Sitting of 25 November 1986

Preamble
The House met a half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
MESSAGE FROM THE QUEEN

  QUEEN'S SPEECH (ANSWER TO ADDRESS)
  The Vice-Chamberlain of the Householdreported Her Majesty's Answer to the Address, as follows:
  I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I opened the present Session of Parliament.

Oral Answers to Questions
  SOCIAL SERVICES

    Northern Region (Report)
    Mr. Dormandasked the Secretary of State for Social Services what action he proposes to take on the report "Inequalities in Health in the Northern Region", a copy of which has been sent to him; and if he will make a statement.
    The Minister for Health (Mr. Tony Newton): Much of the report raises issues for consideration by the regional health authority, which commissioned it and will no doubt take it into account in its planning. For their part, the Government remain committed to the principle of ensuring equitable distribution of NHS resources throughout the country, through policies which have raised NHS expenditure in the northern region by significantly more than the national average since 1979.
    Mr. Dormand: Is the Minister aware that this report demonstrates a consistent link between ill-health and material deprivation? What does he say of the report's claim that no fewer than two thirds of the 678 local government wards in the northern region have levels of permanent sickness that are worse than the average for England and Wales? Does he recall that the Black report said similar things a few years ago, so when will this uncaring, hypocritical Government do something for the region, or has the Minister already consigned us to the scrap heap?
    Mr. Newton: I am aware of two things. The first is that there is considerable academic debate about the linkages between some of the statistics to which the hon. Gentleman referred. The second is that, out of the rising total of NHS resources, the northern region's expenditure has risen from less than £300 million in 1978–79 to well over £600 million in 1985–86, and that is substantially above the increase nationally. I am also aware that 11
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    major capital developments have been completed in the last few years in that region, at a cost of nearly £100 million. The Government are committed to the improvement of health services in the northern region.
    Mr. Boyes: The report "Inequalities in Health in the Northern Region" only adds to an enormous amount of data showing the relationship between unemployment and health, and only Ministers are ignoring that data. Despite the proven need in my constituency for a new hospital, why will the Government not bring forward the resources to build the hospital which they know is needed, instead of leaving it to private capital to build it, as a result of which the very people suffering from ill-health will be denied access to it?
    Mr. Newton: There is absolutely no question of the Government leaving it to private capital to build new hospitals. I have already said that 11 major capital developments have been completed in the northern region in the last five years. Nine schemes are currently under construction at a cost of £31 million, and three more schemes costing £27 million are shortly due to begin. That is all part of the biggest capital building programme in NHS history.
    Mr. Dobson: Despite all the blather from the Minister, will he confirm that the Government have reduced the northern region's population-weighted share of spending on new buildings and equipment by no less than 16 per cent. since 1979?
    Mr. Newton: I will not be lectured about blather by an expert on the subject. The Government's record in capital building speaks for itself. It far outstrips anything for which the Labour Government were responsible.

    Drug Advisory Councils
    Mr. Rathboneasked the Secretary of State for Social Services if he will give a report on the achievements to date of the drug advisory councils.
    The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): Drug advisory committees have been established now in 187 of the 192 health districts in England, and in all the health regions. These committees are responsible for three things; monitoring the prevalence of drug misuse locally, advising authorities on the development of services; and promoting collaboration between the various statutory and voluntary agencies working with drug misusers. All regions are expanding the services available to drug misusers and the Department is monitoring their development closely.
    Mr. Rathbone: I welcome that statement from my hon. Friend. Will sufficient funds be made available in future years to continue this good work, which is something which is particularly difficult in those health authorities which are not funded up to resource allocation working party standards, particularly in the south of England?
    Mrs. Currie: I know that my hon. Friend takes a close interest in this subject and has been working with the standing conference on drug abuse. I commend him for his efforts. We have allocated an additional £372,000 in this financial year to the South-East Thames regional health authority for drug misuse, and it has added £200,000 of its own money. I am delighted to say that every district in the region has set up drug advisory committees, which are making considerable progress.
    Mrs. Roe: Given the obvious concern about, and the threat to health posed by, the re-use of hypodermic needles by heroin addicts, has any progress been made in the development of needles that cannot be re-used?
    Mrs. Currie: It is a matter of considerable concern to us that AIDS and other diseases may be passed on by re-usable needles. These matters are under consideration elsewhere and I believe that an announcement may be made shortly.

    AIDS
    Mr. Kennedyasked the Secretary of State for Social Services if he will give the projected estimated growth rate for acquired immune deficiency syndrome over the next five years; and if he will make a statement.
    The Secretary of State for Social Services (Mr. Norman Fowler): The latest published predictions by the communicable disease surveillance centre estimate that in the United Kingdom there will be 550 new cases of acquired immune deficiency syndrome diagnosed in 1986, 1,300 in 1987 and 3,000 in 1988. Inevitably, these estimates involve a significant degree of uncertainty. There are no published predictions for the United Kingdom beyond 1988.
    Mr. Kennedy: Given the one certainty that the problem will not go away and will get significantly and exponentially worse, will the Secretary of State further clarify the points that he made in his welcome announcement last week to the House, in particular the assurance that his colleague, the Minister of Health, gave over the future of the Public Health Laboratory Service? Given that assurance, may we take it that no reduction in either the funding or numbers of those laboratories is envisaged as part of the laudatory efforts being made to combat AIDS?
    Mr. Fowler: Yes. Expenditure on the PHLS has not been cut. Indeed, spending has gone up in both cash and real terms. There are no plans to cut it, and no question of allowing AIDS work to be prejudiced by a lack of finance.
    Dame Jill Knight: Has my right hon. Friend had an opportunity to make a clear and specific estimate of the cost to the NHS of treating the enormous number of AIDS victims up to 1988?
    Mr. Fowler: Not as such. We estimate that expenditure by the Government on treatment and public education is running at about £17 million this year, and that figure will approximately double next year.
    Mrs. Renée Short: Will the Secretary of State be more specific about the resources that he is prepared to allocate for the treatment of this problem? What will be provided for the regions, which have to deal with the majority of cases?
    Mr. Fowler: We shall take into account the special needs of some regional health authorities which face particular problems, and the need for services for AIDS victims will be taken into account when the allocations to the health authorities are considered. For the next financial year, that consideration will take place over the next month or so.
    Mr. McCrindle: If, as we all must hope, the public education campaign on AIDS is successful, is my right
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    hon. Friend satisfied that the sizable number of inquiries that it is likely to generate can be adequately coped with by the hospitals and health authorities? Is he satsified, too, that the co-ordination between the various charities operating in the area is adequate, and does he see himself as having a role to play in achieving adequate co-ordination?
    Mr. Fowler: Yes, we shall do anything that we can to achieve better co-ordination of voluntary organisation work, which, as my hon. Friend suggests, is very important. As for health authority spending, we have asked every health authority in the country to send us its analysis of what is required in its district. Those reports will be with us by the end of next month.
    Mr. Madden: Will the Secretary of State consider setting up regional Freefone telephone numbers to give callers advice and information on AIDS? On Saturday night I telephoned the Bradord AIDS line for information and was referred by a recorded message to the Terrence Higgins Trust in London. I rang that number every 10 minutes from 6.30 to 9.30, to be told that I was the 28th caller and that up to 400 calls a minute were being received. It is clear that the national publicity campaign that the Secretary of State is introducing will generate a mass of inquiries, with which the present arrangements are completely inadequate to deal.
    Mr. Fowler: The hon. Gentleman is right when he says that there has been a very steep increase in the number of calls being received. A number of lines are giving advice. The College of Health has a national service and charities like the Terrence Higgins Trust also provide counselling. Other lines will become available literally within the next few weeks. We are taking advice from the organisations concerned, and if there is anything that we can do to help to keep the lines open by providing more lines, the Government will do just that.
    Mr. Sims: Is my right hon. Friend aware that the relatively brief trials in the United States on the drug AZT suggest that although it may not be a cure it could delay the progress of this disease? Is he further aware that the Wellcome Foundation is putting a great deal of resources into work on this drug and that the development work is four times ahead of normal progress with a drug of this character? Will my right hon. Friend also confirm that, despite reports to the contrary, adequate quantities of this drug are now available for clinical trials in this country and that the reason for any delay in setting up such trials is to ensure that the trials are properly set up, and not because of any shortage of the drug?
    Mr. Fowler: Yes, I think that I can confirm my hon. Friend's last point. Clinical trials are being set up in the United Kingdom. As my hon. Friend said, AZT is not a cure for AIDS, although in some cases it can prolong life and alleviate the symptoms in some patients.

    Departmental Expenditure
    Mr Wigleyasked the Secretary of State for Social Services what changes have taken place in the expenditure plans of his Department following the autumn statement of his right hon. Friend the Chancellor of the Exchequer on 6 November.
    Mr. Fowler: Spending on the health and personal social services in England in 1987–88 will be £630 million more

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    than previously planned and will reach £19·1 billion. Total spending on social security is expected to be some £1,700 million more than previously planned, and will reach £46 billion.
    Mr. Wigley: On the question of personal social services, will the Secretary of State bear in mind that the fourth report of the Select Committee on Social Services published last July, said that a 12 per cent. increase in spending was needed over and above inflation to meet perceived needs, but that the rate support grant formula gives only a 3·5 per cent. increase? Will the right hon. Gentleman confirm that, even with the additional £600 million to which he referred, there is still a shortage of money to meet the perceived requirement? Will he also confirm whether the Disabled Persons (Services, Consultation and Representation) Act 1986 can be fully implemented with the resources to which he referred?
    Mr. Fowler: On the hon. Gentleman's last point, we shall keep the Disabled Persons (Services, Consultation and Representation) Act under review. I recognise that there are very severe pressures on the personal social services, but the hon. Gentleman will know that in this year's allocation we have made additional provision for community care, which is one of the most important areas covered by the Act.
    Mr. Hayes: I welcome my right hon. Friend's reply, but will he look sympathetically at the 4,000 or so severely mentally handicapped people who are quite simply unable to walk, but are not presently entitled to mobility allowance?
    Mr. Fowler: I shall look at that, but clearly there are a whole range of competing claims for additional social security spending. Under the plans that my right hon. Friend the Chancellor has just announced, social security spending will reach £46 billion a year.
    Mr. Ashley: Is the Secretary of State aware that, on average, 24 per cent. of hospital patients have to wait for over one year before they can have an operation? The percentage in the London regions is comfortably below that, but in north Staffordshire, 36 per cent. of patients have to wait for one year. How does he account for the fact that he has given an extra £30 million to the London regions and no extra money to the deprived regions, like north Staffordshire, which are far worse off? By doing that, is he not perpetuating discrimination against the deprived regions?
    Mr. Fowler: That is simply not correct. It is a total mis-statement of the position. Under the reallocation of resources policy, areas like the right hon. Gentleman's constituency are receiving extra resources. The £30 million that I announced is to deal with some specific problems, especially in some of the Thames regions, where we want the resources to be used to get over some transitional problems. That is entirely separate from the general RAWP policy, which works to the benefit of the right hon. Gentleman's constituents. As he will know, over the last four or five years new hospitals have been going up in his region at a rate which has not been matched in the history of the Health Service.
    Mr. Galley: The additional resources for health are greatly welcomed, but can my right hon. Friend give the House an assurance that there will be an unremitting commitment to improved efficiency in the Health Service
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    as it now stands so that more people can be cared for? Secondly, will he assure the House that top priority for new resources will be given, first, to community care and, secondly, to developing cancer screening?
    Mr. Fowler: Yes. All the areas that my hon. Friend mentions are priorities for the Health Service and for the Government. What he said about the effective use of resources is also right. It is not simply a question of increased resources, but of ensuring that those resources are used for direct patient care.
    Mr. Meacher: Since the autumn statement announced an increase in public expenditure of £4·5 billion, how can the Government conceivably justify their proposal to cut mortgage interest payments for those on the dole to save a mere £15 million? How can they justify paying £30 a week to people on £50,000 a year who are buying £500,000 houses like the one that the Prime Minister has bought at Dulwich, while at the same time putting poor people at risk of losing their homes as well as their jobs? Does it not show that the Government have an ineradicable prejudice against the poor and in favour of the rich, and does it not stink?
    Mr. Fowler: As usual, the hon. Gentleman is over the top, and rather earlier in the day than usual. In due course we shall make a statement about supplementary benefit and mortgage interest, and clearly any regulation that comes forward will have to be debated by the House. From what the hon. Gentleman says, I detect a total prejudice against mortgage tax relief. It is about time the hon. Gentleman made clear his party's position.
    Mr. Holt: When he is next talking to the Chancellor of the Exchequer, will my right hon. Friend raise with him, with his usual courtesy and force, the recent Treasury decision to alter the death grant available for war pensioners? That alteration will reduce the money available to the widows of those who fought for Britain.
    Mr. Fowler: That is not the general position for war widows, but I shall consider what my hon. Friend has said.

    Salmonella
    Mr. Meadowcroftasked the Secretary of State for Social Services what investigations his Department has made into the reasons for changes in levels of salmonella food poisoning between 1980 and 1985; and if he will make a statement.
    Mr. Newton: The Department, through the Public Health Laboratory Service and the notification of cases to the Office of Population Censuses and Surveys, monitors the incidence of food poisoning generally, including that from salmonella. The increase in numbers of cases recorded in recent years reflects in part an increase in reporting of food poisoning. There has, however, also been some increased incidence. Cross contamination of cooked food by raw contaminated products is particularly important, as is the survival of salmonella organisms in processed food and their post-process contamination. We have taken steps to encourage high standards of hygiene for all people handling food in their employment or in the home.
    Mr. Meadowcroft: No doubt there are several reasons for the increase, as the Minister said. Is he aware that a recent outbreak at Raynville primary school in west Leeds,

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    which is a relatively modern building, spotlighted a problem, in that 11 out of the 24 district environmental health officer posts in Leeds are unfilled because of the lack of trained applicants? Surely the Minister can do something to ensure that there are more trained applicants so that the local authority can do its job.
    Mr. Newton: I am aware of the salmonella outbreak in the hon. Gentleman's constituency. He will know that it is proving difficult to indentify the cause and that the school kitchen's hygiene is very good. I have to admit that the hon. Gentleman's second point has not before been brought to my attention and I undertake to consider it.
    Mr. Pavitt: When studying the incidence of salmonella poisoning, has the Minister examined the figures according to whether catering services are provided by private contractors or by an in-house service? If not, will he make an analysis on that basis?
    Mr. Newton: I shall consider what the hon. Gentleman said. I hope he agrees that the key problem, which was highlighted by the Stanley Royd hospital outbreak, is the quality of the supervisory management. That applies as much to in-house as to private catering.

    Leicestershire (Budget Allocation)
    Mr. Jannerasked the Secretary of State for Social Services what steps are being taken to ensure that Leicestershire is brought up to its full budget allocation within resources allocation working party.
    Mr. Newton: Leicestershire has had a real growth in NHS resources of 34 per cent. since 1978–79. From 17 per cent. below its RAWP target in 1976, the district is now only 4 per cent. from target. Decisions on allocations to districts are for regional health authorities, but Trent RHA remains committed to further improvements in services in Leicestershire, and we intend to ensure that Trent can continue to honour that committment.
    Mr. Janner: Although I appreciate the improvement in the Trent region's RAWP allocation, under pressure from county Members of Parliament of all parties, may I say how important it is that the Minister should understand the hardship that still remains because of the inadequacy of health resources in the county? In my constituency, for example, is he aware that the Groby Road heart hospital could cope with 750 open heart operations a year but, because of a shortage of resources, can manage only 500, while people are suffering, are in need and are shifted to other areas? Is the Minister aware that that would not be necessary if the Government would allocate to health the resources that they ought to provide?
    Mr. Newton: The hon. and learned Gentleman will be aware that his regional health authority has provided extra resources for cardiothoracic work in Leicester and is examining many other aspects of the problem with the district health authority.
    Mr. Latham: I thank my hon. Friend for his reply. Can he assure me that, when Leicestershire Members of Parliament meet the district health authority this afternoon, we will be able to tell it without hesitation that the Government intend to meet the RAWP target by the stated date, irrespective of what is done for London?
    Mr. Newton: I note my hon. Friend's request. I spoke to the regional chairman last week. He has expressed
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    himself well satisfied with the outcome of the public expenditure round and the position in which he expects Trent to find itself.
    Mr. Clelland: Has the RAWP process not become descredited under this Government to such an extent that, in the northern region and Newcastle—[HON. MEMBERS: "What has this to do with Leicestershire?"] I am talking about the RAWP process. No doubt the same conditions apply in Newcastle as in Leicestershire. [HON. MEMBERS: "The question is about Leicestershire."] As in Leicestershire, resources for Newcastle are utterly inadequate—so much so that Newcastle district health authority is having to make savings on milk and sugar——
    Mr. Speaker: Order. That is very good, but a bit long.
    Mr. Newton: I am afraid that I caught only about one word in three of the hon. Gentleman's question. However, I am happy to assure both the hon. Gentleman and my hon. Friend the Member for Rutland and Melton (Mr. Latham) of the Government's continuing commitment to the process of ensuring a fair distribution of Health Service resources around the country. Perhaps I might take this opportunity to add to my reply to my hon. Friend and say that we certainly hope to be able to stick to the targets that have been set for Leicestershire.
    Mr. Dorrell: Is my hon. Friend aware that his last comment is very welcome news and adds further to the details that he gave in his earlier answer, which will be widely welcomed in Leicestershire, and which shows the progress towards national average levels of funding for the Health Service? Is he aware that that has had a positive effect in Loughborough, which is now able to make plans to close a late 19th century hospital and a converted workhouse and replace them with a larger, modern institution designed to meet the needs of the 21st century?
    Mr. Newton: I am grateful to my hon. Friend and I hope that the message will not be lost on his constituents. It is that the biggest ever modernisation of the Health Service is under way.
    Mr. Dobson: If the Minister is so proud of what has happened in Leicestershire, how does he explain the latest hospital waiting list figures, which show that there has been a 28 per cent. increase in the number of people in Leicestershire waiting for an urgent operation? There are no fewer than 891 Leicestershire people waiting for an urgent operation.
    Mr. Newton: The hon. Gentleman will know that those figures pre-date the initiative that the Government have launched, that we have set in hand a major programme to reduce waiting lists and that we have put £50 million of new money behind that programme.

    Day Nurseries
    Mr. Andrew F. Bennettasked the Secretary of State for Social Services how many children attended day nurseries in the United Kingdom in each of the last six years; and what plans he has to increase the number of places available in day nurseries.
    Mrs. Currie: In 1980 the number of places in local authority, private and voluntary day nurseries in the United Kingdom was 55,600. In 1981 it was 55,700; in

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    1982—55,300; in 1983—55,800; in 198—57,500; and in 1985—59,700. That is an increase of more than 4,000 during the six-year period, most of which has occurred in the past two years. The estimates we have seen for 1986 suggests a further increase.
    Mr. Bennett: Does the Minister accept that much of that increase has been the result of converting full-time places to part-time places and that there is, in fact, a desperate need in many local authority areas for far more nursery provision in view of the increase in family poverty, the increasing number of one-parent families and the increase in child abuse? What discussions have the Government had with the Department of Education and Science to ensure that there is comprehensive under-fives provision rather than a fragmented service partly provided by the social services and partly by the Department of Education and Science?
    Mrs. Currie: If the hon. Gentleman would care to look to his constituency, which is covered by the Stockport and Thameside local authorities, he will realise that since 1982 there has been a growth of 200 places in day nursery provision. I must tell him that that growth has occurred entirely within the private sector. I congratulate the private sector and hope that the hon. Gentleman will welcome that growth and initiative.
    Mr. Key: Has my hon. Friend had time to read the report of the Select Committee on Education, Science and Arts, which recommended the transfer of departmental responsibility for nursery education from the Department of Health and Social Security to the Department of Education and Science? Will she consider that recommendation as a matter of urgency?
    Mrs. Currie: Given the provenance of the report, I am not surprised at its recommendation. However, I believe that the social services, the departments of local authorities and the Government's under-fives initiative would wish to retain some responsibility for the care of those children in families under stress.
    Ms. Richardson: In considering the implications of the Sex Discrimination Act 1986, which has just reached the statute book, and which lifts the restrictions on times and hours of women's working day, can the Minister say how many of the inadequate number of day care places will offer flexible hours for women working unsocial hours and shift work?
    Mrs. Currie: I am sure the hon. Lady will agree that day nurseries are not the only form of available resource for working women. For example, there are also 57,800 registered child minders, with places for 126,000 children. They provide an excellent service and their numbers have been rising sharply. If I may put it to the hon. Lady in this way, child minders are the most flexible resource of all. I am satisfied that the majority of children of pre-school age receive an excellent service. The service is intended for the children first.

    Wessex Region
    Mr. Hunterasked the Secretary of State for Social Services what reductions there have been in recent months in National Health Service waiting lists in the Wessex region.
    Mr. Newton: Information on month-by-month changes of patients on the in-patient waiting lists is not available
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    centrally. The latest published figures show a decline of 4·1 per cent. in the size of the lists between 31 March 1985 and 31 March 1986, although there was a small increase of 2·6 per cent. in the figures between 30 September 1985 and 31 March 1986.
    Mr. Hunter: While acknowledging and applauding the Government's achievement in reducing NHS waiting lists during the past four or five years nationally in the Wessex region, may I say that the length of waiting lists remains a matter of some anxiety? What further measures does my hon. Friend propose to help the position?
    Mr. Newton: My hon. Friend will be aware of the initiative launched by my right hon. Friend the Secretary of State for Social Services earlier in the year. I am glad to say that we have received some positive and helpful reports from the regional health authority and its districts. At present we are considering how to use the £50 million over two years that will be put behind those efforts.
    Dr. Marek: Does the Minister realise that if he had answered the question truthfully he would have said, "None. Waiting lists have increased. I regret that and I shall do everything that I can to bring them down."? The Minister would not only have announced the 2·6 per cent. figure. He would have said that, within that 2·6 per cent. figure, urgent cases have increased by 7·6 per cent. over the six-month period covered by the figures.
    Does the Minister realise that 10,000 non-urgent cases have been waiting for more than one year in that regional health authority, and that more than 2,000 urgent cases have been waiting for more than one month? Does he realise that the peanuts that he has given as extra resources to bring down waiting lists will not achieve that? Waiting lists have not decreased, and are even worse than the Minister says because he has recently massaged the figures. Will he come clean about that?
    Mr. Newton: If I sought to match the hon. Gentleman's evident desire to have a political punch-up, I would have made the point that the waiting lists now, whatever may have happened during the six months to March, are much lower than those that were left behind by the Labour Government.

    North Western Regional Health Authority
    Mr. Sackvilleasked the Secretary of State for Social Services when he last met the chairman of the North Western regional health authority.
    Mrs. Currie: My right hon. Friend meets regional chairmen every two months to discuss a wide range of issues. The last such meeting, which was attended by all the Health Ministers, was on Wednesday 19 November in Sheffield.
    Mr. Sackville: Will my hon. Friend find an opportunity to congratulate the chairman on the success of his policies for care in the community? Is she aware that Bolton health authority has resettled nearly 50 mentally handicapped people in ordinary housing, a feat which at one time many said could not be done?
    Mrs. Currie: Yes, I shall do that gladly. I am sure my hon. Friend is aware that the Bolton network, which is at the heart of the scheme that he mentioned, receives central funding. Indeed, a total of £ 1·7 million over three years has

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    passed from our Department to that scheme. We are monitoring it closely and watching it with interest. We hope to see it copied elsewhere.
    Mr. Carter-Jones: Is the Minister aware whether, during the discussions, the PR management consultants' report relating to affairs in the Salford health authority was discussed? Is she aware that it recommended further funds for Salford? If they are not provided, despite all that Salford has done, there will either be closures of wards or lengthening queues.
    Mrs. Currie: One or two districts in the North-Western region are planning to overspend in the next financial year. Discussions are under way as to exactly what they should do. I know that close discussions are being held between the region and the districts involved.
    Mr. Robert Atkins: When my hon. Friend next meets the chairman of the regional health authority, will she remind him again of the anxiety being expressed in my constituency and many others adjacent to it about the proposed closure of the children's arthritic ward at the Wrightington hospital near Parbold? Will she assure him that there will be an outcry if that hospital ward is closed without at least a commensurate, if not better, service being offered in exchange?
    Mrs. Currie: My hon. Friend is probably aware that I have already discussed that exact question twice with the regional health authority chairman. We hope to make an announcement about it shortly.
    Mr. Terry Lewis: Is the Minister aware that in my constituency, in the Salford health authority area, there is a mental health day care centre that is still standing empty, although it was built in June this year, because of a lack of funding for staff? Answer that!
    Mrs. Currie: With the greatest of pleasure. I am aware of these problems, but I am also aware that in Salford the number of in-patients treated has gone up from 38,000 to 42,000 in the past four years; the number of out-patients treated has risen from 284,000 to nearly 300,000 and the number of direct care staff has increased from 3,900 to 4,200. Perhaps the hon. Gentleman would like to answer that.

    Hospital Patients
    Mr. Knoxasked the Secretary of State for Social Services how many patients were treated in National Health Service hospitals in the most recent year for which figures are available; and how this compares with the figures for 1978–79.
    Mr. Fowler: In 1985, NHS hospitals in England treated some6⅓ million in-patient cases, 960,000 day cases, and 37·4 million out-patient cases. That is nearly 1 million more in-patient cases, 400,000 more day cases, and almost 3½ million more out-patient cases than in 1978.
    Mr. Knox: Does my right hon. Friend agree that these figures, more than any others, show the expansion of the National Health Service since the Government came to office?
    Mr. Fowler: One of the figures illustrates that a record amount of health care is being provided. The other figures, which establish the same point, are those for the capital
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    building programme, which show that a record number of hospitals have been built by the Conservative Government.
    Mr. Willie W. Hamilton: These figures are one further example of how the Government fiddled figures. Is it not the case that when a patient is prematurely discharged and subsequently has to go back to hospital he is counted as a new patient in the figures for treatment?
    Mr. Fowler: These figures—the exact measurements—were used by Lord Ennals, the former Labour Secretary of State for Social Services. Why was it not a fiddle when he used them, but a fiddle when this Government use them?
    Mr. Dickens: Is it not a fact that the winter of discontent added to the waiting lists of hospitals throughout the United Kingdom? Was it not a Conservative Government who shortened those waiting lists? The Conservative Government are now having a drive to shorten waiting lists even further. Who are the Government of compassion? Who are the Government who care?
    Mr. Fowler: I entirely agree with everything that my hon. Friend has said. I agree especially with his first point, that in 1982 the waiting list went up because of industrial action. However, that industrial action was not condemned by the official Opposition.

    Severe Weather Payments
    Mr. Michieasked the Secretary of State for Social Services whether the trigger temperature of -1·5 deg. C. for the new severe weather payments will apply only where that temperature is attained for seven consecutive days.
    Mr. Ernie Rossasked the Secretary of State for Social Services whether the trigger temperature of -1·5 deg. C. for the new severe weather payments scheme will apply where that temperature is attained only for seven consecutive days measured between a Monday and the following Sunday.
    The Minister for Social Security (Mr. John Major): The test will be based on the average temperature over the seven-day period. It is not a condition that each day in the period has to satisfy the temperature criterion.
    Mr. Michie: As many people still feel that they will lose out next winter, can the Minister tell the House in how many of the past 30 winters the criterion has been met? Secondly, do the Government expect to spend more, or less, on the scheme this winter than was spent last winter?
    Mr. Major: The criterion would certainly have been met in almost every winter within living memory. The effect of these regulations is to ensure that the criteria may be met in areas of the country that may be especially cold. It will therefore deliver the most help to people in most need in the coldest parts of the country.
    Mr. Ross: Can the Minister confirm that, nevertheless, if the weather is cold enough in one week to meet the Government's criterion, and that week runs from Wednesday to Wednesday, no one will be paid?
    Mr. Major: If the cold weather lasts from a Wednesday to a Wednesday, it is equally likely that it would trigger not one week but two weeks' payment. The hon. Gentleman should bear that in mind.
    Mr. Michael Morris: Is my hon. Friend aware that the new, simplified scheme is much to be welcomed? However, will he think again about the capital allowance of only £500, when today's average funeral costs £700? Is £500 not too low a figure?
    Mr. Major: I am grateful to my hon. Friend for his first remark. With regard to the £500 cut-off period for single payment, this has been a stable part of our system for some years and I have no immediate proposal to change it. My hon. Friend will be aware of the changes proposed in funeral payments in the Social Security Act 1986.
    Mr. Ward: My hon. Friend will be aware of the great welcome for the simplified scheme. He will also be aware that it will lead to short-term demands on DHSS offices. Is he satisfied that there will be enough staff to cope with these short-term demands?
    Mr. Major: We are concluding a complement review to match staffing to the needs of the public. I am bound to add that my right hon. Friend also inserted an extra 5,000 staff earlier this year to meet the special pressures that exist in local offices.
    Mr. Meacher: Is the Minister aware that the Government's proposals on cold weather payments are even more restrictive than last year's farce, when 22,000 more elderly people died than in the previous winter? Is he aware that if the minus 1·5 degree temperature rule had applied last winter, bitterly cold though it was, two thirds of the country would have been excluded? Is he also aware that, by limiting payments to those with less than £500 in the bank, he is excluding the vast majority of the poorest pensioners on supplementary benefit? When will the Government learn that the tragic death toll from hypothermia will never be halted as long as the Government are more interested in erecting trip wires to exclude the great majority of those who are most vulnerable?
    Mr. Major: The hon. Gentleman, typically, clearly does not understand the system. Nor does he appear to acknowledge that this is but a small part of the overall help available. I am bound to say to the hon. Gentleman that the amounts available for heating, through the supplementary benefit scale rates, the heating additions and special payments are substantially higher than anything the previous Labour Government ever contemplated.

  PRIME MINISTER

    Engagements
    Mr. Redmondasked the Prime Minister if she will list her official engagements for Tuesday 25 November.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I 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 shall attend a dinner in support of the Somerville college appeal.
    Mr. Redmond: Will the Prime Minister consider during her busy day appointing a special project team to examine the high unemployment figures and to bring about positive recommendations for improvement?
    The Prime Minister: No. I believe that the Government are doing everything possible to increase the number of
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    real jobs available, by their general policy and by the number of special measures that are available to help those who are unemployed, and by their new plans to help the long-term unemployed.
    Sir Fergus Montgomery: Will my right hon. Friend cast her mind back to 1977 and the case of Agee and Hosenball, which affected national security? Does she recall that the Prime Minister and the Leader of the Opposition at the time acted in unison and maintained the traditional bipartisan policy on national security?
    The Prime Minister: Yes. I recall that I was Leader of the Opposition at the time. Those on the Opposition side of the House upheld the bipartisan policy and supported the Home Secretary of the day, when more than 30 on his own side voted against him.
    Mr. Kinnock: Is the Prime Minister aware of a disclosure that on 28 May, the very day on which Admiral Poindexter was assuring our representative, Sir Anthony Acland, that America was absolutely against arms for Iran, Mr. Robert Macfarlane was actually delivering arms in Iran, and doing so covertly? During the Prime Minister's recent visit to President Reagan, did she seek an explanation or an apology for this apparent lapse in the special relationship?
    The Prime Minister: As the right hon. Gentleman is aware, our policy is that we do not give ransom of any kind for hostages. The President of the United States has made his policy clear in his several television interviews. I do not yet answer for the United States.
    Mr. Kinnock: We heard what the Prime Minister said. Will she tell us, on another aspect of the same case, how she can justify the dropping of bombs on a source of terrorism in April and the giving of cut-price gifts of arms to a source of terrorism in May?
    The Prime Minister: I do not answer for the United States of America, nor am I expected to. I have answered the point if the right hon. Gentleman is referring to our policy on Libya, which I believe was fully justified.
    Mr. Soames: Will my right hon. Friend pause to reflect during her busy day that, if the security services are to retain the respect and confidence of the House and the public, the Government should establish forthwith a committee of senior and eminent Privy Councillors to provide parliamentary oversight?
    The Prime Minister: As my hon. Friend is aware, this matter has been raised before. It has been considered before and rejected. I believe that the reasons for its rejection were the same as they are now. One has to trust those who are in charge of the security services and our Ministers in the discharge of their duties, as has been the case in previous Administrations and remains the case in this one.
    Mr. Terry Lewisasked the Prime Minister if she will list her official engagements for Tuesday 25 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Lewis: Is the right hon. Lady aware that the decision yesterday to freeze the Sports Council grant to last year's figure will hit most severely the socially deprived

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    areas, because the extra money which was expected was earmarked in that direction? Will she reconsider that decision?
    The Prime Minister: We recognise that the Sports Council fulfills an important role. It makes a significant contribution to the Government's policy objectives in deprived areas. The council's effective work has our continued strong support and confidence. I am aware of its concern about its grant for next year. The fact is that between 1979 and 1986 its grant has gone up by 67 per cent. in real terms. It received an increase of £6,372,000 in 1986–87—an increase of 16 per cent. in real terms over the previous year—and we informed the council then that it could not expect a higher figure in 1987–88. The Government's record on the Sports Council is outstanding.
    Mr. Squire: Does my right hon. Friend accept that many people view with distaste the spectacle of someone who took a vow of secrecy during his working life and who now, having retired, seeks a large sum of money to break that vow of secrecy?
    The Prime Minister: As my hon. Friend is aware, I can say nothing about the conduct of this case. I can only point out, as I have pointed out before in the House, that, like all present and former members of the security service, Mr. Wright owes a lifelong duty of confidentiality to the Crown. Unauthorised publication of his manuscript would violate this obligation. Mr. Wright served in the security service from 1955 to 1976. His service therefore relates to a period before the Conservative party's time in office. The Government are concerned with upholding the principle of confidentiality and the obligations of staff, without which there could be no effective security service. I believe that these principles have been upheld by successive Prime Ministers and Home Secretaries of both parties.
    Mr. Ernie Rossasked the Prime Minister if she will list her official engagements for Tuesday 25 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Ross: Will the Prime Minister take time today to consider the response made by the Minister for Social Security on exceptionally severe weather payments? Does she agree that it did not deal with the problem of poor people who are frightened to put on the heat when they are cold? Will she consider the scheme proposed by my hon. Friend the Member for Oldham, West (Mr. Meacher) to pay a £5 winter premium from December until March to ensure that thousands do not die of cold this winter?
    The Prime Minister: This Government's record on heating additions and severe weather payments is outstanding compared with the miserable record of the last Labour Government.
    Sir Peter Tapsell: Has my right hon. Friend noticed the strange coincidence that, since my right hon. Friend the Chancellor of the Exchequer went quite a long way towards adopting the economic policies which I have urged on him, there has been some improvement in the employment situation? May we have more of the same?
    The Prime Minister: The improvement in the employment situation stemmed from 1983. One million new jobs have been created since then. The improvement
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    in the unemployment position has lasted for three months and I hope that it will continue. I am glad that my hon. Friend is pleased. I think that my right hon. Friend the Chancellor of the Exchequer was a little surprised at some of the things that he said.
    Mr. Steel: Given the Prime Minister's resistance to the setting up of a special Select Committee of Privy Councillors on the security services, and given the principles of confidentiality which she has just announced to the House again, how can she explain the difference between allowing Mr. Chapman Pincher to publish his book based on information supplied by Mr. Peter Wright, with half the proceeds going to Mr. Wright, and her attempt to stop the publication of a book on the same subject by Peter Wright published under his own name?
    The Prime Minister: I made it quite clear this time and in the previous answer I gave that the Government are concerned with upholding the principle of confidentiality and the obligations of staff in the service, without which there can be no effective security service. Mr. Wright served in the security service from 1955 to 1976 and therefore his service relates to a time before the Government took office. It is clear that the principle we are upholding is the principle of the obligation of staff to the service, without which there could be no effective service. I wish to uphold the efficiency and effectiveness of the service.
    Sir Ian Lloyd: In the context of disinvestment from South Africa, does the Prime Minister believe that the destruction of apartheid should enjoy a unique and singular exception from the fundamental principle that the end does not justify the means? If, as I suspect, she does not think that, does she agree that the anti-apartheid movement now appears to be acquiring most of the characteristics of intolerance, bigotry and sustained discrimination which are common to the very system it seeks to destroy?
    The Prime Minister: As my hon. Friend is aware, the Government's position on sanctions remains the same as it was. With regard to Barclays, that is a commercial judgment for the bank. I must point out that all that has happened is a change of ownership of the properties and interests there.
    Mr. Pavittasked the Prime Minister if she will list her official engagements for Tuesday 25 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Pavitt: Has the Prime Minister had time to study in depth Friday's excellent consensus debate on AIDS? Will she now take two new Cabinet initiatives? First, will she say that the necessary resources will be taken from the Contingencies Fund and not from the allocation regarded purely as NHS, which is comprehensive, and will be comparable in size to the amount found from the Contingencies Fund for the Falkland Islands? Secondly, will she now seek to establish the principle that all vaccines, which we hope will help to solve the problem, purchased by the NHS will be purchased as a service of the Crown, so that there will not be competition for somebody to hit the jackpot, and so that the drug companies' research officers can have cross-fertilisation, and research is not confined within single companies?
    The Prime Minister: I have looked at the debate that took place on Friday, although, unfortunately, I could not be here. It seemed to be a very good debate and the action of the Government seemed very welcome. A considerable sum has been allocated for the prevention of this terrible disease and other steps have been taken. I think that the sum is as much as can be dealt with at the moment.
    With regard to the hon. Gentleman's point about vaccines, my information is that there is no effective vaccine against AIDS. Although there is a great deal of research, I understand that it is unlikely there will be an effective vaccine for some considerable time yet. Therefore, the hon. Gentleman's second question does not arise.
    Mr. Fallonasked the Prime Minister if she will list her official engagements for Tuesday 25 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Fallon: Given the serious football hooliganism this season at Middlesbrough, Exeter, Torquay, Shrewsbury and Darlington and the unwillingness of the Football League to put public safety before its own financial self-interest, will the Government act to protect the rights of residents to shop in safety on Saturdays in their own town centres?
    The Prime Minister: The police are very much aware of the problems that can arise outside the grounds when football matches are being played. It is for them to decide how they deal with that and how they ensure the safety of citizens.
    Q6. Miss Boothroydasked the Prime Minister if she will list her official engagements for Tuesday 25 November.
    The Prime Minister: I refer the hon. Lady to the reply that I gave some moments ago.
    Miss Boothroyd: In the light of recent disclosures showing that President Reagan's admission of a limited supply of arms to Iran fell very far short of the truth, does the right hon. Lady still stand by her original statement that she believes implicitly in the President's integrity in this matter?
    The Prime Minister: It is not for me to answer for United States policy. President Reagan made his position clear in a television statement. It is that the United States does not give ransom in money or in arms for hostages. That is our policy; that is his policy.
    Mr. Marlow: As my right hon. Friend has said that the events which have been scrutinised by a court in Australia arise from circumstances which took place before she was Prime Minister, does she agree that she has no vested interest, whereas the Leader of the Opposition, in his goings-on, is indulging in low, nasty, dirty party politics?
    The Prime Minister: I made it clear that the Government are concerned with upholding the principle of confidentiality—[Interruption.]—and the obligations of staff, without which there can be no effective security service. I believe that those principles have been upheld by successive Prime Ministers of both parties and by successive Home Secretaries of both parties.
    Mr. Kinnock: On a point of order, Mr. Speaker, that arises out of questions. During Question Time it was
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    implied that somehow the well-established and entirely necessary bipartisan approach to national security was being breached. The issue involves a matter of order, not only because of its implications for the conduct of government in this country, but because of its implications for the attitudes of hon. Members. Any Government who do absolutely nothing to impede the publication of a book, knowing it to have been published with information directly from people under a duty of confidence—[Interruption.]
    Mr. Speaker: Order. May I ask the right hon. Gentleman to direct his point of order to me?
    Mr. Kinnock: No Government who do that can preach sermons about maintaining a bipartisan attitude towards national security. That bipartisan attitude is not best sustained, either, by ensuring that what the Prime Minister is not prepared to say in the House is said by a civil servant in secret briefings outside this place——
    Mr. Speaker: Order. The right hon. Gentleman must address his point of order to me.
    Mr. Kinnock: The Government—[Interruption.]
    Mr. Speaker: Order. How can I possibly hear if this shouting goes on?
    Mr. Kinnock: The Government, who put the Cabinet Secretary in a very exposed position that ensures that attention is drawn to disclosures that are harmful to national security, are not in a position to lecture either. I put it to you, Mr. Speaker, that the only question that I have raised, or would raise, is one relating to the decisions of the Attorney-General. The explanation of those decisions, which I have asked for, has no implications for the national security of my country whatsoever.
    Mr. Speaker: I am sure that no hon. Member would seek to impugn the integrity of the right hon. Gentleman.
    Mr. Gow: Further to that point of order, Mr. Speaker. Will you take this opportunity to make your own comment and judgment on the point of order which has just been raised by the Leader of the Opposition? Is it not the case that, in accordance with all precedents, the point of order which was raised by the Leader of the Opposition was not a point of order at all?.
    Mr. Speaker: Order. I say to the hon. Gentleman and to the House that in this place the Leader of the Opposition, whom I judged to be saying that his integrity had in some way been drawn into doubt, is, like every other right hon. and hon. Member, a man of honour.
    Mr. Williams: Further to that point of order, Mr. Speaker. This afternoon we have seen yet another example of the Prime Minister's arbitrariness and her growing contempt for the House of Commons. You will recollect that in previous answers the Prime Minister has said that she will refuse to answer questions relating to the MI5 case. Because the Prime Minister has taken up that position, when my hon. Friends have gone to the Table Office and endeavoured to table questions they have found that there is a Prime Ministerial block and that they are not allowed to put questions to her. Yet this afternoon at the Dispatch Box the Prime Minister read a statement relating to that block, which is not subject to further questioning, although at the same time she brazenly refuses to come to the House and make a formal statement

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    that would be subject to questioning by hon. Members. In view of the antics of the Prime Minister this afternoon, does the block stand? If it does, what rules cover the conduct of a Prime Minister?
    Mr. Speaker: Order. The right hon. Gentleman well knows the rules about blocks on questions. Every day after Question Time I look carefully at the answers that have been given, and they will always be taken into account when questions are tabled at the Table Office.
    Mr. Heffer: Further to that point of order, Mr. Speaker. Some of us, I am sure most hon. Members, have been reading the various press speculations in relation to the court case taking place in Australia. We have also read, for example in the Sunday Express, that the Government are trying to stop the publication of the book because it says that certain sections of MI5 were bugging——
    Mr. Speaker: Order. It must be a point of order that I can answer. I am not responsible for any answers that are given from the Dispatch Box.
    Mr. Heffer: If you will allow me time, Mr. Speaker, I shall make the point. The point I am making is that, with all the speculation that one of our previous Prime Ministers was bugged, along with some Back Benchers, is it not time that the Government made a statement to the House? You have the right to protect Back Benchers, Mr. Speaker. That is your responsibility. Therefore, you should ask and ensure that the Government make a statement to the House on the reports in the Sunday Express and other papers about the matter.
    Mr. Speaker: Order. The hon. Gentleman has been here as long as I have and he well knows that it has never been the role of the Chair to demand statements from the Government Front Bench. That does not lie with me.
    Mr. Campbell-Savours rose——
    Mr. Winnick rose——
    Mr. Speaker: Order. This is developing into an extension of Question Time. I am bound to have to take that into account in the subsequent debate, in which many right hon. and hon. Members wish to take part.
    Mr. Winnick: This concerns you directly, Mr. Speaker. My hon. Friend has quoted the serious allegations of the wrongdoing which has been committed by the security service. We are supposed to be here to ask questions of Ministers. In the absence of any statement by the Prime Minister, and in view of the fact that she refuses to answer questions on the long-standing farce in Australia, can we
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    now table questions relating to those aspects of the security service which have been the subject of questioning in the Australian court and extensive reporting in the press here?
    When we go to the Table Office, Mr. Speaker—this is directly a matter for you—we are not permitted, through no fault of the Clerks, to table these sorts of questions. Will you now give authority for us to ask questions of the Prime Minister about the allegations that have appeared in the newspapers about the security service?
    Mr. Speaker: Order. The question was put in different words, but in the same terms, by the right hon. Member for Swansea, West (Mr. Williams), and I have already answered it. I invite the hon. Member for Walsall, North (Mr. Winnick) to read my answer to the right hon. Gentleman.
    Mr. Campbell-Savours: Further to that point of order, Mr. Speaker——
    Mr. Hayes: It is the same every day.
    Mr. Campbell-Savours: Yes, until we get the truth.
    I put it to you, Mr. Speaker, that the Prime Minister has broken her own block on my questions of last Friday——
    Mr. Speaker: Order. I have dealt with this matter and I have nothing further to say about it.
    Mr. Faulds: This is really in your defence, Sir, as always. Would it not be advisable if you were to remind certain Members—hon. Members—of this House that they should resist the temptation of trying to steal your wig? That applies particularly to the irascible hon. Member for Eastbourne (Mr. Gow).
    Mr. Speaker: Order. My wig is not for sale.
    Mr. Hanley: On a point of order, Mr. Speaker.
    Mr. Speaker: Is the point of order related to my responsibilities?
    Mr. Hanley: I believe so, Mr. Speaker. There is a limit to the number of questions that hon. Members may table and place on the Order Paper. After all that we have been through so far in this Session, could there not now be a limit placed on the number of points of order raised by hon. Members?
    Mr. Speaker: That is a consummation devoutly to be wished.

Civil Servant (Briefing)
3.43 pm
Mr. Tony Banks: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I shall have to take all of this into account when we come to the debate of the day.
Mr. Banks rose——
Hon. Members: Where is the silver?
Mr. Banks: I have melted it down and given it to the Arts Council.
Yesterday, Mr. Speaker, I asked for your guidance on how one could raise the fact that a civil servant, Mr. Jim Coe, had attacked my right hon. Friend the Leader of the Opposition in this place, apparently on the instructions, or with the certain knowledge, of the Prime Minister. I have tried to raise this matter, and have been told that, because this happened at a Lobby briefing and, therefore, did not really happen, it is impossible to raise it. Is it in order for a civil servant in the Palace of Westminster to attack my right hon. Friend the Leader of the Opposition while we are not allowed to raise the matter with those who are responsible?
Mr. Speaker: I dealt with this matter yesterday. I do not know this Mr. Jim Coe. I am not responsible for what goes on at meetings that are not supposed to take place.

MV Kowloon Bridge
3.43 pm
The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): My Department was advised of reports of structural damage to the Hong Kong registered vessel Kowloon Bridge late on Tuesday 18 November. In view of the possible connection with the loss in 1980 of the sister ship Derbyshire, the Department agreed with the Hong Kong authorities that the Department's inspectors should investigate the damage to the Kowloon Bridge and conduct an inquiry on their behalf.
An inspector was immediately appointed to conduct a full investigation into the damage and report to the Department. He boarded the vessel at some personal risk on 20 November in Bantry bay, where she had put in for repairs. Although the inspector's report has not yet been finalised, early indications are that the damage to Kowloon Bridge was entirely consistent with the very severe weather conditions encountered during the voyage across the Atlantic.
Late on 22 November, the Kowloon Bridge broke away from her anchor. The master decided to put out to sea. She then suffered a loss of steering and a Mayday call was put out. The House will wish to acknowledge the skill and bravery with which the crew were taken off by RAF Sea King helicopters with no loss of life. The vessel eventually drifted on to rocks near Baltimore after drifting for 24 hours in severe weather conditions. She has since broken her back between No. 2 and 3 holds.
Inspectors from my Department have also been appointed to investigate on behalf of the Hong Kong Administration the vessel breaking free from her anchor, the loss of steering and the subsequent grounding. The inspectors will complete their work and submit reports on the two investigations as soon as possible. These reports will be published. When I have received them, I will consider what action needs to be taken and whether they indicate any link with the loss of the Derbyshire in 1980, which might be cause for appointing a formal investigation into the loss of that ship.
Mr. Roger Stott: I thank the Parliamentary Under-Secretary of State for responding to my request yesterday to make a statement to the House on the circumstances surrounding the sinking of the Kowloon Bridge. May I on behalf of the Opposition join him in congratulating the Royal Air Force rescue crew, who showed considerable valour in rescuing the crew of the Kowloon Bridge in extremely dangerous and hazardous conditions? That should be placed firmly on the record.
The Kowloon Bridge, formerly the English Bridge, is one of six ships built by Swan Hunter in the early 1970s. In 1980, one of those ships, the merchant vessel Derbyshire, was carrying iron ore from Canada to Japan when it sank without trace in the South China sea with a loss of 44 British seafarers' lives. In 1982, another sister ship, the Tyne Bridge, suffered severe structural damage in the North sea in the region of frame 65. Her crew had to be helicoptered to safety. That was yet another performance by the rescue services in hazardous conditions. An inquiry by Lloyd's Register of Shipping discovered that the ship had not been built according to

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the designers' plans and, accordingly, all other ships in that class were substantially modified under the supervision of Lloyd's Register.
Since 1980, the families who lost their loved ones aboard the Derbyshire and the seafaring unions have been fighting a campaign to persuade the Department to hold a formal inquiry into the tragedy because they feel that the incidents that have happened to her sister ships are not unconnected.
The Department has had two internal inquiries into the loss of the Derbyshire and has decided that no formal inquiry is necessary. That view was conveyed to me by the Parliamentary Under-Secretary of State last Tuesday morning in a letter. Within half an hour of receiving that letter telling me that there was to be no formal inquiry, I was informed that her sister ship, the Kowloon Bridge, similarly en route from Canada and, similarly, carrying a cargo of iron ore, had put into Bantry bay in Ireland suffering from structural cracks in the region of frame 65—yet another ship of the same class suffering from similar structural defects.
In his statement the Minister outlined what happened to the Kowloon Bridge thereafter and we shall await the inspectors' report with interest. Can he confirm that when the surveyor examined the ship in Bantry bay he instructed the ship's captain that it would be unsafe to proceed? Can he assure the House that the surveyor's report of structural damage before the ship broke free from her anchor will be made available to the House and will be considered and compared with the structural faults that occurred in the Tyne Bridge? Will the remaining ships in the class be inspected as a result of the inspectors' finding cracks in the Kowloon Bridge?
In his letter to me of 18 November the Minister made it clear that a report on the Derbyshire had been published in 1981. Neither the seafaring unions nor I have had sight of that report. Will he make it available to them and to me?
Surely it is now time that the Department of Transport acknowledged the depth of concern felt by hon. Members on both sides of the House whose constituents lost their lives when the Derbyshire sank, as well as the concern and anguish felt by the families of those 44 people. In the light of the evidence from the Tyne Bridge and Kowloon Bridge, should not this matter now be laid finally to rest, and that can be done only if the Secretary of State for Transport agrees to a formal inquiry into the loss of the Derbyshire?
Mr. Spicer: I thank the hon. Member for Wigan (Mr. Stott) for his opening remarks. I know that he is extremely knowledgeable about the subject and that he has taken a great deal of interest in it over a number of months.
The hon. Gentleman asked a number of questions, perhaps the most fundamental of which was why there had not been a formal inquiry and whether there needs to be one now. There are two reasons why there has not been an inquiry to date. First, with regard to the Derbyshire, and as the hon. Gentleman acknowledged, there is no evidence to go on. It sank without trace, and that has bedevilled the investigations. I think that is common ground on both sides of the House. As the hon. Gentleman knows, there has, however, been a very detailed investigation indeed into the possible connections between the three sister ships that experienced problems in the early
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1980s and the sinking of the Derbyshire. The lengthy report was published in March this year and is freely available to hon. Members and the public. It was by no means a whitewash, nor was it bland. For example, the final paragraph states:
"The fact that no distress signals were received might be thought to support the explanation that massive structural failure was the cause of the loss of 'Derbyshire'."
There is no mincing of words. The issue is whether there is anything more to find out. That is the only question. These formal investigations are elaborate procedures and are expensive, not only in terms of the public purse but for those who make representations. Therefore, there must be good reason to hold one, and the Government's position is that if any new evidence emerges from the Kowloon Bridge incident, and if there is good reason, they will seriously consider—given that there is something new to look at—the case for a formal investigation.
The hon. Gentleman asked about the advice that was given to the captain before the ship sailed. I must be careful because I cannot prejudge. Two investigations are going on at present, one into the damage itself as the ship arrived at Bantry bay, and the second into the events thereafter. I must not prejudge and, therefore, cannot go much further than what I said in my statement, except to say that effectively it was the master's decision to take the ship to sea. I must not further prejudge the investigations, which will certainly have to concentrate on the issue that the hon. Gentleman has raised.
I can categorically say that the reports of the two investigations now taking place will be made available.
The safety and condition of the remaining ships in the class are very important. They are formally certified as safe and comply with international standards. Those investigations have been undertaken by the appropriate authorities. If any matters arise out of the investigations into the Kowloon Bridge which affect those ships, I should have thought that the certification authorities would be bound to take them into account.
I shall immediately look into the availability of the report published in 1981 and make sure that the hon. Gentleman is sent a copy.
Sir David Price: Is my hon. Friend aware that, in spite of all that he has said, there is no reason not to have a formal inquiry into the Derbyshire affair? Like many other hon. Members who have constituents whose relatives went down in the Derbyshire, I have files of circumstantial evidence, and all the evidence that is available about the loss of the Kowloon Bridge supports that circumstantial evidence.
My hon. Friend spoke about rough weather, but my information is that it was force 8 rising force 9, which is nothing to compare with typhoon force 11 rising force 12, in which the Derbyshire went down. Let us have a formal inquiry for the sake of the people and families concerned. This is not a narrow lawyer's point. On the lawyer's point, my hon. Friend is aware that the people can be found guilty of murder, even when there is no body.
Mr. Spicer: On the specific point about the potential connection between the Kowloon Bridge and the Derbyshire, the first signs are that the weather conditions were very tough. There had been 10 days at storm force 10 or 11 in the Atlantic, which is tough by any standard, and another ship was even more severely damaged in crossing from Canada. There was 40 ft of water on the

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boat deck and the aft was completely submerged and the ship had taken a tremendous pounding. It was not until 24 hours later that the ship began to break up. It did not break up in the area of frame 65, the area on which most interest has been concentrated in the Derbyshire case, because of the other ships that had had that problem. I repeat that if there were any further evidence from the affair we should look closely at holding a formal investigation.
Mr. Eric S. Heffer: Is the Minister aware that many people from Merseyside, some from my constituency and some from others who lost their lives, and some of us have been arguing for a long time that it should be taken as a priority that the families of those people should be given compensation? The responsibility for this is on those who built the ship with a bad design, and the Government could have taken the action before.
There should have been a formal inquiry before, but at least let us have one now. Will the Government assure us that this will take place immediately so that my constituents and others on Merseyside will get a square deal, after losing their husbands or sons? It is scandalous that the Government have done nothing about this since 1980.
Mr. Spicer: That last point is not true. The Government made a massive inquiry, the report of which has been published. It has been made clear to British Shipbuilders that compensation contingencies must be in the accounts should any compensation be required. Compensation, and who is responsible for paying it, has not been at issue. The issues are whether more information is required and whether a formal inquiry would produce more information on the basis of which claims can be made. Already, on the basis of the Government's published report, writs have been served with a view to compensation. We have made it clear that compensation arrangements would be made. The only issue in dispute is whether a formal inquiry will generate new information. If there are any signs that that would be the case, particularly in the case of the Kowloon Bridge, the Government stand ready to consider that.
Mr. Robert Key: This is clearly not a partisan matter and all that we wish is to urge my hon. Friend the Minister to hold a full inquiry. The evidence in the report has been challenged professionally on dozens of points—for instance, the statement that the Kowloon Bridge, formerly the English Bridge, broke up purely because of heavy weather damage. The captain said of the damage that it was between the No. 9 hold and the pump room, which is the same place as on the other vessels—for example, the Tyne Bridge in 1982.
Some important questions were not addressed in 1982. For example, why did the shipbuilder deviate from the original design drawings for the six ships? Who authorised that deviation, and did the designer know? Until those questions are answered, there will be the suspicion of a cover-up. However uncomfortable it may be for ship owners, shipbuilders, Lloyd's and the other people involved, we must press for a public inquiry with full speed, because ships with the same faults are still afloat.
Mr. Spicer: I do not want to prejudge the results of the two inquiries. We shall publish the reports of those inquiries, the first one very soon. The first indications are,
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as I have already mentioned, that it is not hold 9 but holds 2 and 3 that are involved. I shall not trouble the House with the quotation, but today there is a lengthy article in Lloyd's List which confirms that the early signs are that the damage is consistent with storm damage. If there is any new evidence, we shall consider it. In no way are the Government prejudging the outcome of the inquiy, and we shall consider carefully what my hon. Friend has said.
Mr. Donald Stewart: Does the Minister accept that many people would consider that the sudden loss of a vessel of the Derbyshire's tonnage would, for that reason alone, merit an immediate inquiry? It is unfair to the relatives of those who were lost in the disaster that nothing has been done in the meantime. Does not the Minister agree that after the accident to the Kowloon Bridge it is imperative that the matter should be investigated without delay?
Mr. Spicer: It will certainly be investigated. There is no dispute about an investigation. The only dispute relates to the narrow point concerning a formal inquiry. If there is any evidence about new facets, or if there is anything that might connect this disaster with the Derbyshire disaster, we shall seriously consider whether a formal inquiry ought to be held.
Sir Ian Lloyd: Does my hon. Friend know whether the iron ore that was loaded on to the Kowloon Bridge in Canada was in a dry or a wet condition? If wet, may I draw to his attention the very serious representations that have been made to me by a constituent of mine who is an expert in ship loading, all of which had been passed on to him, in which he offered very serious criticisms of the international regulations that apply to the loading of wet ore?
Mr. Spicer: I shall certainly look into that matter. I do not have an immediate answer, but I shall write to my hon. Friend.
Mr. David Alton: Is the Minister aware that 17 of the 44 seamen who were lost when the Derbyshire sank six years ago were from Merseyside and that there is continuing worry, frustration and anger among the bereaved families on Merseyside? I hope that the Minister will take that into account when deciding whether to reopen the inquiry into the sinking of the Derbyshire. Will he also say whether the report in yesterday's edition of the Financial Times—that
"Swan Hunter said yesterday that it had no record of the construction of the Kowloon Bridge"
because of the intervening nationalisation—is true? Will he also say what discussions have taken place with the Irish Government about the pollution of the coastline from the spillage of oil from the Kowloon Bridge?
Mr. Spicer: On the hon. Gentleman's second point, this information was passed to the new owners. The records are with British Shipbuilders. There is no question of there being no records. I listened carefully to what the hon. Gentleman said on behalf of his constituents, just as I listened carefully to what was said by hon. Members on both sides of the House about their constituents. I repeat that if there is any new evidence, or if there is any sign that there is any connection, or any potential connection, between the two, we shall seriously consider holding a formal inquiry.
Mr. Richard Ottaway: Will my hon. Friend accept that he is right not to rush into an inquiry into the loss of this vessel? It is not unusual for vessels to break up in heavy weather. I have in mind the Neptune Sapphire and the Castletown which broke up in the 1970s. They were of a completely different design from the Swan Hunter design that is in question.
Mr. Spicer: I am grateful to my hon. Friend, but I maintain that the Government are open minded about this matter. There is no Government prejudice.
Mr. A. E. P. Duffy: As the Minister has repeatedly reminded us, we must not prejudge the matter. However, will the inquiry bear in mind that the master took the ship from a sheltered haven into violent seas, presumably against advice, presumably when a replacement cable could have been made available and presumably without the repairs having been carried out? One question that obviously arises is whether masters may now be under too much pressure to deliver on time. Incidentally, a further question which must be in the minds of most hon. Members, certainly those with maritime interests, is why a ship was abandoned rudderless, with the engines still running. What discussions will be held with the Irish Government about the ecological disaster that now threatens the coastline of County Cork?
Mr. Spicer: As to the events that led up to the taking of the ship out to sea, there will be two sets of inquiries. One inquiry will be concerned with the initial damage to the vessel. The other will be concerned with the incidents and events leading up to the vessel becoming a casualty—that is, being taken out to sea and thereafter breaking up. The results of those two separate inquiries will be published, the first very soon.
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I am advised that there is very little likelihood of the United Kingdom coastline being polluted. As for the potential pollution of the Irish coastline, that is a matter for the Irish authorities. No doubt we shall be discussing the matter with them.
Mr. Ted Garrett: There is no more interest in this sad and tragic series of events than there is in the north-east. I am pleased that the Minister has made this statement today. If my memory is correct, on a cold, wet and damp autumn day I saw one of those ships launched in the river Tees in virtually a gale force wind. Will the Minister seek to assure as many people as possible, especially influential people in the shipbuilding industry, that the present management, design teams and work force of Swan Hunter are in no way linked with the design teams of the previous period? Every step must be taken to keep to the fore in the hard commercial world the name of Swan Hunter as a good shipbuilding company that has good design teams. Those who watch the Sir Galahad go down the slipway on Saturday 13 December—I hope that the Minister will be invited—will see what craftsmanship is. Despite all that has been said, I fear that the loss of the Derbyshire may go down in history as just as a great mystery as the loss of the Marie Celeste.
Mr. Spicer: I completely support the hon. Gentleman's general proposition about the quality of Swan Hunter and the superb workmanship that it produces. However, I must not go into too much detail, for fear of prejudicing the results of the inquiries and the legal action that might be taken. I cannot go into too much detail about linkages, but I completely agree with the hon. Gentleman's general point.

Sports Council
4.8 pm
Mr. Denis Howell: I beg to ask leave to more the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the Government's decision within the Estimates of the Department of the Environment to discriminate against the work of the Sports Council, especially in vital inner city areas, the failure of the Secretary of State at any time since he has been in office to meet the chairman of the Sports Council, or his sports Minister to hold any discussions with the Sports Council upon the effect of these cuts, which amount to £25 million of sports development, and to call for their resignations."
This year there has been a £1·3 million cut in the Sports Council's budget. That is very serious. As a ratio of 19:1, that means that £25 million worth of inner city sports provision will not now go ahead. The cut has been justified on the basis that last year the Sports Council had an exceptional £5 million grant, but that grant was to compensate for the loss of the Greater London council and the metropolitan counties. Even on last year's showing, this amounts to a further confidence trick by the Government regarding sport in the inner cities.
I can give one or two examples of the serious nature of the situation. At Southwark, the conversion of a former Sainsbury's store into a community centre will not take place. At Brixton, an athletics track will not be built. At Darlaston, in the west midlands, the conversion of a bus depot into a sports centre for handicapped people will not take place. At Gorton in Manchester, a gymnastics centre and at Bury in Lancashire two dual use schemes will not be created.
Mr. Speaker: The right hon. Gentleman has one more minute.
Mr. Howell: Since he was appointed, the Secretary of State has not had the courtesy even to meet the chairman
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of the Sports Council, and the Under-Secretary did not discuss any of the cuts before they were imposed. Every other sector covered by the Department of the Environment has received large increases or at least increases to cover inflation. The House should consider urgently whether the two Ministers should resign.
Mr. Speaker: The right hon. Member has asked leave to move the Adjournment of the House under Standing Order No. 20 for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,
"the reasons why the Government have declined to provide adequate funds to the Sports Council for 1987–88 in order to carry out its inner city sports development programme."
As the right hon. Gentleman and the House know, I have to decide whether to give this matter precedence over the business set down for today or tomorrow. I regret that I do not consider the matter that he has raised as being appropriate for discussion under Standing Order No. 20, and I cannot therefore submit his application to the House.

Sports Council

  STATUTORY INSTRUMENTS, &c.
  Ordered,
  That the draft Restrictive Trade Practices (Services) (Amendment) Order 1986 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Malone.]
  Motion made, and Question put,
  That the draft European Assembly Elections Regulations 1986 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Malone.]
  Not fewer than twenty Members having risen in their places and signified their objection thereto, MR. SPEAKER declared that the Noes had it, pursuant to Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.).
  Ordered,
  That the draft European Assembly Elections (Northern Ireland) Regulations 1986 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Malone.]

