Sitting of 12 February 1987

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

PRIVATE BUSINESS
YORK CITY COUNCII. BILL [Lords] (By Order)
Order for Second Reading read.
To be read a Second time upon Thursday 19 February.
BEXLEY LONDON BOROUGH COUNCIL BILL (By Order)
Read a Second time and committed.
CITY OF WESTMINSTER BILL (By Order)
TEIGNMOUTH QUAY COMPANY BILL (By Order)
LONDON DOCKLANDS RAILWAY (BECKTON) BILL (By Order)
Orders for Second Reacting read.
To be read a Second time upon Thursday 19 February.
BRITISH RAILWAYS BILL (By Order)
Order for Second Reading read.
To be read a Second time upon Monday 16 February at Seven o'clock.
GRAMPIAN REGIONAL COUNCIL (HARBOURS) ORDER CONFIRMATION BILL
Read the Third time and passed.

Oral Answers to Questions
  NORTHERN IRELAND

    Labour Statistics
    Mr. Nellistasked the Secretary of State for Northern Ireland how many people are currently unemployed in Northern Ireland.
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Peter Viggers): The latest figures, released today, show that at 8 January 1987 there were 131,205 unemployed claimants in Northern Ireland.
    Mr. Nellist: The Minister should have gone on to say that that represents 19·3 per cent. of the working population, but is not the real rate more than 24 per cent. when the black hole of the Department's 19 statistical fiddles adds 16,000 uncounted people in Northern Ireland? How can greater unity among working people be brought about in conditions of mass unemployment and the attendant poverty that it brings, in which sectarianism—whether of the orange or the green variety—finds a ready breeding ground?
    Mr. Viggers: I deny what the hon. Gentleman has said. The Government have done a great deal to promote training and employment in Northern Ireland, which the Labour Government's mismanagement prevented that Administration from carrying out. Yesterday, for example, I announced a new package of employment measures. I am extending the restart programme to those who are unemployed for six months. The youth training programme will now guarantee a one-year training place to 17-year-olds as well as to 16-year-olds, so no person under the age of 18 need remain on the unemployment register. Moreover, the enterprise allowance scheme will be increased by 10 per cent. to offer a further 250 places, and a pilot scheme is being introduced to offer unemployed people in the 18 to 25 age range training places with employers' leading to a recognised qualification.
    Mr. Harris: I congratulate the Government on what they have achieved and are seeking to achieve, but how can anyone have confidence in the employment or unemployment figures for Northern Ireland in view of yesterday's revelations by Mr. Justice Nicholson about a massive employment swindle in the building industry involving millions of pounds and apparently financing terrorist organisations? Will my hon. Friend ensure that Mr. Justice Nicholson's comments are followed up and the swindle brought to a complete halt?
    Mr. Viggers: Although it does not directly follow from the question, I can confirm that yesterday's convictions were the latest in a series of successful investigations into tax exemption frauds by the Royal Ulster Constabulary. The Government are vigorously pursuing a policy of cracking down on such corruption.
    Mr. Hume: Is the Minister aware that the unemployment level of 48 per cent. in Strabane in my constituency is the highest not just in Britain and Northern Ireland but in the European Community? Why is there no enterprise zone in that area, given that enterprise zones are supposed to be located in areas of high unemployment to help them tackle those problems?
    Mr. Viggers: There is a limit to the number of enterprise zones that can helpfully be created in any one area, but I undertake to look at the specific point raised by the hon. Gentleman.
    Mr. Dickens: As a former commercial director of a company in Northern Ireland, and having been responsible for placing millions of pounds worth of work in Northern Ireland, is my hon. Friend aware that the hon. Member for Coventry, South-East (Mr. Nellist) has shown no such initiatives in relation to unemployment in Northern Ireland?
    Mr. Viggers: I hear what my hon. Friend says. We are determined to tackle the problem of unemployment in Northern Ireland by promoting prosperity, which will lead to greater employment.
    Mr. Bell: Unlike the hon. Member for Littleborough and Saddleworth (Mr. Dickens), my hon. Friend the Member for Coventry, South-East regularly appears at Question Time and has a productive input into our proceedings in the House—[Interruption.]
    Mr. Speaker: Order. I had hoped that we might get off to a peaceful start today.
    Mr. Bell: I am anxious to lend a hand to any colleague on this side of the House in the face of attacks by Conservative Members. The Minister has given the House good and bad news. The bad news is that unemployment is now 131,205. The good news, which we welcome, is the series of initiatives being introduced in Northern Ireland. Is the Minister aware that the figure of 131,205 people unemployed is greater than the total of 97,000 people employed in the manufacturing sector? More people are on the dole than are working and creating wealth in Northern Ireland. Is that due to Thatcherism, monetarism, plain incompetence, or all three?
    Mr. Viggers: Recent comments about the decline of the manufacturing sector in Northern Ireland have an element of truth in them, as they do throughout the industralised world. There is less employment in many areas in the manufacturing sector, but the line between manufacturing and service industries is now less clear than it was. Strong, lively industrial companies are prospering in Northern Ireland and it is a mistake to sell them down the river.

    Forestry
    Sir John Farrasked the Secretary of State for Northern Ireland what is his policy on the expansion of forestry in Northern Ireland.
    Mr. Viggers: Our forestry policy is to promote the establishment of state and privately owned forests on land for which forestry is the most appropriate long-term use.
    Sir John Farr: I am grateful to my hon. Friend for his reply, but is he aware that a recent survey shows that Ulster is climatically better favoured than any other part of the United Kingdom for the growing of forestry products? As there is a high rate of unemployment in the Province and a surplus of milk and beef products. will my hon. Friend assure the House that he will encourage forestry as much as possible in Northern Ireland?
    Mr. Viggers: My hon. Friend makes some helpful points. We do, indeed, encourage forestry. Expansion of forestry within the state sector depends on the availability of suitable land and public finance, while in the private sector grant schemes similar to those in Great Britain encourage the planting of woodlands.
    Mr. Hume: I agree with the hon. Member for Harborough (Sir J. Farr). Is the Minister aware that many experts believe that the counties of Tyrone and Fermanagh are the most ideal locations in western Europe in terms of climate and soil for the fast-growing willow tree, a source of ethanol, which separates lead from petrol? Does he agree that a major effort towards that alternative use of land by small farmers could transform the economy of the area, and will he support my request to the European Commission for a feasibility study?
    Mr. Viggers: I am sure that the hon. Gentleman will pursue his campaign in his own constructive way. I repeat that the Government's policy is to encourage forestry. We are considering various areas and other schemes. There has been some success in privatising tree-felling, and we can claim some credit for that.

    Anglo-Irish Agreement
    Mr. Dubsasked the Secretary of State for Northern Ireland what talks he has had with the leaders of the Official Unionist party and the Democratic Unionist party on the status of the Anglo-Irish Agreement.
    Mr. Lathamasked the Secretary of State for Northern Ireland what recent representations he has received from political parties in Northern Ireland regarding the Anglo-Irish Agreement; and what response he has made.
    The Secretary of State for Northern Ireland (Mr. Tom King): I have not had any talks with the leaders of the Official Unionist party and the Democratic Unionist party on the status of the agreement. However, I am aware of their concerns and remain ready to discuss those with them at any time. I regularly discuss issues related to the agreement at the request of leaders of the Social Democratic and Labour party and the alliance party.
    Mr. Dubs: Will the Secretary of State make it clear to the leaders of the Unionist parties that whatever the outcome of the impending Irish elections he will proceed with the repeal of the Flags and Emblems Act? Does he agree that the Unionist leaders are doing a disservice to the Unionist community in the North and that they have nothing to gain by their policy of non-co-operation or by awaiting the outcome of the next election in this country?
    Mr. King: I certainly endorse the hon. Gentleman's latter remarks. The recent poll showed that, far from being any advantage to the interests of the Union, the antics of the Unionist parties have damaged the cause that they seek to espouse, for which I have made clear my support. We issued a consultation document on the flags and emblems issue in a draft public order order and we are considering the responses to that. We hope to lay an order before the House shortly, when the House will see the decisions that we have reached.
    Mr. Latham: To avoid any misunderstandings, will my right hon. Friend stress to Unionist leaders that any possible renegotiation of the Anglo-Irish Agreement by an incoming Haughey Government will achieve as much as Harold Wilson's renegotiations of the terms of entry into the Common Market—in other words, not a row of beans?
    Mr. King: We have made it clear that we stand by the Anglo-Irish Agreement. I shall not go further than that because I am aware that there is an electoral contest elsewhere and anything that I say can be taken down and used in evidence against me.
    Mr. Mallon: If and when the Secretary of State meets leaders of Ulster unionism, will he bear in mind that the only real conclusion from the petition that they are today presenting at Buckingham palace is that three quarters of the population of Northern Ireland did not sign it? Will he also bear in mind that when those leaders presume to speak on behalf of the people in the north of Ireland they speak only on behalf of one quarter of the population?
    Mr. King: To go for greater statistical accuracy, I think that about one third of the electorate signed the petition.
    Mr. McNamara: Two out of three did not.
    Mr. King: I am sure that the House will appreciate that revelation. The blinding mathematical insight that if one

    445
    third signed the petition, two thirds did not, can be accepted by all without dispute, but I understand the hon. Gentleman's point.
    Sir John Biggs-Davison: Does my right hon. Friend think that when the Taoiseach said recently that
    "the agreement is already making Unionists think in ways in which they had never thought before",
    he had in mind such an unprecedented event as the presentation of a mammoth petition to the Queen? When that petition is remitted by Her Majesty to her principal Secretary of State, will he give it due consideration and weigh fairly the arguments for a referendum in the Province?
    Mr. King: I understand that the petition has been delivered to Buckingham palace today. It will be for Her Majesty to decide whether, in accordance with normal constitutional practice, it should be referred to me as the Secretary of State for Northern Ireland. In the meantime, it would be inappropriate for me to comment.
    Mr. Alton: Will the Secretary of State tell the House his view of the importance that Unionist leaders in the north of Ireland attach to the erroneous impression that if there were a balanced Parliament after the general election any of the parties would renegotiate the Anglo-Irish Agreement? How much importance does he attach to Mr. Haughey's recent comment that he would be prepared to renegotiate article 1?
    Mr. King: On the latter point, I do not wish to say more than I said in reply to my hon. Friend the Member for Rutland and Melton (Mr. Latham). I made it clear that we stand by the Anglo-Irish Agreement and we would look to continue to operate it whoever forms a Government in the Republic. If there were to he any change, that would be for others, not the Government. We have made it clear that we stand absolutely by the agreement.
    I am grateful for the hon. Gentleman's opening comments. In that respect, I am mindful of the vote of this House and of the overwhelming support of both Houses of Parliament of this United Kingdom in the verdict that they gave. No sane person can draw from that any possible idea that somehow any future balance or situation in the House will improve on the present situation.
    Mr. Gow: Does my right hon. Friend recall the words of the 1979 Conservative manifesto, which said that in the absence of devolved government we would seek to set up a regional council or councils with widely devolved powers? Will my right hon. Friend confirm that he has not excluded from his consideration a return to the policy upon which he and I fought the 1979 election?
    Mr. King: The world has moved on from that position. What I would make clear—obviously, this was the first ambition of my right hon. Friend, one of my predecessors as Secretary of State for Northern Ireland, who did not feel able to proceed further in that direction-is that I welcome from whatever quarter, and certainly and obviously expect from my hon. Friend, constructive suggestions of a way forward that can actually offer some hope, and it is interesting to note that, in contrast with certain of the political leaders, there are others within the the Province who are now turning their minds to what the sensible way forward would be. There have to be sensible discussions. I made absolutely clear on behalf of the Government that the sooner that those can start, the better.
    Mr. Duffy: Despite the condition that the Ulster Defence Association appears to have attached to its recent proposals that the agreement be suspended—the right hon. Gentleman has rightly assured the House that that is out of the question— will the Secretary of State nevertheless bear in mind the suggestion of the alliance party leader in Northern Ireland that a round table conference of all parties should be pursued as soon as the present impasse ceases? Will the right hon. Gentleman watch for such an opportunity?
    Mr. King: I do not want to get hooked on any particular formula or format, but it is sensible that discussions should take place. There is no point in waiting. The hon. Member for Liverpool, Mossley Hill (Mr. Alton) made that clear. It is desirable that we should proceed to discussions. I am conscious that the organisation to which the hon. Gentleman referred, among others, whatever their background, is trying to address, in one respect, the future organisation in the Province.
    Mr. Stanbrook: Is not the agreement completely one-sided and biased against the Unionist majority in Northern Ireland? Was not an important quid pro quo for the agreement the undertaking that the Irish Republic would join the convention for the suppression of terrorism? Does my right hon. Friend agree that after 15 months nothing has been (lone that we have seen the demise of another Government and that the convention still has not been ratified? Why does my right hon. Friend allow the breaking of that promise?
    Mr. King: My hon. Friend is entirely incorrect. The convention has not only been ratified but it has been carried through both Houses of the Irish Parliament, so his allegation is unfair. I know that my hon. Friend wants to see improvement, as everyone does, but why does he not come off the debating points and look at the real issue? We are now getting a degree of co-operation on extradition which was entirely missing a while back. I hope that my hon. Friend will look fairly at these issues and not make incorrect claims but recognise that there has been genuine improvement.
    Mr. Archer: Will the Secretary of State try to persuade the Unionist leaders that even if a referendum were held it would, at most, only tell us what we already know—that is, which side is in the majority? Democracy is about finding ways in which majorities and minorities can live together, discuss their differences and build on what they have in common. Will the right hon. Gentleman explain to the Unionist leaders that that would be a more attractive approach if they want a better press in England?
    Mr. King: I agree with the right hon. and learned Gentleman's comments. Democracy is not about the rule of the majority. It is about the position of and proper respect for the interests of the minority. I shall not comment further, because I do not wish to pre-empt Her Majesty's decision on the treatment of the referendum question, but the Government's general attitude to the principle of referendum is no secret.

    ACE Schemes
    Ms. Clare Shortasked the Secretary of State for Northern Ireland what funding has been made available by the Department of Economic Development in relation to ACE schemes.
    Mr. Viggers: The ACE scheme has proved very popular since it was introduced by the present Government in 1981 with a budget of £1·67 million providing 430 ACE jobs. Since then, funding has been substantially increased. This year's budget was £24·24 million and I am seeking further funds to bring the estimated average number of ACE jobs provided throughout the year to 6,150.
    Ms. Short: May I ask the Under-Secretary of State and the Secretary of State most sincerely to review the decision to sack the six ACE workers at St. Matthews community centre on unspecified security grounds? The workers concerned consider this to be a smear on their character and the work that they have been doing in providing an advice centre and an Irish language nursery. Promotion of the Irish language is supposed to be part of the Anglo-Irish Agreement. Those workers have been told that if they move to other premises they may be able to continue their work, but there are no other premises. Will the Minister agree to meet their trade union to reach a reasonable settlement, and will the Government stop smearing those workers and the work that they have been doing for so long?
    Mr. Viggers: Government assistance has been withdrawn from the St. Matthews tenants association under the terms of the policy outlined in the parliamentary statement on 25 June 1985 by my right hon. Friend the then Secretary of State for Northern Ireland.
    Mr. Archer: Does the hon. Gentleman appreciate that when Government funding is withdrawn, funding from other sources also dries up and the future employment of those involved is prejudiced? Does the hon. Gentleman accept that these are draconian consequences for the organisers of the scheme, who have not even been informed of the allegations against them? Is he aware of press comments right across the political spectrum describing it as farcical to suggest that a Gaelic-speaking nursery school could pose a threat to law and order?
    Mr. Viggers: The statement to which I referred is a careful and comprehensive one which covers a delicate area. It would not be right for me to add or to detract from it.
    Mr. Hume: Is the hon. Gentleman aware that the Irish language school in west Belfast has the full recognition of the Department of Education and Science and that the function of the Irish language nursery school in the Short Strand area is to prepare children to attend that school? Does he appreciate that that nursery school education is an essential part of the educational process of children going on to attend the Irish language school in west Belfast? Will the hon. Gentleman therefore reconsider the Government's decision?
    Mr. Viggers: I ask the hon. Gentleman to read again and consider the statement to which I have referred.

    Prison Population
    Mrs. Virginia Bottomleyasked the Secretary of State for Northern Ireland what is the prison population of Northern Ireland; if he will express this figure as a percentage of the civilian population; and what information he has about how these figures compare with those for the United Kingdom as a whole.
    The Minister of State, Northern Ireland Office (Mr. Nicholas Scott): The total prison population on 1
    448
    February 1987 was 1,893, including 225 young offenders centre inmates. This constitutes 0·12 per cent. of the population of Northern Ireland. I understand that on 31 December 1986 the prison population of the United Kingdom as a whole was 53,603, or 0·1 per cent. of the civilian population.
    Mrs. Bottomley: How does my hon. Friend account for those figures? Will he confirm that, although the clear-up rates are very similar, the ordinary crime rate in Northern Ireland is significantly lower than the rate in the United Kingdom as a whole?
    Mr. Scott: In Northern Ireland the ordinary crime rate is about 43 crimes per thousand compared with between 65 and 70 per thousand in England and Wales. There is a substantial difference between the two, although, of course, a very substantial percentage of the prison population in Northern Ireland have been convicted of terrorist offences.
    Mr. Cox: In view of the Minister's reply during the last Northern Ireland Question Time, will he tell the House whether he has yet met the Northern Ireland Prison Officers Association, or whether he has plans to do so?
    Mr. Scott: As I said during the last Northern Ireland Question Time, I expected to have an early opportunity to meet the association, and I have done so.
    Mr. Bell: As the serried ranks of the prison population were increased by two sentences at yesterday's Crown Court in Belfast, may I ask what kind of Government incompetence allows millions of pounds of taxpayers' money to pass into the pockets of paramilitary organisations through the building of houses in Northern Ireland? Is this not "On the Waterfront" gangsterism on a grand scale? Will the hon. Gentleman confirm that such racketeering and extortion have nothing to do with a united Ireland and nothing to do with union with Great Britain? What, pray, do the Government intend to do about this?
    Mr. Scott: I find it somewhat ironic that such criticism is made at a time when we are beginning to get convictions and I hope that if those accused are found guilty there will soon be more to counter racketeering activities whether in tax exemption certificate fraud, other activities in the construction industry or through drinking clubs, gaming, betting, and so on. We are beginning to choke off the supply of funds from those sources to paramilitary organisations. I am surprised that that is a matter of criticism from the Opposition Front Bench. I believe that all agencies, including the RUC, the Northern Ireland Housing Executive and the Department of the Environment, deserve credit for what is being achieved.

    Public Expenditure
    Mr. Fallonasked the Secretary of State for Northern Ireland whether he will estimate the proportion of Northern Ireland gross domestic product that is accounted for by public expenditure.
    Mr. Scott: Public expenditure and gross domestic product for Northern Ireland are not available on comparable bases, but using the information that is available, it is estimated that public expenditure amounted to some 73 per cent. of gross domestic product for Northern Ireland in 1985.
    Mr. Fallon: Can my hon. Friend confirm that, in this state economy that he is running, public spending per head is some 52 per cent. higher in Northern Ireland than it is in England, housing spending some 357 per cent. higher, and industrial spending some 340 per cent. higher? For how much longer will the taxpayers of Great Britain continue to subsidise this singularly ungrateful Province?
    Mr. Scott: Public expenditure per capita in Northern Ireland is higher than in the rest of the United Kingdom, but that does nothing more than reflect the needs of Northern Ireland. Certainly, it it true that my right hon. Friend has the capacity to choose different priorities. Some areas of expenditure in Northern Ireland are lower per capita than in the rest of the United Kingdom. My right hon. Friend retains the ability to allocate and decide his priorities.
    Mr. McNamara: Will the Minister tell the House what proportion of that 73 per cent. is accounted for by the present security position?
    Mr. Scott: I cannot give the figure in percentage terms, but about ·400 million is accounted for by the security position. Of course, we are anxious about that position and are pursuing policies which, in due course, will diminish that figure.
    Mr. Bellingham: In the context of public expenditure, can my hon. Friend say when the decision is due on the construction of a lignite-fired power station? Is he aware that such a power station recently caused a most horrific smog in Berlin? Therefore, will the pollution aspects be take into account?
    Mr. Scott: That whole question is under consideration and, obviously, there will be inquiries into the environmental impact. We shall also be taking professional advice on the economic aspects.
    Mr. Foot: Is the Minister aware that institutions in the North, such as the Ulster museum and the universities, are providing an excellent service? Is he further aware that they are having to suffer even more severe cuts than the universities and museums in this country? Will he rectify that position as soon as he can, whatever complaints he may hear from behind him?
    Mr. Scott: The funding of universities in Northern Ireland is carried out on the advice of the University Grants Committee, and there is parity with equivalent institutions on this side of the water. The same is broadly true of the museums in Northern Ireland.
    Mr. Michael McNair-Wilson: How much public money is involved in the housing racket? Will a commission of inquiry be set up to investigate that racket to discover exactly where the roots lie, especially as it appears that they may lie on this side of the Irish channel? May we have a full statement from the Government?
    Mr. Scott: More than four years ago the Royal Ulster Constabulary established a special unit to investigate these matters. It has persistently continued that inquiry in co-operation with parties in Northern Ireland and on this side of the water. It is true that there is a cross-channel element. In addition to the convictions yesterday, about 140 prosecutions are pending in this broad area. The RUC has done a first-class job in getting to grips with that racket.
    Mr. Campbell-Savours: Given the high incidence of claims for personal accidents on public property in Ulster—
    Ms. Clare Short: Not Ulster, Northern Ireland.
    Mr. Campbell-Savours: Yes, Northern Ireland.
    Is the Minister aware that last year there were more than 5,000 claims—each with a settlement of £1,500, with £1,000 legal costs— from people who simply tripped over pavements or fell down mythical pot-holes? Are not some people creating an income to which they are not entitled? Is it not time that the GoNernment reconsidered the law?
    Mr. Scott: If the hon. Gentleman is urging me to do that, I shall. However, I believe that our system of compensation in Northern Ireland operates on the same basis as it does on this side of the water. We are trying to be fair both to the public purse and to those who suffer injury.
    Mr. Holt: Is my hon. Friend able to say whether the international fund that figured in his calculations of gross domestic product and public expenditure—recognising that in his recent answer to me he said that the money has not yet been spent—has yet been handed over by the Americans and whether it is on deposit, or was it used to buy shares in British Airways or to prop up the punt?
    Mr. Scott: I am tempted to say that those are not matters for me. The International Fund for Ireland has now been established as an independent body. The members of the board have been appointed and the money will become available to the fund in the very near future. It will be up to the members of the board to decide how it is spent.

    Education Expenditure
    Mr. Mallonasked the Secretary of State for Northern Ireland what is the projected capital expenditure programme for schools and colleges of further education in the constituency of Newry and Armagh for the financial year 1987–88.
    The Parliamentary Under-Secretary of State for Northern Ireland (Dr. Brian Mawhinney): Provision is being made for five major new schemes which will cost an estimated £1· million in 1987–88.
    Mr. Mallon: I thank the Minister for that elaboration, and I commend him for the very personal and courteous way in which he announced it in the different constituencies. Will he confirm that when those building expansions are completed, in relation to the constituency of Newry and Mourne the capital expenditure grant will be in the region of£13·5 million?
    Dr. Mawhinney: I am grateful to the hon. Gentleman for his personal comments and I pay tribute to him for the diligent way in which he has sought to keep the needs of the schools in his constituency before me. I confirm that the overall estimate of the total cost for the constituency of the new works that I have just announced amounts to £12·962 million, and there are some ongoing capital works that have been carried over from previous years.

    Local Government
    Mr. Michael McNair-Wilsonasked the Secretary of State for Northern Ireland what recent discussions he has

    451
    had about measures he is taking to introduce a devolved local administration for Northern Ireland to supplement the existing district council and area boards.
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Richard Needham): My right hon. Friend maintains contact with the leaders of the alliance and SDLP parties. But real progress towards devolution is not possible until the constitutional parties are prepared to hold discussions on these matters. We are ready to facilitate informal preliminary talks among the parties.
    Mr. McNair-Wilson: Does my hon. Friend agree that article 4 of the Anglo-Irish Agreement makes it clear that both Governments recognise that without the co-operation of the representatives of the whole population in Northern Ireland devolution is a dead letter? If the price of the co-operation of the Unionist majority is to have a referendum—which is to ask only that the people of Northern Ireland should themselves give their support to the agreement—why should that referendum not be held and thus this road block be put out of the way?
    Mr. Needham: Devolution is the preferred option of the British Government, as my hon. Friend is well aware, and that has long been the case. The British Government believe that that is the route down which to go, and it involves all the political parties in Northern Ireland coming together to discuss it. The fact that they are not doing so at the moment is regrettable, but we believe that it is the only sensible way forward.
    Ms. Clare Short: When the Government consider future constitutional options for Northern Ireland, including devolution, will they take account of British public opinion and the recent poll in the Daily Express—of all newspapers—that 61 per cent. of the British people want the troops to be withdrawn from Northern Ireland, and that despite the support of all the major parties in Britain only 29 per cent. of the British people want Northern Ireland to remain part of the United Kingdom? When will the British people have some say in how we resolve the problem of Northern Ireland?
    Mr. Needham: The future of Northern Ireland is discussed by the political parties in Northern Ireland with the British Government. That is the route down which we intend to proceed, as our predecessors did before us. We do not deny the difficulties of that, nor do we deny the probably bemused feelings of many members of the British public when they look at some of the constitutional and non-constitutional activities of the political parties in Northern Ireland. However, the way forward is to get the constitutional parties together to discuss, on the grounds of power-sharing and partnership, how to run their own affairs. We are determined to continue down that route.
    Mr. John Mark Taylor: As we are talking about a single province of a United Kingdom, if there were to be a referendum, should not all the citizens of this United Kingdom participate in it?
    Mr. Needham: That is not an issue of such a constitutional nature as to require a referendum to be held, and I am sure that there would be arguments on both sides as to who should be included in it.
    The main line of our policy is to find a way of getting the constitutional parties to come together to discuss how they can govern the Province together on a devolutionary basis.

    Royal Ulster Constabulary
    Mr. Tom Coxasked the Secretary of State for Northern Ireland when he last met the Chief Constable of the Royal Ulster Constabulary; and what issues were discussed.
    Mr. Tom King: I meet the Chief Constable of the Royal Ulster Constabulary regularly. Our meetings are confidential and it would not be right to disclose their content.
    Mr. Cox: I note that reply, but is the Secretary of State aware of the increasing evidence now coming to light, concerning the matters which Mr. Stalker was investigating, about the activities of the Royal Ulster Constabulary? If, against the background of the Anglo-Irish Agreement, we really are seeking to build confidence in Northern Ireland, surely it is the duty of the Secretary of State, whatever degree of confidentiality he may have with the chief officer, to see that these matters, unpleasant as they are, are discussed. The people in both Northern Ireland and the rest of the United Kingdom have a right to know what the findings about them are.
    Mr. King: The hon. Member will be aware of the inquiry being conducted, first, by Mr. Stalker and now by Mr. Sampson. I made it clear to the House on a previous occasion exactly what our position is on that and I have nothing to add to the statement that I made then.
    Mr. Latham: When my right hon. Friend meets the Chief Constable, will he congratulate him on the police work done under the 714 cases? Will he also stress to him that the one thing which the British taxpayer will in no circumstances put up with is the idea that his or her money will be used to fund paramilitary organisations?
    Mr. King: I entirely accept what my hon. Friend says. We take an extremely serious view of this matter. Yesterday's convictions were the latest in a series of successful investigations, and against the impression that this has suddenly come to light I would point out that there were 25 convictions in 1985 and 54 in 1986 and that there are further prosecutions pending. We are determined to see that these matters are pursued extremely vigorously.
    Mr. Flannery: Does the Secretary of State not realise that each time he tells the House that he has nothing more to say about the Stalker report, especially after all that has gone on in the past long months and in view of Mr. Stalker's present position, and the more he goes on doing nothing the more everybody thinks that something nasty and dirty is being concealed?
    Mr. King: The hon. Member would be the first to complain if he thought that I was interfering in an independent investigation of extremely serious allegations. The hon. Member is aware that the first report of Mr. Sampson is at this moment with the Director of Public Prosecutions for Northern Ireland—it would, therefore, he quite improper for me to comment on the possible outcome of it—and that the second report on the further allegations, which may lead to possible charges, is at this moment in the final stages of preparation by Mr. Sampson and will, I expect, be forwarded shortly to the Director of Public Prosecutions as well.
    Mr. Alton: Has the Secretary of State had the chance to consider the recommendations of the Standing and

    453
    Advisory Commission on Human Rights in Northern Ireland, reiterated yeserday by Mr. Peter Barry, that non-jury courts should be replaced by courts of three judges?
    Mr. King: That is a matter on which I have made our views clear, and I think that they are well known. In our response to the Standing Advisory Commission we have made it clear that we are anxious to see, as far as possible, an extension of jury trials, which would be the preferred option.

    Education Expenditure
    Mr. Peter Bruinvelsasked the Secretary of State for Northern Ireland if he will make a statement about the future funding of education in the Province.
    Dr. Mawhinney: Expenditure in 1987–88 will be £729 million, an increase of £54 million on previous plans. The provisional figures included in Cmnd. 56 plan for a further £60 million increase over the following two years to £790 million in 1989–90. This is a clear indication of the Government's commitment to providing the highest standards of educational opportunity for the young people of Northern Ireland.
    Mr. Bruinvels: Recognising my hon. Friend's strong commitment to continuing educational support in Northern Ireland, may I tell him that it is a matter of great pleasure that so much money is to be put into Northern Ireland? It will be money well spent, because in Northern Ireland we have the highest number of school leavers—22·5 per cent.—with one or more A-levels, whereas in the rest of the United Kingdom the figure is only 17·2 per cent.
    Dr. Mawhinney: I thank my hon. Friend and commend him for his interest in this matter. I am sure the teachers of Northern Ireland will appreciate his comments. I pay tribute to the standards of education in the Province. I know that my hon. Friend will also welcome the new vocational education programme which I have just announced, which will particularly help in science and technology in the secondary intermediate school area.
    Mr. Archer: Is the Minister aware of the strong resentment among the university staff affected by the Butler report, in that the working party gave them no opportunity to discuss their concerns? Will they be given that opportunity before the recommendations are implemented? Can the Minister confirm that none of the options will be foreclosed by the initial conclusions of the working party or group?
    Dr. Mawhinney: On the contrary, Mr. Speaker. The interim report of the Butler committee was discussed and endorsed by the academic bodies responsible in both universities, and they are now considering how much of a financial consideration is attached to their acceptance of that report. I have made clear to both vice-chancellors and to Sir Clifford Butler that I am willing seriously to consider the representations that they make to me based on that report.

  PRIME MINISTER

    Government Contracts
    Mr. Dalyellasked the Prime Minister what is Her Majesty's Government's policy towards awarding
    454
    contracts to firms which have broken the law or in respect of which inquiries about possible criminal offences are in train; and how this policy has been applied in the case of Electronic Data Systems Ltd.
    The Prime Minister (Mrs. Margaret Thatcher): The Government seek to deal with contractors of integrity who can be expected to fulfil their commitments. Although information on contracts with particular firms is not all held centrally, I am not aware of any current contracts with Electronic Data Systems Ltd.
    Mr. Dalyell: Does the Prime Minister's answer mean that Electronic Data Systems Ltd. is excluded from potential defence contracts?
    The Prime Minister: No, the answer means what it says, that I am not aware of any current contract with Electronic Data Systems Ltd. With regard to whether it will be considered for any future contracts, it is for the Department awarding a contract to consider the eligibility of EDS for future contracts in the light of the evidence which has emerged and taking into account the nature of the contracts.
    Dr. Bray: Is the Prime Minister aware that this firm is imposing a fine of some £4,000 on employees who leave within a year of completing their training? Does she agree that this is a pernicious form of wage slavery and that it reflects the failure of the Government to provide adequate training in their important industry?
    The Prime Minister: The question I am asked is whether there are any contracts with this firm. The answer is as I have given, that I know of no current contracts with that firm, but in so far as any—[HON. MEMBERS: "Answer."]—future contracts are concerned, they will be considered in the light of all the facts, taking into account the nature of the contract. The Government's interest, as I must make quite clear to the hon. Gentleman, is to get value for money and to help improve the competitiveness of suppliers.

    Engagements
    Mr. Allen Adamsasked the Prime Minister if she will list her official engagements for Thursday 12 February.
    The Prime Minister: This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.
    Mr. Adams: Does the Prime Minister concur with the view that low wages are conducive to increased job opportunities? If she takes that view, could she possibly explain to the House why, in areas with comparatively low wage rates such as the west midlands, the north-east of England, and Scotland—
    An Hon. Member: And Wales.
    Mr. Adams: —and Wales, unemployment is considerably higher than it is in the south-east where wage rates are higher?
    The Prime Minister: The hon. Gentleman is aware that, although, alas, it does not apply to Scotland, unemployment is coming down—[HON. MEMBERS: "Oh."] I indicated that a moment ago. Although this month it has not—[Interruption.]
    Mr, Speaker: Order.
    The Prime Minister: This is partly because Scotland has quite a number of Christmas school leavers. Unemployment is coming down in Wales, the north-west and the west midlands more rapidly than elsewhere. The hon. Gentleman is well aware that there are occasions when jobs are available at lower wages, and if higher wages are asked that leads to the extinction of those jobs and people becoming unemployed. So the price of jobs does matter.
    Mr. Dykes: Will my right hon. Friend take time today to consider the fatuous remarks of Mr. Adelman, the head of the US Arms Control Agency and remind—
    Mr. Speaker: Please relate it to the Prime Minister's responsibilities.
    Mr. Dykes: I am relating my question to the direction of Government policy and No. 10's attitude to these matters. If my right hon. Friend has had time to see these remarks, will she remind the Americans that the Europeans know as much if not more about disarmament and arms control?
    The Prime Minister: I am not certain that I am familiar with the remarks. I shall read them with interest and with a view to maintaining a firm alliance between this side and the other side of the Atlantic on arms control matters.
    Mr. Kinnock: Will the Prime Minister take the opportunity of Question Time to announce that the tax change policies ascribed to her in this morning's newspapers are a falsehood? Because such changes would mean at the very least the doubling of VAT, with devastating consequences on price levels, pensioners, families on low income, employment and industrial costs, will she say that she does not want them?
    The Prime Minister: I read this morning's papers with surprise and with absolutely no knowledge of what would be in them. I point out to the right hon. Gentleman that this Government have brought down income tax from the rates beloved of Labour of 98 per cent. on savings and 83 per cent. on earnings, and at the same time have increased the amount spent on the social services.
    Mr. Kinnock: Given her astonishment at this morning's news, will the Prime Minister give us an assurance that such ideas will not be visited on us, certainly this side of the general election? We clearly remember, in common with the rest of the country, the undertaking before the last election not to increase VAT by 100 per cent. yet within six weeks of the election she increased VAT by 80 per cent. Despite the fact that she was elected as a tax-cutting Prime Minister she has since increased the tax burden on families by 10 per cent.
    The Prime Minister: I give the right hon. Gentleman the assurance that the Government will continue into the next Parliament with their prudent and cautious financial policy, which has resulted in six years of growth, lower income tax rates, a higher standard of living than we ever had before and a higher standard of social services. I hope to be at this Dispatch Box in four or five years' time making the same point.
    Mr. Kinnock: The Prime Minister will not be doing any of that, not least because she is "high-taxer Thatcher."
    The Prime Minister: That is an absurd comment coming from a supporter of a Government who loved
    456
    having a tax of 98 per cent. on savings, who loved to decimate the savings of pensioners by high inflation and who loved having tax on earnings of 83 per cent. and put income tax rates up to 35p in the pound. In fact, since 1979, income tax has been cut by £8 billion, the equivalent of £7 per week for the average family.
    Mr. Adleyasked the Prime Minister if she will list her official engagements for Thursday 12 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Adley: Referring to the pledges at the last election, does my right hon. Friend recall that our party gave a pledge to pensioners to keep the pension ahead of inflation, which pledge has been kept? Is the House aware that there are now more than 1 million additional state pensioners? Does my right hon. Friend agree that inflated promises will be no guarantee to future pensioners? Does she further agree with me that pensioners would be absolutely right to fear the possibility of a Government coming in who could not control inflation and could not keep pensions ahead of inflation?
    The Prime Minister: My hon. Friend is absolutely right. This Government's policies have led to six years' growth, to cutting taxes and to paying pensions, as my hon. Friend said, to 1 million more pensioners than there were when we came in. Our policies have all along protected savings and the value of pensions. It is an excellent record and the Labour party hates it.
    Dr. Owen: In view of the fact that, since 1980, this country has lost in scientists, engineers and technologists on average 1,000 people a year to the United States of America, how does the Prime Minister justify the UGC cuts in the universities, and especially the cuts at the London Business School and the Manchester Business School at a time when practically everyone thinks there should be increased investment in management education?
    The Prime Minister: In view of the first part of the right hon. Gentleman's question to the effect that there have been some losses of scientists, engineers and technologists, it seems to me that he is asking for lower taxation of the top income groups to prevent that drain. We are absolutely delighted to have that endorsement from him. There is something in what he says. With regard to university funding, the recurrent grant to the universities has increased overall by 7 per cent. between 1986–87 and 1987–88. That is a very generous increase. Further, £150 million will he allocated to universities later in the year. The University Grants Committee decides the allocations on the basis of student load and selective judgment of research quality at universities. Because of that, some universities inevitably did better than others.
    Mr. Whitfield: Does my right hon. Friend agree that the revelations recently made by Mr. Ian Curteis on the reason why the BBC banned the production of his Falklands play are yet another example of the treasonable inclinations of those who—
    Mr. Speaker: Order. Relate it to the Prime Minister's responsibilities.
    Mr. Whitfield: —manage the security aspects of the BBC? Does she further agree, therefore, that it is essential that the BBC board of governors, which is meeting today to draw up a shortlist of candidates for the director

    457
    generalship, should choose as candidates only those who have the independence and the Herculean qualities to enable the Augean stables at the BBC to be cleaned up, and finally—
    Mr. Speaker: Order. No, not finally.
    The Prime Minister: As my hon. Friend is aware, the choice of a director general is a matter for the chairman and governors of the BBC. I am sure that his remarks will have been noted in the appropriate quarters.
    Mr. Norman Atkinsonasked the Prime Minister if she will list her official engagements for Thursday 12 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Atkinson: Will the Prime Minister reconsider the answers that she gives in the House and outside about the increase in real jobs since the slump bottomed in June 1983? In view of the statistical evidence now available, does she recognise that since June 1983 there has been a reduction of 350,000 jobs in manufacturing and that in terms of real jobs, which means full-time employment, the numbers on a comparable basis with June 1983 are exactly the same now as they were then, at just over 21 million?
    The Prime Minister: The hon. Gentleman concentrates his remarks upon manufacturing industry. Jobs in manufacturing industry have been down since the 1960s for reasons that he well knows—because of the technological revolution, and because of the investment which he always urges us to undertake. Since 1983, taking supluses into account as well, 1 million new jobs have been created. That is very good news. Jobs in the service sector are equally important as those in the manufacturing sector. Indeed, they depend upon one another.
    Mr. Alexander: Will my right hon. Friend take time during the course of the day to note the formation in Nottinghamshire of the new moderate Labour party with its motto—
    Mr. Speaker: Order. Relate it to the Prime Minister's responsibilities, please.
    Mr. Alexander: Will my right hon. Friend commend that organisation, bearing in mind that its motto is—
    Mr. Speaker: Order. I cannot see how this has anything to do with the Prime Minister's responsibilities. I gave the hon. Gentleman a good chance.
    Mr. Willie W. Hamiltonasked the Prime Minister if she will list her official engagements for Thursday 12 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hamilton: Is the Prime Minister aware that there appears to be no relationship between low wages and employment, as epitomised in the south-west of England? [Interruption.] Is she further aware that unemployment in Devon and Cornwall is higher than the national average, while wages and earnings are far below the national average, and that a solution to that problem would be the acceptance by the Government tomorrow of my Bill to establish a south-west development agency? Despite the opposition to that Bill of her hon. Friends who represent that area, the Liberals and the SDP, will the Government give the Bill a fair wind?
    The Prime Minister: I thought for one moment that the hon. Gentleman was actually going to represent his constituents. I was disappointed. I ask the hon. Gentleman to look back at what a Labour Chancellor of the Exchequer said. He will find that his Chancellor pointed out that there was a relationship between wages and jobs and sometimes, when wages were too high, it meant that jobs were stillborn.

Points of Order (Mr. Speaker's Ruling)
3.31 pm
Mr. Speaker: I wish to make a statement about the raising of points of order which will, I believe, overcome a problem to which the hon. Member for Tiverton (Mr. Maxwell-Hyslop) drew my attention on Thursday of last week. He asked me to consider the practice whereby 1, like my immediate predecessor, have heard points of order arising out of questions immediately after questions and other points of order in their normal place after private notice questions, statements and Standing Order No. 20 applications.
The hon. Member expressed the view that what he described as the "change in the rule" had been tried for long enough and that it was clear that it was giving rise to abuse. He suggested that I should do one of two things: either resort to the normal rule, the doctrine of the first occasion, under which a point of order allegedly to do with an answer at Question Time would be raised immediately after the event to which it refers, or postpone all such points of order until after any private notice questions, statements or Standing Order No. 20 applications, when they would take their normal turn after any points of order of which notice had been given.
I am grateful to the hon. Member for Tiverton for his suggestion. He asked me to reflect and I have done so.
Taking points of order immediately after questions has had the effect in practice of creating two slots for points of order—and indeed it could be said that it almost invites an extension of Question Time. It is an abuse to use the Chair—by means of a point of order—to extend questions to Ministers or to anyone else. One such point of order can easily lead to another and if they are wrongly directed they are a waste of the time of the whole House.
After due consideration, therefore, I propose to revert to the well-tried practice of earlier times and to take points
460
of order, except on any matters needing my immediate intervention, such as breaches of the sub judice rule, or for short notifications by a dissatisfied Member that he intends to raise a certain matter on the Adjournment, in their proper place, which is after all proceedings on private notice questions, statements and Standing Order No. 20 applications.
I believe that this reversion to a former and well-tried practice will be in the best interests of the House.
Mr. Neil Kinnock: Naturally, the House was interested in the Statement that you have just made, Mr. Speaker. Everybody, I am sure, will see the great—[Interruption.]
Mr. Speaker: Order. The Leader of the Opposition may be supporting what I have just said.
Mr. Kinnock: I am certainly illustrating it, Mr. Speaker. Everyone will see the force of your argument. I ask you to reflect on one further aspect—the circumstances in which an entirely appropriate point of order is made, referring to an hon. Member who might reasonably be expected to depart from the Chamber and, therefore, is not able to hear that point of order which may have a direct bearing on that hon. Member's honour, conduct or otherwise. If you would reflect on that matter, Mr. Speaker, I am sure that the House will be grateful for your further view at an appropriate time.
Mr. Speaker: Of course I shall reflect upon that point. Indeed, I must tell the Leader of the Opposition that I have reflected on the whole range of possibilities. I believe that the ruling that I have just stated will have the support of the whole House.
Mr. Andrew Faulds: Further to that point of order, Mr. Speaker. [Interruption.]
Mr. Speaker: Order. I shall take it after business questions.

Business of the House
3.36 pm
Mr. Neil Kinnock: May I ask the Leader of the House to tell us the business for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 16 FEBRUARY — Second Reading of the Broadcasting Bill [Lords].
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
TUESDAY 17 FEBRUARY—Opposition Day (8th Allotted Day). Until about seven o'clock there will be a debate entitled "The Problems and Needs of Disabled People". Afterwards there will be a debate entitled "Women in the Community". Both debates will arise on Opposition motions.
Motion on the Social Security (Payments on Account, Overpayment and Recovery) Regulations.
WEDNESDAY 18 FEBRUARY—There will be a debate on a motion to take note of the Government's expenditure plans 1987–88 to 1989–90, Cmnd. Paper No. 56.
Motions on the Rate Support Grant (Scotland) Order and the Revaluation Rate Rebates (Scotland) Order.
THURSDAY 19 FEBRUARY — Remaining stages of the Banking Bill.
FRIDAY 20 FEBRUARY—Private Members' Bills.
MONDAY 23 FEBRUARY—There will be a debate on the report of the Sizewell B public inquiry on a motion for the Adjournment of the House.
Mr. Kinnock: On Monday week's business, will the Government put down a motion for debate on the Sizewell public inquiry rather than take it on the Adjournment of the House? As the Government's decision on Sizewell is to be announced after the debate, will the right hon. Gentleman ensure that the House is given a further opportunity to debate that decision when it is made?
In his statement on Monday, the Minister of Agriculture, Fisheries and Food promised that next month he will publish a White Paper on his proposals on the rural economy. Will the Leader of the House assure us that there will be a debate on that White Paper and that the Minister of Agriculture will not respond in his preferred fashion—in the form of a written answer?
St. David's day is approaching. Will the Leader of the House undertake to provide Government time in the near future for a whole day's debate on Welsh affairs?
The privatisation of British Airways has involved the sale of a profitable national asset at a loss to the taxpayer of £300 million because the share issue was under-priced, and led to a first-day profit for speculators of £50 million. That is obviously scandalous by anybody's standards. Will the right hon. Gentleman ensure that we have a debate soon on the profligacy of the Government's privatisation policies and how, once again, this sell-off was so under-priced?
Has the right hon. Gentleman noticed that, yesterday, while the Prime Minister was saying in London that she would value it enormously if the United States would consult with its allies on the ABM treaty, in Washington, Mr. Kenneth Adelman, head of the United States Arms Control Agency, was saying that the Western allies have no business telling Washington how to interpret the treaty, because they have "no qualifications"?
462
Will the Leader of the House ensure that early next week we will have a statement from the Secretary of State for Foreign and Commonwealth Affairs telling us, first, whether consultations with the USA are taking place; secondly, what advice is being tendered by Her Majesty's Government on the interpretation of the ABM treaty; and, thirdly, whether Mr. Adelman speaks for Mr. Weinberger, for Mr. Shultz, for the Administration or just for himself?
Mr. Biffen: The right hon. Gentleman's first point was about Sizewell and the debate that is promised for Monday week. I am sure it is right that my right hon. Friend the Secretary of State for Energy should hear the views of the House before he takes a decision. It would be wholly inappropriate to have a debate on this matter on a substantive motion. Therefore, I cannot accede to the right hon. Gentleman's request in advance of that decision. That said, I acknowledge immediately that a different situation will arise after the decision has been announced, and that a debate in that context would be a subject for discussion through the usual channels.
The right hon. Gentleman asked about a debate on the White Paper on the rural economy. That is a lively topic and I take note of what the right hon. Gentleman suggests. It is customary to have the debate on Welsh affairs around St. David's day. Again, perhaps that matter could be considered through the usual channels.
I dissent from the right hon. Gentleman's description of the public launch of British Airways. I thought it was a highly sucessful flotation. One knows with what glee there would have been a chorus of denunciation if it had been a failure. I am sure that many hon. Members would take a keen interest in a debate about privatisation and what it is doing to expand the opportunity for share ownership. Perhaps we could pursue that through the usual channels.
Finally, I note the request for my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs to make a statement about the ABM treaty and the position of the Government. I thought that the matter was made quite clear by my right hon. Friend the Prime Minister during her exchanges with my hon. Friend the Member for Harrow, East (Mr. Dykes). Of course, the matter can be looked at through the usual channels.
Mr. John Mark Taylor: Does my right hon. Friend agree that the harrowing events in the Lebanon compel many people to the conclusion that there is no point in parleying with fanatics? Will he permit a short debate on this subject?
Mr. Biffen: I take account of what my hon. Friend says. I am sure that he speaks for a large number of hon. Members and for many people. He might consider raising the matter by way of an Adjournment debate rather than taking Government time to raise it.
Mr. A. J. Beith: In a debate on the Lebanon, could we have a Government statement saying whether the Secretary of State for Foreign and Commonwealth Affairs is prepared to pursue at the Security Council the appalling situation in Bourj al Barajneh Palestinian refugee camp where starvation has reached the point at which people are eating cats and dogs, and where one woman killed herself and her children

463
rather than face starvation? May we have a statement to the effect that there might be a concerted European initiative to seek an opening up of the route which is now closed to the food convoys?
Mr. Biffen: I shall refer to my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs the hon. Gentleman's point. The hon. Gentleman will recognise that Foreign Office questions come top for Wednesday.
Sir Anthony Grant: Is my right hon. Friend aware that some of us who represent cereal farming areas would welcome as soon as possible a debate in which we could discuss agricultural policy, and especially the implications of rating agricultural land and the suggestion by the leader of the Social Democratic party that there should be a two-tier system of commodities?
Such a debate would enable the right hon. Member for Plymouth, Devonport (Dr. Owen) to reply to the president of the National Farmers Union who said that the SDP policy would annihilate farming and that the right hon. Gentleman did not know what he was talking about.
Mr. Biffen: I thank my hon. Friend for the trailer that he has given the House of his intended speech. It was all the more persuasive in trying to secure a commitment to such a debate. I have already told the Leader of the Opposition about the problems of a debate about the rural economy. I shall see what we can do.
Mr. Jack Ashley: Is the Leader of the House aware that last Saturday Crown immunity ended in National Health Service hospitals and that those negligent health authorities which have allowed dirty and dangerous conditions for patients and staff will now have to put them right at an estimated cost of £50 million? However, the Government have just announced that they do not propose to allow any money for that. May we have a debate next week on that flouting of the will of Parliament?
Mr. Biffen: I cannot accept the situation outlined by right hon. Gentleman and I certainly cannot accept his accusation that the will of Parliament has been flouted by the Government. However, I accept that he has raised an important subject and suggest that he might try his chance with an Adjournment debate.
Mr. Richard Holt: The great scourge of AIDS means that the Government ought to be introducing legislation immediately on tattooing, electrolysis and ear-piercing to ensure that no other avenue is available by which AIDS can be transmitted accidentally to innocent people.
Mr. Biffen: I take account of what my hon. Friend says and I shall certainly refer his point to my right hon. Friend the Secretary of State for Social Services.
Mr. Roland Boyes: The European Community is taking legal action against the British Government because bathing beaches are polluted and drinking water is unsatisfactory because of nitrite concentration and it is considering taking us to court because of an over-concentration of nitrates. Is it not a deplorable scandal that the Government are risking the health of the people of Britain, or is it just another example of the fact that they do not care?
Mr. Biffen: I do not accept that, because a Community institution takes action against the British Government, the British Government are necessarily at fault.
Sir Kenneth Lewis: Has my right hon. Friend considered the reasonable, if controversial, suggestion of the Paymaster General that people in Britain should now be paid on the basis of productivity, efficiency and so on? Would it be a good idea if my right hon. Friend the Leader of the House looked at that in relation to the House of Commons? For example, Ministers who spend wisely should be paid more, those who vote most in the House should receive a bonus and those who sit on Committees for long hours should get extra, except for those Committees that travel abroad too much and they should have a reduction. Perhaps those who raise spurious points of order should also receive less. The possibilities for my right hon. Friend are infinite. Will he consider that and make an announcement on it?
Mr. Biffen: The longer my hon. Friend proceeded the more I began to realise that job evaluation in this place would become a highly controversial topic. I have long thought that there was a great role for the constructive non-production of legislation and that that would much enhance what benefit Parliament could confer upon people. However, I know that all those are matters not of scientific evaluation but of deep instinctive prejudice.
Mr. Dennis Skinner: Will the Leader of the House arrange for the appropriate Minister to make a statement about the links between South Africa and the City? Will that Minister be able to tell us the number and amount of donations given to the Liberal party and the Social Democratic party from the City in the past two or three years, especially with regard to those which have subsidiaries in South Africa? I have drawn the attention of the Leader of the House to that previously. Will he arrange for the Chancellor of the Duchy of Lancaster to make an additional statement with a proper report in the Library on all those firms and individuals connected with the Guinness fiasco that have given money to the Tory party?
Mr. Biffen: I was interested in the earlier manifestation of the hon. Gentleman's question about whether that would be the responsibility of my right hon. Friend the Secretary of State for Trade and Industry or the hon. Member for Berwick-upon-Tweed (Mr. Beith). I noticed that the hon. Member for Berwick-upon-Tweed showed an increasing distaste for the whole nature of the question.
Mr. Kevin Barron: He was fidgeting.
Mr. Biffen: Yes, I accept that he was fidgeting. However, I should like to consider the matter carefully before coming to what might be a snap and ill-matched judgment.
Mr. Patrick McLoughlin: As my right hon. Friend the Leader of the House will know, in the past I have drawn his attention to early day motion 310 on small dairy farms.
[That this House believes that should a reduction in milk quotas be necessary, the first 200,000 litres of a United Kingdom holding should not be included in any calculations, thus helping to ensure the future of the small family farms which have done so much for the British countryside.]
Although we await with interest a debate on the documents that have been published by my right hon.

465
Friend the Minister of Agriculture, Fisheries and Food, we look to him to provide the House with the earliest opportunity to discuss the proposed dairy charges.
Mr. Biffen: I note what my hon. Friend says. He has made that point powerfully to me on previous occasions. I will bear in mind what he says, along with all the other considerations, not least those of the Leader of the Opposition, about a debate on the rural economy.
Mr. James Lamond: Did the Leader of the House get any joy last week when he drew to the attention of the Prime Minister, as promised, the proposal that she should make a statement to the House before she goes on her visit to the Soviet Union at the end of March so that she can be informed of all the issues that interest hon. Members, including the tremendous opportunity to expand our trade with the Soviet Union?
The British Chamber of Commerce is opening an office in Moscow, which, I believe, the Prime Minister may open. May we have an opportunity to tell her what we think she should try to achieve on her important visit?
Mr. Biffen: I am sure that my right hon. Friend the Prime Minister is deeply touched by the interest and concern that the hon. Gentleman shows in her proposed trip, and that she will bear in mind what he has suggested when we come a little nearer to the point of decision.
Mr. John Stokes: Can my right hon. Friend the Leader of the House advise me whether we shall have an early opportunity to debate the Home Affairs Committee report on the redistribution of seats so that the blatant discrimination against England in the matter of parliamentary seats can soon be put right?
Mr. Biffen: There are certain stages in life when one has enough troubles without looking for more. However, my hon. Friend knows perfectly well that, in the first instance, there must be a Government response to the Select Committee's report, and we shall perhaps take the matter further once that has been undertaken.
Mr. Greville Janner: Will the Leader of the House ask the Prime Minister whether she will now make a statement about the proposals to amend section 2 of the Official Secrets Act in view of the fact that she wrote to me saying that there was no intention to amend or repeal the Act? However, the leading article on the front page of The Sunday Times last week stated, "Tories pledge new secrets act", and purports to say that several Ministers have given clear indications that the present Act is a disaster which should be dealt with. Can the Leader of the House ensure that that matter is referred to the House as soon as possible?
Mr. Biffen: The hon. and learned Gentleman knows that earlier in the lifetime of this Administration an attempt was made to secure the reform of that legislation. However, I shall certainly draw his remarks to the attention of my right hon. Friend the Home Secretary, who, essentially, has the responsibility for that legislation.
Mr. Teddy Taylor: As the Court of Auditors in Brussels has just confirmed that a mafia organisation received a Common Market grant of 19 million lire in respect of an alleged delivery of non-existent fruit juice to the NATO headquarters in Sicily, will the
466
Leader of the House arrange for a debate on that matter so that the Government can express their view on that novel use of public funds?
Mr. Biffen: That is an interesting suggestion and a rather novel diversion. However, I shall consider the matter and see what can be done.
Mr. Frank Haynes: Is the Leader of the House aware that there are many pensioners in the country and that if in fact they got their act together and voted in the right way he would be looking for another job? Is he also aware that the Government have not given this country's pensioners a fair deal? They come to my surgery on Saturday mornings to complain about what they should be getting, but are not getting, from the Government. Bearing that in mind, will the Leader of the House find time for a long-overdue debate on the problems of the elderly so that we can put them right?
Mr. Biffen: I cannot offer precisely and exactly what the hon. Gentleman seeks, but in this Chamber one rarely receives that. I can offer him a wide-ranging debate on public expenditure on Wednesday when certainly the financing of retirement pensions will be central.
Mr. Patrick Nicholls: Will my right hon. Friend find time for an urgent debate next week on the conduct of public opinion polls? Does he agree that that would provide an excellent opportunity for the public to understand how they are conducted and to consider, for example, the "Newsnight" poll conducted earlier this week which showed a resurgence in support for the alliance, but was based on the movement of 14 people and was conducted by David Woodhead who, by coincidence, happens to be a Liberal councillor?
Mr. Biffen: I take note of what my hon. Friend says. There may well come a day when one will be concerned to establish minimum standards for the conduct of such polling, but meanwhile there is no possibility of legislation to change those matters. My hon. Friend may like to take the opportunity of seeking an Adjournment debate, because his point has genuine topicality.
Mr. Peter Hardy: Bearing in mind the changes in forestry policy which began this week with the Government announcement and the little difficulty that we had at Question Time yesterday, will the Leader of the House reconsider carefully — this will appeal to many hon. Members on both sides—the question of who has responsibility for forestry in the House?
Mr. Biffen: I take account of what the hon. Gentleman says. He has taken a long and determined interest in this topic. It links with many other aspects of the countryside, about which there is a general desire for a debate.
Mr. Robert Banks: My right hon. Friend will be aware that the Licensing (Restaurant Meals) Bill is on the Order Paper for Second Reading tomorrow following objections raised to it last Friday. In view of the fact that it is a perfectly sensible, reasonable measure for the reform of our archaic licensing laws, will he consider giving Government time to assist its passage through this House if further objections are raised?
Mr. Biffen: Being a coward, of course I shall consider granting Government time, but I should not like my hon. Friend to be optimistic about the outcome of that consideration.
Mr. David Winnick: Is the Leader of the House aware of the widespread anxiety in Britain about the appalling circumstances facing Palestinians in a refugee camp in the Lebanon? Did he read about the Palestinian woman who yesterday committed suicide with her children rather than face starvation? Does he recognise the need for an early statement on the steps that the British Government can take to ease the situation?
Secondly, has the right hon. Gentleman any latest information about the British correspondent who was beaten up by KGB agents this morning in Moscow?
Mr. Biffen: I should like to append the hon. Gentleman's first comments to those of the hon. Member for Berwick-upon-Tweed (Mr. Beith) in making representations to my right hon. and learned Friend the Foreign Secretary. I have nothing to say about his second point, because I am in no position to speak.
Sir John Farr: Is my right hon. Friend aware that the Local Government Act 1986 (Amendment) Bill is about to complete its passage in the other place today? Will he consider whether the objectives of the Bill should command the support of the whole House as it seeks to outlaw excessive expenditure on homosexual and lesbian groups by Left-wing councils? When he has looked at it, I am sure that he will seek to give it a fair wind through this House. What will he do about it?
Mr. Biffen: I have an instinctive sympathy with the point that my hon. Friend is putting, but I am not sure that it has total, unanimous support in the House, notwithstanding the phraseology that he used. I will certainly bear his point in mind.
Mr. Tam Dalyell: Will the Leader of the House ask the Minister who is to wind up the broadcasting debate on Monday, to explain the chemistry by which the noble Lord, Lord Cameron of Lochbroom, sitting alone in the Crown Office, without talking to any ministerial colleagues, apparently reached crucial decisions about an interpretation of the public interest and official security in Britain? Will the Minister explain why Scottish law was flouted in not taking into account the feelings of the victim, in this case the Foreign Office, which had ministerial responsibility and was up to its neck in it, with the Foreign Secretary cancelling engagements with Philip Habib, cancelling visits to the Middle East Association, and being involved in the very issue upon which Lord Cameron made decisions? Will the right hon. Gentleman look at the precedent of Lord Elwyn-Jones, who consulted the then Mr. Michael Stewart in relation to the prosecution of the hon. Member for Thanet, South (Mr. Aitken) in relation to the Daily Telegraph case over Nigeria?
Mr. Biffen: I shall ensure that the hon. Gentleman's remarks are brought to the attention of my hon. Friend who will be replying to Monday's debate.
Mr. Peter Bruinvels: May we have a debate on the lobbying tactics of outside organisations such as the East Midlands Association of District Councils, which came to the House of Commons yesterday? If my right hon. Friend could have spared the time, he would have been horrified at the lobbying and misrepresentations that were put forward by the chairman of Leicester city council's housing committee, Councillor David Middleton, who cast the most amazing slurs on and
468
said amazing untruths about the Minister for Housing, Urban Affairs and Construction and the Housing and Planning Act, which caused great concern to my constituents. Those lies were totally without foundation and have caused unnecessary concern to anyone who lives in a council house. They were given over to the lie that council tenants may be removed at a moment's notice, and that they will not have a say in how their property will be managed. Is this not shocking? Should we not have an opportunity to curtail lobbying, particularly when it is misleading?
Mr. Biffen: At least my hon. Friend did not have dinner with him. There are many ways of offensive lobbying, but the gastronomic way is the one that I have always found most tedious. My hon. Friend has made his point effectively, but I hope that, on reflection, he will not feel it necessary to have a debate.
Mrs. Ann Clwyd: Is the Leader of the House aware that in 1986, with the approval of the Government, British Aerospace issued a brochure at the 1986 Farnborough air show which gave details of the spy satellite that it was building? Is the right hon. Gentleman aware that the Soviet attaché was present at that air show and that he can read English? Therefore, will he ask the Prime Minister to condemn the disclosures of British Aerospace as being irresponsible and damaging to national security?
Mr. Biffen: I take note of what the hon. Lady says. I shall refer her remarks to my right hon. Friend.
Mr. Eric Forth: Does my right hon. Friend recall the triumph of the Fontainebleu agreement, in which it was stated quite categorically that we have finally achieved total financial discipline within the EEC? Is my right hon. Friend confident enough to have a debate on the matter to elicit from the Government and my right hon. Friend the Prime Minister the undertaking that no further moneys will be given to the EEC during this year or next under any guise, that the VAT ceiling will not be increased and that anything masquerading as an inter-governmental agreement will not be undertaken to circumvent the excellent outcome of the Fontainebleu agreement which was so lobbied by the right hon. Gentleman and his colleagues at the time?
Mr. Biffen: I think that I can best help my hon. Friend—"hope deferred"—by saying that there will be plenty of opportunities to discuss relationships with the European Community in specific terms in the weeks and months ahead. On Wednesday of this coming week there will be a debate on the Government's expenditure plans, which relate to our contributions to the European Community. I hope that my hon. Friend will be able to make his arguments then.
Mr. Tony Lloyd: I refer the Leader of the House to the human tragedy being worked out in the Palestinian camps. Is he aware specifically that the President of France has called for international action by the western European powers and that the leader of the Palestinians has called for United Nations action? Given that background, will the right hon. Gentleman reconsider the need for a statement by the Foreign Secretary? Will he also make sure that the Foreign Secretary understands that the House will be grateful if the British Government took part in the maximum possible diplomatic efforts?
Mr. Biffen: I take note of what the hon. Gentleman says. I responded in a forthcoming manner to the hon. Member for Berwick-upon-Tweed (Mr. Beith). I shall ensure that the hon. Gentleman's name is included when that point is passed to my right hon. and learned Friend the Foreign Secretary.
Mr. Harry Greenway: Will my right hon. Friend agree to an early debate on the environment, particularly the need to keep open spaces in built-up areas, so that Ealing Labour council's uncaring proposals to build on the Ealing Green high school playing field in a built-up area, which will take away amenities from children and other people, can be discussed properly and condemned, just as the council was at a public meeting of nearly 500 people in my constituency on Monday?
Mr. Biffen: I take account of what my hon. Friend says. I am sure that the debate on the rural economy will not be particularly directed to the green spaces, such as there are, in Ealing. I shall refer the matter to my right hon. Friend the Secretary of State for the Environment.
Mr. D. N. Campbell-Savours: Is the Leader of the House aware that, although the House may accept that the arrangements for notifying the Chairman of the Public Accounts Committee of major defence projects of a national security nature may have not been breached in the case of Zircon, I believe that the Ministry of Defence deliberately misled the Comptroller and Auditor General? Is the Leader of the House aware of the view that is expressed by a few people who seem to know about these matters that part of the Zircon expenditure was attributed to the Trident programme? That is the way that expenditure has been hidden in the public expenditure White Paper. Will the right hon. Gentleman ensure that a full statement is made and that written questions that I have tabled, which forensically examine the matter to establish the truth, are answered fully and honestly?
Mr. Biffen: The hon. Gentleman makes a serious challenge that deliberate and misleading answers have been given to him by a Government Department. That is a direct accusation either against the Minister involved or against civil servants. I hope that the hon. Gentleman will reflect on that.
Mr. Greg Knight: Will my right hon. Friend provide time next week to the Leader of the Opposition so that the Labour party can make a statement to clear up a matter that is causing a good deal of
470
confusion and uncertainty in the House—who is the Opposition spokesman on employment matters? Is it the hon. Member for Kingston upon Hull, East (Mr. Prescott) or the hon. Member for Dagenham (Mr. Gould)?
Mr. Biffen: Perhaps we should wait to see what the performance this afternoon is like before coming to any premature conclusions.
Mr. Andrew Faulds: May I take it that the right hon. Gentleman is fully apprised of the need for urgent consideration of the appalling sufferings of the Palestinians and that he will urge on his right hon. and learned Friend the Foreign Secretary the need for some immediate help to be provided to them, either some sort of defence of their position or some sort of international intervention in terms of food and economic help?
Mr. Biffen: I shall make sure that my right hon. and learned Friend the Foreign Secretary is made aware of the deep feelings that have been expressed on the subject this afternoon.
Dr. Alan Glyn: My right hon. Friend will be aware of remaining order No. 3 relating to short speeches. When may we expect a debate and decision on this matter?
Mr. Biffen: There are a few procedural matters to be cleared up to ensure that graveyard unanimity, which is so beloved of the usual channels. Once that has been done, I hope that we can proceed.
Mr. James Hill: Is my right hon. Friend aware of the discourtesy that is being shown to some of our naval ships visiting United Kingdom ports? I am particularly thinking of a visit of HMS Conqueror, the nuclear-powered submarine, which was so famous in the Falklands conflict, which is visiting Southampton. Unfortunately, it is being shown a great deal of discourtesy by the Labour-controlled council and has been given no civil reception. Should not this matter be debated in the House so that we can have an overall policy for warships, which may or may not have nuclear weapons on board, visiting United Kingdom ports?
Mr. Biffen: That is a matter which some may consider modest but which I think is important in showing the broad attitudes of those who are seeking public affection in the coming general election. I shall ensure that my hon. Friend's point is given as much publicity as possible.

Points of Order (Mr. Speaker's Ruling)
4.10 pm
Mr. Andrew Faulds: Further to a point of order which was raised a long time ago, Mr. Speaker. You are well aware of my warm predisposition towards you. You made a statement about the point of order procedures. You claimed to be reverting to an older practice. I have grown grey, if not white in parts, in the service and I remember 21 years ago, when I first graced the Back Benches, to be permanently on the Back Benches, that you were still a gallant soldier.
Mr. Speaker: Former soldier.
Mr. Faulds: You had been a gallant soldier, and still are.
You have suggested, Sir, that all these points of order should be postponed until there is lump treatment of them after questions and statements. This means only one thing: if you postpone points of order, you break the continuity of argument to which the points of order referred. I doubt if that is advisable, because it might be interpreted that your intention is to dispossess hon. Members of a long-established tradition of arguing points of order relevant to the matter then under discussion. Were you to maintain this argument, it would mean — [Interruption.] Conservative Members need education. If it comes to a clash of voices, I might win.
If points of order are not acceded to when they are first raised, it seems to me that this lessens the rights of hon. Members to intervene there and then when points on which they wish to comment arise. You have had no trouble on this aspect, Sir, only because the Labour party is a very responsible party and because you have a compliant crowd of drips on the Conservative Benches.
Is it not true that you have become a somewhat radical Speaker, Sir? You have changed the practice on questions in two ways. You have allowed a situation to develop which you are now trying to rectify. Instead of Prime Minister's Question Time being relevant to the Prime Minister's activities of the day — you are trying to restore that—you have allowed that to lapse. Perhaps more important than that, you have allowed the practice to develop whereby hon. Members are allowed to quote in supplementary questions. When I was young, that was not allowed. I ask you carefully to reconsider your application of the rules of procedure on these matters, especially with relevance to the appositeness of points of order being raised the moment the discussion under way needs that intervention.
Mr. Speaker: I thank the hon. Member for the first and final parts of his comments. I hope that I am sticking to the rules as operated by my predecessors. I did not go into this matter lightly. It was raised by the hon. Member for Tiverton (Mr. Maxwell-Hyslop) last Thursday. I have taken a whole week to reflect on it and have consulted widely. I have looked at the Hansard going hack to the beginning of my Speakership. I have noted that consistently there have been attempts to continue Question Time through the Chair and I have found myself constantly saying, "This is not a matter for me. This is a continuation of Question Time." By definition, a point of order must be a matter on which the Speaker can rule. The whole House knows that it is an abuse to seek, through the Chair, to continue Question Time.

