He then quoted a 14-year-old child who had said, "If it's dangerous, as you say, they would not be allowed to advertise it and promote sports events". That is the attitude towards smoking.
I think there is a similar situation with the public at large and with parents as regards drink. I have heard it myself with friends of mine who have children who have had drug problems. The parents have managed to steer them away from that but they say, rather gaily and airily, "He's not taking drugs but he's drinking a bit"—as though that were a kind of improvement of the situation, which, of course, it is not; for drink can be as damaging as drugs.
I was interested in the speech earlier by my noble friend Lord Wigoder. I thought it was an excellent speech. He drew attention to the rising crime rate and the need even for a Royal Commission to examine the rising crime rate among the young. I was glad to hear that he also mentioned alcohol as being possibly a contributory factor to the alarming rise in crime rates. He said also that your Lordships' House would be one of the best places in which to examine all the contributory factors to see what is producing the rising crime rate. I was interested that he should mention alcohol. If such an examination should take place, I hope that alcohol will be highlighted.
Criminal behaviour as a result of an excess of alcohol consumption among the young falls mainly into two categories, physical violence and criminal damage to property, both of which have escalated dramatically in the last five, indeed 10, years and are likely, without being pessimistic, to increase further. I am told that up to 40 per cent. of all young people in detention centres or youth custody centres are held for crimes where alcohol has been a significant factor in their conviction. In Scotland the figure goes up to 60 per cent. A total of 24 per cent. of drunk and disorderly cases as reported by the police involve the under-21 s. This is a doubling of the numbers that were recorded in the early 'sixties.
Forty-five per cent. of all road accidents to the young are alcohol-related. It is very interesting to note, however, that, when those road accidents are reported, very seldom is alcohol mentioned; only the dangerous

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driving or whatever aspect is mentioned. The alcohol component is often left out. Here again something influences the attitude and there is the reluctance to admit that alcohol, in the uncontrolled way that it is being sold and used by the young, is part of a dangerous social trend.
In 1984, of 1,500 drink and driving deaths, 50 per cent. were in the 20 to 24 age group. The statistics on crime and criminal happenings are significant. It is also interesting to consider the importance that we on these Benches attach to drugs. I recall an excellent speech by my noble friend Lord Harris in a debate on the subject. I think that we on these Benches have done a good deal to draw attention to drug abuse in this country.
It is gratifying to note an increase of Government expenditure in this respect. For every one person who dies as a result of drug abuse, 30 die from alcohol abuse. That may be a surprising figure—it surprised me. If one considers the deaths of people under the age of 24, for 71 that died as a result of the use of illicit drugs, 1,000 died from the abuse of alcohol. In this country health education is again badly deficient on alcohol as related to drugs. We must all surely agree that the efforts being made to stop drug addiction and to pursue those who push drugs are admirable. In regard to alcohol, however, it appears that there is a holding back, and the Government must be responsible to a great extent.
What have the Government done? I think that recently the Government have been rather airy-fairy about the situation. In a recent BBC programme, they showed a rather cavalier attitude. The Under-Secretary of the Department of Health and Social Security said, rather gaily: thank the good Lord for alcohol—this in a programme that was trying seriously to examine alcohol abuse
The Home Secretary made a rather odd comment and, although I do not like to take things out of context, I have been trying to puzzle it out. He said that the dead afternoon in Britain must be a thing of the past. I am not sure what the "dead afternoon" is. It is a curious vision of our country that we have dead afternoons. The political correspondent of The Times on the front page of today's issue tells us that there is a great move emanating from the Home Secretary to have a Bill promoted by a Conservative Back-Bencher to liberalise the drinking laws in this country. In the debate that follows such a Bill, it will be interesting to see how many dead afternoons we shall have to consider.
Another curious fact that I discovered in my researches is that in 1979 there was a think tank—indeed, some of your Lordships may even have been on it—on alcohol and the social effects of alcohol. I had heard about this, but could not find a copy of the report anywhere. Then I found that it was rejected. I eventually got hold of a rather dog-eared copy—they are as gold dust—printed illegally in Stockholm by the University of Stockholm. I would chance my arm on this and say that, if the conclusions of that report had been used, many lives in this country would have been saved. In fact, it was considered unsatisfactory and unhelpful. I read bits of it yesterday and, if I can obtain
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it, I intend to take it home and read it more carefully. It is curious that a government-promoted report is totally ignored when it contains figures and projections of the harm caused by an excess of alcohol consumption.
The rest of the world has already taken serious steps in this matter, although the social pattern of drinking is somewhat different. In France it has gone down recently by 20 per cent. We are talking about something different in this country; here it is intoxication, and its immediate effects. In some of the Latin countries one would be talking more of the effects of cumulative drinking and different kinds of drink. There has been a decrease in Italy. The USSR and Poland have had campaigns because alcoholism in those countries is a serious problem. In America, pretty generally in most of the states they have been taking serious action by raising the age limit aspect.
I think that the Government have not yet woken up—or maybe they have woken up but are rather shy about addressing the problem. This may be because of the drinks trade. The drinks trade profits from the increasing sale of drink. It is trying to balance social conscience with maximising its profits. This is only natural, and I do not criticise it. Indeed, I would do it myself if I were in the trade. It is interesting that, in a recent issue of the trade paper Campaign, we are told that Whitbread is moving into music sponsorship to attract the young to Heineken lager. It goes on further to say that young male pub-goers are the key consumers and, more specifically, the objective is to influence the social drinking found down at the local with the mates every evening where five or six pints per night are not unusual. This is a tremendous market. It is interesting also that one of the biggest purveyors of drinks in the country has spent £60,000 on a video of education material. However, if one considers that compared with the expenditure on promotion of its products, which amounts to approximately £2 million a year, one can see that the whole thing is out of balance.
To sum up, sooner or later we will be driven to face the situation on alcohol, and I think probably sooner than later. If the Government, through their Back-Benchers, are to produce a Bill for changing the licensing laws, we, the team in your Lordships' House, of which I am one—we regularly meet, usually whipped in, as it were, by the noble Viscount, Lord Montgomery, who will be overjoyed to read the news in today's issue of The Times—will have to consider all these matters.
I am for liberalising the licensing laws on the Scottish lines, but it is no good going along that road unless one is conscious of the effects of the increasing consumption of alcohol. Although in Scotland the statistics show that the level of alcohol-related crime has dropped—indeed, the level of road accidents has dropped—the consumption of alcohol has gone up, particularly among women. One could say that in Scotland the bad social effects of alcohol as regards immediate intoxication have changed. There has been a cultural change. The actual consumption and probably the long-term effects of alcohol consumption may be continuing apace and probably not improving. That is what we are going to be facing and so I would hope, and I am sure that other noble Lords throughout

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the whole House would agree, that if we are going to go down this road, then the control of consumption is going to be a serious factor. Education, particularly for the young, in assuming healthier life styles, and of course expenditure on helping people who are at a loose end to employ their time profitably, are important, as is, of course, the enforcement of the law. These three things are being done by every civilised western country in the world, and I would hope that the Government will follow suit.