Orders of the Day

  Coal Industry Bill
  Order for Second Reading read.
  Mr. Speaker: I must tell the House that I have selected the reasoned amendment in the name of the Leader of the Opposition.
  4.13 pm
  The Secretary of State for Energy (Mr. Peter Walker): I beg to move, That the Bill be now read a Second Time.
  I should like to give the House a brief explanation of the main clauses. Clause 1 changes the name of the National Coal Board to the British Coal Corporation, and clauses 2, 3 and 4 deal with financial provisions.
  Clause 2 provides for the continuation of deficit grant powers. These are powers which the Government have had since the Coal Industry Act 1980, and the clause extends the power for two years, by which time the chairman, Sir Robert Haslam, has forecast that British Coal will achieve breakeven.
  Clause 3 means that the present redundant mineworkers payments scheme will not be renewed after March 1987, and responsibility for future redundancies will be directly with British Coal. The clause establishes a flexible regime under which, by the introduction of annual orders, grants can be paid towards a broad range of expenditure associated with restructuring, maintenance of concessionary coal and social welfare provisions. The power to make these orders applies to the financial years 1987–88 and 1988–89, but may be extended for a further three years. The forms of expenditure eligible for grant are listed in schedule 2, which includes specific references to such matters as retraining and the promotion of new employment. It is under these provisions that the Government will be able to continue to support the important activities of the British Coal Enterprise company.
  Clause 4 deals with support for redundancies. The suggestion made in the strangely worded amendment of the Opposition, that future costs resulting from recent redundancies will not continue to be met by the Government is wrong. The Bill does not affect past RMPS commitments which continue in force. The costs of past non-industrial workers' redundancies are safeguarded by clause 4, which gives power to pay grants for expenditure incurred before 1987 and which would previously have attracted pit closure grants.
  The next four clauses are needed to ensure that all those employed in the industry will have fair rights of representation. Indeed, they give basic rights for employees in the coal industry. Since the strike those rights have been denied to a very large number of miners throughout the country; miners represented by a democratic trade union, albeit a trade union refused affiliation by the Labour party and by the TUC. These provisions of the Bill, therefore, help thousands of miners to have fair representation on the institutions of their industry.
  The High Court confirmed in June that the coal industry's previous conciliation machinery had to be changed. British Coal is discussing the new machinery with the unions and there is no need to deal with this in the
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  legislation. The Bill deals with three specific areas in which powers are to be taken. They are: miners' welfare trusts, coal industry social welfare organisations and superannuation schemes.
  Clause 5 empowers the Charity Commissioners, after receiving an application from an employee organisation, to amend charitable trusts related to the coal industry if the members of that organisation constitute a substantial proportion of those who may benefit under the trust. The NUM has denied the UDM and such unions as APEX a proper role in the management of social welfare organisations in the industry, and in particular the Coal Industry Social Welfare Organisation.
  Clause 6 empowers me to amend the constitution of a coal industry social welfare body if it appears to me, after receiving representations from British Coal, that any organisation which represents a substantial proportion of British Coal's employees does not enjoy full participation in that body. Clause 7 gives me similar powers in relation to the coal industry superannuation schemes. Clause 8 makes provision for a six-week limit to the time in which legal challenge can be made to orders under clauses 6 and 7.
  The basis of the Bill is to try to encourage the industry and to see that it is successful over the next few years in improving its viability and in improving performance in production and marketing. The provision to change the name follows a request from the management of the National Coal Board because it felt that in terms of its marketing activities in presenting the attractiveness of its fuel, and in terms of its various other schemes for coal promotion, the title British Coal was more appropriate.
  Mr. Richard Ottaway: Could it also be that the name National Coal Board would be unacceptable to the Registrar of Companies if the board were to be put on a corporate status with a view to privatisation or something like that?
  Mr. Walker: I have no idea what the Registrar of Companies would do. I presume that if one wanted to float off the National Coal Board, which is a proper company, one would be able to do so. The request about the title came from the management and very few people would consider that a title such as the National Coal Board is anywhere near as attractive in marketing the product as British Coal.
  Mr. Allen McKay: It is the product that matters.
  Mr. Walker: It seems from the voices of the Opposition that they would prefer to adhere to the title of National Coal Board, irrespective of the marketing attractiveness to the management of British Coal. We intend, through the Bill, to go ahead and give the management the title that it wants. The financial provisions envisaged by the Government and set out in the Bill allow the corporation to embark upon a continuing and massive investment programme. It is envisaged that over the next three to four years more than £2 billion of new capital investment will go into the industry.
  I hope that the country and the House will realise that very few industries in Britain are ensured of a capital investment programme of that dimension. Certainly no coal industry in western Europe will enjoy a capital investment programme of that dimension, and under no

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  Labour Government has the industry enjoyed a capital investment of that size. It is important to recognise that the financial provisions in the Bill are positive ones for the industry. In contrast to the Opposition's amendment, which I shall deal with shortly, the Bill accepts the continuing costs of the restructuring that has taken place in the industry over the last few years.
  The Government have embarked upon the most generous programme ever for any industry to ensure that reorganisation can take place and that there are no compulsory redundancies. There have been incredibly generous early retirement provisions and incredibly generous payments for those who have decided to go voluntarily. The costs of those schemes will continue for many years. The Bill ensures that those costs remain with the Government and are not put on the corporation. That will represent a considerable cost to the taxpayer.
  Such provision is in sharp contrast to the reduction of 168,000 in manpower under Labour, when there were no such generous schemes and no enterprise companies endeavouring to provide alternative employment in mining areas. Future redundancy programmes will represent a cost to the corporation. The scheme that has been announced is generous compared with that of any other industry and continues the policy of only voluntary redundancies. Those financial provisions are a positive approach to the industry.
  The Opposition's amendment says that the Bill paves
  "the way for a further contraction and de-regulation of the industry".
  It is a remarkable contraction in which the Government provide for £2 billion of capital investment. It is a remarkable contraction in which the industry has more investment in plant and machinery than any comparable coal industry in western Europe. The amendment is blatant propaganda and has no foundation in truth.
  I am puzzled by the mention of deregulation. No doubt the right hon. Member for Salford, East (Mr. Orme) will describe the deregulation to be found in the Bill. I do not know of any. It is extraordinary that the Leader of the Opposition and the shadow Cabinet should have the audacity to speak of a further contraction of the industry when, under the past two Labour Governments, the industry contracted by 182,000 men. Did they table motions deploring the contraction of the industry then? That contraction was far greater than anything that has happened under the present Government, and there were no generous voluntary redundancy programmes, no early retirement schemes and no enterprise companies then. Labour's contraction does not compare with the Government's civilised approach.
  The Opposition's remarkable amendment refers to the
  "future for the coal industry within a viable energy policy".
  A Government who put in £2 billion of capital investment are making it perfectly clear that coal is extremely important in the country's future energy policy. We are then told that the Bill
  "jeopardises the financial needs arising from past redundancies".
  That is utterly wrong. the Opposition could not have read the Bill, or perhaps they simply did not understand it. Perhaps the right hon. Member for Salford, East will remove that part of the Opposition's amendment by moving a manuscript amendment now that I have explained that it is a fiction.
  The amendment speaks of
  "low morale in the industry".
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  For an industry in which morale is low, it is performing remarkably well. I am sure that morale is not low, because miners have earned 16 per cent. more in bonus payments this year, because average earnings so far this year have increased at three times the rate of inflation, or because there have been very few days lost his year as a result of industrial disputes. Nor do I think that miners are depressed by the fact that the industry has substantially improved its productivity. I hope that Opposition Members will explain the staggering improvement in productivity.
  It was the Labour party which launched "Plan for Coal", involving the agreement of the National Coal Board, the National Union of Mineworkers and the Government. It concerned investment in the industry and how productivity would rise as a result. Opposition Members know that during the first few years of "Plan of Coal" there were productivity decreases. Indeed, in the first 10 years of "Plan for Coal"—fortunately the Tory Government boosted investment, but even then productivity increased only slowly and little—a planned increase of 4 per cent. a year in productivity turned out to be an increase of 4 per cent. over the whole 10 years.
  Productivity in every coalfield in the country is now 50 per cent. higher than it was in the last year of the Labour Government. It was 2·24 tonnes per man shift then, whereas in the past seven or eight weeks we have reached 3·5 tonnes. How was it that Labour made so much investment but never got the productivity?
  Every coalfield producing a profit is hardly the sign of an industry that is suffering from low morale. We have seen the results of capital investment programmes. As a result of our financial provisions, improvements in management and productivity, and men taking advantage of the bonus payments, the industry is now better able to compete with other forms of energy and therefore better able to get a greater share of the market.
  Mr. Dennis Skinner: If there is all this productivity and the right hon. Gentleman is complimenting people who work in the industry, why, instead of British Coal's recent miserly offer of about £3 a week, does the right hon. Gentleman not intervene and say, "Because of the amazing productivity that I spoke about in the House of Commons, everybody will get £15 a week extra."?
  Mr. Walker: The hon. Gentleman is a good supporter of the NUM. British Coal is anxious to offer considerable incentives to improve productivity, and already does that, but Mr. Scargill hates such incentives and wants flat-rate increases which are not related to productivity. I am delighted to say that earnings have increased by three times the rate of inflation this year as a result of improved productivity.
  The most amazing thing about the Opposition's amendment is that it does not mention anything about one half of the Bill—the four clauses concerning the Union of Democratic Mineworkers. I assume that that is the half of the Bill that the Opposition want. I assume that they have received complaints only about the other half. The right hon. Member for Salford, East will soon tell the House, no doubt, that he recognises the absurdity of the NUM refusing to allow a recognised trade union with a substantial membership to have any rights over the institutions and pension funds to which its members

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  contribute. I hope that we will hear confirmation that the Labour party has decided not to mention the four other clauses because it agrees with them.
  Mr. Spencer Batiste: Despite my right hon. Friend's rather optimistic expectation, does he agree that the aim of the amendment is to divert attention from the fact that the Labour party has no intention of endorsing democracy in the trade union movement?
  Mr. Walker: I happen slightly to share my hon. Friend's suspicions. The manner in which the Opposition have worded their amendment may be referred to as the "Scargill silence". The Labour party has been silenced on this issue by Arthur Scargill. I had no desire to introduce such legislation. However, the National Coal Board contacted the NUM and said that the UDM has that number of persons and represents thousands of miners who are honourable men and who have decided to form the union. These men contribute to the pension funds and the welfare services. The Coal Board claimed that these men should be recognised, but the NUM refused to do that.
  The Government are therefore faced with a dilemma. Either we endorse the position whereby Mr. Scargill can veto the right of thousands of miners to have democratic representation on the institutions to which they contribute, or we can decide to act in the interests of those men. I am convinced that the Government are acting in their interests.
  In the debate on the Loyal Address, some Opposition Members referred to the UDM as simply consisting of scabs, and there was much abuse of those miners. The Labour party refused to let the union affliliate, and the TUC took a similar course. Indeed, many Labour councillors have not been reselected or re-adopted. The Labour party's attitude to the UDM is that it consists of a group of people who deserve to be treated with total contempt. I remind the House that those men kept to the normal tradition of the NUM by having a democratic ballot before taking industrial action. There was a ballot in Nottinghamshire and the midlands, and 73 per cent. of the miners voted against industrial action.
  If the Labour party refuses to support these clauses, it is virtually suggesting that those who continued the honourable tradition of the NUM by holding a ballot before an industrial dispute should be treated with contempt—yet Mr. Scargill refused miners the right to a ballot before the industrial dispute. In effect, the Labour party will say that miners' rights can be vetoed. In my judgment, that would be appalling.
  I ask the right hon. Member for Salford, East to give us direct replies to those points. Does he agree that about a quarter of the miners who are members of one union which is legal and recognised and who contribute to pension funds, charitable funds and social funds must be given the right of representation? We want a clear answer, yes or no, on that point. Does he agree that half the clerical workers who are members of APEX should be granted similar rights? If he does, can he guarantee that a future Labour Government will not repeal the provisions of the Bill? The members of APEX and the UDM want a clear statement from the Labour party on whether a Labour Government would repeal or retain this legislation.
  Mr. Kevin Barron: Before the Minister finishes his speech, will he tell us whether he agrees that APEX should be represented in the organisations to which he referred? Does he agree that all recognised trade unions throughout the British coalfields should be represented on those organisations if and when the Bill is passed?
  Mr. Walker: The important phraseology that applies to any union, including APEX, is that a substantial proportion of its members should be involved. If that is the case, under the provisions of the Bill the union can go to the Charity Commissioners and put its case. If a substantial proportion of men employed in an industry contribute to organisations, they have a democratic right to representation. I hope that we will have a clear statement on that point from the Opposition.
  I want to raise a matter relating to the attitude of the Labour party in that context. Is it true that at a meeting of the parliamentary Labour party last week the sensitivity of the electoral position in north Nottinghamshire was appreciated and that the importance of not alienating the local party members in the UDM was recognised? It would be interesting to know the answer to that. If that is what happened, it reveals the Labour party's bogus attitude on these points.
  The Bill provides good financial provisions for the industry. It encourages the continuation of improved productivity, and it encourages the fine action of British Coal Enterprise Ltd. in new job creation to continue over the coming years. It gives the industry good scope to improve performance and prosperity for the future. It also gives a genuine democratic right to a group of men who acted democratically in the best tradition of miners unions.
  4.35 pm
  Mr. Stanley Orme: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to give a Second Reading to a Bill which, whilst paving the way for a further contraction and de-regulation of the industry, fails to provide for a secure and planned future for the coal industry within a viable energy policy, jeopardises the financial needs arising from past redundancies, ignores the effect of low morale in the industry caused by the loss of 55,000 jobs since the end of March 1985, accelerated by the termination of the Redundant Mineworkers Payments Scheme, omits provisions for the reinstatement of sacked miners, and sets the scene for privatisation of the industry, based on a best-seams-first policy."
  This debate is about the future of the mining industry, and we move the amendment because we are deeply concerned about the current state of the coal industry and the failure of the Government and the Bill to deal with it. The mining industry is at a crossroads. The Government have no coherent energy policy; they have merely used the energy industries as a political tool, motivated only by the ballot sheet and short-term gain. That approach is inappropriate for dealing with our natural resources. The Bill is inappropriate to the future of the coal industry and the nation's energy supplies.
  Miners and the unions believe that the Bill is a pit closure Bill. It is not a Bill for recovery. It will deepen the crisis in the coal industry and weaken Britain's ability to be self-sufficient in energy.
  Since 1979 there has been a loss of 100,000 miners from the industry. Second Reading of the Coal Industry Act 1985 I predicted that within the provisions of that Act, the

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  Government were planning for 50,000 or more redundancies. I predicted then that they were planning for at least another 69 closures over five years, I take no satisfaction from having been proved correct so far. Since April 1985, 55,000 workers in the industry have been made redundant or are under notice and 59 pits have been closed, merged or are under notice of closure or merger. The Bill continues that process. It sets preconditions for further pit closures and redundancies. Little wonder that morale in the industry is at an all-time low—[HON. MEMBERS: "No, it is not."] I urge Conservative Members to go out into the coal industry to see for themselves.
  It is little wonder that in the past few months miners have been queuing to take redundancy. How can they believe in the future of their industry under this Government?
  The carrot of payments under the redundant mineworkers payment scheme has become a stick with which to beat the industry. Its much heralded termination date at the end of March 1987 has set the scene. Most men over the age of 50 have now left the industry. The average age of the mining work force is now down to the early 30s. As those men leave the industry, their skills, which are badly needed, go with them. There will be a problem of retaining a work force of a sufficient scale to dig the coal that the country will need.
  I recently visited Cadley Hill in south Derbyshire, where the deputy manager told me that miners under the age of 30 were applying for redundancy. They are considering reducing the work force from about 950 to 600. At that pit there were more than 600 applications for redundancy. That shows the faith that people have in the industry. That is the answer to the Secretary of State's question about productivity. Yes, productivity has risen. Yes, men are working hard to make up the money that they have lost, but they are also trying to get out of the industry rather than regarding it as their future.
  Mr. Martin Flannery: Is it a fact that many members of the Union of Democratic Mineworkers in Nottinghamshire are asking for redundancy, rather more than of the National Union of Mineworkers?
  Mr. Orme: I shall say something about Nottinghamshire in a minute.
  The Bill is an attempt to predetermine the country's energy choice. It is a deeply political Bill because it is an integral part of the Government's strategy. It sets out the Government's political objectives for the energy industries. Implicit in its financial provisions and its market philosophy is a reduction in deep mine capacity. Inherent within its clauses is the privatisation of the coal industry. Written into the small print is a disastrous expansion of nuclear power which the country neither wants nor needs. Government policy has already decimated the coalfields—[HON. MEMBERS: "Which clause?"] Let me deal with this point. Last week, The Economist pointed out:
  "Unemployment in mining areas hits hard."
  Of the 22 travel-to-work areas that saw the highest increase in unemployment between January 1985 and April 1986, 14 are coalfield communities. That is the size of the problem in the industry.
  The Bill spells doom for coalfield communities throughout Britain, not just for the so-called peripheral areas but for the central coalfields. Even in the prosperous
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  Nottinghamshire area, the Coal Board plans to cut jobs by at least 10,000, reducing the work force from 25,000 to 15,000. On the eve of the 40th anniversary of the nationalisation of the industry, the Government have won the backing of the British Coal chairman, Sir Robert Haslam. In this Bill, they are pressing ahead with setting up the industry to sell it off. That means more pit closures. Already the Government have prepared the way through the sale of National Coal Board housing and ancillaries such as Associated Heat Services plc.
  The Bill's financial provisions need close examination. The recent agreement between British Coal and the Central Electricity Generating Board transfers to the electricity industry profits which should have been credited to the coal industry. They are then clawed back by the Government.
  Mr. Patrick McLoughlin rose——
  Mr. Orme: No, I shall not give way. The Chancellor's autumn statement increased the amount to be paid through the electricity supply industry's negative external financial limit by another £237 million in 1987–88. I see that the Minister acknowledges that. All that extra revenue will come in 1987.
  Clause 3 allocates £300 million with the possibility—that is the point made by the Secretary of State—of the amount being increased to £750 million for the two financial years 1987–88 and 1988–89. That expenditure must be related to the items listed in schedule 2. Those are redundancy and early retirement, transferred workers allowance, existing social welfare activities, concessionary fuel allowance, retraining for those leaving on redundancy or incapacity grounds, and promotion of new employment. Redundancy payments will be made from the new British Coal scheme, but there remain the continuing payments for weekly make-up benefit. During 1985–86, they totalled £169 million.
  It is reasonable to assume that those costs—about £3·3 million a week—will increase in the short term as payments for the older age group within the 20,000 redundancies this year are included. With expenditure of that size, it is unlikely that £300 million will cover the payments alone. Indeed, we must ask whether the upper limit of £750 million is adequate or whether the industry must once again pick up the pieces of Government policy?
  It has been said that the restructuring of the industry is over. The Secretary of State said that——
  Mr. Andy Stewart rose——
  Mr. Orme: Let me develop this point and I shall give way to the hon. Gentleman.
  The Secretary of State made that point to the Select Committee on Energy. We are now told that we are in a period of "healthy restructuring". What is healthy about the contraction of the industry down to 70 million tonnes of coal, as advocated by the Wheeler report, or 65 million tonnes as proposed by The Economist? What is healthy about plans that envisage a reduction in manpower from 115,000 to 70,000? That was also advocated by the Wheeler report and supported by others in the Coal Board and by Conservative Members.
  Mr. Andy Stewart: I thank the right hon. Gentleman for giving way. My right hon. Friend asked him four straightforward questions. When will the right hon. Gentleman give us the answers?
  Mr. Orme: I shall make my speech in my own way. It is a Government Bill and we shall deal with it in our own way.
  Mr. David Ashby rose——
  Mr. Orme: No, I shall not give way.
  Safety is very important. We have heard much about increased productivity, but at what cost? The National Association of Colliery Overmen, Deputies and Shotfirers has expressed real fears about the deregulation of the industry. That is not the deregulation of small mines and opencast mines that many Conservative Members would like to see, but the deregulation of health and safety.
  The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): What does this have to do with the Bill?
  Mr. Orme: We are debating the mining industry.
  Mr. Peter Walker: On a point of order, Mr. Deputy Speaker. I moved the Second Reading of the Bill. I presume that we are debating the Bill. It contains nothing about deregulation, although the right hon. Member for Salford, East refers to it. It is a piece of propaganda that has nothing to do with the Bill.
  Mr. Deputy Speaker (Mr. Harold Walker): I have heard nothing so far which is out of order.
  Mr. Orme: There is nothing in the Bill about the Labour party, either.
  For decades, British miners fought to improve conditions in the pits. As a result, we came to have—[Interruption.]
  Mr. Deputy Speaker: Order. Two debates cannot continue simultaneously. There are too many sedentary interventions.
  Mr. Orme: Conservative Members do not wish to listen to the argument. Recently, conditions have deteriorated in the industry which to date has been the safest mining industry in the world. NACODS especially has shown great anxiety about that deterioration. Part of the legacy left to the coal industry by Mr. MacGregor is the present attempt to introduce American-style working practices and health and safety standards. I remind the House that the fatal accident rate in American deep mines is three times that of the National Coal Board.
  Mr. McLoughlin rose——
  Mr. Orme: No, I shall not give way.
  New regulations and codes of practice are being drafted, much to the consternation of NACODS. Instead of worsening health and safety being allowed in the industry, instead of more intensive working practices being introduced, safety standards should be tightened and maintained.
  Mr. Ashby rose—
  Mr. Orme: No, I shall not give way.
  The Government have linked the increase in productivity with their investment in the coal industry. We must ask where that investment has been concentrated. The answer is that the overwhelming part of it has been put into high technology mining in the central coalfields. The investment is going into automated technology and heavy-duty face equipment. We are in favour, of course, of investment in new technology because we see it as vital for the revival of manufacturing industry, but we want it to be used to create wealth, not to destroy it.
  Mr. Ashby rose——
  Mr. Orme: It would serve the hon. Member better to listen to this central point.
  Miners from all the coalfields are telling us that the National Coal Board is tearing the guts out of the best seams in the pits and sacrificing those which do not have superb geological conditions. This "best seams first" approach is destroying vast reserves of the nation's energy resources. By sterilising seams and closing pits, these reserves are being thrown away for ever.
  Mr. Ashby: We have heard about the points that are not in the Bill, and we listened with great interest. When are we going to hear about clauses 5 to 8?
  Mr. Orme: The hon. Gentleman must wait.
  The closure of Bates, Cadeby and Kinsley drift over recent years has thrown literally millions of tonnes of coal reserves into isolation. It is worth remembering the wisdom of Dr. Ernst Schumacher, the economic adviser to the National Coal Board from 1950 to 1970. He reminded us that coal, as an extractive industry, is unlike any other—its economics are different. He said that coal is a non-renewable source of finite size. To close down mines with recoverable reserves creates waste, it does not eliminate it.
  The Bill gives the Secretary of State the power to amend the coal industry's welfare organisation and superannuation schemes following representations from British Coal. The Coal Industry Nationalisation Act 1946 states in section 46:
  "It shall be the duty of the Board to enter into consultation with organisations appearing to them to represent substantial proportions of the persons in the employment of the Board".
  I understand what the Secretary of State has done in this Bill by giving recognition to what is overall a minority group but which represents a majority within a particular area. If he is giving those rights, why are not the same rights given to the members of the National Union of Mineworkers who are a majority in the industry but a minority in certain areas.
  Mr. Peter Walker: Does not the NUM have representation on the charities, the superannuation fund and anything else relating to its members? Will the right hon. Gentleman answer my question?
  Mr. Orme: The right hon. Gentleman should answer mine.
  Mr. Walker: I just did.
  Mr. Orme: In the pits in south Derbyshire and Nottingham, some minorities are given no rights and are not recognised for negotiation. If the Bill provides rights for one minority group, surely the same rights should be given to minorities elsewhere in the industry. I thought that the Government were in favour of minorities.
  Mr. Peter Walker: Do the NUM members in Nottinghamshire have representation on the superannuation fund and charity schemes? Those members have that representation, but the majority of miners in that area do not. Will the right hon. Gentleman support them having some representation?
  Mr. Orme: I will support the terms—[HON. MEMBERS: "Answer."] I will support the terms within the Bill if the Secretary of State will support the view that the National Union of Mineworkers has negotiating rights. That is my position—I will support it if the Secretary of State will also support it.

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  We shall obviously further discuss this matter in Committee. One of the issues that has contributed to low morale within the industry has been the reinstatement of miners dismissed during the 1984–85 dispute. The unevenness of the re-engagement of miners in different areas is still a matter of grave concern. I ask the Government to urge the chairman of British Coal to speed up the reassessment that he has promised.
  Why has the coal conversion scheme been omitted from the Bill? Why is the Secretary of State winding up that scheme at a time when it needs to be extended to create markets for coal? Many firms in this country are now converting to coal and finding it economical.
  The Bill does not deal with the central points that we believe face the industry. By eliminating deep-mine capacity, by destroying the skills of generations of miners and losing them forever, along with millions of tonnes of coal reserves that are being sterilised the Bill runs contrary to a sensible energy policy for Britain. We need a coal industry that will take us into the next century. We want unity in the coal industry. That is why we shall vote against the Bill and that is why the Labour party and a Labour Government will work for the coal industry—something that the Government are not doing.
  4.56 pm
  Sir John Osborn: British industries, especially the steel and engineering industries of Sheffield, and also the heavy energy users such as the chemicals, cement and paper industries, are concerned that their energy costs when using indigenous fuels—British coal, North sea oil or gas—are higher than those charged to their competitors elsewhere in the world and especially within the EEC.
  Two years ago, before the drop in oil prices, the electricity generated in this country was 84 per cent. coal-fired. Electric steel and iron-making industries in Britain paid higher electricity charges than their competition had to pay. That was the case not only for the larger users but for the smaller users with a high energy component in the cost of manufacture. This was the subject of a recent National Economic Development Office investigation and report. I have also raised this matter with my right hon. Friend the Secretary of State for Trade and Industry as well as my right hon. Friend the Secretary of State for Energy.
  I have raised the problems of the city of Sheffield in the House before and for several years the local engineering employers association, the chamber of commerce and individual steel companies, including British Steel, and especially those dependent on electric steel making have been concerned that their cost of electricity per unit has been higher than that charged to their competitors elsewhere in the world. My right hon. Friend the Secretary of State for Energy is aware that I have raised this with the OECD and through Eurofer with the Commission in the EEC.
  Those who use electricity, much of which is dependent on coal-fired power stations—I do not wish to go into the nuclear debate—hope that Sir Robert Haslam, the new chairman, following Sir Ian MacGregor, will give Sheffield and industries elsewhere electricity at a competitive price.
  Mr. Peter Hardy rose——
  Sir John Osborn: I shall not give way now, but if the hon. Gentleman asks me a question later I will do so.
  My right hon. Friend the Secretary of State is aware of the challenge. My impression is that the shadow Minister, the right hon. Member for Salford, East (Mr. Orme), and his hon. Friends are oblivious to the consequences of uneconomic energy prices, including the cost of extracting coal, on job opportunities in other industries. It is mainly due to the arrogance of the National Union of Mineworkers and its president, Arthur Scargill—my right hon. Friend has already referred to this—who chose to emulate the achievement of 1974, when Gormley, now Lord Gormley, McGahey and others precipitated a general election, thereby deposing a Conservative Government, under the then Prime Minister, my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath). It was Arthur Scargill who precipitated the recent strike in 1984–85.
  It is not my intention to elaborate on what has happened. In south Yorkshire, Nottingham and Derbyshire—close to my constituency—I found region divided against region and pit against pit. Only too often, within a pit the majority were brought out, in fear, by a militant minority with the aid of rent-a-mob. In the early days of the strike, pits were brought out on strike by the Scargill-inspired flying pickets. It was easy. Whereas the miners of a pit may have elected, through their pit committees, to continue to work—many approached me on this matter—one by one they were attacked by the Scargill flying pickets in the pithead changing rooms before going down to the pit face.
  This is the background to the creation of the UDM. Fear made miners, some of whose children were working in the factories with which I am familiar in Sheffield, some of whom were purchasing their cars on credit, and many more of whom were purchasing household equipment on hire purchase and had outstanding mortgages, wish to opt out of the strike. Privately, many of those people who approached Conservative trade unions resented this pressure, a pressure supported by many Labour Members of Parliament, in particular those who represent south Yorkshire constituencies. Scargill, like the Socialists in Sheffield, set out to undermine the stability of the new coal mining villages, particularly those in south Yorkshire. My hon. Friend the Under-Secretary of State has been to Yorkshire. In the summer, he spoke boldly about these issues. In Buxton, he stated that he would not stand by and watch a democratic trade union fight for fair representation, and fail in its fight.
  The Bill will ensure that members of the UDM have equal rights with the NUM on charities and similar institutions that have been set up for the benefit of all miners. I had hoped that Opposition Members would have said to their Whips, "Certainly, I back those hon. Members who support this issue," but there is no sign of that today.
  The second aspect of the Bill is coal industry finance. I welcome the fact that the industry has made a quick recovery from the NUM strike and that the Government have covered the deficit arising from it. I welcome also the fact that rising productivity has been matched by improved profitability and also the fact that—as stated in the latest annual report, which is valuable to hon. Members—the external financing requirement met by the Government was £550 million less than expected. Looking to the future, the coal industry, using new fields

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  such as Belvoir, Warwick and, particularly, Selby, must face the challenge of providing coal at world competitive prices.
  Mr. Barron: I welcome what the hon. Gentleman has said about new coalfields in Warwickshire. Will the hon. Gentleman denounce two of his hon. Friends who are publicly campaigning against the expansion into the south Warwickshire coalfield?
  Sir John Osborn: Anyone facing something that disturbs their countryside will resent it. Even the citizens of Kent are a little alarmed by the Channel tunnel. Even those in the Belvoir area are alarmed by this measure. The environmental considerations—I shall visit the Kenilworth area in the near future—must be faced. I respect the fact that people in the countryside near these areas obviously resent this change, as people in Fulbeck or anywhere else do when faced with the possibility of nuclear waste disposal in their area. The normal attitude is, "Anyone else can face that problem, but not I."
  Mr. Hardy: Will the hon. Gentleman give way?
  Sir John Osborn: I shall not give way again. I wish to make my own speech and not take too long in doing so.
  The announcement in June of a five-year agreement on cheaper coal for power stations will be of great benefit to both industrial and domestic users. Bulk industrial consumers will have been very pleased, for the result of this agreement, in some cases, gave a 7 to 8 per cent. reduction, although the average is less. Some users have said that the agreement is not enough. This applies to the cement industry. The annual report underlines the fact that productivity has increased from 2·24 tonnes per man shift to 3·12 tonnes. I gather—perhaps my right hon. Friend will endorse this—that this has gone up to 3·55 tonnes per man shift. This increase in productivity must be welcomed. It is a sign that the British coal industry is becoming competitive.
  Mr. Hardy: I support the hon. Gentleman's point about the strides made in the record productivity achievement. Will he go back to Sheffield and tell the business men there that they should join him in making representations to the Government to try to ensure that we make the most vigorous and robust national protest about the fact that our achievements are being deliberately marred by partner states in the EEC busily subsidising their high steel and energy users' energy costs, and thereby presenting Yorkshire with an enormous disadvantage? It is time that he and his hon. Friends protested.
  Sir John Osborne: The hon. Gentleman is trying to make my speech for me. He may make that speech himself. This has been a matter for concern, and my right hon. Friend the Secretary of State and my hon. Friend the Parliamentary Under-Secretary of State for Energy are aware of this. I claim to have done much—as has my right hon. Friend the Prime Minister has certainly done—to condemn such hidden subsidies. The EEC Commissioner, Lord Cockfield, has been outspoken in condemning such subsidies. It is up to our representatives in the European Parliament to take up this matter in another place—the European Parliament. I commend the fact that face workers now have an increase of 5·9 per
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  cent. a year. There is a problem of reconciliation between the NUM and the UDM, but I do not wish to prolong my speech.
  Is there any significance in the change of name from National Coal Board to British Coal? I have read a number of press articles, and I have discussed this matter with a number of my right hon. and hon. Friends. The writer of a recent article in The Guardian referred to the parallel with British Leyland. He also mentioned British Airways, British Airports and British Telecom as moves in the direction of privatisation.
  Some Conservative Members hope to see positive steps mentioned in the Conservative manifesto before the next election. I have cited previously—I do so again—the fact that in the early 1970s, when my right hon. Friend the Member for Old Bexley and Sidcup was Prime Minister, I visited Hobart house, the headquarters of the NCB. Sir Derek Ezra, now Lord Ezra, wanted from the Government about £500 million to invest in North sea oil and gas. I had had a series of meetings with international oil companies keen on taking up the role of utilities, which had already acquired power stations and were mining coal elsewhere in the world and which thought of the possibility of taking over some of our coalfields. The solution that I gave to Hobart house was to sell a few of our coalfields, with adequate regulation by Government, to those companies, raise the money, and then compete against them in the North sea. I did not return to Hobart house for some 10 years, when I was welcomed by Sir Ian MacGregor, but this view was not then accepted.
  In considering the market for British coal, one must understand the level of international prices. The export market for British coal is the least acceptable from a commercial point of view for the foreseeable future. I remember the European Parliament's plan 10 years ago when consumption was about 300 million tonnes and 100 million tonnes were to be imported from outside the EEC. About 200 million tonnes were to be produced in this country, of which 100 million tonnes would have gone to EEC countries. If there had been a common energy policy, it might have gone some way down that road, but exports to the EEC have been negligible. Community Energy Ministers have wanted the right to obtain their coal from cheaper sources elsewhere in the world, and this is the position today.
  This morning, some hon. Members went to the British nuclear forum. I was interested to hear that the Central Electricity Generating Board had a programme for coal-fired power stations and nuclear-fired power stations—possibly all pressurised water reactors but perhaps including one or two AGRs—in the foreseeable future. I asked whether coal-fired power stations would use imported coal like power stations elsewhere in Europe. The answer was no, provided British coal was competitive. [HON. MEMBERS: "Oh."] Labour Members defend the coal mines. I would, too. But our coal industry must be made competitive. I think that that is possible and that the measures in the Bill will bring it about.
  Of course, there are difficulties—for example, in burning more coal, there would be an increased threat from acid rain. That risk cannot be eliminated. If desulphurisation equipment is installed, such as that promised by my right hon. Friend the Prime Minister in Norway, it would add to the cost of electricity produced by coal-fired power stations. Ultimately the impact of the greenhouse effect must be considered and the doubling of

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  CO2, in the middle of the next century compared with the level at the beginning of the industrial revolution is another hazard, both of which, but for time, I would have spoken about in more detail.
  The Government should go ahead on all fronts, including coal. This is but one step in making our coal industry competitive and more efficient. I hope that my hon. Friend the Under-Secretary of State will give the assurance that some of our coal will be exported just across the Channel using the Channel tunnel to our competitors in the EEC, especially when there is a railway service to that area. I support the Bill.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. More than 20 right hon. and hon. Members are seeking to catch my eye. Unless speeches are brief, I am afraid that there will be some disappointments.
  5.12 pm
  Mr. J. D. Concannon: May I point out, Mr. Deputy Speaker, that your list includes, I think the name of my hon. Friend the Member for Bassetlaw (Mr. Ashton). He has informed me that he will not be here this afternoon because, unfortunately, his father has passed away. I do not think that there is anyone in the parliamentary Labour party who understands my hon. Friend's view on parts of the Bill. I shall certainly not speak for him, nor shall I speak for my hon. Friend the Member for Ashfield (Mr. Haynes), who is ill.
  It is with sorrow and regret that I make my first contribution in the House for 16 months after my motor accident, when I was left with some difficulties. It looks as though this will be my last contribution—that is, if I get through it. It saddens me that this contribution will, in part, be against my own Front Bench and my right hon. Friend the Member for Salford, East (Mr. Orme). My right hon. Friend knows full well that he is one of the dwindling number of hon. Members with whom I would willingly go into the jungle. In fact, when we were Ministers we shared many a day and night in the political jungle.
  It saddens me that my party has a three-line Whip on this eight-clause Bill. Three clauses affect the largest group of organised and bona fide trade unionists in my area. One need only look at the Conservative Benches to note the number of Nottinghamshire Members of Parliament who sit on the Government side of the House. When I first became a Nottinghamshire Member, there was only one Conservative Nottinghamshire Member of Parliament. People should take cognisance of that fact. I shall certainly not bandy figures about, but no one can dispute which union represents the vast majority of mineworkers in the Nottinghamshire area. The mineworkers have been asking only for their legitimate right of fair representation on the bodies that affect them.
  The Bill provides for fair representation on the Coal Industry Social Welfare Organisation, the mineworkers pension fund and the miners welfare trust. I understand that the intention is to give rights, in proportion to membership, in the management of those bodies. This has all been tried by negotiation. Unfortunately, the National Union of Mineworkers has consistently refused to recognise the reality of the situation in Nottinghamshire, so the Government have had to act.
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  For one who lives in and spends his social hours in and around Mansfield, these problems are a continuing running sore, especially in the running and management of local welfare groups and other bodies. These difficulties only continue the strike, bitterness and intimidation that still takes place between the two groups. If the three clauses to which I referred cut that out, the Bill be worth supporting.
  I can well understand the reasoned amendment and the arguments for it. In normal circumstances I would have no difficulty in supporting my right hon. Friend the Member for Salford, East in the Lobby, but he must understand that, in my area, nothing is normal at the moment. The reasoned amendment states
  "That this House declines to give a Second Reading"
  to the Bill. That is rather strange. With a heavy heart, I shall have to abstain from voting on the amendment.
  I note that in my "Weekly Whip" the sensitivity of the electoral position in north Nottinghamshire is appreciated, and that the importance of not alienating local Labour party members who are not in the UDM is recognised. I must add that that recognition does not spread from the parliamentary Labour party down into local Labour parties in Nottinghamshire. In fact, the opposite applies. There is political apartheid in Nottinghamshire. Not only UDM members, but in certain places, even their families, are not allowed to join the Labour party.
  We all know what is happening in the reselection process. People are not being reselected, not because they have not done a good job for the past 20 years, but just because they belong to a certain organisation. I wish that someone would pass this information on to Walworth road, because, for two years, some of us have been trying to get that fact recognised and acted upon, but to no avail. In fact, the view in Nottinghamshire is that, because local and national elections are pending, someone at last is taking notice, but, unfortunately, coming to the wrong conclusions.
  I was told only three weeks ago by a leading Labour party official that he thought that the Labour party need not do anything because the UDM would go away. The UDM will certainly not go away. As one who lives very close to the miners offices, the pensions office and the CISWO office, may I say to those who seem to think that threatening Nottinghamshire miners—I heard this again today—will bring the result that they desire that they should learn the lessons of the past two years. The Nottinghamshire miners are not to be threatened and bullied and the intimidation that still takes place only make them more determined to succeed.
  It is a sad time for me, after a lifetime's work, to find the greatest trade union so fatally split. I wish that it were not so, but I know that neither I nor anyone else can rewrite history. It is sad for me also to find that the battle on this issue is being fought, not industrially, but in the local Labour party in my area, by people who joined the Labour party, not for the good of the party or so that it would win elections, but to wreak vengeance on people who took certain actions a few years ago. I fear that that can only harm the Labour party in that area in future elections.
  It is like the good old Army term. Someone, somewhere has decided that we in north Nottinghamshire are expendable. One has only to look at the Conservative Benches. The hon. Member for Sherwood (Mr. Stewart)

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  probably does not know how he got here. Some of us do not understand how he got here. I know that some hon. Members in the Conservative party and others are having a ball over our discomfiture in Nottinghamshire.
  During my time in the House I have tackled some dirty, hazardous and onerous jobs for the Labour party. I was hoping that I could retire with my record intact. I have never considered myself to be anything other than a Nottinghamshire miner, and I have done my best to look after the interests of Nottinghamshire miners along with those of my constituents for nearly 21 years. My duties to my constituents are manifestly clear. Clauses 5, 6 and 7 are necessary if we are to start to bring some sort of sense and harmony as well as a sense of fairness, to my area. I wish that we could turn the clock back, but we cannot. The bitterness is still there between families and members of families. It is time somebody started the process of healing those wounds. If the Bill is one way of starting that process, I am all for it.
  It saddens me that on this, my last occasion in the House, I have had to speak against my party for the first and only time in 21 years. After a long spell in the Whips Office, as you will know, Mr. Deputy Speaker, this will be the first time in 21 years that I have had to vote against a three-line Whip. It fills me with a great deal of sorrow and sadness to have to vote against my party on Second Reading tonight.
  5.22 pm
  Mr. Andy Stewart: It is not often that I say that I am honoured to follow in debate an Opposition Member. However, it gives me pleasure today to follow the right hon. Member for Mansfield (Mr. Concannon). We all know and recognise that he has been a friend of the coal industry and of the Nottinghamshire miners.
  I welcome the opportunity to speak in this important debate about the coal industry. The Bill is clearly drafted to protect the rights of the individual, and to give fair representation to the 30,000 miners who belong to the Union of Democratic Mineworkers.
  First, I wish to tell the Labour party that my constituents and the majority of people in Nottinghamshire object fiercely to Opposition Members calling them scabs, and I thank my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) for repudiating the bloody-minded insults of the hon. Member for Newport, East (Mr. Hughes), which he made during the debate on the Loyal Address about my honest, hard-working, democratic constituents.
  My miners were not taking time out during the coal dispute to drop slabs of concrete, murdering their fellow workers. They were not throwing bricks through the windows of their neighbours' homes.
  Mr. Allan Rogers: On a point of order, Mr. Deputy Speaker. I can understand the views of the hon. Member for Sherwood (Mr. Stewart) on this matter and on the Bill. However, the two boys involved in that matter were charged and convicted of manslaughter and it ill-becomes an hon. Member to say such things about two youngsters who are now undergoing the proper punishment for the crime they committed.
  Mr. Deputy Speaker: That is not a point of order. Traditionally, debates on Second Reading range widely. However, I think the hon. Gentleman recognises that perhaps he is going a little too wide.
  Mr. Stewart: I shall substitute the word "manslaughter" for "murder", and I apologise if I have caused any distress to the people I have mentioned.
  My miners were not terrorising the wives and children of working miners. They were keeping the pensioners' fires burning and the factories running. They were keeping the country afloat. They are the courageous men the hon. Member for Newport, East dares to call scabs. He mouthed it but, with the exception of the right hon. Member for Mansfield, the rest of his colleagues think it.
  Now let me give the Labour party a simple truth. We will remember where it stood when our friends were being counted. It stood right behind Scargill and his rent-a-mob. We will remember that the leader of the Labour party never once came to the Dispatch Box to condemn the violence in Nottinghamshire or to support the Nottinghamshire miners.
  Mr. Deputy Speaker: Order. We are not having a debate about historical events. Hon. Members should address their remarks to the Bill.
  Mr. Stewart: The Bill contains three important elements. The first clause will legalise the coal industry's change of name to the British Coal Corporation. The NCB in the past has regarded itself as an institution, part industry, part social services never quite knowing which was its principal function. Because of that, it failed to recognise the importance of providing the nation with its primary source of energy at a price which would have made our industrial goods more internationally competitive, and our electricity at a price which would not be considered a luxury.
  In the past, the National Coal Board and its work force were prisoners of the dictatorial National Union of Mineworkers, which continuously sabotaged its members' prosperity, and failed to grasp the opportunities available to its members in a modern high-tech coal industry.
  When trade union democracy was reborn in Nottinghamshire in 1985, it was a signal to the then chairman, Sir Ian Macgregor to give his industry a new enlightened name—British Coal. Nobody could have predicted that the change from the NUM and the NCB to the UDM and British Coal would have such a profound influence on the industry's fortunes. Productivity is up 50 per cent. and wages are up as a result. Our miners, now in a higher wage bracket, must be looking very closely at Labour's plans to increase income tax to 55p in the pound.
  With the lower unit cost of coal produced, British Coal was able to meet the demands of its largest buyer, the Central Electricity Generating Board, for a lower price. It, in turn, is giving the benefits to the nation in lower electricity tariffs, with all the advantageous spin-offs for the country.
  In my view, British Coal can now proudly stand alongside the other giants—British Petroleum, British Telecom, British Gas, British Airways, British Aerospace and the British people.
  The good fortunes of British Coal could well be the misfortunes of the House, as it is widely rumoured that the defeated Arthur Scargill is about to become one of Labour's new moderate parliamentary candidates for the

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  constituency of Barnsley, Central. I presume that he will be following the path of those other moderate men, Ken Livingstone and Bernie Grant.
  Mr. Deputy Speaker: Order. I am beginning to wonder whether the hon. Gentleman is taking part in the same debate as the rest of us. I hope that he will return to the Bill and not discuss the parliamentary candidates of any party anywhere.
  Mr. Stewart: This must remind the Leader of the Opposition of the fate of Julius Ceasar. I suppose it is anyone's guess, looking at the Opposition Benches, who will be Brutus.
  Restructuring any major industry after years of misdirection cannot be painless, but, to the credit of the Government, substantial public funds have been available for a voluntary redundancy scheme, allowing those who wished to leave the industry to do so, with a commensurate lump sum, and for those over 50 years of age, additional weekly payments. However, it was always recognised that eventually the major restructuring of the industry would be completed, and as a result the present excellent redundant payment scheme would end.
  On 31 March 1987, British Coal will introduce its own alternative. Although I realise that British Coal desires to be independent of Government, its new scheme is unattractive and undesirable to my miners. Sir Robert Haslam, the chairman of British Coal, has already indicated that the industry's scheme cannot be as generous as the Government's. Why not, since the chairman of British Coal has said that restructuring is almost complete and so there will only be a few more redundancies, leaving more than sufficient money to go round when the need arises?
  Originally, the redundancy scheme was for those aged over 50 to be given the advantage of leaving the industry because of their lifelong commitment to it. As a direct result of the coal dispute, restructuring in Nottinghamshire was postponed until normality resumed. Since then, British Coal has tried to retrieve lost ground. But as 31 March 1987 fast approaches, it is estimated that 1,000 men plus in Nottinghamshire will not be released. Is it fair that men who put their industry and their country's needs first at a time of crisis should have to see those who were on strike, on the pretext of protecting their jobs, being given priority over those who worked?
  I urge my right hon. Friend the Secretary of State to reconsider my constituents' position, and I invite British Coal to make the same payments as the Government's scheme offers to those men whom it had intended to release but could not release in time as a result of the coal dispute.
  The proposed legislation to allow democratically elected representatives to sit on the Coal Industry Social Welfare Organisation and on the coal industry's trusts is also welcomed in Nottinghamshire. It has been necessary as a result of the NUM representatives believing, like all good Marxists, that, once elected, people are there for life. The refusal of those men to quit has caused untold difficulties. Now the trusts and charities cannot be used for the benefit of those whom they were set up to help.
  Nevertheless, even without access to those funds, the UDM has honoured all financial claims submitted by its own members as well as those of the NUM against the benevolent scheme. Miners' welfare clubs are renowned
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  for their leisure and recreational facilities, but in Ollerton the NUM has hijacked the club for its headquarters. It is denying ordinary members the right of free and safe access. Those people have ignored all requests to leave and vacate their places on the management trust to democratically elected members. That clearly shows the hypocrisy of the so-called people's democracy.
  During a person's lifetime, he treasures three things dearly: his family, his home, and his pension provision. Over the years, our miners watched their superannuation fund of more than £8,000 million being misdirected, mismanaged and looked upon as a political levy by the NUM trustees until the court ruled otherwise. All pension fund trustees have a legal duty to maximise the financial returns for their members, and no one's political beliefs should obstruct that aim.
  The NUM trustees have abused their position. They have denied their members, after 50 years of hard work, the maximum benefit from their superannuation contributions.
  Mr. Barron: Will the hon. Gentleman give way?
  Mr. Stewart: Incompetence by the NUM trustees may be acceptable to its own members, but it is totally unacceptable to allow them to act on behalf of the 30,000 members of the UDM.
  Mr. Barron: Will the hon. Gentleman give way?
  Mr. Stewart: It is for that reason that the Bill makes provision for other employee organisations of British Coal to be represented on the superannuation fund. When the proposals are implemented, I urge the new trustees to look at the present policies of their superannuation fund, particularly with a view to making realistic provision for early retirement.
  This democratic country has always recognised the banner cry of fair representation. The UDM's demand to British Coal is still the same: fair representation for the men who have brought British Coal to the high level of success that it enjoys today. Hon. Members should remember that when times are good people reward their friends, because when times are bad—and, if we ever have another Labour Government, they will be—they will need their friends, and our miners have very long memories.
  I commend the Bill and reject the amendment.
  5.35 pm
  Mr. Malcolm Bruce: The context in which the Bill has been introduced demonstrates the consequences of the Government's failure to have an energy policy. One reason for the increase in the requirement to allocate funds to the coal industry is the fall in the price of oil. If anything could have been done to stablise energy prices, it would not have left the coal industry, in its struggle towards viability, requiring this amount of increase in funds.
  Having been on the touchline for the past three years, I can testify to the fact that in this House the coal industry has been fought over by the two main political parties as though it were a carcase, to the great detriment of the industry and of the wider economy. I and my party, and no doubt the people of this country, look forward to the day when we shall not need to have frequent debates in the House on the coal industry, because there will be an

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  agreement about how it is run and how the workers should be treated. Regrettably, the flavour of today's debate shows that that day is still far away.
  I realise, Mr. Deputy Speaker, that my next remarks will touch on the past, but the Bill is set in the context of the recent past. The coal strike was provoked and prolonged by the activities of both sides. There can be no doubt that its cost was horrendous. The cost to the industry was well over £2 billion, and the cost to the economy as a whole was substantially more than that. We have come a long way since then, but I should make it clear that I believe that Scargillism and the sort of industrial action that went with it had to be resisted and defeated. The country is the better because that sort of evil has now been defeated.
  The second half of the Bill deals with one result of that dispute—the division in union representation inside the industry. I for one regard that division as regrettable and hope that it will eventually be ended, but I realise that at present that division is inevitable, and there is no clear sign of it being healed. As a result, legislation is required.
  The UDM is concentrated within one main geographical area, and is strong within it, but relatively weak outside it, yet even in its areas of strength the union does not have rights that are comparable to the support that it clearly has among the work force. There are some less publicised difficulties facing the union within the area in which it operates, and I hope that the Government will bear them in mind. First, the UDM has no ability to negotiate grade rates. Its role has not been recognised within the colliery salaried supervisory staff organisation. Indeed, although the NUM, when it is in the minority, can obtain the benefit of UDM negotiated salaries, the reverse is not true.
  Both unions should be treated equally and should be recognised to be representative of their members. I hope that the Minister will bear that in mind. All that can freely and honestly be asked is that they should both be recognised, and treated equally and fairly. It follows from that that the right to be represented on charitable trusts, social welfare bodies and, of course, the superannuation scheme must be recognised. It is a regrettable symptom of the division within trade union representation that legislation is required. It should have been possible to achieve that right without legislation, but regrettably it was not.
  This debate is taking place with the long shadow of Scargill and Scargillism still falling not only across Mansfield—the right hon. Member for Mansfield (Mr. Concannon) has left the Chamber—but across democratic trade unionism, which had to be defended and the tactics of Scargillism defeated. However, in a sense, from beyond the grave the extremists are still trying to claw back and prevent the democratic right of people to join and belong to the union of their choice, and to prevent that union being given equal rights.
  The Labour party will live to regret this day, because Labour Members are showing many working people that they are not fair minded, honest or democratic and that they do not really believe in the full and democratic right of individual people to belong to the union of their choice. The country will take note of that.
  In the interests of brevity, I conclude by saying that for two fairly simple, straightforward and obvious reasons, I
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  find it extraordinary that Labour Members will vote not only for their amendment, but, more fundamentally, against the Bill.
  Although the coal industry is no longer sustaining the massive losses that it did during the strike, it is still not free from public funding. If Labour Members defeat the Bill tonight, one wonders how the National Coal Board, or rather British Coal will continue to operate and to function as an economic organisation. Labour Members will have perpetuated retrospective divisions within the industry which will look back, when the industry and the people in it clearly want to look forward.
  As I said in my opening remarks, I wish that the Government had a more coherent approach to the planning of their energy policy and recognise that they are not even consistent. While claiming to operate within a free market, they have been found to be manipulating and interfering with that market on more than one occasion. That is why, earlier in this Parliament, there was a Bill to abolish the British National Oil Corporation after the Government had been found trying to settle the price and lost public money.
  The Government found massive amounts of money to sustain the strike, and although I believe that the elements that promoted it had to be defeated, it could have been settled much more cheaply in the national interest. One would have hoped that a Government who had the saving of public money as their main priority would do that, rather than conclude as one Minister said, "Whatever the cost, it was worth it."
  In that context my hon. Friends and I will vote against the Labour amendment and in favour of the Second Reading of the Bill.
  5.43 pm
  Mr. Jim Lester: First, I should like to pay tribute to the right hon. Member for Mansfield (Mr. Concannon) as did my hon. Friend the Member for Sherwood (Mr. Stewart), and recognise the brave speech that he made. Those of us on both sides of the House who have known him ever since he came here recognise his sincerity and the value of his contribution to the national effort in the many jobs that he has held in government. he is a brave, honourable and sincere man and, if his speech was the last that he will make in the House, I should like my comments to be put on the record on behalf of Opposition Members as well.
  The right hon. Member for Mansfield expressed sincerely the fundamental truth that nobody can deny men's participation, either in whatever body they choose to form, or as individuals, attack their probity and loyalty to their industry and party—in many cases, that is not my party—and imagine that they will accept it. The truth that the right hon. Member put forward is very real in this place, and it will stand long after the Bill, and many others, have gone through the House.
  I listened carefully to the speech of the right hon. Member for Salford, East (Mr. Orme) and agree with him on one point—we are debating the future of the coal industry. However, there was not much else with which I could agree. If one considers the importance of coal, the ability to sell it and the markets that it can command, one finds that in the electricity industry in 1985–86 the market for coal was the highest since 1979, when the actual purchase was 87·4 million tonnes.

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  We should be concerned about the alternative markets. My hon. Friends and I debated those alternative markets with Opposition Members when we were the Opposition party and they were Ministers. We are discussing where the future of the coal industry lies in terms of alternative markets, industrial conversion and especially export markets. Those markets require the industry not only to be competitive but to be stable and consistent. Those are the markets which we have lost in the past two years and which are declining. Those who consider the future of the industry and of the men enployed in it should turn their attention to those markets.
  I welcome the Bill, and especially the change of name. Forty-nine Acts will need to be amended, which graphically illustrates the importance of the coal industry to this country. It also shows that the coal industry is part of many aspects of our national life, well beyond those Acts which are directly connected to it. After the traumas of recent years, we should look forward rather than backwards and the new name will, I hope, reflect an industry which is now starting to look forwards, without the rigidities of over-subsidy and excessive state involvement.
  The change of name reflects also the current position within the industry, which has already been commented on by my right hon. Friend the Secretary of State and others of my hon. Friends who have said how well the industry has responded. There has been an increase from 2·24 tonnes per man shift in 1978–79 to an average of 3·12 tonnes this year. Indeed, in the past week a record output of 3·55 tonnes per man shift has been achieved, and that speaks volumes for what is happening in the industry. People are working extremely hard and are producing coal at ever more competitive prices.
  At this point I should like to express a caveat, especially in relation to the suggestion of the right hon. Member for Salford, East. None of us who represent mining areas and who were born and have spent lives in mining counties—this applies to many hon. Members present—would contemplate that that increase in output has been achieved by any relaxation of the stringent and necessary safety regulations. The idea that the men down the pit would accept such a proposal, even if any pit management was foolish enough to try it, reveals how little people know about the interdependence of the mining community, and of the fact that men and management work together day by day in the pits.
  It is wrong to suggest—we have heard this expressed in the past—that somehow it is possible to produce more coal by short-cutting on safety. Safety is paramount in the mining industry and the men would not dream of accepting any change in the regulations governing it. I should certainly not support that if it were suggested in any way.
  We know only too well that mining is a difficult and dangerous job. Even with the safety regulations and with a lifetime of training in safety techniques it is significantly more dangerous than, for instance, working in the nuclear industry. I am surprised how many people complain about the nuclear industry, although it does not have a bad safety record when compared with the natural dangers of the mining industry and the number of people who have been killed or injured over the centuries by working in it.
  The increase in production is more the result of better equipment, higher investment and unbroken shift patterns
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  in terms of continuous production. That should be welcomed by anybody who has the real interests of the industry at heart.
  For that reason, I also welcome that part of the Bill that deals with grants. It is a recognition that the process of change, though significant, still requires grants if we are to maintain a strategically important source of energy for many years ahead. The dramatic fall in oil prices that has been referred to had a sudden effect on what is an unrealistic market. Few would accept that it is a genuine market in which one needs to make an immediate response.
  I remember, Mr. Deputy Speaker, as you do, the 1960s, the 1970s and the 1980s. We have seen oil prices so low that the Labour Government decided that they did not want a coal industry and closed about 300 pits. We have seen oil prices so high that they have damaged Britain's economy and the world economy and we have been glad of every tonne of coal that we could mine. Therefore, I have always believed—I think that the Government still believe, and I am sure that when my hon. Friend the Under-Secretary replies to the debate he will reiterate—that the strategic energy policy that has to be pursued in Britain, because of our good fortune, can be likened to the four legs of a stool. We want a coal industry, an electricity industry and an oil industry and we want to encourage investment in saving energy and in new sources of energy at the same time. We need them all. None of them is mutually exclusive. One should make no apologies for the subvention. It is money well spent and before many years are out we shall be debating energy issues in the House again and recognising that situation.
  It is important that the grants should be on a tight rein, because one should, as near as possible, aim for commercial viability. As I have already suggested, there is nothing commercial about oil prices. As Sheik Yamani has been given the sack we shall have to wait to see what the new man does to manage oil prices before we know how to respond in the coal industry. It should be no policy of the Government to encourage short-term commercial decisions which reduce our ability to mine coal beyond a safe level, whatever winds may blow in the future.
  The time scale of the retraining and redundancy grant, with an overall limit to 1992, is a realistic time in which to try to get things right within the strategy for coal, which has been mentioned at energy Question Time, with an overall production of 90 million tonnes.
  Mr. Alec Woodall: Privatisation.
  Mr. Lester: One might talk about privatisation but the industry is not remotely ready for privatisation. It may be in the future, but certainly not in my lifetime in the House.
  In the interests of brevity, my last point concerns the most important people of all—the men in the industry and their relationship in the future. High investment and productivity still require and depend on skilled men, properly rewarded. They require skilled men who do not see the inevitable closure of worked-out pits as a threat. We now see that on the western side of Nottinghamshire pits are closing legitimately and with the support of the men. They do not see that as a threat and they see longer term pay deals and freedom from disputes as a sensible position from 1987 onwards and the pattern for many years to come.
  The coal industry has had that pattern in the past. Disputes are a relatively new occurrence in the mining

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  industry. It has had a long period of industrial stability. We want to return to that position and to encourage all men of good will, whether in the UDM or the NUM, to approach the industry in that way.
  In view of what I said earlier, I shall not labour the point, but it is right to encourage the UDM to have fair and equal rights of representation. We from Nottinghamshire know that the union was born in our area from a commitment to democratic values, which have been sincerely upheld by the right hon. Member for Mansfield. It is strange that the Labour party now accepts the principle of balloting. Balloting is now part of its trade union policy, which it will not withdraw. However, it is in the great difficulty of being hoist by its own petard in not carrying that principle through in relation to the UDM. It is utterly unacceptable that it should seek to discriminate against what is now a legitimate trade union with a membership in Nottinghamshire of some 21,700 out of a total of 24,700 working in the industry.
  The right hon. Member for Salford, East asked about the minority rights of the NUM in Nottinghamshire. I hope that the minority rights of the NUM in Nottinghamshire are every bit as good as the minority rights of the UDM in Durham. With that parity there should be no argument. However, the Bill deals with rights in terms of funds, to which miners have already contributed, and organisations of which they are a natural part. I say with great respect to the hon. Member for Midlothian (Mr. Eadie) that a great cloud still hangs over the superannuation funds of the NUM, of which he is a trustee and which I am sure he is dealing with in an honourable way. It is perfectly fair that the UDM should have representation on any body which is dealing with superannuation funds, particularly in view of that position. We in Nottinghamshire know the historical link between the Labour party and the NUM.
  Mr. Woodall: "Lynk" is the word.
  Mr. Lester: I regard him as a courageous man as well.
  I recognise that that is history, but, as the right hon. Member for Mansfield said, we are now moving into a new era and we cannot turn back and we cannot rewrite history.
  The right hon. Gentleman pointed to Conservative Members who ably represent Nottinghamshire today, saying that in the short term it might be in my interests to stir things up so that we shall win Mansfield and Sherwood and continue to make progress. However, as I said at the beginning, the principle for which the right hon. Gentleman spoke is far more important than our short-term party gains. We should give, and are giving, fair representation and proper safeguards to the united democratic miners. I shall watch with great interest and some concern as the arguments wax and wane between the vested interests already in the industry and the real interests of the men and their contribution to our national welfare as well as to their own good.
  5.57 pm
  Mr. Martin Redmond: I am pleased that the Labour party will reject the Bill, just as the Tory party rejected the Secretary of State as the heir apparent of the
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  Prime Minister. Every miner in the land will want to reject the Bill, and I feel sure that the nation will also want the House to reject it.
  The Bill is a continuation of the Tory policies and dogma that one has come to expect. The Government seek to run down, to divide and to exploit the industry. That is not in the national interest. One has come to expect more sanity from Rampton than from the Secretary of State and the Under-Secretary. I wonder whether the Secretary of State is a fit and proper person to hold office. Everything that he has done since he has been Secretary of State has been contrary to the interests of the nation.
  The need for an energy policy is paramount and the Tory philosophy that leads the Government to seek to reduce the coal industry to nothing is one that I cannot understand. Will they be content to import coal to make up the deficit that will surely result if they get their way and run down the industry? Do they seek to continue to import coal from South Africa and thereby support the South African Government's exploitation of black mineworkers?
  Mr. Martin M. Brandon-Bravo rose——
  Mr. Redmond: If the Tories get their way, the long-term effect on the balance of payments will be dramatic. If the Secretary of State spent more time trying to resolve the problems in the industry instead of counting the money that he receives from the common agricultural policy, he being a gentleman farmer, perhaps we would make more progress.
  There is no doubt that a further loss of jobs in the coal industry will be attributable to Tory party politics. During the miners' strike—I am sorry that it is necessary to refer to it—the Secretary of State categorically denied the existence of any hit list, as did the Prime Minister. The right hon. Gentleman and the right hon. Lady said on many occasions that there was no hit list and that Mr. Scargill and Opposition Members were not telling the truth. Events since the strike have proved beyond a shadow of doubt that there was a hit list of the sort that was discussed during the strike. That suggests that Ministers and others were not telling the House the whole truth.
  There is talk about conciliation and consultation within the coal industry and the need to get away from the past and to march forward together. Unfortunately, we have heard from Ministers and Conservative Back Benchers that they seek to continue the exploitation of the industry and the divisions within it. Industrial relations within the industry used to be the shining example of what could be achieved within the rest of British industry, but the National Coal Board has sought since the strike to turn industrial relations inside out. I assume that this has been done with the compliance of the Minister. When the Secretary of State talks about the high productivity that now prevails, he should understand that it will be an Indian summer unless some lessons are learnt. Unfortunately, if the Government continue with their policy the industry is due for another rapid rundown.
  Mr. Brandon-Bravo rose——
  Mr. Redmond: We were told that the Yorkshire Main pit at Edlington had a 10-year life, but with a change of director the pit closed. That brought great deprivation to the area. Cadeby pit was closed by the board in spite of

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  a recommendation by the independent review body and Mr. Diamond. The Secretary of State gave assurances that the independent review body would be everything that everyone wanted, but, unfortunately, it has not been. It is the same old system, but on many occasions the Minister has misled the House about the teeth of the review body. It is disgusting that the Minister saw fit not to reply directly to a letter that I sent him about Cadeby. I asked him to give the review body some teeth and to ensure that a directive was issued to the board, but he did not reply to that. Instead, he said that the review body's recommendations would not be binding on the board but that it would take them into consideration.
  When the Minister replies, I hope that he will tell me in what circumstances the board will take note of what the independent arbitrator is saying. If the financial and social aspects are not to be accepted, there is nothing left. It is kidding the public to say that the review body exists to see fair play. The Government are daft if they are asking people to believe that, and our people would be daft if they believed the Government.
  Mr. David Hunt: The hon. Gentleman has referred to Cadeby and has said that the financial aspects of Mr. Diamond's recommendation were not observed by the National Coal Board. He should know that Mr. Diamond agreed that substantial continuing losses would be inevitable if the colliery remained open. Mr. Diamond's conclusions on all the mining, marketing and financial matters accorded entirely with the evidence given by the board. It was the agreement of the trade unions and of the board at the time that the recommendations of the review body would not be binding.
  Mr. Redmond: The Minister must listen to what I am saying. When the Minister replies, I ask him to tell me in what circumstances the board will take account of the arbitrator's recommendations. The review body accepts the board's financial arguments, but it draws attention to the social consequences and says that the board should accept the recommendation to keep the pit open pending Government action on employment. Unfortunately, Conservatives seem to want to starve our people of employment. I ask the Minister not to try to mislead the House.
  Mr. David Hunt: I am sure that the hon. Gentleman did not intend to suggest that I misled the House. I think that we are in agreement, basically, but we are not in agreement on whether the review body's report should be binding on the board. It was the original decision that the report would be given detailed and careful consideration by the board, and that has happened. The hon. Gentleman does not have a case for saying that due weight was not given to the report, because it was.
  Mr. Redmond: Will the Minister tell us in what circumstances the board will accept the independent review body's recommendations? If it is not prepared to accept the financial and social aspects of the report, will it be prepared to accept the recommendations generally?
  Mr. David Hunt: I do not want to enter into a dialogue with the hon. Gentleman, but I would say to him that the board has always made it clear that it would give due weight to the conclusions of the review body. There has not been a review body yet that has decided and established that on financial grounds a pit should be kept open. The day may come, but it has not yet arrived.
  Mr. Redmond: I suggest that the Minister reflects on what I am asking. I suggest that he is trying to mislead our people.
  Clause 3 refers to welfare schemes. The welfare club at the Yorkshire Main pit used to be a source of revenue for the social facilities that were provided in the area. The men employed at the Yorkshire Main pit used to contribute to the colliery band, changing room facilities, and improvements generally. Yorkshire Main no longer exists, and the National Coal Board and the Government have a duty to provide money that will enable the welfare schemes to become self-sufficient. They should take that into consideration when they splash the money around. No doubt the Minister will tell us when he replies how many millions they will give to the various colliery closures.
  Clause 3 relates to concessionary coal. Does that include smokeless fuel? If the Minister will nod, I can carry on with my point. [Interruption.] The clause talks about providing money for concessionary coal. Can we take it that smokeless fuel is the same thing? If that is the case, perhaps the Minister could instruct the National Coal Board that it must not penalise those whose contracts included concessionary fuel prior to nationalisation. It is seeking to renege on its obligations. About six pits—my hon. Friend the Member for Rother Valley (Mr. Barron) may mention them in his speech—had agreements that when miners retired they would receive nine tonnes of coal. Now that the village of Maltby has gone smokeless, the smokeless fuel agreement is being used and, obviously, that involves a big reduction in quantity. The board and the Government have an obligation to those old age pensioners to ensure that they have adequate fuel with which to keep warm this winter. I feel sure that the Minister would not want to wage war on them.
  Clauses 5 and 8 mention the word "substantial". What does that mean? I hope that the Minister does not intend to hide behind the Charities Commission when he defines "substantial" when the Bill is enacted. He must insert a figure of 1 per cent., 10 per cent., 20 per cent., 30 per cent. or 40 per cent. Otherwise, he will leave a grey area which will give rise to arguments about the meaning of those clauses.
  Mr. Brandon-Bravo rose——
  Mr. Redmond: I hope that hon. Members on both sides of the House will reject the Bill.
  6.12 pm
  Mr. Spencer Batiste: I, like many of my colleagues, would first like to pay tribute to the right hon. Member for Mansfield (Mr. Concannon) who today made a typically courageous speech, which he said was his final speech in the House. When we were both members of the Energy Select Committee I had the pleasure of accompanying him on a trip to Northern Ireland, where his courage had been tested in a different dimension. I can say without fear of contradiction that through his activities he has enjoyed wide respect in the House. It is a tragedy for him, when he makes a speech that is a model of common sense and reconciliation, and when he speaks for a community in which he has lived and worked all his life, that in the modern Labour party his is a voice in the wilderness.
  I have the privilege of representing a diverse constituency in which the energy industry plays an