Hon. Member for Leicester, East
Mr. James Lamond: On a point of order, Mr. Speaker. You know how carefully we avoid allowing an hon. Member to refer to another hon. Member in the House as a liar. That is correct, of course. You may have noticed, Sir, that the hon. Member for Leicester, East (Mr. Bruinvels), who unfortunately has left the Chamber—this may illustrate one of the points raised by my hon. Friend the Member for Warley, East (Mr. Faulds); the hon. Gentleman is not here to listen to what I have to say — mentioned the chairman of the Leicester housing committee and referred to him not once, but twice, as a liar. If we are so eager to protect ourselves, perhaps we should extend that protection to people who are not here to speak for themselves.
Mr. Speaker: I have frequently—
Mr. Dennis Skinner: Further to the point of order, Mr. Speaker. I was present—
Mr. Speaker: Order. Allow me to deal with one point of order at a time.
I have frequently drawn the attention of the House to that practice. It is a very serious matter in the House to blacken the names of those outside this place who have no means of recourse and to do so under the cloak of parliamentary privilege. Every hon. Member should take the greatest care when referring to people outside this place. Or course, the whole House knows that it would be unparliamentary to use that term in relation to any hon. Member.
Mr. Skinner: Further to the earlier point of order, Mr. Speaker. I raise this point in view of the matter raised by my hon. Friend the Member for Oldham, Central and Royton (Mr. Lamond) and the fact that I was present throughout the lobby which took place in Committee Room 18, which had been organised on behalf of local authorities, many of which were hung councils, some of which were represented by the Conservative party—
Mr. Speaker: Order. The hon. Member must bear in mind that this must he a point of order to me. I was not present and I am not responsible for what is said in Committee Rooms.
Mr. Skinner: This took place in the House, and I should have thought that the Speaker of the House of Commons would be a little concerned at what happened. Tory Members came into the Committee Room and abused local authority representives of all shades and descriptions. Many of the representives then left, only to be followed by another Tory Member, who did the same thing. The net result was that the people at the meeting decided that, because I had stayed throughout, I should receive the accolade of statesman of the meeting.
I am not asking for that accolade from you, Mr. Speaker, but I say seriously in respect of the statement you read out earlier, to which my hon. Friend the Member for Warley, East (Mr. Faulds) properly referred, and in respect of points of order being raised immediately arising out of matters that have been aired, I believe that you will not in all circumstances hold the line against Front Benchers. You may do so against my hon. Friends on the Back Benches, but I am prepared to bet that that line will never be held when Front Benchers decide to challenge your ruling.
Mr. Speaker: These are hypothetical matters.
Mr. Skinner: I just wanted to put them on the record.
Mr. Speaker: Order. I very much hope that both Front Benches will always give a lead in terms of support for the Chair. I note that the Opposition Front Benchers are nodding.
Mr. Alan Williams: Further to the point of order, Mr. Speaker. May I say immediately that of course we respect your ruling and your position. We certainly agree that it is wrong for hon. Members on either side of the House to try to prolong Question Time via points of order. But I ask you to consider and give your advice on a genuine problem that arises from your ruling. Although many of the interventions made at 3.30 pm by hon. Members on both sides of the House may have been abuses of the intention of points of order — I readily accept that — we now have the difficult situation that arises because Ministers are busy and the Prime Minister is particularly busy. If a statement, several statements or a private notice question follow Question Time, it will be at least an hour before a question can be raised relating to what happened and Ministers, and the Prime Minister almost certainly and understandably, will not be in the Chamber.
To ensure that the new system works properly, what arrangements do you propose, Sir, to ensure that at the appropriate time the Ministers who answered questions and the Prime Minister are available in case points of order are raised?
Mr. Speaker: It is not a new arrangement. I am reverting to an old and tried practice, as I said in my considered statement on this matter. I did not take this course lightly, but carefully considered it and consulted widely about it throughout the week. Therefore, it should be of no surprise to the House to learn what was in my mind on those matters.
What I have done is in the best interests of good order in this House. It is reverting to former practice. What the right hon. Member for Swansea, West (Mr. Williams) said about having a Minister present to answer cannot, by definition, be a point of order for me. That is the crux of the matter.
474
Hon. Members have only to look at Hansard to realise that there are constant attempts to use points of order as a vehicle to extend Question Time through the Chair. That is not a function of the Chair, and I do not believe that it is good practice for the House.
Mr. D. N. Campbell-Savours: As someone who invariably takes the second slot on points of order—not the first—I, too, accept that there is abuse. Indeed, that matter has been referred to and is being considered by the Select Committee on Procedure. It hopes to study that precise matter next Monday.
I put it to you, Mr. Speaker, that there are ways to resolve the matter other than by the course that you have decided to take. Would it not be to the benefit of the House if you put this reversion on a limited basis pending the recommendations of the Select Committee? I believe that within that Committee—where the best form of debate takes place — lies a possible solution to avoid the difficulties that arise at 3.30 pm.
The reason why we have the difficulty with points of order at 3.30 pm is that there is no slot within our proceedings for hon. Members to raise issues that they believe to be important, over and above the Standing Order No. 20 procedure. It is important that Parliament finds some way of giving vent to its feelings. By removing the opportunity to put points of order at 3.30 pm, you are simply putting the lid on a kettle of seething disquiet.
Mr. Speaker: I was interested to hear what the hon. Gentleman said about the Select Committee on Procedure considering this matter. That is news to me. Certainly I have received no request from the Chairman of that Committee even to consider the matter. Mr. Speaker is the servant of the House, and if the Select Committee on Procedure makes recommendations and the House accepts them Mr. Speaker will be bound by them.
I am the servant of the House. I was chosen to be Mr. Speaker by the whole House to keep order and to ensure observance of our rules. If those rules are changed by the will of the House, I will certainly abide by that. I welcome the Select Committee considering the matter, if that is its intention.

Hon. Member for Leicester, East
  BILL PRESENTED
    REGISTERED ESTABLISHMENTS (SCOTLAND)
    Mr. Albert McQuarrie, supported by Mr. Alexander Pollock, Sir Hector Monro, Mr. Bill Walker, Mr. Allan Stewart, Mrs. Anna McCurley, Mr. Charles Kennedy, Mr. Nicholas Fairbairn and Mr. David Lambie, presented a Bill to make further provision as to the registration of establishments under the Social Work (Scotland) Act 1968; to provide for the dual registration of certain establishments under both the Social Work (Scotland) Act 1968 and the Nursing Homes Registration (Scotland) Act 1938; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 20 February and to be printed. [Bill 74.]

Employment and Training
4.23 pm
Mr. Speaker: We come now to the debate on employment—
Mr. Jerry Hayes: On a point of order, Mr. Speaker. I understand that there is a custom and practice whereby Opposition and Government spokesmen deposit any important documents that have been published in the Library of the House of Commons, so that hon. Members can be aware of the documents that will be used in a debate.
For the past two days I have been to the Library trying to obtain a copy of the published Labour party document, which has been trailed in the newspapers and which will be used by the hon. Member for Kingston upon Hull, East (Mr. Prescott) today, called—[Interruption.]
Mr. Speaker: Order. I can help the hon. Gentleman and the whole House. There is no requirement for Opposition Front Bench spokesmen to lay documents, and the hon. Gentleman is surely aware of that rule. The custom relates to Government papers—not Opposition papers — that are relevant to the debate. Indeed, many hon. Members write pamphlets and often refer to them.
Mr. Hayes: Further to that point of order, Mr. Speaker. It is much more serious than that. I went to the Library and asked that someone ring Walworth road to request a copy of the document. The Library is full of Labour party pamphlets and other party political literature. The spokesman at Walworth road said that the hon. Member for Kingston upon Hull, East—
Mr. Speaker: Order. I am afraid that I must stop the hon. Gentleman. That is patently not a matter for me.
Mr. Peter Thurnham: Further to that point of order Mr. Speaker. In this imminent debate, would it be in order for the hon. Member for Kingston upon Hull, East (Mr. Prescott) to make his contribution from a sedentary position in view of the report in yesterday's—
Mr. Speaker: Order. Let us get off to a good start.
4.25 pm
The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): I beg to move,
That this House commends the Government on the wide range of practical help it provides through its training and employment measures and the Restart programme; welcomes the national launch of the new Job Training Scheme, endorses the policies of promoting enterprise and small business, more flexible labour markets, better training for young people and adults, and more help for the long-term unemployed; and takes note of European Community Document No. 10119/86 and congratulates the Government on achieving the adoption by the European Community during the British presidency of an Action Programme on Employment Growth in line with the Government's policies.
Mr. Speaker: I wish to inform the House that I have selected the amendment in the name of the Leader of the Opposition.
Mr. Clarke: We are about to start a serious debate on a serious subject during which, no doubt, we may discover what strings the hon. Member for Kingston upon Hull, East (Mr. Prescott) holds in his hierarchy on this subject.
The background to our debate on this important and serious matter was given a few moments ago by my right

477
hon. Friend the Prime Minister, when she reminded us that for the past six months the trend in unemployment has been steadily downwards. Each month there have been good and improved employment and unemployment figures, and each month they have been a bitter blow to the Labour party. It is especially gratifying—I hope to the whole House—that the level of unemployment has been falling fastest in the north, the north-west, Wales and the west midlands—again, a setback for the Opposition.
Mr. John Prescott: What about this month?
Mr. Clarke: I accept that this month has not been as good as the past five months, but the hon. Gentleman will be aware that January is always the worst month of the year. Unemployment figures always go up in January because it is the worst month of the winter. Even so, it is the smallest rise in any January for eight years. It means that the trend over the past six months is the best since 1973 — [Interruption.] The Government's training measures must be looked at against that extremely encouraging background—
Mr. Norman Hogg: The position in Scotland is very different from the gloss that the right hon. and learned Gentleman has tried to put on the figures for England and Wales. The underlying trend in Scotland shows unemployment to be worsening and there has been a collapse in employment in the manufacturing sector. From figures given by the Minister responsible for Scottish industry yesterday, it is obvious that manufacturing jobs in the new towns are down—by 3,500 in East Kilbride and 2,200 in Cumbernauld—since this Government came to office. How can the right hon. and learned Gentleman present such glossy figures in view of the position in Scotland?
Mr. Clarke: Scotland is not doing as well as the other regions that I have mentioned because of the difficulties of the offshore oil industry. That industry gave rise to great prosperity in Scotland until the last change in oil prices, with the resulting change in the outlook for oil companies. There are some job losses in Scotland, but many more new jobs are being created.
The picture over the past six months has been best in the regions that I have mentioned — the north, the north-west, Wales and the west midlands. The picture is not so good in Scotland, for obvious reasons—which the hon. Gentleman, who holds a Scottish seat, knows even better than I. He also knows that the best hope for Scotland and elsewhere is for the good overall national news of the past six months to be maintained, as it is likely to be.
We must best judge those measures against a favourable economic climate and an economy that is performing well. Unemployment and employment figures look much more encouraging when we consider the broad difference of approach that we take, deciding where we are going and comparing what the rival political parties are using to guide their own employment policies.
We know that apart from the argument—sometimes noisy — that takes place between myself, the hon. Member for Kingston upon Hull, East and his colleagues, and apart from the difference about the detail of measures, there is a broad difference of approach both towards the kind of economy that we see emerging and the labour
478
market in which we believe we have to create jobs. That broad division is best described in shorthand as the difference between those in this party and this Government, who are seeking to develop an enterprise economy, and those in the Labour party who still—[Interruption.] It is noticeable that the new guide and mentor of the hon. Member for Kingston upon Hull, East, the hon. Member for Dagenham (Mr. Gould), is not yet in the Chamber. If the hon. Member for Kingston upon Hull, East, went to the other place occasionally and heard debates there, by listening to debates in both Houses of Parliament he might be better informed on all the matters upon which he tries to address this House.
To return to the sharp division between policies that are based upon the development of an enterprise economy and policies that are still based on an inclination towards a public sector-led economy and a publicly planned labour market, that division is traditional between the two great parties. However, it has been made quite clear in recent debates on unemployment that it has never been more sharp than it is now. That is the choice that faces our country when it judges our economic measures.
Quite apart from our macro-economic policies that are designed to produce sustained growth in the economy, we have based all the employment and training policies that we have produced to reinforce our economic policies on the need to change and modernise our labour market so that it comes nearer to the kind of labour market that provides good employment prospects in all the most advanced capitalist countries that have succeeded in overcoming this problem. For instance—this theme runs through all our policies—we encourage and welcome a wider spread of employment in the service industries as well as in manufacturing industries, although I believe that the broad brush division that is made between the two is often artificial. We need jobs in both sectors.
In particular, we have encouraged new business start-ups; we have supported the growth of small and medium-sized enterprises, because that sector of the economy produces the fastest growth in new jobs; we have introduced the business expansion scheme and the loan guarantee scheme and we have developed the local enterprise agency network. In particular, we have encouraged self-employment, which was in the most unfortunate decline in the 1970s. It is now growing again strongly. We have also introduced such measures as the enterprise allowance scheme to support unemployed people who enter into self-employment and we have reduced the national insurance charges that the self-employed pay. We have tried to achieve what could broadly be described as a more flexible labour market. The Wages Bill contained many measures of that kind.
Our economy is becoming much more like those of other developed countries, in which a higher proportion of people are in part-time work, while more people are engaged on short-term contracts. There is a greater development of job sharing, with more people having more than one job. Sometimes that involves more realistic pay for inexperienced school leavers who are going into their first job. However, it also involves more pay that is based on merit and performance for those who have the skills and whose performance is the best.
We have also improved the preparation of our children for today's world of work. During the last seven years we have developed much better links between schools and industry, and we must continue to do so. We are

479
developing a more relevant curriculum for pupils through the technical and vocational education initiative. Our proposed city technological colleges will reinforce that development. We are beginning to sort out the system of vocational qualifications so that pupils can seek to attain a set pattern of qualifications of which employers will be able to make the best use. We are seeking to improve training levels and to raise the skills of our work force. Probably our biggest single success has been the development of the two-year youth training scheme. However, the new job training scheme is the latest and the most exciting example of what we have in mind.
Mr. Roger King: Has my right hon. and learned Friend yet received a letter from the TUC in response to the letter from the hon. Member for Huddersfield (Mr. Sheerman)—some kind of unemployment spokesman on the Opposition Front Bench—who wrote to the TUC complaining bitterly that it had approved the £206 million job training scheme and asking it to complain to the Government about the fact that it was illegal? Has he yet received that letter, or does he think that it is a figment of the Opposition's imagination?
Mr. Clarke: I have seen the letter relating to the alleged illegality point that was raised by the hon. Member for Huddersfield (Mr. Sheerman) who, astonishingly, is not here, although—but we are never quite sure—he is also a Front Bench Opposition spokesman. The hon. Member for Huddersfield will be receiving a letter from the chairman of the Manpower Services Commission this afternoon, refuting his rather silly legal point and explaining that he is making a complaint about perfectly reasonable preparations, on a contingency basis, for the scheme.
Mr. Prescott: Does the Paymaster General acknowledge that he has received a letter from the TUC dated 10 February making clear its position about the job training scheme and pointing out that most of it is not in line with the guidelines set out by the Manpower Services Commission and that therefore it cannot support the scheme?
Mr. Clarke: Far be it from me to intrude into any of the discussions that are taking place between the Labour party and the TUC. My right hon. and noble Friend and I have responded to the work and the proposals of the Manpower Services Commission, based on the unanimous report of its sub-committee. We have an agreement with the MSC, upon which there are TUC commissioners, about how to proceed with the new scheme, on the basis of expanding it as rapidly as we can, consistent with quality. I do not believe that it is misleading. As for the Government and the Manpower Services Commission, there has been an exchange of letters between Ministers and the MSC that makes it clear that we are proceeding on the basis of the last MSC discussions.
Mr. Prescott: What about the job training scheme?
Mr. Clarke: I shall return to the job training scheme in a moment.
I am describing the way in which the totality of our employment and training measures is changing the patterns of work. We need a work force and a labour market that will serve a modern enterprise economy. The
480
theme that runs through the complex package that we have put together is modernisation and an enterprise economy in which the private sector will produce the majority of the jobs and a more skilled, versatile and more appropriately rewarded labour force will be provided to serve it.
Mr. Dennis Skinner rose—
Mr. Martin Flannery rose—
Mr. Deputy Speaker (Mr. Harold Walker): Mr. Martin Flannery.
Mr. Dennis Skinner rose—
Mr. Flannery: You called me, Mr. Deputy Speaker.
Mr. Deputy Speaker: I misunderstood. Mr. Dennis Skinner.
Mr. Skinner: On the question of letters and training, will the right hon. and learned Gentleman refer to the letter that he has received from Mr. Sutton of Pinxton in my constituency who is complaining about the training scheme? He is 58-years-old and is just recovering from several operations for cancer. Having worked for 41 years underground and having been made redundant under the Government's miners' redundancy scheme, he was told to report to the local jobcentre with a view to taking part in the restart programme. Is it not a scandal? Does the right hon. and learned Gentleman not acknowledge that my constituent, Mr. Sutton, has told me to tell Parliament that
"To receive a letter like this is I believe an absolute insult, there can be no depths this Government of lies, deceit and hypocrisy will sink. This letter ought to be read out in Parliament to those Tory cretins, even then I don't think it would shame them."
That is the way in which this Government are reducing joblessness. They are doing it by sending insulting letters to 58-year-old redundant miners, this one having had several cancer operations during the last few years.
Mr. Clarke: I notice from the tone of his letter that Mr. Sutton of Pinxton is, like his Member of Parliament, a shy and sensitive chap who is upset by the letters that he receives. I shall of course consider the letter of Mr. Sutton of Pinxton. However, if he studied carefully the invitation that he received under the restart programme, he would find that he was being approached as a person who had been unemployed for more than 12 months to participate in an individual interview about circumstances that might enable him to return to work. If he is unable to take a job, that will be thrown up during the interview. The idea that, when we write to people like Mr. Sutton who have been unemployed for more than 12 months, it is justifiable for them to take offence is ridiculous. If he came to an interview and it was found that he had particular difficulties, he would be treated with sensitivity; and if it were found that, because of his cancer, he was entitled to other benefits that he is not at the moment receiving, no doubt he would be given advice as to how to claim them.
Mr. Flannery: Earlier in his speech, the Paymaster General referred to modernisation, modern industry and so on. Last week at this time I was waiting to speak under Standing Order No. 20 because I had just learnt that the Stocksbridge steel works in Sheffield had just been notified that 600 of the 2,400 jobs in the factory were to go. It had slimmed down, cut down, done everything that the Government wanted it to do, and now another 600 jobs

481
are to go, 25 per cent. of the labour force. Will the right hon. and learned Gentleman kindly explain to me how that can possibly help us in a very modern factory?
Mr. Clarke: The hon. Member will be aware that over the years there have always been jobs going in some places and jobs being gained elsewhere, lost in one industry and created in another. Of course, I shall look at the case of the Stocksbridge steel works but I also look at the way in which people in Yorkshire and Humberside, for example, are taking advantage of all the employment and training measures that I have been describing and I see how that part of the country has the fastest growth in the number of self-employed of any region. When we are talking about the number of jobs in the country, we are all the time comparing the jobs lost as a result of competition or technological change, on the one hand, with jobs gained elsewhere in a growing and more dynamic economy. The balance at the moment is favourable and what I have described is a package of measures to train our work force into the new jobs that are emerging at an ever-accelerating rate.
Perhaps I may be allowed not to give way for a few moments because, having described the package of measures and the philosophy underlying our approach to this problem, I was going to move on to the approach of the alliance parties. [HON. MEMBERS: "Where are they?"] What has happened is that while I have been giving way to these interventions the alliance representation in the House has actually halved. While I has having this interesting exchange about Mr. Sutton of Pinxton, we have been reduced to one solitary hon. Member from the alliance parties.
Trying to draw out some broad themes before I get involved any more in these individual arguments about constituents, factories and measures, I have tried to study the alliance parties' proposals which were brought up to date only this morning in The Guardian by the hon. Member for Stockton, South (Mr. Wrigglesworth) who tried to describe the distinctive contribution of the alliance parties to the whole question of employment.
At the moment the hon. Member for Stockton, South is somewhat stuck in a groove, trying out everything that he suggests with various computer models—he has a slight obsession with computer models—and the particular proposals that he puts through computer models have a familiar air about them. Sometimes there is a touch of infrastructure spending about them—that seems to be out of favour at the moment, compared with the Select Committee's interest in job guarantees. But the distinctive feature of alliance policies, so far as I can tell from The Guardian today, and the only distinctive feature, is that they are the only people still urging a statutory incomes policy as the key part of their measures. What they urge is the failed method of getting more market-based pay, which was the policy of the 1970s. If one reads the article in The Guardian, one sees that the approach of the alliance parties is to be a new payroll tax exacted on those firms which exceed a pay norm. Quite apart from the practicality of that, it is plain that the alliance parties are going back to the policing of individual pay settlements, company by company, across the country, with the only flexibility being those schemes given favourable financial treatment by the Treasury—an approach to pay and employment which failed quite sadly in the 1970s and which it seems to me quite ludicrous to bring back—
Mr. Donald Stewart rose—
Mr. Clarke:—at a time when our unit labour costs in this country are rising more slowly than those of our competitors. So, again, in the improving climate, the alliance contribution to equality is becoming particularly irrelevent.
What I will leave to the hon. Member for Kingston upon Hull, East to deal with in due course are those parts of the alliance policy which are plainly lifted from a somewhat watered-down version of Labour party policy. I see that the hon. Member for Stockton, South has revised the alliance commitment yet again on the figures. What he has now come up with is that the alliance parties will aim to cut unemployment by one million in three years at a cost of £4 billion. That is plainly cribbed from the Labour party's plan to cut one million in two years at a cost of, £6 billion. It is a curious measure of moderation by those who recently left the Labour party that, when asked to make a contribution, they look at what the Labour party is saying, tone it down a bit and present it with slightly modified figures.
Mr. Malcolm Bruce rose—
Mr. Clarke: I will give way in a moment. There still seems to be a little doubt in the alliance parties about who their employment spokesman is. They have only one in the Chamber at the moment so I will give way to him.
Mr. Bruce: I should inform the House that I am the alliance spokesman.
What is the Government's alternative in circumstances where average earnings are rising at double the rate of inflation and unemployment has stuck at 3 million? It is all very well to attack the Opposition parties. What will the Government do to ensure that the unemployed get jobs, if it is not by having an incomes policy to ensure that money is shared round fairly and evenly?
Mr. Clarke: What is happening at the moment is that pay is rising faster than inflation and we are also getting rapidly improving productivity and better performance, compared with the 1970s, for example, when these alliance policies were born. At the moment—and we must maintain this—unit labour costs in this country are rising more slowly than those of our major competitors. So at this stage still to be advocating what the hon. Member for Stockton, South was advocating, the use or a new tax
"as a means of influencing the climate of pay bargaining…which would not be the short-term centralised draconian policy of the past but a tax levied on firms with over 100 employees who reached pay settlement above the agreed norm",
would involve bringing back the whole machinery of vetting each and every pay increase at a time when it not only was unnecessary, but would be an inhibition of more flexible patterns of pay bargaining.
Mr. Donald Stewart rose—
Mr. Clarke: I will give way for the last time as we have yet another party seeking to intervene, but I must be allowed then to continue my speech.
Mr. Donald Stewart: I am grateful to the Paymaster General, because he has given way a good deal.
Since he has been reading The Guardian so assiduously, would he answer the poser set in one of its editorials a week or two back, dealing with wage levels? Why is it necessary

483
for the Government to contend, in an effort to increase production, that the people at the top must get exorbitant salaries and the people at the other end must have their wages cut?
Mr. Clarke: I have no recollection of ever advocating what the right hon. Gentleman has said, nor can I recollect any of my right hon. and hon. Friends doing so. If any did, I will agree that it was a rather simplistic and undesirable approach to pay.
Let us look at what the Labour party is proposing. When we look at the direction in which the Labour party is going, we can see the very stark choice that faces this country and the very clear difference in the vision that we both have of the kind of economy that we are trying to create and the kind of labour market that we want. If the alliance parties have little if anything new to offer, the Labour party always seems to me to be looking very firmly backwards to the economy and the labour market of former times. In everything that it has said, even when it does not put its documents in the Library, it emphasises the need above all for more public sector jobs, particularly in local government and sometimes in nationalised industries as well. It wants state-directed investment in industry and it continually hankers after various forms of planning agreements which it disguises in various ways. It wants a much more regulated labour market and much more legal control of everything, from minimum pay to statutory arrangements for leave of absence for family reasons. It wants to make it easier to strike again without legal requirements for pre-strike ballots and it wants all the old, legal immunities given back to the trade union movement. In short, what it wants and what it is planning for is an economy in which the state and the biggest trade unions are dominant again, with growing numbers on the public payroll being supported by the taxes of private citizens and private industry.
That same range of political views which is to be found now in the three different political groupings in the country found an echo in the European Community during our presidency, as we developed, as a British initiative, the Anglo-Irish-Italian proposal for an action programme for employment.
This debate is intended to take note of that action programme at the request of the Select Committee on European Legislation. The debate that we had in Europe between Governments, employers and trade unions was about more restricted areas of policy where European-wide action might be relevant in individual countries. The choice offered by this British initiative to Governments, employers and trade unions for discussion was about where Europe sees itself going as a society in work and whether our labour market is to be nearer to the pattern of the United States and Japan or to that of eastern Europe.
In the European Community, with all 12 Governments of the EEC, the decisions and the choice went in our favour. Last June we launched this action programme on our own but with the collaboration of the Italian and Irish Governments. As I pointed out at the time, the Italian and Irish Ministers with whom I found myself arguing were both on the Left of the coalition Governments in those countries—a member of the Irish Labour party and an Italian Socialist. By the time we reached the informal
484
meeting in Edinburgh, we had agreed on the principles of where we were going. Those Edinburgh principles were all agreed and incorporated in the action programme by the time we reached the end of the British presidency.
First, we agreed on the need to develop a more flexible labour market. Our aim was to increase the efficiency of the labour market so that it could respond more dynamically to the needs of employers and the market. We also agreed that there was less need for regulation of such matters as worker directors or leave entitlements of the kind that the Labour party continually advocates. We also agreed on more help for small and medium-sized enterprises and the promotion of the self-employed. We agreed on more training for young people and adults. The main benefit we get out of the European social fund at the moment is with our two-year YTS and we are now looking to help with JTS as well. Finally, we agreed on more help for the unemployed.
If the hon. Gentleman took a less parochial view of these matters he would find that there is great international interest especially in what we are doing in this country for the long-term unemployed—our restart programme, action for jobs, job clubs, and the help and advice that we are giving to every person who is out of work for over six months. Had the Opposition parties played any part in those European Council discussions and the agreement on that action programme, they would have been astonished at the irrelevance of their contributions. There was some participation by the British labour and trades union movement. I had to listen to shell-backed and old-fashioned contributions of some British trade unionists lecturing their European colleagues about this programme and trying to get it rejected. The programme was not rejected; it was agreed. The points that I have just mentioned, all of which were adopted, were suitably adapted to meet the needs of the other 11 countries. The policy of the British Government on employment is now the policy of Europe. That is hardly surprising when we look at the role we were able to play. A higher proportion of our adult population is in work than in any other member country of the European Economic Community or any major industrialised country in Western Europe except Denmark.
Since March 1983 more than a million additional jobs have been created by the British economy, which is more than in the rest of the EEC countries together. The Conservative Government in Britain have new ideas on employment. Our policies, which we agreed in this action programme with our European colleagues, will dominate the work of the European Council of Social Affairs Ministers from now on.
Mr. Prescott: I am grateful to the Paymaster General for giving way. Has he received the press statement that was sent to all hon. Members in the past few days from the European trade unions, which made it clear that they totally reject the flexibility arguments in this programme, which mean the deregulation of employment rights and services that they have seen in this country?
Mr. Clarke: No doubt some TUC representatives went out and got the ETUC to write that. I met the ETUC, the European trade unionists. They were parties to all those discussions. They were not parties to the final decision, which was a decision of the Council of Ministers.
The 12 Governments agreed on this programme. An intrusion of the British Labour movement would have

485
been an irrelevance to our discussions. We took that role because of our new ideas and the package of programme schemes in this country, which is now outrunning in new ideas those of any other European country, and we moved on recently with the package that we announced only a fortnight ago.
The two-year YTS is now to be guaranteed to all l7-year-olds in this country. For the first time no person under the age of 18 in this country need be unemployed after March of this year, unless they have chosen to be so. The restart programme, which gives individual help and assistance as I have described, is now available to everybody after they have been unemployed for six months, which is the time when they are in danger of becoming most disillusioned. We have moved on the new job training scheme, targeting on the under 25-year-olds but making available free training of value to everybody who has been unemployed for more than six months.
Mr. Patrick Thompson (Norwich, North): My right hon. and learned Friend has been speaking of European initiatives and discussions on restart and job clubs. Is he aware that since April of this year, when the new job club was started in Norwich, it has been so successful that there is now a second job club and the prospect of two more to follow? Is he also aware that, of the 113 people who have been through these job clubs, 93 have got jobs and that this 90 per cent. success rate must be attributable to this strategy and these plans?
Mr. Clarke: I am glad to say that we will soon have more than 400 job clubs and we are well on course to having 1,000 in a few months' time. We shall probably go beyond that.
Mr. Prescott: What about jobs?
Mr. Clarke: As my hon. Friend the Member for Norwich, North (Mr. Thompson) has just pointed out to the hon. Member for Kingston upon Hull, East, the whole purpose of the job clubs is to give people who have been unemployed for a very long time assistance in the form of free postage and telephone and also the guidance and motivation which gets them back into jobs. The majority do get jobs—about two thirds get jobs. These are people who have been unemployed. Over 60 per cent of them get jobs.
I am pleased to have caught the attention of the hon. Member for Kingston upon Hull, East, who sits there looking incredulous. More than 60 per cent. of those who go to job clubs, who are long-term unemployed, actually get themselves into jobs. If that fact bears in on the hon. Member for Kingston upon Hull, East, he might stop his automatic knee-jerk opposition to each and every proposition we put forward, a reaction that has been causing so much trouble. The third measure of the recent package we announced was the job training scheme, which will provide free training for people under 25. This measure will fill a real need, which was first thrown up when we went through our restart programme and began to offer a variety of options to those who came to see us.
Mrs. Elizabeth Peacock: Would the Minister, when making points about training, say something to the House about the TVEI scheme, which is excellent? Unfortunately, my local authority continues to turn down the offer of some £7 million which will benefit many young people in my constituency. However, I
486
understand that a meeting is to be arranged which, I hope, will persuade this local authority to change its mind and accept this sum of money.
Mr. Clarke: The behaviour of some Labour local authorities in relation to the offer of schemes, work experience and training for their residents at times has been remarkable but I am glad to say that the number still holding out against TVEI is tiny. My hon. Friend's local authority must be one of the last handful still refusing to participate and I am glad to hear that it is changing its mind. Large numbers of local education authorities are coming forward and seeking to take part as managing agents in the job training scheme, which I have just described as filling a gap in the range of services that we are able to offer through the restart programme.
We are expanding that programme as rapidly as possible in line with quality and in agreement with the Manpower Services Commission. We are finding the managing agents, we will find the work experience, and we will also find the trainees who are eager to take advantage of the scheme. Why is it—when we have discussed and described this package of measures and the results—that we get automatic opposition every time from those who seem to be speaking for the Opposition? It is quite obvious that they do not want to see unemployment continuing to go down in 1987, but they do not address themselves to what they would do in the unlikely and undesirable event of them ever taking power. Would they withdraw all these schemes? Would they withdraw the advice? I very much doubt it. So far the Labour party has consistently opposed everything that we have introduced. YTS and the community programme are described as skivvy schemes. Even the enterprise allowance scheme is described as a skivvy scheme. The hon. Member for St. Helens, North (Mr. Evans), who will be replying to the debate, has even promised to abolish the new workers scheme.
The reason we have continual opposition to training schemes is that the Labour party has a lack of new ideas of its own. Occasionally the ideas that come from the Opposition seem to reflect some of our measures. After Christmas the Leader of the Opposition tried to describe how the Labour party would get 1 million off the unemployment figures. He could get up to only 600,000. Of those, 300,000 were to be in training programmes; that sounded remarkably like the JTS which we were on the point of announcing.
This morning in The Guardian the hon. Member for Stockton, South, speaking on behalf of the alliance, said that its strategy would be
"to offer a job guarantee, including a crash programme of training and reskilling for those who have been out of work for a year or longer and are threatened with the scrap-heap."
That sounds like JTS but we have to wait longer for it.
I give a message to the Opposition parties that they should stop making these attacks on training schemes. Their obvious purpose is to obscure the fact that they do not have credible policies of their own. Whatever time scale of expenditure the various Opposition parties choose, they have no way in which to describe credibly how they will take 1 million off the unemployment register. If I believed that any of them could come up with a programme which would take 1 million off the unemployed figure, it would be my intention and that of my right hon. Friend to take advantage of it immediately and to begin to put it into practice. Such a reduction in unemployment is our aim as well, but the Opposition

487
parties are unable to describe a policy. That has given rise to their recent problems in coming forward with a credible policy to take 1 million off the unemployed figure.
I am sure it also lies behind the change in responsibility on the Labour side for presenting employment policy. I am surprised not to see the hon. Member for Dagenham in his place, given the new role he has to play. In The Times of 11 February we read:
"Mr. Neil Kinnock has given the key task of drawing up Labour's programme to cut unemployment to Mr. Bryan Gould, elected to the Shadow Cabinet for the first time in the autumn, and not to Mr. John Prescott, his shadow Employment Secretary. The appointment, decided by the Shadow Cabinet at its Bishop's Stortford summit in January, has not been officially announced for fear that it would be seen as a demotion or a snub for Mr. Prescott.…Mr. Prescott, although regarded as an assiduous and hardworking member of the team, has nevertheless worried some of his colleagues by making policy on his feet."
That seems to be a description of, for example, the 1 per cent. training tax which the hon. Gentleman announced in a casual speech at Knowsley only a short time ago.
Mr. Prescott: This issue has been raised several times. Perhaps I may be given a second to explain, because it is a fair point. First, hon. Members should not believe all that they read in the press. Secondly, the corresponding position in the Government of my hon. Friend the Member for Dagenham (Mr. Gould) is as Chief Secretary to the Treasury. As I understand it, every Department goes to the Chief Secretary to the Treasury to discuss the financing of its proposals. I do not see the Chief Secretary on the Government Front Bench. The proposal that my hon. Friend should be responsible for the overall financial package for all jobs was made by me at the Bishop's Stortford shadow Cabinet meeting six weeks ago.
I had spent most of my energies on that, but the report referred to stressed the local government contribution. Details have to be worked out for all sectors of the economy and it is normal for the Chief Secretary to the Treasury to be involved. The corresponding position in the shadow Cabinet is held by my hon. Friend the Member for Dagenham.
Mr. Clarke: If I may clarify the division of responsibility in our Government— [Interruption.]
Mr. Deputy Speaker: Order. Hon. Members must neither point to nor refer to persons in the Strangers' Gallery.
Mr. Clarke: The idea that the Chief Secretary's shadow is responsible for drawing up the Labour party's programme to cut unemployment is a curious definition of roles. It is obvious to those who have been observing the Labour party that the Gould committee, as it keeps being called by the hon. Member for Kingston upon Hull, East, is being called in to arbitrate between the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and the hon. Member for Kingston upon Hull, East about the package that they are unable to put together.
Mr. Ray Powell: On a point of order, Mr. Deputy Speaker. I seek your advice because 1 am not informed about what can happen in the Chamber. I listened to your ruling about not referring to or pointing to people who are not actually in the Chamber. I am wondering about the position when someone listening to
488
the debate can be seen by those who are sitting in the Chamber, especially when we know that that person has responsibility in another place. I wonder whether—
Mr. Deputy Speaker: Order. I shall bring the hon. Gentleman's wondering to an immediate halt. The hon. Gentleman has been here for a long time and he knows that my earlier ruling was based on the long-standing practice and convention of the House that we do not refer to persons in the Strangers' Gallery.
May I also remind the House that a large number of right hon. and hon. Members wish to take part in the debate. Interruptions and interventions are made only at the expense of other hon. Members. I have been reluctant to intervene for the same reason. But while I am on my feet I think that I should remind the House of the fact that the debate has to finish at 10 o'clock and that many people want to speak before it ends.
Mr. Clarke rose—[Interruption.]
Mr. Deputy Speaker: Order. If hon. Members persist in ignoring my ruling, I shall have no option but to resort to the disciplinary powers that are available to the Chair.
Mr. Clarke: Opposition Members are making a concerted attempt to stop my speech lest I get to the question of responsibility for policy on their side and exactly what their policy is. Given that we have had that tortuous explanation of how the hon. Member for Dagenham came into the act, let us see whether the hon. Member for Kingston upon Hull, East can shed light on what his policy will be, if, indeed, he remains the spokesman. He committed himself a long time ago to a programme to reduce unemployment by 1 million. As he knows—he acknowledged this in the interview he gave in "Weekend World" last Sunday—that policy must be based on an assumption that they will create 1·5 million jobs to hit that target.
We have already increased jobs by over 1 million in the last three years. The hon. Gentleman intends to create an additional 1·5 million jobs in two years. As he knows, every time he addresses himself to the subject, he has no idea in detail of how the policies of a Labour Government could achieve that. He has told us repeatedly over the last year or so that we will get more details. We were promised details for the Labour local government conference, but that came and went last weekend and we are still waiting. We were brought up to date last Sunday when the hon. Gentleman, in the interview in "Weekend World" with Matthew Parris, said that he would have everything sewn up within six weeks, and so we have six weeks to go. I found that reassuring. Describing the state of affairs in the Labour party, he said:
"The debate's well on. I've produced a pamphlet now…we've already got the semblance of a package."
The pamphlet is not available. It was two years ago that the Leader of the Opposition first geared up his friends in the local authorities to get their spending plans ready. One might have thought that, after two years in the job, Labour's employment spokesman would have come up with more than the semblance of a package. Here, to be fair, is an explanation of that. Last Sunday, Matthew Parris said that the hon. Member for Kingston upon Hull, East had been thinking about that programme for two years as the Opposition employment spokesman. The hon. Gentleman replied:
"The first year was industrial relations, I'm bound to say that was one formidable problem."

489
I dare say that the hon. Gentleman is right. Clearly, he is not the sort of man who can cross the road and chew gum at the same time, but he still had a year on the policy that he intended to put together.
We now know the broad outline of Labour's employment policy. We know that it will cost at least £6 billion because the right hon. Member for Sparkbrook has already conceded that. We know that it will mean increased borrowing and taxation, and we know that it will mean many more jobs in the town halls in particular, but we do not know precisely how many.
The hon. Member for Kingston upon Hull, East has accepted that local authority jobs could account for about one third of Labour's target, about 500,000 jobs. To be fair to the hon. Gentleman, I should quote verbatim the exchange between—
Mr. Allan Rogers: On a point of order, Mr. Deputy Speaker. The motion is to do with Government policies and its backlog of—
Mr. Deputy Speaker (Mr. Harold Walker): The hon. Gentleman is on to a fair point. I am beginning to wonder myself what relevance the Minister's remarks have to the motion. I hope that the Minister will address himself to the motion.
Mr. Clarke: First, Mr. Deputy Speaker, more than the first half of my remarks were entirely taken up with the European action programme and our measures. I was subjected to a constant stream of interruptions. We are also debating an amendment on the Order Paper tabled in the name of the Opposition.
Mr. Greg Knight: On a point of order, Mr. Deputy Speaker. Will you, Mr. Deputy Speaker, clarify the ruling that you have just given, because many of us take the view that because the Opposition have tabled an amendment it is quite right and proper—
Mr. Deputy Speaker: Order. The amendment has not yet been moved.
Mr. Clarke: With the greatest respect, Mr. Deputy Speaker, the amendment has been selected for debate and that is what we are debating. It is most noticeable that, whenever we stray on to the question of responsibility for Opposition policy, the Opposition make a concerted attempt to stop all discussion going further. However, we are talking about how we can tackle the problems of employment, training and unemployment. I am about to quote—
Mr. D. N. Campbell-Savours rose—
Mr. Clarke: I shall not give way. Labour Members cannot complain in one breath about the length of time that this is taking and then continue to intervene during my speech every two minutes.
Mr. Campbell-Savours: The Paymaster General is scared.
Mr. Clarke: The people who are scared, if I may say so to the hon. Member for Workington (Mr. Campbell-Savours), are most of the members of the Labour party, who do not wish to discuss the role of the hon. Member for Kingston upon Hull, East. Nor do Labour Members wish to discuss their policies or their alternatives to what we are putting forward.
Mr. Campbell-Savours rose—
Mr. Clarke: Mr. Deputy Speaker has just ruled that interventions must cease. I shall continue as concisely as I can by quoting the words of the hon. Member for Kingston upon Hull, East when he was describing where he stood on the issue of local authority jobs. Last Sunday Mr. Matthew Parris asked what the hon. Member for Kingston upon Hull, East thought was a real job. Mr. Parris said:
"Mr. Prescott, we mustn't let this remain obscure. You said that you thought about a third of the total jobs created needed to come from the area of local government. A third of those jobs is 500,000. You seem to be implying that that is the sort of ball park that you're in."
I shall read carefully the reply from the hon. Member for Kingston upon Hull, East. I have no doubt that this will not be interrupted by the hon. Member for Workington. The hon. Member for Kingston upon Hull, East said—
Mr. Rogers: On a point of order, Mr. Deputy Speaker. You recently ruled, on my initial point of order, that the Paymaster General was not addressing himself to the motion. He is still not doing that and he is still not talking about Government policies, as outlined on the Order Paper. Will you, Mr. Deputy Speaker, bring the Paymaster General to order again?
Mr. Clarke: I do not think for one moment that the hon. Gentleman has read either the motion or the amendment.
Mr. Thurnham: On a point of order, Mr. Deputy Speaker. Will you confirm that it is in order for my right hon. and learned Friend to speak to the amendment which has been tabled?
Mr. Deputy Speaker: It is the motion that has been moved.
Mr. Clarke: Interruptions are being made to try to obscure the perfectly fair quotation I was going to make from the comments of the hon. Member for Kingston upon Hull, East. I am surprised at the hon. Member for Rhondda (Mr. Rogers) leaping in to prevent me giving the words of the hon. Member for Kingston upon Hull, East. I have a transcript of what the hon. Gentleman said and I shall read it verbatim.
Mr. Campbell-Savours rose—
Mr. Deputy Speaker: Order. The hon. Member for Workington (Mr. Campbell-Savours) has heard the Minister refuse several times to give way.
Mr. Clarke: The hon. Member for Workington keeps interrupting because he knows that I am going to quote from the "Weekend World" programme. The hon. Member for Kingston upon Hull, East said:
"I'm saying that the third, I mean one and a half million, its estimated by the models to get a million off the register, if you fashion your package that more jobs are so designed that they come off the register, one figure of one and half to get a million off the register is an assumption that if you throw money at the problem it cascades down and the effect is a million come off the register if you create a million and a half."
Mr. Campbell-Savours: Just answer the question about the community programme.
Mr. Clarke: The hon. Gentleman should listen to the words of the Opposition spokesman because he continued:
"We're going the other way about. We're actually knowing what kind of jobs we actually want to create. We know what

491
the effect is likely to be on that register. It may not necessarily mean that you need one and half to get a million, but that's the kind of detailed work we're doing at the moment, but clearly if you're talking about a quarter of a million jobs in that area, that's a substantial part of any programme and if we can get more, then we will be delighted, but we're not going to create them just for jobs' sake, we are going to create meeting real needs. And that's the kind of work we're doing and that's why I can't be pushed into a position as to whether it's three hundred thousand or five hundred thousand—when we've completed the work we'll let you have the details in time for the election."
That is gibberish. We should send for the hon. Member for Dagenham to come immediately and explain it, because that is the job that he has between now and the Budget.
Mr. Prescott: It is clear that the Paymaster General does not understand what happened in that programme. The models referred to of 1·5 million to get 1 million off the exchanges assume that one simply puts money into the demand equation and one must create 1·5 million to get 1 million off the exchanges. I hope that that is simple enough for the Paymaster General to understand. Some jobs in construction, for example, are more directly concerned with the exchange and one can take them off the exchange, putting a lot of money into the economy, and hope that one gets I million off the exchange. One can plan that. It is called planning. That is what o Labour is doing and that is how we will get them back.
Mr. Clarke: We should get the pamphlet that the hon. Member for Dagenham was going to produce. We should get something soon that enables us at least to have that policy spelt out with sub-titles so that we can understand what language it is in and what it is aimed at.
Following my description of how the unemployment figures are improving, how we are creating real jobs, how we are creating an enterprise economy and how everything we have done is being criticised by the Opposition, my point is that they, in return, are wedded to a pledge to reduce unemployment by 1 million. That is incredible. It has not been worked out. It has not been agreed between them and they have not yet sorted out a spokesman who will try to present it.
We are certainly content to have the debate on real jobs. We see jobs of all sorts now coming along in industries and commerce. They are real jobs and we are performing better than other countries in the EEC.
Since March 1983, total employment in the United Kingdom has risen every quarter and in every region in England, and it has now increased by well over 1 million. That is the longest period of continuous growth in the number of people working since 1959, when the figures were first published. We must speed it up, and we shall do so by continuing the policies that created the climate to produce that level of employment growth, based on continuous economic growth. The motion commends our employment and training measures, which are part of this progress, and I commend it to the House.
5.20 pm
Mr. John Prescott: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'condemns the Government's policies which have increased unemployment by over two million to the highest recorded level in this country's history; further condemns the
492
Government for drastically reducing people's rights at work and pressurising the unemployed into part-time, low paid, low skilled, special employment schemes; deplores the dismantling of the country's training infrastructure with the abolition of 16 of the 23 statutory Industrial Training Boards and the closure of thirty skillcentres, contributing to the de-skilling of what is already the worst trained labour force of any developed economy; and calls for a reversal of these policies to produce a positive programme of high quality training and the creation of real jobs to meet the ever growing needs of an increasingly divided nation.'.
In their motion, the Government congratulate themselves on selling to Europe an
"Action Programme on Employment Growth",
in line with their policies. In other words, they are selling Europe to adopt the British model because it has won them, they believe, some success and will be good for Europe. Not much has been said about that success.
I welcome the fact that the debate is on our ground because it is about creating real jobs. We will not be pushed into the Government's timeframe for the agenda. We have said that those jobs will be spelt out in the most detailed work ever done by an Opposition party, which will be produced on 12 March. The debate today is not about Opposition policies but about the programme described by the Government in their motion as an
"Action Programme on Employment Growth",
about which the papers have been deposited in the Vote Office for hon. Members to see.
The Paymaster General assumes that the Government's policies of monetarism, the market enterprise, deregulation, privatisation and a reduction in taxes are the ones that have produced the successful model that they are trying to get our European partners to adopt. Presumably that is the Government's claim to success, although, as the Minister knows, the programme does not recommend any action that is binding on us or the European Community.
Socialist Ministers in the European Community tried to get the British Government to agree to financial measures that would have allowed money to go into investment and use public money to get people back to work. However, that proposal was not accepted by the British Government, although it is what we would have advised Socialist Governments to do. It has been done in Europe by both Socialist and Christian Democrat Governments, which is why their levels of unemployment are lower than they are in Great Britain.
There have been seven years of waste under the Government. Some £20 billion has been spent keeping our people idle on the dole, and £50 billion of oil money has been wasted rather than being put into investment and training or into industry and our manufacturing base. It has flooded abroad so that the City can make millions. They know how to make money, but they do not know how to earn it.
Mr. Hayes: Will the hon. Gentleman give way?
Mr. Prescott: No; I want to make my initial points.
The indictment of this Government—seven years of waste—reminds me of the 13 years of waste when the Conservative party was last in government for a long time.
Mr. Roger King: "You've never had it so good."
Mr. Prescott: That may be, but the country paid the price for those 13 years, in balance of payments, reduction in skills and investment, and in our industrial base. It is history, but the Labour party has always had to pick up the mess.

493
The Government inherited surpluses on the balance of trade and the balance of payments, and a manufacturing industry considerably stronger than it is now. After seven years, what is the result of the Government's policies? We have the highest recorded level of unemployment in the history of the country. It is among the highest in Europe. We have the highest rate of bankruptcies—up 170 per cent. since 1979. We have the largest number of people living beneath the poverty line in the European Community. We have a low level of investment in our economy and in manufacturing—17 per cent. below what it was in 1979. We have the lowest proportion of resources invested in training of any developed economy. We have a massive deficit in manufacturing. The Government inherited a £4 billion surplus in manufacturing, but we are now heading for a £7½ billion deficit, much of it being with European countries. We are heading towards a growing deficit in the balance of payments, which the Chancellor has told us he believes will be £1·5 billion in 1987. However, the OECD figure, which I am much more likely to trust, is that it will be a £3·2 billion deficit, despite the help of all the oil money. We still have a crisis in the balance of payments, the balance of manufacturing and the balance of trade.
Let us put all this on the record because our candidates will be reading this sort of stuff to make use of it in the election. [Interruption.] I notice that the Members who are not laughing are those in the marginal seats.
We also have the lowest level of average growth of the developed economies since 1979. Even the record on inflation, the success symbol of the Government, is dubious when compared to what it was in 1979. The argument about inflation is not an absolute one. In 1979 inflation in Britain was at 8 per cent. while in Europe it was 7·1 per cent. In 1986, our inflation was 3 per cent. and that in the seven OECD countries was 1·8 per cent. The Government's inflation record is even worse on a comparative analysis, although they fail to make that comparison.
I hope that the Paymaster General can understand the simplicity of the arithmetic, because that is the reality of the problem.
Mr. Richard Holt: Will the hon. Gentleman give way?
Mr. Prescott: I am not prepared to give way because recently the hon. Gentleman intervened in the speech of my right hon. Friend the Shadow Chancellor and suggested such a preposterous level of employment that he clearly does not understand the facts in his constituency.
The Government's policies have provided a greatly divided nation and the divide is not between north and south—that is far too simple. There is the divide caused by the inner cities, with some London areas with unemployment levels of 50 per cent. The west midlands has been reduced to the begging bowl of the regional economies, with low income areas. Increasingly, the country is becoming bitterly divided. Our labour force is the worst paid, the worst trained and enjoys the worst employment rights of any in the developed economies.
The Government want to impose this "successful" United Kingdom model on the rest of Europe. It is like a car salesman selling a Sinclair C5 to someone who has a Rolls-Royce. They are offering a lousy bankrupt model.
What has been produced after seven years of this economy? It is no coincidence that the other European
494
countries agree with the rhetoric of the European programme and say "Yes, let's have it, but do not impose the same model on our economy." They are happy for Britain to do that because they have more investment, more training, and more research and development, with the result that all their manufactured products are coming here and taking our markets, while we believe in this silly nonsense.
Mr. John Maples: I represent an inner city marginal seat. The hon. Gentleman has said that we have the worst trained labour force in Europe, and he has proposed a 1 per cent. training levy on gross turnover, which I understand would amount to £6 billion, the equivalent of raising corporation tax from 35 to 50 per cent. Has he made an exact calculation of the consequence of such taxes on manufacturing industry costs and competitiveness?
Mr. Prescott: The hon. Gentleman has raised a valid point. It is absolutely critical, and I shall certainly address it, but I should like to deploy my speech first.
We readily accept that the improvement of our economy, compared with other European economies, certainly leaves a great deal to be desired. It is amazing how the Government—with a history of fiddling more statistics than any other Government—make claims as the Paymaster General claimed, about activity rates, comparing Britain with Europe as part of the evidence of success. I am reminded that this is the first time that I have been in the same room with the Secretary of State since we appeared on a television programme. I wish I could face him at another time. It is amazing how statistics are used by the Government. They are beginning to believe their own propaganda.
The motion specifically relates to employment and training. I shall quote figures produced by the Library of the House of Commons. On the last occasion, the Paymaster General rejected the work of the Library. I have had the matter updated and I shall give him the figures. Most people accept that the Library is a good research facility. Hon. Members generally accept the information that it provides. The figures that I shall use have come not out of the fiddle department of Labour's statistics but out of the House of Commons Library.
I presume that most of the figures that the Paymaster General referred to relate largely to 1983. I do not know who was in power between 1979 and 1983 because all the references relate to improvements in 1983. The unemployment figures, even on the Government's fiddle figures—I shall stick with them for the moment—are 1·9 million more than in 1979, despite whatever improvements the right hon. and learned Gentleman talked about. That is a 164 per cent. increase. The Minister talked about an improvement in the unemployment figures in the past six months. During the other 90-odd months that the Government have been in power, the figures went up every month. They have found a few months in which the figure is going down—a lot to do with employment schemes.
Even the Department's employment figures have been changed to make them more favourable. l shall keep with the figures as they are. The number of employees in employment has fallen by 1·5 million. That is 7 per cent. If we take into account the great increase in part-time labour and measure that as full-time equivalents, the Library informed me that the fall is equivalent to 8 per

495
cent., or 1·7 million. That is 1·7 million fewer full-time jobs than in 1979, whatever we do with the figures. In reality, we are clearly talking, even on the fiddle figures, of 1·8 million fewer in work than in 1979. Even on the full-time equivalents, 250,000 more people were in work in 1979, when Labour left office, than there were when we came to power in 1974. That is the reality of the record.
Even the vacancy figures produced by the Department show that a considerable number are dependent upon the community programme schemes. The reduction in unemployment is largely due to the schemes. Even the vacancy figures are brought about by including the CP schemes because nobody wants them. They are advertised in shops, and are regularly put together for the vacancy schemes.
Mr. Kenneth Clarke: If the hon. Gentleman gets a brief from the Library, he must use it properly. He continues to assert the figures that he has described—the reduction in the number of those in work—when he uses figures for those in employment. He leaves out the self-employed and the growth in self-employment. It is no good the Labour party continuing to assert that self-employment does not count when more than one in 10 working people are in self-employment. The hon. Gentleman said that vacancies are accounted for by schemes. They are not advertised in that way. The community programme has been expanded. The hon. Gentleman said that nobody wants community programme jobs, but 250,000 people are in those jobs. It is not true to say that those jobs are untaken. The programme is being expanded. The hon. Gentleman gets hold of a perfectly good brief and, as usual, totally misuses it to try to denigrate the improving position.
Mr. Prescott: The Paymaster General again shows his ignorance of the facts. I repeat for him—because he has difficulty in understanding—that I talked about employees in employment. I carefully used the figures from the Library. Of course, the self-employed figures were vamped up and were not included in this form in 1979. Who put them in? The Government put them in. The revamping of the self-employed figure, as the right hon. and learned Gentleman knows, was considerably increased because the Government came to the view that, on an estimate of the market, more people were to be considered self-employed, so they further inflated the figures of the employed labour force. [HON. MEMBERS: "Rubbish".] It is not rubbish. The Minister made statements in the House to that effect. The Library makes those figures clear. I have the data. I shall pass it to the Minister if he wishes to see it. I suggest that the Paymaster General should visit the Library. It might be useful for him. He will get more honesty there than he gets out of his Department's figures.
A point is often made when comparing the levels of unemployment in Europe. If we look at the unemployment level in Europe and the OECD developed countries and the average for the 1970s and the average under both Tory and Labour Governments, we see that the average rose from 3 per cent. to 5 per cent., and Britain had the average level.
From 1979, something happened to make the British figures depart from the average. The average was 8 per cent. for the countries that I have mentioned. We went to
496
11·6 per cent. I asked the Library what the level of unemployment would have been if we had kept the OECD level. The answer was that there would have been more than I million fewer unemployed than there are now. The OECD has worked it out for us. Let us look at what happened to the British economy. There has been less investment in transport, schools, health—all the public services. None of the other European countries took that point of view. They did not adopt cuts in public expenditure. That is why unemployment in this country rose considerably. Perhaps if we adopt the European model instead of trying to sell the British model, based on that information alone 1 million more of our people would be in work.
We often hear from the Paymaster General and his boss about European activity rates. It is said that work activity rates in Britain are far higher. That is true—under past Labour and Tory Governments. Between 1964 and 1969 our activity rate average was 5 per cent. higher, but it collapsed at a faster rate than it did in Europe. Of course, higher unemployment in Europe reduced work activity rates, but the reality was always a 5 per cent. difference. Between 1979 and 1986, it was only a 2 per cent difference. There was a reduction in the activity rate from 65 per cent. to 63 per cent. Even that shows that the collapse in the activity rate has been greater because something significant happened in the British economy, and that was the election of the Tory Government.
Mr. Thurnham: The hon. Gentleman continues to speak about Europe, but he goes back only as far as 1979. Will he tell the House why, in 1978, a Labour Government submitted a paper to the European Community saying that the situation in the north of England was disastrous because of the general state of the British economy?
Mr. Prescott: The figures that I gave related to the periods from 1964 to 1979 and from 1979 to 1986. History teaches me that there were both Tory and Labour Governments during those periods.
For one reason or another, something significant happened in the British economy. One difference for which the Government make a great claim was the expansion in special employment measures. They rose from 250,000 to 750,000. That increase had a considerable effect in holding down the registered employed figures. The measures are primarily designed to do that.
Indeed, today's figures reveal the Government's panic about unemployment. They claim that, over the past five or six months, unemployment has been reducing. Much of the figures is due to employment schemes and, indeed, the restart programme. I have good evidence for that. A statement dated 18 December was released by the Employment Secretary, Lord Young. Referring to the last figures, he said:
"Restart is undoubtedly one of the major reasons for today's improvement in figures."
I do not suppose that any hon. Member would doubt that evidence, even if he had quibbles about the Library. The Paymaster General had better not quibble because he is under observation.
The figures show that unemployment has increased month after month, but now the Government claim that changes over two or three months are largely due to their policy of special employment measures. Panic has set in in the Government. They have set a target for getting unemployment below 3 million. They have carried out a

497
lot of fiddles and now they are creating a job training scheme which they claim will create 250,000 jobs in 12 months. That will have a clear effect in the jobcentres, but it has nothing to do with training or with providing jobs. However, it is to do with reducing the unemployment figures.
We heard from the Paymaster General about flexibility in business. The European unions have totally rejected that principle. They have seen what flexibility means in Britain where it has reduced health and safety standards. It has removed rights about unfair dismissal and legislation about wages and hours of work, and denies pregnant women the right to go back to employment. None of those things was asked for by business because the surveys carried out and published in "Barriers to Business" show that the main concerns of business men were the rate of interest and value added tax. The Government have done precisely nothing about those things that have contributed to the massive number of bankruptcies in the economy.
Government policy has nothing to do with improving conditions because deregulation is about increasing a part-time, low-paid market. That is what the abolition of the wages councils and the truck Acts was about. Britain is the only country in the world, never mind Europe, which has begun to abolish ILO obligations contained in the wages Acts and the truck Acts. No other European country has done that. The Government have done it because they want to reduce the wages levels that they are becoming increasingly worried about. They are concerned about people in low-paid poverty work. The CP schemes are designed towards that end.
We have heard about the number of people who have got jobs. I shall be in Norwich on Friday and I shall be interested to see the jobs that the Government claim for the people there. The figures for the restart scheme have been given in various parliamentary answers. People have gone through the restart scheme with about 336 interviews, and about 3 per cent. of them went into CP schemes, 10 per cent. went to restart courses, 1·6 per cent. went into training and less than 1 per cent. went to real jobs. The real jobs figure is 2,547. Time and again we have attacked the Government about that and they are conscious of how many people get real jobs.
I have just been given a letter sent by the Manpower Services Commission to employees. It tells them that when they fill out the new form about whether they have gone to a new job they have to say not only whether they got a job when they left the scheme, but guess about a job by putting a positive reply on the assumption that they might have got a job. The letter says:
"I should point out that the information given in the final column should relate to what will happen to the participant where a 'positive' outcome is known. Even if this is not likely to take place for some time this is the information which should he recorded, rather than the immediate destination which may be to return to unemployment."
The person who fills out the form might not have a job to go to, but in 12 months he might have one, and he will record that as if he were going into a job immediately. That is the kind of fiddle perpetrated by the Government to try to show that people are getting jobs. I shall hand the letter to the Paymaster General so that he can read it. On the CP scheme and the job training schemes, that is precisely the kind of fiddle that is going on.
The Government have made great claims about local authorities using taxpayers' money for propaganda. Is the
498
Paymaster General aware of how much taxpayers' money is being used to pay for propaganda for these schemes`' In 1983 some £5 million was paid for advertising, so called, and public relations. The figure has now gone up because between 1986 and 1987 some £30 million of taxpayers' money was used in this way.
I am reminded of one of the adverts on television which said, "Come with me for the job, Joe, we get the going rate." The going rate? He said in a speech yesterday that people should not expect the going rate for the job. However, we have heard on television and everywhere else about the going rate. At least the community programme paid a going rate related to some kind of wage. It averaged £55, but the job training scheme is tied to benefits. People on YTS schemes could be paid less if they went on a job training scheme. That is the first step towards the workfare that the Government have always wanted. It is the first step to a sort of poor law where people will be told to work for their benefits and that they will lose benefit if they do not take a job.
As the Paymaster General's gaffer has left the Gallery, I shall ask the right hon. and learned Gentleman about an article in the press. I do not believe everything I read in the press, but I should like to ask the right hon. and learned Gentleman where he stands. The Independent on Monday said:
"Lord Young faces battle over plans to cut dole.
Having cut people to working for their benefit, the Government now propose further cuts. The Independent says:
"Further cuts in unemployment benefit are being sought by Lord Young, the Secretary of State for Employment, despite strong resistance from senior ministers and backbench
Tory MPs.
But Kenneth Clarke, his deputy, is less enthusiastic".
Where does the Paymaster General stand? Is he in favour of giving people less than the benefit that they would receive under the job training scheme? I should be delighted to hear what he has to say.
Mr. Kenneth Clarke: That report is total nonsense. I am happy to assert that. The Times produced a long and tortuous explanation from the hon. Member for Kingston upon Hull, East (Mr. Prescott) which makes me think that we shall hear more in due course from the hon. Member for Dagenham (Mr. Gould). The hon. Gentleman has just finished an extremely long harangue which, as far as I can tell, attacked every measure by the Manpower Services Commission and the Department of Employment for assisting the long-term unemployed and for promoting training. Which scheme will the hon. Gentleman abolish? Will he abolish the youth training scheme?
Mr. Deputy Speaker: Order. I am sure that the Minister will seek to catch my eye when he wants to reply to the debate. The points that he is raising now could well be dealt with then. A large number of hon. Members want to take part in the debate.
Mr. Prescott: I shall come shortly to the right hon. and learned Gentleman's point about training. He had a great deal to say about the rates for the job. I have here a copy of a speech that he made yesterday and I shall read from it. It says:
"It has always seemed strange to me that everone doing apparently the same job should receive the same level of pay."
Is the Paymaster General listening to the point that he made to the nation yesterday? He said:

499
"It has always seemed strange to me that everyone doing apparently the same job should receive the same level of pay."
Does that mean the system will change for solicitors and barristers in relation to the automatic fees that are charged in their closed shop? The right hon. and learned Gentleman's suggestion raises a number of interesting points. Should the Paymaster General be paid the same rate as the Secretary of State for Employment who is in another place, is not elected and presumably does not have the same obligations as an elected Member? One also thinks of the Secretary of State for the Environment because we all know that he is fairly casual and comes in later than most hon. Members. Should he be paid as a hard-working member of the Cabinet?
The most offensive point in the Paymaster General's speech was that because the cost of living in the north is lower than in the south people there should be paid less than people in the south. A family in the north earns about £70 a week less than a family in the south. That feeds the arrogance of some people in the south who say that people in the north should live on less. It fits in with many of the lectures given to us about activity rates, that people should begin to earn less and should learn to live on less, live on benefits and the pay in job training schemes.
Mr. Kenneth Clarke: Will the hon. Gentleman give way?
Mr. Prescott: No. I have given way once. The right hon. and learned Gentleman can sit down.
Government policy reminds me of Victorian values. It takes us back to the board of guardians, workfare, making do without training, low pay and exploited labour. That is what it is all about. It is sheer arrogance for Conservative Members to believe, having let the City free so that the wealthy will work harder to get wealthier, that low-paid people should be paid less because that will make them work harder. That is the Government's ethic and thinking.
The problem in this country is not high wages; it is low investment. There is low investment in machinery and in training. When the Tory party came to power the right hon. Member for Chingford (Mr. Tebbit) made it clear that the Government would dismantle the training structure. In November 1981, he said that the training requirement of the sectors concerned could be met effectively on a voluntary basis at less cost and with less bureaucracy. We have seen the evidence. Sixteen of the 23 industrial training boards were abolished. Thirty skillcentres were abolished. It is fair to ask, after six years of this Government, what has happened to training?
I shall not quote the tremendous amount of information that is available on the collapse of training of all kinds. I shall quote the one body from which the Government get their evidence, the NEDC. Two weeks ago the NEDC paper made it absolutely clear that the training skills of our people and the shortages of all kinds of skills have increased quite considerably. The NEDC mentions every kind of technology through the traditional industries. I shall not quote the paper as there is insufficient time. [HON. MEMBERS: "Read it."] I will read it if that is what hon. Members wish. It states:
"Current shortages include some which industry should have predicted and some which were identified and unsuccessfully addressed. The shortages, for example, of professional engineers, computer and IT skills, multiskilled
500
craftsmen, and people with managerial and accountancy skills all fall into these categories. Beyond that there are also surprising and recurrent shortages in the traditional skills eg construction where industry is not bringing on enough skilled apprentices, nor allowing access and progression to operatives or adult entrants…there is a low level of awareness and urgency in many firms and organisations of the need to develop these massive resources…A low skills base affects the quality of the UK's goods and services and of our ability to compete in technically demanding markets."
The decline in apprenticeships and in all forms of training has been pointed out by the NEDC.
Perhaps we should consider the resources expended on training. A report produced by the Manpower Services Commission led the chairman of the MSC to suggest that the British labour force was a load of thickies. That is not the word that I would choose, but I agree that it is the worst trained labour force of any developed economy.
It has been like that for decades. It did not start in 1979, but it was the Tory Government in the 1960s who introduced training boards to improve training skills. The belief that if we removed the bureaucracy, the levies, and the delivery mechanisms it would lead to more training has not come true. Those training boards have now been supplanted with YTS.
Even the much reduced apprenticeship programmes run by employers are financed by YTS money. They are no longer additional to it. Industry is spending one-fifteenth of 1 per cent. of turnover on training—about £500 million. Most of our competitors spend about 1 per cent. of their turnover, which is the equivalent of £3·5 billion. Some spend as much as 2 or 3 per cent. of their turnover, according to the NEDC report.
In reality, we do not spend anywhere near enough on training. Since controls have been removed, we do not even spend as much as we did in 1979, when we spent about 50 per cent. more. Even though there are training boards and levies, 95 per cent. of companies are exempt from paying the levy. As a result, training has collapsed. In the construction industry about 50 per cent. of companies are exempt from paying the levy. If our companies spent as much time and energy training our people as they do in finding ways to get round the levy and invested in training our people properly, we would be able to do something more about growth in our economy to deal with those problems. It is a searing indictment of British industry that it does not invest in our people. The evidence is clear to all. The NEDC, the Manpower Services Commission and other bodies make it clear that we do not invest enough money in training our people.
All companies have the responsibility to contribute towards training because training is an investment, not a cost. The problem is that British industry treats training as a cost. Companies, big and small, have been avoiding their obligations. One company that the Government claim is a success is Jaguar. But how much does the Jaguar company spend on training? It spends only 1 per cent. of its turnover. The same is true of Rolls-Royce. That is the reason for their success, of course.
I warn industry that it cannot afford to allow the Government to do that, because they have washed their hands of the skills of the people in this country. The Government have a responsibility to find a financial framework to deal with the problem. The Government should ensure that people have enough skills. The Government have relied upon the Manpower Services Commission and the job training scheme.

