Sitting of 1 July 1987

Preamble
The House met at hall-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    FELIXSTOWE DOCK AND RAILWAY BILL
    To he considered tomorrow.
    TEIGNMOUTH QUAY COMPANY BILL
    To he read a Second time tomorrow.

  SELECTION
  Ordered,
  That Mr. David Alton, Mr. Donald Coleman, Mr. Ken Eastham, Sir Marcus Fox, Sir Anthony Grant, Sir Fergus Montgomery, Mr. Ray Powell, Sir Michael Shaw and Sir John Stradling Thomas be Members of the Committee of Selection.
  Ordered,
  That the members of the Committee of Selection nominated this day shall continue to be members of the Committee for the remainder of this Parliament.
  Ordered,
  That this Order by a Standing Order of the House.—[Mr. David Hunt.]

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Fiji
    Mr. Andersonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Fiji.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I expressed our deep concern about the military coup in Fiji on 14 May, calling for a return to parliamentary democracy. The governor-general has assumed sole executive authority in Fiji. We have maintained normal contact with him through our high commissioner in Suva. Our normal commercial and trading relations continue, as does our aid programme.
    Mr. Anderson: A legitimately elected Commonwealth Government have been overthrown by a military coup and the Government have given no continuing views of their disapproval of that coup. Why have the Government not been firmer in their expressions of disapproval, and what instructions have been given to our high commission staff in Fiji, first, relating to the new Administration and, secondly. in their relations with members of the ousted Government?
    Sir Geoffrey Howe: We have made our view about the coup, as I have just explained, very clear on a number of occasions. For example, some short time afterwards I met the Indian Deputy Foreign Minister, Mr. Natwar Singh. We both explained that we looked for the swift restoration of parliamentary democracy on the basis of the 1970 constitution for an outcome that preserved the stability of Fiji and harmony among the different communities. It is that that the governor-general is seeking to promote, having declared the office of Prime Minister and other Government positions vacant, and it is that that obviously our high commissioner is now operating in relation to the Government and to the governor-general.
    Mr. Campbell-Savours: Will not our own democratic credentials be questioned when the people of Fiji and Vanuatu learn that the driver of the high commissioner's car, registration number CDUK 1, was instructed by the high commissioner to circulate throughout the islands arid deliver Conservative party abusive propaganda against the Labour party to British residents of those islands, and also to seek money to finance the Conservative party campaign at the last election in the form of a letter signed by the right hon. Member for Chingford (Mr. Tebbit)'? It was circulated by a British civil servant. Why is this practice not condemned? Should it not be against the law, and when will some action be taken about this abuse by civil servants?
    Sir Geoffrey Howe: The question has nothing to do with Fiji. It appears to relate to an excellent document making a very powerful case. The point made by the hon. Gentleman is the subject of a question that he has tabled for answer much later on the Order Paper——
    Mr. Campbell-Savours: Five of them.
    Sir Geoffrey Howe: Five? That is characteristic of the hon. Gentleman's extravagance. They will he answered in due course.
    Mr. Cyril D. Townsend: Reverting to the original question, may I ask my right hon. and learned Friend to keep in touch with other countries in the area, such as Australia and New Zealand, which have also taken a sensible line on this issue? Will he give a clear message of support to the governor-general, who has been dealing with great competence with an extremely difficult matter? Is my right hon. and learned Friend aware that that same governor-general has a good record of fighting terrorism in Malaya?
    Sir Geoffrey Howe: I am grateful to my hon. Friend. We are keeping in touch with the Governments in the region to whom he referred. I entirely endorse what he said about the importance and difficulty of the task being undertaken by the governor-general and the extent to which he has our admiration. He has now assumed sole executive authority and is seeking to promote elections which will lead to the restoration of a democratic regime in due course.

    Cultural Diplomacy
    Mr. Keyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his policy on cultural diplomacy.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): Cultural

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    diplomacy is a valuable part of our continuing promotion of British interests and values worldwide. Our policy was set out in some detail in a memorandum to the Select Committee on Foreign Affairs, a copy of which is in the Library of the House.
    Mr. Key: I thank my hon. Friend. Does he agree that our language and culture should be encouraged overseas for their own sake? As the Select Committee report recommends, does he agree that an enhanced cultural diplomacy budget should specifically be set aside, especially for the BBC external services and the British Council?
    Mr. Eggar: I agree with my hon. Friend that the promotion of our culture plays an important part in our general diplomatic effort overseas. I prefer not to be drawn into commenting at this stage on the Select Committee report. We shall study and respond to it in the normal course of events.
    Mr. Tony Banks: Has the Minister studied the speech made by Sir John Burgh, the retiring director general of the British Council, who said that the Conservative Government had completely let down British culture by making a 21 per cent. cut in the budget of the British Council? Why have the Government betrayed British culture abroad, and what do they intend to do about it?
    Mr. Eggar: I was present when Sir John Burgh was making that lecture, and I am sure that he will not thank the hon. Gentleman for that crude caricature of what was an interesting speech.
    Sir Peter Blaker: Does my hon. Friend recall the wide support in the previous Parliament for the proposal for a British world television news service? Is he in a position to state the Government's view on the matter?
    Mr. Eggar: We are aware of the opportunities that are offered by satellite television broadcasting, and British television enterprises are actively involved in this. I think especially of the ITN service. My right hon. Friend's question raises several fundamental issues which we are continuing to study carefully.
    Mr. Canavan: Does the Minister agree that international sporting links should be an integral part of the Government's policy on cultural diplomacy? Bearing in mind the Government's attempted boycott of the Moscow Olympics, why is there a deafening silence on the need to find an alternative venue for the next Olympics, since the puppet regime in South Korea has one of the worst records in the world on the deprivation of human rights?
    Mr. Eggar: The hon. Gentleman has the most extraordinary set of priorities. I should have thought that he would welcome the movement towards democracy that has been promised by the President of Korea.
    Mr. Hayes: Does my hon. Friend agree that the BBC external service is often the only source of truth and hope in many countries where people have been deprived of their liberties? Will he do all that he can to thwart attempts by the Treasury to impose financial restraints?
    Mr. Eggar: The BBC external service has done very well in recent years. Since 1979–80 there has been a real increase of more than 50 per cent. in grant in aid.
    Mr. Foulkes: Will the Minister stop blustering about the remarks made by Sir John Burgh, which my hon.
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    Friend the Member for Newham, North-West (Mr. Banks) repeated? Will he confirm that the budget of the British Council has been reduced by 21 per cent. in real terms since the Conservatives took office? Will he also confirm that Sir John Burgh said that that may mean, if it continues, that the British Council will have to pull out of nine countries by 1991 unless the cuts are reversed? What will the Minister do to reverse that trend and support the work of the British Council overseas?
    Mr. Eggar: Again I must tell the hon. Gentleman that I am sorry that he was not present when Sir John Burgh made his interesting speech.—[Interruption.] The hon. Gentleman's points are different from those made in Sir John Burgh's speech. The British Council's requirements are considered along with other requirements in the context of the annual public expenditure survey. We cannot prejudge the outcome of that survey.

    Iran
    Mr. Gryllsasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's response to Iran's failure to respect diplomatic immunity.
    Sir Geoffrey Howe: As I told the House on 26 June, our firm response to Iran's failure to respect Mr. Chaplin's full diplomatic immunity was designed to bring home to the Iranians the seriousness with which we, and indeed the whole international community, viewed their action. Regrettably, the Iranians responded in a severe and unjustified manner.
    This crisis in relations was not of our making. We are prepared to rebuild a constructive relationship. However, we are interested in the substance of relations between states, not merely the husk, and must be assured that the Iranians will respect the inviolability of our diplomats.
    Mr. Grylls: Is my right hon. and learned Friend aware that many people in Britain and throughout the world will feel safer as a result of the resolute stand that he has taken against terrorism and against the maltreatment of diplomats whose sole duty, does my right hon. and learned Friend not agree, is to serve their country and nothing else?
    Sir Geoffrey Howe: I entirely agree with my hon. Friend. I remind him that the purpose of diplomatic immunity is not to protect diplomats, but to protect their work on behalf of the people of this country.
    Mr. Beith: In the light of the mounting evidence that Iran is not merely failing to respect diplomatic immunity, but is orchestrating the kidnapping of innocent hostages, is it not slightly illogical that nominally we still have diplomatic relations with Iran, but do not have such relations with Syria, which to some extent has sought to put its house in order on such matters? If the Foreign Secretary believes that maintaining the vestige of diplomatic relations may help to deal with the problems that we face with Iran, would that not also be more helpful in a situation where the Syrian Government have at last taken steps to make changes in those matters that greatly concern us?
    Sir Geoffrey Howe: Each of those cases must be considered separately on the facts and evidence available. There was no doubt that the conduct that led to the rupture of relations with Syria was wholly justified, and no

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    one dissented then. It is true that there is some evidence that the Syrians are making some changes in Syria at the moment. However, they do not go far enough by any means to satisfy our requests for the abandonment of support for terrorism. With regard to Iran, the evidence is different. The conduct that led to the present state of affairs, although outrageous and unacceptable, was not in the same category as that which led to the breaking of relations with Syria. That is why we must distinguish between the two cases.
    Mr. Dalyell: What is the Government's policy towards the supply of arms to Islamic fundamentalist groups?
    Sir Geoffrey Howe: That situation is not very frequently likely to arise. However, the supply of arms in all circumstances is subject to the comprehensive control by means of licensing and approval in the ordinary way.
    Mr. Couchman: While I understand the actions that my right hon. and learned Friend has taken in virtually breaking off diplomatic relations with Iran, what arrangements will be made for those people trying to leave Iran to come to this country, for example for medical treatment, who may have relatives in this country and who are at present finding great difficulty leaving that country?
    Sir Geoffrey Howe: The rundown in the scale of our presence in Iran must lead to the virtual suspension of the availability of visas. The position was such that the Iranian authorities were seeking to reduce our representation to nothing more than a visa-issuing factory, with the removal of reality from the relationship. Arrangements are made for visas to be available from other posts and special attention will be given, so far as possible, to cases on compassionate grounds or those of real urgency.
    Mr. Robertson: Why did we allow ourselves to be messed around, with the humiliation that was imposed by the Iranians on us and our diplomats? Why did we not immediately close down the Iranians' arms sales office at 4 Victoria street? Is this country so pathetically desperate for any trade with Iran that those people just across the road from this building can continue to buy and sell vast amounts of armaments for the war between Iran and Iraq, while our diplomatic personnel are beaten up and thrown out of Iran?
    Sir Geoffrey Howe: The hon. Gentleman has approached this matter in a characteristically exaggerated and distorted fashion. The Iranian military purchasing offices are conducting purely commercial operations, which must operate within the confines of British law. This dispute was confined to a consular and diplomatic matter, and it would be wrong, for the sake of British industry and jobs, to disregard the fact that in other respects we still have a substantial export trade with Iran, which is conducted entirely within the law.

    North Atlantic Council
    Miss Fookesasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the North Atlantic Council meeting at Reykjavik on 11 June.
    Sir Geoffrey Howe: As I told the House on 26 June, the conclusions that were reached at the meeting of the North Atlantic Council in Reykjavik were a notable fulfilment of our efforts to promote a real improvement in East-West
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    relations. The United Kingdom was one of the main architects of the agreement that was reached at Reykjavik on the double zero option on intermediate nuclear forces. We have also played a central role in preparations within the Alliance for negotiations on achieving a better conventional balance. The Reykjavik communiqué confirmed the Alliance's arms control policies that were set out last December. A copy of the communiqué has been placed in the Library of the House.
    Miss Fookes: Will my right hon. and learned Friend say whether any consideration was given to the control of chemical weapons, in which, I believe, the Soviet Union has a marked superiority over the West?
    Sir Geoffrey Howe: Yes, that was identified, as it had been in the earlier NATO communiqué, as one of the high priorities for progress. We wish to achieve a worldwide ban on chemical weapons. Last year, encouraging progress was made under the United Kingdom chairmanship of the negotiations. As my hon. Friend points out, this is an important matter, because the Soviet Union retains large stocks of chemical weapons, together with comprehensively trained and equipped forces.
    Mr. Cartwright: As the North Atlantic Council has endorsed the dual zero negotiations on intermediate nuclear weapons, why should that process not be extended to the most dangerous class of nuclear weapons, the battlefield systems? Why do the Government not endorse the concept of NATO and the Warsaw pact negotiating mutual and balanced reductions in the substantial numbers of these weapons that are now deployed in central Europe?
    Sir Geoffrey Howe: We are seeking to achieve progress on conventional arms control, and that was one of the four priorities that were identified in the communiqué. However, battlefield nuclear weapons form no part of the conventional armoury and there is no question of contemplating reductions in the United States and Soviet land-based nuclear missiles with a range of under 500 km, except in conjunction with the establishment of a conventional balance and the global elimination of chemical weapons.
    Mr. Hill: Does my right hon. and learned Friend agree that one of the most serious aspects of any double zero option is the verification after the agreement? Therefore, does he agree that the expertise of the seven nations group of the Western European Union on verification of armaments, which was formed after the last world war, should be used to its full?
    Sir Geoffrey Howe: I have no doubt that that capacity should be used as far as it can be. My hon. Friend is absolutely right in saying that a rigorous and effective system of verification is essential. That remains an important part of the negotiations, which still have to be resolved.
    Mr. Healey: Can the Foreign Secretary assure the House that his Government will not seek — [HON. MEMBERS: "Back again?"] May I allay the alarm on the Government Benches—[Interruption.]
    Mr. Speaker: Order. It is a great pleasure to see the right hon. Gentleman.
    Mr. Healey: I simply want to assure the House that I have returned to the Opposition Front Bench not in

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    response to overwhelming public demand or in order to receive more premature obituaries, but because I have another week to go.
    Will the Foreign Secretary assure the House that Her Majesty's Government will not seek to circumvent the welcome agreement endorsed at Reykjavik to remove two classes of nuclear missiles from Europe by introducing new cruise missiles to Britian on submarines or aircraft, as proposed by the NATO Defence Ministers just before Reykjavik? Will the Government agree to withdraw the American warheads from the Pershing 1A missiles in Germany if the Soviet Union agrees to abandon the proposal which it agreed with Washington on the retention of 100 nuclear warheads in Asia and the United States?
    Sir Geoffrey Howe: The agreement, as sought and so far presented, has not been extended to cover P1A weapons in Germany. It is intended to cover United States and Soviet systems only.
    In answer to the first part of the right hon. Gentleman's question, the Alliance is totally committed to achieving an INF agreement. In that context it continually assesses its nuclear capabilities and makes whatever adjustments are necessary to maintain deterrence. Obviously, an INF agreement would be taken into account in that continuing process.

    Arms Control
    Mr. Formanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's position on arms control negotiations.
    The Minister of State, Foreign and Commonwealth Office (Mr. David Mellor): There has been significant progress in recent weeks in the United States/Soviet negotiations on intermediate range nuclear missiles. I refer my hon. Friend to the answer my right hon. and learned Friend has just given about developments at Reykjavik.
    On conventional weapons, informal contacts between NATO and Warsaw pact representatives have been under way in Vienna since mid-February on the terms of reference for new talks on conventional stability covering the Atlantic to the Urals. Steady progress is being made.
    Mr. Forman: I welcome the progress in the INF negotiations, but can my hon. and learned Friend confirm that the Government's view is that agreement should be concluded if possible by the end of this year? In the interests of meeting such a timetable, do the Government believe that it would be unwise to attach too many conditions to the free standing and balanced INF agreement by attaching conditions to conventional or chemical weaponry, important though it is to make progress on those issues separately?
    Mr. Mellor: Plainly, it is important that a proper balanced view be taken on all these matters. I hope, as the whole House will hope, that proper speed is made in all these negotiations, but in no sense do I think that we should be tied to any arbitrary timetable.
    Mrs. Clwyd: Why are the Government continuing to support P1A in West Germany when it is both militarily useless and politically obstructive to a historic breakthrough in arms control agreements?
    Mr. Mellor: The hon. Lady speaks with great assertion on matters on which one suspects she is not as expert as she claims. The reality—[Interruption.]
    Mr. Speaker: Order.
    Mr. Mellor: It is interesting that—[interruption]
    Mr. Speaker: Order. This is supposed to be about diplomatic exchanges.
    Mr. Mellor: It is interesting that the hon. Lady chooses to seize upon indications that the Soviet Union introduced into the discussions very late on; indeed, only a few months ago. Before that it had been accepted that the arrangements whereby the West Germans have this rocketry and the Alliance fits the warheads stood outside these negotiations. The hon. Lady would play the British card better if she recognised that this was a spurious negotiating gambit by the Soviets and did not leap in as voice and echo to everything that Mr. Gorbachev said.
    Mr. Soames: Does my hon. and learned Friend agree that, as there is not one shred of evidence of any change in Russian expansionist foreign policy, he should go extremely carefully in the arms control talks?
    Mr. Mellor: That is unquestionably right.
    Mr. Alfred Morris: Why did the Foreign Secretary try to intervene in New Zealand's arms control policy at his press conference there in May, and what is felt to have been the outcome of that?
    Mr. Mellor: I think that the right hon. Gentleman should direct that question specifically to my right hon. and learned Friend the Foreign Secretary.
    Mr. Wilkinson: I congratulate my hon. and learned Friend on his new appointment. As an early priority, will he read the excellent article by General Bernard Rogers in Monday's international Herald Tribune, which rightly points out that our spectrum of deterrence — our graduation of deterrence — will be diminished by the elimination of intermediate nuclear force systems? Will my hon. and learned Friend always bear in mind that arms control negotiations are not an end in themselves, but that their purpose is to enchance security?
    Mr. Mellor: I entirely agree with my hon. Friend's last point. I would add that for some time past what General Rogers has been saying has been worthy of the most serious consideration, and certainly it will always get that consideration from me.
    Mr. Robertson: It would be normal to welcome a new Minister to the Dispatch Box, but this new Minister has managed in a few seconds to make us instantly and amazingly nostalgic for his hon. Friend the Member for Mid-Sussex (Mr. Renton), who preceded him. He at least had some expertise in these matters and would never have stooped to this sort of cheap jibe.
    Let me test the hon. and learned Gentleman's instant expertise by asking him whether he can tell the House of any scientific opinion at all in the world that still supports the British Government's objections to a test ban treaty—an objection that is still based on difficulties with verification? When will the Government abandon this totally discredited objection to such a treaty, or are they going to wait yet again for the United States Congress to come to their assistance and let them off the hook?
    Mr. Mellor: It is good to feel at home, being savaged by a dead haggis. The British Government's position on this, as on all other aspects of disarmament and defence, commands a great deal more support, both at home and abroad, than is suggested by Opposition Members, who, after their third successive election defeat, should learn a little humility on these matters.

    Iran-Iraq War
    Mr. Andrew MacKayasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest position in the Iran-Iraq war.
    Sir Geoffrey Howe: As I told the House on 26 June, we are most concerned that this tragic conflict continues after almost seven years. We are continuing to play a constructive role in discussions in New York aimed at finding a negotiated settlement.
    Mr. MacKay: Will my right hon. and learned Friend take the opportunity to put the mind of the House at rest on two points? First, will he assure us that every possible action is being taken to ensure that British shipping in the Gulf is being adequately protected; and secondly, that under no circumstances are arms being sold to either of the combatants?
    Sir Geoffrey Howe: Our policy on the sale of arms is well known. We refuse to sell to either side defence equipment which would significantly enhance its capability to prolong or exacerbate the conflict. That policy has brought us no thanks from either side, but we believe that it is appreciated by the wider international community. To protect our shipping, we maintain the Armilla patrol in the area to offer reassurance and help British ships in an emergency. We keep the operations of that patrol under constant review in the light of changing circumstances. Since January about 120 merchant ships in transit through the Straits of Hormuz have been covered by ships of the Armilla patrol.
    Mr. Rooker: That being so, may I ask the Foreign Secretary why, in answer to question 3, he sought to boast at the Dispatch Box about the number of British jobs protected by the immorality of allowing the office at 4 Victoria street to continue? How can he make that boast, but at the same time say that the Government are not doing anything to prolong the war? Either we are selling a lot of arms to protect a lot of jobs by maintaining that office in Victoria street, or we are not.
    Sir Geoffrey Howe: The hon. Gentleman's question is naive, even for him— [Interruption.] Let me make the position clear. There is a total ban on arms sales along the lines that I have described. That has been firmly maintained for a number of years. However, there is still ample scope for commercial trade unrelated to arms. That commercial trade sustains a large number of jobs in British industry and is of great importance. I am astonished that the hon. Gentleman does not care about that.
    Mr. Dickens: Is my right hon. and learned Friend aware that within the Iranian consulate in Manchester there were those who were IRA sympathisers and who joined in IRA marches in London and Dublin? Is it not possible that if we had not closed that consulate in Manchester we would have found that some of the weapons that were being used——
    Mr. Speaker: Order. This is a mile wide of the conflict.
    Mr. Dickens: I am now saying: is it not possible that some of the weapons that are being used in the Iran-Iraq war could find their way into Northern Ireland?
    Sir Geoffrey Howe: I suppose that all things are possible, but it is a rather remote question from the one before the House.
    Mr. Healey: Bearing in mind the disastrous history of the multi-national force in Lebanon and the stupefying confusion of recent American policy towards Iran, can the Foreign Secretary assure the House that the Royal Navy will not be ordered or allowed to join in the provocative American actions in the Gulf and that Her Majesty's Government will instead seek, through the United Nations, international protection for shipping in the international waters of the Gulf under the aegis of the Security Council?
    Sir Geoffrey Howe: I cannot follow the right hon. Gentleman in the terms in which he opened his question. He knows perfectly well that it is our intention to see that all people concerned exercise the utmost restraint in this area and refrain from any action that might lead to a further escalation and a widening of the dispute. Our Navy and the French Navy are present for the purposes that I have described. They keep in close touch with each other and with the United States Navy. However, there is no question or intention of formal integration. We shall continue to promote the action that I described in the original answer at the United Nations and elsewhere to try to bring the conflict to a close.

    Soviet Union
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning Her Majesty's Government's latest information on human rights violations in the Soviet Union.
    Mr. Mellor: We have welcomed the release of dissidents earlier this year and the recent increase in the rate of Jewish emigration. We hope that the amnesty announced on 18 June will lead to further releases. We remain concerned, however, about the many still unjustly detained in prisons and psychiatric hospitals and the thousands who are being denied the right to leave their county. We shall continue to press the Soviet authorities on these matters, both in bilateral contacts and at the conference on security co-operation in Europe Vienna meeting.
    Mr. Chapman: I am grateful to my hon. Friend for that information. Can he confirm that the practical, beneficial effect of the much-proclaimed policy of glasnost has led to more Soviet Jews who wish to do so being able to leave the Soviet Union? Will my hon. Friend pay tribute to the many individuals and organisations in this country who are trying to make personal contact with people in the Soviet Union who are denied basic human rights. in an attempt to keep their hopes high and to bring to the attention of a wider public the human tragedy involved in such policy within the Soviet Union?
    Mr. Mellor: I had the opportunity of saying almost precisely that to the chairman of the British Council for Soviet Jewry at our meeting yesterday. I look forward to giving a similar commendation on the efforts of so many, including many Members of this House, at a conference on this topic next week.

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    The welcome fact is that, taking the June provisional figures into account, the number of Soviet Jews who were allowed to leave the Soviet Union in the first six months of this year stands at around 3,000. That is more than the total number of those allowed to emigrate in the past three years taken together. My hon. Friend will be aware that problems and difficulties still lie ahead, but that figure represents a welcome development.
    Mr. Grocott: While it is of course right that we make representations on human rights violations whenever they occur, is it not high time that the Government recognised that there is a new mood of reform in the Soviet Union? May we ask the Government to act entirely out of character and respond to that mood of reform positively and sympathetically?
    Mr. Mellor: Of course we respond, but the best form of response is not just to roll over and forget about all the difficulties that we know exist and will continue to exist. Naivety has no part in these matters.
    Mr. John Marshall: Does my hon. and learned Friend accept that the increase in the number of people leaving the Soviet Union is as nothing compared with the 400,000 who are in receipt of invitations to do so?
    Mr. Mellor: I congratulate my hon. Friend, who has been a very distinguished Member of the European Parliament for some time, on his election to the House. I also congratulate him on asking a question that hits the centre of the target of our concerns. It is certainly true that there has been an increase in the number of exits permitted this year to those established refusniks, but there remains a much larger group of people who have been invited to come here and who are now subject to the restrictions imposed by the Soviet Union in January—restrictions of a new and fresh kind. If those restrictions are rigorously imposed and result in the refusal of a substantial number of those people to leave, that will pose a major obstacle to proceedings between our two countries.
    Mr. Mullin: Would it not be possible to take the Government's posturing on human rights in the Soviet Union more seriously if they were willing to extend an amnesty to the six innocent men convicted of the Birmingham pub bombings, who have now been in prison in this country for 14 years?
    Mr. Mellor: Although I know, from my previous incarnation, of the hon. Gentleman's interest in that case, his is not a worthy question. He knows full well that the case is now subject to reconsideration by the Court of Appeal, and that no such liability to reconsideration exists in the Soviet Union for any of the people with whom we are concerned.

    Gulf Shipping
    Sir John Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's commitment to the protection of its national shipping in the Gulf; and what information he has about the equivalent commitment of other nations in the Gulf.
    Mr. Mellor: As reiterated most recently at Venice, we are firmly committed to the principle of freedom of navigation in the Gulf.
    The Royal Navy has maintained a continuous presence in the Gulf since 1980. Since January about 120 merchant
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    ships in transit through the Straits of Hormuz have been covered by ships of the Armilla patrol. Also since January three warships have been deployed in the region. The United States and the USSR are in the process of increasing their naval presence in the Gulf in the light of their commitment to protect Kuwaiti tankers. The French also patrol in the Gulf from time to time.
    Sir John Biggs-Davison: Has not the President of the United States drawn attention to the fact that the contribution of the Royal Navy is proportionally greater than that of any other power? Does not the Royal Navy deserve the thanks of the House for the job that it is doing, entirely without fuss?
    Mr. Mellor: I associate myself entirely with every particular of what my hon. Friend has said, and I hope that the whole House will do so.
    Mr. Tony Lloyd: While recognising the role played by the Royal Navy, may I ask whether the Minister agrees that the American attempt to exclude the Soviet Union from the Gulf—that is certainly how matters appear—is very dangerous? Will he urge the United States to work in co-operation with the Soviet Navy in that area? This is not merely a matter of American self-interest; it is in the interest of the whole world.
    Mr. Mellor: There is no doubt that major extensions of superpower rivalry would be troubling. The Government are very well aware of that.

    South Africa
    Mr. Pikeasked the Secretary of State for Foreign and Commonwealth Affairs what recent representations Her Majesty's Government have made to the South African Government regarding the release of political detainees.
    The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): We have repeatedly made clear to the South African Government our deep concern at the continuing detentions without charge. We have done so both bilaterally and together with our European partners.
    Mr. Pike: While accepting what the Minister has said, may I ask how the British Government intend to make the South African Government realise that we want to see positive steps towards ending the policy of apartheid in that country? One of the important prerequisites of that is the release of all political detainees. How will the Government spell out the message so that the South African Government understand and act on it?
    Mrs. Chalker: We have made repeated representations to the South African Government, not only about detainees, but about all the other issues that have arisen in recent months and years. We shall continue to impress upon the South African Government the need to bring people together around the conference table so that together they can work out a future constitution. There is no way in which we can bring about change from outside. The changes that are needed in South Africa to abandon apartheid totally have to come from within, and we shall use all our diplomatic efforts, with the Twelve and with the Commonwealth, to bring that about.
    Mr. Hunter: In the light of what my right hon. Friend has said, will she please explain her apparent reluctance to

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    enter into a dialogue with the leaders of the black homelands in South Africa, who represent moderation in that country? If she is not reluctant, will she please refute that allegation?
    Mrs. Chalker: I think my hon. Friend knows very well that the so-called independent homelands in South Africa are a key element in what is known as grand apartheid. They are bitterly resented by most black South Africans. Neither we nor any other state have recognised the so-called independent homelands. We believe that no British interests would be served by recognising any of them. The historical background does not alter the present facts. Even fellow Tswanas in Botswana do not recognise Bophuthatswana. It is simply not possible for us to have the sort of official dealings that my hon. Friend would like, without the risk of appearing to recognise such a homeland as an independent state. It would do nothing to bring about the end of apartheid. If I thought that it would do so, we might change our ideas.
    Mr. Battle: In the light of the post-election message of congratulation from President Botha, did the Prime Minister mention detainees in her reply?
    Mrs. Chalker: My right hon. Friend the Prime Minister received a large number of letters from Heads of State as a result of the election. There was nothing out of the ordinary either in the letter that was sent or in the reply, a copy of which I do not have to hand.
    Mr. John Carlisle: Will my right hon. Friend accept that internal security matters in South Africa are for the South African Government, not for our Government? Will she also accept that while certain political detainees are detained, and while the state of emergency exists, peace has returned to the black townships and that people can go about their lives normally, apart from the murderous intent of the African National Congress and others who are bent on disruption?
    Mrs. Chalker: Internal matters are for the South African Government, but I think my hon. Friend knows well enough that the concern of the House and of thousands of people outside it about those who are detained without charge is very real. It is something that we have never espoused in this country, nor do we think that it should happen in other countries. We regret the renewed state of emergency in South Africa, because it is no answer to South Africa's problems. The South African Government need to engage in a dialogue with free and freely chosen representatives of black opinion. That is the first necessary step on the path to a peaceful solution that we all wish to see. Nothing is gained by throwing brickbats in the way that some would have us do.
    Mr. Anderson: Although repression in South Africa is censored and does not appear on our television screens, does the Minister agree that, as was confirmed recently by the United Nations Commission on Human Rights, repression there is at an unprecedented level and that it includes the detention and torture of children? In the light of that, why do the Government continue to give aid and support in the United Nations to the apartheid régime, and why do they protect South Africa in the Security Council by the continued use of their veto?
    Mrs. Chalker: There is no protection of the South African Government in the United Nations by this country. We are deeply concerned about the allegations in
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    the recent report "Children under Apartheid". Although the South African police have denied those allegations, I understand that the South African Deputy Minister for Law and Order has said that such allegations, if true, are horrendous. No doubt, over time we shall hear more about them. The allegations refer to a time past. We hope that if any children are still retained in detention they will be freed by the South African Government.

    Venice Summit
    Mr. Galeasked the Secretary of State for Foreign and Commonwealth Affairs to what extent British objectives were achieved at the Venice summit in June.
    Sir Geoffrey Howe: We sought a continuing commitment by all summit countries to the collective pursuit of economic policies designed to produce sustained non-inflationary growth in the world economy. We also sought renewed commitments to the liberalisation of trade and resistance to protectionism, the reform of agricultural policies, and the economic progress of developing countries, including special help for Africa. We endorsed summit statements on terrorism, East-West relations and the Iran-Iraq war. Our objectives for Venice were met in full.
    Mr. Gale: Will my right hon. and learned Friend tell the House what progress was made in discussions relating to food surpluses?
    Sir Geoffrey Howe: My hon. Friend is entirely right to draw attention to that matter. There has been sustained and encouraging progress in the past year. The communiqués of the Tokyo summit, as well as the meetings held at Punta del Este and the OECD in Paris this summer, preceded the strong requirements of the communiqués from Venice. Moreover, we are seeing worthwhile progress in the European Community in price reductions. For example, there was a 10 per cent. reduction in grain prices last night. The next step will be taken at the GATT, where we shall table comprehensive proposals for the dismantling of agricultural protection. The tide is running for reform. That tide is being sustained by the imperatives of budgetary discipline. We have to keep it moving.
    Rev. Martin Smyth: Will the Secretary of State elaborate on the endorsement of the campaign against terrorism, especially as we have yet to have delivered extradition proceedings from the Republic of Ireland—allegedly because of the miscarriage of justice in English courts—and British subjects continue to be murdered in Northern Ireland?
    Sir Geoffrey Howe: The hon. Gentleman is entirely right to draw attention to the fact that the campaign against terrorism has to be sustained in every quarter in which it is a scourge of the community, as it certainly is in Northern Ireland. He will no doubt welcome the fact that the Prime Minister met the Taoiseach yesterday in Brussels. They agreed on the great importance of continued co-operation in the campaign against terrorism.
    Mr. Patrick Thompson: Bearing in mind the genuine concern about the problems of the poorest countries, particularly the debt problems of countries in sub-Saharan Africa, and bearing in mind that such matters were discussed by Heads of Government at the recent Venice

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    summit, will my right hon. and learned Friend say a little more about initiatives that are about to be taken or are being taken?
    Sir Geoffrey Howe: My hon. Friend is right to draw attention to the importance of the matter. The summit recognised in particular the debt problems of the poorest countries, particularly in Africa, where they were identified as uniquely difficult and calling for special treatment. We were encouraged by the support given at the summit for the Chancellor of the Exchequer's three-point plan for special assistance for certain countries.
    Mr. Frank Cook: Was the Secretary of State able to make reference at the summit to the British objectives in relation to the situation in the Korean peninsula? Was he able to remind our allies that we have been in a state of armistice there for almost 35 years? Was he able to recall that we have to maintain a garrison in South Korea to uphold what is clearly a subversive and decadent regime?
    Sir Geoffrey Howe: The hon. Gentleman has linked a number of topics. The House will welcome the announcement that was made in recent days of the changes that are in prospect in the Republic of Korea. He is right to say that there is a small, token detachment of British troops in the Republic of Korea whose function, among other things, is to commemmorate the great heroism of British troops, including in particular the Gloucester Regiment, in the Korean war some years ago. There was some discussion at Venice of the problems of Korea, when we reaffirmed our desire to see progress in the sporadic attempts to achieve some kind of reconciliation between the two countries on the peninsula.

    Nicaragua
    Mr. Tony Banksasked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the United States Government about the level of their support for the Contra forces in Nicaragua.
    Mr. Eggar: We regularly discuss important issues, including the situation in Central America, with the United States Administration, and they are fully aware of our views.
    Mr. Banks: May I draw the Minister's attention to early-day motion 9, which points out that on 27 June 1986 the world court found that the United States Government were guilty, on no fewer than eight counts, of offending international law in respect of supplying arms to the Contras and their actions on Nicaragua? What will the Government do, in terms of the much-vaunted special relationship that appears, or is said, to exist between this country and the United States, to ask the United States Government when they will conform with the rulings of the international court? When will this country stop indirectly supplying arms to the Contra forces, as the Minister knows we are doing?
    Mr. Eggar: There is no truth in the hon. Gentleman's wild allegations. I wish that he would withdraw such assertions, which he insists on making across the Floor of the House and for which he has no evidence whatsoever.
    Mr. Baldry: Will my hon. Friend confirm that the only way to solve the problems of Central America is by
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    political initiatives and not by armed force, and that the best way forward must still lie in the Contadora peace process?
    Mr. Eggar: My hon. Friend is absolutely right. The way to solve the problems in Central America is by working through the Contadora process rather than through military solutions.
    Mr. Foulkes: How can the Minister state so categorically that the Blowpipe missiles that are now impounded in Panama in the ship Per Evesta were not destined for the Contras, in spite of the evidence of the Tower commission? As there is now evidence of Blowpipe missiles being supplied to the Afghan rebels also, why is Shorts, which is owned and controlled by the Government, allowed to continue to supply Blowpipe missiles behind a wall of silence?
    Mr. Eggar: I might have hoped that the hon. Gentleman would have had more chance to come to terms with the reality of the situation. We are not supplying arms to the Contra rebels. We have said that quite clearly. The hon. Gentleman has had four weeks off and should not give rein to his fantasies in such a manner.

    South Africa
    Mr. Colvinasked the Secretary of State for Foreign and Commonwealth Affairs when he last met the newly-appointed ambassador from the Republic of South Africa; and what was discussed.
    Mrs. Chalker: My right hon. and learned Friend has not yet had any formal discussions with the new South African ambassador since his appointment, but he expects to do so soon. I met the ambassador on 22 April last.
    Mr. Colvin: When my right hon. Friend meets the new ambassador formally, will she put on the agenda the independence of Namibia? Does she agree that the start of negotiations for the withdrawal of Cuban troops from Angola would be a significant step towards the implementation of Security Council resolution 435?
    Mrs. Chalker: I can assure my hon. Friend that when my right hon. and learned Friend meets the South African ambassador he will consider Namibian independence. We remain committed to the United Nations Security Council resolution 435. It is the only internationally acceptable basis for a Namibian settlement. We have recently reminded the South African Government of the need for its early implementation. However, we have not set preconditions for the implementation of resolution 435, nor has the United Nations. We recognise that withdrawal of all foreign troops from Angola and Namibia would create the best possible conditions for a lasting settlement. We welcome the prospect of renewed United States-Angolan negotiations and will discuss that with Dr. Crocker later today.
    Mr. Tom Clarke: When the Minister's right hon. and learned Friend takes part in such a meeting, will he express the distaste of the people of this country for South Africa's undermining and destabilising of the front-line states, most noticeably and most recently in Mozambique and Botswana?
    Mrs. Chalker: The hon. Gentleman already knows that no violence across borders, by whomsoever it is

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    committed, is likely to solve the grave problems of southern Africa. Indeed, whenever there is an incursion into another country, it is deprecated.

    Hong Kong
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to maintain stability in Hong Kong; and what is his policy on discussing any proposed constitutional changes in the colony with the Government of the People's Republic of China.
    Mr. Atkinsonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's policy towards democratic reform in Hong Kong.
    Sir Geoffrey Howe: Both we and the Chinese Government have undertaken clear commitments to maintain the prosperity and stability of Hong Kong. The excellent progress made by Hong Kong since the signature of the joint declaration on its future is evidence that those commitments have been upheld. We naturally maintain contact with the Chinese Government over a wide range of issues concerning the future of Hong Kong.
    The Hong Kong Government published a Green Paper on representative government in May. We hope that all sections of the community in Hong Kong will express their views on the options presented in the Green Paper.
    Mr. Adley: As, for nearly 150 years, the Hong Kong constitutional position has been dominated by the
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    proximity of China, and as the British and Chinese Governments—as my right hon. and learned Friend said—are committed to the maintenance of stability, does my right hon. and learned Friend agree that change without the overt consent of the Government in Beijing to the constitutional position in Hong Kong could be dangerous folly? Does my right hon. and learned Friend further agree that the interests of the people of Hong Kong relate far more to the substance of stability than to the shadow of experimentation?
    Sir Geoffrey Howe: It is important that there should be convergence between any changes made now and the system that will be in place after 1997. None of the options set out in the Green Paper is inconsistent with that approach. Her Majesty's Government, the Hong Kong Government and the Chinese are engaged in listening to the views of the people of Hong Kong on future constitutional arrangements.
    Mr. Atkinson: Will my right hon. and learned Friend confirm that in 1997 China will take over the system of government in Hong Kong that will be operating at the time? Does he agree that a referendum would be the best means of determining the views of the Hong Kong people towards the options in the Green Paper?
    Sir Geoffrey Howe: Plainly, there will have to he continuity between the system of government that is in operation in 1997 and that which takes over immediately thereafter. Obviously, with regard to matters set out in the Green Paper, we are listening to all the representations made to us. It would be wrong of me to anticipate the outcome of that public consultation.