8.11 p.m.
Viscount St. Davids: My Lords, I should like to follow the noble Viscount in his argument, with much of which I agree, but I feel it is my duty to speak for a very short time and I am going to deal with one simple point which I will express as briefly as I possibly can.
I should like to see something in the gracious Speech to protect a group of people who have private rights which are being taken away for public purposes without compensation. I speak of those who try to go to the courts to pursue a diplomat. The rules about suing diplomats are absolutely necessary. It would be very difficult to have any kind of system of diplomacy without them. I am not on that subject at all—that is on the international side—but purely on the subject of what we can do among ourselves in this country.
If you have a garden and somebody wants to take the end of it off to make a road, that is a private property of yours which is taken away and you are entitled to compensation from the public. That is a simple case. These people have got a right. It is not a right to anything solid but it is a right to go to the court to sue in respect of a wrong they consider has been done to them. It is not as visible a right as part of your garden, but a right it is. It is not an easy right to assess because you cannot tell what would happen or what, if you came before the court, the court would decide. So it may be said that it would be difficult to assess what these people's right is.
There is an easy way to assess it, and that is to put it before a court. You cannot put the diplomat before the court, and indeed the right that the person had has in fact been transferred to the Crown, because the Crown has taken that right for public purposes. It is the Crown which ought to be put in front of the court. If it was possible for an individual, finding himself in the position that he could not sue a diplomat, to be able to sue the Crown in the name of the diplomat, then the case would be assessed, the value of what had been taken from him would be assessed and it would be possible (if matters could be thus arranged) for the Crown to compensate him.
This is a business which is affecting quite a large group of people now and is causing a great deal of public concern—so much so that I have been approached on this and the advice I have given is that this is what they should go for. If Her Majesty's Government are able to go along that road then everybody will be very pleased and it will cause a great deal of satisfaction. If they do not feel themselves able to go along that road, this group of people intend to take their wrongs to the European Court.
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I am a British patriot. I want to see the British courts do what is right. I would loathe to see compensation given to these people by any courts other than our own. If Her Majesty's Government are able to go with this argument and give these people their rights in accordance with the method I have suggested or with any other method they can think of, I myself will be delighted and there will be many very pleased people in this country.
8.15 p.m.
Lord Harris of Greenwich: My Lords, let me begin with a point on which I think there will be universal agreement, and that is to congratulate my noble friend Lord Bonham-Carter on a maiden speech of rare quality and excellence. I think he raised an issue of high public importance: the interface between the ethnic minorities and the criminal justice system. I hope, given his expertise in this area, that his words will he looked at extremely seriously by the Home Office and by the other departments involved.
I propose, speaking at this stage of the debate, to cover the areas of two government departments: first, the Home Office and, subsequently, the Department of the Environment. These are of course the principal departments involved in our debate today.
If I may, I will turn first to the contribution of the Home Office in respect of the gracious Speech. I would say at the outset how very much I regret the fact that there is once again no reference to the repeal of Section 2 of the Official Secrets Act, 1911. We have had debates on this issue in this House before. I think it is a common experience, wherever we may sit, that we find it quite clear that Ministers are becoming increasingly embarrassed at having to get up and make the sort of speeches which they do in order to defend a continued policy of inaction. Perhaps that is not surprising. Successive British governments over the past 20 years have declined to take any action but I think we are now in a very different situation, because after the Westland affair how can anyone seriously put forward an argument in favour of more prosecutions under Section 2 of the 1911 Act?
Here we had a case where senior Ministers worked together to leak a Law Officer's opinion to the press: something wholly unprecedented in the public affairs of this country. They worked together and they leaked it. In fact the Solicitor-General was set up by Mr. Brittan when he was Secretary of State for Trade and Industry and was quite deliberately asked to write this letter with the clear objective of leaking it to the press in order to put Mr. Heseltine at a disadvantage.
In view of the direct responsibility of Ministers in this matter, it is perhaps not surprising that none of the officials involved has been prosecuted; but I am quite sure that the Law Officers must be particularly embarrassed about this, given the fact that those same Law Officers agreed to the prosecution of a junior woman civil servant in the Foreign and Commonwealth Office for leaking something (quite wrongly, I may say) where it was conceded by the prosecution that no question of national security was involved; and that girl was sent to prison.
I find humbug of this kind quite intolerable and I very much hope that soon after the next general

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election, whatever government there may be, we shall at last have a repeal of this wholly undesirable piece of legislation.
I think we have to accept the fact that our country has a reputation for almost obsessive secrecy, and often ineffectual secrecy. I believe that this is beginning to damage the quality of public administration in this country. It adds to the climate of suspicion about the motives of politicians and their double standards. If anyone continues to doubt that view of our obsessive secrecy, one has only to look at the most recent example of this in the extraordinary court case which is now being conducted in New South Wales to which the Government are a party. I cannot recall a piece of greater folly in recent years than for a government to set about launching this case.
I have no brief for ex-members of MI5 or MI6 who choose to enrich themselves by publishing books about their colleagues. But it seems to me that this is a clear example of gross overreaction by the Government, who have now sent the Cabinet Secretary to defend the position which Ministers have adopted. I cannot imagine any senior civil servant having in recent years been put in a more unenviable position than Sir Robert Armstrong.
So much for what is not in the speech. Let me now make some relatively brief references to three Home Office proposals that are within it. First, I very much welcome, as did my noble friend Lord Wigoder, the decision of the Government to implement most of the recommendations of the report of the noble and learned Lord, Lord Roskill. I think it is long overdue to take action in this important area and I join him in saying that, on balance, the Government are right not to move on the recommendation of that committee to dispense with juries in complex fraud cases.
I am bound to say that at first I was not sure what would be the right policy for the Government. But increasingly I came to the conclusion, having been rather neutral on this question, that it is quite impossible to decide to abolish the right to be tried by jury unless there is an overwhelming consensus in favour of that policy. It is quite obvious that there is no such consensus, and accordingly I believe that the Government are entirely right to have decided not to follow that recommendation.
Secondly, speaking for myself—because we have not yet had an opportunity of discussing this matter in any detail—like my noble friend Lord Wigoder I welcome the proposal to go after the assets of sophisticated criminals. We had a debate on this in the proceedings on the Drug Trafficking Offences Act and on that occasion I made my own position quite clear, that I very much hoped that we would not try to put a ring fence around drug trafficking and pretend that it was perfectly all right to take action in this area, but wholly wrong to take it in other areas of sophisticated crime.
Quite apart from anything else, drugs do not form an isolated area around which you can put a ring fence. Drugs are simply one of a group of serious criminal offences which are interrelated, where people who are involved in drug trafficking move easily in and out of counterfeit currencies, of armed robbery and of sophisticated fraud. That being so, it seems to me quite right to introduce this proposal in the Bill.