501
The Paymaster General was quite wrong to inform the House that the TUC fully endorsed the now job training scheme. Most of the commission members made it clear that they thought that the upper limit would be 55,000, but the Government suggested that there would be 110,000 places. I quote from a letter that I received from the TUC yesterday in which it says:
"TUC commissioners should make it clear at the next Commission meeting the TUC's absolute insistence that the training offered must be of good quality and a target/upper limit of 100,000 places is entirely unrealistic."
The TUC believed that the limit should be 58,000. That was generally agreed by the commission. The TUC suggests a lower number because it believes that otherwise there is an insufficient quality of training. The TUC believes that we will he pushing too much under the system in that way.
We have evidence of that. The report by the Comptroller and Auditor General published yesterday made it absolutely clear that money is being wasted in our training programmes because we are trying to force to many places through the system in the manpower training. The MSC has not got enough money to do the planning. [Interruption.] The Government had an awful lot to say about the Audit Commission's report on local authorities, but they have not yet said a word on the report by the Comptroller and Auditor General which deals with the Manpower Services Commission and training,
The Government made statements before the Audit Commission's report was published. We have already heard Lord Young in the other place say that we must wait to study the report. But that did not stop Ministers commenting about the London authorities before the Audit Commission report was ever published.
Mr. Kenneth Clarke: If the hon. Gentleman reads the report — he has not as yet read from any of these documents in a reasonable way when he cites the figures — he will discover that the report concedes that the adult training strategy introduced by the MSC is an improvement on the old TOPS scheme. It suggests ways in which better value for money might be obtained. It also refers to dates two years ago, and a great deal has been done since then. The chairman of the Manpower Services Commission will be giving evidence to the Public Accounts Committee about his reaction to the criticism. The report is, on the whole, favourable and in line with what we are doing. It is quite wrong of the hon. Gentleman to make such remarks.
Mr. Prescott: I ask the Paymaster General to read the report again. However, I shall give him one point that is relevant to the TUC's opposition to the programmes under the job training scheme. The qualifications that it gave for new resources was that they should be limited to about 58,000 and that there should be a topping up amount to the allowance. These were not met by the statement. The right hon. and learned Gentleman must not persist in saying that the TUC totally endorses his programme. It does not, and the TUC made that clear in writing to me.
The Comptroller and Auditor General made it clear that most employers did not know how many skills there were or even what they wanted. That is deplorable. It is said that nobody knows what is needed in the market. The Manpower Services Commission wanted to bring in a computer to deal with that problem. However, the
502
Comptroller and Auditor General pointed out that there was not enough money available, and the programme was cancelled. Yet the Paymaster General says that all his programmes can be financed with the same amount of money. But no new resources are available. That is one of the complaints made by the TUC and other bodies. It is nothing to do with quality training; it is skivvy training. It has more to do with reducing unemployment and the figures involved. It has nothing to do with training adult people.
Mr. Kenneth Clarke rose—
Mr. Prescott: I am not giving way.
Let us face it: the Government through their programme are asking Europe to adopt the British model. Why should Europe adopt our collapsing economy, which has the lowest investment, the poorest trained labour force and a manufacturing industry that is declining faster than that of any other European country? We' have a skill shortage. That is the state of the British economy after seven years of this Government.
But there is an alternative, and the Paymaster General is getting very worried about it. We know that we can return people to work. The Europeans have done it with more success than we have, and we may have a lot more to learn from them than they have from us. In order to reduce unemployment, we need to invest in our economy and to train our people. That will mean Government intervention. The market will not do that. We will put the alternative to the electorate.
It is hypocrisy to assume that the Government's model is the one that Europe should adopt. If anything, the European strategy is more in line with the Labour party's proposal. The electorate will soon know that and will make the obvious choice.
6.1 pm
Mr. Robert Rhodes James: No doubt the House will be grateful for that thoughtful and sensitive intervention by the hon. Member for Kingston upon Hull, East (Mr. Prescott). I have been trying to think of something on which I can congratulate the hon. Gentleman. All that I can think of is that ray wife was born in his constituency, and until an hour ago she was rather proud of it.
One of the first rules of this House is that no hon. Member should be involved or interested in another constituency. The second is that a repetition of an old speech is tedious. After all, who reads old speeches? I intend partially to disregard those perfectly reasonable and valid rules.
On 5 March 1980, when you, Mr. Deputy Speaker, occupied a different position, I made a speech on employment and training opportunities in which I strongly supported the record of the Conservative Governments of 1951 to 1964, and the life, aspirations and work of Harold Macmillan. That speech greatly upset my Front Bench. It included remarks such as this:
"there is a level of unemployment in this nation which is absolutely unacceptable in a decent society". — [Official Report, 5 March 1980; Vol. 980, c. 548.]
I concluded with other words critical of my Government and tried to make the point that, while my constituency may prosper, I represent my country.
That speech immediately followed a speech by the then Member for Truro, David Penhaligon. Others have paid

503
their tributes to him. I shall simply say in public that he was the kind of colleague who makes one feel honoured to be a Member of Parliament. I feel the same about Guy Barnett.
Ms. Clare Short: Did the hon. Gentleman ever say that to him when he was alive?
Mr. Rhodes James: Yes, he was my friend, and Guy was joint chairman with me of the United Nations parliamentary group.
In 1980 the problem was grave enough, with 1·25 million unemployed, and it became more grave. I continued — I am afraid without much success in my own party — to try to explain and explore what was happening. I tried to draw the attention of my right hon. and hon. Friends to the problem.
There has now been a substantial change in attitude, but we still face the difficulty of trying to interest politicians in the long term. They are fascinated by tactics and immediacy, but they are uninterested in strategies. To look a week ahead is a quantum leap for many of them, although my right hon. Friends the Secretaries of State for Employment and for Education and Science are different from the common run. We must stop thinking solely in terms of tactics and immediacy.
We are suffering from unnecessary unemployment and from the depression of our education standards. The words "standard" and "quality" have become like the word "elite". People criticise and deride them. Our children have the longest period of schooling in western Europe, yet we have produced too many people who are illiterate, innumerate and massively ill equipped for the real world. The amount of money we spend on remedial teaching and training is an area where we have failed— [Interruption.] All of us are involved in state education. I send my children to state schools and I had no formal education before the age of 12. Some would say that it shows.
We are dealing with the most appalling scandal and paying a high price for the years of the permissive society —the years that the locust hath eaten. We had another lost generation then because we forgot our standards and our quality.
The link between education and employment is close and strong. I have been banging this drum for many years and have usually been met by a sceptical silence from Opposition Members. The strategic part of employment policy is not to do with YTS, job clubs or restart. Important and admirable though such schemes are, they are temporary. The strategic part of employment policy lies in massive investment in schools and in teachers' career and salary structures. In higher education, it lies in student support, civil research and academics' salaries. We must look to the future.
I strongly support the recent proposals of the Government. My only criticism is that these welcome and important resources should be available within a shorter time scale — perhaps two years rather than three. The foundation for our long-term prosperity and success must be laid now.
Finally, I must apologise to the hon. Member. for Kingston upon Hull, East. I had no wish to offend him in my rather quick response to his speech. I am in no position
504
to criticise or sneer at any hon. Member. It is just that I feel very strongly about this subject. I obviously got it wrong.
Mr. Prescott: I accept the hon. Gentleman's generous apology.
Mr. Rhodes James: I am most grateful.
I conclude by appealing to my right hon. and learned Friend to look hard again at resources for education at all levels, because education is the foundation of the future of our children and of our nation.
6.9 pm
Mr. Malcolm Bruce: I shall first respond to the tribute paid to my colleague, Mr. Penhaligon, by the hon. Member for Cambridge (Mr. Rhodes James). In a sense, I stand in his shoes and feel very much overshadowed by that fact. I know that the House misses him, but it will understand that my party misses him much more and we appreciate the tributes from both sides of the House.
I looked at the document twice and I found that it rather resembled the Soviet constitution. It was a model of what appeared to be the right thing to do. However, I feel that it should be judged ultimately by its execution. My remarks will really be directed towards the areas in which I feel that the Government have fallen short or are likely to fall short in terms of their current initiatives. The document also falls short in a couple of areas.
What it says about the long-term unemployed is inadequate. The alliance parties have said that our objective is to give a guarantee to the long-term unemployed. We make it clear that that is an objective and we appreciate that converting it into reality cannot be achieved in 24 hours. Nevertheless, we have to make a special effort to give the long-term unemployed a real prospect of getting back to work. I do not intend to snipe at restart, but the proportion of people who have gone through the restart programme and then obtained a permanent job still seems very small. Job clubs have also been mentioned, but although they are good for individuals they do not create any new jobs.
The document signed by the Paymaster General talks of the need for employment protection. I wonder how that squares with the sweeping away of wages councils and the removal of protection from an area of the economy where it is absolutely essential—protection not just for the low paid but for employers who want to offer decent wages and do not want standards depressed to what can only be called sweatshop conditions.
We were all a little taken aback by the comments of the Paymaster General yesterday following his Peat Marwick lecture. The press release that I read sounded reasonable in the sense of advocating greater flexibility, but the specific things that it was hoped to sweep away were radical in the extreme and I do not believe that the Paymaster General seriously thought that his stance was likely to provoke a widespread positive response from those who represent people in a negotiating situation. I do not have the exact words, but the Paymaster General should consider what he said in subsequent television interviews. He gave the impression—if he did not say it in so many words, the words that he used amounted to the same thing—that people in the regions of England and

505
in Scotland were paying themselves too much and should pay themselves less so as to attract investment and thus create jobs.
I am surprised at the Paymaster General using such language because it is not in character. He knows that wages and employment do not correlate as simply as that. Investment decisions, why companies locate in certain areas and why some expand and some contract, are all affected by many circumstances of which pay is only one. The counter-argument is that costs in London are now so high that firms should be moving out and individuals seeking to leave London to go elsewhere where the cost of living is lower, but in fact people and firms are moving into London despite the substantial premiums and people are not moving out of London because there are no jobs to move to. Indeed, increasingly the best jobs are concentrated in London, thus draining talent and enterprise away from other regions of the United Kingdom.
Mr. Andrew Rowe: Did the hon. Gentleman see that arch-priest of the London weighting allowance, Mr. Clive Jenkins, castigating my right hon. and learned Friend the Paymaster General this morning for suggesting that it might be worth having differential wages in different parts of the country? Yet has nct Clive Jenkins spent most of his trade union career negotiating substantial London weighting for his members?
Mr. Bruce: I shall not respond directly to that, but I will make an important point relating to my own constituency. The most recent surveys available show the cost of living in Aberdeen to be the same as the cost of living in London and the south-east of England. Yet our pressure to secure some sort of weighting allowance for Aberdeen has been thoroughly and firmly resisted by the Government in every area. There is a relevant and pertinent point behind the hon. Gentleman's intervention, but I suggest that it shows simply the complexity of the system and, in my view, the over-simplistic solution that the Paymaster General sought to offer yesterday.
Another area in which I support the remarks of the Paymaster General, as far as they go, and feel that the Labour party is boxing itself into a serious blind alley relates to the exchange that took place over the number of people in work and the relevance or irrelevance of the self-employed and small businesses. People in the Labour party have to face up to a certain reality—that the only job growth taking place in the United Kingdom economy, or for that matter in the economies of most of the developed countries, is among the self-employed and small businesses employing fewer than 20 people. If the Labour party does not recognise that fact and work to realise the potential of that enterprise, it will never achieve any of the targets that it claims for its programmes. In fact, the Labour party is interested in creating jobs only in areas under the control and manipulation of the public sector. Although some of those jobs are relevant, the Labour party must recognise that in a mixed economy it has to be flexible and recognise that free enterprise and small businesses are a crucial sector which must be backed.
Mr. Rogers: How does the hon. Gentleman reconcile his remarks about growth occurring only in the small business sector with the Government's constant claim that they are creating jobs in all sectors of the economy? I
506
noticed the Ministers nodding when the hon. Gentleman said that because they were hoping to make a cheap point against us.
Mr. Bruce: I am not sure that it is my job to answer for Ministers. I am sure that the Minister who is to reply can answer for himself in due course. All I am saying is that we have to create new jobs in the manufacturing sector and that new jobs are indeed being created.
Mrs. Peacock rose—
Mr. Bruce: I am sorry, but I cannot give way too many times.
The net growth is coming from the small business sector, so I and my party are concerned to support measures that will expand that sector. We are not critical of what the Government are doing, as far as it goes, but we should be going much further down that road. The evidence that can be seen—which, as I have said, is a criticism of the shortfall — shows that one of the problems is that the take-up of the small business schemes being supported by the Government varies regionally.
With regard to the problems affecting Scotland, I believe that if the Government have any pretensions about holding seats in Scotland they must start talking about unemployment in a way that shows that they understand the seriousness of the problem north of the border. The underlying unemployment trend in Scotland has been steadily upwards and my constituency has the highest increase in the rate of unemployment in the United Kingdom. I am not a pessimist about that in the long run, but it is a real problem.
One of the problems in Scotland is that we have the smallest percentage of small businesses and self-employed of any sector of the United Kingdom economy. If we can turn that round, we shall mave made a significant contribution to dealing with unemployment.
The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): The hon. Gentleman is right to say that there is a regional variation in the Government schemes available for small businesses. In fact, there is discrimination in favour of Scotland, the north-east, the north-west and a small part of the east midlands because of the business improvement services. I am sure that the hon. Gentleman welcomes that, as I do. There is no way in which we would be anxious to introduce such a scheme, with EEC support, in the south-east. I am sure that the right hon. Gentleman agrees on that.
Mr. Bruce: My point is not that I disagree with what is being done, but that a great deal more needs to be done. I suspect that more could be done to help existing businesses to develop and expand rather than simply creating new businesses, many of which fail within the first year. I am sure that the Minister has had representations from many small businesses. He will therefore know, as I do, that people resent the fact that there is help available to get into business but it is not always available to help people stay in business and to grow and expand in employment. That is an area in which a great deal more could be done, and my party is addressing itself to finding new ways to stimulate employment.
The problem that should and could be addressed by the Conservative party is its attitude towards small businesses. I exempt the Minister from that as I believe he is committed to them. I refer to the Prime Minister's

507
comment that Westland helicopters is just another small business. Her definition of a small business as one which employs 200 people shows a lack of understanding of what is really meant by the term "small business", which is one that would employ between one and 20 people. We need to do a great deal more to encourage further development in that area. I am not saying that the Government's schemes are not welcome, but simply that there are not enough of them and that they are not adventurous enough.
The main problem which we face right now and which the Government face, if they are at all honest with themselves, is that after seven and a half years of Conservative Government the unemployment figure is stuck at 3 million and when one allows for the 1 million people on schemes it is really a great deal higher than that. The Government have announced the expansion of the JTS scheme, which is clearly designed to take the unemployment figure to below 3 million, but the underlying trend is not downwards and there is no evidence that the Government have any solution that will lead to the creation of a sufficient number of long-term jobs.
The Paymaster General sneered at the Labour and alliance parties for putting forward a programme that would reduce unemployment, on a costed basis, by about 1 million. He can afford to do that because he is in government, but the British people will judge the Conservatives not on what they say they will do in the future, but on their record over the past eight years. That record shows not only a massive increase in unemployment, but that unemployment is stuck at a level significantly higher than it has ever been and higher than virtually all our competitors. For the most part, unemployment has been kept at its current level by the expansion of schemes, some of which are useful to individuals and contain valuable training elements, but most of which do not lead to the creation of sufficient long-term jobs in any sector of the economy. The Government's failure to address that problem has lost them the confidence of people in many parts of the United Kingdom.
The Paymaster General criticised the alliance parties for putting forward an incomes strategy for controlling earnings, but it is folly for the Government to pretend that they do not have an incomes strategy when the Paymaster General advocated his own incomes strategy only yesterday when he suggested that people in the poorer areas should accept lower pay. If that is not a reference to an incomes strategy, I do not know what is.
The Secretary of State is trying to duck the fact that average earnings are rising by 7·5 per cent., which is twice the rate of inflation. Unit costs may be falling, but the basis for any future expansion is not encouraging because a significant increase in the number of jobs in this country cannot be achieved without an incomes policy or refuelling inflation. We are honest enough to identify that as a real problem that any responsible Government should take on board. We know the risk of expanding the economy by generating inflation. We believe that the Government know those risks and therefore will not expand the economy and create jobs. Worse than that, they are going for the obscenity in the current climate of considering a massive reduction in taxation rather than stimulating the creation of new jobs. My party accepts that to do both
508
would be ideal, especially for a Government about to call an election, but a Government who chose between one or the other without having stimulated the economy would rightly be indicted if they made the wrong choice.
The Government are in severe danger of making the wrong choice, not just for themselves but for the country. If they wanted to carry the British people with them, they would recognise the need for positive and constructive measures to deal with unemployment and to improve services. That should be coupled with a policy designed to keep inflation under control so that we do not throw away the stability that we may have in other sectors. That is what the British people are looking for, but there is not the slightest sign that the Government have any such policy.
As I said at the beginning of my speech, the document reads well, although it contains one or two Thatcherite themes, which the Minister doubtless insisted on as his contribution to securing unanimity. But it is a long way short of what is actually happening and if its aims are not achieved there will be no significant reduction in unemployment and there will not be the return to work and prosperity for which people are looking. Training schemes are fine—in this country we are unskilled and inadequately trained—and I welcome those training elements that work within the Government's schemes, but it is pointless to throw money at training schemes unless we get beneficial results from them and proper jobs at the end of the day—and the Government have no strategy for achieving that.
6.25 pm
Sir Philip Goodhart: Unlike the hon. Member for Gordon (Mr. Bruce), the hon. Member for Kingston upon Hull, East (Mr. Prescott) is a competent partisan politician. I am not entirely surprised that during his long speech he made no reference to the billions of pounds that the Paymaster General and the Secretary of State have obtained from the Treasury for our training programmes. I am not at all surprised that he could not find it within him to say a single good word about any of the training programmes that have been introduced by the Government.
However, I was slightly surprised that during the hon. Gentleman's long speech, most of which was devoted to training problems, he made no reference to the fact that the technological revolution, which we are in the middle of, is immensely destructive of skills. Any sensible training policy must recognise that we are in the middle of a period when the need for many traditional skills is fast disappearing. After all, the strikers who have just left the picket lines at Wapping thought that they were striking against Mr. Murdoch. However, we all know that they have been striking against the technological changes which have made their long-acquired skills totally redundant. That has happened elsewhere.
Twenty years ago it would have seemed unimaginable that a television repair man would ever be short of work. However, now, because of the increased reliability and complexity of television sets, there is no need for the television repair man in the way in which we imagined that there would be 20 years ago. In the aftermath of the great freeze, it might seem foolish to predict that there may soon be a surplus of plumbers. However, because of technological changes in the building industry, I suspect that that may well happen by the beginning of the 21st century.

509
When Opposition Members talk about long apprenticeships, they have got it wrong, and when the Government emphasise the importance of short, modular training schemes, they have got it exactly right. About 18 months ago my hon. Friends the Members for Banbury (Mr. Baldry) — I am delighted to see him in the Chamber—and for Broxtowe (Mr. Lester) and I put forward a proposal in a pamphlet suggesting that one way in which the flexibility of training might be improved would be to introduce training vouchers. I am glad that the Government are moving some way in that direction.
We argued that an essential element in that was that no unemployed person who was willing to undertake training should lose benefit. I am glad that the Paymaster General has accepted that principle in the admirable new job training scheme. It is entirely right that no one should lose benefit when he is willing to undertake training. The Government's new scheme received scant thanks from the Opposition, but I welcome it.
However, the Government have not yet made sufficient use of our universities or polytechnics for training programmes. In the past few months the Secretary of State for Education and Science has eased the squeeze on our universities and polytechnics, but the extramural departments of our universities may well have to cut their work. Several of my constituents have written to me drawing attention to the financial problems faced by the extramural department of London university. We should not cut those departments; we should seek ways to harness their skill and capacity to assist our national training programmes.
We are supposed to consider European Community document No. 10119/86 in this debate. The Wellcome laboratory in my constituency has recently made great strides in anaesthetics. When I read many EC documents, I find them as mind-numbing as some of the products from the Wellcome laboratory. Part of this document, too, was mind-numbing, but one paragraph riveted my attention. It advocates
"the provision of improved information and advice about employment opportunities throughout the Community, so as to remove obstacles to movement between Member States, using as appropriate the SEDOC system."
I note that one of the principal authors of the document is the Irish Minister for labour and that one problem at present is the rapid movement of the Irish unemployed to the United Kingdom.
For the past few years, Dublin has had a Lib-Lab Government who follow a policy of high Government spending buttressed by high taxation and a public sector borrowing requirement of 15 per cent. of gross national product—the shape of things to come if we have a Lib-Lab Government. The result of those policies has been a national unemployment rate of 19·6 per cent., soaring inflation and the emigration of 100,000 young Irish people to the United Kingdom, many of whom have gone straight on to our unemployment rolls. If they had not been forced out by the Lib-Lab Government in Dublin, the fall in our own unemployment figures would have been sharper and we would be substantially better off. When the Minister deals with the continued implementation of the European employment initiative, I hope that he will ignore the instruction to him in the document because we do not wish to see a greater flow of unskilled, potentially unemployed workers coming to the United Kingdom.
510
It would be churlish of me to end on a note of discord. We should congratulate the Government on their record on training and job creation over the past year.
6.35 pm
Mr. Ron Leighton: It is a great pleaure to follow the hon. Member for Beckenham (Sir P. Goodhart). His knowledge and interest in these matters are well recognised in the House and he makes a valuable contribution to the Select Committee. He also regularly writes pamphlets which we all read with great interest.
Today, we are debating unemployment and training — an area where the Government have failed. In my constituency, unemployment has risen by 300 per cent. since 1979, so the Government's failure is obvious and glaring. If Labour "was not working" when unemployment was 1·3 million and falling, what have we to say about this Government with unemployment at 3·3 million a year or, on other reckoning, about 5 million? It is an appalling waste of people's lives and economic resources. The dole queue costs about £20 billion a year and lost production costs about ·30 billion. Such economics is crazy.
The tragedy is worse, deeper and longer lasting than in the 1930s, yet the Treasury Bench does not recognise that. The Government show no remorse and certainly no self-criticism. The Paymaster General is not good at self-criticism. He has not apologised to the millions of people whose lives have been blighted; instead, he portrays a dream world, a fantasy land, where everything is for the best in the best of all possible worlds. He even suggested that our policies were the envy of the world and that he is leading the rest of Europe
We are told that an EC document is relevant and I, too, have looked at it. It appears that in November the Paymaster General wrote to his right hon. and learned Friend the Foreign Secretary. I am sure that the House is well able to contain its excitement at that news. We need not waste any time on the letter because it was just a series of cliches and platitudes. For the British Conservative Government to have the effrontery to talk about giving leadership on employment to other countries is mind boggling. Their only expertise is in the production of the biggest dole queue in Western Europe.
Mr. Kenneth Clarke: No.
Mr. Leighton: I repeat, the Government have produced the biggest dole queue in Western Europe. If the Paymaster General can tell me of a country in Western Europe which has a smaller dole queue than we have, I shall readily give way. He does not appear to wish to leap to his feet.
Mr. Clarke: I imagine that the hon. Gentleman is thinking in terms of absolute figures. In percentage terms, our unemployment is about average for the European Community and well below that of several other countries.
Mr. Leighton: I beg to differ. The Paymaster General is wrong on that, and I am frightened that he should be so misinformed. I shall write to him on this and also give him some figures later in my speech. Perhaps it is his attendance at those awful EEC meetings that causes him problems. I commiserate that he has to put up with those meetings; perhaps they have affected his judgment.
If we are to find a solution to our maladies, it will be by our own efforts and not through the Common Market.

511
The Common Market is a major cause of our employment problems. Cmnd. 9911, the White Paper issued in October 1986 entitled "Developments in the European Community January-June 1986", shows that in 1970 we had a healthy surplus on our balance of trade with Common Market countries — the equivalent in today's prices of £3·2 billion. At that time, for every £100 that we imported from the Common Market we exported £143. Currently, for every £100 that we import we export only £68. Instead of having a healthy surplus with the Common Market of £3·2 billion we now have, from January to June 1986, a deficit of £5·2 billion—an annual rate of £10·4 billion. That trade deficit, which has been inflicted on us, has cost us at least I million jobs.
Mrs. Peacock: Will the hon. Gentleman give way?
Mr. Leighton: I prefer to finish my argument, if I may.
From 1979 to 1985, the number of employees in manufacturing in the rest of the EEC fell by 11·4 per cent. In the United Kingdom it fell by 24 per cent. In other words, the number fell by twice as much in Britain. For the biggest economy in the EEC, West Germany, employment in manufacturing industry during that period fell by 763,000 jobs.
Mrs. Peacock: Currently, a massive investment in manufacturing is occurring in the north of England. I am pleased that the hon. Member for Kingston upon Hull, East (Mr. Prescott) is present, because I understand he recently visited my area. Over £20 million is being invested in new factories in manufacturing in west Yorkshire. That should be put on the record, because that is good investment.
Mr. Leighton: I understand that the hon. Lady has a marginal seat in the north of England, and that she would have liked to intervene during the speech of my hon. Friend the Member for Kingston upon Hull, East. If I will do as a surrogate, I am happy that she was able to get that point on the record.
I should like to get back to the main point of how employment has fallen in the EEC compared with Britain. In West Germany 763,000 jobs have been lost, in France 687,000 jobs and in Italy 614,000 jobs. In the United Kingdom the number has fallen by 1,741,000. In other words, over a million more manufacturing jobs have been lost in Britain than in any of those countries. The trade deficit that the Common Market is inflicting on us costs at least I million jobs, and all the figures prove it. The Paymaster General's going to Brussels or Strasbourg and taking part in these meetings will not solve the problem. The Common Market is not the solution; it is the problem.
The Government's monetarist policy—in particular, the high exchange rate which we suffered from for a number of years — is now changing. The Paymaster General mentioned in his speech that our labour costs are falling compared with those of Germany and Japan. That is quite right. That is the function of the movement of the exchange rate in Japan, Germany and Britain. It was the high exchange rate that the monetarists inflicted on us, plus membership of the Common Market, which wiped out a quarter of British manufacturing industry.
We still consume manufactured goods — financed, increasingly, by credit — but we import them. Those
512
goods are produced in foreign factories, which provide employment abroad, while our industrial areas are turned into deserts. We shall never successfully tackle our unemployment problem until the EEC trade deficit is rectified. Until the tide of manufactured imports is stemmed and some balance is restored, we shall never satisfactorily tackle unemployment. We cannot stand back; we cannot leave it to the market. We must have a proper industrial policy in Britain.
The second way that the Government has caused unemployment is this. As industrial societies mature and manufacturing processes become more sophisticated and mechanised, the numbers employed in manufacturing gently decline as a percentage of the total. For example, in Denmark between 1979 and 1985 the number declined by 3·4 per cent. Simultaneously, the numbers in services —health, education and personal social services—float up. That is the accepted process in mature industrial countries. One process compliments and compensates for the other, maintaining an equilibrium of full employment. That is what happened in Britain before 1979. From 1966 to 1974 employment in manufacturing fell by 8 per cent. Employment in personal services rose by 25 per cent. Between 1974 and 1979 employment in manufacturing fell by 8 per cent. and in personal services it rose by 8 per cent. One floats down gently, the other floats up gently, leaving an equilibrium.
Between 1979 and 1985 the number employed in manufacturing declined by 25 per cent. The increase in services was only 1 per cent. That was not a gentle float down in manufacturing but a violent collapse. It was not the natural decline that we would normally expect; it was butchering. It was engineered by the monetarist policies of the Conservative Government.
During that period, there was no adequate compensatory increase in personal services. The United Kingdom is now the smallest spender on health, in percentage terms and in absolute terms, of the advanced industrial countries. The Conservative party has reined back expenditure on education, as was mentioned by Conservative Back Benchers, and cut expenditure on personal social services. That is a major cause of unemployment being higher in Britain than in other countries.
Reviving manufacturing industry takes time. It will take time before that revival will turn into jobs, although it must be done. Expanding our services can be done fairly quickly. That is a major way that a new Government can fairly quickly reduce unemployment. I congratulate my hon. Friend the Member for Kingston upon Hull, East — he has come in for a bit of criticism today—who wants to make good the ravages on our services in health, education and personal social services. He can do it quickly, and those jobs can be provided quickly. Those jobs are financed through the public sector, which is one of the reasons why they are being cut back. I applaud my hon. Friend's initiative.
Another area is construction. There is a backlog of maintenance on council housing of some £20 billion. The Audit Commission, to which my hon. Friend referred, in its report on local government, explained that in 1979 central Government expenditure in London on housing was £1·5 billion. It is now only £500 million, one third of what it was. That is why we have homelessness, why housing is in such a terrible state and why 500,000 fewer construction workers are at work than a decade ago. That

513
has to be rectified and reversed. I should like my hon. Friend the Member for Kingston upon Hull, East to make provision for the employment of a further 500,000 people in the building industry. Of course that can be done. Indeed, it must be done if we want to live in a civilised country with proper housing. When he does that, he will save a lot of money which we are wasting on bed and breakfast accommodation. Nor will he suck in imports in so doing. Britain has the raw materials. Bricks are made out of mud. We do not have to import mud from Japan; we have plenty of British mud to make bricks.
Why do we not pay the private employer for the additional workers he takes on a subsidy which is roughly equal to unemployment benefit? That would make a lot of sense. People are demanding action. They are not complacent like the Paymaster General. He always looks cheerful, no matter how high the unemployment figures. Whatever disaster happens, the right hon. and learned Gentleman comes along, puts his hands in his pockets, pulls up his trousers, smiles at us and tells us that everything is all right.
On 3 May, there will be a human chain from Liverpool to London of ordinary people demonstrating and demanding that action should be taken.
Mr. Greg Knight: Will the hon. Gentleman give way?
Mr. Leighton: I am not anxious to give way because I have taken too long already. If the hon. Gentleman will forgive me—
Mr. Knight: Will the hon. Gentleman give way?
Mr. Leighton: If the hon. Gentleman insists.
Mr. Knight: I am grateful to the hon. Gentleman for giving way. He has told us some of his ideas for creating 500,000 jobs. What effect would the Labour party's policy of introducing a national minimum wage have on employment? Would not the introduction of such a policy destroy 500,000 jobs?
Mr. Leighton: There is absolutely no evidence for that. With great respect to the hon. Gentleman, that is pure claptrap. That is untrue. If he would like to present me with any credible argument to support that idea, I should look at it.
Employment is not achieved by forcing down wages. If forcing down wages were the way to get employment, Britain would be the country with the highest employment because our wages are the lowest in Europe. Obviously, we cannot take that idea seriously.
The Select Committee on Employment spent a lot of time undertaking careful research and it produced a job guarantee programme. The Paymaster General made light of other calculations by people who are working on plans. But we worked on our plans and did the research and had it double checked with the London Business School. Professor Alan Budd worked through all the figures. We offered the Paymaster General a way of giving a job guarantee to the long-term unemployed, but we did not hear a positive response. Instead, we got the restart programme.
It is right that we should keep in contact with the long-term unemployed. My criticism is that it was wrong to stop having contact with the long-term unemployed in 1982. There used to be regular contact with the long-term unemployed, but in 1982 the Government stopped that because the numbers being thrown on the dole queues
514
were so high in one year—almost 1 million—that they could do nothing with them. The Government therefore stopped talking to those people. In 1983, the Government tried to slash the jobcentre service. They wanted 10 per cent. fewer people to be employed in it. At that time, the jobcentre in my constituency in Heigham road, East Ham was to be shut down and the Government were talking about putting counters in Woolworth, building societies and banks.
It is right that there should be contact with the longterm unemployed, even if it is a deathbed repentance. We should have elections more often because we would see more reversals of Government policies. The Government have started to consider the problems of the long-term unemployed. They must forgive us if we suspect their motives and think that this is not an onslaught on unemployment but merely an onslaught on the statistics. Having brought the statistics down, perhaps the Government will think about getting unemployment down as the next step.
I criticise the restart programme because of Ministers' ludicrous presentation of it. They do the programme a disservice in the way that they try to explain it. Their wildly exaggerated, inaccurate and partisan claims, which border on the mendacious, cannot be remotely justified. We need a factual and dispassionate assessment so that we can have a rational debate, not the lurid propaganda of the Government's claims.
Ministers present the restart scheme in three ways. They talk about a "positive offer" being made to roughly 90 per cent. of people. If one says that quickly, it sounds as though 90 per cent. of the unemployed get jobs. The Government use a new language or jargon. Normally, we talk about people "placed" in jobs but the Government talk here about people "submitted" to jobs. That is meaningless because we do not know whether the offer has led to anything.
Secondly, Ministers talk about people "placed". They do this only rarely and get very bad tempered when they talk about it. I can understand why, because few people are actually placed. Thirdly, to add to the confusion. the Government talk about the number ceasing to claim benefit — 18 per cent. But there is always a flow of names off the register. During the previous five quarters, before the restart scheme 18 per cent. of people came off the register.
The Paymaster General said that the restart interview would last one hour, but it is now on average 25 minutes. Applicants receive a letter, and I hope that I am not trespassing on the time of the House—[HON. MEMBERS: "The hon. Gentleman is."] In that case, I shall not continue. I shall seek a later occasion to talk about this.
6.57 pm
Mr. Kenneth Carlisle: I am glad to take part in this debate because unemployment, rightly, is the issue of profound concern in the United Kingdom. The concern of Conservative Members is shared equally with the hon. Member for Newham, North-East (Mr. Leighton), the Chairman of the Select Committee on Employment. The fact that virtually all Western countries are suffering from unemployment in no way reduces the agony of the problem in Britain. There are no starry or magical solutions, but if we are to have hope we must meet two vital conditions. First, we must nurture a society which encourages enterprise and the creation of wealth.

515
Secondly, through education and training, we must force feed at every age and level the necessary skills and a sense of excellence.
One of the finest achievements of the Government has been to rekindle a spirit of enterprise. At last we have that essential background of economic stability, steady growth and an economic outlook which looks good. Here I part company with the hon. Member for Newham, North-East who had nothing but unbridled gloom to offer on the subject of the economy. Like so many of his colleagues, he is determined to see no hope.
With inflation low, demand buoyant and output and productivity significantly better, the climate is right for businesses to invest and risk new ventures. We can all welcome the fact that there are almost a million more self-employed people than in 1980 —a sharp contrast with the decline in numbers during the depressing decade of the 1970s. That reversal of the depressing trend under the Labour Government is the result not of luck but of a specific and co-ordinated policy to promote enterprise. For instance, we have removed the excessive taxation which is toxic to energy and smothers enterprise and we have eased the worst restrictions in planning and employment law.
We have pursued a steadfast and continuing programme to lift the burden from small businesses. What will the imposition of a £6 billion training levy, as promised by the Opposition, do for enterprise in small businesses? We have launched the successful enterprise allowance scheme to give positive help, to small businesses and enterprises, and it has won valid praise from all sides. It is responsible for launching 2,000 new enterprises a week and they are supported by a network of enterprise agencies which provide help and advice. We all know of people in our constituencies who have faced redundancy after years with a major employer, but who have found new purpose in the excitement of establishing their own businesses. As the election approaches, those people should rightly question how Labour policy will help them and encourage the spirit of enterprise. How would high inflation, which will result from the promised vast expenditure of a Labour Government, leave us with anyone with the confidence to invest in business? How would higher taxation fire people with a desire to work harder and take on risks? How would the inevitable burden of costs and the deluge of restrictions spawn any enterprises? Clearly they would not. Those policies failed in the 1970s and they will fail again.
Our policies are the policies for enterprise, but there are four specific problems in relation to that programme for enterprise. First, it is almost impossible for someone out of work in the north to move to a job in the south. The housing market simply does not allow that because the cost of housing is so much greater in the south. To assist the unemployed we must seek policies that will loosen the housing market.
Secondly, it is difficult for new businesses to raise venture capital. My right hon. and learned Friend the Paymaster General mentioned the loan guarantee scheme, but that scheme has done little to encourage extra venture capital because the banks use the same criteria to lend under that scheme as they do for a normal loan.
The goal that we are successfully pursuing is to create a country of enterprise, but that is only one arm of our policy. We must also have a fully-trained work force in the
516
necessary skills. If that training is to be effective it must start at an early age in our schools and must continue for a lifetime. The Government are the first to admit that what we have already achieved is not enough. No one can be complacent, but the Government's training initiatives are on the right road. At last, we have a structure to sustain training throughout life. We have a programme to introduce technical education that is relevant to work and that training is carried out in our secondary schools. YTS has been extended so that no school leaver under 18 need be unemployed. The new JTS, to which my hon. Friend the Member for Beckenham (Sir P. Goodhart) referred, will give six months training to anyone under 25 who has been out of work for six months. Our adult training programme has been expanded and training is a central part of the community programme.
Nevertheless, we must do even better in both quality and quantity. In my constituency matters could be improved, and I am aware that my practical examples may be mirrored elsewhere. My hon. Friend the Member for Cambridge (Mr. Rhodes James) said that we must improve general standards and I agree that the basic disciplines are of central importance, but in an engineering city such as Lincoln we also need more technical education at secondary school level. I want a city technology college established in Lincoln so that young people have a choice of high quality technical education. Such a school would also benefit from the involvement of local business enterprise and investment. The college of technology in Lincoln has a major and growing role to play in the training of school leavers and older people. That college needs better buildings and a greater range of facilities. I support our policy for local training because skillcentres are often too far away and remote. I also wish for greater funding of our local college.
That college is just one centre in Lincoln for the training of those on the community programme, which raises a third problem. Building work is often the best work for a community programme but few worthwhile building projects are being approved for the community programme. I appreciate that a scheme must not compete with commercial builders, but the work that is currently being turned down for the programme would not otherwise go ahead at all. We face a shortage of building workers and it must be right to increase that training wherever possible.
The fourth problem concerns the unemployed who join courses at colleges. If a course is termed "full time" people lose benefit even if they are available for work. I know that the new JTS will address that problem, but my hon. Friend the Member for Beckenham was right on the mark when he said that we should adopt the principle that anyone out of work who wishes to seek training should be given that opportunity.
We shall continue to make progress as we have a clear policy for enterprise and training and a commitment to improve our efforts in both those areas, but we do not share the Labour party delusion that central control and central Government can solve all problems. In relation to training, there must be a partnership with industry because industry knows best what skills are necessary for the market place. In Lincoln some progress has been made and many firms have links with the schools. Large businesses such as Marconi and Ruston Gas Turbines have developed courses in partnership with the college of technology. The Government must seek ways to stimulate

517
greater investment in training by businesses both large and small. Such commitment exists in Germany and we must achieve it here.
The Labour party has never learned that the way for a Government to be charitable is not to turn Government into a charity. To ensure success the Government must establish a structure within which enterprise and training can flourish. The British people want skills, but relevant skills, and in the end it is only a partnership of Government and industry that will deliver those skills.
7.7 pm
Mr. A. E. P. Duffy: In the terms of the motion we are invited to commend the Government for the employment measures described by the Paymaster General. Those employment measures are scarcely making any impression in the Yorkshire and Humberside region, despite the optimistic intervention by the hon. Member for Batley and Spen (Mrs. Peacock).
The economy of the Yorkshire and Humberside region has deteriorated alarmingly under this Government and continues to do so. The relief for that position lies not with Department of Employment micro-economic measures but with macro-economic measures. Contrary to my hon. Friend the Member for Newham, North-East (Mr. Leighton), I believe that, at long last, our membership of the European Community offers us the possibility of considerable gain. Before I discuss that, I wish to reveal to the House what has happened in the Yorkshire and Humberside region.
Mr. Leighton: My hon. Friend said "at long last". We have been a member of the Community for 15 years and it has inflicted great damage upon us. Just how long do we have to wait to receive its beneficial effects?
Mr. Duffy: Yorkshire and Humberside people do not ask for handouts. That is not their style. They believe that they can give the nation a fair return for the investment that it makes in them. Traditionally they do not believe in "owt for nowt." However, they are very concerned that the long decline in the basic industries upon which the north of England built its prosperity is dividing Britain—the north declining and under-privileged, the south enjoying the lion's share of investment and growth.
The House is familiar with that scenario, but it needs to be reminded that that gap is widening. In 1983, the Yorkshire and Humberside County Councils Association published the "New Deal" regional strategy—the last Yorkshire and Humberside regional strategy that is available to us—and it tried to address this disparity. It concluded that
"the Region must make the most of its potential: action must be taken to help the Region's problem areas and industries; the Region must receive a fairer share of national resources."
Since then, despite the strenuous efforts of the Yorkshire and Humberside Development Association and of all the local authorities in the region to promote it, the necessary change of direction has not been achieved. Indeed, in some ways the region is now worse off. Unemployment has risen higher to above the national average; personal incomes continue to decline relative to the national average; poor housing and infrastructure, especially in the inner cities, have suffered further deterioration, perhaps reflecting the region's continued below average share of public spending.
The Government and the European Commission give some help to deal with these problems and the county and
518
district councils are also working hard on them, notably my own city of Sheffield. However, the abolition of the metropolitan county councils that represented nearly 70 per cent. of the region's population has involved a loss of resources and has weakened the region's voice at a time when major problems must be faced.
Nearly 500,000 jobs have been lost in metal manufacture, textiles and engineering since 1979 and, contrary to the claim of the Paymaster General, more jobs are going every week. Last week, 300 railway jobs were lost in Doncaster. This week, 600 steel jobs in Stocksbridge have been lost. I want the Treasury Bench to know that in south Yorkshire there is widespread fear that during the next two, three or four weeks a further 1,000 steel jobs will be lost. Meanwhile, there are allegations in the current Metal Bulletin of continuing state aid to German steel, although such subsidies are banned under EEC rules.
Traumatic job losses and the combined effects of earlier slum clearance and plant closure have resulted in dwindling employment opportunities in south Yorkshire and in vast tracts of redundant land and buildings. Anyone who drives up the M 1 and comes abreast of Sheffield has only to look to his left in the direction of the centre of Sheffield to see that, although 20 years ago, it was one of the most industrialised cities 'in western Europe, it is now devastated and almost wholly derelict.
There is no new industry in Sheffield. I do not expect all the steel works and engineering works that have been lost to be recovered, but I repeat that there is no new growth at all, apart from a few small units, for which we are grateful and which the city council is very anxious to encourage. However, they are making no impression at all upon an unemployment figure in my constituency that is concealed by the travel-to-work scheme, about which I shall say more in a moment.
But it does not end there. Poverty in Britain is more widespread now than it was when the urban programme began in Sheffield 20 years ago. Then unemployment, nationally, was 500,000 — 2·2 per cent. of the economically active population. Now, on a narrower definition, it is over 3 million—six times what it was then. That is now the primary cause of poverty. Sickness, child care, low pay, and particularly retirement, all contribute, but it is unemployment that has pushed up the number of people who are claiming supplementary benefit from 2·6 million in 1968 to nearly 5 million by the mid-1980s. In Sheffield alone, the number of people claiming supplementary benefit increased from 39,000 in November 1979 to 75,000 by the mid-1980s, so the dramatic increase has been among those unemployed people who have been claiming the unemployment allowance. It has increased by nearly five times, more than reflecting the increase in unemployment from 5 per cent. of the working population to more than 16 per cent.
There is little prospect of relief. A detailed breakdown of the unpublished Government report, about which we heard much in the House towards the end of last year, entitled "United Kingdom Regional Development Programme 1986–1990" reveals that south Yorkshire will face further employment cuts and worsening environmental and industrial dereliction, with little likelihood of recovery. The report says:

519
"Dereliction, lack of good services, industrial sites and poor internal communications tend to discourage development, in particular to the north-east of Sheffield in the River Don and River Dearne valleys, and environmental problems will grow as dereliction follows closures in basic industries."
That describes the part of south Yorkshire that lies between my constituency to the east of Sheffield and the constituency of my hon. Friend the Member for Don Valley (Mr. Redmond). I know that my hon. Friend is most anxious to say a word about this, if he catches your eye, Mr. Deputy Speaker. He represents the Don Valley, and I am thinking of the Don Valley. [Interruption.] I do not know whether Conservative Members are laughing at my reference to the condition of the Don Valley. I invite them to go and look at it. Those who represent southern constituencies cannot appreciate just how serious is the neglect of the north and the widening gap between the north and the south, unless they keep in touch with the north of England.
The report also says that future employment prospects within the coal industry remain "bleak". Although productivity has improved, the increased use of new technology will further reduce manpower demands in 1990. The report adds that what is certain is that south Yorkshire needs more financial resources.
Many areas suffering from industrial decline receive aid from the European regional development fund, but these grants are not as effective as they should be, because most national Governments, as we all know, in the Community, including our own, cut other spending by an equivalent amount so that the net benefit to the local area is small. The European regional development fund should be used to provide a truly additional source of funds for the qualifying areas that I am now describing in Yorkshire and Humberside.
As for the United Kingdom regional aid programme, the November 1984 review made substantial economies by cutting grants to those highly capital-intensive developments that provide few additional jobs. However, these savings are being retained by the Exchequer instead of being channelled back to the assisted areas in more effective forms of aid. The steep rises in unemployment in some parts of our economy—notably again in Yorkshire and Humberside—mean that regional aid needs to be maintained at 1984 levels, in real terms.
In the 1984 review some parts of Yorkshire and Humberside had their assisted area status reduced; others had their status taken away and consequently lost both United Kingdom and European Community aid. However, these decisions were made in the light of unemployment levels prevailing at that time, and since then more huge job losses have been announced in the region. In addition, some settlements with increasingly severe problems in the coalfield receive little or no aid because they are grouped in "travel-to-work" areas with more prosperous, larger towns. This also applies to my own east end of Sheffield. It applies to parts of Humberside and to north Yorkshire. The Government should give higher assisted area status where this is justified by changing circumstances, without waiting for a full national review. Yorkshire and Humberside have much to offer and many locational and environmental advantages—
Mr. Rowe: On a point of order, Mr. Deputy Speaker. This is a very interesting dissertation on regional aid, but is it in order?
Mr. Deputy Speaker (Mr. Ernest Armstrong): The House would be well advised to leave these matters to the Chair. I will decide what is in order.
Mr. Duffy: Yorkshire and Humberside have much to offer and many locational and environmental advantages. The problem—and if the hon. Gentleman had just been a little more patient as well as more courteous he would have allowed me to come to this point — is how to unlock the potential. On all sides one encounters the view that it is reasonable to seek more help for the region. It needs extra incentives, for example, to benefit fully from measures such as support for innovation. It makes sense for a whole coalfield, not just part of it, to have assisted area status and to benefit from European Community aid. There is a growing feeling, and it must not be minimised, that it is inequitable for the region to receive only about one twelth of the aid that goes to Scotland when the two are of the same size and experience the same level of social and economic deprivation.
My own city of Sheffield and its council have a plan, the Sheffield employment plan for regeneration, that over the next two years would create 25,000 jobs and training places in the city. Did the hon. Gentleman not want to hear about that? It regards public sector enterprise as essential to meet the city's growing needs and also to improve the quality of life. It would deploy it as a tool of economic regeneration but with the council itself planning and executing the first stage of the job creation plan. Nevertheless, it looks to the Government to open the way through a programme of economic growth, to switch national expenditure away from maintaining unemployment to creating jobs in the public service if they are not available to us in manufacturing. I have argued that there is no evidence at all of recovery in Sheffield's manufacturing district which is largely my constituency. How is the city to avoid being accused of neglect if it does not seek job creation wherever it can? The city believes, however, that that can come only if the Government remove the battery of legal and financial restrictions on local authorities.
The key to a revival of employment in Yorkshire and Humberside, as in some other regions, may lie in a pregnant sentence in that unpublished report:
"South Yorkshire is likely to remain fairly depressed because the area is very much dependent upon a general upturn in the U.K. and overseas".
In short, the European Community, in particular the United Kingdom and West Germany, need to devise and implement more expansionary policies. It is in that direction that relief for Yorkshire and Humberside probably lies for it would reduce unemployment at a time of low inflation. It would offset the depressing effect on America's trading partners of the current cuts in both the budget deficit and the trade deficit of the United States. It would defuse protectionist pressure in the United States, aimed at Europe as well as Japan. The view that the correction of United States deficits will act as a drag on world growth, requiring the adoption of less restrictive policies by Japan and West Germany, has been endorsed by the International Monetary Fund, yet European Governments, especially those of Britain and West Germany, remain unimpressed. They simply do not

521
believe that it is possible to contrive a sustained, non-inflationary expansion at the rate required to bring down unemployment, yet one country has recently done just that.
The United States spent its way out of unemployment in the traditional way without an increase in inflation because it managed to combine expansionary policies with a strong exchange rate. It did so by keeping interest rates high. It was an act which any European Country expanding alone would find difficult to follow, but it demonstrates that a modern industrial economy can expand out of unemployment without unleashing a wave of inflation, provided the exchange rate does not fall. For the members of the European Community, trading so closely with each other, the most effective way to do this, if the political problems could be overcome, would be to expand together. Then, the additional imports sucked into any one country as growth picked up could be matched by exports to its trading partners, with little change in the pattern of exchange rates.
A British initiative to foster expansion would not only benefit depressed regions such as Yorkshire and Humberside but would respond positively to the appeal by Mr. James Baker, Treasury Secretary, in Washington two days ago when he looked to the Group of Five—but he was obviously looking to the member nations of the European Community principally — for a co-ordinated economic expansion. I hope that the Chancellor will not only listen to him but will initiate a meeting of the Finance Ministers of the Group of Five with a view to such a policy, for not only would that serve to improve economic relations with the United States and head off protectionism, but Britain's image in Europe would be transformed and the European Community itself would be back on the rails at last, addressing a problem that really matters.
7.26 pm
Mr. Richard Holt: I am very grateful for the fact that the hon. Member for Kingston upon Hull, East (Mr. Prescott) has returned to his seat because he would not give way earlier this afternoon when he made a remark in respect of an intervention which I had made during an earlier debate when his right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) had been courteous enough to write to me and tell me that he was going to mention me during a debate — which was why I intervened. I am grateful, because it now gives me the opportunity to remind the hon. Gentleman of what his right hon. Friend said. He said that the unemployment figures were falling in my constituency probably because of the characteristic excellence and industry of its Member of Parliament. So perhaps the hon. Gentleman would have a further look at that before he seeks to snarl and sneer in future across the Dispatch Box at an hon. Member who wants to make an intervention.
Mr. Prescott: He said that you got the figures wrong.
Mr. Holt: I did not have the figures wrong. The figures were actually correct. The hon. Member for Stockton, South (Mr. Wrigglesworth) sought to intervene in what the right hon. Gentleman was saying, which he did because the right hon. Gentleman, despite saying twice that he would give way to me and refusing to do so, did give way to the hon. Gentleman, who then misled the House with the figures that he gave. He knows now, because I have
522
told him personally, and they have been corrected in the House; but I am magnanimous enough to accept that it was not his fault. He went for his figures to Cleveland county council. The council has written to me and has admitted that the basis of the figures which it used to give the information to the hon. Member for Stockton, South was incorrect. It made them up.
We have just heard a very good speech which I thought was intended for next week when we will discuss the economy. Today we are supposed to be discussing training. I say that with great respect to the hon. Gentleman. He does make a good contribution but it was totally out of order.
Mr. Deputy Speaker: Order. The hon. Gentleman should not make that kind of allegation. It is a wide debate today.
Mr. Holt: With respect, Mr. Deputy Speaker, you were not present earlier when my right hon. and learned Friend the Paymaster General was stopped by the Chair when he was seeking to make a point. At that stage the range of the debate was very wide.
Mr. Robert Atkins: The intervention was not allowed.
Mr. Holt: The intervention was not allowed. Unlike most of the hon. Members; opposite, I have had some experience in dealing with apprentices and running apprenticeship schemes. I have employed and trained many young people.
Mr. Prescott: In what trade?
Mr. Holt: Furniture. I was chairman of training for London region and a member of the furniture industry training board. The fundamental failures in apprenticeships have their roots in a number of causes, including the raising of the school leaving age without any consultation with industry about its needs at that time. I believe that was done by right my hon. Friend the Prime Minister. Further, the age of majority has been eroded from 21 to 18, and the truncated apprenticeship period has been reduced to 18 months or two years.
I blame all sides of industry and the trade unions — especially the one I had personal dealings with— for not being realistic enough to take the same approach as the EEPTU, which has set a model for how apprenticeships ought to take place. I commend my hon. Friend and all those responsible for the training of young people to look very closely at the whole question of apprenticeships and to forget the old time-honoured schemes whereby if one lived long enough one was given signed indentures. I was guilty of signing many indentures without any verification of job capability, which was alleged to be part of the training. That is one of the reasons why we continue to have skills shortages in many areas.
We want a flexible training scheme for young people which has standards. I welcome the Government's initiative to offer YTS to all people up to 18 years of age, but the Government must have closer links and integration with the education world. In my part of the north-east of England—and I believe I speak as the most northerly so far of all the hon. Members who have spoken in this debate — there are apprenticeships in skills, but the trade unions have not sought to train people in a modular way by providing specialist training and core training, so that as they embark upon a career there is an integration of

523
education even before they reach their training. Perhaps we could recognise and realise this by paying young people who stay at school beyond the age of 16.'There is little difference between paying youngsters to stay at school to the statutory leaving age and giving them an allowance to be trained by an employer subsequently.
Mr. Ken Eastham: The hon. Gentleman makes reference to the trade unions and changing the ways of training by modules. I remind and advise the hon. Gentleman that module training has been quite the norm for the past 10 years.
Mr. Holt: I accept that, but I was saying to my hon. Friend on the Front Bench and to other hon. Members that this modular expansion has not yet been integrated into the education system. For that reason I hope that the CTCs which have been announced will recognise the needs of industry and that there will be a through-put of training for young people from the earliest days so that they can not only choose and diversify but also more easily re-train into other skills at a later stage in life. I find, like the argument by my hon. Friend, that many of the young people I helped to train and was responsible for were given skills that are no longer necessary. They were not given a groundwork enabling them to move into other areas.
This was one of the fundamental failures of the training boards and why it was right that the training boards were discontinued. I cannot speak with great personal knowledge of all the training boards, but I did have an in-depth knowledge of the furniture industry training board and some knowledge of the catering industry. I probably have had more free lunches via the training board than I have had as a Member of Parliament, and that says a great deal, because they were always seeking what to do and how to do it. They were profligate, bureaucratic and, in the end, meaningless. My company, for which I was responsible, was one of only two companies in the whole of the furniture industry that had total exemption from having to fill in the iniquitous forms for grant and levy. Many other people had to fill in those forms to pay the levy.
Mr. Prescott: Will the hon. Gentleman give way?
Mr. Holt: If the hon. Gentleman has an intelligent contribution to make to this debate—because so far he has not—I am quite willing to give way. He would not give way to me but I am much more courteous to him. If he cannot shut up, then I am afraid I shall have to be very rude to him indeed.
Mr. Prescott: I say to the hon. Gentleman that those statutory training boards that he is talking about produced twice as many apprentices as we have today.
Mr. Holt: Many of them trained in the wrong skills, and that is what it is all about— [Interruption.]
Mr. Deputy Speaker: Order
Mr. Holt: They were decided by the members of the board and the officials. The vast majority of the people who did the training in the furniture industry in High Wycombe were former senior officers in the RAF because it was a nice, easy sinecure for them after they came out of their service, and they were appointed by the director who was himself in the same role.
Mr. Prescott: And you want to do something about it? You sat on the board.
Mr. Deputy Speaker: I must remind the House that a great number of Members are wishing to speak. Exchanges of this kind only delay the debate unnecessarily. Mr. Richard Holt.
Mr. Holt: I am grateful, Mr. Deputy Speaker. I am sure that all people, both inside and outside this House, will draw their own conclusions from the antics and the attitude of the hon. Member for Kingston upon Hull, East (Mr. Prescott) in the way he has sought very rudely to intervene in the speech of everyone who has spoken so far.
I wish to move on to another topic which has been mentioned by hon. Members opposite and on this side of the House. I wish to talk about restart in the field of training. In my constituency there is one jobcentre. I checked this morning with that job club. So far 60 people have been to that job club. Of that 60, 21 are still there. Nine have left for reasons which are not known. One has gone into a training scheme. Six have gone on to community programmes and 23 have gone into what I believe the Opposition would call real jobs — including one audio-visual aids technician, two PSV drivers, two security guards, one galvanising foreman, one radio repair man, two general workers. One person has gone to Wales to work as a cook, one has gone to the south-east of England to work as a nanny, one has gone to France to work as a general labourer, and two have gone into colleges to be lecturers. Those are all real jobs. They cover 23 of the 39 people who have so far gone through the job club. If the same rate of success applies to other job clubs, there will be an even greater dent in the unemployment figures than we have had so far.
I hope that my hon. Friend noted that three of those jobs were away from the north-east. Unless greater help is given to people who wish to take up employment elsewhere in this country and also in Europe, the unemployment figures in the north-east will continue to be high.
Last Saturday I had at my surgery a young couple who had had the misfortune to be out of work for some time. The man had found a job in Southampton. His house in my constituency was worth only £12,000 compared with £30,000 for a more modest house in Southampton. Therefore, he had had to give up the unequal battle of trying to keep two homes and had had to return to the dole queue in the north-east, although he had successfully filled the job in Southampton for a time.
That experience has been repeated over and over again as a consequence of an initiative which I took 18 months ago to try to link the High Wycombe and Thames valley area with the north-east in conjunction with local newspapers. The Government do not seem to have the will to tackle the problem. There is a reluctance to recognise that Rachman is dead and that it is time to open up the rental market so that more people can have the facility to be lodgers.
Mr. Martin Redmond: Would it not make sense to have sufficient council houses to rent in the south to enable those in the north who wanted to move to go into a public sector house for a bridging period until they had sufficient money to move back to the private sector?
Mr. Holt: I take the hon. Gentleman's point. I put forward a slightly more novel scheme because I believe in

525
home ownership. I have already suggested to my Front Bench that rather than building masses of council houses we should consider seriously giving substantial grants of £6,000, £8,000 or £10,000 to people who want to move. The Government might make the grant equivalent to the amount that a person would receive from the dole or from social security for one or two years and let him use that money as a deposit on a house in the private sector. The equity could be held by the Government until such time as the person had moved along the mortgage scale. If someone defaulted, obviously he would be in trouble, but this would give people a stake in the area to which they were moving, and it would not cost the Government any more than it is costing them now to keep someone on the dole for a year or a year and a half.
Mr. Christopher Hawkins: My hon. Friend cannot expect people to move from the north to the south by giving them grants unless more houses are built in the south. That would involve opening up the green belt.
Mr. Holt: My hon. Friend can take that up with other people.
There has been much criticism by Opposition Members of the lack of training. I can give the number of professionals working in training. Professionals in training in industry and commerce are helping to train for the future. The Institute of Training and Development was established only in 1964 and in its first 15 years its membership grew to under 5,000. It is now 6,500, so it has grown by 1,500 over the last few years. The much more representative and larger Institute of Personnel Management, which is responsible for training, has grown from just under 22,000 to just over 27,000 in the past five years. So we can see that large numbers are involved in professional training.
While the Government must continue the initiatives which they have introduced, some of them need modification. It is not right to say that once a person has undertaken a period of training that gives him a qualification. We need established standards from proper technical, professional and vocational bodies who are capable of providing and organising examinations.
7.46 pm
Mr. Ken Eastham: The case made by the hon. Member for Langbaurgh (Mr. Holt) destroys the famous remark about getting on one's bike to find a job. Is the realisation dawning even on the Government Benches that getting on one's bike to get a job down south is not a sensible, practicable proposition for people who desperately need jobs? The debate is not about housing but about employment and training. Every time I listen to Government Front Bench spokesmen on the subject I become more depressed because we keep on hearing the same old record—nothing new. We hear the same old excuses.
The Paymaster General often refers to packages, as he did today. When he appears before the Select Committee on Employment to talk about various schemes he uses the word "packages" as if men and women were packets of tea. That indicates how much he is out of touch with the human side of the problem. Of course, he makes his usual broadsides and raises the usual bogies about how wicked the Labour party is. He condemns the policies we believe
526
in, such as a minimum rate of pay. We make no apology for believing in a minimum rate of pay because we are against starvation wages.
The right hon. and learned Gentleman also referred to wage rises being withdrawn and pointed out that we would give protection to workers. We make no apology for that either. That does not affect the issue of employment and jobs. If conditions are right, workers will respond. That has always been the case. Usually, it is bad management that creates disputes and strikes, as I shall illustrate shortly.
There is now less talk about employment and more statements about the Manpower Services Commission and so-called training. There is a training scheme for this, a training scheme for that and a training scheme for the other. We have got training schemes coming out of our ears, but what we need are jobs.
When I read the motion tabled by the Government, which once again refers to training, I thought that it would be useful to remind the House of the scale of the various training schemes. The purpose is to help to massage the unemployment figures. When the Minister replies he may dispute that. However, to remind the House how many training schemes there are, I shall recite from the following list. There is the YTS, the TVEI, adult training job training programme, national priority skills, job training scheme, local grants to employers, other local skills action, training for enterprise, special groups, management development, wider opportunities training programme, other occupational and adult training support, the Open Tech open learning.
In 1986–87 717,105 people will be engaged in those training schemes. In 1986–87 the cost to the taxpayer for the MSC and other bodies will be £1,337 million. The Government have expended a massive sum of money on so-called training and that does not go without much criticism.
I am sure that the Minister will have taken the opportunity to read the recent report entitled "Department of Employment and Manpower Services Commission: Adult Training Strategy". It resulted from an investigation by the National Audit Office of the MSC's development and implementation of an adult training strategy. The NAO makes many reservations in the report about expenditure: and training.
Paragraph 7.6 on page 23 states:
"MSC has no national or local database recording the skills possessed by the working population and, since the introduction of voluntary registration for employment in 1982, it had kept no inventory of the skills of the unemployed. Although some data from national surveys are available, NAO concluded that MSC does not have the information which would enable it to be certain that training is not being provided in skills already in good supply or in surplus and available for use. While the classification of skills and qualifications might well pose difficult problems, and the collection and analysis of the relevant personal details would clearly be a costly task, it is difficult to see how the real requirement for MSC support for training can be determined accurately without a better balance sheet than exists at present of the supply of and demand for skills."
There is considerable criticism of the massive expenditure that is now being made by the Government on some of those so-called training schemes. Obviously, skill shortages exist in some parts of the country but it is also recognised that there is a serious mismatch for making provision for the skill deficiencies. Yet we provide all sorts of training for skills that are surplus to requirements.