European Council
3.32 pm
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I should like to make a statement about the European Council held in Brussels on 29 and 30 June. I was accompanied by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs.
The main issues before the Council concerned the future financing of the Community. The issues were: to improve budget discipline and management; to reform the operation of the common agricultural policy; the structure and size of the Community's resources; continued progress towards the completion of the single European market; and more effective use of the regional and social funds.
In addition, the Council dealt with three important immediate questions: the 1987 budget, the agricultural price package and the proposed oils and fats tax.
The task of this Council was to agree on guidelines that would lead to the necessary decisions at the next meeting of the Council in December. There was considerable agreement on the steps that have to be taken if we are to resolve the problems of the Community's finances. There were two points, however, with which we could not agree. First, we were not prepared to accept that there should be a decision now on the size of Community resources. We have made it clear throughout the discussions that it is necessary, before that question is addressed, to have agreement on effective and binding control over Community spending, including, in particular, agricultural spending. Secondly, we could not accept that the level from which we start to calculate agricultural spending for the future should be simply revised upwards to include every element of overspending in the current year.
Those are substantive points, on which we have both to protect the taxpayer and to take sound and considered decisions for the long-term health of the Community. They also go to the root of whether the Community is really prepared to tackle the problem of agricultural overspending. We agreed, however, first, that the use of the Community's resources should be subject to effective and binding budgetary discipline; and that this must apply to all expenditure and to all the institutions—the Council, the Commission and the European Parliament. Secondly, on agriculture, we agreed that additional measures are required to stop surplus production, and so to reduce costs and keep expenditure within the budget framework.
These reforms could be accompanied by measures to ensure some setting aside of agricultural land, less intensive farming and, in certain circumstances, by selective financial aids within a Community framework. Thirdly, we agreed that arrangements for the United Kingdom to receive an abatement will continue. So far as we are concerned, they must be at least as favourable as those in effect now.
During the rest of this year, the Community has the opportunity — indeed, the task — of translating the guidelines on budget discipline and on agriculture into draft decisions and regulations for our consideration at the December Council.
The Council reaffirmed the importance which we attach to meeting the target of removing, by 1992, the remaining barriers to trade within the Common Market. We should look for decisions by the end of 1988 on product
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standards, the wider opening of public contracts, the liberalisation of capital movements, insurance, and the mutual recognition of qualifications. These measures, by leading to a freer flow of goods and services and opening up a genuine single market, would help the creation of wealth and jobs.
On research and development, in order not to hinder work on agreed programmes, we proposed that spending could continue at present levels. The question of additional funds falls to be settled later, along with other decisions on future financing.
I made it clear that the United Kingdom would not agree to the new tax on oils and fats, which was proposed by the Commission and supported by France and others. I am glad to tell the House that it was not adopted.
Some detailed, not to say abstruse questions on monetary compensatory amounts on agricultural products were submitted to the Council. There was concern about how some aspects of those would operate in practice. It was therefore agreed that they should he re-examined by 1 July next year. My right hon. Friend the Minister of Agriculture, Fisheries and Food will deal with these matters more fully in his statement.
On the 1987 budget, the Council agreed to a solution on the lines we have advocated: Community funds for agricultural support, instead of being paid in advance, will now be paid in arrears. The Commission's proposal for an intergovernmental agreement to raise additional funds outside the Community budget was rejected.
We went to the Council determined to make progress in bringing Community spending under more effective control than in the past, and thus to ensure that the Community lives within its means. There are now clear guidelines for better control of the Community's finances. The priority task is for the Community to do the detailed work necessary to make those guidelines enforceable. The United Kingdom, and especially this House, has been the driving force behind this approach. We shall continue our efforts to achieve the necessary decisions in the interests of a soundly financed and strong Community.
Mr. Neil Kinnock: Being in a minority in the EEC is not the worst fate that can befall a nation or a Prime Minister if, as a consequence, the negotiating position is enhanced and positive results are achieved. The question is whether that really will be the outcome, when the Prime Minister has said that she is against giving money to bankrupts and then, in Brussels, proceeded to do precisely the opposite. Is not that exactly what she has done this week—first, by agreeing to a messy, makeshift contrivance over this year's £3·5 billion budget deficit, and, secondly, by acceding to an expensive farm price settlement that will add to food surpluses? Will she tell us why, when the crisis of Common Market insolvency is so obvious, pressing and immediate, she did not use that reality to secure the radical reform and effective control on spending that is manifestly needed now?
We have been here so often before that we are beginning to doubt the Prime Minister. Is not the Prime Minister's failure to press home the negotiating advantage that arises from the present insolvency a result of the fact that while she knows what she is against in the budget and in the common agricultural policy, she does not really know what she is for? She has no positive and precise

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proposals for the root and branch reform that is needed of the Common Market and the common agricultural policy.
Will the Prime Minister give us an assurance now that she will veto any proposals to put VAT on any items that are currently zero-rated? Will she guarantee that she will prevent any steps to impose VAT on children's clothing and shoes, on fuel, public transport, new housing and on books and newspapers as well as on food?
The Prime Minister: First, I do not think that anyone would take advice from the right hon. Gentleman about effective control over spending. Secondly, there was more than a full blocking minority against an oils and fats tax. People ought not to agree to an intergovernmental agreement as a means of raising more money to meet the deficit on this year's spending. Therefore, it was met in other ways that have been set out in documents that are now in the Library, and those ways are infinitely better.
Thirdly, as the right hon. Gentleman should be aware, there have been and will continue to be, further reforms in the common agricultural policy. He will have heard many times of milk quotas and of the reduction in price that there has been for, I think, five or six years in succession. He will also have heard of things such as guaranteed thresholds and limited intervention on things such as set-aside. These measures will continue. A reduction in price is not enough, and that is why there have to be other measures of the kind that I have mentioned.
There were a number of what are called stabiliser proposals at this meeting and in the Agriculture Council, and we are now seeking to get further guidelines on these translated into regulations for each and every commodity. Value added tax was not even mentioned at this meeting, nor was harmonisation of tax even raised either by the Commission or by anyone else. I stand by precisely what I said during the election campaign.
Mr. Terence Higgins: Is my right hon. Friend aware that throughout the last Parliament the Select Committee on the Treasury and Civil Service urged more effective budgetary discipline in the European Community? My right hon. Friend is to be enthusiastically congratulated on the stand that she has taken. Having said that, is it not the case that the present situation has arisen because we have constantly bailed out the EC by way of temporary measures such as intergovernmental agreements and so on? Since loans to the EC are not allowed and there are no intergovernmental proposals to be agreed, could she say whether she will continue to refuse to accept any further temporary finance to bail the EC out of its present crisis?
The Prime Minister: I gladly applaud and acknowledge my right hon. Friend's efforts in trying to get effective guidelines. He and a number of other right hon. and hon. Members made their points clearly soon after Fontainebleau, when we got agreement in the European Council on guidelines to restrain agricultural expenditure. We got the relevant minute, but I am the first to say, as my right hon. and learned Friend the Foreign Secretary and I said in the last two days, that the agreement that we got in the European Council was not translated into practice by the Agriculture Council nor by the European Council, although we have frequently been trying to get down the amount of spending on the common agricultural policy and on other matters as well. Therefore, this time
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we said that before we could consider an increase in own resources, those guidelines must be translated into regulations of one kind so that they can be legally enforceable. That is the task that we face between now arid the December Council, and according to how that task is performed we shall have to consider what further steps to take.
Mr. David Steel: Does the Prime Minister confirm that all the other 11 Heads of Government were out of step with her on the package of proposals and that she put forward no alternative package to the one that they had agreed? Does she also accept that agreement on the single market that she supports and that we support is likely to be blocked by others if we do not agree to progress on development of the structural funds? Will she also accept that every time the Council of Ministers fails to reach an agreement the budgetary problems simply get worse and that the lack of an expanded research and development programme, for example, simply weakens the Community? Finally, does she believe that the reforms of the CAP, that we all agree are needed, can only be made on the basis of an immediate reduction in total cost? Is that her view and, if so, has she told her Minister of Agriculture, Fisheries and Food that?
The Prime Minister: I do not know whether the right hon. Gentleman listened carefully to what I said. A number of things were agreed. We could put out the oils and fats tax only with a full blocking minority. Indeed, more than a blocking minority was obtained and rather more than that was obtained against an intergovernmental agreement. If one takes seriously what the right hon. Gentleman says, it seems he agrees with the other 11 that we should have the agriculture price guide for the future at a bloated level increased by all of the exceptional circumstances this year—the price of the dollar and the disposal of agriculture surpluses, all of which have gone into the bloated level. He wants us to agree to that, thus increasing the CAP expenditure, when he says that he wants to reduce it. Moreover, he asks us to agree to that without any discussion in the European Council, which is what they have refused. He asks us to agree to the other point I raised—an immediate increase in the ceiling Of own resources paid to the Community without discussion and without effective financial guidelines. Those were the two points that my right hon. Friend and I refused to agree upon.
Sir William Clark: Is my right hon. Friend aware that the vast majority of people would applaud the strong stand she has taken on extra money for the EEC budget? Is it not wrong that the British taxpayer should provide money to help the political ambitions of some continental politicians over agriculture? Does she not agree that if the EEC budget is increased, this will merely exacerbate and exaggerate the surplus we have in the EEC? This is the one thing we have to eliminate. Consequently, nothing should be done with British taxpayers' money that would in any way increase any surplus in the EEC.
The Prime Minister: My hon. Friend has gone to the heart of our case at the Council. Before any money is voted for an increase in the resources of the EEC we must he certain that there will be more reforms in the common agricultural policy and in other spending. That must not

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be merely embodied in a Council minute, as it has been in the past. It must be enforceable by being put into regulations. That was one of the main differences between ourselves and other people. We want to be certain that that will happen before we look at an increase in own resources. Then we can look at that possible increase in the light of perhaps other means to increase expenditure on things such as research and development. However, because the CAP is now taking up so much, it is not possible to do that.
It is not always easy in the European Council, because nine members of the Council profit financially from being in the Community, as well as profiting in other ways, whereas three of us put in net contributions that are redistributed among the rest of the nine. Naturally, there is always a greater demand for increased expenditure than there is defence against it. We must be certain of the purposes for which it is required.
Mr. James Molyneaux: In fully supporting the Prime Minister's demand for realism, may I ask whether she received the full-hearted support of the Prime Minister of the Irish Republic in view of that unique relationship which found expression in the Anglo-Irish Agreement?
The Prime Minister: I am sure that the right hon. Gentleman's arithmetic is impeccable. Since 11 Members were on one side in certain matters and only one on the other, he will find the answer to his question.
Sir Peter Blaker: Is my right hon. friend aware that she will have the overwhelming support of Conservative Members for the strong stand that she took on the four most important matters at that meeting: the attempt to bring order into the financial affairs of the Community; reform of the common agricultural policy; liberalisation of the internal market; and the rejection of the tax on oils and fats?
The Prime Minister: I am very grateful to my right hon. Friend. The stand that we took was right. We want quicker progress towards a single market. After all, it was in the original treaty of Rome. We want to get enforceable order into the Community's finances, and I believe that the other things that we did were right. The Community has been making progress, but it is slower than we would wish. It was very important to ensure that the proposal for an oils and fats tax was not adopted because it would have had a devastating effect on protectionism in world trade. It would have been leading the way in protectionism, which would have been very bad. Moreover, it would have increased the cost of living in this country, especially because of the increase in the price of margarine and cooking oil. It would have been a bad precedent.
Mr. D. E. Thomas: What discussion was there on regional and social fund spending by the Council of Ministers? Does the Prime Minister support the principle that if there is to be a reduction in CAP spending, some of the money should be transferred to the regional and social funds to replace jobs that have been destroyed in agriculture and related industries?
The Prime Minister: There was considerable debate on the amount going into the regional and social funds. Since the Fontainebleau agreement in 1984, there has been a substantial increase in the regional and social funds. For
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example, payments from those two funds have increased by 82 per cent. since that time, which represents a 64 per cent. increase in real terms. Nevertheless, some people wanted to double the amount presently spent on them. Naturally, we cannot agree to that, bearing in mind the fact that the Community is already overspent. When we have effective discipline on spending we can consider the various demands on the budget in a proper light.
Mr. Jim Spicer: Despite the fact that my right hon. Friend made it clear that nine of the member states are beneficiaries, is it not a fact that as far back as November 1984 all members of the Council of Ministers agreed that there should be total budget control? Can she give a logical explanation of why the other 11 seem to have reneged on the undertaking that they gave then?
The Prime Minister: We are all beneficiaries from the Common Market. It is the largest trading bloc in the world, and we all benefit in that way. The nine are net financial beneficiaries, and three of us are net contributors. The measures to control expenditure were embodied in the European Council minute. As every hon. Member who represents an agricultural constituency will know, there have been price reductions for many years. There have been milk quotas, which have caused problems in themselves, and there have been limited intervention and limited guaranteed thresholds. Those measures have got surpluses very much lower than they would otherwise have been. Further steps were taken at this meeting. What was not honoured was that the increase in the CAP budget should be less than the increase in own resources. Now we are saying that that must not only be agreed between us but must be enforceable in a regulation.
Mr. Nigel Spearing: Does the Prime Minister recall that in the early 1980s she said that the 1 per cent. ceiling should not be breached? But on 14 November 1983, at column 611, the former Chancellor of the Exchequer—now the Secretary of State for Foreign and Commonwealth Affairs—said that the government would be prepared to consider going through that ceiling provided that effective control of the rate of increase in agricultural and other expenditure was achieved.
Does the Prime Minister recall that she came back from Fontainebleau claiming that that effective control had been achieved? Who is conning who? Did the EEC con the Prime Minister or did she con Parliament and the people?
The Prime Minister: The hon. Gentleman is quite right. When we got the agreement at Fontainebleau under which own resources were increased to 1·4 per cent. we received an excellent arrangement for rebate which has meant that since the Fontainebleau agreement £3·2 billion has been returned to us by way of rebate. Part of that came from effective control over spending. As I explained, in a minute to the European Council, that has not proved to be watertight. On the contrary, agricultural spending has gone — [Interruption.] As the hon. Member is aware, agricultural spending is decided by majority and does not have to be unanimous. Because of that experience, we are now trying to enforce the agreements by ensuring that they are translated into financial and other regulations. Before we considered any increase in spending, the 1·4 per cent. had to be considered by the House and was passed by the House. Any increase in relation to value added tax or own resources would also have to be ratified by the House.
Several Hon. Members rose——
Mr. Speaker: Order. I have to take account of the fact that there are two other statements after this and the last statement is to do with the meeting of the EEC Agriculture Council. No fewer than 56 right hon. and hon. Members including 22 maiden speakers have applied to speak in the subsequent debate. I will therefore allow questions on this matter to continue for another 10 minutes.
Sir Fergus Montgomery: Is my right hon. Friend aware that she earned the gratitude of the British people in the stand that she took in Brussels yesterday? Will she tell Monsieur Chirac that it is a pity that there were not more housewives at that important meeting? Would she finally agree that under her Government, Britain has got its finances in order and would it not be better if the other members of the European Community also followed suit?
The Prime Minister: Yes, I agree with my hon. Friend. Each of us has to apply fairly stringent rules to our finances and that includes many other Ministers present at that European Council meeting. We are saying that stringent rules have to apply to our national financing and they must also be applied to the Common Market financing. That is recognised on both sides of the House. I believe that the Opposition should support us in that objective.
Mr. Bob Cryer: The Prime Minister always mentions benefits from this organisation. She admits that the costs are continually soaring. There is a £10 billion deficit in the trade in manufactured goods between the Common Market and the United Kingdom. In spite of the Prime Minister's protestations, food stocks are soaring. What are the benefitss? Would not the best benefit be to withdraw from the Common Market?
The Prime Minister: When the internal market is complete we shall enjoy the benefit of a single market which will help all manufacturing. I believe that it is a great benefit to our farming community and therefore to the whole rural economy for us to be a member of the Common Market. It is certainly a very great political benefit. If we were outside the Community with a very powerful group on the continent of Europe, we would be able to feel the draught very clearly.
Mr. Robin Maxwell-Hyslop: Has my right hon. Friend seen any perceptible movement among the other Heads of Government towards realising what must now be obvious, that if the common agricultural policy is to support incomes in rural areas rather than the owners of refrigerated warehouses and grain silos, sooner or later quotas will have to come in across the whole spectrum of agricultural produce? How far are we away from grasping and realising that obvious and pressing truth?
The Prime Minister: There have been a number of price reductions and price reviews over the past five or six years——
Mr. Maxwell-Hyslop: They are no good.
The Prime Minister: I hear my hon. Friend say that the prices are no good. I would not say that they are no good. However, they are not sufficient on their own. That is why we have had to introduce quotas. My hon. Friend comes from a part of the country which is aware of the difficulty which that can cause. However, such action had to be taken. There are other mechanisms guaranteeing only a
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certain amount of the guaranteed threshold. Other measures that are now being established are limiting the times in the year when food can be sold into intervention. We are really trying to move to a position in which intervention becomes a safety net and not merely a means of storing surplus stocks. It is difficult to get rid of the surpluses that we now have, and that are an overhang on the world price, but great efforts are being made and further efforts were made in this price review. My hon. Friend will know that one cannot make changes that are too sudden, bearing in mind the fact that the farming industry cannot take sudden changes because of the cycle of production.
Mr. Alexander Eadie: Since the right hon. Lady told the House that an effective decision was taken to freeze expenditure on research and development, will she inform the House what impact that will have on the United Kingdom? The right hon. Lady must be aware that in this country great criticisms are made about the spend on research and development. Do she and her Government propose to do anything to deal with any difficulty that may arise in relation to the spend on research and development?
The Prime Minister: Yes. As I said, we made provision for that while we were at the European Council. What we are talking about is not our spending on research and development. As the hon. Gentleman knows, taxpayers' spending on research and development in this country on civil and defence matters is a bigger proportion of our national income than that of most other countries on the continent. We are talking about Community research and development, and we could not agree an increase in that spending because the Community is already overspent far this year. Therefore, any additional spending must be considered when the financial discipline that I referred to is in place. Because there could have been problems on continuing research programmes and obtaining finance we said that the amount of money in this year's budget can continue to be spent, as can the same amount in next year's budget. That should obviate any difficulties that might otherwise have occurred.
Mr. Michael Latham: Will my right hon. Friend confirm that it remains her policy, in pursuing British objectives—as she said at the annual dinner of the National Farmers Union — to resist any measures that are directly discriminatory against British agriculture?
The Prime Minister: Yes. I think that my hon. Friend is after a particular mechanism that arises time and time again and limits help to farms to the first few head of sheep or cattle, which deliberately helps small farms, but is detrimental to our larger farms because our family farms are bigger. Such proposals arise from time to time, and I believe that they did once again in this Agriculture Council. My right hon. Friend the Minister of Agriculture, Fisheries and Food was stern in refusing to accept them.
Mr. Ron Leighton: Is the Prime Minister aware that I give her eight out of 10 for her performance? The first point that she lost was when she returned on a previous occasion from Fontainebleau and said that she had solved the problem when she had not, as we told her. The second point is one that she could retrieve. We fear that in the future, when it is fudged and

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mudged in Copenhagen or Bonn, she will once again give more money. That is what we think will happen, and her bluster will not stick. Will she tell us why we should have a common agricultural policy? What is the benefit of it? Are we to assume that this great movement of nations is dependent on a common price for onions? Why do we not repatriate our agricultural policy? Why does not each country have its own agricultural policy? We cannot reform it, so why do we not end the common agricultural policy?
The Prime Minister: I am grateful for the eight out of 10, but I am still wondering a little. We have been negotiating financial arrangements for this country since 1981 and up to the end of 1987 we have secured a return from the Community budget for this country of £6·6 billion, which is a considerable figure. Nevertheless, we are still net contributors. With regard to the other matters that the hon. Gentleman raised, we shall consider increasing own resources when we have that binding, enforceable discipline in place, which is not there at the moment. The hon. Gentleman may recall that even in this brief spell of questioning I have had more applications for Community spending on research and development and on structural funds. An assurance has been sought that we will ensure that Britain's farms are properly treated on a fair basis with those in the rest of the Community. This requires money. We have a thriving rural economy, partly because of the common agricultural policy.
Mr. Michael Fallon: Is my right hon. Friend aware that in reminding the member states' Governments and the Commission of the principle that finance must determine expenditure and not expenditure determine finance she speaks not only for the British people but for millions of taxpayers across Europe?
The Prime Minister: I am grateful to my hon. Friend. My right hon. and learned Friend the Foreign Secretary and I put that point many times on Monday and Tuesday in the debates. We must determine our expenditure according to reasonable income and not tot up our demands and say that we must make the necessary transfers to meet those demands. That is not the way that we must go and I agree with my hon. Friend.
Several Hon. Members rose——
Mr. Speaker: Order. I will endeavour to call on the later statement those hon. Members who have not been called during this statement.

"Today" Newspaper
4.6 pm
The Chancellor of the Duchy of Lancaster (Mr. Kenneth Clarke): With permission, I should like to make a statement about the future of the Today newspaper.
Under the Fair Trading Act 1973 the consent of the Secretary of State for Trade and Industry is required for all newspaper mergers which concentrate into the hands of one newspaper proprietor newspapers having a paid-for circulation of 500,000 per issue. My right hon. and noble Friend's consent cannot normally be given without a report from the Monopolies and Mergers Commission. He can, however, give consent without such a report where he is satisfied that the newspaper concerned in the transfer is not economic as a going concern, is to continue as a separate newspaper and that the case is one of urgency.
My right hon. and noble Friend has received such an application for the transfer of the Today newspaper from Lonrho plc to News International plc. He is satisfied that this application meets the criteria that I have outlined and, taking account of all the relevant circumstances, he has decided that it is right for him to give his consent to it. He has accordingly consented to the transfer.
Mr. John Smith: Is the Chancellor of the Duchy aware that what he has announced is a breathtaking abdication of responsibility by the Secretary of State for Trade and Industry? Under the Act, such a takeover is illegal and void unless conditional or unconditional approval is given by the Secretary of State. In acceding to the pistol that was put at their head by the arrogant Mr. Murdoch, who required the Government's permission by 4 pm, the Government have betrayed their responsibilities to Parliament and the people by indulging Mr. Murdoch's whim.
Is the Chancellor of the Duchy aware that Mr. Murdoch already owns 32·2 per cent. of all of the circulation of daily newspapers and 35·2 per cent. of all the circulation of Sunday newspapers in this country? To allow him to gobble up Today without a single condition put in his way is breathtaking in its audacity. The Opposition would urge a referral, whoever was acquiring it in such a monopolistic manner. Should not the Chancellor of the Duchy invite the Secretary of State to review his decision so that some conditions can be put on the merger, if it is to be allowed? Why can we not have a referral so that this monopolistic situation can be thoroughly reviewed and examined in the public interest?
Mr. Clarke: My right hon. and noble Friend has referred himself clearly to his duties under the Fair Trading Act, has made an extremely responsible decision in the present circumstances and has taken account of the matters that he is supposed to when reaching his decision. This takeover has an effect on the circulation figures, but the title in question is a new one that has been recently established. It has 2·5 per cent. of the market and the company that is acquiring the title does not have a title in this part of the market, where titles such as the Daily Mail and the Daily Express are mainly in competition.
The right hon. and learned Gentleman and those who support him are themselves irresponsible if they assert that, whoever had been involved in the application, a referral would have been made. This newspaper is losing a substantial amount of money and is plainly at risk of

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closure. Its sister title, Today on Sunday, has already closed. A referral would have caused considerable delay and my right hon. and noble Friend had a resolution from the board of the company saying that it was its intention to close if the matter were referred. He made his decision, not because of that resolution, but because of the state of the title, which is losing large sums and because 500 jobs would be at risk if a referral were made and the newspaper closed.
I suggest that right hon. and hon. Members of the Opposition would have made an equally strong protest if a referral had been made and the newspaper had closed. Then they would have accused my right hon. and noble Friend of acting irresponsibly by gambling with the future of journalists, whose jobs have been secured by my right hon. and noble Friend's decision.
Mr. Kenneth Hind: May I congratulate my right hon. and learned Friend on acting so quickly to save jobs? In view of the political slant of this newspaper and the fact that it supports the Liberal alliance, does he agree that to refer it to a commission dealing with mergers would not be appropriate?
Mr. Clarke: I am grateful to my hon. Friend for his support. It will be interesting to see what alliance Members have to say about mergers. The issue is not the political control of the newspaper but the position of the title, its future, jobs on Today and the public interest, which my right hon. and learned Friend has properly addressed.
Mr. Malcolm Bruce: Does the right hon. and learned Gentleman accept that we regard his statement as a disgraceful negation? Does he agree that to accept the 4 o'clock deadline was an outrage? His excuses are lame in the extreme. The way in which he replied to the hon. Member for Lancashire, West (Mr. Hind) perhaps explains why Government Members are so keen on the proposition and why the anger expressed from the Opposition Front Bench was so synthetic.
Does the right hon. and learned Gentleman accept that the national press in Britain is concentrated in the hands of two hard-line proprietors who represent an imposed political line which illustrates the most distasteful aspects of the two main political parties? Is that a tolerable and proper way to ensure choice or morality? Is he aware that the regional press which has to compete with the big battalions will not be cheering his announcement today?
Mr. Clarke: We were not working against a 4 o'clock deadline. The last resolution that we received from News International plc was that, in the absence of consent by midnight tonight, the title would be closed forthwith. My right hon. and noble Friend's decision was not determined by that. He had to address himself to his duty under the Fair Trading Act 1973 that this was an urgent case. A referral to the Monopolies and Mergers Commission would have caused a delay of weeks, during which time the company would have continued to lose substantial sums. The company asserted that it proposed to close the title. It would have been a gamble to make the referral in the hope that the title could survive long enough for its future to be sorted out given the Monopolies and Mergers Commission's recommendations.
The hon. Member for Gordon (Mr. Bruce) makes political points about the control of the newspaper but they are not the predominant or important factors. It is no
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good asserting that the decision is disgraceful if hon. Members will not face the reality that my right hon. and noble Friend has saved a newspaper title and preserved a substantial number of jobs.
Mr. Jonathan Aitken: In a calmer moment, will my right hon. and learned Friend give serious consideration to whether the time has come for us to abolish this embarrassing and increasingly meaningless non-referral of newspapers to the Monopolies and Mergers Commission? Does my right hon. and learned Friend recall that only a few months ago, in conditions of great gravity, financial hardship and urgency, The Sunday Times was not referred to the Monopolies and Mergers Commission? Before that, The Times acquisition was not referred to the commission; and before that The Sun was not referred. Can we at least give Mr. Murdoch a free pass and have done with it?
Mr. Clarke: I think that my hon. Friend's criticism is of the legislation and the way it began. The key point, to which my hon. Friend has no more an answer than the Opposition, is that it is beyond dispute that the newspaper is in serious financial difficulty. Its immediate future was imminently at risk. In those circumstances it was the duty of my right hon. and noble Friend to address himself to the facts, to the Fair Trading Act and its provisions arid to exercise his duty in the public interest — which I believe he has done.
Mr. Michael Foot: Did the Secretary of State give any consideration whatsoever to lifting the so-called deadline imposed by Mr. Murdoch, so that the House of Commons and others could express a view? Was that ever considered? Does the Minister appreciate that, if that had been done, others would have had an opportunity to express their views? The decision brings the whole of the so-called anti-monopoly legislation into disrepute and people will have no faith in it. The Ministers said that Mr. Murdoch has no other newspaper in the same field. Does he mean that Today has not yet reached the degrading standard of journalism which Mr. Murdoch's other publications represent?
Mr. Clarke: The resolution of the board was before my right hon. and noble Friend and that is the only statement of the quality of a company that we have. He had to consider not just that resolution but whether the case was urgent. He had to weigh up the alternatives—a referral or a non-referral.
A referral would have taken weeks if not months and caused uncertainty while a solution was produced. The case was urgent, so it was necessary for my right hon. and noble Friend to work within his own timetable and come to a decision in time for it to be effective. As a result of his decision, Today will continue to be on sale and it will continue to be a title in the newspaper market. The editorial content of a newspaper is not a matter for my right hon. and noble Friend.
Mr. John Redwood: Does my right hon. and learned Friend agree that it is significant that no other bidder publicly emerged to save the jobs? Does he further agree that it shows that rich Liberals, having discovered that such views lose them votes, are not prepared to have those views lose them money?
Mr. Clarke: I agree with my hon. Friend. There have been other bids and rumours of other bids which appear

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to have fallen through. That was not the resolution before my right hon. and noble Friend. A particular bid was referred to him, and he had to exercise his powers under the Act. In the circumstances, he was right to take the decision that he did.
Mr. Brian Wilson: Does the right hon. and learned Gentleman agree that the Murdoch press is already responsible for introducing a degree of mendacity and privacy invasion into the British media which is unknown in modern times? Does he agree that it is profoundly undemocratic to extend the influence of this American citizen over the British media and that it will be widely seen as a pay-off by the Conservative party to the Murdoch press?
Mr. Clarke: As I said a few moments ago, I have no doubt that, had my right hon. and noble Friend taken a decision which involved closure, he would have been accused, among other things, of a pay-off amongst the journalists on the Today newspaper who opposed the Government during the election campaign. He would be accused of taking his revenge by robbing them of their jobs. None of that came into his consideration.
Perhaps the hon. Member for Cunninghame, North (Mr. Wilson) was trying to pay a compliment to News (UK) Ltd. and Lonrho, and to the impartiality of newspapers under that ownership. The editor and previous editor seemed to be respected journalists. A new editor has been appointed to the title and I have no reason to believe that he is not an independent journalist. The public interest has been best protected by what we have done.
Mr. Martin M. Brandon-Bravo: My right hon. and learned Friend and my Conservative colleagues are entitled to take a somewhat cynical view of the customary protestations of Opposition Members that they care about employment. Is it not a simple fact that the paper was losing £38 million a year and that 500 jobs were at risk, and that that was the Government's prime consideration?
Mr. Clarke: I agree with my hon. Friend. It is obvious that what influences Opposition Members most is whether they agree with what a newspaper says. My hon. Friend and I—and my right hon. and noble Friend who made this decision—are concerned about the jobs and about the future of a separate title in Fleet street, which might otherwise have folded and followed Today on Sunday into oblivion.
Mr. Tony Benn: Is the Minister aware that nobody will be at all surprised that, following the scurrilous campaigns waged by Mr. Murdoch in support of his colleagues, the Government have conceded immediately to his demands in this case? Is he further aware that nobody will take at all seriously his remarks about protecting jobs, as Today began with the tragedy at Warrington and is now to be bought by the man who slaughtered 5,000 jobs at Wapping? Therefore, any suggestion that the Government's decision is about protecting jobs will not be taken seriously. Is the Minister aware that Mr. Murdoch has cancelled without any consultation the house agreement between the journalists at Today and their previous proprietor and has imposed on them the house agreement that he imposed on the News
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International journalists? Journalists are being bought and sold like chattels. Is that the right hon. and learned Gentleman's definiton of the freedom of the press?
Mr. Clarke: Clearly, the right hon. Gentleman's opinions are mainly governed by his implacable prejudice against the proprietor of News International, who has acquired the Today title. Those prejudices are not relevant to this decision, and nor do the management of newspapers and the arrangements between newspapers and their journalists directly concern my right hon. and noble Friend. Furthermore, I have no evidence that the Today journalists will necessarily object to the arrangements to be made. Those matters will arise now that the merger is to go ahead and once the title is secured and the newspaper sets off under the new ownership.
Mr. James Hill: Does my right hon. and learned Friend agree with me that the 32·3 per cent. ownership referred to by the right hon. and learned Member for Monklands, East (Mr. Smith) should be considered alongside the fact that our ex-Labour colleague, Mr. Maxwell, at presents controls 28 per cent? There was a rumour that he was to buy Today himself, which would have brought him well over the 33 per cent. mark. In fiscal terms, Mr. Murdoch is clearly a very brave man to give £40 million to a paper that is losing £38 million every year and he should be congratulated rather than derided.
Mr. Clarke: I agree with my hon. Friend. According to my figures, News International has 33 per cent. of the popular dailies, Mr. Maxwell's Mirror Group has 26 per cent., United Newspapers has 25 per cent. and the Associated Newspapers Group 14 per cent., whereas Today has only 2·5 per cent. Those figures give some indication of the impact on the market, or the concentration of power.
Mr. Eric S. Heffer: Is the right hon. and learned Gentleman aware that the people of Liverpool will not take seriously the Government's talk about saving jobs? In two days' time, 750 News International workers will be made redundant, in spite of the fact that—unfortunately—they worked during the Wapping dispute. Therefore, people will not take any notice of the Government's claim that they are concerned about 500 jobs. Members of Parliament from the area made representations to the Government asking them to do something and only today I received a reply from them saying that they will not intervene in commercial decisions. The Government are in Murdoch's pocket and they do exactly what Murdoch wants.
Mr. Clarke: The difficult Liverpool case that the hon. Gentleman describes is beside the point, unless he seeks to deny that the closure of Today might have cost jobs. It seems obvious to me that, had my right hon. and noble Friend gambled with the future of the title, and had the board gone ahead with its stated intention of closing it, many jobs would have been lost. That is the issue to which we must address ourselves today.
Mr. David Sumberg: Will my right hon. and learned Friend bear in mind the fact that the Opposition's synthetic anger comes from a party which wholeheartedly supported the rioters at Wapping? Will he

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remember that the Labour party's political prejudice has now been shown to extend to their being totally careless of the loss of 500 jobs?
Mr. Clarke: I agree with my hon. Friend. We are witnessing merely an extension of the policy of the Opposition who, as my hon. Friend said, have supported industrial action against the premises of News International that was illegal and sometimes violent. Now, because of their hostility to the proprietor of News International, they are prepared to be quite reckless about the jobs of the Today workers.
Several Hon. Members rose——
Mr. Speaker: Order. For the reasons that I have already stated, I shall allow questions for a further five minutes.
Mr. Andrew Faulds: Does not this abdication of responsibility underline the need for the House to examine the whole question of the ownership of the British press, which is coming increasingly under alien influences—in this case the malign influence of an Australian carpetbagger who, for his own commercial aggrandisement, has chosen to become an American citizen and who has managed to achieve a decline in the already appallingly low levels of the British popular press, as well as one of the quality papers?
Mr. Clarke: The application that my right hon. and noble Friend considered, and gave a proper legal judgment in, came from News (UK) Ltd. and Tiny Rowlands' Lonrho organisation. I repeat that most of the matters being raised by the Opposition are quite irrelevant, and none of them more so than the question of the nationality of one of the leading figures in one of the companies involved.
Ms. Clare Short: Does not the Minister understand that the issue at stake here is not just a party political issue; it goes much wider and affects the quality of our democracy. The high concentration of ownership of the British media and the degrading pornography and lies spread throughout the press are a danger to the quality of our society. If the Minister will not make a reference to the Monopolies and Mergers Commission, will he agree that his Government should review the question of the concentration of ownership of the press for the sake of democracy, which is a bigger issue than his party or ours?
Mr. Clarke: I am sure that all hon. Members are concerned about the future of the newspaper industry and about the state of our democracy and so on. I am sure that we are all anxious to ensure that we obtain a truthful, accurate and reasonably independent press in this country. However, those were not the issues that had to be considered by my right hon. and noble Friend—except that he had to take a view of the public interest and to decide what was in the interests of achieving the best kind of press. In particular, he had to address himself to the immediate problem of a title that was losing a large amount of money and was under the threat of imminent closure. The company that owned it came to him with a proposal for a merger with another company intending to continue it as an independent title. I believe that, on a moment's reflection, people will understand that he came to the only sensible and responsible decision.
Mr. Mark Fisher: Does not the Minister agree that a diversity of views and choice are
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essential for democracy and that, as my right hon. and learned Friend the Member for Monklands East (Mr. Smith) explained, concentrations of ownership must limit that diversity? Is he unaware that we are the only European country that does not have specific legislation to control concentrations of ownership in our press? Is he further unaware that the problem attacks our culture and our democracy as a whole and not simply the newspaper industry? Large areas of our media and our cultural industries—the film industry, publishing, radio, satellite and cable—are being concentrated in the hands of fewer and fewer companies, and that cannot be in the interests of our country.
Mr. Clarke: We all want to see diversity in our newspapers and a reasonable range of news, but what we are dealing with here is a critical and urgent situation that has arisen in the case of a new title only about 18 months old. It had won an extremely small stake in the market and was losing money so heavily that the board resolved that it was imminently about to close. It is certainly probable that, had my right hon. and noble Friend done as the Opposition have urged, we would simply have one less newspaper and 500 fewer jobs. I do not believe that that would serve the interests of democracy, the newspaper industry or the public.
Mr. Ron Leighton: Is the Chancellor of the Duchy of Lancaster, who is new to his job, aware that previous royal commissions have warned against the danger of monopoly and recommended more diversity? If Rupert Murdoch, who is an undesirable alien if ever there was one, gets his hands on the Today newspaper, it will be a massive move towards monopoly. Does the right hon. and learned Gentleman recall that it was said that new technology would give extra diversity and that there would be new newspapers? If the first newspaper founded with new technology falls into the maw of Rupert Murdoch, that will extend the monopoly of our press. Can the right hon. and learned Gentleman remember the glib promises that Rupert Murdoch gave concerning The Sunday Times, but which he broke and which have been referred to by the Opposition? If monopolies and mergers legislation and the Monopolies and Mergers Commission will not deal with monopolies, what is the point of having the commission and that legislation?
Mr. Clarke: Had a Labour Secretary of State been faced with this application, he would not have been entitled to base his decision on dislike for the political views of the proprietor, dislike of the way in which an industrial dispute had been conducted by that firm or any other of those matters that have so taxed the Opposition. The right hon. and learned Member for Monklands, East (Mr. Smith), to avoid the obvious problem of asserting that he disliked Rupert Murdoch and News International, said that he would have referred any such application for that newspaper. However, all that that would produce is total closure. In fact, the right hon. and learned Gentleman would have to reject the type of arguments that have been urged by his Back Benchers.
Mr. David Harris: Will my right hon. and learned Friend continue to reject completely the cant, humbug and insults from the Opposition Benches? Does he agree that there might be some point in making a

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reference to the Monopolies and Mergers Commission in this case if some other person wanted to buy Today? However, apparently no one else wants to buy it and therefore there is no possible point in making a reference to that commission. Does my right hon. and learned Friend accept that, in my case as a journalist, if I happened to work for the Today newspaper I would be glad that somebody such as Mr. Murdoch wished to buy it rather than nobody—for then I would be out of a job?
Mr. Clarke: There certainly was no other application before my right hon. and noble Friend. There have been repeated stories in the newspapers about other people being interested in the newspaper, but my right hon. and noble Friend has had to consider what was before him—an application from News International accompanied by a board resolution from News (UK) Ltd. stating that the paper would close at midnight tonight if the bid was referred. We looked at the finances of the newspaper and certainly there was the strong probability that the newspaper would not survive a reference while, at the same time, the Opposition indulged their political prejudices and other people tried to get bids together. My right hon. and noble Friend was faced with no other sensible choice.
Mr. David Winnick: Is the Minister aware that few people in the country will truly believe that the Government would have approved this deal had not Mr. Murdoch given total, loyal support to the Tory party over many years? Is the Minister aware that the relationship now between this Tory Government and Mr. Murdoch clearly smells of outright political corruption?
Mr. Clarke: I think that that is an outrageous allegation from the hon. Gentleman. [HON. MEMBERS: "It is true."' If any member of the public believes that this decision was taken solely because the Government are sympathetic to the views of Mr. Murdoch, he would be believing a total untruth. This morning and this afternoon, the Secretary of
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State has addressed himself to his legal duties under the Fair Trading Act 1973, the facts as they were presented to him and his judgment of them. His judgment was that it was urgently necessary to give consent to this application to avoid a closure and to make sure that a newspaper continued in existence.
Mr. Peter Thurnham: Does not the success of News International prove the folly of trying to protect restrictive practices, as advocated by the right hon. Member for Chesterfield (Mr. Benn)?
Mr. Clarke: If the right hon. Member for Chesterfield was allowed to determine industrial relations in the newspaper industry and had some of the industrial action that he has supported succeeded, we would have fewer newspapers in this country and a much more uncertain outlook for the press, democracy and all the other considerations that the Opposition have discussed. We are merely facing unreasonable political prejudice on the Opposition's part and that prejudice is trying to get behind a sensible, legal decision.
Mr. John Smith: Will the Chancellor of the Duchy of Lancaster define the section of the market to which he referred? Is it not the case that Today occupies the same section of the market that The Sun occupied before its purchase by Mr. Murdoch? If the Minister is so sincere about protecting jobs, why did he not make it a condition of consent that those jobs were protected?
Mr. Clarke: At the moment, Today is in the middle of the market. Obviously one cannot determine this, as, for a start, it is a matter of judgment. In my judgment, Today is in the same part of the market as the Daily Mail and the Daily Express. The security of those jobs will depend on the improved success of the title. The title obviously must win more circulation and readership and get itself into a more secure financial position. At the moment, it is uneconomic and is facing the threat of closure. My right hon. and noble Friend has rescued the paper from that threat.