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I should say that in the United States this is now regarded by most law enforcement agencies, both at federal level and in many of the great cities on the eastern seaboard, as one of the central questions which confront them. They believe it is just as important as the question of length of sentences. The United States have moved much further than we are intending to do. They have introduced a provision in federal law, whereby the assets so seized by the courts—which may include the houses of those concerned, aircraft, ships and jewellery—can be sold off as a result of an order by the court and can be used to provide additional resources for law enforcement agencies. Many big American police departments now receive substantial sums of money as a result of this policy. That is a very sensible idea and it is one which we should consider seriously over the next few years.
Thirdly, I should like, as my noble friend Lord Donaldson of Kingsbridge did a few months ago, to come back to the question of prison numbers, which are now hovering around the level of 47,000 to 48,000. There is a need for something to be done, but I am bound to admit that all of us who understand the present political situation know perfectly well that there is unlikely to be any significant action between now and the date of the next general election, because Ministers arc inevitably trapped by some of their own rhetoric of the past.
But I should like to make two points. First, I believe that, given the gravity of the situation as described by my noble friend Lord Donaldson, the idea of finding some form of happy halfway house should be rejected. I am a born believer in trying to create a consensus in many areas. I think it was the late Evan Durbin, when looking at the problem in one area of criminal justice, the death penalty, who said that the British had such a talent for compromise that, in his view, they would eventually hang every other murderer, and under the Homicide Act a few years later that is precisely what we did.
I do not believe that a happy halfway house is a way in which we can approach this crisis of numbers. We have tried the compromise, and the compromise was to introduce parole at the lower end of sentences. We now have the situation that it matters not whether you get 10 months or 18 months in prison, because in reality, as the judges are quick to point out, you come out on exactly the same day. Therefore this particular move, which we supported and continue to support, given the fact that it is impossible to move away from it rapidly without making the current situation even worse, has not, I am afraid, succeeded.
I believe that the earlier and much bolder idea of the noble Viscount, Lord Whitelaw, when he was Home Secretary and wanted to move to a situation where there would be automatic release from one-third of the lower end of sentences, without any parole process whatever and with those offenders being automatically supervised in the community by members of the probation service, would be far more satisfactory from that point of view and would have had a more significant effects on numbers. I do not believe it would create deep public anxiety and, given the concern of the judiciary at the moment, I find it hard to believe that it would now meet with their unremitting opposition. We shall come back to this issue on the

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Criminal Justice Bill, but I do not believe, as I have indicated, that we can drop the present policy immediately, because the effect on prison numbers would be very serious indeed.
Next we have to recognise the serious risks in our prison system if we continue the present degree of overcrowding. We have heard this referred to by the noble Lord, Lord Carmichael. We have had serious disturbances in recent weeks at Saughton prison in Edinburgh and more recently at Peterhead. We have also had in the last year a significant number of hostage-taking situations in prisons in England and Wales. We are dealing here with an explosive situation, and if action is not taken we can be quite certain that there will be serious repercussions in the prison system which could lead to people losing their lives. That is the reality of what we are now talking about—
Lady Saltoun of Abernethy: My Lords, if the noble Lord will give way, I thought that the hostage-taking situations were in Scotland.
Lord Harris of Greenwich: My Lords, there was indeed a hostage-taking situation which took place at Peterhead. What I am saying is that in the last year there have been a number of hostage-taking situations where people were threatened in prisons in England and Wales. They have not had the degree of publicity that there was in Scotland, because the persons concerned were not generally members of the prison service. They were often other inmates, although I think in one or two cases a member of the prison service was in fact involved.
I now turn to the Department of the Environment. We are going to have a Bill dealing with local government contracts. The Bill to some extent reflects the Government's enthusiasm for the virtues of privatisation and also their frustration that they have been prevented from introducing privatisation in local government because they have lost power in so many local authorities in this country. They have also been frustrated because of the lack of enthusiasm of many Conservative-controlled councils for the policy.
Let me briefly set out our views. We reject in principle further moves to make the United Kingdom an even more centralised state. It was Douglas Jay, when he was a junior Minister in the post-war Labour Government, who used a phrase which I am sure he regretted subsequently. The phrase was: "The gentleman in Whitehall really does know best". The Conservative Party of that time pointed fingers of scorn at Mr. Jay but they have moved further and faster in this direction than any post-war government in the United Kingdom. It is indeed their central, guiding principle.
We believe in the right of local communities to make their own decisions. Sometimes it will certainly be right to privatise services. In a number of London boroughs, and no doubt elsewhere, some of the refuse collection services are grossly inefficient and extremely expensive. It is at least arguable that in some cases they would be more efficiently run by the private sector. However, in many other areas of this country the quality of the public service is certainly as good if not
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better than any potential alternative. It seems to me the height of absurdity to have this doctrinaire provision of privatisation at all costs, irrespective of the consequences. I think that it is deeply objectionable and I make that clear at the outset.
The real problem is that the balance of power in many local authorities often fails to reflect local opinion, and that, of course, is the responsibility of the electoral system favoured by the two Front Benches in this House. It is opposed, as we know, by a majority of this House, which is why the Bill of the noble Lord, Lord Blake, on local government proportional representation was not opposed by the Government when it was introduced and went through all its stages in this House. If was eventually blocked by the Government in another place.
Perhaps I may illustrate the problem of dealing with some of the abuses which undoubtedly have occurred in this particular area. On 26th January 1983 (col. 348 of Hansard) my noble friend Lord Tordoff and I raised the question of the behaviour of Southwark Council in relation to contractors at Greenham Common. We pointed out that a resolution had been passed by Southwark Borough Council saying:
"(i) This Council supports the action of the Greenham Common Women's Peace Camp in opposing the siting of the U.S. Cruise Missiles in Britain, and affirms its opposition to all nuclear weapons.
"(ii) This Council notes that construction of silos and support facilities is already being undertaken by British companies sub-contracted by Tarmac, which have been awarded the contract for all work on the missile site.
"(iii) Therefore, in line with this Council's nuclear-free policy, it is resolved not to employ in any future capacity, Tarmac or any of the Companies so engaged.
"(iv) This Council also undertakes to encourage other Councils to adopt this resolution, and support them in doing so".
I believed at the time and I still do believe that that resolution was unlawful. However, if it had been challenged in a court by an individual ratepayer, as it could have been, the problem is that the ratepayer would have had to run the risk of being dragged through to the Court of Appeal, even if he won in the court of first instance, and eventually into the House of Lords itself. No ratepayer is going to take on a local authority in a matter of that sort.
I believe that resolutions of that kind and the policies that lie behind them are objectionable in principle. It is not for local authorities to debar contractors simply because they have worked for Her Majesty's Government. At the time, we complained to the noble Lord, Lord Bellwin, and I may say that we did not get very far. He told us he would talk to the Office of Fair Trading about it. But they decided to do nothing. We pursued the noble Lord, Lord Skelmersdale, about it, but he indicated a certain lack of enthusiasm for acting in what he described as an isolated case. That was in 1983. To some extent I suppose that we are gratified that, after three years, we are at least seeing some limited movement in this area.