527
I spoke to an officer in Manchester—not an MSC officer—and I asked him about training facilities in the city that I represent. He said that some people on YTS are training for jobs that do not even exist. I asked him to give me some examples. He said that there were courses in Manchester for beauticians but that there was virtually no chance at the end of the day of them getting jobs. Another YTS is on the welfare of animals. There will be virtually no jobs in Manchester for the people on that scheme.
Mr. Trippier: I should like and would welcome evidence of those schemes. There is no way that the Department of Employment or its Ministers would encourage that sort of thing. We have tried desperately to detect those managing agents who run courses for which there are no jobs. That is unnecessary training. If the hon. Gentleman will send me details, I will look into the matter.
Mr. Eastham: It is not my responsibility to feed the Minister that information. He has enough civil servants supporting him who could check that.
I obtained that information from the Low Pay Unit and from an officer who receives considerable feedback from people involved in some of the youth training schemes. It is up to the Minister to ask the civil servants to do their homework. He may be embarrassed to make that request. I wonder whether there are other training schemes, perhaps for ferret catchers or budgie keepers. All sorts of strange things come up when the Government decide that they want to create some sort of training scheme to keep people occupied. The purpose of the training schemes is to massage down the unemployment figures.
There are many training schemes for hairdressers, yet there is no overwhelming need for so many hairdressers. The Minister may say, "Oh, well, some of them keep on their hairdressing after the scheme." That is true, but it is also true that, with the low rates of pay on the YTS, some employers say, "We will keep you on, but we are not going to pay you any more than the YTS rate." That is sheer exploitation and is another matter that perhaps the Minister should take time to investigate.
There is also the other aggravation concerning the wages councils for which the Minister was responsible. Now there is no protection for anyone under the age of 21. There is no such thing as a minimum rate of pay. There are no workers' rights, even for holiday entitlement, for anyone under the age of 21. That causes all sorts of aggravation. It is all entwined with the YTS. [Interruption.] A Conservative Member is murmuring. I am always courteous and I always give Conservative Members a chance to reply. Does the hon. Gentleman wish to intervene?
Mr. Geoff Lawler: The hon. Gentleman said that wages councils had been abolished for people under 21. Does he accept that there is possibly some correlation between that fact and the fact that we now have lower than the EEC average of unemployment for people aged under 25, and that school leaver unemployment is coming down rapidly?
Mr. Eastham: That is a doubtful argument. I doubt whether it can be verified. We have challenged the Minister on this issue on numerous occasions in Committee and he has never provided any proof of that, nor did any other
528
Conservative Member. I say to the Government, please do not go along the road of thinking that unemployment has been resolved by having people working on starvation pay, because that does not work.
A great suspicion is now developing that the training schemes in Britain have been borrowed from American ideas. There is suspicion about schemes such as the compulsory labour schemes, which are supported by the Tories, such as "Pay for your dole pay" and "Work for your dole pay". They consider that they are the way out. They are called training schemes to make them look respectable.
Another area of MSC activities which gives rise to concern is the private management agents. Because the Government privatise everything, they privatise management agents. Those gentlemen are in the business for profit. In some cases they make more than £50 per student to comply with the YTS, for which the taxpayers pay. There are other ways in which the taxpayer could spend money than by putting money into private training agents' pockets.
The MSC managers are causing great concern in our area. A dispute is taking place in Sale, just outside Manchester. My right hon. Friend the Member for Salford, East (Mr. Orme) has written to the Paymaster General about a firm called Senior Coleman Ltd., which is in dispute with 112 workers who have had deplorable conditions. In addition, it has decided to intimidate four handicapped workers who are deaf and dumb by saying that unless they go back to work they will lose their jobs and never get another one. Unfortunately, the MSC manager locally is co-operating in recruiting scab labour to take on some of this work. My right hon. Friend said in his letter:
"Further, I have since been informed by the Trade Union that the Regional Manager of the Manpower Services Commission based in Manchester, namely Mr. Yendley, has been actively assisting the company in recruiting workers whilst an official dispute is taking place."
The Minister said that he would like some information, and this information is freely and readily available.
Mr. Litherland: My hon. Friend highlights a deplorable case. The employers to whom he has referred are already suffering in that they are deaf and now unscrupulous and uncaring employers are added to that. Has not the Government's policy laid the fertile ground for inciting the greediness and nastiness of such employers?
Mr. Eastham: My hon. Friend is right to say that the Government encourage such activity by employers, and I am sure that public opinion will condemn the Government for using the MSC and its agencies to undermine people who have legitimate grievances. I hope that the Minister will take this on board.
I remind the Minister about the responsibilities of the employers. The trend nowadays is for employers no longer to pay for training, and instead the Government are spending the taxpayers' money on it. On 5 February, the Chancellor made an interesting statement about this. A newspaper report says:
"The Chancellor, Nigel Lawson, yesterday urged industry to invest more in training after seeing new evidence of shortages of skilled labour in some industries and regions. Industry was now making enough profit to invest more in its future, he told the National Economic Development Council."
The employers, through the CBI, gave their reply in the same article, which said:

529
"David Nickson, president of the CBI, said that seven million, or one in eight, Britons were illiterate. Industry needed young people who could read, speak, add up and apply their knowledge in a practical way."
That is an appalling indictment of the Government. There are continuous cuts in education, and as a result illiteracy is increasing. This should be a matter of great concern, and money should be expended on training in further education colleges. I am told by educationists that for about £20 million we could embark on an adult literacy task force which would considerably improve the abilities of some of our workers.
Those are some of the matters that I should like the Minister to consider. I could go on for another 20 minutes, but others would like to speak. As I keep saying in the Select Committee on Employment, we want jobs. We do not want any of this artificial training — we want real job opportunities. Only then will we make progress.
8.5 pm
Mr. Michael Colvin: I will not pick up any of the detailed points made by the hon. Member for Manchester, Blackley (Mr. Eastham), although I enjoy serving on the Select Committee on Employment with him. This may be an appropriate moment to pay tribute to the previous Chairman of the Select Committee, the former hon. Member for Newcastle-under-Lyme, Mr. Golding, who has now gone off to fish in more turbulent waters, but who did a good job, and is ably followed in the Chair by the hon. Member for Newham, North-East (Mr. Leighton). The hon. Member for Blackley spoke about a mismatch in training. When we were discussing reform of the industrial training boards, one of the points that came through clearly was that the ITBs, in spite of the best intentions, had been responsible for a great deal of the mismatch.
We have heard a lot of ritual noises from the official Opposition, but I must confess that if we ever had the misfortune of being in opposition, which we hope will never occur, we would probably also be making ritual noises. However, there is one fundamental and important difference between us. There has never been, in my recollection, a Conservative manifesto that has promised to cut unemployment. Even if we were to manage to get everything right, the United Kingdom cannot operate in isolation. We are part of the world economy and are subject to world economic factors. Someone, somewhere, be it in the middle east or elsewhere, is bound to shove a spanner in the works, as happened in 1973, which will knock us off course.
On the other hand, there has never been a Labour party manifesto that has not promised to cut dole queues, and voters will need to look carefully at the difference between Labour's promises and performance.
Mr. John Evans: The hon. Gentleman has claimed that there has never been a Conservative manifesto that has promised to cut unemployment. Can he comment on what the Prime Minister said a couple of weeks ago when she promised the nation a return to full employment? Was that being economical with the truth or does the hon. Gentleman anticipate that that promise will not figure in the next Conservative manifesto?
Mr. Colvin: There has never been an undertaking to cut unemployment in the short term, and that is the trap into
530
which Labour Members always fall. They believe that by throwing Government money at the problem they can create jobs quickly. That may be the case, but in the long run they create unemployment rather than solve the problem. They have never succeeded in creating jobs in the long term. In spite of what the hon. Member for Kingston upon Hull, East (Mr. Prescott) said, all Labour Governments have left dole queues that were longer than when they came into office.
There is a problem with the credibility of the Labour party's alternative policies. I condemn it because it will never learn from its mistakes. One has only to look at its current promise to reduce unemployment by 1 million over a two-year period at a cost of £6·8 billion. It is hardly surprising that the hon. Member for Kingston upon Hull, East is recorded in the Municipal Journal of 7 February 1986 as saying:
"How did we get this promise of one million jobs? Who worked on the programme? Promises such as these simply label us with targets that we cannot achieve and exposes our credibility."
It is nice for Conservative Members to be able to agree with at least something that the Opposition spokesman has said.
The so-called alliance is no better. It is a pity that alliance Members are not here. They are thin on the ground in Parliament. After some of the statements that have been made by alliance Members today, they should be here to hear our comments on some of their pronouncements. They have also said that they will cut unemployment by 1 million. They give themselves an extra year—they say three years at a cost of £4 billion. The hon. Member for Gordon (Mr. Bruce) made a Freudian slip. He nearly referred to the increase in employment that has occurred under the Government. He corrected himself at the last moment.
I was interested to see that, since March 1983, it is estimated that 985,000 new jobs have been created. Admittedly, a lot of them are for women working part-time, but nevertheless they are new jobs. Again, since March 1983, 457,000 more people are estimated to have become self-employed. That is good. It is a pity that alliance Members are not here to congratulate the Government on that achievement. The hon. Gentleman referred also to the fall-off in investment. We can put him right. In 1984, total fixed investment, both public and private, was at an all-time record in real terms. It is expected to have risen a further 4 per cent, in 1985 to £60 billion at current prices. It is, therefore, growing at a faster rate than the overall growth rate. This is the reverse of what occurred during the period 1974–79.
Many people ask why there was not more investment in the past and why there is so much more now. It is interesting to note that the return on capital from new investment in manufacturing industry in the period of the last Labour Government was 2 per cent. It is hardly surprising that investors were reluctant to put their money into manufacturing. The average return on new investment in manufacturing industry today is 17 per cent. Again, it is hardly surprising that investors are putting money into manufacturing, contrary to what Opposition Members would lead us to believe.
The Opposition's policy—whether alliance or Labour — would lead to some short-term jobs. We all know that. But the fact of the matter is that, in buying these jobs, which they would do with public money, they will weaken

531
the economy and that would lead to ever higher borrowing. In turn, that would lead to higher interest rates, and that would lead to runaway inflation. As the right hon. Members for Cardiff, South and Penarth (Mr. Callaghan) and for Blaenau Gwent (Mr. Foot) admitted when they were Leaders of the Opposition, inflation is the mother of unemployment.
Conservative Members welcome the Government's motion. I even welcome some of the points made in the Opposition's amendment. I welcome the way in which they draw attention to the importance of training.
I endorse what is set out in the European Community document which was produced during our period of presidency. The Government motion takes note of that document. I wish that they had been a little more robust in what they had to say. It shows that the United Kingdom is leading the way in employment and training, although West Germany could be said to have set the style with its dual system of education and training, from which the United Kingdom has learnt a great deal.
Pages 8 and 9 of the EEC document, in the section dealing with training, called for measures to
"promote amongst both employers and employees a greater awareness of the importance of training both in encouraging economic growth and in meeting the aspirations of individuals, … encourage employees to invest more in training in industry, … aid the development of more responsive training systems, including the use of new technologies and distance learning for the provision of education and training,".
I digress to mention an experience that I had while working for my right hon. Friend the Member for Waveney (Mr. Prior). During our period in opposition, he set up a manpower working group to study the problems that we knew we would have to face when we gained office at the general election in 1979. That was back in 1977–78. At that time, we seriously considered the possibility of having to face unemployment levels of around 4 million. We jolly well knew then that there would be no short-term solution. While studying the plans for the Open Tech programme we realised that many training resources in schools, colleges and universities were not being fully used. We considered that the doors should be opened to those who needed that training.
I can well understand the EEC document. It asks for Community action to examine ways of
"overcoming restrictions on access to training,".
It also calls for ways of
"identifying the developing training needs of enterprises at local level."
That leads me to a specific and welcome development training in the United Kingdom. Those whose job in is to train often complain that employers do not tell them what is wanted. What could be more logical than for employees to link in with educators and trainers, to let those at the sharp end of the job market know which skills are most in demand? The new Local Employer Networks are designed to involve employers more effectively in our system of vocational education and training.
On 3 February, this new training and education initiative was nationally launched. I welcomed the remarks by my right hon. and learned Friend the Paymaster General in his opening speech about that new scheme. There was a reception in the House last week, sponsored by my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet). It is perhaps a pity that more hon. Members
532
did not go to the reception to hear what the scheme was about. The Local Employer Network scheme is a joint initiative by the Association of British Chambers of Commerce, the Confederation of British Industry and the Manpower Services Commission. It aims to make a substantial contribution to national economic performance by improving vocational education and training. It is intended to have a network in every local education authority area. Each network will feed information on present and future employment needs to local planners of vocational education and training. It will represent employers in that planning process and provide a wide range of services related to education and training. It will provide a continuous dialogue between all who are involved.
Back in November 1985, a report was published for the Manpower Services Commission and the National Economic Development Office under the title "A Challenge to Complacency". Among other things, the following was suggested:
"We think that what is needed is a network of locally-based arrangements. The roles of such network of local bodies could include monitoring firms, training activity, collating information about small firms' needs, distributing some MSC grants, gathering local labour market information and organising local skill testing."
Several of these aspects have already become central to the role of Local Employer Networks. What do we want these networks to achieve? First, they should consult employers about their needs and problems. Secondly, they should collect and interpret data on the local labour market and, thirdly, they should pass on what they have learnt to education and training providers. Those are just three of the main aims in an exciting concept. Local Employer Networks have the potential to wipe out our skill shortages by tackling the causes at local level.
The chairman of the Manpower Services Commission, Mr. Bryan Nicholson, said on the day of the launch of the Local Employer Networks:
"They offer an unparalleled opportunity for companies to ensure they get the right skills and qualifications in their workforce to help them compete in world markets."
A key feature of the scheme is joint action. The chairman of the CBI education and training committee, Mr. John Peake, said at the launch of the network project:
"For a number of years the CBI … has taken the view that a local employer network should be established to ensure that industry's voice is heard in vocational and educational training at local level. Industry is well represented on these issues at national, regional and sectional levels, but until now, for a variety of reasons, this has not always been the case at local level."
Now the CBI has got what it wants. I think it welcomes the plugging of that gap and its only reservation is that we do not try to reinvent the wheel and duplicate work that has already been done. The second of the three partners is the chamber of commerce. Mr. R. G. Taylor, the director-general of the Association of British Chambers of Commerce, said at the launch:
"It is ironic that even at a time of high unemployment in the UK, we have persistent shortages of particular skills which are inhibiting the growth of many companies. One of the great advantages of Networks is that they will be able to spot skill shortages before they become damaging and ensure that remedial action is taken in good time."
It is encouraging to know that over 100 networks throughout Britain will soon be responding to training and retraining needs at all levels and for all ages. They will do that for high-tech jobs, such as computer programmers, and low-tech jobs such as skilled jobs in the construction

533
industry. Employers of every size and type will be invited to join their local network. The plan is to commission one in every local education area within a year. The first member networks already set up are in the cities and towns of Middlesbrough, Manchester, Redruth, Slough, Aberdeen, Luton, Sheffield, Norwich, Hull, Birmingham, Solihull, Enfield and Portsmouth which is in my county, Hampshire. I am sure that hon. Members who represent constituencies in those towns and cities will welcome the existence of those network members and will play their part in the work that they do.
There is a network in Portsmouth and that is good, but it raises a question in my mind. To make a constituency and parochial point, I wonder why there are none in Southampton. I made some inquiries of Southampton chamber of commerce and was told by Mr. Peter Beebe, its director-general, that the Southampton chamber, which I think is the largest chamber in Hampshire with direct membership in the city of about 1,600 firms and businesses and about a further 3,000 associated members throughout the country, found it essential wholeheartedly to support the concept. The chamber has already got a nucleus of employers who have agreed to join the network and is working hard to expand the employer base.
I think that Mr. Beebe plans to call the members of the network together and will invite the organisers of the network to help his chamber to the next stage. He made the point that he did not want to see the network become a talking shop. There is a wide disparity between chambers of commerce and I have seen good and bad ones. The Southampton chamber of commerce is extremely good and is active in promoting business and employment. However, in some parts of Britain chambers of commerce are little more than talking shops.
All hon. Members will wish to congratulate the local enterprise networks on their initiative and will want to wish Mr. David Stanley, the project director, all the best in this initiative. I shall end my speech with the words that he used on the day of the launch. He said:
"The aim of networks by working closely with Vocational Education and Training, and planning for employment needs well into the 21st century, is to improve levels of skills and to better utilise Britain's workforce which, we hope, will in turn be reflected in enhanced economic performance for Great Britain Limited."
I wholeheartedly welcome this scheme and the Government's support for it.
Mr. Deputy Speaker: The debate has been in progress for four hours and only 11 hon. Members have had the opportunity to address the House. I hesitate to ask for brevity now, especially from those hon. Members who have sat through the debate, but it is necessary to do so. The first Front-Bench speaker hopes to catch my eye at 9.20.
8.26 pm
Mr. Martin Redmond: In moving the Government motion the Paymaster General spent five minutes talking to it and then subjected the House to a load of garbage and bile, the like of which I have never heard. He winced when the auditor's report was mentioned, and it is worthwhile looking at that report. It makes the accusation that perhaps the Manpower Services Commission and the Government are not cost efficient because there is no way of checking. One could infer from that that the Government have a lot to answer for-in the
534
way that the MSC is run. It is rather strange that the MSC is not cost efficient, because the Government have spent the last seven years browbeating the public sector into becoming cost effective. It does the Government no good to preach that to the public sector and practise something totally different by seeking to manipulate employment and training.
On a number of occasions the Paymaster General refused to give way to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). Then he took the hump when my hon. Friend gave him similar treatment. Perhaps he will learn a lesson from that.
One of the reasons for the country being in such a mess is the lack of Government forward planning. I have listened to the Prime Minister a number of times and I listened to her today at Prime Minister's Question Time. I have also listened to Government Ministers, and to hear them one would think that there were no problems about unemployment or the Health Service or education. They are not living in the same real world as; I am.
There are many problems in my consituency and I suggest that the Paymaster General and the Prime Minister should come down from their ivory tower into the world of reality that the people of Britain have to endure. Perhaps they should stop behaving like the little Dutch boy who put his finger in a hole in the dyke to stop the water from coming out. We would make better progress if the Paymaster General pulled his finger our. and got on with the job that he is paid to do.
In the Yorkshire and Humberside region there are old industries that have been the backbone and wealth of the country for many years. They have certainly seen us through two worlds wars and helped industry to recover from the effects of the wars. Of course, they have been exploited and, having been exploited, they are now left to rot.
The high unemployment in Yorkshire and Humberside creates many problems which I do not have time to go into. Part of the Don Valley area in my constituency has one of the highest unemployment levels in the Doncaster area with the exception of Thorne on the east. The people of my constituency are good and proud people and they want the opportunity to work. The steel industry, the pits and the fishing industry, from Sheffield to the east coast, are now being left on the scrap heap. As the old industries die out, there is nothing to replace them. That is as a direct result of Government policies and a lack of forward planning.
I am sick to death of hearing Ministers blaming past Governments for today's faults. I have never heard owt so daft in my life. The Ministers blame the previous Labour Government, the Macmillan Government and future Labour policies, but not today's policies. It is the Government's policies that can help solve today's problems. I hope that for the good of the country the Government will step aside and let a Labour Government in with the sort of policies that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) was talking about. They are good, sound policies.
The apprenticeship scheme has been referred to. The Coal Board had an excellent apprenticeship scheme. It had to train over 50 per cent, more than it required because the private sector did not want to spend any money on apprenticeships. Of course, the private sector offered higher wages, hence the need for the Coal Board to train more apprentices. Unfortunately, with the Government's

535
policies and the rundown of the industry, such apprenticeships, even though they have been scaled down in years, are not coming through. Because the Coal Board is not taking the youngsters on, we have problems with those youngsters.
It is daft to say, as one Minister did, that we should have lower pay for the north and keep high pay in the south. The Daily Mirror contained an article attributed to the Paymaster General. It says, "Ban comparability payments." I heard the Paymaster General make a remark earlier in reply to a question saying that Lord Young gets nowt. Perhaps he is frightened of getting some comparability with Lord Young.
The CBI should be concerned, as the Government should be concerned, because the number of jobs available down south and the lack of jobs up north is forcing wages up in the south. If jobs were forced up north, there would be a better balance in wages. If the Paymaster General wants me to go into detail I will be pleased to see him later over a cup of tea.
We talk about wages being the cause of the lack of job opportunities. I do not hear the people who advocate that sort of policy talk about the high wages and salaries of the directors and captains of industry. That is in order according to the opponents of wages for the workers. Of course, we must have profits to reinvest in industry. Well, when the exchange controls were lifted, all the profits went abroad to build factories to bring goods back to Britain. The philosophy of the Government is that the lowering of income tax will create jobs because of the spin-off effects. I do not see any jobs coming from the big fat profits that the directors have been making under this Conservative Government.
I shall now come back to forward planning. We have to keep coming back to it because we have to plan if we are to meet the challenges of the 21st century. The Government's motion talks about the MSC, YTS, ATS and uncle Tom Cobbleigh and all. I ask you. They fiddle the figures. I looked at Prime Minister's Question Time and I thought, Christ, Groucho Marx and his team. I can just imagine them running around. I apologise, Mr. Deputy Speaker, if I swore, but the Government's policies are enough to make a parson swear. We do not have forward planning. For example, there has been great publicity by the Prime Minister about the Channel tunnel. It is said to be a massive project which will enhance Europe and so on, but she has left it to the private sector to raise the funds. I have no argument about that but, at the same time, we must have decisions in relation to infrastructure. All the jobs that the Channel tunnel will create must not be down south but must be brought up north either to the west or east or both. The Government must make those decisions now to enable local authorities such as Doncaster to come up with suitable schemes to complement that decision.
It took a large amount of Government money to try to lift Corby out of the mire that Government policies had put it in. When one is dead weight, it costs much more. Help in my constituency and in Yorkshire and Humberside is needed now.
An application for development status was turned down. The letter said:
"The AA map has to have some stability."
536
The initials "AA" stand not for Automobile Association but for assisted areas. While we are talking about stability, may I ask why cannot local government have stability? In seven years there have been about 13 schemes in relation to rate support grant that have caused all sorts of problems for forward planning. We need help now, not two years on, because that suggests that Nero fiddles while Rome burns.
I ask the Prime Minister to bring about a co-ordinated team that will embrace all Government Departments within a region so that they can start planning for the future. Government Departments do a little bit here and a little bit there. The British Enterprise Board and British Rail are all doing separate things and there is duplication. We need forward planning so that we can work as a team, but not as the Minister of Agriculture, Fisheries and Food and the Secretary of State for the Environment did earlier this week. There is the Secretary of State for Education and Science's grand design for education. The Government should get their heads together with the Department of Education and Science to see how we can co-ordinate, not when the lads are reaching maturity but early on, so that we can have the sort of core training that will equip pupils to meet the challenges and changes of the future.
I should like to comment briefly on the MSC which has a training and retraining scheme for the private nursing home sector. Local authorities employ a hell of a lot of people in that area and they should have the same facilities. There is a high turnover of staff in that area of social service work and the local authorities should have that facility.
Unless we take positive steps, we shall see a breakdown of law and order in this country. It will get worse and riots will bring the troops on to the streets. That will happen if the Minister does not listen to the advice of Labour Members and bring about some sensible forward planning.
8.41 pm
Mr. Michael Marshall: In following the hon. Member for Don Valley (Mr. Redmond), I should like to say that he has been present for most of the debate, as I have. He has shown some restraint in saving his remarks until he was called to speak, unlike his hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who gave an unfortunate exhibition on the important occasion of this debate. Although I do not agree with the views of the hon. Member for Don Valley, he expressed them in a good humoured and balanced manner. I should like to respond briefly to just one of the points that he made and which, I think, it is important that we debate among ourselves. He said that, if elected, a Labour Government would seek to freeze all opportunities for overseas investment. In saying that he is running into a classic trap. British industry, which has been built up over many generations and which operates throughout the world, provides not only a stream of dividends but an essential underpinning for much of the invisible earnings of the City, to the tune of about £7 billion a year. I shall be happy to debate that point with him on another occasion.
In meeting the spirit of what you said earlier, Mr. Deputy Speaker, I should like to concentrate my remarks on training and retraining, especially in relation to skills shortages. I wish to do that because throughout the debate —I have heard it all—one of the key aspects has been

537
the changes that have been caused by technology. That was touched on by my hon. Friend the Member for Beckenham (Sir P. Goodhart). The hon. Member for Don Valley criticised Governments for blaming their predecessors. It is true that all Governments do that and all Governments can be criticised for not doing as much as is humanly possible. That is the nature of the beast. However, the Government are facing problems of technological change on an unparalleled scale. I should have thought that there would be common ground across the Floor of the House as we try to look at the ways in which we could resolve some of those grave issues.
There is no doubt that the shortage of skills is the preeminent problem that we face in relation to training. A year ago the CBI said that three in every five companies would take on people in the skilled areas if they could overcome the problem of training. Companies were facing difficulties in filling jobs that required skills, qualifications and experience.
I should like to comment especially on information technology because that area is not only the fastest growing but is the key to future growth and prosperity and to matching our competitors. If we do not manage to achieve that build up of skills, we shall see our international trading position and thus our domestic economy badly eroded.
I differ from many hon. Members in feeling that during the debate there has been a concentration on what could be termed public activity, in terms of what Governments, the Manpower Services Commission and, to a degree, the universities and polytechnics are doing, and the public funding that is used.
I do not have any difficulty in supporting the motion because important initiatives have been taken. However, if we do not recognise what industry is doing about training we shall neglect an important area of debate. My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) partly answered the criticism that was made earlier by the hon. Member for Kingston upon Hull, East by discussing the limited amount of training that is done by some companies. However, in the period which my hon. Friend describes, the return on manufacturing industry averaged 2 per cent., and there was a great problem in putting aside resources for training because of the limited funding that was available to meet that task. As my hon. Friend rightly pointed out, there are now more profitable opportunities for British industry, up and down the country. There is an opportunity to move ahead once more in relation to industrial training.
The hon. Member for Kingston upon Hull, East was certainly adrift when he refused to recognise the substantial areas in which training is successfully carried on by industry. Within the Palace of Westminster, many hon. Members consider that issue with blinkers on.
The Select Committee on Science and Technology in the House of Lords recently issued a useful report on education and training for new technologies. However, it tended to concentrate on the idea of public funding, whether in Government schemes, or by universities and polytechnics. In my view, the Committee did not achieve the right balance because when one considers the figures, there is no question that industry still does far more training than any other part of Government or the education system.
The central training provisions of British Telecom are far larger than the entire electrical engineering resources
538
of all our universities and polytechnics. As another example, ICL and IBM also provide far more training individually than the entire computer science training units at all our universities and polytechnics. Such companies underpin and, in many cases, underwrite much of the work done by universities and polytechnics, and I welcome that. We must look at training for new technologies if we are to build on what is successfully happening in some companies, and if we are to open up the way for others.
In a sedentary intervention earlier today, the hon. Member for Stockton, South (Mr. Wrigglesworth) asked how companies could be encouraged to do that. I should like to suggest to my hon. Friend the Minister some thoughts about that, especially in the light of the Budget that we shall consider on 17 March. To reiterate the problem once more, the National Computing Centre's latest estimate showed that 60 per cent, of all companies involved in information technology do not take on trainees. Therefore, there is a danger that they will look to others to do the training and then poach those who have been trained. The Minister may recall that the Undersecretary of State for Trade and Industry, my hon. Friend the Member for Coventry, South-West, (Mr. Butcher), warned, in a 1980 pamphlet entitled "The Big Steal", of that increasing problem. However, that problem is far greater today.
What can be done? Two years ago I was a member of a working party that argued that 3 million new jobs could be created by the end of the century if certain legislative restraints were removed and if the Government provided the opportunities that would open the way for the information technology industry to develop and expand. If we moved in that direction, we could see that number of jobs created. I shall be happy on another occasion to debate those figures. We have seen some movement in that direction, as is reflected in the creation of about 900,000 new jobs.
I should like to outline one or two suggestions which could give added encouragement to training. I strongly disagree with suggestions made by Opposition Members that a further levy on industry for training would be the way ahead. Opposition Members have been plain about their views, and the hon. Member for Kingston upon Hull, East admitted today that the Labour party would lax small businesses. That would hit at companies in the growth sector which are least able to meet that kind of impost. That sort of taxation is the wrong way to go. It is true that the alliance parties have argued along the same lines. Therefore, the arguments at the election will be fairly poised. However, we could consider encouraging companies to use their own money and in that respect we should look carefully at training costs and taxation.
Perhaps the Government could be persuaded to consider this proposal within taxation policy. Training costs, including pay, could be treated as a loan and that loan could be subsequently repaid, if there was a premature departure of the person who was trained. Otherwise, it would be a tax write-off. That would begin to help build apprenticeship training. Many hon. Members on both sides of the House recognise that there is a problem caused by the decline in our apprenticeship system. In Germany there is a form of indenture apprenticeship which is successful. Perhaps we should move in that direction, but allowing companies a tax incentive.

539
Similarly, I would extend the same principle to individuals seeking training. Those who have deep knowledge of information technology reckon that someone with no knowledge of it can acquire the digital skills and basic needs in 18 months. It is important that we should recognise that. Moreover, the underpinning of industry requires constant up-dating. Over the coming years we shall see the need for people to train and to be retrained. Individuals, whether in work, about to start a job or unemployed, should be given an incentive to undertake training. I should like to see such training allowable as a deduction against personal taxation.
It is possible to give generous tax relief to individuals or companies, perhaps in the American style, for making donations to education and research. I would take that process one step further and say that in recognising companies' activities in training it would be reasonable to set up a Queen's award for training for companies of all sizes.
The idea of a repayable and tax-free loan recognises the collapse of the apprenticeship system as we have known it. In future we can find ways to prevent poaching and to provide a greater sense of stability and continuity in this area. On individual training for future employment and a tax-free allowance, information technology skills can be acquired in a relatively short period. The incentive of that should appeal increasingly to a society which will have more and more people working from home in small information technology businesses. I see that almost as a reversion to the growth in craft industries where many people, working at a keyboard, can relate to a centre and will need to meet for social rather than industrial or technical reasons. That is the background in which such individual training should be encouraged.
Tax-free donations for those who support education and training would be in keeping with the Government's consistent line in so far as they have already changed taxation policy to assist the arts. That would be a sound development. It would provide opportunities for many people to show that they believe in the importance of that area, particularly those in industry who have perhaps been involved in building their business and who can provide seed corn for other opportunities.
It may be said that a Queen's award is a gimmick, but I do not believe so. The Queen's award for export is regarded with great pride. My right hon. and learned Friend the Paymaster General and my hon. Friends must have seen, as I have, the Queen's award for export flag flying over companies which have achieved it. We underestimate what people will do, not for monetary award but for pride.
A few years ago many hon. Members were impressed when we saw the great response to the campaign, "I am backing Britain". It reflected the deep patriotism of many of our people. We should encourage them to say, "I am training for Britain", and let us help them to" do that.
8.54 pm
Mr. Stan Thorne: The background to my speech is a travel-to-work area in Preston where 17,722 people are unemployed. Today we are talking about job creation and the motion refers to employment and training initiatives.
540
First, we must recognise certain priorities in overcoming this problem. I am convinced that it will be difficult, even for a Labour Government, radically to improve employment opportunities. I am certain that we must concentrate on labour-intensive industries, particularly the building industry. The shortage of houses, the problem of school repairs, the question of health centres, nurseries and so on would be met by major investment in the building industry. Moreover, that would create many jobs in the short term. In turn, that would have a multiplier effect on manufacturing industry.
I am aware that technology is changing. The Government have cut skillcentres and I hope that a Labour Government will give urgent priority to reestablishing a wide range of skills. But, despite those skillcentres, fewer jobs will be available and that is a fact that we must face.
We should already be planning for a much shorter working week, for example, three or four days' work. That raises the question of planning for leisure. There is no justification for asking workers in Britain today to work 50 or 60 hours a week, considering our unemployment figures. I am thinking, not of leisure on the poverty line but of leisure that can be creative. For that we must invest in public services. A Labour Government will give tremendous priority to meeting people's needs if they wish to be re-elected after a five-year term and to put Socialist measures into effect. Only Socialist measures can ultimately solve our economic problems. Anybody who believes that private enterprise can meet the needs of the British people over a long period and in real terms is living in cloud-cuckoo-land. We must control our resources, and plan our economy and the way in which we meet the needs of people in terms of buses, railways, street lighting, old people's homes and care centres. We are not meeting those needs; the Government do not have that sort of priority. Private profit is still the Government's main consideration.
My son-in-law has been unemployed in Liverpool for six years. He would like to be an ambulance driver. He inquired about the prospects, but there were no vacancies; yet the local ambulance services are crucially short of resources. People are suffering as a consequence.
We need investment in a large number of areas to achieve growth in the economy to meet the need for new jobs. Using the country's wealth to create jobs and relieve poverty is a human and moral consideration that must be uppermost in the mind of the next Labour Government.
Training is mentioned in the motion. Millions of people will have to be trained, and that will need considerable planning. Hundreds of thousands of adults in Britain could do extremely valuable work by going back to school as mature students and obtaining qualifications. That demands resources. Will there be the necessary investment in education to provide retraining, re-education and the application to new technology that is so vital? Those are some of the problems that the next Labour Government will face. I am confident that they will solve them.
I do not propose to emulate other speakers who have taken 20 minutes to make a few valuable points, but I must mention the problem of Leyland Trucks. Leyland Trucks is still facing a considerable problem with regard to job losses. It is suggested that Paccar or Daf could take over Leyland Trucks. Research shows that both companies would demolish Leyland Trucks, and thus there is a major concern that 5,000 jobs could be lost in direct terms, but many more indirectly. Paccar and Daf spell doom for job

541
prospects in the area. This is at a time when programmes at Leyland's assembly plant are increasing. Leyland are again producing fire engines. What, one might ask the Government, is the Ministry of Defence doing to ensure that military vehicles are manufactured at Leyland Trucks? That is a clear possibility, but the Government do not care.
Employment is a major priority for the next Labour Government: they will ignore it at their peril. I am confident that the Labour party will make a realistic appraisal of needs and resources, and will take control of those resources which are vital to establish jobs, and will not hesitate to maintain that as a powerful priority.
9.3 pm
Mr. Geoff Lawler: I shall follow the themes of the hon. Members for Kingston upon Hull, East (Mr Prescott) and for Manchester, Blackley (Mr. Eastham) on the question of the training programmes that the Government are providing.
Both hon. Gentlemen slated the Government's training programmes. They did not put forward any constructive alternatives, say what they would do when they came to power, or what was wrong and what could be done.
Mr. Eastham: Will the hon. Gentleman give way?
Mr. Lawler: Perhaps the hon. Gentleman will allow me one minute. They did not say how they would seek to improve training constructively. I am sure that my hon. Friend the Minister would welcome constructive criticism and that he would not be ashamed to say that, if there were better ways of training people, the Government would not be slow to listen to them.
Mr. Eastham: I am sorry if the hon. Gentleman did not pick up one of the points that I deliberately tried to make. I was referring to illiteracy and some of the shortcomings in education. I was suggesting that it would be a good idea if the Government were to redirect some of the money away from bogus training schemes to further education colleges to improve literacy.
Mr. Lawler: Resources to further education colleges are increasing in real terms. The hon. Gentleman confirmed what I have just said by referring to bogus training schemes. I shall pick one example, the youth training scheme.
The Labour party, especially its spokesman, the hon. Member for Kingston upon Hull, East, must make up its mind about the youth training scheme. Does the Labour party welcome it? Is it a scheme that is doing good and achieving results—which is why the majority of trade unions and certainly the sensible trade union leaders are supporting it—or does the Labour party think that it is a skivvy scheme and a bogus scheme? If so, the Labour party should say so so that everyone knows precisely where it stands.
If the Labour party thinks that the YTS is a skivvy scheme and a bogus scheme, what would it introduce to replace it? How would the Labour party increase the training of young people? All we know from what we have heard is that a levy would be imposed, yet the hon. Member for Kingston upon Hull, East went on to say how terrible it was that so many companies managed to be exempted from the levy in respect of training boards. Surely the problem would be even greater if a levy of 1 per
542
cent. were imposed on all companies, let alone if it sustained the bureaucracy to which my hon. Friend the Member for Langbaurgh (Mr. Holt) referred.
The only other definite proposal which we have heard from the Labour party is that a greater allowance should be paid to YTS trainees. That is very nice, but will an increased allowance mean that there will be less money to spend on the training of young people, or will it mean that companies will have to pay the top-up allowance? If companies have to pay that allowance, they will he able to afford to recruit fewer young people. Youth unemployment has been a serious problem and the number of apprentices has fallen because, over the past 20 years, the price of youth labour had been constantly bid up by the action of unions and weak management. Consequently, many young people have been priced out of jobs and training.
Although I welcome the change of heart by many trade unions, old attitudes persist. Only the other day I was at a construction company office and was told of a young man over 21 who was a labourer but who wanted to train as a bricklayer. The company was happy for him to do so and the labourer was happy to take a wage cut so that he could go on to the construction industry training board scheme and be paid at the appropriate rate. He recognised the investment in training that would be made by the company. But he was not allowed to undertake that training because his union would not let him. The union put a block on it. So long as such union attitudes persist—as they would if the Labour party came to power—there will not be the numbers of people in training that we so desperately need.
Mr. Eric S. Heffer: Will the hon. Gentleman give way?
Mr. Lawler: If the hon. Gentleman will forgive me, I want to continue because there is not much time.
It is right that those who have suffered most from unemployment — the youth—should be be benefiting most from the Government's steps to increase training and put more people in work. The pledge that no school leaver under 18 will need to be unemployed is a major one which any Government would love to give. It means that there is now an effective vaccine for everyone under 18 against the disease of unemployment. There can he nothing more wasteful than for our youth to leave school with no hope and no training to undertake.
Unemployment for those under 18 is an option only for those who have been misguided enough to listen to the likes of some hon. Members, to organisations such as Youthaid, to those who, unfortunately, have been misinformed or to those who choose, for their own reasons, to be deliberately idle. The time has come for that not to occur at the taxpayers' expense.
The youth training scheme has been successful because it has changed the attitudes of employers who now voluntarily subject themselves to rigorous inspection to ensure that the training which they provide meets the quality demanded by the MSC. Employers do that so that they can obtain sponsorship from the MSC. Employers now have a commitment to train, which means that the numbers trained have increased and the financial commitment has increased. An ideological commitment is returning to industry, which recognises the importance of training for all the reasons that we have heard in the debate.

543
There are positive sides to the changes. An increasing number of companies and an increasing number of employer associations are incorporating YTS in their training arrangements and reforming the old apprenticeship systems — for example, in the electrical contracting and construction industries.
More significantly, and moving away from traditional training and craft areas, people are being trained who would never have had the opportunity even two or three years ago. Shop assistants are receiving proper training in core skills to enable them to diversify during their working lives so that they are not left stocking shelves. Workers in warehouses are learning how to use computers so that they have opportunities to diversify and advance their careers. Those basic core skills mean that everybody leaves the YTS with a qualification to take to future employers. They have the knowledge that their qualifications are worth something and are what they employer wants. That is a major change of attitude.
It is no coincidence that about 29 per cent. of school leavers go into unskilled jobs but that of those leaving the YTS the figure is only 15 per cent. We are making training available to all. That means that companies are extending their skill base; that a work force can adapt and retrain as the changing economy demands; that the country has fewer unskilled people chasing a declining number of jobs in that category; that young people have something that they can sell and that they have a start in life.
The most satisfying aspect of my discussions with young trainees was to discover that young people who had been written off at school as academically hopeless and given no hope of a future by their careers teachers were now, because of the YTS, able to do something as valuable to themselves and society as can those who are more academically gifted.
There has been a change of attitude among many people who now have a widespread acceptance of the YTS, especially those on it. That is where the Labour party is dangerously out of touch with the youth of today. Who can blame young people being cynical about politicians when they hear Opposition Members, including the hon. Member for Kingston upon Hull, East, continually carping about the YTS? Yet 90 per cent. of participants find the scheme extremely worthwhile, and one reason for that is that it creates jobs.
My constituency in Bradford has above average unemployment. The latest figures — I checked them today — show that 75 per cent. of people leaving the YTS go into work. Overall, 82 per cent do something and only 18 per cent. go back on to the unemployment register. It is no coincidence that school-leaver unemployment in Bradford is going down and that more and more young people go into skilled jobs.
We have heard a great deal about shortages and undoubtedly they exist—for example, in the construction industry, as was mentioned by the hon. Member for Liverpool, Walton (Mr. Heffer). In the Yorkshire and Humberside area there were 1,192 entrants to CITB courses in 1979, while in 1986 there were 1,904 entrants—800 more than in 1979. The Opposition cannot have it both ways. They cannot say, on the one hand, that we need training in all those skill shortages to fill vacancies
544
and, on the other, condemn all that the Government are doing to expand training by claiming that that does not create jobs. They have to make up their minds.
Training creates jobs to fill the skill shortages that so much hamper the expansion of production. It allows new products and new methods of production to be developed, and also equips our young people with the skills they need to set up in business on their own. Enterprise is alive and kicking with young people. Some 26 per cent. of those receiving the enterprise allowance are under 25. I am pleased to say that the attitude of many young people has changed. They no longer leave school with the attitude, "Who will give me a job?", that the world owes them a living. Instead, they ask, "How can I create a job for myself and also for others?"
The lesson to be learnt is that 16-year-olds, taken on as permanent employees at possibly twice the YTS allowance but receiving little or no training, are not doing themselves a favour by sacrificing their long-term potential for short-term gain. The Government's target should be not 66 per cent. of school leavers looking for employment going on to YTS but nearer 100 per cent., which would mean the transfer of about 140,000 young people aged 16 from employment into YTS, though not at additional cost to the Government, because employers would realise a saving of about £1,500 per employee by paying allowance and training costs rather than a wage.
Consequently, we should eliminate almost completely unskilled jobs. We should remove once and for all the stigma that YTS is second best. Also we should remove any distinction between employee and trainee. All would have a legally guaranteed contract. There would no longer be two classes of youth labour. We should also catch up that much sooner with the number of under-18-year-olds who are in vocational training and education in advanced competitor countries. Eventually, the proportion of the work force with a vocational qualification would begin to match the proportion in, for example, Germany.
Many of today's young people still perceive that the going for them is tougher than it was for their parents. So it is, if the easy option is preferred, and if the level of their expectations is no higher than £60 a week and the first job that comes along, with no training and no career prospects. If, instead, a school leaver wants the opportunity to achieve a level of skill competency that will enable him or her to go for a high wage job, with good prospects, the prospects for young people now are much brighter than they have ever been.
9.16 pm
Mr. George Park: During the 1980s the recession bit deeply into manufacturing industry in Coventry and the west midlands. Internationally known companies such as Alfred Herbert disappeared, and others — such as British Leyland, Alvis, Talbot, GEC and Rolls-Royce — drastically slimmed down their labour force. But what has become clear in the past 12 months is that the recession is still very much with us. Even the suspect official figures show that last month in Coventry there were 25,000 unemployed, plus 844 school leavers.
In parts of my constituency of Coventry, North-East, unemployment levels are as high as 40 per cent. Business organisations that are not prone to criticise the Government have issued outright condemnation of the Government's inactivity. The West Midlands Engineering Employers Association says:

545
"We are sick and tired of the Chancellor telling us we need to keep wage settlements low. That now seems to be the whole answer to our problems. But in a recent survey 46 per cent. of wage settlements in the West Midlands were below 4 per cent. and more than 80 per cent. below 5 per cent."
The Chancellor's argument is that as labour is cheaper, firms will take on more workers, but reduced real wages lead to reduced demand and higher unemployment.
The Chancellor has now apparently passed the parcel to the Paymaster General, judging by his speech to the City University Business School yesterday. That speech gains credence because of its source, but Ministers are just as capable of coming out with daft ideas as anyone else.
The Paymaster General conjures up an "Alice in Wonderland" picture of employers distributing largesse to their employees in totally unjustified amounts, unrelated to their performance or to the position of the company— a situation I never came across in a lifetime of working on the shop floor. Companies are urged to pay lower rates of wages, as it is said that this will produce more jobs in the regions. The ultimate logic of that argument is that if we worked for nothing we should get all the jobs.
National pay bargaining is condemned, but the Paymaster General and his advisers seem unaware that in many sectors, such as engineering, national bargaining seeks to establish basic minima, with regional and company variations negotiated in hard-won agreements at local level. Job evaluation seeks to establish the value of a job to the employee and the employer; it has to be related to the ability of a company to pay and its prospects.
Instead of indulging in these flights of fancy, if the Government wanted to be constructive they could do something about the rates of interest which push up the costs of borrowing for research and development to enable companies to continue to be prosperous. They could do something about cheap, subsidised imports of castings, for example, from Spain and Brazil which have already cost us 700 jobs in Nuneaton. They could do something about the dumping of cement by Greece. They could stimulate demand by spending money on the infrastructure. For example, we have in Coventry 944 unfit dwellings, 4,935 buildings which lack basic amenities and 4,182 which need renovation. If we started to rectify that situation nationwide the problem of the labourer wanting to be a bricklayer would be solved because there would be jobs for all the people in the building industry.
The Government could do something about the open access to the United Kingdom market, which does not apply in the reverse direction. I have not got time to develop that argument, but people know all about the tariff barriers that our goods have to jump in other countries which exporters from those countries do not meet when their goods enter this country.
Despite the huge totals of the unemployed, which have trebled since this Government came into office, employers still say that there are skill shortages. This brings me to the question of training. The Government repeatedly stress that training must be market-led and that in the long term responsibility must lie with the employers; but it is well known that in a recession one of the first costs to be cut is that of training.
In engineering the intake of apprentices has dropped from 27,000 in the mid-1970's to around 8,000 in 1985—although I realise that there are other approaches to training. The Government have channelled resources
546
through the Manpower Services Commission, but there is a need for real liaison to see that the money is used effectively. Too much reliance is placed on local labour market intelligence to inform the planning of training provision, but this cannot be relied on to give a firm prediction of future training needs. This may partly explain why, in the three White Papers on training, no mention was made of the needs of women or of black people nor of the reasons for the closure of the industrial training boards and skillcentres.
Instead of trying to break the backs of the trade unions through punitive legislation, the Government will be well advised to look to coherent and well-reasoned policies towards British industry, based on reality and not on fancy, and not drive further wedges between north and south by advocating reductions in wages to go with the reductions in jobs which we have already had—and I include in the north anywhere above Watford. The Paymaster General has said' that expectations must change. Let him make a start by creating the expectation of a job and a decent home for millions of our fellow citizens.
Mr. Don Dixon: On a point of order, Mr. Speaker. Many hon. Members on the Opposition and Government Benches have been waiting to take part in the debate. Unfortunately, because of the length of some of the speeches, some hon. Members have been squeezed out, including me because I gave my name to you, Mr. Speaker, this morning.
Could I make a point of order which I hope is constructive? Some two years ago I suggested to one of the members of the Select Committee on Administration that next to that digital clock in this Chamber there should be another digital clock, the same as on the Annunciator, showing when an hon. Member gets up. When Members rise to speak they do not realise the length of time they are speaking. It is all right to have a clock on the desk so that the Clerk can see how long an hon. Member has been speaking, but sitting on this side of the House we cannot see and do not realise the length of time an hon. Member has been speaking. Can that be taken up with the Leader of the House to see whether something can be done about it, so that instead of appeals being made from the Chair for short speeches hon. Members who speak w ill be conscious of the time?
Mr. Speaker: I fully share the frustration expressed by the hon. Gentleman and I say to the other hon. Members who have been unable to be called tonight that they only need to look at the list at the end of the Chamber to see the length of the speeches. One solution would be for the House to pass the ten-minute limit on speeches, which would have enabled everybody who wished to speak to do so.
9.26 pm
Mr. John Evans: My hon. Friend the Member for Jarrow (Mr. Dixon) put forward a suggestion which will be supported throughout the House with a great deal of sympathy. I add my commiserations to those hon. Members on the Government Benches who have not been able to participate tonight, but I suggest that they should level some of that criticism at the Paymaster General, who spoke at inordinate length at the beginning of this debate.

547
This has been one of the most cynical motions that the House of Commons has ever had before it. It
"commends the Government … welcomes the national launch … congratulates the Government".
We have not heard one word tonight from the Paymaster General or any of his hon. Friends about the fact that there are 3¼ million people who are registered as unemployed in this country. In fact, about 4½ million people are out of work who are available to work if there were any jobs for them.
The fact that the wording of the Government motion comes entirely from the EEC document entitled, "Action Programme for Employment Growth", which is itself something of a joke, only adds to my cynicism of almost everything that this Government have done in employment and unemployment over the past eight years. There was a very strange omission from the Paymaster General's speech this afternoon, and indeed from the speeches of all his hon. Friends. Only two weeks ago, at the action for jobs breakfast, about which we heard such a great deal, the Prime Minister told the country that she was aiming for full employment. It is significant that the Paymaster General and the Secretary of State have said not one word about that remarkable promise that the Prime Minister made to the nation only a fortnight ago.
I have followed employment and unemployment issues ever since I came into the House of Commons. I have worked with or against every Secretary of State who has ever held that office, but I am bound to say that the present twin incumbents of the office in my view have reduced the Government's credibility on statistics in general and unemployment statistics in particular to the lowest ever level. The truth is that no one in this country now believes the Government's unemployment statistics. The Paymaster General and the Secretary of State are not in the least concerned with the plight of the unemployed. We never hear anything from them about the problems of unemployed people with families, particularly those who have suffered long-term unemployment.
The Paymaster General is not even concerned with the actual numbers of unemployed because he constantly alters the totals to mask the amount of unemployment that exists in our society. He is certainly not concerned with the growing divide between north and south, although I accept that the "south" has to be very carefully measured. Certain figures were released recently which I found fascinating and saddening and which indicate the depths of the north-south divide. Let us take three constituencies in the north-west and three constituencies in the home counties. I appreciate very much the problems of women, but nevertheless male unemployment is a very solid indicator of the depth of the problem. The unemployment rate in Liverpool, Riverside is 38·4 per cent., in Chesham and Amersham 3·9 per cent., in Manchester, Central 36·3 per cent., in Esher 4 per cent., in Knowsley, North 32·2 per cent., and in Beaconsfield 4·2 per cent. That is a clear indication of the depths of male unemployment in the north and south of this country.
Mr. Litherland rose—
Mr. Evans: I am sorry; I cannot give way to my hon. Friend although I have referred to his constituency. Time is extremely short.
548
The Government are not remotely concerned with the decline in manufacturing industry. My hon. Friend the Member for Newham, North-East (Mr. Leighton), in a devastating critique of the Government's statistics, pointed out that there has been a drop in employment in manufacturing of 1,750,000. My hon. Friends the Members for Sheffield, Attercliffe (Mr. Duffy) and for Don Valley (Mr. Redmond) outlined the devastation in their areas where once-great industries have been reduced to virtual rubble. Certainly the Government are not concerned about the decline in skills, although we have heard a great deal about skill training from the Government Benches.
Some interesting figures were released recently by the engineering industry training board. They give a clear indication of the size and scale of the problem. On page 7 of the document issued on 22 January the EITB said:
"Between 1980 and 1984 the recruitment of craft and technician trainees into the industry fell by 50 per cent. In the 1986–87 training year total recruitment is provisionally estimated at 8,125, against over 20,000 in 1980–81. This will include 2,175 YTS trainees."
Later the EITB said:
"CBI surveys in 1985 began to show increasing evidence of shortages of traditional craft skills."
It takes four year to train a traditional craft apprentice, so in 1985 we were beginning to see the results of the Government's folly in 1981–82.
The one and only concern of the Government and their Employment Ministers is statistics. I would not dream of accusing Ministers of the Crown of lying to the House. I would not even dream of accusing them of subverting the truth. They may conceal it at times and certainly they are often economical with the truth, which appears to be an ongoing issue for them. None the less, if we compare the Government's position on unemployment and employment measures with reality, we find that the two have little in common.
As the public are aware, the unemployment figures provide the classic example of the Government's handiwork. There have been some 19 changes in the way the figures are compiled or presented. All the changes have had the same effect—to reduce the gross total of those eligible for benefit. I shall not go over the precise figures. Suffice it to say that if the Labour Administration of 1979 had used the same basis of counting the unemployed as the present Administration, there would have been fewer than 1 million officially registered as unemployed when the 1979 election took place. I remind Conservative Members that they won that election on the lying slogan that Labour was not working. How many of them are now ashamed of the filthy campaign which they ran on that occasion against the Labour party?
The Government will tell us that there have been only six changes in the presentation of statistics. I have written to the Parliamentary Under-Secretary of State for Employment, the hon. Member for Pendle (Mr. Lee), giving him evidence of the 19 changes. So far I have not heard from him. No doubt we shall learn from the Department of Employment that two plus two equals three.
Another example of the black propaganda employed by the Department of Employment is the title given to its latest wheeze to get the unemployed off the register in time for a general election—the job training scheme. The first point about that scheme is that there are no wages. The people who will be dragooned into the scheme, who will

549
be mainly young people, will get only their previous rate of benefit, but it will not be called benefit. To get round the nightmare of bureaucracy and regulation which passes for a welfare system, conscripts to the scheme will receive payments slightly lower than their previous rate of benefit, topped up to exactly that level by a training allowance. The Government have still not decided what they want to call the new payment. I suggest that they ask some of the people who have been involved in the pilot areas and they will probably receive some interesting suggestions.
Secondly, all the information which is available on the so-called training that is involved in the scheme and which the young people would receive shows that it will be negligible—perhaps five or six hours a week. That total is equivalent to about three or four weeks' training in six months. At the end of that six months we are told that they will obtain a qualification. In fact, they will gat a useless piece of paper which will guarantee them nothing. There will certainly be no work for them.
When the Minister replies, will he tell us what those young people have been trained for and where the jobs are that they will receive when they have finished their six months' training? The job training scheme will not improve Britain's training record, which has been well documented in a whole range of reports.
In a report submitted to the MSC in 1985 entitled "Adult Training in Britain" it was noted that:
"for the workforce as a whole, off-the-job training occupied on average 1·9 days per year. This represents perhaps 14 hours compared with the 30–40 which is thought to be good practice in West Germany—and the 9·5 days per year which it has been calculated British managers spend on business lunches, above a normal lunch break."
This new scheme will not improve on that. Indeed, to dignify this concoction with the title of a scheme is beyond a joke. However, the Government are not joking. They are deadly serious in their endeavours to get this scheme off the ground, so much so that within weeks of it being offered to young people in pilot areas around the country, and without waiting for an appraisal of its effectiveness, the Government have decided to increase its availability nationwide and to increase the number of places to 110,000 before September.
Now we hear of proposals to increase the scope of the scheme still further, to the 220,000 under-25s who have been unemployed for more than six months and to the whole of the age group without a job. That would probably involve about 500,000 people.
Time grows short and, unfortunately, much of what I have prepared must be left on the cutting-room floor. However, it must be said that this rather cynical motion talked of more help for the long-term unemployed. If Ministers really want to help the long-term unemployed, why do they not give the higher rate of supplementary benefit to the over-55s, who would truly benefit from it? The truth is that in vast areas anyone who is over 55 and is unemployed is on the scrap heap. He will not get a job in the future. It is cynical of the Government to suggest anything otherwise.
On the matter of cynicism, the speech that the Paymaster General made yesterday is possibly one of the most synical speeches that he has ever made in his political career. He talked about offering a five-point action plan designed to remove barriers to flexibility in pay bargaining. He said that an annual pay round should be banned. However, I remind the Paymaster General that we
550
are still a democracy and it is for the employers and trade unions to decide whether they wish to abandon the annual pay round.
The Paymaster General talked about abandoning the going rate. As my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) said, the MSC advertisements on television talked about paying the rate for the job. Presumably that will be dropped from the advertisements.
The Paymaster General talked about abandoning comparability and job evaluation. Surely those are tools which are necessary in industrial relations and which are used by all managements.
Finally, the Paymaster General talked about ending national pay bargaining. Certainly, in the private sector, pay bargaining has always been about minimum rates. Considerable plant bargaining follows national pay bargaining and that gives wide variations across different parts of the country.
The Paymaster General said that all these practices
"restrict labour market flexibility, encourage excessive pay increases and destroy jobs."
He did not offer a single shred of evidence in the speech, in the press release or in his speech today to the House. He gave the game away when he said:
"In the public sector, virtually all employees are covered by national agreements. Where the government is the employer we will seek to gain acceptance of a wider geographic variation in pay rates … Greater variation in pay rates will help reduce differences in regional unemployment rates. Lower wage costs in the regions may encourage firms to move there."
Why are the firms not flocking there now? Why are they not flocking to the north-east, where the wages are lower? Why are they flocking instead to the M4 belt and other areas where wages are higher, and retreating from the regions?
The Government have served notice that they intend to attack workers in the public sector, the Civil Service trade unions and workers in local government. Notice has been served that the Government intend to ensure that those who live and work in the outlying regions had better expect wage cuts from the Tory Government soon.
There is a deep cynicism at the heart of the Tory party. On Monday, I read in The Independent about the plight of a dozen former Ministers in the Tory Cabinet, who have picked up a remarkable batch of directorships and consultancies over the past years. They include a former Secretary of State for the Environment, the right hon. and learned Member for Hexham (Mr. Rippon), who has increased his directorships from 33 to 47. Presumably he cannot manage on his £18,000 a year.
On page 1 of The Independent on the same day there was an article saying that the Secretary of State for Employment is seeking further cuts in the unemployment benefit. The article said:
"Lord Young, who carries the support of the Prime Minister, is convinced that more limitations on social security benefits are needed to persuade more people, particularly school leavers, to take up the Government's jobs and training schemes."
It is all very well for well-heeled former Secretaries of State and City-slicker Members of Parliament to earn fat salaries, but the unemployed and the poor have to suffer at the hands of the Tory Government. There is much talk about an early general election. The sooner the better. We

551
can put the Government's policies in front of the country, get the Government out of office and get in a Labour Government. I commend our amendment to the House.
9.42 pm
The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): Throughout this long debate, I have been fascinated to hear which Government schemes the official Opposition have chosen to attack, and which they have chosen to leave well alone. With the exception of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), they have chosen to avoid talking about small firms and entrepreneurship, I suspect for two reasons. First, they have to concede that the Government have taken the high ground on the subject, with record figures in self-employment and the net growth in small firms reflecting our success, as was made clear by my hon. Friend the Member for Lincoln (Mr. Carlisle). Secondly, they do not believe that they could convince the electorate that they understand enterprise or small firms. They admitted as much by not mentioning them once in either of their manifestos for 1979 or 1983.
On the other hand, the Opposition talked a lot about what should be done that could destroy this sector, such as the significant increase in local authority rates, which would finance their half-baked ideas on council expenditure, and increases in taxes which would kill off the entrepreneurs and risk-takers and nullify the projected increase in the jobs about which they fantasise. If, after all that, the firms in the sector are dead but will not lie down, the Opposition will hit them with a statutory training levy. That proposal was as eloquently rejected by my hon. Friend the Member for Arundel (Mr. Marshall) as it is by me. How can the Opposition say that they are in touch with the electorate when they want to hand them the poisoned chalice entitled "Real needs, local jobs"?
The Opposition are fond of quoting my Department's statistical data but choose to ignore the more than 1 million extra jobs that were created between 1982 and 1984 in firms employing fewer than 20 people. The hon. Member for Kingston upon Hull, East (Mr. Prescott) worships at the altar of the regional enterprise boards, but even they recognise the vital importance of new and emerging companies. It is a slow process, but they are beginning to recognise that new jobs will come from small firms—a fact that we have been trying to hammer home for the past few years. Conservative Members want to know what restrains the Labour Front Bench from declaring wholehearted support for small businesses. Is it that, by increased support given through local authorities, they can benefit only a mere fraction of the total population of small firms, whereas by increased rates and taxes they will damage them all? I point out to the hon. Member for Attercliffe that Sheffield is a good example of an area with high rates.
These days, we are talking about 1·6 million small businesses and 2·7 million self-employed people. They are record figures. Unless local authorities are to subsidise, invest in or lend to every small business, which is a ludicrous proposition, any help given to the chosen few will be a drop in the bucket alongside the increased charges that they will have to face, according to the recent Labour party policy document.
Mr. Bruce rose—
Mr. Trippier: I have no intention of giving way. We face a shortage of time.
How many small firms meetings have been attended by the hon. Members for Kingston upon Hull, East, for Huddersfield (Mr. Sheerman), for St. Helens, North (Mr. Evans) and for Birmingham, Ladywood (Ms. Short)? Not a lot, I should think. How many of those who have attended such meetings have found that their audiences have asked for substantial increases in rates and taxes, or did the Shadow spokesmen not mention that point? The Opposition have not mentioned it in the debate.
One of the most successful schemes introduced by the Government is the enterprise allowance scheme. Most people would find it difficult to attack the scheme. It is like motherhood—one could not knock it—but that does not stop the hon. Member for Kingston upon Hull, East from having a go. Shortly, we shall launch the 200,000 business set up under that scheme. Opposition Members should tell the people who run such businesses and employ people that they are not in real jobs and hear what they have to say. They should tell people employed in tourism that they are in candyfloss or Mickey Mouse jobs and hear what they have to say.
There are conflicting claims between the hon. Member for Kingston upon Hull, East and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) about whether a statutory levy is to be introduced for all businesses, which would have the effect of increasing corporation tax by at least 15 percentage points. The hon. Member for Gordon (Mr. Bruce) accurately referred to the European Community document, the action programme on employment growth, which stands as part of the motion. Frankly, the Opposition should be prepared to listen to what the hon. Gentleman said about it. We could learn a great deal from the European Community social affairs council. Over the past 18 months, not just from December, the action programme adopted by the Council—adopted unanimously, as my right hon. Friend said—sets four priorities for action. First on the list is more help for small businesses and the self-employed. There was not a dissenting voice in Europe, only from the British Labour party. The council suggested better training for young people and adults, more help to get the long-term unemployed back to work and steps to loosen the labour market by, for example, the encouragement of more part-time and temporary employment.
The real lesson to be drawn is how far the countries of the Community, whatever their political colour, have moved away from the 1960s-style economic policy that is still so loved by the Opposition. Only the official Opposition and the alliance are left still believing that one can somehow spend one's way out of unemployment. The message is very clear. Everyone except the Opposition is out of step. They have learned absolutely nothing from the past.
What about the policies of the alliance? There is disarray in the alliance. I listened carefully to the speech by the hon. Member for Gordon. He will remember that in January 1986 the Liberals announced officially:
"We aim at creating one million jobs in three years at a cost of £4 billion per annum."
By the spring of 1986 the equation had been changed again. Officially the SDP-Liberal alliance — they were together then — said that their Budget policies would reduce unemployment by at least 750,000 over three years.

553
At the Liberal party conference in September 1986—what a wonderful conference that was, especially when it discussed defence policies — the Liberals committed themselves to a policy of reducing unemployment to 2 million over the lifetime of a Parliament, while in the previous week the SDP proposed to cut unemployment to under 2 million within two years. That was an even more ambitious target than that of the Labour party. This morning it was changed again, according to the article that we all read in The Guardian written by the hon. Member for Stockton, South (Mr. Wrigglesworth). He says the target will be achieved within three years, so he is moderating the policy somewhat.
Mr. Bruce: You will not achieve any reduction.
Mr. Trippier: Did you have a word with him before you came into the Chamber?
Mr. Speaker: Hon. Members must not keep bringing me into the debate.
Mr. Trippier: At least we all know that, despite its past conflicting claims, the Labour party says that it can reduce unemployment by 1 million. But how and at what cost will it do that? That is the question The Guardian asked last weekend. How many jobs must be created in order to knock 1 million off the register? Is it 1·3 million, 1·5 million, or 1·7 million? No account is taken of the jobs that will be shed by companies crippled by the increased rates and taxes that are proposed.
Why should the Labour party be any more credible now than it has been in the past? Every previous Labour Administration promised to reduce unemployment and every one has presided over substantially increased unemployment. [Interruption.] It did not work in the past so why is it more likely to work in the future? [Interruption.] The Leader of the Opposition has said that under a Labour Government local authorities will be the engines of growth in our economy. [Interruption.
Mr. Speaker: Order. We often hear things in this Chamber with which we disagree but we listen to each other.
Mr. Trippier: Labour models its policy on a plan drawn up by Southwark council. Southwark's proposals call for the creation of 6,000 new jobs within two years and these would include a pool of 400 council employees to cover for absences and nearly 1,000 trainee positions in council departments. About three quarters of the jobs created would be people working for the council. On the basis of Southwark's own figures, the total cost of that plan, if applied nationally, would be £20 billion.
However, it is not just the cost and the nature of the employment envisaged that make these proposals demonstrably daft. The weakness of the scheme is compounded by the fact that nearly a quarter of Southwark council's existing white-collar jobs are currently vacant. The hon. Member for Kingston upon Hull, East hailed the Southwark blueprint as "the best thing that had happened on the employment front for a long time." That is a clear indication of his failure to understand how real and lasting jobs are created.
Mr. Rogers: Will the hon. Gentleman give way?
Mr. Trippier: No.
Miraculously, the Opposition urge us to spend more on training, but when we introduce a scheme to help that
554
process, like the job training scheme, they say that it is rubbish. The Opposition cannot have it both ways. In recommending an expansion of the scheme, the Manpower Services Commission stresses the absolute priority that must be given to quality. That point was made by some of my hon. Friends.
I shall now respond to the point made by the hon. Member for Manchester, Blackley (Mr. Eastham). No one would seek to deny that in geographical terms there is a skill shortage in certain sectors. However, there is no need to get carried away about that because the figures show that fewer than 15 per cent. of firms currently expect output to be constrained by a shortage of skilled labour. That percentage contrasts with the figure of 50 per cent. that applied when the Labour party was last in government. We did not hear much about that from the hon. Member for St. Helens, North (Mr. Evans).
The hon. Member for Newham, North-East (Mr. Leighton) tried to rubbish restart. The aim of restart is to provide people who have been out of work for a long time with opportunities to help them back into the labour market. How can one attack that? In fact, 4 per cent. of interviewees are placed immediately into work as a direct result of the interview. Many others go from restart into opportunities such as the enterprise allowance scheme, the community programme, training and jobclubs which, in turn, lead to a job. I know that it was news to the hon. Member for Kingston upon Hull, East, but 60 per cent. of those leaving jobclubs go into a job. I bet the people who have found those jobs do not think that that Government initiative is tea and sympathy. I bet they do not think that in Langbaurgh, as my hon. Friend the Member for Langbaurgh (Mr. Holt) was quick to point out.
The hon. Member for Blackley and my hon. Friend the Member for Bradford, North (Mr. Lawler), in his excellent contribution, spoke about YTS. The hon. Member for Huddersfield made a point of assuring the House just last week that he and his hon. Friends have never voted against the youth training scheme. He is right. I am glad that he said that and I welcome it. However, it does not stop his hon. Friend the Member for Kingston upon Hull, East from denigrating the young people on the scheme. Time without number — we hear it again today—he has referred to YTS as a "skivvy scheme". That is an insult to those on it and an insult to the trade union members who are commissioners on the MSC.
In spite of all the rhetoric about the need for more spending on training, it is shameful that the previous Labour Government vetoed an embryonic form of the youth training scheme on the ground that it would be too expensive. The House will be interested to hear that the Department of Employment is today spending five times as much on training as the Labour Government did in their last year of office.
We are used to the Labour party accusing us of fiddling the figures but I am surprised to hear it trying to roast this old chestnut again today. The measures we have introduced to help young people and the unemployed are popular with the people they are designed for, even if they are not popular with the Labour party, and they work. That does not suit the Opposition, so every time we introduce something new they say we are interested only in numbers and not in people. What did the previous Labour Government do?
Mr. Litherland rose—
Mr. Trippier: Listen to this. I bet Opposition Members did not know this. Did the Labour Government add on to the unemployment count everyone on Government training schemes or receiving subsidies, everyone on STEP, the youth opportunities programme or those kept in work through temporary subsidies? Of course not. They knew then, as they know now, that people working on schemes such as the community programme or those receiving full-time training are not unemployed. If the Labour party employment spokesman was able to set about reducing the unemployment count by 1 million as he claims he can, will that be before or after he has added on all the people on special employment and training measures and all the young people who are being trained on the youth training scheme?
When he is put on the spot, as he was on "Weekend World" on Sunday by Matthew Parris, he was blown out of the water, as was his party and his policies. The reply he gave to the question about what his party would do if it was to come into power was pathetic. He said that he believed the Labour party could reduce unemployment by creating more jobs. He went on to say:
"we will spell out where they come from and you keep dragging me down to three hundred thousand."
The hon. Gentleman cannot be specific. He kept referring to the "Bryan Gould Committee". There is a new application coming from him for the plain English award for 1987. Because he now has to refer everything to the committee of his "comrade", as he calls him, the hon. Member for Dagenham (Mr. Gould), he will probably become more balanced because now he has a chip on both his shoulders.
The truth is that the Opposition policy is wholly shredded, which is probably what has happened to the document that was supposed to be released at the weekend. Their efforts in the debate have been abominable. They are in disarray. Never have their policies been so absurd. They must be rejected.
Question put, That the amendment be made:—
The House divided: Ayes 160, Noes 221.

Division No. 91]

[10 pm

AYES

Abse, Leo

Carlile, Alexander (Montg'y)

Adams, Allen (Paisley N)

Carter-Jones, Lewis

Anderson, Donald

Clark, Dr David (S Shields)

Archer, Rt Hon Peter

Clarke, Thomas

Ashdown, Paddy

Clay, Robert

Ashton, Joe

Clelland, David Gordon

Atkinson, N. (Tottenham)

Clwyd, Mrs Ann

Banks, Tony (Newham NW)

Cocks, Rt Hon M. (Bristol S)

Barron, Kevin

Cohen, Harry

Beckett, Mrs Margaret

Coleman, Donald

Beith, A. J.

Corbett, Robin

Bell, Stuart

Corbyn, Jeremy

Benn, Rt Hon Tony

Cox, Thomas (Tooting)

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

Craigen, J. M.

Bermingham, Gerald

Crowther, Stan

Bidwell, Sydney

Cunliffe, Lawrence

Blair, Anthony

Davies, Rt Hon Denzil (L'lli)

Boothroyd, Miss Betty

Davies, Ronald (Caerphilly)

Boyes, Roland

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

Bray, Dr Jeremy

Dewar, Donald

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

Dixon, Donald

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

Dormand, Jack

Bruce, Malcolm

Dubs, Alfred

Buchan, Norman

Duffy, A. E. P.

Caborn, Richard

Eastham, Ken

Callaghan, Jim (Heyw'd & M)

Evans, John (St. Helens N)

Campbell-Savours, Dale

Fatchett, Derek

Canavan, Dennis

Faulds, Andrew

556

Field, Frank (Birkenhead)

Morris, Rt Hon A. (W'shawe)

Fields, T. (L'pool Broad Gn)

Morris, Rt Hon J. (Aberavon)

Flannery, Martin

Nellist, David

Foot, Rt Hon Michael

O'Brien, William

Forrester, John

O'Neill, Martin

Foster, Derek

Orme, Rt Hon Stanley

Foulkes, George

Park, George

Fraser, J. (Norwood)

Parry, Robert

Freeson, Rt Hon Reginald

Patchett, Terry

George, Bruce

Pavitt, Laurie

Gilbert, Rt Hon Dr John

Pike, Peter

Godman, Dr Norman

Powell, Raymond (Ogmore)

Golding, Mrs Llin

Prescott, John

Gould, Bryan

Radice, Giles

Hamilton, James (M'well N)

Redmond, Martin

Hamilton, W. W. (Fife Central)

Rees, Rt Hon M. (Leeds S)

Hardy, Peter

Richardson, Ms Jo

Harrison, Rt Hon Walter

Roberts, Ernest (Hackney N)

Hart, Rt Hon Dame Judith

Rogers, Allan

Heffer, Eric S.

Rooker, J. W.

Hogg, N. (C'nauld & Kilsyth)

Ross, Ernest (Dundee W)

Holland, Stuart (Vauxhall)

Ross, Stephen (Isle of Wight)

Howarth, George (Knowsley, N)

Rowlands, Ted

Howell, Rt Hon D. (S'heath)

Sedgemore, Brian

Hoyle, Douglas

Sheerman, Barry

Hughes, Robert (Aberdeen N)

Sheldon, Rt Hon R.

Hughes, Roy (Newport East)

Shields, Mrs Elizabeth

Hughes, Sean (Knowsley S)

Shore, Rt Hon Peter

Hughes, Simon (Southwark)

Short, Ms Clare (Ladywood)

Janner, Hon Greville

Silkin, Rt Hon J.

John, Brynmor

Skinner, Dennis

Kaufman, Rt Hon Gerald

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

Lambie, David

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

Lamond, James

Soley, Clive

Leadbitter, Ted

Spearing, Nigel

Leighton, Ronald

Steel, Rt Hon David

Lewis, Terence (Worsley)

Stewart, Rt Hon D. (W Isles)

Litherland, Robert

Stott, Roger

Lloyd, Tony (Stretford)

Straw, Jack

McDonald, Dr Oonagh

Thomas, Dafydd (Merioneth)

MacKenzie, Rt Hon Gregor

Thorne, Stan (Preston)

Maclennan, Robert

Wardell, Gareth (Gower)

McNamara, Kevin

Wareing, Robert

McTaggart, Robert

Weetch, Ken

McWilliam, John

Welsh, Michael

Madden, Max

Williams, Rt Hon A.

Marek, Dr John

Wilson, Gordon

Marshall, David (Shettleston)

Winnick, David

Maxton, John

Wrigglesworth, Ian

Maynard, Miss Joan

Young, David (Bolton SE)

Meacher, Michael

Michie, William

Tellers for the Ayes:

Mikardo, Ian

Mr. Frank Haynes and

Millan, Rt Hon Bruce

Mr. Allen McKay.

NOES

Aitken, Jonathan

Boyson, Dr Rhodes

Alexander, Richard

Bright, Graham

Amess, David

Brinton, Tim

Ancram, Michael

Brittan, Rt Hon Leon

Arnold, Tom

Browne, John

Ashby, David

Bruinvels, Peter

Atkins, Rt Hon Sir H.

Bryan, Sir Paul

Atkins, Robert (South Ribble)

Buck, Sir Antony

Atkinson, David (B'm'th E)

Budgen, Nick

Baker, Nicholas (Dorset N)

Bulmer, Esmond

Baldry, Tony

Burt, Alistair

Batiste, Spencer

Butler, Rt Hon Sir Adam

Bellingham, Henry

Butterfill, John

Bendall, Vivian

Carlisle, Kenneth (Lincoln)

Benyon, William

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

Bevan, David Gilroy

Carttiss, Michael

Biffen, Rt Hon John

Cash, William

Biggs-Davison, Sir John

Chalker, Mrs Lynda

Blackburn, John

Channon, Rt Hon Paul

Blaker, Rt Hon Sir Peter

Chapman, Sydney

Body, Sir Richard

Chope, Christopher

Bottomley, Peter

Churchill, W. S.

Bottomley, Mrs Virginia

Clark, Dr Michael (Rochford)

Bowden, Gerald (Dulwich)

Clark, Sir W. (Croydon S)

557

Clarke, Rt Hon K. (Rushchffe)

Hordern, Sir Peter

Colvin, Michael

Howard, Michael

Coombs, Simon

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

Cope, John

Howell, Ralph (Norfolk, H)

Cormack, Patrick

Hunt, David (Wirral W)

Corrie, John

Hunter, Andrew

Couchman, James

Jenkin, Rt Hon Patrick

Cranborne, Viscount

Jessel, Toby

Critchley, Julian

Johnson Smith, Sir Geoffrey

Dorrell, Stephen

Jones, Gwilym (Cardiff N)

Dover, Den

King, Roger (B'ham N'field)

Dunn, Robert

King, Rt Hon Tom

Durant, Tony

Knight, Greg (Derby N)

Dykes, Hugh

Knight, Dame Jill (Edgbaston)

Eggar, Tim

Knox, David

Evennett, David

Lamont, Rt Hon Norman

Eyre, Sir Reginald

Lang, Ian

Fairbairn, Nicholas

Lawler, Geoffrey

Fallon, Michael

Lee, John (Pendle)

Fenner, Dame Peggy

Lilley, Peter

Finsberg, Sir Geoffrey

Lloyd, Peter (Fareham)

Fletcher, Sir Alexander

McCurley, Mrs Anna

Fookes, Miss Janet

Macfarlane, Neil

Forman, Nigel

MacKay, John (Argyll & Bute)

Forsyth, Michael (Stirling)

McQuarrie, Albert

Fowler, Rt Hon Norman

Malone, Gerald

Fox, Sir Marcus

Marshall, Michael (Arundel)

Franks, Cecil

Mawhinney, Dr Brian

Fraser, Peter (Angus East)

Mitchell, David (Hants NW)

Freeman, Roger

Moate, Roger

Fry, Peter

Monro, Sir Hector

Gale, Roger

Morrison, Hon C. (Devizes)

Gardiner, George (Reigate)

Neubert, Michael

Gardner, Sir Edward (Fylde)

Ottaway, Richard

Gilmour, Rt Hon Sir Ian

Portillo, Michael

Glyn, Dr Alan

Powley, John

Goodhart, Sir Philip

Rhodes James, Robert

Goodlad, Alastair

Rhys Williams, Sir Brandon

Gorst, John

Ridley, Rt Hon Nicholas

Gow, Ian

Rippon, Rt Hon Geoffrey

Grant, Sir Anthony

Roberts, Wyn (Conwy)

Greenway, Harry

Roe, Mrs Marion

Gregory, Conal

Rossi, Sir Hugh

Griffiths, Peter (Portsm'th N)

Rost, Peter

Ground, Patrick

Rowe, Andrew

Gummer, Rt Hon John S

Rumbold, Mrs Angela

Hamilton, Hon A. (Epsom)

Ryder, Richard

Hamilton, Neil (Tatton)

Sackville, Hon Thomas

Hampson, Dr Keith

Sainsbury, Hon Timothy

Hannam, John

Sayeed, Jonathan

Hargreaves, Kenneth

Shaw, Giles (Pudsey)

Harris, David

Shaw, Sir Michael (Scarb')

Haselhurst, Alan

Shelton, William (Streatham)

Hawkins, C. (High Peak)

Shepherd, Colin (Hereford)

Hawkins, Sir Paul (N'folk SW)

Shepherd, Richard (Aldridge)

Hawksley, Warren

Shersby, Michael

Hayes, J.