Agriculture Council
4.35 pm
The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor): With permission, I shall make a statement about the meeting of the Council of Agriculture Ministers of the European Community, which took place during last night.
After four months of negotiations, the Council finally took decisions on support prices and other measures for 1987–88. The compromise agreement marks a further significant step towards achieving a reformed common agricultural policy that is more market orientated, with reduced price support and with intervention systems operating to provide a safety net and not an alternative market outlet. The changes in the cereals and oilseeds regimes complement the substantial reforms which were achieved last December in the milk and beef sectors. The agreement will produce savings for the Community budget in 1987 and 1988; and it is a relatively favourable settlement for the United Kingdom, improving the position of our farmers and traders relative to their main competitors in the Community.
The decisions include substantial changes in the support arrangements for a number of commodities. There will be cuts in the prices at which cereals, oilseeds, rice and olive oil are bought into intervention. The periods of the year during which intervention is available for these products will be shortened. Guarantee threshold arrangements are introduced for olive oil, soya beans and tomatoes, and the existing threshold arrangements for oilseeds will operate more effectively. The Council also cut support for wine, protein crops and those fruit crops which place the biggest burden on the budget.
Following the discussion in the European Council earlier in the day, there was no question of the oils and fats tax being adopted. The Commission has not withdrawn its proposal and intends to hold discussions with overseas suppliers. I re-emphasised our position of strong resistance to that tax and made it clear that our attitude is unchanged.
The package includes a number of decisions in the agrimonetary area. Those include a devaluation of the green pound so as to reduce United Kingdom monetary compensatory amounts by 7 points for beef and 5½ points for other commodities, with the exception of sheep. Green rate changes for sheep will be considered as part of the review of the sheep regime later this year. Besides the devaluations, our farmers and traders will benefit from changes in the method of calculating monetary compensatory amounts for beef, cereals and dairy products, for which we pressed during the negotiations.
Following discussion by Heads of Government, the Council adopted new arrangements for phasing out existing positive MCAs and continued the present system that prevents new positive MCAs from arising, but with some adaptations which should be of some assistance in reducing the inflationary effects and which provide for the more automatic removal of new negative MCAs. This new system will be reviewed after one year.
I estimate that, taking the prices and the green rate changes together, this package will itself leave United Kingdom farm incomes unchanged. The effect on consumers will be very small.
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In the negotiations I secured a number of welcome changes to the Commission's original proposals. I fought off any decision on the proposal to limit the number of ewes per farm which can receive annual premium. The Commission promised to make a proposal for a system of milk quota leasing; this is now being discussed in Brussels. I negotiated an additional year, up to April 1989, for the acceptance of salted butter into intervention. The Commission has agreed to present an overall study of alternative land use for consideration by the Council in the autumn, and the Council has accepted the need to take rapid measures to ensure an adequate margin for the refining of raw cane sugar in the United Kingdom.
This agreement is a further important step in the direction of reform. But the problems of surplus production remain, and, with them, the heavy budgetary burdens that result. There is no doubt that further decisions will be needed later in the year to correct the unacceptable budgetary situation.
Mr. Brynmor John: Because of the complexity of statements such as the one that we have just heard, more questions appear to be begotten by them than usual. I hope that we shall be given a guarantee of an early debate so that we may reduce the number of questions.
I wish to make two references to the statement which I think will be uncontentious. First, let me say to the right hon. Member for Westmorland and Lonsdale (Mr. Jopling), who was formerly Minister of Agriculture but has now been replaced, that we thank him for the courtesy and patience with which he has always explained and kept us informed of developments. Whatever our judgment of his tenure of office, we wish him well on the Back Benches.
Mr. Dennis Skinner: He was a dumpling.
Mr. John: Yes, but he was the best dumpling we had.
Secondly, I welcome the new Minister of Agriculture, who makes his first appearance in his position today. He brings many attributes on his return to the Ministry, but he certainly does not bring as many inches with him. While I cannot promise that I shall see eye to eye with him on many issues in the metaphorical sense, at least I shall have more chance of doing so in the physical sense than I had with his predecessor.
Any efforts that the right hon. Gentleman makes to bring sanity to the common agricultural policy will have the backing of the whole House. I welcome the news that there will be no oil and fats tax, and that the Commission is not pursuing the new premium flock size limitations. The effect of the former would be penal for both United Kingdom consumers and the Third world, and the effect on the latter would be discriminatory. The Commission intends to return to both measures later, but it must be told in no uncertain terms that our opposition will not waver in the interim.
I should like to ask some detailed questions. The first concerns milk quota leasing. The effect of that will depend on how quickly it is brought into force. We are already into the financial year. How quickly will it come about, and will it be of any help in the current financial year?
Secondly, will the Minister confirm that, even with the lowering of the MCAs—I congratulate him on the masterly clarity of the statement on MCAs and negative MCAs—our beef producers will still be at an 8 per cent. disadvantage as opposed to their Irish counterparts, consequent on the October package for the Irish Republic

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alone? Can the Minister tell us whether — and, if so, when — the common agricultural policy will run out of money this year? Making payment in arrears rather than in advance, and other savings, would not appear to be anything like enough. Many people fear that what the Minister says about corrections to the policy later in the year simply means the raising of further revenue. That will be resisted by both sides of the House until the EEC undertakes reform that will eliminate surplus production of food within the Community.
Thirdly, what is the expected effect of the price proposals on the volume of reduction? The Minister talked about the cut in cereals, oilseed rape and other products, and that must be placed alongside December's livestock package. But what is the estimated effect of the changes in reducing the food mountains in the various regimes? Will it bring reductions in those, or will it merely lead to more production as farmers try to grow more to compensate for lost income?
Will the Minister also clarify his statement that the agreement will produce savings in 1987–88? Will it produce savings against the budget, or against the overspend which is now £3 billion to £3·5 billion above what was budgeted for the CAP? Is the report in the Financial Times accurate? It says that all the savings will be offset by the so-called reform of the agrimonetary system agreed largely by the Germans and the French at the conference.
This package amounts to yet another evasion of responsibility — another hasty and short-term package, and another failure of will on the part of the Ministers. Once again, the need to reform the CAP has been accepted and then forgotten. But this is not an endless process. It has gone on for far too long, and the Ministers must tame the CAP before it destroys them.
Mr. MacGregor: I understand the point that the hon. Gentleman has made about the complexity of the issues, and I am sure that my right hon. Friend the Leader of the House will have heard his remarks about the need for a debate—although the number of questions that the hon. Gentleman has asked me almost provokes a debate in itself.
I am grateful to the hon. Gentleman for his tribute to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling). It gives me the opportunity to say that my right hon. Friend played a very notable part in advancing the reforms of the CAP. He was in the forefront, because he understood that they were necessary in the long term for our farmers' interests. He fought hard and successfully for British interests in achieving those reforms, and I believe that he will be seen to have played a significant part in the development of agriculture. I am also grateful for the hon. Gentleman's remarks to me.
Two of the main objections to the oils and fats tax were those raised by the hon. Gentleman—first, that it would be heavy on consumers, and heaviest on the poorest consumers in the United Kingdom, and, secondly, the Third world impact. There has been considerable concentration on American resistance to the tax but the hon. Gentleman is right to draw attention to the Third world. As for the limit on headage payments for ewes, I stressed strongly in the Council, when it was pushed from that discussion into discussing the sheepmeat regime, that I regarded it as very discriminatory towards the United
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Kingdom. My right hon. Friend the Prime Minister said the same in her statement, and I will maintain that position.
We had considerable discussion about milk quota leasing both before I arrived at the Council and during my time there. I will be following up that discussion urgently, and I hope that arrangements will be made as soon as possible.
As for beef producers vis-á-vis the Irish, there is still a gap, but I am sure that the hon. Gentleman will recognise that we have achieved a considerable improvement in the position as a result of the changes that have been made. It is important to note that the Irish Minister voted against the final MCA package—the green rate package. On the question of the cost of the CAP and the change from advance payment to reimbursement, that is now going to the ECOFIN Council so that Finance Ministers can decide exactly how it should be implemented. It is not possible at this stage to say how much budgetary savings will be achieved from it during the year, but clearly it could be significant.
I entirely agree with the hon. Gentleman about dealing with the budgetary gap in the CAP through further revenue proposals. That is why we originally fought the cereals co-responsibility levy, and it has been a major argument in our opposition to the oils and fats tax. I am glad to know that my resistance to those measures will be supported by the Opposition.
As for the expectation of production, the purpose and thrust of our progress on stabilisers in the Community system is to reduce production where we have surpluses. However, we cannot always be sure exactly how much will be achieved. We all know the effect of technological advance and progress in increasing production from the same amount of land. It will also depend on our harvest. But the thrust of the proposals is to reduce surpluses, and hence to reduce production where there are surpluses.
Finally, the hon. Gentleman spoke of evasion of responsibility and a hasty decision. As it has taken us four months — almost into the marketing year for several commodities—to reach agreement, it was hardly a hasty set of decisions. The fact that it took so long to reach those decisions surely demonstrates the difficulty of reaching agreements among 12 people on what are now clearly enormous challenges for all Agriculture Ministers. Very painful decisions had to be taken which would have very painful effects on many farmers. Therefore, it is understandable that it took so long. That we are facing up to the issues shows that there is no evasion of responsibility. There has been a significant change of attitude, compared with a few years ago, among the Council of Ministers, and it is realised that these issues have to be tackled. However, we are only one of 12 member states. I agree with the hon. Gentleman that we need to make further significant progress.
Several Hon. Members rose——
Mr. Speaker: Order. I ask for brief questions on this statement. We have a very heavy programme in front of us today, and there will be questions on agriculture tomorrow.
Sir Hector Monro: I congratulate my right hon. Friend on his appointment. Will he accept that many of us on this side of the House appreciate the long hours of work that he has put into the EEC during the last few

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weeks in order to reach a long overdue conclusion? Will he also bear in mind that in the livestock and less-favoured areas there is still grave concern about confidence and future stability? Can my right hon. Friend reassure us about beef production, and can he say whether a further devaluation of the green pound is possible? Finally, is he convinced that there is no way in which the Irish could get round the agreement and obtain preferential treatment in our markets?
Mr. MacGregor: I am grateful to my hon. Friend. I agree with him that conclusions were long overdue. I was anxious to reach a settlement because I recognised the uncertainty that was being created for farmers and traders because of movement into the marketing year, with no decisions having been taken. I understand only too well my hon. Friend's point about future confidence and the stability of the regimes. However, I strongly believe that it is in the long-term interests of farmers that we should get on top of the surpluses and the enormous budgetary overruns in order to create confidence. Without doing so, we run the risk of a descent into chaos. Therefore, it will be to the long-term advantage of our farmers that reform should be achieved.
I cannot say whether or not there will be a further devaluation of the green pound. The results that we achieved—a better position on the green pound than the Commission originally proposed — were fair to our producers in the current circumstances, bearing in mind also the need to avoid heavy budgetary increases.
Mr. Geraint Howells: May I first congratulate the right hon. Gentleman on taking over this very high office of looking after British agriculture and consumers? I wish him well in his deliberations, and may he be blessed with good health. I pay tribute also to the right hon. Member for Westmorland and Lonsdale (Mr. Jopling), who has retired from that office, for services rendered to British agriculture.
By devaluing the green pound by 5 per cent., are British farmers now competing on equal terms with their European counterparts? Will the right hon. Gentleman also assure sheep producers that he will not give in on the number of sheep that qualify for the ewe premium? Furthermore, how long does the right hon. Gentleman think it will take to do away with our surpluses? Does he think that they will diminish in four or five years?
Finally, there seems to be a little disagreement between the right hon. Gentleman and the Prime Minister. I understand that he is quite pleased with this week's deliberations in Brussels. However, having listened to the Prime Minister, I do not believe that she is satisfied with the present state of the common agricultural policy. What, therefore, does the future hold for British agriculture?
Mr. MacGregor: Again, that is almost a speech in a debate. However, to be as brief as possible, I am grateful to the hon. Gentleman for his welcome. I am very conscious of my heavy responsibilities. I am even more grateful for the tribute that he paid to my right hon. Friend the Member for Westmorland and Lonsdale. It was extremely well deserved.
On the hon. Gentleman's point about devaluation and whether it has helped British producers, it is important to look at the estimated changes in average support prices. If one looks at the early calculations, which are fairly
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accurate, one sees that, overall, the change in average support prices in the United Kingdom is about plus 2·4 per cent., compared with the Community average for the Ten of about plus 0·5 per cent. Therefore, we have achieved a very helpful and relatively improved position for British farmers. The hon. Gentleman knows that there has been a 7 per cent. devaluation for British beef, whereas it is 5·5 per cent. for other commodities. We shall have very difficult discussions on sheepmeat when we see the Commission's proposals for the review of the sheepmeat regime. I gave a clear indication in the Council that I was strongly opposed to the proposal for a ceiling on headage payments.
As to when the surpluses might disappear, I have been in the job for only a short time, but even after having been in it for quite a long time, I suspect that it would not be possible to answer that question.
Finally, I assure the hon. Gentleman that there is no disagreement between my right hon. Friend the Prime Minister and me. I should have liked there to be more progress this week on agriculture.
Mr. Nicholas Budgen: Since my right hon. Friend the Prime Minister now concedes that reform of the common agricultural policy and the system of budgetary control agreed at Fontainebleau has failed, why cannot the Government, first, be very polite to our 11 partners in the EEC and, secondly, make it absolutely plain that in no circumstances whatsoever will the Government recommend to this House that there should be an increase in resources payable to the EEC?
Mr. MacGregor: That question should be addressed to my right hon. Friend the Prime Minister. In fact, she responded to it in the earlier exchanges.
Mr. Ron Davies: Why is the Minister content to rely entirely on price cuts rather than on quotas to curb production?
Mr. MacGregor: I hope that I have made it clear that I am not doing so. For example, if he looks at what has been achieved in the dairy sector, the hon. Gentleman knows perfectly well that quotas have been introduced and that they are producing considerable stability. However, there are very serious administrative and policing difficulties over transferring that stability to other sectors, such as cereals. We have to face the fact that land must come out of cereals production. That is why we are looking at alternatives. They include set-aside and alternative land use. I hope to explore further these alternatives at Community level as well as at national level.
Sir David Price: On alternative land use, will my right hon. Friend tell the House whether the present agreement will help or hinder the further production of wool in the United Kingdom, which many of us feel could be expanded? He will recall that once it was the great, staple trade of large parts of the kingdom.
Mr. MacGregor: I do not think that the agreement that has been reached this week has any impact on that issue. However, I know that many people in the farming community are looking at possibilities for wool. However, one should not exaggerate the impact that they will have on land use, having regard to the problems that we face over surpluses.
Mr. Harry Ewing: May I press the Minister a little further on his understandably brief reference to the wine industry? During the discussions on the wine industry, were any proposals put forward to increase the amount of fermentation alcohol that is to be refined and unloaded on to the industrial alcohol market? If such proposals are put forward, I urge the Minister strongly to resist any increase in the amount of fermentation alcohol to be distilled because of the disastrous effect that it would have on the production of industrial alcohol in chemical industries, such as those in Grangemouth, which is in my constituency.
Mr. MacGregor: During the time that I was in the Council there was little discussion of the wine regime, and that particular matter was certainly not discussed. I cannot recall offhand what happened earlier in the Council discussions. However, I shall write to the hon. Gentleman.
On the hon. Gentleman's wider point, I have taken note of what he said. I am aware of the various discussions that are taking place about industrial use, and I shall wish to consider the matter further.
Mrs. Elaine Kellett-Bowman: I thank the Minister for following in his predecessor's footsteps and resisting the limitation on ewe headage payments. I thank him, too, for getting a better devaluation of the green pound than at one time looked possible. However, may I ask him to follow in the footsteps of his right hon. and learned Friend the Foreign Secretary? Now that New Zealand is no longer pulling its weight in defending the free world, will he consider distributing the 75,000 tonnes among British farmers?
Mr. MacGregor: I know how strongly my right hon. Friend felt about the ceiling on ewe premiums, and I agree with him entirely. I am happy to follow in his footsteps, as in other ways. As for my hon. Friend's point about New Zealand, that issue does not face us at present.
Mr. William Ross: Given that in two statements today we have been told about less intensive farming and changes in land use, will this not in practice translate into lower production per acre? Since no further money is to be made available, will the Minister confirm that eventually that will be translated into a loss of farms and into a loss of jobs in farming? Given that we have a land frontier with the Irish Republic, have the matters been discussed within the ambit of the Anglo-Irish Intergovernmental Conference in an effort to make the Irish Republic accept the sensible stance that has been taken by Her Majesty's Government?
Mr. MacGregor: I have not been a party to the discussions in the Anglo-Irish Conference, so I do not know the answer to the question. On the wider question that the hon. Gentleman asked, obviously less intensive use of land will play some part in dealing with the problem of the surplus that we face. The fact is that, with the enormous improvements in yields and in farming technology, together with the ability, not only until now but increasingly in the future, to produce much more food from the same amount of land, it is clear that agricultural land will have to come out of food production. We have to face up to that as one way in which the problem of the surpluses will have to be tackled.
Mr. Nicholas Bennett: My right hon. Friend will be aware of the tragic number of family farm
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bankruptcies that have recently occurred in Wales. Therefore, I welcome the fact that farm incomes will not be worsened and that my right hon. Friend is to take urgent action on milk quotas and the leasing of them. What does my right hon. Friend now believe to be the green pound gap for the beef sector?
Mr. MacGregor: I should like to make it clear that when I was referring to a neutral impact on farm incomes I was talking in relation to the package. Of course, many other factors affect farm incomes during the year—it is too early in the year to say what the effect of those will be—including the effect of the harvest and the way in which dairy producers react to reduced quotas and so on. I have stated that I believe that the beef devaluation was the fairest and best deal that we could get for our beef producers in the current price fixing review.
Mr. Gerald Bermingham: Does the Minister agree that the value of the green pound and its periodic devaluation or revaluation have often meant that British farming has lost out over the years because of the gap between the fixing of one value and the fixing of another? Would it not be better to tie the value of the green pound to the European basket of currencies a propos sterling, and thus protect our farming industry?
Mr. MacGregor: I do not think that that would necessarily make any difference. It is important to recognise what has happened with the devaluation of the green pound over recent months. We must consider the combination of the strengthening of sterling and the result of the negotiations that we have just completed in the price fixing review. Since February, cereals MCAs have fallen by about 14·5 points, and beef MCAs have fallen by almost 16 points. That is the kind of devaluation that farmers and many others were calling for in February, and it has now been achieved.
Mr. Charles Morrison: When does my right hon. Friend hope that the consideration of milk quota leasing will be complete? The matter is causing grave concern. In the context of the grain surplus, has any consideration been given to the possibility of encouraging spring cereals, as opposed to winter cereals, as a means of reducing overall production?
Mr. MacGregor: On the first question, I understand entirely my hon. Friend's concern on behalf of farmers. I stressed the urgency of getting some resolution of the matter during the Council discussions. We shall follow it up urgently. I hope that we shall be able to get decisions fairly soon. The second question was not discussed during the negotiations.
Mr. Robert Maclennan: Will the Minister be kind enough either to publish in the Official Report or perhaps to set out in detail in a letter his detailed calculations about the impact of the package on farm incomes, sector by sector, to explain the interrelationships of the MCA changes with the various cuts in price support?
Mr. MacGregor: I shall consider how that could be done. Of course, the estimate I have given that the effect on incomes would be neutral is tentative at this stage. It is difficult to single out the impact purely of the price fixing decisions on incomes, given that so many other variables affect incomes.
Mr. Nicholas Winterton: Will my right hon. Friend direct his attention to the problems of the dairy industry, particularly those of the small dairy farmer, in light of the remarks made by our right hon. Friend the Prime Minister? She said that measures should not be introduced because they would have to be phased in, and they should not have a retrospective impact. Will he recall the problems of smaller dairy farmers, who were retrospectively faced with quotas? Will he give an assurance, if the matter was not discussed at the recent Council meeting, that he will consider not imposing any further quota cuts on farms that have quotas of under 300,000 litres? Further, if there are quota sales, will the Minister consider imposing levies on farmers when farms have quotas in excess of 300,000 litres? That would preserve and ensure the position of the smaller dairy farmer, which is important in many parts of the country.
Mr. MacGregor: As my hon. Friend knows, I well recall the introduction of dairy quotas. I know of his extreme interest in the matter. He referred to retrospective impact. I strongly believe that, if the Council had faced up to the need to deal with dairy surpluses earlier than it did, we would not have had such difficulty and pain in the first year. Nevertheless, now that the situation has stabilised quite a good deal, it is helpful to the longer term certainty of dairy producers. There are no propositions before us that would enable consideration of the type of issue that my hon. Friend raised, but I have heard what he said.
Mr. Tam Dalyell: What can we usefully say about the change in the guaranteed credit restrictions on tomatoes and the guaranteed threshold agreements for growers in places such as central Scotland? Will the Secretary of State put on the agenda for the autumn session, on the matter of alternative land use, the future of the low country of Caithness and Sutherland? It is becoming an urgent matter throughout Britian.
Mr. MacGregor: The hon. Member for Pontypridd (Mr. John) helpfully suggested that it was a complex price package. I am grateful for that. I knew that I would be caught out on some detail of the price package. I shall write to the hon. Member for Linlithgow (Mr. Dalyell) about the tomato matter. My right hon. and learned Friend the Secretary of State for Scotland has been dealing with the matter of the low country. I have not yet had time to look at it.
Mr. Robert Key: What a welcome relief it is to hear my right hon. Friend say that he anticipates no fall in agricultural incomes as a result of the package. I ask him to address the consequential problem of the crisis facing the agricultural engineering industry. It has two consequences for agriculture: first, increased import penetration with manufactured goods and, secondly, the growing problem that farmers face of getting spare parts for machinery.
Mr. MacGregor: I am sure that my hon. Friend will agree that it is inevitable that, when we are facing up to worldwide surpluses, the agricultural engineering industry, with which I keep in close contact, is bound to face considerable market problems. There is no way of avoiding that problem; it is worldwide. Before I went to Brussels yesterday, I was at an exhibition at which there were a number of representatives of the agricultural engineering industry. I thought that they were innovative and doing well in carving out markets for themselves.
Mr. Brian Wilson: I am surprised that a man from Lanarkshire has been caught out on the tomato matter. Does the Minister agree that quotas in any shape or form would have a disproportionate and disastrous effect on fragile rural communities in Scotland? Will he resist at all costs the imposition of such quotas? Does the negation of the oils and fats tax extend to fish oil and fishmeal?
Mr. MacGregor: On the first point about sheep quotas, we do not actually know what proposals the Commission will make in its review of the sheep regime. We shall have to wait to see what they are. On the second question about the oils and fats tax, some dispensations have been given for fish oils. I repeat that, for a variety of reasons, we are opposed in principle to the oils and fats tax. I am glad to say that a number of other member states, sufficient to produce a qualified minority blocking vote, hold the same view. We do not now have to consider the proposition.
Mr. David Heathcoat-Amory: Does my right hon. Friend agree that we are only part way through an agricultural revolution based on new technologies and techniques that will go on increasing European production? What is the overall effect on cost of the package of rather modest price adjustments? Does my right hon. Friend agree that, eventually, we shall have to repatriate the cost of agricultural support so that member countries can decide how much taxpayers' money to commit to agricultural support?
Mr. MacGregor: I agree with my hon. Friend. One of the big difficulties, and why this matter is such a challenge, is that we shall increasingly see the impact of all the things to which he has referred raising production. On actual costs—or the effect on the budget of this package—if one takes into account the extra revenue that has resulted from a sugar levy, the saving to the budget this year and next year is about 1 billion ecu, or £700 million. Of course, that is a saving to the budget, and to that extent there will be an impact on the overspend. The actual saving, not including the increased revenue from the sugar levy, is about 800 million ecu.
Mr. Bob Cryer: Will the Minister translate the savings that he claims for 1988–89 in the agriculture budget into a percentage? It is currently 73 per cent. of total Common Market spending, but what does he expect it to be in 1988–89? He said that the oil and fats tax proposal has not been withdrawn by the Commission. However, will he assure the House that, if the veto still exists, it will be applied by the Government to stop any increase?
He said also that the problems of surplus production will continue. Is he not concerned that, as those surpluses grow, giving dramatic evidence of the failure of the CAP, the Government could make a better job of that by renationalising agriculture in the United Kingdom? Es he not disturbed by the fact that the pro-Market fanatics, such as the right hon. Member for Old Bexley and Sidcup (Mr. Heath), never attempt to defend the Common Market now?
Mr. MacGregor: Currently, the proportion is not 73 per cent. but, from memory, I think that it is about 67 per cent. It is too early to make any estimates for future years because we finished only a few hours ago. I have already made it clear that the oils and fats tax is not now before

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the Council. In fact, it was pushed right off the debate. The Commission is maintaining its proposal, but the qualified blocking minority stood firm during the discussions and the question is now academic.
On surpluses, I would not put all the emphasis on the failure of the CAP because this matter is a difficult challenge for the CAP. I should put much more emphasis on the great success of our farmers, and the trades that assist them, in producing enormously increased yields in recent years. It is that that produces the challenge for us. However, I do not believe that tackling this matter at a national level alone is sufficient. What strikes me, compared with when I was last in the Ministry, is that this issue cannot now be resolved, even within the CAP. It needs to be resolved at an international level because of the high levels of agricultural support in so many countries, including the United States, as a result of the surpluses. The importance of the GATT negotiations, on which we are now embarking, is to deal with agricultural surpluses worldwide. The problem will not be solved purely on a national level.
Several Hon. Members rose——
Mr. Speaker: Order. I shall endeavour to call the four hon. Gentlemen who are standing, but I ask them to be brief.
Mr. Derek Conway (Shrewbury and Atcham): My right hon. Friend's news on the green pound is welcome as is the fact that he is continuing to resist the discredited alliance two-tier cereals pricing policy. Can my right hon. Friend assure the House of the time scale that we might see for milk quota leasing? Will he tell the House a little more about the impact on our surpluses of New Zealand imports? Finally, can my right hon. Friend assure those of us who are not competing for Shadow Cabinet election, but who have farming constituents, that the proposals contained in his statement this afternoon will, on reflection, defend a central British national interest?
Mr. MacGregor: If I may, Mr. Speaker, I shall answer those questions — or some of them — briefly. My hon. Friend is entirely right about the two-tier cereals pricing policy. I can think of no policy that is more designed to hit British cereal farming interests, as compared with European, than the two-tier cereal pricing policy that the alliance put forward at the election. As I have already suggested, we are urgently pursuing the timescale for the milk quota system. On my hon. Friend's final point, I can assure him that I am determined to see that British farming
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interests are not unfairly jeopardised. I shall stand up for legitimate British farming interests as we continue with the problems of dealing with the CAP reform.
Mr. Neil Hamilton: Does my right hon. Friend get depressed at continually having to meet European politicians who exhibit so many of the fixations of the Labour party, such as little concern for the interests of consumers and taxpayers, but obsessive concern for producer interests, repressive regimes, and spend, spend, spend policies, regardless of where the money is coming from? Does he appreciate that many Conservative Members agree with the view expressed by my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) that these countries in the Community that produce the surpluses should pay for them?
Mr. MacGregor: A change of direction appears to be taking place in the Council of Ministers. However, the problems are so difficult that it will take time to make the significant changes that I should like to see. I stress that there is clear concern for consumers and that the effect of this year's price package on them will be small. In fact, it will amount to less than one tenth of 1 per cent. on the retail price index.
Mr. Anthony Steen: On alternative land use, is my right hon. Friend aware that we now have more than 200 commercial vineyards in this country? He mentioned wine in his statement, but can he say something about the way in which wine will affect alternative land use in the future?
Mr. MacGregor: I hope that it will expand in this country. About a quarter of a mile from my cottage in Norfolk is an excellent English wine grower who is doing extremely well. I am keen to encourage the wine-growing sector in this country. However, it is still so small that it does not make any impact on or play any part in the wine regime.
Mr. John Carlisle: Has any consideration been given to the reduction of Third-world cereal substitutes? My right hon. Friend must accept that it is a little galling for our cereal producers to be encouraged to cut their production while there are massive imports from the Third world in substitutes?
Mr. MacGregor: That was not much discussed during my time at the Council. However, my hon. Friend should take some other points into account, such as the interests of the livestock producers who have benefited quite a lot recently from the change in cereal prices. Of course, we have responsibilities to Third-world countries. I had that very much in mind and it was one of the reasons that we opposed the oils and fats tax.

"Today" Newspaper
5.17 pm
Mr. John Smith: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the proposed sale of the Today newspaper to News International plc and the necessity for reference to the Monopolies and Mergers Commission".
In view of the heated exchanges that took place in the House earlier today, I need hardly dwell on the fact that this is a specific and important matter. It hardly needs to be argued that the matter is urgent because its urgency was prayed in aid by the Government in justification of their decision. Therefore, I seek to make this application under Standing Order No. 20.
Mr. Speaker: The right hon. and learned Gentleman asks leave to move the Adjournment of the House under Standing Order No. 20 for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the proposed sale of the Today newspaper to News International plc and the necessity for reference to the Monopolies and Mergers Commission".
I have listened with care to the questions this afternoon and to what the right hon. and learned Gentleman has just said. He knows that my sole duty in considering an application under Standing Order No. 20 is whether to give it priority over the business set down for today or tomorrow. I regret that I cannot find that the matter that he has raised meets those criteria and I cannot, therefore, submit his application to the House.
Mr. Smith: On a point of order, Mr. Speaker. This is an important matter, and we understand the restrictions under which you must operate. However, as the Leader of the House is in his place, might I request that the Government find time, perhaps early next week, for a debate on this subject?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Wakeham): Further to that point of order, Mr. Speaker. I recognise the importance of this subject and the interest that has been shown in it. The Government will make arrangements for an early debate on the matter, but perhaps the timing is best discussed through the usual channels.
Mr. Tony Marlow: On a point of order, Mr. Speaker. As the first statement today by my right hon. Friend the Prime Minister was of much greater significance and importance than the subsequent statements, would it be possible to ask the Leader of the House, who is here at the moment, for an early debate on that subject also?
Mr. Speaker: I am sure that the Leader of the House will have heard that, but the hon. Gentleman may have another opportunity to ask him tomorrow.

"Today" Newspaper

  BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 17 JULY
  Members successful in the ballot were:

  Mr. Churchill

  Mr. Paice

  Sir Brandon Rhys Williams

Orders of the Day

  Debate on the Address
  [FIFTH DAY]
  Order read for resuming adjourned debate on Question [25 June]
  That an humble Address be presented to Her Majesty as follows:
  Most Gracious Sovereign,
  We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain arid Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. Churchill.]
  Question again proposed.

  Debate on the Address

    Cities (Education and Services)
    Mr. Speaker: As I have already announced to the House, no fewer than 48 right hon. and hon. Members seek to take pail in today's debate on the Queen's Speech. I again make a special plea for brief contributions, bearing in mind the fact that a large number of new Members wish to make their maiden speech.
    I must announce to the House that I have selected the amendment in the name of the Leader of the Opposition.
    Mr. D. E. Thomas: On a point of order, Mr. Speaker. At the beginning of our debate on the Queen's Speech, I asked whether you could select the amendment tabled by myself and my hon. Friends, which is second on the Order Paper, after the Leader of the Opposition's amendment. Does your decision on that amendment rule out the selection of my amendment in tomorow's debate? If our amendment were selected, it would give us the opportunity to vote on the substantial matters contained in it.
    Mr. Speaker: If the hon. Gentleman looks at Standing Order No. 32, he will see that my discretion to allow a second amendment is confined to the last day of the debate on the Queen's Speech. I have not yet considered that matter. Today, we have the Leader of the Opposition's amendment.
    5.22 pm
    Dr. John Cunningham: I beg to move, at the end of the Question, to add:
    but humbly regret that the Gracious Speech lacks any coherent strategy to regenerate Britain's cities and urban areas, contains proposals to diminish local accountability and undermine the quality of local services, especially housing, and to introduce the poll tax; and regret those Government proposals which will disrupt Britain's education service, limit choice, restrict opportunity, threaten standards and lead to greater central control.
    I congratulate the Secretary of State on his reappointment to his position. I guess that, like us, he shares the hope that he will have to spend more time in this Parliament on future effective legislation and less time on retrospective legislation, putting right the incompetent previous acts of his predecessors. I express commiserations to the right hon. Member for Brent, North (Sir R. Boyson)

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    who, in spite of our differences, always treated my hon. Friends and me with courtesy and consideration in our dealings with him.
    The recognition by the Government of the need to have more urgent and more effective address to the needs of Britain's cities and urban areas is welcome. The Labour party has believed for many years in the need for new policies and mechanisms to deal with the deteriorating circumstances in many urban communities. A huge consensus for action for change has developed outside Parliament and outside politics, led by voluntary organisations, the churches and professional bodies. Given the mountain of evidence and the broad nature of views in that consensus, it is extraordinary that it has taken eight years for the Conservative Government to get the problems of millions of British citizens back to the top of the agenda.
    It was over a decade ago that a Labour Government recognised that need, when they conceived the ideas of partnership to begin a more sustained, coherent attempt to improve the physical environment: employment opportunities, community facilities, housing, education and morale in neglected city and urban communities. The principles and ideas embodied in partnership are as valid now as then. The problems are well defined. We all know that, while some areas of all our cities and towns are bright, vibrant, attractive, prosperous and reasonably safe and secure, although increasingly less so, too many of our urban communities are forced to live in awful conditions of unfit housing, high rates of deprivation, unemployment and crime, and have little hope of change unless policies are changed dramatically.
    We know that the people want again to make a contribution to rebuilding Britian's economy, our manufacturing base. We know, as they do, how vital it is that our cities should be strong, attractive, thriving and well-managed communities because in the ebb and flow of national, indeed international, change, the cities will always be central to millions of people as the places in which they most want to live and work.
    However, a visit to many of our major cities today, such as Glasgow, Newcastle upon Tyne, Leeds, Manchester, Liverpool, Coventry, Birmingham and London, demon-states the failures of Government policies over the past eight years and the damage resulting from those policy failures. We see industrial decline, dereliction, social injustice, the miseries of persistent high unemployment, low pay and racial prejudice. We see that the welfare state can no longer guarantee the people's welfare. Why is that? Why are large areas of our major towns and cities so neglected? Who benefits from such neglect? Not their citizens, not Britian. Not the British people, whether they live in town or country.
    Mr. Tony Marlow: The hon. Gentleman said that the Labour party recognised those problems some 10 years ago. Will he tell the House, and, I suppose, the nation, why the worst problems of housing, education, deprivation, industrial decline and unemployment take place without exception in areas controlled by Labour local authorities? Why have they not done anything about them?
    Dr. Cunningham: I intend to spend the next 20 minutes addressing the House on why those circumstances are as
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    they are, but I regret giving way to the hon. Gentleman because I shall develop my speech in my own way. I say simply that what he says is not true. What has happened, on the contrary, is that in election after election at local level, the Tory party has been driven from office in the inner cities and urban areas, leaving manifest problems in its wake—for example, in Liverpool.
    Britain is weakened by that weakening of our cities, which were and should be the backbone of our economy, the centres of British innovation in science, the arts and medicine, as well as in industry. Why are school teachers demoralised and schools falling down? Why are we unable to fight crime as effectively as we should? Why is so much housing, whether public or private, rundown and in need of repair? Why are so many of our young people unemployed? Why are so many women afraid in their own cities, even in their own homes?
    It is not that Tory policies have not been tried. It is not that the Tories have not had time. They have had eight years. It is not that their policies have not been tried extensively. There have been 43 Acts of Parliament on local government alone since 1979. It is not that Tory Ministers have not tried to trick their way through, either. They have tricked local government, local communities and even the law. On an unprecedented number of occasions, Conservative Ministers have acted outside their legal powers to frustrate local authorities, and, when they lose in the courts, do they concede graciously? On no; they legislate retrospectively to make their actions lawful.
    Mr. John Maples: One of the Tory policies on the inner cities that has worked quite well is that of establishing urban development corporations, particularly in London. Does the hon. Gentleman really think that the Labour authorities in east London could have achieved in a million years what the London Docklands development corporation has achieved in seven?
    Dr. Cunningham: I am always generous in giving way to hon. Members, but I do not intend to give way if they intervene on different parts of the argument. The hon. Gentleman must know full well that I shall be coming to urban development corporations in a moment.
    Yes, Tory Ministers have had time; they have tried; they have tricked their way through from time to time—the Secretary of State is the best example of that. They have failed to meet the challenge of necessary change in our communities. To date, the record is one of failure and incompetence, but the Government's systematic removal of financial support for our inner cities has been no accident. It was not incompetence. The massive, cumulative reductions now total almost £21·6 billion in rate support grant alone. The 60 per cent. reduction in housing investment, the abolition of the traditional urban programme and all the regular annual cuts have not been the result of incompetence—they have been deliberate acts of policy. The massive, bureaucratic, contradictory and inconsistent legislation has made the sensible management of social services, housing, education and other services immeasurably more difficult for those who are responsible for the affairs of our cities.
    It has been interesting to hear and read some of the speeches of Ministers and former Ministers in the debate. Take, for example, the right hon. Member for Henley (Mr. Heseltine). He said:

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    "We want to make it possible for growth and prosperity to return to the inner cities".
    However, we must be fair to him, because he said that in 1979 when he was the Secretary of State for the Environment. He is still saying the same today. On Monday, he urged his ministerial colleagues to take powers. Where has he been these past eight years? Ministers have taken powers all right. There have been 43 Acts of Parliament and next week there will be another Local Government Bill. One thing is certain with this Government: there is always a Local Government Bill, and a permanent state of legislature change—always with the effect of giving Ministers more powers, always centralising power, always diminishing the power, role, freedom and flexibility of elected local government and often strengthening the power of non-elected local administrations.
    Ministers have not taken only powers—they have taken the money, too. Consider what the Conservative Government have done to funding in the partnership and programme authorities—those councils in the very inner cities and urban communities that we are discussing today. Government figures show that between 1981 and 1987 the reductions in grant to partnership and programme authorities amounted to £9·8 billion, while special programme funding was at £1·9 billion. The reductions were five times greater than the additional funding.
    It used to be accepted that councils' main programmes were the most important tools in the process of regeneration, but the Government have abandoned that approach. The special programmes are hopelessly inadequate to solve the problems. Moreover, the collapse of manufacturing industry has had devastating additional effects on many inner city and urban areas, compounding the problems that they face. In addition, when one recognises that housing investment programmes in those same areas have been slashed from £2 billion in 1979 to £621 million this year, and that the loss of housing subsidy totals £1·4 billion, it is impossible not to see the damage that the Government's policies have done.
    The plethora of conflicting, confused, contradictory legislation, and the financial powers that have been condemned as so damaging even by the Audit Commission and by any reasonable person, should lead anyone to conclude that the position of local government in many of these areas has become impossible.
    The Government are in danger of compounding these failures, as the Financial Times said in a leading article yesterday. Like our amendment, the FT concludes that the Government have no coherent strategy or philosophy for the future of local government in Britain. Like us, that newspaper questions the motives and the methods of the Government. To his credit, the right hon. Member for Henley called, as we do, for a coherent Government strategy to deal with these problems. Few outside the Conservative party — in Parliament, at least — believe that we can solve the problems of the inner cities and urban areas by ad hoc, piecemeal, unco-ordinated, ill-considered change of the type that we have experienced and which is proposed.
    The Government propose again to diminish the constitutional position of elected local government. Few believe that that can lead to more effective, more sensitive, better quality, more open or responsive public services in education, housing provision or social services.
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    That is not to say that the status quo is acceptable to us. No one can be content with a position in which millions of our fellow citizens suffer inadequate housing, education, health and environment. Change is not only necessary but inevitable. How we manage that change is at the centre of the political differences between the Labour party and the Government. It is time for a new agenda for local government. We believe that the reform of local government functions, structure and finance should be on that agenda. That, too, is a widely held view—except, apparently, in the present Cabinet.
    There should be a White Paper on inner-city policies. The last one — regrettably, the only major study of urban policy — was launched by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) when he was Secretary of State for the Environment in 1977, a decade ago. The Government should respond quickly and positively to the realistic, reasonable requests from Jeremy Beecham of the Association of Metropolitan Authorities and Margaret Hodge of the Association of London Authorities for the opening of a new, constructive dialogue in what they describe as a spirit of co-operation. Such discussions should also include the voluntary organisations from the beginning. Their considerable expertise will be invaluable if they are consistently involved.
    Ministers, and especially the Prime Minister, should recognise that, so long as we depend for local administration and delivery of crucial services on institutions with no real autonomy, Government and Parliament cannot escape the ultimate responsibility for the quality and effectiveness of those services. The record and current attitude of the Government is to take power and autonomy away from local councils and local people, c e appwhile laying the blame for failure at local level.
    The Government hold directly conflicting views. In industry they call for local and regional initiatives and solutions, the market solution, but in local government policy the Government centralise more and more power. However, they cannot centralise the ideas and the knowledge so essential to good local government. The Prime Minister and successive Secretaries of State apparently cannot accept, let alone work with, the competition of ideas in a plural democratic society.
    What about the Government's policies and initiatives? On Monday, the Chancellor of the Duchy of Lancaster described Government priorities. He said that they were
    "to ensure that the benefits of a property-owning democracy and an enterprise economy …"
    Dame Jill Knight: On a point of order, Mr. Speaker. Is it not against the rules of the House for an hon. Member to read a newspaper in the Chamber during the course of a debate?
    Mr. Speaker: That is of course true and I hope that no hon. Member is doing so.
    Dr. Cunningham: The Chancellor of the Duchy said:
    "to ensure that the benefits of a property-owning democracy and an enterprise economy reach those parts of the country that they have not yet reached".—[Official Report, 29 June 1987; Vol. 118, c. 348]
    It sounded faintly like an advert for German beer except that the Government's product is a lot of gas, a bit of froth and a bitter taste. They have taken a plethora of initiatives of limited value and impact. They have proposed city action teams, task forces, urban development grants,