However, if we had had an honest electoral system, the resolution would not have been passed in the first place because, in the elections in Southwark preceding the passage of that resolution, 43 per cent. of the electorate had voted for the majority Labour Party and 52·7 per cent. had voted either for the Alliance or for the Conservative Party. In those three years, therefore, first an unlawful policy was introduced and

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acted upon, and secondly we had a situation where other local authorities followed that example and did exactly the same thing. This has been done because minority groups of political enthusiasts who have had a temporary majority in the local authority are determined to drive through their policy, whatever the consequences may be. That is the position not only in Southwark but in many other local authority areas in this country.
I think local government has suffered severely from excesses of this sort. I believe that in the absence of local government proportional representation, which would in most (though not all) cases prevent extremist minorities from getting into power in the first place, what will happen is that more and more power will be transferred to the centre. All those, of whatever party they may be, who want a vigorous local government in this country must appreciate that without local electoral reform central government is bound to become more interventionist.
If I may, I shall end by quoting the views of the Audit Commission on this general question. The commission produced its Report and Accounts for the year ended 31st March 1986 this summer. In the course of that report it said:
"The Commission is concerned at the evidence of waste and inefficiency in inner London in particular. On almost all the measures available to the Commission, the standard of services delivered in a number of inner London authorities appears worse than in comparably deprived authorities outside the capital; and the costs are higher, even after taking account of London weighting. The chief executives of the authorities principally concerned usually acknowledge the facts; but they would claim that little can be done in the real world in which they have to operate—it is the cost, they consider, of local democracy. The Commission considers that other factors are at work as well. Relations between members of the authorities and their senior officers are not universally on a sound footing; senior appointments are not always made on the basis of ability to do the job; and salaries and conditions of service of senior officers often fail to attract people of the calibre needed for what are demanding jobs in some of the most deprived areas in the country".
Summarising that report in rather more direct language, what the Audit Commission is saying—and I believe that anyone who knows what has been going on in inner London knows this to be true—is this. First, there are inefficient, high cost services, largely because of the dominant role of public sector unions in the boroughs concerned. Secondly, there are atrocious relations between many chief officers and elected members which have resulted in an exodus of able staff who are no longer prepared to put up with the situation. Thirdly, senior, and quite often other, appointments are made on the basis of political support for the majority party.
In other words, what we are seeing here are the politics of Tammany Hall in New York City now being relentlessly applied in London. That is the situation we now face in this country. If we do not move in favour of changing our electoral procedures which give rise to power being misused by militant minorities, there will be, as I have indicated, a further massive movement of power from local communities to central government. We on these Benches will fight that with all the power at our command.
8.40 p.m.
Lord Underhill: My Lords, perhaps at the outset I may express my most sincere appreciation for the
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maiden speech of the noble Lord, Lord Bonham-Carter, and for the subject which he selected, the obvious detailed attention he gave to it and the sincere way in which he presented those points.
We welcome a number of the matters to which the noble Earl referred when he introduced this debate today. To save time I shall not go through them, save to say that when they arrive in the form of Bills we shall give them sincere attention even though we may welcome some of them only in principle. It will be strange not to have a normal type Transport Bill, which to my memory has been an annual occurrence ever since 1980. But we shall be monitoring very carefully the bus deregulation aspects of the Transport Act 1985 and we shall not hesitate to raise matters with Ministers, or even in your Lordships' House, should problems arise.
I think it is generally known that I have the honour of being president of the Association of Metropolitan Authorities. We deeply regretted the fact that no Minister was present at the annual meeting of the association held at the end of October. This influential local authority association represents 19 million people in this country but no Minister was present. I mention this because it is indicative of one serious omission from the Queen's Speech. There is no reference to any proposal to build a better relationship between central and local government. In fact some of the proposed legislation will do just the opposite.
It appears that activity carried out on a public basis is anathema to this Government. The Government seem to have little confidence in elected local councillors. I remind noble Lords, especially the noble Lord, Lord Harris, that the Labour Party has 9,000 councillors and they do not all behave in the manner which is suggested. The Government seem to have little faith in elected representatives on local councils or in the generally dedicated local government officers.
My noble friend Lord Carmichael referred to the disparity between north and south. That was made glaringly obvious in Faith in the City, the report of the commission of the most reverend Primate the Archbishop of Canterbury, on urban priority areas. We have had various recent surveys, including one carried out by the DHSS itself, which indicate a massive increase in the number of people now living below supplementary benefit level. The noble Earl referred to orders which will be produced for urban development corporations. In the light of my experience of 46 days sitting on the Select Committee dealing with the London Docklands Development Corporation, I hope that the Government will have serious prior consultations with the local authorities and local organisations concerned before any one of these orders is brought forward. That is vitally important.
There is not a word in the Queen's Speech about the National Health Service. Whatever one's views may be, no one could fail to be impressed by the speech of the noble Countess, Lady Mar, and by some of the points she made regarding the health service. From time to time we are given impressive figures by Ministers opposite which seem to suggest that everything is all right in the National Health Service. After listening to the noble Countess, I hope that Members may think otherwise. Everywhere one goes

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one hears complaints of hospital closures and of ward closures, either on a permanent basis or for periods such as weekends. A large hospital near me closed for a fortnight during the summer.
As recently as last week the BMA commented that the extra provision made in the Autumn Statement will not have the overall effect that the association hoped for in improving care for patients. There was also in the Autumn Statement a slight move towards appreciating the need for increased public spending. That was welcome after years of denial by the Government of the value of public spending, particularly on our infrastructure. But the proposals on housing are just tinkering with the problem. There is nothing in the proposed legislation to deal with the massive investment that is required. Four local authority associations have issued a joint report on the massive investment that is required in the repair and maintenance of public and private sector housing and for new homes. The Department of the Environment has itself produced a report which indicates the massive figure that is required.
I suggest to the Minister that the Government should consult with the building and construction employers and listen to what they want. I was with a number of them only last week. What the employers want for their industry, for their workers and for tackling the job for which they are equipped, is a planned, rolling programme. That is completely absent from the proposed legislation. When do the Government intend to allow local councils to use the substantial receipts they have from the sale of public assets? Surely this question must be answered when the Minister comes to reply.
On 30th April last year your Lordships debated the social effects of government policies. In the course of that debate I referred to Chapter 8 of Faith in the City which deplored the steady decline in central government support to local authorities. I remind noble Lords that in 1978–79 central government support to local authorities was 61 per cent. of their expenditure. In the current year it is down to 46·5 per cent. Since 1979–80 local councils have lost something in the region of £17 billion as a result of the cut in the central government grant. This is one reason why many councils have found it necessary to go for rate increases, regrettable as they may be.
The legislative programme refers to a measure,
"to improve the basis for the payment of rate support grant".
Frankly, these words give cause for concern in the light of the Government's consistently appalling record on local government finances. The noble Earl said that the proposed Bill would cease the recycling of any annual grant money which is not used by certain authorities. This will go to the Treasury, not to local authorities. Again, this will present some local authorities with problems of finance.