Silvester, Fred

Hayhoe, Rt Hon Sir Barney

Sims, Roger

Hayward, Robert

Skeet, Sir Trevor

Heddle, John

Smith, Sir Dudley (Warwick)

Henderson, Barry

Speed, Keith

Heseltine, Rt Hon Michael

Spencer, Derek

Hickmet, Richard

Spicer, Jim (Dorset W)

Higgins, Rt Hon Terence L.

Spicer, Michael (S Worcs)

Hind, Kenneth

Squire, Robin

Hogg, Hon Douglas (Gr'th'm)

Stanbrook, Ivor

Holland, Sir Philip (Gedling)

Steen, Anthony

Holt, Richard

Stern, Michael

558

Stevens, Lewis (Nuneaton)

Waddington, Rt Hon David

Stewart, Allan (Eastwood)

Wakeham, Rt Hon John

Stewart, Andrew (Sherwood)

Walden, George

Stokes, John

Wardle, C. (Bexhill)

Tapsell, Sir Peter

Warren, Kenneth

Taylor, John (Solihull)

Watts, John

Taylor, Teddy (S'end E)

Wells, Sir John (Maidstone)

Temple-Morris, Peter

Wheeler, John

Terlezki, Stefan

Whitfield, John

Thomas, Rt Hon Peter

Wilkinson, John

Thompson, Donald (Calder V)

Winterton, Mrs Ann

Thompson, Patrick (N'ich N)

Winterton, Nicholas

Thorne, Neil (Ilford S)

Wolfson, Mark

Thornton, Malcolm

Wood, Timothy

Thurnham, Peter

Woodcock, Michael

Townend, John (Bridlington)

Yeo, Tim

Tracey, Richard

Trippier, David

Tellers for the Noes:

Twinn, Dr Ian

Mr. Francis Maude and

van Straubenzee, Sir W.

Mr. David Lightbown.

Vaughan, Sir Gerard

Question accordingly negatived.

Employment and Training
  STATUTORY INSTRUMENTS, &,c.

    Merchant Shipping
    Motion made, and Question put forthwith pursuant to Standing Order No.101(5) (Standing Committees on Statutory Instruments, &c.)
    That the draft Merchant Shipping (Prevention and Control of Pollution) Order 1987, which was laid before this House on 26th January, be approved.— [Mr. Neubert.]
    Question agreed to.

PETITION

  Mr. Alexander Ogorodnikov
  Mr. Neil Thorne: I have the honour to present a petition on behalf, mainly, of my constituents, whose religious headquarters are in the constituency of Ilford, North. I wish to associate myself and my hon. Friend the Member for Ilford, North (Mr. Bendall) with the sentiments of the petition.
  It is a short petition, and if I may I will read it.
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The Humble Petition of Oasis House, Chadwell Heath, sheweth.
  That the Soviet Christian Alexander Ogorodnikov is in abject conditions in a Soviet labour camp on a charge arising from his leadership of a Christian discussion group.
  Wherefore your Petitioners pray that your honourable House encourage the Foreign Secretary' in his representations to the Soviet Government with the purpose of obtaining Mr. Ogorodnikov's release and reunion with his wife and son.
  And Your Petitioners, as in duty bound, will ever pray, etc.
  To lie upon the Table.

Electrical Products (Supply to BAOR)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maude.]
10.15 pm
Miss Betty Boothroyd: In a nutshell, the debate is about the experience of British electrical manufacturers and the problems that they meet in trying to sell their products into the West German market. More particularly, it is about manufacturers of electric lighting products produced by such firms as Simplex Lighting of Tipton in my constituency, which tells me that it is unable even to sell its lighting products for installation in British Army of the Rhine establishments in West Germany because of the insistence by German installers of an approval mark which is needed in addition to the European recognised standard of safety.
We have the ludicrous situation of British defence establishments equipped with non-British electrical goods, and men and women in our defence forces reading and writing their letters home under lighting produced in Germany and paid for by British taxpayers.
But the debate is also about the impact that this barrier to trade has on our historically high trade deficit in manufactured goods which is presided over by the Government. It is about the consequent loss of revenue to the electrical manufacturing sector and the resultant loss in terms of jobs.
Lighting equipment produced by Simplex and many other similar manufacturers in this country is made in accordance with a standard known as BS4533. The Minister will know that this equates with the harmonised European standard of IEC 598. It is nonsense that, in spite of complying with all the harmonised European standards, electrical products supplied to West Germany must, in addition, carry what is known as the German VDE mark of approval. This insistence of the VDE mark is bound up with German insurance law. That law allocates responsibility for liability, in cases of damage, between the manufacturer on the one hand and the installer of the equipment on the other.
The installers of the equipment have a professional body which arranges employers' liability insurance. To obtain insurance cover, goods must be VDE approved. So, only German electrical products can be used in the Federal Republic for its insurance law to be valid. However competitive we become in terms of costs, we do not stand a chance because of this national approval system. Allowed to operate as it does, this situation directly contravenes the free movement of goods provisions of the treaty of Rome, so an illegality is being perpetuated.
Naturally, I am concerned about this situation. In the first place, it is illegal. Secondly, it has an adverse effect on the electrical manufacturing sector in the United Kingdom. As the Minister knows only too well, the west midlands is an area of manufacturing, or it once was. The people whom I represent are at the sharp end when job opportunities are lost because of obstacles to trade which the Government seem to fail to do anything about.
I need hardly remind the Minister tonight that, for almost a year, I have been making representations to the Ministry of Defence, the Department of Trade and Industry and the Department of the Environment. In a pathetically inept manner, Ministers have passed the buck from one to another. I have asked more than a dozen
560
parliamentary questions to try to stimulate some action, but I am forced to raise this matter on the Adjournment tonight because of the unsatisfactory responses that I have received.
If the Minister has examined his file he will know that what I am seeking is, first of all, for the Government to confirm the implementation of the low voltage directive of the EEC. That directive is known as directive 73/23. The Government also need to establish the incompatability and indeed, the illegality of adding to that the national VDE mark of approval that is insisted on by installers in the Federal Republic. It has now reached the stage where only the Government can enter into those negotiations with our EEC partner, the Federal Republic.
When I wrote to the Department of Trade and Industry, the Minister agreed that it was incompatible and on 22 July last, and in relation to action being taken in West Germany, he wrote:
"The way they do this, demanding a VDE mark, would however, seem to us incompatible with the Low Voltage Directive."
The Minister went on to say that he was taking the matter up with the German Ministry of Economics.
Even earlier than that, on 30 April last, a Minister at the Department of the Environment wrote to me acknowledging that Simplex Lighting products met the international standards, but he admitted regarding West Germany:
"In relation to international agreements, it is questionable whether or not the spirit of the agreement is being observed."
He went on to say that, in collaboration with the Department of Trade and Industry, he was pressing for consideration to be given to the wider issues involved. I have heard nothing from either Department since those dates.
There is action that could be taken. The Minister is aware that when goods comply with recognised European standards, as these do, under article 3 of that directive, it is made clear that their free movement should not be impeded. Yet, exports are impeded because of the insistence on this national marking.
I regret the fact that this is a very technical debate, but I assure the Minister that I have looked into this matter very carefully. The Government could bring action against West Germany under article 170 of the EEC treaty because the Federal Republic is failing to fulfil its obligations. I do not expect that the Government will take that action but I am keen to know what alternative action will be taken—and taken speedily—to see that British exports do not meet such obstacles.
I wish to consider another aspect of the matter. In answer to a parliamentary question, the Minister agreed that
"Any restrictions must impact on the … lighting industry"—[Official Report, 21 November 1986; c. 373.] However, he said that he could not assess the precise extent of loss of revenue.
Surely that cannot be right. Even if the loss to British electrical manufacturers of the West German market cannot be assessed—I appreciate that—some assessment can be made in relation to British defence establishments. It is, after all, the Property Services Agency's policy to encourage the use of British equipment in Crown establishments. Therefore, it must be possible to assess by how much manufacturing contracts could be increased were Crown Suppliers able to supply luminaires to the

561
British Army of the Rhine. On 21 November last, in answer to my question, the Minister, who was then at the Ministry of Defence, said:
"The average value of electrical installation work tendered for in property occupied by BAOR is about DM80 million per annum."
That is about —30 million a year. The Minister then said:
"The great majority of this work is placed with German contractors".—[Official Report, 21 November 1986; c. 358 .]
In spite of the excellence of British products and in spite of our prices being competitive, on the Government's own admission the majority of this work goes to German contractors, and it does so because German insurance law demands a national mark that is incompatible with EEC standards, and the British Government have so far done nothing about it. There can be no greater example of the Government's lack of support for British industry than this.
I have a great deal of sympathy tonight for the Minister. I had to telephone three Government Departments before I found out who was to respond to this debate. In all logic, I think that it should have been the Department of Trade and Industry, but this job has landed in the lap of an Environment Minister. Even so, I gave his office some notice of the points that I wished to raise, because I want some answers.
Despite the Minister's direct responsibilities in the Department of the Environment, it will not have escaped his notice that our manufacturing trade balance has taken a nose dive since his Government came to office. Six years ago, our trade balance in manufactures was in surplus to the tune of £5 billion. Since then we have moved into a deficit of over £7 billion. That historic situation has been brought about by the incompetence of this Government in responding to the real needs of the manufacturing sector.
Nor, I think, will it have escaped the Minister's notice that millions of jobs have been lost in the manufacturing sector. If he looks tonight at his own Government's figures, he will discover that about 200,000 jobs were lost between 1979 and 1986 in the electronic and electrical engineering industries. Many of those jobs were obviously lost in the west midlands.
What I am seeking tonight will not redress the massive imbalance in industrial and human devastation. I do not pretend for one moment that it will, but I believe that it will help those firms that are trying to compete with their hands tied behind their backs. I ask the Minister tonight to take action in support of British jobs and industry and to seek the lifting of what I consider to be an illegal obstacle to our export trade.
10.27 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): I know that the hon. Member for West Bromwich, West (Miss Boothroyd) has raised several questions in the past about this subject with both the Property Services Agency and the Department of Trade and Industry. The essential point, I believe, concerns complaints that British companies make about the difficulties that they experience when wishing to sell products to the British Army in Germany. For that reason, it falls to my Department to answer, although wider issues are raised, and I shall start by referring to them.
The low voltage directive, which came into force in the United Kingdom in 1975, covers the kind of light fittings
562
that the hon. Member has referred to in her previous queries, along with most electrical equipment, with some exceptions, operating in the ranges 50 to 1,000 volts AC and 75 to 1,500 volts DC. This provides that electrical equipment, which meets the safety requirements of harmonised standards drawn up by the European electrical standards body, CENELEC, or standards produced by its international equivalent, IEC, must be allowed to be sold in all Community markets unless the member state can prove that the equipment does not meet the safety provisions of the directive itself.
Instead of using standards, manufacturers can make a declaration on the safety of the product, or offer a certificate produced by a recognised certification body as proof of conformity with the directive, and free circulation must be allowed unless the product is proved unsafe. Additionally, a product for use by the general public, but not for industrial or public sector use, tested by a certification body recognised under the directive must be accepted without further test by a certification body in another member state. Thus a product tested to a specific standard by, for instance, the British Standards Institution or others listed in the directive must be accepted by a certification body in another member state if the standards used by both are identical. A product tested, for instance, to a British standard which is not identical to a German DIN standard will not be covered by this arrangement.
As regards British light fittings, those meeting British Standard 4533—and although the hon. Lady said that that was equivalent to the International Standard 1EC598, I am informed that it is only partially equivalent—as my hon. Friend the Minister of State, Department of Trade and Industry told the hon. Member on 24 November, officials in the Department of Trade arid Industry have pursued the question with the federal economics and labour ministries in Bonn and have received an assurance that no legal or de facto regulations exist which require light fittings to meet a German standard or carry a German, for example UDE, certification mark. It is worth pointing out that the standard 1EC598 is not a European harmonised standard but an international one. That means that it has no effect on the right of goods to free circulations.
In respect of luminaires meeting an international standard, low voltage directive 73/23 allows for their free sale without additional testing, but it is open to member states to query an assertion of conformity if unsupported by certification or other proof. However, the British standard covering luminaires, which I believe the hon. Member was querying, is, I understand, only partially equivalent to the international standard, and it would be open to German authorities to demand evidence that the product meets other general safety requirements. The same would apply in the United Kingdom to a foreign product suspected of being unsafe. It would be open to the manufacturer to have his product tested and certified in the United Kingdom by a body recognised under the directive, and this would ease the task of proving safety.
I shall now turn to the construction work which the Property Services Agency carries out for the British forces in Germany. I think that there is a certain misunderstanding about the scope of our operation there. The rules for such work are set out in a supplement to the NATO Status of Forces Agreement Treaty Series No. 73 (1963) between the Federal Republic of Germany and all the NATO foreign forces stationed in Germany. Thus the agreement

563
covers not only the United Kingdom but the United States, Canada, Holland, France and Belgium. The salient features of this agreement in the context of the hon. Member's question are that construction work is subject to German contract law and is carried out on our behalf by the German Construction Administration; the land and property remain in the ownership of the Federal Government and buildings have to be maintained to German standards, because Germany is the host nation; buildings revert to the Federal Government when no longer needed. The United Kingdom may apply its own standards in the field of public safety and order where these are equal to or higher than those prescribed in German law, but responsibility then rests with the United Kingdom for the application of those standards.
In the rare cases where the United Kingdom carries out the work direct that is, not through the German authority, for security or other operational reasons it must
"respect the Federal Republic regulations regarding competition, preferred tenders, and prices applicable to public contracts".
As a result of the NATO Status of Forces Agreement virtually all the Property Services Agency's work is carried out for it by a German Federal Government authority known as the German Construction Administration which is a network of offices at federal and lande level, spread throughout the British Army of the Rhine area. The federal contract rules for construction tendering procedures are used in the same way as for any other public contracts placed by the German authorities. These make provision for competition and action to combat restricted and unfair practices.
The salient points in the context of the question are as follows. Specific products, or methods, or specific places of origin or sources of supply may only be expressly specified if justified by the value of the work concerned. Designation of specific products or methods — for example, trade names — may be used exceptionally, however, only with the suffixed note "or of equivalent type" if it is not feasible to provide a description by means of accurate, universally understood terms. Standard trade terminology should be used to specify the service; the relevant DIN standards can be used. It is for those reasons that it is not the same situation that arises with PSA contracts in this country. We are talking about a totally different situation, constrained by the rules set out in the NATO Status of Forces Agreement.
I shall now turn to the practical application of the NATO Status of Forces Agreement in the terms that the PSA carries out its work for the British forces. First, I need to say something about the German construction industry. The German Construction Administration, and its subordinate organisations in the Lander at the regional level, normally use German contractors, most of whom are small businesses specialising in particular aspects of the building trade. Large general contractors such as we know them in this country are a rarity. PSA try to encourage British contractors to compete wherever possible, but for the most part such contracts that have been placed with British firms have tended to be for specialist equipment. The German contractors and manufacturers are liable in German law for any faults that arise from the work they carry out. They therefore act with extreme caution in choosing the equipment they wish to install and lean
564
towards using fitments which have a recognised German standard as a defence should a case be brought against them. In Germany, DIN standards and VDE certification are used widely and German contractors are therefore used to supplies having such German clearance.
It is against this background that British manufacturers have to establish a market for their goods, and nobody can overstate the difficulty that they have. While the EEC low voltage directive allows for the access of many goods in the way I have described, there are practical difficulties to overcome. Even when we have educated German contractors to accept goods other than those with VDE marks, there is the practical difficulty of German contractors obtaining the British products and securing the essential back-up service which they would reasonably demand before feeling secure in their purchase of the British product. There are thousands of small electrical companies throughout Germany which have established sources of supply from wholesalers. British suppliers would need to establish outlets for their supplies and spares and servicing. Clearly the normal rules of competition would be applied by German contractors in selecting the equipment they wished to use.
Interdepartmental consultations are now proceeding to consider how best to improve the prospects for British manufacturers to supply their products to the British forces in Germany. There will need to be consultation with the German Construction Administration on whether they can apply the German contract law in a less restrictive way in order to allow products to be supplied to the British forces which do not necessarily comply with German standards but nevertheless meet the general safety requirements. We are looking currently particularly at the clause which states
"Standard trade terminology should be used to specify the service; relevant (DIN) standards can be used."
Discussion has also started in Brussels on a new works directive covering public building contracts in the Community which will make mandatory the use of European standards where they exist, which, in the near future, should also assist the free circulation of products within the Community. One strong incentive which should encourage German contractors to consider British supplies will be price. While no direct comparison records have been kept, it is considered that, while up to about a year ago German products had a competitive edge over their British counterparts on price, this has probably changed in our favour because of the change in the exchange rate.
The hon. Lady referred to some of the queries which she has raised before and the non-reply to some of those queries. I am informed that full replies were given to the parliamentary questions on 24 November by my hon. Friend the Minister of State, Department of Trade and Industry. Therefore, I do not think that I can accept the hon. Lady's criticism.
Miss Boothroyd: What I was complaining about was the fact that Ministers tell me that they have written to the German Ministry of Economics and they would let me have their response. This was last year. I have had no response to that.
Mr. Chope: I shall ensure that the hon. Lady is kept informed about the consultations. This is an issue which she has been pushing very hard. It is appropriate that we have the opportunity to discuss it so extensively.

565
Another issue raised was whether it would be possible to take action under the treaty of Rome. I am instructed that action under the treaty can be taken only if there are Government regulations causing barriers to trade. As the hon. Lady has been told previously, there is no evidence of any such regulation or any informal arrangement having such an effect. That is why we cannot take action under the treaty.
I am most anxious that British suppliers have the maximum opportunity to sell their goods in Germany. In 1983 the PSA held a seminar under the auspices of the British Overseas Trade Board to detail the building opportunities in Germany and other overseas countries
566
where the PSA has work and to encourage exports. I thought that that was an important initiative. I do not think the response from contractors and suppliers has been as good as it might have been. Each year since, we have supplied the Export Group for Construction Industries with lists of projects which will be tendered for in the coming year with the same objective of encouraging exports. I want to ensure that those contractors, manufacturers and suppliers with an interest are given the maximum support to compete.
Question put and agreed to.
Adjourned accordingly at nineteen minutes to Eleven o'clock.

WALES
  Horticultural Development Council
  Horticultural Development Council
  Annual Review of Agriculture
  Annual Review of Agriculture
  TVEI
  TVEI
  YTS
  YTS
  Jobcentres
  Jobcentres
  Voluntary Projects Programme
  Voluntary Projects Programme
  Rescue Archaeology
  Rescue Archaeology
  Labour Statistics
  Labour Statistics
  MSC Schemes
  MSC Schemes
  Water Supplies
  Water Supplies
  Historic Buildings Council
  Historic Buildings Council
EMPLOYMENT
  Community Programme
  Community Programme
  Nuclear Safety
  Nuclear Safety
  Professional and Executive Recruitment
  Professional and Executive Recruitment
PRIME MINISTER
  President Reagan
  President Reagan
  Fraserburgh
  Fraserburgh
  Engagements
  Engagements
  Anglo-Irish Agreement
  Anglo-Irish Agreement
  Nuclear Accidents
  Nuclear Accidents
DEFENCE
  Tactical Missile System
  Tactical Missile System
  Swynnerton Range
  Swynnerton Range
  Armoured Production
  Armoured Production
  Defence Projects
  Defence Projects
  Squadron Leader Hare
  Squadron Leader Hare
  Royal Air Force
  Royal Air Force
  Pensions
  Pensions
  Royal Navy (Drugs)
  Royal Navy (Drugs)
EDUCATION AND SCIENCE
  Universities (Grants)
  Universities (Grants)
  Schools (Finance)
  Schools (Finance)
  Chancellors School
  Chancellors School
  Trafford
  Trafford
  Secondary Schools (Substandard Places)
  Secondary Schools (Substandard Places)
TRANSPORT
  M1 (Telephones)
  M1 (Telephones)
  Cars (Change of Ownership)
  Cars (Change of Ownership)
  Private Hire Vehicles
  Private Hire Vehicles
  M1 Service Stations
  M1 Service Stations
  Transportation of Hazardous Goods
  Transportation of Hazardous Goods
  Light Dues
  Light Dues
  BAA (Shares)
  BAA (Shares)
ENVIRONMENT
  Private Flats
  Private Flats
  Safety Glass
  Safety Glass
  London Docklands Development Corporation
  London Docklands Development Corporation
  Disabled People (Housing)
  Disabled People (Housing)
  Capacitors (Health Hazards)
  Capacitors (Health Hazards)
  Lancaster House (Conference)
  Lancaster House (Conference)
  Housing Management Courses
  Housing Management Courses
TRADE AND INDUSTRY
  Labour Statistics
  Labour Statistics
  Timesharing
  Timesharing
ENERGY
  Plutonium
  Plutonium
  Euratom
  Euratom
  House Coal
  House Coal
  Diesel Fuel
  Diesel Fuel
  Nuclear Power Stations
  Nuclear Power Stations
  Nuclear Safety
  Nuclear Safety
  NCB (Manpower)
  NCB (Manpower)
  British Gas
  British Gas
HOME DEPARTMENT
  Licensing
  Licensing
  Houses in Multiple Occupation
  Houses in Multiple Occupation
  Police Discipline (Access to Witnesses)
  Police Discipline (Access to Witnesses)
  Animal Welfare
  Animal Welfare
  National Marriage Guidance Council
  National Marriage Guidance Council
  Immigration
  Immigration
  Data Networks
  Data Networks
  Domestic Crime Prevention
  Domestic Crime Prevention
  State Security
  State Security
  Nuclear Safety
  Nuclear Safety
  Bail Hostels
  Bail Hostels
  Remand Prisons
  Remand Prisons
  Mafia
  Mafia
  Deportations
  Deportations
  AIDS
  AIDS
SCOTLAND
  Domestic Violence
  Domestic Violence
  Rape
  Rape
  Stobhill General Hospital, Glasgow
  Stobhill General Hospital, Glasgow
  Gaelic Language
  Gaelic Language
  EC (Food Stores)
  EC (Food Stores)
  AIDS
  AIDS
  Auctioneers (Registration)
  Auctioneers (Registration)
  Mentally Ill People (Services)
  Mentally Ill People (Services)
  Alternative Land Use
  Alternative Land Use
  Nuclear Safety
  Nuclear Safety
  Public Bodies (Appointments)
  Public Bodies (Appointments)
HOUSE OF COMMONS
  Parliamentary Contributory Pension Fund
  Parliamentary Contributory Pension Fund
FOREIGN AND COMMONWEALTH AFFAIRS
  Republic of Ireland (Embassy)
  Republic of Ireland (Embassy)
  Austria (AIDS Testing)
  Austria (AIDS Testing)
  Anglo-Irish Intergovernmental Council
  Anglo-Irish Intergovernmental Council
  Geneva Conventions
  Geneva Conventions
  Mafia
  Mafia
NATIONAL FINANCE
  Corporation Tax
  Corporation Tax
  Labour Statistics
  Labour Statistics
  Central Office of Information (Cash Limit)
  Central Office of Information (Cash Limit)
  Higher Rate Taxpayers
  Higher Rate Taxpayers
  Film Industry
  Film Industry
  Incomes
  Incomes
NORTHERN IRELAND
  Republic of Ireland
  Republic of Ireland
  Public Representatives (Co-operation)
  Public Representatives (Co-operation)
  Royal Ulster Constabulary
  Royal Ulster Constabulary
  Anglo-Irish Agreement
  Anglo-Irish Agreement
AGRICULTURE, FISHERIES AND FOOD
  Wildlife (Poisons)
  Wildlife (Poisons)
  Food Aid
  Food Aid
  Environmentally Sensitive Areas
  Environmentally Sensitive Areas
  Horses (Botulism)
  Horses (Botulism)
  Mafia
  Mafia
  Milk Quotas
  Milk Quotas
  Headage Payments
  Headage Payments
  Cattle (Tuberculosis)
  Cattle (Tuberculosis)
  Agricultural Land
  Agricultural Land
SOCIAL SERVICES
  Severe Weather Payments
  Severe Weather Payments
  Queen Elizabeth II Hospital, Welwyn Garden City
  Queen Elizabeth II Hospital, Welwyn Garden City
  Maternity Payments
  Maternity Payments
  Birth Statistics
  Birth Statistics
  Ambulance Service
  Ambulance Service
  Mentally Ill and Handicapped People
  Mentally Ill and Handicapped People
  Benefits
  Benefits
  AIDS
  AIDS
  Abortions
  Abortions
  Councillors (Allowances)
  Councillors (Allowances)
  Heart Disease
  Heart Disease

Preamble
The House met at three of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Hereford.

Message From the Queen
The Earl of Airlie: My Lords, I have the honour to present to your Lordships a message from Her Majesty the Queen signed by her own hand. The message is as follows:
"I have received your Address praying that the Address to my Royal predecessor of 5th July 1927 on peerages in abeyance is set aside and submitting certain recommendations on the procedure to be followed should further claims to peerages in abeyance arise. I will comply with your advice and will issue instructions in accordance herewith".

EC Consumer Consultative Committee
3.7 p.m.
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, upon relinquishing the presidency of the European Community on 31st December last, the chairman of the European Council of Consumer Affairs Ministers indicated the progress made for strengthening the Consumer Consultative Committee and for the correction of the imbalance therein between consumer interests and others; and what dates have been arranged for meetings both of the Consumer Affairs Ministers and the Consumer Consultative Committee in 1987.
Lord Beaverbrook: My Lords, my honourable friend the Parliamentary Under-Secretary of State for Corporate and Consumer Affairs has drawn attention in speeches to the resolution agreed by the consumer council last October. This resolution referred to the need for effective and duly representative consultation of consumers so that consumers' priorities are adequately reflected in the work of the Community. In line with the resolution, the Commission will keep the matter under review and report at the end of 1987. The Government understand that the Belgian Presidency will hold a consumer council on 10th June and that the Consumer Consultative Committee will be deciding future meeting dates next week.
Baroness Burton of Coventry: Obviously, my Lords, the answer to the first part of the Question is no. I believe that the Government are sympathetic to the idea of reforming the Consumer Consultative Committee, but do they accept that the real problem lies in Brussels? Is the Minister aware of the dissatisfaction that is felt among consumer organisations
738
about the ineffectiveness of the committee, as reflected in the report to your Lordships' House of the Select Committee so ably chaired by the noble Baroness, Lady Serota? Arising from that, may I ask the Minister to tell the House whether the Government support Conclusion No. 68 of that report which calls for the strengthening and reform of the Consumer Consultative Committee?
Lord Beaverbrook: My Lords, naturally I am aware of the concern of the noble Baroness and of her efforts on behalf of consumers in Europe. There are a number of subjects under discussion. As she will know, there are proposals on unit pricing, toy safety and imitations of consumer products. All these matters may come before the Council of Ministers, but the agenda is a matter for the Belgian Presidency.
Baroness Burton of Coventry: My Lords, I asked the noble Lord about one specific matter. I wish that he would not ride off on other red herrings. I asked him if he could tell the House whether the Government accept Conclusion No. 68 of the report of the Select Committee of your Lordships' House which was chaired by the noble Baroness, Lady Serota.
Lord Beaverbrook: My Lords, the Government accept the findings of the Select Committee that the present consultation arrangements are not satisfactory. The new resolution of the Council underlines the necessity for effective and duly representative consultation of consumers. The European consumer council and the Government are not wedded to any particular reforms but want to see emerging a credible package of improvements.
Baroness Serota: My Lords, can the noble Lord say whether consideration is being given to publishing the reports of the Consumer Consultative Committee in the future?
Lord Beaverbrook: My Lords, I think that that will be a matter for the committee itself to decide.
Lord Harmar-Nicholls: My Lords, will my noble friend keep in mind the real meaning of "consultation"? The enthusiastic voices of consumers are not silent and their point of view is certainly made known. It is right that it should be. However, consultation ought not automatically to mean that what they recommend must be accepted. There are many other surrounding circumstances that the people who make decisions have to take into consideration.
Lord Beaverbrook: My Lords, I agree with my noble friend. The Government are not privy to the European Commission's consideration of these matters. However, the consumer council has called on the Commission to produce a report and we hope that it will take note of the consultation that has taken place.
Baroness Nicol: My Lords, we welcome the statement from the noble Lord that the Government support the findings of the Select Committee. However, we should like to know whether there has been a British initiative on any of the recommendations put forward by that committee and on any of

739
the items discussed by it. For example, has there been a British initiative on the introduction of consumer impact audits, which would be a cost-effective and useful innovation? What about direct consultation with consumer groups? There is nothing about that in the original Answer that the noble Lord gave.
Lord Beaverbrook: My Lords, with regard to impact statements, the Government will press for the resolution to be implemented conscientiously and effectively. At the end of the year the commission is to make a progress report and we shall review that carefully.
Baroness Burton of Coventry: My Lords, the end of the year is a long time away. May I ask the Minister one other question? What representations have the Government made to the European Commissioner for Consumer Affairs on reform of the Consumer Consultative Committee? Is he aware, following the remarks made by his noble friend Lord Harmar-Nicholls and from my questions that the Commission and the people in Brussels are unlikely to be overburdened by the decisions that they take?
Lord Beaverbrook: My Lords, we constantly press for progress on consumer matters. As I said, my honourable friend has made a number of speeches, including one on 19th November to the European Parliament, to press for progress in this matter.

Nuclear Deterrent: Capacity
3.13 p.m.
Lord Mayhew: 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 are the expected changes in international relations in the 1990s which will call for a more than fivefold increase in the capacity of the British nuclear deterrent.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, as the Government have made clear on many occasions, Trident, like Polaris, will be a minimum deterrent and will include only those enhancements which will be vital if Trident is to continue to meet effectively, well into the next century, our national deterrence criteria—criteria which have remained essentially unchanged and have been judged appropriate by successive governments for more than 20 years.
Lord Mayhew: My Lords, will the noble Lord give an assurance that if the Soviet threat and the danger of war in Europe recede in the years ahead, the policy of a fivefold escalation of nuclear weapons will be modified by the Government?
Lord Trefgarne: My Lords, the exent to which Trident will be more capable than Polaris will depend upon a number of factors (notably the effectiveness of Soviet defences) which cannot be judged in detail until the time comes.
Lord Molloy: My Lords, can the Minister assure the House that the Trident policy will in no way endanger our forces in Europe with regard to the weapons they have in their hands to resist aggression, if need be? Can he assure the House that British forces on the ground and in the air will in no way suffer because the Government are following the extraordinarily expensive Trident policy?
Lord Trefgarne: My Lords, I can assure the noble Lord that the great danger that British troops in Germany now face is the prospect of the policy of noble Lords opposite.
Lord Graham of Edmonton: My Lords, can the Minister confirm that the Trident cancellation fee will be 125 per cent. of the original cost of £7 billion? How does the Minister justify such a contract? Is it not a contract designed primarily to obstruct future governments who may wish to decommission Trident and may well have an election mandate to do so?
Lord Trefgarne: My Lords, no. There is no intention of moving in the way that the noble Lord suggests. The cancellation terms that are being incorporated in the contract which exists for the first submarine, and which will be in place before long for the second submarine, seek only to be fair and reasonable to the parties concerned.
Lord Orr-Ewing: My Lords, is my noble friend aware that for a decade 10,000 Soviet scientists have been deploying their version of SDI: that is to say, the interception of missiles by missiles? If that achieves the results that they intend, is it not wise to have extra capacity so that with Trident we can afford to choose as between decoys and nuclear warheads?
Lord Trefgarne: My Lords, yes, indeed. My noble friend is right. By the time that Trident comes to be deployed in the mid-1990s, a much greater range of defences will have to be penetrated. For all that it will be able to achieve, Trident will represent a smaller proportion of Soviet strategic warheads than Polaris did in 1970, even if the currently proposed 50 per cent. reductions in strategic arsenals are to be agreed between the super powers.
Lord Kennet: My Lords, the Minister of State has told the House that Trident's penetration ability depends on Soviet defences. It is easy to understand that. Is it the Government's opinion that Soviet defences are likely to be the stronger or the weaker if the Reagan Administration were now to confirm every comma of the ABM Treaty and cancel their SDI initiative?
Lord Trefgarne: My Lords, I doubt whether that has much to do with it. Soviet defences and offensive capability continue to grow unabated.
Lord Jenkins of Putney: My Lords, the Minister's Answer to the original Question consisted of nothing but vague generalisations. Will he spell out a little more the purpose of Trident? Is not the idea behind Trident that it should be able simultaneously to kill a large number of people in a large number of Soviet

741
towns? What is the need for that when everybody on earth can already be killed several times over? Does he agree that there is no point in Trident? It is an unnecessary expenditure upon which the Government have embarked, and they are entirely unable to explain exactly why they have done so.
Lord Trefgarne: My Lords, the purpose of Trident is to deter any potential aggressor from launching an attack upon us. We can only do that by having a credible response.
Lord Avebury: My Lords, the Minister said that we had to have a fivefold increase in the number of warheads because of the greater range of Soviet defences which will have to be penetrated in the 1990s. Is the development of Trident predicated on the assumption that the Soviets will have an anti-ballistic missile system in place in the 1990s, contrary to their treaty obligations?
Lord Trefgarne: My Lords, the basis of the system that we are now acquiring and will deploy in the mid-1990s is that by that time the existing Polaris system will be coming to the end of its useful life. It is therefore necessary to have a new system in place. We are certain that by then we will have to penetrate a wide range of new defensive capabilities.
Lord Mottistone: My Lords, is it not most important not to mention detailed figures when one is talking about a deterrent? It is much more important to keep people guessing about one's capability than to try to spell it out. Would it not be better if noble Lords opposite did not try to intrigue my noble friend into giving details? Would it not be better if this Question—to which my noble friend has not given a figure answer—is forgotten altogether?
Lord Trefgarne: My Lords, my noble friend puts his finger on a very appropriate point. The whole effectiveness of an independent nuclear deterrent is the uncertainty which it plants in the mind of the potential aggressor.
Lord Cledwyn of Penrhos: My Lords, on referring to SDI the noble Lord touched on an immensely important point. He confirmed to his noble friend Lord Orr-Ewing that in the development of SDI the Russians are as far advanced as, if not further advanced than the Americans. Is that indeed the case? If Russian SDI is as far advanced as American SDI, why are these two points not put on the table in disarmament conferences?
Lord Trefgarne: My Lords, I did not say that. I said that Russian research in this area is proceeding apace. What the success of that research is I cannot yet say. I certainly cannot yet say for certain what the scale of the defences will be in the mid-1990s.
Lord Cledwyn of Penrhos: My Lords, is it not the case that Mr. Caspar Weinberger has said that the Russians have been working on SDI for at least 14 years? Has the noble Lord nothing more to say about the matter? It is no use leaving it in the air. Do Her Majesty's Government believe that Russian SDI development is significantly far advanced?
Lord Trefgarne: My Lords, as Mr. Weinberger has said—and as I have said in this House on a number of occasions and as the noble Lord has reminded us—Soviet research in this area has been proceeding for 10 or 15 years at least. Therefore if we are to achieve a system of our own we need to get a move on. The SDI programme has started only comparatively recently. Precisely what success the Soviets have so far had, I cannot say. However, it would be a brave, and I believe unwise, man who assumed that they will not have some success between now and the mid-1990s.
Viscount Trenchard: My Lords, does my noble friend agree that in addition to the reason that he has given for Trident being only comparable with Polaris at the turn of the century—namely, the build-up of the anti-ballistic defences—there is also the important question of submarine vulnerability? Will he confirm that his painstaking scientists, civilians and service experts are still advising that it is necesary to move to something with the range of Trident by the mid-1990s if we are to keep a deterrent comparable in effectiveness to the one we have at the present time—though nothing like five times as effective?
Lord Trefgarne: My Lords, my noble friend is certainly quite right to remind your Lordships that by the mid-1990s the Polaris system will be coming to the end of its useful life and will have to be replaced with one system or another. We believe that the Trident system is the most cost-effective way of doing that, not least because of the improvement in Soviet anti-submarine capability, as my noble friend points out, which will to some extent be countered by the fact that the Trident submarines will have some 15 times more sea room in which to conceal themselves.
Lord Mellish: My Lords, to avoid any misunderstanding, will the Minister take it from me that there are many noble Lords on both sides of the House, who believe that the ownership of Britain's nuclear deterrent has been absolutely right; and that furthermore that that is proven by the fact that today the Russians appear to be much more conciliatory than they have been in the past? Does he agree that it would be quite foolish of us to take that situation for granted and do away with any nuclear deterrent unless we can be absolutely certain that peace is sound and viable?
Lord Trefgarne: My Lords, I welcome the fact that some members of the Opposition are not as daft as their leaders.
Lord Hatch of Lusby: My Lords, in his original Answer the Minister referred to Trident being the minimum deterrent. That is a comparative term. If present weapons are capable of obliterating the whole human race five times, what would he consider to be the maximum deterrent?
Lord Trefgarne: My Lords, I am not sure that that is a question which needs an answer.

Banks: Foreign Takeovers
3.26 p.m.
Lord Williams of Elvel: 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 foreign takeovers of British-owned banks.
Lord Beaverbrook: My Lords, I refer the noble Lord to the reply of my honourable friend the Economic Secretary to the Treasury to the debate on Clause 22 of the Banking Bill on 15th January during Committee proceedings in another place.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord for his reply. Is he aware that there is serious disquiet in the British banking community, which is shared by the Bank of England, that major British banks may now be open to takeover from foreign institutions without proper control? Is he aware that there is nothing in the Banking Bill so far which prevents this? Are the Government flexible on this issue or is their mind closed?
Lord Beaverbrook: My Lords, noble Lords will be aware that the Banking Bill is presently in another place. It would be inappropriate and premature for me to comment on it now. There will be ample opportunity for noble Lords to discuss and fully debate the Bill when it comes to your Lordships' House. However, I understand the concern of the noble Lord. It may be of some comfort that in the one case where an attempt was made to acquire a UK clearing bank the matter was referred to the Monopolies and Mergers Commission and the acquisition was stopped.
Lord Grimond: My Lords, while we understand his reluctance to go too far in this matter before the Bill appears, can the Minister assure the House that the Government are aware of the peculiar importance of Scotland in this area? Will he give some assurance that if a Scottish bank is threatened with takeover not only will its importance in the British banking system be adequately safeguarded but also its importance for Scotland? At present under takeover laws this does not appear to be a factor which is taken into account.
Lord Beaverbrook: My Lords, I shall of course bring the comments of the noble Lord to the attention of my honourable friend in another place.
Lord Taylor of Gryfe: My Lords, while I share the concern of the noble Lord who has raised this Question, is the Minister aware that the British banks referred to have been actively engaged in the past five years in acquiring US banks? Is there any danger of retaliation in the event of any prohibition being established? Does the Minister not feel that there is adequate provision in the consideration of the Monopolies and Mergers Commission of public interest in dealing with this matter?
Lord Beaverbrook: My Lords, we are not aware of any reciprocal attempt by American banks simply
744
because our banking institutions have purchased companies in the United States. We are not aware of any particular move in the other direction.

Business
Viscount Davidson: My Lords, it may be for the convenience of the House if I announce that the Report stage of the Pilotage Bill will be adjourned at approximately 7 p.m. for about one hour and that during this adjournment the Protected Shorthold Tenancies (Rent Registration) Order 1987 and the Rent (Relief from Phasing) Order 1987 will be taken.
Petroleum Bill
Brought from the Commons; read a first time, and to be printed.
Grampian Regional Council (Harbours) Order Confirmation Bill
Brought from the Commons, read a first time, and, (pursuant to the Private Registration Procedure (Scotland) Act 1936) deemed to have been read a second time and reported from the Committee.

Pilotage Bill [H.L.]
3.30 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Brabazon of Tara.)
Lord Simon of Glaisdale: My Lords, before a decision is made on that Question, I should like to ask the Minister how late he proposes to proceed on this Report stage. It is a most important Bill, reforming the law for the first time since 1913, and reforming the system of pilotage, which dates from long before that. There are 112 amendments listed for consideration. A number of them are of great importance; some are very lengthy, and some are very difficult to understand. Will the Minister assure us that we shall not be sitting into the early hours of the morning, or even the late hours of the night? I should like to remind your Lordships—
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, not until I have put the Question! My noble and learned friend on the Cross-Benches did not let me do so. If he wishes to speak on the Question, he must let me put it.
The Question is, That the Report be now received.
The noble and learned Lord may now proceed.
Lord Simon of Glaisdale: My Lords, may I have an answer from the noble Lord? The Bill is very lengthy with 112 amendments. Not all of us are in the full

745
plenitude of the mental and physical powers of the noble Lord and others of your Lordships. It would be an abuse of your Lordships' use of parliamentary time if the Bill were pursued very late tonight in view of the fact that we are starting at half past three.
The Lord President of the Council (Viscount Whitelaw): My Lords, I am sure that the House will appreciate that this was the Bill on which we tried the new procedure of a Standing Committee. I believe that I am right in saying that some 11 hours of debate took place during the Committee stage in that Standing Committee. I also remind your Lordships that this was a procedure to enable the amount of time taken on Report to be cut down. From what the noble and learned Lord, Lord Simon of Glaisdale, is saying, that does not seem necessarily to be the case. However, I am sure that we should proceed to the best of our ability. I am also sure that if, in view of the considerable time that has been taken in Committee, all noble Lords keep their remarks very short—as I am sure they will—we should make very satisfactory progress.
On Question, Motion agreed to.
Report received.
Clause 1 [Meaning of "competent harbour authority" and "harbour"]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 1:
Page 1, line 15, after ("area") insert ("or areas").
The noble Lord said: My Lords, I beg to move Amendment No. 1, with the leave of the House I wish to speak at the same time to Amendment No. 2. These are technical amendments. There are a number of harbour authorities who have responsibility for one or more additional harbours, over and above the harbour which is in an active pilotage district and by virtue of which they qualify as a competent harbour authority. There is no need for their CHA responsibilities to cover such additional harbours, and this amendment limits their responsibilities to harbours where there is an active pilotage service. I beg to move.
Lord Strathcona and Mount Royal: My Lords, I do not wish to speak to these amendments. However, as we are at Report stage I should like to make a point about the groupings.
I remind your Lordships—if that is necessary particularly after the comments that have just been made—that we are allowed to speak only once on amendments. If we group the amendments—and some of them are complex, as the noble and learned Lord has said—we run into a real danger of getting into difficulties when we reach some of the detailed amendments later. Therefore, I suggest that while we talk to them when they are introduced, it would be very helpful if they could be formally moved and then almost immediately withdrawn in case anyone wishes to make a comment later on any of the grouped amendments.
Lord Brabazon of Tara: My Lords, with the leave of the House, of course noble Lords have every right to do that, if that is what they wish, when we come to the various amendments. The groupings were agreed
746
through the usual channels; but if a noble Lord wishes to speak on a particular amendment which was grouped with others, then, as I understand it, he has every right to do so.
Lord Shackleton: My Lords, they may have been agreed through the usual channels, but not necessarily with those who, like the noble Lord, Lord Strathcona, wish to move the amendments.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 2:
Page 1, line 17, at end insert ("but, where there are two or more separate such areas, include only those areas which fall wholly or partly within an active former pilotage district").
On Question, amendment agreed to.
Clause 2 [General duties as to provision of pilotage services]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 3:
Page 3, line 28, at end insert—
("( ) Without prejudice to the generality of subsection (1) above, each competent harbour authority shall in performing its functions under that subsection have regard in particular to the hazards involved in the carriage of dangerous goods or harmful substances by ship.")
The noble Lord said: My Lords, I shall deal with this amendment very briefly. It fulfils an undertaking which I gave in Committee when discussing amendments moved by my noble friend Lord Swinfen and the noble Lord, Lord Underhill, which were spoken to by many others. It places a specific duty on competent harbour authorities to take account of the hazards presented by shipping carrying dangerous cargoes when they are considering pilotage needs in the port, including the stage to which pilotage should be made compulsory. I beg to move.
Lord Swinfen: My Lords, I welcome this amendment and I thank my noble friend for bringing it forward.
On Question, amendment agreed to.
Clause 3 [Authorisation and employment of pilots]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 4:
Page 3, line 32, leave out ("subsections (3) and (6)") and insert ("subsection (3) and section (Employment etc. of authorised pilots)").
The noble Lord said: My Lords, I beg to move Amendment No. 4, and at the same time speak to Amendments Nos. 15 and 30 in my name on the Marshalled List. I understand that it will also be convenient for noble Lords to speak to Amendments Nos. 15, 16 and 17, and Amendments Nos. 31 to 35.
Amendment No. 4 provides for the transfer of the provisions about the employment or other contractual arrangements made with pilots to a new clause proposed in Amendment No. 30. I shall briefly outline that now.
Clause 3 of the Bill as it stands at present is long and complex, and during our discussions in Committee there were understandable requests that we should consider whether it might be simplified and clarified. This amendment is the result of our efforts, and while

747
I fear noble Lords will see that it does not shorten the Bill, I hope this part of the Bill will now be a little easier to understand.
The principal change is that, by virtue of this amendment and the associated amendments to Clause 3, the provisions concerning the employer or other contractual arrangements which a pilot has with his CHA are separated from those concerning his authorisation to do the job as pilot. It is important to bear in mind the difference between the situation under present legislation and that proposed in the Bill. At present a pilot's relationship with his authority is governed solely within the statutory provisions by his licence: in future he will have a contract agreement, whether of employment or of service, and his authorisation does not therefore play the same central role as his licence does at present. I hope the separation of these two aspects into separate clauses will help to make this clearer.
The new clause contains in subsection (1) a specific power to make arrangements for pilots' services to be provided either by contract of employment or by a contract for services, which would include arrangements with self-employed pilots. I hope this reassures noble Lords that the earlier drafting did not allow for the possibility of self-employment, despite our statements, in the White Paper and elsewhere that it was our intention to do so.
The provisions concerning the obligation on a CHA to offer employment now fall in subsections (2) to (4). I am afraid that we have not been able to find a way of simplifying them. But I think that, set against the new subsection (1) their place in the overall scheme of things is much clearer. In Committee, the noble and learned Lord, Lord Simon, suggested that the matter might be left to negotiation with the pilots' organisations, but where the intention is to give pilots a statutory right, I believe that more specific provisions of the kind in these subsections are inescapable.
I should mention two particular points on these subsections. First, the offer is now simply "to employ" rather than "to employ as a pilot", which meets Lord Simon's point about the position of those who may be employed to do other work as well. Secondly, the arrangements about who should be the relevant licence holders in pilotage districts with revised CHA's (the case in subsection (3)(b)) have been amended, as it has been pointed out that the original arrangements would have been impracticable, at least in the present London pilotage district.
Finally, Clause 3(7) of the Bill was interpreted as ruling out any possibility other than employment. As I explained in Committee when moving the amendment which added that subsection, the intention was to make it clear that, if no agreement with a pilot on his employment was reached, the CHA was not obliged to authorise him. The revised version in subsection (5) of this amendment makes clear that that also applies where no other arrangements, on some basis other than employment, have been made with the pilot. In other words, that a CHA is under no obligation to authorise—and indeed almost certainly will not authorise—any pilots with whom no arrange-
748
ments, whether based on employment or self-employment, have been made.
I hope noble Lords will agree that the amendment is an improvement. Inevitably, the statutory right to be offered employment which we are proposing looms large in the clause, whereas there is no similar need for detailed provisions covering the various other arrangements which will be possible, and which will be arrived at by discussion between the CHA's pilots and agents. This amendment will make it plain that such other arrangements are possible. I beg to move.
Lord Underhill: My Lords, I should like to make one or two introductory remarks. It will be noted that there are a number of amendments down in my name and in the name of my noble friend Lord Carmichael of Kelvingrove. I hope that the House will accept my assurance that these are in no way party political amendments. I have been advised on these matters by the pilots' organisation who are seeking fair and equitable treatment under the new scheme. Although the Bill is very controversial, it is not politically controversial. I hope that the House will clearly understand that point because with the number of names which appear on the amendment there may be the impression that these are party political matters. Party politics does not enter into these amendments.
It may well be that some of my remarks will be disjointed. I appreciate that there must be a certain amount of grouping but I did not receive the final grouping until 1.45 p.m. As we have to do our own clerical work and research, matters may be in a bit of a mess.
Concerning Amendment No. 16, in the names of the noble and learned Lords, Lord Brightman and Lord Simon of Glaisdale, and also Amendment No. 4 which has been moved by the noble Lord, Lord Brabazon of Tara, there is no way in which the pilots' organisation can support leaving out from the Bill subsections (4), (5) and (6). That would be the position in both Amendment No. 16 and the government amendment which noble Lords have just heard. Amendment No. 16 in the names of the noble and learned Lords, Lord Brightman and Lord Simon of Glaisdale, would have the effect of allowing a competent harbour authority to vary the terms of each type of contract so as to nullify the options. Other noble Lords will be putting their own case, but as I can only speak once, I must deal with all the amendments at this stage. Amendment No. 16 would allow individual pilots to make a choice between being employed or self-employed. Such a mix in the same authority would result in administrative and operational chaos. The pilots would be unrepresentational and at the end of the day the two camps could easily be at each others throats.
Amendment No. 16 must be considered with the government amendment which would add the new clause under the government Amendment No. 30, on the employment of authorised pilots, and also amendments which appear in my name, Nos. 31 to 35. It is somewhat strange that in the Bill, the Government appear to take the view that it is right for pilots not authorised in new régimes to participate in the determination of whether or not those pilots who will continue shall be employed or self-employed. If

749
that interpretation of what is contained in the Bill is incorrect, I hope that the Minister will put me right.
The government amendment is preferable to Amendment No. 16 provided it is amended along the lines suggested in my amendments Nos. 31 to 35. Unless that is so, then frankly we do not like Amendment No. 16, and we do not like the new clause in the government Amendment No. 13. Amendment No. 17 in my name would delete subsection (7). As drafted, that subsection is totally unacceptable. The statement made by the Minister at Committee stage that the amendment would provide a fall back is not clear. The Minister stated that the amendment would provide a fall back for pilots to be employed by the CHA.
The subsection can be interpreted as meaning that a competent harbour authority would be able to offer any terms that it may consider fit, even derisory terms, which was the phrase used by the noble Lord, Lord Walston, at col. 49 of the Hansard report of the Committee stage. The potential new pilot would be unable to accept such terms, and the CHA can be considered to have avoided a statutory duty of the obligation to offer to employ. Such treatment could not be considered fair, and would make a mockery of any local negotiations. The competent harbour authority would have total power over any pilot wishing to continue his profession under employed status.
Concerning the Government Amendment No. 30, as drafted, this new clause would allow a competent harbour authority to employ pilots on whatever terms the CHA thought appropriate. Subsection (1) states:
"… a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots.".
Subsection (5) states:
"A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with such arrangements as the authority considers appropriate under subsection (1) above.".
This is precisely what is at present in subsection (7) of Clause 3 to which I have already stated objection. It can be seen from subsection (5) that a relevant licence holder—namely, a pilot presently licensed wishing to continue as a pilot—will not be authorised to do so by the CHA unless he accepts the terms and conditions of employment offered by the CHA.
It is incredible to think that the Government of this country in revoking pilots' licences by means of legislation should command that injustice by what can only be described as an act of immorality. To then introduce a clause entitled temporary procedure for resolving disputes as to terms of employment, to which we shall come to later on, adds only insult to injury. Clearly, if the primary legislation states that the terms and conditions are to be in accord with what a CHA considers appropriate, then what purpose can be served by the establishment of an arbitration panel? Primary legislation will allow a CHA to ignore its determinations.
Amendments Nos. 31 to 35 of this clause are all designed to ensure that any terms and conditions offered are reasonable, in the broadest sense of the word, and should in the event of disagreement be referred to arbitration. The drafting will not in any
750
way inhibit the freedom of the proposed arbitration panel. Concerning subsection (5), this amendment is more in accord with industrial attitudes prevalent in the latter quarter of the 20th century than the Government's drafting. It recognises what the Minister said throughout the Committee stage about the ability and power of the pilots to negotiate. Without this amendment which I am proposing to subsection (5), there will be no real rights of negotiations and all the power in the world will be to no avail. In summary, these amendments—Nos. 31 to 35—to the Government's amendment have something to do with justice and a sense of fair play and will ensure, as well as this type of legislation can, industrial harmony. The amendments which I propose are in full accord with the desire of the pilots to agree to the reorganisation scheme, but it should be fair and equitable as has been promised three or four times by government Ministers.
Lord Simon of Glaisdale: My Lords, there were a number of objections to Clause 3 as it stands, most of which have been dealt with by the noble Lord, Lord Underhill. The most serious was that whereas at present pilots are, except in two pilotage districts, independent contractors, the clause as originally drafted and as now reported to your Lordships gives no rights to the pilots as independent contractors.
What is more, any contract given under what is now subsection (4) has no need to be, as the noble Lord, Lord Underhill, pointed out, a reasonable contract. That has been met by the noble Lord the Minister, and I desire to say that in this and a number of other respects he has gone a long way to meet views expressed in Committee. Nevertheless, I agree with the noble Lord, Lord Underhill, that the new clause the noble Lord has tabled is still unsatisfactory.
The fourth thing that was wrong with the clause as originally drafted, and is still wrong, is that although an offer of a contract of employment—which meant direct employment, master and servant—has to be offered, and need not be a reasonable one, that was subject to nullification if a majority of the relevant licence holders (those are the old pilots in question) or the relevant authorised pilots (those are the new pilots in question) decided otherwise. But there was no statement about what the alternative was. There was no statement that if they did not agree the offer of direct employment, they have the right to be self-employed as at present.
The drafting of this clause is extremely complicated—and I shall not read it out because it is a very long clause—and the definition of "relevant licence holders" is extremely difficult to understand. I have not been able to understand subsection (6) at all even after listening to the proceedings in Committee and examining it a great many times. After shaking it and holding it up to the light, I confess that I still do not understand what it means.
I hope that the noble Lord the Minister will explain what it means as it appears in the new draft, preferably without looking at the Notes on Clauses or any brief but looking, as the pilots and the Members of the harbour authorities will have to do, at the provsions of the Act as they will appear. It was for those reasons that my noble and learned friend Lord

751
Brightman—unfortunately he has to go now, and it therefore falls to me to introduce Amendment No. 16—put down Amendment No. 16. I think your Lordships will agree that at any rate it avoids all the drafting difficulties of the clause as it appears.
It also obviates what I agree with the noble Lord, Lord Underhill, is the objectionable subsection (7) which takes away the right given on the vote. We put down the amendment after I had had the privilege of first meeting representatives of the pilots and ascertaining that they wanted to have the option of self-employment. That is the main purpose of our new provision.
I subsequently met them again in the company of the noble Lord, Lord Strathcona, who could not be present the first time. They pointed out to me the point made by the noble Lord, Lord Underhill; namely, that to have in one port or harbour some who are self-employed and some who are directly employed would be extremely difficult administratively. In fact, I think they put it that it was inviting administrative chaos.
Nevertheless, we decided to leave the amendment down because we hoped that provisions could be made by negotiation for a majority decision to be taken in each case. In other words, a majority of the pilots at any particular port who opted for direct employment would carry the whole personnel of the pilotage area, and those who opted for independent employment by a majority would similarly carry the vote.
I personally was encouraged when I saw one of the amendments to Amendment No. 30 by the noble Lord, Lord Underhill—it is Amendment No. 35—which refers to the representatives of the relevant licence holders. My only objection to that is that it involves this extremely complicated definition of "relevant licence holders". But it is something of that kind that the trade unions should negotiate on behalf of the whole body of pilots in a pilotage area, and on their behalf have the free option of either independent contractors or direct employment. It was for that reason that we maintained the amendment for your Lordships' consideration.
Like the noble Lord, Lord Underhill, I think that a lot of the objections to the original clause remain in the new clause, Amendment No. 30. In the first place, it has all the clumsy and difficult draftsmanship; and I still adhere to the view that I expressed on Second Reading that this is on the whole a well-drafted Bill and the fact that this clause is so clumsy, difficult and incongruous suggests that the draftsman has been given an impossible chore. I also think that the new subsection (5) takes away the right of choosing between being an independent contractor and being an employed pilot. If we look back to Clause 2, the competent harbour authority has to,
"provide such pilotage service as it considers need to be provided".
Under the amendment it can then either offer a contract of employment or a contract for services. If one looks at subsection (5) of the new clause one sees that the offer need only be what the competent harbour authority considers to be appropriate. In other words, that takes away the choice that is apparently given by the earlier part of the new clause.
752
When we eventually consider that new clause we shall obviously have to consider very carefully the amendments of the noble Lord, Lord Underhill. At present it seems to me a most unsatisfactory clause and I hope that the Minister will have the opportunity of reconsidering it before the next stage, particularly to see whether there cannot be erected a system of consultation on the lines that I suggested which would give a real choice in each port between direct employment and the independent contractor status, which the pilots so greatly value and which operate today in all except two pilotable districts.
4 p.m.
Viscount Simon: My Lords, I have only two comments to make when we reach Amendment No. 30, but I assume from what has been said by the Minister that that will be moved in due course by him and we can deal with that matter when we come to it. In that case, on Amendment No. 4 I want to thank the Minister for having accepted the point to extend some of these provisions to cover people who are both pilots and otherwise employed as well.
Lord Strathcona and Mount Royal: My Lords, before the Minister replies I should like to make two points. This little debate has reinforced the point I was trying to make at the very beginning of this Report stage that it will be extremely important, if each of these amendments should subsequently be moved and discussed, for us to do our best to keep it as short as possible. Some of the considerations spread over a whole series of amendments and it is proper that we should be having a debate on this amendment attempting to cover many of the others. I believe we shall need to have an opportunity to discuss them one by one.
The only other thing I want to say is that I agree with almost everything that the noble Lord, Lord Underhill, said. I was lost in admiration for the way he managed to marshal all the arguments that have given us a good many misgivings about this matter.
I recognise that my noble friend the Minister is doing his best to put into the legislation what the Government say were their intentions—that it would be possible for pilots either to be employed or to be self-employed. If they were self-employed it would be possible for organisations—particularly one has in mind Trinity House—to operate on an agency basis. What has happened subsequently—one regrets that all this is happening at Report stage instead of at Committee stage—is that it has become extremely clear to the pilots that whatever the legislation may say the practicalities are that self-employment will simply not be an attractive and viable option. Unless self-employment is likely to be an option the agency concept simply will not work.
While one thanks the Government for their noble attempts to put into reality what their declared original intentions were, I believe that a number of us are expressing considerable doubts—even the great legal minds who do not totally understand what the clause means—about whether the Government have succeeded in doing what they have said they are trying to do.
Lord Brabazon of Tara: My Lords, I said when I explained Amendment No. 30 to your Lordships that it had not been easy to make it any clearer. But we have gone a great distance in making it considerably clearer, as we said at Committee we would do. Therefore I have fulfilled that wish of the Committee and I am grateful to the noble and learned Lord, Lord Simon of Glaisdale, for having said those kind words about the number of occasions on which I have met views expressed in Committee.
I take first the remarks of the noble Lord, Lord Underhill, in relation to his Amendments Nos. 31 to 35 to my Amendment No. 30. The noble Lord said first that it was unsatisfactory that pilots who were not going to be authorised should be able to determine whether the pilots who are to be authorised are to be employed or self-employed. The choice has to be made before the appointed day for practical reasons. It is therefore not possible to know whether pilots are to be authorised; therefore to allow all the existing pilots to exercise this choice is the only practical option.
The amendments are intended, as the noble Lord explained, to provide for arbitration to apply to any dispute between the pilots in a port and the CHA. From the references to relevant licensed pilots I take it that this procedure is intended only to operate in the period before the appointed day, not thereafter.
As I am sure the noble Lord will accept, for such a provision to be practicable it would need to be expanded considerably so as to indicate, for example, how the arbitrator is to be appointed and how his terms of reference are to be set. One would need to specify what constituted an offer, as mentioned in the third amendment.
To deal with the principle of these amendments, I am not at all persuaded that it is right or necessary for arbitration to apply to contracts of service as well as contracts of employment. A contract of service may be direct with self-employed pilots or it may be with an agent. I reaffirm, particularly to my noble friend Lord Strathcona, that it is our intention that the concept of self-employment or agents should be possible and we believe that in this Bill it is. A CHA may wish to go to competitive tender before placing such a contract and I find it difficult to see how arbitration on the reasonableness of the terms of such a contract would work.
As your Lordships are aware, and as the noble Lord, Lord Underhill, mentioned, we have brought forward an arbitration clause that relates to the employed situation, since we have accepted that the statutory obligation on a CHA to offer employment, if the pilots so wish, requires some such way of determining disputes about the terms on which employment should be offered. Those arrangements provide pilots with a firm assurance of equitable treatment that will form the basis on which, if they wish to pursue other options involving self-employment or employment by an agent, they will negotiate with the CHAs or the agents. If satisfactory alternatives cannot be agreed, they have the option of employment with its associated arbitration procedures to fall back on. I believe that is the right course on which we should proceed.
754
Turning now to Amendments Nos. 34 and 35, moved by the noble Lord, Lord Underhill, the effect of these amendments is not entirely clear to us. Subsection (5) of the new clause is intended to make clear only that, whatever arrangements are arrived at in a CHA's area, there is no obligation on a CHA to authorise anyone who is not willing to serve under either of such arrangements. I should have thought that that was fairly straightforward. How the arrangements are to be determined is covered elsewhere in the clause. They will indeed be the arrangements that the CHA thinks appropriate, but subject to the requirements of subsection (2) which may oblige them to offer employment, and subject also to the requirements of any arbitration provision. Those are important provisions which, if invoked, may well limit the options open to the CHA, but to make all arrangements subject to the pilots' agreement—as these amendments appear to be implying—would, I believe, be quite wrong.
The CHAs will, of course, wish to reach agreement with the pilots about the arrangements for the provision of their services, but at the end of the day it is the CHA which has the statutory responsibility for providing the service. It must be able, subject to the statutory provisions I have mentioned, to decide what are and what are not appropriate arrangements for the port.
The noble and learned Lord, Lord Simon of Glaisdale, in speaking to his Amendment No. 16, recognised that there were certain disadvantages to it. I am bound to say that we feel the same thing. My first worry concerns the practical implications of what is proposed. It seems to me that a CHA could find itself employing half of its pilots and entering into contracts of self-employment with the other half, which the noble Lord, Lord Underhill, suggested would be an undesirable end product to this clause. It might be possible to make such an arrangement work, but I find it difficult to envisage. It is not a very economical or practical way of organising a pilotage system. It would be possible to modify the proposed amendment so that all the pilots in a port decided by a majority vote for employment or self-employment. However, that would lead straight to the complexities in the Bill which arise from the difficulty of specifying who should vote on such an issue in each port before it is known which pilots will be authorised. The noble and learned Lords, Lord Simon and Lord Brightman, would no doubt prefer to avoid these, as I should too, if an acceptable alternative can be found.
A second point in the noble and learned Lord's amendment which concerns me is that the amendment would leave it to the pilots to choose between employment and self-employment. Our own proposals would give them the right to insist on employment if they so wished, and that is to give the pilots a fall-back position of security if they decided that they need one in the absence of the protections which they enjoy at present under the 1983 legislation. It would be tipping the balance too far in the pilots' favour, I believe, to give them an unfettered choice no matter what the port wanted.
A further point which concerns me is that the amendment proposed by the noble and learned Lord seems to rule out a contract for services with an agent

755
which might then itself in turn employ or have contractual arrangements with the pilots. I think we have already decided that it would be a pity to rule out this possibility.
The fourth concern I have is that the amendment proposes arbitration on the reasonableness of the terms not only of a contract of employment but also of a contract for services. I find this rather a difficult concept to grasp. It is, of course, not unusual to resort to arbitration to determine whether the terms of a contract have been met or where the costs on a contract would fall. It seems to me less usual to seek arbitration on the reasonableness of the terms of a contract yet to be made. This may be because I find it more natural to think of contracts in terms of competitive rendering in the market place than as something that a third party has to decide is reasonable.
I believe that the noble and learned Lords have cut through a number of issues in a very elegant fashion in putting forward this amendment, but in doing so I think they are in danger of creating one or two further difficulties which our Bill manages to avoid, admittedly at the expense of a certain amount of elegance and brevity in the noble and learned Lords' amendment.
The noble and learned Lord, Lord Simon of Glaisdale, asked what happens if a CHA does not have to offer employment. As we have explained previously, the appropriate arrangements for pilotage are to be a matter for the competent harbour authority. The main safeguard for pilots is that they can require a CHA to offer employment. As I said when speaking to Amendment No. 30, we believe that this goes a long way to correcting any confusions which might have occurred as to whether self-employment was a viable option in the Bill. I think it goes a long way in that direction.
We shall come to Amendment No. 36—the new arbitration clause—in due course. I think that that clause too meets a good many of the concerns implied by the noble Lord, Lord Underhill, in his amendment. I believe that that is the right way to proceed. Therefore, I cannot accept these amendments.
4.15 p.m.
Lord Simon of Glaisdale: My Lords, before the Minister sits down, I do not know whether this is a convenient time to ask him to deal with the point I raised on Amendment No. 30. Perhaps I may put the point again. If one looks at Amendment No. 30, subsection (1) of the new clause appears to give the pilots the offer of either a contract of employment or a contract for services. If one looks at subsection (5), one sees that it is entirely up to the harbour authority to decide which is the appropriate contract to put forward. In other words, it takes away the choice at the option of the harbour authority.
I apologise if I did not make the point clear when I originally spoke. I should be very grateful if the noble Lord would deal with it whenever it is appropriate.
Lord Brabazon of Tara: My Lords, with the leave of the House, I will deal with it briefly. I had hoped that
756
I had covered it in my most recent speech. Under subsection (1) it is the harbour authority's option as to whether to employ pilots or to offer contracts of service. That has always been the case since the Bill first started in your Lordships' House. Subsection (5), as I explained, merely gives the harbour authority the right to refuse any person who is not willing to provide his services under either arrangement.
The Deputy Speaker (Lord Nugent of Guildford): My Lords, I should explain for the assistance of the House that I propose to call each amendment in turn because there are many grouped together informally for the convenience of the House. This will give any noble Lord who wishes to speak on an amendment thus included the opportunity to do so.
On Question, amendment agreed to.
Lord Swinfen Lord Swinfen moved Amendment No. 5:
Page 3, line 33, after ("such") insert ("number of").
The noble Lord said: My Lords, Amendment No. 5 is grouped with all the amendments through to No. 8, but I propose to speak to Amendments Nos. 5, 6, 8, 11 and 12, because they all relate to the same subject and are necessary to achieve the same ends. I am rather surprised at the grouping that has been proposed, because at the Committee stage whoever assisted the Minister to get it right did get it right. At this stage it is different. It shows just how awkward the whole situation is.
This group of amendments is designed to ensure that pilots who are already working in a particular port authority's area will not need to take any examination or requalify to work for the new competent harbour authority in that area after this Bill becomes law. The Minister did respond to the amendments at Committee stage, but on rereading what he said, I am still not satisfied that those pilots who are qualified and working at the moment will be able to continue working in the same areas. He seemed to think that I had a wider question in mind and talked about—I must get this right—licensees from Liverpool and other places. I am thinking at the moment that if, for instance, a pilot is licensed to operate in and out of Southampton and he has been doing so for a number of years, why should he need to re-qualify in order to do exactly the same job but employed by a competent harbour authority rather than as a self-employed person? I beg to move.
Lord Underhill: My Lords, I wish to intervene in this matter only because the grouping is said to be for Amendments Nos. 5 to 8. Amendment No. 7 stands in my name and that of my noble friend, and in that amendment we are urging that an authorisation should remain in force for a period of not less than one year. This matter was considered at the Committee stage and there was a very wide measure of support for it. Under the Bill a pilotage exemption certificate may be granted to a master or a first mate. Clause 6(4) provides that such a certificate shall remain in force for one year and may be renewed annually, subject to certain conditions in carrying out the pilot's duties.
What Amendment No. 7 seeks to ensure is that precisely the same conditions as apply to a pilot's