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    urban regeneration grants, urban development corporations and Mr. Richard Branson. Several are obscure, with few, if any, new cash resources. Others, like urban development corporations, are more significant but even in total they fall hopelessly short of the scale and nature of the task.
    I challenge Ministers to explain their objectives for these policies and to explain what they propose in the Queen's Speech. Can they tell us what they think these initiatives will have achieved by the end of this Parliament? There is still an absence of any clear sense of purpose and of a strategy to bring resources back to the inner cities in anything like sufficient quality or quantity. No one seems to know who is in charge. Is it the Chancellor of the Duchy of Lancaster, or the Secretary of State for Trade and Industry? According to today's Financial Times, in a period of a few hours yesterday, no fewer than four different Cabinet Ministers claimed overall responsibility for heading this alleged drive to solve inner city problems. Who is in charge? Who is responsible?
    Mr. Neil Kinnock: Richard Branson. Virgin on the ridiculous.
    Dr. Cunningham: None of these initiatives will bring any new freedom of choice to people in the areas concerned. Indeed, urban development corporations meeting in secret deny freedom of information or involvement not just to individuals but to local authorities and to voluntary organisations as well. Such corporations are not required to cooperate in other local plans; too often, the property market leads their work and it is not led by local people's needs or choices. The London Docklands development corporation is the worst example in that regard. [AN HON. MEMBER: "It is very successful."] The hon. Gentleman says that it is very successful. In answer to questions from my hon. Friend the Member for Newham, South (Mr. Spearing), the Secretary of State for the Environment has admitted that the total impact of the London Docklands development corporation is a net loss of jobs in the area concerned. That was the Government's answer during Question Time.
    Mr. Nigel Spearing: That answer was about jobs coming in and about jobs lost through closures. There was a net loss of 517 jobs. Does the answer not show that the urban development corporations cannot be a national model because large areas of public land adjacent to the City of London are being sold and the plans for them do not meet the urgent needs of the inhabitants of Southwark, Tower Hamlets and Newham? It is not regeneration at all.
    Dr. Cunningham: I share my hon. Friend's concern, but that is not to say that we are against the principle of development corporations. However, in reality they are failing to meet the needs of the very local people that the Government say they are expressly trying to assist. No one can convince me that the constituents of my hon. Friend the Member for Newham, South (Mr. Spearing) can afford an £80,000 apartment in the docklands. They are being priced out of the development corporation area because of what is going on there in the property market.
    To be effective, spending and development must be with the participation of local communities and should not be undertaken on their behalf or imposed on them. The
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    dockland experiment and experience shows that public investment must come first. That is the lesson from American experience and of the best of local government. Absence of such participation is exactly what many Tories complain about when they criticise local councils. However, it is exactly what they now apparently support and propose in their policies on central direction and control.
    It is sad to see that the Chancellor of the Duchy of Lancaster has lost the battle with the Secretary of State for the Environment over contract compliance legislation. Again, the American experience is clear; again, legislation is necessary; and again I emphasise that the Labour party stands ready to assist with the passage of sensible contract compliance proposals.
    It is deplorable to see the complete absence of any intention to strengthen the Race Relations Act 1976 or legislation to end racial harassment in housing. In 1983, in similar circumstances, the Conservative party manifesto said:
    "Our goal is to make Britain the best housed nation in Europe."
    In the eight years of Tory policy, investment in housing has been slashed. Millions of houses are now unfit and I million more have fallen into disrepair, giving the nation a total housing repair bill of a staggering £50 billion. That includes many thousands of families in owner-occupied inner-city houses who cannot even get improvement grants. About 250,000 elderly people want to move to more suitable accommodation, such as bungalows or ground-floor flats, but cannot do so because Government policies stop councils building that accommodation and releasing family homes to those on the waiting list. The Tory attitude to housing is that its provision should be left to the market, that somehow Adam Smith's hidden hand will ensure that enough housing will be provided and that divine intervention will ensure that, as fewer resources go into council housing, more will go into the private sector. That has not happened, and it is unlikely to happen.
    Mr. Jerry Hayes: In every sense of the word, the hon. Member for Copeland (Dr. Cunningham) is an honourable gentleman. Will he take this opportunity to express dismay at some of the propaganda put forward by his party during the general election campaign? It said quite clearly that the Conservative Government's proposals were to privatise council properties over the heads of tenants and that that would lead to Rachman-type landlords and high rents. Now that the hon. Gentleman knows about Government policy, will he take the opportunity to refute that?
    Dr. Cunningham: I certainly will not refute that, not least because I said it in several speeches during the election campaign. Until such time as we see the detail of the Government's intention, that remains our view about their intentions and proposals. It is our view not just about people in local government housing, but about elderly people in sheltered dwellings schemes as well.
    In addition to all that, we are now apparently to have a poll tax throughout Britain — the only democratic country to employ such a manifestly unfair and regressive tax. The tax will not be related in any way to people's ability to pay. Again, Tory confusion is evident because the impact of the tax will be most severe in the inner cities, as the Government's own figures show. It will mean startling increases in bills in inner London and most major

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    industrial conurbations. It will further divide Britain because, inner London apart, the people of the north of England and Scotland will be hardest hit while people in the prosperous parts of the south of England will benefit. The poll tax will particularly hit extended Asian families in inner cities and urban areas.
    We know, on the admission of Ministers, and of the right hon. Member for Brent, North in particular, that the poll tax will be at least twice as expensive as rates to collect. The poll tax will be much easier to evade than the rates. Those who pay will have to pay more to make up for those who do not register and do not pay.
    We arc told by The Daily Telegraph that the Government are considering a massive bureaucratic and costly system of Big Brother checks to trap people at swimming pools, bowling greens, libraries, museums and social services departments. We read that many Conservative Members and former Ministers have suddenly discovered the horrors of all this since the conclusion of the election campaign.
    On Monday, the right hon. Member for Henley said:
    "Twice I have advised Conservative Cabinets and shadow Cabinets against this form of local authority finance, and twice, at least, they have accepted my advice. I must say that I have not yet seen any reason to change my mind. I shall listen to the reasons why my right hon. Friends have changed theirs."—[Official Report, 29 June 1987; Vol. 118, c. 281.]
    We did not know he had changed his mind. On 9 December 1986, when a Conservative Back Bencher, he voted on a Second Reading for the principle of a poll tax for Scotland. To make absolutely sure, later, on 5 March 1987, he voted for the Third Reading of the Bill confirming all the details of the legislation of a poll tax for Scotland. He must have a short memory.
    We know that people such as the Prime Minister will save almost £2,000 a year from the poll tax, while many pensioners, single parents, student nurses, apprentices and unemployed people will pay more. We also know that we do not have a proposed poll tax from any sense of fairness on her part. The whole world knows that a poll tax is unfair. It is a tax specifically excluded by the American constitution.
    The poll tax results from a decade-long search to redeem a reckless political promise by the Prime Minister to abolish domestic rates, made without the slightest idea about how to replace them. That included a search for a Secretary of State and a Tory party careless enough, self-seeking enough, divisive enough and reckless enough to legislate and force it through. After four previous attempts, the right hon. Lady has found a Secretary of State who represents unfairness personified. He will force the legislation through regardless of the social, economic, constitutional, and I dare say political, damage it will inevitably cause.
    We on the Labour side look at the people who support the proposal and at the party that supports it: we look at them with sorrow for the British people whom it will harm, and with contempt for those who will support it in the Lobbies. It is not surprising that people in many urban areas and inner cities reject Tory candidates and Tory councils. People recognise the damaging consequences of Tory policies. They have to live with them. The Government programme shows no sign of a coherent response and no evidence of direction. That is why we tabled our amendment and that is why we shall divide the House tonight.
    5.54 pm
    The Secretary of State for the Environment (Mr. Nicholas Ridley): I thank the hon. Member for Copeland (Dr. Cunningham) for his kind words about myself arid particularly about my right hon. Friend the Member for Brent, North (Sir R. Boyson). I am grateful to him and in turn I commiserate with him on the two perils which he has recently had to face: first, getting back here, and, secondly, staying on the Opposition Front Bench. The second peril is still to come. He survived the first peril by a squeak. I gather from his constitutents that the poor performance of the Labour party in the opinion polls persuaded them that it was safe to keep him without risking the nightmare of a Labour Government. I only hope that the hard Left will take such a charitable view when it comes to next week's elections and that we can look forward to working with the hon. Gentleman in the future. If he does not succeed, he will at least be spared a very hard legislative programme that my Department will be putting forward during the coming Session.
    Dr. Cunningham: I am grateful to the Secretary of State for his felicitations. I ought to thank him because, as he ought to know, when he came to my constituency and in an injudicious speech announced that there was no need for any new council housing in Copeland and no need for any new bungalows for pensioners or people with disabilities, he encouraged a few waverers to vote for me.
    Mr. Ridley: I seem to remember that the subject of my speech in the hon. Gentleman's constituency was the future of the nuclear industry. I do not want to open old wounds. It would be much better if the hon. Gentleman and I could continue in the felicitous form in which I started my speech and, if I may say so, in which he started his speech.
    First, I should like briefly to amplify the proposals in the Gracious Speech which concern the privatisation of the water industry. Before legislating to return water authorities to private ownership we will bring forward a Bill early this Session to allow water authorities to prepare for water supply and sewerage functions to he privatised. The Bill will also permit compulsory trials to be undertaken of water metering for households, so that they may test this as a fairer system of charging for water. We have announced that we intend to establish a national rivers authority to take over pollution control and other regulatory functions of the water authorities at the same time as the water authorities are privatised.
    A decision has not yet been taken whether it will be possible to include this second, longer Bill in this Session of Parliament, and, as we intend to publish a consultation paper and have full consultation on our proposals, it looks somewhat unlikely.
    Mr. Allan Roberts: Is there any possibility in the future of the metering of water being made compulsory rather than optional, as at the moment? Will there be metering of sewage? Does the Secretary of State now accept that it is impossible to privatise those functions of the water authorities that relate to the cleaning-up of pollution and that, therefore, the real burdens of public expenditure will be kept by the Government and not saved by privatisation?
    Mr. Ridley: The hon. Gentleman will want to see the consultative paper, but he will find that our new proposals

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    properly leave with Government the responsibilities that are the Government's in those matters. He will see that the Bill gives the water authorities power to set up trials for metering in trial areas where there would have to be power for them to insist on metering to study the effects of it based on demand and on people's behaviour.
    Mr. Allan Roberts: On people's behaviour?
    Mr. Ridley: I will amplify that. The point is the effect on demand of various charging strategies.
    Today's debate is about those parts of the Gracious Speech related to the inner cities — local services and education. In choosing to link the issues for debate, the Opposition at least seem to recognise that they go together as part of a coherent strategy, which is what the hon. Member for Copeland wanted. The strategy is not short-term, piecemeal or cosmetic. Inner city revival can arise only from a radical shift in the balance of power to the people who live in inner cities and use local services. It can be based only on private sector-led growth.
    Local authorities are indeed crucial. On their attitudes, their levels of spending and levels of rates and their policies on matters such as planning, housing and education hang the finely balanced decisions which private investors take about whether to locate and expand in one area rather than another. Local authorities perform that vital function well where they have an understanding of the requirements for business growth, but in too many of our inner cities that has not proved to be the case.
    Last week, the hon. Member for Sheffield, Brightside (Mr. Blunkett) — the first unblushing maiden of this Parliament — made a plea for us to leave matters to inner city local authorities. He asked for
    "the opportunity to do things for ourselves." — [Official Report, 25 June 1987; Vol 118, c. 73.]
    Translated, that means spending more public money. The hon. Gentleman has been doing that for a long time in Sheffield — [Interruption.] The House should listen to these figures. Last year, spending per adult in Sheffield was £755, which is £82 above the national average and £153 above GRE. The business rate was 342p—139p or 65 per cent. above the national average business rate of 213·2p. The average rate for the metropolitan districts was 265p, so he was 77p or 29 per cent. above the metropolitan district average. On top of that, he has a deferred purchase loan of £110 million. It is clear to people who care about the appalling problems of Sheffield that, despite that massive expenditure, he is not going in the right direction to solve those problems.
    The record of the Labour party in local government on inner city regeneration has not been happy. There was talk earlier about the docklands——
    Dr. Cunningham: I hope that the Secretary of State notified my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) that he intended to mention him in this way. That is the normal courtesy of the House, as I wrote to the right hon. Member for Henley (Mr. Heseltine) to tell him that I would be mentioning him in the debate. In view of what the Secretary of State said, can he explain why the Audit Commission described Sheffield as one of the most efficient and well-managed cities in the country? Why does he think that, at council and parliamentary level, people support the Labour party in Sheffield in such massive numbers?
    Mr. Ridley: I followed the example of the hon. Member for Brightside of not warning me that he would be speaking about these problems last Thursday. I never dreamt that he would not be here for the debate during which those matters would be discussed.
    Mr. Allan Roberts: So the Secretary of State did not tell him.
    Mr. Ridley: And he did not tell me. My point is that cities such as Sheffield will not recover until they get their business rates to a level where they can start to attract businesses.
    The record of the Labour party on inner city regeneration has not been happy. There used to be a committee of London boroughs called the docklands joint committee, which met to plan the revival of London's docklands. The committee sat for five years under Labour as well as Conservative Governments. It achieved almost nothing. The dereliction simply spread. Since the London Docklands development corporation was established in 1981, the area has been transformed, with 7,000 new houses having been built or under construction, the provision of 10,000 permanent jobs, more than 400 companies starting up or moving into the LDDC area and £2·2 billion of private investment being committed.
    During the past few months, we have added to the list of London and Merseyside four new urban development corporations — the Black Country, Trafford Park, Teesside and Tyne and Wear development corporations—each charged with regenerating their areas. They are now establishing themselves. They will bring a single-minded approach to their areas which could lead over a decade to private investment between three and six times the initial pump-priming investment by the public sector. We shall also be setting up mini urban development corporations to tackle smaller sites. They will have the same powers as the larger UDCs, but above all they will create the business-friendly environment and single-minded approach which are the necessary pre-conditions for regeneration.
    The hon. Member for Brightside and his friends have not learnt the lessons of this approach. There can never be enough public money to do everything through municipal ownership, nationalisation and services provided by highly unionised public sector services. It is inherently inefficient, and, worse, the necessary level of rates drives businesses and business men alike away. A partnership between local and central Government on inner city policy must be one between partners who believe in attracting private enterprise and capital through a constructive attitude to the private sector, low rates, sensible planning and the pursuit of excellence in education, housing and many other essential services. Partnerships where there is no consensus seldom seem to work. But with compatible partners, much can be done, and I believe increasingly that there will be more compatibility when the practice of local democratic accountability conforms with the theory.
    The present rating system gives neither accountability to local residents nor effective control over local authority spending to the Government. Spending has continued to increase inexorably. During the past eight years, it has increased in real terms by 13 per cent. In the current financial year, local authorities are budgeting to spend, on average, 4 per cent. above the rate of inflation. That average conceals wide variations between authorities.

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    Inner city authorities have increased spending way above inflation. They have been able to do that because, in those areas, as few as one in four adults pays full rates. So people have been content for the costs of local authority services to be met by others.
    Profligate spending has not only driven employers and would-be employers away and thus lost jobs, but resources have been taken away from other areas by the rate support grant formula as the spiral of inner city decline causes the rate base in inner city areas to diminish, while their needs—as expressed in the GREs—grow. People who live in frugal shires, which many of my hon. Friends represent, know all too well that their annual rate support grants dwindle and their rates increase with little relationship either to their ability to pay rates or to their use of local services. Last year, many of my hon. Friends were clamouring for a reform of the present system — and that was after the most generous rate support grant settlement in years.
    Dame Jill Knight: Will my right hon. Friend not lose sight of the fact that need does not always exist only in the inner areas of a city? In my area, on the edge of Birmingham, there is a very high proportion of one-parent families. There is great resentment that so much money is spent on the inner city while need exists outside. In one inner city area, a series of hanging baskets was placed in the streets, which looked very pretty. But they had all been stolen within 24 hours and were sold on what is called the black market. If that money had been spent to help schools in the outer areas, a great deal of help would have been available for one-parent families which is not available now. Will my right hon. Friend remember that need does not only exist in inner areas?
    Mr. Ridley: I will of course remember what my hon. Friend has said. She will be encouraged to learn that many of her constituents, particularly the single and one-parent families, will benefit largely from the community charge.
    As I have said, the present local government finance system is not only grossly unfair; it provides very poor accountability. The only effective solution to the problem is to ensure that all pay something towards the costs of local services. That is why we propose to phase out domestic rates and replace them with a flat rate community charge payable by all adults in each area. We set out that policy at length in the Green Paper on the reform of local government finance. We have consulted on the policy and we have published all the details. My right hon. and hon. Friends fought and won the recent election campaign on that policy. On the now famous basis of "What you see is what you get" many people voted for us on the basis that we would introduce the community charge. We should not and will not let those people down. For Opposition Members to suggest that, having published all the details of the reform and having been elected to office, we should now immediately turn round and tear those details up is to deny the verdict of the electorate.
    Mr. Jack Straw: All Opposition Members are well aware that when the poll tax issue was really tested before the electorate in Scotland, the result was a crushing defeat for the Conservative party. I want to pick up on one critical issue. The Secretary of State said that the fundamental principle of the poll tax was that everyone should pay a flat rate charge. Does that mean therefore
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    that the undertakings given during the election campaign to cover the 20 per cent. minimum paid by the poorest through housing benefit is to be abandoned? if not, what is the Government's policy?
    Mr. Ridley: The hon. Gentleman has asked about the 20 per cent. paid by the poorest. The Government have made it absolutely clear that up to 80 per cent. rebates will be available for those on low incomes. With regard to the 20 per cent., income support will be uprated by the equivalent of the average of the 20 per cent. of the community charge. We have always stated that. That means that some people on income support will be slightly better off, although some may be slightly worse off.
    Locally raised non-domestic rates will be replaced by the national non-domestic rate set at uniform poundage by the Government. There will be a revaluation of non-domestic property in 1990. The national non-domestic rate will not be able to increase each year by more than the rate of inflation. The proceeds of the national non-domestic rate——
    Mr. Paddy Ashdown: Will the Secretary of State give way?
    Mr. Ridley: I will give way in a minute.
    The proceeds will be distributed to all authorities as an equal amount per adult. There will be a transitional period of up to five years. The effect of that in Sheffield, for example, would have been to bring down the business rate by 30 per cent. That will be a great help in bringing more investment and more jobs to the inner city areas that we have been discussing. Indeed, the whole of the community charge and the new system of local government finance has been designed largely with a view to reducing the rate burden of business and industry of the areas about which the House is most concerned.
    Mr. Ashdown: The Secretary of State rightly drew attention earlier to the importance of lower rates, business confidence and success. How does he square that statement with the fact that his proposals will overnight, without any increase in services, mean an increase to the business community in business rates which could in Somerset, for instance, mean an increase of 20 per cent. or 30 per cent.?
    Mr. Ridley: I do not believe that "overnight" is the right word. There are transitional arrangements. At the same time, we do not know the results of the revaluations, which might have very different results in different parts of the country. All I can say is that it must be true that, with a total sum of money that is close-ended, if the rates are to come down for businesses in inner city areas, they are bound to go up for other businesses in other places. I would not deny that for a moment.
    The community charge is a charge made for the services provided by a local authority. It is like a service charge, which is rather different from a poll tax. Against that background I must mention three allegations that have been made about it—curiously enough, mainly since the election.
    First, the community charge is said to be inequitable between the north and the south. However, surely the right principle is that between two different areas, having taken account of differing needs through needs grant or the GREs, people should pay the same charge for the same level of services, except of course that the less well-off will be protected by rebates and uprating of benefits.

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    Let me give an example. If we consider two district councils, Copeland in Cumbria and Cotswold in Gloucestershire, we see that this year in Copeland every adult will enjoy services to the value of £689 while in Cotswold the figure is £589. The average rates bill per adult in Copeland is £162. In Cotswold it is £230. Therefore, my constituents were charged £68 more per head than the constituents of the hon. Member for Copeland (Dr. Cunningham), although £100 per head more was spent on the hon. Gentleman's constituents than on mine. Those rate bills were after extra grants had been paid to Copeland on account of its needs. After taking account of the hon. Gentleman's constituency's needs, higher spending in his constituency resulted in a lower charge for which my constituents have had to pay. That is not fair.
    Dr. Cunningham: The Secretary of State says "That is not fair." He should continue with his comparison. If he compares unemployment, bad housing and deprivation in Copeland and the resource base, and if he compares the political administrations, he will discover that Copeland is Labour-administered and his area is Tory-administered. In Copeland the district council has not increased the rates for six years. This year, the rates were reduced. Is the Secretary of State claiming that all that should be thrown away for some ephemeral gain from a poll tax and a uniform business rate? He is talking nonsense.
    Mr. Ridley: I am sorry that the hon. Gentleman does not like this point. The fact remains that his constituents are being subsidised by my constituents for no other reason than the fact that property and rateable values in my constituency are higher than those in his constituency. The needs of his constituents are taken account of in the GREs. He does not have a leg to stand on. Had the community charge been in place this year, the charge in Copeland would have been £258 and £180 in Cotswold. My constituents would still have £100 less spent on them per adult than the hon. Gentleman's constituents, but they would have paid £78 less per adult. That would be a much fairer system and a better signal for people to realise that they receive what they pay for.
    Dr. Cunningham: Rubbish.
    Mr. Ridley: Another argument is that it is inequitable that all should pay the same amount. It is simply not true to say that all will pay the same for local authority services. As I have said, those on low incomes will be protected by the 80 per cent. rebate and the uprating of benefits by 20 per cent. of the average community charge. Old people living in residential homes and the severely mentally handicapped will be entirely exempt. Students will pay only 20 per cent.
    Mrs. Elaine Kellett-Bowman: When my right hon. Friend refers to those on low incomes, is he referring exlusively to those on supplementary benefit or to those somewhat above that level?
    Mr. Ridley: There will he a taper from those who will rely entirely on income supplement to those whose income is slightly above it, but the precise details have not been put forward.
    Mr. Allan Roberts: Will the Secretary of State give way?
    Mr. Ridley: I must get on.
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    Secondly, about half of local authority expenditure will be met by the Exchequer, which is financed by a most progressive income tax. The better-off will certainly contribute more through the national tax system, but they will not have to pay a premium on top through the local tax system. That is as it should be. Redistributive taxation should be for one authority only—the Chancellor of the Exchequer. The third allegation was made last Thursday by the Leader of the Opposition, who gave the House one of the best imitations that I have ever seen of Neil Kinnock addressing a ticket-only Labour election rally. All that was missing was Brahms. Among other schoolboy howlers, the right hon. Gentleman alleged that the community charge was a tax on voting. He does not understand the two meanings of the word poll. The only way to avoid the tax was to surrender the right to vote, he said. That allegation is totally groundless for three reasons.
    First, the right to vote will not depend on registration for or payment of the community charge. Secondly, it will not be possible to avoid registration for the community charge by failing to register to vote. Thirdly, there will be completely separate registers compiled on a different basis for community charge and for electoral purposes. I hope that he will not repeat that nonsense in the future.
    Our proposals are the only solution that achieves accountability and preserves true local democracy. At a time when the Labour party in local government is getting more extreme, and when the spending of local authorities takes so much of the nation's resources, it is the only possible solution which will save local government as an institution with real powers and real discretion. None of the alternatives on offer does anything to improve accountability.
    Dr. Cunningham: The Secretary of State has been very generous in giving way, but it is important that this matter is clear and on the record. Is the Secretary of State giving the House and the country a categorical assurance that there will not be, under any circumstances or conditions, cross-referencing between the electoral register and the registration of people to pay poll tax? Is that what the Secretary of State is saying?
    Mr. Ridley: That is an absurd question. The hon. Gentleman knows perfectly well that the electoral register is published. I suspect that he had it during the election and put "Labour", "Liberal", "Conservative" and "doubtful" against it all the way down. I cannot possibly promise that nobody will look at the electoral register and the hon. Gentleman knows that as well as I do.
    If the present system were left in place there would have to be a revaluation. We could not continue with figures based on values from 1973. Those who are concerned about turbulence with the new system should consider what the effect would be of moving, under the present grossly unfair and unaccountable system, to new rateable values after all this time.
    There must be an incentive for councils to control their costs. The community charge provides that incentive, and our new Local Government Bill that was published last Friday provides local authorities with a way of so doing. This legislation sets out six services—costing authorities some £3 billion a year — which will be exposed to competitive tendering. It provides a power for more

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    services to be added to the list. It outlaws abuse of non-commercial contract conditions that are so beloved by Labour authorities, and I am glad that the hon. Member for Copeland says that he supports this in principle.
    Over the past year the evidence of the potential savings from competitive tendering has continued to mount. The Audit Commission, for example. has estimated that over £500 million could be saved from local authorities' budgets for housing maintenance, refuse collection and vehicle maintenance.
    We have confirmation of the benefits from an unlikely source—the National and Local Government Officers Association. In February it commissioned some opinion poll research on privatisation and, according to an article in Local Government Chronicle, NALGO reported:
    "Researchers find such strong feelings that privatisation is an extremely good idea that they advised that though it is an issue of great importance to NALGO, it should probably be avoided in the campaign to defend public services."
    The report went on to say:
    "The overriding perception is that private equals efficient, which means the principle of privatisation is accepted as a solution to the public sector's inefficiency".
    Worse was to come for NALGO. It held a conference on "Privatisation: an effective response" and found that some of its members
    "even want to work in the private sector, expecting higher wages and better promotion chances".
    It is no accident that some of the areas of greatest inner city deprivation and decay lie where there is the greatest dominance of rented housing. This is not the time or place for me to go into the details of what the Government propose for the future of housing. Those details will be made available to the House shortly, and in the autumn there will be a major Bill that deals with the Government's response to the serious problems of housing.
    Mrs. Alice Mahon: Does the Secretary of State agree, as he has just made a point about privatisation and efficiency, that it has been a huge failure in Halifax? We had the launch of the urban renewal house unit, which is now called Estate Action and we waited 16 months for Wimpey to come up with the money. We have now been left with 320 dwellings. The Government would not allow us to borrow, but will they allow us to do so now because Wimpey has pulled out after keeping us waiting for 16 months, thus allowing properties to fall into dereliction? Will the Secretary of State allow Calderdale council to borrow the money? Does he agree that in this instance the private sector was inefficient?
    Mr. Ridley: I cannot comment on that circumstance because I do not know the details, but I shall make inquiries and write to the hon. Lady.
    With the major reform of housing policy that we are proposing, the measures in the Gracious Speech will not only provide a lot of work for the House but will provide the most comprehensive set of instruments for tackling dereliction and poor housing, poor councils, poor schools, poor job opportunities and poor environment, which are the components of the inner city problem. The Labour party is said to be trying to adjust to the "new world"—the world of prosperity, wider ownership and more freedom and opportunity. I hope that its response to all our policy initiatives will not remain sterile and negative. If it attacks these proposals, whether it admits it or not, it will be seeking to perpetuate the problems that we are debating today.
    6.27 pm
    Mr. John Cartwright: I welcome the Government's determination to tackle the problems of the inner city. I hope that their determination will be accompanied by a recognition that many of those problems have been aggravated by the policies that the Government have pursued over the last eight years.
    I hope that we will not see yet another Whitehall-organised and directed campaign in which no fewer than seven Government Departments compete with each other for headlines in the national press, while little changes for the ordinary people who live in the inner cities.
    Nor do we want to see another series of initiatives that will create more jobs outside the target areas than they offer to the unemployed in the inner city. Our first priority, if we want to tackle the problems of the inner cities succesfully, should be to listen to the people who live in those areas and see how far it is possible to incorporate their ideas and solutions into the programmes that we are putting forward.
    Housing figures strongly in the Gracious Speech. It has been my experience that if one goes to the most depressed and run-down council estate the most practical advice usually comes not from the architect who created the problem in the first place, not from the academics, however well intentioned and impressive, but from the tenants who live in those estates and who understand the problems. They want entry phones, changes in the layout of the estate to reduce the risks of crime and vandalism and extra staff to supervise what goes on and to keep the place clean and tidy. Their basic view is that essential services such as lifts and lights should work. They have plenty of ideas for improvements but their ideas cost money. All too often the money is simply not there. Certainly it is not there in sufficient volume to deal with the problems.
    If we really want to improve difficult, run-down estates we must recognise that providing the resources is just as important as providing new forms of management and ownership. There is a wide measure of agreement in all parties that we should try to break down the over-centralised, remote, monolithic management of council housing. But it is no good doing that unless we provide the resources to back up change and to make estates decent places in which to live. If we do not do that but simply change management style and organisation, the cynicism will continue, as will the sense that nobody really cares.
    I have for long argued the case for housing co-operatives. We should ensure that tenants have much more control over what goes on in their homes and on their estates, but we cannot create housing co-operatives overnight. People must want to come together in a co-operative and they must develop the ability to take the responsibilities involved in managing their own estates. Let us encourage co-operatives but do not let us believe that such a solution will come rapidly.
    The Government have not yet spelt out what they mean by the housing action trust approach. Perhaps they are considering what is happening in the Thamesmead development which is now run by a housing action trust. All its members are elected by the residents. That solution can be applied elsewhere. There is much good sense behind it, but once again the problem is one of resources. Thamesmead is not yet up and running. It has not yet taken over full responsibility for running the area, and. it has major resources problems despite the valuable

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    development land that is available to it. I wonder whether other housing action trusts will be able to deliver the goods and improve our run-down council estates.
    The other aspect of the housing problem which we must begin to face is the desperate housing shortage in the inner cities. In my area housing shortage is the worst that I have known in 20 years as an elected representative. Homelessness is growing at an alarming rate. In my local authority 234 priority homeless families are waiting for somewhere to live and another 79 potentially homeless families are behind them in the queue. Husbands and wives are compelled to live apart. The army of single homeless young people is a growing problem. They wander round and sleep rough, on friends' floors or in cars. They are totally unable to find housing in the inner London area.
    I accept that many of the problems are aggravated by the length of time that it takes local authorities to relet empty property. That is also a problem of resources. There are major difficulties in putting into a decent state of repair some of the housing which we were encouraged to throw up in the 1960s and which has not stood the test of time.
    Local authority administration also causes problems. Slow-moving bureaucracy means that properties are not let swiftly and are then vandalised or used by squatters with the result that even more work has to be done and the property remains outside the housing stock for even longer. But even with the most perfect local authority administration in the inner cities there are simply not enough homes to meet the need.
    The Government suggest that the private landlord is the knight in shining armour who will come to the rescue. I doubt whether the private investment necessary to provide the rented housing that we need will be forthcoming. I doubt whether it can produce housing at a cost that the homeless can afford. People who want to make a profit out of housing must charge rents way beyond the reach of homeless people in the inner cities.
    I would rather the Government provided more resources for housing associations and encouraged them to tackle the desperate shortage of rented accommodation than try to breathe new life into the discredited private landlord system.
    The Government should also build upon the public-private partnership, which they have tentatively begun, by the use of public funds as a leverage to encourage building societies and other institutions into index-linked investment in housing. That could help provide the rented homes that we need.
    I strongly endorse what the hon. Member for Copeland (Dr. Cunningham) said about the poll tax proposals. They will do nothing to improve our inner cities. I accept what he said about the injustices and the costs of the proposals. The combined effect of the community charge and the unified business rate will be that the biggest loser in terms of resources for local government will be Greater London and the biggest gainer will be the south-east of England, outside Greater London. That will merely exacerbate the existing problems. The hardest-hit residents will be in the inner London boroughs because they are likely to have to pay a great deal more. The problems will be fewer in the outer London areas and residents in the leafier areas of Surrey will be the gainers from the switch from rates to
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    poll tax. I am sure that the people of Surrey will welcome that, but such a financial change will accentuate the flight of people from the inner city.
    Mr. William Cash: The Layfield report examined the proposals for local income tax suggested by the hon. Member for Woolwich (Mr. Cartwright) and his colleagues and found that they would be extremely expensive, costly and burdensome.
    Mr. Cartwright: I do not accept that. I was a member of the Layfield committee and what it said stands up to the test of time. Layfield's basic proposal was that we should have a clear decision on whether we wanted local accountability or national direction. The House has not yet made that choice and the people have not yet had an opportunity of making that choice.
    The impact of the poll tax will encourage the people whom we want to remain in the inner cities to move out.
    Mr. Robert B. Jones: The precise consequence of the enormous increase in rates under the loony Left in London has been to drive businesses and individuals out to the shire counties, creating pressure on land and house prices and creating skill shortage problems. It is no solution to say that we should stick to the rating system.
    Mr. Cartwright: I do not advocate sticking to the rating system. I advocate a switch to local income tax, which is better, fairer and more straightforward than either rates or a poll tax.
    The poll tax will create enforcement problems. Evidence suggests that the mobile population in our cities will aggravate the enforcement problems simply because more people generally move around in the inner cities. Enforcement will as a result be more costly in the inner cities than elsewhere.
    The hon. Member for Copeland referred to an article in The Daily Telegraph earlier this week about local authority officers being recruited as poll tax narks to shop people who use services without being registered. The hon. Gentleman did not need to read The Daily Telegraph because the proposal was included in the Government's Green Paper published in January 1986. It said:
    "The task for local authorities would be to develop their information systems so that, if they were providing a service to an individual, it would be possible to check back conveniently, either before or after the event, on whether a person was registered and take steps to register those who were not."
    Thus, we would actually be encouraging local authority officers, sometimes providing essential services, to act as a sort of secret police force for the poll tax collectors to ensure that everyone was swept into the net. The Secretary of State tried to pour scorn on the suggestion that there would be a risk of people who registered to vote finding their names on the poll tax register. I refer him to the Department of the Environment and Welsh Office paper on the poll tax. On the problem of the enforcement of registration, it said:
    "Registration officers will be able to use the electoral role to help check the completeness of the community charge register, and vice versa."
    It is therefore evident that anybody who registers to vote will make himself liable for inclusion on the poll tax register.
    From what we have heard in the past week or so it seems that the Government are now to some extent

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    backing away from their original concept of a poll tax to be paid by every person in the community. Recently we have heard talk of a rebate system and of the idea that those on supplementary benefit would have their benefit increased to take account of the poll tax charge. Surely all that simply undermines the Government's original contention that they did not want people who voted in local elections for improved services then evading the costs of those services. The more the Government move to take away the worst rough edges of the poll tax proposals, the more they undermine that original argument for total accountability and the more they find themselves on the slippery slope towards an income-related tax for local services.
    Of course, I do not object to that. I cannot understand the Secretary of State's argument this afternoon. He says that it is absolutely right, fair and proper for us to pay for national services on the basis of our income, but that it is improper for us to pay for local services on that basis. To me, that makes no sense at all. If the Government are totally and irrevocably opposed to the concept of a local income tax, they might at least listen to the expert advice of the Chartered Institute of Public Finance and Accountancy, which rejects the whole concept of a poll tax but suggests that the Government should consider
    "some form of banded community charge which could better reflect ability to pay than does a flat rate tax."
    I hope that even at this late stage the Government will consider that.
    The Government are right to stress the partnership approach in tackling the problems of our cities, but it should not be merely a public sector and private enterprise partnership. We need a series of partnerships. We need partnerships between central and local government, in the interests not of the political parties in control but of the people whom they represent. Most important, we need a partnership that involves the people of the inner cities. We should stop thinking solely in terms of people from Whitehall and Westminster, however well-intentioned, coming in from outside to do things for the people of the inner cities. We should be trying to give those who live in the inner cities a real chance of standing on their own feet and sorting out their own problems.
    6.44 pm
    Mr. Timothy Raison: I very much agree with the last remarks of the hon. Member for Woolwich (Mr. Cartwright). The idea that the problems of the inner cities can be solved simply by people moving in and doing things for them can he falacious. The inner cities will succeed in solving their problems only through their own strength and determination.
    I broadly welcome the Gracious Speech, which marks the continuation of the very successful policies which we have been pursuing since 1979 and which flow from the remarkable endorsement of those policies by the electorate in the general election. If I had to summarise the election in a nutshell, I would say that on defence policy and on economic policy we won by a knock-out but that on social policy we perhaps did no more than win on points.
    It seems clear that social policy will dominate this Session of Parliament and perhaps this Parliament as a whole. I profoundly believe that we must get it right. We have to face very important matters and we must think about them carefully. I hope, in particular, that we will think carefully about the remarks that all of us heard on
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    the doorsteps during the election campaign. It is remarkably good for us to have to knock on so many doors and listen to so many different people speaking to us frankly when we canvass them. I have come away with a number of very clear points that I would like to pursue.
    I noted that my right hon. Friend the new Chief Secretary to the Treasury, whom I greatly respect, delivered a cautionary speech the other day about public expenditure. Clearly, we cannot abandon our public expenditure policy, but I believe that there is enough buoyancy in tax revenue at the moment for us to contemplate a number of areas in which we might provide a bit more money to good effect.
    During the election campaign, one message that came over to me very clearly was the message about pensions. I was frankly surprised at the force with which old-age pensioners argued that they were pretty close to the bread line. Although we have done valuable things for them, I believe that the Government would be doing something that would be well received and very just if they could add another couple of pounds over and above what comes under the RPI to the next uprating.
    I ask the Government to do what they can to relax the restrictions on the spending of the capital receipts of local authorities. It would not be right to say to the local authorities, "You can spend 100 per cent. of the capital receipts" because that would have an inflationary effect on the construction industry. But if it were possible to raise the present 20 per cent. and 30 per cent. levels that are permitted at present, adding perhaps a further 10 per cent. to each, that would make a useful contribution towards dealing with pockets of homelessness.
    As my right hon. Friend the Secretary of State for Education and Science is here, let me say that I hope that we can do more to support civil science and the universities.
    I turn to the aspects of the environment that have dominated this debate so far. I very much welcome my right hon. Friend's plans for stimulating the private rented sector by liberalising tenure and rent control. It is high time that we embarked on that process and it is a good thing to embark on it at the beginning of a new Parliament so that it is given time to be seen to work—as I believe it will— and so that we may dissipate the fears which have always existed that another Government will up-end the policy. I hope, too, that we shall support the housing associations, as the hon. Member for Woolwich suggested. There is a real need to stimulate the rented sector. We have had great success with our home ownership policies and we must now work hard on the rented sector.
    I am less sure about the proposal to give council tenants the right to transfer the ownership of their homes to other landlords. That proposal needs to be thought about and explained carefully. The public will need to understand that it is a workable proposal and, if that is not possible in the near future, it might be better to leave it over for a later Session rather than rushing into it. At the moment I have an open mind about it, but I certainly have to be persuaded.
    What worries me is that the proposals seem to reflect an overall exaggerated distrust of local government. We all know about the loony Left and we know that sometimes we are talking not just about lunacy but about a brutal malevolence. Nobody wants that to 'persist, but it seems a mistake to allow our suspicions in that regard to spread over into a generalised suspicion of local government—a