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  important role. In Allerton Bywater is the North Yorkshire area headquarters of the NCB, shortly to be renamed the British Coal Corporation. Surrounding it is a long-life pit which has won a recent order to supply the new ICI coal-fired plant in Huddersfield—the largest in Europe—with 44,000 tonnes of coal a year and many mining communities. Just to the east in the Selby constituency is the new coalfield in which increasing numbers of my constituents will work as this impressive and massive development proceeds.
  Immediately to the south and east of my constituency are the great coal-fired power stations of Ferrybridge, Drax and Eggborough which will consume 4 to 5 million tonnes of coal a year to generate 2,000 MW of electricity. Others of my constituents are employed there. In the heart of my constituency at Scarcroft is the headquarters of the Yorkshire electricity board which employs more than 7,500 people to service nearly 2 million customers in diverse industries and communities, and in hospitals and old people's homes, each of which in its own way and in varying degrees depends on energy.
  While many of my constituents work in the energy industry, be it in the production of coal, its conversion to electricity or the supply of electricity, all of them have in common with all other hon. Members' constituents that they are also consumers of energy and, as such, are entitled to expect an adequate supply of energy in a suitable form at a price that does not disadvantage them. It is a prime responsibility of government to develop policies that will do just that. We must protect our people against the vagaries of middle eastern wars, the rapacity of OPEC and the still unextinguished militancy of the NUM leadership. In doing so we must use our natural resources wisely, while facing up to the challenges that new energy sources pose for us, for the nation that gets its energy policy wrong will be unable to get many other policies right.
  We are fortunate in the United Kingdom in having diverse options. Any sensible policy will build on that diversity and must have the development of our coal industry as a major component, but not at any price. The cost of energy must be internationally competitive or all who depend on it will go to the wall. An excessive price for coal may in the short term save some jobs in the coal industry, but it will cost jobs in steel, refractories and engineering.
  For those reasons I welcome the Government's determined efforts to put the coal industry on a healthy and profitable footing. I applaud our massive £4·8 billion of capital investment in the industry. Since 1983 alone we have invested over £1·5 million per day in the industry and under this Bill, which the Opposition will oppose, that figure will rise to £2 million a day. Selby with its current productivity of over 12·3 tonnes per man shift is a good example of how that investment translates into a modern industry, offering excellent prospects to those who work in it and realistic prices to those who depend on it. The 23 per cent. increase in productivity announced today by the NCB for the past 12 months is another hopeful signpost for the future for those who work in the industry, for those who depend on it for their earnings and for the future well-being of our energy policy, provided all concerned in the coal industry play their part.
  Since 1983, an additional £5 billion has been spent on subsidising the industry. While the bulk of that has gone
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  on financing the major restructuring which has taken place and which was necessary, a significant part has been inflicted on the nation unnecessarily by Scargill's strike. The industry could not survive another strike like that, nor could it survive serious disruption in future which would destroy the confidence of customers, such as ICI and the CEGB, which have other options.
  We must move on now to the industrial relations of the 21st century and not remain locked into past battles, as the Labour Front Bench has demonstrated that it is this afternoon through its inability to rise above the instructions issued to it by the NUM leadership. It is with sadness that I note those parts of the Bill which make provision for fair representation for all miners on the institutions of the industry. I am sad that that should be necessary, but I recognise that it is.
  The UDM split from the NUM because the NUM leadership would not follow its own constitution. That split was widened when the NUM adopted what for many miners was an unacceptable alternative constitution which concentrates even more power in the hands of its leadership. Surely that leadership should by now realise that the UDM will not be intimidated in the future any more than it has been in the past, and that the Government will not allow it to be excluded by NUM intransigence from the representation to which its 30,000 members are entitled.
  It is also sad to observe the craven performance of the Opposition in this matter. The right hon. Member for Mansfield spoke of the political apartheid in north Nottinghamshire. The Labour Front Bench is rightly vociferous in condemning apartheid in South Africa, yet, when it comes to coal's traditional homelands, how they cringe before the forces of militancy. This phoney and contrived Opposition amendment is an unworthy and blatant manoeuvre to avoid facing up to the important issues of democracy that are raised in the Bill. That unworthy manoeuvre is exposed all the more, because by voting against the Bill Labour Members will be voting against the funds that are needed for the future of the coal industry, against the new jobs that will be created in the years to come by British Coal Enterprise Ltd. and against democracy. One thing that I can promise is that—be it in this debate, in Committee or on Report—Labour Members may think that they can duck the issue of democracy, but we shall bring them back to it time and time again.
  It is sad, but not surprising, that a party whose leader lacked the guts to stand up to Arthur Scargill until others had defeated him now lacks the guts to support basic human rights in the trade union movement. That is why so many rank and file trade unionists throughout the country—not just in Nottinghamshire—recognise ever more clearly that when the chips are down it is only to the Conservative party that they can turn to protect their interests. Labour is the party that will deny them the protection of our laws from the militant trade union bosses who have abused them in the past.
  This Bill gives us an opportunity to look forward to the coal industry as it can be and as it should be. The major restructuring is now over. Notwithstanding the collapse of oil prices, the board plans to break even in 1988–89 and to reach full commercial viability in the following year. We have all heard that story before, but the rapid increase in productivity of 23 per cent. in the last year alone gives us at last realistic cause for optimism. We must give the

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  industry the funds that it needs to see it through, just as we must reinforce the basic democratic rights of those miners who reject Scargillism in all its unpleasant manifestations. I commend the Bill to the House.
  6.23 pm
  Mr. Geoffrey Lofthouse: As has already been said, this is a Bill about the future of the mining industry, although from some of the speeches that have been made one would think that the debate was an inquest into what has taken place during the last few years.
  Clause 1 proposes that the National Coal Board should instead be known as the British Coal Corporation. However, that new name has been in use for quite a few months and I am not sure what would happen if the Bill failed to get a Second Reading tonight. I do know that the change of name has fuelled the suspicion of many in the industry about the future and privatisation. For the life of me, I do not understand why the NCB should be so arrogant as to change its name—which it has no statutory authority to do—before this House has taken the decision. Of course, that is typical of the arrogance displayed by the leadership of the NCB over the past few years.
  Clause 2 relates to the deficit grant, and, as I understand it, puts back the break-even point by a year, to 1988–89. The NCB is projecting a loss of £300 million in 1986–87, and the loss this year is entirely due to the new agreement between the NCB and the electricity industry, which decreases the price of coal to that industry. As a result, the NCB will suffer a revenue loss of £4 million in 1986–87. I understand that that is equivalent to £3·80 per tonne. Given the amount that the electricity supply industry must pay the Government via the external financing, limit for 1986–87—at present set at £1,416 million, over and above interest payments—it represents a straightforward revenue-raising operation.
  Indeed, the Chancellor's autumn statement on 6 November increased the amount to be paid via the negative EFL for 1987–88 by £237 million more than the amount established in the CEGB's medium-term development plan. It will now have to pay £1,305 million instead of £1,068 million. That is extra revenue for the Government in an election year, and will account for 79 per cent. of the £300 million transferred to the electricity supply industry from the NCB. In other words, 79 per cent. of the revenue reduction experienced by the NCB is being ploughed back through the Treasury's coffers.
  We have recently heard much about British Coal's new strategy. It was first mentioned in October 1985. The objective is to move to a point at which the industry can operate profitably, and it is argued that competition means that that cannot be done by price increases. One understands that—we must compete in the markets, and it would be foolish to say otherwise. It is also said that there should be a significant reduction in production costs, and that is where one of the major problems arises.
  It is argued that the new strategy means that maximum output should come from low-cost collieries. At present, it is said that such collieries whose operating capacity is more than £1·65 per gigajoule are likely to be uneconomic. We are told that the aim for long-life collieries is £1·50 per gigajoule and that the aim in respect of new investment will be as low as £1 per gigajoule. Any colliery that does not reach that target is under threat of closure.
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  According to the board's figures for July this year, 49 mines are making a profit and 77 are making a loss. Incidentally, the figures do not include social costs. Of the 49 pits in profit, some have limited reserves, and that fact is recognised. One must therefore ask what the size of the industry will be if it is to operate purely and simply under the financial guidelines laid down by the NCB's new strategy.
  How will the NCB achieve the targets that it believes are necessary to put the industry on a profitable footing by the target date of 1988? Recently, the director of the Nottinghamshire area, Albert Wheeler, in a paper that he gave to the mining engineers annual conference, put forward a plan which, if my memory serves me right, the new chairman of British Coal, in his evidence to the Select Committee on Energy, recently said that he would support. If Mr. Wheeler's plan is fully accepted by British Coal and the Government, the work force will be down to 70,000 men for 90 million tonnes of coal. If the Wheeler plan does not envisage this, I would welcome a correction from the Minister.
  The Wheeler plan would also mean the continuation of the policy that is beginning to operate in the mining industry of raping the best seams and taking out everything that is easy to get at, leaving behind what in years gone by we would never have dreamt of leaving. This means that the projected 300 years of coal reserves about which we have been talking for many years would go, and our natural fossil reserves would last for only 50 years.
  Mr. Orme: Is my hon. Friend aware that at the Sizewell inquiry British Coal said that there were 300 years' worth of reserves, but during the miners' strike Sir Ian MacGregor told me that the way that he wanted to extract the coal would mean that it would go within 50 years?
  Mr. Lofthouse: I take my right hon. Friend's point, and that would be the effect of the Wheeler plan. The new chairman of British Coal, in his evidence to the Select Committee, made it clear that he supported the Wheeler plan. It seems likely that the Wheeler plan is tied up with the time scale of the Bill, because it coincides with the new strategy.
  The Bill encourages the further deregulation of the industry. I am not talking just about the desire of many Conservative Members to deregulate the small mines in opencast production, but about a matter of life or death importance to all who work in the industry. I am talking about the deregulation of health and safety in the industry. These may be strong words, but this is the position facing the mining industry if coal is produced by raping the mines along the Wheeler plan.
  For decades, miners fought to improve conditions in the pits and to establish low accident rates. As a result, we came to have the safest mining industry in the world, but since the start of MacGregorism, conditions have deteriorated and the serious injury and accident rates in particular have climbed steeply. Nobody can refute that. Part of the MacGregor legacy is the attempt to introduce American-style work practices and health and safety standards. I remind the House that the fatal accident rate in American deep mines is three times that in British coal mines.
  Recently, I went to America and visited some mines. After 39 years down the coal mines here, I can categorically state that I have never been down mines as

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  unsafe as those I saw there. They are not fit for men to work in. Now, as a result of MacGregor, similar workings may be adopted in our mines.
  If the Government accept the Wheeler plan on behalf of the industry, they will be accepting several new practices. There will be coal production six days a week, with longer shifts underground. Winding shafts will be made available 23 hours a day at full capacity. The role of craftsmen will be changed and some crucial maintenance tasks will be given to machine operators. The role of deputies and other officials will be changed. A variety of new incentive schemes will be introduced. The use of roof bolts, trackless vehicles and highly flexible production techniques used in American mines will be increased.
  Mr. McLoughlin: Does the hon. Gentleman accept that to introduce a number of the practices that he has set out would require changes in both the Mines and Quarries Act 1954 and the Health and Safety at Work, etc. Act 1974? Where in the Bill are those changes made?
  Mr. Lofthouse: The hon. Gentleman is a little premature, because I am coming to that point.
  The Wheeler plan would also mean increasing the use of private contractors and revising the health and safety regulations applying to mines to permit these new working practices. When I went to America, I saw the system of controlling road ways by roof bolts, as Wheeler is suggesting. This system cannot work in the geology of our coal mines. There will be rapid increases in the injury rate, and I am talking now not as a Bevin boy—if the hon. Gentleman knows what that means—but as someone with 40 years' experience down a hole in the ground. The American system cannot work safely. A system of taking control of the statutory obligations of deputies and overmen and passing them down the line is another suggestion in the Wheeler plan.
  When questioned by the Select Committee on Energy two weeks ago, Sir Robert Haslam said that he agreed with the broad thrust of the strategy, and denied that that required the relaxation of safety standards. Mr. Ken Moses, the British Coal technical director, told the Select Committee that the only legislative change would be to the Coal Mines Regulation Act 1908, which limits hours of work underground. However, at a meeting of the mines qualification board only a week later, Mr. Moses said that if the meeting did not agree to amend the rules covering the qualifications for shotfirers and deputies British Coal would get the regulations changed another way. In one week, he had told two different stories. There is no way that the Wheeler plan can go through without altering the regulations. British Coal fully expects to be able to alter those regulations, and it is not beyond the bounds of possibility that they will cease to operate.
  New regulations and codes of practice are being drafted. The first one to be prepared—on access and egress—raises the limit on the number of men working in a heading from nine to 18. To those who are not familiar with the mining industry, that means that where there is a heading with only one way in no more than nine men can work there. That is a wise precaution. However, the suggestion is that the code of practice should be altered to increase that number to 18. The deputies union, The National Association of Colliery Overmen, Deputies and Shotfirers, whose representative is my hon. Friend the
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  Member for Wentworth (Mr. Hardy) has real fears regarding the use of this redrafted regulation, especially in single entry faces. Anyone with mining knowledge will readily understand those fears. NACODS is concerned that the increased use of roof bolts in these and other situations would also put lives at risk.
  Safety regulations in the mining industry are interconnected, yet the regulations are being changed one by one. How can changes to one be agreed before seeing the changes that are being proposed for the others? It is perfectly obvious to the mining unions that the new working practices presuppose drastic changes to safety regulations across the board. I hope that the Minister will assure us that this talk of changes is moonshine and that the regulations will not be altered, for that would permit British Coal to rape the coal industry, as is happening in America.
  The hon. Member for Elmet (Mr. Batiste) said that if we do not get the price of energy right the whole exercise will be futile. Constantly we hear about the price of generating electricity by coal compared with the price of generating it by nuclear power. The Minister informed me today that the cost of decommissioning nuclear power stations is included in the cost of generating elctricity by nuclear power. It was a clever answer. I asked for the true costs, but in his answer the Minister referred just to the costs. The true costs have not been included because they are unknown. The colossal cost of producing electricity by nuclear power has not, therefore, been included in the overall production costs.
  If we fail to include the true cost of producing electricity by nuclear power, we shall deceive the House and the public. If its overall production cost is not greater than the cost of generating electricity by coal, the Government will be committing a criminal act. The hon. Member for Elmet referred to the Selby coalfield. That coalfield has been welcomed in Yorkshire. However, only 49 m of coal will be extracted from each unit; 50 m will be left there. We shall be leaving more coal in each unit than we shall be taking out. That is rape of the industry. Such a policy for the future energy needs of this country would not be wise. Further sums ought to be done regarding the decommissioning of nuclear power stations.
  Mr. William O'Brien: Has my hon. Friend taken note of the fact that research and development costs for nuclear energy amount to £150 million a year and that that figure has to be compared with about £45 million for research and development into non-nuclear energy? Does my hon. Friend think that that is relevant to his point about the decommissioning of nuclear power stations?
  Mr. Lofthouse: Yes. The amount of money that is spent on nuclear power research and development is far in excess of the amount that is spent on coal research and development, or research into any other form of energy. The Department and the Minister should look carefully at that point.
  I am not knocking the enterprise scheme. An honest endeavour is being made to find jobs for people. However, five or six pits have been closed in my area since the strike, and 42 per cent. of all those aged 24 are unemployed. So far, I have been able to identify only two jobs for them. The Bill will create massive job losses. The Government are therefore obliged to provide jobs in the mining

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  communities to replace the jobs into which those kids would normally have gone. The redundancy payments scheme has been attractive. That is why men have left the industry. However, it is not attractive to kids leaving school who would normally have gone into those jobs. There is nothing for them to do. We cannot even get intermediate area status from the Government.
  Mr. Batiste: Will the hon. Gentleman give way?
  Mr. Lofthouse: No, not for the moment. Intermediate area status would help us to attract industry to the area. The Government ought to take note of the further rapid rundown of the mining industry.
  Mr. Batiste rose——
  Mr. Lofthouse: I do not intend to give way to the hon. Gentleman. The Government might just as well wipe out the review body if they do not intend to give it any teeth and allow it to take note of the social consequences of the Bill.
  6.48 pm
  Mr. Patrick McLoughlin: No hon. Member could have heard the speech of the right hon. Member for Mansfield (Mr. Concannon) without realising his great sincerity, because of his experiences in his constituency.
  A number of hon. Members have referred to the safety aspects of the present policies. The Bill deals in no way with the drastic changes that will be needed to certain parts of the Mines and Quarries Act 1954 to take care of the deputies and the overmen who have to work underground. Those changes would have to be considered by the House before they were put into effect.
  Nobody can deny that the British coal industry has gone through a very rough time in the last few years, particularly between November 1983 and the end of the coal dispute. The industrial action that was taken in 1984 by some members of the National Union of Mineworkers resulted in great damage to the industry. I hope that the Bill will be the start of a new era and of a fresh attitude in the industry, in which I will always have an interest. I worked in the industry for seven years, for six of which I was a member of the NUM. My father before me was for about 30 years a member of the NUM. I never really got to know him because he died when I was so young.
  The amendment that stands in the name of the Leader of the Opposition is yet another example of the backward-looking attitude of the Labour party today. It is still living in the past and does not acknowledge what has happened in the industry in the past few years. That is not necessarily what everybody would have wanted to happen in the industry.
  No doubt everybody shares the regret at the way in which the industry and the union have been torn apart. Nevertheless, that has happened and there is no point in trying to say that everything is all right and that we will forget and blot out those two years. We cannot blot out those years or the fact of bricks being thrown through people's windows. We cannot blot out abusive phone calls in the early hours of the morning.
  I can assure hon. Members who have been lucky enough never to receive abusive phone calls that there is nothing more horrifying or more frightening to a person or to a family than that at 2 or 3 o'clock in the morning. Unfortunately, those things cannot be blotted out and
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  reconciliation between the mining unions will not come easily. Such reconciliation will be made all the harder by the attitude of the Opposition who continue, it would seem, to take the Scargill line. They have not told us their justification for opposing this Bill.
  The Opposition amendment talks about low morale in the industry. If one were to look for evidence of such low morale one could not find it in the current production figures. To have a future, the industry must provide coal at an economic cost, and at a saleable price. Some hon. Members have said that the coal grant conversion scheme is about to end. I have not heard that, but if it were to end, I should regret it. I should regret to see that scheme corning to an end, because coal is an efficient fuel for industry and it is a shame that British industry burns premium fuels to the extent that it occasionally does. There is great capital cost involved in installing coal-fired plant in industry.
  Mr. O'Brien: Does the hon. Gentleman agree that we ought to make representations that the conversion scheme should be extended to local government and to area and district health authorities?
  Mr. McLoughlin: A strong case could be made for such extension. The Opposition talk about low morale in the industry. Low morale is more apparent in the Opposition than in the coal industry. High productivity will benefit the industry. The right hon. Member for Salford, East (Mr. Orme) talked about men over the age of 50 who have now left the industry and accepted redundancy. Some of the people over 50 that I knew when I worked for the National Coal Board, as it then was, deserved redundancy. Miners who work under ground from an early age up to the age of 50 deserve redundancy. I say good luck to them. I am glad that such people have been able to leave the industry with a relatively good settlement. I do not share the anxiety of the hon. Member for Salford, East about people over the age of 50 using the generous redundancy scheme.
  The Opposition amendment does not refer to pit closures. How could it? If it did, it would be double talk by the Opposition, because between 1964 and 1970, when they were in Government, they were good at pit closures and closed far more pits than the present Government have been able to close. In the area in which I lived on the Cannock Chase coalfield there were about 27 pits. Now there is just one, Littleton colliery. All the others have been closed.
  The amendment refers to the reinstatement of sacked miners. This is a matter for British Coal and must be looked at on the basis of some of the crimes committed by the people who were dismissed. One cannot look at the Bill without considering what happened during the miners' industrial action when some members of the NUM, following the quite appalling leadership of that union, brought about the horrifying events of 1985. It was a tragic 12 months for the whole industry, and the only people who gained from it were those who were trying to make an industrial dispute a political dispute. Certainly, the miners did not gain from it.
  There is no doubt where the blame lay for the miner's dispute. It lay with the leaders of the NUM who failed to hold a ballot. No matter how one talks around that, one cannot get away from it. In places where ballots were held, a majority of people wished to continue working. In the ballot in which I took part, 72 per cent. voted to continue

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  working and 28 per cent. voted to go on strike. My line of action was obvious, and I continued to go to work during some difficult periods.
  The failure of the NUM to hold a ballot and the subsequent changes in its rules led to the formation of the Union of Democratic Miners. I am pleased that my hon. Friend the Under-Secretary of State has on several occasions supported the right of the UDM to exist in the coal industry. The intransigence of the NUM in refusing to face the situation that exists means it is trying to override the right of the UDM to exist. I regret that the Opposition do not support this Bill, because it will give proper rights to people who work in our coal industry.
  I should like to see the return of total normality in the industry and I hope that that feeling is shared by every hon. Member. The Opposition refuse to acknowledge the true situation in the industry and continue to look back to what it was. They should accept the situation that exists and if they do not do that, the progress that we all want will not occur. The change of name to British Coal will make coal easier to sell. In the past, the marketing department has had problems and the way in which a product can be marketed makes a great deal of difference.
  Undoubtedly, great opportunities lie ahead for the coal industry and they exist in spite of the National Union of Mineworkers, not because of it, because that union has damaged the opportunities for British Coal. It caused damage to the philosophy of marketing the product. It is important that coal is sold to the big customer, the CEGB, but it must be sold also to other industries, because by doing that sales of coal can be increased.
  It is vital that a supplier should be able to promise continuity of supplies. It was a great tribute to British Coal that throughout the dispute it managed to ensure that all its industrial customers were serviced. That is the greatest marketing point that the marketing department can put over. It was important that those industries which used coal were able to get supplies. If supplies had failed, those customers which we all accept are so important, would have gone elsewhere. They would have done that if coal had proved an unreliable energy source. Continuity is important to industry.
  I hope that, although it is late in the day, the Opposition will reconsider their opposition to the Bill and see the error of their ways. If they truly want a coal industry with some continuity, they will support the Bill.
  6.59 pm
  Mr. Michael McGuire: The hon. Member for Elmet (Mr. Batiste), among others, has spoken of the militancy of the miners. He also made out a good case for a co-ordinated energy policy, which we would welcome.
  Many years ago, when, like me, my hon. Friend the Member for Midlothian (Mr. Eadie) was on the Back Benches, the militancy of the miners was always raised. In 1919, we had what was known as the Sankey commission because the whole industry was in one hell of a mess. Sankey recommended that, if we wanted a prosperous coal industry in the longer term, there would have to be public ownership. He offered miners a charter.
  The charge about miners' militancy is answered by the fact that even when they had total power in their hands, they did not achieve the miners' charter which was suggested in 1919. Many of the pioneers of public
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  ownership were miners. We are a declining body in the House and will decline further. It can be seen in the annals of the Labour party, a party that the miners did as much as anybody else to found, that whereas we once had 56 Members of Parliament, we are now down to 15. They had complete power in their hands, but when the militants said, "Eh, lads, why are we not trying to get what was laid down by an independent commission in 1919?", they replied, "To achieve that will probably be at the nation's expense and we should put the welfare of the people first. We can pull down the temples of nationalisation but we have more to gain from them than anyone else."
  The weakness of the Bill is that it does not address the nation's energy requirements as part of a well thought out policy. I thought that the hon. Member for Elmet said that, too. If we consider the Government's tactics, it is clear that what they are really saying through the Bill is that coal is expendable. One could be forgiven for thinking that coal is regarded as the cornerstone of Government energy policy, to judge from their words, but I do not believe that the Government are planning that way. The Bill is a knee-jerk reaction. Events have overtaken the Government and they have had to introduce legislation to match the situation.
  As my right hon. Friend the Member for Salford, East (Mr. Orme) said, if the Government really had the welfare of the coal industry at heart, as they pretend, there would have been more attention to the coal conversion scheme. The hon. Member for Derbyshire, West (Mr. McLoughlin) said that he hopes that the scheme will continue because it has been successful. Every other press release issued by the Under-Secretary of State tells us about all of the successes and that huge industrial concerns are finding it cheaper to convert to coal. I hope that the Minister will tell us that that scheme will continue and that its absence from the Bill should not be taken as an indication that the Government will abandon it.
  I am sorry that I missed the speech by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse). We feel that the attempt to achieve a leaner, fitter and smaller industry is really an attempt to make it more attractive to potential private owners. The industry has not been in public ownership for long. Vesting day was 1 January 1947, so we are about to celebrate its 40th birthday. Before nationalisation, it was, in every sense of the word, a bloody industry. Like clockwork, 1,000 men were killed each year because it was run privately and profit was the king. Safety came a poor second.
  Conservative Members will have a job persuading the country. We have heard a lot of election speeches today. Those lads are a bit quick out of the traps chasing that hare. The lady who is referred to as Maggie might have Conservative Members hanging on, and I am not certain that they will all come back. They have all been polishing their election speeches today and having a bit of fun.
  Mr. Neil Hamilton: The hon. Gentleman will not be back either.
  Mr. McGuire: No. I am one of the casualties of life. Politics is full of ups and downs and mine is down at present. I am an optimist by nature, though.
  Conservative Members have sharpened many of their election speeches on the Union of Democratic Mineworkers/National Union of Mineworkers conflict. It seems silly that Conservative Members cannot wait to

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  offer the industry to the public. One of the most enduring Conservative principles is that any big industry should be privately rather than publicly owned. I hope that they translate that enthusiasm to an industry which tends to undermine the case for the coal industry—the nuclear power industry.
  I prophesy that there is no way in which the nuclear power industry could be sold to private capital. Although it is an important source of electricity in America, not one nuclear power station has been ordered since the Three Mile Island affair. It did not take Chernobyl to bring about that attitude. They would not touch nuclear power with a barge pole because of the costs and dangers.
  Research by the coal industry and the Central Electricity Generating Board on fluidised beds is jointly funded. I do not know whether we would argue for total Government funding, but we definitely want at least parity with the nuclear power industry on hidden costs. The idea of removing from the public the threat of miners' militancy, and the desirability of having an energy source which cannot be prejudiced by such action, comes through in Ministers' speeches. I want people to say why we should privatise the CEGB and its nuclear power element. There would be not one taker.
  We all want a profitable coal industry. Nobody has said so far how well our mining machine manufacturers do out of a steady base, but if that base is eroded, their chances of competing successfully, as they do now, will be severely weakened. Mining machinery is one of the jewels in our export crown. I am bound to have a last fling at nuclear power. I should love to know how many nuclear power stations we have exported. When we debated that matter many years ago, one of the prizes offered was the prospect of exporting nuclear power stations all over the world. In fact, we had to give away one of those nuclear power stations and no one would touch the other one that we offered. If the hush telegraph is correct, it appears that we are going for the American system and the go-ahead will be given for Sizewell.
  Mr. Lester: Will the hon. Gentleman give way?
  Mr. McGuire: I did not intervene earlier, although I was tempted. I would like to press on. I do not refuse to give way out of any discourtesy to the hon. Gentleman; he knows that I have a high opinion of him as one of the more rational of the Nottinghamshire Members. I would not say that he is the only rational Nottingham Member, but he is one of the few.
  We must remember that a profitable and bigger coal industry will be the necessary base for the mining machinery manufacturers. I declare an interest as I am associated with a plant on the fringes of my constituency. That plant is doing wonders. We should pay more attention to the mining machinery manufacturers and realise that it is a necessary ancillary of a profitable coal industry.
  I wish now to discuss the burning issue of the Union of Democratic Mineworkers and the National Union of Mineworkers. I differ from a number of my colleagues in that I believe that the strike should have been confirmed by a ballot. The bedrock of the NUM was its steadfast allegiance to the ultimate test in democracy. That allegiance commanded the attention, almost the admiration, of the country, even though the public sometimes suffered from that will as expressed at the ballot box.
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  There have been only two strikes in the coal industry in all the years that I have been a Member of this House. I was born on the day that the general strike began—3 May 1926. From then on the union was shackled with too high a proportion required for a successful ballot. The figure was 66⅔ per cent.—an absurd requirement. I believe that 55 per cent. is more in keeping because a bare majority creates difficult arguments on the margins. A proportion of 55 per cent. leaves a gap of 10 per cent. to 45 per cent. However, there have been only two strikes—in 1972 and 1974 respectively. I regret very much that we did not heed the common sense that was emerging then.
  When Conservative Members rile and ridicule the connection between the mining industry and the Labour party, they do a disservice to their own intelligence. There is an umbilical cord in that connection. Conservative Members will know from other debates that sometimes parties are tied in a way that makes them less free than they would like to express themselves on a specific issue because of historical or other connections. There is no doubt that we were inhibited in the British Labour and trade union movement.
  There was an essence of solidarity in the Labour and trade union movement, and the unflinching solidarity of the striking miners caused people to suffer dreadfully for 12 months. There were doubts among Labour Members as to whether the exercise had been entered into in the best possible way.
  After the next general election I will take from this House the memory of the generosity of my colleagues in the mining group, the trade union movement and the parliamentary Labour party. There was no ostracism, although they disagreed with me when I stated my views clearly in the PLP. I expressed my views in my constituency PLP, which was a more difficult task as striking miners were present who thought that my speech was the most dreadful that they had ever heard—especially from a Member of Parliament sponsored by mineworkers.
  Th consequences of the conflict between the NUM and the UDM are with us today. I told Sir Robert Haslam—and if I meet him again I will repeat this point—that the conflict is not one that he can solve. He has to react to the events as they are now. Miners such as I, who came from the coalface, and my hon. Friend the Member for Bolsover (Mr. Skinner) and my other hon. Friends, who became branch secretaries, did not have to read about these matters in books, to solve the conflict. We enjoyed the confidence of our fellow men and became pit secretaries and standard bearers—not for the miners, but for the Labour party representing that particular section of the trade union movement. It is our duty to hold out the hand of friendship.
  There is one swift way in which the UDM will almost wither on the vine, and that will be a good withering. The NUM must say that there will never again be a strike without the test of a ballot. That was the raison d'etre for the emergence of the UDM. It is not in the interests of the NUM or the UDM that the conflict should continue to worsen like a festering sore.
  There are those who argue that the conflict is diminishing. There must be severe tugging at people's heartstrings: many miners are members of mining communities and their fathers' fathers and their relatives were members of the NUM and often occupied high positions. Anyone who has a mining connection—even

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  if that can be traced back to a grandfather or beyond—must realise that there is a great pull of loyalty. There is a comradeship in the communities that extends beyond the ordinary boundaries of most other associations.
  This is a deep conflict for the UDM because, in a sense, its members are betraying something that they once held dear. They have done that for a good reason and I would not castigate them for that. I was attacked by many people in my constituency when I refused to join the condemnation of the UDM and claim that its members were scabs or blacklegs. There are technical meanings for both those words and they did not apply to the Nottinghamshire miners or to any other group of miners who, following a ballot, followed the direction of that vote.
  I do not believe that there is any profit to the Labour party or to the mining unions in the conflict, which is a festering sore. Together we should hold out the hand of friendship. We should say that we have more in common than divides us. The conflict is in the interests of those who do not have our welfare at heart and who want to see us divided. The sooner we can bring about the reconciliation the better.
  My right hon. Friend the Member for Mansfield (Mr. Concannon) made a wonderful speech—and wonderful speeches are not always those with which people agree. I like to see the man who goes into a hostile audience, says what he really believes and commands attention and admiration. My right hon. Friend's record speaks for itself. He was in a difficult position. My position was less difficult, but we must battle on.
  This will probably be my last speech in a coal debate and it may even be my last speech in this place. Although I anticipate that the Prime Minister will say that she will hang on for some time, for obvious reasons I feel that political considerations will dictate the date of the election. I think that the election will be sometime between June and October 1987, so this will probably be my last chance to address my colleagues on both sides of the House.
  I want a reconciliation and my aim is not to say or do anything that will make that less likely. I ask my friends in the NUM to consider how to achieve that reconciliation. Although I have no influence, those with influence with the leadership of the UDM must explain that the best interest lies in reconciliation because the UDM will have proved its point. If that influence is exerted, the united opposition of the NUM, the UDM and the Labour party will prove that this is a flawed and short-term Bill. The Bill is not in the long-term interests of the coal industry.
  We may argue for tactical reasons whether to vote only for the reasoned amendment, but whatever happens I believe that the Bill will be put to a searching test.
  7.19 pm
  Mr. Phillip Oppenheim: I support the Bill as the only realistic way forward for the coal industry in Britain today. Fundamental changes are taking place in the industry which are making coal less of a burden to other industries and less of a burden to the domestic consumer. The changes are long overdue, and many of them are reflected in the Bill. In the past, fear of the unions has prevented such changes. To explain the current opposition to the changes that are enshrined in the Bill I
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  shall delve briefly into the history of the industry. I make no apologies for doing that because the coal industry, more than almost any other, is a prisoner of its history.
  Conservative Members must recognise that we are seeing—in many ways represented by the opposition to the Bill from Opposition Members—the legacy of the many years of severe exploitation which occurred in the coal industry in the 18th and 19th centuries. In the 20th century, that exploitation created in Britain mining communities which were almost self-contained, self-centered tribes which were alienated and apart from the rest of society. Miners were opposed to the management because of the suffering and the tribulations of their forefathers. Those mining communities were proud of their achievements. Despite fighting underground against the elements, and on the surface against appalling conditions, they banded together and built their communities into something to live for. That was the basis of the wagon circle mentality of many mining communities—a mentality that was so cynically and tragically exploited by Scargill and the NUM and represented by Labour's refusal to support the Bill.
  Those backward-looking attitudes were mirrored and fostered by many generations of appalling management in the industry. In the 1920s there was still no formal training for British rank-and-file miners compared with the position in Germany, where miners had two years compulsory part-time training. By 1941 only 63 per cent. of coal in Britain was cut mechanically, compared with 97 per cent. in the Ruhr in Germany. In 1938 Polish mines were 59 per cent. more efficient than British mines.
  That appalling degeneration in the coal mining industry was reflected in an abhorrent strike record. Between 1929 and 1938, 2 million days a year were lost as a result of strikes. Of the insured working population, the 6 per cent. in the coal mining industry accounted for a massive 64 per cent. of the strikes. Even during the last war, in 1944, 1·64 million man days and 22 million tonnes of coal were lost while we were battling against Hitler on the continent.
  Such is the appalling legacy that we have inherited that, in 1945, a politician was moved to write:
  "What statistics cannot record, however, is the persistent guerilla warfare which continues in the majority of pits between management and men…Taking the country as a whole, probably half the pits are kept in existence by the other half…In fact, by 1944, economic laws had ceased to apply in the industry."
  That politician was Harold Wilson, writing in "New Deal for Coal". That appalling legacy explains why, since the Coal Mines Act 1931, social and political considerations have outweighed economic ones, to the long-term disservice not only of other British industries or the country as a whole but of the coal industry.
  Such has been the failure since the war that of 750,000 jobs which existed in the mining industry at the end of the war, fewer than 200,000 were still in existence by 1979. It is perhaps ironic that a majority of the closures took place in the years of the Wilson Government. Indeed, in my constituency, 12 mines were closed and 15,000 jobs were lost during the period of the Wilson Government. Those jobs were lost with appalling redundancy terms being offered. My constituents did not forget that recently. The Labour party's twistings and turnings, and its contortions in refusing to condemn violent picketing and refusing to support the democratic aspirations of the UDM, may have

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  lost any last vestige of moral authority and political respect that the Labour party of old retained in many parts of the midlands.
  The 1984–85 strike was, in many ways, the last atavistic thrashings of the old way of doing things. It is sad that such energies as were expended during that strike were turned in upon ourselves and against our countrymen rather than against our overseas competitors. Most people now realise that the old attitudes which may have been justified in the past only lead us backwards and that only high productivity and a high efficiency industry can guarantee jobs.
  It is unfair to burden other industries with high energy costs. Recently I visited a dye works and a hosiery manufacturer in my constituency. I was surprised when the trade union leader in that works told me that, during the previous 20 years, he had been appalled at the high energy costs which his company had to pay and which had definitely resulted in a loss of competitiveness and a loss of jobs in his industry. Jobs were being lost in one industry to pay for the jobs in the coal industry.
  The NUM has no right to expect the rest of industry to bail it out indefinitely. Labour Members sitting comfortably here have no right to expect men to dig holes in the ground in difficult conditions at the taxpayers' expense just to satisfy their 1930s ideals of industrial machismo. Most people realise that. UDM members realise that. Only Scargill and the Labour party still refuse to accept those facts and the right of the UDM to exist and to be represented.
  That is why the Labour party's views are becoming increasingly marginalised, not just ideologically, but by the facts. The facts are that, in the past, the industry slipped inexorably downhill, achieving the not inconsiderable double of losing jobs and costing taxpayers' money at the same time. In contrast, the industry is now investing record amounts, paying record wages, achieving record productivity and, above all, producing energy for consumers and industry at a lower cost than before.
  Those inescapable facts explain the backward-looking views of the Labour party and the NUM and their contortions and blind refusal to accept the logic of progress. Nothing demonstrates the Labour party's head-in-the-sand mentality and its undemocratic, authoritarian views more than its refusal to accept the UDM and its refusal to admit the tremendous progress which has been achieved in the industry since the end of the strike.
  7.28 pm
  Mr. Peter Hardy: The hon. Member for Amber Valley (Mr. Oppenheim) will forgive me if I do not follow his argument. I wish to refer to the speeches of my hon. Friend the Member for Makerfield (Mr. McGuire) and my right hon. Friend the Member for Mansfield (Mr. Concannon).
  We all wish to see the back of this appalling and disreputable Administration, but if the Prime Minister stays in office a little longer, we may at least be allowed to hear my hon. Friend and my right hon. Friend make further speeches. They seemed to think that their speeches this evening were their valedictory ones. At least after the next election my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) will be with us, unlike some of the Conservative Members who are here tonight.
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  I shall be grateful to see him and others who hold the same views, because the argument that he advanced this evening is important.
  I do not propose to make a long speech and repeat some of the points that have already been raised. They require a serious response from Ministers, not least those referring to the financial position of the National Coal Board. None of us object to the financial provision. The reason for the Opposition's criticism of the Bill is clearly stated—it will pave the way for further contraction. I shall say a word or two about that in a moment.
  There is little serious argument about the provision of funds to maintain the National Coal Board's viability. Indeed, when the last measure was before the House, I suggested that it was a trifle optimistic. It was more designed to reflect Sir Ian MacGregor's stewardship as being successful than to provide for the long term. We expressed serious concern about that at the time. Perhaps Ministers did not pay close enough attention. Perhaps Ministers are a trifle schizophrenic in their approach to the coal industry. The Minister will understand why I say that. We heard today from the Secretary of State and some Conservative Members about how well the coal industry is doing. They are seeking to bask in the industry's achievements. The fact remains that, at the same time as basking in the record achievement, the Government are remarkably inactive, inert, in ensuring that commercial success is achieved.
  How much energy have the Government put into going to Europe and demanding a fair share of the European coal market? How much energy have the Government put into their arguments that Europe should not develop a dependency on dumped coal from eastern Europe, which is sent to Europe at any price? Eastern Europe will always undercut our price, so desperate is its search for foreign currency. How much energy have Ministers put into resisting the importation of South African coal? That coal is mined in conditions that would not be regarded as tolerable in this country, not even by some Conservative Members who might like to be coal owners again.
  On the question of South Africa, I ask the Minister to pay particular attention to information that I have received during the past two days. Indeed, I mentioned this point yesterday during questions. That information shows that South African coal is being brought into Britain in a rather furtive manner, taken to a private coal mine in the north of England, and then, again furtively, taken to the National Coal Board's establishments in the midlands where it is mixed with opencast and deep mine production—again furtively—so that, at the end of the day, no one knows that the NCB has imported South African coal.
  If greengrocers have to label their oranges as coming from South Africa, if Barclays bank—not an institution which has always been admired on this side of the House—has pulled out of South Africa, we are entitled to be rather firm in our requirement that the Minister examines South African involvement with the NCB. The Minister has heard me on this subject before, because the board's structural involvement appeared to be rather doubtful, dubious and suspect a couple of years ago.
  No doubt the Minister will talk about British Coal Enterprise. I, like my hon. Friends, will not criticise it. I am pleased that in Bolton road in Wath-on-Dearne in my constituency workshops have been established by British Coal Enterprise. It is a highly desirable development and the people involved in it have done an excellent job.

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  Nevertheless, the Minister must understand that the scale of job slaughter in my constituency and in those of my hon. Friends means that, welcome though the development is, it can be dwarfed by a single decision of the National Coal Board.
  I was grateful for the fact that the Labour Government established a similar scheme for the steel industry in the late 1970s. Such bodies can make a contribution, but they cannot be used as an excuse for further slaughter of our economic prospects. The Minister and Conservative Members should understand that this is only a small country, and if we inflict desperate and severe wounds on some of our communities, it means that the whole body politic is not sound. The damage could have lasting consequences, and it sometimes is not especially economic.
  The Government must recognise the logic of the achievement of which they boast. They must ensure that British Coal is able to secure markets. We believe that the industry has moved dramatically towards competitiveness, but the Government need to demonstrate that they cannot and will not require British Coal's competitiveness to be set against coal produced by abused or slave labour, or coal available from countries in need of currency. I trust that the Minister will make it clear that British Coal will not be expected to be competitive with both hands tied behind its back.
  On 22 October 1979—almost eight years ago—I tabled a parliamentary question on the future of coal technology. In reply, the then Under-Secretary of State said:
  "Advanced coal technology developments are taking place in the fields of fluidised bed combustion, gasification to yield substitute natural gas and fuel gas, and in the production of oil from coal. In fluidised bed combustion, the NCB and private industry are pressing forward with the development of industrial boilers and furnaces."—[Official Report, 29 October 1979; Vol. 972, c. 381.]
  The Minister nods, but the fact remains that reference has already been made to the proposal that there should be two coal-fired power stations. Yet the development of fluidised bed combustion, which has taken place in Yorkshire under the auspices of the IEA, is being developed commercially in other countries, not here. That is once again a sad demonstration of Britain's inventiveness, with the failure of British political institutions to capitalise on that intellectual achievement.
  It is not good enough for the Minister to allow the Central Electricity Generating Board, which was involved in the research, not to be prepared to embody that research in new coal-fired stations. I trust that the Minister will have the backing of his hon. Friends.
  We also need to demonstrate that British Coal will remain a compassionate organisation. Unlike many industries, it has to recognise community responsibilities. I am sure that the hon. Member for Broxtowe (Mr. Lester) appreciates that. Unfortunately, in the last year or two some very hard decisions have been taken. I know of one man—a workmate of my father—who, at the age of 78, had to give up his bungalow and move into an old people's home. There, at Winterwell house in my constituency, he was properly cared for. After a little time, at the age of 79, he became robust and healthy again, returned to normality and married.
  On that man's marriage, the local authority said that he could not stay in the old people's home and gave him
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  a flat. Before he entered Winterwell house he had received a concessionary coal allowance, and when he went into the flat he hoped to receive it again, but the NCB said no. I said to the NCB, "But surely you rejoice at the reactivation of this once long and faithful servant?" The NCB still said.
  It appears that if the man had moved to a house that burned coal he could have been provided with coal, but as the council could only offer him a flat with gas heating he could not have an allowance. What the NCB was basically saying was that had he had a couple of tonnes of coal dumped on his doorstep first, he could have converted to a cash allowance. For the NCB to take that attitude to a faithful and long-serving employee—a man of 79, who was returned to the land of living; who, one might say, cocked a snook at the concept of mortality—was very insensitive.
  That sort of inflexibility developed with Mr. MacGregor—this might offend one or two Conservative Members—when the principle of deception became almost acceptable. It developed with the strike—the result of a contrived connivance. Conservative Members cannot deny that, when Cortonwood was proposed for closure five weeks after a promise that it would have five years' more life. It was at that point that some of us became convinced that when the strike was over the NCB's first task would have to be to try to restore morale and establish co-operation. There are still grounds for deep suspicion. I do not criticise the present chairman, but some of the gentlemen with whom Mr. MacGregor surrounded himself have to learn that the MacGregor fashion will not persist.
  I am deeply worried about safety. My hon. Friend the Member for Pontefract and Castleford referred to the anxieties concerning my association. Although the Minister may claim that it is not a direct part of the Bill, it is a relevant aspect of the matter. I trust that the Minister, in his reply, will offer comments that satisfy those serious anxieties. I hope also that he will not be as partisan as the Secretary of State was, but will recognise that we should seek to take real steps to re-establish a happier atmosphere within the mining industry.
  We must have reconciliation. The petty, partisan approach adopted by hon. Gentlemen opposite is not at all helpful. I know that they cannot resist the temptation to try to cling to their seats, but the wiser, more mature approach adopted by the hon. Member for Broxtowe will serve as a better model than that adopted by the hon. Member for Sherwood (Mr. Stewart). It is a model that should transcend narrow, short-term party political considerations. The Opposition do not criticise the Bill because of such considerations. The Opposition adopt this attitude because our areas have suffered quite enough. We cannot afford to support a Bill which would make matters even worse.
  7.40 pm
  Mr. Den Dover: I support the Bill. I welcome the giving of rights to the second largest mineworkers, union. It is wrong that the National Union of Mineworkers has had a monopoly in democratic rights.
  I wish to speak particularly about opencast mining. Over the last few years, whereas opencast mining produced about 14 million tonnes or so per year, as a percentage of the total output it rose from 12 per cent. in 1978–79, to 13 per cent. in 1982–83, to 15 per cent. in 1983–84, and in

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  1984–85, the year of the strike, to 36 per cent. During 1985–86, opencast output has been 16 per cent. of total output.
  We have heard a lot of talk about the activities of deep mining, yet we are in danger of forgetting opencast mining production. I should like to complain about the omission from the Bill of any movement towards privatisation and deregulation. The Opposition's amendment states that the Bill
  "sets the scene for privatisation of the industry".
  I only wish that it did. We should go further.
  I am the parliamentary consultant for two opencast mining contractors. We should allow them more scope to make their expertise and techniques available to the overall interests of the consumer in the country. For example, mainly a civil engineering operation takes place. Coal is extracted from seams as thin as a few inches—perhaps up to a few feet. This procedure is carried out in strong competition with deep mining methods. These firms have expertise in exploration and in bidding for areas of mining deposits around the country that could make the operation more efficient.
  I do not condemn or criticise the activities of the opencast mining executive within British Coal. It has some first-class officers, particularly George Lindley, who is in charge of the operation. We should allow private firms to have more scope to extract coal. We tend to treat private mines—drift mines—as the poor relation, as a small production unit, yet coal is to be gained, particularly where old deep mining activities have ceased. Through privatisation and profit motivation, which have been criticised by Labour Members, a lot more coal would be won in the interests of the consumer and at cheap prices.
  Therefore, the Bill is deficient. I hope that, in the next few years, we shall see more steps taken by the Conservative Government—perhaps in their next phase of office—towards privatisation and deregulation. At the moment, the monopolies held by British Coal and the largely unionised work force are too great. Opencast mines and private mines, which have a large union membership, have something to show.
  I hope that the Minister will remember the interests of opencast mining and will recognise that we could do something in future to make it more effective and more cost efficient in terms of production and the interests of consumers. It will also stop the increasing importation of coal. That will be in the interests of the country.
  7.46 pm
  Mr. Michael Welsh: I do not support the Bill. The financial aspects of it have not been thought out properly. The Bill does not contain the detail that one should have thought the Government would desire. We do not dispute the fact that there is no substitute for efficiency. I accept that. There is a danger that, if we cut the industry too much, we will be in financial difficulty. The Bill may aim to do that. The result would be a contradiction, as has been said by Conservative Members. It is a possibility.
  Clause 2 of the Bill provides £200 million for deficit grants. That sounds like a lot of money. In 1984–85, the amount was £2·25 billion. When we examine the figures in that light, we will see that the amount provided is low.
  Mr. David Hunt: Will the hon. Gentleman acknowledge that, in 1985–86, the loss was £50 million?
  Mr. Welsh: I accept that. It was a mistake to drop it to £50 million. The money was needed to make the industry efficient and enable it to stand on its own two feet, as the Minister desires.
  Clause 3 mentions an amount of £750 million. Basically, that money is provided to close pits and to cause miners to be unemployed. The aim is not only to close pits but to reduce production. That will be one of the difficulties for the Government.
  One or two of my hon. Friends have said that, if the result of the Bill were to reduce production to about 90 million tonnes, the price of coal would increase. The Government will not reduce the price of coal unless they write off all the debts of the pits that they close. That is the only way in which it can be done. If the Government do not do that, unit costs will increase, and that will mean an increase in the cost of coal. An increase in productivity and a decrease in production will lead to a loss. Fewer units will have to carry a larger industrial debt. This is now a capital intensive industry. The wage bill does not represent a great deal, but the level of capital investment represents a terrific amount.
  Demand for coal might be for 90 million tonnes. If supply is brought down to that level and the authorities say that they will supply only that amount, the coal industry and the country will be in a difficult position. If there is no surplus capacity, supply cannot be increased. There is really only one shaft—all the shafts in the country put together. If that shaft is closed, the capacity to produce is lost, and the supplies needed will not be available. That is the great difficulty into which we will run.
  One cannot just open a pit. It is not like opening a factory. It takes between 10 and 15 years to get a pit into production. Even in the 1930s, when rotten coal owners were running the industry and the industry was much rougher than it is now, the mine owners always kept excess capacity. In my village of Bullcroft the people once worked only three days a week. There was surplus capacity then. I started work in 1939. We were glad, when the war came, that we had the surplus capacity to use to win the war. It was important that we should satisfy the demand.
  If supply is reduced to the level at which it just satisfies present demand, we shall not be able to increase supply later. It is important always to ensure that we can increase demand at a given time, and that means carrying surplus capacity. In the meantime, we must fight for overseas trade and get more people to buy our coal. It is better to do that than to be caught short.
  Clause 3 will close pits, destroy communities and increase unemployment in mining areas. My pit, Bullcroft, has closed. The workshop at which my brother was secretary has closed also—perhaps because he was involved! Four hundred jobs have been lost. We have nothing to work on. We now have British Coal Enterprise. To be fair, about nine people work in its office.
  This legislation will force job losses on other businesses. It is doing something else that is frightening. If the demand for coal increases and we cannot meet that demand, we shall have to import coal, thereby exporting miners' jobs. That is terribly depressing. The Government have thought about the industry in the short term rather than the long term.
  I think that enough has been said about the review procedure, so I shall be brief. The Secretary of State said that the National Coal Board would give full weight to the

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  findings of the review bodies. When the review bodies decided that pits should be closed, the NCB gave "full weight" to that decision, but when they decided that pits should be kept open, the NCB closed them. The NCB has treated with contempt the chairmen of the review bodies. The NCB set up the review bodies, asked them to make recommendations and then completely ignored them. The Bill will make matters worse. Not only will "full weight" not be given, but the findings will be weightless.
  Under this legislation, the Government are saying, "Here is £750 million, but you must close pits and sack men." In effect, the Bill instructs the National Coal Board to sack men. The Government are saying that the board can have the money only if it cuts down on the number of workers. In other words, it can have the money only if unemployment is created in mining areas.
  There are some omissions from the Bill. The Government might say, "This is the National Coal Board's doing. It is not to do with us." But they say nothing about the miners who were sacked. I should have thought that a compassionate Government would include a provision whereby the board would consider individual cases and, if the board found that everything was all right, miners would get their jobs.
  It is embarrassing that the Bill is carrying on the strike. We are trying to smooth everything to make the industry efficient and have forgotten about the strike, yet the Government are carrying it on.
  Mr. Ottoway: If the hon. Gentleman wants to extend this hand of harmony across the divide between the two unions, is he saying that he supports the proposal in the Bill to allow the Union of Democratic Mineworkers participation rights?
  Mr. Welsh: I am not saying that. I am being fair. I am talking about other clauses. I do not think that Acts of Parliament help. If I fell out with my wife and an Act of Parliament said that she had to come back to me, she would just throw it away. People must become involved and talk about the issues. That is not done with Acts of Parliament. The only good thing is that, within the next 12 months, we shall be in government. We shall introduce a coal Bill which is good for the industry, the miners and the nation. The nation deserves a better coal Bill.
  7.57 pm
  Mr. Martin M. Brandon-Bravo: I associate myself with the tributes paid to the right hon. Member for Mansfield (Mr. Concannon). His brand of integrity will be sorely missed in this place.
  I believe that the public at large will be surprised that the present law does not give all employee organisations fair participation in the management of trusts, welfare organisations and superannuation schemes. Therefore, the Government are right to correct an omission that is unacceptable in a democratic society.
  It must have come as a surprise to the present leadership of the main union to find that democracy is not the overbearing power of a majority to do just as it wishes; nor does it allow a minority to exercise unreasoned restraint on the legitimate aims of a majority. Democracy is a difficult and delicate balance. It must provide for the rights of minority views and, in this case, a substantial minority. Clearly, the present NUM leadership does not
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  subscribe to the sense of balance or democracy as we understand it. Therefore, I believe that the Government are morally bound to ensure the protection of a reasoned and reasonable minority in the provisions of this Bill. Of course, it is convenient if an employer does not have to negotiate with a multiplicity of unions. The problems of leapfrogging in wage negotiations or blocking tactics in the area of welfare and pensions are well documented. If the circumstances do not exist for a single union—they no longer exist in the mining industry—there must be a provision to deal fairly and justly with the new situation.
  In the debate on the Gracious Speech, the hon. Member for Newport, East (Mr. Hughes) expressed pride in his family heritage in the coal industry. I do not believe that he did any service to the industry now or for the future to describe decent, law-abiding citizens as scabs. A total of 30,000 decent families in Nottinghamshire who exercised their democratic right to vote and who were denied the proper fruits of that vote were not acting as scabs. That label is an affront to the basic dignity of all those families. Nothing could underline more the Labour party's rejection of the rule of law and the rights of people within a democracy. Its values are those of a totalitarian, state unionised society which would be rejected by the overwhelming majority of our people.
  I welcome most warmly clauses 5 to 8 dealing with representative participation. That the Charity Commissioners can respond to the just submission from employee groups otherwise excluded is patently fair. Equally, the power granted to the Secretary of State to enable full participation in a relevant social welfare body surprises only by its absence from the industry now. Perhaps most important is the right under clause 7 to allow the provision for participation in the superannuation scheme.
  The Labour party's general attitude to pension funds needs a higher profile than hitherto. One would expect that funds should be managed with the prime objective of providing the pension and other benefits to which the contributing employee rightly feels entitled. That entitlement may not be carved in the proverbial tablets of stone, but it should not be hostage to the amateur chicanery of the exponents of social engineering and so-called good works.
  Those may well be right and proper subjects for political debate and decision in the House. However, they are not matters that should deter fund managers from acting in the best and absolute interest of the beneficiaries, be they employees or their surviving spouses.
  It is appropriate to comment on the years ahead. It seems plain and simple common sense to have attainable targets for this industry, just as for any other. To aim to break even and reach commercial viability by 1990 is neither pie in the sky nor an objective that should be viewed in fear. The absence of targets that are hard to achieve, but genuinely achievable none the less, is a recipe for sloppy management and sloppy working practices that ultimately draw on national resources that are better used and in great demand elsewhere in our economy. There surely must be greater pride in working for a corporation that makes a margin of profit, that can invest without a begging bowl and avoids the constant conflict of interest when in this place we have to decide between competing claims on the national purse.
  Yesterday, I asked a question of my right hon. Friend the Secretary of State for Energy. I was content with his

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  answer and accept that money is not a brake on the work of the enterprise company. However, I want to underline a public concern. During the terrible strike there was little sympathy for the anti-democratic and totally alien behaviour of the bully boys directed and encouraged by the NUM leadership. I believe that there was considerable sympathy for the communities which were clearly threatened by the changes which most, in their heart of hearts, knew were inevitable and necessary.
  The question what the Government would do for those people was a commonly expressed concern by those outside the mining areas and was a nagging pull on those who were in good long-life areas facing charges, in my view unfairly made, of "You're all right, Jack." I hope that British Coal Enterprise maintains a high and positive profile. I believe that the Secretary of State was absolutely right to pour scorn on a Labour party that did very little in that area when it had charge of the process of change. That process of change will always exist in an extractive industry.
  My hon. Friend the Under-Secretary of State in June of this year made it clear that we would not let down a democratic trade union in a fight for fair representation. The treatment of Nottinghamshire miners and others of like views has been nothing short of shameful—by the NUM, the TUC and especially the Labour party. The Labour party is in no way deserving of the support many of those lifelong members still wish to give. The party affiliations of those Nottinghamshire men is not our concern. Our concern is that they receive the justice from this place to which they are rightly entitled. I use the words of my hon. Friend the Under-Secretary in June that it would be outrageous and an affront to natural justice if we did not deliver this legislation on their behalf.
  8.7 pm
  Mr. Allen McKay: We are coming to the end of a long debate. As usual in mining debates, it has been interesting and many important points have been raised. Coal legislation is normally given a three-hour debate late at night. When we have a full day in prime time it shows the importance attached to this Bill by the Government and the Opposition.
  The hon. Member for Amber Valley (Mr. Oppenheim) gave us a text book talk on the mining industry and the problems it has faced. In three quarters of his speech he justified why we should vote against the Bill. Whether he knew it or not, he clearly showed what goes through the minds of the people in the mining communities when they see this Bill.
  I am a member of the British Association of Colliery Management. I can tell the Minister that most members of that organisation will be voting Labour next time. They realise that this Bill puts their jobs and their industry on the block along with everything for which they have worked. That is not hearsay but something that has been fed to me and I have no reason to disbelieve it.
  The hon. Member for Amber Valley also criticised the situation as he finds it. He, above any hon. Member, should realise what happens to an industry when one encourages foreign imports.
  The hon. Member for Chorley (Mr. Dover) spoke about the privatisation of opencast mining. There is no doubt that if privatisaton comes about, opencasting will be the first on the scene. I can say to the Minister and the hon. Member for Chorley that if they want opencasting,
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  by all means let them go ahead. However, let it be on their patch. We do not want it on ours and we shall certainly not have it. Opencasting by its very nature is found in mining areas. We have had the problem of colliery closures for many years. In order to attract industry to those areas—believe me, we welcome British Coal Enterprise and wish more would happen—we shall have to create a fresh environment. We certainly do not want to see the opencast mining industry coming to an area in which we are trying to build a new environment that will attract industry.
  The Secretary of State spoke about productivity. We agree that productivity has increased, but the right hon. Gentleman spoke not about bulk productivity but about output per man shift. There are two ways in which that increase in productivity can be achieved: by increasing the rate of output or by reducing manpower while maintaining the same level of output. Of course, there has been a decrease in manpower as well as in the number of collieries, so there has been an increase in output per man shift.
  Investment did not just start in 1979, when the Conservative party came to power. Before I became a Member of Parliament I worked with the NCB, planning investment. Thus, in the Barnsley and south Yorkshire area, we were planning the investment that can now be seen. All credit to the Government for carrying on with the plans laid then, but hon. Members should not go away with the idea that only the Conservative Government invest in industry. The Labour Government invested heavily in the coal industry. After the next election, a Labour Government will continue the investment that this Government have made. However, a Labour Government will not run the industry down but will build it up.
  It is true that the Labour Government had a closure policy, but after nationalisation we had a legacy of small, unproductive collieries that should have been closed years earlier. On nationalisation, the mineworkers immediately accepted that collieries should close, because they wanted to get rid of the problem. The industry has always had to face the problem of colliery closures, being an extractive industry. I can remember, however, when coal was at a premium, and could not be got at any price. It was wanted worldwide. Consequently, it annoys me when Conservative Members say that industry does not owe the NCB anything. In those days, industry owed the NCB and the miners everything, because it lived on the backs of miners.
  During the era of Sir Alf Robens, people came round and patted us on the head, saying "Be good lads. I know you could earn a lot more, but we've got to look after this country's industry, so you can only have sixpence." That sixpence was accepted because the interests of the country and of industry lay at the heart of the miners' policy.
  I entered the industry in 1945, and in my very first week I had a run in with the under-manager. At the time, I did not know that he was the under-manager, and I only found out when I went home for my dinner. My father and sat down for dinner, and he said, "I understand you've had a run in with Mr. Naylor." I said, "Sorry, Dad, I don't know him." He said, "Well, you remember a man with one eye, a limp and a flat cap?" I said, "Yes. He hit me." My father said, "That's the under-manager. You'll eat your dinner and walk down to the pit and apologise."
  My father told me to do that for two reasons: first, he thought it right and proper that I should apologise;

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  secondly and more importantly, he was frightened of losing his job if I did not do so. The Bill will take us back to those policies. I first went down the pit in 1945. I admit that it was a good pit. It belonged to Earl Fitz William, and he looked after it. He looked after the men who worked in it, but he looked after his pit ponies much better. Do the Government want to return to that era?
  It was a proud day for all who worked in the colliery in 1947 when the blue flag was unfurled at the top of the winding tower and a plaque was unveiled that read, "For the people by the people." We got the oldest man in the pit, who was 78 years old, to go up the tower and unfurl the flag, and he then rode down the yard on a pit pony. That is what the industry was like then. He had to work until that age, because there was nothing for him once he stopped working. Provision for retired miners, and so on, has come only since nationalisation.
  The Secretary of State now wants the NCB to change the proud name that it has born since 1947 to the British Coal Corporation, but that will not alter the product. For the right hon. Gentleman to say at the Despatch Box that that is how to sell coal is ridiculous. If coal does not sell, the marketing manager has to be sacked. That is how coal is sold, and not by altering the name. Consequently, we have good reason to be suspicious. The only conclusion to be drawn is that we are seeing the beginning of the privatisation of the NCB and the coal industry.
  The Secretary of State and the Government want to haul down the blue flag and to cover up the plaque. They want to prepare for the Tory dream—the privatisation of the coal industry and the demise of the NUM. That is what they are really after. But the NCB came about because the private owners were incapable of running the industry on a national basis that could provide the material and fuel needed. They were unable to provide the necessary investment that would put the industry into its present condition. It is only because of nationalisation that we have a coal industry today.
  Do the Secretary of State and the Government want to take us back to the pre-nationalisation era, to give the industry back to the private sector on a plate after all that investment and work? It would seem so. The huge capital investment needed to modernise a clapped out industry into one that can take on any coal industry in the world is apparently to be passed over to the private sector, but the NCB is a producer not only of coal but of mining machinery and ideas. It has passed over to industry all its information on research and development. For example, the NCB's research and development on hydraulic supports has been used by the aircraft industry. Mining machinery, along with the expertise of our mining engineers has been exported. Is all that to be thrown away? Apparently so.
  The industry has lost 100,000 men since 1979 as it has been run down. We estimate that the Bill will involve closing about 20 collieries, which will lead to the loss of 20,000 or 30,000 men, or more. I accept that the redundancy scheme is one of the most generous devised, and that many of my constituents will live 20 years longer than if they had worked until they were 65. My father died very largely as a result of pneumoconiosis. If that redundancy scheme had existed then, he might have lived for many more years. However that was not to be. Now, however, the carrot is finished. It was dangled only to get
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  the industry back on its feet and to draw volunteers. As a result, we are looking at compulsory redundancies, with the NCB offering the very minimum.
  The alternative to coal is nuclear power. Today I went to the nuclear symposium, which was very good. A map showed the power stations that the electricity generating industry wishes to introduce as the new generation of power stations. That is quite right, because if we do not start soon, the position will be serious. However, they want to site all the coal-fired power stations on the coast. They are there not for the sake of the environment, or so that people can look over the railings to watch the sea coming in, but to make the importation of coal more efficient.
  Let us consider what has happened over the several years during which coal has been imported. I shall use the Minister's figures. In 1979, we imported 4 million tonnes of coal. In 1986, that figure is 12·3 million tonnes. Coal is coming to this country from every coal-producing country in the world, including South Africa. That is what is happening to the coal industry and those are the contingency measures that the Government are considering.
  I have asked the Minister to consider the problem of concessionary coal and I hope that he has not forgotton it. It involves not only his Department, but the Department of the Environment. I refer to the pensioners, widows and retired miners who, because they are disabled and unable to deal with solid fuel, receive cash in lieu. However, somebody has decided that because they receive cash in lieu, their housing benefit rebate must be reduced by between £3 and £4 a week. We had a debate the other day about keeping people warm in the winter. What sort of person can take £4 a week from those people because they receive cash in lieu? I should like the Minister to look into that.
  In conclusion, it is time that we had an energy policy, and it is time that we looked at the power station problem, because it is serious. It is time that we put down plans or gave permission to build two coal-fired power stations immediately, not next year. Let us look forward to the next 100 years, not the next 20 or 30. We should look forward so that industry knows exactly what is planned and so that we know exactly what we shall generate, what we are likely to need and where it will come from. In that way, we can satisy all requirements of an energy policy.
  8.22 pm
  Mr. David Ashby: I have listened to the debate and wonder why the Opposition oppose the Bill to the extent that they do.
  The first clause changes the name of the National Coal Board to British Coal. The industry has been through a natural evolution and is now successful and paying its way. It has received massive investment and now has high productivity. I believe that it is the highest ever. High productivity is not achieved with low morale. High productivity shows the high morale of the industry. When one considers all those aspects it is clear that change is needed.
  There will be pride in the new name of British Coal because it presents a new public face for a modern industry. I have not heard any substantial speech from Opposition Members that opposes that change of name. Therefore, it cannot be the change of name to which the Opposition object.