757
exemption certificate shall apply to a pilot's authorisation. At present a licence is renewable each year unless there is incapacity or disability. In our view there is no justification whatever for this difference of treatment between a pilotage exemption certificate and a pilot's authorisation.
At the Committee stage the noble Lord the Minister said that the Bill made no provision for periods for which an authorisation should last. He said it was possible for it to run on until revoked. However, he kindly said that there might be something good in the suggestion that there should be a fixed time for a certain period, which might be extended, if that was helpful. The noble Lord suggested that that was a possibility and that he would look at it. He recognised that a minimum period of one year would enable pilots to plan ahead.
Incidentally, on this matter, in relation to the arbitration clause I would urge that there should be some basis for appeal if the authorisation is not to be renewed after a period of one year. At this stage that point is not at all covered by the arbitration clause. That is one of the defects we shall point out when we reach that clause. Amendment No. 7, at this stage, is mainly urging that an authorisation should be for a period of not less than one year. I should like to know from the Minister whether his kind offer to look at this possibility of a period has been looked at and whether he can now accept my amendment.
Lord Mottistone: My Lords, it seems to me that all these amendments, particularly Nos. 6, 7, 8 and 12, are limiting the competent harbour authority's choice of pilot and removing its control over the number of pilots it has to employ. To that extent it is defeating the object of the Bill to make sure that the numbers that are employed satisfy the demands of a particular port. I did not get from either my noble friend Lord Swinfen or the noble Lord, Lord Underhill, the message that that was what they had in mind; but that would seem to me to be the outcome of these amendments if they were to be agreed to. Accordingly, I am against them if it comes to that point.
Lord Greenway: My Lords, I supported the principle behind the amendment of the noble Lord, Lord Underhill, at the Committee stage and, very briefly, I should like to say that I do so again. As I see it, it removes yet another obstacle against the self-employment of pilots.
Lord Brabazon of Tara: My Lords, my noble friend Lord Swinfen, as he said, moved identical amendments at the Committee stage and at that time I gave my reasons for not accepting them. Therefore I shall be as brief as I can now in, I am afraid, giving the same reasons. Incidentally, we had originally suggested that Amendments Nos. 11 and 12 should be grouped together with these amendments, but that suggestion was rejected by noble Lords opposite and we bowed to their wishes. So there is co-operation, and I am very happy to answer now the points made in connection with Amendments Nos. 11 and 12.
As I have said, these amendments are identical to those which were put down at the Committee stage. These amendments would have the effect of relieving
758
existing licensed pilots of the need to meet any qualifications set by the CHA for the authorisation of pilots under the new arrangements. The first three amendments would relieve such pilots only if they already worked in the district concerned, but Amendments Nos. 11 and 12 would also relieve former licensed pilots transferring from another port of any need to satisfy the CHA of their abilities. As I pointed out in Committee, one effect of the amendments might be that where there was a vacancy a CHA might have no option but to accept any former licensed pilot who applied.
Of course there is a special case for special treatment of existing pilots who could be expected to know the port at least as well as anyone else. The Bill recognises this special case by providing for CHAs to set different qualifications for former licensed pilots. In many cases I am sure the possession of a licence will be enough to satisfy a CHA that a pilot should be authorised. However, I cannot agree that they should not have the right to go further if they think it is necessary and require the applicant to demonstrate that he can meet any necessary qualifications.
In Committee, my noble friend Lord Swinfen suggested that was totally unfair to pilots, but I believe it would be unfair to the CHAs who are to carry the responsibility for safe pilotage in the port, as my noble friend Lord Mottistone pointed out, if they were not to retain the right to satisfy themselves as to the abilities of those they are authorising.
Lord Strathcona and Mount Royal: My Lords, may I interrupt the noble Lord for one second? Surely the implication of that is to say that the pilots who are doing the job at the moment are not capable of doing it. Either they are capable of doing it now and capable of going on doing it, or else they are not capable of doing it now—in which case they are not adequate to do it in the future.
Lord Brabazon of Tara: Not at all, my Lords. I said that obviously most of the existing pilots, if not nearly all of them, will continue working in the same places as they are now and they will not need to have any special qualifications.
Turning to the amendment in the name of the noble Lord, Lord Underhill, and others, as I said in Committee, I cannot accept that authorisation should be renewed automatically. A CHA must have the right to terminate an authorisation in the circumstances which are described in Clause 3(9). On the suggestion that there should be a minimum period for which the authorisation should last, I agreed in Committee to take the point away for consideration. On reflection, I am afraid I do not think that this would be desirable. In future a pilot's security about his future must rest on the terms of his agreement with the CHA. He will be employed either with the obligations that places on the employer in the way of notice and so on, or under some kind of arrangement in which such matters will be determined by the particular terms of the contract or agreement.
To apply conditions of this sort also to an authorisation issued by a CHA seems to be unnecessary and confusing. It amounts to additional employment protection which I cannot see anything in

759
the circumstances of pilots to warrant. Moreover, a fixed period of, say a year might well cause practical difficulties at the outset of the new regime by making it difficult for a CHA to release pilots who would otherwise be prepared to leave in order to make way for someone from another port. That is a very important point and one which I do not think noble Lords would want to interefere with, shall I say? So for those reasons I cannot accept these amendments.
4.30 p.m.
Lord Swinfen: My Lords, I have listened with care to what my noble friend has said. I am inclined to agree with the comments of my noble friend Lord Strathcona and Mount Royal. I should like to take the matter away and read carefully what the Minister and other noble Lords have said with a view possibly to coming back at the next stage with a different amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Lord Underhill Lord Underhill moved Amendment No. 7:
Page 3, line 38, at end insert—
("( ) An authorisation under this section shall remain in force for such period, being not less than one year, as the competent harbour authority may prescribe and shall at the expiry of that period be renewed; provided that such obligation to renew shall not apply in the case of a pilot suffering from an incapacity.").
The noble Lord said: My Lords, I have spoken to this. Frankly the Minister's reply is not satisfactory. He said that this is a matter for negotiation. This means that in one harbour authority an agreement could last for one year and in another there could be none at all because of local negotiation. If we want pilots who are experienced to stay in the job and not say that they will get out, there ought to be a minimum period. I think it is not asking too much to suggest that the minimum period be one year.
It is a point of principle, I think, that this should be a matter not just for negotiation in each competent harbour authority but laid down in legislation. The authorisation should last for a period of one year to give the pilot something to look forward to in that one-year period. I beg to move.
Viscount Simon: My Lords, as I understood the argument of the Minister, he objects to the suggestion that there should be an automatic renewal. I do not know whether the noble Lord, Lord Underhill, would be prepared to modify the amendment to withdraw that proposal. There would then be a period of one year with no obligation to renew.
Lord Underhill: My Lords, with the leave of the House, I can see that that is a problem. Perhaps the Minister would be prepared to accept the period of one year. I agree that automatic renewal presents certain problems. We have said that it should be renewed,
"provided that such obligation to renew shall not apply in the case of a pilot suffering from an incapacity".
I appreciate that there could be other circumstances. If the Minister says that he is prepared to consider an amendment to cover a period of one year and we can look at the other matter later, I shall be happy to
760
withdraw the amendment. If that is not the case, it will be better to vote on the amendment and have the matter corrected on Third Reading.
Lord Brabazon of Tara: My Lords, I am afraid that I could not give the assurance which the noble Lord seeks, as I thought I had explained in answer to the amendment. I also pointed out one considerable difficulty to which the amendment gives rise. I think that we shall have to take the opinion of the House.
Lord Strathcona and Mount Royal: My Lords, may I ask the noble Lord two questions? Will he consider the possibility that an amendment along these lines might apply to existing pilots in the changeover period, as opposed to what happens thereafter, as he has said that the future employment terms will be subject to arbitration? I think that we can all accept that one could argue about the subject then. Some of us are concerned apparently to be taking away something from pilots that they now have. Therefore, we are in a slight muddle. May I ask whether this is something that would be covered by the arbitration clauses in the transitional period? If so, it may well be that this meets the case.
Lord Brabazon of Tara: My Lords, that is exactly the sort of thing at which I imagine the arbitration will look. The arbitration process is for the transition of pilots from the present arrangements into future arrangements.
Lord Underhill: My Lords, is the Minister giving a categoric assurance that Clause 36, the arbitration clause, will cover the question of a minimum period for the first authorisation? If that is the case and it will be written into the record, I shall be happy.
Lord Brabazon of Tara: My Lords, with the leave of the House, I was hoping to deal with the matter more fully when we reach the arbitration clause. The pilots and ports are already talking to us about what will be within the purview of the arbitration procedures. I cannot give a cast-iron guarantee that this will be included, but I very much expect that it will be.
Lord Broxbourne: My Lords, surely my noble friend appreciates that the only reference to an arbitration clause is in the new clause proposed by Amendment No. 36. The matters that will be subject to arbitration are there specified. There is rather surprisingly no provision for arbitration in the Bill as originally drafted. Surely my noble friend is not saying that the specific terms of reference prescribed in the statute can be varied by these sorts of discussions and bargaining?
Lord Brabazon of Tara: My Lords, with the leave of the House, the arbitration clause deals specifically with the terms of any provision of any contract of employment to be entered into between the parties; that is, the pilot and the port. As authorisation is the equivalent of employment or self-employment, and it would be covered by that.
Lord Underhill: My Lords, with the leave of the House, in the light of what the Minister said—and we shall read carefully what he said—and of any debate

761
we may have on the new clause proposed in Amendment No. 36, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 9:
Page 3, line 44, at end insert (", time-expired apprentice pilots or recognised assistant pilots").
The noble Lord said: My Lords, with this I speak to Amendments Nos. 13 and 29.
These amendments fulfil the commitment I gave in Committee to give pilot apprentices and Manchester Ship Canal helmsmen a second level of priority for authorisation as pilots once the supply of applications from former licensed pilots has dried up. This priority, like the licensed pilot's own priority, will last for four years after the appointed date. We thought it preferable in drafting terms to refer to the Manchester Ship Canal helmsmen as "recognised assistant pilots" rather than by name, but the definition covers their position. I beg to move.
Lord Swinfen: My Lords, the Minister said that he was speaking to Amendments Nos. 13 and 29. Was he speaking to Amendment No. 28 also?
Lord Underhill: My Lords, it may help the Minister if I tell him that I have Amendments Nos. 9, 13, 28 and 29.
Lord Brabazon of Tara: My Lords, I apologise. I was meant to be speaking to Amendment No. 28 also, which is purely a drafting amendment.
On Question, amendment agreed to.
Lord Kirkhill Lord Kirkhill moved Amendment No. 10:
Page 3, line 45, leave out ("four") and insert ("two")
The noble Lord said: My Lords, in moving Amendment No. 10, I speak to Amendment No. 14 also.
I recognise that the emphasis lying behind the amendments is against the thrust of this part of the Bill. I return to comments and views which I expressed at the Committee stage.
I was not of course myself a member of the Committee and I confess as an aside that I felt somewhat disadvantaged in speaking from behind the seated members of the Committee, although from their point of view they may well have regarded that as being something of a blessing in disguise. However, at this point of the Bill there is an alternative argument and it is one which I think should be expressed and one to which your Lordships should give your consideration.
The guidance notes presented to Parliament by the Secretary of State for Transport, Marine Pilotage: Legislative Proposals, at the introduction on page 1 open with these words:
"In recent years there has been growing concern about the costs of using British ports, in particular compared with those on the Continent, and the Government is anxious to seek ways of helping to reduce these costs".
While none of us would dispute the urgent need to reorganise pilotage in the United Kingdom, which is
762
the purpose of the Bill—and certainly one of the principle aims of the Bill is to reduce pilotage costs—the Minister should accept that in general there is only scope for reducing costs in ports which have a surplus of pilots. That seems to me to be self-evident. I believe we should keep in mind that all ports do not have surplus pilots and most British ports already have the correct number of pilots for current requirements. This is unlikely to change significantly as a consequence of any change in compulsory pilotage arising from the consultations and investigations very properly required under Clause 5(4) of the Bill before us.
The Minister is no doubt aware, because I pointed this out to him at the Committee stage, that in Scotland there are probably only two ports—the Forth and the Clyde—where there is a surplus of pilots. Clearly then in most ports the numbers of pilots has been properly and sensibly regulated over the years, and contrary to the view expressed at an earlier stage by the Minister a very large number of the members of the British Ports Association to which he then referred are dissatisfied with the proposed arrangements for compulsory transfer of pilots to fill future vacancies.
And what of the ports which already employ pilots—ports such as Shetland, Orkney, Montrose and others? They already enjoy the very situation which this Bill seeks to create and yet they too will be subjected to what I consider to be an unfair restraint. Why should they not continue to exercise their present right—the right to choose the best man for the job? The best man may in many if not most cases be an experienced pilot transferred from another district. But from time to time candidates with better experience and specialised local knowledge will offer, and they should have the opportunity of putting their expertise and specialised local knowledge to good use.
In considering the pilots who may become surplus to the future needs of some pilotage districts, your Lordships should not ignore the very large number of master mariners with specialist ship handling skills who, through no fault of their own, are also surplus to requirements because of the ever-declining merchant fleet. They too are deserving of some consideration and ought not to be denied opportunities of employment during the long four years provided by the Bill.
Nor should it be assumed that a local review of compulsory pilotage will significantly reduce the number of pilots in many of the ports. Pilots provide their service in the interests of safety. The duties of the pilot have tended to change over the years and, while they continue to fulfil their primary function of giving guidance to ship masters as to local conditions and safe navigational requirements, it is surprising that not much has been said so far on the increasingly important role that pilots now play as a consequence of reducing manning on merchant ships.
Indeed, I am informed that it is not unusual nowadays to find only the master and a helmsman on a ship's bridge when entering or leaving port, and in some instances the master not only has to con his ship into the harbour but also has to steer the ship—sometimes with remote control gear. As a consequence, the pilot forms a very effective part of

763
the bridge team, effectively a unit in the ship's crew for the purposes of entering and leaving the harbour. This is a factor which undoubtedly will be considered by the competent harbour authorities in their deliberations before issuing pilotage directions and this may well detract from further reduction in the need for pilots.
Since the safety of navigation must be the foremost consideration, it is incumbent upon competent harbour authorities to appoint the very best man for the job. It may very well be that in many ports a pilot transferred to a comparable district would be the most suitable candidate, and clearly wherever possible priority must be accorded to the employment of qualified pilots from other comparable districts wherever this is sensible, feasible and in the interests of safety.
But the noble Lord, Lord Swinfen, at the Committee stage said that he believed the problem of reducing the period for compulsory transfers from four years to one year—the proposal which I then had before the Committee—would be resolved more quickly than I realised. At col. 28 of the Official Report of the Public Bill Committee on 9th December, the noble Lord, Lord Swinfen, said that he was,
"led to believe that in order to have enough pilots in two years we really ought to start recruiting now to make certain that they are trained".
Assuming the vesting date on which the Bill when enacted becomes operative to be 1st January 1988, then we are really saying that the compulsory transfers must continue in force until 1st January 1992.
As the noble Lord, Lord Swinfen, indicated, many pilots will have retired by that time and this is surely an argument for reducing the period of time during which the restriction is operative; hence my proposal before your Lordships' House that it be one or two years. When I raised this issue at the Committee stage the noble Lord, Lord Gray of Contin, suggested just this compromise of two years which is now before the House. This would take us to 1st January 1990.
If I may turn now to Amendment No. 14, because these two amendments very properly are grouped together, and having particular regard to the necessity in the interests of safety that a competent harbour authority should always appoint the best man for the job, it seems to me that my proposed amendment in that light is not unreasonable. When at some future date a competent harbour authority is recruiting pilots to fill vacancies, priority of consideration, as I emphasised a moment ago, must be given to surplus pilots from elsewhere. No one would dispute such a sensible principle.
The Minister at an earlier stage gave it as his opinion that basic skills are the same and that there is no reason to give local people priority over licensed pilots from whatever port. I argued at that stage that I thought that local expertise was a factor which a competent harbour authority must take into consideration. I consider that the statement of the Minister was somewhat misleading. I do not put it more strongly than that.
Pilots in some districts have little ship manoeuvring to undertake and their function is largely to conduct ships from the pilot station to the point at which a
764
docking pilot takes over. In some districts—and I used Milford Haven as an example at Committee stage—pilots are experienced in the handling of ultra-large vessels with vast open spaces and very specialised needs for berthing at tanker terminals and so on. Conversely, other ports are small, very intensively utilised and subject to widely varying weather conditions.
My submission then and now is that the basic skills are quite different and that pilots experienced in one type of skill could not readily adapt as easily as the master of a ship who holds a pilotage exemption certificate and who is already experienced in that size and type of vessel in that location. The examples which I used at an earlier stage were Milford Haven on the one hand and Aberdeen, of which I know something, on the other.
The Minister said in replying to that point at Committee stage that if there were no applications from previously licensed pilots from other ports offering their services, it would be an option to recruit locally. I found that helpful because I had not been able to infer that that was an application of the Bill at that point. Therefore, his remark was helpful to me at the time.
Nevertheless, while training can be given, there is an obvious advantage in ports where specialised conditions exist in recruiting a master of a ship who has already held a pilotage exemption certificate for that port and who is familiar with constraints imposed by local weather conditions, confined spaces and the employment of manoeuvring aids such as dynamic positioning systems and thrusters.
Quite simply, in the interests of safety, the best man must be employed for the job. During Committee stage my noble friend Lord Carmichael of Kelvingrove wisely drew the attention of the Minister to the question of training transferred pilots and the assessment as to when a pilot has acquired sufficient local knowledge. I consider that this is a real problem in ports where specialised local conditions exist.
A pilot transferred in spring or summer could well have gained basic familiarity with fair weather conditions. He may not encounter storm or ice conditions for six months or so and, having been granted a local licence and the cost burden of his training having been terminated by his original port, he could then be faced with conditions which he has never before experienced. Is he the better man to safely conduct a ship to a safe berth, or is the better man a ship master who for years has operated in and out of the port in all weathers and who has a pilotage exemption certificate?
I commend these two amendments for your Lordships' consideration. Their effect, if they are carried into the Bill, will be, first, to reduce the time limit to two years instead of imposing constraints for four years, by which time a problem of imbalance of ages could be created. Secondly, new employment opportunities would not be confined to a few pilots, necessary though it is to give them a priority, but would be afforded to certain experienced master mariners in our declining merchant fleet who, like pilots, also have ship handling skills and, in the case of holders of local pilotage exemption certificates, have

765
superior local knowledge compared with pilots transferred from districts where conditions are quite dissimilar. Thirdly, in those ports where there is already a correct number of pilots, including those who already employ pilots, the position would not be worsened or constrained. It is in the light of those arguments, which I believe to be relevant (although I accept that they are against the major thrust of the Bill), that I move Amendment No. 10. I beg to move.
Lord Brabazon of Tara: My Lords, I congratulate the noble Lord, Lord Kirkhill, on having come back again at this second stage of the Bill. Admittedly he has moved from one year to two; however, I fear I have to tell your Lordships that even with that I shall not be any friendlier towards the amendments than I was at Committee stage. Nonetheless, I shall attempt to be brief.
Lord Kirkhill: Hear, hear!
Lord Brabazon of Tara: Subsection (3) of Clause 3 is aimed at ensuring as far as possible that existing licensed pilots shall be given every opportunity to continue in their profession under the new regime. I think that that will be welcomed in all quarters of the House. However, I should like to give two reasons why we do not accept that the two-year period would allow sufficient time, first, for harbour authorities to decide on the number of pilots they will eventually need once the initial wrinkles in the pilotage service they wish to provide have been smoothed out, and, secondly, to allow a reasonable period of time for those who wish to carry on in pilotage to find a new berth. We hope there will be cases of ports where there is no surplus of pilots and where volunteers will be prepared to take early retirement, so creating vacancies for surplus pilots from elsewhere. All this takes time, and I cannot accept that the first amendment will give everyone long enough.
Nor can I accept the second amendment. I accept the point that there are wide differences between harbour areas and that a pilot moving from one port to another may have a great deal to learn about the local conditions. But there would also be a period of learning for a master with a pilot exemption certificate, or for a master of a ship regularly trading into the port, before he is able to deal safely with the variety of vessels which use the port. There seems to me not much difference between a CHA taking an existing pilot from another district, who would have to familiarise himself with the local conditions, and recruiting a master with local knowledge and experience who is not sufficiently competent to pilot all types of vessels. There is of course no question of CHAs being obliged to take on pilots from elsewhere without satisfying themselves as to their suitability. Transfers will not be compulsory. A CHA will have the right to turn down anyone, former licensed pilot or not, who does not have the required qualifications even within the four years. Therefore, the question of safety which the noble Lord, Lord Kirkhill, has mentioned does not, in our opinion, arise.
Given that pilotage and in particular the number of pilots is a national problem, it does not seem to me to be too much to ask of authorities which are in the
766
position of needing additional pilots that they should look long and hard before turning down experienced pilots from other ports.
These provisions have been discussed at great length in the preparation of the Bill between the British Ports Association and the pilots. I certainly have not heard that, as the noble Lord, Lord Kirkhill, suggested, there are large numbers of those in the BPA who are dissatisfied with this provision. Therefore, I cannot accept these amendments.
Lord Kirkhill: My Lords, detecting a wide measure of support for my position in your Lordships' House, and ever the skilful parliamentarian as I believe myself to be, the Minister will no doubt be relieved to know that I shall not be pressing my point to a Division. However, I want to say one thing to him before I resume my seat. At the point to which I make reference, this is another example of a Bill drawn in United Kingdom terms which has great significance for Trinity House and others but has little or no significance for the more remote geographical areas of the United Kingdom.
Lord Brabazon of Tara: My Lords, with the leave of the House, the noble Lord himself said that the Bill has significance possibly in the Clyde and the Forth; and that so far as I am concerned is pretty remote from here.
Amendment, by leave, withdrawn.
[Amendments Nos. 11 and 12 not moved.]
5 p.m.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 13:
Page 4, line 2, at end insert—
("( ) If at any time during that perod there is such a shortfall, the competent harbour authority shall not authorise any person who was not immediately before that day a time-expired apprentice pilot or a recognised assistant pilot unless the number of such apprentice and assistant pilots applying to be authorised who have the required qualifications also falls short of that number.").
The noble Lord said: My Lords, I spoke to this with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
[Amendment No. 14 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 15:
Page 4, line 3, leave out subsections (4) to (8).
The noble Lord said: My Lords, I spoke to this with Amendment No. 4. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 16 and 17 not moved.]
Lord Underhill Lord Underhill had given notice of his intention to move Amendment No. 18:
Page 4, line 42, leave out ("may") and insert ("shall in the absence of other commensurable arrangements")
The noble Lord said: My Lords, subsection (8) provides that a harbour authority,
"may pay into any pilots' benefit fund … such contributions as may be required by the rules governing that fund".
That deals with the Pilots' National Pension Fund. At the Committee stage an amendment was proposed to substitute "shall" for "may". This amendment brings

767
in that essential change and also introduces this qualification. At present, self-employed pilots contribute to the Pilots' National Pension Fund—
Lord Brabazon of Tara: My Lords, I wonder whether the noble Lord will give way for a moment. We have just passed Amendment No. 15 in my name which struck out subsections (4) to (8).
Lord Underhill: My Lords, unfortunately the Minister is correct. This shows the difficulty of hasty grouping. I would have referred to the position of the pension fund, because it is a vital issue affecting the pilots. We shall now have to see how we can bring that in at Third Reading.
[Amendments Nos. 18 and 19 not moved.]
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal moved Amendment No. 20:
Page 4, line 46, at end insert—
("( ) Where by virtue of subsection (4) above a competent harbour authority has to offer a contract of employment to a "relevant licence holder" as a "new pilot", the terms of that contract shall include a provision ensuring that the "new pilot's" remuneration exclusive of any contribution that may have to be made into any pilots' benefit fund by virtue of subsection (8) above will be no less than that which he would have been entitled to as a "relevant licence holder" in or in the approaches to the harbour of the competent harbour authority at that time.").
The noble Lord said: My Lords, this amendment is important. It concerns a broad issue which we have already addressed and which we shall be addressing several times later this afternoon. I refer to giving legal effect to the Government's undertakings to treat continuing pilots fairly. I am practically quoting the words of the Prime Minister in saying that. I have a feeling that the Minister will say that his amendment on arbitration has everything to do with this amendment, but there is one major uncertainty in his amendment.
What we seek could be achieved by the Minister giving us an undertaking that words to the effect of this amendment, which says that the earnings of continuing pilots should be equivalent to what they are earning now, might be within the terms of reference for arbitration. If he says that, as I hope he will, it occurs to me that there would be no objection to putting in this amendment anyway. Then we would have a belt and braces position. We would be certain that the the Government accept this provision as being a statement of one of the aspects of what any reasonable person would regard as the meaning of the undertakings about fairness for continuing pilots which have been so often repeated by the Government.
I hope that the noble Lord will be able to accept this amendment and will also be able to give us the assurances which are associated with subsequent amendments. I beg to move.
Viscount Simon: My Lords, I should like very warmly to support the spirit behind the amendment of the noble Lord, Lord Strathcona, but I am bound to say that I do not think it works. The amendment begins with the words:
"Where by virtue of subsection (4)".
768
Subsection (4) has been removed from the Bill. If the Minister could indicate agreement in principle with what the noble Lord, Lord Strathcona, is getting at, it would be a great help to all of us.
Lord Mottistone: My Lords, I am sorry to sound again a damp note on this, but it seems to me that this is an attempt to guarantee a pilot's level of earnings under the new arrangements. The amendment disregards other aspects of conditions such as volume of work, hours or work, nature of work, area of work and so on. It also ignores the fact that sometimes earning levels have been brought up much too highly by ill thought-out rate setting by existing pilotage authorities. Therefore I doubt whether the amendment should be supported. We debated it in Committee and I think it should be rejected.
Lord Underhill: My Lords, perhaps I may also support the principle of the amendment and what the noble Lord, Lord Mottistone, has said. It may well be that in the negotiations locally the question of hours and other matters of work conditions will be discussed, but what is important is that the negotiations will be on a local basis between a port authority and the pilots in that area. National negotiations are going by the board. The pilots have declared their full support for a scheme or reorganisation as the Bill proposes. Having declared their support, and having had on at least three or four occasions assurances from Ministers and from the Prime Minister that they will be given fair and equitable treatment if negotiations on earnings are to be left to local negotiations, the pilots are frightened that some of them could find themselves in an adverse position. That is why they are endeavouring to lay down in the amendment moved by the noble Lord, Lord Srathcona, some guarantee that their earnings will not be less than is at present provided on a negotiated basis.
Lord Simon of Glaisdale: My Lords, on the drafting point that was made by the noble Viscount, Lord Simon, that there is a reference to subsection (4), which has been removed, perhaps I may make two points. First of all, I very much agree with the noble Lord, Lord Underhill, about the excessive grouping that we have had. We have got into a mess over Clause 3 and will, I think, continue in that way.
So far as concerns subsection (4), it is true that it has been removed in terms. However, there is a similar subsection in the Minister's new clause that in effect has replaced most of Clause 3. I should have thought that there would not be any difficulty if your Lordships choose to add the provision, and the reference to subsection (4) can be tidied up at the next stage of the Bill. I suggest that there is every advantage in not being deterred by a purely drafting point and for this matter to be decided on its merits.
Lord Brabazon of Tara: My Lords, perhaps I may say first to the noble and learned Lord, Lord Simon of Glaisdale, that the new clause of Amendment No. 30 has been tabled for a week, and indeed the noble Lord, Lord Underhill, put down some amendments to it. I cannot accept therefore that people have not had an opportunity to look carefully at it.

769
Turning to this specific amendment, it is of course similar to one that was put forward at Committee stage. But, as my noble friend has explained, the purpose of the present amendment is to require CHAs which are obliged to offer employment to licensed pilots, to provide them with at least the same level of remuneration as that to which licensed pilots in the ports concerned are entitled before the harbour authorities assume their responsibility for pilotage. I fear that after very careful consideration I regard this amendment, as I regarded the amendment that was brought forward in Committee, as imposing too much of a straitjacket on the harbour authorities.
I recognise that in the past legislation on some occasions has provided for the level of earnings of employees being transferred by legislation from one employer to another to be preserved; and indeed that is what we are proposing in this Bill for the employees of pilotage authorities. However, most of the pilots are classified as self-employed. Pilotage charges are set at levels whch are expected to yield particular levels of earnings for the pilots in each district, but what they actually earn depends on the volume of shipping using the ports. After implementation of this Bill, where pilots become employees of the harbour authorities, their earnings are likely to be much less dependent on fluctuating volumes of shipping than they are at present. I believe that to be an important consideration which argues against guaranteeing employed pilots in the future levels of earnings to which they were entitled as self-employed pilots. Their levels of earnings as employees of the harbour authorities are likely to be more secure.
I suggest that it is also relevant to bear in mind that the ports have not been party to the national agreements on pilots' pay, which, though no longer in operation, still largely underlie pilots' earnings, nor were the ports party to the way in which pilots earnings have been determined locally in the various districts.
During the debate in Committee on the corresponding amendment, some noble Lords—for example the noble Viscount, Lord Simon and my noble friend Lord Strathcona and Mount Royal—argued that the Government would be going back on their assurances that pilots remaining in the industry will receive fair and equitable treatment. Indeed some noble Lords seemed to argue that fair and equitable treatment and the guaranteeing of present levels were synonymous. I cannot accept that. The earnings to which the pilots are at present entitled as self-employed persons reflect their availability for service at all hours of the day and night, at weekends, on bank holidays, at Christmas and so on, which I think was the point that my noble friend Lord Mottistone was driving at.
The Select Committee on Transport in another place referred to a number of localities in which there was prima facie evidence of low productivity, and the noble Lord, Lord Underhill, accepted that point in debate in Committee. I suggest that in some cases earnings levels may well not reflect those low levels of productivity. Should we now guarantee pilots, if they enter employment, those same levels of income, it will be open for the pilots in negotiations with the harbour authorities to argue for additional payments for overtime and for working during unsocial hours, at weekends, on bank holidays and so on. Where
770
productivity is low and the earnings to which pilots locally are entitled do not reflect that fact, it would be open to the pilots to argue for increased payments to reflect increased productivity.
I believe therefore that if we were to legislate to guarantee pilots who are to be employed by harbour authorities the levels of earnings to which they are now entitled as licensed pilots, we should be going much further than giving them the fair and equitable treatment to which they are entitled; indeed we should be placing on the harbour authorities an imposition which would still be both unfair and inequitable, and that would feed through into costs to users of our ports which would be higher than they should be. I hope that noble Lords will agree that this is not the best way to proceed.
However I have put down an amendment on arbitration to this effect which we shall have an opportunity of debating later. This amendment proposes to include in the Bill an arbitration procedure under which a panel will be set up to consider disputes on pay and conditions of service that are referred to it either by a harbour authority or by the pilots. Its recommendations will be binding unless the two parties to a dispute agree otherwise. It will have powers in all cases where pilots are employed by CHAs, and not only where pilots insist on employment, as would be the case with the amendment proposed by my noble friend.
The amendment which I have put down also provides for my right honourable friend the Secretary of State to lay down guidelines which the arbitration panel will be required to take into account. As I said earlier, my officials have already started discussions with representatives of the ports and the pilots about the content of these guidelines, and I am sure that they will need to include a reference to the levels of earnings to which licensed pilots are at present entitled.
I very much hope that noble Lords will agree that, with the compensation terms for pilots leaving the service which my right honourable friend the Secretary of State has already announced, the restrictions on recruitment from outside the industry that are already in the Bill and the pilot's ability to insist on employment, for which we are also legislating, this provision for settling disputes between pilots and the harbour authorities gives pilots the assurance of fair treatment, which they are entitled to expect. Therefore I hope that in the light of that explanation my noble friend will not feel the need to press this amendment.
5.15 p.m.
Lord Swinfen: My Lords, before my noble friend sits down, may I point out that he mentioned fair and equitable treatment? Where in the Bill are the guarantees that Government have been promising for so long?
Lord Brabazon of Tara: My Lords, we have not yet come to that point. We shall reach it when we deal with Amendment No. 36, among other measures on arbitration.
Lord Broxbourne: My Lords, the Minister has criticised the amendment of my noble friend as putting

771
things into a straitjacket. Surely it would be a more respectful and perhaps more accurate way of stating the proposition to say that it has the virtue of clarity and certainty, which the alternative procedure adumbrated by him probably will not have.
Lord Brabazon of Tara: My Lords, with the leave of the House, perhaps I may say that is does indeed make things abundantly clear, but unfortunately it makes them clear beyond what we think they should be.
Lord Strathcona and Mount Royal: My Lords, I am extremely grateful to my noble friend who is sitting behind me because I feel that he has flushed out from my party in government a rather embarrassing state of mind. Most of the early part of his reply struck me as essentially irrelevant, if I may say so.
As for the remarks of the noble Lord, Lord Mottistone, about ill thought-out rate setting, the answer is that it simply demonstrates that some of the people who will be handed total authority appear to be incompetent in their jobs, which gives no comfort at all. The question of present levels of earnings and so on, and in particular the very unrespectable argument about self-employment, are essentially irrelevant. The real question, which the Minister quite fairly put, is: what do most of us understand by "fairness"? I believe that my noble friend behind me was supporting me when he said that this is what the ordinary man understands as the meaning of fairness.
The noble Lord then dealt with some complicated questions about how pilots' entitlements had been calculated in the past. That is an extremely complicated point from which I suggest we try to stay away. If he is saying that that is the principal impediment, I dare say we could find a different form of words which would talk about present entitlements as opposed to remuneration, if that would help him. He has said that he does not want to give that undertaking. The trouble about that is that he has not yet laid down the guidelines to which we shall come in Amendment No. 36.
I am made extremely apprehensive about those guidelines by what the noble Lord has now said. He has said, "Our idea of what should be in the guidelines is extremely different from yours". Until he said that, I was in the mood to say that we would tackle this point when we reach the arbitration clauses, withdraw this amendment and return to it on Third Reading if we cannot have satisfactory guidelines. When he expresses his view of what is fair in the way that he has, he makes me apprehensive about what the guidelines will contain. I feel tempted to press the amendment. I think that the Minister looks pregnant for the fourth time during this Report stage, and before I sit down he may care to make a further contribution.
Lord Brabazon of Tara: My Lords, with the leave of the House, my noble friend has completely misinterpreted what I said about the guidelines for the arbitration procedure. I shall repeat the phrase, which he will be able to read tomorrow in Hansard. I said that my officials have already started discussions with representatives of the ports and the pilots about the content of the guidelines. I am sure that they will need
772
to include a reference to the level of earnings to which licensed pilots are at present entitled. I could not be much clearer than that.
Lord Strathcona and Mount Royal: My Lords, I am grateful to my noble friend. He has said that the guidelines will refer to the pilots' present entitlement. He did not say what sort of a reference it would be. He said, "I do not like the present entitlement". That leads me to suppose that the guidance will say that the arbitration should take no cognisance of present earnings levels even if it addresses the general problem of earnings levels.
I am sure that the Minister intends to meet some of those arguments later. I have no wish to provoke him into an uncooperative mood, and so I am prepared to withdraw the amendment at this juncture.
Amendment, by leave, withdrawn.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 21:
Page 5, line 4, at end insert—
("(aa) that the authorised person has ceased to have the qualifications required from persons applying for authorisation by it under this section or has failed to provide evidence that he continues to have those qualifications").
The noble Lord said: My Lords, Amendment No. 21 fulfils a commitment that I gave in Committee to bring forward an amendment which will allow an authorisation to be suspended or revoked if the pilot concerned no longer meets the qualifications required by the CHA. That was a suggestion made by the noble Viscount, Lord Simon, for which we are grateful. It is of course principally directed at the question of health and fitness for the job, where there may in certain cases be a need, in the interests of safety, to take a pilot off pilotage duties straight away without of course affecting his rights under a contract of employment or other agreement. I beg to move.
Viscount Simon: My Lords, I am obliged to the noble Lord. I am not surprised that he has brought forward an amendment as he undertook to do.
On Question, amendment agreed to.
Lord Underhill Lord Underhill moved Amendment No. 22:
Page 5, leave out lines 5 to 10.
The noble Lord said: My Lords, it has been suggested, and it seems sensible, that Amendments Nos. 22, 23 and 24 should be taken together. The pilots are concerned that this clause could enable a CHA to circumvent Section 54 of the Employment Protection (Consolidation) Act 1978 which relates to the right of an employee not to be unfairly dismissed and Section 59 which relates to dismissal on grounds of redundancy.
Subsection (9) (c) relates to agency self-employed pilots and subsection (9) (b) relates to the employee and is totally unnecessary but on completely different grounds. A CHA will have contracted an agency to provide pilotage services on its behalf. It is envisaged that it would be for an annual lump sum. That being so, surely it is up to the agency to decide how best to manage its affairs. There are a number of ways by which it could cope with reduced revenue. The

773
removal of an authorisation by a harbour authority need not be one of them. Any such action would reduce flexibility. The pilots feel that those two paragraphs illustrate the fact that the Bill does not help them. They feel aggrieved by it.
Amendment No. 23 proposes to leave out "(a)" which appears in subsection (10), which states:
"Before suspending or revoking an authorisation under subsection (9)(a) above, a competent harbour authority shall give written notice … and shall give [the person] a reasonable opportunity of making representations".
Subsection (9)(a) relates to a person being guilty of incompetence or misconduct. The amendment, by deleting "(a)", would give the right to have a written notice and to make representations to those persons covered by paragaphs (b) and (c).
Paragraph (b) provides:
"that the number of persons for the time being authorised by it under this section exceeds the number required to be authorised";
and paragraph (c) provides:
"that it is appropriate to do so by virtue of any alteration in or the termination of any contract or other arrangement".
We now have paragraph (aa) as a result of Amendment No. 21, to which the Minister has referred. It is unfair that a pilot who is to have his authorisation revoked or withdrawn on grounds of incompetence or misconduct will have the right to have a written notice and to make representations, while those who come under paragraphs (b), (c) and now (aa) will not have that right.
We debated that matter in Committee. I cannot see the argument against giving all categories the right to written notice and to make representations. We were told by the noble Lord, Lord Gray of Contin, in Committee that it would remove a management ability. The point that was made in reply to that was that we have surely reached a stage in industrial relations that persons who are affected by paragraphs (b), (c) and (aa) should have the same right to a written notice and to make representations as those persons who have had their authorisation revoked or suspended because of incompetence or misconduct. There is no rhyme or reason why that should not apply to everyone affected by subsection (9), as now amended. That is the substance of Amendment No. 24.
5.30 p.m.
Lord Brabazon of Tara: My Lords, as the noble Lord, Lord Underhill, has explained, the amendment would deprive a CHA of the power to suspend or revoke an authorisation other than on grounds of incompetence or misconduct. I am not yet persuaded that the powers to remove an authorsation on the grounds specified in paragraphs (b) and (c) can reasonably be dispensed with.
It can of course be argued that it is the cost of pilotage that matters to the ports and their customers and that the number of pilots is a secondary consideration. In logic that may be true, but all past experience shows that if there are more pilots than are necessary, then costs will be related to those numbers. That is after all the root of the difficulties that have caused this new legislation to be necessary.
774
The powers to suspend or revoke are of course discretionary, and there is nothing to prevent a CHA agreeing with the pilots how many of them are to be authorised and agreeing with them to maintain that number even if trade declines and the demand for pilots' services and the available income decline. That may well be an attractive arrangement where self-employment is to be the basis on which pilotage services are to be provided. I certainly take note of that point which the noble Lord, Lord Underhill, made.
I believe that any such arrangement must be for the CHA to agree with pilots on a port-by-port basis. To write in a statutory provision that authorisation must, except for cases involving misconduct or incompetence, run on indefinitely would remove one of the central provisions which a CHA needs to have available if we are to achieve the Bill's objective of maintaining the cost effectiveness of pilotage services. It is a provision which we hope will not need to be called on very extensively, but it would be irresponsible to remove it, at least without providing some adequate replacement.
Turning to Amendment No. 23, as the noble Lord said, we discussed a similar amendment at some length in Committee, and I made it clear that in our view a pilot's rights in such matters as employment protection should be attached to his contract of employment or other agreement under which he carries out pilotage for the CHA. It is inappropriate to attach them to his authorisation, which merely enables him to carry out his duties under that contract or agreement.
The noble Lord, Lord Underhill, suggested that the same argument could be applied even to cases where a pilot's competence or conduct were in question, under subsection (9)(a). I am tempted to agree—but I do not—and accept that subsection (10) could be dispensed with altogether. But that would be going too far.
However, I feel fairly strongly that it should not be applicable with regard to paragraphs (b) and (c). Nor can I agree that an appeal procedure of this kind can be justified. As I have said before, a pilot will have his contract of employment or other arrangement with the CHA and if there is any question of unfair dismissal or breach of contract his remedies will be clear. If he wishes to appeal because he disagrees with the judgments that the CHA has made about the number of pilots needed in the port or whether the pilotage is to be provided by directly employed pilots, by an agency or by some other arrangement, then those seem to be the matters entirely within the CHA's areas of responsibility in which it would be inappropriate for the Secretary of State to be given a role.
The noble Lord queried whether two sections of the employment Act were applicable in these circumstances. I said at the Committee stage that pilots who took employment under the new arrangements, and who had a contract of employment, would be covered by the employment protection Act. I shall look again at the points which the noble Lord, Lord Underhill, has raised, but further than that I cannot go.
Lord Strathcona and Mount Royal: My Lords, I should like to support the noble Lord, Lord Underhill.

775
Amendment No. 23 does not apply if we agree to Amendment No. 22; but that is purely a procedural question.
The Bill refers to "the number required". One must assume that the noble Lord is implying that the body who will decide how many are required is the CHA itself although it does not say so. I should have thought that that was a fair presumption. The next question which arises is this. Supposing one has an agency and the agency decided to employ all part-time pilots—that is not an inconceivable scenario, is it?—one would need a great many more pilots in that situation than if one had full-time pilots. Supposing then the CHA decides how many pilots it thinks it needs on a full-time employed basis, what is the agency to do if it wants to employ different kinds of people on a different kind of basis? The CHA might be prepared to agree to the proposal by the agency but there is nothing in the Bill which says that it has to do so.
The second point was referred to just now by the noble Lord. What happens if for some reason an authorisation is removed? Somewhere in the Bill it says that one cannot have a person purporting to be a pilot on the bridge of a ship if he is not authorised to do so. One then has the situation where an authorisation has been removed and, ipso facto, the man can no longer be employed. Is that a reason we would wish to give for his losing his job? If so, is he able to claim unfair dismissal, for example? I do not know the two sections of the Act to which the noble Lord was referring but I should have thought that one of the provisions which we need to write into the Bill in some way is that authorisation cannot be removed in such a way as to take away a man's job. Otherwise, one simply says, "We want to get rid of this fellow. What we shall do is to take away his authorisation and then he automatically loses his job." That must be an unsatisfactory state of affairs.
When I first considered this I thought it raised an outrageous issue of principle: that when the perceived demand for the services of a given profession—be it school teachers, doctors or lawyers—drops below the market requirement, one takes away their right to practise, because that is what the authorisation is about. I then started to consider that although in principle it is highly objectionable, in practice it may be acceptable. They will not be offered a job if they are not needed by the CHA. It therefore does not matter if it has taken away their authorisation. But if one looks at it the other way round, it seems to me that one must somehow provide sufficient flexibility for an agency arrangement whereby the numbers can be determined other than directly by the CHA. One must also ensure that the loss of authorisation cannot be used as a device to get rid of somebody whom one does not wish to employ. For those reasons, unless the Government can come up with a better idea, I believe that we ought to accept this amendment.
Lord Carmichael of Kelvingrove: My Lords, the Minister may recall that I moved the equivalent of Amendment No. 23 at the Committee stage. I listened to his reply which he repeated in large substance a few minutes ago. I feel much the same. It is asking a great
776
deal, where someone has been dismissed because he has been guilty of incompetence or misconduct affecting his capability as a pilot, that he should be given a notice in writing stating why.
The Government Amendment No. 21 says
"that the authorised person has ceased to have the qualifications",
in the opinion of the competent harbour authority. If it was merely considered by the harbour authority that they have ceased to have qualifications—whatever these qualifications were—they would have no protection by having a statement in writing. The only people who would have a statement in writing and a right to appeal would be those who were dismissed because they have been guilty of incompetence or misconduct affecting their capability as a pilot.
One of the points made at the Committee stage was this. There are certainly situations in which a pilot may, in his expert and technical judgment, not satisfy the competent harbour authority in its commercial judgment. There may be a very definite difference of opinion here. It may be that the employment Acts would not give protection. The pilot may say that in his judgment it would be wrong to take in a ship in those conditions, or that it would be dangerous because of the cargo to take in a ship in those conditions. If a pilot had the reputation within a CHA of being over-cautious—although he might have perfectly good reasons for being so—he would have no entitlement under the Bill as it stands to be given any security at all or any explanation in writing.
I therefore ask the House to consider accepting Amendment No. 23, which leaves out "(a)". The subsection would then read:
"Before suspending or revoking an authorisation under subsection (9) above, a competent harbour authority shall give written notice of its intention to do so to the authorised person.".
That would mean that every pilot who was dismissed for whatever reason, including the reason given in the Government's new Amendment No. 21, would be given notice in writing as to why he was being dismissed. In a responsible job such as pilotage where there could be a conflict of commercial and expert technical judgment, it is little more than merely a dismissal under the Employment Act. Therefore, if the Minister will not accept this amendment, I shall want to test the House on Amendment No. 23. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 23:
Page 5, line 12, leave out ("(a)").
The Deputy Speaker (Lord Aylestone): My Lords, the Question is that Amendment No. 23 be agreed to? As many as are of that opinion will say, "Content"—
Lord Mottistone: My Lords, if Amendment No. 22 is withdrawn then the point of Amendment No. 23 is lost because it is not leaving out paragraph (a), it is just leaving out "(a)". Amendment No. 23 is consequential on Amendment No. 22.
Lord Underhill: My Lords, if the noble Lord will permit me, leaving out "(a)" refers to (9)(a) which

777
appears in subsection (10). Therefore, by leaving out "(a)" all the categories to which my noble friend referred will be covered.
5.43 p.m.
On Question, Whether the said amendment (No. 23) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 74.

DIVISION NO. 1

CONTENTS

Airedale, L.

Llewelyn-Davies of Hastoe, B.

Aldenham, L.

Longford, E.

Ardwick, L.

Lovell-Davis, L.

Aylestone, L.

Meston, L.

Blease, L.

Monson, L.

Bonham-Carter, L.

Morris, L.

Brockway, L.

Mulley, L.

Bruce of Donington, L.

Nicol, B.

Buckmaster, V.

Norfolk, D.

Carmichael of Kelvingrove, L.

Phillips, B.

David, B.

Pitt of Hampstead, L.

Dean of Beswick, L. [Teller.]

Prys-Davies, L.

Diamond, L.

Ritchie of Dundee, L.

Elwyn-Jones, L.

Rugby, L.

Ewart-Biggs, B.

Seear, B.

Gallacher, L. [Teller.]

Shackleton, L.

Geddes, L.

Simon, V.

Graham of Edmonton, L.

Stallard, L.

Gray, L.

Stedman, B.

Greenway, L.

Stewart of Fulham, L.

Gregson, L.

Strabolgi, L.

Grey, E.

Strathcona and Mount Royal, L.

Hanworth, V.

Houghton of Sowerby, L.

Swinfen, L.

Irving of Dartford, L.

Underhill, L.

Jeger, B.

Wallace of Coslany, L.

Jenkins of Putney, L.

Wells-Pestell, L.

John-Mackie, L.

Wigoder, L.

Kagan, L.

Wilson of Rievaulx, L.

Kennet, L.

Winchilsea and Nottingham, E.

Kilbracken, L.

Kirkhill, L.

Winterbottom, L.

Liverpool, E.

Ypres, E.

NOT-CONTENTS

Abinger, L.

Gainford, L.

Ampthill, L.

Gardner of Parkes, B.

Auckland, L.

Glanusk, L.

Bauer, L.

Gormanston, V.

Beaverbrook, L.

Hesketh, L.

Belstead, L.

Hives, L.

Bessborough, E.

Home of the Hirsel, L.

Boardman, L.

Hooper, B. [Teller.]

Boyd-Carpenter, L.

Hylton-Foster, B.

Brabazon of Tara, L.

Inchcape, E.

Brougham and Vaux, L.

Killearn, L.

Broxbourne, L.

King of Wartnaby, L.

Butterworth, L.

Lane-Fox, B.

Caithness, E.

Lauderdale, E.

Cameron of Lochbroom, L.

Layton, L.

Carnegy of Lour, B.

Long, V.

Carnock, L.

Lyell, L.

Cathcart, E.

McAlpine of West Green, L.

Coleraine, L.

Macleod of Borve, B.

Cork and Orrery, E.

Marley, L.

Cox, B.

Maude of Stratford-upon-Avon, L.

Craigavon, V.

Cullen of Ashbourne, L.

Merrivale, L.

Davidson, V. [Teller.]

Mersey, V.

Denham, L.

Molson, L.

Dilhorne, V.

Mottistone, L.

Dundee, E.

Munster, E.

Ferrier, L.

Murton of Lindisfarne, L.

Fraser of Kilmorack, L.

Orr-Ewing, L.

778

Pender, L.

Sudeley, L.

Penrhyn, L.

Teynham, L.

Polwarth, L.

Trumpington, B.

Portland, D.

Vickers, B.

Rankeillour, L.

Vivian, L.

Sanderson of Bowden, L.

Whitelaw, V.

Sandford, L.

Wise, L.

Shannon, E.

Young of Graffham, L.

Skelmersdale, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.50 p.m.
[Amendment No. 24 no moved.]
Lord Underhill Lord Underhill moved Amendment No. 25:
Page 5, line 15, at end insert—
("( ) Any person who was before the appointed day a holder of a full licence and who is subsequently employed by a competent harbour authoritiy may by notice in writing to the authority require it to employ him on terms which deem his period of employment to be reckoned as from the date when he was first licensed.").
The noble Lord said: My Lords, for convenience, I should also like to speak to Amendment No. 95A in the name of the noble Lord, Lord Swinfen, which partly covers the same point; namely, the back-dating of a pilot's employment. Through this Bill the Government will make a number of self-employed pilots take the form of employees. The amendment ensures that as employees they will enjoy legal employment rights which they would not otherwise have. This principle is enshrined for pilotage authority personnel in Clause 23(5) of the Bill and has been agreed informally between representatives of the ports and pilots. As the Government are initiating change, it is up to them either to provide a legislative guarantee by inserting that in the Bill and agreeing to the amendment, or to say that they agree with the principle and bring forward their own amendment.
At Committee stage, in col. 38 of Hansard, the Minister said that he does not consider that this is a matter for legislation. There are currently discussions going on between pilots and the ports. However, I am informed that the latest views put forward by the Department of Transport who take part in these discussions are that guidelines only would be sufficient for discussion between the two parties. Guidelines are not enough.
It is generally acknowledged, as was made absolutely clear at Committee stage, that the British Ports Association cannot commit its members. It cannot say, "We agree with this" and therefore every harbour authority falls into line. That does not happen. The general council of the TUC can come to certain decisions, but they are not binding, in most cases, upon the different trade unions. The trade unions can say: "We shall take no notice, we shall go on". The BPA can come to an agreement with the pilots, which would not necessarily be binding on all port authorities. To be fair, a legislative guarantee is required. What is asked is that the period of employment before this Bill comes into effect should be reckoned as their period of employment for benefits and entitlements under the Bill. I beg to move.
Lord Swinfen: My Lords, I must support the noble Lord, Lord Underhill, in this amendment. If this

779
amendment is agreed to I shall not move my Amendment No. 95A because both are in the same terms.
We have a situation where a number of independent individuals who are self-employed, have been press-ganged, or are being press-ganged for the most part, into employment. As the Bill is drafted, it will be extremely difficult for the majority of those individuals to insist in their negotiations with the competent harbour authorities that they remain self-employed.
Let us take, for example, a number of very senior, highly-qualified accountants in the City of London who, in any one year, probably earn far more than three noble Lords put together. Let us suppose that they are moved to the Treasury to sort out its problems. This is much needed, but that is beside the point. They are treated as if they have come straight out of school, recently qualified, and have no seniority and experience. It is absolutely right that pilots with 25 or more years' experience, and a long time before that at sea for many years, should be treated in a responsible manner. I am all in favour of the amendment.
Lord Strathcona and Mount Royal: My Lords, I should like briefly to add my support to the amendment. It goes back to the definition of what is meant by fairness. It is perfectly clear that the period of service prior to the change in the nature and the terms of employment should be reckonable. It is one of the four conditions which to me relate to the question of the Government's good faith in being prepared to write into the legislation the undertakings of fairness that they have so often repeated.
Lord Brabazon of Tara: My Lords, these amendments propose that the Bill should deal for employment protection purposes with the previous service of pilots to be employed by CHA's in the same way as it deals with the previous service of the employees of pilotage authorities. The difference is of course that the pilots' previous service is as self-employed pilots, and there has been absolutely no exception to the principle that such self-employed service should not count towards a period of service for the purposes of rights under the 1978 employment protection legislation. I do not believe that it would be right to make an exception in this case. That legislation is about employment and employees and I hope that noble Lords will agree that it would be quite wrong to extend its provisions to periods of self-employed service.
The noble Lord Lord Underhill, mentioned that discussions which are going on under the chairmanship of my department's officials between representatives of the ports and of the pilots about the drawing up of national guidelines within which negotiations between harbour authorities and pilots might take place at local level.
The port's representatives have said that they are prepared to see such guidelines state that, in the event of redundancies becoming necessary after what we have called the shake-down period, the terms offered to the pilots will be no less favourable than those which would have been payable under statutory requirements
780
if previous service as a licensed pilot counted as employment. That seems to me to be a very important concession to the pilots, especially when it is seen in the light of the statutory arbitration procedure which we propose to set up. Any dispute which arises about redundancy terms between a harbour authority and the pilots will of course be capable of being referred to the procedure, and clearly the arbitration panel will expect to take account of the national guidelines such as I have referred to and which have been agreed between representatives of the ports and of the pilots. I believe that that takes care of the point raised by the noble Lord, Lord Underhill, about whether or not these national talks between the ports and the pilots would go down to the local level. This seems to me to be the right way to deal with this issue. The pilots will be able to appeal to the arbitration panel and to point to the national guidelines if an individual harbour authority decides to ignore their periods of self-employed service; but I believe we should avoid making a nonsense of the 1978 employment protection legislation, which we should be doing if we tried to relate it to periods of self-employment.
My Lords, I hope with the assurances that I have given that noble Lords will not feel that the pilots are now being hard done by and that the mechanism we propose will be just as effective as the way that the noble Lord tries to put it in the amendment.
Lord Shackleton: My Lords, perhaps I may ask the noble Lord whether he can find any parallel situation to the pilots of a kind that would make a nonsense of the 1978 Act. The noble Lord seems to be opposing this major undertaking that we hope the Government would honour on the grounds that technically it would do damage to other legislation. Are there other comparable examples where a self-employed group such as the pilots is being specially provided for? Does this create a nonsense of the Act? What the noble Lord said sounded reasonable, but I am not satisfied with his reason.
Lord Brabazon of Tara: My Lords, I cannot give an example offhand of any other case to which this might apply. Of course it might set a future precedent, which would be undesirable as well. But I think that the alternative that I have offered is a fair one.
Lord Underhill: My Lords, I do not know that the Minister has really offered an alternative. He has referred to quidelines. But is it not a fact that Associated British Ports have broken away from the British Ports Association? If that is the case, then where stands any agreement that may be reached by the BPA?
It is already recognised that it cannot be binding. It will make it an even worse position that Associated British Ports have broken away from the ports authority body conducting negotiations. Could it not mean that we have one port authority which says, "We will not recognise the past service of previously self-employed pilots" and another port authority, not too far away, saying, "We will recognise"? Surely that is not simplifying the matter but creating more bitterness among pilots. The last thing we want in this Bill is to create bitterness among the pilots who want to be

781
ready participants in this reorganisation scheme, and yet this lays the foundation for bitterness and controversy.
I have not consulted the TUC as to their view of the 1978 protection Act but, as my noble friend Lord Shackleton made clear, this is a unique occupation. A great majority of the pilots have been self-employed. It has been a different occupation altogether. We do not know where the guidelines are going to be. We cannot reinforce the guidelines. The Minister says that these could be covered by the arbitration machinery. When we come to Amendment No. 36 we shall have to have a long discussion to see exactly what will be covered by the arbitration machinery and what will not.
This is a vital principle. Men who have given years of devoted service to the safety of British shipping should be safeguarded in this legislation, not by casual guidelines, so that their past service will rank when the new regime takes over. Unless the Minister can give me something far stronger than he has given so far, this is another issue on which, for the fair, equitable and honest treatment of the pilots, the House should declare a view.
Lord Brabazon of Tara: My Lords, with the leave of the House, I would say that Associated British Ports while not a member of the BPA, are participants in these discussions, and they will of course be part of the national guidelines to which I referred. The noble Lord obviously does not feel that what I have said is fair, but what I said was that these national guidelines would be taken into account by the arbitration panel. Therefore, if a port outside tried to go against them they would almost certainly lose when they went before the arbitrators.
Lord Underhill: My Lords, before the noble Lord sits down, if he believes that this is something that ought to be in the guidelines, and if he believes that therefore the arbitration machinery to be set up should take cognisance of the guidelines, why is there hesitancy to write this into the legislation so that there is not the slightest doubt whatever as to what the Government and the country want?
Lord Brabazon of Tara: My Lords, it is for the reasons that I have already given in my original reply.
6.5 p.m.
On Question, Whether the said amendment (No. 25) shall be agreed to?
Their Lordships divided: Contents, 61; Not-Contents, 71.

DIVISION NO. 2

CONTENTS

Airedale, L.

Craigavon, V.

Aldenham, L.

David, B.

Ardwick, L.

Dean of Beswick, L.

Aylestone, L.

Diamond, L.

Bessborough, E.

Elwyn-Jones, L.

Blease, L.

Ewart-Biggs, B.

Brockway, L.

Gallacher, L.

Bruce of Donington, L.

Graham of Edmonton, L. [Teller.]

Buckmaster, V.

Carmichael of Kelvingrove, L.

Gray, L.

Cathcart, E.

Greenway, L.

782

Gregson, L.

Ponsonby of Shulbrede, L. [Teller.]

Grey, E.

Hanworth, V.

Ritchie of Dundee, L.

Hatch of Lusby, L.

Russell of Liverpool, L.

Irving of Dartford, L.

Seear, B.

Jeger, B.

Shackleton, L.

John-Mackie, L.

Simon, V.

Kagan, L.

Stallard, L.

Kinnoull, L.

Stewart of Fulham, L.

Lawrence, L.

Strathcona and Mount Royal, L.

Llewelyn-Davies of Hastoe, B.

Longford, E.

Swinfen, L.

Meston, L.

Tordoff, L.

Monson, L.

Underhill, L.

Morris, L.

Wallace of Coslany, L.

Mulley, L.

Wells-Pestell, L.

Newall, L.

Wilson of Rievaulx, L.

Nicol, B.

Winchilsea and Nottingham, E.

Norfolk, D.

Perry of Walton, L.

Winterbottom, L.

Phillips, B.

Ypres, E.

Pitt of Hampstead, L.

NOT-CONTENTS

Abinger, L.

Inchcape, E.

Ampthill, L.

Killearn, L.

Auckland, L.

Lane-Fox, B.

Bauer, L.

Lauderdale, E.

Beaverbrook, L.

Lindsey and Abingdon, E.

Belstead, L.

Long, V.

Boardman, L.

Lyell, L.

Boyd-Carpenter, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Marley, L.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Broxbourne, L.

Butterworth, L.

Merrivale, L.

Caithness, E.

Mersey, V.

Cameron of Lochbroom, L.

Molson, L.

Campbell of Alloway, L.

Mottistone, L.

Carnegy of Lour, B.

Mountevans, L.

Carnock, L.

Munster, E.

Coleraine, L.

Murton of Lindisfarne, L.

Cork and Orrery, E.

Orr-Ewing, L.

Cox, B.

Pender, L.

Davidson, V. [Teller.]

Penrhyn, L.

Denham, L.

Polwarth, L.

Dilhorne, V.

Portland, D.

Dundee, E.

Rankeillour, L.

Ferrier, L.

Sanderson of Bowden, L.

Fraser of Kilmorack, L.

Sandford, L.

Gainford, L.

Shannon, E.

Glanusk, L.

Skelmersdale, L.

Gormanston, V.

Strathclyde, L.

Halsbury, E.

Sudeley, L.

Henderson of Brompton, L.

Teynham, L.

Hesketh, L.

Trefgarne, L.

Hives, L.

Trumpington, B.

Home of the Hirsel, L.

Vickers, B.

Hooper, B. [Teller.]

Vivian, L.

Hylton-Foster, B.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
6.15 p.m.
Lord Swinfen Lord Swinfen moved Amendment No. 26:
Page 5, line 15, at end insert—
("(10A) The competent harbour authority by which a pilot's authorisation is revoked under paragraph (b) or (c) of subsection (9) above shall pay compensation to the pilot for the loss of that authorisation; and the amount of that compensation shall be determined in accordance with regulations made by the Secretary of State.
(10B) Regulations under subsection (10A) above shall require the amount of the compensation in any case to be calculated by reference to the number of years the pilot has worked as a pilot in waters which include the authority's harbour or its approaches, whether before or after the appointed day and whether as an employee or otherwise; and provision may be made in the

783
regulations for reducing the amount of compensation to which the pilot may be entitled (apart from any such provision) under subsection (10A) above by the amount of any compensation to which he is otherwise entitled by reason of the revocation of the authorisation.").
The noble Lord said: My Lords, I apologise to your Lordships that originally I made some mistakes in the draft of this amendment—some of you may have been misled by them—before I corrected them in time for the Marshalled List.
At the Committee stage of the Bill, my noble friend the Minister said:
"If the authorisation is revoked, the pilot will still have the protections contained in his contract of employment safeguarded by employment legislation".—[Official Report, Public Bill Committee, 10/12/86; col. 70].
This amendment deals with the compensation payable to pilots for loss of their jobs on redundancy within the four-year period. As the Bill stands a pilot of, say, 30 years standing can be transferred from being self-employed to being employed by one of the competent harbour authorities and, because of changing circumstances in the area and the business to and from his port, can lose his job within the four-year period through no fault of his own. If there is a general run-down of trade to the nation as a whole there may be nowhere else for him to go within that line of business.
My noble friend has been emphasising the fairness with which the Government propose to treat pilots throughout this Bill. For example, let us take a pilot aged 59 with 20 years' service as a pilot, for two of which he has been employed by the competent harbour authority. Under the Bill he will be entitled to compensation for redundancy as though he had been employed for only two years. I have with me a pamphlet produced by the Department of Employment in 1986, pamphlet PL808. According to the table in the pamphlet this pilot would get three weeks' redundancy money. However if my amendment were accepted—I think the terms of it can only be construed as fair treatment—he would get 29 weeks' redundancy money.
Let us take another example of a much younger man aged 35, employed for the same length of time by the competent harbour authority. He would get two weeks' redundancy money. If he had been a pilot for a total of eight years he would get eight weeks' redundancy money. This problem becomes more serious as the pilot becomes older. I have a strong suspicion that it would be the older pilots who would get redundancy first because they do not have the length of service to give to the competent harbour authority.
My noble friend the Minister, who has been emphasising all the way along the fairness with which the Government are proposing to deal with the pilots, should accept this amendment. I know he will say that it can be dealt with by arbitration. Pilots are not in a particularly strong position at the moment. The competent harbour authorities will take them on. They will then decide how many pilots they need. They are really like the Christmas walnut in the crackers. They have nowhere to go. I beg to move.
Lord Brabazon of Tara: My Lords, this is a similar amendment to the one that the House has just decided upon. Indeed, it is identical to an amendment my noble friend moved in Committee. Whether it satisfies my noble friend or not, this amendment would give the pilots an entitlement to compensation over and above the employment protection provisions to which they will be entitled by virtue of their contracts of employment or other contractual arrangements.
As noble Lords are aware, and as I have said before, we are shortly bringing forward amendments which will introduce the arbitration procedure that will, among other matters, be able to deal with the question of the terms that will apply on subsequent redundancy. That, I believe, is the proper way forward in this matter. My noble friend suggested that the pilots are in a weak position. I do not believe that is the case. When we reach the arbitration amendment, they will have a good case there. My noble friend also suggested that the pilots had nowhere to go. The ports will still need pilots. Furthermore, for the first four years they are obliged to offer jobs first and foremost to existing pilots. I think the pilots are in a pretty strong position.
Lord Underhill: My Lords, before the noble Lord sits down, may I raise one point? When we come to the arbitration clause, surely this only takes effect for three years and then it will be out. What is going to be the position on the point which the noble Lord, Lord Swinfen, raised with regard to pilots who will be covered by the particular amendment he has moved after the arbitration clause has ceased to take effect? That is the important part of the amendment of the noble Lord, Lord Swinfen.
Lord Strathcona and Mount Royal: My Lords, that seems to be a very good question. The noble Lord has taken refuge in what to me is not a very respectable point, and we have mentioned this before. He fell back on the self-employed argument being the reason why this period of service should not be counted. He overlooks, I think, a letter—which has very often been quoted—from the Prime Minister, which said that she recognised that the terms of service of pilots had few of the characteristics of self-employment. I think I am quoting her actual words; I do not have the letter with me.
I really do not believe that it is a very respectable argument to take shelter behind the fact that they were pseudo self-employed before the Government made these radical changes to the working conditions in which pilots find themselves. While I am perfectly prepared to agree that potentially the arbitration clause may cover the first three years of their service—indeed, one would hope that they will have a chance to negotiate terms which will cover subsequent service thereafter—the fact remains that we still do not know what considerations the arbitrators are going to be told to take into account. Every time the noble Lord, as we see it, resiles from the Government's undertaking about fairness, so we become more and more nervous as to what those guidelines may say. This is the fair warning one has to give him as to what is in front of us.
Lord Shackleton: My Lords, I must say that the more I hear of this debate the more confused I

785
become. Is the Minister saying that they will automatically apply the guidelines of the arbitration procedure? There will be no discretion. Will they be arbitrating? If it is a matter of interpreting the guidelines, one can see that there may be some scope, but one hopes the guidelines will be quite clear, that they will provide adequately in accordance with the Government's previous promises; in which case why the need to arbitrate? This matter seems to me to be very difficult.
Some of my trade union colleagues may be able to comment more on how an arbitration procedure takes place, but it seems to me that they would not automatically be applying the guidelines; they would in fact be trying to work out some sort of compromise between what the ports may say and what the individual pilot may say. I think the Minister really has got himself into an intellectually indefensible position on this matter.
I must say at this time that I wish more of your Lordships were here to hear this debate. Gradually, if more noble Lords were here, the Government's majority would be whittled away.
Lord Mottistone: My Lords, I rather think that the noble Lord, Lord Shackleton—for whom I have the highest opinion, having started off in your Lordships' House under his leadership—is over-exaggerating this situation. My noble friend has been sniping from behind. It is all fair for the Opposition. I can remember being in Opposition and producing just the sort of arguments that the Opposition are now producing—"We must have the guidelines" and "It is no good going to this stage of the Bill without the guidelines". It is a common thing to do.
In taking up the point made by the noble Lord, Lord Shackleton, if you look at Amendment No. 36, what subsection (3) says is quite clear:
"In making a determination under subsection (1) above the arbitration panel shall have regard to any general guidance issued by the Secretary of State as to the matters to be considered by them."
That seems to me to be quite straightforward. Of course it would be nice to know now what the guidance points will be, but as I understand it from my noble friend his department and the interested parties are in constant discussion at the moment. No doubt they will agree something, perhaps before this Bill has got through another place.
However, I do not think it is altogether reasonable at this stage to press my noble friend to come out suddenly with all sorts of guarantees when the whole matter is under discussion. It would seem to me that there is quite enough flexibility to cover an awful lot of these amendments, and I really think that noble Lords are pressing things much too hard and quite unreasonably.
Lord Shackleton: My Lords, although I am not entitled to speak again, with the leave of the House I am entitled to correct a misstatement. We are not fighting this matter on party lines. That has been made very clear. The noble Lord knows that he has colleagues round that side, and it is a pity that he introduced a party point.
Lord Brabazon of Tara: My Lords, with the leave of the House, I shall pick up a couple of points. I am
786
grateful to my noble friend Lord Mottistone for his contribution. I have already said on a number of occasions that among those guidelines for the arbitration, or indeed if one of the parties wished, redundancy payments certainly would be one of the matters to be taken into consideration.
I must also correct another point which was made about the arbitration procedure lasting only for three years. Under subsection (7) of the new arbitration clause, that is the minimum period it would last. The subsection goes on to say:
"no such order shall affect the terms of any contract continuing in force at that date."
Once they have made that contract, that goes on beyond the arbitration timetable.
Lord Swinfen: My Lords, I am not sure about the Minister's comments that because the arbitration does not go on beyond three years that should not have any effect on the contract that goes on beyond that term. Contracts can be made for a period longer than three years, longer indeed than the four years when a pilot comes in. It is a total red herring. I can see absolutely no reason why the Minister should not accept this amendment. He is hiding behind very nebulous guidelines of which very little indication has been given. He himself, other Ministers, the Prime Minister herself having talked all the way through about the way in which pilots are going to be treated fairly, I feel quite honestly that I have no alternative but to ask the opinion of the House.
6.28 p.m.
On Question, Whether the said amendment (No. 26) shall be agreed to?
Their Lordships divided: Contents, 55; Not-Contents, 60.

DIVISION NO. 3

CONTENTS

Airedale, L.

McGregor of Durris, L.

Aldenham, L.

Meston, L.

Aylestone, L.

Monson, L.

Broadbridge, L.

Morris, L.

Brockway, L.

Mulley, L.

Bruce of Donington, L.

Nicol, B.

Buckmaster, V.

Norfolk, D.

Carmichael of Kelvingrove, L. [Teller.]

Perry of Walton, L.

Phillips, B.

Cathcart, E.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

Russell of Liverpool, L.

Diamond, L.

Seear, B.

Ewart-Biggs, B.

Shackleton, L.

Gallacher, L.

Simon, V.

Graham of Edmonton, L.

Simon of Glaisdale, L.

Gray, L.

Stallard, L.

Greenway, L.

Stewart of Fulham, L.

Grey, E.

Strathcona and Mount Royal, L.

Hanworth, V.

Hatch of Lusby, L.

Swinfen, L. [Teller.]