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    view that seems to be reflected in some areas of our policy. We need local government in this country. It is a fallacy that we can run everything from the centre; if we pour everything into the centre, the centre will not hold, and it is crucial for our Government to achieve a clear and positive idea of what local government can do.
    Last year, in the debate on the Address I spoke about the community charge proposals that were to be introduced in Scotland. Then I expressed my doubts about the community charge on grounds of fairness and administrative viability. I cannot say that those doubts have been dispelled from my mind.
    I know that the new system as a whole—of course, it consists not only of the community charge and the unified business rate, but a change in the composition of the rate support grant, which is most important — is extremely attractive to my county of Buckinghamshire. I am aware of that from the exemplification figures that I have seen and I must bear that fact in mind. I certainly believe that it is correct to look for a more sensible and objective rate support grant rather than the somewhat nonsensical system that we have had in recent years. However, we must get something that is believed to be fair and manageable. Although I believe that we should go ahead with the reform of the non-domestic rate and rate support grant system we must think a bit harder about whether we have got the right answer with the community charge. I believe that it would be perfectly possible to have the other two sides in the triangle without having the community charge as the means of providing the domestic contribution. My right hon. Friend must accept that a great deal of argument and persuasion must be gone through before many people will accept that reform.
    I am glad that my right hon. Friend the Secretary of State for Education and Science will reply to the debate tonight. I hope that we shall not approach education in any spirit of distrust or a desire to bash local government. I accept that the Secretary of State has the job of overall supervision of the education system. The Education Act 1944 made that role absolutely clear, as did R. A. Butler when he piloted the Bill through Parliament. I believe that, in years gone by, Secretaries of State have not sufficiently exercised their role of monitoring the education system.
    I believe that it is right that my right hon. Friend should take powers to provide a system of testing children as they proceed through the education system. I must confess that I wrote a pamphlet in 1976 in which I advocated the testing of children at the ages of seven, 11 and 14. Therefore, it would be rather surprising if I did not support the present proposals. Those proposals are good and I believe that it is right to have a core curriculum, as contemplated by my right hon. Friend. I believe that it should be a fairly loose curriculum and I certainly hope that it will not be a great mass of detail. However, I believe that it should provide some kind of general steer on the way in which we approach the all-important question of what is taught in our schools.
    I believe that my right hon. Friend will be under a lot of pressure the whole time to get subjects added to the curriculum. He will be asked to include whatever happens to be the current concern of the day. It may be AIDS one day or child abuse on another. Such topics are important, but my right hon. Friend must be firm and say, "No, that is not what the educational core curriculum is about". The
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    core curriculum is concerned with the more traditional elements of education. I believe that my right hon. Friend is on the right lines and I give him my support.
    I also believe it is right to give more financial control to schools and I believe that that is a welcome form of delegation. However, almost the greatest need at the present time within the education system is a period of constructive harmony and constructive tranquillity. We have witnessed a great deal of turmoil. I certainly hope that our proposals will not extend that turmoil. I am sure that my right hon Friend understands extremely well the pressing need to get on with the business of finding the right system for determining teachers' pay. I believe that we would all like to get that problem out of the way. Perhaps I am being too optimistic, but it would be very good to solve that problem in a matter of months because, at the present time, it is bedevilling things.
    My right hon. Friend must take care that he does not ram the proposals for opting out down the throat of a rather unwilling educational community. As with the proposals for transferring the ownership of council houses, I believe that the proposals for opting out need to be presented more clearly and there should be more discussion about them before they are in a condition to go through Parliament. If, after such discussion, my right hon. Friend still feels that they are the right proposals, there is no need to include them in the Education Bill that I believe my right hon. Friend will introduce in this Session. Such proposals will keep perfectly well for a later stage. I believe that it would be a great pity to bring in such proposals if they serve to undermine the otherwise positive things that my right hon. Friend has offered and, with any luck, the positive response that he will receive. The same thing applies to the proposals about the Inner London education authority, which is a difficult, contentious area, and my right hon. Friend should move with extreme care.
    There are many other matters that could be covered, but what comes through from this debate, and what I am trying to say, is that we have the chance in this Parliament to improve the conditions of all people. In many ways we are pointing in the right direction. However, I urge my right hon. Friends to get on with the things that will really help. They should not get trapped into pursuing some other things that will be of only marginal, if any, advantage and will serve only to promote discord rather than harmony.
    6.56 pm
    Mr. Paul Flynn: I represent, with great pride, the constituency of Newport, West. Newport, West is a constituency that was formed in 1983 and its first Member was Mr. Mark Robinson. Mr. Robinson was a diligent, hard-working Member whose talents were swiftly recognised by the Conservative party and he won promotion as a junior Minister at the Welsh Office. Mr. Robinson's work within the constituency won him the respect and affection of its people.
    The decision of the people of Newport, West to reject Mr. Robinson was in no way a reflection on his gifts, energies or work. The right hon. Member for Aylesbury (Mr. Raison) referred to "a knock-out" on certain issues, but in Newport, West the Conservative party was the victim of a walkover. In local government elections, the people of Newport, West regularly gave the Labour party 60 per cent. of the vote for council members. In the last

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    election, there was a swing of nearly 11 per cent. to Labour. That swing represented a judgment on the work of the local authority.
    Today and in the previous debates we have heard an ugly caricature of the work of Labour local authorities — indeed, all local authorities. The right hon. Member for Aylesbury said with some truth that there will be great resentment of the gratuitous insults contained in the Government's intentions. Those intentions will be deeply resented by local authorities of all political colours. I believe that the attempts to suppress and frustrate the work of good, intelligent local authorities will be deeply resented and all parties will revolt against those attempts.
    History contains some dire warnings about Governments who have subjected themselves to the delusion that absolute power means they have an absolute monopoly of wisdom, intelligence and judgment. I commend hon. Members to read once again Gibbon's "The Decline and Fall of the Roman Empire". They will discover what happened when Rome decided to draw the power to the centre. The effects of that attempt are found in the volumes devoted to the fall of the Roman empire.
    The words "sterile" and "negative" have been used to characterise the work of the Labour local authorities. However, I can talk with great pride of the work of Newport borough council. In the interests of brevity I shall confine myself to one area of its work — housing. Of course, that council cannot compete with the rate freeze suggested by my hon. Friend the Member for Copeland (Dr. Cunningham), but rates have been frozen for three years within the borough. The borough's policy on housing has been one of high achievement, sensitive management, inspired innovation and a genuine non-doctrinaire quest for continued improvement.
    It may come as a surprise to hon. Members on both sides of the House to learn that an authority that has been Labour for almost every one of the past 50 years has, for nearly 20 years, been selling council houses. Its reasons for doing so are not the Government's reasons. It is not done as an act of social engineering, a self-motivated act designed to win people to its side. It has always been part of the history of the Socialist movement—going back on the continent to the Swedish Socialists, and in this country to the Rochdale pioneers and the early guild Socialists —that home ownership is the cornerstone of Socialism. We have always considered it right for a person to own his home; what we object to is the belief that it is right to own someone else's home.
    The reason that we in Newport have sold council houses for all this time is that we have seen the dilemma of housing in its long-term aspect. Too often, it is forgotten, or seen as a temporary, short-term problem. But when we decide on our answers to housing problems, we are looking for solutions that will not merely last for the life of a Parliament or a council, but will stand firm and good for 60 or even 100 years. The decision to sell council houses in Newport was made, and the sales are being continued, to create stable, mixed communities, and because, in these inflationary times, it is not property but rent that is theft.
    We have heard the words "sterile" and "negative". Let us look at the achievements in Newport. Every pre-war dwelling in the town has been modernised; every council house has been equipped with central heating; 20 per cent. of stock has been sold to its sitting tenants, and it is all still occupied by the same tenants. There are highly successful
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    and innovative share ownership schemes to enable the very young to get on to the ladder of home ownership, and stay-put schemes to help the elderly to remain in their communities. All those schemes are up and running. There are more housing action areas in Newport than anywhere else in Wales, and there are brilliantly successful pioneering schemes for the elderly and the disabled. A continuous, successful and unique programme of decentralising power to the estates and the tenants has been introduced.
    I could proceed with a long litany of such achievements, but it is a measure of what has happened that those great achievements have been made in the teeth of remorseless antagonism and hostility from the Welsh Office. There has been a 95 per cent. cut in real terms in new money for funding housing since 1979. Apprenticeships have virtually disappeared, and have been replaced by the candy-floss MSC jobs, leading to enormous problems in obtaining skilled building workers. Repeated bureaucratic and frustrating delays by the Welsh Office have left the borough constantly under-funded and under-resourced. To make matters worse, the Government have locked away the money that we legitimately obtained—nearly nearly £28 million — and thrown away the key. We cannot touch it. We cannot use it to create jobs and better housing.
    Finally, let me quote the words of a great Member of Parliament for the county of Gwent — Aneurin Bevan—when he was Minister of Housing. He said that his finest ideal—what he hoped above all else to create in the new estates that were being built in the late 1940s—was the reproduction of what he described as the most lovely feature of English and Welsh village life in which the farmworker, the lawyer, the blacksmith and the doctor lived side by side in the same street. He wanted to create the rich tapestry of a mixed community. That is a high ideal that we have rarely achieved.
    What do we see in Thatcher's Britain today? Do we see the picture of that tapestry, a balanced picture of harmony and order, or do we see something else? What we see is not a tapestry, but an ugly jigsaw broken by lines of division and injustice. We are seeing the creation of ghettos. On one side are those whose estates are shunned: they are places of fear, crime and neglect. The other, almost equally worrying, piece of the jigsaw shows the privileged estates behind barricades with security fences and guards in front of them.
    That is our choice today. Do we take the line—this is what we will vote on tonight—that we will continue to try to create in the long term that happy rich tapestry of a mixed community, or do we carry on as we are and produce again the Thatcherite confusion of our jigsaw estates and our jigsaw society of injustice and unfairness?
    7.5 pm
    Mr. Timothy Kirkhope: First, Mr. Deputy Speaker, let me thank you for calling me so early in the debate. I should like to crave the indulgence of the House on this first occasion that I have spoken in the Chamber.
    I am particularly honoured to follow as Member of Parliament for Leeds, North-East such a distinguished politician and parliamentarian as the right hon. Sir Keith Joseph. I am sure that it is unnecessary for me to remind the House of his enormous contributions over 31 years to this place, to his constituents, to his party and to the

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    country. He has held many major offices of state, including housing, social services, industry and education, but I shall confine myself now to saying that he has been most kind and thoughtful to me, as his successor, and that I know how highly he is regarded by all those whom he has helped over the years with understanding, warmth and humility.
    I am particularly proud to represent Leeds, North-East, being a northerner myself and having been born and educated and having lived in the north all my life. I am proud of being northern, and of representing a northern seat. At the same time, I am fully conscious of the important role played by the northern region in the prosperity of the nation as a whole—in the past, in the present and, I trust, in the future.
    I do not think it very helpful to look at the north in a parochial or a narrow way. Such an attitude, in my view, creates greater divisions — divisions that are quite unnecessary in what is a comparatively small country. That kind of negativism has not helped us over the years. We in the north are dynamic, positive, inventive and hardworking. We are a strong and important component of the whole nation and its activities, and we must always remain so.
    My constituency is perhaps notable for being very broad in its cross-section of the communities who live within it. The northern end contains the countryside and farmland around Harewood, Shadwell, Wike and the other villages, and goes down through the suburbs of Leeds to Chapeltown in the inner-city area of Leeds. I should like to mention Chapeltown particularly, as it is very relevant to today's debate. Chapeltown is a community made up of all kinds of parts. There are a number of different ethnic-minority communities, and from time to time there are tensions. However, I should like to give credit to the community leaders and others in that part of my constituency who, over the past few years, have co-operated fully with each other. As a result of Government initiatives during the past eight years, they have begun to build a community of great happiness, potential and prosperity.
    Leeds as a whole, like the rest of the north, has adapted to changes over the years. My constituency has been very much a part of those changes. Leeds contains a large number of businesses. Members of the business community do not necessarily work in the constituency but they reside there. They have great confidence in the future of the area. They have told me how much they welcome the Government's initiatives, particularly those that relate to the abolition of rating, as we know it, and the new community charge provisions. The effect will be greatly to increase the ability of businesses, particularly in my area, to do well. They will then be able to employ more people, which will create greater prosperity for Leeds and for other great cities.
    My constituency contains just over 65,000 electors. All of them have aspirations—some great, some limited—but all those aspirations are important to me, as their representative. It is my duty to help them to achieve their aspirations. When we speak of the powers of local government and national Government, we should be concerned about preserving as many powers as possible for ordinary people. Certain powers must, of course, be delegated to central Government. That has always been
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    the case, and it will always be so. However, it is important not to assume a divine right to hold too many powers over others, or to deny freedom to individuals to direct their own destinies and those of their families. Such paternalism is open at times to misuse, and in some areas, particularly the poorer areas of our cities, such misuse leads to resentment within the community.
    In this context it is worth noting that it is not just a phenomenon of the 1970s and the 1980s that central Government have sought to vary or to reduce local powers. It happened much more radically when the health services were nationalised, when national assistance was taken over by central Government and when the electricity and gas services were taken from local authorities and put under national control. History shows that Governments on their own are particularly unable to create success out of failure, to promote happiness out of misery or to create wealth out of poverty. Only people themselves — free people, with the power of preference and the power of activity—can change things for the better.
    I served as a county councillor for some years and saw the developing conflict between local government and central Government. With more goodwill and understanding, we might have avoided some of the extreme results. I saw central Government adding to the legislative burden of local authorities, while at the same time trying to keep expenditure in check. I saw local authorities abusing their position by exercising functions that were not rightly their own and attempting at times to avoid the effects of national policy by circuitous means.
    Now is the time to set out precisely the functions that may be undertaken by local authorities so that future misunderstandings may be minimised. Now is the time to ensure that as far as possible central Government do not add to those responsibilities by their own processes. That would at least provide an opportunity for mutual respect between central Government and local government to be restored and maintained.
    I support the Government's education proposals. I mentioned earlier the Chapeltown area, which is in my constituency. It is made up of many different interests and groups of people. They are particularly keen that there should be more freedom for parents to choose how their children shall be educated—by what means and in what places. In their education proposals the Government have provided a marvellous opportunity to allow that freedom to be respected.
    I believe in freedom for both individuals and families. I believe also in the attendant rights and responsibilities that accompany such freedom. They are the cornerstone of our society, and they are our best guarantee against dictatorship or oppression. That is fully consistent with my Conservative philosophy, and it is the basis upon which I hope to pursue my parliamentary career.
    7.14 pm
    Mr. Gerald Bermingham: The pleasant task falls to me of following two maiden speakers, both of whom, though from different sides of the Chamber, were equally succinct. The content of their speeches was also quite pleasant.
    My hon. Friend the Member for Newport, West (Mr. Flynn) quoted Gibbon. I note his past interest in leasehold reform, which is very near and dear to my heart, as it is to the hearts of many other hon. Members who represent

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    Lancashire constituencies where we have chief rents to worry about. I make that early "plug" now, knowing that I have immediate support from my hon. Friend.
    The hon. Member for Leeds, North-East (Mr. Kirkhope) succeeds a man who had many friends on both sides of the House. Because of the way that he has spoken tonight, I suspect that the hon. Member will also acquire many friends on both sides of the House.
    I read the Gracious Speech with great care and noted that it contains proposals relating to copyright and intellectual property. Those who have had time to consider those matters over the years know that reform is much needed. However, when they introduce the legislation we trust that the Government will draft it with care and that they will learn from the experience of other parts of the world where reform, when rushed, often led to disaster.
    The subjects for debate tonight are the inner cities and education. I represent not an inner city but a northern industrial town that lies between two major cities. The Minister who has responsibility for these matters but who is not in his place at the moment knows, from his other incarnation, that I am somewhat persistent in furthering the interests of the people of St. Helens. St. Helens is not an inner city but it suffers from the urban deprivation of the inner cities. Other towns like St. Helens ought to be considered. It is very easy to talk about the inner cities but to forget the old industrial towns of the north that have suffered just as much from de-industrialisation, bad housing stock and lack of investment.
    St. Helens is boxed in by its motorways. The M62 lies to the south, the A508 to the north, the M6 to the east and the M57 to the west. Therefore, one drives past it. I give the Minister fair warning that when it comes to urban investment he must not dare to drive past St. Helens, otherwise I, for one, will demand to know why St. Helens is being left out of the plans for investment, infrastructure and replacement of housing stock. It is galling to realise that money will be afforded to Liverpool and Manchester, which I welcome. Warrington has its new town. I welcome that, too. However, St. Helens has its rights, and those who represent St. Helens intend to ensure that it succeeds in obtaining its fair share. The people of St. Helens deserve equality of opportunity. In the last Parliament I begged that St. Helens should be given equal development status and equal investment grants, but it did not get them. Because so many jobs in the glass industry have been lost, on this occasion we intend to have our share of the cake.
    Education is irretrievably linked with the redevelopment and regeneration of an area. Therefore, Ministers should look most carefully at the education proposals. I dread that we shall return to the days of my boyhood when, as one neared the age of 11, one began to sweat and worry about the examinations that would separate and differentiate one boy or girl from another.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Dunn) indicated dissent.
    Mr. Bermingham: The Minister shakes his head, but he always shakes his head in disagreement when I touch on a raw nerve.
    Sir Rhodes Boyson: That is because the hon. Gentleman is usually wrong.
    Mr. Bermingham: The right hon. Gentleman has accused me of usually being wrong. I have inevitably been proved right, particularly when I have criticised the Secretary of State, among others.
    I listened to what was said during the election campaign. It seems that there is to be some form of selectivity. Schools that opt out may be able to choose the type of pupils that they want. I wonder what the criteria will be. "Do you come from the right side of the street? Do you come from the right part of town? Do you have the ability to supply your own books and to pay for your own school trip?" I remember teaching many years ago in a primary school in Rotherham. Those who know south Yorkshire will know just how rough the back end of Rotherham was 10 or 20 years ago. I remember the children who were deprived. Eventually inevitably they lacked opportunity. I do not want to see selectivity back in our education system.
    Would it not be nice if the Secretary of State recognised that there is a link between education and achievement and that there is a link between a future and an investment in youth? Would it not be nice if we began by providing proper nursery schools, adequately staffed and supported primary schools, and, subsequently, secondary schools in which one does not have to rely on parents to buy books, as one does in Derbyshire, or to provide all the extras, for the state actually has an input? If we recognise that by investing in children we create the intellectual assets of tomorrow, perhaps we shall realise that education, further education, advanced education and university training are great investments in our society.
    If the Government come forth with investment in education and the inner cities—remembering, of course, places such as St. Helens—I shall cheerfully withdraw all of the criticisms that I have made, and I shall do so humbly and openly. I fear that I shall not make that apology. We shall have to wait for the electorate to give us the chance to put right the wrongs within our society.
    7.21 pm
    Sir Rhodes Boyson: The House has heard two excellent maiden speeches, one from the hon. Member for Newport, West (Mr. Flynn) and the other by my hon. Friend the Member for Leeds, North-East (Mr. Kirkhope). In some ways, I am making a second maiden speech. It is 12½ years since I spoke from the Back Benches. One finds a type of later adolescence, for one who has enjoyed office, to return, in metaphorical terms, to the crystal waters of belief—the driving forces that brought us here—and again return to the main principles.
    I am particularly interested in my right hon. Friend the Secretary of State's ideas about schools opting out. Throughout the 19th century, although it was the century of classical liberalism, it was a matter of opting in. That century began out of personal efforts and small areas and moved towards more power for local government and national government and, funnily enough, to more centralisation. Some hon. Members have talked about Socialism. I have always considered that the Benthamites were almost the beginning of what followed 20 or 30 years ago when we said that we were all Socialists. The past 10 or 20 years of this century are the years of contracting out —of opting out. The tide of movement against more collective control has come. Throughout the developed world, we are moving towards more individualism and more personal choice in every way.

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    I welcome the passage in the Gracious Speech that states:
    "My Government will take action to raise standards throughout education and to extend parental choice."
    I believe in consumer control of education and health, as the Government also believe in it in the economic field and in denationalisation. I believe that parents should be sovereign. The child — the scholar — belongs to the parent. The parent is the only one who is totally and solely concerned for the child. I respect the education experts, although they usually are experts in other people's children. But I would sooner have the commitment and concern of parents. Similarly, I respect the expertise of teachers and head teachers, but they are still concerned for the school and the standard of the school, and the only person who is ultimately concerned for the child is the parent. A child's education is the biggest responsibility of a parent's life. Any extension of parental choice is good. Indeed, neither parents nor pupils brought about the disasters that have occurred in education over the past 25 years —the discovery method in primary schools, non-selection gone mad, and non-orientation in secondary schools. They were brought in by experts, advisers, even Her Majesty's inspectorate, and a body of political interference. The parents were certainly not involved in any decline.
    I am a believer in the direct funding of schools. I would settle for direct funding of schools in opting out. However, I have one proviso. The decision should be made in the school, not by governors or teachers, but by consumers — parents — by secret ballot and, if necessary, in a secondary school, by parents and the senior forms in the primary schools from which new pupils are to be found. The children are involved in every way.
    On the matter of opting out, I shall ask the Secretary of State three questions. First, what is the position of voluntary schools? If they opt out by agreement, are they still responsible for 15 per cent. of capital costs? That would strike me as unfair. Secondly, in areas in which parents want a school because they are dissatisfied with the present schools, how do they opt in to national funding? In my constituency, a group of about 200 Moslems want a Moslem school. I support Jewish schools, Catholic schools and other Church schools. I support the right of Moslems, as long as they follow a basic curriculum, to have their own school. Can they go to the Secretary of State, as I hope they can, and say that they want to opt into this method of direct national funding because no school in the area satisfies them? Indeed, it could be in Brent. All of us have read the reality regarding Brent. Hundreds, if not thousands, of parents in Brent soon will not want any of the schools in Brent because of Left-wing intervention and the way in which schools are run. Is there a chance for them to say that they want their own school because none of the present schools satisfies them?
    Thirdly, what about independent schools that have recently been founded? Some such schools cost less than those in the state system. There is one in Northampton, and others in other areas. Can the great independent schools which work for the education of our children say that they too want to be fee-free? Can they return to the basic organisation of educating poor children that started them in the first place?
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    I welcome the national curriculum. I have read the pamphlet written by my right hon. Friend the Member for Aylesbury (Mr. Raison). I regret that a word was not put in before "curriculum", and that word is "minimum". I am concerned about a minimum curriculum by achievement, which all those with an IQ of 70, well-taught and attending well, can achieve at 7, 11 and 14. Beyond that, the teacher should be free. I should not like any textbook specifications. It must be the minimum standard. What happens if, at 7, 11 or 14, a child does not pass? He cannot wait for an inquiry to see why he has not passed. In certain parts of America, one may have a re-course in the summer and take the examination at the end of it, as some of us at university did from time to time. In Germany. one goes back a year. With a minimum curriculum, what will happen to those who do not pass? If they do not pass, it will mean that they are handicapped for life unless they are brought up to the required standard.
    I have taken from the Library a book which I have not seen for years, and that is the "Handbook of Suggestions for Teachers". We used to have a minimum curriculum. It was guided by the "Handbook of Suggestions for Teachers". When, in 1950, I met my first secondary modern school class, I was given a copy. Indeed, when Her Majesty's inspectors visited the school, they asked me whether I had a copy. Although they were satisfied by the teaching, they were interested to know whether I had a copy of that book which offered guidance and not over-specification. It was last published in 1946 and states that the board —at that time we had just moved out of the system of the Board of Education—
    "hope … that the present volume will be regarded as a necessary part of the equipment of every teacher in a Public Elementary School. It remains for the teachers themselves to apply and to adapt the standards of practice suggested in the volume in the particular circumstances of the schools in which they are at work."
    By all means let us have a minimum curriculum but let us also have maximum freedom for teachers to go beyond it and to teach from the textbooks and syllabuses that they want so long as they cover the minimum curriculum.
    Opposition Members have referred to selection in education. Yes, there is now selection because a comprehensive school is a neighbourhood school. One can buy one's child a place in it by buying a house in the area. If Opposition Members think that that is an advantage, they must have funny ideas about education. Estate agents refer to houses being in certain catchment areas and advertisements to that effect can be seen in newspapers. All that the Labour party did was ensure that those comprehensive schools that are basically grammar schools, but with a CSE stream, are available to the rich. However, the comprehensive schools in the inner cities tend to be of a lower standard, and are often secondary modern schools, with only a few pupils taking GCEs. I find it astonishing that there can be any praise for what the Labour party did.
    There is always selection. Indeed, we are all here as a result of selection. We are not, for example, the first 50 names in a telephone directory, about which Bill Buckley talks. We have come here by a highly selective method. One can watch Wimbledon. Children in Czechoslovakia start to learn tennis at the age of five or seven and that is why competition is so intense from those people. Selection is everywhere, but the issue is the type of selection that we are offered. Opposition Members have referred to a rich tapestry and that is what I should like to see in schools.

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    I should like to see schools of different types, commercial, science, language, craft, technical, mathematical and dancing schools — all of which must conform to a minimum curriculum, but all of which could offer two extra hours' tuition in their special subjects in the evening. In that way, we could compete with Germany and Japan. Selection must come back in some form, and it must include individual self-selection.
    Individual men and women differ in every way — for example, in their height, the speed at which they grow, the age at which they go bald, in their sense of humour and in the side of the Chamber on which they choose to sit. Anyone who believes that the one thing in which individuals are equal is a mark I brain which is the same in everybody's head makes the flat earthers seem the most rational of men.
    On local government, I am in favour of the community charge. Despite its disadvantages, I believe that it will have great advantages over the present system and over any alternative method. I agree with the concept of a universal business rate and with the privatisation of local services. Political contracts should not be imposed by local authorities. I agree with contracting out of the Inner London education authority. However, I advise my right hon. and hon. Friends on the Front Bench that if it is right for Westminster, Kensington and Wandsworth to contract out of ILEA because they do not like the way in which it is run, some parts of other London boroughs, which are Socialist-controlled, might like to contract out also. Wembley. for example, might like to contract out of Brent, Chingford out of Waltham Forest — where I was a councillor for seven years — and Hornsey out of Haringey. Indeed, one could find examples throughout London. If that principle is established—and it is such a good thing that we need more of it—we should extend it.
    I shall return regularly to this topic because I am on record as saying that the local government reforms of 1964 and 1972 were a disaster for this country. They destroyed familiarity with areas. They occurred when hon. Members from all parties worshipped size and conglomerates in industry. Tower blocks were built, as were large comprehensive schools. However, the tower blocks are now being knocked down. Schools are now smaller and businesses are breaking up into smaller parts. Why can we not do the same in local government? It should not be done through Westminster and Whitehall. Individual areas should be able to say that, because they are of a certain size and population, they can manage and, therefore, want to be on their own. They should be allowed to operate as parts of the great free society of the Conservative Government.
    I welcome the fact that my right hon. and hon. Friends on the Front Bench are taking much of education away from the local education authorities by the system of opting out. They are doing the same with housing also. If that is the case, there could be smaller authorities and we could return to local authorities that are responsible for small libraries, street paving and other matters relevant to local government. In that case, local government could be run by volunteer councillors attending two nights per week and one day per month, receiving only their expenses and being reimbursed for their loss of earnings. Local
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    government would then not be run, as it is now, by the poly-Trots who are employed full time, together with their political hangers-on, to run the Socialist boroughs. In that way we could return to real local government.
    There is no time to waste in London. I am sorry that there are not more hon. Members present who represent London constituencies. However, I shall make sure that they know what I have said this evening because I shall need their support at some stage. It is always well to get in early. The community charge will help to bring back discipline and people will know that they are paying for what they voted for. The people are the source of authority and that is part of self-help. I am surprised that the community charge has not been met with great cheers from Opposition Members. All that is required is enlightenment and it is only a matter of time before Opposition Members say that the community charge is the best thing since sliced bread.
    The community charge will not come into effect until 1990 which is when the next local elections will be held in London. There will not be time for it to have been effective in 1990, and the next election in London after 1990 will be in 1994. Are we to have eight years of Socialist spending in London, in areas such as Waltham Forest, Hammersmith and Fulham and Brent?
    We want rate capping because otherwise the Socialist desert of the inner city, about which we are all concerned, will extend to the suburbs. There are three renowned geographers present in the Chamber, as all hon. Members will be aware. I shall not name them now as I must not delay myself and the House. Those hon. Members who are geographers will know that a desert will expand unless the vegetation on its fringes is protected. The fringes of London are the Camdens, the Brents, the Waltham Forests and other such areas. Unless those areas are protected by rate capping, the inner city, its Socialist problems and the deprivation that I sometimes think is built in for political voting purposes will extend to the suburbs. Although we may solve the problems of the inner city, its problems will spread to the suburbs. Therefore, there should be rate capping so that any authority that spends more than its grant-related expenditure should not be allowed to increase its expenditure this year by more than the rate of inflation. That should apply throughout London because, if it does not, the problem of the Socialist desert will spread.
    I hope that I am allowed to return to that matter at some time in more detail. However, I conclude on a tone of harmony. [Interruption.] I welcome the fact that Opposition Members are concerned. Indeed, that is a great gesture from them. I turned up one of Matthew Arnold.'s narrative poems in the Library earlier this week, in which he wrote:
    "Hath man no second life? Pitch this one high."
    Tonight, I have begun my second political life.
    7.38 pm
    Mr. Pat Wall: It is perhaps apposite that this debate is on the cities because I believe that it is the custom in a maiden speech to make references to one's own or adopted city. Bradfordians are proud of their city and its traditions of craft, skill and hard work. We are proud of our heritage which includes Forster, Delius, Margaret McMillan, J. B. Priestley and many more. We are proud of much of our modern city, if not of all of its new redevelopments. We are proud of the national

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    photographic museum, our refurbished St. George's hall, the Alhambra theatre and, in the light of tomorrow's debate, of our flourishing tourist trade. However, as the country's fifth largest conurbation, Bradford shows and mirrors exactly the problems of so many of the cities in this land.
    Last Friday I accompanied a delegation concerned with further development of a historic and interesting part of our city known as Little Germany. It is known as Little Germany because of the refugees who came there, settled and expanded part of our textile trade. As many waves of immigrants have done in the city of Bradford, they added to our heritage and culture.
    On that visit, I should have been accompanied by the right hon. Member for Henley (Mr. Heseltine), but at the last minute he declined to come. That lost him some support among his friends in the city, as his political allies lost votes in the general election in the city of Bradford. But I do not blame the right hon. Gentleman. He was faced with the prospect of accompanying three Labour Members of Parliament, who had not only won three seats and increased their votes, but had other distinctions—a hat-trick in the 101 Damnations, two goals in the Terrible 30 and even a semi-finalist in Rupert Murdoch's Eve of Poll Fearsome Four. Therefore, I am not surprised that the right hon. Gentleman was not interested in sponsoring our Bradford league.
    However, had the right hon. Gentleman or, more importantly, any of the Ministers responsible for inner cities, urban renewal or trade and industry walked along the Leeds road for a mile and a half at most, out of the Little Germany district in the centre of Bradford, he would have seen Crofts engineering largely demolished, the Metro bus workshop closed after deregulation, GEC closed and replaced by a supermarket — three factories that employed 7,000 Bradford workers now employing 125.
    When I arrived in Bradford some 18 years ago, it was at the time of the building of the M62, which was finished within two years of my moving to the city. It was to link the Atlantic sea port of Liverpool with the European gateway of Hull, before our entry into the Common Market. The motorway was to bring renewed prosperity to the industrial areas of Lancashire, west, north and south Yorkshire. In Bradford we had real hopes 18 years ago—and 16, 15 or even 10 years ago. We hoped that the motorway would result in the development of industry, with engineering brought into the town to replace the declining wool industry. Our children were promised a future with an expanding university and colleges, and jobs that were cleaner, more technical and more interesting than the jobs that their parents and grandparents had. That promise was held out to the people of Bradford.
    What must be understood about the cities is the terrible desolation and breaking of people's hopes and aspirations over recent years. At that time we were in the "white heat of the technological revolution", as Harold Wilson called it.
    Even some of those of us who doubted the ability of the declining British capitalist economic system to solve the problems and improve the lifestyles of our people could not have foretold how quickly those promises would turn to ashes. The M62, the trans-Pennine highway, runs from redundant Liverpool, through de-industrialised
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    Lancashire and west Yorkshire. It bisects north and south Yorkshire, with the closed steel mills and the empty pit villages of two eras of MacGregor. It ends in the port of unemployed Hull, where today there are not even any fishing boats. Our university has faced 30 per cent. cuts under the Conservative Government. Our smaller colleges are closed or closing. The vast majority of the students of the largest college in Bradford are on YTS or have become part of other groups of unemployed young people. Bradford is not producing the scientists, technicians and designers that we were promised when the M62 was built.
    From 1978 to 1984, jobs in manufacturing, energy and construction fell by 30,700, a fall of 35 per cent. In the same period, most of the jobs created were in the service sector and in supermarkets. We attracted only 6,600 jobs, and 84 per cent. of them were for part-timers.
    The Prime Minister talks of abolishing Socialism and of her popular people's capitalism. Over generations, capitalism has done little for the mass of Bradford people. Old-style capitalism in Bradford was the mills. It is true that they brought some fine civic architecture to our town. The mills' confidence meant that the banks were built like cathedrals. On the wool exchange, people boasted that there were more Rolls-Royces per head than in the London stock exchange. But those mills were built on the backs of tens of thousands of workers in squalid back-to-back housing, and for eight-year-old children working part-time in the mills, while the mill owners lived in luxury.
    Post-war capitalism in Bradford was in engineering. However, two thirds of engineering has already left Bradford. Apparently modern progressive people's capitalism is jobs in supermarkets. Somebody in Bradford said as a joke that, taken to its logical conclusion, that means that we shall end up selling each other packets of sausages and tins of paint, nobody will make anything in Britain, and all manufactured goods will be imported.
    The reason why the general election was called 12 months early had nothing to do with opinion polls or with the division between the two alliance parties on defence. I believe that it was called because the more serious Conservative Members realised that we are on the verge of the third major recession in the post-war period. Nothing in the Government's programme offers anything to the people of Bradford. It is not the hiving-off of some of our better schools in the better-off areas to be the private privileged bastions for sections of the upper middle class that we need in Bradford; it is the rebuilding of the one third of our schools that were built before 1904. It is not the hiving-off of our housing estates to private landlords and developers that we need; we need payment to help with the backlog amounting to £130 million, to refurbish housing in our city. That sum represents the amount that we would get in 10 years from the housing investment programme.
    We are on the eve of a further recession. All the signs show a slowing down in the economies of Germany, America, Japan and all the major western powers. Britain is incapable of dealing with the growing trade war on a world scale, because of the underinvestment, under-research and underdevelopment of our industry, and our undertrained work force. Britain is incapable of facing such competition.
    I say, sadly, that no one in the Opposition likes poverty, indignity, squalid housing or slum schools. We stand for the elimination of those things, not their increase. I have to tell the good people of East Anglia and the Thames

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    Valley, the majority of whom voted for the Conservative party in the past two general elections, that a further crisis in Britain will hit the south more than the rest of the country. It will hit the service and financial sectors. The good people of those areas may find that their dreams will turn to ashes tomorrow, like the dreams of Bradford, Liverpool, Manchester, Newcastle and other workers over the past 10 years. I should like to return to that subject in debates in the House to a greater extent in future because that is the platform on which the debate between both sides of the House must be conducted.
    I believe that we shall not see the death and abolition of Socialism. The people in the south-east and the more prosperous areas will learn, like those in Bradford. We are proud of our heritage, that the Independent Labour Party was founded in our city, and that Keir Hardie fought a famous by-election in my constituency. People will realise that Socialism is more relevant than ever, and that it is only the collective action of people, the use of public ownership and public finance in our cities that can establish a platform of decency on which individuals can flourish and develop.
    I can honestly claim that the Conservative party, in attempting to prevent me from speaking in this House, spent more money during the last two elections than has ever been spent against any candidate. We estimate that at least £250,000 was spent on newspaper advertisements, and many people think that the figure was even higher. I humbly suggest to Conservative Members that that was a poor investment. I suggest that in future, instead of those ludicrous advertisements and quotations, they confine the debates in this House and future elections to the issues. I cannot promise them that they will get better results in Bradford, but at least they will be much cheaper.
    7.51 pm
    Mrs. Teresa Gorman: I am delighted to be here representing the constituency of Billericay. First, I want to pay tribute to my predecessor, Harvey Proctor, who was a most conscientious, and hard-working Member of Parliament for the constituency and greatly respected by the people for whom he assiduously worked. I know that he had many friends in this House, who greatly admired his work to provide better protection for people who had mental problems. He will be greatly missed in the constituency. I have a tremendous example of hard work to follow.
    Billericay is close to London — about an hour to the east, in the green belt. One might wonder why the green belt should be concerned about the inner city. A number of speakers have made the point that the green belt is to some extent threatened by the problems of the inner cities. The constituency has many delightful villages and open spaces, but the pressure to develop those spaces because of the needs of people who want to escape from the suburbs in the east of London — suburbs that are controlled by Socialist councils which have developed the most horrible living conditions for people in those areas — is of great concern to the people whose interests I represent.
    Billericay is a delightful microcosm of the type of prosperity that the policies followed by the Government have introduced to the country. It is successful; it is an area in which jobs are chasing people; and it enjoys the type of people's capitalism that we are extending to all parts of this country. The hon. Member for Bradford, North (Mr.
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    Wall), who painted such a gloomy picture of his part of the world, should cheer up, because we intend to continue those policies, which will, I am sure, reach Bradford, North before the next election. I am sure that the people who voted for the hon. Gentleman will carefully consider whether the Socialism that is largely responsible for the destruction of the industries in Bradford, North, and elsewhere is something that this country can really afford.
    The people of Billericay are concerned about the pressure to develop in the green belt. Their young people often have difficulty in finding somewhere to live because the price of property, the result of that pressure, has gone through the roof. Many of the areas are as expensive, when it comes to buying property, as those in central London. Those young people travel up and down each day on the Liverpool street and Fenchurch street lines, which are grossly overcrowded and rather mismanaged by our nationalised British Rail — I hope that we shall get round to privatising it with a view to improving services. They travel to work, leaving home between 6.30 and 7 am to come to London — as I know from canvassing—and come home at 6 pm looking grey and tired. They would be happy to live in London near their work if they could find somewhere to live. However, in many parts of the city there are large areas in which young people can no longer find housing. That is largely because of legislation, much of which was misguidedly developed in this House.
    I know, because I was a city councillor for Westminster, that there are tens of thousands of houses and flats in London that are held out of occupation because of the Rent Acts, which we must reform. Thousands more houses are held out of occupation because of the inefficiency of local government management of property. I say that, not in anger, but in sorrow, as some of those authorities are Conservative, although the majority are Labour. Local authorities are inherently inefficient at managing property. They have no real motivation to put it back into circulation quickly, so it stands idle, boarded up and useless. In order to get that property back into circulation, we must wrest control of those council estates from the authorities. I welcome the policies that were set out in the Queen's Speech by my right hon. and hon. Friends to do something to reform the management and ownership of the property that is now controlled by city councils.
    My right hon.Friend the Member for Aylesbury (Mr. Raison) said earlier that he was a little concerned about schemes to make the tenants of such estates co-owners, but I want to draw the House's attention to an example from what is, perhaps, an unusual source — Castro's Cuba. There, having nationalised all the property, Castro found himself in such a mess that he was unable to fund them, so he converted the rents that were paid by people into mortgages. This simple measure made the people home owners overnight. For a Communist society, that must have been an enormous innovation — a jolly good capitalist measure. I recommend it, to spread ownership more widely in our cities. It does not have to be difficult to make those estates privately owned and run organisations.
    Vast acres in the centre of London are held out of occupation by local authorities who were hoping arid praying — deludedly, as it turns out — for a Labour Government to return and allow them back into the housing development business. I am sure that that will not happen. I hope that the Government will consider the possibility of making local authorities auction off that land

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    so that it can be developed by the private sector, and more young people can find homes in the City. The problems of our inner cities have been caused by too much Government and local authority power, intervention and planning. The solution is not to introduce yet more laws to perpetuate that practice. We need more power to be returned to the hands of the people who live in the cities. In doing so, we want to reduce the cost of running those cities.
    A point that has been raised several times in the debate is the proposal to change the way of collecting domestic rates. A great deal has been said about the amount of money to be collected.
    There are other measures in the Queen's Speech that go hand in hand with the proposal to alter the rating system. They are:
    "Measures … to promote further competition in the provision of local authorities' services."
    I know that those measures are dear to the heart of my right hon. Friend the Secretary of State for the Environment. As a member of a council, I know that there is an enormous waste of funds in local authorities. The way that we do things is complicated and expensive. I should like to relate a story about a hole in the road. When I was a city councillor we had to have a hole dug in a road, the sort of thing that has to be done in every street from time to time. On this occasion I took particular interest because it was the street in which I live. I found that it was to cost us £1,200 to have this hole dug and refilled but by going round private builders and asking for a better price I found that we could do the same job for £400, one third of the original cost. That is a measure of the economy that we can make when we introduce new measures for competitive tendering.
    I would like to see all local government services put out to tender, not just the dustbins but the core services as well. One of the most heartwarming remarks I have heard from my right hon. Friend the Secretary of State for the Environment is that he would like local authorities to meet once a year to award tenders, then pack up and go home. When we achieve that level of local government we will have solved the whole problem of the rates. We shall be saving such enormous sums of money that we need no longer worry about how that money is collected.
    The solution to the inner city problem is not the hair of the dog — more planning and more interventionist measures. The solution is to reduce planning, to introduce control by the people who live in those cities. That should be done not by fake Socialist co-operatives on which the busybodies in the community take over and persuade local authorities to spend even more on their pet schemes but by enfranchising all the people who live in the cities. That can be done by handing over to them the ownership and management of the property they live in. It is the ownership of private property that gives people respect for their surroundings, which makes them keep an eye on the streets to see that they are not becoming dangerous. It encourages them to keep the kids in order and stop vandalism and generally restore to the city the kind of friendly neighbourliness that once existed. It was the planners who moved in and smashed those neighbourhoods and it is the planners, the bureaucrats, the
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    organisers who want to dominate and inflict their ideas and opinions on people's lives who are the enemies in our society.
    I am convinced that the policies proposed in the Queen's Speech and already begun by the Government will enable us to achieve those aims. By doing so, we shall take the pressure off the green belt so that the constituents of Billericay whom I have the honour to represent will be able to sleep quietly in their beds, no longer worried that their part of the countryside is to join the urban sprawl of London. We shall achieve our aims, handing back power to the people, which is what Conservatism is all about.
    8.3 pm
    Mr. Martin Flannery: I am sorry that the Secretary of State for the Environment is not in his place. Earlier I listened to his speech and he was surly enough to speak disparagingly about my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) when my hon. Friend was not here. My hon. Friend's constituency already had one of the biggest Labour majorities in Britain and at the last election he increased it by 9,000.
    In south Yorkshire there are 17 seats and only one of them is held by a Tory, whose vote went down. That is the reality of life in the great cities of the north. The Conservative party should take note of that because in the process of time there will be a change of Government. I profoundly agree with my hon. Friend the Member for Bradford, North (Mr. Wall) who said that the election was called a year early for a good reason and that the people who called it knew that a most serious situation was about to develop. The Conservatives could not possibly have got in if they had called the election many months later. Therefore, from their viewpoint they were wise to call it when they did.
    I should like to speak about education. Our amendment says that we:
    "regret those Government proposals which will disrupt Britain's education service, limit choice, restrict opportunity, threaten standards and lead to greater central control."
    I should like to speak about some of those things. The Government have unleashed an all-out attack on our education system, a system that has taken well over 100 years to develop, and they will destroy it as they have destroyed so many things.
    I should like all Conservative Members to come to see the great area of east Sheffield lying still and quiet. In the centre there was a large Tory poster on which with unconscious ironic humour was written,
    "The fastest growing economy in the world."
    We raised the matter with the television companies, but the demolition agents were there when we went to have a look at the site where the poster had been. The convener of shop stewards went into the office that he had left on having been made redundant. A man sitting there said that he was in charge of the demolition team who were knocking down the factory. That is the kind of thing imposed on us by the Tories.
    The Government are now about to fire a broadside at education, launch a full-frontal attack on the whole of our education system. They have imposed a settlement against the will of the teachers and in time that will be dealt with. The Government are anti-union and certainly anti the teacher unions. They are attacking comprehensive education because they know that it is the focal point of