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  The next three clauses deal with the financial aspects of the Coal Board. We had hoped that the Coal Board would be financially independent, but that is not the case. Further deficit grants of about £300 million will be required. When I entered the House three years ago we had a debate on the deficit grants—we have had such debates subsequently—and I remember that £900 million was required to make up the deficit. I supported that grant then—as I support it now—because I could see that the Government believed in the future of the coal industry and wanted to put money into it to secure its future. We wanted the investment. I proudly support the Bill, parts of which require and provide for further grants, because I still support the coal industry.
  I should like to know whether the Labour party opposes the Bill because it does not support the coal industry. Does it not want grants to provide for the deficit? That cannot be the case. What is the Labour party's real reason for its opposition? The reason is, of course, to be found in clauses 5 to 8 about which there has been a deafening silence.
  The hon. Member for Makerfield (Mr. McGuire) mentioned the umbilical cord that connects the Labour party with the NUM—about which we dare not speak. That provides a great hint as to the parliamentary Labour party's attitude and opposition to the Bill.
  I come from an area where many pits have run out of reserves. The Labour party's amendment makes no mention of British Coal Enterprise, from which body north-west Leicestershire has received valuable help with injections of finance and the advice. Many former miners now have their own businesses and many miners who were made redundant, or who took redundancy, have jobs in businesses in north-west Leicestershire which owe their foundation to British Coal Enterprise. Those jobs that were created with the help of British Coal Enterprise are still founded on coal board funding.
  When it came to doing something about areas where the mines were closing, my party did something substantial. We never whinged or wrung our hands over it; we went in positively with proposals of financial support. The Opposition's amendment does not even mention that.
  The real basis of their opposition is, as I have said, to be found in clauses 5 to 8. I attempted to ask the right hon. Member for Salford, East (Mr. Orme) when he opened the debate for the Opposition, whether he was "frit" to deal with clauses 5 to 8. The right hon. Gentleman said that he dealt with them. He devoted 30 seconds out of a 20-minute speech to those four clauses. What an outstanding slap in the face for the miners of Leicestershire and south Derbyshire who are members of the UDM.
  It is clear that the Labour party does not care about the many miners who are members of the UDM. It is clear from the amount of time that the right hon. Gentleman gave to that in his speech that the Labour party is ignoring those miners and does not care about their democratic rights. The Labour party does not want members of the UDM to be represented on bodies to which they have subscribed.
  The hon. Member for Makerfield (Mr. McGuire) spoke briefly about the support that he had from the parliamentary Labour party, but he was speaking alone. The parliamentary Labour party might have been giving him support in the House, but the Labour party outside is giving no support to anyone who supports the UDM.
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  The Labour party in the constituencies is determined that any Member who supports the UDM should be dealt with in the same way as the hon. Gentleman and should lose his seat. The real reason why the parliamentary Labour party is opposing the Bill is that it is afraid. Its members are frightened for their jobs. [Laughter.] There can be no other substantial reason why they should do so.
  Hon. Members may laugh, but when the miners of north-west Leicestershire realise that this vital Bill, which deals with their well-being and their future, with the money that they have invested and with their welfare, was dealt with in 30 seconds of pure opposition by the right hon. Member for Salford, East, they will not like the Labour party. I shall have the right hon. Gentleman's speech printed and delivered to every working miner in my constituency. I want them to read the way in which they are being treated by the Labour party. I want them to understand that they have no future with the Labour party which is determined that the UDM should not succeed.
  Why should not the UDM succeed? After all, surely the Labour party believes that people should be free to form and participate in unions. Members of the UDM have done nothing more than that. They have freely come together to form their own union. Why should they be so opposed? It is because of the close relationship between the Labour party and the NUM—the umbilical cord, as it has been referred to. That is why the Labour party hates the UDM. Come election time, I want its members to know that.
  There is no reference in the amendment to clauses 5 to 8 or to the representation on the various bodies by the NUM. For the Labour party, the UDM is officially dead. All that we have heard from Labour Members are speeches which look backwards to the days of inefficiency. They can ask only for a reinstatement of the miners who lost their jobs because they abused and intimidated the working miners who defied Mr. Scargill's illegal strike.
  I am sure that Labour Members cannot disagree that the strike was illegal. It had no official backing. There was no ballot. Those people who refused to participate in its illegality were abused and intimidated and now the Labour party can only table an amendment asking for the reinstatement of those people. In the face of the Bill, that is a hollow and superficial approach.
  The right hon. Member for Salford, East has acted as Mr. Scargill's lapdog. The hon. Member for Midlothian (Mr. Eadie) is to reply to the debate and will no doubt lick Mr. Scargill's boots. The Leader of the Opposition lets Mr. Arthur Scargill sleep on his lap. Only the right hon. Member for Mansfield had the courage to refuse to allow Mr. Scargill to piddle on him. Every Opposition Member is letting Mr. Scargill water upon them. They have allowed themselves to be Mr. Scargill's lapdogs and that is the reason for the opposition to the Bill.
  I support the Bill. Anyone who opposes it is opposing the mining industry—nothing less than that. I shall make sure that the miners of the north-west Leicestershire know that the Labour party opposes the mining industry.
  8.36 pm
  Mr. Lawrence Cunliffe: I oppose the Bill this evening. First, I must declare an interest in that that I am president of the miners' parliamentary group and a member of the national executive of the NUM, and from time to time I am the Labour party's Whip on energy matters. I can say, without fear of contradiction, that

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  many of those who have participated in the debate this evening have done so because they have an expert knowledge of the organisations that are represented within Britain's mining industry. Many of them have good, loyal, efficient, long years of service based on sincerity and a determination for that great industry to succeed.
  First, I am opposed to the financial provisions of the Bill even though the Labour party will not vote againt the money resolution. As an old Lancastrian would say, "If they offer you a bob or two instead of a quid, take it and come back again."
  Today the Secretary of State boasted that the provisions of the Bill were so generous that in return miners would want to show their loyalty and commitment to the industry. But there is a conflict in that. Let me remind the House of some of the things that he said. As a Whip on energy matters, I have known six Secretaries of State for Energy and seven shadow spokesmen and I have never known such political opportunism or such a despicable or disreputable speech by a Secretary of State as we heard today.
  The Bill allegedly contains new financial provisions for the industry. The Secretary of State said that those financial provisions are the most positive to have been put before the House for many years. I remind him that in July 1968 a Labour Government introduced the redundancy payments scheme for miners. That Administration was the architect of the Bill. That Labour Government understood that the industry was contracting and that market demand was diminishing rapidly. At that stage Belgian, German and French pits were closing and there was contraction generally in western Europe.
  We then heard that there should be unity in the industry, but the Secretary of State demeaned the standard of debate despicably by making every comment that he could to re-open the wounds which were inflicted in the trauma of the strike that many of us endured or witnessed not so long ago. The right hon. Gentleman boasts that the coal industry is now more viable than previously and that there is higher morale within it. In any event, those were the sort of words used by the hon. Member for Leicestershire, North-West (Mr. Ashby). But at the same time the Secretary of State is asking miners to accept a 30 per cent. reduction in redundancy payments from March, which will be 12 weeks from Christmas, when the notices will be given. Another 28,000 miners will be wondering about their future in the industry.
  The chairman of the National Coal Board is now saying, basically, that he is trimming off the fat for the privatisation of the mining industry within four years. We have witnessed the exodus of 50,000 miners from the industry, and they will probably be followed by another 30,000. They have left the industry basically because of depression, dejection and demoralisation. They see not a degree of security in their future within it.
  This is happening under a Government who rule by confrontation. The Government have never intended at any stage to intervene in their role as a conciliator. That was not their intention during the strike and it has not been their intention since. They see fit, however, to accuse the Trades Union Congress and the Labour party of non-intervention, the very policy that the Government advocated throughout the strike. There has been no mention today of the boasting and bragging of
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  MacGregor, who claimed that he and the Prime Minister, in collusion, set up the strike against Scargill. No evidence has been forthcoming about that.
  Can a miner see security in an industry which is contracting and in which financial incentives are being reduced? As I have said, redundancy payments are to be reduced by one third. Miners are being told that in future only higher investment pits will have a stake in the industry. The Government say that there is no planned energy policy and that market forces will rule the roost. That is their philosophy and that is well known. It is well known also that the Bill paves the way for a further 40,000 miners to leave the industry. We see Kent, Scotland, Lancashire, Durham and Northumberland going to the wall. Only two thirds of the Yorkshire pits remain open, with two thirds in Nottinghamshire and some in the east midlands. What is the planning for our great mining industry?
  Against that background, the Government talk about morale in the industry, ask why the men have left and speak about the productivity targets that are being achieved. I accept that there is a need for reconciliation. Indeed, there must be reconciliation for the sake of the future of every British miner. The leadership of one union or another is irrelevant now, and my colleagues and I are interested in the future of the British miner and the British mining industry.
  I know many members of the national executive of the National Union of Mineworkers and I know that there is no demand for capitulation prior to reconciliation. That is not the way forwards. If there are two wrongs, the result will not be a right; there must be a meeting of the parties. There are those who say that the NUM's national executive is not prepared to take any initiative, and that that attitude is shared by the TUC and the Labour party, but I propose to read a resolution calling for unity that was moved by the Scottish area of the NUM.
  Mick McGahey is not of my political disposition and I do not look towards the regime or system that he would support, but I pay tribute to him. He is the vice-president of the NUM and he has displayed great statesmanship since the strike in seeking reconciliation. There has been no intimidation and no threats. Let us further the initiative that he has taken, which is demonstrated by the Scottish area's resolution.
  The resolution instructed the national executive
  "to ensure that national unity is achieved with the highest priority at the earliest possible moment by calling on the TUC and the Labour Party to make themselves available in assisting"—
  this does not mean intervention—
  "in the re-unification of British Mining Unionism".
  That flies in the face of the accusations and allegations that have been made this evening. I reiterate that leadership of the miners is irrelevant now.
  Many miners are still suffering from the problems and trauma that accumulated during a period of strife. Debts piled up and mortgages and homes became at risk. The tragic scene that ensued is now a period in our history and it would be well to forget it and place it behind us. That is a view that is taken by many of my colleagues. If the people and the organisations can get together, I am sure that we can bring unity back into the coalfields and offer stability to the industry.
  That leads me to political objectives. Every miner needs a job, and to have a job he needs a mining area. If a miner

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  is to have a mining area as we knew it, he needs a planned energy policy. If he is to have a planned energy policy, he needs a Labour Government. No miner, regardless of where he stands, has a right to betray his forefathers, who pledged themselves to oppose everything that this reactionary Tory Government have done over the past seven years. Regardless of inter-union disputes, no miner has any right to turn his back on the Labour party, the only party that can deliver for him security for the future, a viable industry with democracy within it and consultation before decision. It can do that by ensuring that a Labour Government are returned at the next general election who will bring that about and help the poor, the dejected, the disabled and the sick. That will be the task of the next Labour Government, and I ask every miner to ensure, regardless of the circumstances, that a Labour Government have the opportunity to do that which I have outlined.
  8.48 pm
  Mr. Neil Hamilton: I did not agree with the conclusion of the hon. Member for Leigh (Mr. Cunliffe), but I appreciated the spirit of reconciliation to which the rest of his speech was directed and the spirited way in which he spoke. As someone whose family has been involved in mining for many years and who grew up in coal mining communities in south Wales, I appreciate the strength of feeling of Labour Members when they speak about an industry in which they and their families have also spent lifetimes. I am pleased to hear expressed the spirit of reconciliation which seems to pervade the Labour party, but I wish that Labour Members would not be so reactionary and backward-looking in their speeches.
  As always in debates of this sort, we have heard a great deal of what is ancient history about the coal industry. Since being a Member of this place I have spoken in virtually every coal debate, and on each occasion I have heard about the Sankey Commission in 1919, the circumstances that prevailed in the 1930s and the position before nationalisation. All that is getting on for 50 years ago, or more.
  Whatever the faults that characterised the industry in the past, we cannot base our prophecies on events which took place before the lifetime of many hon. Members. I prefer to look forward to the future of the coal industry because I believe that it is secure. It can expand again, if we build on the Government's efforts of recent years to make it a profitable, commercial industry which can sustain itself, instead of having to depend on the generosity of taxpayers and the annual proffering of the begging bowl.
  The productivity figures announced yesterday by my hon. Friend the Minister show that man-shift output has increased to 3·5 tonnes. That is a 50 per cent. increase on the figures before the strike and gives us great confidence in the future of the coal industry. We can reverse the decline that has affected the industry during the past 40 years.
  In terms of world coal consumption, in 1964 40 per cent. of energy was produced through coal; in 1974 the figure had fallen to 28 per cent.; but in 1984 it had risen to 30 per cent. That has not been the history of energy consumption in the United Kingdom. In 1973, 38 per cent. of our energy was produced by coal, but by 1983 that had fallen to 35 per cent. Therefore, we are running against the trends in world energy consumption.
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  The reason is that, despite the most favourable competitive climate for coal seen for generations as a result of the Arab oil shocks in the early 1970s, we have completely failed to capitalise on the opportunities which were there to be grasped. Despite governmental diktats to the CEGB that it had to buy a larger proportion of fuel from the National Coal Board than it would have liked; despite the limits on imports, a tax on fuel oil and all the money that we rightly spend on conversion grants; and despite the investment coupled with deficit grants which are now over £10,000 million for each decade, the coal industry is still in decline. That is a shame, but it can be reversed.
  We have arrived at the most extraordinary position whereby not only are consumers and taxpayers not satisfied because they have to buy coal at too high a price, which in turn means that the costs of production of other industries are artificially high, but producers, whom we all represent, are not satisfied. Like the common agricultural policy, the ills of the coal industry arise from political interference with the market, restrictions on competition, and the inherent failures of monopoly.
  I wish that I could accept the pessimism of Opposition Members, which would be transmuted into optimism for me, and think that the Bill presaged the privatisation or liberalisation of the coal industry. Regrettably, that is not the Government's intention. I wish it were. [Interruption.] Privatisation would secure the future of the coal industry. The private sector of the coal industry is well constructed. I declare an interest as a consultant to the National Association of Licensed Opencast Operators. [Interruption.] Opposition Members have made great play of the situation that existed in the coal industry before nationalisation. I would be the first to admit that at that date the coal industry was a shambles and that many companies and coal owners were a disgrace to the human race. No one wants to return to that.
  Although the private sector is only small, the illusions about it that Opposition Members always peddle will be destroyed. There is plenty of scope to extend it, even without touching the assets of the NCB, soon to be transmuted into British Coal. I am surprised that there is no mention of what the Monopolies and Mergers Commission proposed in its report on the NCB in 1983. Paragraph 11.95 states that the private sector of the coal industry
  "provides a small but valuable element of competition to and comparison with the operations of the Opencast Executive and should be encouraged as a means of increasing the efficiency of the NCB operation. Moreover, the techniques used in opencast operations have developed considerably since the present statutory limit on the operations of the licensed operators was fixed in 1958. We recommend therefore that this should be increased"—
  from the 25,000 tonnes at which it was statutorily fixed in 1958—
  "to a new limit of 100,000 tonnes, and that there should be provision for appeal by the operator to the Secretary of State if the Executive refused to grant a licence for a site containing a quantity of coal within the statutory limit."
  There is a desire within the private sector to expand production and employment opportunities and to provide the coal, which would replace imports, for the CEGB. That would prove a net benefit for all the coalfield communities in which small opencast sites are situated. Therefore, I am disappointed that there is no move in that direction in the Bill. It could only be to the benefit of the industry, and certainly to the benefit of the NCB, to have

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  that competition and comparison and to expand over the years. That would make but a small inroad into the monopoly of the National Coal Board, to the benefit of consumers and taxpayers.
  One further point concerns the agreement recently reached on the supply of coal from the board to the CEGB. As my hon. Friend the Minister will be aware, the new supply agreement is split into three tranches. The first 50 million tonnes of coal will be sold at £47 a tonne, the next 10 million tonnes will be sold at £34 a tonne and the next 12 million tonnes will be sold at £30 a tonne. Nobody can object to the price of the marginal units being sold at a lower price than the earlier ones, because that is a sensible commercial arrangement. However, it is not sensible for the private sector to have to sell all its coal, not at an average cost as the coal board does, but on the basis of the third tranche of £30 a tonne.
  The average price per gigajoule of NCB coal is 171p, whereas the average price of private sector coal will be 133p. That will ruin the private sector and runs contrary to the direction in which the Government should be moving and contrary to the interests of more than merely the private sector. The private sector is not being given any monopoly privilege. It makes its profits after it has paid a £16 a tonne royalty to the NCB. That is much higher than the average profit that the opencast executive makes on its contracted-out mining. Therefore, we are not giving anything other than opportunity to the private sector. We are certainly not giving it monopoly profits and rights as we do to the board, if we expand that sector. That is in the interests of the whole country, and I wish that the Bill went some way towards it.
  I trust that the Minister, who I am sure has been listening carefully to what I have said, will be able to give me some hope that either in Committee or on the next occasion when a similar Bill is introduced the Government will introduce the necessary amendments. I look forward to the future of the coal industry with a confidence that I wish Opposition Members could share, because I believe that the Government are committed to an expanding coal industry that produces cheap energy for the country and cheap energy for British industry so that it can provide the jobs that we sorely need.
  8.59 pm
  Mr. Kevin Barron: The hon. Member for Tatton (Mr. Hamilton) accused Oppostion Members of indulging in ancient history. For the first time since I have been a Member of Parliament, most Opposition Members will be voting against a Bill such as this, not because of ancient history, but because of the history of the last three years, during which time all this money has been poured into the coalfields by the Government.
  In the last three years deficit grants have been written off and money has been poured into redundancy payments, yet from listening to Conservative Members one would think that in the coalfield areas of Britain the Government had lined the streets with gold. In effect, they have made unemployment worse than perhaps at any other time in our history. More important, they have caused youth unemployment to become critical. They have stopped recruitment into coal mining, as a result of which young people are no longer taken on for training. In my
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  opinion, this has sounded the death knell for the British coal mining industry as we have known it over the past few decades.
  I do not want to live in the past, and neither does any other Opposition Member, but we must recognise the realities of what the Government have persistently done over the last three years by the introduction of coal Bills that have given all this money to the industry. Until tonight we have never voted against the Second Reading of such a Bill because of the implications of it.
  Clause 3 is one of the main provisions for financing the industry. One of its main proposals is for the redeployment and reduction of the work force in the industry, but if skilled and experienced people continue to leave the industry, especially at the same rate as over the last four years, the industry will be unable to respond to any upswing in the event of an urgent demand for coal, and that is the direct result of the way in which the Government have financed the industry.
  If the nation needs more coal and it cannot be obtained by improved profitability at existing collieries, the only alternatives will be to employ more miners—which clause 3 does not propose—or to buy more imports. I have a feeling that clause 3 will prevent British Coal from taking up the opportunity to expand, certainly in the short term.
  I nearly took my handkerchief from my pocket when I heard Conservative Members saying how they were concerned about the welfare of the coal mining industry, although I notice that not many of them have stayed for the conclusion of the debate. The hon. Member for Elmet (Mr. Batiste) nearly had me crying when he referred to the social welfare provisions of clause 3, and I am sorry that the hon. Gentleman is not now present to hear my remarks. I would have believed the hon. Gentleman more had he talked about the urgent need for a social welfare organisation in the new Selby coalfield. The Yorkshire NUM has been asking for such an organisation for years, and it is still waiting to obtain it, even though it is vital for our coalfield communities. I do not oppose the provisions of clause 3 relating to British Coal Enterprise, but I only wish that those provisions could create the jobs that some hon. Members have led people to believe.
  The clause provides for grants towards the retraining of redundant mine workers. I understand that at present the retraining scheme has received a funding from the Government of £10 million. That scheme lasts for eight weeks, and anyone who attends loses his unemployment benefit. It cannot be compared with similar in-house training that has been undertaken by the British Steel Corporation in south Yorkshire, which does not impose any disincentive on people, and at least trains them in a proper manner. I am not talking about the one funded by the European Steel and Coal Community, which is an even better retraining scheme.
  British Coal Enterprise and the retraining schemes have been abysmal, knee-jerk reactions introduced by the Government because of the problems of which they did not take account when they introduced Bills on the coal industry in the past four years. If the Minister could prove me wrong, I would be prepared to listen to him.
  The Bill does two things. First, the Government and British Coal have failed in the promises made in previous Bills. March 1987 was supposed to see the end of further financial provisions for British Coal. The Government have failed because the money and the capital resources

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  going into the coal industry have financed massive redundancies and not restructured the coal industry to increase its efficiency and enhance its chances of profitability and maintaining employment in coalfield areas.
  I am fed up with junior Ministers coming to the Rother Valley and talking about the terrible situation in the coalfields, or making tours of the south Yorkshire coalfield, or the Derbyshire coalfield, and saying how awful the regional economy is because of the rundown of basic industry. I would not mind their visits or their comments if they would do something about the problem, either by arresting the decline in the industries or by putting something into the local economy that will replace them.
  Secondly, the Bill is a device to clear the decks for privatisation. Conservative Members have said that that is not true, but it is. The Bill looks to potential buyers in the way that it delivers short-term profits in the next three or four years. I am pleased to say that the Government will be thwarted because they will lose the next general election. The industry will be saved and made efficient, but not for short-term profits by those who tell Sid about the lucrative deals that can be made by buying the remaining British coalfields. It will be saved so that the nation will not have a gun at its head to force it to import energy. It will be saved by a Labour Government.
  There has been much talk about the absence of speeches on the three clauses that deal with the social and welfare organisation and the mineworkers pension scheme. Nobody would wish to deny that right. Some of the speeches from Conservative Members have been far wide of the mark about what the NUM and the vast majority of miners want and for which they are pressing. No matter what happens in the short term when the Bill is passed, in the long term there is the need for the mining unions to get back together. There is a need for people to set up again the organisation that was born in 1946 and which saved and bought sanity not only into the coalfields but into the energy needs of the country. I hope that that will be brought about again by the vast majority of hon. Members on both sides of the House. Today, the coal mining industry has been used for short-term gains and to save necks at the next general election. I hope that all miners will realise why people are making those speeches.
  9.8 pm
  Mr. Richard Ottaway: There are two reasons for the Bill. The first is the fall in oil prices, and the second the aftermath of the coal strike in 1984–85. The first part of the Bill deals with the change in the name to British Coal Corporation. I hope that this is not the first inkling of privatisation of British Coal. The industry is not yet ready for privatisation, and will not be for a long time. To embark on that road will be political, economic and financial folly.
  The second part of the Bill deals with financial support for what will be the British Coal Corporation. It is worth noting that the primary reason for the introduction of deficit grants is that if it were not for the fall in the price of oil the National Coal Board would have made a profit this year of about £100 million. However, forces outside the Government's control have led to the introduction of deficit grants.
  The most important part of the Bill for my constituents in Nottingham, North will be the participation of the
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  UDM in the various coal industry organisations and trusts—in particular, participation in the welfare funds, the social welfare bodies and the superannuation funds.
  One does not need to guess why it has been necessary to introduce the Bill. It is because the NUM would not concede rights on the various bodies concerned with those trusts. That is unbelievable, and it will come as a great surprise to the average man in Nottingham high street or Bulwell market that that is not already the case. Even more unbelievable, however, is the Labour party's opposition to the proposals, but it will probably come as no surprise to those who have followed the relationship of the Labour party with the UDM during the last two years.
  There was mob rule in my constituency during the coal strike. The flying pickets of the NUM tried to prevent my constituents from getting into Babbington colliery. Civil liberties were denied to the people of Nottingham. Despite that, they made it to work.
  One would think that the Opposition would have supported the efforts of the people of Nottingham to go to work, bearing in mind that their only crime was compliance with the NUM rule book. Since then, the Labour party's policy has been to show hostility towards the UDM. Members of the UDM have been called "scabs" in this House, and Opposition Front Bench spokesmen have said that the right not to strike is not a fundamental right. The Opposition have now decided to oppose the Bill. That tops it all. I agree with my hon. Friend the Member for Broxtowe (Mr. Lester) that parity of rights between NUM and UDM members is desirable and necessary if we are to achieve the reconciliation to which so many Opposition Members have referred. Members of the UDM do not enjoy the rights for which the Opposition are calling. For Opposition Front Bench spokesmen to offer to trade rights and liberties with the Secretary of State—[Interruption.] The Opposition said that they would support these proposals if certain rights were given. That shows a lack of integrity. I have yet to hear any Opposition Member give a good reason for opposing the Bill.
  Not to support the Bill is an attack on democracy. Since 1985 the NUM has embarked upon a war of attrition with the UDM. The NUM wants to kid the world that it represents the UDM on the various coal industry trusts. That is cloud cuckoo land. As my hon. Friend the Member for Wirral, West (Mr. Hunt) said in a speech to the NUM, it is a breach of natural justice which will not be forgotten in Nottingham.
  The Labour party can do something to remedy the position and ingratiate itself with the people of Nottingham. There is a rumour that Mr. Arthur Scargill is being considered as the parliamentary candidate for Barnsley. The Labour party would be barmy to take him on, but just in case it decides to do so, it would have two particular advantages. First, he would have to stand down as president of the NUM. That would allow at last proper dialogue between the UDM and the NUM. Secondly, the Labour party would never again form a Government. For both reasons, I urge the Opposition Front Bench to take on Mr. Arthur Scargill as the parliamentary candidate for Barnsley. I urge the House to support the Bill.
  9.13 pm
  Mr. Alexander Eadie: Having listened to the debate, one might be led to believe that the coal industry had never been discussed since the miners' strike. We have to ask ourselves the reason. If ever a Bill had the

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  stamp on it of preparing for a general election, the Coal Industry Bill has it. It was rushed before Parliament with almost indecent haste. No sooner had the Sovereign uttered the words of the Gracious Speech than it was top of the agenda of legislative measures. Why is that? It can only be because of a cynical calculation that it will assist in returning Tory candidates in Nottingham and the surrounding area at a general election. That tells us what some hon. Members already suspect—that the general election will be sooner rather than later. I hope that it is soon because, if it is not, some of the general election speeches will have been made too early.
  This debate has shown that very few of our fellow miners in Nottinghamshire—I deliberately say fellow miners—will be deceived. Giving bargaining rights to a weak, breakaway union in the mining industry begins to look more and more like a velvet hand in an iron fist because Government policy will reduce the membership of that union by half. That is because it is the policy of the Government to contract the mining industry in Nottinghamshire
  My right hon. Friend the Member for Salford, East (Mr. Orme) has given the figures about contraction and I shall give some figures later in my speech. He made an interesting point about bargaining rights, which perhaps I should clear up right away. We are told that there is something wrong with equal rights. We said that we would not oppose the Bill if the Government were prepared to give equal negotiating rights to people in the mining industry. The Government can think about that in Committee.
  Mr. Peter Walker: We will have a lovely Committee stage.
  Mr. Eadie: We will, and the right hon. Gentleman will probably never be there.
  I want to deal with something which shows that this is a pit closure Bill and an election Bill. The Government's policy on the coal industry is to be condemned. I should like first to speak about the best-seams-first policy mentioned in our amendment. Since the Government were elected in 1979 they have conspired with British Coal to pursue what I would describe as a black site policy. There is nothing wrong with that if it is in tandem with a green fields site policy of planning and developing new pits.
  The coal industry is extractive and the Government are planning the eventual contraction and demise of the industry. It is to the Government's shame that not a single new pit has been sunk during their term of office. The existing pits are worked under a black site policy. As my right hon. Friend the Member for Salford, East said, the Government are even accelerating the demise of most of them. The best seams are being developed and planning the reserves of coal in the totality of a pit is being ignored. The policy being pursued was described in yesteryear as grabbing the berries and to hell with the rest. That policy will inevitably lead to pit closures because when the berries in the pits have gone millions of tonnes of coal will be lost for ever.
  H. G. Wells described coal as bottled sunshine. The Government are closing pits and shedding manpower. I got from the Department of Trade and Industry the figures for the nine months to September. In that time we imported nearly 5·5 million tonnes of coal. One could add
  216
  the equivalent of the coal consumed by a large power station because we are importing subsidised electricity from France. To judge from the way in which the French react to imported agricultural produce from Britain, the entire nation would be up in arms if Britain exported such quantities of cheap subsidised electricity.
  It cannot be emphasised strongly enough that the Bill is deeply political. It is an integral part of the Government's electoral strategy. It is full of blandishments to the breakaway union, the name of which is not even mentioned in the Bill, in that it provides for its representation on the coal industry's trusts, the welfare organisation and the superannuation fund. The Government are thus hoping to curry favour with the electorate in Tory marginal seats. All of this is transparent. Mining communities have already been alerted about the Bill, which means nothing short of devastation for mining communities and the slaughter of pits and jobs.
  In the Nottingham coalfield, for example, British Coal is planning to cut jobs by at least 10,000 from 25,000 during the next few years. I raised that matter with the Minister at Question Time yesterday, but he was so busy running away on his pushbike that he forgot to answer my question about investment in Nottingham and elsewhere.
  Mr. Brandon-Bravo rose——
  Mr. Eadie: I propose to raise that issue again now. When considering investment, we must bear in mind the fact that British Coal had made two changes in its accountancy practices. The first concerns deferred interest, which counted as capital expenditure in 1983–84.
  Mr. David Hunt: As he was the Minister responsible, the hon. Gentleman should know that the change was made in 1976–77.
  Mr. Eadie: I am afraid that the hon. Gentleman could easily make a mistake. I have a letter saying what happened to capital expenditure in 1983–84. There was an £86 million capital expenditure increase in 1983–84, whereas there was a £63 million capital expenditure increase in 1982–83. The second change concerns leased assets being included for the first time in 1985–86. I got this information from the Library. If I am wrong, I apologise, but I hope that the Minister will apologise as I am sure that my letter is much more current than his.
  Mr. Stephen Dorrell: It's the facts.
  Mr. Eadie: Yes.
  When we speak of investment in the coal industry, we do not take account of investment in 1979. There was investment in the industry before 1979. We have had three Ministers with responsibility for coal since 1979, but the present Minister is the only one who has disowned "Plan for Coal". He has been scathing about it, but previous Ministers have defended it. Let us hear what he will say now.
  Mr. David Hunt: I have now found that section in the board's accounts in 1976–77 which acknowledges that the policy of deferred interest was adopted under the stewardship of the hon. Member for Midlothian (Mr. Eadie). I must defend him. It was entirely appropriate for an industry with assets with a high capital cost and a long construction period to move in that direction. The hon. Gentleman also got the investment figures wrong. Perhaps he is coming to them.
  Mr. Eadie: I was about to consider the investment figures. I will give the Minister copies of my correspondence.
  I was trying to explain that the investment did not start then. For example, I have the figures for investment in Nottinghamshire. The investment in north Nottinghamshire in 1979–80 was £87 million, and in south Nottinghamshire £62 million. That makes a total investment in 1979–80 for Nottinghamshire of £149 million. However, the current investment as projected for this year is £97 million.
  Part of the argument that we have advanced is that the Government are pursuing a policy of contraction in the mining industry.
  Mr. David Hunt rose——
  Mr. Eadie: The Minister must allow me to make my speech and then he can make his. He is trying to be too clever by half.
  Mr. David Hunt: The hon. Gentleman's facts are wrong.
  Mr. Eadie: If they are wrong, I can only say that they are authenticated by the House of Commons Library figures. I should like to make my speech in my own way.
  The figure for Scottish investment in 1979 was £55 million. It will be £23 million in 1985–86. The figure for investment in Yorkshire and Barnsley in 1983 was £259 million and in 1985–86 it is £195 million. The figure for South Wales was £57 million and it will be £45 million in 1985–86. The corresponding figures for the south midlands are £86 million and £53 million.
  These figures illustrate the Opposition's point. The Government are pursuing a policy of contraction in the mining industry. No new pits are being opened. As a consequence, and when the black site policy is exhausted, the industry must inevitably contract.
  Mr. Ashby: What about Selby?
  Mr. Eadie: The Labour Government sunk the pit at Selby.
  We know the answer that the Minister gives about privatisation in the industry. He says that there are no plans for that and the Secretary of State referred to that again. That is like what we hear in the United States of America. An American points to the highest skyscraper but always adds that it is the highest skyscraper this year.
  Yesterday, at Question Time, the Secretary of State went further in reply to a question from one of my hon. Friends. He said that he could not give any guarantee that privatisation would never take place. The Government's policy on privatisation is well known. They will sell any public asset if they think that the price is right to prop up their financial bankrupt policies.
  It is interesting to consider the last City study on the feasibility of the privatisation of British Coal which was carried out two years ago by the stockbrokers Laurie Millbank. The report concluded that to offer prospective shareholders a commercially viable business about 60 of the 180 pits operating would have to close. The report said that they would need to be closed. The figure has now been cut to 119 pits.
  The chairman of British Coal has said that the number will be further reduced to 110 by the end of the current financial year, with four more closures and four more mergers on the cards. On those figures it is evident that the
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  industry is being prepared as a fatted calf to attract the Government's friends in the City. The chairman of British Coal will offer no resistance to that process. The reasoned amendment mentions the 55,000 jobs that have been lost to the industry since the end of March 1985. That can be put in starker terms: 20,000 jobs have gone since April.
  It is appropriate to comment on an aspect of the high-risk strategy being pursued by British Coal in relation to the one-face pit. Very few qualified mining engineers would consider that that made sense. It is established that mother nature does not give up her treasures lightly. Areas differ geologically—some are more uncertain than others. The policy of the one-face pit is regarded in some areas as a pit closures policy. If something happened at that one face, the pit would be an immediate candidate for closure. There is praise one week for the miners' higher productivity and prospects of pit closures the next week. No wonder that there is a crisis of morale in the mining industry.
  During this general election debate, some Conservative Members have been staking their credentials. I shall state my credentials. I shall talk about the present position of the victimised miners in the industry in relation to industrial relations as contained in the Bill and in relation to the crisis of morale.
  For more than 50 years I have been a member of the NUM. Before I came to the House I worked in the mining industry for more than 30 years. I am the grandson and the son of miners. In 1956, my father was killed in a pit. I am the son of a victimised miner. In 1926, my father became a victim and did not return to the pit until 1935. Therefore, I am not unprejudiced. Indeed, I am very prejudiced. It is rather rich of the Government to amend the 1946 Act when to date they have only paid lip service to it. Put bluntly, they ignored its provisions on conciliation and consultation.
  Had those provisions been implemented, victimised miners would not have been dragged through industrial courts, whose findings in so many cases have been ignored. Their cases would have been dealt with within the industry. Justice would not only have been done but would have been seen to be done. That would have prevented edicts coming from Hobart house saying:
  "The price of insubordination must be paid."
  I say bluntly that all who had a part to play, whether in the Government or in British Coal, in meting out the scandalous treatment to the victimised miners will carry it to their everlasting shame. There is a condemnatory line in Dante's "Inferno" which states:
  "Heaven will have none of them. Even hell itself spews them forth."
  The total number of men dismissed by the National Coal Board for offences or alleged offences arising from the 1984–85 strike was 962. Only a few of that number were dismissed for offences against persons or for damage to property. If the board's criteria for re-employment, as explained to the Select Committee on Employment, had been instituted, almost 90 per cent. of miners sacked for activities connected with the strike would have been re-employed. Therefore, I think that the Government have a cheek when they talk about amending the 1946 Act.
  One aspect of our amendment concerns our industries being deprived of new technology. I believe that a central policy of the Government in this pit closure Bill is to contract the coal industry. In our reasoned amendment we say that the Government will cut off from our industries

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  the new technologies that will become available by the use of coal. Coal use will not be confined to burning it in power stations; two other uses may become available. It is little known that we have already developed synthetic North sea gas from coal. I took an all-party delegation to Westfield in Fife where the process is already well developed.
  When I was a Minister, that process of development had been running for only a matter of weeks and the consumer never noticed any difference. Today at Westfield that process of manufacturing synthetic North sea gas is so advanced that there is a wish to run it as a pilot plant for two years continuously to prove its commercial value. Those at Westfield—the scientists and technologists—are worried that the privatisation of British Gas could scupper that plant. What should worry us is that, if we contract the coal industry still further, we will not have our own coal to aid technological development.
  The other advance is that of deriving oil from coal, but the history of this process is depressing. In 1978, as a result of British brains and inventiveness, we had developed two technologies which could do that. It was decided by the then Government to operate two pilot schemes on a three-year run and the Government earmarked £20 million for the project. Indeed, an agreement was signed with the National Coal Board to implement that process.
  Today one of those technologies has been scrapped—perhaps it is being developed in Japan. After seven years we have not got the pilot plant to process coal to oil off the ground. The best we have got is a plant in north Wales which uses 2·5 tonnes of coal a day. I would describe it as a laboratory effort. We are still not sure when it will be working. Oil from coal is not a Walter Mitty idea. For years it has been developed in South Africa by the Sasol project. Our process was superior in this use of coal. The Government seem to be an anti-manufacturing and anti-industry Government.
  The Government state that the service industries will provide the jobs in the mining communities. Apparently, tourism, hotels, visits to our stately homes will provide increased jobs in the future. If only we all wore kilts and showed our bare knees, that would attract more jobs.
  This nation was a great industrial nation and it can be one again. I have little patience with people who denigrate the inventiveness and genius of our scientists and engineers. We have some of the best mining engineers in the world. The case for developing the coal industry is overwhelming. We should not be pursuing a policy of contraction. Coal is wealth that we have at our disposal—far greater than that derived from North sea oil. We will go into the Lobby to vote against this Bill because we believe in expanding the coal industry, not in contracting it.
  9.38 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I have listened with great interest to the debate. This is a vital Bill for the future of the coal industry. The surprise throughout the debate has been the Opposition's attempt to avoid debating the Bill.
  The hon. Member for Midlothian (Mr. Eadie) described the Bill as an election measure. Indeed, at one stage he referred to this as a general election debate. The hon. Gentleman should ask himself why he terms it so. It
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  is undoubtedly a Bill that is good for the industry and good for the work force, yet the Opposition are opposing it, and we have a right to ask why.
  Hon. Members have asked a number of pertinent questions. I shall do my best to respond in the time available to me, and I shall write to hon. Members on the points with which I do not have time to deal. I shall make a few general remarks which I believe are important in understanding the Government's intentions in introducing the Bill.
  My right hon. Friend the Secretary of State for Energy, in opening the debate, said that the Bill heralded a new period in the life of the British coal industry. I join him in paying tribute to the industry's management and work force. At all levels and in all areas they have worked increasingly hard over the past 18 months to bring the British coal industry back from the brink to which it had been brought by that tragic and unnecessary strike.
  Mr. Woodall: A colliery not three miles from my front door, which was opened only in 1979 and has 12 million tonnes of reserves, was closed in August this year as an economic measure because the NCB saddled it with capital charges. As the Minister is talking about the Government's great attempt to bring the coal industry up to date, will he explain why that happened?
  Mr. Hunt: I gave way to the hon. Gentleman because it is likely that he has sat through this debate and listened to every word. He knows that decisions on individual collieries are a matter for British Coal. The Labour Government brought in the Coal Industry Act 1977, section 6(1) of which concludes by stating that the objective of the Act and the grants is
  "the elimination of uneconomic colliery capacity."
  That Act was passed by the last Labour Government.
  In paying tribute to the men and management in the industry, I must say that I am proud to be associated with a Bill that strengthens the industry's ability to withstand the competitive pressures of energy markets and enables this great industry to look forward to the future with more confidence and in a much healthier state. As my hon. Friend the Member for Amber Valley (Mr. Oppenheim) rightly said in an outstanding speech, only high productivity can secure the future of the industry.
  I shall nail one point immediately. The right hon. Member for Salford, East (Mr. Orme) and others mentioned safety. The right hon. Member mentioned this in the context of increasing productivity jeopardising safety standards. It was pointed out to him by my hon. Friend the Member for Broxtowe (Mr. Lester) that that is not the case. I plead with the right hon. Gentleman and the hon. Member for Cynon Valley (Mrs. Clwyd), who raised the same point yesterday, not to let safety become a party political issue. I would be sorry if anyone tried to score party political points by referring to fatalities in the coal industry. For me, and I believe for almost all hon. Members, even one fatality is one too many. Everyone in the industry is striving to reduce the number of fatalities and injuries.
  I am pleased to be able to tell the House that the rate of fatalities is steadily declining. Over the past 10 years, the worst year in the coal industry was 1978–79, when 72 men died. That was an appalling year. In 1985–86 that figure fell to 27, and I am pleased to say that so far this year only 10 deaths have occurred, but that is still 10 too many.

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  British Coal's first priority is the health and safety of employees. The industry's accident and fatality record is improving steadily in line with the introduction of better equipment, increased training and improved work practices. The hon. Member for Cynon Valley said that, in south Wales, there had been four fatalities this financial year. That is not the case. Altogether, in south Wales, there have been two fatalities this financial year, but that is two too many. I hope everybody will accept that men and management alike will not countenance any effort to improve productivity which does not treat safety as paramount.
  Mr. Allan Rogers: I should like to make a point about the industry's remarkable safety record and the way in which fatalities have been reduced over the years. This has involved an enormous joint effort by the men employed in the industry, by the management and by successive Governments. Does the hon. Gentleman accept that most mining accidents have occurred because of the great rush for profit and short cuts taken in fulfilling the strict requirements which have been laid down? That has happened, not just in the accidents in this country, but in the great tragedies in South Africa.
  Mr Hunt: I am, of course, talking about this Government's stewardship of the coal industry. There is no evidence that productivity has any association with a diminution in safety. The most productive pits are the ones with the best safety record, and the Opposition should acknowledge that.
  Mr. Hardy: The House will have noted the hon. Gentleman's commitment, which he offered the House yesterday and repeated today, that safety is of paramount importance. Does he accept the anxieties expressed by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse), which I sought to echo, about the uncertainty in my association, which has a remarkably important involvement in safety in mines? That uncertainty must be cleared up as a matter of urgency.
  Mr. Hunt: The hon. Gentleman knows full well that a review of regulations is taking place. It was initiated not by the Government but by the mines and quarries inspectorate. I understand that it is proceeding with full consultation with all the unions concerned.
  The first part of the Bill deals with the change of name to British Coal Corporation. That is an important recognition of the fact that there has been a significant change to a modern, self-supporting and fully viable member of the energy industry. My hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn) stressed the importance of exports. Shortly before that tragic and unnecessary Scargill strike, this country was a net exporter of coal. The strike swept us from that position, and the subsequent fall in world coal prices has meant that it is now much more difficult to gain a foothold in world markets.
  Nothing would please me and my right hon. and hon. Friends more than to see British coal filling this country's needs and being exported all over the world. I stress that I agree with my hon. Friend the Member for Hallam in that laudable objective. It is no use urging companies to use British coal if they can buy a similar grade from abroad at a lower price. That is now the key issue.
  Great strides have been made in the industry since the strike towards making British coal competitive. The
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  chairman of British Coal, Sir Robert Haslam, has made clear his confidence that the industry is heading for calmer waters. The Government share that view and very much welcome the prospect of a more stable period for the industry. I would prefer Labour Members not to continue the attacks on British Coal Enterprise. It is a vital part of any social strategy that this Government operate that there should be an enterprise company breathing new life into coal mining areas. It could do with a little more assistance from the Labour party.
  I am at a loss to understand the comments of the right hon. Member for Salford, East on the Bill's financial provisions. Some Labour Members fail to realise how much British Coal's future depends on these financial provisions. It took the hon. Member for Wentworth (Mr. Hardy) to say to the House and to his right hon. Friend the member for Salford, East, "I do not think that any of us object to the financial provisions." He said that after his right hon. Friend had spent some time attacking the financial provisions. I agree with the hon. Member for Wentworth.
  Mr. Hardy rose——
  Mr. Hunt: I should like to explain why I agree with the hon. Gentleman. British Coal is technically bankrupt. It has no financial reserves to offset its losses, and the current power to pay deficit grant ends at the end of next March. The Bill does not, as hon. Members have claimed, take away British Coal's future. On the contrary, if it were not for the Bill, British Coal would have no future at all.
  Mr. Hardy: Will the Minister accept that what I was doing was endorsing the principle of providing financial support to British Coal? I said that on the previous Bill some of us argued that the optimistic assumption taken then was one which we questioned. The Government then were far more concerned to try to make Mr. MacGregor's tenure of the chairmanship of the NCB look a great deal more successful than it really was.
  Mr. Hunt: I rely on the record, which everybody will read tomorrow, as to exactly what the hon. Gentleman said.
  The third part of the Bill concerns the UDM. The debate has been astonishing. It is almost as if the Opposition are unaware that half the Bill exists—I refer to clauses 5, 6, 7 and 8. I must pay tribute to my hon. Friends the Members for Hallam, for Sherwood (Mr. Stewart), for Broxtowe, for Elmet (Mr. Batiste), for Amber Valley, for Chorley (Mr. Dover), for Nottingham, South (Mr. Brandon-Bravo), for Leicestershire, North-West (Mr. Ashby), for Tatton (Mr. Hamilton) and for Nottingham, North (Mr. Ottaway) all of whom stressed important issues, but none more so than an hon. Member whom we are delighted to have in the House, my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin). Only last year he was working underground at Littleton colliery. He rightly pointed out that the Bill strives to restore the democratic tradition of the industry. It is a tradition of which the Opposition and the NUM have in the past been justly proud.
  We were privileged to listen to what I thought was an extremely brave speech from the right hon. Member for Mansfield (Mr. Concannon). He has never lacked courage in what he has done. Speaking as a former Whip myself, I know that it took courage to stand up and say that, after

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  21 years of never voting against a three-line Whip, tonight he would have to do so. He gave his reasons loud and clear, and they were echoed to some extent by the hon. Member for Makerfield (Mr. McGuire). He was talking about the need to recognise a democratic trade union. A democratic union is a strong union, and a democratic industry is a strong industry. As the right hon. Gentleman, my hon. Friend the Member for Sherwood and others have pointed out, there were men throughout the country, chiefly in the midlands, who endured violence, threats and ridicule in order to protect their democratic rights under the law. They were the real victimised miners. Let us hear no more nonsense about that. Since the strike finished, they have seen those democratic rights usurped by a union to which they do not belong.
  I can appreciate that back in 1946 and in the early 1950s there was no reason to believe that other unions would need to be introduced into the industry's various organisations. There was only one proud union. Today, that is no longer the case. Today we have the remnants of that union, and we have tens of thousands of mineworkers who no longer feel that it represents their interests. The Bill is designed to ensure that those men who stood by this country during the strike do not suffer as a result.
  Opposition Members talk about democracy. There has been a shadow over this debate. My right hon. Friend the Secretary of State identified it as the shadow of Scargill. For fear of upsetting one man, the Opposition continue to deny basic democratic rights and, indeed, human rights, to tens of thousands of workers in an industry dear to their hearts.
  In the debate on the Loyal Address it was regrettable that the hon. Member for Newport, East (Mr. Hughes), who has been mentioned several times, criticised the Bill and said:
  "The encouragement of a breakaway scab union is highly provocative."—[Official Report, 12 November 1986; Vol. 105, c. 32.]
  "Scab union" indeed. I hope that the hon. Gentleman regrets those remarks.
  Why has the language changed? We heard none of that in this debate. I think that we have a right to ask why. We read in the Sunday newspapers that the Leader of the Opposition is sending
  "a high-powered envoy to the Nottinghamshire coalfield this week to head off a potential electoral disaster for the party.
  His mission will be to persuade the breakaway Union of Democratic Mineworkers not to put up a rival to Labour's…candidate."
  Could that be why there has been such a lack of strong language tonight? The answer has been discovered, as so often happens in the House, on a photocopying machine. I have with me a document that is headed:
  "Proceedings of the Party Meeting on Thursday 20 November 1986 at 6 pm in Committee Room 10."
  It says:
  "The party would be voting against the Coal Bill on a three line whip and a reasoned amendment was being tabled… The sensitivity of the electoral position in North Nottinghamshire was appreciated and the importance of not alienating local party members who were in the UDM recognised."
  Now we have the truth. It is the sensitivity of the electoral position that is paramount. The Opposition are crumbling. They have tabled a reasoned amendment that may enable them not to damage their electoral position.
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  We have heard high and mighty language about the importance of our great coal industry, but now we know the truth—it is the electoral position in Nottinghamshire that has so silenced Opposition Members tonight.
  The reasoned amendment claims several things, but misunderstands and misrepresents the purpose of the Bill. It claims that there is a contraction in the industry. The hon. Member for Midlothian should not start quoting statistics for investment. After all, under this Government, £5 billion has been spent on investment in the coal industry. Moreover, we are now in the first year of a three-year programme involving another £2 billion. That is more money than in the whole of the Labour Government's period of office.
  The amendment also seeks to establish that there has been a lack of investment in the industry. The average real rate of investment under the Labour Government was 35 per cent. lower than under this Administration. I am proud of our achievements. It is incredible that the Labour party should speak of low morale in the coal industry. We continually hear of productivity records being broken at pit, area and national levels. Indeed, I am delighted to have received information tonight—I know that people in the NCB worked hard so that the House could hear these figures tonight—showing that last week productivity in the British coalfield reached a new United Kingdom record of 3·59 tonnes per man shift. [HON. MEMBERS: "Hear hear."] Let Hansard record that the cheer from the benches behind me, which was led by my right hon. Friend the Secretary of State, was not accompanied by anything other than silence on the part of Labour Members.
  It is extraordinary that Labour Members do not recognise the industry's great achievements. The House by now sees, I hope, the amendment's abysmal failure to recognise any of the realities of the coal industry today. What saddens me most is that, by tabling it, Labour Members have shown their desire to go against what we used to think of as their democratic principles and have omitted all mention of the provisions on fair representation. It makes no difference to us if they wish to deny rights to such a fine body of men affiliated to the Labour party, but it shocks me to see that the Leader of the Opposition has signed his name to a denial of the rights for which working men have fought so long. Labour Members are indeed parliamentary puppets on a Scargill string. Surely the men have a right to expect that we will not fail them. Conservative members certainly will not do so.
  Question put, That the amendment be made:—
  The House divided: Ayes 177, Noes 268.

  Division No. 7]

  [10 pm

  AYES

  Abse, Leo

  Boyes, Roland

  Adams, Allen (Paisley N)

  Bray, Dr Jeremy

  Anderson, Donald

  Brown, Gordon (D'f'mline E)

  Archer, Rt Hon Peter

  Brown, Hugh D. (Provan)

  Ashley, Rt Hon Jack

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

  Atkinson, N. (Tottenham)

  Brown, Ron (E'burgh, Leith)

  Bagier, Gordon A. T.

  Callaghan, Rt Hon J.

  Banks, Tony (Newham NW)

  Callaghan, Jim (Heyw'd & M)

  Barnett, Guy

  Campbell, Ian

  Barron, Kevin

  Campbell-Savours, Dale

  Beckett, Mrs Margaret

  Canavan, Dennis

  Benn, Rt Hon Tony

  Carter-Jones, Lewis

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

  Clark, Dr David (S Shields)

  Bermingham, Gerald

  Clarke, Thomas

  Bidwell, Sydney

  Clay, Robert

  Blair, Anthony

  Clelland, David Gordon

  Boothroyd, Miss Betty

  Clwyd, Mrs Ann

  225

  Cocks, Rt Hon M. (Bristol S)

  McKelvey, William

  Cohen, Harry

  MacKenzie, Rt Hon Gregor

  Coleman, Donald

  McTaggart, Robert

  Conlan, Bernard

  McWilliam, John

  Cook, Frank (Stockton North)

  Madden, Max

  Cook, Robin F. (Livingston)

  Marek, Dr John

  Corbett, Robin

  Marshall, David (Shettleston)

  Corbyn, Jeremy

  Martin, Michael

  Craigen, J. M.

  Mason, Rt Hon Roy

  Cunliffe, Lawrence

  Maxton, John

  Cunningham, Dr John

  Maynard, Miss Joan

  Davies, Rt Hon Denzil (L'lli)

  Meacher, Michael

  Davies, Ronald (Caerphilly)

  Michie, William

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

  Mikardo, Ian

  Deakins, Eric

  Millan, Rt Hon Bruce

  Dewar, Donald

  Miller, Dr M. S. (E Kilbride)

  Dixon, Donald

  Morris, Rt Hon A. (W'shawe)

  Dobson, Frank

  Morris, Rt Hon J. (Aberavon)

  Dormand, Jack

  Nellist, David

  Dubs, Alfred

  Oakes, Rt Hon Gordon

  Duffy, A. E. P.

  O'Brien, William

  Dunwoody, Hon Mrs G.

  O'Neill, Martin

  Eadie, Alex

  Orme, Rt Hon Stanley

  Eastham, Ken

  Park, George

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

  Parry, Robert

  Evans, John (St. Helens N)

  Patchett, Terry

  Faulds, Andrew

  Pavitt, Laurie

  Field, Frank (Birkenhead)

  Pendry, Tom

  Fields, T. (L pool Broad Gn)

  Pike, Peter

  Fisher, Mark

  Powell, Raymond (Ogmore)

  Flannery, Martin

  Prescott, John

  Foot, Rt Hon Michael

  Radice, Giles

  Forrester, John

  Randall, Stuart

  Foster, Derek

  Raynsford, Nick

  Foulkes, George

  Redmond, Martin

  Fraser, J. (Norwood)

  Richardson, Ms Jo

  Freeson, Rt Hon Reginald

  Roberts, Allan (Bootle)

  Garrett, W. E.

  Roberts, Ernest (Hackney N)

  Godman, Dr Norman

  Robertson, George

  Golding, Mrs Llin

  Robinson, G. (Coventry NW)

  Gould, Bryan

  Rogers, Allan

  Gourlay, Harry

  Rooker, J. W.

  Hamilton, James (M'well N)

  Ross, Ernest (Dundee W)

  Hamilton, W. W. (Fife Central)

  Rowlands, Ted

  Hardy, Peter

  Sedgemore, Brian

  Harrison, Rt Hon Walter

  Sheldon, Rt Hon R.

  Hart, Rt Hon Dame Judith

  Short, Ms Clare (Ladywood)

  Heffer, Eric S.

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

  Hogg, N. (C'nauld & Kilsyth)

  Silkin, Rt Hon J.

  Home Robertson, John

  Skinner, Dennis

  Howarth, George (Knowsley, N)

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

  Howell, Rt Hon D. (S'heath)

  Soley, Clive

  Hughes, Dr Mark (Durham)

  Spearing, Nigel

  Hughes, Robert (Aberdeen N)

  Stott, Roger

  Hughes, Roy (Newport East)

  Straw, Jack

  Hughes, Sean (Knowsley S)

  Thomas, Dafydd (Merioneth)

  Janner, Hon Greville

  Thomas, Dr R. (Carmarthen)

  John, Brynmor

  Thorne, Stan (Preston)

  Jones, Barry (Alyn & Deeside)

  Tinn, James

  Kaufman, Rt Hon Gerald

  Torney, Tom

  Kinnock, Rt Hon Neil

  Wardell, Gareth (Gower)

  Lamond, James

  Weetch, Ken

  Leadbitter, Ted

  Welsh, Michael

  Leighton, Ronald

  White, James

  Lewis, Ron (Carlisle)

  Wigley, Dafydd

  Lewis, Terence (Worsley)

  Wilson, Gordon

  Litherland, Robert

  Winnick, David

  Livsey, Richard

  Woodall, Alec

  Lloyd, Tony (Stretford)

  Young, David (Bolton SE)

  Lofthouse, Geoffrey

  Loyden, Edward

  Tellers for the Ayes:

  McCartney, Hugh

  Mr. Chris Smith and

  McGuire, Michael

  Mr. Derek Fatchett.

  McKay, Allen (Penistone)

  NOES

  Adley, Robert

  Alton, David

  Aitken, Jonathan

  Arnold, Tom

  Alexander, Richard

  Ashby, David

  Alison, Rt Hon Michael

  Ashdown, Paddy

  226

  Atkins, Robert (South Ribble)

  Henderson, Barry

  Baker, Nicholas (Dorset N)

  Hickmet, Richard

  Baldry, Tony

  Hicks, Robert

  Batiste, Spencer

  Hill, James

  Beaumont-Dark, Anthony

  Hind, Kenneth

  Benyon, William

  Hirst, Michael

  Best, Keith

  Hogg, Hon Douglas (Gr'th'm)

  Bevan, David Gilroy

  Holland, Sir Philip (Gedling)

  Biffen, Rt Hon John

  Holt, Richard

  Blaker, Rt Hon Sir Peter

  Hordern, Sir Peter

  Boscawen, Hon Robert

  Howell, Ralph (Norfolk, N)

  Brandon-Bravo, Martin

  Howells, Geraint

  Bright, Graham

  Hubbard-Miles, Peter

  Brown, M. (Brigg & Cl'thpes)

  Hunt, David (Wirral W)

  Bruce, Malcolm

  Hunter, Andrew

  Bryan, Sir Paul

  Hurd, Rt Hon Douglas

  Buck, Sir Antony

  Irving, Charles

  Bulmer, Esmond

  Jackson, Robert

  Carlisle, Kenneth (Lincoln)

  Jenkin, Rt Hon Patrick

  Carttiss, Michael

  Jessel, Toby

  Chapman, Sydney

  Johnson Smith, Sir Geoffrey

  Clark, Sir W. (Croydon S)

  Jones, Gwilym (Cardiff N)

  Clarke, Rt Hon K. (Rushcliffe)

  Jopling, Rt Hon Michael

  Cockeram, Eric

  Joseph, Rt Hon Sir Keith

  Coombs, Simon

  Kellett-Bowman, Mrs Elaine

  Cope, John

  Kennedy, Charles

  Dicks, Terry

  Key, Robert

  Derrell, Stephen

  King, Roger (B'ham N'fieid)

  Douglas-Hamilton, Lord J.

  King, Rt Hon Tom

  Dover, Den

  Kirkwood, Archy

  du Cann, Rt Hon Sir Edward

  Knight, Greg (Derby N)

  Dykes, Hugh

  Knight, Dame Jill (Edgbaston)

  Eggar, Tim

  Knowles, Michael

  Farr, Sir John

  Knox, David

  Favell, Anthony

  Lamont, Rt Hon Norman

  Fenner, Dame Peggy

  Lang, Ian

  Finsberg, Sir Geoffrey

  Latham, Michael

  Fletcher, Alexander

  Lawler, Geoffrey

  Fookes, Miss Janet

  Lawrence, Ivan

  Forman, Nigel

  Lee, John (Pendle)

  Forsyth, Michael (Stirling)

  Lester, Jim

  Fowler, Rt Hon Norman

  Lewis, Sir Kenneth (Stamf'd)

  Fox, Sir Marcus

  Lightbown, David

  Franks, Cecil

  Lilley, Peter

  Fraser, Peter (Angus East)

  Lloyd, Sir Ian (Havant)

  Freeman, Roger

  Lloyd, Peter (Fareham)

  Fry, Peter

  Lord, Michael

  Gale, Roger

  McCrindle, Robert

  Galley, Roy

  McCurley, Mrs Anna

  Gardiner, George (Reigate)

  Macfarlane, Neil

  Garel-Jones, Tristan

  MacKay, Andrew (Berkshire)

  Gilmour, Rt Hon Sir Ian

  MacKay, John (Argyll & Bute)

  Glyn, Dr Alan

  Maclean, David John

  Goodhart, Sir Philip

  Maclennan, Robert

  Goodlad, Alastair

  McLoughlin, Patrick

  Gow, Ian

  McNair-Wilson, M. (N'bury)

  Gower, Sir Raymond

  McQuarrie, Albert

  Grant, Sir Anthony

  Major, John

  Greenway, Harry

  Malins, Humfrey

  Gregory, Conal

  Malone, Gerald

  Griffiths, Sir Eldon

  Maples, John

  Griffiths, Peter (Portsm'th N)

  Marland, Paul

  Grist, Ian

  Marlow, Antony

  Ground, Patrick

  Mather, Carol

  Grylls, Michael

  Maude, Hon Francis

  Gummer, Rt Hon John S

  Mayhew, Sir Patrick

  Hamilton, Neil (Tatton)

  Meadowcroft, Michael

  Hancock, Michael

  Meyer, Sir Anthony

  Hanley, Jeremy

  Miller, Hal (B'grove)

  Hannam, John

  Mills, Iain (Meriden)

  Hargreaves, Kenneth

  Mills, Sir Peter (West Devon)

  Harris, David

  Miscampbell, Norman

  Haselhurst, Alan

  Mitchell, David (Hants NW)

  Havers, Rt Hon Sir Michael

  Moate, Roger

  Hawkins, Sir Paul (N'folk SW)

  Monro, Sir Hector

  Hawksley, Warren

  Morris, M. (N'hampton S)

  Hayes, J.

  Morrison, Hon C. (Devizes)

  Hayhoe, Rt Hon Barney

  Morrison, Hon P. (Chester)

  Hayward, Robert

  Mudd, David

  Heddle, John

  Neale, Gerrard

  227

  Needham, Richard

  Spicer, Michael (S Worcs)

  Nelson, Anthony

  Stanbrook, Ivor

  Nicholls, Patrick

  Stanley, Rt Hon John

  Norris, Steven

  Steel, Rt Hon David

  Onslow, Cranley

  Steen, Anthony

  Oppenheim, Phillip

  Stern, Michael

  Osborn, Sir John

  Stevens, Lewis (Nuneaton)

  Ottaway, Richard

  Stewart, Allan (Eastwood)

  Owen, Rt Hon Dr David

  Stewart, Andrew (Sherwood)

  Parkinson, Rt Hon Cecil

  Sumberg, David

  Patten, J. (Oxf W & Abgdn)

  Tapsell, Sir Peter

  Pattie, Geoffrey

  Taylor, Rt Hon John David

  Pawsey, James

  Taylor, John (Solihull)

  Penhaligon, David

  Taylor, Teddy (S'end E)

  Percival, Rt Hon Sir Ian

  Tebbit, Rt Hon Norman

  Pollock, Alexander

  Temple-Morris, Peter

  Portillo, Michael

  Terlezki, Stefan

  Powell, William (Corby)

  Thomas, Rt Hon Peter

  Powley, John

  Thompson, Patrick (N'ich N)

  Prentice, Rt Hon Reg

  Thurnham, Peter

  Price, Sir David

  Townend, John (Bridlington)

  Proctor, K. Harvey

  Tracey, Richard

  Raffan, Keith

  Trotter, Neville

  Raison, Rt Hon Timothy

  Twinn, Dr Ian

  Rathbone, Tim

  van Straubenzee, Sir W.

  Rees, Rt Hon Peter (Dover)

  Vaughan, Sir Gerard

  Renton, Tim

  Viggers, Peter

  Rhodes James, Robert

  Waddington, David

  Rhys Williams, Sir Brandon

  Wakeham, Rt Hon John

  Ridsdale, Sir Julian

  Walker, Rt Hon P. (W'cester)

  Roberts, Wyn (Conwy)

  Wall, Sir Patrick

  Robinson, Mark (N'port W)

  Wallace, James

  Roe, Mrs Marion

  Waller, Gary

  Rossi, Sir Hugh

  Ward, John

  Rowe, Andrew

  Wardle, C. (Bexhill)

  Sackville, Hon Thomas

  Watts, John

  Sainsbury, Hon Timothy

  Wells, Sir John (Maidstone)

  Sayeed, Jonathan

  Wheeler, John

  Scott, Nicholas

  Whitfield, John

  Shaw, Sir Michael (Scarb')

  Wiggin, Jerry

  Shelton, William (Streatham)

  Wilkinson, John

  Shepherd, Colin (Hereford)

  Winterton, Mrs Ann

  Shepherd, Richard (Aldridge)

  Winterton, Nicholas

  Shersby, Michael

  Wolfson, Mark

  Shields, Mrs Elizabeth

  Wood, Timothy

  Silvester, Fred

  Wrigglesworth, Ian

  Sims, Roger

  Yeo, Tim

  Skeet, Sir Trevor

  Young, Sir George (Acton)

  Smith, Tim (Beaconsfield)

  Soames, Hon Nicholas

  Tellers for the Noes:

  Speller, Tony

  Mr. Michael Neubert and

  Spencer, Derek

  Mr. Mark Lennox-Boyd.

  Spicer, Jim (Dorset W)

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 60 (Amendment on Second or Third Reading):—
  The House divided: Ayes 263, Noes 173.

  Division No. 8]

  [10.14 pm

  AYES

  Adley, Robert

  Bright, Graham

  Aitken, Jonathan

  Brown, M. (Brigg & Cl'thpes)

  Alexander, Richard

  Bruce, Malcolm

  Alison, Rt Hon Michael

  Bryan, Sir Paul

  Alton, David

  Buck, Sir Antony

  Arnold, Tom

  Bulmer, Esmond

  Ashby, David

  Carlisle, Kenneth (Lincoln)

  Ashdown, Paddy

  Carttiss, Michael

  Atkins, Robert (South Ribble)

  Chapman, Sydney

  Baker, Nicholas (Dorset N)

  Clark, Sir W. (Croydon S)

  Baldry, Tony

  Clarke, Rt Hon K. (Rushcliffe)

  Batiste, Spencer

  Cockeram, Eric

  Beaumont-Dark, Anthony

  Concannon, Rt Hon J. D.

  Best, Keith

  Coombs, Simon

  Biffen, Rt Hon John

  Cope, John

  Blaker, Rt Hon Sir Peter

  Dorrell, Stephen

  Boscawen, Hon Robert

  Douglas-Hamilton, Lord J.

  Brandon-Bravo, Martin

  Dover, Den

  228

  du Cann, Rt Hon Sir Edward

  Knowles, Michael

  Dykes, Hugh

  Knox, David

  Eggar, Tim

  Lamont, Rt Hon Norman

  Farr, Sir John

  Lang, Ian

  Favell, Anthony

  Latham, Michael

  Fenner, Dame Peggy

  Lawler, Geoffrey

  Finsberg, Sir Geoffrey

  Lawrence, Ivan

  Fletcher, Alexander

  Lee, John (Pendle)

  Fookes, Miss Janet

  Lennox-Boyd, Hon Mark

  Forman, Nigel

  Lester, Jim

  Forsyth, Michael (Stirling)

  Lewis, Sir Kenneth (Stamf'd)

  Fowler, Rt Hon Norman

  Lightbown, David

  Fox, Sir Marcus

  Lilley, Peter

  Franks, Cecil

  Lloyd, Sir Ian (Havant)

  Fraser, Peter (Angus East)

  Lord, Michael

  Freeman, Roger

  McCrindle, Robert

  Fry, Peter

  McCurley, Mrs Anna

  Gale, Roger

  Macfarlane, Neil

  Galley, Roy

  MacKay, Andrew (Berkshire)

  Gardiner, George (Reigate)

  MacKay, John (Argyll & Bute)

  Garel-Jones, Tristan

  Maclean, David John

  Gilmour, Rt Hon Sir Ian

  Maclennan, Robert

  Glyn, Dr Alan

  McLoughlin, Patrick

  Goodhart, Sir Philip

  McNair-Wilson, M. (N'bury)

  Goodlad, Alastair

  McQuarrie, Albert

  Gower, Sir Raymond

  Major, John

  Grant, Sir Anthony

  Malins, Humfrey

  Greenway, Harry

  Malone, Gerald

  Gregory, Conal

  Maples, John

  Griffiths, Sir Eldon

  Marland, Paul

  Griffiths, Peter (Portsm'th N)

  Marlow, Antony

  Grist, Ian

  Mather, Carol

  Ground, Patrick

  Maude, Hon Francis

  Grylls, Michael

  Mayhew, Sir Patrick

  Gummer, Rt Hon John S

  Meadowcroft, Michael

  Hamilton, Neil (Tatton)

  Meyer, Sir Anthony

  Hancock, Michael

  Miller, Hal (B'grove)

  Hanley, Jeremy

  Mills, Iain (Meriden)

  Hannam, John

  Mills, Sir Peter (West Devon)

  Hargreaves, Kenneth

  Miscampbell, Norman

  Harris, David

  Mitchell, David (Hants NW)

  Haselhurst, Alan

  Moate, Roger

  Havers, Rt Hon Sir Michael

  Monro, Sir Hector

  Hawkins, Sir Paul (N'folk SW)

  Morris, M. (N'hampton S)

  Hawksley, Warren

  Morrison, Hon C. (Devizes)

  Hayes, J.

  Morrison, Hon P. (Chester)

  Hayward, Robert

  Mudd, David

  Heathcoat-Amory, David

  Neale, Gerrard

  Heddle, John

  Needham, Richard

  Henderson, Barry

  Nelson, Anthony

  Hickmet, Richard

  Neubert, Michael

  Hicks, Robert

  Nicholls, Patrick

  Hill, James

  Norris, Steven

  Hind, Kenneth

  Oppenheim, Phillip

  Hirst, Michael

  Osborn, Sir John

  Hogg, Hon Douglas (Gr'th'm)

  Ottaway, Richard

  Holland, Sir Philip (Gedling)

  Owen, Rt Hon Dr David

  Holt, Richard

  Parkinson, Rt Hon Cecil

  Howell, Ralph (Norfolk, N)

  Patten, J. (Oxf W & Abgdn)

  Howells, Geraint

  Pattie, Geoffrey

  Hubbard-Miles, Peter

  Pawsey, James

  Hunt, David (Wirral W)

  Penhaligon, David

  Hunter, Andrew

  Percival, Rt Hon Sir Ian

  Hurd, Rt Hon Douglas

  Pollock, Alexander

  Irving, Charles

  Powell, William (Corby)

  Jackson, Robert

  Powley, John

  Jenkin, Rt Hon Patrick

  Prentice, Rt Hon Reg

  Jessel, Toby

  Price, Sir David

  Johnson Smith, Sir Geoffrey

  Proctor, K. Harvey

  Jones, Gwilym (Cardiff N)

  Raffan, Keith

  Jopling, Rt Hon Michael

  Raison, Rt Hon Timothy

  Joseph, Rt Hon Sir Keith

  Rathbone, Tim

  Kellett-Bowman, Mrs Elaine

  Rees, Rt Hon Peter (Dover)

  Kennedy, Charles

  Renton, Tim

  Key, Robert

  Rhodes James, Robert

  King, Roger (B'ham N'field)

  Rhys Williams, Sir Brandon

  King, Rt Hon Tom

  Ridsdale, Sir Julian

  Kirkwood, Archy

  Roberts, Wyn (Conwy)

  Knight, Greg (Derby N)

  Robinson, Mark (N'port W)

  Knight, Dame Jill (Edgbaston)

  Roe, Mrs Marion

  229

  Rossi, Sir Hugh

  Thomas, Rt Hon Peter

  Rowe, Andrew

  Thompson, Donald (Calder V)

  Sackville, Hon Thomas

  Thompson, Patrick (N'ich N)

  Sainsbury, Hon Timothy

  Thurnham, Peter

  Sayeed, Jonathan

  Townend, John (Bridlington)

  Scott, Nicholas

  Tracey, Richard

  Shaw, Sir Michael (Scarb')

  Trotter, Neville

  Shelton, William (Streatham)

  Twinn, Dr Ian

  Shepherd, Colin (Hereford)

  van Straubenzee, Sir W.