My noble friend Lord Carmichael also dealt with the proposal to abolish domestic rating in Scotland. Presumably this will be in line with the Government's Green Paper Paying for Local Government. It must be emphasised that there is not the slightest doubt that this will be a preliminary run for similar legislation in future for England and Wales. We can only hope that
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there will be a general election and that a new Labour Government will stop that measure being introduced to cover England and Wales.
Meanwhile, I must ask—and I have asked this on previous occasions—what notice do the Government really take in response to consultation papers? On Green Paper after Green Paper responses have been generally opposed to some measures, but the Government have taken no notice. There is widespread opposition to the Green Paper proposals. That most influential body, the Chartered Institute of Public Finance and Accountancy (CIPFA), in particular has given a quite reasoned rejection of the proposals.
I must refer to a letter dated 5th November which was sent to the Prime Minister, a copy of which I have, signed by the chairman of the Association of District Councils, the chairman of the Association of County Councils, the chairman of the Association of Metropolitan Authorities and the president of the Convention of Scottish Local Authorities. I shall quote just two paragraphs:
"Apart from the opposition of individual local authorities themselves and all our Associations—irrespective of political control—there is widespread opposition to the proposed community charge and the uniform business rate from professional bodies, the city, the trade unions and other sectors of the Community."
The letter continues:
"As the next session of Parliament draws near, and with the likelihood of a Bill for Scotland being included in the Queen's Speech, we, the leaders of local government in Great Britain, earnestly ask you to meet us, with your Secretaries of State, to discuss ways of finding a system of local government finance that you and we can all live with."
Noble Lords may remember that on a rating Bill, which seems years ago now, we urged that there should be a review of the whole question of local government finance. The Prime Minister has been engaged with other matters, but I hope the Minister will draw attention to the fact that it has been mentioned in your Lordships' House because it is an important suggestion—that there should be a careful review of local government finance and a system to be devised, as the letter says, with which we can all live.
The Scottish Office has admitted that the proposal for Scotland has met with the strongest rejection by the Convention of Scottish Local Authorities. That body is to unite with the other three local authority associations for England and Wales in opposing the Bill for Scotland. There will be opposition from all the local authority associations. In fact, the Scottish Office has stated that the responses from the most influential bodies—and some of them were listed by my noble friend Lord Carmichael—were three-to-one against a poll tax. No matter what individuals may try to argue, a poll tax and community charge will impose charges on every member of the community, irrespective of how poor they are.
Reference was made in one speech (not in your Lordships' House) to the fact that details of the Bill can be argued later, but that we should reflect on the fact that a millionaire living alone in a Scottish castle will pay only one-quarter of the community charge imposed on a family of four poorly-paid workers. Nobody can deny that that is what will happen. Reference was also made to the special register of ratepayers that will have to be compiled. Noble Lords

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will appreciate that I know a little about the compilation of electoral registers and about the problems they cause. I also know a little about their inaccuracy, as the Home Office will readily agree, and the difficulty of keeping electoral registers up to date. This is to he a separate register and one can imagine that the same problems will arise.
Before proceeding to two or three other matters, may I ask the Minister whether it is the Government's intention, under the provision of sweeping up other legislation, to introduce any further legislation to deal with local authority publicity or other proposals in the Widdicombe report. The Government must have made up their mind by now and it will be useful to have that information.
I was absolutely surprised that in the noble Earl's speech no reference at all was made to the proposal in the gracious Speech for the Remuneration of Teachers Act 1965 to be repealed. I recognise that the Secretary of State has still to make a Statement on the present negotiations but that is promised in the gracious Speech. It will mean disbanding the statutory Burnham Committee. We know that criticisms can be made about Burnham, but what is to take its place? The withdrawal of any provision for collective bargaining will he strongly resisted. It will be resisted by teachers and local authorities. Let us remember that at present it is the local authorities who are the employers, not central government. I hope there will be no suggestion that central government will employ teaching staff in future. Surely even this Government do not intend to take away negotiating rights from half a million workers; because that is the number involved in our teaching staff.
What is needed, as I think everyone will agree, is a return as quickly as possible to harmony in the classrooms for the benefit of the pupils, the teachers and parents. I am convinced—and I am certain that other noble Lords and, I hope, everyone will agree—that teachers want to be restored to their place of respect in society. Whatever may be said in favour of the Secretary of State's proposals, we must keep in mind that we have to find ways of attracting good young people at the lower level into the teaching profession. It is absolutely vital that that should be done. There must be no attempt by the Secretary of State to make an arbitrary decision, casting aside what has been achieved by the negotiating body at Nottingham—and everyone must agree that the negotiators, who were busy for a whole week, did a splendid job in managing to get as far as they did in the negotiations.
My final point deals with the proposed Bill on compulsory tendering for local authority services. Of course there must he value for money. Local councils want value for money because when services are cost-effective their limited resources, which are being cut and cut, can he spread on to other areas. As I have already said, these resources are already affected by the Government's various financial restrictions. All four local authority associations have rejected the Government's proposals for compulsory tendering. The county councils, the metropolitan authorities, the district councils and the Scottish local authorities are all united in condemning the Government's proposals.
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In fact, a statement issued by all four authorities has been sent to every Member of Parliament.
For many years local councils have had the power to contract out their services. About 84 per cent. of them however have generally found it better to keep their services in-house. Local councils resent compulsion in this matter. They want to he left to determine how best to handle their own services and to decide whether they should contract out some and keep some in-house. We should remember that they are accountable to the people who elect them. They come regularly before the electors to justify what they are doing. As Councillor Jack Layden of the AMA has said:
"Democracy is only to be tolerated if it gives the results the Government desires. The great mistake of local government is to dare to disagree".
In many cases the contracting out experience of a number of local authorities and hospital bodies has been disastrous. The pay of some cleaning contractors' staff is appalling. When I was travelling to the House the other day I was listening to a programme presented by Mary Goldring which included two of our prominent and respected trade union leaders. I heard John Edmonds of the General. Municipal, Boilermakers and Allied Trades Union refer to the shocking pay of some contractors' staff. Some were receiving £1·40 an hour and some were receiving as little as £1 an hour.
When considering tendering under the London Regional Transport Bill, the Government resisted our attempts to include amendments laying down conditions of service. When the Transport Act 1985 was before the House we discussed a clause dealing with the tendering for subsidised bus services which expressly laid down that conditions of employment must not be included in any proposed contract. The omen for the compulosry contracting-out by local authorities is dark and dismal. Are contracts to have no concern for training and apprenticeships? Is there to be no reference to health and safety in them despite the legislation? Is there to be no reference to equal opportunities despite the legislation? Is there to be no reference to pension provisions or fair conditions of employment?
The noble Earl said that there should be fair competition. Fair competition means keeping the same decent pay standards that local authority workers now have. It will be disastrous for many of the workers employed by the firms to which services may be contracted out if the items to which I have referred are not included in their contracts.