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    our education system. They have imposed on us the so-called assisted places scheme under which they will cream off a section of the community. They have the nerve to take public finance in order to do that — money for the education of our children and which we have paid by way of rates and taxes. They are appropriating that for themselves and for their children. They have initiated a drive towards centralisation, the like of which we have never witnessed, and have launched an unprecedented attack on local democracy.
    Complete confusion prevails about how the Government will carry out their disruptive plans. They are so utterly confused that they have no idea about how they will put those plans into effect. The Government will cause chaos and find themselves in great difficulty. I spoke briefly to the Secretary of State for Education and Science in the corridor and he was kind enough to welcome me back, God preserve us. I said to him, "It is not a revolution in education that you are engaging in; it is a counterrevolution and it will not work." The Government will learn that as surely as I am here.
    The Secretary of State for Education and Science had the effrontery to bring out some curious work called "GREB" —I am not sure how it is pronounced—and he calls it the great reform education Bill. I have never seen anything like it. It is an all-out onslaught on education and should be called the great anti-state education and disruption Bill. That will be discovered by many people who do not suspect what is happening and, as I have said, chaos will prevail. So fundamental are the provisions of the Bill that it will need draconian methods to put it into effect.
    Some of us can remember when the Prime Minister gave that press conference that morning. She was in a most unholy mess as the proposals had not been thought through. She did not know what she was saying. I listened to the various news reports that day and in every subsequent statement made by other Ministers they tried to undo the damage that the Prime Minister had done by sowing such confusion because she did not even understand her brief about education. No wonder that she panicked a week before when she thought that we were going to win the election. As a result, we have not seen much of a Minister whom she apparently had a row with, and who may not be a Minister much longer.
    The Government's policies mean that there will be selection. The National Federation of Parent-Teacher Associations, which represents 4 million parents, called the opting-out process "a divisive mechanism". We did not call it that. No matter what the Government say, there will be selection. Children undergo a process of continuous assessment at school. It has existed for years. Now we have the mentality that Friday morning is test morning. Children will be tested at 7, 14 and so on, which is a waste of time when they are assessed all day every day by their teachers. The fewer students that teachers have, the better they can assess them.
    Whitehall, instead of the democratically elected local education authorities which are so near the people, will reign. The Tory party at one time used to call itself the party of local democracy. It is now the party of anti-local democracy. It no longer believes in local people having any say in anything. The local comprehensive will become the local selective if we allow the Government to have their way. The Prime Minister said:
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    "We are not excluding the possibility that they may also raise additional sums".
    The Government are raising additional sums in the posh areas. I visited those areas as a member of a Select Committee. In the south the parents already contribute three times the capitation allowance. What do the parents contribute for education in Sheffield, Bradford and those great cities? Does anyone think that they have money to give for education? Government Members are filching money that we have contributed through rates and taxes to use for their children.
    State education is now in the hands of people who have never believed in state education. They do not send their children to state schools, and they never attended such schools. Those people now presume to lecture us on state education notwithstanding the struggles we have waged on it. Our children are in the hands of people who have a flag day mentality. They are siphoning off our cash, as well as the loot from their shares and so on, for their children's education. It means the return of the secondary modern through a creaming off process under the guise of freedom of parental choice. Who do they think they are talking to about freedom of parental choice? That is the reality. More than anything else it means the total destruction of the successful system of comprehensive education. It has been so successful that the Tories have hated it almost from the beginning. They know that every HMI report increasingly vindicates state education.
    I ask the Minister why the Government sat on the report of the HMIs until after the election. It is hard for the Minister to have to hear these things. He would like us to talk nicely and politely about the ravages that are occurring to our education system. They know that exam results are better than they have ever been and that more and more of our young people qualify to go to universities, polytechnics and colleges. They also know that education, like the Health Service, is expensive. They are determined to smash comprehensive education at all costs. They will run the risk of destabilising a successful system of education for their own class prejudices.
    Ever since the 11-plus exam was abandoned by all civilised LEAs, the Tories have attacked the education system with their black papers and disguised freedom associations and so on. However, they will lose out because they have blundered with this so-called plan. They have enlisted The Sun, the News of the World, the Daily Express, the Daily Mail and the Murdochs to attack us. The reality is that they are their papers. They have the entire panoply of the gutter press at their disposal in every attack on our education system. They are now desperate because they know that even their voters prefer comprehensive education to private education.
    They could go to private schools because they had the money. They thought of vouchers, but they would not work. They intend to fund the so-called CTCs with private money and a new creaming-off process. They have tried to smash the teachers unions. We cannot educate our children without a well looked after union of teachers. They thought up the expensive assisted places scheme for creaming-off. They imposed a GCSE before proper preparations were made. That was denounced by the National Confederation of Parent-Teacher Associations., which said that:
    "We found that schools are short of teachers, ancillary staff and cash, and that basic training and teaching material deliveries have been completed in only 3 per cent. of secondary schools."

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    The parent-teachers association said that, not me. Those associations asked for a lengthy period of calm and consolidation. What hope do they have with those so-called plans? There will now be a long, wearying and totally unnecessary attack by the Tory party on our education system. It is to be unleashed on us by this most dogmatic and doctrinaire of all British Governments. It will be superimposed on all the disruption and destabilisation of our education system that they have caused by holding back teachers' wages when they could have offered increases two or three years ago. That is a reality that they must know. We shall fight tooth and nail to defend our education system. I prophesy that we shall win when chaos intervenes, as it undoubtedly will.
    8.16 pm
    Mr. J. F. Pawsey: We have listened to the usual speech delivered in the usual way and for the usual time by the hon. Member for Sheffield, Hillsborough (Mr. Flannery). I do not intend to waste any of my time on replying to the observations that he made. However, I would like to refer to two interesting speeches which were made by my hon. Friends. The first was by my right hon. Friend the Member for Brent, North (Sir R. Boyson), who made what I can only describe as a Boysonic speech. I look forward to hearing many more such speeches.
    The other that I thought particularly noteworthy was from my hon. Friend the Member for Billericay (Mrs. Gorman). She spoke exceedingly well. She is obviously knowledgeable in the subjects that she referred to—local government, the green belt and the need for more competition to be introduced into local government. She spoke with authority and I look forward to hearing her speak again in the Chamber.
    There was an interesting contrast of styles between those speeches, but they were linked by the fact that each speaker knew precisely what they were speaking about, which is in marked contrast to the speech that we have just sat through.
    I would like to concentrate on education. The proposals on education that have been outlined in the Gracious Address are worth while and will do a great deal to improve the quality and standard of state education. I would refer specifically to the national curriculum, the introduction of grant-maintained schools and the provision of greater responsibility to schools, head teachers and governing bodies and parents.
    The national curriculum will ensure that all pupils at state schools will benefit from a core of common subjects that will include maths, English, foreign languages, science and technology. This is no revolutionary concept. It is already common practice in many countries, certainly throughout Europe and elsewhere. The idea of having attainment targets at 7, 11 and 14 will ensure that parents and teachers will know what standards children should be, and are, achieving. For the first time in the United Kingdom we will have a clear national standard against which parents, teachers and employers will be able accurately to judge the performance of individual children. The three separate benchmarks of attainment will help to ensure that each child reaches a good standard of education. If a child begins to slip behind, that slippage will be identified and remedied.
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    The fact that 40 per cent. of children under-achieve has been a source of great concern both in the House and outside for some time, and the attainment targets will do much to ensure that the numbers of under-achieving children will be reduced. I welcome the basic core of studies, but hope that there will be some flexibility, because although science and technology are of genuine and real importance, I would not like children who are gifted — for example, in art — to be denied the opportunity to pursue their talent simply because of an artificially restricted syllabus. I understand that music, art and physical education will all continue to be taught and studied and that there is no intention to force children into an educational straitjacket. They will not be art-deprived.
    But the national curriculum should ensure that school time — teachers' and pupils' time — is concentrated on what are increasingly seen as the more important subjects and to the detriment of more peripheral studies. A greater concentration on those subjects will benefit children when they leave school because they will be able to use them in their adult working lives.
    The establishment of a national curriculum should not stop teachers exercising their professional imagination and responding to challenges. My right hon. Friend the Member for Brent, North also made that point. The national curriculum should reflect the needs of an industrial-based society and the recognition that, in an increasingly technological world, our young people must be trained in the subjects that they will use in the outside world.
    My second point relates to the establishment of grant-maintained schools. As my right hon. Friend the Member for Brent, North said, the quality of state education in some education authorities is so poor that an increasing number of parents are voting with their wallets and their feet and are moving outside those LEA areas.
    Mr. Flannery: Rubbish.
    Mr. Pawsey: The hon. Gentleman says, "Rubbish", but the facts are clearly there. Some parents are so worried about their children's education that they will sell their homes and move from the catchment area of one school into the catchment area of a school that is seen to be better. Parents who can afford it will exercise their freedom of choice and will buy independent education for their children. That is a major criticism of the quality and standard of education being provided by many local education authorities.
    Mr. Ashdown: Will the hon. Gentleman give way?
    Mr. Pawsey: No. Several hon. Members are anxious to make their maiden speeches today, so I shall press on.
    In several local education authorities of the type to which I have referred, the core curriculum will improve education, but if heads, parents and governing bodies can opt out of the LEA and accept a direct grant, they will be better able to provide the type of education required by parents, teachers and employers. Additionally, it will introduce a measure of competitiveness which is lacking in education now. That competitiveness will be ignored by the LEA at its peril, for if it is ignored, more schools will decide to opt out of LEA control.
    Grant-maintained schools will be of benefit to the remaining grammar schools, especially in those areas where the Labour and Liberal parties still pursue a

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    vendetta against grammar schools. Only this morning, I heard that the LEA in my area has dropped plans to abolish grammar schools.
    Mr. Alan Howarth: Hear, hear.
    Mr. Pawsey: I am delighted to hear my hon. Friend agreeing with that point. He also represents a Warwickshire constituency, and he will be aware that Warwickshire county council has abandoned its plans to abolish grammar schools. My right hon. Friend's policies are beginning to work even before they reach the statute book. The local education authorities understand that grammar schools which are threatened will opt out, and are trying to pre-empt that move by abandoning their own schemes to abolish grammar schools.
    Provided that grant-maintained schools can control their own development with adequate funds, funds which will enable them to identify and satisfy their priorities, they will have a bright future. I am convinced that parents will beat a path to their doors, and that will undoubtedly help to lift standards in the remaining LEA schools. Competition is a good spur.
    However, I must ask my right hon. Friend one question. Will the ownership of school premises and land be vested in the trustees of schools that opt out of the LEA? Will the school be completely outside the control of the LEA?
    The Secretary of State for Education and Science (Mr. Kenneth Baker): indicated assent.
    Mr. Pawsey: I see my right hon. Friend nodding, but it would be helpful if he referred to the point when he replies to the debate.
    When enacted, this legislation will apply to all secondary schools and to primary schools with more than 300 pupils. Therefore, it will apply to comprehensive schools, but it should not be assumed that if a comprehensive school opts out of the LEA it can automatically become a grammar school or a technical school. I understand that, as now, the Secretary of State's permission would be required before a school could change its essential character.
    The proposal will ensure that, within the basic framework of the core curriculum, a school's ethos and character can be protected and strengthened, to the benefit of the children who attend that school. In many education authorities, the hand of the bureaucrat lies heavily on schools, and that is to the disadvantage of teachers, governors, parents and pupils alike.
    In our concern about the quality and standard of state education, we should remember that the great debate was started in 1976 by Opposition Members. The answer is not found simply by voting more funds. If that was the solution, education in the United Kingdom would be second to none, for during the past five years expenditure on education in schools has increased in real terms by 10 per cent. per pupil.
    My third point relates to the devolution of more responsibility to individual schools, head teachers and governing bodies. That will be widely welcomed, but it is essential to provide the head teacher with the necessary financial and administrative expertise required to run a large secondary school. We can learn a lesson from the independent schools which appoint bursars to take some of the administrative and financial burden from the head
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    teacher. It would be logical to follow that example in our larger secondary schools. Additionally, head teachers should receive more training in administration and man management than they do now. It should not be assumed that a good teacher automatically becomes a good manager. It would also be helpful for school governing bodies to have a greater range of expertise than they do now.
    All that having been said, I am committed to the view that a school which has more control over its budgeting will make better use of funds and resources. The head teacher and his governing body are in a much better position than the bureaucrats at shire hall to know precisely what new equipment or textbooks are required by a class. If repairs to buildings are required, the headmaster and the school governing body will be in a better position than the officials at shire hall to ensure that the repairs are carried out as quickly and as cheaply as possible. I am in favour of devolving more control over budgets to individual schools.
    The solutions that have been proposed by my right hon. Friend the Secretary of State are radical and imaginative, It is a case of serious problems requiring strong measures, and I am delighted that my right hon. Friend is bringing these measures forward. I give him the utmost credit for having fought them through. I am delighted that he recognises the difficulties and problems that exist in state education. I am delighted that my right hon. Friend has not abdicated his responsibility to children or parents and I welcome my right hon. Friend's proposals.
    Mr. Flannery: Canonise him.
    Mr. Pawsey: That will come later.
    However, I have one area of concern. For any educational reform to work, it is clear that we should enjoy the wholehearted co-operation of the teaching profession. Sadly, that is not the case at present, despite the substantial pay award. I am aware that my right hon. Friend the Secretary of State is issuing a Green Paper on teachers' pay and conditions. Certainly he needs no urging from me or any other hon. Member to issue that as quickly as possible so that the interim or temporary arrangements can be wound up and replaced by something more permanent.
    I very much regret that the teacher unions have not responded to my right hon. Friend's suggestion that they meet him to discuss a more permanent machinery to replace the present interim arrangements. I am aware that my right hon. Friend has done his utmost to persuade teacher unions to discuss those points with him. Even now, I hope that they will do that, not just for the benefit of their members, but for the benefit of the nation's children.
    Mrs. Kellett-Bowman: Will my hon. Friend give way?
    Mr. Pawsey: My hon. Friend must forgive me. There are a number of maiden speeches yet to be made and I am anxious to press on.
    In conclusion, if we are to improve the quality and standard of state education, the measures outlined in the Gracious Speech must be adopted and I am delighted that my right hon. Friend the Secretary of State has the courage and conviction to introduce these considerable and wide-ranging measures.
    8.32 pm
    Mr. Ieuan Wyn Jones (Ynys Môn): It is with some trepidation that I make my first real contribution to the proceedings of this House. I thank you, Mr. Deputy Speaker, for calling me to make my first speech so early in the new Parliament.
    My constituency of Ynys Môn made history in the early hours of 12 June this year when the constituents elected their first Plaid Cymru Member of Parliament. I am conscious of the great honour and responsibility that they bestowed upon me. I am bound to say that Ynys Môn has usually returned hon. Members who have been in the mainstream of the Welsh radical tradition in politics. Indeed, in the latter part of the 19th century, Anglesey, as the constituency was then known, was represented by Ellis Jones Griffith. During this century it was represented by Lady Megan Lloyd George and Cledwyn Hughes, as he then was. All three hon. Members represented Anglesey for three quarters of a century and were strongly in favour of some measure of home rule for Wales.
    I want to pay a particular tribute to one of my predecessors — Cledwyn Hughes, now Lord Cledwyn of Penrhos. For 28 years he was returned regularly to the House and he became the constituency's favourite son. During his long parliamentary career he held high office, particularly as the Secretary of State for Wales and as the Minister of Agriculture, Fisheries and Food. During his tenure at the Welsh Office, the Welsh Language Act reached the statute book in 1967. That was a significant milestone in the history of the language and we look forward to similar proposals being brought forward by the Government to strengthen the language.
    I said that Ynys Môn normally returned hon. Members from a particular tradition. That tradition was broken temporarily in 1979 when my immediate predecessor, Mr. Keith Best, a Conservative, was elected. He was known as an assiduous constituency MP and we were all saddened by the manner in which his parliamentary career came to an end.
    Ynys Môn is known affectionately in Wales as "Môn Mam Cymru". For the benefit of the House, may I say that that translates as "the mother of Wales". Following the election result, there was a feeling that the wayward mother had at last returned home and would recount the stories of the past eight years when she was tempted away, but found the charms of home and the deep sense of history too difficult to resist.
    The island is known not only for its scenic beauty, but for its sense of pride in its community and its community values. Whether they have been born on the island or have moved there recently to live, the people of Anglesey pull together to protect and nurture their community. However, I warn the House that that community is under threat, principally from unemployment. Holyhead, the biggest town on the island, is an unemployment blackspot with one in four out of work. The town relies heavily on the port of Holyhead for employment and with the recent loss of jobs in the marine workshops and the dry dock unique skills built up over generations have been lost, perhaps for ever.
    In Ynys Môn we are also dependent on agriculture and the public sector. We look to the Secretary of State for Wales to defend the interests of our farmers in the negotiations in the European Community, particularly on the sheep market regime, and thus prevent a repeat of the
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    debacle that we saw over the introduction of milk quotas. We note with alarm the Government's attack on the public sector as outlined in the Queen's Speech particularly on local authorities and the privatisation of the water industry which will be resisted fiercely in all parts of Wales.
    During the election campaign the idea of a Welsh senate appealed to more and more people and a number of opinion polls stated that more than 50 per cent. of the electorate favoured the establishment of a Welsh senate. Although that support was not translated into hard votes for Plaid Cymru on this occasion, the House should note that the people of Wales have been alarmed at the collapse in manufacturing industry, cuts in regional aid, the lack of real training opportunities for our young people and the lack of a developed infrastructure in terms of good road, rail, sea and air links. The idea of a Welsh senate is gaining ground because people see the link in all those things and recognise their inability to get things changed.
    The proposals set out in the Queen's Speech on education are noted with some alarm, not only on the Opposition Benches, but by many parents, teachers, parent-teachers' associations and school governors. The Government's first tasks must be to restore morale in the classroom and to restore teachers' negotiating rights.
    Listening to the Prime Minister address the House on Thursday, I had the distinct feeling that the Government's proposals on education have not been properly thought through. We have a right to know whether parents are to be charged for music lessons, sport trips and other activities. If so, we will oppose that as that opens the door to selection based not on choice, but on parents' ability to pay.
    What about the talented musicians and sportsmen of families on small incomes? My brother, if I may say so, is a talented musician and received the full benefit of the free comprehensive state education service. My father, on a minister's stipend, could not have afforded any fees.
    In the county of Gwynedd we are very concerned at the opting out proposals contained in the Queen's Speech. In many rural areas, such a scheme would spell disaster. Many of our secondary schools are small and face falling pupil numbers. In addition, we are in the middle of a consultative process on tertiary education. We also have reservations about the introduction of a national — or core—curriculum in Wales. What does national mean in that context? We are against further centralisation as a matter of principle. But on a point of detail. what would happen to bilingual education if a core curriculum were established? Some local education authorities in Wales are concerned that the provision of bilingual education will be hampered by such a scheme. The Secretary of State for Wales should make the Government's position clear at an early date.
    My final point adverts to the general comments that I made earlier in my speech. In the period before the election some party political broadcasts, notably and surprisingly by the Labour party, showed a map of Britain with Ynys Môn missing. I was elected to ensure that Ynys Môn was put back on the political map of Wales. I tell hon. Members that from here on they disregard Ynys Môn at their peril.
    8.40 pm
    Mr. James Cran: I thank you, Mr. Deputy Speaker, for allowing me to make my maiden speech this evening.

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    I have the privilege of representing the Beverley constituency, and I have the greater distinction of following Sir Patrick Wall, who is a distinguished public servant and who represented the constituency of Beverley for 33 long, successful and fruitful years.He is held in as high regard by his constituents as he was in this House, as I have gathered since I arrived here. Sir Patrick Wall is a defence expert of international repute. He has held high office in NATO and there is no journey that he would not make to any part of the globe in the defence interests of the United Kingdom. His wise counsel will be missed in this Chamber, as it is already in the corridors of NATO.
    I shall spare the House a geographical description of the constituency of Beverley, but it is sufficient to say that, although my constituency abuts the river Humber, few of my constituents recognise what they regard as a modern corruption—the name Humberside. I and most of them — I say this to my Front-Bench colleagues — want to revert as soon as possible to the more traditional name of the East Riding of Yorkshire.
    Most of my constituents work in the Hull conurbation, hence my interest in inner city policy, to which I shall return later in the debate. There is another reason for my interest in this topic. Before being elected to this House I served as the midlands director of the CBI. I became deeply involved in the urban problems of that region and had to work closely with the local authorities that were charged with implementing many of those urban policies. As I talked to local politicians I never doubted where their hearts lay, irrespective of politics. The hearts were always in the right place, but in my view it is heads that solve problems and not hearts.
    Sloganising does not help to solve the intractable problem of inner city deprivation. I am thinking particularly of the example of the hon. Member for Brent, South (Mr. Boateng), who talked last week about the Balkanisation of the inner cities, whatever that means. I caution against listening to rhetoricians or orators, because we need to be level-headed to solve these problems. That is exactly what we are getting from the Government Front Bench. Balkanisation has not been caused, as the hon. Gentleman tried to suggest, by the Government, but by what I regard as myopic local authorities, and it has resulted in matters which all hon. Members would deplore and which I have seen at first hand in places such as Handsworth — I live only a few miles from there — and to a lesser extent in the Hull conurbation. We all deplore the shocking environmental problems of unlettable council houses, decaying private rented housing, little social balance in the communities in which people live, and often with poor schooling. In some people's eyes, the worst problem is that of street crime and vandalism. In the face of all this, any fair-minded individual, he it a politician or anybody else, would recognise the enormous amount that the Government have done to ameliorate these problems, including programmes to alleviate social problems, which is quite right. I hope that the Government will continue along that line and I will support them in it.
    It is the lack of economic regeneration that exacerbates social problems. Of that I have no doubt, given that I have operated particularly in the west midlands in the past few years. One of the keys to solving our problems in the inner cities is to encourage enterprise, which is something that we all want to do something about. One of the best means of solving the problem, in contradistinction to what I have
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    heard earlier in this Chamber in the debate, is urban development corporations. I say that as somebody who has not looked on urban development corporations from afar but as one who, in a small way, helped to lobby for the black country urban development corporation.
    We should ignore the local authority lobbying that I have seen for the past year or more, which is hostile to urban development corporations because they see UDCs taking powers away from them. It seems to me that that is irrelevant. It is what does the job best that matters, not who or what does it.
    The other matter that UDCs have illustrated is that inner city progress is achieved not by the public sector or the private sector alone but by the two of them working in co-operation. I see that in the conurbations of this country and where it is working best we are seeing the best results.
    As someone who has been involved with UDCs. I see four reasons for their success. First, they have an ability to target resources. I often find that local authorities, although they are well-meaning, do not target resources in the manner that some of us would like. Secondly, we should not use the scatter-gun approach to economic development, but concentrate on well defined discrete geographical areas. Thirdly, there is the equally important aspect of the speed of decision-making. The private sector will not wait for ever for local authority committees to come to decisions. Speed of decision-making is of the essence. Fourthly, and perhaps most important of all, is the ability to liberate private sector funds. The private sector cannot do it by itself, the public sector cannot do it by itself, but together there is no doubt that they can do it. That is why we lobbied so hard in the black country for a UDC. Local authorities are bad at delivering such things. They do not mean to be bad, but they are. I therefore respectfully disagree with the hon. Member for Sheffield, Brightside (Mr. Blunkett) who last week petitioned the Prime Minister to use local authorities as vehicles for economic development. I do not want funds that might go to an urban development corporation to be channelled to Humberside county council, for instance.
    I appeal to the Secretary of State not to forget our small cities. Attention is usually grabbed by places such as Liverpool, Manchester and Glasgow but there are other conurbations which are not so large but are equally important. Hull should be considered. I hope that the Secretary of State will take my representation seriously and establish a Humberside urban development corporation. I believe that the future of 1 million people in that part of the country depends upon an urban development corporation.
    I heard this evening for the first time the details of many UDCs. I need more details. Perhaps that is what we require for the area which I represent.
    Many new initiatives were promised in the Queen's Speech. I have no doubt that they will help, but we must improve what is already being done. Many projects need improving. I do not intend to go into detail because I am conscious that others wish to make maiden speeches, but I shall mention one or two possibilities.
    I have represented industry and business for over 10 years and I can assure the House that they are at distraction point because of the antics of some local authorities, which increase rates irrespective of the ability of companies or work forces to pay. I strongly support the proposals for rating reform. The sooner they are

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    introduced the better. By that route we shall give confidence to British industry and so populate inner cities. The sooner the Government do that the better. Local planning procedures are inhibiting development in the urban areas. Flexibility is the watchword for local planning. In my view, it is lacking.
    Property valuation in inner cities is also a problem. Large tracts of derelict land in inner cities are kept according to 1970 valuation sheets. They are not sold because the true valuation is much lower.
    The special programmes for inner cities need refining. One Opposition Member earlier criticised the urban programme. I think that it has been immeasurably successful. The urban programme ranges widely over disparate projects, but better targeting of resources is needed.
    The derelict land programme has transformed lunar landcapes in some of our inner cities. Again, the Government must market their grants better. More aggression is required by Department of the Environment offices to achieve a better overall performance within regions and nationally. The Government should reappraise derelict land grant to the private sector because it must make a loss to qualify for grant which is, if I might be forgiven, rather Irish.
    We should continue to devote more resources to the problem of clearing dereliction. No inward investment will go to an inner city when the investor sees only a lunar landscape.
    In conclusion, I thank the House for listening to me with such courtesy to which elsewhere, I confess, I am unaccustomed.
    8.57 pm
    Mr. Chris Mullin: I have the privilege of representing Sunderland, South. I succeed Gordon Bagier to whom I wish a long and happy retirement. Despite my name appearing on every hit list of child eating extremists dreamed up by the Tory party Central Office and their friends in the SDP, Sunderland, South recorded the highest ever Labour vote. I am not foolish enough to believe that that was due to me, but it is hard evidence of the deep division created by the Prime Minister and her friends since they formed the Government. On a night when a Tory majority of over 100 seats was obtained, the Labour party more than doubled its majority in Sunderland, South.
    Anyone interested in the effect of the merciless application of market forces should study Sunderland. We have whole streets where almost no one is working. A generation of children is growing up, but those children may never work. At the last count 26,790 adults — 26 per cent. of the male population and a substantial part of the female population—were out of work. Half of that 26,790 were less than 35 years of age and 40 per cent. of them had been out of work for two years or more.
    At the last count 1,700 school leavers were looking for jobs but there were only 17 vacancies. At the same time 3,438 people were on what are euphemistically called special measures which, when the Prime Minister was in opposition, she liked to call "pretend jobs". Today large parts of Sunderland depend upon cheap labour, known as the community programme. In India I believe that people
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    who are out of work are forced to sit by the roadside chipping stones for 10 rupees a day. I sometimes wonder whether that is where we are heading.
    Sunderland was once the biggest shipbuilding town in the world. That is within the memory of most Sunderland people, but those who are slightly older than me recall when one could not go round the town without hearing the sound of hammers on rivets. Today, there in only silence. In the nine years since the present Government came to power the number of engineering workers in Sunderland has halved.
    It is sometimes said that the shipbuilding industry is obsolete, and that what is happening is inevitable. Never. As far as I know, the Gracious Speech contained no proposal that we should stop being an island. As long as we are an island, we shall always need ships, and there is no reason on earth why those ships should not be built here in Britain or why the huge accretion of skills that we have built up over generations should not be put to good use rather than being wasted in the dole queues.
    It has sometimes been said that our shipbuilding and engineering workers cannot compete and that they should be competing with workers in South Korea, whose wages are about a third those in British shipyards. Every night on our television screens we see what the South Koreans think of their Government, and I hope that it never comes to that here.
    The other day, the Prime Minister referred to the shibboleths of the 1930s. People might be forgiven for thinking that she is dedicated to the shibboleths of the 1830s. Many people in Sunderland are only too well aware of what the 1930s meant and they recognise the symptoms when they see them. A fine lady in my constituency, Mrs. Peggy Weatherstone, recently told me about her childhood in Sunderland in the 1930s. Her mother suffered chronically from asthma and was constantly in fits on the floor. Mrs. Weatherstone had to run down to the telephone box at the end of the street and ring for the doctor. The doctor would ask, "Have you got a pound?" and she would answer "No. We won't have a pound until we get our relief on Friday". The doctor would reply, "Come back on Friday, then." That is how it was, and that is how many people think it may be again.
    There is also the experience of a Sunderland shipyard worker, Danny Morgan. He can recall a time, as recently as the mid-1960s, when he would turn up with the others at the gate of the yard and the foreman would say, "We'll have you, you and you, and the rest of you can go home." Those days are coming back, and plenty of people in Sunderland and elsewhere recognise the symptoms.
    Last week I was approached by a blind lady in my constituency who has three children. She simply wanted to move from the council house in which she lives to one a little nearer to her mother in another part of my constituency. When I asked a councillor to look into her case the answer came back, "It's not possible because just about all the houses in her street have been sold off." That has happened in the last seven or eight years.
    The Prime Minister and her colleagues have been in power for nearly a decade. They have deliberately used mass unemployment as a weapon to degrade and humiliate our people — [HON. MEMBERS: "Come off it."] Hon. Members are not supposed to heckle maiden speeches.
    The Government have ruthlessly subverted respected institutions for political ends. The police and the courts have been converted into instruments of the Tory party.

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    The BBC has virtually been converted into an arm of the state and now the Prime Minister and her Government are proposing an all-out assault on local government which, in Sunderland and elsewhere, is the last line of defence for millions of poor people and their families. The Government propose to hive off the best state schools and let the rest sink.
    They propose to bring back the private landlord and to strip the public sector of its best housing — at least, the parts of it which have not already been sold. Finally, they propose a measure which, despite all Conservative Members' denials, will take away the votes of thousands of poor people — the poll tax. People will not dodge paying it just because they want to; it will be a matter of survival rather than of choice.
    The Prime Minister and the Government have unleashed a mean streak in our country. They have mobilised the fortunate against the unfortunate. Millions of our people are now held hostage by the greed and myopia of the southern middle classes. My job, and that of my hon. Friends, will be to defend the unfortunate from the tyranny of the fortunate, to try to offer a vision of a society in which people care for each other once again and to try to revive the decent instincts of the British people, so ruthlessly snuffed out by the Government.
    Finally, I refer to one other matter with which I have been associated for two or three years now —the cases of the six innocent people convicted of the Birmingham pub bombings and the four innocent people convicted of the Guildford and Woolwich pub bombings, all of whom have been in prison for 14 years. I have researched the cases extensively and I am satisfied — I take comfort from the fact that many hon. Members on both sides of the House are satisfied — of the innocence of those people. I believe that many people in high places know that these people are innocent, or at the very least strongly suspect that that is the case. These cases stain our judicial and political system. I know that that view is widely shared on both sides of the House and I pay tribute to the hon. Member for Harborough (Sir J. Farr) who has spoken out on this matter. I, and many others, will not rest until justice is done for those people.
    9.4 pm
    Mr. David L. Shaw: Thank you, Mr. Speaker, for fitting me in before the winding up speeches. I hope at some future date to be able to take some more time on issues affecting my constituency. Tonight, I should like to start by paying homage and thanks to my predecessor, Peter Rees, who has so kindly looked after me in these past seven months and who also looked after the constituency for some 17 years. Peter was well known and, I believe, well liked in the House of Commons. He was also well known and well liked in the constituency. Over the years, I have been to many constituencies, but I am afraid that I cannot say of a great many that the constituency Member commanded such a liking as was commanded by Peter. Peter certainly achieved much, and that was illustrated in the recognition and recommendations from those for whom he worked. I should also like to commend Peter Rees's longstanding work for the port of Dover. On many occasions he took an interest in and lobbied to improve the communications to the port.
    I should like to feel that I shall remain the Member for Dover for as long as did the Member at the turn of the
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    century, George Wyndham, who held the seat for some 24 years. It would also be nice to be returned four times unopposed as he was.
    Dover intends to develop greatly the tourist industry within its area. Dover is one of the most beautiful constituencies in the country. It contains three castles. One can see the castle at Dover as one arrives across the English Channel or as one arrives at Dover from the land. It is a beautiful castle and it has defended the nation for some 2,000 years. Indeed, it is reputed that Julius Caesar had to land some miles away because he was thrown off by the castle's defences.
    Defence is terribly important to Dover. The Royal Irish Rangers have been stationed in Dover for some three and a half years — their history goes back 300 years. The Royal Marines are stationed in Deal. For many years, previous Members have helped to keep them in the area. We are proud to play our part in the defence of the nation. We are proud that, in the 13th century, Dover was described by Matthew Paris as the "key of England".
    There is much within the constituency that is attractive. The countryside is beautiful. Agriculture prospers within the countryside, but there is also other industry, such as coal mining, that is extremely important to the constituency.
    The port of Dover is the dominant industry and it employs, directly and indirectly, 10,000 people. It will be for those 10,000 people that I shall express my concern when, later in the course of the session, I hope to be called to speak in the Channel tunnel debate. The port of Dover has successfully expanded during the past few years of the Conservative Government as economic growth has resulted in more passengers going abroad and more freight being exported. The port of Dover looks forward to the next four years of economic growth under this Government.
    I should also like to pay tribute to two other companies in the area, Dover Engineering Works and the Avo Electrical Company, not only because they are world beaters, but also because the management had the sense, under this Government, to apply to buy out the companies. They are now mainly owned locally as a result of management buy-outs, and that is what the new capitalism is all about. That is what has given the managements the opportunity to expand their businesses.
    Another company within the area is the Buckland paper mill, which makes Conqueror paper of the type that is used in the House of Commons. That company is especially interesting because it has given share options to all of its staff—not just the managers, but also those on the shop floor and the secretaries of the typing pool. They know what wealth creation is about — they have seen and received the benefits of wealth creation.
    In the last few moments of my speech I should like to deal with the Gracious Speech and the relevance of wealth creation to that speech. I was somewhat saddened and depressed by some of the comments that were made in earlier speeches. I am sad because wealth creation has been knocked and attacked. The policy of attacking wealth creation does not exist in most other Parliaments of the world today. Even in the Soviet Union, the debate has moved on, and I hope that it will not be long before it moves on in this Parliament as well.
    I heard attacks on speculators, but it seems to me that the only speculators in stocks and shares who deserve to be attacked nowadays are councils like the 20 Labour

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    councils that invested in the News on Sunday. That was one of the fastest bankruptcies that the country has ever seen. Ratepayers' money was lost, and when trade unions invested in the paper their members' money was lost, too.
    When I was a councillor, I and my colleagues knew that the only way that we could control expenditure was by common sense, because we knew that the expenditure control systems were inadequate. Both Labour and Conservative Governments had tried to control local authority expenditure, but it had not proved possible in the 1970s or the 1980s. I commend the community charge to the House as an advance in controlling local government expenditure.
    I also reject the attacks on the stock exchange and share ownership that were made in earlier speeches. Nearly 20 million people in this country now own shares. That is a wonderful statistic, and I hope to see it expand considerably in years to come. Attacks on share ownership are an attack on pension funds, and hence an attack on the coal miners in my constituency, who own part of the largest pension fund in the country. I am pleased for the coal miners who own shares, and I hope to see them own more.
    Let me now return to the subject of the winding-up speeches, education. It is vitally important to the young of this country, but we have failed in some key areas. We have failed in terms of interesting and involving parents in how their children are educated, and in terms of interesting and involving business men more in that subject. Consequently, I was not surprised when one teacher told me the other day that when he had asked his class how many of them would run their own businesses in later years not one member of the class put up his hand. Yet by the law of averages in this country, where one person in seven is self-employed, at least three or four pupils should have done so. I believe that that is because the education system has not had enough business men involved in it. It has not enjoyed enough parental interest, or enough of an opportunity to develop children in the way that they need to be developed.
    Thank you, Mr. Speaker, for allowing me to speak in such a brief session before the winding-up speeches. I wish to support the motion on the Gracious Speech.
    9.13 pm
    Mrs. Ann Taylor: My first speech in the House was made some time ago, and it is rather strange to be here again making a maiden speech as a new Member —especially such a brief speech so late in the evening. Let me first say a word about Mr. John Whitfield, my predecessor, who was in the House for four years. He was, to say the least, an abrasive character : indeed, he would have regarded that as a compliment. The best acknowledgement that I can give him is that he always believed in ensuring that people knew his opinions.
    My constituency is far larger and more diverse than many people realise. It has many of the problems of an old industrial area, and I hope to be able to speak on those in the House in the not-too-distant future. However, today's debate is on the inner cities and education, and I should like to say a few brief words about that.
    I share the concern expressed earlier by my hon. Friend the Member for Copeland (Dr. Cunningham) that the Government's new interest in inner cities should be more
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    than a token gesture, and that local authorities should not be bypassed in dealing with inner city problems. However, I am also concerned that all the help, if there is to be real help, should not go just to the large city areas, but should also go to the large northern towns which have, albeit on a smaller scale, many of the problems about which we have been talking today. The Dewsburys and the Huddersfields of this world have high levels of industrial dereliction and housing need, besides high levels of multiple deprivation which, although not on the same scale as Leeds, are the product of the same chronic under-investment.
    One of the areas of greatest under-investment in our towns and cities is housing. When this Government were first elected in 1979 they made the decision to cut spending on housing by half. We are now seeing the consequences of that deliberate policy. The waiting lists are longer than ever before; there is less building and less improvement. There has been a real deterioration in the condition of the housing stock.
    The Government have concentrated their energies on selling council houses. They do not seem to realise that the housing crisis cannot be solved by selling the houses. That may achieve other aims, but it will not contribute to the solution of housing problems, especially when local authorities are not allowed to use their capital receipts. The only way to solve or even to begin to solve this very real housing crisis is to build and to improve and repair more houses. The housing problem cannot be solved simply by changing the tenure of those who are already housed. I hope that the Government will embark on substantial investment as part of their about-turn on the inner cities.
    I am profoundly disturbed by the Government's education proposals. Schools will be able to opt out of local authority control. I am desperately worried about the Government's plans for examinations at the ages of seven, 11 and 14. I do not want my children's education to he ruined by examination swords hanging over them and dominating the school curriculum in the way that the 11-plus examination was used to dominate junior schools when I was young.
    Of course there is a place for examinations, but pupil profiles are infinitely more valuable. We cannot turn back the clock and allow primary schools to become testing places, with competition between schools and the comparison of results and with cramming for brighter children to boost school results, all of which we had in the 11-plus days and all of which would mean a return to the kind of testing that is proposed by the Prime Minister and this Government.
    Does the Secretary of State intend to encourage schools to opt out? Has he thought through the consequences? Are we to have rural schools opting out and selecting and, by definition, therefore rejecting some pupils who might want to attend them because they are nearest to them? What will happen to pupils who have to travel a long distance to other schools? Who will pay? How long will their journey be? Will that really be in the educational interests of those children? What will be the basis of selection? Will bright children be selected? Will the children of pushing and motivated parents be selected? At the interviews to which the Prime Minister referred, will parents be asked whether they are willing to help with the PTA, with fund raising and, indeed, with funds?
    The Secretary of State should devote his energies to promoting strong, local community schools that have