  Shepherd, Richard (Aldridge)

  Vaughan, Sir Gerard

  Shersby, Michael

  Viggers, Peter

  Shields, Mrs Elizabeth

  Waddington, David

  Silvester, Fred

  Wakeham, Rt Hon John

  Sims, Roger

  Walker, Rt Hon P. (W'cester)

  Skeet, Sir Trevor

  Wall, Sir Patrick

  Smith, Tim (Beaconsfield)

  Wallace, James

  Soames, Hon Nicholas

  Waller, Gary

  Speller, Tony

  Ward, John

  Spencer, Derek

  Wardle, C. (Bexhill)

  Spicer, Jim (Dorset W)

  Watts, John

  Spicer, Michael (S Worcs)

  Wells, Sir John (Maidstone)

  Stanbrook, Ivor

  Wheeler, John

  Stanley, Rt Hon John

  Whitfield, John

  Steel, Rt Hon David

  Wilkinson, John

  Steen, Anthony

  Winterton, Mrs Ann

  Stern, Michael

  Winterton, Nicholas

  Stevens, Lewis (Nuneaton)

  Wolfson, Mark

  Stewart, Allan (Eastwood)

  Wood, Timothy

  Stewart, Andrew (Sherwood)

  Wrigglesworth, Ian

  Sumberg, David

  Yeo, Tim

  Tapsell, Sir Peter

  Young, Sir George (Acton)

  Taylor, John (Solihull)

  Taylor, Teddy (S'end E)

  Tellers for the Ayes:

  Tebbit, Rt Hon Norman

  Mr. Peter Lloyd and

  Temple-Morris, Peter

  Mr. Michael Portillo.

  Terlezki, Stefan

  NOES

  Abse, Leo

  Craigen, J. M.

  Adams, Allen (Paisley N)

  Cunliffe, Lawrence

  Anderson, Donald

  Cunningham, Dr John

  Archer, Rt Hon Peter

  Davies, Rt Hon Denzil (L'lli)

  Ashley, Rt Hon Jack

  Davies, Ronald (Caerphilly)

  Atkinson, N. (Tottenham)

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

  Bagier, Gordon A. T.

  Deakins, Eric

  Banks, Tony (Newham NW)

  Dewar, Donald

  Barnett, Guy

  Dixon, Donald

  Barron, Kevin

  Dobson, Frank

  Beckett, Mrs Margaret

  Dormand, Jack

  Benn, Rt Hon Tony

  Dubs, Alfred

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

  Duffy, A. E. P.

  Bermingham, Gerald

  Dunwoody, Hon Mrs G.

  Bidwell, Sydney

  Eadie, Alex

  Blair, Anthony

  Eastham, Ken

  Boothroyd, Miss Betty

  Evans, John (St. Helens N)

  Boyes, Roland

  Faulds, Andrew

  Bray, Dr Jeremy

  Field, Frank (Birkenhead)

  Brown, Gordon (D'f'mline E)

  Fields, T. (L'pool Broad Gn)

  Brown, Hugh D. (Provan)

  Fisher, Mark

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

  Flannery, Martin

  Brown, Ron (E'burgh, Leith)

  Foot, Rt Hon Michael

  Callaghan, Rt Hon J.

  Foster, Derek

  Callaghan, Jim (Heyw'd & M)

  Foulkes, George

  Campbell, Ian

  Fraser, J. (Norwood)

  Campbell-Savours, Dale

  Freeson, Rt Hon Reginald

  Canavan, Dennis

  Garrett, W. E.

  Carter-Jones, Lewis

  Godman, Dr Norman

  Clark, Dr David (S Shields)

  Golding, Mrs Llin

  Clarke, Thomas

  Gould, Bryan

  Clay, Robert

  Gourlay, Harry

  Clelland, David Gordon

  Hamilton, James (M'well N)

  Clwyd, Mrs Ann

  Hamilton, W. W. (Fife Central)

  Cocks, Rt Hon M. (Bristol S)

  Hardy, Peter

  Cohen, Harry

  Harrison, Rt Hon Walter

  Coleman, Donald

  Hart, Rt Hon Dame Judith

  Conlan, Bernard

  Heffer, Eric S.

  Cook, Frank (Stockton North)

  Hogg, N. (C'nauld & Kilsyth)

  Cook, Robin F. (Livingston)

  Home Robertson, John

  Corbett, Robin

  Howarth, George (Knowsley, N)

  Corbyn, Jeremy

  Howell, Rt Hon D. (S'heath)

  230

  Hughes, Dr Mark (Durham)

  Pendry, Tom

  Hughes, Robert (Aberdeen N)

  Pike, Peter

  Hughes, Roy (Newport East)

  Powell, Raymond (Ogmore)

  Hughes, Sean (Knowsley S)

  Prescott, John

  Janner, Hon Greville

  Radice, Giles

  John, Brynmor

  Randall, Stuart

  Jones, Barry (Alyn & Deeside)

  Raynsford, Nick

  Kaufman, Rt Hon Gerald

  Redmond, Martin

  Kinnock, Rt Hon Neil

  Richardson, Ms Jo

  Lamond, James

  Roberts, Allan (Bootle)

  Leadbitter, Ted

  Roberts, Ernest (Hackney N)

  Leighton, Ronald

  Robertson, George

  Lewis, Ron (Carlisle)

  Robinson, G. (Coventry NW)

  Lewis, Terence (Worsley)

  Rogers, Allan

  Litherland, Robert

  Rooker, J. W.

  Lloyd, Tony (Stretford)

  Ross, Ernest (Dundee W)

  Lofthouse, Geoffrey

  Rowlands, Ted

  Loyden, Edward

  Sedgemore, Brian

  McCartney, Hugh

  Sheldon, Rt Hon R.

  McGuire, Michael

  Short, Ms Clare (Ladywood)

  McKay, Allen (Penistone)

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

  McKelvey, William

  Silkin, Rt Hon J.

  MacKenzie, Rt Hon Gregor

  Skinner, Dennis

  McTaggart, Robert

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

  McWilliam, John

  Soley, Clive

  Madden, Max

  Spearing, Nigel

  Marek, Dr John

  Stott, Roger

  Marshall, David (Shettleston)

  Straw, Jack

  Martin, Michael

  Thomas, Dafydd (Merioneth)

  Maxton, John

  Thomas, Dr R. (Carmarthen)

  Maynard, Miss Joan

  Thorne, Stan (Preston)

  Meacher, Michael

  Tinn, James

  Michie, William

  Torney, Tom

  Mikardo, Ian

  Wardell, Gareth (Gower)

  Millan, Rt Hon Bruce

  Weetch, Ken

  Miller, Dr M. S. (E Kilbride)

  Welsh, Michael

  Morris, Rt Hon A. (W'shawe)

  White, James

  Morris, Rt Hon J. (Aberavon)

  Wigley, Dafydd

  Nellist, David

  Wilson, Gordon

  Oakes, Rt Hon Gordon

  Winnick, David

  O'Brien, William

  Woodall, Alec

  O'Neill, Martin

  Young, David (Bolton SE)

  Orme, Rt Hon Stanley

  Park, George

  Tellers for the Noes:

  Parry, Robert

  Mr. Chris Smith and

  Patchett, Terry

  Mr. Derek Fatchett.

  Pavitt, Laurie

  Question accordingly agreed to.
  Bill read a Second time and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

  COAL INDUSTRY BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Coal Industry Bill, it is expedient to authorise the payment to the British Coal Corporation out of moneys provided by Parliament of—

  (1) grants (not exceeding in aggregate £100 million or such greater sum not exceeding £200 million as may be specified in a relevant order) with a view to reducing or eliminating any deficit shown in a statutory consolidated profit and loss account of the Corporation and its subsidiaries for the financial years of the Corporation ending in March 1988 and 1989;

  (2) grants (not exceeding in aggregate £300 million or such greater sum not exceeding £750 million as may be specified in a relevant order) towards any expenditure of the Corporation or their subsidiaries which—

  (a) relates to costs falling to be charged to such a profit and loss account for a financial year of the Corporation ending not earlier than March 1988 or later than March 1992 in which the Corporation are redeploying and

  231
  reducing the number of their employees with a view to adjusting the future supply of coal or reducing production costs;

  (b) is a kind specified in relation to such a year in a relevant order; and

  (c) does not exceed the costs falling to be so charged or such larger amounts as the Secretary of State and the Corporation may with the approval of the Treasury agree;

  being grants which comply with any restrictions on the amount which may be paid in respect of any such year imposed by a relevant order made in respect of that year;

  (3) grants towards any relavant expenditure of the Corporation (within the meaning of section 6 of the Coal Industry Act 1977) in a financial year of the Corporation ending after March 1987 which—

  (a) relates to costs falling to be charged to such a profit and loss account in respect of any period specified in section 6(3) of that Act or to obligations undertaken by the Corporation in any such period; and

  (b) does not exceed the amount of the costs to which it relates or such larger amount as the Secretary of State and the Corporation may with the approval of the Treasury agree;

  being grants limited to one half of the expenditure in that year which would be eligible for such grants apart from that limitation;

  and in this Resolution—
  'a statutory consolidated profit and loss account' means a consolidated profit and loss account prepared in accordance with a direction given under section 8(1) of the Coal Industry Act 1971: and
  'a relevant order' means an order made by the Secretary of State with the approval of the Treasury and approved by a resolution of the House of Commons.—[Mr. Boscawen.]

  Parliamentary Constituencies (Wales)
  10.26 pm
  The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): I beg to move,
  That the draft Parliamentary Constituencies (Wales) (Miscellaneous Changes) Order 1986, which was laid before this House on 16th July, in the last Session of Parliament, be approved.
  This is the draft of an Order-in-Council to give effect to the final recommendations of the report of the Boundary Commission for Wales on its 1985 interim review. The commission reviewed nine parliamentary constituencies in north and mid-Wales, and submitted its report to my right hon. Friend the Secretary of State for the Home Department on 2 July 1986.
  The report was laid before Parliament on 16 July, together with a draft order to implement the commission's proposals in full. If the draft order is approved by both Houses, it will be submitted to Her Majesty in Council for the necessary order to be made. The form of the order follows the same pattern as the two previous orders made in 1985 and earlier this year which implemented the proposals arising from interim reviews carried out by the Boundary Commission for England.
  The form of the order is as follows: Article 2 substitutes the constituencies in the schedule for the existing constituencies previously created by the Parliamentary Constituencies (Wales) Order 1983. Article 1(2) provides for the order to take effect 14 days after it is made, though it will not affect the present constituencies until the next general election. As a consequence, any by-elections held in the meantime will be held on the basis of the present boundaries.
  Let me give a word of explanation as to interim reviews. As hon. Members may know, the parliamentary boundary commissions have the discretionary power to hold interim reviews between their general reviews, which take place every 10 to 15 years. The last general review was completed in 1983 and resulted in new parliamentary constituency boundaries for the general election held that year. Those boundaries were based on the local government boundaries which existed during the review. However, since then, reviews by the Local Government Boundary Commission for Wales have divided district and county boundaries from the constituency boundaries. The Welsh Boundary Commission decided that it was necessary to reconcile these divided boundaries by holding interim reviews, of which this is the first since the last general review.
  The commission published its provisional recommendations in the summer of 1985. There were five representations about those proposals. A local inquiry was held in October 1985 into whether the community ward of Eglwysbach, at present divided between the constituencies of Conwy and Meirionnydd Nant Conwy, should be placed wholly within the latter constituency, as the commission had recommended. The assistant commissioner upheld the commission's recommendation, and the commission decided to confirm its original proposals as its final proposals. These are given effect in the order.
  My right hon. Friend the Home Secretary has not received any representations objecting to the proposals since they were submitted to him. For the most part, the changes involved are the minimum necessary to align

  233
  the constituency boundaries with local government boundaries, the one exception being the change which was the subject of the local inquiry.
  I commend the draft order to the House.
  10.30 pm
  Mr. Roy Hughes: I have for the Minister a few brief questions about the review of the boundaries of nine parliamentary constituencies. Have any public meetings been held about the proposals? Has the hon. Gentleman met the boundary commissioners from time to time to discuss the boundaries? I do not think he said exactly how many electors overall will be directly affected. Have the county councils of Gwynedd, Clwyd and Powys played any part or made any representations to the commissioners? I ask the same question about the district authorities and the political parties involved. Was he able to decide upon the points that they raised?
  10.31 pm
  Sir Anthony Meyer: I shall not detain the House for more than a moment or two, but I cannot let this occasion pass, any more than I let it pass in 1982, without taking the opportunity to call down imprecations on the graves of the boundary commissioners. On this occasion they have not mucked up all the constituencies in the county of Clwyd as they did in 1982 and the sins—if there are any sins this time—are only those of the housemaid whose baby was a very small one.
  I cannot let this occasion pass without once again drawing attention to the insensitivity of public servants who simply removed from the electoral map of Britain the ancient names of Flint and Denbigh which first sent representatives to this House in 1547 to the last Parliament in which the hon. Member for Calais took his seat. How can a lot of jumped-up boundary commissioners abolish with one stroke of the pen 400 years of history? I am a merciful man and I have always voted against capital punishment, but I will vote for any amendment which makes an exception for boundary commissioners.
  10.33 pm
  Mr. Keith Raffan: I shall be brief. There is a reference in the report of the Boundary Commission for Wales, on which the order is based, to my representation that the name of my constituency of Delyn should be changed to Delyn and Prestatyn. As I believe the last boundary review showed, not sufficient thought and care is given to the naming of constituencies. My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) agrees with me on that. This is not just a matter of local sensitivity, although that is important enough; it is also a matter of accuracy.
  My constituency consists of the whole of the borough of Delyn plus part of the borough of Rhuddlan, namely Prestatyn and Meliden. Those two communities make up nearly 20 per cent. of my electorate. Many electors in Prestatyn and Meliden are understandably confused about which borough they belong to. They are in the parliamentary constituency of Delyn, but they are not in the borough of Delyn, and correspondence from these electors frequently goes to the local government officers of the wrong authority. The representation that I made that Delyn be renamed was not accepted because, in the words of the report, the constituency
  "was approved by Parliament only three years ago."
  234
  Surely it is not a valid reason for perpetuating a mistake to say that it was made only three years ago.
  I hope that the Boundary Commission will take the opportunity to change the name of my constituency to a more accurate name when it next has the chance to do so. The new name that I propose is not too long. In Wales, already have Ceredigion and Pembroke, North; Meirionnydd Nant Conwy, and Merthyr Tydfil and Rhymney. In Scotland, the names are even longer. Indeed, my native land is replete and with triple-barrelled constituencies such as Carrick, Cumnock and Doon Valley; Inverness, Nairn and Lochaber; Ross, Cromarty and Skye, and Tweeddale, Ettrick and Lauderdale, which are much more of a mouthful than Delyn and Prestatyn. If those constituencies can be so clearly and accurately defined, I do not see why my constituency cannot receive the same fair treatment.
  Apart from that one consideration, I fully agree with the boundary commissioners' recommendations and warmly welcome the 367 electors of the village of Northop Hall, who are now released from Socialist bondage into my tender, loving care.
  10.35 pm
  Mr. Gwilym Jones: I have a feeling that the Order will go through quite rapidly and I do not want to delay it. I support my hon. Friends from north Wales with the usual trepidation that any south Walian has when interfering in matters that affect north Wales.
  Mr. D. E. Thomas: Does the hon. Gentleman understand that there are no Walians, only Welsh persons, so he should have no trepidation?
  Mr. Jones: I appreciate the distinction that the hon. Gentleman is making. We all have our own way in which to refer to geographical or traditional differences between one end of the Principality and another.
  I support my hon. Friend the Member for what is at present called Delyn (Mr. Raffan). I am sure that he has proposed an admirable alternative, which I hope will be properly considered. These minor changes to half a dozen constituencies should not be treated lightly. At least three are among the most marginal constituencies in the Principality. Alyn and Deeside is held temporarily by Labour with a majority of about 1,100. Wrexham is held temporarily by Labour with a majority of about 400 and Montgomery is held temporarily by the Liberal party with a similar majority. I am sure that the House will be interested to hear that a movement of a little over 2,000 votes would bring those seats into the Conservative fold and complete the process, by the next general election, of the Conservative party being the majority party in Wales.
  My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) spoke of the disappearance of the illustrious names of Flint and Denbigh although they were even easier to pronounce. I should like also to congratulate my hon. Friend the Minister on his efforts to pronounce Welsh names correctly.
  10.37 pm
  Mr. Douglas Hogg: I thank my hon. Friend the Member for Cardiff, North (Mr. Jones) for his support for the Order. Like him, I look forward to the day when the Conservative party dominates the Principality. I fancy that that will not be all that long postponed.

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  I have very great sympathy for what my hon. Friend the member for Delyn (Mr. Raffan) said. A double-barrelled name is in no way a disqualification for naming a constituency or for naming an hon. Member.
  Mr. D. E. Thomas: Hear, hear.
  Mr. Hogg: All that I can sensibly say is that the Commission decided that this was not a sensible time to make a change. I hope that the House does not feel that it wants to dissociate itself from such a view.
  My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) is right. The constituency names of Flint and Denbigh are distinguished and historic. I am pleased to say that they are represented by an hon. Member who is at least as distinguished, if not as historic.
  The hon. Member for Newport, East (Mr. Hughes) raised a variety of points and the answer to most—although not all—of these can be found on page 9 of the commissioners' report. I shall summarise these very briefly. The total numbers involved are 1,018 and the constitution of that figure is conveniently set out in tabular form on page 9. Perhaps I could recommend that the hon. Member for Newport, East study the table. There were five representations, and again these are conveniently summarised on the same page of the report. There was one public meeting held in October 1985 which was presided over by one of the deputy commissioners. Details of that can be found in the report. I think that I have answered the three points that the hon. Gentleman was kind enough to put to me. In these circumstances, I commend the order to the House.
  Question put and agreed to.
  Resolved,
  That the draft parliamentary Constituencies (Wales) (Miscellaneous Changes) Order 1986, which was laid before this House on 16th July, in the last Session of Parliament, be approved.

  Scottish Highlands and Islands
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Portillo.]
  10.40 pm
  Mr. Charles Kennedy: I am grateful for the opportunity this evening to raise some of the dramatic and important concerns, not just in my constituency and in the Highlands and Islands but of the Scottish economy as a whole which have been caused by the decline in the price of oil and the attendant collapse in much of the oil-related activities in those communities heavily dependent on such activity.
  The back-drop to the debate is obviously the quite unimaginable effects of the unexpected collapse that has taken place in oil prices during 1986. The Minister, as he has responsibility for industry at the Scottish Office, will be the first to appreciate the importance of the oil industry to the whole of the Scottish economy. It is especially important in those parts of the country where entire communities are dependent on the well-being of one particular industrial concern which, in its turn, is almost entirely dependent on the well-being of the oil and oil-related industries.
  In my constituency we have already witnessed some of the catastrophic effects engendered by the present position. The Howard Doris yard at Kishorn has recently gone into receivership and the potential achieved by that yard in days gone by for employing thousands of people and the potential which, until recently, it still hoped to realise, of employing hundreds of people—which the Minister would accept is a significant number for the west coast of the Highlands and for the Skye and Lochalsh district—has disappeared, at least for the foreseeable future. The difficulties of that company and of that yard in particular, are clearly directly attributable to the difficulties of the industry in which they are operating.
  Equally, it must be said that the other oil yards on the mainland of the Highlands—both Highlands Fabricators at Nigg in my constituency and McDermott's at Ardersier in the constituency of my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston) must face an extremely uncertain and therefore dispiriting time over the months and years ahead for the simple reason that, with the decline in prices, there is a great deal of uncertainty, a lack of forward planning and a dearth of orders for which yards of that magnitude can bid. That in turn is further reflected in the case of the Lewis Offshore yard at Arnish which at present, thankfully boasts a healthy order book but which clearly cannot, without an upturn in the industry, expect further security of contracts and employment in future.
  Those big fabrication yards, which have become crucial to the economy of the Highlands and Islands, to varying extents from receivership to a reasonable order book—although with a question mark above it—and the gradations in between all face uncertainty. More crucially, the communities and the jobs that are so dependent on their well-being also face uncertainty.
  Obviously, that spills over to the onshore related sectors of the oil industry in supply, servicing and support. I know that that is of concern to my hon. Friend the Member for Orkney and Shetland (Mr. Wallace), who is present tonight—
  Mr. James Wallace: My hon. Friend has mentioned the problems that face the construction yards, not least in his constituency. Does he accept that oil supply bases in my constituency have been threatened and redundancies announced because of the recession? In addition, the inspection, repair and maintenance base at Lerwick that was opened in the summer by the Prince and Princess of Wales has not had work since. I do not want to anticipate what my hon. Friend wishes to say about what should be done, but it must be in the area of action that will stimulate further exploration and activity offshore.
  Mr. Kennedy: I am grateful to my hon. Friend. I know that he has been active both in his constituency and in this House with me in pursuing the claims and concerns of his constituents and the industries located in Orkney and Shetland. He mentioned some examples in his brief intervention. I agree with him that that is one aspect of the industry that is especially hard hit, not least in his constituency. Some of the measures that I wish briefly to outline tonight would advantage and benefit his area and mine.
  As a result of the quite drastic downturn in activity, in a fragile economic area at the best of times—such as Skye and Lochalsh, Wester Ross and the Highlands and Islands as a whole—there has been a severe contraction of the economic base. Hard on the heels of the hammer blows of the closure of the pulp mill at Corpach and the closure of the aluminium smelter at Invergordon, the further decline in oil-related activity has placed quite intolerable strains on an economy which, at the best of times, is liable to be even poorer or slightly weaker because of its geographical location than other parts of Scotland.
  The working assumptions for the levels of unemployment—as opposed to the travel-to-work assumptions—by the Manpower Services Commission and others in the towns of Invergordon and Alness are about 40 per cent., which underlines how drastic and severe are the economic problems associated with the decline.
  Throughout the year several hon. Members, including myself and my hon. Friend the Member for Orkney and Shetland, have pressed the case for tax changes to stimulate North sea oil exploration and development work. We were pleased to welcome the change that the Chancellor of the Exchequer introduced in his autumn statement two weeks ago. It will be of assistance to that hard-pressed sector. However, we want to go further and say that any further fiscal stimulae, any further tax incentive that is given to the oil companies, must be very carefully tied to a commitment by them that such extra revenue that comes in through cash flow will be geared towards further development and exploration work. The only safe way to ensure that the extra money that the Treasury is willing to forgo to help the industry will see its way to the front line of the industry, with further contracts open to bidding by the fabrication yards and the support, supply and servicing sectors.
  I hope that the industry Minister at the Scottish Office and his opposite number in the Department of Energy will confirm that they will be making the case to Treasury Ministers to introduce the necessary changes to encourage further development.
  I am especially interested in a report that appeared just over two weeks ago in the Sunday Telegraph which suggested that, in addition to, or even in place of, tax
  238
  incentives, the Government were considering the possibility of equity arrangements for the oil companies as an alternative means of encouraging further development. I appreciate that that is perhaps more the responsibility of the Treasury or the Department of Energy, but I hope the Minister will confirm that he will pass on our interest in these arrangements, which suggest that they may have the right blend of public and private sector capital to make them worth while.
  What further steps can be taken for the sake of the Highlands economy and the communities in it in the wake of the fall in oil prices? First, I would make a plea on behalf of all of us who represent Highlands and Islands constituencies. We want to see regional development status restored as fully as possible to those parts of the area which lost it in the redrawing of the regional development map two years ago. It is surely the case that an area of the country which has great difficulty competing on an equal basis, as it does because of its distance from markets, is bound to be more severely disadvantaged and face even more unfair competition when it is not able to offer companies the same level of inducements as they are able to attract or receive elsewhere within the Scottish economy. I hope that the Minister, despite the reticence, that he has shown on this issue in recent weeks in the House, will be able to say that he is willing to look again at the matter, because the present situation is a strong disincentive for a potential inward investor in the Highlands and Islands.
  Secondly, we have recently seen the boundaries of the Highlands and Islands Development Board extended to include the Moray area, but, sadly, and not in line with the recommendation of the Select Committee on Scottish Affairs, that increase has not been met or matched by a requisite increase in finance. I believe that the Budget should be increased by at least £1 million. I hope that the Minister will consider that.
  Thirdly, despite the overall economic gloom, there are still some exciting economic projects being mooted within the Highlands and Islands, in which the Highlands regional council—particularly the planning and development departments of the council—and the Highlands and Islands Development Board have been involved. One is the Dornoch crossing, which could be an important addition to the infrastructure, and indeed to the entire lifeline of the northern community, stretching right up through Ross-shire, Sutherland and Caithness and to Orkney. My hon. Friend the Member for Orkney and Shetland will confirm the importance of this project to the passage of goods and people. I hope that the difficulties which that dual road and rail crossing, which we want to see in the Highlands, ran into earlier this year can be overcome by the Scottish Office dealing with ScotRail and with the help of the European regional development fund.
  I would also say in passing, as one is talking about bridges, that I am sure that in the coming weeks and months the Minister will see more material on his desk on the proposed bridge to Skye, about which the Highlands regional council has recently had a further consultant's report delivered to it. It seems an exciting project and one which could do a great deal to open up again the economic potential of the west coast and of the island itself.
  Equally, on the tourism and leisure side, there are two skiing developments—one at Ben Wyvis, in my constituency near Strathpeffer, and the other at Aonach Mhor in Lochaber, in the constituency of my hon. Friend

  239
  the Member for Inverness, Nairn and Lochaber, both of which I know have been brought to the attention of Ministers by the local authorities concerned, by private developers and by others, and both of which I think deserve careful consideration by Ministers as a possibly valuable contribution to the leisure orientation of the Highlands economy.
  All those who wish to support the development and further stimulation of the Highland economy can only shake their heads in disbelief at the current difficulties faced by a valuable project which would be a unique facility, not just for the Highlands or for Scotland as a whole, but for the British economy. It is not the Minister's fault. Indeed, perhaps it is no Minister's fault. It is the fault of the bureaucratic inertia which envelops the British planning system. The Land and Marine Company has a strong desire to open a subsea facility near Tain. As it breaches a site of special scientific interest, a public inquiry has had to be held. The Scottish Office is considering the matter further. The company will clearly have difficult in tendering effectively for an international contract when it is faced with such planning blight.
  If I say that the amount of the site of special cientific interest which is affected by the proposal is less than one quarter of 1 per cent. and that a petition signed by hundreds of people in the area has been sent to the Scottish Office, saying that they want the project because of the jobs that it will bring, it seems crazy that, against the generally gloomy backdrop, and with an exciting project which is wanted by the Department of Energy—it is the sort of project which any Government would want—the planning procedures of the Scottish Office are such that it is taking a long time to come to fruition.
  There are opportunities on the horizon, but I should leave the House and the Minister in no doubt that there are great difficulties, too. The oil decline has been largely to blame for the problems that we are encountering and for the excessive and unacceptably high unemployment. Although it is an international problem which ultimately will demand international solutions, none the less the Government could take some steps. The Opposition have been urging them to take those steps during this year, and I hope that tonight the Minister will confirm that some of those steps will be considered and carried out.
  10.56 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Ian Lang): I congratulate the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) on his success in affording the House the opportunity to consider the economy of the Highlands and Islands and how it is affected by reduced oil prices. The Government are conscious of the benefits which have accrued over the years to the Highlands and Islands from the development of the United Kingdom continental shelf, and we share the understandable anxiety of those who live in the area about the impact of the downturn in some oil-related activities on communities, especially those where local employment is heavily dependent on the fabrication yards.
  I shall consider several aspects of the current position, but, first, I shall try to set it in perspective. The difficulties of achieving consistently high employment in the Highlands and Islands are well-known to successive Administrations; and they have not proved amenable to
  240
  any single all-encompassing solution. The discovery of oil in the North sea led to a surge of activity, and from the early 1970s until 1981 oil-related work provided a noticeable and welcome boost to employment. Much of this was related to the construction of the oil terminals, with a high proportion of incoming workers, at Sullom Voe and Flotta. As these were completed, there was a corresponding reduction between 1981 and 1985, leaving about 1,200 permanent jobs at the oil terminals. Added to these were about 3,500 jobs at the end of 1985 in the fabrication yards.
  Against that background of an inevitably reducing construction-related work force—it is important to recognise the distinction—the number of jobs wholly associated with North sea oil in the Highlands and Islands has not shown a dramatic change of late. For example, the June 1986 figure of 5,783 was slightly up on the 5,573 recorded in December 1985. However, I recognise that the fabrication yards face a very difficult ordering position. I am aware that the McDermott yard at Ardersier has notified redundancies of more than 500, and the problems of the Howard Doris yard at Kishorn, to which the hon. Gentleman referred, are widely recognised.
  But it is important to keep the matter in perspective. Low prices inevitably give rise to short-term difficulties for oil supply industries. The oil industry is by no means all doom and gloom. It will not help to talk down its prospects, as is happening in some quarters. There will continue to be opportunities for tough, competitive companies that are willing to face up to the challenges. We need to consolidate and to sustain the United Kingdom's leading position in this industry, especially in developing new, cheaper means of exploration and development.
  Oil exploration activity is holding up well this year, and oil and gas production continues at high levels. My colleagues at the Department of Energy have approved 12 new developments this year worth over £2 billion. The forthcoming tenth round of offshore licensing will help to maintain the momentum of exploration activity.
  Mr. Michael Forsyth: Does the Minister agree that, if the Government were to follow the prescriptions of alliance policy, as announced by the hon. Member for Gordon (Mr. Bruce), and limit the output from the North sea, unemployment in the Highlands and elswehere in Scotland would be a good deal worse?
  Mr. Lang: My hon. Friend has made an important point. I shall refer to that point shortly. There is good reason to have confidence in the future.
  It has been suggested—it is precisely the point that my hon. Friend made—that the Government should intervene to cut the rate of oil production as a means of forcing up the oil price and thereby increasing development activity. This is not a practical or desirable proposition for a variety of reasons. United Kingdom production amounts to only about 6 per cent. of the world total. Any action we take would therefore have a negligible effect on world markets. Activity in the offshore supply industry depends on the level of current production being maintained. Any cutback could have disastrous effects. In any case, it must be remembered that lower oil prices benefit the wider economy and help to create jobs.
  The Government are well aware of the need to maintain the right fiscal regime in the United Kingdom continental shelf. The system created in 1983 is generally responsive

  241
  to oil price fluctuations and does not inhibit worthwhile new activity. But the position is kept under constant review, and I am aware of the various suggestions for change which have been put forward. Of course, we recognise that some operators are facing cash flow problems as an immediate result of the fall in oil prices. It is for this reason that my right hon. Friend the Chancellor intends to accelerate the repayment of some advance petroleum revenue tax. Again, the hon. Member for Ross, Cromarty and Skye referred to it. This will inject over £300 million into the United Kingdom oil economy and will, I hope, be reflected in an increase in offshore activity.
  Turning to a more general consideration of the area's economy, we are taking positive steps. The Highland and Islands Development Board is the Government's principal agency for improving the Highlands and Islands economy and social conditions. The board is very well aware of the difficulties that the oil industry is facing. The board has already identified the Invergordon area and Stornoway as priority areas and has expressed concern about the effect of the impending closure of the Kishorn oil rig yard on the local economy of Lochalsh and Wester Ross. The board is constantly seeking new developments and projects which will be suitable for the Highlands and Islands, and particularly those which will make use of the natural resources and the natural advantages of the area.
  Direct financial assistance to businesses is available in the form of loans at below commercial rate, interest relief grants, equity participation and relocation grants. The board can provide assistance for capital projects and for working capital. In special circumstances, for example, when a project faces high start-up costs and offers particularly good economic potential, special grant assistance towards the cost of buildings and for other capital outlays can be available from the board. The board is empowered to assist all types of projects that would contribute towards the development of its area, and these are divided between its four functional divisions—fisheries, industrial and commercial development, land use and tourism.
  In 1985–86 the HIDB provided over £20 million in assistance for 1,891 projects. The board expects, during 1986–87, to approve total assistance of £18 million to about 1,600 cases, providing around 2,200 jobs. In addition, it may also give financial assistance to projects which have social or partly social objectives but which may not be commercially viable.
  Therefore, the board's activities are already geared to improving the economy and creating new jobs, and any adverse effects of the oil industry difficulties will be taken into account. I mention these points to demonstrate that action is already being taken as part of the board's normal functions, without the need for new incentives. The board is not short of funds, and it has been successful in attracting £3 of private sector investment for every £1 spent by the board. The total investment in 1985–86 from both sources was an impressive £85 million. My right hon. and learned Friend the Secretary of State has already told the board that its powers of assistance can be supplemented as necessary through regional selective assistance when major projects are at stake.
  The board has had considerable success in attracting new developments and this can be measured by the number of new jobs created in projects which the board has assisted. The estimated number of jobs created in 1985–86 was 2,500 and this was an increase over the 2,000
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  jobs created in the previous year. I am satisfied that the board is doing all that it can to stimulate the Highlands and Islands economy and encourage private sector investment in its area. Naturally, I hope that it will be even more successful in creating jobs in the years to come. I was glad recently in Committee to move a motion relating to an order to extend the HIDB area to include parts of Moray within its borders.
  I draw the attention of the House to Invergordon, where we have set up an enterprise zone. I recognise that the number of new jobs in the zone is small in absolute terms, but nevertheless progress has been reasonably encouraging. There are now almost 400 jobs in 50 firms in the zone compared with 100 in eight firms at designation three years ago. It would, of course, be wrong to compare Invergordon in its rural setting with the other Scottish enterprise zones. It is not in direct competition with them over projects for which a central Scotland location would be appropriate. There are still seven years of the enterprise zone to run and infrastructure, such as the link road at Alness, is now virtually complete. Considerable opportunities remain for further development and employment at the zone. Indeed, only yesterday, my hon. Friend the Parliamentary Under-Secretary of State for Scotland—the hon. Member for Argyll and Bute (Mr. MacKay)—was in the area opening BP's £3·3 million fish farm food manufacturing plant and subsequently returning to Edinburgh down a now quite excellent A9 road.
  On the positive side, the Invergordon area is benefiting from oil developments. The Cromarty Firth is now firmly established as the United Kingdom's main centre for the inspection, repair and maintenance of oil rigs and has made excellent progress in attracting a large share of the IRM market. Other assistance available within the HIDB area includes that provided by the Scottish Development Agency. The agency can and does operate within the HIDB area, principally through its land renewal and environmental projects but also in respect of major industrial projects. In certain instances, such as Highland Craftpoint, the agency provides support for the venture's operational budget alongside assistance from the HIDB.
  Under a special arrangement, the European Commission has accepted the whole of the HIDB's area as eligible for assistance from the European regional development fund, notwithstanding the fact that parts of it are now non-assisted following the 1984 changes. Since 1975, some £98 million of ERDF assistance has been provided to the area. Selective financial assistance may be available to projects which operate, maintain or safeguard employment in manufacturing, mining and construction industries within assisted areas. In addition, assistance may be given to meet training expenses associated with start-up or expansion.
  The Scottish Development Agency contributed some £700,000 towards the upgrading of facilities at the Invergordon support base in 1984 and is now contributing a further £1 million towards a new wet dock there. A further £1·5 million is being provided through the European regional development fund and the Highlands and Islands Development Board. The temporary downturn in the oil industry will obviously affect trade at the base, but I am confident that the provision of the new dock will leave the base extremely well equipped to compete for available work.
  The hon. Member for Ross, Cromarty and Skye suggested that changes should be made to the existing

  243
  assisted area status in parts of the Highlands and Islands. I know that that is a favourite theme of his. As the House knows, the present assisted area structure was established after a comprehensive review of regional policy and the assisted area map. It must be remembered that the designated status of an area is based on an assessment of relative needs across the United Kingdom as a whole. Changes to the status of particular areas inevitably have implications for others and it is by no means certain, even given the difficulties in the oil industry, to which reference has been made, that a review now would result in the changes which the hon. Gentleman seeks. It is important to achieve some stability in the present arrangements which have been in place for only two years. I do not believe that the time is yet ripe for considering a change of status.
  The drop in oil prices has brought about some retrenchment by the operators. Inevitably, there is an initial reaction to review spending programmes and this has led to some companies reducing or delaying development projects. However, current production is largely unaffected. Delays in new projects have hit most severely orders to the fabrication yards, and with four of them—at Nigg, Ardersier, Kishorn and Lewis—the
  244
  Highlands and Islands area has been particularly affected. The hon. Gentleman has rightly referred to the concern over the Howard Doris yard going into receivership and the redundancies announced at McDermott, both in areas where unemployment is already high.
  I would not attempt to argue that the present oil price climate makes the short-term prospect for major new fabrications other than difficult, but it is wrong to look only downwards at the present trough. The oil industry is essentially cyclical by nature and the operators essentially realistic in approach. The industry will now be looking to the smaller less capital intensive developments in both gas and oil, to methods of enhanced recovery from existing fields, and at technological and work practice improvements to enable it to continue production and bring new developments on stream at costs which make these profitable. It is essential that the oil-related industry in all its aspects, in the Highlands and Islands and throughout Scotland, gears itself to respond to these requirements and that it recognises the existing and potential markets not only on the United Kingdom continental shelf but elsewhere in Europe and further afield.
  Question put and agreed to.
  Adjourned accordingly at ten minutes past Eleven o'clock.

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  Merchant Fleet
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  Dock Labour Scheme
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  Railway Safety
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  Buses
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  Docklands (Road Access)
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  Transport Act
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  MV Kowloon Bridge
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FOREIGN AND COMMONWEALTH AFFAIRS
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ENERGY
  Uranium
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  Nuclear Installations
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  Power Stations
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  Nuclear Reactors (Safety)
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  Departmental Initiatives
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EMPLOYMENT
  Work Test
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  Job Monitoring
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  United States of America (Tourists)
  United States of America (Tourists)
  Jobstart
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  Departmental Publicity
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  Disabled Persons (Work Test)
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PRIME MINISTER
  Westland plc
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  Crown Dependencies
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  Engagements
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ATTORNEY-GENERAL
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NORTHERN IRELAND
  Anglo-Irish Agreement
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HOME DEPARTMENT
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  Ashwell Prison
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  Prisoner Escapes (Salisbury)
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EDUCATION AND SCIENCE
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TRADE AND INDUSTRY
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WALES
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SCOTLAND
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DEFENCE
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AGRICULTURE, FISHERIES AND FOOD
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SOCIAL SERVICES
  Erith and Queen Mary's Hospitals
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  Medicines (Information)
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  Hospital Drug Formularies
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  Drugs
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  Severe Disablement Premium
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  Patients (Waiting Lists)
  Patients (Waiting Lists)
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  Health Authorities (Staff)
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  Conductive Education
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  Competitive Tendering
  Competitive Tendering
ENVIRONMENT
  Sheltered Accommodation
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  Housing Expenditure
  Housing Expenditure
  Angling
  Angling
  Local Authorities (Political Propaganda)
  Local Authorities (Political Propaganda)
  Transport (South Yorkshire)
  Transport (South Yorkshire)
  Mortgages
  Mortgages
  Imported Building Materials
  Imported Building Materials
  County Expenditure
  County Expenditure
  Forth and Clyde Canal
  Forth and Clyde Canal
  Property Services Agency
  Property Services Agency
  Council House Sales
  Council House Sales
  Home Improvements
  Home Improvements
  Housing Staff College
  Housing Staff College
THE ARTS
  Departmental Initiatives
  Departmental Initiatives
CIVIL SERVICE
  Delegate Responsibility
  Delegate Responsibility
NATIONAL FINANCE
  Balance of Payments
  Balance of Payments
  Cigarette Duty
  Cigarette Duty
  Mortgage Tax Relief
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  Independent Taxation
  Independent Taxation
  Counterfeit Goods
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  Direct Cosmetics Ltd
  Direct Cosmetics Ltd
  Value Added Tax
  Value Added Tax
  Media Advertising
  Media Advertising

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

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Hailsham of Saint Marylebone: My Lords, before the commencement of business, I should like to take the opportunity to inform the House that tomorrow I am to have the honour of attending upon His Royal Highness the Duke of Kent when he opens the new Crown Court at Guildford. Accordingly, I trust that the House will agree to grant me leave of absence tomorrow.

Financial Services Act: Authorisation Decisions
Lord Parry: 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 satisfied that the Financial Services Act 1986 will promote open authorisation decisions by regulatory bodies.
Lord Beaverbrook: My Lords, I have nothing to add to the Answer given on 6th November to the noble Lord's identical Question.
Lord Parry: My Lords, the House will know that I am grateful to the young Minister for his full and clear response. However, in view of the welcome provision in the Act, which gives SROs the right to establish independent complaints schemes, and of the Minister's confirmation in another place that applicants for authorisation could have recourse to such schemes if they wished to complain about the practices of the SRO, will not the noble Lord express the hope—and note the hope expressed by Members of both Houses—that such schemes will be established and invested with real powers? Moreover, will he press SROs speedily to take up the opportunity offered by the Act?
Lord Beaverbrook: My Lords, under the Act, the SROs are required to act fairly and reasonably in recognising businesses applying for authorisation. As a self-regulating organisation, it is the criterion of recognition that its rules and practices about admitting or expelling members must be fair and reasonable and there must be adequate provision for appeals.
Lord Williams of Elvel: My Lords, in the light of yesterday's reported request by a major investment bank for a judicial review of the decision by the Takeover Panel, will the noble Lord confirm that the operation of what he describes as "fair and reasonable" rules and practices will also be open to judicial review?
Lord Beaverbrook: My Lords, I am not able today to confirm whether they will be open to judicial review, but your Lordships' House passed the Act which provides for many functions to be transferred to a designated agency composed of experienced practitioners and independent lay members. It would be for the agency to assess the organisation's rule books and to decide whether the rules on admission are fair and reasonable.
Lord Hacking: My Lords, will the Minister accept that this is a problem that needs tackling, and tackling soon? Accepting that proposition, will the Minister also accept that at present potential SROs are not only formulating their rules but are accepting members into their company? Is this not the matter which directs itself to the problem of authorisation?
Lord Beaverbrook: Yes, my Lords

South Africa: UN Sanctions Resolution
2.39 p.m.
Lord Hatch of Lusby: 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 their attitude to the UN General Assembly resolution of 11th November 1986 calling on the Security Council to adopt comprehensive, mandatory sanctions against South Africa.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we voted against this resolution because we oppose general economic sanctions which we believe would only serve to stiffen the South African Government's resistance to ending apartheid; to undermine further the stability of the region; and to destroy the jobs of large numbers of ordinary people in South Africa, in neighbouring countries and in Britain.
Lord Hatch of Lusby: My Lords, is the noble Baroness aware that in the commercial and financial world organisations such as Barclays Bank, IBM, General Motors, Kodak and many other such corporations take a different view from Her Majesty's Government? Is the noble Baroness prepared to take into consideration the rapidly increasing view of the commercial world so far as South Africa is concerned when this Motion is debated, as I believe it is due to be, in the Security Council?
Baroness Young: My Lords, our attitude to any possible motion in the Security Council is something that we would have to decide when such a resolution appears. At present, it is a hypothetical question.
Lord Cledwyn of Penrhos: My Lords, is the noble Baroness able to say whether the Government supports the action of Barclays Bank in withdrawing from South Africa? Would the Government be prepared to support other large British companies if they so decide to withdraw from South Africa? Finally, is the noble Baroness able to say whether the

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Government were consulted by Barclays Bank prior to the withdrawal, and what advice they gave?
Baroness Young: My Lords, the action of Barclays Bank is a matter for Barclays. It is a commercial decision for them. As regards the point about whether we were informed in advance, we were warned in very general terms.
Lord Mackie of Benshie: My Lords, would the noble Baroness care to say what alternative measures—assuming that the Government disapprove of apartheid—they think the world and the British Government should take, apart from sanctions?
Baroness Young: My Lords, the attitude of the British Government has been very plain. We joined with our Community partners in a statement of the measures that we were taking in September. On the positive side, we have given considerable financial support to the black African community within South Africa.
Lord Mellish: My Lords, is the noble Baroness aware that sanctions are designed to help the coloured people? Would the noble Baroness like to make a comment as to whether they do?
Baroness Young: My Lords, as a general principle we have taken steps to help black South Africans within South Africa. As regards the particular issue of Barclays' disinvestment in South Africa, that, of course, is a matter for Barclays.
Lord Williams of Elvel: My Lords, will the noble Baroness answer my noble friend's second question, which was whether Her Majesty's Government would encourage other firms and other industries to withdraw from South Africa?
Baroness Young: My Lords, the question of whether a company should disinvest from South Africa is a matter for the commercial judgment of companies and not for Her Majesty's Government.
Lord Parry: My Lords, is it not a fact, however, that the judgment was taken on the grounds that apartheid is no longer profitable, not that apartheid is evil?
Baroness Young: My Lords, it is, I think, for Barclays to answer why they took the decision.
Lord Kinnaird: My Lords, would the noble Baroness perhaps not agree that it is about time that some of us stopped meddling in other countries' business?
Baroness Young: My Lords, I think that the attitude of the Government to South Africa, and particularly to the policy of apartheid, is well known, but of course my noble friend makes an important point.
Lord Hatch of Lusby: My Lords, is it not the case that the chairman of Barclays Bank has already stated that the decision taken was not taken solely on commercial grounds, but also on political grounds? Is the noble Baroness aware that Barclays Bank have
434
already announced that there is no reason to suppose that any employee will lose his job because of this disinvestment? When the noble Baroness speaks of the end of apartheid and the improvement of conditions in South Africa, is it not the case that just this week the Presidential Council's report on the Group Areas Act, which is a foundation stone of apartheid, has been shelved, and that therefore the hope expressed by Her Majesty's Government that the South African Government will get rid of apartheid is still as remote as it ever has been?
Baroness Young: My Lords, it is not my business to speak on behalf of Barclays and the reasons which led them to the decisions which they have taken, and I do not intend to move from that point. On the second point that the noble Lord, Lord Hatch, raised, the fact of the matter is that the South African Government have taken a number of steps to end apartheid but, as I have said to him on many occasions in the past and I say again, we think that they have been too few.
Lord Gisborough: My Lords, would my noble friend agree that there is a lot of evidence that the South African Government would like to have dismantled apartheid more quickly than they are doing but that they are held up by their electorate, who are insisting that apartheid remains? Therefore, is it not important to play to the electorate as much as it is to play to the government?
Baroness Young: My Lords, I think that the policies of the South African Government are again a matter for them, but, as I have said on many occasions, the British Government would like to see an end to the system of apartheid.
The Earl of Halsbury: My Lords, is it not time that we allowed Barclays Bank, General Motors, old Uncle Tom Cobbleigh and all to get on with their own business and leave us to get on with ours?
Baroness Young: My Lords, I can only say, "Well said!"

Freight Transport
2.46 p.m.
Lord Gainford: 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 action they are taking to prevent environmental damage by promoting freight travel by rail rather than by road.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, it has been the policy of successive governments that industry should be free to choose the most suitable and cost-effective freight transport. At the same time we recognise that heavy flows of lorry traffic on unsuitable roads can damage communities and this Government have made full use of their grant powers under the freight facilities scheme to encourage the use of rail where it makes good environmental

435
sense. So far 177 grants totalling £61 million have been approved, removing 34 million tonnes of freight a year from unsuitable roads.
Lord Gainford: My Lords, I thank my noble friend for that Answer. Has he any information as to what Her Majesty's Government may be able to do for companies which have a factory where there is no easy access to railway sidings, which have to use a lorry to get their freight to the railway and which then perhaps face the prospect of having to use a lorry at the other end? Those companies may think "Well, why not let us go the whole hog and take it by road anyway".
Lord Brabazon of Tara: My Lords, this scheme is primarily for those companies that have reasonable access to the railway system and therefore can either build a siding from the main line to their factory or perhaps build some form of conveyor belt system. If the factory is too far away from the railway and it requires road transport to and fro, it would not be suitable for this scheme.
Lord Underhill: My Lords, would the Government be prepared to review the rate of grants for the freight facilities to which the Minister referred in his main Answer? Secondly, as transport by rail is profitable over 200 miles, will the Government take a look at the possibility of having transhipment centres outside the main conurbations, bearing in mind that at least in Paris two have been established which are a great success commercially? Would that not relieve the situation and enable the speedy transfer of goods from rail to road in the conurbations?
Lord Brabazon of Tara: My Lords, on the noble Lord's first question, we keep the criteria for the grants under consideration. The main criteria are that there should be worthwhile environmental benefits and that the traffic would otherwise go by road in the absence of a grant. But we must not forget value for money and the fact that the grant is for capital expenditure only. On the noble Lord's point about transhipment centres, that is something I shall have to look into. I do not have details of that with me at the moment.
Lord Mellish: My Lords, the Minister said in his reply that it is a matter of freedom of choice for those who wish to convey goods, but is he aware that the position is now absolutely chaotic? Rail and road have been mentioned, but what about river transport? The River Thames is empty today. Noble Lords can go out to have a look. It is absolutely empty, and yet all our bridges and roads are choked up. Does the noble Lord agree that at some stage, somewhere, some Minister has to have the courage to say to those who deal with freight, "Look, that sort of freight is either going by rail or by river"? No other country in the world would stand for this situation.
Lord Brabazon of Tara: My Lords, as I said in my original Answer, it has been the policy of successive governments that freight should be moved by the most suitable and cost-effective means. The noble Lord may have his views on that. I would point out, however, that there is another type of grant available for inland waterways transport under Section 36 of the Transport
436
Act 1981. A number of schemes have been approved for grant under it, but not a great many.
Lord Somers: My Lords, has not this subject been raised countless times in the last two years? Since it has been proved that heavy road traffic does considerable damage to many buildings, some of them very valuable, when will the Government do something about this? Are they going to wait until all these buildings have tumbled down and are completely irreparable?
Lord Brabazon of Tara: The noble Lord asks what we are doing about the situation, my Lords. First, we have this grant, and since it came into operation over 34 million tonnes of freight a year have been removed from unsuitable roads. I should have thought we were doing something about it.
Viscount Massereene and Ferrard: My Lords, my noble friend referred to unsuitable roads, but it is not only that. Is he aware that the situation is absurd? Bulk cargoes such as iron and timber travelling over 100 miles ought to go by rail. Does he also agree that to a certain extent it is a question of life and limb? If one travels on some of these motorways in the pouring rain, in the dark, with these vast lorries weighing 40 tonnes and doing 70 miles an hour, it is a question of life and limb. I have nearly been killed two or three times.
Lord Brabazon of Tara: My Lords, I am sorry that my noble friend has had these experiences. I trust that he will therefore draw attention to the possibility of these grants to any shipper who is involved in this sort of business and make sure that everyone knows they are available.
Lord Taylor of Gryfe: My Lords, does the Minister agree that the transport of coal is the biggest contributor to British Rail revenue so far as freight is concerned, and that that revenue was lost to some extent during the miners' strike when traffic was transferred to road transport, which is environmentally damaging? What steps are being taken to ensure that coal is now transported substantially, or overwhelmingly, by rail, which is less offensive to the environment?
Lord Brabazon of Tara: My Lords, I am afraid that I do not have the figures for what proportion of coal transport moved to the roads during the miners' strike has since returned to British Rail. British Rail can compete successfully with road transport for the movement of coal and the more that goes back to rail the better. On the other hand, we know very well why the freight was transferred from railways to road, and from that point of view the railways, or their employees, have only themselves to blame.
Viscount St. Davids: My Lords, does the Minister have figures for the damage done to the environment by the accidental spillage of dangerous and poisonous cargoes from road vehicles compared with comparable dangers from spillage from road or water transport? Are there figures that he can give the House on this subject?
Lord Brabazon of Tara: Not without notice, my Lords, but I shall look into the matter and see whether I can find such figures.

Navigation Light Dues: Policy
2.54 p.m.
Lord Campbell of Croy: 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 intend to spread the costs of lights for navigation more widely, so that an inordinate burden does not fall upon the British merchant fleet.
Lord Brabazon of Tara: My Lords, the Government are aware of the burden these charges impose, both on the shipping industry and on United Kingdom ports, and are giving close consideration to means of reducing it.
Lord Campbell of Croy: My Lords, I thank my noble friend for that reply. However, is he aware that the tax in question, light dues, is levied on merchant shipping but not on other categories of vessel which also benefit from these navigational aids, and that some neighbouring countries that compete with our ports and shipping raise the costs of lighthouses from general taxation?
Lord Brabazon of Tara: My Lords, I am aware of the point my noble friend makes. It is true to say that we are the only Western European country which charges light dues to users rather than the taxpayer. As regards other classes of users, we have looked into the possibility of charging yachtsmen; but we recognise that would be administratively very difficult and would be unlikely to secure a positive benefit. So far as charging fishing vessels is concerned, we are considering that problem at the moment, particularly in regard to the services of the Decca navigation system.
Lord Simon of Glaisdale: My Lords, have not the Government had the report, which they themselves commissioned on this matter, for a year now? Even if there are administrative and political difficulties in implementing some of the recommendations, is not the figure of 14 light due free entries—free passage after that number of entries—grossly anomalous? Should not that anomaly be dealt with right away by substantially raising the figure of 14?
Lord Brabazon of Tara: My Lords, I must confess that I am not entirely clear on the figure of 14 to which the noble and learned Lord, Lord Simon of Glaisdale, referred. He spoke about the Arthur Anderson Report, which was issued some little time ago. We are looking into this. A further study is under way at the moment. I shall make a statement on it in due course.
Lord Lloyd of Kilgerran: My Lords, can the Minister help on how long it will be before the matter relating to fishermen will be dealt with and published?
Lord Brabazon of Tara: My Lords, regarding the payment of light dues when the lighthouse authorities take over the operation of the Decca navigation system, there is an order currently before the House and I believe it will be debated before long.
Lord Greenway: My Lords, will the Minister agree that the burden mentioned in the original Question falls upon foreign flag shipping as our Merchant Navy has dwindled to a shadow of its former self?
Lord Brabazon of Tara: My Lords, it falls on all shipping which enters our ports, whether they be foreign or British.
Lord Campbell of Croy: My Lords, is my noble friend aware that that means there is a temptation to shipping to go to Rotterdam and other ports nearby rather than to our ports? Also, is he aware that he has not mentioned the Royal Navy or other ships owned by the Government which do not have to pay these dues?
Lord Brabazon of Tara: My Lords, on my noble friend's first point, yes, we are well aware of the difficulties this causes our ports in comparison with those of our Continental competitors. As far as the Royal Navy is concerned, Parliament decided in 1894 that the Royal Navy should not pay, and that remains the position at the moment.
Lord Strathcona and Mount Royal: My Lords, can the Minister give the House any information as to how these charges compare with the costs of pilotage which we shall discuss later this afternoon?
Lord Brabazon of Tara: My Lords, light dues, or the provision of lights, currently costs about £60 million in the current year, of which the amount actually paid by users is some £44 million.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Davidson will, with the leave of the House, repeat a Statement that is to be made in another place on the "Kowloon Bridge".

Local Government Act 1986 (Amendment) Bill [H.L.]
The Earl of Halsbury: My Lords, I beg to introduce a Bill to restrain local authorities from promoting homosexuality. I beg to move that this Bill be now read a first time.
Moved, That this Bill be now read a first time.—(The Earl of Halsbury.)
On Question, Bill read a first time, and to be printed.

Brighton Marine Palace and Pier Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Pilotage Bill [H.L.]
3 p.m.
Lord Brabazon of Tara: My Lords, I beg to move that this Bill be now read a second time.
This is an important Bill on an important subject. It concerns the marine pilots, who are a body small in number—currently about 1,300 in the whole country—but with a distinguished tradition of service to shipping. Few of us come across the work of the pilots in our day-to-day lives, yet their services are vital to the safe movement of many of the ships which enter and leave our ports. They are an important element in the transport system on which our ability to export and import successfully depends. And they will remain so in future. Despite the increasing sophistication of traffic management techniques in the ports, and of the equipment available to masters, it is still true that for many ships and in many ports there is no substitute for the combination of up-to-date local knowledge and shiphandling competence which the pilot can offer.
However, the way in which pilotage is at present organised has long been recognised by almost all who are familiar with it to leave much room for improvement. There was a series of reviews during the 1970s, culminating in some legislative changes through the Merchant Shipping Act of 1979 since consolidated into the Pilotage Act 1983. But the reforms which are needed are still not being carried out. The pilotage authorities (or the committees through which they exercise their responsibilities) are generally composed of representatives of the main parties with an interest in pilotage, principally the pilots, shipowners and port authorities. Each party tends to try to protect its own interests and the pilotage authorities have generally found it difficult to agree on the far-reaching reforms which are needed in some cases to improve local pilotage arrangements. Even where such proposals for reform are put forward, the existing legislation gives all the main interested parties the opportunity of objecting to the draft bylaws and orders necessary for change. A situation of stalemate has resulted in which progress towards reform has been minimal. The present structure certainly provides for full, indeed almost interminable, discussion of the problems of pilotage. What it does not do is give anyone the ability to take clear decisions and the power to carry them through.
Perhaps this would not matter very much if it were not clear that the inflexibilities of the present system are imposing a greater cost/burden on shipping using our ports than it need. In 1985, pilotage cost shipping using UK ports some £47 million. Productivity is in a number of cases low, working practices are often archaic, and all dispassionate observers agree that there are many more pilots than are needed. Even so, charges for pilotage in the main ports are set so as to pay for some 15 per cent. more pilots than there actually are.
It became clear in the early 1980s that, although the pilots are, technically, self-employed, a scheme would be needed to compensate pilots who were made redundant if any progress was to be made to reduce their numbers more quickly than natural wastage
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would allow. Proposals for such a scheme were drawn up by the merchant bankers, Samuel Montagu, but ultimately one of the parties involved, the General Council of British Shipping, decided that they could not accept the scheme which was being proposed. A Subsequent attempt by my honourable friend Mr. David Mitchell to achieve an agreed compensation scheme also foundered because the GCBS found the terms unacceptable. The inability of the main interested parties to agree on a compensation scheme led directly to this Government's publication of a Green Paper at the end of 1984, which proposed a greatly simplified system under which pilotage would become the responsibility of individual harbour authorities and would be treated as one of the services provided by them for vessels using the port.
Following consideration of the comments received in response to the Green Paper, and of the recommendations made by the transport committee in another place in their report on pilotage in 1985, we remain convinced that such a transfer will lead to pilotage services which meet local needs in a flexible and cost-effective manner, without any detriment to the safety of shipping or to the protection of the local marine environment. The central proposal of the Bill which we are now putting forward is that this transfer of responsibility for pilotage should take place.
What are the main advantages which we see these proposals as bringing? First, harbour authorities are ideally placed to take responsible decisions on safety and on the pilotage requirements of ships using their ports. They already have responsibilities for safety of navigation. They will be keen to ensure that services are efficiently provided and at a cost no higher than is necessary. At the same time, they will see it as in their own commercial interests to safeguard the safety of shipping using their ports.
Secondly, with the development of shore-based management systems for shipping entering and leaving ports and the prospect of their becoming increasingly sophisticated and widespread, there is likely to be scope for integrating the management of such systems with the management of pilotage services, as is the case in some ports where pilots are already employed.
Thirdly, the harbour authorities will be in a position to provide proper direction and effective management of their pilotage services, with clear-cut decisions, in a way which has not been possible for pilotage authorities under the present legislation.
Fourthly, decisions will be taken locally, with a minimum of interference from bodies with national or other wider responsibilities, including my own department and, if I may say so, my right honourable friend the Secretary of State. I am sure this is right. Local pilotage requirements should be related to the risks to navigation in the particular harbour and harbour approaches and the volume and nature of traffic using the harbour.
Fifthly, pilotage is at present regulated in every detail by the complex body of legislation and regulation. One commentator has even suggested that an Act of Parliament would be necessary to alter the length of bootstraps of a Southwold pilot; this is an exaggeration, but it sometimes seems not much of one. Under our proposals, the legislative framework

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governing pilotage will be greatly simplified with, we hope, a great saving in bureaucracy for all the parties concerned. Lastly, our proposals include provision for a statutory compensation scheme, to be laid down by the Government, for pilots who would be made surplus under the new regime.
It has sometimes been suggested that the mainspring of our proposals is in some sense an attack on the pilots. Nothing is further from our thoughts. We have every respect for the difficult and sometimes dangerous job which the pilots do. Out aim is to reform the system of pilotage and to provide the pilots with a firm and lasting basis for the future conduct of their profession and to put an end to the doubts and uncertainties which have dogged pilotage for so many years.
I shall now turn to the provisions of the Bill itself. Part I of the Bill sets out the functions that harbour authorities will in future have in respect of pilotage. Clause 1 defines the harbour authorities which will have pilotage responsibilities, and which, for these purposes will be known as "competent" harbour authorities. These are authorities which have statutory powers over the movement of ships and in relation to safety of navigation. Harbour authorities outside areas where pilotage services are at present provided will not qualify as competent harbour authorities, since there is no prima facie need for pilotage services in their harbours. Nor will certain other authorities, including own-account operators. But it will be possible for such authorities to seek orders making them competent harbour authorities if they think it necessary. The clause also provides an order-making procedure under which responsibility for pilotage can be assigned to a particular authoritiy in cases where more than one harbour authority in a locality fits the statutory definition and it is not sensible for them both to consider the need for pilotage; there are also one or two minor ports where there is no statutory harbour authority, and an order providing for pilotage to be handled by another authority will have to be made.
A list of the authorities which we believe will fall within the statutory definition has been published as an annex to the Government's recent White Paper on pilotage. This is not a definitive list, since qualification as a competent harbour authority depends among other things on what the authority's governing legislation says. And the list will in any case be subject to amendment by orders made under the powers sought in Clause 1.
Clause 2 lays down the central duties which competent harbour authorities will have—those of considering whether it is necessary for a pilotage service to be provided, and whether it should be compulsory and, if so, in what circumstances, for ships to be required to use it. The authority will also be required to provide such services as its consideration shows are necessary. One point I should emphasise is that the duty to consider pilotage needs is not confined to the authority's present harbour limits—they will also have to look at the approaches to their ports.
Clause 3 deals with the authorisation of pilots by competent harbour authorities; this will follow much the same practice as the present licensing of pilots by
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pilotage authorities, with qualifications being set locally. Unlike the present licensing arrangements, however, an authority will be able to withdraw an authorisation if at some future date there are too many authorised pilots or they wish to change the arrangements for pilotage in their district.
I should like to draw attention to two important features of this clause. Under subsection (3), the existing licensed pilots will have priority for authorisation under the new régime for the first four years and harbour authorities will be obliged to offer employment to the pilots needed in their areas, unless a majority of local pilots have agreed that some other arrangement, perhaps involving self-employment, should be made. Subsections (4) to (6) are the rather complicated provisions necessary to achieve this. This of course strengthens the position of the pilots in negotiating future arrangements with the harbour authority.
Clause 4 places a duty on authorities to approve or license vessels being used as pilot boats. It goes further than existing legislation in that it requires the authority to satisfy itself that such boats are tit for this purpose.
Clause 5 introduces the concept of a "pilotage direction", by which an authority will be able to direct that such types of vessels as are specified in the direction shall take a pilot while navigating in the harbour. Within its harbour area, an authority will be free to make such a direction when it judges necessary: if it considers compulsion is needed outside its current harbour area, it will first need to obtain a harbour revision order to extend its jurisdiction to the area concerned. Paragraph 1 of Schedule 1 provides a simplified procedure which will be available to authorities seeking such extensions before the appointed day, provided that the area concerned is already subject to compulsory pilotage under the existing régime. As at present, fishing vessels of less than 47·5 metres in length will be exempt from compulsory pilotage, as will be Her Majesty's ships, by Crown exemption which does not need to be specified in the Bill.
Clause 6 requires a competent harbour authority which has imposed compulsory pilotage to issue pilotage exemption certificates to masters or first mates who can meet their reasonable requirements concerning skill, experience and local knowledge. The restrictions on grounds of nationality, or based on the number of local pilots, which are provided for in the existing legislation will not be retained, although the Secretary of State will be able to relieve authorities of their obligations to issue certificates where there are unusual hazards.
Clause 7 prevents an authority discriminating in favour of its own ships. Under Clause 8, authorities may charge for their pilotage services. Such charges must be reasonable, and will be subject to appeal to the Secretary of State by port users and other authorities affected, in the same way as appeals may already be made against certain other port charges. As at present, authorities will have the option of making charges on users of pilotage exemption certificates where they believe it is reasonable to expect them to contribute towards the cost of the pilotage service.

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Clause 9 allows an authority to arrange for certain of its functions to be carried out by an agent or another harbour authority, or to make joint arrangements with another authority.
Clause 10 deals with those areas, including certain major estuaries, where the pilotage activities of one authority may affect the interests of another authority or port operator. What is the best arrangement will depend on local circumstances, and the Government do not think it right to force these authorities into one particular mould. However, there is a natural concern that the interests of all the authorities and operators should be protected, and that the most sensible and economical arrangements for the estuary as a whole should be made. Accordingly, the Secretary of State will have a power to call for information on these arrangements and, if necessary, to change them.
Clause 11 provides for the resolution of disputes between authorities. Clause 12 concerns accounts. In order that port users may be able to judge the reasonableness of charges for pilotage, authorities will be required to make their pilotage accounts available for inspection.
Part II of the Bill includes the provisions necessary if authorities and their pilots are to be able to operate pilotage services effectively. Clauses 13 to 18 deal with detailed matters of day-to-day pilotage operation and largely following existing practice. Clause 19 sets out the limitations which will apply to the liability of pilots and the harbour authorities; these are on broadly similar lines to those in the existing pilotage legislation, although the monetary sums have been increased.
Clause 20 concerns deep sea pilotage, that is pilotage carried out beyond harbour limits. Such pilotage is not regulated by legislation, and this clause merely provides for the continuation of the present arrangements under which certain bodies are approved for the purposes of issuing certificates to deep sea pilots.
Part III of the Bill deals with the winding-up of the existing pilotage organisation. Clause 21 abolishes the existing pilotage authorities, and requires the Pilotage Commission to draw up proposals for the transfer of their assets and liabilities to the appropriate harbour authorities, These transfers will be effected by a scheme or schemes made by the Secretary of State. Where there is more than one harbour authority who succeeds to a pilotage authority, the commission will need to allocate the assets and liabilities between them.
Clause 22 sets out how such schemes shall apply to the staff of the pilotage authorities: in general, they will simply be transferred to the harbour authority's employment; but where, as with Trinity House, a body which is at present a pilotage authority is to continue in other capacities, it will be for them to decide whether staff shall be retained or transferred to a harbour authority. Where a pilotage authority's pension obligations are not fully funded, a scheme may require the harbour authorities to rectify this.
Clause 23 provides for the abolition of the Pilotage Commission once it has completed the tasks assigned to it under this part of the Bill. Clause 24 provides for alterations to the functions and constitution of the Pilotage Commission during the period after enactment of the legislation.
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Clause 25 requires the Secretary of State to make a scheme for the compensation of pilots who are surplus to requirements once the harbour authorities have authorised the pilots they think necessary in their areas. Harbour authorities will be required to make payments as set out in the scheme. The terms to be available were announced by my right honourable friend the Secretary of State on 23rd May, and were reproduced in our recent White Paper. Pilots will receive a lump sum calculated on the basis of a year's recommended earnings. In addition, the Pilots' National Pension Fund have agreed to make available to surplus pilots early retirement benefits within a total of £15 million, funded from the surplus within the fund.
Clause 26 provides for the Pilotage Commission's expenses and other costs to be recovered from harbour authorities and authorities may recover such costs, and the cost of compensation payments, from port users.
Part IV is supplementary, and Schedule 1 contains transitional provisions. As well as the simplified procedures for obtaining a harbour revision order for the extension of compulsory pilotage, which I have already mentioned, I should draw attention to paragraph 2 of this schedule, which ensures the continuance in being and contined operation of the Pilots' National Pension Fund after the repeal of the legislation under which it was established.
That, then, is the Bill which we have placed before your Lordships. I have not thus far mentioned Trinity House. We of course recognise that, as authority for nearly half the present districts, Trinity House has accumulated immense experience and expertise in pilotage. I believe that Trinity House itself accepts the logic of the harbour authorities deciding what pilotage requirements should be placed upon shipping, but it would, of course, be a great pity if we were to lose the experience of Trinity House in the provision of pilotage services.
I was very pleased to hear, therefore, that Trinity House is establishing a new subsidiary company—Trinity House Agency Services Limited—through which it will be able to operate services for competent harbour authorities, not just in the areas at present served by Trinity House, but throughout the country. I understand that there have already been discussions with a number of ports, and I am sure that all competent harbour authorities would be well advised to look at the possibility of making use of Trinity House's unrivalled experience in pilotage matters.
I should also like to say a word about the vexed question of the employment status of pilots. Although there are some ports where pilots are already employed, the great majority of pilots have a status which the Inland Revenue have classed as self-employed. There has been a lot of debate, generating more heat than light, about whether this status is comparable to self-employment as the term is generally understood, and even pilots themselves have been known to argue either way. Be that as it may, the present legislative provisions laying down the framework within which the pilots currently work will be removed under our proposed legislation, and in future a variety of arrangements will be possible.