I saw a report of a speech made by the Secretary of State for the Environment, Mr. Ridley, to the Carlton Club of all places. He said:
"It is open to local authorities to opt out of national agreements to pay their staff what they can afford, so that any local authority that wants to can take control of its payroll costs. I strongly advise them to do so."
That is a blatant suggestion that there should be pay cuts for local authority staff. That will destroy morale in the town hall in the same way that the Government have destroyed the morale of the teaching staff. I hope that the Government will think seriously about the matter again. We approve of some of the proposed legislation, but some of it is disastrous and we shall oppose it as strongly as we can.
9.4 p.m.
Lord Skelmersdale: My Lords, not for the first time, your Lordships have put me in a quandary—should I deliver a speech, answer noble Lords' questions or do a bit of both? Fortune favours the brave, so I shall attempt to tread the middle path. We have had a wide-ranging debate and inevitably I can cover only a few of the original points raised. Some of the points were not so original, but I shall leave that. I shall have to resort to writing to many noble Lords.
After a debate such as the one we have just had, it is easy to forget that we are debating that section of the gracious Speech which refers to home and environmental affairs. That is why I was grateful that the noble Lord, Lord Bonham-Carter, chose today to make his excellent maiden speech. I can assure him that I have reached that stage in my political career where I find it difficult to listen to myself. Judging by the number of noble Lords who came into the Chamber to listen to him, the House does not agree with his assessment of his political age. Whether the noble Lord is right or wrong, I hope that we shall hear from him again both soon and often.
The noble Lord spoke about a most important matter: that is, the treatment of ethnic minorities in the criminal justice system. He referred to a recent NACRO report on the subject. I am pleased to be able to tell your Lordships that my right honourable friend the Home Secretary and my noble friend Lord Caithness recently met NACRO representatives for a useful discussion on the report. That shows we are not complacent. Much of the NACRO report reinforces existing government policy that everyone, whatever their ethnic background, should receive equal and fair treatment.
I know that the prison department in particular is doing much in that field and has introduced extensive ethnic monitoring. I was grateful to hear the noble Lord describe the recent instruction to prison governors on race relations as a model of its kind. I shall draw his request for the same to be done in the police service to the attention of my right honourable friend.
My noble friend Lord Caithness covered thoroughly proposals in the Criminal Justice Bill, so I shall deal with questions about it by what in planning terms is known as written representation. Much of the debate has been concerned with the relationship between the police and society, whether criminal or not. The noble and learned Lord, Lord Elwyn-Jones, based his speech on the premise that we are facing the worst crime wave we have ever known. The level of recorded crime has increased, but it has been increasing at somewhere between 5 per cent. and 7 per cent. each year. not for seven but for 30 years, irrespective of what government were in power. That leads me to believe that there is no link such as he suggested.
The noble Lord, Lord Wigoder, drew attention to the need to find out more about the reasons for crime. I am sure that the House will welcome any increase in our knowledge on that matter. Likewise, I hope that the House will agree with the support given by the noble Lord to the work of the police. The noble and learned Lord, Lord Elwyn-Jones, the noble Lord, Lord Donaldson, and, to some extent, the noble Lord, Lord
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Harris of Greenwich, suggested that too many people are sent to prison. I should emphasise that this Government uphold the independence of the judiciary. However, we have a very wide range of noncustodial disposals for offenders of all ages. We have encouraged the greater use of cautioning by the police, particularly for young offenders and the elderly. We give priority to making more use of existing noncustodial disposals rather than increasing their range. The use of community service orders, for instance, has increased considerably.
As to prison overcrowding, we are pressing ahead with the biggest prison building programne this century. The Government's building and refurbishment programme includes a total of 20 new prisons and will provide some 17,000 additional places by 1995. The noble Lords, Lord Donaldson and Lord Harris of Greenwich, will appreciate (who better?) that no prisons at all were built in this country between 1918 and 1958. We have a tremendous backlog to catch up on.
I do not believe that it is profitable for me this evening to discuss the future of Section 2 of the Official Secrets Act. I know enough, however, to say that is is widely recognised to be out of date but that its replacement does not yet command respect.
The noble Earl, Lord Longford, to whom I listened with growing interest, suggested that minimum prison standards were something that we should all aim for. The Government are not at present persuaded that the mere expression of certain standards as minima would of itself make a significant contribution to bringing about the improvements that are needed. Several noble Lords raised the subject of the prison population plus an increase in numbers of long-term sentence adult males. A fall in the reception of short-45,000 by the beginning of 1986. It has since risen again to 47,450 on 7th November. The increase this year is attributable mainly to a rise in the remand population plus an increase in numbers of long-term sentence adult males. A fall in the reception of short-term adults has been insufficient to set off these increases. All these matters are being looked into by the Home Affairs Select Committee of another place in the context of its general inquiry into prisons, penal reform and alternatives to custody. We await its report with interest and we shall be responding to it in the usual way.
I do not rejoice in the need, but I can tell the noble Lord, Lord Wigoder, that successive Home Secretaries have made clear that applications from police authorities for increases in police establishments will be considered on the basis of the proven needs of the force in the light of advice from Her Majesty's Inspectorate of Constabulary. As part of this programme, my right honourable friend said that he was prepared to approve increases of 430 police posts for provincial forces in this financial year. As a first step, he approved increases of 179 of these posts in August and a further 111 in October. He will be considering shortly the possibility of allocating a further tranche on the basis that forces would begin recruitment in the closing months of the current financial year.
So far as concerns the Metropolitan Police, following a review to establish where there were

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specific needs for additional manpower, my right honourable friend has decided that the Metropolitan Police should receive an increase in its establishment of up to 1,200 over the next—
A noble Lord: Four years, my Lords.
Lord Skelmersdale: Four years. I am grateful to the noble Lord.
The right reverend Prelate the Bishop of Birmingham asked me about the Family Law Reform Bill and asked particularly whether the Government should not also show their support for legitimate families by removing the tax benefit available to illegimate families. The Government recognise that there are circumstances where couples may be better off in a fiscal sense by virtue of being unmarried. The government Green Paper on the reform of personal taxation published by my right honourable friend the Chancellor of the Exchequer in March this year suggests reforms to put an end to tax penalties on marriage. For example, with tax relief on mortgage interest, under the present system, a married couple are entitled to relief on a mortgage up to a value of £30,000, whereas two single people living together can claim relief on a mortgage up to £60,000. The Green Paper suggests that one approach might be to apply mortgage interest relief to residents rather than to individual taxpayers. In that way, two people would share relief whether married or not.
While still considering the law, I should like to respond to my noble friend Lady Faithful] on the subject of family courts. I observe that my noble friend's concern remains on this subject. That is why my right honourable friend the Home Secretary established an interdepartmental committee of officials to examine the feasibility of a unified court with exclusive jurisdiction in family matters in 1984. The committee identified three options for a family court. The Government have issued a consultation paper on them. That consultation period closed on 31st October and the responses are being analysed. Costings of the main options for a family court are also being carried out. The Government will take a decision as soon as possible once this work has been completed.