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    proper resources and that can cater for all the children in the area. If the Secretary of State is concerned about the education of all children, he will back down both on the proposal that schools should be able to opt out and also on the proposal that examinations should be held at seven, 11 and 14. A healthy education system does not consist simply of a series of hurdles. That is no education system; it is just an escape route for the few. If the Secretary of State does not believe that there is a case for investing in all of our children, he should not be responsible for education.
    9.18 pm
    Mr. Giles Radice: We have heard an impressive crop of maiden speeches. My hon. Friend the Member for Newport, West (Mr. Flynn) spoke eloquently and powerfully about his Conservative predecessor, Mark Robinson. whom we all remember. He was learned enough to quote Gibbon's "The Decline and Fall of the Roman Empire" against the Tories' education proposals. The hon. Member for Leeds, North-East (Mr. Kirkhope) praised Keith Joseph, my old sparring partner. Whatever we thought of Keith Joseph's policies, we all respected him for his courtesy and honesty in the House. It was nice to hear his successor's remarks about him.
    My hon. Friend the Member for Bradford, North (Mr. Wall) spoke knowledgeably and with feeling about his city. From my visits to Bradford, I know how schools there desperately need investment in their fabric. The hon. Member for Billericay (Mrs. Gorman) made an eloquent speech. We were certainly interested in the lessons that she drew from Castro's Cuba. The hon. Member for Ynys Môn (Mr. Jones) spoke with sympathy about one of his predecessors, my old friend Lord Cledwyn of Penrhos, and gave a warning about the Government's education proposals. The hon. Member for Beverley (Mr. Cran) showed his interest in inner city problems. We look forward to hearing from him in future. My hon. Friend the Member for Sunderland, South (Mr. Mullin) showed his concern about the problems in the town of Sunderland, which, of course, I know well, and about the problems of the north of England. We welcome him to the House. The hon. Member for Dover (Mr. Shaw) spoke about his constituency. I wish him well, but I cannot promise him that he will be returned unopposed, as was one of his lucky predecessors. Of course, I welcome back my hon. Friend the Member for Dewsbury (Mrs. Taylor). Clearly, all those hon. Members will play an important part in our future debates.
    Education plays a major part in the Gracious Speech. Indeed, in one of his characteristically modest press briefings, the Secretary of State for Education and Science promised that he would make an important wind-up speech on his proposals tonight.
    Mr. Kenneth Baker indicated dissent.
    Mr. Radice: We now know that his speech will not be important, so I can have more time to make my remarks.
    Education was, of course, a key issue at the 1987 general election. It is right that it should have been so. Parents are more than ever aware that their children's life chances are to be decisively affected by the schooling that they receive. As for the individual, so for the nation as a whole. As we move towards a knowledge-based economy, it becomes ever clearer that our prosperity will depend on
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    the skills and talents of our people and that the most effective way in which we can develop such skills is by investing in education and training.
    Contrary to the view that is put across by the popular press and, I am afraid, all too often by Government Ministers, there is much to praise about British education. Our primary school system is widely admired not only in this country but in other countries. Judging by examinations at ages 16-plus and 18-plus, standards have risen significantly over the past decade. So much for those who claim that the spread of comprehensive secondary education has led to a decline in standards. That is not the truth. The quality of our higher education is highly respected throughout the world. I particularly highlight the achievement of polytechnics and other public sector institutions which, over the past eight years, have widened access and preserved standards, in spite of the Government's failure to provide adequate funding. Of course, the Open university, set up by a Labour Government, is a triumphant success, so much so that., despite increases in charges, it is over-subscribed by 25,000.
    For all the achievements, we cannot be complacent. Education faces challenges and problems. and many of the problems are of the Government's making. Year after year, the Secretary of State's own advisers—the HMI — have pointed to the lack of books and equipment, the poor state of repair of too many of our schools, and the shortage of teachers in key subjects, all of which represent a threat to educational standards. Yet in a report published a few days after the general election, the Select Committee on Education, Science and Arts warned the House that Government spending plans for next year will lead to reductions in spending on books, equipment, repairs and maintenance. So much for the Secretary of State's claim during the general election that the Government are releasing enough resources to provide pupils with an adequate supply of books and equipment, and enough money to repair our schools.
    Indeed, the Select Committee confirmed a point that I have made on a number of occasions, both to the Secretary of State and to his predecessor, that insofar as there has been some improvement in the resources going to education, it has come about largely because local education authorities have chosen not to follow the Government's spending plans. As the right hon. Member for Shropshire, North (Mr. Biffen), my old pal, reminded the Government yesterday, money is important in education. If the Government want to boost the supply of books and equipment, to tackle the backlog of repairs and maintenance and if they want smaller classes, they must provide extra resources.
    One glaring weakness is the damaging education and training gap that has now opened up between this country and our main competitors. About two thirds of West Germany's labour force have a recognised academic qualification, compared with only half of the labour force in this country. In Japan, most young people stay in full-time education until they are 18. In Britain, fewer than one third of our young people stay in full-time education after the age of 16. Our proportion of 18-year-olds going into higher education is lower than that of many of our rivals. Yesterday the Royal Society revealed a brain drain from this country of high-flying scientists and engineers.
    The obvious conclusion from those disturbing facts is that if we are to survive and prosper as a nation we must

    581
    carry through a major expansion of educational opportunities. Tragically for this country's future, the Secretary of State will not recommend such a programme or outline any relevant legislation to the House this evening. Instead, he will tell the House about the Government's ill-thought out and hastily conceived proposals which, if they become law, will disrupt Britain's education service, restrict opportunity, threaten standards and lead to an education service run on the basis of "the Secretary of State and Whitehall know best."
    The Tory proposals were revealed to the nation for the first time at the general election, and a right old shambles ensued. Apart from making the obvious blunder of suddenly inserting a muddled and half-baked opt-out proposal into the Tory manifesto at the last minute, it was clear that the Secretary of State had failed to brief the Prime Minister about its implications. Hence the undignified spectacle of the Secretary of State, once he had learned how to switch on his car telephone, rushing out a disclaimer only hours after the Prime Minister had blurted out the awful truth that opt-out meant selection and charging.
    Mr. Patrick McLoughlin: Does the hon. Gentleman not agree that there is selection in this country? There is selection if one is in the privileged position of being able to afford private education. There is selection if one is in the privileged position of being able to move house to the school that one wishes one's children to attend. I have received two letters from constituents, informing me that people are moving house so that they can send their children to the school that they want. Therefore, there is selection, but we want to give opportunity to everyone, and not just to some.
    Mr. Radice: The answer to the problem that the hon. Gentleman has just outlined is to ensure that every school is a good school and that they are all comprehensive schools. That is what we must do.
    As the polls showed, the more the voters heard about the Tory's education plans, the more they disliked them. What had been held as the centrepiece of the Tory manifesto suddenly became the great unmentionable in polite Conservative circles. Given the shambles of the election, it is not surprising that the Secretary of State decided last week to invite his Ministers and their senior advisers to a well-publicised secret council of war. According to The Independent, a Department of Education and Science official is reported as saying that the meeting was designed to ensure the philosophical coherence of the Government's programme.
    Given their record, I remain unconvinced about the Education Minsters' credentials on philosophical coherence. First, we have the chameleon-like figure of the Secretary of State, once a wet, now rapidly drying out as he tries to make himself acceptable as the Prime Minister's successor. In any case, he is far more interested in saying something that might grab tomorrow's headlines rather than dealing with the philosophy or logic of his own proposals.
    Then we have the right hon. Gentleman's deputy, the hon. Member for Mitcham and Morden (Mrs. Rumbold), who is extremely schizophrenic about her distinguished past in local government. They can always turn for ideological advice to the Under-Secretary, the hon.
    582
    Member for Dartford (Mr. Dunn), the self-styled philosopher king of Dartford, who, we understand, owes his surprising survival to his position as the Prime Minister's spy in Elizabeth house. Finally, there is the new Minister responsible for higher education, the hon. Member for Wantage (Mr. Jackson), who until recently, I understand, was the prize fellow for All Souls. I am not sure that his new job is much of a prize. He has the unenviable task of trying to explain the Government's higher education policy.
    Out of that high-powered philosophical discussion, two brilliant ideas emerge. The first is GREB. Apparently the Secretary of State has coined the acronym for his Bill of GREB, which stands for the great reform education Bill.
    The second brilliant conclusion reached by the Secretary of State, again reflecting his characteristic modesty, is that GREB should at the very least be regarded as the equal of R. A. Butler's Education Act 1944. I find the Secretary of State's claim preposterous. The 1944 Act, drawn up by R. A. Butler and his Labour Under-Secretary Chuter Ede, was the fruition of a long period of detailed discussion and consultation. It followed and drew on the authoritative Hadow and Spens report on secondary education. It had a three-year gestation period from Green Paper to statute book. It was founded on a broadly based consensus, not only between parties but between the Government on the one hand and local government and the teaching profession on the other. By providing for the first time secondary education for all, it greatly expanded education opportunities. Finally, the 1944 Act established the principle of free schooling as of right.
    The contrast between the 1944 Act and the proposals in the Queen's Speech is glaring. Whereas R. A. Butler proceeded on the basis of careful discussion and consultation to achieve the widest possible agreement, this Secretary of State sacrifices everything for instant publicity. I referred to the shambles over the opt-out proposals.
    Mr. Tony Baldry: Will the hon. Gentleman give way?
    Mr. Radice: I shall not give way because I have little time.
    The city technology idea was launched at the most recent Tory conference, when it was little more than a scribble on the back of an envelope. The main purpose was to win the Secretary of State a standing ovation from the party faithful. No wonder so little progress has been made in its implementation.
    The national curriculum project was launched on "Weekend World". The Secretary of State was apparently more interested in pressing Matthew Parris than getting the idea accepted by those who will have to work with it. Whereas R. A. Butler worked constructively with local government and the teaching profession, the present Secretary of State works against the education partners. The CTCs, the open enrolment policy, the opt-out proposals and the delegation of school budgets will all weaken the local education authorities without putting any coherent alternative in their place.
    The move against the Inner London education authority, euphemistically described in the Queen's Speech as reforming the structure of education in inner London, can only be motivated by political spite. It certainly has no

    583
    educational justification. In 1981, the committee on the future of inner London education, chaired by Lady Young, concluded that the problem of inner London
    "calls for a single authority of adequate size".
    Even the 1979 committee, which was chaired by the present Secretary of State — then a Back-Bencher — rejected the proposal for London boroughs to opt out of ILEA on the ground that that would leave a rump of the poorer, deprived boroughs. If that was the case then, what is the argument for the Government's proposals now? Perhaps the Secretary of State will tell the House how such a policy is supposed to improve inner London education. Like too many of his colleagues, the Secretary of State's motto seems to be, "If I cannot control an institution, I shall either abolish it or seek to undermine it."
    Certainly, the Secretary of State is an enthusiastic centraliser. Apart from the moves against the local education authorities that I have described, he proposes to remove the polytechnics from local government responsibility and put them under a body that he can ultimately control.
    We have also heard disturbing rumours that the Secretary of State plans to run the national curriculum centrally from Elizabeth house. There is a strong case, on social and economic grounds, for an agreed core curriculum, but there is an overwhelming case against a national curriculum that is imposed and then controlled from Elizabeth house. I suspect that it will not work, and even if it did. it would be dangerously authoritarian. Paradoxically, at a time when the French are moving away from central control, the Secretary of State has ambitions to become the British Napoleon.
    The main argument against the Government's education proposals is that they are attempting, under the guise of greater choice, to reintroduce selection and to expand charging for education.
    First, a word about charges. For all the Prime Minister's reassuring words during the election that parents will have to pay only for a few extras, the reality is that parental contributions are already essential to maintain the basic curriculum, as many reports have shown. They are essential to ensure that the schools have the books and equipment that they need and that school buildings are properly maintained. However, it is clear that the Government want to move much further down the road of pay-as-you-learn. The Secretary of State has already announced, since the election, that he would like all authorities to follow the bad practice of a few and charge for music, field trips, swimming and many other sporting activities. For all the protestations to the contrary, it is surely revealing that whenever the Prime Minister mentions the so-called opt-out schools, as she did again last Thursday, she talks about school fees. The truth is that the Government want a pay-as-you-learn system, and if one cannot pay, one will not receive a good education. They should listen to the wise words of the right hon. Member for Shropshire, North:
    "I hope that it will be clearly understood that the proposals are designed to reinforce that collective tradition of maintained education and that they are not intended to be some oblique form of privatisation."—[Official Report, 30 June 1987; Vol. 118, c. 399.]
    I hope that the Government take notice of what he says.
    Finally, I turn to selection. Whatever the Government's protestations, the city technology colleges, the so-called popular schools and, most of all, the opt-out schools will, by their very nature, become selective. In choosing their
    584
    pupils they are bound to use the national tests — at seven, 11 or 14—that the Secretary of State proposes to introduce. So, we could be talking about not only an 11-plus, but a seven-plus and a 14-plus. Instead of a unified national system of education we shall increasingly have a two-nation education system, with the lucky few going to the selective schools and the majority to the inferior, less prestigious schools.
    We shall see the re-creation under another guise of the old grammar school-secondary modern divide. Tory educationists as well as Labour ones condemned the old 11-plus system as being unfair, divisive and inefficient. That is why the Prime Minister approved so many schemes for comprehensive reorganisation when she was Secretary of State for Education and Science. She got rid of more grammar schools than any other Secretary of State in living memory. When Sir Keith Joseph was Secretary of State for Education and Science he concluded that it would be wrong to bring back selection and that the most sensible policy, both for the nation and for its citizens, was to concentrate on raising the standards of all pupils. The present Secretary of State for Education and Science seems to have forgotten that very simple point and his proposals are without reasonable justification.
    Today, the vast majority of parents get their first choice of school and rather than create first, second, third and fourth division schools, we should now set ourselves the task of making sure that whatever school parents choose it will be a good school. That means guaranteeing that all schools are well resourced, that teachers arc well trained and regularly update their skills and that our curriculum and our examinations system stimulate and stretch. Excellence for all is what Britain needs, not high standards for a few achieved at the cost of the majority. We reject the Government's education proposals and we shall vote against them.
    9.41 pm
    The Secretary of State for Education and Science (Mr. Kenneth Baker): One of the pleasures about speaking in the debate on the Address is that one is able to congratulate a number of maiden speakers. We have heard. many eloquent speeches, quite the largest number of maiden speeches that I have ever heard on one day. The hon. Member for Newport, West ( Mr. Flynn) made an eloquent speech and started by paying a generous tribute to a friend on the Conservative side and, I think, a friend in many parts of the House, Mark Robinson. We are sorry that he is not with us. The hon. Member for Newport. West was ambitious in that he recommended hon. Members not only to read Gibbon's "The Decline and Fall of the Roman Empire" but to read it again. He represents the town in which I was born and I hope that he will look after my birthplace well. I think that his wife was taught by one of my cousins who was an English teacher. I am sure that we shall hear much more from the hon. Gentleman.
    My hon. Friend the Member for Leeds, North-East (Mr. Kirkhope) succeeds Sir Keith Joseph who made a considerable contribution to the previous Conservative Government. My hon. Friend spoke about the needs of the north and spoke movingly about the confidence of the people of the city of Leeds. He welcomed the effect of the unified business rate upon that city. He also welcomed our

    585
    education policies, particularly because of the significance that they may have in the inner city part of his constituency, Chapeltown.
    Then we heard the maiden speech by the hon. Member for Bradford, North (Mr. Wall). It was a rigorous attack on capitalism. The hon. Gentleman has a gloomy attitude to life and I do not agree with him that we are on the edge of a major recession. His speech was a vigorous defence of old-style Socialism and I have no idea how Mr. Hugh Hudson will present that or the hon. Gentleman in future.
    My hon. Friend the Member for Billericay (Mrs. Gorman) made an eloquent maiden speech, and spoke from her great experience in local government. She is a strong supporter of competition in local government services and I was glad to hear that she is such a strong defender of the green belt, protecting the interests of her own constituency. There is a consequent obligation for more development in our inner cities.
    Then we heard a speech by one of the Welsh Nationalists, the hon. Member for Ynys Môn (Mr. Jones). He spoke of his predecessor, Keith Best, and paid tribute to the assiduous work that Mr. Best did in that constituency. The new hon. Member for Ynys Môn is a most eloquent speaker and I congratulate him on his speech. He said that in the election some political maps that appeared on television excluded Ynys Môn I thought Vincent Hanna had struck again. I am quite sure that he will represent his constituency effectively.
    Then we had a speech from my hon. Friend the Member for Beverley (Mr. Cran), who is bringing clearly to the House his considerable experience in industry in the west midlands and in the Confederation of British Industry. He spoke from his experience of how effective urban development corporations are.
    We had a speech from the hon. Member for Sunderland, South (Mr. Mullin) who, I am sure, will be a worthy successor to Gordon Bagier. Then we had a speech from my hon. Friend the Member for Dover (Mr. Shaw), who follows a very popular former colleague of ours, Peter Rees. My hon. Friend brings to the House a practical business experience. He made a very eloquent and robust defence of our programme, particularly in the area of education.
    Finally, I welcome back to the House the hon. Member for Dewsbury (Mrs. Taylor). We are very sorry that she had to come in by defeating John Whitfield. She made her second maiden speech tonight and I am sure that she will be welcomed by many on both sides of the House who remember her when she represented Bolton, West.
    Many hon. Members today referred to the proposal of education reform outlined in the Gracious Speech, as did many speakers on other days. The main proposal on education in the Gracious Speech is the establishment of a national curriculum. We want all our children to receive a good education—wherever they live, whatever type of school they go to and whatever their ability. That expresses a unity of purpose. There is no divisiveness here, there are no exceptions and there will be no preferential treatment. If Opposition Members think that, it is in their imagination. The reality is that we stand for higher standards and greater quality for all our children. That is what we shall deliver.
    Our chosen instrument is the national foundation curriculum. This will be an entitlement for all five to
    586
    16-year-olds. All children will get the breadth and balance of agreed programmes of study in the foundation subjects —maths, English, a foreign language, science, history, geography and technology in all its aspects. We shall also find time within the national curriculum for physical education, music and art. All parents, wherever they live, will have the security of knowing that their children are receiving a fair deal — the national curriculum. Better, they will know, from the periodic tests to which the hon. Member for Dewsbury referred, what their children are achieving at the ages of seven, 11, 14 and 16. She expressed anxiety about this and I have heard anxiety expressed elsewhere. Therefore, I say to her that the idea of testing has been criticised, but that testing is nothing new. The process of assessment at those ages will involve testing. HMI inspections of primary schools show that reading is now tested in 93 per cent. of schools. A range of standardised tests—about nine—are used. Mathematics is tested in approximately 76 per cent. of the schools. What about the quarter of primary schools where maths is not tested and where these children may not be getting a fair deal?
    Mr. Radice: What will the tests be used for?
    Mr. Baker: They will be used to assess the ability of the child at ages close to seven, 11 and 14. They will also take into account the varying range of ability at each of those ages. The hon. Gentleman should be aware that this is not a particularly uniquely Conservative proposal. Tests have been implemented in English and maths by the Inner London education authority. They are used to assess the ability of the child and, if needed, to provide the basis for extra remedial coaching or teaching.
    The Leader of the Opposition, in his speech last Thursday, not only attacked our proposals, and this particular proposal, but accused us of wishing to introduce them malevolently. That is nonsense, because the person who started the debate on the national curriculum in 1976 was a former Labour Prime Minister, Jim Callaghan. He called for
    "rigorous educational standards …greater monitoring and accountability of teachers …greater concentration on the basic skills of literacy and numeracy and …giving greater priority to technical, vocational and practical education."
    Mr. Kenneth Hind: Will my right hon. Friend give an undertaking to the House that his reforms, which many of us think will be a great improvement, will end the practice in many areas whereby the comprehensive system is rounded down to the level of the secondary modern instead of being rounded up to the level of the grammar school?
    Mr. Baker: I shall come to that point in a moment. May I finish my point about the national curriculum? The hon. Member for Durham, North (Mr. Radice) said that we might find some common ground. There is considerable agreement across the country that we must move this way. There is agreement that there should be a national curriculum—[Hon. Members: "A core curriculum."] The difference is on how we should arrive at that core foundation curriculum. I sense much consensus irrespective of party. We share a common interest in raising standards.
    In the next few weeks, I shall be issuing a consultation document on what we intend by way of legislation on the national curriculum. There will be a debate not just in the

    587
    House but in the country. We want to listen to people in the education system. Indeed, the debate has already started and many educationists have commented on the proposal.
    The second element of our proposals to reform and improve education covers the point made by my hon. Friend the Member for Lancashire, West (Mr. Hind). Another major strand of our policy is to involve parents more in the education of their children—to bring them more into the education system. The trend has been growing for the past 10 years; it has not happened suddenly. There has been greater parental involvement, and every report from the inspectors says that if parents can he attracted to visit a school, even once a term, and to take an interest, we shall begin to build a bridge between the home and the school which will improve the education of the child and improve the school itself.
    Dr. Cunningham: Where does the right hon. Gentleman send his children to school?
    Mr. Baker: The hon. Gentleman refers to my children. I thought that the Labour party deplored the practice of dragging into politics the families of politicians. I should have thought that the latter days of the election campaign showed the danger of that path. I stand by the choice that I made, and I want more parents to be in a position to exercise choice in the education that their children receive in the state system. Much humbug and hypocrisy is talked about the matter. If the members of the shadow Cabinet are so convinced about the sanctity of public provision and the consequent limitation of choice, why do not more of them live in council houses in their constituencies?
    Mr. Radice rose
    ——
    Mr. Baker: I must not give way to someone who has benefited from an independent education. [Interruption.]
    I want to consider open enrolment. That has been strongly——
    Mr. Radice: Will the Secretary of State give way?
    Mr. Baker: I want to turn to our policy of open enrolment which will allow parents——
    Mr. Radice: Give way.
    Mr. Baker: I will not give way.
    I want to consider the policy of open enrolment which will allow parents greater choice——
    Mr. Radice: Give way, give way.
    Mr. Baker: I know that this may be the last appearance of the hon. Member for Durham, North but never mind.
    I want to consider the policy of open enrolment. Under that policy parents will have a much greater say over the choice of the school in the state-maintained sector which they want their children to attend.
    My hon. Friend the Member for Birmingham, Hall Green (Mr. Hargreaves) has drawn to my attention a case in Birmingham. This has not occurred in ILEA, Haringey or Brent. It has occurred in the city of Birmingham which the Labour party boasts is under moderate control. The school in question is Baverstock, which is a very popular comprehensive school. However, the Labour education committee has set an admission limit on that school. The headmaster of the school, Mr. Perks, has offered to take an extra class in September for 30 children who have been denied access to the school. According to The Times Education Supplement:
    588
    "Most of the parents who have been refused the school of their choice claim to be from working-class backgrounds and many are Labour supporters. The council's refusal has angered them and now threatens to split the Labour group.
    Mrs. Shirley Truckle, a member of the Labour Party for 20 years … claims … that … 'I have not been offered any choice about which school"
    her son
    "should go to."
    That is the reality of Labour councils in practice.
    Mr. Ashdown: Will the Secretary of State give way?
    Mr. Baker: The head of that school wants the children, the children want to go to the school, and their parents want the children to go there. The school wants to take the children. The only group saying no is the Labour-controlled education committee. That is what we want to change. Our policy will bring a major extension of parental choice and influence.
    Mrs. Mahon rose——
    Mr. Baker: Next week I shall be issuing a consultative document on this policy——
    Mr. Ashdown rose
    Mr. Speaker: Order. I must tell new hon. Members that if the Secretary of State does not give way, they must not persist.
    Mr. Baker: I am reluctant to give way to the hon. Member for Yeovil (Mr. Ashdown), who is the education spokesman for the Liberal party, because if I give way to him, I shall have to give way to the education spokesman from the SDP.
    Mr. Ashdown rose——
    Mr. Baker: I am sorry, I will not give way to the hon. Member for Yeovil.
    The hon. Member for Durham, North referred to the creation of two types of schools. I do not accept that argument at all. I do not believe that local education authorities will allow their less popular schools to sink because these schools will also be subject to the national curriculum. They will also be able to benefit from our policies.
    One nation in education is not the same as one system of education. Some schools are better than others. Parents want to get their children into those schools and they are willing to move house to do that. Teachers want to work in those schools. Good people come forward to serve as their governors. I have not invented unpopular schools. They are a feature of the system defended so fully and uncritically by the Labour party. I am concerned about pupils in all those schools. I want to raise standards for all and I do not believe that that can be guaranteed by uniformity. I put my trust in diversity and pluralism. I want a choice of schools—comprehensive, grammar and grant-maintained schools, city technology colleges, independent schools and church schools. I want to liberate those forces which will apply upward pressure for improvements.
    We need a set of policies to stimulate those changes. There is a revolution in hand. We have listened to the fears, hopes and aspirations of the parents. We want to make our schools more accountable. Choice is the lever. The Labour party's denial of choice angers parents and frustrates children.
    Mr. Allan Mckay rose in his place and claimed to move, That the Question be now put.
    Questions, That the Question be now put, put and agreed to.
    Question put accordingly, That the amendment be made:—
    The House divided: Ayes 250, Noes 360.

    Division No. 1]

    [10 pm

    AYES

    Abbott, Ms Diane

    Douglas, Dick

    Allen, Graham

    Duffy, A. E. P.

    Alton, David

    Dunnachie, James

    Anderson, Donald

    Dunwoody, Hon Mrs Gwyneth

    Archer, Rt Hon Peter

    Eadie, Alexander

    Armstrong, Ms Hilary

    Eastham, Ken

    Ashdown, Paddy

    Evans, John (St Helens N)

    Ashley, Rt Hon Jack

    Ewing, Harry (Falkirk E)

    Ashton, Joe

    Ewing, Mrs Margaret (Moray)

    Banks, Tony (Newham NW)

    Fatchett, Derek

    Barnes, Harry (Derbyshire NE)

    Faulds, Andrew

    Barnes, Mrs Rosie (Greenwich)

    Fearn, Ronald

    Barron, Kevin

    Field, Frank (Birkenhead)

    Battle, John

    Fields, Terry (L'pool B G'n)

    Beckett, Margaret

    Fisher, Mark

    Beggs, Roy

    Flannery, Martin

    Bell, Stuart

    Flynn, Paul

    Benn, Rt Hon Tony

    Foot, Rt Hon Michael

    Bennett, A. F. (D'nt'n & R'dish)

    Forsythe, Clifford (Antrim S)

    Bermingham, Gerald

    Foster, Derek

    Bidwell, Sydney

    Foulkes, George

    Blair, Tony

    Fraser, John

    Blunkett, David

    Fyfe, Mrs Maria

    Boateng, Paul

    Galbraith, Samuel

    Boothroyd, Miss Betty

    Galloway, George

    Boyes, Roland

    Garrett, John (Norwich South)

    Bradley, Keith

    Garrett, Ted (Wallsend)

    Bray, Dr Jeremy

    George, Bruce

    Brown, Gordon (D'mline E)

    Gilbert, Rt Hon Dr John

    Brown, Nicholas (Newcastle E)

    Godman, Dr Norman A.

    Brown, Ron (Edinburgh Leith)

    Golding, Mrs Llin

    Bruce, Malcolm (Gordon)

    Gordon, Ms Mildred

    Buckley, George

    Gould, Bryan

    Caborn, Richard

    Graham, Thomas

    Callaghan, Jim

    Grant Bernie (Tottenham)

    Campbell, Menzies (Fife NE)

    Griffiths, Nigel (Edinburgh S)

    Campbell, Ron (Blyth Valley)

    Griffiths, Winston (Bridgend)

    Campbell-Savours, D. N.

    Grocott, Bruce

    Canavan, Dennis

    Harman, Ms Harriet

    Carlile, Alex (Mont'g)

    Hattersley, Rt Hon Roy

    Cartwright, John

    Healey, Rt Hon Denis

    Clark, Dr David (S Shields)

    Heffer, Eric S.

    Clarke, Tom (Monklands W)

    Henderson, Douglas

    Clay, Bob

    Hogg, N. (C'nauld & Kilsyth)

    Clelland, David

    Holland, Stuart

    Clwyd, Mrs Ann

    Home Robertson, John

    Cohen, Harry

    Hood, James

    Coleman, Donald

    Howarth, George (Knowsley N)

    Cook, Frank (Stockton N)

    Howell, Rt Hon David (G'dford)

    Cook, Robin (Livingston)

    Howells, Geraint

    Corbett, Robin

    Hoyle, Doug

    Corbyn, Jeremy

    Hughes, John (Coventry NE)

    Cousins, Jim

    Hughes, Robert (Aberdeen N)

    Crowther, Stan

    Hughes, Roy (Newport E)

    Cryer, Bob

    Hughes, Sean (Knowsley S)

    Cummings, J.

    Hughes, Simon (Southwark)

    Cunliffe, Lawrence

    lllsley, Eric

    Cunningham, Dr John

    Ingram, Adam

    Dalyell, Tarn

    Janner, Greville

    Darling, Alastair

    John, Brynmor

    Davies, Rt Hon Denzil (Lanelli)

    Johnston, Sir Russell

    Davies, Ron (Caerphilly)

    Jones, Barry (Alyn & Deeside)

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

    Jones, leuan (Ynys Môn)

    Dewar, Donald

    Jones, Martyn (Clwyd S W)

    Dixon, Don

    Kaufman, Rt Hon Gerald

    Dobson, Frank

    Kennedy, Charles

    Doran, Frank

    Kilfedder, James

    590

    Kinnock, Rt Hon Neil

    Quin, Miss Joyce

    Kirkwood, Archy

    Radice, Giles

    Lambie, David

    Randall, Stuart

    Lamond, James

    Redmond, Martin

    Leadbitter, Ted

    Rees, Rt Hon Merlyn

    Leighton, Ron

    Reid, John

    Lestor, Miss Joan (Eccles)

    Richardson, Ms Jo

    Lewis, Terry

    Roberts, Allan (Bootle)

    Litherland, Robert

    Robertson, George

    Livingstone, Ken

    Robinson, Geoffrey

    Livsey, Richard

    Rogers, Allan

    Lloyd, Tony (Stretford)

    Rooker, Jeff

    Lofthouse, Geoffrey

    Ross, Ernie (Dundee W)

    Loyden, Eddie

    Ross, William (Londonderry E)

    McAllion, John

    Rowlands, Ted

    McAvoy, Tom

    Ruddock, Ms Joan

    McCartney, Ian

    Salmond, Alex

    Macdonald, Calum

    Sedgemore, Brian

    McFall, John

    Sheerman, Barry

    McKay, Allen (Penistone)

    Sheldon, Rt Hon Robert

    McKelvey, William

    Shore, Rt Hon Peter

    McLeish, Henry

    Short, Clare

    McNamara, Kevin

    Skinner, Dennis

    McTaggart, Bob

    Smith, Andrew (Oxford E)

    Madden, Max

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

    Mahon, Mrs Alice

    Smith, Cyril (Rochdale)

    Marek, Dr John

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

    Marshall, David (Shettleston)

    Snape, Peter

    Marshall, Jim (Leicester S)

    Soley, Clive

    Martin, Michael (Springburn)

    Spearing, Nigel

    Martlew, Eric

    Steel, Rt Hon David

    Maxton, John

    Steinberg, Gerald

    Meacher, Michael

    Stott, Roger

    Meale, Alan

    Strang, Gavin

    Michael, Alun

    Straw, Jack

    Michie, Bill (Sheffield Heeley)

    Taylor, Mrs Ann (Dewsbury)

    Michie, Mrs Ray (Arg'l & Bute)

    Taylor, Matthew (Truro)

    Millan, Rt Hon Bruce

    Thomas, Dafydd Elis

    Molyneaux, Rt Hon James

    Turner, Dennis

    Moonie, Dr Lewis

    Vaz, Keith

    Morgan, Rhodri

    Wall, Pat

    Morley, Elliott

    Wallace, James

    Morris, Rt Hon A (W'shawe)

    Walley, Ms Joan

    Morris, Rt Hon J (Aberavon)

    Warden, Gareth (Gower)

    Mowlam, Mrs Marjorie

    Wareing, Robert N.

    Mullin, Chris

    Welsh, Andrew (Angus E)

    Murphy, Paul

    Welsh, Michael (Doncaster N)

    Nellist, Dave

    Wigley, Dafydd

    Oakes, Rt Hon Gordon

    Williams, Rt Hon A. J.

    O'Brien, William

    Williams, Alan W. (Carm'then)

    O'Neill, Martin

    Wilson, Brian

    Orme, Rt Hon Stanley

    Winnick, David

    Paisley, Rev Ian

    Wise, Mrs Audrey

    Parry, Robert

    Worthington, Anthony

    Patchett, Terry

    Wray, James

    Pendry, Tom

    Young, David (Bolton SE)

    Pike, Peter

    Powell, Ray (Ogmore)

    Tellers for the Ayes:

    Prescott, John

    Mr. Frank Haynes and Mr. John McWilliam.

    Primarolo, Ms Dawn

    NOES

    Adley, Robert

    Banks, Robert (Harrogate)

    Aitken, Jonathan

    Batiste, Spencer

    Alexander, Richard

    Beaumont-Dark, Anthony

    Alison, Rt Hon Michael

    Bellingham, Henry

    Allason, Rupert

    Bendall, Vivian

    Amery, Rt Hon Julian

    Bennett, Nicholas (Pembroke)

    Amess, David

    Benyon, W.

    Amos, Alan

    Bevan, David Gilroy

    Arbuthnot, James

    Biffen, Rt Hon John

    Arnold, Jacques (Gravesham)

    Biggs-Davison, Sir John

    Arnold, Tom (Hazel Grove)

    Blackburn, Dr John G.

    Ashby, David

    Blaker, Rt Hon Sir Peter

    Aspinwall, Jack

    Body, Sir Richard

    Atkins, Robert

    Bonsor, Sir Nicholas

    Atkinson, David

    Boswell, Tim

    Baker, Rt Hon K. (Mole Valley)

    Bottomley, Peter

    Baker, Nicholas (Dorset N)

    Bottomley, Mrs Virginia

    Baldry, Tony

    Bowden, A (Brighton K'pto'n)

    591

    Bowden, Gerald (Dulwich)

    Glyn, Dr Alan

    Bowis, John

    Goodhart, Sir Philip

    Boyson, Rt Hon Dr Sir Rhodes

    Goodlad, Alastair

    Braine, Rt Hon Sir Bernard

    Goodson-Wickes, Dr Charles

    Brandon-Bravo, Martin

    Gorman, Mrs Teresa

    Brazier, Julian

    Gorst, John

    Bright, Graham

    Gow, Ian

    Brittan, Rt Hon Leon

    Gower, Sir Raymond

    Brooke, Hon Peter

    Grant, Sir Anthony (CambsSW)

    Brown, Michael (Brigg & Cl't's)

    Greenway, Harry (Ealing N)

    Browne, John (Winchester)

    Greenway, John (Rydale)

    Bruce, Ian (Dorset South)

    Gregory, Conal

    Buchanan-Smith, Rt Hon Alick

    Griffiths, Sir Eldon (Bury St E')

    Buck, Sir Antony

    Griffiths, Peter (Portsmouth N)

    Budgen, Nicholas

    Grist, Ian

    Burns, Simon

    Ground, Patrick

    Burt, Alistair

    Grylls, Michael

    Butcher, John

    Gummer, Rt Hon John Selwyn

    Butler, Chris

    Hamilton, Hon A. (Epsom)

    Butterfill, John

    Hamilton, Neil (Tatton)

    Carlisle, John, (Luton N)

    Hampson, Dr Keith

    Carlisle, Kenneth (Lincoln)

    Hanley, Jeremy

    Carrington, Matthew

    Hannam, John

    Carttiss, Michael

    Hargreaves, A. (B'ham H'll Gr')

    Cash, William

    Hargreaves, Ken (Hyndburn)

    Chalker, Rt Hon Mrs Lynda

    Harris, David

    Channon, Rt Hon Paul

    Haselhurst, Alan

    Chapman, Sydney

    Hawkins, Christopher

    Chope, Christopher

    Hayes, Jerry

    Churchill, Mr

    Hayhoe, Rt Hon Sir Barney

    Clark, Hon Alan (Plym'th S'n)

    Hayward, Robert

    Clark, Dr Michael (Rochford)

    Heath, Rt Hon Edward

    Clark, Sir W. (Croydon S)

    Heathcoat-Amory, David

    Clarke, Rt Hon K. (Rushclifte)

    Heddle, John

    Colvin, Michael

    Heseltine, Rt Hon Michael

    Conway, Derek

    Hicks, Mrs Maureen (Wolv' NE)

    Coombs, Anthony (Wyre F'rest)

    Higgins, Rt Hon Terence L.

    Coombs, Simon (Swindon)

    Hill, James

    Cope, John

    Hind, Kenneth

    Couchman, James

    Hogg, Hon Douglas (Gr'th'm)

    Cran, James

    Holt, Richard

    Critchley, Julian

    Hordern, Sir Peter

    Currie, Mrs Edwina

    Howard, Michael

    Curry, David

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

    Davies, Q. (Stamf'd & Spald'g)

    Howarth, G. (Cannock & B'wd)

    Davis, David (Boothferry)

    Howe, Rt Hon Sir Geoffrey

    Day, Stephen

    Howell, Rt Hon David (G'dford)

    Devlin, Tim

    Howell, Ralph (North Norfolk)

    Dickens, Geoffrey

    Hughes, Robert G. (Harrow W)

    Dicks, Terry

    Hunt, David (Wirral W)

    Dorrell, Stephen

    Hunt, John (Ravensbourne)

    Douglas-Hamilton, Lord James

    Hunter, Andrew

    Dover, Den

    Hurd, Rt Hon Douglas

    Dunn, Bob

    Irvine, Michael

    Durant, Tony

    Irving, Charles

    Dykes, Hugh

    Jack, John

    Eggar, Tim

    Jackson, Robert

    Emery, Sir Peter

    Janman, Timothy

    Evans, David (Welwyn Hatf'd)

    Johnson Smith, Sir Geoffrey

    Evennett, David

    Jones, Gwilym (Cardiff N)

    Fairbairn, Nicholas

    Jones, Robert B (Herts W)

    Fallon, Michael

    Jopling, Rt Hon Michael

    Farr, Sir John

    Kellett-Bowman, Mrs Elaine

    Favell, Tony

    Key, Robert

    Fenner, Dame Peggy

    King, Roger (B'ham N'thfield)

    Field, Barry (Isle of Wight)

    King, Rt Hon Tom (Bridgwater)

    Fookes, Miss Janet

    Kirkhope, Timothy

    Forman, Nigel

    Knapman, Roger

    Forsyth, Michael (Stirling)

    Knight, Greg (Derby North)

    Forth, Eric

    Knight, Dame Jill (Edgbaston)

    Fowler, Rt Hon Norman

    Knowles, Michael

    Fox, Sir Marcus

    Knox, David

    Franks, Cecil

    Lamont, Rt Hon Norman

    Freeman, Roger

    Lang, Ian

    French, Douglas

    Latham, Michael

    Fry, Peter

    Lawrence, Ivan

    Gale, Roger

    Lawson, Rt Hon Nigel

    Gardiner, George

    Lee, John (Pendle)

    Gill, Christopher

    Leigh, Edward (Gainsbor'gh)

    Gilmour, Rt Hon Sir Ian

    Lennox-Boyd, Hon Mark

    592

    Lester, Jim (Broxtowe)

    Roe, Mrs Marion

    Lightbown, David

    Rossi, Sir Hugh

    Lilley, Peter

    Rost, Peter

    Lloyd, Sir Ian (Havant)

    Rowe, Andrew

    Lloyd, Peter (Fareham)

    Rumbold, Mrs Angela

    Lord, Michael

    Ryder, Richard

    Luce, Rt Hon Richard

    Sackville, Hon Tom

    Lyell, Sir Nicholas

    Sainsbury, Hon Tim

    Macfarlane, Neil

    Sayeed, Jonathan

    MacGregor, John

    Scott, Nicholas

    MacKay, Andrew (E Berkshire)

    Shaw, David (Dover)

    Maclean, David

    Shaw, Sir Giles (Pudsey)

    McLoughlin, Patrick

    Shaw, Sir Michael (Scarb')

    McNair-Wilson, M. (Newbury)

    Shelton, William (Streatham)

    McNair-Wilson, P. (New Forest)

    Shephard, Mrs G. (Norfolk SW)

    Madel, David

    Shepherd, Colin (Hereford)

    Major, Rt Hon John

    Shepherd, Richard (Aldridge)

    Malins, Humfrey

    Shersby, Michael

    Mans, Keith

    Sims, Roger

    Maples, John

    Skeet, Sir Trevor

    Marlow, Tony

    Smith, Sir Dudley (Warwick)

    Marshall, John (Hendon S)

    Smith, Tim (Beaconsfied)

    Marshall, Michael (Arundel)

    Soames, Hon Nicholas

    Martin, David (Portsmouth S)

    Speed, Keith

    Mates, Michael

    Speller, Tony

    Maude, Hon Francis

    Spicer, Jim (Dorset W)

    Mawhinney, Dr Brian

    Spicer, Michael (S Worcs)

    Maxwell-Hyslop, Robin

    Squire, Robin

    Mayhew, Rt Hon Sir Patrick

    Stanbrook, Ivor

    Mellor, David

    Steen, Anthony

    Meyer, Sir Anthony

    Stern, Michael

    Miller, Hal

    Stevens, Lewis

    Mills, lain

    Stewart, Allan (Eastwood)

    Miscampbell, Norman

    Stewart, Andrew (Sherwood)

    Mitchell, Andrew (Gedling)

    Stewart, Ian (Hertfordshire N)

    Mitchell, David (Hants NW)

    Stradling, Thomas, Sir John

    Moate, Roger

    Sumberg, David

    Monro, Sir Hector

    Summerson, Hugo

    Montgomery, Sir Fergus

    Tapsell, Sir Peter

    Moore, Rt Hon John

    Taylor, Ian (Esher)

    Morris, M (N'hampton S)

    Taylor, John M (Solihull)

    Morrison, Hon C. (Devizes)

    Taylor, Teddy (S'end E)

    Morrison, Hon P (Chester)

    Tebbit, Rt Hon Norman

    Moss, Malcolm

    Temple-Morris, Peter

    Moynihan, Hon C.