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A competent harbour authority or its subsidiary company will be able to employ the pilots, and I have referred to the provision in the Bill which offers authorised pilots a right to insist on such employment. But pilotage services can alternatively be provided in a number of other ways—by agreement between individual self-employed pilots and the authorities, by pilots' co-operatives, by contracts with Trinity House, or with another agent, who may in turn employ pilots to make agreements with self-employed pilots. In all these cases it will, of course, be for the parties concerned to reach agreement on the terms and conditions which will apply, and this seems to us much more likely to lead to arrangements which fit local circumstances than detailed regulations of the kind which have proved so inflexible in the present legislation.
I believe that this Bill will allow pilotage better to meet current need, and indeed that the structure we are proposing will allow efficient services to be provided for as far ahead as any of us can see. The Bill also provides, I believe, for fair treatment of all those, pilots and others, who work in the present system. They will need to be prepared to accept changes, and some may find the period of transition to the new system difficult to adjust to. But the long-term future of our ports, and hence of the pilotage services, depends on adjusting to modern circumstances and operating efficiently.
I commend this Bill to your Lordships' House, but before the Question is put I should also like to say a brief word about the second Motion standing in my name on the Order Paper; that is, That the Bill be committed to a Public Bill Committee. Last Session a number of your Lordships suggested that the congestion of business might be relieved by taking the Committee stage of a Bill off the Floor of the House. Subject to the agreement of the House, it is accordingly proposed that the Pilotage Bill be committed to a Public Bill Committee. The procedure is clearly set out in The Companion to the Standing Orders at pages 152 and 153, but I should like to draw your Lordships' attention in particular to the fact that Lords not named in the Committee may attend, speak and move amendments, though they may not vote. The Committee normally sits between 3.15 and 5.45 p.m., except on Thursdays when it sits from 3.45 to 6.15 p.m.
The Government are fully aware of the advantages and disadvantages of Public Bill Committees, and we realise that many of your Lordships feel that the scope for the usefulness of this procedure is limited. But, as many of your Lordships also feel that there may be something to be gained by it, we are happy to refer the Pilotage Bill to such a Committee, if the House agrees. My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)
3.23 p.m.
Lord Underhill: My Lords, I first thank the noble Lord the Minister for so clearly explaining the Bill, and also the Government for issuing the
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memorandum on the legislative proposals, which I found extremely helpful. As the noble Lord, Lord Brabazon, has said, this is an important Bill. While it is not politically controversial, there are sections of the Bill which may prove to be controversial. The reference to the Public Bill Committee is one that we on this side of the House accept. Consideration as to whether it is successful or useful can be determined after the Committee's deliberations, as can consideration of whether it is the right way to do things, at the right time or otherwise.
We had an initial canter on this matter in the debate on 25th June, which was opened by my noble friend Lord Shackleton, who I am pleased is to speak in this debate. The Minister has reminded us that the British Ports Association and the General Council of British Shipping were in support of the report of the Select Committee of the other place, to the effect that pilotage should be transferred to harbour authorities. I think that those noble Lords who have read the Commons Transport Committee's report will agree that it is an excellent report.
In our previous debate, Trinity House was said to have expressed some criticism, and I questioned, in the course of that debate, what use would be made of the expertise that Trinity House has given in the past and undoubtedly can still give in the future. I am pleased to have the communication to which the noble Lord, Lord Brabazon, has referred, stressing that Trinity House now supports the need for ports to have pilotage responsibility and has formed the company which, under Clause 9 of the Bill, ports are free to use as agents, if they so desire. I gather that Trinity House has reservations, particularly on Clauses 21 and 22 with which I shall not deal, but no doubt my noble friend will be dealing with those in the course of his speech.
Lord Shackleton: My Lords, may I interrupt my noble friend? Trinity House has always been in favour, certainly in recent years, of transfer to the harbour authorities.
Lord Underhill: My Lords, I think I am being corrected on that. It was critical of certain aspects of the proposed transfer. In that debate I also stressed the view of the Opposition that it would not necessarily oppose the transfer of pilotage to harbour authorities, but would want very carefully to see exactly what would be the proposals in the Bill and exactly how matters would work out. That still remains our view. We have a very sympathetic attitude to the Bill, but there are certain points, to some of which I will refer, which can be dealt with fully in Committee.
I support the view of the pilots' organisation that a pilotage scheme should meet the needs of industry and the environment, and ensure fair and equitable treatment for the pilots. I was very pleased that in our previous debate a number of noble Lords emphasised the importance of environmental considerations. I will come back to that later on.
With regard to Clause 1, I note that the memorandum issued jointly by the Ports Association and the General Council of British Shipping points out, in its paragraph 4, that pilotage authorities at present include representatives of pilots, shipowners and the harbour authorities. Then, paragraph 13 of

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their joint memorandum stresses that one of the deficiencies of the present pilotage authorities is that,
"They are composed of representatives of often conflicting interests.".
How is such conflict of interest to be avoided under the Bill, merely by transferring responsibility for pilotage to the harbour authorities?
I understand that under Clause 1 of the Bill the Secretary of State is to be given powers to consider whether the competent harbour authorities should be pilotage authorities; and, under Clause 10, to determine schemes of pilotage which cover more than one authority. Then I note that under Clauses 24 and 25 the Pilotage Commission will have the responsibility of advising the Secretary of State, at his request, on matters connected with the reorganisation of pilotage. That would appear to be rather too indefinite with regard to central administration and direction, because Clause 23 provides that the Secretary of State will determine the date on which the commission shall be wound up.
What, then, will be the position as regards advice to the Secretary of State once the Pilotage Commission is wound up? The pilotage organisation is very concerned that, in particular, the Bill will lead to a fragmentation of administration. Clause 3, which gives power to the harbour authorities to determine the qualifications of pilots, means that this is a decision set completely locally. I think that point was emphasised by the noble Lord, Lord Brabazon. Where are there to be criteria laid down as to the determination of the qualifications of pilots? So far as I can see, there is no provision for this, in this clause or elsewhere, or for any regulations on the matter. Similarly, in Clause 4, the competent harbour authority is to have the duty—I noticed these words were particularly used by the Minister—to satisfy itself as to the fitness of boats to be used for pilotage. Again, I can see no reference to any statutory standards laid down.
Paragraph 20 on page 9 of the British Ports Association memorandum of 17th June last, before its current joint memo with the general council, referred to criticism that port authorities may lack the skill or the will to provide suitable pilot boats. Although that memo provided an answer, the very fact that the point was raised by the association suggests that this is an important issue.
I noted that the Transport Committee of the other place strongly recommended that responsibility for both licensing and manning standards should rest with the Department of Transport. That proposal has not been accepted by the Government and it is not in the Bill. I hate to refer to the speeches of noble Lords who are to speak later in this debate, but I noted in particular that my noble friend Lord Shackleton said:
"We are waiting for a satisfactory code of practice and draft pilot boat construction, survey and certification regulations".—[Official Report, 25/6/86; col. 379.]
We note that there is no reference at all to that in the Bill.
Similarly the issue of pilotage exemption certificates is to be the sole responsibility of the harbour authorities, provided that the skill, experience and
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local knowledge of the master or first mate are to their satisfaction. Will there be any criteria laid down? There is no reference to them in the Bill. If there are to be criteria, how are they to be laid down?
I now come to the question of compulsory pilotage, which is covered in Clause 2 and later in Clauses 5 and 7. In our previous debate I questioned whether there should be particular areas or classifications of ships and cargoes where compulsory pilotage should be required. As noble Lords will have heard from the Minister, the Bill leaves this solely for the harbour authority to determine.
As I stated earlier, various noble Lords stressed in the debate in June the important question of the environment. Again, I am pleased to note that some noble Lords who stressed that are to take part in this debate. But I note that there is no reference whatever in the memorandum of the Government to the important questions of the environment or the public interest. As I said, a number of noble Lords regarded this as very important when considering compulsory pilotage.
I note that Clause 5(4) provides that before giving a compulsory pilotage order a harbour authority shall consult the relevant shipowners and others who may carry on harbour operations in the area. Will that mean that proper regard will be paid to the public interest? That appears to be missing from the clause. If a harbour authority should decide to remove the present compulsory pilotage, will the pilots' organisations be consulted? Your Lordships will notice the reference to consultation with shipowners and others before a compulsory pilotage order is made. What about consultation with the pilots' organisation should a present compulsory direction be removed? There appears to be no reference whatever to this.
Clause 8 refers to pilotage charges and there is provision for a right of appeal by shipowners and harbour operators to the Secretary of State. Noble Lords will have listened carefully to what the Minister said about the earnings of pilots, and this is to be left solely to the harbour authorities for local negotiation with pilots. Until 1984 pilots' earnings were subject to what was known as the Letch agreement. That was an agreement between pilots and shipowners, but the shipowners withdrew from that in, I think, 1984.
The British Ports Association's briefing of 17th June, to which I referred, stated in paragraph 20:
"Ports authorities must be allowed to negotiate reasonable terms and conditions for their new employees".
I can see nothing in the Government's memorandum which refers implicitly to that matter, although the noble Lord, Lord Brabazon, indicated that it will be a matter for local negotiations. Shipowners will have the right of appeal on the question of charges, but there seems to be nothing in either the Government's memorandum or the Bill giving the right to the pilots' organisation to make any appeal if it is dissatisfied with any negotations that are conducted locally. That would be on a very small scale indeed in the case of a number of pilots employed by certain pilotage authorities.
Lastly, in our previous debate a number of noble Lords emphasised that any pilotage legislation must be

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fair and equitable to the pilots. That was emphasised in a letter which the Prime Minister wrote on 21st April. The final paragraph, paragraph 41, of the Government's memorandum on the present proposals stated:
"It is confident, too, that the legislation will provide a lasting basis for the future of marine pilotage, while at the same time providing equitable treatment to the present and future members of a distinguished profession".
To be fair to the Minister, he emphasised the importance of this fair and equitable treatment. I ask whether the Bill provides for this fair and equitable treatment for pilots which everybody seems to favour.
Paragraph 2 of the introduction to the Government's memorandum states:
"protracted attempts to reach agreement on a voluntary early retirement scheme for surplus pilots finally broke down in 1984".
On 23rd May this year the Secretary of State announced that agreement in principle on a compensation scheme had been reached between the pilots' organisation and the ports association, but, as the Minister informed the House, the general council had not been prepared to agree with these proposals. We find in Clause 25 that a compensation scheme will be made by statutory instrument and nothing definite is laid down in the Bill, although it has been stated that the scheme will be on the basis of a Statement made by the Secretary of State on 23rd May, which is included as Annex A to the Government's memorandum.
It is emphasised that some £14 million is to be set aside from the pilots' national pension fund, but the chairman of that fund, in correspondence with the noble Lord, Lord Brabazon—who will be more aware of it than I am—has set out circumstances in which that sum may be exceeded. That could present a problem which does not appear to be covered. There is nothing in the Bill to provide any assurance that existing benefits, including those relating to early retirement schemes, will be preserved. We have argued before on privatisation schemes that a scheme of reorganisation of this kind, which everybody agrees is a desirable objective, should make absolutely clear that existing benefits, including those relating to early retirement schemes and their general conditions, will be preserved.
I noticed in the recent statement by Trinity House—I am certain that my noble friend Lord Shackleton will not mind my referring to this, because it is dated 21st November and I received it only yesterday—that it is stated:
"It will also be financially impossible to create a commercial company able to offer advantageous rates if that company has to assume the financial burden of superannuation and/or redundancy payments to its staff".
In the absence of anything clear and specific in the Bill—the statement from Trinity House would appear to be a strictly good, commercial one—I ask again, is fair and equitable treatment of pilots fully guaranteed?
It is unfortunate that the Government stated in their original Green Paper that there is no justification whatever for public funds to help in this way. As I said at the outset, we give general support in principle to the Bill, but there are issues, some of a controversial nature, that we will wish to see thrashed out in Committee.
3.40 p.m.
Lord Walston: My Lords, I too should like to thank the noble Lord, Lord Brabazon, for his very clear exposition of the Bill. At the same time, to set at rest any doubts that he may be having, I may say that we on these Benches support the general principles of the Bill and look on it as an improvement in what he himself described as the present cumbersome system of organising pilotage. That does not mean to say that we do not have some rather serious reservations and some criticisms, some of which I will briefly mention, and on which I am sure my noble friends Lord Grey and Lord Simon will elaborate in more detail. I also support strongly the proposal that the Bill should have its Committee stage under the new procedures. This, I hope and believe, will be a considerable improvement and will save a lot of the valuable time of the House.
We have a very long and maritime tradition and the safety of our seafaring folk, our ships and our coasts is something of which we are rightly proud, going back as it does to the days of Henry VIII and the beginnings of Trinity House. The Merchant Navy, although declining in importance, is still of the greatest importance to this country, so that our shores and the access to our harbours should be above all safe, with that safety ensured at the lowest cost consistent with fair treatment and fulfilling the obligations.
Safety must be paramount in this matter. I think it is absolutely right, both in principle and in practice, that the safety of individual harbours should be in the hands of the harbour authorities, whether it be safety from noxious substances or of ships when navigating or when tied up in harbour, including—and I am glad that the noble Lord, Lord Underhill, mentioned this—the safety of the environment. That is clearly a responsibility of the local authority.
The Bill puts squarely on the shoulders of the competent harbour authorities their obligations in this respect. But it is perfectly right to say that some harbours are too small to fulfil their functions adequately or consider that they do not have the proper facilities for so doing. The proposals that Trinity House should continue to fulfil its traditional obligations for pilotage by setting up a company to offer services to those harbour authorities is surely the right arrangement for such places.
It is very good to know that Trinity House itself, with certain reservations, approves of the Bill and that in principle the pilots do also. I think that much credit should go to the noble Lord, Lord Brabazon, and his officials for having overcome the reasonable and justified fears expressed in earlier debates and elsewhere concerning these matters.
On the point of safety, I am not very clear about the responsibilities of the competent harbour authorities for the waters outside their own existing demarcations. I am afraid that Clause 6 is somewhat unclear to me. I refer particularly to those areas outside the haven ports, the area that I personally know best, the Goodwin Sands and so on and the Thames estuary, where there are very great hazards to shipping well known to competent masters and masters used to that type of navigation. However, given the type of ships that come into those waters from time to time, particularly those carrying dangerous cargoes, I hope

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that the noble Lord will be able to assure us that the pilotage of those areas and the wider waters is fully taken care of. I should have thought that this is one of the areas where Trinity House has a vital role to play.
In connection with Trinity House, it is essential that it should continue to retain, or acquire, the resources to enable it to do its job properly. The financial obligations on Trinity House and its ability to acquire the funds to carry them out, as mentioned in Clause 21, are not entirely clear to me. I hope that we can receive assurances that this problem has been adequately taken care of; or possibly it should wait until Committee stage when it may be necessary to table some amendments to ensure that this is done.
When all is said and done, pilotage must depend upon the pilots themselves. They play the vital role in the safety of shipping in approaches to harbours and within harbours. They are, I am sure all noble Lords agree, a very fine—if occasionally somewhat difficult—body of men who fulfil their highly responsible functions with enormous skills. These people must be fairly treated.
There are doubts—I think that some of them are justified—that under the new arrangements there may be additional difficulties that are not at present experienced. I know that the present system is not the right one—I fully accept that. There are too many pilots. It is always difficult to reduce the numbers in any profession, particularly in a profession as skilled as pilotage. The rewards of pilots show an enormous variation that to my mind cannot be justified simply by the differences in their jobs. Some figures which I have been given show that in Neath, for instance, the net earnings of pilots are £46,000.
Lord Strathcona and Mount Royal: My Lords, perhaps I may interrupt the noble Lord to say that I saw those figures as well and was staggered by them. I asked a question and those of whom I asked the question fell about laughing. They said "Oh, everybody knows that Neath is a husband and wife and they own the port".
Lord Walston: My Lords, I do not know whether it is the husband or the wife who is the pilot, but whoever it is at Neath appears to be doing rather well—as indeed are the husband who lives at Barrow and the wife who lives at Heysham, where the earnings are £37,000. We should compare those situations with Londonderry and Tyne, where the earnings are in the neighbourhood off £11,000. I am not saying that Neath and Barrow and Heysham are too high and I am not saying that Londonderry and Tyne are too low; I do not know. However, I cannot believe that it is right that there should be these enormous discrepancies. I suggest that that is something which the new proposals will overcome to some extent, always in consultation with the pilots.
Redundancies have already been talked about. I think there will have to be redundancies, as there are in many professions these days. It is essential that the redundancies resulting from these new arrangements should have sufficient funds available to make sure that the full commitments are properly met and are met out of central funds rather than out of the
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funds of the individual harbours. Many of those harbours will not have such funds available.
There is the further question of certificates of exemption. Here again I think the principle is right. The masters of vessels coming or going regularly from Continental ports—and I speak again of Harwich and Felixstowe—should, if they fulfil the various qualifications, have certificates of exemption, as they do indeed at the moment if they come from EC countries. However, that should be extended to the Scandinavian countries, from where vessels come with exactly the same type of skill and frequency as they do from Holland and Belgium.
I therefore support the proposal which I think is a good one. However, it must not be overdone or done too rapidly because once again it will diminish the amount of work available for existing pilots, cause unhappiness and dissatisfaction and very probably put an undue strain on the amount of money available for redundancies. I hope that, while the certificates of exemption will be granted as proposed, that will be done in a gradual manner.
The next very important question is that of the safety of pilots. Some people may think that the job of a pilot is to go out on calm harbour waters in a pleasant launch, climb up a companionway, have a drink with the master and take over on the journey into harbour; or, if the journey is out of harbour, climb down the companionway, get into the launch and, as the sun sets, float back happily to home and family. That does sometimes happen but there are many occasions when it does not. The seas may be rough, conditions difficult, a blizzard may be blowing and there may be fog. It can be a very uncomfortable and hazardous job. It is absolutely essential that there should be safeguards to ensure that the vessels in which pilots are transported are not only sound and seaworthy —as I am sure they are in all major ports—but also that there is an adequate crew on board in case some accident should occur which would mean that the coxswain would be left in sole charge while the pilot floundered in the water. I think that matter also needs looking at.
I know that the main objective of this Bill is a reduction in costs. That is an admirable objective. The other objective (which appeals to me rather more) is to place responsibility squarely on the shoulders of the harbour authorities themselves. I cannot say to your Lordships that I believe there will be any immediate reduction in the costs of pilotage in the short term. In the long term, there will be. I hope that will take place and I believe that it can if the matter is worked out properly.
I was very glad to hear the noble Lord, Lord Brabazon, mention that, with the advent and the growth of new techniques for navigation, it is very important that individual harbours should have the independence to try out new systems which are particularly suitable to their areas and which might, with or without modifications, be adopted elsewhere. I trust your Lordships will not think it is too fanciful to draw an analogy, looking far into the future, between Heathrow and Gatwick, where airplanes are brought down with no need for a pilot to go on board the 707 as it comes in. That is all done by remote control.

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I am not for a moment suggesting that a time will come in the lifetime of even the youngest of your Lordships when pilots will no longer be needed. However, there is undoubtedly enormous scope for the introduction of new technologies at a more rapid rate than is happening at the present time. Those will make the task of pilotage somewhat simpler and more sure and will contribute to the overall necessity of safety within harbours and in surrounding waters. I believe this to be a good Bill, full of good intentions and well expressed. I believe that after the Committee stage it will be a still better Bill.

"Kowloon Bridge"
3.57 p.m.
Viscount Davidson: My Lords, with the leave of the House, I shall now repeat a Statement on the "Kowloon Bridge" which is being made in another place by my right honourable friend the Parliamentary Under-Secretary of State, Mr Michael Spicer. The Statement is as follows:
"My department was advised of reports of structural damage to the Hong Kong registered vessel 'Kowloon Bridge' late on Tuesday, 18th November. In view of the possible connection with the loss in 1980 of the sister ship 'Derbyshire', the department agreed with the Hong Kong authorities that the department's inspectors should investigate the damage to the 'Kowloon Bridge' and conduct an inquiry on their behalf.
"An inspector was immediately appointed to conduct a full investigation into the damage and report to the department: he boarded the vessel at some personal risk on 20th November in Bantry Bay, where she had put in for repairs. Although the inspector's report has not yet been finalised, early indications are that the damage to the 'Kowloon Bridge' was entirely consistent with the very severe weather conditions encountered during the voyage across the Atlantic.
"Late on 22nd November, 'Kowloon Bridge' broke away from her anchor. The master decided to put out to sea. She then suffered a loss of steering and a 'Mayday' call was put out. The house will wish to acknowledge the skill and bravery with which the crew were taken off by RAF Sea King helicopters with no loss of life. The vessel eventually drifted onto rocks near Baltimore after drifting for 24 hours in severe weather conditions. She has since broken her back between No 2 and 3 holds.
"Inspectors from my department have also been appointed to investigate on behalf of the Hong Kong administration the vessel breaking free from her anchor, the loss of steering and the subsequent grounding. The inspectors will complete their work and submit reports on the two investigations as soon as possible. These reports will be published. When I have received them, I will consider what action needs to be taken and whether they indicate any link with the loss of the 'Derbyshire' in 1980, which might be cause for appointing a formal investigation into the loss of that ship."
My Lords, that concludes the Statement.
4 p.m.
Lord Underhill: My Lords, the House will be grateful to the noble Viscount for repeating the Statement. We heartily endorse what is said about the skill and bravery of the RAF personnel in being able to save the whole crew of the "Kowloon Bridge". We all appreciate that.
I note that in the first paragraph of the Statement the damage to the "Kowloon Bridge" is linked to the loss of the sister ship "Derbyshire" in 1980, when all lives were lost. The Statement says that it was agreed that the department's inspectors,
"should investigate the damage to the 'Kowloon Bridge' and conduct an inquiry on their behalf—.
The last paragraph of the Statement says:
"The inspectors will complete their work and submit reports on the two investigations".
Does that mean that there is now to be an investigation not only into the "Kowloon Bridge", but also into the tragic loss of the "Derbyshire" in 1980?
Until we get official replies from the Minister we can only work on what the media tell us. I gather that an inquiry of some kind into the "Derbyshire" was commenced but it was stated then that there was no conclusive evidence. As they were sister ships it is necessary to clear up the position completely. Is there a difference between an inspector's report and a full inquiry? I recognise the expertise of the inspector, but I am sure that the public will wish to have their fears allayed by a full inquiry. Will either the report or, as I hope, an inquiry look into the allegations that the "Kowloon Bridge" put to sea against advice? What advice was that, and why was it given?
It has been suggested—and again we can only go on the media reports—that there were structural faults to the "Tyne Bridge", another sister ship, in 1982, following which structural alterations were made to two vessels. It is essential that everything possible should be done to clear up the whole of this question of structural faults; first, to allay public concern, and, secondly, in the interests of the shipbuilders themselves. Until the position is clarified they will be under a cloud.
I understand that there is only slight oil spillage from the "Kowloon Bridge". What is the position with regard to pollution in a case such as this, which involves a vessel off the coast of a foreign country? Whose responsibility is it?
Lord Walston: My Lords, we too on these Benches endorse strongly the praise that has been given to the brave and skilful men who, in appalling conditions, rescued the crew from the "Kowloon Bridge". I should like to ask for a little more amplification than the noble Lord, Lord Underhill, has asked for, with regard to the inquiry. The inquiry will look at the structural condition of the "Kowloon Bridge". The Statement says that,
"early indications are that the damage … was entirely consistent with the very severe weather conditions encountered during the voyage".
While undoubtedly the weather was very severe and that area of the Atlantic is an extremely awkward one, surely such a bulk carrier should have both design and construction to enable it to survive, without severe

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damage which renders it unseaworthy in waters and gales of that kind.
I agree with the noble Lord, Lord Underhill, about the inquiry into the loss of the "Derbyshire" in 1980. It is not clear from the Statement who is going to carry out the investigation and what co-ordination there will be between that investigation, which, apparently, according to the last paragraph of the Statement is going to take place, and the present inquiry into the "Kowloon Bridge".
Some of your Lordships may have seen a small paragraph in The Times today which suggests that there were weaknesses in bulkhead 65 in two other of four similar ships. It would be valuable for us to have further information about this. Is it the case that weaknesses in the bulkheads have been found and that weaknesses were found in identical bulkheads? If so, when were the ships built? Were they also built in the same yard as the "Kowloon Bridge" and the "Derbyshire"? Are these structural or design faults? Assuming that there are two other ships with these weaknesses, what is the position in regard to them? Are they still free to sail on the high seas without further inspection?
Again, I reiterate what the noble Lord, Lord Underhill, has said. It is essential that these investigations should be carried out fully and speedily to allay any fears in the seagoing fraternity; and to reassure those who are contemplating placing further orders for tonnage in British yards that this situation cannot possibly be repeated, and that the high standard of British yards is as good as ever it has been.
Viscount Davidson: My Lords, I should like to thank the noble Lords, Lord Underhill and Lord Walston, for their reception of this Statement and underline once again the admiration and high regard which your Lordships have for the skill and courage shown by the crews of the Sea King helicopters.
I may not have made it completely clear that two investigations have been put in hand. The first one mentioned refers to the inquiry into the damage to the "Kowloon Bridge" after it had crossed the Atlantic and arrived at Bantry Bay. Regarding the severe damage, I would say to the noble Lord, Lord Walston, that an Italian tanker was much more severely damaged than the "Kowloon Bridge". It was when it arrived at Bantry Bay that an inspector was appointed to go out and see how bad the damage was. That damage was entirely consistent with storm damage after the weather the vessel had encountered. I am advised that this inquiry will report within a week.
The second investigation relates to the loss of the vessel after it left Bantry Bay. As the Statement said, it is a question of looking at the loss of steering, the breaking free from her anchor and the subsequent grounding. That will take a little longer and I cannot at this stage say when the report will be received. It will certainly be published.
With regard to comparisons with the "Tyne Bridge" and the "Derbyshire", I can only draw your Lordships' attention to the fact that everything to do with any previous incidents involving similar vessels has been covered in detailed reports which are all to be found in
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the Library of the House. The present incident is the subject of the two inquiries I have mentioned, and I am unable to prejudge the result of those inquiries. I am therefore unable to speculate on any of the points of detail which noble Lords have raised and therefore am unable to make any further comment about that.
As regards pollution, I should add that the vessel was carrying iron ore and the only oil on board was the oil fuel, in bunkers, used for propulsion. I am advised that there is very little danger of pollution of United Kingdom beaches.
Viscount Massereene and Ferrard: My Lords, I was a director of a company which owned ships carrying iron ore, although they were only small ships of about 12,000 tons. In the Statement my noble friend said that the "Kowloon Bridge" lost her anchor. However, if there is any wind at all a ship does not rely on just one anchor but always has two anchors out. Ships have other anchors on board, too. The ship also had her engines. In fact, because it is cheaper to build them so, most of these iron ore carriers and tankers have only one screw. I know that some have two. If the ship had suffered damage coming across the Atlantic it was rash of the captain to take to the open sea.
There is another point. Presumably the ship drifted in the night, but the captain ought to have taken his bearings on the shore. If there was no light from which to take bearings he should have arranged for that. The situation seems most odd to me.
If the ship's rudder jammed when the captain got out to sea and the ship had only one propeller, he was then in a hopeless position. A ship with twin screws can to some extent steer even with a jammed rudder. I should just like to make that observation.
Viscount Davidson: My Lords, my noble friend has made certain observations but I will not comment upon them because, obviously, we are awaiting the result of the inquiry. However, I am sure my noble friend's remarks will be noted.
Lord Campbell of Croy: My Lords, is my noble friend aware that the only debate which took place on the loss of the sister ship, the motor vessel "Derbyshire", was the debate initiated by me in this House on 13th May 1981? Concern was expressed at that time about the possibility of defects in the hull. However, the only common fact appears to be that both vessels were carrying iron ore. Will my noble friend take into account in the inquiries the investigations which the Minister who answered at that time promised would be made into the loss of the motor vessel "Derbyshire"?
Viscount Davidson: My Lords, I can assure my noble friend that that will be taken into account.
Lord Greenway: My Lords, is the noble Viscount able to tell the House—I suspect that at such short notice he cannot—that the reason the ship had to put to sea after she lost, as I understand it, one of her anchors and, therefore, in the existing weather was unable to lie to her remaining anchor, was due to the fact that since the closure of the Whiddy Island oil refinery there were no longer any tugs available in that area?
Viscount Davidson: My Lords, again I find it extremely difficult, if not impossible, to comment on that. All I can do is repeat one sentence of the Statement which says:
"the master decided to put out to sea".
Lord Cayzer: My Lords, is it not a fact that there are six sister ships which were built at Swan Hunter?
Viscount Davidson: My Lords, I believe that is the case.
Earl Attlee: My Lords, can the noble Viscount confirm that in the Statement he mentioned loss of steering, while the newspaper reports that I read stated that the ship had lost her rudder? A rudder post is a massive item and it would seem to me that if a ship loses her rudder she would almost certainly go down by the stern.
Viscount Davidson: My Lords, it is up to the noble Earl to decide whether he wants to believe the Statement or the press.

Pilotage Bill [H.L.]
Second Reading debate resumed.
4.14 p.m.
Lord Greenway: My Lords, we seem to be having a rather nautical afternoon, but perhaps we may now return to the Pilotage Bill.
I welcome the introduction of this Bill, so ably done by the noble Lord the Minister. I think that all parties have reached what I might call a grudging acceptance of the fact that the Government have won their way on this Bill and that what remains to be done is to make the best of what we have before us. I particularly welcomed the remarks of the Minister regarding Trinity House, and I shall have more to say on that subject later. I also welcome the fact that, provided the House wishes, this Bill is to go to a Public Bill Committee. Without wishing to blow your Lordships' trumpet too much, a committee of that sort in your Lordships' House is perhaps an ideal vehicle for sorting out some of the problems that still exist with the Bill.
Perhaps I may be permitted to make one or two observations by way of background. First—and I do not think that any noble Lord has referred to this—it seems to me that the Bill has come to your Lordships' House with slightly indecent haste. I realise that the Government have to get on with their legislative programme, but I think I am right in saying that the Bill was printed only a week ago and it has allowed very little time for some of the interested parties to muster their thoughts.
The other point that I make as a general background observation, and one I made during our debate last summer, is that sadly the British Merchant Navy is rapidly declining. Some people have even forecast that it will consist of as few as 100 ships by 1990. Therefore, today's percentage, which I think is around 10 per cent. of ships under the British flag using British ports, may well be considerably lower by 1990.
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Both the noble Lords, Lord Underhill and Lord Walston, spoke extremely well. They covered most of the salient points. Therefore, I shall merely make one or two observations on what they have said. Incidentally, the noble Lord, Lord Underhill, spoke so well on behalf of Trinity House I begin to wonder whether he is making a bid to join his two noble and distinguished friends as an Elder Brother.
Looking to the Bill itself and to several of its provisions, I think that certainly the directions concerning ships should be enlarged upon. We have heard reference made to safety and I intend to come on to that subject in a moment. However, I believe that we should write into the Bill a wider description of the term "ships", especially with regard to those which may carry dangerous or noxious cargoes.
The noble Lord, Lord Underhill, made a very relevant point when he touched upon public interest concerning whom a competent harbour authority shall consult. I appreciate that the harbour authorities themselves feel that it would be much better if they could be allowed to get on with running the ports in the way that they want to; but there is a legitimate public interest. I cite as a possible example the situation a few years ago when a foreign company wanted to moor a gas tanker permanently in the Solent areas. There was an enormous public outcry and the ships were never moored there.
In some of the harbour areas we are discussing ships like these potentially dangerous gas carriers come very close to areas of population. Therefore, when considering this Bill in Committee it would be wise to look at what interest there may be—whether from the point of view of the local authority or an environmental concern—to ascertain whether those interests should not have some say in the matter of how the harbour authority is to run its pilotage limits. It also seems to me, if I read the Bill aright, to be slightly strange that a harbour authority has to have the support of the Secretary of State if it wishes to extend its present pilotage limits, but not if it wishes to reduce them.
Mention has been made of cost. I do not want to dwell too long on this subject but I was pleased to hear the remarks of the noble Lord, Lord Walston, with regard to ports not being able to reduce costs, certainly at the outset. It is a great temptation to a port—and, as I have said before in this House, running ports is a very competitive business—either to reduce its limits or to extend the number of pilotage exemptions in order to save costs, and both these measures have a bearing on safety.
Turning to the question of exemption, so far as I can make out there is no direction in the Bill to state that any master or mate coming up for a pilotage exemption certificate must be able to speak English. I think that such a provision ought to be written into the Bill. With regard to the renewal of exemption certificates after a one-year period, I should like to quote from Clause 6(4) of the Bill:
"A pilotage exemption certificate shall not remain in force for more than one year from the date on which it is granted, but—
(a) if the holder continues to be the master or first mate of a ship, may he renewed annually".

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There again, I think that we are using "ship" in a very loose sense, and I think it would be better if the phrase "a ship of substantially the same type or substantially the same tonnage" were written into the Bill. This would be an extra safeguard.
I mentioned the possible issue of a large number of exemption certificates—indeed the Bill almost requires harbour authorities to issue such certificates. In itself this can give rise to dangers with vessels, not necessarily ships, which have on board a person who has a pilotage exemption. I have cited instances before in this House, and I shall now give another. We all remember the poor unfortunate skipper who cut Southend Pier in half earlier this year. I believe he was asleep at the time. That is an example of a ship which used a port frequently. The master may well have had a pilotage exemption certificate, or perhaps he was merely operating within the port limits, in which case he would not have needed one. But next time it may easily be a ship coming from abroad, which has on board an exempt master who may fall asleep and—who knows?—he may run into a gas tanker rather than Southend Pier. The consequences are appalling to contemplate.
Let me cite another example. I think it was two or three years ago that a small coaster called the "Sea Ems", which was in-bound from Germany and had a German master who had a pilotage exemption, ran between the outer piers and the sea wall at Coryton at the Mobil Oil Refinery, neatly cutting all the oil lines as he went through. I believe that he, too, was asleep. I find it amazing that he passed through without hitting anything else but he did so and, luckily, on that occasion there was no tanker unloading at the berth. That is another instance of what can happen if too many exemption certificates are issued.
While on the subject of exemption and the limits of pilotage, perhaps I may just recall the current talk about the Minches area of North-West Scotland, where steps are being taken to move further out to sea large tankers and ships with dangerous cargoes. What happens if the Port of London draws in its pilotage limits to the Nore from Harwich and Folkestone, where they are at the moment? The big tankers and ships with dangerous cargoes will be passing up the Thames estuary, which is notoriously shallow in some places. Surely that is a much greater potential problem than in the Minches?
May I now turn briefly to the subject of pilot boats, which has already been mentioned. As I understand it, at the moment the pilot boats owned by Trinity House are to be transferred lock, stock and barrel to the harbour authorities at a certain date. Contrary to what some people think, pilot boats are very specialised craft which have been developed over a number of years. In effect they have to make what I can only describe as a "controlled collision" every time that a pilot boards or disembarks. In some busy areas this can mean up to 100 contacts a day with ships. In such circumstances Tom's fishing boat just will not do. I believe that the Government should take note of what was said in the Transport Committee in another place about some kind of conditions regarding the construction of pilot boats. Before I leave the subject, may I ask
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the Minister what happened to the draft code of practice on pilot boat construction survey and certification regulations which was produced in October 1983 and which, so far as I know, has not since seen the light of day?
As a parting shot, and using Heathrow and Gatwick as an analogy, the noble Lord, Lord Walston, mentioned VTS (vessel traffic services). Despite his optimism, I must sound a note of caution about such schemes because I can foresee all sorts of problems in which a shore-side operator, who may not be well versed in how ships work and manoeuvre, does not have a pilot on board and is giving instructions to someone who is a stranger to the port, which could hinder rather than expedite navigation. Before such schemes are introduced I think that they should be discussed very carefully with the pilots themselves, because in my opinion one cannot do better than the man on the spot, and in this case the man on the spot is the pilot who is qualified and who knows all the ins and outs of that particular port.
Turning now to the question of Trinity House operating as an agency, this is something which I very much welcome and I am pleased that the Minister gave a little time to it. However, as has been stated by the noble Lord, Lord Underhill, what worries me is how, under the Bill as it is presently drafted, this will work. The Bill seems to me to be very woolly, and I do not see how Trinity House can operate this agency without some extra wordage being written into the Bill to make sure that it maintains some of its pilot boats and staff in order to be able to fulfil this agency requirement.
Before concluding I should like also to agree with what the noble Lord, Lord Underhill, said with regard to the pilots themselves. They have many years of expertise in their own particular field and I think that many will not intend to stay on after this Bill comes into force. The surplus of pilots which has been mentioned briefly will probably disappear at that time, because I think that a lot of the older pilots will say, "I have had enough" and will leave. I believe that the surplus problem will disappear as soon as the Bill comes into force. Those who are left, the pilots who will have to work with Trinity House as an agency, with the ports or with some of their fellow members in a loose association have, on the whole, been rather hard done by through the Bill. The Committee must bear that in mind in its deliberations.
To sum up, it is now vital to get all interested parties working together. That has been one of the big problems hitherto. It was one of the main reasons why the pilotage section of the Merchant Shipping Act 1979 did not work. That Bill, as your Lordships may remember, went through Parliament on the nod, despite strong objections from some of the pilotage authorities, on the last day of a Labour Administration. It was not even discussed in your Lordships' House. The Committee which is to consider the Bill should be made well aware of that fact because this time we must get it right. I think all interested parties agree on that.
4.30 p.m.
Lord Strathcona and Mount Royal: My Lords, the Minister is right. There is general agreement that some

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reorganisation of pilotage is long overdue. As the noble Lord has just said, it is perhaps a measure of the difficulty that it has taken seven years, and I think five Ministers, for the Government to offer us a solution to the problem.
Most of us can support the principle of devolving authority to the ports. They will make commercial judgments. Thereafter, the details become more contentious, in much the same way as the Government have often said that they would like local authority spending to be related to its tax raising powers. The difficulty is how to achieve that in detail. There is a real danger in trying to oversimplify something that is inherently a complicated problem. I agree with the noble Lord, Lord Greenway, and I have said this before, that it is a pity that the Government have never managed to get all interested parties round a table to see whether or not they could reach agreement. Again, as he rightly said, we have to deal with the Bill that is put before us.
The question is whether the detailed provisions of the Bill, as part of a totally radical approach, will achieve the Government's laudable claims of bringing about an economic, effective and safe pilotage régime, with due regard paid to the interests of the public and the people who work in the system. The danger is that we may provoke the maximum of disruption for the minimum of benefit.
It is worth remembering that the British system is much admired abroad. At least one nation is seriously contemplating copying the system that we are about to sweep away. There are major issues of safety and potential environmental damage involved. Pilotage is about safe and expeditious navigation. It arose because of a perceived need for the service by shipowners and shipmasters. I did not succeed in flushing out the figures that I wanted from the Minister during Question Time, but my understanding is that pilotage costs are not large in relation to overall port costs. They amount to something of the order of 10 per cent. if we exclude the labour costs of discharging the vessel. If we include the cost of discharging the vessel, my understanding is that overall costs go down to about 2 per cent.
We must therefore be careful not to chase after comparatively minor savings and create great potential difficulties in the process. The earnings of pilots are not excessive. I was glad the noble Lord, Lord Walston, made the point that distribution appears to be somewhat inequitable, without suggesting that overall levels are excessive. Let us remember that the present system works on the basis that many of us in industry would like to achieve—no work, no pay. That is a sound basic system even if there are anomalies which need to be ironed out.
If it has not already become clear, I should mention that I have discussed this matter with the United Kingdom Pilots' Association whose honorary, and I stress "honorary", president I have been for some years. I hope that I do not speak about a complicated matter from a biased point of view, but I suppose that it is inevitable that that is my departure point.
I shall try to group my misgivings about the Bill under three headings. The first, which has been
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mentioned by all noble Lords who have spoken since the Minister, is the worry as to whether it is fair, legitimate or wise to hand over unfettered authority for pilotage to straight commercial interests.
In an increasingly competitive environment, it is inevitable that commercial interests will be pulling in the opposite direction from considerations of public safety and environmental protection. The Minister was being a little naive or over-optimistic in some of the comments he made about that. As the noble Lord, Lord Greenway, postulated, is it acceptable that dangerous cargoes such as those carried in liquid natural gas carriers, chemical carriers or even nuclear waste carriers should, on a purely commercial basis, be allowed to lay down conditions under which they come into a port? We think of Flixborough. We think of Bantry Bay, not the recent incident, but an earlier explosion. It is worth remembering the point that come out a moment ago in the Statement, that even when we do not have dangerous vessels, the damage that can be caused by the rupture of a ship's hunkers can be severe.
There are two dangers that we should face. The ship operator may say to the port, "I shall take my ship elsewhere if you insist on me having over-expensive pilotage provisions". What will the port operator do? Furthermore, the hard-headed shipowner—regrettably we must face the fact that the majority of shipowners are not now British, although I am not suggesting that British shipowners are any less hard-headed than foreign ones—may say to his shipmaster, "You are the shipmaster. You are paid to be the shipmaster. Do not incur a lot of extra cost by taking on one of these expensive pilots. You take the ship in. That is what you are meant to do". Those are possible real commercial pressures. It is an over-simplification to say that the commercial interests of the port operator are sufficient safeguard with regard to dangerous cargos.
This leads me to a more general point that arises throughout the Bill. The Bill makes clear that it is sweeping away all existing legislation regarding pilotage and starting again. One cannot call it a green field situation; one might call it an open water situation. We are starting from scratch. We are not simply making changes or tinkering. This means that the legislation when it become an Act has to do two rather different jobs. It has to set out the regime that will apply to pilotage for many years ahead. It has to deal also with the transitional period before we reach what one might call the steady state. If the competent harbour authority is to produce regulations that set out the terms under which the port will be used, there should be consultation with outside interests.
I should like here to address one small point to the noble Lord, Lord Walston. The noble Lord talked about the local authority rather as though it was the same as the port. It is not. It is true that the local authority should have an input into what the port authority lays down as conditions that apply to the port. There are also environmental considerations, particularly as regards dangerous cargoes. I suggest to the noble Lord that a serious problem arises, certainly in the transistional period.
May I suggest a way out of the problem? I put my proposal in the form of a question. One has to balance

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the need for consultation against the possibility of continuous consultation leading to frustration and inaction. I wonder, however, whether it would not be sensible to charge the Pilotage Commission with the task of considering the regulations that the competent harbour authorities produce. That task will be substantial. Within the White Paper there are over 100 separate ports. We shall presumably, therefore, have 100 different sets of regulations. How are we going to give other people the chance to vet the regulations in order to see whether they are acceptable? I wonder whether this might not be a suitable task for the Pilotage Commission. I do not expect the Pilotage Commission to be entirely "gruntled" with the idea. Nevertheless, I put the idea to the Minister as something that he might consider.
There is one rather strange provision in the Bill. Clause 8 singles out shipowners as people who have the right to object to harbour charges. Does not that proposition lie rather oddly with the Government's declared intention that commercial judgment is to be the guiding criterion? If charges are unreasonable, will not shipowners go to another port? It looks very much as though the shipowners have been getting at the Government and have managed to get this provision specially written into the Bill. Has it not emerged this afternoon that a number of other people might like to be consulted? I feel that the Minister will have to be consistent in regard to this matter when we come to the Committee stage.
A worry connected with the chance for shipowners to object to charges is the possibility that the CHA will fix the remuneration of pilots having in mind the amount of charges that it is hoped to levy on shipowners, and then, if the shipowner objects, it will have to go back to the pilots and say "I am terribly sorry. The wretched shipowners have objected to our charges. They have beaten us down and we shall therefore have to reduce what we can offer you in the way of earnings".
While on the subject of consultation and opportunities to object, I should like the Minister to tell me whether the words in Clause 8(6)(a),
"any persons who carry on harbour operations within that harbour",
include, for example, wharf owners or people who have an individual business associated with the transfer of cargo within a harbour. That is a specific point. It can no doubt be dealt with at Committee stage if necessary.
A second area of concern is the danger of proliferating administrative cost and losing both operational flexibility and economies of scale as a result of fragmenting pilotage organisation right down to individual ports. There are, as I have said, over 100 ports mentioned in the White Paper. A number of other issues arise under this general heading, some of which have already been mentioned. Is there not a danger of under-utilisation or proliferation of pilot boats? Will it not be more expensive for each port to have a pilot boat and a standby pilot boat? Similarly, a number of other provisions will have to be made.
As the noble Lord, Lord Walston, I believe, mentioned, the subject of pilot boats is probably the
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single most emotive subject to pilots. Pilotage is the second most dangerous maritime activity after North Sea diving. At least one pilot is killed every year. Pilots would prefer to see the standards and the manning of pilot boats made the responsibility of the Department of Transport. We come back to the commercial pressure arguments. I put it to the Minister as a matter that needs to be seriously discussed.
The question of fragmentation also touches upon a matter mentioned by the noble Lord, Lord Greenway. It is what I call the estuarial problem. The Government make a curious statement in the White Paper. Paragraph 21 on page 4 states:
"The Government does not consider that a single authority for each major estuary is necessarily the best way of organising pilotage".
I do not believe that many people will agree with that statement. I am pretty sure that Trinity House does not. The noble Lord, Lord Shackleton, will perhaps be able to enlighten us in a moment. Would the Minister care to say why the Government make that unsupported statement?
It has, I believe, a much wider implication than might at first appear. All kinds of potentially difficult situations will be created. What happens to Perth in relation to Dundee? Is it expected that Perth will ask Dundee to provide a pilot when it is trying to suck away some of the trade from Dundee? Is it expected that Ipswich will ask Harwick and Felixstowe if it will loan a pilot, saying "Actually, we are going to cut our charges old boy, but you don't mind lending us a pilot and pilot boat, do you?" That does not sound like a sensible regime. If responsible for a small port, I should be pretty worried.
The third area of misgiving concerns the conditions of employment of the pilots themselves. Luckily the noble Lord, Lord Underhill, has already said almost everything that needs to be said on that subject. There are two issues. First, there is the question of compensation for those who will be made redundant as a result of these proposals. Secondly, there is the question of safeguarding the earnings of those who will continue. The difficulty is that the Government say all the right things but then do not appear to be willing to follow them up in the Bill or, indeed, when it comes down to hard negotiations.
The pilots say, "The Government, by their actions, are undermining our livelihood. Surely it is their responsibility to compensate those who are going to lose their jobs and to safeguard the earnings of those who are going to continue in their jobs". Throughout the Government have resolutely refused to put up a bob in compensation. One way or another they have put up millions for the steelworkers, for the miners and even for the farmers, but because there are ony 1,200 pilots they have refused to bother at all. I do not want to sound too provocative, but they have tended to take shelter behind the question of self-employment, and the Prime Minister herself has admitted that that is a pretty poor excuse. However, she has also said that she recognises the need for safeguarding the livelihood of those who will stay in the business. All that seems to have happened so far is that the Government have found a convenient milch cow in the shape of the pilots' pension fund. They have made a massive raid on that and said that that has bailed them out of the

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trouble. I do not think that we can expect the pilots to be very chuffed by that.
Some protection for pilots needs to be written into the Bill because they feel that up to now their negotiations both with the Government and with the ports have been less than satisfactory. We have already talked about the Government, but the port operators and the shipowners unilaterally abrogated the alleged earnings agreement and told the pilots that they just have to get on with it. If that is to be the way in which negotiations are to be conducted in the future, small wonder that pilots will be seeking to write some protection of their position into the Bill.
The pilots do not like the Bill; it is no use pretending that they do. However, throughout all these negotiations they have tried to be co-operative and I hope and believe that they will continue to be so. Certainly I have no intention of trying to wreck this Bill, but I believe that we shall have to write into the Bill provisions for the compensation of people who lose their jobs and for the protection of the earnings of those who stay in the business. There are also misgivings about the safety implications and the cost-effectiveness of the way in which the Government are applying the provisions for devolving the authority to the ports.
I conclude by quoting—and one word needs altering—from the last paragraph of a recent leader in The Times which referred to the Peacock Report on the BBC. It said:
"At bottom, today's debate is about the management of change, an art which British institutions—parliamentary as well as broadcasters—still have much to learn".
I believe that that is exactly where we are today.
4.55 p.m.
Lord Shackleton: My Lords, so excellent and detailed have been the various speeches that the House will be glad to hear that I shall make a very short speech indeed, but not an entirely friendly speech so far as the Government are concerned. Unlike Trinity House—of which, as noble Lords know, I am an Elder Brother—I am not at all content to accept this Bill, because in my view some quite major aspects of the residual problems have not been worked out.
However, I should like first to congratulate the Government on getting the Bill to start in your Lordships' House. I know what a struggle it always is in the legislative committee to get anything to start here and we have to do a proper job. On the other hand, we have not had very long in which to prepare, as has been pointed out by the noble Lord who has made such an excellent speech. At the outset I should like to make one correction. A letter did go round from Sir Frederic Bolton saying that Trinity House had specifically asked that their brief be amended to record that it too warmly welcomes the Bill. That, I think, arises entirely out of a misunderstanding and I am not accusing the British Ports Association of trying to put words into the mouth of Trinity House. It welcomes the transfer of responsibility to the harbour authorities, and this is a course that it has advocated for many years. However, there are serious objections, and I think that I would be critical of Trinity House for thinking it just so easy to set up a new body—the
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technical services company, the pilotage company—to operate under a Bill which they had not seen.
I believe that Trinity House is now well aware that there are serious defects in this Bill. However, it is anxious to co-operate with the Government—everybody always tries to co-operate with the Government if they possibly can. I must say that I should personally find it very difficult to co-operate with the Government unless they are prepared to recognise some of the anxieties which have been expressed, particularly by the noble Lord who has just spoken, and which have been aired in a quite admirable speech by my noble friend on the Front Bench in which he raised all the issues which the Government will have to face.
I hope that, when we deal with the matters which concern pilots or pilotage authorities, the Government will be prepared to lend their help in the drafting of certain amendments. They have a responsibility. We do not have much in the way of resources for drafting these amendments and we do not have a long time in which to do so and, as the Government are taking this initiative, it is right that they should help.
For my part I regret that it has been necessary to introduce this legislation at all. As I advocated on an earlier occasion, with sensible co-operation the necessary reforms could have been carried out without introducing this complicated Bill. Nonetheless we have the Bill. We shall no doubt give it a Second Reading today, although I wish we were not going to do so. I ask the Government to go back and look at some of the points that have been raised and maybe the noble Lord will be able to resolve some of my anxieties.
The Government have encouraged Trinity House—and now I would like to speak very much in the interests of Trinity House—to seek to provide a service. The then Minister—the noble Earl, Lord Caithness—on the last occasion said that he saw a useful role and that it was important that the harbour authorities should consider whether it would be better that Trinity House should provide some of these services rather than that the harbour authorities should take them on. We have had no financial arguments, no financial figures, to justify what the Government are doing and we do not know whether the transfer to the harbour authorities will save money. If the Minister has any estimates as to what the Government, or rather the shipowners, hope to save, it would be helpful.
The Minister today mentioned the need to make use of the experience of Trinity House, and of course Trinity House has sought to set up something called Trinity House Agency Services Ltd. under the chairmanship of Sir John Cuckney. The question is, is it going to be able to function at all? Its assets are to be expropriated, and I use that word deliberately. This is in fact a confiscation Bill. Let us not mince words on this. They are to be expropriated and handed over to the Pilotage Commission, a kind of residuary body which is not a residuary body. The Government like residuary bodies. We have one for London. From all accounts I do not think they are very satisfactory, but they may go on for ever. Unless the Pilotage Commission can come up with some satisfactory

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solutions, I can see the Government increasing their responsibilities for pilotage rather than diminishing them.
I should like to ask the noble Lord—and maybe he can give an answer—how is he going to be able to float a company when the resources and assets are about to be taken away? In addition, the staff at Trinity House tend to have anxieties and they will begin to move out, and how does Trinity House carry on in the interim? This is not only a matter of timing; it is a matter of practicality.
Until the Pilotage Commission have approved the proposals, the company will not know what assets it will have to work with, nor what liabilities it has to cover. Many of the pension arrangements—and I have not got the details—in Trinity House are unfunded, for obvious reasons. Trinity House followed past Civil Service practice, and it has operated very much under Civil Service rules.
Under Clause 22—which I think will need rewording—what will happen to the existing Trinity House staff of acknowledged expertise, and their centralised planning location in London, if they are going to be dispersed all over the world to a hundred different competent authorities? This is a serious problem if the Government wish Trinity House to continue. It will not be able to continue unless there is clarity about the assets and some reasonable arrangement with regard to the staff.
I think that the Government are giving the Pilotage Commission a frightfully difficult job. They are shuffling off responsibilities on to them. If the new company has to assume the financial burdens of superannuation and redundancy payments due to its staff for their former service to Trinity House as the pilotage authority, it is difficult to know how the sums will come out.
This has been a great public service and a great individualist service. The pilots have been individuals, and have been brave and dedicated men. Let us not play around too much with some of the excess profits that a few pilots have made. At least they are not anything near what is being made in regard to takeovers in the City. It is proper that they should have remuneration, and it may be that there are details that need to be sorted out, but I suspect that one of the consequences of this Bill is that the Government will have to fulfil a bigger role.
There will be no main, sizeable pilotage centre in this country to develop pilotage services. The fact that Trinity House looks after only 50 per cent. of the pilotage has not stopped it pioneering the design, for instance, of pilot launches. As I understand it, there will be no single body—perhaps the Minister can say that there will—that will be looking at this across the board and doing necessary research. An agency could not now be created under the proposals. I shall wait with a good deal of interest to hear what the Minister can say about the prospect of a new pilotage service being financed when the assets and staff are being taken away from it.
5.5 p.m.
Viscount Rochdale: My Lords, when I first became aware that this Bill was to be introduced into your
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Lordships' House by Her Majesty's Government I doubted very much whether I should be able to make a useful contribution as I was so out of date on this subject. However, on looking through some of my old papers I came to the conclusion that I wanted to make a brief speech at Second Reading.
I must admit to having somewhat of a shock that these proposals should have emerged only during the last two or three years, first, with the Government's Green Paper, then with the House of Commons report, then with the White Paper, and now with the Bill. Your Lordships may wonder why I was shocked. My noble friend Lord Brabazon has given a certain amount of fairly recent historical background to this Bill. He went back about six or seven years. But I should like to call your Lordships' attention to a report on the major ports of Great Britain published in 1962 and subsequently debated in your Lordships' House. If I may say this with reasonable propriety, it came to be known euphemistically as the "Rochdale Report".
The Rochdale report was primarily concerned with the creation of estuarial port authorities, grouping together in the main estuaries the great multiplicity of smaller authorities into single estuarial authorities. For instance, we suggested the Clyde, the Forth, the Tyne and Tees, the Humber and Southampton, and to some extent it covered even changes in the Port of London. For the most part our report was accepted by the government of the day. Although the inquiry was set up under a Conservative Government, the report was accepted by a Labour Government.
Our report was not primarily concerned with pilotage. I cannot just recollect whether we were gently warned off pilotage; that may be so. But inevitably we had something to say about pilotage. At that time the only port authorities of any significance which were also pilotage authorities were those of Bristol and Liverpool. The others for the most part had their separate pilotage authorities with, as has been mentioned, self-employed pilots.
So far as the general principle of who should be responsible for pilots was concerned we had this to say:
"the question of pilotage should be borne in mind when the organisation and responsibilities of any Port Authority are under review".
That was in 1962.
We made specific recommendations with regard to particular estuarial authorities, most of which have subsequently been established, but in those recommendations invariably we urged that the responsibilities for pilotage should be under the estuarial authorities. The principle was that harbour authorities should be responsible for pilotage. In a way that is what the present Bill is all about.
However, I find it difficult to understand how then it came about that in Her Majesty's Government's Green Paper it says:
"Organisation of pilotage has remained substantially unchanged since the implementation in the 1920s of the Pilotage Act 1913".
That was a long time ago. Why has the matter emerged just now? My noble friend Lord Brabazon went some way to answer that question. But the answer is obvious. We must all be perfectly well aware of the tremendous changes there have been in shipping throughout the world in recent years.

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I refer not so much to the alarming reduction in the British merchant fleet. That to my mind is only partially relevant to the matter we are discussing now. What I have particularly in mind is the change in the pattern of world trade, the change in the pattern of port usage, the change in the number, size and presumably draught of ships and, with all that, the lack of adjustment of pilotage facilities to match present-day reduced pilotage requirements. That has resulted in a very substantial increase to shipowners of pilotage costs and is therefore a deterrent to our trade both inwards and outwards. That applies whether they are British ships or ships from anywhere else round the world.
As we all know, pilotage is not the only cause of the increase in costs compared with other European ports. My noble friend Lord Campbell of Croy referred to the cost of lights. The high costs of United Kingdom ports was a year ago forcefully brought to the attention of your Lordships' Select Committee on European Affairs when that committee was examining the Commission's draft directive on European maritime transport policy. The report came out in March this year. In the evidence submitted to the committee by the British Ports Association it stated:
"unacceptable charges on ships calling at United Kingdom ports also arise from the operation of the current system of marine pilotage in the United Kingdom".
It went on to indicate some of the related points which it saw as necessary and which are largely dealt with in one way or another in the present Bill.
I make no apology for mentioning those historical references, and I do so with no sense of criticism. This has been going on since 1962. I mention those points not by way of criticism but rather to emphasise the urgency of something being done by way of change now. That point is unanswerable and change is overdue. I welcome the Bill, though I realise, as other noble Lords do, that it needs careful consideration on a number of points when it reaches its later stages.
I think I am right in saying that the Bill coins a new phrase "competent harbour authorities". They will have the responsibility for pilotage squarely placed on their shoulders. Their experience should help them to decide—whether or not through an agency such as has been discussed earlier today—that pilotage is necessary; what pilotage is necessary; whether it should be compulsory; what area it should cover, and so on. That will be their responsibility. That should add greatly to the flexibility of the service. It should in due course—I emphasise "in due course", because I am inclined to agree that the reduction in costs will not occur immediately— produce a reduction in costs and do so with no loss of excellence of service or safety. I therefore give a strong welcome to the Bill.
However, I have one or two further points to make. I should like to emphasise, as other noble Lords have done, the importance of Trinity House. It should continue to provide its services from its centuries of expertise and do so in an important way. I think the initiative of Trinity House in the organisation it has in mind to set up under Sir John Cuckney must be for congratulations. Problems will arise, such as those mentioned by the noble Lord, Lord Shackleton, as to
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how the organisation will work and how it will be set up. I think I am right in saying—perhaps my noble friend when he replies will confirm this—that Trinity House will still be responsible for deep-sea pilotage.
There are a great number of points to be considered at Committee stage. They will be difficult, but I do not think they will involve party political considerations. I want to refer particularly to one point to which nearly every other noble Lord has referred. I think it is important to do so, and it is the question of compensation. It will be difficult and complex, much more complex than might be apparent on a superficial reading of the Bill. There will be redundant pilots. There will perhaps be redundant Trinity House staff with their accrued service entitlements. Compensation must be fair and be seen to be fair. I believe it will be costly, but it will be much more costly as a result of the many years it has taken to arrive at what we are discussing today. If it could have been done in the late 1960s or in the 1970s it would have cost a great deal less.
The other point related to compensation is that of uncertainty. There will need to be careful consideration not only for potentially redundant pilots and staff but also for the port authorities themselves. The Bill refers to a period of transition. I do not know how long the transition will take, but if it is too long the uncertainty will grow. Many pilots will not know what their future is and they may look for employment elsewhere. Port authorities may as a result lose people that they anxiously would have liked to have kept on. Therefore it is urgent to try to remove the uncertainty.
That is all I want to say. I welcome the Bill. I hope it will have a rapid passage and a safe berthing in the statute book.
5.20 p.m.
Earl Grey: My Lords, I wish to confine my brief contribution to the environmental aspects of the Bill. This Bill has the qualified support, with many reservations, of the United Kingdom Pilots' Association, in that a reform is needed to improve the safety and protection of our seaways. In a reference to Clauses 2 and 5, which give total power to port authorities to decide which vessels should be subject to compulsory pilotage, the danger is that costs could be reduced by cutting back on the pilot strength of any given area.
The United Kingdom Pilots' Association would like recommendations to provide that other bodies such as themselves or local councils may report to the Secretary of State in the event of a harbour authority failing to provide a responsible service. Would it not be advisable to have compulsory pilotage for ships carrying noxious and dangerous cargoes? A major accident in our waters could have catastrophic consequences on our environment and safety as ships pass very close to our urban areas.
Over the years, we have experienced and suffered from accidents on a large scale though, luckily, very rarely in our Channel waters, although I am led to believe that it could only be a matter of time before a major accident occurs. I should like to see in this Bill stronger legislation governing any ship that passes through our waters. There is the obvious question of ships carrying nuclear waste, although I would

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assume, in that circumstance, that a competent, qualified pilot would be in charge. I only hope that I am correct in that assumption. I trust that the Minister would confirm that.
Ports have to consult only with commercial users in these matters. I should like to see the ports having a legal requirement to provide pilots under certain conditions. The public interest is of prime importance and must therefore override any commercial interests.
The concern that has been put to me regarding the livelihood of pilots is with reference to those pilots who accept early retirement. There is no safeguard in the Bill against pilots, who work in another area, retiring but continuing to exercise their profession elsewhere, thus endangering the livelihood and the profession of existing pilots. Would the Minister be prepared to consider this?
I should also like to support the noble Lord, Lord Strathcona, and others in what they have said about the lack of compensation. There is nothing for me to add, except to ask the Minister to give this matter a great deal of consideration. We recognise that pilots provide a valuable and necessary service and are considered to be of the highest quality. Their contributions and ideas must be welcomed and considered, as it is their experience which is vital to our wellbeing and safety.
5.23 p.m.
The Duke of Norfolk: My Lords, some of your Lordships might be surprised at my speaking on this Bill. My reason for doing so is that I live six miles from Goole on the Humber, which is 50 miles inland and a port as old as any in the Kingdom established by the Danes in rather awkward circumstances about a thousand years ago. I familiarised myself with the latest situation about six weeks ago by going on a pilot launch with two Members of the other place. We had a most intriguing trip from Flamborough Head, up past the great port of Hull, that is rather slumbering along, and up the Trent, where the private wharves are booming. We passed the private wharves that had been set up where the Hull ferry used to cross to Lincolnshire. They have now been overtaken by the great Humber Bridge. We then came on to Goole. I disembarked at a private wharf called Howden Dyke, which is beyond the port of Goole on the way to Selby, which is also six miles from my home and a very famous private wharf at the moment, for it is literally booming with trade.
I shall talk about private wharves in a moment but I should like very much to welcome this Bill because it seems to me that there is considerable muddle at the moment with the Merchant Shipping Act, 1979 and the Pilotage Act, 1983. I feel there is much room for legislation to tidy up everything.
Although I approve of the Bill, I feel that there are many worrying points. In the first place, the Bill seems to have been put together after talking to the shipowners and the port authorities. I do not think that either of these bodies has the greatest of records in public relations. They have had strikes and other unpleasant situations, which has usually meant that something was wrong.
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The people who do not seem to have been consulted very much are the pilots themselves. The pilots—towards whom I am biased, for they took me on this trip—are members of a wonderful profession. It has already been said by several noble Lords what a proud and wonderful people they are. They all must have become masters of ships before they can acquire a pilot's certificate; they have to know the whole of their estuary or port really well, and they have to keep themselves up to date. They are self-employed members of a proud profession and I hope that they will be consulted in far greater detail by the Minister, that they will not be made merely employees of the competent harbour authorities and that their contracts as self-employed professionals will be allowed to continue, with very special positions.
I think that the pilots should themselves have the chance to regulate the affairs of the ports in which they work. They are represented by the Transport and General Workers Union. Your Lordships may be surprised at my talking about unions from this side of the House; but that is the union to which they belong. I think that that union, which has a sub-branch, should be consulted in the making of the Bill. I am glad to see noble Lords opposite nodding in assent—a rare sight when it concerns me!
Let me turn to the question of private wharves. It may interest your Lordships to know that the private wharves of the Trent and the Ouse have a greater tonnage going through them than the port of Goole. The ways that these private wharves have been set up are individual histories. They are creations of free enterprise, they are dynamic, they work all day and night. At Howden Dyke (where I got off) they used to load fertilisers for farmers. Now it is a teeming beehive of activity. They do not have port cranes; they have the kind of cranes that builders hire, wheeled cranes or cranes on tracks. How they do not collide when they are on shipping work, I do not know. Everybody works in together; there is much profit sharing; great sheds are being built one behind another. These are the people who are taking the trade now.
Selby is a booming port because of the private wharves there. Again, if one goes over Selby toll bridge (as I frequently do) one can see these cranes unloading the ships by means of driving to the ships that come alongside. The pilots like working with them because they are spur-of-the-moment activities and the pilots like that sort of intensity of work. I need hardly say that the great port of Felixstowe started, I think, as a private wharf. Be that as it may, it is not in my province. Certainly, the private wharves are a new creation, new since the war, and should be taken into consideration; although I seem to have been the first peer to have spoken of them.
My next point deals with pilotage direction and Clause 5 which lays down laws about dangerous and hazardous cargoes. Again it does not appear that pilots are going to be consulted. The pilots should be consulted about all laws made in pilotage direction by these competent harbour authorities. The pilots are the people who know whether some sandbank has shifted or not, by crude experience, and they certainly should be consulted on such things.
I very much welcome the Bill. I welcome in particular the way it is going to look after the question of

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redundancy of pilots. On the east coast they are working very hard. It is on the west coast—the Mersey and the Clyde—where there are too many pilots. The east coast, as we all know, is shipping to the Common Market and has far greater activity taking place there.
I can remember the awkward strikes which occurred when I was working as a young officer in the London Docks. In those days we unloaded at London and transhipped to Rotterdam. Then, I am afraid, the London Docks and many other docks closed down. However, I believe that if this Bill shows initiative in regard to the future of our country we might find ourselves unloading again, for Asia, in our ports and shipping the goods through the Channel Tunnel to the Continent. I hope that is exactly what will happen in our country in years to come.
I have one final point to make. I am afraid that I have a very long-standing engagement, and I hope that your Lordships will not mind if I ask your permission to leave before this debate comes to an end.
5.32 p.m.
Lord Blease: My Lords, first of all I should like to apologise to the Minister and to other noble Lords for my absence from the Chamber during the earlier parts of this debate. I had unexpected and urgent business to attend to.
My intervention in this Second Reading debate will be brief. I wish to indicate, from the representations made to me, that many of the proposals in this Bill have caused much concern among the members in Northern Ireland of the United Kingdom Marine Pilots' Association. Much of that concern has been expressed by my noble friend Lord Underhill in his speech from the Opposition Front Bench. I have been encouraged by the very practical and helpful points that I have heard made by many noble Lords from all parts of the House since coming into the Chamber and listening to the debate.
However, in addition to the points already dealt with, the members of the pilots' association in Northern Ireland are particularly concerned about the future of this vital service to industry and trade in the Province. The port navigation channels at Belfast, Kilroat, Ballylumford, Larne, Londonderry and Coleraine are among the critical transport sea links that provide for trade and commerce to the heart of Northern Ireland's industry.
It is the view of many that the Bill puts at risk these vital sea routes. It is the considered view of professional marine officers that this Bill attempts to put a passage through on purely uncharted waters to an unknown future for the pilotage service. The paper that has been presented to me by the pilots' association indicates concern about the future standards of the pilotage service and the necessary professional training and experience; and also about the proposed system of payments, negotiations, accountability, the rights of appeal and pensions. These have been dealt with by other noble Lords, and perhaps I might have the opportunity of referring to these matters in more precise detail during the future stages of the Bill in your Lordships' House. In the meantime, I hope that the Minister may be able to bring forward more
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satisfactory assurances than those contained in the Bill about the future of this distinguished public service and the future wellbeing of the officers in the pilotage service.
5.35 p.m.
Lord Simon of Glaisdale: My Lords, in addressing your Lordships I must make the same declaration of interest as was made by the noble Lord, Lord Shackleton, though I should add, if I may, that I only became an Elder Brother of Trinity House after ceasing to be President of the Admiralty Division. I add that because my own view, for what it is worth—and it is worth very much less than that of my noble and learned friend Lord Brandon who is sitting beside me—is that the subsisting system of pilotage was very much over-criticised. I think that was the view of the noble Lord, Lord Shackleton, too, and I believe that was shown by the trouble which arose during the 1970s when attempts were made to make improvements.
I tend to take the same view as the noble Lord, Lord Shackleton, that a great deal could have been done by administrative actions. Nevertheless, the Government have brought forward this Bill and I think they are very much to be congratulated in having got the consensus that they have managed to accumulate. This Bill in today's debate has really been praised with faint damns, and sometimes the damns have been more than faint! But at any rate it must be a rational scheme to bring pilotage nearer to the ports. After all, pilotage is a function of harbour management.
Secondly, the Bill does provide flexibility and, thirdly, it does provide potential competition between rival ports in the facilities and the service that they can offer. I think that point was really implicit in the excellent speech that we had from the noble Duke. The noble Lord, Lord Shackleton, has said everything from the point of view of Trinity House that I would have wished to say. It has been encouraging that virtually every noble Lord who has addressed your Lordships has been loud in praise of the service that Trinity House over the centuries has vouchsafed to our maritime interests. The very first of the Pilotage Acts—that of 1806—had a long Preamble which is really nothing more than a panegyric of the way Trinity House was providing a service, as it said, "from time immemorial". That seems to have been the case up to today.
I do not wish to enter into any details on the Bill, but I would say this. I have frequently been a critic of the drafting of our statutes, and so it is only right to say that this seems to me to be a well drafted Bill. I think it is important to recognise that because there has been hardly a speaker in today's debate who has not wanted to inscribe something extra into the Bill My own view is that we shall certainly have to look seriously at dangerous cargoes. Probably there will have to be a specific reference to that. But as for all the administrative details, they are far better kept off the face of the statute. The noble Viscount, Lord Rochdale, with his great experience, mentioned the potential—in fact, anticipated—complexity of compensation provisions. If we try to write them into the Bill we shall grossly overload it and, in effect, wreck it for all ordinary purposes.