I agree with the noble Viscount, Lord Falkland, that alcohol misuse is a growing problem worldwide which is fully recognised by the Government. The Department of Health and Social Security gave grants totalling well over £800,000 to voluntary bodies working in this field in 1985–86. The Health Education Council works closely and effectively with both the DHSS and the voluntary organisations. The 1979 CPRS report, to which the noble Lord alluded, recommended the publication of a consultative document to state government policy and advance discussion of the issues.
In 1981 the Government published Drinking Sensibly, which explained its position on the prevention of alcohol misuse and the provision of relevant services and was designed to encourage an informed debate on the sensible use of alcohol. I can assure the noble Lord that this is an issue of importance of which the Government are well aware and take seriously. An answer of course is education.
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Another, in the view of my noble friend Lord Montgomery, is liberalisation. With regard to that Bill, I can correct the noble Lord. The Government do not yet have a view.
It is easy for noble Lords south of the border to accuse my right honourable friend the Secretary of State for Scotland of rushing his local government finance reforms. However, I did not expect this view to come from the noble Lord, Lord Carmichael. They are being brought forward in Scotland earlier than in England and Wales because the Scottish experience of revaluation in 1985 made it clear that continuation of the present rating system was no longer an option. In 1985 the then Secretary of State made it clear that legislation will be introduced as soon as possible. The present Secretary of State is fulfilling that pledge and has stated his intention that the necessary Bill will receive its Second Reading in another place by Christmas.
There have been suggestions—most recently from the noble Lord, Lord Underhill—that the Government are rushing matters, or even worse, pulling a fast one. I must remind the noble Lord that proposals for the whole country were made during the 1974 election campaign and have been followed by no fewer than two Green Papers. What good would a further consultation exercise do? Now 12 years later this whole subject must qualify for the Guinness Book of Records, as the slowest "fast one" in parliamentary history.
Lord Underhill: Will the noble Lord give way? I was not complaining so much about the speed, but that there are consultation documents issued, there is overwhelming objection, and the Government just ignores it.
Lord Skelmersdale: My Lords, I do not accept that there was overwhelming objection. I agree that there was a balanced response. It is not the first time that governments have legislated on the subject of balanced responses. It is not the moment to debate the subject of dog licences with noble Lords, but that is a case in point.
It is not only north of the border that local government finance needs attention. This time, however, it is not so fundamental but a tidying up exercise. My noble friend Lord Caithness covered this fully when he spoke of the abolition of grant recycling.
However, he did not say that this ludicrous situation was roundly criticised by your Lordships earlier this year when you complained that government can provide estimates only of the likely amounts available from recycling at a date which is too late to ensure that authorities take extra grant into account when setting their budgets and rates. The Government's objective is to maximise grants by keeping spending down and so increase local authorities' accountability to their ratepayers. Grant entitlements will therefore depend more closely on authorities' spending decisions. Finally, the Bill will end the absolute nonsense whereby excessively high spending authorities attract their share of the recycled monies.
As my noble friend Lord Eccles recognised very clearly indeed one of the areas covered by local

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authority revenue spending is schools. This is funded partially by rates and partially by rate support grant. I recognise that teachers have seen their pay slipping back. How could we not, with all the upset the teachers have brought about to the total disbenefit of the very students who are in their care with all that has been done to damage children's future employment prospects? My right honourable friend the Secretary of State has intervened in the pay and conditions negotiations conducted by the local education authorities. We need a pay structure that will reward good teachers. Nobody disagrees with that. It must provide incentives to perform well and to seek responsibility. So far as concerns this year's settlement, there is not as yet a full signed agreement. My right honourable friend the Secretary of State for Education and Science is considering the draft agreement reached last Saturday by some of the parties against his own well published criteria. He will announce his conclusions as soon as possible.
I should just like to add that in 1979 teachers were 13 per cent. below the Houghton level, compared with the retail price index. By October 1987, under the Government's proposals, they will be over 10 per cent. above Houghton. The Government are looking for a settlement that is good for the children, good for the teachers and good for the country. In the words of my noble friend Lord Eccles, they want a good status all round. The noble Lord, Lord Underhill, will agree that this would restore the teachers to their place in society.
As my noble friend Lord Beloff and the noble Lady, Lady Saltoun, recognised, the Government have therefore decided to introduce for the future a Remuneration of Teachers Bill. This legislation will repeal the Remuneration of Teachers Act 1965 and will introduce new arrangements to settle teachers' pay, salary structures and, most important to my mind, conditions of service. The Burnham arrangements will be replaced by an interim advisory committee.
My noble friend Lady Trumpington has asked me to express her regrets that she is unable to be present to listen to your Lordships' very relevant points on health and social security matters. My noble friend is sure that the House will understand that she is prevented from being here because she is fulfilling long-standing engagements visiting national health hospitals in the Manchester area.
The noble Countess, Lady Mar, referred to the National Health Service and the so-called cuts therein. The noble Countess said that she would like to hear someone in government say "Thank you" to nurses, teachers and other public sector workers. I have to say that my colleagues both in this House and in another place take every opportunity to express their appreciation of the efforts of these workers, and I am happy to take this opportunity to do so once again.
Let me turn to the noble Countess's comments on the state of the National Health Service. The Government do not deny that there are problems. It would be surprising if there were not points to criticise in a vast service employing about 1 million people, but the problems are being tackled. For instance, health authorities have developed plans to reduce waiting
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lists and waiting times, and £50 million over two years has been allocated to help them tackle this problem. Over the next two years £30 million has been allocated to help regions with less than average growth—principally the four Thames regions—to continue to make progress in improving services for priority groups and for patients who live outside the main cities.
The noble Countess raised a particular point in relation to orthopaedic services in Worcester. I think that it would be to the service of the House if I wrote to the noble Countess on that particular detailed point.
A subject that regularly concerns the House is hospital waiting lists and times, and the noble Countess, Lady Mar, raised it again today. Even though waiting lists have fallen since March 1979, the Government fully recognise the justifiable concern that patients should not wait excessively for necessary treatment. Progress has been made. Record levels of activity mean that more patients than ever before are being treated. Some 50 per cent. of patients are admitted to hospital immediately. Of those admitted from the waiting lists, 50 per cent. wait for seven weeks or less. We should be concerned with the other 50 per cent.
The Government recognise that unacceptable waits still occur in some areas. Detailed reports from the regions demonstrate that more effective use of existing resources can produce good results, but in order to make the most impact in some areas effective use can be made of additional funding. That is why we have recently announced the figure of £50 million. The waiting list fund will allow even the most difficult problems to be tackled.
The right reverend Prelate the Bishop of Birmingham, like us, accepted that AIDS is the major public health problem facing the country and that urgent action is required. The right reverend Prelate welcomed the vigorous co-ordinated action that is being taken under the direction of a group of senior Ministers chaired by my noble friend the Lord President. If I may say so, the right reverend Prelate gave the best explanation of this terrifying virus that I have ever heard. My right honourable friend the Secretary of State for Social Services has already announced that a major and continuing advertising campaign is being undertaken to inform everyone how to limit the spread of this disease. This will use all available media and will support a leaflet giving detailed advice which will be distributed to every household in the country (some 22 million) as soon as possible.