Houghton of Sowerby, L.

Tordoff, L.

Hylton-Foster, B.

Underhill, L.

Irving of Dartford, L.

Wells-Pestell, L.

Jeger, B.

Wilson of Rievaulx, L.

Kennet, L.

Winchilsea and Nottingham, E.

Lawrence, L.

Liverpool, E.

Winterbottom, L.

Llewelyn-Davies of Hastoe, B.

Ypres, E.

787

NOT-CONTENTS

Abinger, L.

Hives, L.

Ampthill, L.

Home of the Hirsel, L.

Bauer, L.

Hooper, B. [Teller.]

Beaverbrook, L.

Inchcape, E.

Beloff, L.

Lane-Fox, B.

Belstead, L.

Lauderdale, E.

Bessborough, E.

Layton, L.

Birdwood, L.

Long, V.

Boardman, L.

Lyell, L.

Boyd-Carpenter, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Marley, L.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Butterworth, L.

Caithness, E.

Merrivale, L.

Cameron of Lochbroom, L.

Mersey, V.

Campbell of Alloway, L.

Molson, L.

Carnegy of Lour, B.

Mottistone, L.

Carnock, L.

Mountevans, L.

Cox, B.

Munster, E.

Craigavon, V.

Murton of Lindisfarne, L.

Craigmyle, L.

Penrhyn, L.

Davidson, V. [Teller.]

Polwarth, L.

Denham, L.

Portland, D.

Dundee, E.

Rankeillour, L.

Ferrier, L.

Shannon, E.

Fraser of Kilmorack, L.

Skelmersdale, L.

Gainford, L.

Sudeley, L.

Glanusk, L.

Trefgarne, L.

Gormanston, V.

Trumpington, B.

Henderson of Brompton, L.

Vivian, L.

Hesketh, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.36 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 27:
Page 5, line 27, at end insert ("but he shall not take part in any proceedings relating to any question affecting himself personally").
The noble Lord said: My Lords, it gives me great pleasure to move my own amendment instead of resisting what I believe to be ridiculous amendments from other people. This amendment seeks, in the case of competent harbour authorities which are also local authorities, to protect pilots from being misunderstood if they happen to sit on committees which deal with matters affecting their own terms and conditions.
At Committee stage my noble friend Lord Harvington, in moving Amendment No. 30 on my behalf, sought to remove the whole of what is now subsection (1). My noble friend the Minister said, among other things, that the object of that subsection was to allow a pilot's technical knowledge and experience to be called upon as necessary. With that I would not quarrel in any way whatsoever. Therefore, in order to provide this protection of their good name, which is the object of the amendment, I have proposed here to add a small sentence at the end of subsection (12).
I am advised that the wording follows fairly closely a similar provision in the Gloucester Pilotage Order, which shows that there is some basis for it; but of course I shall fully understand if my noble friend says that in primary legislation it has to be worded in another way. However, I do think that something along these lines ought to be in the Bill; and I beg to move.
Lord Carmichael of Kelvingrove: My Lords, I have a great deal of sympathy with the amendment tabled
788
by the noble Lord, Lord Mottistone, except that I think it is unfair that it should apply only in the case of pilots. For a long time now I have been rather concerned about the whole question of declaring an interest, because in your Lordships' House and in the other place if one has merely said, "I have an interest in this" one can go on talking and taking a full part in the debate that follows. I have never checked this, but I am sure that noble Lords on all sides of the House have frequently taken part in a debate, having declared an interest in just as few words as that, and then voted.
I think that the noble Lord has a very strong point here and, if this were the beginning of a revision and a new look at the whole question of interest and involvement, I should be happy to take it further. We are coming on to something which is dear to my own heart fairly soon, and some time in March we shall be discussing what we call in Scotland the poll tax, the alternative to rates. Every single Member of your Lordships' House, particularly if he is a Scottish Member, is bound to gain by it. There is not the slightest doubt that he will gain by it; yet it would be ridiculous for a Member not to take part unless we changed the whole basis of matters. That may be correct but I think it could get us into great difficulties.
That is the basic reason why I feel it is wrong just to take out pilots as being the only people who are affected. I certainly agree with the principle of the amendment and would support it, except that it is too specific and perhaps slightly punitive towards one small section of the population.
Viscount Simon: My Lords, like the noble Lord who has just spoken, I was rather surprised that the noble Lord, Lord Mottistone, put this forward. After all, of all the places in the United Kingdom, the House of Lords is a place where we have an immense amount of expertise on all sorts of subjects and, provided people declare an interest, we welcome their taking part in discussions and bringing that expertise to bear.
If a pilot happened to be a member of a local authority and the discussion concerned pilotage, it would be well for him to declare his interest—everybody would know it in any case—formally take part in the discussion and to offer his advice. If the noble Lord had said that he should not vote, I would understand that. That is quite possible. However, to say that he must not take part in any discussion on the subject about which he knows seems to me extraordinary.
Lord Mottistone: My Lords, I did not say that.
Viscount Simon: The noble Lord tells me that he did not say that. I thought he said that such a pilot was not to take part in the discussion.
Lord Mottistone: I shall reply when I come to wind up.
Viscount Simon: My Lords, I do not think that we should vote against the amendment, but I am surprised, and I wonder whether the noble Lord when he winds up will give a little more explanation of what is in his mind.
Lord Simon of Glaisdale: My Lords, I support the amendment, subject to the drafting,
"any question affecting himself personally".
This seems to me much too broad. I thought that the Minister was convincing in Committee when he argued against the rejection of the whole of the subsection. When it comes to taking part, and particularly voting on a matter of personal interest, provided that personal interest is more narrowly drawn than here, I think that the noble Lord, Lord Mottistone, is on a valid point. It is most unsatisfactory in local government that persons who have an interest in a transaction should take part in it.
I thought that the noble Lord, Lord Carmichael, had a valid point when he asked, why only pilots—to which I think the answer is that we are legislating about pilots. I think he is quite right that the matter ought to be considered in a wider context. While we are legislating about pilots and specifically giving them immunity in this subsection, it seems to me that the noble Lord, Lord Mottistone, is justified in taking the line that he does.
Lord Swinfen: My Lord, despite my noble friend's unflattering reference to the past two amendments, I support the principle behind this amendment. Like the noble and learned Lord, Lord Simon of Glaisdale, I have a feeling that barrack-room lawyers in particular might draw the word "personally" too broad. The question of the discussion of a pilot's hours on duty could be considered to be personal to one particular pilot among others. If the noble Lord is willing to take this back and redraft it to include some declaration of interest, that would be better.
Lord Underhill: My Lords, when the noble Lord, Lord Mottistone, replies to the points that have been made, will he indicate whether he believes that this provision should apply to any person on the committee with shipping interests? It seems a little unfair to say that, because the clause deals with pilots, we will debar pilots in the way suggested by the noble Lord. There could easily be shipping interests on the committee. Does he propose on Third Reading to come forward with an amendment to deal with those?
Lord Brabazon of Tara: My Lords, we have had an interesting little debate on the amendment, which I think is sensible. I am glad to say that I think it is unnecessary since it is already made clear under Section 94 of the Local Government Act 1972, which regulates the membership and proceedings of local authority committees, that committee member shall not take part in proceedings that affect them personally. That section will continue to apply, notwithstanding any of the provisions in the Bill.
The debate has gone somewhat wider than the Bill. I suggest that this is not an appropriate moment to try to reform the local government Acts.
Lord Swinfen: My Lords, will all the competent harbour authorities be local authorities as well? Otherwise surely they would be excluded.
Lord Brabazon of Tara: My noble friend has not studied the Bill with the care that I hoped he had and
790
pretends to have done in other respects. This part of the Bill applies only to those competent harbour authorities that are local authority harbours, which is a fairly small number in the country.
Lord Mottistone: My Lords, it was a happy little debate. Perhaps I may answer quickly because we must not waste time. We have wasted too much time already on unnecessary Divisions.
Noble Lords: No.
6.45 p.m.
Lord Mottistone: To take the point of the noble Viscount, Lord Simon, my noble friend the Minister said in Committee that we want the expert knowledge and experience of pilots in the areas in which they can be useful, and I said that that was absolutely right. The object of the amendment is to make sure that they are not involved in discussions on their pay and other conditions. In that respect, the shipping interests as such would not be affected. The representatives of the shipping industry would not be talking about that sort of thing. That answers the noble Lord, Lord Underhill.
The noble Lord, Lord Carmichael, had a point in what he said. As my noble friend said—of course one should have known this—it is already covered in the local government legislation.
I am glad that my amendment is unnecessary. I should have thought that in your Lordships' House, when one declares an interest in talking in a broad sense about a subject of which one has knowledge perhaps because one is being paid to be observant of it, that is all right, provided the debate and legislation do not affect one's pay and conditions personally. That is the real issue of which one must steer clear always, on which one must not vote and about which one must not even talk in an assembly such as this. When it comes to the poll tax, that will be rather fun, will it not?
Lord Carmichael of Kelvingrove: Indeed.
Lord Mottistone: Yes, it will. However, in another place they vote on their own pay from time to time. The buck must stop somewhere, and perhaps Parliament is the place. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 28:
Page 5, line 28, leave out ("subsection (12) above") and insert ("this section").
The noble Lord said: My Lords, I spoke to this with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 29:
Page 5, line 33, at end insert—
(""time-expired apprentice pilot" means a person who has served the full term of his apprenticeship as a pilot but is not the holder of a licence under section 12 of the Pilotage Act 1983;
"recognised assistant pilot" means a person who acts as an assistant to pilots in a pilotage district and is recognised as such an assistant by the pilotage authority for the district but is not the holder of such a licence.").
The noble Lord said: My Lords, I spoke to this with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 30:
After Clause 3, insert the following new clause:
("Employment etc. of authorised pilots.
.—(1) Subject to the following provisions of this section, a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots in the area in relation to which its duty under section 2(1) above is exercisable (whether under a contract of employment or a contract for services).
(2) A competent harbour authority shall offer to employ under a contract of employment any person it authorises under section 3 above ("the new pilot") unless—

(a) a majority of the relevant licence holders have agreed during the period beginning six months and ending three months before the appointed day that this subsection shall not apply; or

(b) a majority of the relevant authorised pilots have agreed on or after that day that this subsection shall not apply.

(3) For the purposes of subsection (2) above—"relevant licence holders" means—

(a) in the case of a competent harbour authority whose harbour falls within more than one former pilotage district, the persons who at the time of the agreement were holders of full licences (within the meaning of section 3(3) above) for the pilotage district in which the area for which the new pilot is authorised falls;

(b) in the case of a competent harbour authority whose harbour falls within a former pilotage district in which another such authority's harbour also falls, the persons who at that time were holders of such licences for that district and, in the opinion of the Pilotage Commission, were then regularly providing their services as pilots within the part of the district in which the first-mentioned authority's harbour is situated;

(c) in any other case, all the persons who at that time were the holders of such licences for the former pilotage district in which the competent harbour authority's harbour falls; and "relevant authorised pilots" means—

(i) in the case mentioned in paragraph (a) above, the persons who at the time of the agreement are authorised pilots for the area for which the new pilot has been authorised; and

(ii) in any other case the persons who at that time are authorised pilots for the harbour of the authority.

(4) Where by virtue of subsection (2) above a competent harbour authority is obliged to offer to employ persons it authorises under this section for part of its harbour but not persons it authorises for another part, it shall not authorise any person for any area falling within both those parts unless it offers to employ him throughout that area.
(5) A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with such arrangements as the authority considers appropriate under subsection (1) above.
(6) A competent harbour authority may pay into any pilots' benefit fund established under paragraph (i) of section 15(1) of the Pilotage Act 1983 such contributions as may be required by the rules governing that fund in respect of any authorised pilot providing his services under such arrangements as mentioned in subsection (1) above.").
The noble Lord said: My Lords, I spoke to this with Amendment No. 4. I beg to move.
Lord Underhill Lord Underhill moved, as an amendment to Amendment No. 30, Amendment No. 31:
Subsection (1), line 2, leave out ("such arrangements as it considers appropriate") and insert ("reasonable arrangements").
The noble Lord said: My Lords, I referred to the five amendments, Nos. 30, 31, 32, 33, 34 and 35, in my name, but in view of the breadth of the grouping there
792
was not sufficient opportunity to get to grips with what was proposed, particularly in Amendment No. 31.
The new clause which the Government have put forward says:
"a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots".
My amendment proposes to change the words,
"such arrangements as it considers appropriate"
to "reasonable arrangements". Here I shall be guided by such persons as the noble and learned Lord, Lord Simon of Glaisdale, because I am certain that when the arbitration panel, to which considerable reference has been made in the course of our debates, comes to consider matters it will surely take cognisance of whether "reasonable arrangements" are rather different from,
"such arrangements as it considers appropriate".
Therefore it seems to me that the adoption of the words that I am suggesting in Amendment No. 31 could be vital when we come to the consideration by the arbitration panel, if eventually we get the arbitration panel. In any case, although we have said that the period could be extended beyond three years, it may not be. It seems to me that Amendment No. 31 is very reasonable and I do not know whether the Government can find a reasonable argument for not putting in the words "reasonable arrangements". It seems to me very difficult to argue against it. I beg to move.
Lord Simon of Glaisdale: My Lords, I support this amendment. Naturally I am attracted by the word "reasonable" in this connection, because my noble and learned friend Lord Brightman and I used a similar expression when we tried to frame a short amendment to take the place of this clause. But I am particularly anxious to get rid of the words,
"such arrangements as it considers appropriate".
I am afraid that the noble Lord the Minister must be getting bored rigid by the point that I make; namely, that subsection (5) of his new clause takes away the option of either self-employment or employment—a contract for services or a contract of employment—that is apparently given by subsection (1) of his new clause. Obviously, the noble Lord the Minister is satisfied that that point is not good, but as my mind still is obscure on the point I would ask him once again to try to clear it.
The point is that the competent harbour authority has to make such arrangements as it considers appropriate for carrying on the pilotage business, whether under a contract of employment or a contract for services. On the face of that, that gives what the Bill does not give and what we have all clamoured for; namely, the preservation of the right of self-employment by pilots. But when one turns to subsection (5) it says:
"A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot",
and then come the crucial words,
"in accordance with such arrangements as the authority considers appropriate".
So that what the competent harbour authority may do, notwithstanding that the majority of pilots may

793
wish to be self-employed, is consider it appropriate to go under the first limb of the "whether" and offer a contract of employment and not a contract for services. If that is refused the competent harbour authority may refuse to authorise because a pilot has not accepted the arrangements that the CHA considers appropriate.
I know that the noble Lord the Minister says that subsection (5) only applies if the pilot refuses either the offer of a contract of employment or a contract for services, but I am afraid that I simply cannot read that into the subsection. It is for that reason, as well as for the reason given by the noble Lord, Lord Underhill, that it seems this amendment justifies acceptance. In any case, I should be very grateful if the noble Lord the Minister would clear my mind on that subject, if it is still a mind capable of being cleared.
Lord Mottistone: My Lords, speaking strictly at this stage to Amendment No. 31 only, and with great trepidation crossing swords with the noble and learned Lord, I am advised that the use of the word "reasonable" could expose a competent harbour authority to challenge in the courts on the grounds that the arrangements made were not reasonable. It is also unquestionably the case that Amendment No. 31 would greatly weaken the ability of the competent harbour authority to determine the nature of the services to be provided. But the problem of being challenged in the courts is a rather more important one.
Lord Brabazon of Tara: My Lords, my noble friend Lord Mottistone makes an interesting point. I thought I had already answered Amendment No. 31, in the name of the noble Lord, Lord Underhill, when I spoke to Amendment No. 30, and I also thought that the noble Lord had already spoken to Amendment No. 31. May I try to clarify the mind of the noble and learned Lord, Lord Simon of Glaisdale? I feel nervous about trying to do so, because if a legal brain such as his cannot understand the point then I feel rather doubtful whether I shall be able to explain it to him.
As he said, all subsection (5) does is this. A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot under either option; that is to say, employment or self-employment—
Lord Simon of Glaisdale: My Lords, I am so sorry to interrupt, but where does the noble Lord get those words?
Lord Brabazon of Tara: My Lords, I am paraphrasing the subsection, which is perhaps a mistake when replying to the noble and learned Lord. Subsection (1) of the new clause is really very little different from what used to be in the old clause, except that we refer to a "contract for services". It is primarily the competent harbour authority that decides whether it wishes to employ pilots or to make other arrangements under a contract—either self-employment or through an agency. That is the best I can do to explain the position to the noble and learned Lord. I do not know whether he is any clearer about it now.
Lord Underhill: My Lords, I wonder whether the explanation that we have just been given is one which
794
I as a layman can understand. I gather that there is provision for the pilots to take votes as to whether they all wish to be employed or self-employed. Therefore I gather that it is not solely in the hands of the competent harbour authority to decide.
I have listened to the arguments put forward by the noble and learned Lord, Lord Simon of Glaisdale, that the use of the word "reasonable" is very important. As a complete and utter layman on matters of law, I have nevertheless been long enough in your Lordships' House to hear long arguments from Ministers as to why the word "reasonable" should be used. It seems to me that this is a case where the inclusion of the words, "reasonable arrangements", rather than, "such arrangements as it considers appropriate", is a reasonable request.
In the light of the support which we have received from such an eminent legal mind as that of the noble and learned Lord, and in light of the fact that the Government say that they cannot accept what is said, I believe that the House ought to accept the amendment. We can deal with the principle of subsection (5) when we come to my Amendment No. 35. I wish to put this to the House.
7.1 p.m.
On Question, Whether the said amendment (No. 31) shall be agreed to?
Their Lordships divided: Contents, 42; Not-Contents, 57.

DIVISION NO. 4

CONTENTS

Ailesbury, M.

Llewelyn-Davies of Hastoe, B.

Airedale, L.

McGregor of Durris, L.

Attlee, E.

Monson, L.

Broadbridge, L.

Mountevans, L.

Brockway, L.

Newall, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Craigavon, V.

Perry of Walton, L.

David, B.

Pitt of Hampstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L. [Teller.]

Diamond, L.

Donoughue, L.

Seear, B.

Ewart-Biggs, B.

Shackleton, L.

Gallacher, L.

Simon, V.

Graham of Edmonton, L. [Teller.]

Simon of Glaisdale, L.

Stallard, L.

Greenway, L.

Stewart of Fulham, L.

Grey, E.

Strathcona and Mount Royal, L.

Hanworth, V.

Houghton of Sowerby, L.

Tordoff, L.

Irving of Dartford, L.

Underhill, L.

Jeger, B.

Wilson of Rievaulx, L.

Kennet, L.

Ypres, E.

Lawrence, L.

NOT-CONTENTS

Abinger, L.

Cameron of Lochbroom, L.

Aldenham, L.

Carnock, L.

Ampthill, L.

Cathcart, E.

Bauer, L.

Coleraine, L.

Beaverbrook, L.

Cowley, E.

Belstead, L.

Cox, B.

Bessborough, E.

Craigmyle, L.

Boardman, L.

Davidson, V. [Teller.]

Boyd-Carpenter, L.

Denham, L. [Teller.]

Brabazon of Tara, L.

Dundee, E.

Brougham and Vaux, L.

Ferrier, L.

Caithness, E.

Gainford, L.

795

Gray, L.

Maude of Stratford-upon Avon, L.

Halsbury, E.

Hesketh, L.

Merrivale, L.

Hives, L.

Mersey, V.

Home of the Hirsel, L.

Molson, L.

Hooper, B.

Morris, L.

Hylton-Foster, B.

Mottistone, L.

Inchcape, E.

Murton of Lindisfarne, L.

Lane-Fox, B.

Norfolk, D.

Lauderdale, E.

Penrhyn, L.

Layton, L.

Polwarth, L.

Lindsey and Abingdon, E.

Rankeillour, L.

Liverpool, E.

Shannon, E.

Long, V.

Skelmersdale, L.

Lyell, L.

Strathclyde, L.

Macleod of Borve, B.

Trefgarne, L.

Marley, L.

Trumpington, B.

Resolved in the negative, and amendment to Amendment No. 30 disagreed to accordingly.
Viscount Long: My Lords, I beg to move that further consideration on Report be now adjourned. For the convenience of the House, we shall not return to consideration of this Bill until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

Protected Shorthold Tenancies (Rent Registration) Order 1987
7.9 p.m.
The Under-Secretary of State for the Environment (Lord Skelmersdale)The Under-Secretary of State for the Environment (Lord Skelmersdale) rose to move, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee.]
The noble Lord said: My Lords, I beg to move the first Motion standing in my name on the Order Paper. I trust that it will be convenient to the House if I introduce both orders together. This is the second time in a week that I have been privileged to announce extensions to the right to rent. These orders, which I hope will be widely welcomed, will restore some of the incentives for private landlords to let properties left empty because of restrictions of the Rent Acts. They will encourage landlords to make accommodation available in London where housing need is particularly high. This will benefit many people—job movers, single people and the homeless—for whom private renting is the logical or sometimes the only choice.
I shall deal first with the Rent (Relief from Phasing) Order, which abolished the phasing of rent increases for regulated tenancies. Notwithstanding the history lesson which the noble Lord, Lord Dean, gave me last week, the House will need no reminder that it was the Labour Party's Rent Act of 1965 that introduced the current fair rent machinery. That Act made no provision for the phasing of rent increases. Landlords were allowed to charge the full fair rent immediately. Phasing of increases in regulated rents is not fundamental to the fair rents system. It was introduced at a time of high inflation to protect tenants from paying large increases all at once. In particular, the Conservative Government in 1973 froze rent increases, and this was subsequently converted into statutory phasing in the Housing Rents and Subsidies Act 1975 which provided for an increase in the fair rent to be payable in three equal instalments. In 1980,
796
as inflation started to go down, we altered the phasing provisions and the effective period of registrations. We reduced the period before a fair rent could be reviewed from three years to two years and made a similar change to the phasing period. The effect of this is that only half any increase in rent can be charged immediately; the full rent one year later.
Under phasing the landlord never gets a fair rent. He does not get the fair rent assessed in 1985 until 1986—when it has already fallen behind. When in 1987 a new fair rent, appropriate for 1987, is set, he cannot get that until 1988. "Unfair rent" would be a better description; less fair than it was in 1965 when Labour introduced the system.
For many years private landlords have lost out because rent increases fell behind the rate of inflation. Since 1970 private rents have lost a fifth of their value against the retail price index, and two-fifths against average earnings or indeed against local authority rents. During the 1970s this falling behind was particularly marked. Inevitably there has been a catching up process, and this is still continuing. Nonetheless, the annual rate of increase in registered rents has fallen from 12·5 per cent. in 1983 to 8.5 per cent. in 1986. Inflation is now at its lowest for many years. The abolition of phasing will make a marginal difference to rents payable but it will help landlords to obtain a better yield from rentals and in turn help them to carry out repairs to their property. Ending phasing will not of course affect the ability of tenants to claim housing benefit on any higher rent.
The second order with which we are concerned today is the Protected Shorthold Tenancies (Rent Registration) Order which deals with shorthold tenancies in Greater London. Initially, it was a precondition of a shorthold tenancy that a fair rent had to be registered for that tenancy. This condition does not apply and never has applied for any other private letting. The law gives the Secretary of State power to review the position and modify the conditions. This he did in 1981. It was clear that the requirement for uneconomic fair rents to be registered was enough to deter many landlords from using shorthold. So, this requirement was waived for shorthold tenancies outside Greater London.
While precise statistics are not available, it is increasingly apparent that shorthold is being used successfully elsewhere in England and Wales. This is not the case in London, however. That is why with this order we now propose to lift compulsory rent registration for shorthold tenancies inside London to bring them into line with shortholds elsewhere. Noble Lords tell me practically every day how important it is to make available more rented accommodation, while others press me on the need to protect the tenant. Shorthold tenancies achieve both these objectives.
The order does not affect the position of existing shorthold tenants in London. Their existing fair rents will continue to have effect. I emphasise that it is still open to either landlord or tenant of a shorthold tenancy outside London to apply for a fair rent to be registered although it is not now compulsory.
Both these orders help to further the joint causes of increasing choice in housing and helping those in housing need. I commend them to the House.
Moved, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee.]—(Lord Skelmersdale.)
7.15 p.m.
Lord Dean of Beswick: My Lords, we seem to be having a surfeit of debates on this type of rent legislation in your Lordships' House. I am sorry that there is no representative present on the Alliance Benches to speak on such an important issue. I should have thought that it is important enough to attract them to this Chamber even at this time of the evening.
Your Lordships will recall that a fairly broad debate was initiated only two weeks ago by the noble Lord, Lord Harris of High Cross. Noble Lords who took part covered almost the whole field of rented accommodation in the private sector as affected by the orders. During that debate noble Lords on all sides of the House gave various statistics. It depends on one's political point of view what one thinks will happen when this type of order is brought forward and the alterations take place. I have no desire to hold back your Lordships or to restate what I said on that day. What I said and what my party believes in is on the record.
For instance, I do not believe for one moment the Minister's claim that London will be better off. All the indications from people involved in private sector housing in London are that London will be worse off. I made the point that when last there was a total release on renting in the private sector and a full market policy was introduced in the late 1950s by the then government, housing was not freed for letting. However, property in the private sector was freed to be sold at attractive prices compared with what rents could have brought in. I see no reason to alter my view on that issue.
In his speech, which was as long as was necessary for the occasion, the Minister spoke about the rate of inflation and the rates of increase in rents. But is it not a fact that over the past two years rents in the private sector have increased by 17 per cent? If noble Lords take the trouble to do the calculation they will see that the increase is more than double the rate of inflation. On that score one could not say that the landlord is losing out on the basis that rents are below the rate of inflation.
The Minister also made the point that the order will allow the landlord to carry out necessary repairs. This has never been proved. There is no evidence to suggest that as soon as the clarion call goes out from here tonight and landlords become a great deal freer than they were before they will immediately start—if they have not done so already—to survey the properties, bring in the property repairers and start a repair programme. That is not the case and never will be. I believe that more houses will be brought on to the market but for sale in the private sector.
In the debate two weeks ago I produced evidence from a report commissioned by a section at Cambridge University. As your Lordships will be aware, the report concluded that rented housing is a diminishing commodity which would continue to do so. Nobody could see a future for the present private rented housing stock. Whether one could introduce a
798
building programme for the private rented sector is a much wider issue. This would require massive investment from the Government and from the private sector in order to make it attractive for the private sector to become involved. There is no question but that government money would have to be involved.
As a consequence of these two orders the balance will be tilted against the tenant. Many tenants who have been in their houses for quite a number of years are now in the twilight of their lives. There is no question but that they will be disturbed and frightened by the consequences of these two orders. I have had letters from various organisations and individuals mentioning these fears. Time will prove whether or not they are groundless but history will show that these people are probably right and there is room for concern.
The Minister mentioned that three-year phasing was introduced because of the higher rate of inflation in those days. He now says that because the rate of inflation is low they believe they should take a further step and, when the rent is set, reduce the period from two years to one year. No one can guarantee what will happen in the future, but let us suppose that for reasons outside the control of this Government inflation takes off. That has happened in the past because of the oil crisis. It was a Conservative Government at the time but it could equally have occurred under a Labour or an Alliance Government.
No government could have protected this country from the consequences of the tremendous increase in the cost of living that took place at that time because of changes in oil policies. Is the Minister prepared to say that should the denominator move the other way the Government will be prepared to come back to this House for a review of the situation in the light of their policy having been mistaken? I do not think that one can ask for anything less than that.
Normally, in another place, when such orders are considered, these statutory instruments are dealt with pretty expeditiously upstairs in Committee, and eventually they become consigned to history. However, on the occasion that these two orders were moved in the other place they were discussed in the full Chamber at the request of the Opposition because at that point in time the Opposition had neither the desire nor the power to interfere with what was taking place. It was made clear by the spokesman of my party that we were against what was happening.
I have to say that although the orders will be accepted tonight without a Division, as is the custom in this House, we are categorically opposed to them. We do not believe that they will achieve the Government's objective. That view was expressed by some noble Lords during the debate that took place in your Lordships' House a few days ago. I know that the orders will be accepted but I want to put on record that, when a Labour Government are elected to office, one of their first priorities will be to review the private rented sector to see whether the tenants in that sector are getting a square deal. Having said that, I shall end my observations on that score.
My noble friend and colleague from Camden, Lord Stallard, has had a long career in local government. He

799
was Member of Parliament for an inner London borough and must be better versed or at least as well versed as any Member of your Lordships' House in the effects of these two orders on private sector tenants in London. I have no doubt that he will explain them in his usual very lucid and forceful manner.
Lord Monson: My Lords, I should like briefly to extend a warm welcome to these two orders. I should also declare a modest interest so far as the first one is concerned.
I cannot agree with the noble Lord, Lord Dean, that these orders tilt the balance against the tenant or that they will strike fear into tenants' hearts: I think that that is going a little over the top. I cannot agree that the abolition of phasing will cause any genuine hardship. After all, wages and salaries rise every single year without fail. Food, petrol, gas, electricty and clothing rise at least once a year. Why should rents alone be singled out to be held down artificially, and held down not only below the market value but below the so-called fair rent, which itself is below the market value, in the South of England at any rate if not necessarily in the North and the Midlands?
As the noble Lord, Lord Skelmersdale, has pointed out, these orders will encourage owners of houses to let property which at the moment they feel they cannot let economically because of the restrictions that have been imposed hitherto. As such, these orders will positively prevent hardship rather than cause it and for that reason I welcome them once again.
Lord Stallard: My Lords, as my noble friend has said, quite recently we had a long debate on rent control and deregulation, and it is not my intention to cover ground that we have already covered. Certainly we have no time this evening, and as custom stands at the moment, at the end of our short debate on these orders there is not much that can be done about them in this House.
There has been mention of a number of points that I should like to pick up. In his opening remarks the Minister did his best to put forward these orders as two innocuous little measures which did not mean a lot and would not do much damage. No harm would be done, he said, and in any case it was a previous Labour Government who had introduced the 1965 Rent Act. As my noble friend pointed out, the fact that in another place we insisted that these orders be debated in the full Chamber is a measure of the interest and anxiety that have been aroused outside this House by these orders and their interpretation, as we who live among the victims know.
The noble Lord, Lord Monson, mentioned phasing and asked why rents should not rise just as food and everything else have risen in cost. The simple answer, which was given also during the debate on the Motion tabled by the noble Lord, Lord Harris, the other week, is that in recent years the retail price index has hovered around the 5 per cent. to 7 per cent. mark but that certainly in London housing costs have been increasing at the rate of 17 per cent. and more. It is self-evident that if housing costs and rents are rising at 17 per cent. and the RPI is rising at only 5 per cent.,
800
that is an adequate reason for not increasing rents every year.
The figure of 17 per cent. that I have mentioned relates only to the first six months of 1986. In London there are instances of increases in the year of over 100 per cent. I do not know whether the noble Lord, Lord Monson, could justify a rent increase of 100 per cent. when the cost of living is rising by 5 per cent., 7 per cent., 9 per cent. or 10 per cent. There is no justification for that kind of rent increase. There is therefore something wrong with the basis of his argument.
Lord Monson: My Lords, does the noble Lord not agree that the reason for the high increases is the restriction of supply? If more rented accommodation comes onto the market because of the abolition of restrictions, rents will not rise to such a great extent.
7.30 p.m.
Lord Stallard: My Lords, that is a much longer argument which I should love to debate with the noble Lord, Lord Monson. That is a myth that has built up since 1965. There is ample evidence to prove that there are more reasons than the one he gave for the diminution of rented stock which has taken place not just because of the simple facts that the noble Lord has pointed out. There is a long list of reasons why rented accommodation is not as widely available as it was. Building and development have taken away huge chunks of it. We know that the lodgings or digs in which many people used to live when they first came to London have disappeared. A huge chunk of such rented accommodation has been taken away.
We know that it is more acceptable to the new breed of tenants, as it were, to buy rather than rent. Whole heaps of what was originally rent-controlled accommodation have been converted into self-contained units of accommodation and sold off in that fashion. It is just too glib to say that the 1965 Act caused the disappearance of rented accommodation. There are a number of complicated reasons. They are easily understood by those who live and work in inner city areas, particularly London. It is not as simple as the noble Lord made out. I have dealt with the phasing argument.
Phasing and the tenants' ability to pay are crucial. The justification for phasing is simple. Tenants in the private rented sector in London are often the people with the lowest incomes. They are the poorest people. That is evidenced by reports and surveys which have been carried out ad infinitum. They are just unable to pay high increases all at once. Recent government statistics prove that incomes are not rising anywhere near as high as registered rents. That is another reason why tenants cannot pay the increases.
The Minister said (I believe his honourable friend in the other place said the same) that those people can obtain housing benefit. We have had a number of debates on that subject in this place. We are all aware that while the Minister says that tenants can obtain housing benefit, one of his noble colleagues in another department is doing his best to ensure that fewer tenants qualify for housing benefit. Ministers are under pressure to take people off housing benefit and to reduce the number who qualify.

801
The Government cannot have it both ways. They cannot say that those people can obtain housing benefit, because many of the people who will be affected by the proposals contained in the first order are not eligible for housing benefit. Many are students, and many others are pensioners with a small occupational pension which takes them outside the scope of housing benefit. There are low paid workers and single women who are often outside the scope of housing benefit. They suffer hardship due to the rents and because they receive no assistance with them. That is an answer to the point put forward by the noble Lord when he introduced the order.
We know that in 1984 the average weekly rent was £212 for furnished accommodation and £76 for unfurnished accommodation. I can only talk about London, but much of this applies only to London. Shortholds apply only to London, so why should we not talk only about London? We are talking about £212 a week for a furnished flat and there are advertisements for unfurnished accommodation in London at upwards of £76, £100 and £150. It is suggested that those rents could go higher in the next few months. It therefore becomes evident that the argument against phasing does not hold water.
The points put forward about phasing by the Minister and the noble Lord, Lord Monson, can be dealt with adequately with regard to London. Fabulously high rents cannot be afforded by people who need accommodation. That is one reason why we were concerned and insisted that the order be taken on the Floor of the House.
My noble friend said that the Minister thinks that when the clarion call goes out from this House tonight that these orders have gone through, everyone will jump in and free all their houses for rent, loads of rented accommodation will be available and all repairs will be done overnight. That is another myth. It is another story. The clarion call that will go out from this side of the Chamber tonight is that there will be a review of the matter. In the debate initiated by the noble Lord, Lord Harris, I spelt out what our party's housing policy would be. There is no ambivalence about it. There is no question of the Minister asking us what we would do. We have said what we will do. One of the things we will do is to abolish shortholds. That should be the clarion call that goes out from here. There will be no such thing as shortholds in the life of the government who will take over in the next few months.
The argument is that the order on shortholds merely brings London into line with the rest of the country. London was excluded. It is said that it is about time that it was brought into line with the rest of the country. In 1981 when shorthold tenancies were introduced, it was the noble Lord's predecessors and his honourable friends' predecessors in the other place who argued that London should be treated differently. They would never have got the legislation through had they not argued that point and pressed it on the Government because of the sheer size of the privately rented sector in London.
London is not like other places. I do not know whether the noble Lord is aware that I have lived all my adult life in London. London is different in every
802
respect, whether it be transport, health, education or housing. Whatever aspect one looks at, London is not the same as other parts of the country. Members on both sides in the other place recognised that and made provision for it when they introduced these tenancies and the phasing that we are discussing tonight.
The size of the rented sector in London forced that attitude on Members of the other place. There is a much higher rent-income ratios. I mentioned that when I discussed a previous order. They are much higher. The rent-income ratios in London are almost grotesque. I know Hackney, Lambeth, Brent, Camden and Islington.
Lord Graham of Edmonton: And Edmonton, my Lords.
Lord Stallard: I know Edmonton and Tottenham as well. I know many parts of London where those things are true. Rent-income ratios are different in London. Such things do not happen elsewhere in the United Kingdom. Of course the Government responded to Members of Parliament (mainly their own Members) representing London, and they introduced this legislation.
The Shorthold tenancy was already a diminution of tenants' rights. Given London's long tradition of the exploitation of tenants by landlords, more protection was needed in the capital. I could go on talking for another hour and a half talking about exploitation and Rachman. I took the liberty of sending one or two press cuttings to the noble Lord, Lord Harris, after he had used his cuttings. I have not yet had a reply. I hope that he had had a chance to study the press cuttings that I sent him.
Outside London market rents and registered rents are much closer than they are in London. In London market rents can be as much as four times the amount of registered rents. There is no incentive for London landlords to apply for rent registration with such a ratio. Tenants rarely apply because they fear harassment. That is a real factor in London. If I had time, I should be happy to read reports by the Select Committee on the Environment which contain long lists of cases of harassment which still go on in London. Tenants are still being terrorised by landlords and high rents.
Not all tenants are aware of their rights. Whatever the Minister may say, tenants of shorthold properties do not know their rights or how to enforce them. I have heard it said that they should know their rights because they receive enough material and everything is written down. It is written down but it is no doubt written in Whitehall jargon. It is said that they have all these leaflets and documents and therefore they should understand their rights. They do not all understand their rights or how to enforce them.
As I said before, the Government's shorthold proposals amount to effective decontrol. That is the nub of the matter. The Government fully intend to decontrol rents altogether. If noble Lords, on whatever side (including the government side) were honest they would say that that is their ambition. The noble Lord, Lord Harris, made no bones about it. He is in favour of complete decontrol. That is the objective.

803
Although these two orders may appear innocuous, they are the thin end of the wedge. They are a step towards the total decontrol of rents. That is the Government's ambition, although not in the lifetime of this Parliament, as has been said by the Secretary of State and the Minister in the other place. However, they both said that they did not know about the next Parliament. In other words, it is not very far from their minds that this policy is a runner.
As shortholds already carry less security, it will lead to a boom in shorthold lettings in London. Tenants will be intimidated into signing shorthold agreements in deperation. Large numbers of new lettings will be on shorthold, all at market rents, and the tenants' rights will be almost totally ignored. There is no doubt about that. Tenants will end up paying more rent. In many cases that is rent they cannot afford. That means more arrears and more harrassment. It certainly means more evictions. Or they will leave the privately rented sector and go elsewhere—perhaps the Embankment—or to local authority bed and breakfast if they can make themselves homeless.
The empty private homes will not be let, in spite of what the noble Lord, Lord Monson, thinks. Those properties that become empty as a result of this process of winkling out, or harrassment and emptying, will not be let. There is much more profit to be made in London by selling, and they will be converted and sold. There is no doubt about that. In 1977, of 550,000 empty properties in private ownership only between 8,000 and 30,000 could be said to be empty for any reason connected with the rent Acts. The bulk were sold.
I shall not weary your Lordships with any more statistics although I should love to. On shortholds, the measure that the Minister has introduced means, so far as I am concerned, a stepping up of the Rachman-type landlord that we knew immediately after the 1957 Act. This is another invitation for that kind of activity in London, where there is such scarcity and where there is so much money to be made from a free-for-all with no controls or legislation. One does not have to be very bright to work out what will happen and who will come in and grab the pickings.
As I have said, the tenants will be made homeless. Local authorities which are already in real difficulties with bed and breakfast accommodation will be hard pressed to do much about the problem. We shall have more serious problems in London than we have at the moment. We have had a debate recently on the difficulties in the inner cities. We have had the debate on a Motion relating to the International Year of the Homeless moved by the noble Lord, Lord Scarman, which, again, points out the problems of the homeless in London. The situation arises mainly in London and in the big inner city conurbations.
To introduce this measure, which is a licence to double and treble those problems, is absolutely crazy and almost criminal. If it were possible to do something about this tonight I should be going through the Lobby to vote against the thin edge of the wedge of total decontrol. That is what these two orders represent to me. There is no way that I can agree to them. I understand, as my noble friend says, that they
804
will be agreed to because of the customs of the House, I think that is a great pity.
Lord Monson: My Lords, before the noble Lord sits down, may I put one short question to him as he has made several criticisms of my intervention? I agree with him that to some extent London is a special case. For example, the ripple effect of the City Big Bang is sending up values all over London. This inevitably affects tenants as well as potential owner occupiers. Does the noble Lord agree that a solution to the problem of the hard-pressed private tenant might be found if private tenants—who at the moment are unique in receiving no tax relief or subsidy of any kind—were brought into line with council tenants on the one hand and owner occupiers on the other by being given some kind of tax relief or subsidy? Would he agree that that might ease the problem?
Lord Stallard: My Lords, I would not rule that out of any review. These orders are not the way to review rent controls. I think that the noble Lord, Lord Harris, would have agreed with that. The matter needs review. Those aspects that the noble Lord, Lord Monson, mentioned must come into that review. We have to look at the possibility of attracting institutional capital—from building societies and so on—into that area, where they will provide the funds and accredited housing associations will do the building or the renting. These are all constructive and practical possibilities but they cannot happen in the atmosphere created by these two orders.
I would therefore say that the policy I outlined in the previous debate will be the Labour Party's approach to the matter. We understand all the problems that have arisen since previous legislation. We shall not say, "Because you did this, we shall do that." We shall do it because the whole matter needs rejigging and reshaping. That is what will happen immediately after the next election when the Labour Government looks at the new housing policy. I would certainly not rule out those matters for consideration.
7.45 p.m.
Lord Skelmersdale: My Lords, I am grateful to the three noble Lords who have spoken in this very short debate, which certainly hotted up in the last 19-odd minutes.
The noble Lord, Lord Stallard, was a little mischievous, to say the least, because shorthold tenancies were introduced as an initiative to encourage private landlords to let property. Almost overnight 5,000 came into existence. The key element of shorthold is that it is a fixed term tenancy of between one and five years at the end of which the landlord may if he wishes take possession of his property. I am fully aware that the noble Lord, Lord Stallard, does not approve of this. He says that the constrictions are so unintelligible that tenants will not know what they are letting themselves in for. It is a fixed period of years. That is a very simple concept to grasp. However, much more importantly the whole edifice comes crashing to the ground if the landlord does not go through the prescribed routine. As the landlord of a shorthold tenancy in Somerset I know this perfectly

805
well. I should declare another interest, incidentally, as a tenant in London.
Lord Stallard: My Lords, before the Minister leaves that point I also mentioned that tenants in London are desperate. I do not think the Minister has grasped the situation of people looking for accommodation in London. Desperation will make them sign all kinds of bits of paper, and accept all kinds of conditions. They might understand some, but sheer desperation will make them accept.
Lord Skelmersdale: My Lords, I am answering points in the best way that I am able in the limited time available. If the noble Lord, Lord Stallard, will let me continue with my speech he may find that he has rather more answers than he expected.
Under shorthold the tenant does not have a right to stay on beyond the fixed term. He or she will be aware of this when taking the tenancy. This is the most important aspect of shorthold from the landlord's point of view and is crucial in cases where a landlord envisages only a short-term let. It will be for the landlord and tenant to agree on the length of the fixed term and the level of rent. If a tenant chooses to seek a registered rent the landlord will have nothing to gain by not continuing the shorthold because, once registered, the fair rent will apply to any subsequent lettings.
The department has received very few complaints about the use of shorthold outside London following the removal of compulsory rent registration in 1981. On the other hand, there have been several complaints that compulsory registration acts as a deterrent to landlords who want to make accommodation available on shorthold in London.
The noble Lords, Lord Dean and Lord Stallard, covered some of the same ground and talked about the increases in fair rents being much higher than the rate of inflation. I accept the figures given by both noble Lords showing that for the first half of 1986 the mean increase in rent on re-registration was 17 per cent. This works out, as I said, to an annual rate of about 8 per cent. However, these figures—as I also sought to show in my opening speech—must be put into perspective. Rent increases in the 1970s—a time of high inflation—lag well behind the retail price index and other cost indicators. Comparing rent levels and prices in 1970 with 1986 gives a surer indication of the erosion of the value of fair rents. It is small wonder that the private sector has been substantially reduced over the long term. I accept that these orders will not have the dramatic overnight recovery potential that the noble Lord, Lord Stallard, suggested that I put forward in my speech just now. Nonetheless, I think that they are valuable.
Rents for that period between 1970 and 1986 rose by about 340 per cent. Over the same period the all-item retail price index rose by 417 per cent. Local authority rents—and this is an interesting point—rose 581 per cent.; average earnings rose 579 per cent. I think that these figures all speak for themselves. All that this change will do is to allow landlords the full registered rent; the amount that the rent officer deems to be a fair rent at the time of registration. It does not alter the way in which registered rents are assessed.
806
The noble Lord, Lord Monson, very nearly answered the second point of the noble Lord, Lord Dean, and the first point of the noble Lord, Lord Stallard, concerning inflation and what the future would bring. I have no better crystal ball than any other noble Lord in your Lordships' House. However, phasing was never the right way to deal with rent rises even in a time of high inflation, and we now recognise that. Why should the landlord, who, by definition, is equally affected by inflation, be made to subsidise his tenant, whose income may well be rising in line with inflation? Help for tenants is largely a matter for housing benefit.
Turning to housing benefit, we estimate that some 626,000 private sector tenants received housing benefit in 1984. That is about one third of all private sector tenants, and I cannot say what proportion of the 550,000 Rent Act tenants received housing benefit.
I did not come armed with figures for students and single people, but I can tell the House that a family of two adults and two children, paying some £25 per week in combined rent and rates, would not cease to be eligible for housing benefit until their income reached around £152 per week, or £7,900 per year. Therefore, I do not think that one can argue in that case that housing benefit thresholds are set at too low a level to help the least well off.
I dispute that the Department of Health and Social Security is in conflict with the policies of the Department of the Environment. It is common ground among all concerned that the public purse should not be asked to meet rents which are set unreasonably high purely to cheat the benefit system. The Department of Health and Social Security is discussing with the local authority associations ways of building into the machinery of DHSS grants to local authorities incentives to encourage local authorities to ensure that this abuse is prevented. Of course local authorities already have the power to withhold benefit on unreasonable rents, and the great majority exercise that power sensibly. That will not change. The changes that we are making today do not disturb the basic system of fair rents. However, even if they did, there would be no conflict between raising rents and taking measures to discourage benefit abuse.
It is true that in 1981 the Government were against removing compulsory rent registration for shortholds in Greater London. At that time we had no experience of how a shorthold would operate without compulsory rent registration. The experience of the last six years has shown that outside London shorthold operates very well without it and provides much-needed accommodation. The demand for short term rented accommodation is at its greatest in London and we see no justification for continuing the requirement that fair rents must be registered on shortholds here.
The noble Lord, Lord Stallard, made great play with the review which is due to take place within the next few months, when he anticipated that a Labour Government would come into power. That review has been taking place continuously for the last two years under a Conservative Government. Nonetheless, the noble Lord, I suspect slightly unintentionally, gave us a very good advertisement for our introduction of private capital into the rented housing market through

807
the Building Societies Act, of which we are extremely proud and which he clearly thinks is a step in the right direction and would like to see continued. I agree with the noble Lord, but we shall know the effect of that when it gets off the ground, in the same way as we shall know the effect of these orders when they get off the ground. I do not expect them to have the damaging effect which the noble Lord Lord Stallard, and in a rather softer and more muted tone, the noble Lord, Lord Dean, clearly expected.
The Government's housing policy is about choice. The right to buy is well established. The pent-up demand from a million households has been released. The right to rent is our next goal. We shall continue to open up variety in tenure and to stimulate private investment in housing. Whether we shall go along the route suggested by the noble Lord, Lord Monson, as regards tax advantages I cannot yet say. That is something which has been suggested to me in this House before and I believe it was last mentioned at Question Time by the noble Lord, Lord Hams of High Cross. It is certainly one of the many things which we are considering in the area of the private rented sector. However, the extension of assured tenancies, the changes to encourage privately financed shared ownership and the new specific power for local authorities to support private rental development, are all important steps along the road.
The two orders which we are considering tonight are small but significant steps in the same direction. On that basis I commend them to the House.
On Question, Motion agreed to.

Rent (Relief from Phasing) Order 1987
7.55 p.m.
Lord Skelmersdale: My Lords, I beg to move.
Moved, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee].—(Lord Skelmersdale.)
On Question, Motion agreed to.
Baroness Hooper: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.56 to 8 p.m.].

Pilotage Bill [H.L.]
Consideration of amendments on Report resumed.
[Amendments Nos. 32 to 34 not moved.]
Lord Underhill Lord Underhill moved, as an amendment to Amendment No. 30, Amendment No. 35.
Subsection (5), line 3, leave out ("the authority considers appropriate") and insert ("are agreed between the authority and the representatives of the relevant licence holders").
The noble Lord said: My Lords, as with Amendment No. 31 we included this amendment in
808
the mass grouping. But I wonder whether the Minister would take a careful look at Amendment No. 35 because it is a different principle to what we ask in Amendment No. 31. Here we are saying that instead of the clause reading:
"the authority considers appropriate"
We are suggesting the following amendment:
"are agreed between the authority and the representative of the relevant licence holders".
The Minister has agreed that discussions are taking place and that there will be, we hope, an agreement. Therefore, instead of making it look so authoritative, as though the authority is the determining body, if we were to insert the following:
"arrangements as are agreed between the authority and the representatives of the relevant licence holders"
that would give some satisfaction and it would not cost the Government anything to agree to it. I beg to move.
Lord Simon of Glaisdale: My Lords, I hope that the noble Lord, Lord Underhill, will say why he has limited the amendment to the relevant licence holders or all the old pilots. I also wish to take up a point I made earlier which applies equally to Clause 3 and Amendment No. 30. I should like to ask whether it is possible to simplify enormously the very clumsy definition of "relevant licence holders" and "relevant authorised pilots", which the Minister accepted was, even if necessary, rather cumbrous drafting? One could cut straight through that by referring to the trade union representatives of the pilots. The phrase appears later in the arbitration amendment. If the Minister would consider that matter, it might be possible to simplify the present Clause 3, or the new clause, Amendment No. 30 in that way.
Lord Brabazon of Tara: My Lords, I think it would be helpful to the House if I tried to set out the intention behind the new clause in this amendment. Subsection (1) will allow a CHA to make what arrangements it considers appropriate for the provision of pilotage services. In principle, they will be able to choose between self-employment and employment. It will not be open to the pilots to make this choice. Subsection (5) says that there is no obligation on the CHA to authorise anyone if he is not prepared to accept such arrangements.
These subsections are subject to the provisions in subsections (2) to (4) which allow the pilots the option of being offered employment. That will limit the CHA's option in that they will no longer be able, if the pilots exercise their option, to introduce arrangements on any other basis. If the pilots do not exercise the option available under subsections (2) to (4) then the full range of options remain open to the CHA including the right to insist on employing the pilots they need. I accept the point made by the noble and learned Lord, Lord Simon of Glaisdale, that the drafting of subsection (5) in particular has caused problems. I shall be happy to look again at the particular wording.
Concerning the amendment in the name of the noble Lord, Lord Underhill, I have referred to that earlier. But it would be a good idea for me to take on board what has been said this evening and to come

809
back, I hope, with something which at least will be a little clearer. But I do not think that it will interfere with the principle of what we are trying to achieve.
Lord Underhill: My Lords, I am grateful to the Minister for agreeing to have a careful look at this matter. It may be that I am showing how little I know about some of these matters. I was given the impression that when we were discussing a subsection in the Bill which has been replaced by subsection (5) of this new clause, that there would still be an option as to whether the pilots wished to be employed or self-employed and then the CHA would decide accordingly. I think that I heard the Minister say now that the CHA will decide which system it has. Surely there is the opportunity for the members to say which system they want? I hope that the Minister will consider this matter and also the point raised under my Amendment No. 35. On that basis, I beg to withdraw the amendment.
Amendment to Amendment No. 30, by leave, withdrawn.
The Deputy Speaker (Lord Airedale): The Question is, That Amendment No. 30 be agreed to?
Viscount Simon: My Lords—
Lord Simon of Glaisdale: My Lords, I hope that the noble Viscount will go ahead. He remains seated, so I will go ahead. I have already made a number of rude noises about this amendment and its predecessor Clause 3. A moment ago the Minister suggested that subsection (2) gives the pilots a choice between a contract of employment and a contract for services as self-employed. That limits the apparently very wide options of the CHA under subsection (1). I wonder whether the Minister is right on that point.
Subsection (2) says that the competent harbour authority shall offer to employ the pilot under a contract of employment unless a majority of the relevant licence holders have agreed, or a majority of the relevant authorised pilots have agreed. It does not say that they have the right to opt instead for a contract for services as self-employed. I wonder whether the Minister, if he thinks there is anything in that, will look at that again in connection with his further look at the redrafting of the Bill. I am sorry to be so pertinacious about that.
The Minister was good enough to try to convince me about the interrelationship of subsection (1) and subsection (5), and there is no point in our arguing that again. But I ask again with great respect, since I do not understand it, whether he will explain what subsection (4) means.
It is a particularly baffling piece of drafting. As I suggested on Second Reading, I feel confidence in the draftsman of this Bill, and I have no doubt that he has something cogent in mind, but I am afraid that I cannot see it. Can the Minister give an example of one of the new harbour authorities which will be affected? I rather thought that it was an authority like the new Tees authority would be, where you get a main port, Teesport, on the south side of the estuary and the old
810
pilotage of Hartlepool on the north. But I was baffled then by the words;
"any area falling within both those parts".
If the noble Lord could enlighten me on what that is intended to do to begin with and secondly how it does it, I should be extremely grateful.
Viscount Simon: My Lords, the point I wanted to raise on this amendment arises on subsection (6):
"A competent harbour authority may pay into any pilots' benefit fund … such contributions as may be required".
This was discussed in Committee. I looked up the Committee's report and it appears to me that the Minister did not agree to change this to "shall pay" on the grounds that some of the pilots might not be members of the pilots' benefit fund. Is that a sound argument?
If any pilots were not members of the fund, then surely no contributions would be required of them, so the question would not arise. I still think that in so far as any pilots are members of the fund the clause should read:
"A competent harbour authority shall pay into any pilots' benefit fund … such contributions as may be required".
I was going to raise also subsection (5), but we have said so much about that, and the Minister kindly said that he is going to look at it again, that I shall say no more about it.
Lord Underhill: My Lords, I should like to support the point just made by the noble Viscount, Lord Simon. I had amendments down to other clauses of the Bill dealing with the pilots' benefit fund which quite rightly were ruled out because those clauses were deleted and I was not able to move the amendments; but the principle still stands. If I had known that the other clauses were going to be ruled out I should have had an amendment to this particular amendment of the Government, which I do not think we saw until a few days ago.
It seems to me that the Minister might have a careful look at this. If you make it a permissive matter as to whether a harbour authority shall pay into the fund, one could be in a situation where even long-serving pilots might find themselves out of the fund because the harbour authority does not wish to pay the contributions. That seems to me again to be extremely unfair. Surely there ought to be the inclusion of the word "shall", or this should be worded somewhat differently so as to avoid a decision being taken by a harbour authority which would unfairly affect pilots whether long serving or new.
8.15 p.m.
Lord Brabazon of Tara: My Lords, I shall attempt to answer the points as best I can. I would pick up the noble Lord, Lord Underhill, on one matter. This new clause, Amendment No. 30, has been down for a week, and the noble Lord has put down amendments to it, so he did of course have the opportunity—
Lord Underhill: My Lords, will the noble Lord permit me to intervene? I did not put down an amendment to that amendment because I had amendments covering this point in other amendments

811
which have gone by the board because the clauses have gone.
Lord Brabazon of Tara: My Lords, that is true. If the noble Lord would cast his mind back to about midday today, we suggested that his amendments be grouped in an earlier group because then they would not have fallen. Perhaps they would have fallen, but at least we could have had a discussion on them.
I covered the pensions point in Committee. Let me try to answer first the noble and learned Lord, Lord Simon of Glaisdale. I think I have already answered this point, but the onus at the beginning of the operation—let us try to simplify it—is that the CHA decides whether to employ pilots or whether to offer self-employment. If the CHA decides that it would like to offer self-employment, it is up to the pilots to decide whether they wish that option to be exercised. If the pilots decide that they do not want to be self-employed, they have the right to call the competent harbour authority—
Lord Simon of Glaisdale: My Lords, is the noble Lord sure that he is right about that? Subsection (2) refers only to "a contract of employment".
Lord Brabazon of Tara: My Lords, I know I am right about it. Whether I am expressing it in the correct way is for the noble and learned Lord to decide.
The noble and learned Lord also asked me about subsection (4). He is quite right. This is intended to cover the Tees and Hartlepool area, where one harbour authority covers two pilotage districts. The subsection provides that where pilots in one former pilotage district opt for employment, a CHA shall not authorise a pilot for the whole harbour being employed in one part but not in the other. To avoid confusion it has to offer to employ in both ports. I amended that subsection in Committee, and I could point out the relevant part to the noble and learned Lord perhaps at a later stage.
The issue of pensions was raised by the noble Viscount, Lord Simon, and the noble Lord, Lord Underhill. I covered this point at Committee stage. If I could briefly sum up what I said, not all pilots in the future may wish to join the pilots' pension fund. They may wish, for instance, to join the pension fund of the competent harbour authority, or indeed (as they may do under government legislation) wish to make their own pension arrangements. That briefly is why we say "may" rather than "shall" in that subsection.
On Question, Amendment No. 30 agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 36:
After Clause 3 insert the following new clause:
("Temporary procedure for resolving disputes as to terms of employment.
. —(1) Where any dispute arises between a competent harbour authority and an authorised pilot—

(a) as to what the terms of any provision in any contract of employment which is to be entered into between them should be; or

(b) whether the terms of any provision in any existing such contract between them should be modified,

and that dispute cannot be resolved by negotiation between them, the authority or the majority of the authorised pilots for its
812
harbour may refer the dispute to the arbitration panel appointed in accordance with subsection (2) below and the panel shall determine what the terms of that provision should be and the contracts of employment between the authority and authorised pilots to which their determination is to apply ("relevant contracts").
(2) The arbitration panel referred to in subsection (1) above shall consist of a member appointed by the Secretary of State and two members appointed respectively by a body appearing to the Secretary of State to be representative of harbour authorities throughout the United Kingdom and a body appearing to him to be representative of pilots throughout the United Kingdom.
(3) In making a determination under subsection (1) above the arbitration panel shall have regard to any general guidance issued by the Secretary of State as to the matters to be considered by them.
(4) Where the arbitration panel make a determination under subsection (1) above then, subject to any agreement to the contrary between the parties and to the effect of any subsequent determination under this section—

(a) on and after the date on which the determination is made any relevant contracts entered into before that date shall have effect with the substitution for any inconsistent provision of a provision in the terms determined by the panel; and

(b) any relevant contracts entered into on or after the date shall contain a provision on those terms.

(5) In the case of an authority whose harbour falls within more than one former pilotage district, for the reference in subsection (1) above to the majority of the authorised pilots for its harbour there shall be substituted a reference to the majority of the authorised pilots for the part of the harbour for which the authorised pilot as to whose contract the dispute has arisen is authorised.
(6) Subject to the provisions of this section, the Secretary of State may by regulations make such provision as he thinks fit as respects the referral and determination of disputes under subsection (1) above and such regulations may, in particular, provide that the expenses of such referrals and determination are to be borne by the Pilotage Commission or by such other person as the Secretary of State thinks fit.
(7) The preceding provisions of this section shall cease to have effect on such date (not being earlier than the expiry of the period of three years beginning with the appointed day) as the Secretary of State may by order prescribe, but no such order shall affect the terms of any contract continuing in force at that date.").
The noble Lord said: My Lords, in speaking to Amendment No. 36, with the leave of the House, I shall speak at the same time to Amendments Nos. 102 and 109 which are consequential to it. My noble friend Lord Strathcona has various amendments to those amendments which we shall also no doubt debate.
Lord Simon of Glaisdale: My Lords, on the grouping list according to my note here there is also Amendment No. 37. Is that right?
Lord Brabazon of Tara: Yes, my Lords. That is one of the amendments of my noble friend Lord Strathcona which is an amendment to this amendment.
We have already discussed these amendments considerably this evening, but they follow from discussion in Committee on amendments to Clause 3 which sought to include, in an offer for employment which the CHA was obliged to make under that clause, a guarantee as to the level of earnings which should apply. I made it plain, and I have made it plain again today, that I did not regard such a guarantee as justifiable, but I recognised that there was a feeling in the Committee that the provision about the offer of employment needed to be supplemented. Several noble Lords suggested that an arbitration procedure should be considered. These amendments set out such a procedure which I hope your Lordships will accept.

813
Briefly, the procedure provides for the appointment of a panel of three, with one member appointed by the Secretary of State and one each by representatives of the ports and pilots respectively. If negotiations between a CHA and pilots about the terms and conditions of employment which will apply in the port reach an impasse, it will be open to either side to refer the matter to the panel. Their meeting will be binding unless both parties agree otherwise, whether beforehand or subsequently. The Secretary of State will be able to give the panel general guidance as to the matters to be considered by them. These are for future consideration, and as I have said, we have already had some discussion with representatives of the ports and pilots. I envisage they will require the panel to take account, among other matters, of previous recommended level of earnings of pilots in the port.
Subsection (7) of the proposed new clause will allow the Secretary of State by order to discontinue these procedures, but not until at least three years after the appointed day. This recognises that these are special provisions arising from the change in legislation. There is no case for making them apply permanently. After withdrawal, it will be for ports and pilots to settle terms and conditions between them in the normal way, as any normal workforce does.
The amendment to Schedule 1 provides for the arbitration procedure to be available before the appointed day, as well as afterwards; and that amendment, and the amendment to Clause 27, will allow the cost of the panel to be met from funds raised by the Pilotage Commission.
The matters which may be referred to the panel will not just be levels of earnings, but may, if one of the parties wished, include any other terms and conditions of employment, including pension arrangements, hours of working, redundancy payments, the effects of removal of authorisation on the contract of employment, the length of notice to be given in contracts and other such matters. I believe that with the acceptance of these amendments there can no longer be any doubt in anyone's mind that the Government are fulfilling the undertakings we have given the pilots who continue in the profession, no less than those who retire, that they will receive fair and equitable treatment. I hope noble Lords will agree to accept these amendments. I beg to move.
8.30 p.m.
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal moved, as an amendment to Amendment No. 36, Amendment No. 37:
Subsection (3), at end insert ("Such general guidance shall be in accord with the undertakings given, in particular, in respect of the equitable treatment of the continuing pilots".).
The noble Lord said: My Lords, I am not sure whether procedurally I should start by thanking the noble Lord for Amendment No. 36 as I am supposed to be speaking to Amendment No. 37. But I shall take a chance and say how much I welcome the noble Lord's amendment, even if, by implication, it is not totally without reservation.
We saw his amendment only two days ago. It is a fairly lengthy one. We have mentioned it several times this evening and I am sure we shall be mentioning it again before we finish. There is no doubt that an
814
arbitration procedure of the kind my noble friend is proposing takes much of the steam out of the suspicions that some of the pilots have had about what their position would be after the Bill was passed. I have no wish to open up any old wounds by explaining why such suspicions have arisen.
I think the Minister recognises that subsection (3) is crucial. My amendment would make subsection (3) read:
"In making a determination under subsection (1) above the arbitration panel shall have regard to any general guidance issued by the Secretary of State as to the matters to be considered by them. Such general guidance shall be in accord with undertakings given, in particular, in respect of the equitable treatment of the continuing pilots".
Let me say immediately that those words may not be totally satisfactory and acceptable. But the point all the way through is the spirit which the words are intended to convey. We have not used the word "fairness". Instead we have used the phrase "equitable treatment". But a number of words, all of which are very similar, have been used, as has been so often pointed out by various Ministers from the Prime Minister downwards, and in both the Green Paper and the White Paper. Unfortunately it is true to say that there appears to be some disagreement as to exactly what "fairness" in this context means. I should not have suspected that strongly until the debate we had earlier today.
I was very glad to hear the Minister rattle off a list of some of the issues that he envisaged would be covered under this arbitration clause, which appears to be fairly comprehensive and is something that was raised earlier, particularly in connection with the removal of authorisation. I was very glad to hear my noble friend say that that was included. On the question of "fairness", we talked about previous earnings or present entitlements. I recognise that there are technical difficulties because we have Letch agreements, proper numbers and all sorts of complicated technicalities which surround the way in which pilots' earnings have been calculated heretofore.
I think I heard the Minister say that one matter to be taken into account would be the present level of earnings. I hope I heard him say that. I should be grateful if he would confirm that as it is a matter of great importance.
Lord Brabazon of Tara: Yes, my Lords.
Lord Strathcona and Mount Royal: My Lords, I see that I have that correct and I am greatly relieved. If he has said that, we have gone a long way. Whether he and I will disagree about the interpretation of what taking into account the present level of earnings means is still open for discussion. However, I understood him to say and to repeat just now he did not feel that the present level of earnings would necessarily be sustained. He seems almost to have made two conflicting statements, because the thought that most of us have is that if the Government unilaterally decide to alter the whole basis on which people earn their living it is up to them to see they are no worse off than they were before. I really believe it is basically as simple as that.
If the Minister is saying that he accepts that, then we are moving forward and the arbitration clause will

815
work effectively. However, it is also true to say that the pilots have had problems since the passing of the 1979 and the 1983 Acts. Every now and again a White Paper or a consultative document is produced which says that the intention is this, that or the other. What has invariably happened is that people—particularly civil servants or the Government—have said, "There may have been all kinds of White Papers, there may have been all sorts of noble intentions, but is this in the legislation? If it isn't in the legislation, I'm sorry, you've had it."
That is the background against which all this is being considered. It is extremely important, therefore, that these guidelines should be as comprehensive, and as binding as possible. I very much hope that the Minister is going to be able to tell us that there is a reasonable prospect that we may see these guidelines before the Bill has its Third Reading in this House, so that at least if we are desperately unhappy we can indicate our feelings about the matter before the Bill finally leaves this House and goes to another place, where it may not receive all the careful attention which it is receiving in this House and which it looks like going on receiving for some hours yet.
I cannot see that words on the lines of my Amendment No. 37 would bind the Government other than to saying that they are against sin and on the side of the angels. I hope that the noble Lord will feel able to accept it. I beg to move.
Lord Underhill: My Lords, I should like to support Amendment No. 37, standing in the name of the noble Lord, Lord Strathcona, but also to speak to the Government's new clause.
As the noble Lord has said, I also welcome the fact that the Minister has kept to his undertaking to look at the question of some machinery. Whether this fills the Bill is another matter but at least he has endeavoured to carry out his promise to look at the question of representations and appeals.
I wonder how far there have been negotiations with the various bodies concerned in drawing up this particular new clause. Has the pilots' organisation been consulted? Has the ports' organisation been consulted? It seems to me that when drawing up a clause involving a new procedure of arbitration it would have been wise to hold such consultations beforehand. However, there may have been consultations. Maybe the Minister can assure us on that issue.
It will be recalled that at the Committee stage I and other Members pressed on various clauses that there should be opportunity for appeals or representations. On a number of them, the Minister, I will not say rejected them, but saw no need for them. I am hoping that now we have this new clause on arbitration before us we can take a very careful look to see exactly what will be the final terms that the arbitration panel will be able to look at.
Generally speaking, those of us who are at all interested in industrial relations do not like arbitration without firm provision for negotiations beforehand. Unfortunately, this Bill leaves negotiations completely on a local basis between a particular port authority
816
and the pilots. There is no basis for general negotiations of conditions and terms; it is all left locally.
As is really covered by the amendment in the name of the noble Lord, Lord Strathcona, whatever we may feel about arbitration, I am certain that it will be regarded by the pilots as no substitute for some guarantee of their present entitlements and conditions. They will want to feel that that is part of the new machinery, and that really is the substance of the noble Lord's amendment to the Government's amendment.
Reference was made earlier on this afternoon to the initial period of three years. The Minister drew attention, quite rightly, to the fact that it is possible for this to be extended. The Secretary of State has the authority to decide whether there shall be a date later than three years. What happens if there should be any change in conditions, new contracts, even after the closing date? What happens to any question of arbitration in those matters?
Similarly, when I raised the question of Associated British Ports being separated, the Minister kindly told me that they had been a party to the particular matter we were discussing then. What will be the position of associated British Ports in relation to the appointment of a representative to the arbitration panel? Will they be participating in the appointment of that representative, or will it be more desirable that there shall be two representatives from the ports—one from the BPA and one from Associated British Ports—giving the pilots two representatives to balance up? If the Minister assures me that whatever may be applicable an arbitration to the British Ports Association will also be applicable to anything that the Associated British Ports may wish to do, then I will accept what he says on that. However, as the noble Lord, Lord Strathcona, has stressed, the most important matter in the whole of this new clause will be the guidelines to be issued by the Secretary of State under subsection (3).
I would echo what the noble Lord has said. I am sure that everybody will agree that there has been no deliberate attempt to keep the debate going. There have been legitimate questions of a controversial character, though completely non-political in their controversial nature, but this is a very important and complex Bill and it is obvious that we are not going to complete it tonight. I would echo the plea that the noble Lord has made, that it would be of help to everyone if before the Third Reading we could see the actual terms of the guidance to be given by the Secretary of State as to these guidelines because it is the guidelines which will be the key to the whole arbitration clause. If the guidelines are wrong, then you may as well throw this amendment away; it will be of no value to the pilots or to the ports. Therefore, the guidance notes are of great importance to us.
There arises from Lord Strathcona's amendment the point that—I accept what the Minister has said—the guidelines will include reference to the earnings as at present. The important thing is: will the guidelines give some sort of positive recommendation that these are the sorts of matters to which the new agreements between the CHAs and the pilots should be directed? Merely to list them up without some sort of positive lead in the guidelines would appear to me again to mean that something would be missing.