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The other thing that I wanted to do was to refer to the accompanying White Paper. Your Lordships had an admirable exposé of the Bill from the noble Lord the Minister; but there can be no doubt, as the noble Lord, Lord Underhill, pointed out, that we have an immense advantage in the White Paper. The noble Lord, Lord Houghton of Sowerby, used to ask for a White Paper to accompany the Finance Bill. I expect that the noble Lord, Lord Aldington, will remember that. The Treasury were always against it. I always suspected that that was largely because they thought they would get a Finance Bill more easily through the other House if it was not understood. But I hope that other departments will, on other Bills, consider what has been so successfully done on this Bill. I join your Lordships in hoping that the Bill will be given a Second Reading and will not on the face of it be too violently improved in Committee.
5.42 p.m.
Lord Swinfen: My Lords, during the debate on marine pilotage that we had last summer on, I think, 25th June, I asked the Minister at the time, my noble friend Lord Caithness, whether he would convene a conference of all interested parties. He was not very keen on doing it. I got the impression that he did not think it was necessary. Again, on 25th July, I put down a Question for Written Answer to Her Majesty's Government to ask what progress had been made in their consultations, and whether they would convene a conference of all interested parties. My noble friend on the Front Bench will recall his reply, that he had agreed to take the chair in a meeting between Trinity House and the British Ports Association. So there has been some consultation with the pilots; not, however, I think, a very great deal.
I get the feeling that this Bill has really come about as, in many ways, rather a hotch-potch and that there has not yet been sufficient consultation between all parties. I am sure that if all parties had got together in the drafting of the Bill we would have a very much shorter time in Committee, Report and Third Reading stages than I suspect we are going to have. I think there is still time to arrange such a conference, if the Minister is prepared to act faster than most government departments are normally prepared to do. He has to get up and go. I am sure he will do it. I am sure it is worthwhile. I issue that to my noble friend as a challenge. It certainly will not do any harm.
I have been briefed on this Bill by representatives from the five different groups comprising the London district pilots organisation. They are very willing to co-operate with the Bill. They do not like the way it has been prepared. While they know that change is necessary, they feel that there are certain improvements which need to be made.
I am rather worried about the environment, as anyone who reads what I said last June will see. I am very concerned that the competent harbour authorities will reduce the area of pilotage from the present pilotage districts only to their own legal harbour authority areas, which are very much smaller. I know about the Thames estuary. I do not know about other estuaries and approaches to other harbours, but I suspect the problems are the same. A lot of the
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serious and dangerous parts of a sea voyage are outside the harbour authorities' areas.
It is a lot cheaper to run a pilot in a smaller area. He will not be working such long hours, he can do more trips every week and, therefore, fewer pilots will be needed. I think this is something that needs to be looked at, and I hope my noble friend can confirm that the Minister will ensure that the competent harbour authorities make certain that their pilots go out far enough to do the job properly. It may even be necessary to extend the harbour areas to do that.
Other noble Lords have talked about noxious and dangerous cargoes. I think that some of the chemicals being produced by scientists nowadays, and used industrially, are so dangerous that, as well as the crew, there must be a pilot on board, just as an insurance. We could kill our fish stocks; we could make a total estuary dead for years with some of the chemicals that are transported today. Someone has already mentioned the Flixborough disaster. Similar things can happen at sea. It is not so easy to get the emergency services there to deal with them—there are no roads.
Another point that worries me is exempt vessels, which have already been mentioned by the noble Lord, Lord Greenway, and others. I realise that it is irritating for masters and mates of relatively small vessels, who are trading in and out of the same ports the whole time, to have to get special exemption certificates, but I feel that it should be the individual men who have the certificates, not the vessels.
Lord Simon of Glaisdale: My Lords, is the noble Lord right in implying that it is the vessel which has an exemption? Under, I think, Clause 6, it is the captain or the first mate.
Lord Swinfen: My Lords, I took advice on that matter, and I understood that for vessels under 6,000 tonnes, it was the vessel that was exempt if it was used for coastal traffic. I honestly do not see how a vessel can steer itself. I have met men in the past who have said that their cars know the way home late on a Saturday night. I have never believed it. Even less do I believe it of a ship at sea where there is wind and tide affecting it. This is something that we need to look at, possibly in Committee. I think there should be no great hardship to seamen, who are constantly trading in and out of the same ports, in taking examinations in regard to those ports.
The other point is the pilotage exemption certificates for masters and mates of larger vessels trading in and out of the same harbours the whole time. That is fine when they are all using the same boat or a similar boat. But, as I understand it—and I stand to be corrected on this—at the moment a master who has an exemption certificate on a relatively small vessel can be transferred to a super-tanker (I can never remember the correct name for such ships) and he will still have a valid exemption certificate, although he is in charge of a very much larger and less manoeuvrable vessel. If it happens to be loaded with gas, he is in charge of a floating bomb.
Another important point is that anyone from any nation who is granted an exemption certificate should have a competent knowledge of the English language. More and more advice is being given to ships over the radio. We expect aircraft crews coming into this

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country to be able to speak in English to the aircraft controllers. It should be exactly the same for a ship. It is no use trying to help a ship coming in from South Korea to one of our ports, if the only language that the person speaks is South Korean. An exemption certificate is no help when he is in trouble, and he may not get into trouble until it is too late to put a pilot on board, because of the positioning of the pilot boats.
Clause 14(5) refers to the control of a vessel by someone who is not on that vessel. I think it refers to the new vessel traffic services system that is being set up in some ports. I believe it is necessary that, whoever is controlling those systems, should themselves be fully qualified pilots, experienced in handling different sizes and types of ships and of the way in which the currents run and the wind affects vessels in the area where they will be operating the services.
I now move on to the competent harbour authorities. They are not all on their own. Look, my Lords, at the Thames. The inner Thames will, I think, have nine. If you take the whole of the current pilotage area, there will be 14 competent harbour authorities. Some of them are fairly close together. Would it not be sensible to make certain that they have a common pilotage service which will serve them all and cut down costs? What is the point in having a pilot who operates only into Gravesend when Tilbury is virtually across the river? As your Lordships know, the Thames pilots are at present in five groups—the river pilots, the Medway pilots and the London sea pilots South, North and West. They are already working together, so that they operate as a team and can operate in different directions.
Today, if you take a ship down the Thames you can only use a pilot who takes the ship out. In the future, if there is no legislation, there will be a pilot who can take the ship out and then bring another one back home again instead of having to return home by train or road. A similar sort of system can be used in any other area, so that ports will combine and work together. I am sure that that would be a lot cheaper and more economical. I know that ports are competing with each other for business, but that is no reason why they should not cut their own costs by co-operating on that point.
Pilot boats have already been mentioned. It is absolutely essential that we have safe, secure vessels to get our pilots out to the ships that they are going to help. If we do not, we shall end up with a dead pilot, with dead pilot boat crews and possibly with a disaster, because the vessel that they were going to help runs aground. It is essential that the Department of Transport keeps control of the quality and number of crews on these vessels, and also of their training.
I am not sure who under the Bill will license the pilots. If the competent harbour authorities are the people who will issue the licences, will they cut their costs yet again in training them? There is a danger there. Possibly the licensing for all the ports should be by Trinity House. It has the expertise and, I understand, trains pilots for various nations overseas as well, so that it has a service which it is already running.
Another point that we shall need to go into in Committee concerns conditions of service. I
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understand that the staff of Trinity House who will be transferred to the competent harbour authorities will be guaranteed employment for four years. There is no such guarantee for pilots, possibly because they are self-employed at the moment. Also, I am not sure what is the position of the pilot who takes employment with the harbour authorities, does not like it and then leaves. We have to make certain that his pension arrangements are satisfactory and are transferred properly to the new competent harbour authorities.
5.56 p.m.
Lord Mottistone: My Lords, I think my noble friend Lord Swinfen will find many of his questions, including that on the exemption certificates, answered by this White Paper in the comments on Clauses 3, 6 and 10. I should like to start by congratulating my noble friend the Minister on the particularly clear and convincing way in which he introduced this Bill. I am entirely behind it. I have been advised by many sources, particularly the General Council of British Shipping. I have also had advice from Trinity House, for which I am most grateful. This whole subject has a long and tangled history and it has been clear for some time that the present pilotage arrangements are outmoded and expensive to users.
Unlike many noble Lords who have been talking about the pilots with such support and encouragement, saying how splendid they are—which might well be so of Trinity House pilots, but I have not had occasion to work with them—I have to say that my experience with pilots has not been at all a happy one. I had occasion to take on a pilot when I was commanding a ship in the Persian Gulf and I had to have compulsory pilotage going into the oil port of Bahrein. I should mention that all the pilots concerned were British and they all had to have a master's certificate.
It soon became obvious that the pilot had no knowledge that, when he ordered "Full Ahead" in a destroyer with 40,000 h.p. and weighing about 2,000 tonnes, he was calling for a great deal more power than he had ever seen in his life. We hastily put that right, but it was a very dangerous situation. It was a great eye-opener to me that anybody who was put on board a ship of that shape and size would go there without at least knowing that the Royal Navy had different helm orders from the merchant service.
My next experience was taking that same ship into Colombo where there was also compulsory pilotage. Having been warned from the time before, and seeing the pilot getting into extreme difficulty going into what was admittedly a very difficult berth, I asked him whether I could take over because I thought I knew the ship better than he did; and he was sensible and reasonable enough say yes. Therefore, it is not surprising that I am not so carried away with enthusiasm or believe that pilots always do the right thing when they are given the chance.
My first experience of pilots was not of that nature but was of Suez Canal pilots. That is much more relevant to what we are debating, because they were paid enormous sums of money as they had convinced everybody that their art was so skilful that nobody else could possibly do the job. I had occasion to meet some of the pilots. When we were on the third whisky, they

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did express a little shame. They were on to a jolly good thing. It might be said that, because they convinced everybody in the outside world that they were the only people who could do the job, they contributed quite considerably to the Suez campaign in the 1950s. People were very frightened as to what would happen if they were removed.
I knew, partly from later personal experience of taking a ship through the canal but also from wise and experienced naval officers who had had occasion to take their ships through the canal during war when for one reason or another a pilot was not available, that it is a skilled job but not something that a competent sea captain cannot do at any time. We must not be too carried away with the thought that only pilots can do these things. I welcome the exemption certificate—which, as my noble friend will see when he reads the White Paper, is strictly for people, not for ships—as an example of where captains will be allowed to take their own ships if they satisfy the competent harbour authority that they are appropriate to do so.
I suggest that there is not much dispute between us. The changes in the pattern of trade and the increases in the size of ships mean that there are several hundred pilots too many for the work being done. The noble Lord, Lord Greenway, said that he thought that all the superfluous pilots would leave automatically when the Bill became law. I hope that he is right. Obviously it is not economical.
The real flaw in the present arrangements is that there is no incentive for the pilotage authorities to provide a cost-effective personal service. For this reason above all others I welcome the Bill's central proposal to transfer responsibility for pilotage to the ports. They compete with each other and will have a direct commercial interest in providing a good quality, low cost service. They will compete not only with each other but with the Continental ports, which at present they do not. The noble and learned Lord, Lord Simon of Glaisdale, said much the same. I think that it is central to the subject.
I was sorry that my noble friend Lord Strathcona made a great issue about the dangers of commercial pressure. One has to have some commercial pressure in the modern world. I would go so far as to say that one has always to have commercial pressure to get the most efficient results out of people. The degree to which commercial pressure should be applied could be a matter for discussion. It is my belief—I think all the evidence confirms this, certainly the Green Paper and all that it says—that there has not been enough. That is why we have to have this new system.
I would argue, for example, that safety will not be prejudiced as the result of a transfer to the ports. I think that it will probably be enhanced. As the Green Paper says at paragraph 3.2:
"This is the natural choice: the authorities have responsibilities for the safety of navigation within their boundaries; they have the capability to manage pilotage services; they have a direct concern in the efficiency of operations within their ports; some authorities have developed sophisticated systems for monitoring and managing traffic for ensuring its safe passage into and out of port, and with the development of new technology there will be advantages in placing the pilotage service under the same authority as shore-based traffic management systems".
Lord Strathcona and Mount Royal: My Lords, has the noble Lord, Lord Mottistone, ever heard the story of the shuttle pilot who was asked what he thought as the shuttle took off? He said, "I remind myself that every component on this ship went to the man who put in the lowest bid", and we know what happened to the shuttle.
Lord Mottistone: My Lords, I think that is irrelevant. One can produce that sort of argument for anything that one wants to. If my noble friend's argument was taken to a logical conclusion, when the pilots came to him and said, "We want to have £1 million a year like certain top businessmen do", he would give it to them. There must be a limit to this and a system that imposes limits. One cannot control things entirely by hoped-for good will. Sadly in the modern world we do not always get good will; nor do we always get people who are thoroughly dedicated to their jobs and totally unselfish and ungreedy. These things, I am afraid, do not happen.
I welcome the opportunity for Trinity House to act as agent for ports if it is the ports wish. I suggest that, despite occasional disputes, there is no animosity as such between the shipping industry and Trinity House.
In consequence of these points—which I am rather rushing, because it is helpful to be able to get this out of the way with other business to come—I welcome the Bill as providing an acceptable instrument for tidying up this essential area of maritime activity. On the whole I think that there is a fairly wide consensus that it is acceptable. We have heard that the pilots are not wholly behind it. Indeed, some are probably dead against it. Naturally one would expect that because, on the whole, their way of life is having a measure of control put upon it which it has not had in the immediate past.
Although I welcome the Bill as a whole, there are still dangers of monopoly and therefore of abuse lurking in some corners of the proposed system. I welcome the safeguard that it contains, for example, for appeals against pilotage charges. I am less certain that the issues of compulsory pilotage and charges for the use of pilotage certificates for ships' masters have been thoroughly thought through.
I have three areas in which I hope to have amendments in due course. The noble and learned Lord, Lord Simon of Glaisdale, commented that other noble Lords have been saying that they want to add to the Bill. I agree with him that it might get spoilt thereby. I want to take from it. For example, I should like to see Clause 8(3) removed. It empowers the competent harbour authority to make charges for the use of a pilotage certificate. If a master or mate has been able to obtain a pilotage certificate to navigate his ship without engaging a pilot, why should the port be able to make a charge? I accept that the cost of granting, renewing or altering the certificate should be recovered, but that charge is already dealt with in Clause 6(7). It seems to me that the only money that the CHA should get is the cost of granting a certificate. One of the objects of the Bill is to make the whole matter more economical for shipping. Albeit the amount involved is relatively small, a ship whose master or mate has a pilotage certificate ought to be allowed not to pay anthing for pilotage.

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Another part that I think could well be omitted is Clause 3(11) of the Bill. This provides that a pilot will not be barred by reason of being a pilot from membership of any committee with a pilotage function of a local authority; that is, a harbour authority. I question whether it is reasonable that active pilots should be entitled to participate in committees that might be dealing with matters in which they have a direct interest. Maybe it is a matter of rewording rather than cutting out Clause 3(11), but I think that at present it is leaving it wide open for pilots to be able to go in and have a hand in committees that decide, among other things, their own incomes.
Clause 26 deals with the funding of expenses and liabilities on the winding-up of pilotage authorities. Clause 26(5) provides that a competent harbour authority can recover such expenses, together with the cost of financing the pilots' compensation arrangements by increasing any charges, dues or fees payable to them. Leaving aside the question of financing the pilots' compensation, which is another matter, I believe that there is a strong case, if this extra financing has to be handled in the transitional phase, for government financial assistance towards the cost of these changes rather than that it should all come back on the unfortunate ships. Once again the ships have to field the financial bill. I think that the object of this exercise is to try to reduce unnecessary costs for ships so as to make our harbours more competitive both among themselves and with Continental harbours and to enable our shipping lines to pay less so they can operate more competitively in the world at large. That is surely what this Bill is all about and anything which does not work towards that end needs to be looked at very seriously.
Finally, on. a matter of technical detail, when my noble friend comes to reply will he be able to give us some idea of when these special committees will sit? I believe he told us that the time of day would be from 3 to 4.30 p.m. There is the usual gap of a fortnight between now and the beginning of the Committee. However, following that, will it go consecutively day by day, or, as in an ordinary Committee stage, will it happen on set days planned through the usual channels? Knowing that would be most helpful in arranging one's programme.
I wish the Bill every success, and I hope your Lordships will not be carried away too much by my noble friends who are dedicated supporters of the pilots.
Lord Swinfen: My Lords, before my noble friend sits down, is he aware that when I was talking about exempt vessels I was talking about existing legislation and not the Bill? Under Part IX of the London Pilotage District By-Laws it is stipulated that vessels under 3,500 gross registered tonnes (and I did say 3,000 earlier; I apologise to the House) trading coastwise are exempt from the need to take a pilot. They must use a pilot for 60 days before the exemption applies, but once the exemption applies it is the vessel—no matter who is in charge of the navigation—that is exempt. That is my understanding of the position. I am sure that the Minister will be able to put us both right.
Lord Mottistone: My Lords, surely we are talking about the Bill and not what is happening now. What is happening now is to be swept away by the Bill.
Lord Swinfen: My Lords, that is not as I understood it. I think it is absolutely essential that we make sure that this point is in the Bill before it becomes an Act.
6.15 p.m.
Viscount Simon: My Lords, we have had a very interesting discussion on this Bill. It has lasted longer than I thought it would. A great many important points have been made, mostly points of detail. I think that the best comment I can make on them is to say that each of them is a marker for discussion in Committee or later, and I shall not refer to any of the suggestions unless they come up against what I wish to say on the general issues raised by this Bill.
As has been made perfectly clear, the primary objective of the Bill is to reduce the cost of pilotage services. To do so will in a small way improve the competitive position of our ports and therefore the competitive position of British exports and the cost of our imports. I say "in a small way", because pilotage dues, although they may seem large when they appear on a bill, are small in relation to all the other expenses that have to be incurred. I do not think we should be too concerned about that.
The noble Lord, Lord Shackleton, asked whether there was any estimate of what saving might be achieved. I doubt whether it is possible for anyone to work that out; if anyone has, no doubt the Minister will tell us when he comes to reply. I think he will agree that the savings, assuming that they are all achieved, would be very small.
The method proposed in the Bill is contained in Clause 2 and that is that the new pilotage authorities shall keep under review the need for pilotage, including the need for compulsory pilotage, and keep the numbers of authorised pilots in line with needs. I take it for granted that all this is to be done without endangering the high safety standards we require and have enjoyed under the present system.
I am sure that your Lordships will agree that the criticisms which gave rise to this whole inquiry and the Bill which is now before us were against the system but not against the pilots themselves, for whom we all have the very highest approval. The noble Lord, Lord Mottistone, told us that he had not found pilots as satisfactory as he had expected. We then discovered that one of them was in Bahrain, one somewhere else and another in the Suez Canal. I could not agree more than the Suez Canal pilots are very much overpaid. However, their pilotage was not unimportant because it was in fact traffic control. They were needed because traffic control had to be maintained and that was done by Suez Canal pilots.
In this country as well the pilot's job is very often a matter of traffic control. At one time I had a connection with the port of Poole and in that port the pilot's job was almost entirely one of traffic control and making sure that the very narrow principal channel was not blocked by two ships proceeding at one time.
Perhaps I may make one point about the suggestion that the number of authorised pilots should be

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adequate to meet needs. It should not be forgotten that the pilotage service must deal with peaks of traffic. I think it has been mentioned by one noble Lord already that there is a good deal of difference in demand at different times and the pilot service must be large enough to handle the peak traffic without delay. That means that there will be more people on the roster than will be required every day of the year.
The debate of 25th June has been mentioned several times already with regard to the Unstarred Question asked by the noble Lord, Lord Shackleton. In that debate my noble friend Lord Kennet said at col. 389 of the Official Report:
"safety is not for sale".
I like that expression. The noble Lord, Lord Strathcona, (at col. 392) said:
"we should be wary of a relentless and unreasoning pursuit of … unproven cost savings at the expense of efficiency, safety and the disruption of the … lives of dedicated professionals".
I wish to speak particularly of safety. I disagree with the noble Lord, Lord Mottistone. I am concerned that port authorities, with the new responsibilities they will be getting at a time when so much emphasis is being laid on reducing costs, may find themselves under intolerable pressures to discount risks which they have been protected from for many years by efficient pilotage. I wonder whether it would not be desirable to include in the Bill a provision that any reduction which might be contemplated by the new pilotage authorities in an area where pilotage is at present compulsory or even where it is normally provided to be proposed should be subject to approval from the Secretary of State in whatever way is thought best. I am speaking of approval by some independent body with knowledge of existing conditions. I do not want, from this Bench, to invite any more government involvement than is necessary, but I can imagine cases where pilotage authorities, in their drive for economy in a highly competitive field, ought perhaps to be curtailed in the public interest.
We have heard a good deal today about the opinions of licensed pilots, although the shipowners and port authorities are in general agreement about the proposals and Trinity House, on whose behalf much was said in the debate on 25th June, is now satisfied. I have been told, although at second hand, that Trinity House warmly welcomes the Bill. The noble Lord, Lord Shackleton, thought that that had been slightly overstated. I have had words with one of the elder brethren about the Bill and he was reasonably content, if I may put it that way.
Before we started with the Bill I sensed a feeling, which has since been confirmed by several noble Lords, that existing licensed pilots are not altogether happy. As someone said not very long ago, this is not surprising when one of the objects over the years is to reduce the numbers and perhaps in some districts make the duties of those who transfer to the new pilotage authorities more onerous than they were. Nor is it surprising that a good many licensed pilots feel rather sore. I appreciated very much what the noble Duke, the Duke of Norfolk, said. These people are highly professionally trained and are used to going on board ships and talking to the master in language
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which both of them understand. They ask whether they are now just to be servants to go out and do what they are told to do. I do not think it will happen that way but I can well understand the feelings that this has produced in a number of the pilots.
What we can do about it, apart from gradually educating people by experience to the new system, I do not know. The White Paper ends with a promise to provide equitable treatment for the present and future members of a distinguished profession. That promise must somehow be put into effect. It is natural that details of what can be done are not available at this stage. Clause 25 indicates in broad outline what is intended in the way of compensation for pilots leaving the service. That outline will have to be put into some form. I agree with my noble namesake that it is not desirable to put such matters into the Bill itself; but the outline is there and it is to be followed.
What about those who transfer to the new pilotage authorities as authorised pilots? There is nothing in the Bill about them. They are given priority over other applicants when they first apply for positions as authorised pilots but nothing is said about the terms. When as a result of an Act of Parliament people are transferred from one employment to another—and while this is a little different because they are being transferred from self-employment to another employer, the principle is the same—is it not usual for some guarantee to be given to the people transferred that they will not be any worse off? I should like to see something of that kind written into the Bill. These and other matters will no doubt be considered in Committee or in subsequent stages of the Bill.
I conclude with one comment. It seems to me, as was mentioned by another noble Lord, although I cannot remember who, that there is no party political content to the Bill. I hope that when it goes into Committee and on to subsequent stages your Lordships will consider on their merits any proposals that are made by way of amendments and will vote upon them on their merits irrespective of the stable from which they come.
6.24 p.m.
Lord Carmichael of Kelvingrove: My Lords, that was a felicitous note on which to finish this part of the general debate. This is basically a non-party political measure and I hope that when the Bill reaches Committee it will be treated in that way.
The Bill has been brought forward because there is a surplus of pilots. I have read the report of the earlier debate initiated by my noble friend Lord Shackleton and I was struck by the figures given by the noble Lord, Lord Walston. He said that between 250 and 400 pilots were surplus to immediate requirements. The Select Committee which reported in June 1985 said much the same thing. It was suggested in an intervention by the noble Lord, Lord Mountevans, that this is because we have too many ports. Perhaps we have too many ports, but there is no doubt that ships are becoming much larger and modern mechanisation of the ports means that ships are turned around faster.
The growth of air cargo has a part to play as well. In tonnage terms Heathrow is one of the largest ports in

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the country. In addition, large lorries bring cargo over on ferries from the Continent. Nowadays, many of the large ships from abroad go only to a single port in Europe or in the United Kingdom. In this connection, I can certainly understand the worry of my noble friend Lord Blease about Northern Ireland. Many of the goods for Northern Ireland which used to go directly by ship now go by road from the South to Liverpool or come down from Glasgow and cross over via Stranraer. All these developments have no doubt affected the loading of British ports.
Since the days when the noble Viscount, Lord Rochdale, made his impressive report, shipping has changed out of all recognition. The issue of the report coincided with a sail down the Clyde. There was great jubilation and pleasure at the idea that we were to have a Clyde port authority instead of all the little ports. That was looked upon as one of the salvations, but in some ways the Clyde is now a sadder river than it was then. It is an example of how time has caught up with so many of our plans.
The noble Lord, Lord Walston, gave the figures for European pilotage fees and British pilotage fees. He suggested something with which perhaps the noble Viscount, Lord Simon will agree. He suggested that it was asking too much to believe that the reduction of pilotage fees would greatly change the costs of British shipping. It obviously has some effect, and if anything can be done both to reduce the costs and to increase efficiency, it should be done. A 12,000 tonne vessel coming into London pays pilotage fees of £2,500. The same vessel going into Rotterdam pays £800. I shall not make the party political point that Rotterdam is a municipal port, but that happens to be the case. A 1,500 tonne vessel coming into London pays £1,180. The same vessel going into Rotterdam pays £300. Even if one reduces pilotage fees slightly, something other than those fees encourages ships to go into Rotterdam and Le Havre. It may well be that pilots are not required for as long. Certainly the figures are very different. The ports are busier. They may have a better system.
The Select Committee asked that ships should give better advance notice of their estimated times of arrival and departure. I understand that there is considerable wastage of pilotage time because, under the present conditions, a ship can arrive and demand a pilot and a pilot must be available on the spot. Perhaps those tidying up measures would be helpful. They were all suggested in the Select Committee report.
I am perhaps more familiar with Select Committee reports, particularly this one, because I was on the committee for many years. I believe that, by and large, it has done a fairly efficient job. The noble and learned Lord, Lord Simon of Glaisdale, mentioned the White Paper. I think that between the White Paper and the Select Committee report there is a much better understanding of the Bill than we get even from the Notes on Clauses—possibly because the Notes on Clauses are compiled by draftsmen and the White Paper is done in a much more general way. I certainly found it extremely helpful.
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The debate has shown a remarkable example of how governments of all parties can go wrong in their estimation of the feelings of the House. I hope that that will not be the case here, but I believe this Bill was selected for a Public Bill Committee on the basis that it was reasonably uncontroversial and that there was general agreement on the principles of the Bill, with no real party involvement. Today's debate shows that we are likely to have a fairly long Committee stage. I am sure that at the end of it I will be much better informed on pilotage, judging from the great expertise shown in the House today. The Minister went through the Bill fairly and helpfully. We shall read his speech before we come to the Committee stage and I am sure it will be of great help to us.
All noble Lords have paid tribute to Trinity House, its experience and accumulated knowledge. Obviously that is something which should not be thrown away. I am glad—perhaps because in some ways I am a sentimentalist—that the name of Trinity House is to be continued in the new company which is to be set up. Many speakers obviously have great experience of this subject and, as I said, I am sure this will be a better Bill after the Committee stage.
My noble friend Lord Underhill raised many questions on various parts of the Bill which emphasised the need for detailed consultation. The debate generally indicated that detailed consultation will still be required. The noble Duke, the Duke of Norfolk, suggested that he would be leaving early, so perhaps while he is still here I could say that I cannot add to what he said, and certainly not with the authority that he can bring to the subject, except to say that I hope the Government will have considerable consultation with the Transport and General Workers Union, particularly concerning the pilots. I understand that many of the pilots, particularly those in the port of Goole, as the noble Duke, the Duke of Norfolk said, are concerned about the situation. Incidentally, Goole is one of the ports that I have visited, and it is interesting to find that, in what one considers almost the centre of England, large ships are moored.
All this emphasises the fact, as the debate clearly showed, that although the Government have consulted a great deal on the Bill, more consultation is needed. Of course, in the last debate initiated by my noble friend Lord Shackleton, we heard that Trinity House had been consulted only a few days earlier. That emphasises the point that the Government could perhaps have been a little more careful.
My noble friend Lord Underhill, and others, were particularly concerned about fair treatment for the pilots. As regards pilot earnings, I do not know how important this is but certainly in the fairly detailed Table 4, on page 7 of the Select Committee report, there is no indication of earnings of the class referred to in the debate. I agree that in a certain number of ports, and for pilots individually and independently employed, earnings may be a great deal more. However, they are nothing like the earnings for much lower skills in many other parts of the country.
The noble Lord, Lord Greenway, referred to safety. The Select Committee report emphasised the importance of safety when it said that the question of safety is the most important point and that the second

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most important point is pollution. The report was referring particularly to the hazardous cargoes which many ships carry today.
I have mentioned pilotage charges, but a study of port charges is also interesting. I understand, again from some European countries, that pilotage charges are reckoned to be only 1 per cent. of total port charges, whereas in the United Kingdom, for whatever reason, the Select Committee puts it at between 7 per cent. and 12 per cent.; and in some cases even higher than that.
I am sorry that my noble friend Lord Shackleton appeared to be so antagonistic towards the Bill. I look forward to reading his speech more carefully to see on what points he disagrees. He has had considerable experience in this matter and as an Elder Brother of Trinity House his views cannot be ignored. I had believed that although some people were perhaps slightly worried about the future of pilotage, and particularly the treatment of individual pilots, there was general agreement between the Government and the pilotage authorities, and the pilots themselves, about the need for such a Bill.
A great deal was said by a number of noble Lords about pilots and their redundancy payments. Perhaps the Minister will take note of the fact that there is a feeling that, in many cases, people have said that the Secretary of State does not have enough power; but I should have thought that Clause 25(4), which deals specifically with redundancy terms, possibly gives the Secretary of State too much power. The Bill proposes that the Secretary of State will decide excactly what will be the terms and conditions, and the times of payment, for redundancy and compensation. This will all be decided by the Secretary of State without being spelt out. That is a point which should be taken up in Committee.
I am trying to rush ahead as quickly as possible. The noble Lord, Lord Mottistone, questioned the whole basis of a pilot's income. He said that he is glad that a commercial element will be involved—I think I heard him correctly. He said that there is to be a competitive and commercial element in pilotage. I hope that, despite the experiences the noble Lord described, the sheer professionalism of pilots will overcome any disadvantage that pure commercialism might bring to a situation where saving money was the only criterion.
The noble Lord raised a point which, again, the Select Committee clearly brought out. There needs to be a redefinition of the relationship between the pilot and the master of a ship, and a much clearer understanding of what is that relationship. I am sure that where pilots are familiar with ports, ships and their masters there will already be an arrangement. They will know how each other thinks, particularly if they use the port regularly. However, perhaps there should be a much better definition of that relationship.
I said at the beginning that I think that the Committee stage will be fairly long. I am speaking with very little experience of your Lordships' House, but I am not sure whether I generally agree with the suggestion of a committee of this House, which I think is perhaps not the best way to proceed. However, from what has been said in this debate today, obviously the
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nitty-gritty of the matter can only really be satisfactorily threshed out in committee. I look forward to that, but hope that it is not the thin edge of the wedge to send to a committee other types of Bills that are rather more party political.
I look forward to the Minister's reply and perhaps to a letter or some further explanation in writing of the very important points that have been raised today. Perhaps a way of shortening the Committee stage would be for the Minister to explain more clearly some of those points that have been raised.
6.40 p.m.
Lord Brabazon of Tara: My Lords, I am most grateful to all noble Lords who have taken part in this debate this afternoon. It has certainly been a most interesting debate. I was particularly glad that my noble friend Lord Strathcona and Mount Royal was able to speak with the authority of his role as honorary president of the United Kingdom Pilots' Association, and of course the noble Lord, Lord Shackleton, and the noble and learned Lord, Lord Simon of Glaisdale, gave us the benefit of their knowledge as elder brethren of Trinity House. Many other noble Lords have also made most useful contributions.
As the noble Viscount, Lord Simon, said in his speech, many of the matters raised were Committee points. This observation was also made by the noble Lord, Lord Carmichael. If I tried now to cover every point that has been raised during the debate we should probably be here all evening and I am fully conscious that there are two more debates to follow after this one. If I may therefore I shall answer the main points that have been made and maybe write to noble Lords; obviously, other points will be raised in Committee. As I and other noble Lords have said, we greatly welcome the constructive approach which Trinity House is adopting in the formation of their new subsidiary company to carry on agency work for the ports. The noble Lord, Lord Walston, credited me with some of the initiative taken toward moving in that direction but I have to tell the noble Lord that the credit is due to my predecessor and noble friend the Earl of Caithness, since this happened before he moved. Trinity House of course have accepted, since the publication of the Green Paper, that changes to the present arrangements need to be made. Whatever doubts they may have had about the precise remedies that we were proposing, I believe that it is absolutely right for them to seek to ensure that their expertise remains available to the pilotage service and to show that, as in other fields, their long tradition can adapt to changing circumstances.
How the provision of agency services will work is a matter on which a great deal of detailed work needs to be done in quite a short time. I think that this is the point that the noble Lord, Lord Shackleton, was making. Some of the provisions in Part III of the Bill may well have a bearing on the terms of an agency operation. In particular, I am thinking of the provisions concerning the transfer of staff, and assets and liabilities. Those points were also raised by the noble Lord, Lord Shackleton. We believe that what is in the Bill is sufficiently flexible to open the door to successful agency services; but if Trinity House—or better still, Trinity House and the ports in

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concert—feels that amendments are needed, we shall be prepared to look at them as favourably as we can. However, there is nothing in the Bill which will compel Trinity House to dispense with staff with whom it does not wish to dispense, nor does it necessarily deprive it of its pilotage assets. That depends on the terms of the scheme to be proposed by the Pilotage Commission and approved by the Secretary of State.
Lord Shackleton: My Lords, I am sorry to interrupt but it is a very crucial amendment. Can the Minister say whether it is possible that Trinity House will be able to retain its assets until such time as it has been able to get its company going and start debating approaching the market? If it does not have those assets, it cannot get the company going and will not be able to approach the harbour authorities.
Lord Brabazon of Tara: My Lords, I take the point about which the noble Lord asks. That is what I am saying: we must do some detailed work on this matter in a short space of time. Obviously, if the noble Lord is right, Trinity House would not be able to perform these agency services. It is our intention that it should be able to perform these agency services, so something must be done to make sure that is possible.
Many noble Lords—notably the noble Lords, Lord Underhill, Lord Walston, and Lord Greenway and my noble friend Lord Strathcona—talked about the safety of pilot boats. The safety and manning of pilot boats is a matter to which a great deal of attention has rightly been given. The provisions in Clause 4 of the Bill are intended to replace the provisions in the present Pilotage Act requiring authorities to approve the boats. They certainly do not rule out specific regulations and guidance on such matters from the department and we are still pursuing this actively, as we told the House of Commons Transport Committee.
As regards the particular point of the manning of pilot boats, we are about to circulate to the interested parties for comment a draft merchant shipping notice—I think the noble Lord, Lord Greenway, was asking about this—which says that in the great majority of cases the Department of Transport accepts that it is right for pilot boats to be manned by at least two people in addition to the pilot but that a statutory requirement to that effect would not be right because of the variety of types of pilot boat and the differing conditions in which they operate. Therefore, the proposal is that the manning of each pilot boat will be determined by the department's district surveyor after consultation with the pilotage authorities concerned.
Much attention has also been given in the debate to the question of the areas of compulsory pilotage. It has been suggested that the proposal that competent harbour authorities should be given the responsibility for deciding on the extent of compulsory pilotage in their areas will mean that corners will be cut on safety and that there should be some requirement on them to seek the approval of an outside body—perhaps the Pilotage Commission, which my noble friend Lord Strathcona and Mount Royal suggested—before their plans are finalised. I think that a requirement of this kind would run the grave danger of recreating the present system under which local problems have
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become the battleground for national arguments. I know that the Pilotage Commission, which has borne the brunt of trying to make such decisions at the national level, feels that these are local decisions which can best be made by the harbour authorities themselves.
Of course commercial interests have a part to play and no authority will want to charge more than is necessary for pilotage, but commercial interest and statutory responsibilities for safety need not he in opposition, and a harbour authority has as great an interest as anyone in ensuring that pilots are available where masters need them, that masters are required to take a pilot where safety demands it, and in general that the smooth operation of the port is not put at risk by unsafe navigation. I think that my noble friend Lord Mottistone made that point most clearly. There can be nothing less commercially successful for a harbour than to have its entrance blocked by a ship that has run aground or which is carrying hazardous material that has caused pollution or something of that kind. It would simply not be in the interests either of the harbour authorities or the shipowners.
Reference has been made to certain hazards which are outside present harbour authority boundaries. The Bill takes those boundaries as its starting point, and I believe rightly, since we intend that the authorities should take a fresh look at the pilotage requirements of ships using their ports and should not be constrained by limits set many years ago when shipping movements and navigational equipment were quite different and reflected patterns of operation which are not necessarily the most sensible ones today. I believe that all accept that some of these limits are now outdated: for instance, the compulsory areas of the London district from Margate to Dungeness. However, the Bill places a clear statutory duty on the authorities to look beyond their port limits and consider what is needed in the approaches. In Schedule 1 we have offered them a very much simplified procedure for extending their jurisdiction to any areas beyond their boundaries where pilotage at present is compulsory and where they believe it should remain so in the future, and even where they do not judge compulsory pilotage to be necessary they will he able to authorise pilots to cover those areas on a non-compulsory basis.
Much attention has also been given in the debate to the question of pilots' guaranteed earnings levels. I listened carefully to what was said about the need to include in the legislation a requirement that, where they are to be employed in the future, pilots should receive what are termed their "current entitlements" as to earnings levels. By "entitlement" is meant the recommended levels for each district agreed under the former Letch arrangements, updated since the agreement ceased to operate. Those levels are not the same as those that pilots have been earning. I am not sure that "entitlement" is the right term, as pilots have never had a guarantee that those levels would be achieved, although in practice they have usually been exceeded. I can understand the pilots' wish that some such requirement should be included, with the aim of ensuring that levels of earnings under the new régime are comparable with those that they enjoy at present.

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As regards a right of appeal for pilots, I understand that the British Ports Association has accepted, in discussions with the pilots' union, the UKPA, that disagreements on earnings levels should be referred to an independent third party and that that procedure is to be available during the initial shake-down period of the new system. Whether such arrangements should continue after that period will be a matter for subsequent discussion.
I do not believe that the changes that we are proposing will, in practice, generally make any great difference to pilots' earnings. Our contacts with the ports suggest that the savings that they are looking for will come from the retirement of surplus pilots, more efficient working arrangements and the review of pilotage rules, rather than by attempting to depress pilots' earnings; but, nonetheless, I remain unconvinced that it would be right to constrain the ports in that way. They should be free to negotiate with pilots on a basis which, as well as earning levels, can take into account considerations such as how much the port can afford and what productivity is being achieved.
I know that representatives of the ports and pilots have been discussing those issues. I hope that some form of mutually satisfactory assurances can be arrived at. Obviously, this is a subject on which there will be much further discussion as consideration of the Bill proceeds into Committee.
The noble Lord, Lord Walston, and others asked about the possible compulsory redundancy of pilots. I hope that compulsory redundancy among pilots will turn out to be a non-problem. Many pilots will of course be ready to accept the compensation terms already announced. We are in discussion with the ports and pilots to establish transfer arrangements so that surplus pilots who wish to carry on are offered every chance of moving to other ports, so enabling pilots in those ports to take early retirement when they would not otherwise have been able to be released. That seems the best way of tackling the imbalance between the places where there will be a surplus of pilots who would like to carry on working and those where there is no surplus but where pilots would be prepared to retire early. It is the aim of us all to avoid any compulsory redundancy if at all possible.
I turn now to other points which have been raised. My noble friend Lord Strathcona and Mount Royal did not agree with the statement that a single authority is necessarily the right solution in all estuaries. I shall ask him to look at the Thames and the Medway. Pilotage into the port facilities operated by the PLA and the Medway Ports Authority could be provided by a single workforce or by two separate forces. At this stage we cannot say which is the more sensible arrangement. It would be wrong for the Bill to force the two ports concerned to organise in a way which may not be the best answer to local needs. In some cases a single pilotage operation may be the right answer but not in every case.
My noble friend asked about Clause 8(6) and whether private wharves would be included. Yes, my Lords, they will be able to appeal against pilotage charges.
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The noble Lord, Lord Shackleton, asked me to put a figure on the cost savings that we expect to achieve. I am reluctant to do so because the future cost of the service will depend upon a large number of variables upon which the harbour authorities will have to make local decisions: on the area the pilotage service needs to cover; the number of ships which should be required to take a pilot and the number likely to do so from choice; the number of masters likely to qualify for exemption certificates; and the number of pilots needed for the service to be provided.
Although the ports are doing much preparatory work, they are not yet in a position to provide firm data on which cost estimates could be based. I think any general figure at this stage may well prove misleading. However, as an indication of the number of costs involved, I can say that if 350 pilots were to leave the profession, annual savings of about £7 million, out of a total pilotage cost last year of £47 million, should follow once short-term costs have been met. I hope that authorities will be able to find other areas for savings—for instance, in the provision of pilot boat services.
My noble friend Lord Rochdale made an excellent speech. I am sorry that it has taken us so long to produce the legislation. I know the marvellous work he did on the report in 1962. He asked me whether Trinity House would continue to be responsible for deep sea pilotage. The Bill provides for the future licensing of deep sea pilots and allows Trinity House to continue with that function.
The noble Earl, Lord Grey, expressed concern that pilots may be transferred to other ports, depriving pilots there of their jobs. We intend that there should be a transfer system which will help avoid the need for any compulsory redundancies. I can assure him that there is no question of forcing any pilot to retire against his will in order to make way for a pilot being transferred from elsewhere. The noble Earl and other noble Lords talked a great deal about dangerous cargoes. The noble Earl suggested that all ships carrying dangerous goods should be compelled to take a pilot. There may well be special hazards associated with such cargoes. We see no reason why the harbour authority should not be capable of assuming the responsibility of deciding whether compulsion is needed. It is by no means true that such vessels are always subject to compulsory pilotage at present. For instance, Tees and Hartlepool handles a great deal of that traffic with a non-compulsory pilotage service. Its safety record is as good as any one else's. It is worth making the point that although there is no compulsory pilotage at Tees and Hartlepool, over 70 per cent. of ships entering the port choose to take a pilot.
My noble friend Lord Swinfen among other things, talked about the exemption of vessels from compulsory pilotage, and whether the certificates were attached to the vessel or the master. They can be both. Ships below a certain size can be exempt from compulsory pilotage, and there are good reasons why that should be the case. It is presumably easier to navigate a small ship than a large one.
The compulsory pilotage certificates provided for in Clause 6 would be attached to the master or mate and not the vessel. I take the point about whether someone

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could obtain an exemption certificate for a car ferry and then pilot a supertanker. I wish to study that point.
I should like to thank the noble and learned Lord, Lord Simon of Glaisdale, for his kind words about the drafting of the Bill and the White Paper. It has been useful to us all to have the White Paper produced at the same time as the Bill. The noble Lord, Lord Carmichael, did not think that we now needed Notes on Clauses. I propose that Notes on Clauses should still be available so that noble Lords who wish to have them for the Committee stage will be able to have them. But I agree that the White Paper has done a valuable job.
May I say a final word or two about why we regard it as so important to make the changes proposed in the Bill? As my noble friend Lord Rochdale said, pilotage is a cost on that great part of our trade that travels by sea. It may not be the largest cost but, to the extent that it is an unnecessary burden, our exporters and importers are being placed at an unnecessary disadvantage. We have taken a number of steps to make our ports more competitive with one another and with those abroad, and there are areas that still need working on. Pilotage is inextricably part of the ports' scene and cannot be seen in isolation from the success or otherwise of our ports. This Bill will permit pilotage to adjust to changing circumstances and offers those who work in the service a secure and well founded base for their activities. It also deals fairly, I believe, with all concerned.
Turning quickly to the question asked by my noble friend Lord Mottistone about arrangements for the Committee stage, it is hoped—provided that your Lordships give the Bill a Second Reading and agree to the Motion that I am about to move—that the Committee will meet, in respect of the first two days, anyway, on Tuesday, 9th December and Wednesday, 10th December, at 3.15 p.m. Following upon what has normally been the case, I understand that on those days—I said this in my opening remarks—the Committee will sit from 3.15 p.m. to 5.45 p.m.
With those remarks, I hope that your Lordships will agree that the Bill should be read a second time.
On Question, Bill read a second time.
Lord Brabazon of Tara: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Bill be committed to a Public Bill Corn mittee.—(Lord Brabazon of Tara.)
On Question, Motion agreed to.

Privileges and Immunities of MEPs: ECC Report
7.1 p.m.
Lord Templeman Lord Templeman rose to move, That this House takes note of the Report of the European Communities Committee on Privileges and Immunities of MEPs (8th Report, 1985–86, H.L. 105).
The noble and learned Lord said: My Lords, the eighth report of the Select Committee on the European Communities deals with the privileges and immunities
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of Members of the European Parliament. The present privileges and immunities derive from the protocol of 1965 which was then annexed to the European treaties. That protocol can only be amended by proposals submitted by the Commission to the Council and accepted by the unanimous agreement of member states endorsed by their national parliaments. It is therefore clear that this is a subject in which power will remain with the Government and with the United Kingdom Parliament to say "Yea" or "Nay" to the proposals put forward.
At the request of the European Parliament, the Commission has drafted proposals. It is those proposals that have been considered in the 8th Report. The European Parliament in general wishes to make clear that its Members owe a duty to the Community as a whole and not only to the member states from which they derive their power. It wishes to ensure that those Members are free to travel and carry out their work throughout the Community forming and testing views that they can then present to the European Parliament.
In that respect the principles that animate the European Parliament are no different from the ancient principles that your Lordships will find set out in Appendix 6 to the 8th Report. That appendix consists of a helpful note by a legal adviser on the history of United Kingdom parliamentary privilege and forms a useful background to the report with which your Lordships are concerned. On page 57, the appendix points out that,
"In connection with civil proceedings the fundamental principle of the ancient law and custom of parliament was that 'Unless Parliament could keep its membership intact, free from outside interference, whether or not the interference was with the motive of embarrassing its action, it could not be confident of any accomplishment'".
It is that principle that has been put forward by the European Parliament in its suggestions.
The existing position, the proposals of the Parliament and the suggestions of the Commission will be found set out in Appendix 3 of the report of the Select Committee. Appendix 3, on page 24, sets out the three articles—Articles 8, 9 and 10—to which particular reference is necessary. Article 8 sets out that under the existing arrangements covered by the 1965 protocol, the immunities and privileges of Members of the European Parliament include the fact that no. restriction
"shall be imposed on the free movement of members of the Assembly travelling to or from the place of meeting of the Assembly".
It is the wish of the Parliament that that privilege shall extend not only to travelling to and from the meeting place of the Assembly but also in travelling throughout the Community gathering information necessary for the purposes of MEPs. The Parliament has therefore made the request set out on page 24 that,
"No administrative or other restriction shall be imposed on the free movement of members of the Assembly travelling within the Community".
The Commission's proposals limit that request. It suggests that the immunity should extend to
"administrative or other restriction imposed on the free movement of members of the Assembly travelling within the community in connection with the performance of their duties".

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In other words, there will be no immunity of privilege allowed to an MEP who is off on a holiday or frolic of his own. As regards that proposal, the committee, in paragraph 47, on page 19, agrees with the suggestion put forward. It says,
"This would ensure that no restriction is imposed on the free movement of MEPs travelling within the Community in connection with the performance of their duties".
But it makes one suggestion in respect of which I would be glad to hear the Government's reaction. It is that the freedom must be made subject
"to considerations of public policy or public health which a Member State considers to be of overriding importance".
That suggestion is made against the possibility that the Government may have sure information that some terrorist has succeeded in obtaining membership of the European Parliament, and it will also enable the Government to have control over parts of the Community where there is perhaps some disease in respect of which vaccination or other precaution is required. That is the suggestion made by the committee in regard to Article 8.
Article 9 is also set out on page 24 of the 8th Report. At present it provides that,
"Members of the Assembly shall not be subject to any form of enquiry, detention or legal proceedings in respect of opinions expressed or votes cast by them in the performance of their duties".
That corresponds, of course, to the privileges of members of the United Kingdom Parliament. It is suggested that there should be added the provision that,
"Members of the Assembly may withhold evidence insofar as such evidence has a bearing on their activities as Members of the European Parliament. To that extent the impounding of documents shall also be forbidden".
The Commission approves of that request, and the committee likewise approves. Its views are set out in paragraph 48 on page 19, where the committee says,
"A right to withhold evidence about opinions expressed and votes cast would follow naturally on the immunity from any form of enquiry which MEPs already enjoy and is similar in kind to the privilege enjoyed by United Kingdom Members of Parliament in legal proceedings in this country".
We hope to be informed of the Government's attitude to that recommendation.
I come now to Article 10, the most controversial of the existing articles and the present proposals. At the moment, under the 1965 protocol, Members of the European Parliament enjoy two distinct and rather contradictory immunities. In the territory of their own state, they shall enjoy immunities accorded to Members of their Parliament. But, in the territory of any other member state they shall enjoy immunity from any measure of detention and from legal proceedings, whatever immunities may be accorded to Members of the national Parliament.
There are two existing safeguards. First, the immunity cannot be claimed when the Member is found in the act of committing an offence. That deals, broadly speaking, with MEPs committing acts of violence who can be arrested straightaway and who cannot rely on their immunity in that respect. Secondly, there is the precaution that the immunity shall not prevent the Assembly exercising its right to waive the immunity of one of its Members. To anticipate the policy of the Parliament, it waives the
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immunity of any of its Members unless there is some evidence that the work of the Member as a Member of the Parliament is being impugned or threatened. Parliament and the Commission wish to broaden that to make the immunities of Members of the European Parliament the same throughout the Community. The European Parliament's request is set out at page 25 of the report and says:
"Members of the Assembly shall enjoy in the territory of the Member States immunity from any measure of detention and from legal proceedings".
When the committee examined that proposal they were of the opinion that it did not differentiate between arrest for civil and arrest for criminal offences, and it seemed to apply to civil proceedings as much as to criminal proceedings. Therefore, the immunity might extend, for example—to take a reductia ad absurdum—to the claim for maintenance by a wife of a Member of the European Parliament. However, on taking evidence from the European Parliament, we found that that was not the intention, and since then the Parliament has been recommended to amend the suggestion so that the immunity shall only be from prosecution, arrest or other measures which are limited to criminal offences and clearly do not come within civil proceedings.
They will continue the reservation that a Member found in the act of committing an offence shall not be entitled to immunity, and they will continue the provision concerning the right and duty of the Parliament to waive privilege in a proper case. It is that proposal which has caused the greatest amount of controversy.
I should point out that the existing arrangements have had some strange results. For example, a Member of the European Parliament appointed by the United Kingdom Parliament, who committed a crime in the United Kingdom could be arrested and tried in this country and could not plead immunity. However, a Member of the European Parliament—appointed, as is now the case, by the United Kingdom electorate—who committed a crime in France, could not be arrested or tried. Similarly, an MEP appointed by the French, who committed a crime in the United Kingdom, could not be arrested or tried.
These differences stem from Article 10 and also from the different rules of different member states with regard to the rights of Members of their own respective national Parliaments. Your Lordships will see that set out at Appendix 5 at page 53. Appendix 5 sets out in the table the rights and immunities accorded by each member state to the Members of its own Parliament. For example, Belgium grants freedom of speech and voting to its Members and protection of sources of information However, the most relevant ones are these. Belgium grants freedom from arrest or detention and freedom from criminal prosecution. Turning to page 54, your Lordships will see that those same immunities are granted by all the member states with the exception of the United Kingdom, the Netherlands and Ireland. All other member states grant immunity from arrest and prosecution to their own Members, and the reasons for that are largely historical.
Freedom from arrest and from criminal proceedings was originally claimed on behalf of Members from the

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United Kingdom, but it no longer exists and the reason is that in the long period of 800 years which has seen the development of parliamentary government in this country, two basic principles have been accepted. The first basic principle is that no one is above the law and therefore a Member of Parliament should not be given immunity; he is subject to the law like everyone else. The second basic principle is that everyone is equal before the law and therefore a Member of Parliament does not require any extra immunity; he is subject to the law but will receive free and fair treatment, and he will not suffer from the fact or be disturbed from exercising his power as a Member of Parliament.
In other parts of Europe arrest and prosecution have, from time to time, been used to hinder or to intimidate Members of national Parliaments. The European Parliament does not believe that the danger is passed, nor that it is impossible, even in the United Kingdom, for arrest and prosecution to be used as political weapons. I am touching on delicate ground, but those of your Lordships who are familiar with the history of France beginning with the Dreyfus case and ending with the explosion on board the Greenpeace ship in New Zealand, will recognise that in that country it is not always possible to divorce politics and law. One has examples through to the end of the Second World War of the grievous wrong suffered by Opposition Members of Parliament under the dictatorships in Germany, Italy, Spain and Portugal. Therefore, it is not surprising that in member states other than the United Kingdom and those which have the common law, there has been this express exemption from arrest or prosecution.
Since the 1965 protocol, the European Parliament has been asked to waive the claim to immunity, and through the cases which it has heard there runs the theme of the anxiety of the European Parliament to make sure that none of its Members suffer from political persecution. If your Lordships will look, for example, at page 78 of Appendix 7, there is set out the speech made to the European Parliament by the rapporteur in the Zahorka case. He says that the principle is that there is an old Latin concept, fumus persecutionis, which really means the suspicion of persecution, and it is that which the European Parliament is enthusiastic to suppress.
He continues:
"The fact is that really, if you look a little further into the origin of fumes persecutionis, you realise that, except perhaps in Great Britain, it goes back in fact many centuries in our national parliaments. The fact is that in every age certain persons have tried to hinder parliamentary activity or political activity, certain persons have wanted to damage the parliamentarian, the politician, to hinder him from exercising his mandate in the normal way, and from conducting democratic political activity".
Therefore, I am not merely being chauvenistic when I say that there is an historical difference between Great Britain and the other member states. That was recognised by the European Parliament and it remains anxious to see that, as the rapporteur puts it, no one can:
"hinder parliamentary activity or political activity".
It is for that reason that the European Parliament and the Commission have suggested a widening of the immunity granted to all Members of the European Parliament.
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There is one other difference between the United Kingdom Parliament and its means of protecting its Members, and the European Parliament. Over the years, the privileges and immunities of Members of the United Kingdom Parliament have really fallen into desuetude. However, both Houses of Parliament—and in particular the House of Commons—have retained, and will from time to time exercise, the powerful weapon of committal for contempt. If there were any danger of any interference with any Member of the House of Commons, that House has its own power to commit for contempt and thus to prevent any threat or any limitation on the freedom of a Member of the United Kingdom Parliament.
Of course the European Parliament has no such power. It has no jurisdiction; it cannot make any order; it cannot commit anybody for contempt committed in any of the member states, and quite rightly so. It has no power, and therefore if European Members of Parliament are to be protected, then (unlike the situation for Members in the United Kingdom Parliament) that protection must take the form of the grant of immunities and privileges. It is with those considerations in mind that the Select Committee, having considered the very powerful evidence of those Members of the United Kingdom Parliament who, quite naturally, could see no reason why there should be any difference between their privileges and those of Members of the European Parliament,made its recommendations in Paragraph 54 of the report. Your Lordships will find the summary of the committee's recommendations beginning at page 20. The committee were willing to accept that
"Members should be immune from arrest or criminal proceedings";
and then made one important safeguard that it should be
"in respect of any acts except crimes of violence".
We see no reason why there should be any privilege extended to a crime of violence for which, in any event, waiver ought to be made automatically.
We suggest
"There should be no corresponding immunity from civil proceedings".
And, as I have indicated, the European Parliament, having considered the views expressed by the Select Committee, have so provided.
Then paragraph 55 stipulates:
"Immunity should not apply to the arrest of a Member committing, about to commit or having just committed an offence."
That is the existing law accepted by the European Parliament, and nothing turns on that.
Then Paragraph 56 says that:
"Parliament should have a power to waive a Member's immunity from arrest and criminal prosecution."
That power of waiver exists and is exercised whenever the Parliament is convinced that there is no question of possible interference with the political activities of a Member.
Then the committee go further and say:
"There should be a duty to waive the immunity where this would not he contrary to the interests of the [European] Parliament. This

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should apply in particular in every case where a Member is charged for an offence which is unrelated to the activities of the Parliament or any aspect of Community law or practice and where a Member is asked to give evidence not bearing on these matters."
Then we make suggestions with regard to the procedure for waiver. We say:
"The procedure for waiver should be simple and quick, and there should be machinery for provisional waiver in urgent cases."
Finally, although the power of waiver lies with Parliament, we have said that the exercise of that power must be reviewable by the European Court of Justice so that one gets consistency and overview by a European Court of Justice who will consider whether the European Parliament is in fact exercising its descretion in a proper manner.
We shall be interested to learn the views of her Majesty's Government both on the proposals put forward by the European Parliament and the Commission and the suggestions made by the Select Committee. In the final analysis it will be for Her Majesty's Government and the United Kingdom Parliament to determine which, if any, of the extension of the immunities and privileges they are prepared to support. My Lords, I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on Privileges and Immunities of MEPs (8th Report, 1985–86, H.L. 105).—(Lord Templeman.
7.23 p.m.
Lord Silkin of Dulwich: My Lords, I know that the House will wish me to thank the noble and learned Lord, Lord Templeman, for the clear explanation both of the problem and of the committee's proposals. I hope I shall not embarrass him if I mention that after three years he is ceasing to be Chairman of Sub-Committee E, and also if I thank him for the work he has done as such and the numerous cogent reports which have come from his chairmanship.
While the dual mandate existed before the advent of directly-elected MEPs it was natural enough that MEPs desired equality with their national colleagues at least within their own territories, and in addition they needed further immunities, as the noble and learned Lord, Lord Templeman, explained, to protect them when carrying out their European duties elsewhere.
However, the picture was necessarily changed by direct elections. Equality with national colleagues ceased to be relevant. Equality between MEPs became indispensible. As M. Georges Donnez, the rapporteur of the Parliament, said to the members of the Sub-Committee, that was the corner-stone of the system. The question that your Lordships' Select Committee had to consider was at what level of protection that equality should be achieved. It did a considerable amount of work on the subject, hearing a number of witnesses and receiving a number of representations, and I very much hope that that work will be fruitful.
Representatives of Parliament who gave evidence accepted one fundamental principle which governs our own system in this country and which, in my view at any rate, is appropriate to any democratic legislature. M. Donnez put it clearly, and what he said is repeated at paragraph 17 of the report on page 10:
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"Parliamentary immunity is not, as we all know, the privilege of individual Members of Parliament, but is a guarantee for the institution which has the purpose of protecting that institution from any outside authorities or bodies. In the Parliament's view, the integrity of the institution had to be protected by conferring appropriate freedoms and immunities on its Members, enabling them to move freely throughout the Community, to act freely in their duties as a Parliamentarian and to be free from any form of intimidation in connexion with those duties.".
The noble Baroness, Lady Elles, whom I am glad to see in her place, agreed—and this is reported in the same paragraph—that privileges and immunities,
"should only be such as is absolutely necessary for the execution of the powers of the Parliament".
In other words, these privileges so called, perhaps more accurately immunities, are not for the glorification of individuals but simply to ensure, and no more than to ensure, that the parliament is able to carry out its functions.
I believe that both those MEPs and others who support that view are to be congratulated on their willingness to adopt that approach—the approach which has for long been that of our own Parliament, as is made clear both in Erskine May and in the report of the Select Committee on Parliamentary Privilege in 1967, a committee which I had the honour to chair and whose members included the noble and learned Lord the Lord Chancellor and other noble Lords.
While the principle is clear, its application causes problems. There appear to be two major difficulties. First, as the noble and learned Lord, Lord Templeman, reminded us, the European Parliament does not enjoy those powers of committal for contempt which are the principal means of protection developed by the high court of Parliament. It therefore possesses no means itself of preventing, or deterring, individuals or organisations from exercising or threatening pressure.
Your Lordships' Select Committee has drawn attention at Paragraph 39 to this deficiency, as did the noble and learned Lord in his opening remarks. In that paragraph can be found the comment that this is,
"a marked gap in the protection enjoyed by the European Parliament".
Without it there are no effective means of preventing attempts to bring improper pressure so as to influence the parliamentary action of MEPs.
Certainly my own view from my personal experience in dealing with privilege in another place is that protection against improper pressure is more important than any other aspect of privilege. Indeed the privileges committee in the Commons has, on a number of occasions considered and condemned such pressures, and there is an appendix in the report which indicates the kind of matters about which I am speaking.
We cannot expect to transplant into a different system the system that we have here. I believe that the European Parliament and our Government ought to be thinking about the matter in order to consider whether it is possible to devise a system which would have an equivalent effect, though obviously not in the same form. If it became successful, that system ought to be given legislative effect so that this marked gap in the protection would be removed.