I agree with the right reverend Prelate that public information and education are our best hope at present in keeping this disease under control and stopping its spread. The implications of the disease for treatment services, counselling of victims and education and training of professional staff, are among the issues being urgently considered, and I am sure that further announcements will be made shortly.
The noble Lady, Lady Saltoun, made a powerful speech on the subject of embryo research. As she will know there has been considerable debate on this important issue since the publication of the Warnock report in 1984. There are strongly and sincerely held

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views on both sides of the debate, and I shall draw the noble Lady's views to the attention of my noble friend Lady Trumpington.
In the closing moments of the debate there was a broadside, if I might call it such, from the noble Lord, Lord Underhill, on the subject of competition for local authority services. I shall, I suppose, eventually discover what terrors there are for local authorities in these particular services. All the proposed legislation does is to get value for money for the ratepayers by imposing fair competition between local authorities' own workforces and the private sector.
The noble Lord, Lord Harris of Greenwich, has totally misunderstood the situation. Authorities will retain the responsibility for deciding what level of service to provide. If an authority can show that its own staff can provide the best and cheapest service, then of course they will continue to do so and have no cause for concern at all. But if the private sector can offer a better deal for the council's ratepayers and consumers of the service, then obviously that is the option that the council should choose. We know from experience that it works. To answer the noble Lord, Lord Harris, it is not privatisation by the back door, nor is it compelling local authorities to do anything but give value for money to their ratepayers.
Lord Harris of Greenwich: My Lords, who makes the final judgment in these matters? Is it the district auditor, or who? What is the policing authority? Is the noble Lord implying that it is entirely a matter for the local authority to decide itself, or is there some pressure brought upon the authority in this matter?
Lord Skelmersdale: My Lords, I shall have to debate this matter with the noble Lord when we get the Bill in your Lordships' House; but there are many methods of deciding how and wish what relevance local authorities perform. There is the Government, the district auditor; and in certain circumstances, as the noble Lord will know, there are the courts.
Where authorities have done this voluntarily major savings have been made either by contracting out or by securing more efficient working methods where the in-house team wins the contract. Savings of 20 or 30 per cent. in contracted-out services, with the quality maintained or even improved, are commonplace.
The local authority's role is to administer the services that Parliament has decided that they should administer. It is not illegal in this country to trade with South Africa, nor for United Kingdom companies to own subsidiaries in South Africa. Nor is there any law requiring employers to recruit a set proportion of ethnic minority employees, for example. An increasing number of authorities are indulging in political posturing; for example, by banning contractors who have worked at nuclear missile sites or who have transported workers across picket lines. Others are doing all they can to make it harder for contractors to compete with direct labour organisations. They say what contractors must pay their staff, and they lay down other conditions of employment. They are not, my Lords, the courts.
These kinds of practices have nothing to do with a contractor's ability to carry out work or supply goods,
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or with an authority's duty to its ratepayers to obtain value for money. They are merely an attempt by authorities to impose their own social policies on firms who wish to do business with them. The Bill will therefore include measures to stop authorities abusing the contractual process.
I observe that I have already spoken for very much longer than I should have, and I shall therefore write to those noble Lords whose points I have missed. I would say one further thing especially to my noble friend Lord Beloff. There is no doubt in my mind that the gracious Speech presages a very full programme indeed in the coming months, although hopefully your Lordships will not suffer quite as much legislative indigestion as we have seen in this and previous years. Be that as it may, this debate shows us that our consideration of the Bills my noble friend and I have unveiled to the House today will be neither short nor sweet. To be forewarned, though, is to be forearmed, and I am grateful to all noble Lords who have taken part, in whichever part of the House they sit. I look forward to many interesting debates on these and other subjects, lasting well into the summer.
Baroness Burton of Coventry: My Lords, before the noble Lord sits down, is he aware that each time he referred to a noble Baroness I hoped that he would reach me? I made a short speech in which I asked him two questions. They were very definite. I gave him previous notice. Will he please give me an answer?
Lord Skelmersdale: Yes, my Lords, most certainly. The noble Baroness, Lady Burton, is a formidable force on the subject of consumer affairs. I do not think it would be right in a debate such as this to debate with her the difference between this and consumer protection. However, I can tell her that we intend to make regulations under Part III of the Consumer Protection Bill to require landlords who resell gas and electricity to give itemised bills to their tenants stating the number of units consumed and the statutory maximum price. These regulations will be made as soon as possible after the Bill receives Royal Assent. I expect to have the continued support of the noble Baroness on this matter.
So far as her point on the EC goes, at the Council of Consumer Ministers in Luxembourg on 29th October the council passed a resolution as a result of a UK proposal which includes a reference to the need for effective consumer representation. The resolution pointed to the need to ensure that appropriate conditions exist for the effective and duly representative consultation of consumers on matters affecting their interests so that consumers' priorities are adequately reflected in the work of the Community. The Council has not sought to dictate to the Commission about precisely how improvements should be made but it hopes to see a credible package of improvements emerging. The Commission is due to report back to the Council in a year's time. I hope the noble Baroness will find this to be some progress.
Baroness Burton of Coventry: My Lords, why did the Minister not give me that information when it was there? Why has he had to have it dragged out of him-because if I had not asked him a question we should not have had the answer?
Baroness Hooper: My Lords, I beg to move that this debate be now adjourned until tomorrow.
Moved, That this debate be now adjourned until tomorrow.—(Baroness Hooper.)
On Question, Motion agreed to and debate adjourned accordingly.

West Glamorgan Bill [H.L.] Brighton Marine Palace and Pier Bill [H.L.] Dyfed Bill [H.L.] London Underground (Goodge Street) Bill [H.L.]
Presented; read a first time; read a second time pro forma, and reported from the Committees.
County of Cleveland Bill [H.L.]
Presented; read a first time; read a second time pro forma, and reported from the Committee.
Greater Manchester (Light Rapid Transit System) Bill [H.L.] Greater Manchester (Light Rapid Transit System) (No. 2) Bill [H.L.] Mersey Docks and Harbour Bill [H.L.] Port of Fosdyke Bill [H.L.] River Humber (Burcom Outfall) Bill [H.L.]
Presented; read a first time; passed through all their remaining stages pro forma, and sent to the Commons.
Essex Bill [H.L.] Mid Glamorgan County Council Bill [H.L.] Plymouth City Council Bill [H.L.] York City Council Bill [H.L.]
Presented; read a first time; passed through all their remaining stages pro forma, and sent to the Commons.

Exeter City Council Bill [H.L.]
Presented; read a first time; passed through all its remaining stages pro forma, and sent to the Commons.
House adjourned at twenty-seven minutes before ten o'clock.

  RESIDUARY BODIES: ADMISSION TO MEETINGS
  RESIDUARY BODIES: ADMISSION TO MEETINGS