817
The other point that has not been mentioned is the regulations that are to be made. Different from the guidelines, there are regulations to be made under subsection (6) as the Secretary of State thinks fit,
"as respects the referral and determination of disputes under subsection (1)".
Obviously that relates to the terms of those regulations, because if the terms of referral and determination are not right then once again this clause will not be as valuable as we hoped it would be.
I repeat that we thank the Minister for giving attention to this, but it is not yet in its final desirable shape. If we can see the guidelines, if we can have some idea of what the regulations will be like, and if the other points that have been raised can be considered, then I think we shall be more satisfied.
Lord Simon of Glaisdale: My Lords, I do not desire at this stage to speak about Amendment No. 36 in general except that I should like to associate myself with the gratitude that has been expressed to the Minister, because I was one of those who at the Committee stage urged the necessity of either appeal or arbitration. This is yet another example of the way the noble Lord has gone far to meet the views that were put forward in Committee. I am also very grateful for his sending me a copy of the letter which he wrote to the noble Lord, Lord Underhill, about the matter.
The only other thing I should like to say about Amendment No. 36, the new clause, arises strictly out of the amendment of the noble Lord, Lord Strathcona; namely, the reference to the general guidance in subsection (3). Desirably that would be subject to parliamentary control, but at any rate I think it is highly important, as has been said, that Parliament should see that general guidance before the Bill passes into law, and indeed that your Lordships should see it before completing the passage of this Bill, whether on Third Reading or on the Motion, That the Bill do now pass. In the meantime, I agree that we have had highly satisfactory indications from the noble Lord the Minister as to the content of those lines of guidance.
Turning to the amendment itself, No. 37, I readily acknowledge the far greater knowledge which the noble Lord, Lord Strathcona, has about these matters. I agree with the general thrust and intention of the amendment. Moreover, I have always been in favour of legislating in comprehensible terms, in ordinary language if possible, and avoiding terms of art if that is possible. Nevertheless, I am bound to say that to write these words into a statute would present any court faced with them with an absolutely insurmountable difficulty.
What are the undertakings given in respect of the equitable treatment? I know perfectly well what the noble Lord had in mind, but no court, having to construe this on a challenge, will possibly know, or, if it knows, will be able to judge. So I hope that the noble Lord, having made his point and knowing my sympathy both with his approach on this Bill and on the general way one should legislate, will nevertheless not press his amendment.
Viscount Simon: My Lords, I should like also to express my firm approval for the amendment of the
818
noble Lord, Lord Strathcona. I have listened to the noble and learned Lord, Lord Simon of Glaisdale, and I fully agree that this is a very difficult point. The question of drafting is exceptionally difficult but we must face this difficulty, must we not? The pilots have been led to believe that they are going to be fairly and equitably treated, and unless something is written into the Bill I feel that they will be greatly disappointed.
Also, if I am still in order, perhaps I may follow the example of the noble Lord, Lord Underhill, and make one reference to Amendment No. 36. When I read it I thought there was a little difficulty over the opening words, and perhaps when the noble Lord comes to reply he will say something about that. The beginning of this new clause says:
"Where any dispute arises between a competent harbour authority and an authorised pilot".
But what about disputes that arise before the authorised pilot becomes so authorised, when he is discussing what his terms and conditions are going to be? That would be outside the terms of Clause 36.
Then I bethought me that possibly that was dealt with in Clause 109, to which the noble Lord, Lord Brabazon, has already referred. That certainly widens the subjects which can be referred to this arbitration, but it is only where the dispute arises before the appointed day. Is it imagined that there will never be any disputes about terms and conditions of employment after the appointed day? Will those also not need to be subject to investigation and arbitration even though the applicant is not by then an authorised pilot? I will, if I may, just leave those thoughts with the noble Lord, and if he feels inclined to say anything about them when he replies I shall be delighted.
8.45 p.m.
Lord Brightman: My Lords, I rise only to speak on Amendment No. 37. I entirely agree with what my noble and learned friend Lord Simon of Glaisdale has said. In my submission, it imposes a duty which is simply not justiciable. It is too vague. The undertakings are not defined. I ask: to whom were the undertakings given, by whom were they given and on what occasion were they given? I ask your Lordships to reject Amendment No. 37 as drawn.
Lord Shackleton: My Lords, I think we are in real difficulty now. The Government could feel a little bit aggrieved at the criticism of what is obviously a brave attempt to meet some of the anxieties of the pilots. The truth of the matter is that I do not believe that under this Bill, however hard the Minister tries, we are going to get real satisfaction; nor, I suspect, are the Government going to move on the guidelines question with a view to publishing them before we come to Third Reading. Governments do not usually like producing guidelines, and we do not know how far those guidelines will be binding, how long they will last and how far they will reflect the policy of the government of the day.
Quite early this morning I thought I heard Mr. Clarke saying that in future pay should be determined not by old-fashioned methods such as comparability and job evaluation but in relation to the profits of undertakings. We do not know what guidance will be given in these matters and I should like to suggest to

819
the noble Lord—because this is a new, major clause and it is very difficult to debate on Report stage—that if he is going to give consideration to the points that have been made, perhaps this particular clause should be recommitted. I am not suggesting that should be done today but it might be done later when he has had a chance to consider these matters, especially if guidelines are going to be published. It is very difficult, because we have the chance to speak only once. It is the classic example of something that could be recommitted, and recommitted any time up to Third Reading.
The noble Lord may not wish to speak on that, but it is quite clear that despite the sincere efforts he has made to get this right it is a very difficult matter. The noble and learned Lords who have spoken have pointed out that the noble Lord's amendment—which I do not think he ever really thought was a serious legal proposal; so I do not think they need worry too much about that—makes it clear that we are in real difficulties, and it may be that some discussion on recommitment may even help the task of not only the noble Lord but of his honourable colleagues in another place when the Bill goes there in Committee.
Lord Brabazon of Tara: My Lords, to answer the noble Lord, Lord Shackleton, I must say that I am not attracted to the idea of recommitting this new clause. The new clause has been produced in response to a specific undertaking given at Committee stage to your Lordships. I feel it is well within the bounds of behaviour of your Lordships' House that I should bring forward an amendment at this stage.
Lord Shackleton: If I may interrupt—
Lord Brabazon of Tara: No. We are on Report. I will not give way; I am sorry.
Lord Shackleton: This is a point of procedure, if the noble Lord will give way.
Lord Brabazon of Tara: No. I will not give way I should like to get on with the business. We are going slowly enough as it is. I know this is an important matter but we are at an important stage.
If I may deal briefly with the amendment, I am bound to agree with the noble and learned Lords who have spoken that the amendment would make little sense in legislation and would be very hard to interpret.
To turn to the more general points on Clause 36, I believe that the precise matters to be covered by the general guidance that the Secretary of State will give to the arbitration panel will need further consideration. The noble Lord, Lord Underhill, asked whether we had consulted on the preparation of this. We have indeed discussed it with the UKPA and the British Ports Association and discussions will be going on.
Lord Underhill: But have they agreed?
Lord Brabazon of Tara: I do not know whether they have agreed, but we are talking to representatives of
820
the pilots and of the ports about what should go into the general guidance. I very much doubt whether those discussions will have reached meaningful conclusions while the Bill is still in front of your Lordships. It may be so. I do not know.
As I said earlier to my noble friend Lord Strathcona and Mount Royal—and I repeat—I envisage among the considerations that the Secretary of State's general guidance covers will be the recommended level of pilots' earnings under the present arrangements. That does not imply a guarantee of earnings at the present level. As my noble friend will be aware, pilots' earnings are not at present guaranteed in any case.
The noble Lord, Lord Shackleton, referred to what my right honourable friend the Paymaster General had said, or was reported as having said, on the wireless this morning.
Lord Shackleton: He said it in his own words.
Lord Brabazon of Tara: Very well, in his own words—I did not hear him myself—namely, that pay in future should be linked to the profits of undertakings, and I quite agree with him. Pilots' earnings at present, as my noble friend Lord Strathcona and Mount Royal will well know, are set at the beginning of the year to take account of what they think the traffic will be into and out of a port in that year. If the traffic in the year falls, perhaps even to nothing, the pilots will not earn anything at all. Therefore, it is a complete myth to say that pilots' earnings at present are guaranteed.
Turning to the noble Lord, Lord Underhill, I have talked about the consultations that have taken place. He asked whether the associated British ports were involved in these discussions. I said earlier that they were. As things stand at present, I think that they will be bound by the decisons made by the Brtitish Ports Association, but I should like to check up, see what the position is and come back to the noble Lord.
The noble Viscount, Lord Simon, asked what would happen before authorisation. That, I think, is covered in Schedule 1.
We are, of course, speaking to the amendment of my noble friend Lord Strathcona and Mount Royal. I have already said—and I think that my noble friend accepted it—that we would not be able to accept it.
Lord Strathcona and Mount Royal: My Lords, the noble Lord, Lord Shackleton, is quite right. This was a hastily conceived amendment and we did not think that it was a serious legal proposal. I freely acknowledge that I have called down upon my head the predictable criticisms of the noble, learned and formidable Lords on the Cross-Benches, if I may so call them. It may be that the proper course is to have a look at something on similar lines, taking out such words as "undertakings given".
I suggest to the Minister that he has slightly confused our discussions by launching into a general debate on Amendment No. 36, with which we have not dealt yet. I had better get out of the way Amendment No. 37 by agreeing, with the leave of the House, to withdraw it subject to the possibility that, given that we are not going to see any guidelines before the Bill leaves the

821
House, we may have to try to insert some kind of rider there. After that, perhaps we can return to the general discussions on Amendments No. 36. That will give us a chance to deal with these matters at the appropriate time. I beg leave to withdraw the amendment.
Amendment to Amendment No. 36, by leave, withdrawn.
Lord Shackleton: My Lords, I take it that Amendment No. 36 is now debatable. I must say to the Minister that, if ever anyone made a case for recommitment, he did by his refusal to let me explain further the purpose of the amendment. It showed a degree of discourtesy that I have never before encountered on Report. I went out of my way to say that we appreciated the efforts that he has made. I still think that it may be necessary—I do not wish to prolong the debate—to give the matter further consideration, and this will be difficult on an amendment at Third Reading. I do not ask him to do anything more. On Report we are always in difficulty. On the whole I think that noble Lords have shown great restraint in not trying to take advantage and speak more than once. I think it is a pity that the noble Lord refused to let me intervene.
Lord Simon of Glaisdale: My Lords, as we are now debating Amendment No. 36, I ask the noble Lord to consider three points.
The first is that raised by the noble Viscount, Lord Simon, as to Amendment No. 109, which deals with the situation before the Act comes into force. There will therefore be only licensed pilots and not authorised pilots. As the noble Viscount pointed out, in the second line of the new clause there is a reference to "authorised pilot". A few lines lower there is a reference to,
"the majority of the authorised pilots for its harbour".
The noble Lord thought that that trouble was taken care of by the amendment to the schedule so far as the situation before the Act was concerned. If I may say so, I am not convinced that it is. I ask him at least to be good enough to look at it again.
The second point arises on subsection (1)(d), where evidently there may be a dispute as to an existing contract between an authorised pilot and the CHA. Will the noble Lord say in what circumstances an existing contract may be reviewed, and what sort of existing contract? The point is even stronger if the existing contract has been entered into before the appointed day.
The other point that I should like to make is that paragraph (a) again deals with a contract of employment. There is yet another indication of the bias of the Bill against the self-employed pilot. Finally, about eight lines down in subsection (1) there is a phrase to which I have already referred,
"the majority of the authorised pilots for its harbour".
If one could use that phrase in the much disputed and disliked part of the new clause which your Lordships have written in, Amendment No. 30, probably a good deal could be simplified by that.
I realise that there will be difficulty in so far as the draftsman has obviously wanted to bring in the existing pilots. I wonder whether that is strictly
822
necessary and whether one could get by all that complication and cumbrousness by referring as here to,
"the majority of the authorised pilots for its harbour".
I do not suggest that the noble Lord should reply to those points at this time, but I should be very grateful if he would say that he will consider them before the next stage.
9 p.m.
Lord Underhill: My Lords, I passed my general remarks on the amendment, because I thought we were dealing with the whole grouping. But may I make two additional remarks before the Minister replies? First, I am certain that if we had had this new clause at the Committee stage, there would have been very detailed consideration given to every single subsection. Most noble Lords who were interested in the Committee stage will recognise that this question of arbitration, of appeals and of machinery for representation is one of the keystones to the whole of the Pilotage Bill. That is why it is so essential that we should get it right.
Despite what the Minister has replied to my noble friend Lord Shackleton, perhaps he will consult with his colleagues on whether or not this clause might deserve recommital, because if this is not right the comfort within the new regime will not be satisfactory. It is vital that we should get the whole of this right.
I raised the question of the period of three years when I spoke earlier, and this is the one point to which the Minister did not reply. Obviously he had a lot of points to deal with. The decision as to the expiry date, which can be beyond three years, is left to the Secretary of State. It is made clear, as I believe the noble Lord said at the outset, that,
"no such order shall affect the terms of any contract continuing in force at that date."
What will be position of any new contracts that may be made after that date? There is no provision for negotiating machinery except at the local level. There is no machinery for arbitration. I am certain that the pilots will be anxious to know. The side note reads:
"Temporary procedure for resolving disputes as to terms of employment".
While they will be vitally concerned with the temporary procedure while the new regime is finding its footing, they will be equally concerned with the permanent procedure for dealing with disputes.
Lord Kennet: My Lords, I have probably said this before and I ask the House's pardon, but I am going to say it now. I think it is not within the normal customs of this House that any Member of the House, whether a Minister or not, should refuse to give way to a former Leader of the House. I regret that it happened and I think many Members of the House also regret it.
Viscount Long: My Lords, I am most grateful for what the noble Lord said; but we go by the standards of this House and the noble Lord, Lord Shackleton, with great respect, apologised. He knew what Report stage meant and there was only one question at that moment. He virtually said it himself—
Lord Shackleton: My Lords, did I apologise? For what?
Lord Strathcona and Mount Royal: My Lords, I have not yet spoken to Amendment No. 36 and I hope the House will not think that I am trespassing upon its time or generosity, nor will the Minister think I am trying to take advantage of his very valuable offer of this arbitration clause, but I want to put something to him. He will recall that at Report stage we discussed what was then Amendment No. 110, which will be Amendment No. 97 if we ever reach it, whereby I was concerned that there was no system for consultation or appeal against regulations produced by competent harbour authorities. I suggested that the Pilotage Commission during the transitional period would be a suitable body to tackle that problem.
I just wonder whether the Minister would be prepared to consider the possibility of extending the first few sentences of this clause to include disputes which might arise between the competent harbour authorities and other interested bodies, because having set up the arbitration panel here is a possible way of getting it to do something else, which I believe we should make some provision to do.
Lord Mottistone: My Lords, I should like to make two quick points. One is that we often have this pressure for recommitment, when somebody has produced a new clause as a result of pressure at an earlier stage, and I do not think it is deserved in this case. My other point is on what the noble Lord, Lord Strathcona, has just said. I have down Amendment No. 46 which is about disputes procedure and I am not sure that I would not welcome his thought when I come to that. For once I have agreed with him, but I do not expect that I shall do so again.
Lord Brabazon of Tara: My Lords, may I first apologise to the noble Lord, Lord Shackleton, if he thought I was being particularly hasty or rude to him—
Lord Shackleton: Thank you.
Lord Brabazon of Tara: My Lords, he knows the procedures of the House at Report stage and he has, in fact, had the opportunity, now that we are back to discussing the new clause, to make his point, so that at least is something.
The noble and learned Lord, Lord Simon of Glaisdale, asked me a number of detailed questions which I should like to look into, particularly the first about the appointed day and the one about existing contracts. I would emphasise that this new clause only covers contracts of employment and not other arrangements which might be made. He also asked me to look at the wording regarding the majority of authorised pilots in subsection (1) and I certainly undertake to do that.
The noble Lord, Lord Underhill, asked me what would happen after three years or if those three years were extended. I am bound to say that I spoke about that during my opening remarks on the new clause. I made the point that after a certain amount of time pilots and ports should settle terms and conditions
824
between them in the normal way of any other workforce.
My noble friend Lord Strathcona wanted to widen the arbitration process to cover points which I suspect we shall come to when we reach Clause 5. I must say that I am not attracted to that idea. I suspect that he is talking about the area of compulsory pilotage and that sort of thing. I am not certain that my noble friend Lord Mottistone will agree when he hears what he has to say about that.
In general terms I am grateful to noble Lords for having accepted this amendment. I assure the House that we have done our best to produce it in consultation with those involved and as a commitment that I made at the Committee stage. If it is not quite perfect, we shall do our best to put it right.
On Question, amendment agreed to.
Clause 4 [Pilot boats]:
Lord Swinfen Lord Swinfen moved Amendment No. 38:
Page 5, line 34, after ("Ships") insert ("shall not be").
The noble Lord said: My Lords, in moving Amendment No. 38, I shall also speak to Amendment No. 39. I make no apologies for bringing forward the same two amendments as I brought forward at the Committee stage of the Bill. In doing so I thank my noble friend the Minister for sending me a copy of the draft M notice, the merchant shipping regulation on the manning of pilot boats. That appears to be satisfactory.
The pilot boat is in many respects the most important piece of equipment that we are talking about in this Bill. It is the one piece of equipment that means that the pilot service is able to operate at all. It is the piece of equipment that makes certain that pilots themselves continue to be available in sufficient numbers to operate an efficient service. With inefficient pilot boats, we should soon lose our pilots and we should have no one with any experience or training left.
There are times when pilots need to be put on board ships in howling gales during which anyone with any sense would bolt the front door and sit beside the fire. Pilots do not go out because they wish to go out in such weather. They go because some ship, coming from another part of the world, is out there and needs to get to safety. I realise that there are times when a ship should run for open water in bad weather. However, that is not always possible, and if there is a difficult estuary, no matter where, the ship may well need a pilot to get in. Without a pilot boat, it will not have a pilot. Some weather is too bad for even helicopters to fly.
At Committee stage my noble friend said that he would be bringing forward proposals to cover the survey of pilot boats as soon as possible. I suspect that these will be in the form of notices like the M notice. However, it is important that the proposals should be strengthened by the inclusion of these amendments in the Bill. The competent harbour authorities are going to be in competition with one another. They are commercial undertakings. In the past we have seen how our harbours have run down; they have been in

825
severe financial difficulties, sometimes because of dock strikes and sometimes for other reasons.
A harbour authority in financial difficulties will be looking for ways of reducing its costs. One of the easiest ways is to cut down on maintenance, let something go another month before being replaced and make do with second quality materials. The temptation is there. The vast majority of individuals and harbour authorities will not be tempted; but lives are at stake, not just the lives of the pilots but possibly the lives of the crew on the ship to which they are trying to get. The ship gets into difficulty and the lifeboats have to go out and risk the lives of their crews.
It is important that an amendment of this kind, whether this one or another one that my noble friend brings forward at the next stage if he is prepared to do so, goes into the Bill to strengthen it on this point. I beg to move.
Lord Greenway: My Lords, I agree with the noble Lord, Lord Swinfen, about the great importance to pilots of good pilot boats. At earlier stages of the Bill I supported the provision of some means of keeping pilot boats up to a required standard. It is probably fair to say that at the moment the pilot boats in this country are of a very high standard compared with those of other countries. However, I have a certain reservation about the general survey of pilot boats, because surveying a pilot boat is rather an expensive business. It might be beyond the means of some of the smaller ports to go through this process. I wonder whether the Minister will be able to comment on that point when he comes to reply.
At the Committee stage the Minister gave an assurance that he would bring forward as soon as possible some means of covering the suggestions that we put forward. Perhaps he will be able to give us a little more information on this.
9.15 p.m.
Lord Brabazon of Tara: My Lords, my noble friend Lord Swinfen, the noble Lord, Lord Greenway, and other noble Lords are quite right to be concerned about the state of pilot boats. By saying that I do not mean to imply that the present state of pilot boats is bad; I am talking about future standards. I can only reaffirm what I said during the debate on these amendments in Committee. The safety and manning of pilot boats are important issues. As my noble friend Lord Swinfen is aware, the department has circulated to interested parties a draft merchant shipping notice which provides that the manning of each pilot boat will be determined by my department's district surveyors after consulting the pilotage authority concerned. In future of course the CHAs will be consulted, following the transfer of pilotage responsibilities to them.
As regards the suggestion that the Secretary of State should approve and license pilot boats, I still think it is important that CHAs should have this responsibility regardless of whatever else is done in the way of regulations. The powers to make regulations on the standards of pilot boats are already contained in legislation in Section 21 of the Merchant Shipping Act 1979 and it is therefore not necessary to include such powers in pilotage legislation.
826
What has made progress difficult in this matter is not any lack of statutory powers but rather the difficulty of making sensible proposals that relate to a fluid situation. My department is nonetheless still considering the terms of regulations on the survey of pilot boats. In Committee I undertook to bring forward proposals on this matter as soon as possible and definitely before the implementation of the Bill.
The noble Lord, Lord Greenway, asked me about the expense of surveying pilot boats. Of course expense is involved—I am not quite sure exactly what it is at the moment—but I think that competent harbour authorities in the future, being commercial organisations, will probably be in a better position to pay those expenses than the present pilotage authorities.
I am aware of the concern about the pilot boat issue and I have undertaken to take things forward on both the manning and the survey aspects. Therefore, I do not consider that this amendment is necessary. I hope that my noble friend will take my word for it that we intend to move ahead on the lines I have suggested and feel able to withdraw the amendment.
Lord Strathcona and Mount Royal: My Lords, perhaps I may ask the Minister two questions. Did I understand him to say that he hopes to bring forward regulations before the Bill leaves this House or before it goes to another place? That is my first question. My second point is possibly not in the form of a question. The noble Lord, Lord Swinfen, said that the people who are vitally interested in the state of these boats are the chaps who have to ride in them; I refer to the pilots. I acknowledge what the noble Lord, Lord Greenway, has said. Formal surveys can be very expensive. At the Committee stage I said that I was not enamoured of the idea of introducing the rather elaborate, and to me rather rigid, Board of Trade type of regulations in respect of pilot boats. But could we not have some arrangement whereby the pilots will have the right of consultation, and indeed our old friend the arbitration procedure, if they are not satisfied with the boat that is being provided by their CHA? The difficulty is that they go to the CHA and say, "Look, it's a ropey old boat that you are giving us"; and the CHA turns round and says, "If you don't like the pilot boat you had better go and work somewhere else". That is not a very satisfactory situation at all. What is needed is some way in which the pilots can express the view that the boat which is being provided is not satisfactory for the purpose.
Lord Brabazon of Tara: My Lords, with the leave of the House I shall answer those two points. What I said about the timing of this matter was that we should bring forward the regulations before the implementation of the Bill.
My noble friend makes a point about consultation and he is worried that pilots may be asked to go out in a ropey old boat. However, when we bring forward these regulations they will of course be binding on the harbour authority. If the pilot does not like the boat, presumably he will be able to go to the marine surveyors and say that he thinks there is something wrong with it and they will have to look into the matter, although, the boat having been certified, I hope they will not find anything wrong with it.
Lord Swinfen: My Lords, I thank my noble friend for what he has said. I think that everyone who has taken an interest in this Bill will be interested to see a draft of the regulations before the Bill leaves this House. I shall be grateful if my noble friend can produce it for us. He gave me to understand, though I may not have understood him correctly, that the regulations were being produced under Section 21 of the Merchant Shipping Act 1981.
Lord Brabazon of Tara: No, my Lords; 1979.
Lord Swinfen: I gained the impression, my Lords, that there was some difficulty in drafting regulations that were suitable for all the different harbours and the different areas in which the pilot boats would be operating. One of the points about my Amendment No. 39 is that Section 4 allows for different regulations for boats operated from different harbours. If that particular aspect is a problem in drafting the regulations, will my noble friend consider bringing forward an amendment to this Bill that would amend the relevant Act so that different regulations can apply to different pilot boats in different areas? Quite obviously a boat that may suit the noble Lord, Lord Kirkhill, out of Aberdeen may not be suitable out of Southampton; they have different conditions. I should be interested to hear what my noble friend has to say. I wonder whether he will consider that point and give me an assurance on it.
Lord Brabazon of Tara: My Lords, with the leave of the House, I do not think that it is necessary to have an amendment to the Merchant Shipping Act to allow us to make different regulations for different areas. I am pretty sure that that is correct, but if I am wrong I shall write to my noble friend.
Lord Swinfen: My Lords, having received that information, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 39 not moved.]
Clause 5 [Pilotage directions]:
Lord Underhill Lord Underhill moved Amendment No. 40:
Page 6, line 12, at end insert—
("(2A) A competent harbour authority shall have jurisdiction for the purposes of pilotage over the area which immediately before the appointed day was a pilotage district which included the area of that authority.
(2B) A pilotage direction shall not specify an area other than an area which immediately before the appointed day was a pilotage district unless a harbour revision order has been made under section 14 of the Harbours Act 1964 or, in Northern Ireland, a harbour order has been made under section 1 of the Harbours Act (Northern Ireland) 1970, to alter the limit of the area in respect of which the direction is to apply.
(2C) Schedule (Altered Areas) shall have effect in relation to harbour revision orders under subsection (2B) above.").
The noble Lord said: My Lords, Clause 5 deals with the question of compulsory pilotage. It may be helpful to the House if, in moving Amendment No. 40, I speak also to Amendments Nos. 44, 108, 112 and 113. The important relevant amendments are Amendments Nos. 40 and 108, the other three amendments being consequential.
In Amendment No. 40 there are three specific proposals dealing with pilotage outside port limits, a harbour revision order and altered areas. These proposals will ensure that the safety of navigation is not on the appointed day prejudiced in those areas currently subject to compulsory pilotage but outside the port limits which it is proposed under the Bill should become the new outer limits. The amendment stipulates that reductions of such limits should be made by means of harbour revision orders.
Amendment No. 108, which is to be inserted before Schedule 1 and become a new schedule, is consequential upon that particular amendment on the safety of navigation outside port limits. It is designed to protect the public interest in the safety of navigation and the consequencs arising from any such changes. It will ensure that initially pilotage areas remain as presently defined. Before they can be changed the Secretary of State will have to consult bodies or organisations representative of the public interest. It is of the utmost importance that the public should be able to voice its opinion about any changes to compulsory pilotage areas. I beg to move.
Lord Greenway: My Lords, I supported the principles behind the amendment in Committee and I should like to do so again. We have the problem of the Thames Estuary, about which we have talked on several occasions during our proceedings. Under the Bill it is intended that the present pilotage limits should be drawn into the harbour limits, leaving a large area of what is often rather treacherous sea completely open and without any pilotage. The noble Lord, Lord Underhill, has a point with these amendments. I should like to reiterate my support.
Lord Swinfen: My Lords, I should also like to support the spirit behind the amendment on the environmental grounds that I mentioned in Committee. The noble Lord, Lord Greenway, mentioned the London pilotage district. The Goodwin Sands, the most notorious banks, which have claimed more ships than anything else in this part of the world, will no longer be under pilotage. It is essential not only from the environmental point of view but for the safety of shipping that such an amendment be accepted.
Lord Mottistone: My Lords, as I understand it, the amendments would extend the power of the CHA to impose compulsory pilotage. They would give a CHA power to do so by a pilotage direction both within and outside its area of jurisdiction. There would be no right of appeal. That is unacceptable. I hope that my noble friend will be able to turn down the proposal.
Lord Brabazon of Tara: My Lords, we have been over this ground before in Committee. As I understand the intention behind the amendments, it is that a CHA would need to obtain a harbour revision order to reduce the present area of compulsory pilotage or to extend it beyond the limits of the former pilotage district. I am not sure that the amendments achieve that objective. I drew noble Lords' attention, when the same amendments were discussed in Committee, to an

829
apparent inconsistency in the circumstances in which a harbour revision order would be required after the appointed day and those in which a harbour revision order would be required by the shortened procedure before the appointed day. I doubt whether the noble Lord, Lord Underhill, intended that.
Be that as it may, we are talking about compulsory pilotage. I am sure that we should be wrong to take the present limits, whether of the pilot districts or of areas of compulsory pilotage, as a starting point for the CHAs. The existing pilotage districts were established decades ago when modern navigational aids were not available and when patterns of trade and shipping movements were different from what they are today. Similarly, areas of compulsory pilotage were generally laid down long ago in different circumstances. I do not believe that it is realistic to start from the assumption that existing pilotage districts or existing areas of compulsory pilotage make sense in today's world.
My noble friend Lord Swinfen mentioned the Goodwin Sands within the London pilotage district. They fall within part of the London pilotage district, which the London pilots accept does not need to be subject to compulsory pilotage any more. I also point out that compulsory pilotage is applicable only when a ship is entering or leaving a port within that district. Any ship passing up the Channel past the Goodwin Sands does not have to take a pilot. That point is stretching matters a little.
I accept, and the Bill makes clear, that CHAs should look very carefully, from the point of view of safety, at present compulsory pilotage areas even though in some areas they are drawn very wide. They must also look at them critically. I am sure that they will act responsibly in doing this as they do in the other cases of statutory responsibilities for the safety of shipping which they already exercise. I see no reason why they should need to seek harbour revision orders to reduce areas of compulsory pilotage from the limits which were set so long ago and in such different circumstances. If that is indeed the intention of the amendments I must ask noble Lords to reject them.
9.30 p.m.
Lord Underhill: My Lords, I have no intention of asking the House to vote on these amendments. As the noble Lord has said, they were discussed at the Committee stage. However, we felt that they were so important that they should be brought before the full House at Report stage.
The Minister says that it is questionable whether they meet the desired objective. The desired objective is to ensure that there are no changes in the areas of compulsory pilotage unless all factors are taken into consideration. I shall look carefully at what the Minister said because there is one further stage and there are subsequent amendments which may have some effect on this position. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Greenway Lord Greenway moved Amendment No. 41:
Page 6, line 13, after ("apply") insert ("to pleasure craft of less than fifty tons gross tonnage or").
The noble Lord said: My Lords, in the past pleasure craft have always had the benefit of an exemption from compulsory pilotage by virtue of the specific exemption of pleasure yachts contained in Section 11(3)(b) of the Pilotage Act 1913 and, following the repeal of that provision, by Section 8 of the Merchant Shipping Act 1979 by virtue of the general exemption for ships of less than 50 gross tonnes.
No such exemption is contained in Clause 5 of the current Bill, with the result that pleasure craft generally could be the subject of pilotage directions requiring compulsory pilotage. Not unnaturally the Royal Yachting Association is somewhat concerned about that. I acknowledge that most competent harbour authorities would not contemplate compulsory pilotage for any pleasure craft. Nevertheless the risk that some might is, I submit, a real one. There will be a great many competent harbour authorities, some of which are very small concerns, who will not necessarily see the sense in pleasure craft continuing to be exempt. For example, they may well be influenced by a need to spread costs, and in the absence of any objection procedure regarding the making of pilotage directions the Bill contains no restraint on an overzealous approach. It would in theory be possible, for example, for pilotage directions to be made for the simple purpose of trying to exclude pleasure craft from particular areas of the harbour such as a fairway. A requirement of compulsory pilotage in such areas would no doubt be quite effective for such a purpose.
The principle of exemption is not without precedent in the Bill as drafted. Already an exemption exists from the compulsory pilotage in Clause 5(3) for fishing vessels under 47.5 metres. I realise that the drafting of a new exemption for pleasure craft is to some extent complicated by differing views concerning the best method of applying a limit whether it be by length or by tonnage. I have therefore chosen 50 gross tonnes more as a discussion point. It would be open to amendment if necessary.
The Minister is himself a yachtsman and I trust that he will look favourably on this amendment.
Lord Mottistone: My Lords, I should like very strongly to support the amendment.
Lord Shackleton: There will be no need to recommit on this amendment! I thank the noble Lord for his apology.
Lord Brabazon of Tara: My Lords, I am grateful to the noble Lord, Lord Shackleton, and I reaffirm my apology to him. However, I am bound to say that I do not propose to accept this amendment and I therefore hope that the question of recommitment will not arise. I am a yachtsman, but I doubt whether there would be room for a pilot on board my boat in addition to my crew.
It is our view that harbour authorities, given their responsibilities for safety of navigation in their areas, should have the power to impose compulsory pilotage on such types, classes and size of vessels as they believe necessary in the interests of safety. I am therefore

831
reluctant to accept this amendment, which would assume that there are no circumstances in which it would be reasonable for pleasure craft below a certain size to take a pilot. It is very unlikely that many harbour authorities will in practice decide to bring any pleasure craft (except possibly the very largest) under compulsory pilotage. However, the central principle of the Bill—and I think that my noble friend Lord Mottistone to some extent forgets himself in his support for the amendment—is that the decisions should be for the local harbour authorities to make, taking account of all the local circumstances. I am not certain that the noble Lord, Lord Greenway, will be happy with that reply.
Lord Greenway: My Lords, I am certainly a little disappointed. The Royal Yachting Association will read what the Minister has said in reply to the amendment and will make up its mind as to how it wishes to proceed further. I should like to voice my thanks to the noble Lord, Lord Mottistone, who is commodore of your Lordships' yacht club.
I believe that there is a difficulty here. Speaking from the point of view of the pilots themselves, they do not want to have to go out and pilot yachts. They have better things to do. As the Minister said, maybe the harbour authorities can make up their minds about this matter. However, I think that something that has been incorporated in the legislation for a great many years should perhaps be looked upon a little more favourably. Nevertheless, I do not intend to press the matter in any way. I am grateful to the Minister for his reply and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Underhill Lord Underhill moved Amendment No. 42:
Page 6, line 20, at end insert—
("and
(c) any other person appearing to it to have a substantial interest").
The noble Lord said: My Lords, we are still dealing with the question of compulsory pilotage under Clause 5. As well as dealing with Amendment No. 42, I should like to speak to the consequential amendment, Amendment No. 43. Clause 5(4) states:
"Before giving a pilotage direction a competent harbour authority shall consult—

(a) the owners of vessels which customarily navigate in the area to which the proposed direction would apply; and

(b) any other persons who carry on harbour operations within the harbour of the authority;

or, in either case, such persons as it considers to be representative of them".
In other words, owners of vessels and persons who may carry on other harbour activities within the harbour will be consulted but no public interests.
I believe that I used the words "public interest" in Committee. During the discussion reference was made to the possibility of local councils being bodies which should be consulted. I think that in Committee we were asked what interests local councils have in this matter. We are dealing with vessels which might be carrying hazardous cargoes and there may be other problems of that kind. Instead of using the words
832
"public interest", Amendment No. 42 says that, in addition to the two groups of persons or bodies who shall be consulted, we should add a third group under a new paragraph (c):
"any other person appearing to it to have a substantial interest".
By that we mean any other person appearing to a competent harbour authority to have a substantial interest. This seems to be a matter for the public good. I can see no reason why the Government should not accept the amendment because at the end of the day it will be the competent harbour authority which has to decide which other persons who have a substantial interest should be consulted.
Lord Brabazon of Tara: My Lords, the noble Lord, Lord Underhill, has explained his amendments. They are, as he said, similar to amendments that were put down at Committee stage. Pilotage is one aspect of the controls which need to be exercised in harbours and their approaches to ensure the safe movement of shipping. The Bill recognises this by placing pilotage under the same authorities as these other controls. As I pointed out in Committee, when making directions about the movement of shipping in their ports, most port authorities are not under any formal obligation to consult anyone other than shipowners, who are the people who may be financially affected by such decisions and whose ships are directly at risk if the harbour authority makes the wrong decision.
Pilotage does not raise any issues of safety or otherwise which would justify a statutory obligation to consult more widely than is required in the case of directions about the movement of shipping. That is not to say that authorities may not consult more widely when they think it necessary; and they will have the benefit and expertise of the local pilots, although, as I said in Committee, I do not believe that a statutory obligation to consult them would be at all appropriate since they will be the CHA's employees or in a contractual relationship of some other kind to provide their services to the CHA. For these reasons I must urge your Lordships to reject the amendments.
Lord Underhill: My Lords, I am disappointed with the Minister's reply. I make it quite clear that this amendment has not been prompted by any particular interests, except those of the pilots. It is the pilots who are urging that there should be consultation with other persons who appear to have a substantial interest. It is not any conservation group, or other group of that kind; it is not any group of local authorities. It is the pilots who believe that it is desirable in the general interest that this should be agreed to. But in the light of what the Minister said and at this late hour, I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
[Amendments Nos. 43 and 44 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 45:
Page 6, line 29, at end insert—
("(6) Notice of a pilotage direction given under this section, or of the amendment or revocation of any such pilotage direction, shall be published in such manner as the Secretary of State may by regulations direct.")
The noble Lord said: My Lords, the Pilotage Act 1983 requires at Section 15(4) that:
"Notice of any byelaw proposed to be submitted for confirmation under this section shall, before it is so submitted, be published in such manner as the Secretary of State directs".
There are similar requirements concerning the publication of general directions affecting navigation made by harbour authorities. As drafted, the Bill makes no provision for the publication of a pilotage direction. It is clearly important that information about compulsory pilotage should be brought to the attention of those affected, not the least because failure to comply with a pilotage direction may under Clause 13 lead to criminal proceedings against the master. It would be an improvement to Clause 5 if we added an amendment on the lines of that which I propose. I beg to move.
Viscount Simon: My Lords, I am delighted to be able to support an amendment of the noble Lord, Lord Mottistone. He is quite right.
Lord Underhill: My Lords, I should have supported this amendment if I could have been assured that the notice was to be given in a public manner and had the House agreed to my previous amendment so that when the notice was given in a public manner those bodies with a substantial interest could have done something about it. But it is a step in the right direction. I regret only that the other provisions which I have mentioned have not been taken up.
Lord Swinfen: My Lords, I should also like to support this amendment. Concerning the words of the the noble Lord, Lord Underhill, there is nothing to stop another body making representations.
Lord Brabazon of Tara: My Lords, I think for once we are all in agreement on an amendment, although I am not quite sure that our reasons for agreeing are exactly the same. I accept that masters of ships using a harbour should be made aware that a pilotage direction has been made by the local harbour authority, particularly in view of the offence provisions in the Bill for failing to comply with a pilotage direction.
However, I do not accept that it is necessary for the Secretary of State to make regulations setting out how such a notice is to be published. I would regard that—and perhaps other noble Lords, may think the same—as a little bureaucratic, and I believe that it would be best left to the discretion of the CHAs as to how best to make known the existence of a pilotage direction.
I cannot accept the amendment as drafted. However, I accept that CHAs should make known the existence of a pilotage direction, and I am prepared to bring forward a suitable amendment to cover this point at the next stage.
9.45 p.m.
Lord Underhill: My Lords, before the Minister sits down, could he say whether the statement made by the noble Lord, Lord Swinfen, is correct: that if a notice is
834
published in some form—about which the Minister is going to bring an amendment—any person, any body, would be eligible to make representations?
Lord Brabazon of Tara: My Lords, with the leave of the House, I do not think that that is the case. The only people who can make representations—I think I am right, and I shall check on this—are the shipowners, as detailed elsewhere in this clause. I shall look into that point.
Lord Underhill: My Lords, they are the ones to be consulted. The subsection refers to the bodies that he shall consult. It makes no reference to the bodies which may make representations.
Lord Mottistone: My Lords, I am indeed grateful to my noble friend for undertaking to bring something forward on these lines at the next stage, and I have pleasure in withdrawing this amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 46:
After Clause 5, insert the following new clause:
("Resolution of disputes concerning pilotage directions.
.—(1) Where any dispute arises between a competent harbour authority and those persons required to be consulted in accordance with section 5(4) above concerning the provisions of a pilotage direction any party to the dispute may appeal to the Sectetary of State.
(2) On an appeal under subsection (1) above the Secretary of State shall settle the dispute in such manner as he considers appropriate and may in particular direct that such provisions as are mentioned in that subsection shall not have effect or shall have effect subject to such modifications as he may specify.")
The noble Lord said: My Lords, at Committee stage we had an amendment on these lines seeking a right of appeal. It was unfortunately not properly taken because there was a muddle over the grouping. I suppose that I should not have agreed to it. The main points I want to make—and I do not want to go over the same ground again—are at cols. 15 and 16 of the Official Report relating to Amendment No. 48.
However, I should like to make three points. The ability to impose compulsory pilotage inevitably involves the imposition also of an additional cost on port users. I would remind your Lordships that this tends to be forgotten. One of the features of this Bill is to make things more economical for operating trade from these ports.
The cost of pilotage for a small ship which has probably been accepted in the past could amount to 30 per cent. of the entire voyage revenue. The Bill gives the competent harbour authorities a monopoly of pilotage services. It is unreasonable to create a monopoly power without at least giving those affected by it a right of appeal against its possible abuse. For example, when we had the monopoly of British Telecom the Government wisely set up the Director General of Telecommunications, in effect acting as a court of appeal against British Telecom because it is a

835
monopoly. It would not have been necessary if it was not a monopoly.
The Bill provides for a right of appeal in respect of pilotage charges, and in including such a right of appeal the Government have recognised that some control over the exercise of a competent harbour authority's responsibilities is needed. A similar control is needed over a CHA's power to impose compulsory pilotage, and that is all that this amendment seeks to achieve.
There is one point which I know will not satisfy my noble friend. He said at Committee stage that the Secretary of State cannot see himself as a court of appeal. I am afraid we have recast him as that, but we have done that because other Secretaries of State frequently are a court of appeal. For example, the Secretary of State for the Environment has an appeal position in relation to planning appeals. There are a whole host of others one could quote.
Therefore I hope that my noble friend will not press that point too hard. I fully accept that the way I have worded the amendment may be wrong. I come back to him—though he indicated he would not like it—by saying that perhaps this arbitration procedure, if it becomes a bit more solid than temporary (and I understand why he wants it to be temporary at this stage) may be a body—if the Secretary of State does not want to act as a court of appeal—that could take this on. Basically it is not fair or economical in the trading sense for shipowners to have to pay compulsory pilotage in all circumstances without some way of appealing against it, if that is necessary. I beg to move.
Lord Brabazon of Tara: My Lords, I fear that this time I can only reinforce the comments that I made during debate at Committee on a similar amendment which my noble friend put down. While I agree this amendment is more limited in that it restricts the right to appeal to those parties which the CHAs are required to consult under Clause 5(4), I am still not convinced that an appeal to the Secretary of State on decisions which depend on local circumstances is appropriate. The CHAs will have to consult port users before making a pilotage direction and that will give the opportunity for them to make representations. In the nature of things, a CHA will be bound to give careful consideration to the views of its customers. Otherwise it could be in danger of losing those customers. But I consider that to give my right honourable friend the Secretary of State a power to override the decisions of the CHAs in this area would represent a substantial derogation from the responsibility of the CHAs for decisions on pilotage needs in their harbours, which, as I can only reaffirm, it is the intention of this Bill to place fairly and squarely on their shoulders. Therefore I am afraid that I cannot be as friendly as I have been to my noble friend's previous amendments.
Lord Mottistone: My Lords, it is late and I shall not pursue this point. I see a germ of a way through for this. I can see in the long term what my noble friend is saying. There may be a stage when the new CHAs do
836
not act responsibly enough and they will have to learn by losing trade if they make a mistake. The temporary arbitration idea might be a solution. I might come back on Third Reading with something along those lines; but at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Pilotage exemption certificates]:
Lord Underhill Lord Underhill moved Amendment No. 47:
Page 6, line 31, leave out ("shall") and insert ("may").
The noble Lord said: My Lords, in considering Amendment No. 47, it will be helpful if I speak also to Amendments Nos. 48, 51 and 52. It will be noted that Amendment No. 47 has a wide measure of support. We are dealing now with Clause 6 covering pilotage exemption certificates. Paraphrasing subsection (1) it states that the CHA shall on application grant a pilotage exemption certificate to a master or first mate. We believe that the word "shall" should be substituted by "may".
On Amendment No. 48, as the clause is written, the CHA will not be able to refuse the issue of a pilotage exemption certificate, for whatever reason, provided it is satisfied as to an applicant's skill, experience and local knowledge. We believe that having regard to the sometimes suspect insular régimes on ships it is essential to be able to have special regard to vessels containing noxious cargoes and the effects of large vessels navigating in restricted channels. The acceptance by the Minister, when he brought forward an amendment to Clause 2 dealing with cargoes conveying dangerous and noxious substances, makes it all the more important that we should give consideration to the question of granting exemption certificates.
Amendment No. 51 suggests that the criteria for examination should be the same for authorised pilots as for those to be granted pilotage exemption certificates. If my memory serves me correctly, this matter was raised at Committee stage and we could not see why the Minister did not accept that there should be no difference whatever in the criteria for granting a certificate to the master or the first mate to those granted to authorised pilots. Amendment No. 52 states that a holder of a pilotage exemption certificate may be in the position of not being experienced in the handling of large vessels of different characteristics and which will have lower margins of safety, and therefore should not be automatically entitled to a certificate for them. Therefore, we are saying that any certificate granted to a master or mate should be for the same class of vessel, not necessarily for any class of vessel.
Lord Mottistone: My Lords, these four amendments all water down the provisions of this clause. As drafted, the competent harbour authorities shall grant a pilotage certificate to masters and first mates who can satisfy the competent harbour authority of their

837
ability to navigate their own vessel without having to take a pilot. All these amendments will weaken the requirement to issue certificates and put unnecessary obstacles in the way of candidates.
I could produce arguments against each and every one of them but I am not going to waste your Lordships' time doing that. It is a fundamentally faulty, narrowing, restrictive set of amendments which I hope your Lordships will reject.
Lord Simon of Glaisdale: My Lords, with regard to Amendment No. 48, the noble Lord, Lord Underhill, made it plain that what he had in mind was dangerous cargoes. When your Lordships were discussing this matter in Committee, there was general agreement that dangerous cargoes should be specifically dealt with. I ventured to express doubts as to whether it was necessary to amend both Clause 6 and Clause 2. The noble Lord the Minister brought forward Amendment No. 3 to Clause 2 in order to meet the points that had been made. I therefore wonder whether, in view of Amendment No. 3 which is now part of the Bill, we need Amendment No. 48 at all.
Lord Swinfen: My Lords, my name is to Amendment No. 47 basically because it ties in with my Amendment No. 53. I shall not in fact be moving that as I shall be accepting my noble friend's Amendment No. 49 and Amendment No. 50, or agreeing with him on them.
However, I wonder whether Amendment No. 48 does not tie in with my noble friend's Amendment No. 3 to Clause 3 which deals with the question of pilots, not masters of vessels, who have exemption certificates. I do not think that the two are the same. I feel that we should be particularly careful of vessels where the master has an exemption certificate, who do not normally carry dangerous cargoes but may do on one or two odd occasions. This point may cover that. It is a safety point, and I think that Amendment No. 48 certainly has some value.
Lord Greenway: My Lords, I supported the feeling behind these amendments at Committee stage. On what has been said now, my noble and learned friend may well be right in that the Government's commitment to writing in dangerous cargoes to Clause 2 of the Bill may well have implications here. The noble Lord, Lord Mottistone, said that he felt that the situation was adequately covered in the Bill as drafted; but I think that Lord Underhill's Amendment No. 52 has some bearing. It is important that if a master or mate is granted an exemption certificate for a certain class of ship—say, for instance, an ordinary cargo ship—and then that master happens to be transferred to a high-sided car carrier, which suffers from the problem called windage (a major consideration in pilotage today) he should not necessarily retain that exemption certificate. I believe there is some merit in that amendment.
10 p.m.
Lord Brabazon of Tara: My Lords, Clause 6(1) requires those CHAs which adopt régimes of compulsory pilotage to issue pilotage exemption certificates to any person who can meet the required standards. I said during the debate in Committee that the only grounds on which we think a CHA should be entitled to refuse to issue a certificate are those relating to an individual's competence, experience and local knowledge. I reaffirm that this evening.
As to allowing CHAs to have discretion in issuing certificates to vessels carrying dangerous cargoes, I do not agree that a CHA should be allowed to restrict the issue of certificates for such vessels since the cargo has little bearing on the competence of the master to navigate his vessel.
However, I said during Committee that I accepted that there might be cases where the combination of hazardous cargoes, bad weather conditions and difficult navigational circumstances was such that a CHA might believe that no certificates could safely be issued. Clause 6(3) allows the Secretary of State to exempt such CHAs from the normal obligation to issue such certificates. But such cases will be exceptional and I am sure that the general rule must be that certificates are to be issued. To allow them to be withheld on any grounds other than the competence of the master or mate involved means that unnecessary costs have to be borne by shipping, as my noble friend Lord Mottistone reminded us.
As your Lordships are aware, a Government amendment which was accepted earlier today means that CHAs will now have a duty, when considering under Clause 2 what pilotage services need to be provided in the harbour and approaches and whether pilotage should be compulsory in those areas, to have particular regard to the hazards involved in the carriage by ship of dangerous goods or harmful substances. I think all your Lordships are agreed that that was a good amendment.
Having decided that pilotage should be compulsory, a CHA is required under Clause 5 to issue a pilotage direction specifying the ships, areas and circumstances to which compulsory pilotage will apply. The CHA may apply a direction to all ships or to all ships of a certain description, and this will allow a CHA to take into account considerations such as whether a vessel is carrying passengers or hazardous cargoes.
Having decided which vessels are to be subject to compulsory pilotage, the next step required under Clause 13 is that such ships shall be under the pilotage of an authorised pilot or under the pilotage of a master or first mate possessing a pilotage exemption certificate. Both authorised pilots and pilot exemption certificate-holders must have satisfied the CHA that they are competent to pilot vessels within its harbour, and I believe it would be wrong to allow a CHA further discretion to restrict the issue of certificates for certain vessels for reasons unconnected with the applicant's skill and experience.

839
An important point is that the fact that a vessel is carrying hazardous cargo makes a master with a pilotage exemption certificate no less capable of piloting his vessel in just the same way as it makes a pilot no less capable of piloting a vessel. My noble friend Lord Swinfen, I thought, carried his imagination to the limit when he said that perhaps somebody who had a pilotage exemption certificate would once in a while carry a dangerous cargo and he might have earned that pilotage exemption certificate by carrying passengers. I hope that even though my noble friend is concerned about dangerous cargoes, he would not wish to be any less concerned about the carriage of passengers.
The noble Lord, Lord Greenway, said that of course high-sided car carriers, for instance, are particularly likely to carry a lot of windage, but the Bill as drafted says that a pilotage exemption certificate must apply to the same sort of vessel. That was something which we introduced in Committee. I remain unconvinced that the qualifications for pilotage exemption certificates should invariably be the same as those for authorised pilots. On some matters qualifications to be required from pilots and masters will be the same, but there is no reason why this should always be so. Authorised pilots will be required to handle a variety of sizes and types of vessels even within a certain class. Every vessel has different handling characteristics.
The CHA will wish to satisfy itself that a candidate for authorisation has sufficient experience on a wide number of vessels. On the other hand, a pilotage exemption certificate relates only to a master's or first mate's ability to navigate his vessel within the CHA's area. It is therefore likely that the qualifications to be met by authorised pilots will be more stringent or more extensive. Under Clause 6(2), the CHA is only prevented from imposing more onerous requirements on certificate holders than those laid down for authorised pilots.
As to Amendment No. 52 to remove subsection (2)(a), this subsection would prevent a CHA imposing unreasonable requirements on certificate holders which had little to do with the difficulties and dangers of navigation in its area. I cannot see that there is any case at all for dispensing with this subsection. To open the possibility that requirements might be imposed which are not related to the difficulties and dangers of navigation seems quite unnecessary and could well lead to unnecessary costs having to be borne by shipping. Therefore, I must ask the noble Lord to take account of my answer. I hope that he will not feel the need to press the amendment.
Lord Underhill: My Lords, the Minister of course has had excellent advice from his Department, but some points still need to be made. First, there was general welcome for Amendment No. 3 to Clause 2, but that related to the provision of pilotage services, proposing that they should take account of hazardous cargoes. There was pressure in Committee. Here we
840
are dealing with the granting of exemption certificates. I should think that there would be a strong legal argument as to whether the question of exemption certificates and the issue of them come under the duty of the provision of pilotage services. We are introducing these amendments to be thoroughly satisfied with the position.
The noble Lord, Lord Mottistone, said that this weakens the position—weakens the position of whom?
Lord Mottistone: Of the competent masters of ships.
Lord Underhill: I asked that question because there was emphasis on costs in the answer of the Minister. From our standpoint, this strengthens the position of authorised pilots. It ensures that those granted exemption certificates—the master or chief mate—shall be in exactly the same position as authorised pilots. I am sorry that the Minister cannot agree. The noble Lord, Lord Swinfen, accepted that we are dealing here with exemption certificates and not services.
As to Amendment No. 51, I cannot possibly see why the criteria for examination and qualification should not be the same for those granted pilotage exemption certificates as for authorised pilots. I am advised by our own pilots that they too cannot understand this. That is the reason for the amendment.
The Minister has rejected all the amendments. At ten-past ten I do not think I can do other than beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 48 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 49:
Page 6, line 35, after ("impose") insert ("(a)").
The noble Lord said: My Lords, I beg to move Amendment No. 49, and at the same time I shall speak also to Amendment No. 50. I agreed at Committee stage to consider an amendment to make explicit provision about competence in English of candidates for pilotage exemption certificates. These amendments place a specific requirement on CHAs to satisfy themselves that a candidate for a pilotage exemption certificate had adequate knowledge of the English language. I beg to move.
Lord Swinfen: My Lords, perhaps I may say how much I welcome these two amendments.
Lord Greenway: My Lords, I also spoke on this matter and I am most grateful to the Minister for bringing forward this amendment.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 50:
Page 6, line 38, at end insert ("; and
(b) in any case where it appears to the authority to be necessary in the interests of safety, that his knowledge of English is sufficient for that purpose.").
On Question, amendment agreed to.
[Amendments Nos. 51 to 53 not moved.]
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 54:
Page 6, line 49, at end insert ("or may during such period as aforesaid, if he is satisfied as aforesaid, suspend the operation of any pilotage exemption certificate already granted in respect of the harbour or part of the harbour in question.").
The noble and learned Lord said: My Lords, this amendment raises a point that I mentioned at the Committee stage. Under subsection (3) the Secretary of State may, by reason of unusual hazards involved in shipping movement within a harbour, give directions that there shall be no issue of exemption certificates for such periods not exceeding three years as he may specify.
At the Committee stage, owing to the reference to unusual hazards and to the time limit, I read that as meaning fortuitous hazards and I gave as an example a wreck which had not yet been shifted, or a normally dredged channel which was for some reason awaiting a dredger which was not available, where the local pilot would know the situation but a visiting master or mate in possession of an exemption certificate would not know the local situation of the temporary hazard.
That construction was not contradicted at Committee stage, but recently the noble Lord the Minister has written to me saying that what is in mind in this subsection is a permanent hazard of navigation in some particular port, and I accept that. Nevertheless, it seems that there ought to be consideration, now that we are amending the pilotage law after a lapse of 70 years, whether there should be a suspension in the case of the type of hazard that I mentioned.
Therefore notwithstanding the noble Lord's letter, for which I am most grateful, I have put down for your Lordships' consideration Amendment No. 54 and Amendment No. 55, which is really just a means of carrying it out. I think everything will depend on whether the Minister has any evidence either way as to whether the sort of unusual hazard which I mentioned might lead to danger in navigation, so that any exemption certificate which had already been issued should be suspended, and whether the harbour authority should have a duty to notify the holder of the certificate of such suspension. It may also be that there will be exemption certificates in relation to some of the harbours to which the Minister referred in his letter. If so, some suspension procedure might be called for. I beg to move.
10.15 p.m.
Lord Brabazon of Tara: My Lords, I am grateful to the noble and learned Lord for having moved this
842
amendment and for his thanks to me for having written to him earlier on the subject. Clause 6(3) is intended to deal with the possibility that in a few places there may be a case arising from the general circumstances of the port for believing that no certificate should be issued. It is not envisaged that the clause will be used in response to short-term changes in the navigational circumstances, which we believe a master holding a pilotage exemption certificate should be as capable of coping with as an authorised pilot.
However, the amendments of the noble and learned Lord have pointed to a gap in the Bill as drafted. Where the Secretary of State does make the direction under Clause 6(3), what happens to any certificates which have already been issued? The point may not be of great practical significance as it is likely that in any port where a case for a direction under Clause 6(3) can be made, such as Sullom Voe, no pilotage exemption certificates have in fact been issued. However, the Bill does need to cover the point and I should like to take it away for further consideration.
Lord Simon of Glaisdale: My Lords, it only remains for me to thank the Minister for his words. I am entirely content that he should take the point away and consider it. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 55 not moved.]
Clause 8 [Pilotage charges]:
Lord Mottistone Lord Mottistone moved Amendment No. 56:
Page 7, line 47, after ("may") insert (", subject to section 27(6) below,").
The noble Lord said: My Lords, Amendment No. 56 is a paving amendment to Amendment No. 103; I shall speak to them both. Shipowners believe that the only cost that a certificate holder who undertakes his own pilotage should finance is the administrative cost associated with the issue, alteration or renewal of the certificate.
At Committee stage I put down Amendment No. 63, cols. 103 to 106 of the Official Report, Public Bill Committee, which sought the deletion of Clause 8(3) for that reason. It is all part of the business of trying to make shipping cost-effective and competitive. Your Lordships need constantly to remember that we are losing our merchant fleet at far too fast a rate because we cannot compete. Any penny we save is worth it. During the debate at Committee stage, my noble friend said, at col. 105 of the Official Report, Public Bill Committee,
"there is nothing in the Bill which forces a competent harbour authority to make these charges. It is an option open to it … it might need only to be transitional while the costs involved in implementing this legislation are taken forward. After that they could perhaps drop pilotage charges. But it is important, at this stage anyway, that they should be allowed to make charges for certificates.".
The point of Amendment No. 103 is to take up that very aspect and write it into the Bill. The amendment proposed specifies that the CHA could charge for the use of a certificate, but only so as to assist in meeting any cost arising from the reorganisation of pilotage effected in the pursuance of the Bill. Until the Bill is enacted and a new regime is in place, it is not possible to predict whether certificate holders have benefited from reorganisation. Some masters who have not been able to obtain certificates under the existing legislation may succeed in doing so under the new arrangements. They will have benefited and might therefore be expected to contribute to financing the change.
We have therefore proposed a compromise based entirely on what my noble friend had to say, and I hope that he will feel that he can go some way to accepting the amendment. I beg to move.
Lord Underhill: My Lords, I must oppose the amendments tabled by the noble Lord, Lord Mottistone, as I am advised that these amendments will restrict a CHA's ability to charge pilotage exemption certificate holders so as to recover costs incurred for the winding up of the present pilotage organisation. They will not be able to make charges in order to recover some of the costs of an ongoing pilotage operation from which the pilotage exemption certificate holders benefit. That is a very important point. We shall find that there will be discrimination against those ships using the services of a pilot and in that respect the proper management of a pilotage service will be inhibited. I have been advised on these matters and my advice seems to be completely contrary to the views, whether advised or otherwise, that the noble Lord, Lord Mottistone, expressed. I hope that the Minister will agree with my objection.
Lord Greenway: My Lords, I should like to support the noble Lord, Lord Underhill, on this point. It is quite proper that a charge should be made for exemption certificates to help the general administration costs of pilotage. After all, that is done on the Continent today and I see no reason why it should not be done here as well.
Lord Brabazon of Tara: My Lords, when we discussed this matter in Committee I mentioned the reasons why, in the short term, CHAs should have the option of requiring a contribution from certificate holders. Some mariners, particularly those operating in ports where there have previously been restrictions on the issue of certificates, will be among the most direct beneficiaries of pilotage reorganisation and can reasonably be required to pay towards the costs associated with that reorganisation. I am glad that my noble friend has recognised this in tabling his amendment. But, as I also explained in Committee, whatever the short-term position, I believe there is also a case for allowing a CHA the option of making such charges in the long term to help meet the costs of the pilotage service in the port.
844
There may be some ports where it is reasonable for ferry traffic to be charged in this way, so that those needing to take a pilot, whether occasional visitors or the ferry operators on occasion, do not find themselves facing a prohibitive charge. There is, as I said, the general benefit to safety which a pilotage service brings to a port and from which as regular users the certificate holders benefit considerably.
I also mentioned the provision for appeal to the Secretary of State on such charges. That will prevent abuse of the system. That final sentence is, I am afraid, on this occasion the only comfort that I can give to my noble friend.
Lord Mottistone: My Lords, I thank my noble friend. I am terribly disappointed when I hear the noble Lords, Lord Underhill and Lord Greenway, making speeches to the effect that we must have money coming into the ports. The ports do not go away but the shipping is disappearing. The priorities of your Lordships in this discussion are out of step with what is happening to this country. I think it is very sad. I also think it is sad that my noble friend could not take this a little further than he was able to, but it being late I shall not press the point at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Use of agents and joint arrangements]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 57:
Page 8, line 36, leave out ("(4)") and insert ("(Employment etc. of authorised pilots)(2)").
The noble Lord said: My Lords, this is consequential. I beg to move.
On Question, amendment agreed to.
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal had given notice of his intention to move Amendment No. 58:
Page 8, line 36, leave out ("or 6(1) above") and insert ("6(1) above or section 25").
The noble Lord said: My Lords, I have been caught unaware by this amendment and I frankly admit it. I had not noticed that I was down to speak to it. I do not know whether the noble Lord, Lord Carmichael, would be prepared to move it in my stead.
Lord Brabazon of Tara: My Lords, before noble Lords decide who is to move the amendment, perhaps I may mention that in principle I am prepared to accept it except that I feel there is a printing error in it. I think that noble Lords are referring to Section 26 rather than Section 25. I pointed that out to the noble Lord, Lord Underhill, earlier, but I am afraid that it has not been corrected on the Marshalled List. If the amendment refers to Section 26, I am prepared to accept it.
Lord Strathcona and Mount Royal: My Lords, I beg to move Amendment No. 58, which I can modify so that it reads "section 26" instead of "section 25". Will that be in order?
Lord Simon of Glaisdale: My Lords, I am not sure where we are. Has the noble Lord, Lord Strathcona and Mount Royal, moved a manuscript amendment to put his amendment in order? A manuscript amendment may be moved on Report; otherwise surely the amendment that is put from the Woolsack should be that which is printed.
Lord Strathcona and Mount Royal: My Lords, if it will make the noble and learned Lord any happier, I shall be very happy to make a manuscript amendment which will read:
"Page 8, line 36, leave out ("or 6(1) above") and insert ("6(1) above or section 26").
The Deputy Speaker (Earl Cathcart): My Lords, it is for the House, with leave, to accept the amendment in that form. I thought that the House had accepted it. I ask again: will the House accept this as a verbal manuscript amendment? That is agreed.
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal moved the following manuscript amendment:
Page 8, line 36, leave out ("or 6(1) above") and insert ("6(1) above or section 26")
On Question, amendment agreed to.
Clause 10 [Information and directions as to joint arrangements]:
The Deputy Speaker: My Lords, in calling Amendment No. 59 I should advise your Lordships that if that amendment is agreeed I cannot call Amendment No. 60.
Lord Underhill Lord Underhill moved Amendment No. 59:
Page 9, line 18, leave out ("may require any of") and insert ("shall require all").
The noble Lord said: My Lords, I hope that we can agree on this amendment because it will be noted that Amendment No. 60, tabled by the noble Lord, Lord Swinfen, is exactly the same as mine except that my amendment inserts the words "shall require all" whereas that of the noble Lord inserts only "shall require".
This point was discussed during the Committee stage of the Bill and we thought it important to put it forward again. It deals with the supply of information from CHAs. Where information is required under Clause 10 we consider that all the relevant CHAs should be asked to supply it and it should not merely be left open for one or other of them to do so. Therefore, I hope that the Minister will accept this amendment.
The noble Lord, Lord Swinfen, will explain why he has tabled his Amendment No. 60 (which has also been linked with Amendments Nos. 61 and 63 in his name) in which instead of asking for "information" he prefers to use the word "particulars". Obviously he will tell the House why he wishes to do that. I beg to move.
Lord Swinfen: My Lords, I am perfectly happy to accept or agree to Amendment No. 59, which will mean, as the Deputy Speaker said, that Amendment No. 60 cannot be moved. I do not honestly think that Amendment No. 63 is all that important. It is simply that the word "particulars" strikes me as being better than "information". The House may disagree.
As the noble Lord, Lord Underhill, explained, this discussion is a re-run of the debate that we had at Committee stage to make competent harbour authorities operating in the same estuary—or, as is the case in Manchester and Liverpool, on the same canal—operate together. The noble Lord, Lord Mottistone, said earlier that it was important to bear in mind the cost of shipping. This amendment bears that cost in mind, because it will end up with a reduction in the cost of pilotage if these areas, which are all approached by the same area of water, are operated with one large pilotage team that is capable of being moved hither and thither as, where and when required. It is wasteful to have pilots sitting at Ramsgate, for instance, doing nothing, while all the traffic is coming in from the North Sea and only pilots from Harwich are operating. Nowadays it is possible to see from where the traffic is coming and to move pilots from point A to point B to meet it. That strikes me as common sense.
I know that the Bill, as drafted, gives the power to the Minister. The Minister must take the matter in hand and insist that competent harbour authorities which are operating against one another (they are all after the same trade) use the cheapest possible method of running the pilots for the benefit of the shipping industry. The Bill's prime object is to reduce costs to the shipping industry.
10.30 p.m.
Lord Brabazon of Tara: My Lords, I listened carefully to the debate on these amendments when they were brought forward in Committee. I have subsequently read the proceedings again several times. I remain convinced that it would be wrong to accept them. To do so would be likely to compel the Secretary of State to impose an unnecessary burden on a number of harbour authorities. In particular, there are likely to be a number of authorities falling within the definition in Clause 10(1) where there is unlikely to be any practical problem about the future organisation of pilotage. It is a central principle of the Bill that decisons about what pilotage services are needed are local matters which should be decided locally by CHAs in the light of their experience. To accept these amendments would involve the Secretary of State in a number of decisions which should be made locally.

847
We do not want to reproduce the faults of the present system in which far too many local decisions are referred upwards to be taken at national level.
Clause 10 is intended very much as a reserve power to enable the Secretary of State to ensure that, in cases where decisions taken by a CHA may affect the interests of other CHAs or operators in the area, the arrangements made take proper account of the interests of those authorities and operators. We expect that it will in most cases be unnecessary for the Secretary of State to exercise this power and that CHAs will take proper account of the interests of other authorities and operators.
Nevertheless, I should make it clear, and perhaps I did not do so during the debate at Committee stage, that the Secretary of State recognises the importance of ensuring that suitable arrangements are made in the major estuaries and that he will accordingly require information under this clause of the CHAs in, for example, the present London District and in the Mersey, the Humber and the Severn Estuaries. I hope that that gives some assurance to the noble Lord, Lord Underhill, and to my noble friend Lord Swinfen.
I come now to Amendments Nos. 61 and 63. I envisage that when the Secretary of State requires an authority to provide him with information under Clause 10 he will have a pretty clear idea as to the issues he is interested in in each case, and they are likely to vary from one case to another. That being so, it will make sense for him to specify what information he requires; otherwise, as might happen under the amendments brought forward by my noble friend, he could well find himself receiving a good deal of information which was of no interest to him but which an authority might have gone to a good deal of time, trouble and expense to prepare. At the same time he might find the issues which concerned him not being properly dealt with. I think that it is essential that the Secretary of State should be in a position to specify what he wants to have, and I must ask my noble friend to withdraw the amendments.
Lord Underhill: My Lords, I tried to be brief when I moved the amendment. I am grateful to the noble Lord, Lord Swinfen, for further explaining it. In Clause 10 four categories are mentioned where there might be joint arrangements. After detailing the four categories the clause states:
"the Secretary of State may require any of the authorities, or, in the case of paragraph (c) or (d) above, the authority concerned".
The amendment therefore in effect deals only with paragraphs (a) and (b).
Clause 10(1)(a) says:
"Where the harbours of two or more competent harbour authorities fall wholly or partly within a single former pilotage district".
Paragraph (b) says:
"access for ships to the harbour of a competent harbour authority is customarily available through the harbour of another competent harbour authority".
The point of my amendment is this. If we are going to ask for information—and I recognise that the Secretary of State will want to have information—then he should obtain it from all the authorities concerned and not just from one of them.
I must again ask the Minister to read very carefully what has been said on this matter and to see whether or not he himself feels it desirable to tighten up this provision when we come to the next stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 60 and 61 not moved.]
Viscount Long: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at twenty-three minutes before eleven o'clock.

  "WHEN THE WIND BLOWS": SCREENING POLICY
  "WHEN THE WIND BLOWS": SCREENING POLICY
  MISSING PERSONS: STATISTICS
  MISSING PERSONS: STATISTICS
  MISSING PERSONS: POLICE PROCEDURES
  MISSING PERSONS: POLICE PROCEDURES
  AIDS: SOURCE OF VIRUS
  AIDS: SOURCE OF VIRUS
  SEVERE WEATHER PAYMENTS
  SEVERE WEATHER PAYMENTS
  SDI RESEARCH: CIVIL EXPLOITATION
  SDI RESEARCH: CIVIL EXPLOITATION
  ANTI-TACTICAL MISSILE RESEARCH
  ANTI-TACTICAL MISSILE RESEARCH
  CHANNEL TUNNEL BILL: PETITION PROCEDURES ADVERTISEMENTS
  CHANNEL TUNNEL BILL: PETITION PROCEDURES ADVERTISEMENTS