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The second major difficulty, again referred to by the noble and learned Lord, is that, illogically but inevitably, representatives of different member states look at the systems in those states in formulating their ideas on what is the minimum desirable or necessary protection. The noble and learned Lord has drawn attention to Appendix 5 of the report, which is a useful tabulation of the systems in those states. The most noticeable difference which has already been referred to between systems in other states and our own is that nine of the states provide freedom from arrest, detention and criminal prosecution. Apart from ourselves, the Netherlands and the Republic of Ireland, they all do. Those three have no such privilege. The justification for that privilege is, as I understand it, the history of those countries and the fear that, without it, arrest, detention and criminal prosecution might be used to create an improper obstruction of an MEP in the performance of his duties.
In this case improper obstruction can be dealt with, notwithstanding the lack of committal powers of the parliament, because the parliament is dealing directly with the prosecuting authority in the national state. The existence of that immunity brings with it the need for exceptions. Immunity from arrest and detention does not prevent the apprehension of those who are said to be in flagrante delicto, actually committing or having just committed an offence. It is not wholly clear either what that expression means or what further consequences may flow from it once the apprehension has taken place. Indeed it is not easy to follow why it should have an effect on the question of prosecution, however important it is to have an effect on the question of arrest to prevent the continuation of the offence.
More important in my view is that immunity from prosecution could not work without a system of waiver of immunity. In the cases which arose in the 15 months between November 1984 and February 1986, which are listed in the report, the immunity has been waived live times and a waiver has been refused six times. It would take up much too much time if I were to examine those cases in detail. Suffice it to say, so far as one can understand the decision, decisions have not plainly followed a single consistent path. The principle which I applaud is to prevent the use of prosecution to obstruct legitimate political activity. The problem is to define "legitimate political activity". The more controversial the issue the harder it is to define fairly and the more diverse the results are likely to be.
For my part I am bound to say that I should prefer to solve the problem by removing the immunity altogether as in this country and by leaving the law to operate without impediment as we are able to do here. But I appreciate the difficulties that other member states would find about accepting that now, though one would hope they could move towards it. If it is unacceptable because of the different conditions in other member states then it seems quite essential that the decisions on waiver, though initially taken by the Parliament itself, should, as the Committee has proposed, be open to review by the European Court of Justice so that a body of European jurisprudence may be established to deal with what is essentially a European problem.
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I hope that we shall hear what is the view of the Government on that issue in particular. It seems to me that, if in the future we are to have decisions which are not open to the suspicion that different decisions are made in different circumstances which might have a political consequence and a political reason, then uniformity is necessary.
The noble and learned Lord has given exhaustive consideration to the points made by the Committee in dealing with the proposals, complicated by the fact that not only the European Parliament, the Commission and in due course the Council and the national parliaments will have to consider each point and will not necessarily agree to go further. Like the noble and learned Lord I am impatient to hear what is the Government's approach to the points where the Committee has made recommendations.
7.37 p.m.
Baroness Elles: My Lords, I should first like to thank the noble and learned Lord, Lord Templeman, and the members of Sub-Committee E of the Select Committee on the European Communities for the courtesy with which they received Members of the European Parliament and heard their evidence—in particular the valuable evidence given by M. Donnez, the rapporteur. I am also grateful for the recommendations contained in the report and the introduction of this subject by the noble and learned Lord. I shall try not to be too long so that noble Lords can quickly hear the views of Her Majesty's Government, but I wish to deal with one or two points that have arisen.
First, we welcome this report very much in the European Parliament. I should like to say to noble Lords—I think I have said this every time I have spoken on one of the reports coming from your Lordships' House—how immensely valuable we find these reports for their objectivity, their power of analysis and the clarity with which the case is always presented. Even if Members do not always agree with all the contents (and that is not the case with this report) the reports are enormously appreciated and serve as a guide to decisions we take on matters that have been discussed in your Lordships' House.
We particularly welcome the recommendation which recognises the need for equality of treatment. Clearly this could have had a certain political implication and perhaps Members of another place might not agree with that conclusion. But for those who serve in the European Parliament it is an essential ingredient of our work as parliamentarians. Anybody serving in the House of Commons, for example, would not expect separate treatment for people coming from Scotland, from Wales or from England. One would expect the same treatment with regard to privileges and immunities. We in the European Parliament take the same view.
What was surprising when the report was published was the reaction of Members of another place. They appeared to think that all had changed with the report, but since 1973, when we became Members of the European Community, delegates from both Houses of Parliament to the European Parliament have had the same immunities and privileges as Members of our

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national Parliament when we are in the United Kingdom, and still do for the time being. But the minute we cross to Calais we have the immunities and privileges which are spelt out in Article 10(b). From that point of view there is no change in our position.
Similarly a French MEP, as the noble and learned Lord, Lord Templeman, implied, would have the privileges and immunities of a French Deputy. But the minute he comes to Dover, he has all the amenities and privileges spelt out in Article 10(b), which are considerably wider than many privileges and immunities for national Parliaments.
As the noble and learned Lord, Lord Silkin, pointed out, since the direct elections in 1979, the position for MEPs has changed, as also has their status. Whereas we were all Members of our national Parliaments up to 1979, now, since the 1984 European parliamentary elections, there are only 42 Members who have a dual mandate out of the 434, excluding the special case of Portugal and Spain, where, although some are no longer Members of their national Parliaments, they were originally elected from that national Parliament. But only about 10 per cent. of the 434 Members now have the dual mandate.
As to the work of the Members of the European Parliament, I hesitate to say how much we travel, but even in my political group we have Members from Denmark and Spain as well as from Britain. In the normal course of our parliamentary year we can have meetings in Madrid, Copenhagen, Brussels, Strasbourg and London. As to members of committees, for instance, the Legal Affairs Committee met in Athens three weeks ago. All this takes place in the normal course of our work. We must be able to cross frontiers, go through Customs, have our ordinary passports treated in the normal way and not be hindered or restricted in any way in the course of our European parliamentary work. If I may use the phrase, our work patch is not the United Kingdom, as it is for the MP in Westminster; it comprises the 12 member states of the European Community and we have to be able to move freely, as is intended under Article 8 of the 1965 Protocol, which is, of course, subject now to amendment.
But there are one or two specific points that I should like to raise, particularly because the working paper, the document which is under the name of the rapporteur, M. Donnez, is to be debated in the European Parliament in its plenary session in December. Whereas the original amendments from the Parliament are contained in your Lordships' report (together with the amendments proposed by the Commission)—there are new amendments which have been voted in by the Legal Affairs Committee of the European Parliament and which eventually are to be debated.
Therefore, with permission, I should like to raise these as problems which we shall have to be discussing and considering. The first is whether under Article 8 immunity applies in all cases as it now stands in the proposal from the European Parliament. I very much support the view which has been expressed both by the noble and learned Lord, Lord Templeman, and by the noble and learned Lord. Lord Silkin, that this should
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only be in cases where Members of the European Parliament are travelling in connection with their parliamentary duties. The argument has been that, because we travel so much, very often one may tag on a holiday at the end of one's travels and it would be difficult to prove. But I would rather that the onus was on the MEP to prove that he was on business rather than on holiday than to have free travel throughout the Community, regardless of the purpose for which the MEP is travelling.
Similarly, there is the question of immunity from prosecution, arrest or legal proceedings. We assured the noble and learned Lord, Lord Templeman, and members of that sub-committee that this only applies to criminal proceedings; and there will be an amendment, if it is deemed necessary, to explain that this applies only to criminal proceedings and not to civil proceedings.
I should be grateful if, when the noble and learned Lord, Lord Templeman, winds up, he would perhaps comment on the fact that the memorandum from the Lord Chancellor's office on civil liability may give the wrong impression. Civil liability is not in question in this case. It simply is not relevant to the protocol either as it stands or as we intend to have it amended. No doubt my noble friend the Minister will be commenting on this problem.
The other problem which we have and which has already been raised is the basis on which a decision to waive immunity is made when it is requested by the relevant national authority. This raises a problem. At the moment we have three criteria with which I shall not take up the time of your Lordships. They are contained in the various reports produced by M. Donnez concerning political activity, a point on which the noble and learned Lord, Lord Silkin, touched.
At the end of the day, the report is presented to the European Parliament on a Monday evening. I must inform your Lordships that it depends upon how many people are in the House at that time and it is decided by a simple majority vote. That is a democratic way of proceeding, but in a matter which is as important as this, where the waiving of immunity is concerned, possibly the European Parliament could be advised to find a more strict and coherent way of deciding. I do not think it should be left to chance or to a political group decision at that stage. It is more important; it is for the Parliament itself as a whole to be able to take that decision.
In conclusion, I confirm that I consider that the waiving of immunity is a very important issue at which we should be looking a little more seriously in the Parliament. Noble Lords will understand that the way in which the privileges and immunities of the European Parliament have, so to speak, grown and been adapted from the protocol of 1965 must take into account the practices and traditions of other member states. I consider that Members of the European Parliament who come from the United Kingdom and who represent the electorate of this country are privileged and honoured to come from a country which for some 800 years has had an elected Parliament and which recognises (and has recognised for centuries) the rights and freedoms of individuals and Members serving in the Westminster Parliament.

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Noble Lords will know that this is certainly not true of many of the member states with which we are working. I acknowledge and accept that many of them have anxieties—legitimate anxieties—as to the rights of their parliamentarians, who must be able to get to the European Parliament, just as we in this country have always been able to come to our Parliament. If there is a slight balance in favour of the MEP, I beg noble Lords to recognise that the privileges we have in this country are inestimable and have not been shared by others. It is in this spirit that I very much support the recommendations of this report and will listen with great interest to the reply of my noble friend the Minister.
7.48 p.m.
Lord Cledwyn of Penrhos: My Lords, may I, too, thank the noble and learned Lord, Lord Templeman, and the other noble Lords who sit on Sub-Committee E for this excellent report. I should also like to thank the noble and learned Lord, Lord Templeman, for the instructive speech with which he opened this debate. The task of the Committee was not an easy one, as the report shows, and it has sensitive political implications, but I think that the noble and learned Lord and his colleagues showed a sure touch, and we are all very grateful to them.
They make plain in paragraph 3 that they are "concerned only with immunities" and, in paragraph 4, they define the extent of the new immunities and privileges now sought by the European Parliament for its Members. These, in my view, are very substantial and go far beyond those which were enacted in 1965. As the noble Baroness, Lady Elles, who makes so distinguished a contribution to the European Parliament, has said, the chief argument in favour of change is that whereas in 1965 the Members were indirectly elected, today (and since 1979) they are elected by direct universal suffrage.
This sounds like a reasonable argument, and it must be given due weight. In the democratic system, people who are freely elected deserve respect and the facilities to enable them to perform their duties and to discharge their responsibilities to those who elect them. Like many others, I take the view that the immunities and privileges must relate to those duties and responsibilities—that is, to the functions which the elected representative has to carry out.
This Parliament and indeed every other Parliament in the Community must therefore consider these recommendations carefully on the basis of this principle and on what privileges and immunities are really necessary. They must also consider these in relation to the immunities granted to national Members of Parliament.
We in this Parliament know from our experience of diplomatic immunities and privileges how they can be misused and abused, and the Government are currently considering what changes are needed to tighten up diplomatic privileges. We recognise of course that European Members of Parliament need the appropriate degree of immunity to do their job but it would also be a mistake to extend that immunity
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beyond what is essential or to define it so loosely that undue advantage can be taken of it.
As the noble and learned Lord, Lord Templeman, said, we have a great deal of experience of immunities and privileges in this country. The noble Baroness, Lady Elles, has just referred to uniformity in this country as between Englishmen, Scotsmen, Welshmen and Irishmen. There was a time when immunities and privileges were granted to Englishmen in Wales which Welshmen did not enjoy, and I can assure the House that that was a source of endless trouble. Mercifully, that was a long time ago. But we read with great interest the history of United Kingdom parliamentary privilege in Appendix 6 to the report, and I think your Lordships will agree that after centuries of custom and practice we have got it just about right in this Parliament. The note on page 56 of the report sums it up succinctly. It reads:
"the main privileges of Parliament and its Members concern immunity from legal process which might keep a Member away from his parliamentary duties; freedom of speech and proceedings within Parliament; and sanctions imposed by Parliament for contempts".
The report discusses arrest on criminal charges, and, as we know, the Standing Orders of this House except arrest or detention on a criminal charge. My own experience over 36 years in both Houses is that privilege is a mantle to be worn very lightly. Some Members—very few—take themselves too seriously. I recall a Member who, on being stopped by the police in connection with a possible motoring offence, said to the officer, "Do you realise who I am?" That was a revealing thing to say.
As the report says, the most fundamental privilege concerns the need for Members to be able to attend Parliament. It quotes White from his book, The English Constitution, where he said:
"Unless Parliament could keep its membership intact, free from outside interference … it could not be confident of any accomplishment."
It is freedom of access to the Parliament and freedom of speech in that Parliament which are crucial. It is when you extend those freedoms that you begin to get into difficulties. This is especially true when you are operating in 12 countries over half a continent.
Evidence was given by the Foreign and Commonwealth Office and the Home Office upon this proposal that MEPs should be granted immunity on all journeys within the Community, provided they could be defined as proper duties of an MEP. The Commission defined a journey "in connection with" the performance of the duties of the MEP. I regard that as too wide and open to abuse. The Foreign and Commonwealth Office rightly argued that a member state should be able to preserve a residual power to prevent the entry of any person. The Home Office also thought the words "in connection with" were far too elastic. Article 8 therefore needs very careful study and I hope the noble Baroness will elaborate on the Government's view of its implications.
On Article 9, which deals with freedom to withhold evidence, I note that the Lord Chancellor's Department had a very proper reservation to make. The Commission had agreed with the European Parliament that evidence could be withheld if it had a bearing on the activities of an MEP. The noble and

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learned Lord the Lord Chancellor pointed out that the words were imprecise because they failed to make it clear that such right would be applicable to criminal proceedings only and also that immunity could be claimed even if the activities of the Member were marginal to the case. These are very important distinctions which need to be recognised.
Article 10, which, as the noble and learned Lord, Lord Templeman, pointed out, is probably the most important, deals with immunity from detention and prosecution; and there were interesting exchanges on this article between the Committee and the witnesses. The point which caused concern was that immunity might apply to civil proceedings, but this fear seems to have been allayed by those who gave evidence to the Committee.
Finally, the Commission's proposed formulation of Article 18 on waiver has caused confusion, and here again the noble Baroness's observations will be appreciated. There are therefore a number of very important reservations which must be made, and the noble and learned Lord and his noble colleagues have made this plain in their report. We must also take into account in our consideration of these problems the 18th Report of the Select Committee on European Legislation in another place. However, I return to paragraph 40 of the report because it enunciates the basic principle on which the European Parliament and the Commission should proceed. It says:
"The Committee consider that immunities should not be designed for the benefit of individual members but solely for the benefit of the European Parliament as one of the Communities' institutions."
I think Mr. Peter Shore's oral evidence to the Committee was both interesting and important. He said that the most important point was "functional need". He said, in answer to Question 178:
"The politician outside Parliament seems to me to be unprotected by privilege in any way, and has to behave himself according to the law of the land".
I agree with that. I agree with paragraph 50 of the report that the United Kingdom and the other Parliaments must take care not to create a supranational élite with a supra-national privilege and immunity. That is what we must guard against.
To return to paragraph 50 of the report, while I support it, I still have doubts as to whether the changes—even those suggested by the Committee—are absolutely necessary. I am open to conviction. In his evidence for the Foreign Office, Mr. Robin Renwick said this:
"So far as individual cases are concerned, we are not aware that the existing arrangements have caused any serious difficulty in respect of MEPs carrying out their normal functions".
That is a very important statement from the noble Baroness's department and I shall be grateful to her if she can confirm that departmental opinion. Is there in fact any evidence that any MEP has been frustrated in his obligation to represent his constituents or to perform his proper duties because of the inadequacy of the 1965 protocol? These are substantial privileges and they should not be amended without good cause.
I certainly agree with the remarks of my noble and learned friend Lord Silkin about the need for some parliamentary power to deal with the possible use of
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improper pressure upon MEPs. That is not dealt with in the draft or the report but I think the point made by my noble and learned friend is a very important one.
I recognise that there is a desire in the European Parliament for uniformity. I understand that perfectly well; but if uniformity is imposed then a new and complex situation could arise, in that national Members of Parliament and MEPs of the same country could enjoy different immunities and privileges. That is a possibility as things stand at the moment. There are distinguished Members of the European Parliament in this House but under these new proposals they would enjoy wider privileges than Members of the British Parliament. After centuries of developing parliamentary privilege, we should pause before we allow this paradox to emerge, because it may have unpredictable consequences at some time in the future.
I do not want to dwell on these possibilities because, if certain things happened in certain countries, not excluding our own, it is possible that the European Parliament and indeed the Community could be damaged beyond repair. One hopes that that will not occur but, in my view, it would be more sensible if Members of the European Parliament sought privileges and immunities which approximate to those we enjoy. I wish the European Parliament well, but it is young in years. It comprises members from 12 nations, each with their own political tradition, which we recognise and respect. Our fervent hope is that it will develop into a strong, democratic and enduring institution, but that will not come overnight, and we must move slowly and surely. It is for this reason that this report is so important and why the questions raised in it must be given the most careful consideration.
8 p.m.
Baroness Young: My Lords, this has been a most interesting debate on a highly technical subject. It has given us a useful opportunity to reconsider the functions and needs of the European Parliament and indeed, of parliamentary bodies in general. If I may do so, I congratulate all your Lordships who have taken in this debate this evening on the careful contribution which each has made.
I should, however, right away like to congratulate the noble and learned Lord, Lord Templeman, and the Select Committee for the characteristic clarity and thoroughness of the report. I was impressed by the committee's analysis of the Commission's proposals. It has correctly identified the major problems. If I express disagreement with some of the recommendations made by the Select Committee, this in no way lessens my respect for the coherence and integrity of the conclusions which the Select Committee has reached. It is largely a matter of political judgment how a balance can be struck between the need to guarantee the effective functioning of the European Parliament and the need to respect our national parliamentary traditions.
At present MEPs' privileges and immunities are laid down in a protocol signed by the member states in 1965 and to which the United Kingdom subscribed as part of the legal framework of the Community by its

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ratification of the Act of Accession in 1972. Members of the European Parliament currently enjoy three types of immunity under the 1965 protocol. First, under Article 8, their freedom of movement when travelling to or from a place of meeting of the Parliament cannot be hindered by any administrative or other restriction. They also have certain special customs and exchange control facilities which, in the Select Committee's judgment, add little to the general freedom from such controls enjoyed by all Community citizens.
Secondly, MEPs' freedom of expression: under Article 9, MEPs are protected from any form of inquiry, detention or legal proceedings in respect of opinions expressed or votes cast in performance of their duties. Thirdly, under Article 10, MEPs enjoy immunity from detention and legal proceedings outside their own country and, insofar as their national MPs enjoy such immunity, within it.
The Commission proposal before us today was made at the request of the European Parliament, which has been discussing changing its privileges and immunities ever since it was directly elected for the first time in 1979. The proposal includes amendments of all three relevant articles (8, 9 and 10) of the existing protocol.
For Article 8, the Commission propose widening MEPs' freedom of movement to cover all travel in connection with the performance of their duties, and certain provisions assisting MEPs who wish to reside in one of the Community's working places. The noble and learned Lord, Lord Templeman, asked me whether freedom of movement should be made subject to the requirements of public order and public health. Perhaps I could say that, as regards Article 8, the Commission propose, as I have mentioned, a working which is much wider than the present article. I should be more prepared to consider a change if I felt that MEPs were suffering difficulties in respect of their freedom of movement, but I do not think this is the case and I agree with the Select Committee that freedom of movement of MEPs cannot be absolute. It must be subject to considerations of public policy and public health which an individual member state considers to be of overriding importance. I am glad that the Select Committee recognises the need for this qualification.
Secondly, the Commission proposal would apply Articles 12(b) to (e) and 14, to enable Members of the European Parliament to set up their homes near one of the working places of the Community institution. The Government do not regard these changes as raising any difficulties for our own taxation and customs requirements, since they would apply to MEPs residing outside the United Kingdom.
For Article 9, the Commission would extend the protection of MEPs' freedom of speech, to allow them to withhold evidence having a bearing on their parliamentary activities, and forbidding the impounding of relevant documents. For Article 10, the Commission suggest a uniform immunity from detention and legal proceedings which would abolish the present distinction between the immunity that MEPs enjoy outside and inside their own countries.
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Finally, the other substantive Commission proposal is to amend Article 18 of the protocol to provide that privileges and immunities should be accorded to MEPs solely in the interests of the Community.
The main problem raised by the Commission proposal is the provision for uniform immunities for MEPs; that is, immunity against legal proceedings and detention applicable in all member states—a point I think made by the noble Lord, Lord Cledwyn. Your Lordships' committee has pointed out that non-British MEPs already enjoy immunity from detention and legal proceedings in respect of acts committed in this country, unless they are caught in the act.
I understand the argument for consistency. In this instance, however, I do not believe consistency is a sufficient argument for extending such privileges to British MEPs in this country. To do so would mean that British MEPs enjoy greater privileges and immunities in Britain than do Members of Parliament. The political and practical significance of that cannot be overlooked. Nor do I believe that such a step is needed on functional grounds. We should need to be persuaded that any great difficulties have arisen from the operation of the present protocol. Even if the present protocol is imperfect, that is no reason to extend its coverage and create fresh problems.
One of these problems is that a widening of MEPs' immunities will introduce risks of delay in national judicial procedures caused by the speed at which the European Parliament decides whether or not to waive immunity. At the moment, immunity procedures in the Parliament take six months or even longer. The Select Committee quite rightly underlines the need for more rapid procedures in the Parliament. But I must point out that the member states cannot themselves determine the European Parliament's rules of procedure which are, quite properly, for that body itself to decide.
Baroness Elles: My Lords, would the Minister give way? I am most grateful. One of the reasons for delay is, of course, the delays by the national authorities, who are not always very quick on the uptake in coming to the European Parliament, asking for waiving of immunity. The other reason is that where the Member has the dual mandate, in each case every time the European Parliament waits for a decision from the national Parliament before taking any decision, because it is usually left to the national Parliament to decide whether or not they wish to waive the immunity. I think, on an analysis of the cases before the European Parliament, these have been the main reasons why there have been delays, and not because of any internal procedure within the European Parliament. I am most grateful to my noble friend for giving way.
Baroness Young: My Lords, I am most grateful to the noble Baroness for that point of explanation as to why the particular situation has arisen. I think it is certainly something to bear in mind, but I will continue with the point that I was making. It is essential that the immunity procedures should be accelerated before member states decided on any expansion of the immunities conferred under the protocol.

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One might also fear that an extension of immunities could increase the abuse of the system. This is the most difficult of all. The Select Committee points out that the present protocol gives very broad immunity indeed; that is,
"from any measure of detention and from legal proceedings".
This could easily be interpreted as applying to civil as well as criminal proceedings. I welcome the Select Committee's suggestion that Article 10 should, by its express terms, confer immunity only in respect of arrest or criminal proceedings, excluding crimes of violence, and should not therefore apply to civil proceedings—the point, of course, which the noble and learned Lord, Lord Templeman, explained. But I doubt whether it would be possible effectively to enforce the limitations it desires.
I understand that, for example, the distinction between criminal and civil proceedings is drawn very differently in member states of the Community. Only this month, the Parliament has refused to waive the immunity of Lionel Jospin, a French Socialist MP and MEP charged with defamation. One might also wonder about definitions of violent crime. So the feasibility of ensuring uniform treatment of MEPs in these circumstances must remain open to doubt.
The general problem of abuse of immunities is well illustrated by Appendix 7 of the Select Committee's report. Since 1984, immunity has been upheld in several cases which relate to an MEP's activities going well beyond strictly parliamentary functions; for example, publishing articles advocating violent demonstrations and attacks on public buildings—that was the Kloeckner/Haerlin case; supporting an illegal abortion clinic—the first Pannella case; and stealing passports for Czech refugees—the Zahorka case.
The Select Committee recognises the problem over the obligation to waive and the judicial review. Under the present provision in the protocol, there is no obligation on the European Parliament to waive the privileges and immunities of MEPs where such a waiver is not contrary to the interests of the Community. The European Parliament should not be the ultimate arbiter in respect of its immunities (as this Parliament is). It should be duty bound under Article 18 of the protocol to waive immunity where this would not be contrary to its interests and there should be the possibility of review by the European Court of Justice of its immunity decisions. Again, this is an extremely useful suggestion which should be a basic component of any Commission proposal on this matter brought to the Council.
Before I conclude, I should say a word about any likely progress on the Commission proposal. The prospects for a full Council discussion look relatively remote at present. The European Parliament still has to give its opinion on the Commission proposal. Its original request was adopted by only 93 votes against 83 in 1983—as my noble friend Lady Elles told your Lordships' Committee—so the Parliament may now suggest further amendments. This could in turn lead to a revised Commission proposal which would delay consideration by the Council. Finally, it is important to remember that any change to the protocol counts as treaty amendment (under Article 236 of the EEC
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Treaty) and would require the common accord—that is, unanimity—of the member states.
The noble Lord, Lord Cledwyn, asked whether there was any evidence that any MEP has had difficulties because of the inadequacies of the 1965 protocol. I cannot, of course, answer for non-British MEPs, but in respect of British MEPs, I know of no case of difficulty since the United Kingdom acceded to the Community in 1973.
To conclude, I hope I have made clear our view that the present protocol—although it was framed in its original form over 30 years ago—still performs a useful function. We need an effective, directly elected European Parliament to enhance public awareness of Community activities. Our MEPs—and I think we are all very pleased that one of our MEPs was able to take part in this debate—can act as a check on Community decision-taking and promote useful change within it. The Single European Act, which your Lordships debated and approved only recently, will enable the European Parliament to fulfil its role still more effectively. That seems to the Government to be the right route to follow. We are not persuaded of the wisdom of a change in privileges and immunities which would not significantly improve the ability of MEPs to represent their electors. Indeed, it might merely promote a sense of alienation between elector and elected.
Finally, may I say that I shall of course read carefully the report of the debate, but I express once again our gratitude to the noble and learned Lord, Lord Templeman, and to his committee for the work that they have done. I hope that I have answered the points that have been raised—the points on which we are in agreement with the committee, the points on which the Government's view differs from that of the committee—and have explained fully the reasons for our differences of opinion.
8.14 p.m.
Lord Templeman: My Lords, the Select Committee will be gratified at the informative and knowledgeable debate which has taken place in respect of their report. The noble and learned Lord, Lord Silkin of Dulwich, has great experience in this field and is well appraised of all the constitutional and historical bases for the privileges and immunities of Members of Parliament in this country and abroad. Then we had the noble Baroness, Lady Elles, and the noble Lord, Lord Cledwyn of Penrhos, putting succinctly and well the two different—though I would not say opposing—views of a Member of the European Parliament on the one hand and, on the other, the view of a Member of the House of Commons. There is a conflict of history and a conflict of approach between those two.
That brings me to the Minister. I quite agree with the noble Baroness that this is a question of political judgment. That is why I began in opening by stressing the fact that it is for Her Majesty's Government, with Parliament, to determine what they are prepared to accept and what they are not prepared to accept. But the Select Committee felt that it would be most useful to the House and, we hope, to the Government, if we expressed our prima facie views, always being prepared to be differed from, either in principle or in

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detail, and I am very grateful to the noble Baroness for the detailed and frank answers which she has given to the problems which we have raised.
May I conclude by saying that I feel just a tinge of regret that, as happens on so many occasions, at the end of the day we will probably say: the European Community is all very well but we insist on being slightly different. I can understand the approach but I feel a slight regret that we cannot go along, as I feel a regret on other subjects when some of the Members of the Community will not go along with us. It is only a slight regret, because I recognise the very different approaches and the very real concern which is felt on both sides of the House and by Cross-Benchers at the proposals which have been put forward. I am very grateful for the debate.
On Question, Motion agreed to.

British Art Market: Safeguards
8.17 p.m.
Lord Fanshawe of Richmond Lord Fanshawe of Richmond rose to ask Her Majesty's Government whether they will take steps to safeguard the British art market in the negotiations within the Council of Ministers of the European Community over the 7th and 18th VAT Directives.
The noble Lord said: My Lord, some noble Lords may be wondering why I have put down a Question this evening on a subject (namely, the arts) which will be discussed at some length tomorrow. My reason is that this subject which I hope to explain to your Lordships this evening, is so important,and is particularly a Treasury matter, that I felt —and I think many people who are interested in the arts world in London felt—that we should have a specific discussion on it. I also ask the Question in an endeavour to remove uncertainty on an issue which is causing concern at the moment throughout the art market in Britain.
First, perhaps I may ask why Britain is the centre of the world art market. As Paul Whitfield of Christie's said in an outstanding speech at a recent seminar arranged by the European movement:
"The British have always been great collectors. Rather as some countries always seem to produce composers, and others performers, the British have since the seventeenth century been known for the richness and quality of their collections. Fortunately, during the last three centuries, or at any rate up until the last war, we were, nationally, able to afford the hobby—and also as great travellers had the knack of being in the right place at the right time, which for the collector is as important as the wherewithal itself. The countries which we colonised and which became pink on the maps also made their contributions: Moghul jade and Hindu bronzes in exchange for the English language, our legal system and Brown Windsor soup. Not a bad bargain, but perhaps not everyone would agree.
"And so the great houses of Britain, and tens of thousands of smaller mansions, villas and retired sea captains' cottages, became a bulging treasure trove of everything imaginable, not just the home-produced Georgian furniture and silver, nor the classic Italian and Dutch old masters, but also of German porcelain, Italian glass, Persian carpets, Chinese porcelain, Maori feathered cloaks and Japanese ivories. And when it came to trading these treasures and curiosities, the British evolved a system in the eighteenth century—the time when the great auction houses sprang up—a system which has survived and prospered to this day. There is something about the open and simple bargain, binding both parties in a relaxed but efficient market place which appeals greatly to our national temperament.
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"The development of the Stock Exchange, and of the other great exchanges, Baltic, coal and so on; and of Lloyd's insurance market, and of the auction system, all seem to point to this. Hand in hand with this expansion of the basic wholesale market has come a tremendous proliferation of antique dealers in the widest sense. There is certainly no city in the world with as many specialists in such an incredible range of subjects. Certainly not in New York. I do not think that Paris could be included: there is not the sheer spread that is to be found here in London. Figures for the whole of this market are not easy to come by—so some informed guesswork will have to do".
Mr. Whitfield estimated,
"the combined total of United Kingdom fine art auction sales to be in the region of $460 million. Sales by dealers will, naturally enough, come largely from this figure, or rather the proportion of it not accounted for by private or overseas purchases, plus a percentage mark-up. But it will also include a significant amount of purchases made outside the auction market here or abroad—private purchases, for instance. And it is therefore possible to infer that the total annual value of the UK art market is somewhere in the region of £800 to £900 million. Of this figure, the major auction houses consistently report that their sales in London include roughly 30 per cent. of consignments from abroad. A somewhat similar level of purchases abroad by the dealers can be assumed. These are direct imports, many of which may be re-exported. After, that is, the London art market has earned its share of commission, insurance premium, restoration costs, packing and shipping, advertising revenues and so on. Not to mention the considerable but unquantifiable sums spent in the West End hotels, restaurants and shops by the overseas dealers here to attend the sales. One has only to stand in King Street or Bond Street after a major picture sale to realise this.".
I have made a very lengthy quotation from Paul Whitfield's speech, but it is a most impressive description of what we see in London today of an art market that is not just the centre for Britain but the centre for the Community, and it is important to realise this.
The proposals of the draft 7th European Community directive seem to bring about the imposition of a 15 per cent. value added tax to the importation of works of art into this country as well as to other countries of the Community. The 18th directive, which may be puzzling some of your Lordships, ends derogations that were allowed under the 6th directive and would have a similar effect, particularly for the treatment of auctioneers. The implementation of this directive will mean that the sale of any work of art will start with a premium on its total market value, and this premium will double when an item is sold by a private UK collector. In the past VAT has been levied at auctions not on the estimated market value but on the service charge and as far as registered dealers are concerned on what is termed the margin, the profit on their purchase price.
Mr. Denys Sutton, who is a most distinguished editor, writes in his magazine Apollo in an article which is to be published next month:
"This charge initiated in 1973 has been accepted as a compromise but it is still opposed by our national museums who maintain that they should be freed from VAT on a par with overseas buyers. In fact what is now being proposed is that on each occasion that a work of art passes from one European Community country to another, or enters the European Community from outside, it will carry VAT. Every time it is sold within the Community it will attract more VAT. In other words the work of art will be subjected to the 'cascade principle' so that before long the VAT payment could well be greater than the intrinsic market value of the work of art in question".
The latest draft 7th directive will impose VAT on the full sale price whenever a work of art comes to market. That is bad enough, but in addition the 15 per cent. charge on imports would, as Geraldine Norman wrote recently in The Times, "be lethal". The loss to

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this country and the damage to our centre as a world market will be underlined when your Lordships realise that for the first time for many years the Impressionist sales planned for London this autumn will outclass New York. Somewhere between 60 million and 70 million dollars is thought to be the figure that could be raised between the two leading auctioneers, Christie's and Sotheby's.
If the proposal is agreed in Brussels, what will happen? The international art market will move not to Paris, not to Brussels, not to Rome, not even to Munich; it will move to New York or to Geneva. Not only Britain but Europe will be the loser. In addition, import tax will deter those wishing to bring or sell works of art into this country. We have only to remember the sale last week of a Constable for £2.5 million at Christie's and ask ourselves whether that private owner or collector in New York would have shipped the picture to London to be sold in Christie's, with all the benefits that provided for Britain and the Community, if he was to be charged 15 per cent. on the value before he brought it through Customs. I very much doubt whether he would. He would have flogged it in New York or sent it to Geneva or somewhere else where he would not have to pay that sort of tax.
I am not suggesting that we should have a tax advantage over our European friends. I wish Her Majesty's Government to stop the European Community putting itself at a disadvantage against the rest of the world. Either Europe goes our way or we lose. I hope that I have made it clear that the reason for that happening is because—this is a fundamental point—it is the United Kingdom tax regime that sets the environment for our success as a world centre.
I am glad that the noble Lord, Lord Diamond, who played such an important part in our Treasury as a Minister some years ago, is planning to take part in this debate. He knows how important the tax regime is in maintaining an international art market in London. In order to keep it that way, it is most important not only that we have the advantage of the entrepot of experts in London but that works of art move in and out of the country without restriction.
What am I asking tonight? I am asking Ministers this evening to fight our corner and that of the interests of the European Community as a whole. I also hope that my noble friend Lord Cockfield who is one of our Commissioners in Brussels, will take the same view. There are rumours in London that he is responsible for pressing for action that will damage Europe's international market. But where is Europe's international market in the art trade? It is here in London, in Britain. We are members of the Community, and we are managing to bring a great deal of profit and help to the Community as a whole, not just to Britain.
Your Lordships expressed your concern some years ago in the 1977–78 31st Report of the Select Committee on the European Communities entitled VAT on Second-Hand Goods at page vi, paragraph 15. As on other issues in our political and public life, your Lordships' House was ahead of the game as usual and in 1977–78 had already realised how important this issue was.
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I have two important questions to which we need a reply this evening. First, I hope that my noble friend the Minister will tell us the position under the Single European Act, which was passed in the last Session of Parliament. Does this mean, in the final analysis, that the United Kingdom will be voted down in Brussels? This did not seem to be indicated in the letter sent to Hugh Leggatt, a leading dealer and a member of the Museums and Galleries Commission, on 6th November of this year by my right honourable friend Richard Luce, Minister for the Arts. He states in his letter:
"Decisions on the implementation of this would be for unanimous decision by the Council of Ministers".
I should be grateful for an explanation from my noble friend.
Secondly, the same letter goes on to suggest:
"The appeal procedure through the European Court of Justice could overrule the views and decisions of the United Kingdom Government".
Is that correct? I must assume that it is since it has been written in a formal ministerial letter. If it is correct, it will result in a very grave situation in the long term and I should like to know this evening how this will affect the position of the United Kingdom Government. I assume that we will continue to fight, if necessary, in the European Court of Justice on the European case, because (as I hope I have indicated this evening) I am making a European as well as a British case. I believe that case would stand up in the European Court of Justice if, as I hope it never will, the case ever gets there. I should be grateful for clarification from my noble friend.
It is rare that the art world is unanimous about anything, but on this occasion it is. I have not mentioned furniture dealers this evening but there is a very important letter in today's Financial Times from Mr. George Levy of Blairman's. Auctioneers, dealers, galleries and collectors are all deeply concerned. They are supported by Members of both Houses of Parliament and I suspect by all political parties.
While encouragement of our cultural heritage and the build-up of our new European collections is a keystone of Government policy, this proposal will be disastrous for the private European collections. As Professor Brian Morris, chairman of the Museums and Galleries Commission, will confirm, it will have a grave effect on museums throughout Britain. My noble friend Lord Windlesham, chairman of the British Museum, is unfortunately unable to be here tonight. He would, I know, fully support my remarks on this subject, as I have discussed it with him prior to this evening.
I apologise for the time I have taken, but this is an important issue and a complicated one. In conclusion, I should like to say how particularly glad I am that my noble friend Lord Poltimore is making his maiden speech this evening. I know that his first hand knowledge gained working with Christie's will be of great value to our debate tonight and I look forward to hearing his views. I should also like to say how glad I am that my noble friend Lord Beaverbrook is making his maiden speech on an arts subject at the Dispatch Box the evening. All of us in all parties tonight will expect him and the Government to fight and win our

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case in Brussels. I hope that the reply of my noble friend will make clear the attitude of the Government on this matter.
8.33 p.m.
Lord Poltimore: My Lords, this is the first time that I have had the honour of speaking in your Lordships' House. Perhaps I may thank noble Lords in advance for listening to what I have to say. I fully agree with my noble friend Lord Fanshawe, who, in his excellent speech, dealt with most of the points I wished to raise with an eloquence that I cannot match. I know little about many of the subjects which are debated in this House, but, having worked in the art trade for almost 10 years, I feel I can speak with some knowledge on this subject. I also declare an interest in this matter.
In the face of considerable opposition from America and Switzerland, London has since the war established its position as a centre of the art world, largely due to being free of import and export taxes. If VAT is charged on the import of works of art into this country and indeed on the sale of any work of art, London will cease to be an international market-place and millions of pounds worth of trade will not be imported into this country. This does not include invisible earnings generated by the successful market from air tickets, shipping, restoration and the foreigners who, as my noble friend Lord Fanshawe has said, shop in our cities, stay in our hotels and eat in our restaurants. Without doubt it would be bad for Britain in terms of national income and aesthetic pleasure.
Although it may be tempting to feel that taxing the full value of works of art every time they appear on the market would increase tax revenue, I personally would argue that such a move would kill the goose that laid the golden egg by driving the market out of this country and with it many of the fiscal and other benefits the country derives from such a successful market. Harmonisation for harmonisation's sake seems to be the motive behind the draft Seventh Directive, but how short-sighted can this be? If VAT was introduced, the centre of the art market would move to New York or Geneva. Although London would suffer most, the whole of the EC would also suffer.
It is difficult enough, due to lack of money and the strong purchasing power of the American dollar or Japanese yen, for a museum in this country to buy works of art on the open market; now life will be made even more difficult for our museums by giving them a 15 per cent. disadvantage. Similarly, collectors and dealers alike will find that the Americans, the Swiss and the Japanese will have a 15 per cent. advantage every time they raise their hand at auction or walk into a gallery. Today's private collectors who enrich the museums of the future will certainly be at a disadvantage.
It is often said that our national heritage is being sadly depleted and it seems illogical to impose a system of taxation which gives non-EC buyers an advantage. I have spent many hours in my attic looking for hidden treasures to sell. Alas, there is
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nothing but dust. However, some noble Lords and many others who have to sell a treasured possession to pay death duties or install a new roof or central heating will, if they want to sell in London under the new tax scheme, suffer from the VAT imposition. One does not need to be a mathematician to work out how much money this entails for a work of art worth thousands of pounds.
If the draft Seventh Directive is passed in its present form I should have to advise anyone to consider selling in America or Switzerland or some other non-EC country. They will be the future centres of the art world. Owners often say they hope their treasured possessions will be bought by a museum in this country or find a good home here. They may well be disappointed.
The magnificent Rubens of Samson and Delilah which was imported into this country was sold to the National Gallery some years ago for almost £2½ million. Only last Friday, as my noble friend Lord Fanshawe said, a picture of Flatford Mill by John Constable which came from America was sold in London for a world record price of £2·4 million, and was secured for England. A Rembrandt, two Franz Hals and some £70 million-worth of Impressionists are coming up for auction in London at the beginning of December alone. This may never happen again. English museums, collectors and the trade will find it almost impossible to compete under the threatened scheme.
A foreign vendor, faced with the prospect of an import tax on his property into the UK, even though the tax payment may be deferred for six months, is likely to decide to sell in other centres where there are no such barriers. In respect of the Rubens which sold for £2½ million, a deposit of £375,000 would have had to be paid to HM Customs well in advance of the sale. In the case of the Constable, some £360,000 would be left at the customs, only to be reclaimed if the object was resold to a non-EC country.
There is a solution which works well in Britain and which we think should perhaps be introduced throughout the EC—the so-called margin scheme, which was so well explained by the noble Lord, Lord Fanshawe. The auctioneers should be taxed in accordance with their status as agents. This would stimulate the art trade in the EC, arguably bringing more tax revenue to the various EC governments, and would enable the EC to compete with the rest of the world. This would be sensible harmonisation.
In conclusion, I must say that we are proud that London is still the centre of the art world and by and large has the best expertise and knowledge available anywhere. The art world, consisting of museums, collectors, auctioneers and dealers, is united in its opposition to the draft Seventh Directive. I urge noble Lords and the Government to oppose the draft Seventh Directive and the introduction of VAT in this manner, to oppose the centre of the art world moving to America or Switzerland, to oppose this needless incentive for the export of works of art and to oppose the consequential cultural depletion. I urge noble Lords to oppose the draft Seventh Directive, not just for Britain's sake but for the sake of the EC as a whole.
8.41 p.m.
Lord Strabolgi: My Lords, it is a great pleasure and a privilege to congratulate most warmly the noble Lord, Lord Poltimore, on his excellent maiden speech. The noble Lord has spoken with deep knowledge and great sincerity and conviction about a subject on which he is an expert. I understand that the noble Lord is in charge of 19th century paintings at one of our oldest, most respected and most important auction houses in London. I cannot claim the experience or expertise of the noble Lord although I have some knowledge of this field. I agree wholeheartedly with everything he said and I hope that he will speak to us on many other occasions. I hope too that the Government and indeed the Commission will take heed of what the noble Lord has said.
The House is grateful also to the noble Lord, Lord Fanshawe, for asking this Unstarred Question tonight, and from this side of the House I should like to say that I strongly support his speech. I agree with him that the matter is so important that it merits a separate debate.
As has been said, works of art and antiques have hitherto been allowed to be imported without restriction. There are at present no customs duties or import taxes. The draft directive proposes the imposition of VAT on all imports of works of art and collectors' items into this country. This proposal, which amounts to an import tax, would be detrimental to our art trade. As has been said, many sellers would bypass London altogether and sell direct to the United States, Switzerland or Japan. An import tax would deter many collectors in this country, and in the long term our national collections would suffer. As VAT is waived for exports from Britain there would be a great increase in applications for export licences, and a further drain on our national heritage.
Why is it not possible for the EEC to develop its own free market? Why should VAT not be waived on works of art imported between Community countries? This might make some sense and be an encouragement to the free movement of works of art between these countries, to the enrichment of European culture and eventually to that of other countries as well outside the Community.
I should like to ask the noble Lord who is to reply for the Government how many times VAT is to be levied on the same object. The noble Lord, Lord Fanshawe, just touched on this. I should like to ask the noble Lord, Lord Beaverbrook, how many times it is going to be levied. Is it to be three times initially; once when bought on the Continent, twice on import into the United Kingdom, and three times on resale to a client in this country—and on further sales as well, so that eventually the amount of VAT could be greater than the value of the work of art, particularly if it is not in the highest category?
I should also like the Government to confirm that books will continue to be zero rated, as they have always been. Perhaps I may remind the House that during the darkest days of World War II there was a proposal to make books subject to purchase tax. This was heavily defeated in another place when Members on all sides combined to vote down what was considered a short-sighted and philistine measure. Ever since then books have been exempt from
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purchase tax and VAT. I mention this because I hear perturbing rumours that the Commission in Brussels is planning that by 1991 nothing, not even children's shoes, should be zero-rated or exempted. Rather than harmony, this will bring discord and will have an adverse effect on education and culture. There will be many practical problems if books are to be liable for VAT on importation.
The same thing goes for far cheaper works of art. Noble Lords have spoken tonight about the expensive paintings sold at our large auction houses, but many works of art are bought by tourists when they go abroad. They may want to buy a water colour of Venice to hang on their wall. What will happen if they buy a French book to read on holiday? Are they supposed to go through the red channel when they return? Are they supposed to declare it? Is the customs officer supposed to charge them a small sum in VAT and then to account to his department? While all this is going on people trying to smuggle drugs and so on will be able to steal through unsupervised. The whole thing is ludicrous and clearly has not been thought through.
Concerning our home art trade, the proposed tax will have a disastrous effect on the British art market, both on dealers and auction houses. At present, as your Lordships are aware, VAT is charged on the dealer's mark-up or on the auctioneer's commission, and not on the selling price. When the noble Viscount, Lord Eccles, was a Minister—and I am sorry that he cannot be with us tonight—and this proposal first reared its ugly head he managed to get it altered so that it was not on the selling price but on the auctioneer's commission or the dealer's mark-up, and that has been accepted by the trade.
As we all know, prices today for many works of art are extremely high, as there is a world demand. Fifteen per cent. on an auction selling price of £1 million or more is a pretty hefty sum. Why should buyers come to London to pay this? They will not, of course, and the major auction sales will be held in future in New York, Geneva or Hong Kong. This has already happened with the Brussels art market, which accepted this proposal some years ago. This would be catastrophic for London, which is an even bigger art market and is a world art centre, and would be a serious loss of invisible earnings to this country.
A further disadvantage would be that our museums and private collectors here would not be able to compete with foreign buyers, who would not be liable to VAT and would have a 15 per cent. advantage at any auction. This of course would result in the further loss of our heritage overseas. As the noble Lord, Lord Fanshawe, said, I understand that VAT is a fiscal matter. I believe, too, that unanimity among member states is required under Article 99 of the treaty. I too ask the noble Lord, Lord Beaverbrook, if he will confirm this. If it is so, as I believe it is, there therefore seems no reason why the Government should not object, and I hope that they will show great resolution over this ill-founded proposal.
8.50 p.m.
Lord Charteris of Amisfield: My Lords, perhaps I may first add my congratulations to those of the noble Lord, Lord Strabolgi, to the noble Lord, Lord

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Poltimore, for his admirable and extremely well-informed maiden speech, which was most enjoyable.
As I understand the position, the United Kingdom is being required to alter its existing régime for VAT on works of art for the sake of harmonisation with the other countries in the Community. The concept of harmony is indeed beautiful, but to harmonise when it is clearly against one's interests to do so is another story. Your Lordships may remember from your youth the story of Struwwelpeter and the long-legged scissor man. It seems to me that that is a story which might apply to harmonisation. It is like having all your fingers chopped to the same size for the sake of tidiness.
Everything that there is to be said against this regulation has already been said better than I can say it, but I have been specifically asked to speak by my friend and colleague Professor Brian Morris of the Museums and Galleries Commission. He and I, as Chairman of the National Heritage Memorial Fund, both believe that the imposition of this VAT directive will have very unfortunate results. As has been said, saleroom prices will rise by 14 per cent. to United Kingdom purchasers, who will thus be at a disadvantage compared with overseas buyers. This will make it increasingly difficult for works of art to be acquired by museums and galleries and for agencies such as the National Heritage Memorial Fund to prevent the export of works of art which are of importance to the heritage.
Acquisition grants available to museums and galleries are, sadly, low in relation to the escalating prices in the salerooms. The added burden of 15 per cent. will make matters even worse. As has been said already this evening, if that happens, London will cease to be the premier centre of the art market, which will most likely move to New York. For many reasons, that will be a great pity. At present, museum directors quickly get to know what is coming up for auction in the London salerooms. They can easily arrange to view an item that they need for their own collection and to bid for it. If New York instead of London becomes the centre of the art trade they will not know nearly so easily what is coming up for sale and, if they do, will not be able to afford the air fare to view it—and if they paid the air fare they would probably not be able to afford to buy the item!
The point that Professor Morris particularly asked me to make is that it will not affect only the national museums. Last year, through its local museum purchase grant, the Museums and Galleries Commission helped provincial museums to buy no fewer than 585 items for their collections, many in the open market. The National Heritage Memorial Fund was involved in quite a number of those purchases and also helped with others. There will be a temptation for owners of heritage property to sell abroad rather than in London. That, I believe, will put a great strain on the export control system.
Apart from those considerations, the imposition of this directive will have a grave and depressing effect on all museums and galleries which are doing everything they can, under difficult financial circumstances, to keep heritage items in this country. This will be particularly regrettable at a time when they are doing
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so much more to mobilise private money. They are doing this with the inspired support of the Minister for the Arts, whose department has introduced new schemes such as the business sponsorship incentive scheme. Therefore, I very much hope that Her Majesty's Government will decline to accept these EC proposals and, by doing so, bring much comfort and encouragement to all who are concerned with the preservation and augmentation of the nation's heritage.
8.55 p.m.
Lord Diamond: My Lords, I hope your Lordships will be good enough to allow me to say a few words at this appropriate break point, for reasons which I shall explain in a moment. However, perhaps I may first say how grateful I am—and, from what has been said, I am sure is the whole House—to the noble Lord, Lord Poltimore, for his very informed speech. On such an issue—if I may be so bold as to say this to him—it is of more than usual importance that someone so well versed in the practice of what we are discussing should come to the Chamber and, so to speak, give evidence on what really goes on.
It is very easy in this sphere of taxation to do enormous damage unintentionally, with the best will in the world. This is a very sensitive market and I suggest to the Government that they should proceed in a very sensitive way.
The reason why I sought this opportunity of addressing your Lordships is because I wanted to make quite clear to your Lordships' House that we on these Benches—the Social Democrats and the Liberals—are strongly in favour of, and support everything that the noble Lord, Lord Fanshawe, and others have said. I say that to make it quite clear, as the noble Lord anticipated, that those views are expressed from all sides of the House. It is now complete, with Cross-Benches, both Opposition parties and Conservative Back-Benches. I am sure that the Government will take that unanimous point of view well into account.
This is a very complex issue. One could take almost hours to go fully into all the complex detail. However, your Lordships will be glad to hear that I suggest there is no reason for that because the issues are really very plain. The issue is not one of harmonisation, with respect to all those who have cast doubts on that. Harmonisation is a good proposition and there is no earthly reason why we should not harmonise in the Community on the basis of what has been shown to work, and work very well, in this country. In my view, harmonisation is not the issue. It is the simple issue—and the noble Lord, Lord Fanshawe, put it very well indeed—of whether a most important market stays in London, and therefore in the Community, and benefits London and the Community, or whether it goes outside the Community probably to New York or, more likely, mainly to New York and partly to Geneva. That is the issue we are discussing tonight.
What are the arguments against it? What are the arguments in favour of doing what the Commission suggests? I do not believe that there is a revenue argument. Of course, without access to all the statistics and estimates made by the Inland Revenue I am not able to assert this; but my feeling is that the damage

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caused by this directive will in the long run more than outweigh the extra revenue which would be obtained. Of course that is an issue which every Treasury Minister has to consider. Noble Lords in this House have been through the same process. Every government must consider, at Budget time, when proposing and suggesting to the other place that certain taxes should be altered, how much it will affect the situation in the long run.
I should be quite surprised if the Government can say that they have worked out the estimates with great care, with all the knowledge that they have behind them, and have come to the conclusion that, in the long run, there is a great deal more revenue to be gained than lost by carrying out what is proposed in the directive. Therefore I hope very much that the Government will listen to the views that have been expressed on all sides of the House and really endeavour to harmonise on the basis of the proven practice which we have had for some considerable time in this country. It always raises a question-mark in my mind when there is a proposal to move forward in taxation in a particular form and a particular way which has to depend on pretending that the law is not what it is. One should always say to oneself, "Wait a bit! Is this the proper way to proceed?"
Here we have a proposal which depends on the assumption that an agent is a principal. I am no lawyer but it seems to me that there can be no simpler state of the law than the difference between a person who is an agent and a person who is a principal; but in order for this measure to work it is assumed to be deemed that the agent is the principal and therefore he is deemed to buy and sell goods instead of merely handling them and never takes on the ownership of them at all. That can only be justified, as I say, by the pretence that the agent in question is the principal. One should always hesitate when a suggestion of that kind is put before one which depends upon going along the road that is marked "Danger. Do not proceed this way unless you jolly well have to".
So for those reasons, and all the reasons that have been put before your Lordships with such clarity and forcefulness, I hope that the views of the Committee of your Lordships' House which were expressed in its report published in June 1978 will still prevail. They read as follows:
"For all these reasons"—
and the Committee have listed the reasons—
"the Committee conclude that the Commission should be asked to reconsider its position, and to seek ways of harmonising in this instance Community practice on the lines of the prevailing system in the United Kingdom".
That is why we find that good Europeans like the noble Lord, Lord Fanshawe, whom, if I may say so, I have known for years as a good European, and others as well as myself are all saying the same thing: there is nothing inconsistent with our European approach and with the desire that the trade should be kept where it properly belongs, which is in London, in the Community.
9.3 p.m.
Baroness Birk: My Lords, we are all extremely grateful to the noble Lord, Lord Fanshawe, for raising
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this matter tonight. Perhaps I may also add my congratulations to the noble Lord, Lord Poltimore, on his excellent and knowledgeable speech, which I think he found as enjoyable to make as we did to hear.
When notice of this debate appeared on the Order Paper and I started looking into the question, what struck me was the way in which this subject was described on the document that recorded the Select Committee's work. First, in bold letters appears "VAT on Second-Hand Goods", and then we read:
"Draft directive on a common system of value added tax to be applied to works of art, collectors' items, antiques and used goods".
Somebody, somewhere, either has a tremendous sense of humour or is not really sure what we are talking about, because while there may be some reason—though I do not say that there is necessarily—for arguing a different case for a second-hand 'fridge, there is certainly not the same case to be made when talking about works of art and antiques.
The noble Lord, Lord Fanshawe, pointed out the importance of the art industry to our country and to Europe, so I shall not go over the same ground again. As I understand it, the draft directive comes under Article 99 which requires a unanimous decision. The proposal is now before the Council's working party, and I hope for some clarification on this point from the Minister when he replies, because there have been different ideas put forward in various newspaper reports from which noble Lords have quoted. As this directive comes under Article 99—and it is not for instance like air transport matters where rules have to be enacted by a certain date—it is my understanding that this matter could not find its way very easily to the European Court, and that in the end it will be a matter for the Ministers of this country to hold out and, if there is a difference of opinion, for the question to be resolved within the Cabinet. I think it is extremely important that we should have some very clear answers to this question.
I should like to add some questions so that the Minister has them before him now. It will also give him a chance to obtain some of the answers if they are not immediately at his fingertips. Do the Government intend to use their veto? I am not talking just about the statement made by the Minister for the Arts, which was most felicitous and encouraging, but which, to be perfectly honest, is not good enough for the matters that we are discussing tonight. If they are, then the Government have to make it quite clear that they will use their veto in order to have sufficient clout. Then if the Government do use their veto, what are the next steps? Ministers may disagree. Here I am thinking that perhaps the Chancellor of the Exchequer may not take the same line as the Minister for the Arts, and it has also been pointed out by other noble Lords that our Commissioner in Europe (who is engaged on behalf of the EC and not this country) takes a view which sounds as though it may be very different from that taken by all noble Lords who have spoken in this debate on this question of harmonisation. Like other noble Lords who have spoken, I have always been in favour of entry into Europe right from the early days.
My view has always been that we should have been in Europe many years before we were. It would be wrong for anyone—I do not mean here—to make out

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that there is anything anti-European in what is being said tonight, because there is not. A great deal has been said about the commercial side of this matter and the effect that there will be on dealers and auction houses. I should like to underline what has been said about the cultural and educational side and how the proposal will affect our museums and galleries if by any mischance—it could be a mischance—it gets through.
As we know, our galleries and museums depend to a great extent on benefactors. They are encouraged by the Government. Private collectors have given 80 per cent. of the National Gallery collection. As my noble friend Lord Strabolgi pointed out, benefactors make small contributions as well as large.
We know that the National Art Collections Fund depends upon the money which is contributed to it. It buys the picture or object and under this directive it will have to pay 15 per cent. VAT. The noble Lord, Lord Fanshawe, asked the Minister a question about this, but, as I understand it, it is almost a rolling 15 per cent. which will be imposed every time the picture or object is sold, whether or not it comes into this country.
The British Museum has been mentioned. I am a member of the council of the British Museum Society. We try to make gifts to the museum. When we make purchases ourselves I believe that at the moment we can recover the 15 per cent. tax because we are a registered charity. I am not sure whether that will apply if the directive comes into force. I should like to know the answer.
Another way we help the museum is by contributing money so that it can buy an expensive or much wanted object or picture. In such cases we shall have to find more money, which is unlikely because we are a small society, or the museum will have to make up the financial gap. If the directive comes into force museums and galleries will not be able to make acquisitions. They are not treated generously by governments in their arts allocations. The increase to museums and galleries announced the other day was 3.75 per cent. When they have paid increased wages, they will be denuded of the means to buy pictures and sculptures.
There is another point. Part of the work of curators is educational, for them and for the people whom they serve. That depends on their having access to works of art from which they can choose pieces to buy for their museums. This proposal will almost completely dry up that outlet. If the Government do not want to see our culture shrink almost to a pinhead they will have to make up the difference between what the museums and galleries can afford and will have to pay if they are not to be put into a straitjacket with regard to new purchases.
The directive will have not just a commercial, material effect; it will alter people's attitudes towards collecting and donating to museums and galleries. As my noble friend pointed out, people have great pride and take pleasure in thinking that they can donate or leave something to a museum. It may not be worth hundreds of thousands of pounds; it may be worth only a fairly small amount. They will not be encour-
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aged to do that. People will have a different attitude. They will shut their minds and not want to do that.
That could undermine our position as the centre of the art trade. From the point of view of young people, this would be a tremendous educational loss. There would gradually be less to see in the galleries and museums. I am not saying that this would happen overnight. There are, after all, stocks. But instead of art being a lively, spirited and growing occupation, it would tend to taper out. This would not entirely eliminate, but would certainly bring about shrinkage of, the considerable education schemes and plans for young people that constitute one of the objectives of our museums and galleries today. It would make this function extremely difficult.
As we are all at one in this debate, our discussion may not have proved all that interesting but at least there has been unanimity of view. No one has said that we are talking nonsense and that the proposal is absolutely essential to our continued relationship with Europe. Nothing along those lines has been heard. We look forward now to hearing the answers of the Minister to the various questions that have been put. We want to be clear on events up to date, what options are open to us and what the future may hold.
9.15 p.m.
Lord Beaverbrook: My Lords, we have had a most interesting debate, and I should like to thank those who have taken part, especially my noble friend Lord Poltimore who made an excellent maiden speech. I am sure that I speak for all your Lordships when I say that we look forward to hearing him in the future. We welcome particularly his considerable knowledge of fine art.
The House is also grateful to my noble friend Lord Fanshawe of Richmond for raising today the important issue contained in the Commission's proposals in the draft seventh and eighteenth VAT directives. The absence of representations in the House today in support of the Commission's proposals, which bear among other things on the taxation of all secondhand goods, including works of art, antiques and collectors' items, is, to say the least, a strong indication in itself that the proposals might be detrimental to the interests of the British art market.
Perhaps I may say a word about the background to this issue. The sixth VAT directive, which is the basis of Community VAT law, requires among other things that the Council should adopt a harmonised system for taxing secondhand goods, including works of art. The Commission first presented its proposal for the harmonised system in 1978 in the form of a draft seventh directive, modifying it in 1979. Until the directive is unanimously agreed by the Council of Ministers, member states may retain their existing schemes. The special scheme for works of art in the United Kingdom includes exemption at importation.
In a similar way, the sixth VAT directive provides for temporary derogations which the Commission's proposals in the draft eighteenth directive seek to eliminate. In that draft directive, as in the draft seventh directive, proposals are made which bear on the tax treatment of agents, who, in many other member states at present and in the Commission's

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proposals, are frequently seen as principals in taxation matters. The obvious example in this aspect is the position of auctioneers, including auctioneers who handle works of art.
The draft eighteenth directive is relatively new, and initial discussions in Brussels have not yet focused on the proposals affecting agents. On the other hand, the draft seventh directive has clearly been the subject of considerable discussion over a number of years. The fact that little progress has been made is an indication of the difficulties which member states have with the proposals. The key factors for the United Kingdom lie in three areas: first, the fundamental nature of the Community scheme for taxing secondhand goods; secondly, the taxation status of agents; and thirdly, the treatment of works of art, antiques and collectors' items, particularly at importation.
I will not dwell long on the nature of the proposed Community scheme. Suffice it to say here that the proposal would not affect the amount of tax chargeable on an internal transaction. Minor technical difficulties lie in the fact that, at exportation, residual tax in an item—that is, tax remaining, in taxation parlance, "unconsumed"—is not removed in the United Kingdom scheme which could, if not recognised, lead to double taxation in an importing member state. But as I say, these are minor difficulties. Similarly, although the importance of this aspect to the fine arts trade is fully recognised, I do not intend to spend much time on the question of agents.
The principal concern to the British art market, as demonstrated in your Lordships' House today, lies in the question whether or not works of art, antiques and collectors' items should be subject to taxation upon importation. As I have said, as part of the existing scheme for secondhand goods in the United Kingdom, we do not subject such items to import VAT. The thought that this tax exemption might be lost had led to claims that the flourishing London art market would be irrevocably harmed, to the detriment not just of the fine arts trade, but also to United Kingdom and Community cultural interests. Let me therefore turn to the nature of the British art market.
The centres of the world are market are few. Pre-eminent among them are New York, Geneva and, of course, London. Indeed, London may well be the foremost market attracting the finest examples of fine arts for sale, whether to British or to foreign collectors. The reasons why London has survived while so many have failed lie in its long-standing reputation for expertise and reliability in identifying important works of art; and in marketing those products to the best advantage. Buyers and sellers alike are attracted to London: the sellers in the knowledge that the London market will attract those willing to pay the full market price, and the buyers in the knowledge that the product will be what it is held out to be. Both parties can rely on the service and fair dealing of the auction houses.
Those then are the primary trading strengths of the British art market. But, undeniably, there is also a fiscal reason why the London art market has flourished, particularly in relation to other centres in the Community. This has to be so, because if the market sees the loss of a fiscal provision—the import
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exemption—as detrimental to its interest, then the presence of it must have been an advantage.
The essence of the case being made on behalf of the British art market is that, notwithstanding the fact that a large proportion of imported items are, upon sale at auction, subsequently re-exported without bearing VAT, the fact that an item may remain in the United Kingdom bearing tax under the proposals in the seventh directive, will be sufficient to deter and deflect the would-be seller from sending the item to London in the first place.
As several of your Lordships have pointed out, the seller could instead select other market centres, such as Geneva or New York, where taxation upon importation would not act as a deterrent. This is so because the seller would assume that the liability to pay VAT on an item sold for retention in the United Kingdom would depress the bid which the home buyer could make. The argument concludes that not even the exemplary standing of the British art market could withstand this perceived detriment to our market.
Not unnaturally, the representatives of the fine arts trade are concerned to protect their pre-eminence in the world market. But their motives are not entirely self-protectionist. Any loss to the United Kingdom market would be a loss to the Community, as trade would be driven to New York, Geneva or other centres outside the Community. Despite the mobility of buyers in this sector, the tendency would be to diminish the opportunities to purchase fine arts goods, and the loss in cultural terms to the Community would follow. With this in mind, and without fear of competition within the Community, the Fine Arts VAT Working Party has proposed that the exemption at importation should be available to all member states. I have to say, however, that other member states do not at present seem inclined to support that suggestion.
The House need hardly be reminded that the Government will continue to take account of trade interests and representations in responding to all Community proposals. This principle will be observed in relation to discussions on the seventh and eighteenth VAT directives as in all others. I would observe, however, that the fine arts trade would do well to put flesh on the bones of its arguments by submitting to officials a promised paper commissioned to analyse in detail the prospective economic impact of the Commission's proposals. The paper has been slow to emerge, and its absence does not assist in preparing and presenting a fully effective response to the Commission's proposals. It is absolutely essential to shed light as well as heat on the issue.
My noble friend Lord Fanshawe of Richmond has raised two interesting points. On the question of the Single European Act, I can assure my noble friend that the Act does not affect the need for unanimity—that is, the unanimous agreement of the member states on fiscal matters.
The noble Lord and the noble Baroness, Lady Birk, raised the question of Article 99. So far as the prospect of the Commission going to the European Court of Justice is concerned, there is no question of the United Kingdom being taken to the court for failure to agree

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to harmonisation. Article 99 of the Treaty of Rome gives power to the Council to adopt legislation to the extent necessary to ensure the establishment and functioning of the internal market. Once such legislation is adopted—and it needs unanimous agreement—any member state alleged not to be complying with it can be taken to the European Court, but not for refusing to agree to adopt a proposal.
The noble Lord, Lord Strabolgi, brought to our attention several important points. On his point on the taxation of books, I can tell him that the present zero rating of books in the United Kingdom will not be affected by the proposals of the draft seventh or eighteenth VAT directives, nor are there any other proposals which would affect the zero rating of books. The noble Lord also mentioned the question of the cascade effect, as did my noble friend Lord Fanshawe. I can assure the noble Lords that there will be no question under these directives of double taxation. The draft seventh VAT directive contains specific provisions to avoid this possibility.
The noble Lord, Lord Strabolgi, made a point on private importation of items such as water colours that have been bought on holiday. Under the seventh VAT directive the present limited relief for private importation of works would in fact be abolished.
The noble Lord, Lord Diamond, raised a point as to whether the revenue collected under the proposals would in fact not be outweighed by damage done in the long run. We are awaiting economic analysis from the Fine Arts VAT Working Party, and it is difficult to calculate without this information. Nevertheless, we recognise that this argument has merit.
The noble Baroness, Lady Birk, brought up the matter of whether the British Cabinet could use its so-called veto to block progress. At this stage there would be no point in expressing a veto before we have had the opportunity to put fully and effectively this country's view, and other member states might yet well be won over. On the noble Baroness's point about the British Museum getting its VAT returned, this is a complicated matter and I shall write to the noble Baroness on the point.
Noble Lords have raised other questions. In order not to delay the House tonight I hope that noble Lords concerned will forgive me if I write to them on their particular points. In closing, I can give the assurance that no decisions on these matters are imminent in Europe. Indeed, I again emphasise that without the unanimous agreement of Ministers in Council no value added tax directive can emerge. We would hope to convince our Community partners of the force of our arguments in agreeing finally a scheme which served the dual purpose of satisfying harmonisation goals with the preservation of a major fine arts market, to strengthen rather than diminish cultural aspirations of the Community as a whole.
Baroness Birk: My Lords, before the noble Lord sits down may I put one point to him? He said several times that the Government were awaiting the report of the Working Party. That worries me a little. The effect of this directive going through, if it does, is much wider than concerns just the fine arts dealers in London
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should have thought also that the Government would have ways of getting this information for themselves. This makes me a little uneasy.
Lord Beaverbrook: My Lords, these directives apply to secondhand goods in their entirety, not just the question of works of art, collectors' items. The Government see it necessary for the fine arts market industry in London to make available, as soon as possible, its own figures so that the Government can have at their disposal the best information when going to make our country's proposals to our partners in the Community.

Chevening Estate Bill [H.L.]
Referred to the Examiners.
House adjourned at half past nine o'clock.

  MIDDLESEX GUILDHALL: FUTURE USE
  MIDDLESEX GUILDHALL: FUTURE USE
  CAYMAN ISLANDS: VIDEO PIRACY
  CAYMAN ISLANDS: VIDEO PIRACY
  SDI RESEARCH AND THE ABM TREATY
  SDI RESEARCH AND THE ABM TREATY
  PENALTY FARES ON PUBLIC TRANSPORT
  PENALTY FARES ON PUBLIC TRANSPORT
  AIRPORT COMPANIES: SERVICES
  AIRPORT COMPANIES: SERVICES
  STANSTED AIRPORT: PREVENTION OF CROSS-SUBSIDY
  STANSTED AIRPORT: PREVENTION OF CROSS-SUBSIDY
  AIRPORTS: VALUATION OF ASSETS
  AIRPORTS: VALUATION OF ASSETS
  NUCLEAR POWER STATIONS: INSURANCE PROVISIONS
  NUCLEAR POWER STATIONS: INSURANCE PROVISIONS
  NUCLEAR POWER STATIONS: CAPITAL COSTS
  NUCLEAR POWER STATIONS: CAPITAL COSTS
  NUCLEAR WASTE: DISPOSAL COSTS
  NUCLEAR WASTE: DISPOSAL COSTS
  NUCLEAR-GENERATED ELECTRICITY: COSTS
  NUCLEAR-GENERATED ELECTRICITY: COSTS
  NUCLEAR POWER STATIONS: PROVISION FOR DECOMMISSIONING COSTS
  NUCLEAR POWER STATIONS: PROVISION FOR DECOMMISSIONING COSTS