    Thompson, D. (Calder Valley)

    Mudd, David

    Thompson, Patrick (Norwich N)

    Neale, Gerrard

    Thorne, Neil

    Needham, Richard

    Thornton, Malcolm

    Neubert, Michael

    Thurnham, Peter

    Newton, Tony

    Townend, John (Bridlington)

    Nicholls, Patrick

    Townsend, Cyril D. (B'heath)

    Nicholson, David (Taunton)

    Tracey, Richard

    Nicholson, Miss E. (Devon W)

    Tredinnick, David

    Onslow, Cranley

    Trippier, David

    Oppenheim, Phillip

    Trotter, Neville

    Page, Richard

    Twinn, Dr Ian

    Paice, James

    Vaughan, Sir Gerard

    Parkinson, Rt Hon Cecil

    Viggers, Peter

    Patnick, Irvine

    Waddington, Rt Hon David

    Patten, Chris (Bath)

    Wakeham, Rt Hon John

    Patten, John (Oxford W)

    Waldegrave, Hon William

    Pattie, Rt Hon Sir Geoffrey

    Walden, George

    Pawsey, James

    Walker, Bill (T'side North)

    Peacock, Mrs Elizabeth

    Walker, Rt Hon P. (W'cester)

    Porter, Barry (Wirral S)

    Waller, Gary

    Porter, David (Waveney)

    Walters, Dennis

    Portillo, Michael

    Ward, John

    Powell, William (Corby)

    Wardle, C. (Bexhill)

    Price, Sir David

    Warren, Kenneth

    Raffan, Keith

    Watts, John

    Raison, Rt Hon Timothy

    Wells, Bowen

    Rathbone, Tim

    Wheeler, John

    Redwood, John

    Whitney, Ray

    Renton, Tim

    Widdecombe, Miss Ann

    Rhodes James, Robert

    Wiggin, Jerry

    Rhys Williams, Sir Brandon

    Wilkinson, John

    Riddick, Graham

    Wilshire, David

    Ridley, Rt Hon Nicholas

    Winterton, Mrs Ann

    Ridsdale, Sir Julian

    Winterton, Nicholas

    Roberts, Wyn (Conwy)

    Wolfson, Mark

    593

    Wood, Timothy

    Woodcock, Mike

    Tellers for the Noes:

    Yeo, Tim

    Mr. Robert Boscawen and Mr. Tristan Garel-Jones.

    Young, Sir George (Acton)

    Question accordingly negatived.
    It being after Ten o'clock, the debate stood adjourned.
    Debate to be resumed tomorrow.

    Cities (Education and Services)

      BUSINESS OF THE HOUSE
      Ordered,
      That, at this day's sitting, the Ways and Means Motions and the Motions relating to Procedure (Personal Pension Schemes) and Procedure (Future Taxation) may be proceeded with, though opposed, until any hour.—[Mr. Durant.]

      CHANNEL TUNNEL BILL
      Motion made, and Question proposed,
      That the Lords Message of 7th May in the last Session of Parliament, relating to the Channel Tunnel Bill, be now considered.—[Mr. David Mitchell.]
      Hon. Members: Object.
      Mr. Speaker: Objection taken.

  Ways and Means

    1. PROFIT-RELATED PAY
    Motion made, and Question proposed,
    That provision may be made about schemes providing for the payment of emoluments calculated by reference to profits.—[Mr. Norman Lamont.]
    10.18 pm
    Sir Brandon Rhys Williams: Without wishing to detain the House I would like to comment briefly on the rather unfamiliar procedure that we have before us. We find that no fewer than 31 Ways and Means resolutions have been put before the House to be moved formally by my right hon. Friend the Financial Secretary.
    I believe that we understand the reason for this procedure, it is because it is the intention of my right hon. Friends—[Interruption.]
    Mr. Speaker: Order.
    Sir Brandon Rhys Williams: It is well understood by the House that my right hon. Friends intend to reintroduce many of the clauses contained in the Finance Bill that was not completely proceeded with at the time the general election was called. I think that the House has a special responsibility where methods of taxation are concerned, and I feel some anxiety at the enormous latitude that the House will be giving to the Treasury if we allow—[Interruption.] —all these resolutions to be passed without any comment.
    Mr. Speaker: Order. If the hon. Members standing at the Bar of the House do not wish to come into the Chamber, will they kindly leave?
    Sir Brandon Rhys Williams: I think, Mr. Speaker, that when such resolutions are before the House it is appropriate to draw attention to anxieties which I feel, and which I know are shared by right hon. and hon. Members on both sides of the House. In resolutions Nos. 2 and 3, for instance, we find the expression
    "including provisions having retrospective effect".
    I feel that, if that constitutes a precedent, it is a bad one, and if it is normal practice, it is bad practice. I think that it would be wrong for the House to pass on the nod a resolution that permits taxation to have retrospective effect without drawing attention to the fact that this is normally regarded by the House as very undesirable.
    I should like to make two other brief comments. Resolution No. 13 refers again to Lloyd's underwriters. I have no interests to declare in this connection, but many of my constituents have been extremely anxious about the provisions included in the Finance Bill which received a Second Reading a few weeks ago. We hope that the Department has taken note of the substantial objections that were raised to the proposals originally included in the Finance Bill, and that when the Bill comes before us again, it will be amended to take account of those objections. I hope that my right hon. Friend the Financial Secretary, with the leave of the House, will be able to give us an assurance on that aspect before we proceed to pass the resolution tonight.
    Finally, I should like to draw attention to resolution No. 17 of these 31 resolutions, dealing with companies' chargeable gains. I think that this resolution will give latitude to the Department to reintroduce the highly controversial clauses affecting life insurance companies

    595
    and their funds, which were received with great hostility before. I trust that the Department will not think that if the house passes these resolutions now, it constitutes facit acceptance of the orginal proposals which aroused so much adverse comment before.
    I do not wish to say more, but I hope that, before we leave this topic, my right hon. Friend will be able to give some assurances that, when the Finance Bill comes before the House again, we shall be allowed to debate all these matters very fully, and it will not be thought that we have sold the pass by approving the resolutions tonight.
    10.23 pm
    The Financial Secretary to the Treasury (Mr. Norman Lamont): There is, of course, nothing unfamiliar or unusual about bringing forward Ways and Means resolutions for a Finance Bill. That is the normal thing to do. Indeed, a Finance Bill cannot be introduced without the Ways and Means resolutions and if the resolutions were voted out, the Government would be unable to bring forward the Finance Bill. The Bill will be published in a few days' time. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) will know that, before the Dissolution of the last Parliament, we said that we intended to bring back the parts of the Finance Bill that were not carried before the Dissolution. That was announced by means of a Written Answer. The Ways and Means resolutions are the same as those that we had with the previous Finance Bill.
    My hon. Friend referred to resolutions Nos. 2 and 3, and the reference to retrospective effect. In those resolutions, the phrase "retrospective effect" refers to the provisions of the Bill, when it is published, being backdated to Budget day. That, too, was made clear before Parliament was dissolved.
    My hon. Friend referred to the resolution concerning Lloyd's. Discussions are continuing with Lloyd's. The chairman has said that he hopes that it will be possible for the Government' and Lloyd's to reach an agreed view on the problem.
    My hon. Friend also referred to chargeable gains and how they apply to the policy holders of life assurance. We have listened to what has been said. I cannot anticipate the Finance Bill. The resolution does not commit either my hon. Friend or the House to whatever the Finance Bill contains. The resolution is there so that the Finace Bill can be presented. I commend the resolution to the House.
    Question put and agreed to.

    1. PROFIT-RELATED PAY

      I. PROFIT-RELATED PAY
      Resolved,
      That provision may be made about schemes providing for the payment of emoluments calculated by reference to profits.
      Mr. Speaker then proceeded, pursuant to paragraph (3) of Standing Order No. 50 (Ways and Means motions) to put forthwith the questions necessary to dispose of the further motions, which were made by Mr. Norman Lamont.

      2. ANNUITIES ETC.
      Resolved,
      That provision (including provision having retrospective effect) may be made about contracts, schemes or other arrangements providing for the payment of annuities or lump sums.

      3 RETIREMENT BENEFITS SCHEMES
      Resolved,
      That provision (including provision having retrospective effect) may be made about retirement benefits schemes.

      4. EMPLOYEE SHARE SCHEMES
      Resolved,
      That provision may be made amending section 47 of and Schedule 10 to the Finance Act 1980 and section 38 of and Schedule 10 to the Finance Act 1984.

      5. CHARGES ON INCOME
      Resolved,
      That provision may be made as to the dates on which certain payments made between companies on or after 17th March 1987 are to be treated as received.

      6. APPORTIONMENT OF INCOME ETC. OF CLOSE COMPANIES
      Resolved,
      That provision may be made amending Schedule 16 to the Finance Act 1972 with respect to accounting periods beginning on or after 17th March 1987.

      7. FOREIGN PARTNERSHIPS
      Resolved,
      That provision (including provision having retrospective effect) may be made with respect to the taxation of persons resident in the United Kingdom who are members of partnerships resident outside the United Kingdom.

      8. DUAL RESIDENT COMPANIES
      Resolved,
      That provision (including provision having retrospective effect) may be made with respect to companies which are resident in the United Kingdom and are also within a charge to tax under the laws of a territory outside the United Kingdom.

      9. CONTROLLED FOREIGN COMPANIES
      Resolved,
      That provision may be made, in relation to dividends paid on or after 17th March 1987, with respect to the circumstances in which a controlled foreign company, within the meaning of Chapter VI of Part II of the Finance Act 1984, is to be regarded as pursuing an acceptable distribution policy.

      10. OFFSHORE FUNDS
      Resolved,
      That provision may be made amending Schedule 19 to the Finance Act 1984.

      11. DOUBLE TAXATION RELIEF : INTEREST ON OVERSEAS LOANS
      Resolved,
      That provision (including provision having retrospective effect) may be made amending sections 65 and 66 of the Finance Act 1982.

      12. DISCLOSURE OF EMPLOYMENT INFORMATION OBTAINED FROM INLAND REVENUE
      Resolved,
      That provision may be made amending section 58 of the Finance Act 1969.

      13. LLOYD'S UNDERWRITERS
      Resolved,
      That charges to income tax (including charges for the years of assessment 1985–86 and 1986–87) may be imposed by provisions about underwriters.

      14. RELIEF FOR LOSSES ON UNQUOTED SHARES
      Resolved,
      That provision (including provision having retrospective effect) may be made extending the definition of "excluded company" in section 37(12) of the Finance Act 1980.

      15. CAPITAL ALLOWANCES FOR DWELLING-HOUSES LET ON ASSURED TENANCIES
      Resolved,
      That provision may be made with respect to capital allowances in respect of expenditure incurred on the construction of buildings consisting of or including dwelling-houses let on assured and certain other tenancies

      16. RECOGNISED INVESTMENT EXCHANGES
      Resolved,
      That provision may be made enabling enactments referring to The Stock Exchange to have effect, with or without modification, in relation to other recognised investment exchanges.

      17. COMPANIES' CHARGEABLE GAINS
      Resolved,
      That provision may be made with respect to the treatment for the purposes of corporation tax of chargeable gains accruing to companies on or after 17th March 1987.

      18. COLLECTIVE INVESTMENT SCHEMES
      Resolved,
      That provision may be made about collective investment schemes.

      19. ROLL-OVER RELIEF: OIL LICENCES
      Resolved,
      That provision (including provision having retrospective effect) may be made excluding licences under the Petroleum (Production) Act 1934 and the Petroleum (Production) Act (Northern Ireland) 1964 from the classes of assets in section 118 of the Capital Gains Tax Act 1979.

      20. BUILDING SOCIETIES: GROUPS OF COMPANIES
      Resolved,
      That provision may be made for the purposes of sections 272 onwards of Chapter II of Part XI of the Income and Corporation Taxes Act 1970 estending references to a company to include a building society within the meaning of the Building Societies Act 1986.

      21. COMMODITY FUTURES, FINANCIAL FUTURES AND OPTIONS
      Resolved,
      That provision may be made—

      (a) for bringing gains on certain disposals of commodity futures, financial futures and options within the charge to capital gains tax or corporation tax on chargeable gains, and

      (b) with respect to the treatment under the Capital Gains Tax Act 1979 of certain options.

      22. PAY AS YOU EARN
      Resolved,
      That provision may be made with respect to the payments to which section 204 of the Income and Corporation Taxes Act 1970 (pay as you earn) applies.

      23. SUB-CONTRACTORS IN THE CONSTRUCTION INDUSTRY
      Resolved,
      That provision may be made amending section 70 of the Finance (No. 2) Act 1975.

      24. MANAGEMENT PROVISIONS
      Resolved,
      That provision may be made amending section 118 of the Taxes Management Act 1970.

      25 INHERITANCE TAX: INTERESTS IN POSSESSION
      Resolved,
      That, for the purposes of inheritance tax, provision (including provision having retrospective effect) may be made with respect to interests in possession in settled property.

      26 CAPITAL TRANSFER TAX AND ESTATE DUTY: ACCEPTANCE IN LIEU
      Resolved,
      That provision may be made, with retrospective effect, with respect to the acceptance of property by the Commissioners of Inland Revenue in satisfaction of capital transfer tax or estate duty.

      27. STAMP DUTY (EXEMPT SECURITIES)
      Resolved,
      That provision may be made amending section 50 of the Finance Act 1987.

      28. STAMP DUTY RESERVE TAX
      Resolved,
      That further provision (including provision having retrospective effect) may be made in relation to stamp duty reserve tax.

      29. OIL TAXATION
      Resolved,
      That provision may be made—

      (a) amending sections 62 and 63 of the Finance Act 1987 and paragraph 5 of Schedule 2 to the Oil Taxation Act 1975 with respect to chargeable periods ending after 1st January 1987; and

      (b) amending Schedule 10 to the Finance Act 1987 with respect to March 1987 and subsequent months.

      30. GOVERNMENT FEES AND CHARGES
      Resolved,
      That provision may be made with respect to certain powers to require the payment of, or to determine by subordinate legislation the amount of, fees or charges which are payable to Ministers of the Crown or to other persons who are required to pay them into the Consolidated Fund.

      31. GOODS TRANSHIPPED AS STORES ETC.
      Resolved,
      That provision may be made with respect to goods transhipped as stores and the use in port, without payment of duty, of goods carried as stores.

    PROCEDURE (PERSONAL PENSION SCHEMES)
    Ordered,
    That, notwithstanding anything to the contrary in the practice of the House relating to matters which may be included in Finance Bills, any Finance Bill of the present Session may make provision for the payment of sums out of or into the National Insurance Fund or the Northern Ireland National Insurance Fund in connection with provisions

    599
    relating to the payment of minimum contributions under Part I of the Social Security Act 1986 or Part II of the Social Security (Northern Ireland) Order 1986.

    PROCEDURE (FUTURE TAXATION)
    Ordered,
    That, notwithstanding anything to the contrary in the practice of the House relating to matters which may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—

    (a) provisions amending the Taxes Management Act 1970;

    (b) provisions with respect to amounts due by way of penalty or interest;

    (c) provisions with respect to interest on tax overpaid;

    (d) provisions with respect to the payment of corporation tax without assessment

    (e) provisions amending Chapter II of Part XI of the Income and Corporation Taxes Act 1970;

    (f) provisions amending section 418 of that Act; and

    (g)Provisions amending section 87 of the Capital Gains Tax Act 1979.

    Bill ordered to be brought in upon the foregoing resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Secretary Fowler, Mr. Secretary Ridley, Mr. Kenneth Clarke, Mr. Secretary Channon, Mr. Secretary Moore, Mr. Secretary Parkinson, Mr. John Major, Mr. Norman Lamont, Mr. Peter Brooke and Mr. Peter Lilley.

    FINANCE
    Bill to grant certain duties, to alter other duties and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance, presented accordingly by Mr. Norman Lamont and read the First time; to be read a Second time tomorrow and to be printed. [Bill 7.]

  Domestic Furnishings (Flammability)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
  10.27 pm
  Mr. Conal Gregory: Tonight I wish to raise the subject of the Government regulation of the flammability of domestic furnishings.
  I extend a double welcome to my hon. Friend the Member for Warwickshire, North (Mr. Maude). First, I am delighted about his appointment as Parliamentary Under-Secretary of State with responsibility for corporate and consumer affairs. Secondly, I welcome him to the Dispatch Box on the occasion of his first Adjournment debate.
  This evening I wish to raise the danger that is posed by much modern polyurethane foam-filled furniture. It is a killer. Unless action is taken to improve safety standards, it may claim 3,000 lives over the next 10 years. I praise the Yorkshire Post for its campaign. Most of the victims will be children and old people. Many will die, not from burns but from the thick, acrid smoke and toxic fumes that are rapidly generated when foam ignites in upholstered chairs and settees. Over the past 25 years, deaths from furniture fires have increased fivefold. Now one in five domestic fire deaths involves upholstery, compared with one in 20 in 1962.
  In arguing for better fire resistance in modern furniture, firemen emphasise the challenge that they now face. From the moment that a foam-filled settee catches fire, the occupants of a house may have no more than three minutes to escape before they are overcome by noxious gases, smoke and intense heat. By contrast, it takes a fire crew, on average, between five and eight minutes to reach the scene in response to a 999 call, which is usually made after a fire is well established. It is a race against time which they and the occupants of the house often lose.
  In a recent Birmingham flat fire, in which six people died, the first firemen arrived four minutes after the emergency call, but it was already too late. Those who tackled the blaze cite it as a classic example of a fire involving modern furnishings. In 1984, the most recent year for which fire statistics are available, there were 157 confirmed deaths as a direct result of furnishings, and 130 deaths as an indirect result. After food, textiles are the most common source of material for a fire, amounting to a staggering 16,589 in 1984
  Mr. Richard Holt: Will my hon. Friend give way?
  Mr. Gregory: I have only just got under way.
  In North Yorkshire, fire fatalities in the 1980–84 period were 11, 11, four, nine and four. In the three neighbouring counties of Humberside, West and South Yorkshire, fire deaths amounted to 56 and 43 for 1983 and 1984 respectively. Clearly, there is a story behind these grim figures, which I shall reveal.
  As long ago as 1978, a Home Office report "The Fire Risks of New Materials" concluded that manufacturers ought to produce upholstered furniture with increased fire resistance as a
  "matter of the utmost urgency."
  That followed research into the burning characteristics of furniture, which found that polyurethane foam

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  produced more rapid fire growth with a greater risk to life and damage to property than traditional furniture. The report stated:
  "In mere terms of the volume we think it likely that upholstered furniture has the largest single potential of contributing to fire and toxicity hazards.
  We cannot over-stress the urgency of the need to bring domestic and residential upholstered furniture back towards the level of fire performance prevailing before the introduction of polyurethane foams in all or any sort of formulation. It is the speed of development of fire which we think makes all the difference by virtue of its effect on available escape time.
  We therefore believe that quantity production of upholstered furniture with a reduced flammability is a matter of the utmost urgency."
  That conclusion came as no surprise to thousands of firemen who had already faced the effects of modern furniture fires, not under controlled laboratory conditions but in people's front rooms. For 20 years, firemen have been pointing to the dangers, but in spite of better training, quicker response times and more sophisticated firefighting equipment, they are still unable to save many people because of the sheer speed with which flames and fumes spread. The loss of 10 lives at a store in Manchester in 1979 touched the nation. The coroner issued a stark warning about fires involving furniture containing polyurethane and polypropylene. He said:
  "Anyone who has furniture with this foam either in a public place or in the home—and that means just about everybody —should remember that if a fire occurs there does seem to be a critical time of just a few minutes."
  Although the exact cause of the Woolworth fire remained a mystery, furniture containing polyurethane and polypropylene was blamed for the rapid spread of the blaze. During the inquest, the head of combustion products at the Government's fire research station at Borehamwood, said that new fire regulations would soon be introduced requiring all furniture made in Britain to be resistant to smoking materials. He said:
  "They will not set alight when in contact with a cigarette or a match."
  But when the regulations were drafted in 1980, and revised in 1983, they fell short of that safety expectation. Although the first half of his promise was fulfilled in principle with the introduction of the compulsory cigarette test, the match test was made voluntary. Today, most furniture made in Britain is likely to fail the match test, not only in the laboratory but, more importantly, in the home.
  In 1980, the Upholstered Furniture (Safety) Regulations were approved by Parliament. They followed two prvevious noteworthy publications; first, the report on "Fire Risks of New Materials" of November 1978, to which I have referred, and, secondly, British Standard 5852 part 1 1979 "Fire Tests for Furniture: Methods of Test for ignitability by Smokers' Materials of Upholstered Composites for Seating". The former publication recommended that top priority should be to reduce ignitability from small ignition sources. A second priority was to reduce the rate of fire development. The British Standard test method addressed the matter of testing for ignitability by cigarettes and matches, the latter by a gas flame simulating a match. The regulations introduced the requirement for upholstered furnishings seating to be resistant to a smouldering cigarette, but for labelling only with respect to its performance in the match test.
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  The safety of domestic furniture is being dictated by those who use the cheapest materials which will satisfy the minimal cigarette requirement. Yet, since that tragedy in Manchester in 1979 fire-retardant treatments have been developed for most fabrics that cover foam, and safety standards have soared in contract furniture.
  California has its own regulations. If I compare Los Angeles and greater Manchester, which are not too dissimilar in urban size, residential fires in greater Manchester generally result in twice as many fatalities as in Los Angeles. Examples of combusion-modified foams include Carefoam DX from Dunlopillo, made in Harrogate, and Beaverfoam, made in Derbyshire. Synthetic fabrics are available, such as those from Joseph Newsome and Sons of Batley, and the flame-resistant Dralon velvet developed by Lister of Bradford. Skopos Fabrics of Dewsbury have produced flame-retardant cotton furnishing fabrics for more than 10 years, which would add an estimated £24 to a £500 three-seater sofa. Therefore, the foams and fabrics are available.
  West Yorkshire, which is a typical local authority. reveals that 20 per cent. of the fires in homes are caused by children playing with matches, which is a risk that is not covered by the present safety regulations. Nationally in 1984, only road accidents claimed more lives of children under 14. The Government's own body, the Property Services Agency, insists on fire-resistant furniture but the Government do not for their own citizens. Is that an example of double standards?
  Although firemen and safety watchdogs have called repeatedly for the introduction of the match test to reduce the number of furniture fires, and were supported recently by some textile manufacturers, the industry was successful generally in persuading the previous Minister responsible for consumer affairs to shelve the match test in his review of the regulations. The compromise of a code of practice which aims to outlaw some of the worst combinations of fabrics and foams will not in any way encourage manufacturers to upgrade their products.
  Mr. Tony Lloyd: I am grateful to the hon. Gentleman for giving way and should like to congratulate him on securing this important debate. On the code of practice, will the hon. Gentleman urge the Minister to tell us when that code will be published, or at least when the consultation document on that code will be published, so that we know what the Government now have in mind, however inadequate that might be?
  Mr. Gregory: I am grateful for that intervention, not only for the encouragement to make this an all-party matter but also because it raises the valid point that we have still not yet seen the code of practice. Indeed, it is surprising how few people concerned with this great industry are aware of it. That applies also to the consumer bodies and I shall refer to that in a moment.
  Mr. Holt rose——
  Mr. Gregory: I shall give way if my hon. Friend will bear with me for a moment more.
  I have suggested that cheap competition will win over safety. The code does not propose a match test equivalent. It was drafted by the Furniture Industry Research Association and was based on a biased questionnaire. One of the association's members who was sent the questionnaire has stated:

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  "to lobby the Government to delay the passing of more stringent legislation is tantamount to asking them unnecessarily to risk further loss of life."
  That is pretty strong stuff.
  The code has gone to a Department of Trade and Industry working party, but its membership was hardly objective. Only one representative of the fire services was included in the 25-strong group. The Royal Society for the Prevention of Accidents, which is Europe's largest safety organisation was, amazingly, excluded. If the British Standards Institution had been consulted at an early stage it could have ensured that the safety measures in the code were subjected to proper validity tests. Even that key element was missing. The code cannot and will not be a soft option on safety.
  Mr. Holt: I am grateful to my hon. Friend for giving way.
  May I declare an interest, Mr. Speaker? Could I ask my hon. Friend whether, before embarking on his crusade, he took the trouble to speak to the furniture industry, whether he has been to FIRA, whether he has examined the nature of the problem on the ground as well as reading the Yorkshire Post? Will he accept an invitation from me, as the parliamentary spokesman for the furniture industry, to come with me to see the nature of the problem? Perhaps he might then suggest that we stop motor cars from going on the roads because they carry petrol, which causes fires in the same way as furniture?
  Mr. Gregory: I am fascinated, as I am sure that the Registrar of Members' Interests will be, to hear your declaration which was not published in the Register of Members' Interests, which I sought to obtain before tonight.
  Mr. Holt: It is.
  Mr. Gregory: However, I congratulate you on this new interest——
  Mr. Speaker: Order. It is not me.
  Mr. Gregory: I hear what you say——
  Mr. Speaker: Order.
  Mr. Gregory: I hear what my hon. Friend has said, and I shall take note of those points.
  What should the Government now do? I should like to make five suggestions. First, if the Government are really determined to see safer furniture, they should set a firm date for the match test under BS 5852. Such a naked flame test would complement the existing cigarette test. That should be from 1 January 1988. There should not be a further three-year delay as proposed by the British Textile Confederation. That decision should be taken urgently and after advice from a truly representative group of consumer, industry, fire and trading standards sectors. But, in the light of the Minister's written reply today to my hon. Friend the Member for Poole (Mr. Ward), will he give an assurance that match test equivalents will be implemented immediately?
  Secondly, the Government should revise the regulations so that manufacturers cannot shelter behind a loophole on children's ages. Currently children's furniture designed exclusively for under-11 -year-olds is protected, but who is to say that teenage brothers and sisters do not enjoy bean bags depicting the A Team and other televisions stars?
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  Thirdly, the penalties for contravention are clearly inadequate. Level five, which means a maximum of £2,000 and/or three months' imprisonment, is not an adequate disincentive.
  Fourthly, a levy should be imposed on the furniture industry to fund inspection and control by trading standards officers, rather than leaving it to the small local authority budgets. The industry, rather than the ratepayer, should fund impartial quality control.
  Finally, there should be a public awareness campaign by the Government. Asbestos was known to be toxic for many years, but once the media and public became aware of the danger, it had to be removed. Most modern foam-filled furniture can create lethal fire conditions within three minutes. That means that a suite of furniture is an incendiary device.
  While tonight I have suggested a live-point plan, invite my hon. Friend the Minister, when replying to the debate, to advise how far domestic furniture sales will come within the general duty to trade safely, enshrined in the Consumer Protection Act passed by the House only last month, and how far specific regulations will still be required.
  I welcome my hon. Friend in his new role, arid hope that he will speak out for consumers. Public safety rather than industrial muscle and inertia should be the order of the day.
  10.42 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Francis Maude): I am grateful to my hon. Friend the Member for York (Mr. Gregory) for his kind remarks. He has pursued this subject over the years with great vigour and force. During the past two years when I was lurking in the Whips Office, I was able to observe with some admiration the skill with which he deployed his arguments.
  I am glad to be able to tell my hon. Friend and the House, especially the hon. Member for Stretford (Mr. Lloyd), who raised the issue specifically, that today we issued consultation papers to all interested parties, setting out proposals for a new code of practice. As has been suggested, it will not be a voluntary code, but it will he a basis for new regulations to replace the Upholstered Furniture (Safety) Regulations 1980. It should be stressed that non-compliance with the provisions of the code would be a criminal offence.
  Before I deal in detail with the issues, it is right to remind the House that the United Kingdom already leads the world in legislation on fire resistance of domestic furniture. Our insistence on resistance to ignition by a smouldering cigarette has been followed only by Ireland.
  The 1980 regulations and the 1983 amendments addressed the question of ignitability alone. The reason for doing so was the availability at that stage of a new British standard method of test for ignitability. The regulations called up that standard as the basic underlying test method essential to all safety regulations. They made labelling concerning cigarette and match resistance a requirement from 1 October 1980 and resistance to cigarette ignition became mandatory from the end of 1982. It is a fact that the statistics on accidental domestic fires show that smouldering cigarettes are the main cause of fires that start in upholstered furniture, so the regulations went to the

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  heart of a known and serious problem. Comparatively few fires start as a result of small flames such as those of a match.
  The design and manufacture of upholstered furniture was revolutionised early this century by the invention of foam materials, made first from natural rubber and then from synthetics. These very versatile and relatively cheap materials combine the functions of the metal springs and fibre padding which used to make up the inside of easy chairs and sofas. They thus simplified furniture manufacture and greatly reduced costs to the consumer, as well as extending the range of consumer choice of the shape and appearance of furniture. The material which is now dominant as filling for upholstered furniture, as my hon. Friend knows, is polyurethane foam. The behaviour in fire of this material led to widespread concern, forcefully expressed over the years by my hon. Friend and others. The amendment regulations of 1983 introduced positive labelling for upholstered furniture in relation to both cigarette and match tests. The intention was to encourage the consumer to see and buy furniture with greater resistance to ignition than that required by law to enable informed and clear decisions to be made.
  Mr. Holt: I have listened to my hon. Friend. Do the Government intend to introduce legislation, or a code of practice, for the carpet industry as well as for the furniture industry? What plans do the Government have to introduce the banning of cigarettes and matches, which are the igniters of furniture and carpets?
  Mr. Maude: Carpets will come under the general safety requirement at the appropriate time, under the Consumer Protection Act 1987. Of course, my hon. Friend makes a vivid point in suggesting that the only safe way of avoiding fire is to avoid any flame whatever. There is no such thing as a completely safe house; there cannot be. All that we can do is to try to establish regulations that outlaw the most dangerous of substances and materials, and enable the customer to make sensible and informed choices as far as possible.
  The regulations, as amended in 1983, also imposed a stringent requirement on children's upholstered furniture of a particularly lightweight and moveable kind. I stress again that the existing regime in the United Kingdom is the most rigorous in the world. We take the view that the most constructive approach to the problem is the development of types of foam with better performance characteristics. To that end the industry and my Department jointly financed a research programme at Queen Mary college. The persistence of researchers has recently been rewarded by a breakthrough. From this year there are grades of polyurethane foam available on the market with significantly improved resistance to ignition, with satisfactory technical qualities, and at acceptable prices. Meanwhile there have been promising technical developments in textile materials used for covering furniture, which enable the furniture manufacturers to choose from a wider range of materials with match flame resistances than was available in 1980. These developments widen the options available for legislation. We have therefore been urgently considering what further steps should be taken.
  It was suggested some 18 months ago that new legislation could be loosely based on parts of a
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  classification scheme produced by the Furniture Industry Research Association, which classifies both filling materials and covering materials. This makes it possible to devise a code of practice under which the less fire-resistant covers would only be permitted in combination with the more fire-resistant fillings, and vice versa. This approach has the merit of obliging both groups of component manufacturers to upgrade their products. It is a flexible and imaginative response to the problem. This approach seems to me to provide better protection for the consumer than either of the apparently available and simple measures that are generally advocated in this field—the mandatory match test for covering materials, and a complete ban on polyurethane foam as a filling material. My hon. Friend homed in on that in the debate. The most fundamental objection to the match test on its own is that it says nothing at all about the fire resistance of the filling materials. It is a test that covers just the covering material and not the filling material.
  The code of practice proposals will be mandatory and will enable furniture manufacturers for the first time properly to specify the ignitability characteristics of their components, whether covering fabrics, filling fibre or polyurethane foam. They can be applied to loose cushions and eventually to loose covers and to materials sold for upholstering or re-upholstering furniture bought separately or already in the possession of the customer.
  Most importantly, they will encourage the use of the more fire resistant polyurethane foams now available.
  The draft code of practice and accompanying consultation documents are being issued today. Replies are requested by the end of September and I shall make a statement as soon as I have considered all the comments. I should like to emphasise that all constructive comments will be welcome.
  Mr. Holt: Would my hon. Friend care to say how the Government intend to regulate the importation of furniture from overseas? Will such furniture be tested at the port of entry or at the port from which it is sent? What proposals do the Government intend to produce for imported furniture?
  Mr. Maude: I cannot answer that point now, but I shall make sure that my hon. Friend has an answer as soon as possible.
  In all these areas we have to take account of the customer's right to choose. It is essential that consumers be warned of possible flammability hazards. None the less, they may choose an item on the grounds of comfort, cost, appearance or durability. There is a clear case for minimum standards for upholstered furniture and for mattresses and we are legislating for these. Our present aim about other furnishings is to ensure that consumers are able to make choices based on clear and reliable information.
  This is not a simple subject and there are no simple answers. Our standards are already the strictest in the world, but what is acceptable at one time may become unacceptable later. The regulations made in 1980 and amended in 1983 now require radical revision. I am grateful to all those who have contributed to the wider debate in the working group set up last year by my predecessor. They included technical and commercial experts from the furniture, textiles and chemical industries and from research establishments in these fields, as well as local authority and fire brigade professionals.
  Mr. Tony Lloyd: The Minister has told us about the people who contributed to the working group. He will be aware that the Fire Brigades Union was not invited to take part in that. Will he give a guarantee that all those who are concerned with fire protection and fire safety will have their views properly evaluated and taken into account in the consultative process?
  Mr. Maude: Yes. The consultation papers will be available to anybody who expresses an interest and the comments of such people will be welcomed. I think that the fire professional who sat on the working group was a fire officer from Manchester who had particular knowledge of the Woolworth store plan, about which reference has been made. Comments from all those who have a professional interest in the matter will be welcomed.
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  All of us involved in this subject are engaged in an effort to save lives, and nothing could be more important. The issue today of this draft code of practice and the accompanying document is a major step towards new and better legislation on the flammability of domestic furnishings. I look forward to a wide range of constructive responses and I am grateful to my hon. Friend the Member for York for once again raising this matter. I apologise if I have not dealt with all of the specific points that he raised, but he will understand that I have been in this post for a fairly short time and am not as familiar with the intricacies of the subject as I hope to be in a few months. I shall certainly make sure that he receives detailed replies to all the points that he has raised.
  Question put and agreed to.
  Adjourned accordingly at seven minutes to Eleven o'clock.

EMPLOYMENT

  Women's Needs
  Ms. Richardson
  asked the Secretary of State for Employment what are the main needs of women in the policy areas within the sphere of his Department's activities; what has been done to identify and quantify these needs and to monitor services delivery; what consultation is carried out with women to ensure their views are adequately represented; and what training is given to his staff to raise their appreciation of the needs of women.

  Mr. Nicholls
  The Government consider that in the employment field the main need of both women and men is the creation of new jobs. The Department of Employment's activities are directed to achieving this through deregulation and the development of the enterprise economy. Women as well as men have benefited from the employment, training and enterprise measures offered by my Department and the Manpower Services Commission, on which we have already spent in excess of £10 billion since 1979.

  The Government nevertheless recognise that women have in the past been disadvantaged in the labour market and in consequence have special employment needs. Our equal opportunities polices are designed to address those needs and are described in detail in "The Nairobi Forward Looking Strategies for the Advancement of Women—A Review". This document was published in April 1987 and a copy has been placed in the Library.

  We are fully apprised of women's views through the normal process of consultation and through our regular contacts with the Equal Opportunities Commission, the Women's National Commission and women's voluntary organisations. The Advisory Committee on Women's Employment exists to advise Employment Ministers on all aspects of our policies affecting women in the labour market, and my Department is also represented on the interdepartmental ministerial group on women's issues.

  Training for staff at all levels within the Department of Employment group incorporates coverage of equal opportunities. Some courses have separate modules which specifically concentrate on the equal opportunities dimension, for example, a course for MSC "field" staff who have day-to-day responsibility for running programmes. This training ensures that staff fully understand the group's equal opportunities policy and the practical implications of that policy for the provision of services and for the group as employer.

  Enterprise Allowance and Community Programme
  Ms. Ruddock
  asked the Secretary of State for Employment if he will list the criteria for the award of (a) enterprise allowance and (b) a community programme place.
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  Mr. Cope
  The purpose of the enterprise allowance scheme is to help those unemployed people who would like to set up business on their own but are deterred from doing so because they would lose their entitlement to unemployment or supplementary benefit. To help ensure that the purpose of the scheme is met, applicants must he aged at least 18 and under 65 and have been unemployed and actively seeking work for at least eight weeks. Additionally, applicants must be directly or indirectly in receipt of unemployment benefit or supplementary benefit, have £1,000 available to invest in their proposed business, plan to work full time and be free from any restrictions on their employment in Great Britain.

  The proposed business must be new, suitable for public support, be based in England, Scotland or Wales, and remain in the overall control of the applicant.

  The community programme provides opportunities for long-term unemployed people to gain work experience on projects of community benefit. It is open to those aged 18 to 24 who have been unemployed for six out of the last nine months and those aged 25 to 62 who have been unemployed for 12 out of the last 15 months.

  In addition, all applicants must have been continuously unemployed for the two months before they apply, and be directly or indirectly in receipt of an appropriate state benefit.

  Small Firms
  Mr. Grylls
  asked the Secretary of State for Employment how much money has been lent by the banks to small firms under the Government's loan guarantee scheme; what is the number of firms involved; and what is the average amount of each loan and the losses to date under the scheme.

  Mr. Cope
  Bank lending of £586 million has been assisted by the scheme up to 31 May 1987. The average amount of each loan was £32,800. About 17,800 guaranteed loans were made to over 16,000 firms. The cost of claims net of premiums and other receipts has been £109 million.

  Television Manufacturing Industry
  Mr. Hoyle
  asked the Secretary of State for Employment what assessment he has made of the impact on employment opportunities in the television manufacturing industry in the light of the recent purchase of the Ferguson Group by Thomson.

  Mr. Lee
  It is too early to assess the effect of the purchase. Decisions on employment levels are of course for the manufacturing companies themselves.

  Window Cleaners
  Mr. Hoyle
  asked the Secretary of State for Employment how many times inspectors from the Health and Safety Executive have visited commercial window cleaners in the last five years.

  Mr. Cope
  I regret that the information requested is not readily available and could be obtained only at disproportionate cost.

  Mr. Hoyle
  asked the Secretary of State for Employment (1) how many accidents involving window cleaners have been reported to the Health and Safety Executive in the last five years;
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  (2) how many fatal accidents involving window cleaners have been reported to the Health and Safety Executive in the last five years.

  Mr. Cope
  18 fatal injuries to window cleaners were reported to the Health and Safety Executive during the five years 1981 to 1985. Provisional records show two fatalities in 1986. The provisional number of non-fatal injuries reported to HSE in the 12 months from April 1986 was 26. The number of accidents prior to 1986 is not readily available and could be produced only at disproportionate cost. Accidents which occur at premises not subject to inspection by HSE are reportable to local authorities.

  Mr. Hoyle
  asked the Secretary of State for Employment (1) what safety measures the Health and Safety Executive recommend to window cleaners;

  (2) what measures are being taken by the Health and Safety Executive to improve safety for window cleaners.

  Mr. Cope
  Guidance note GS 25 "Prevention of Falls to Window Cleaners", published by the Health and Safety Executive in 1985, provides technical advice for window cleaners on safety matters. It also gives advice on the legal duties of employers, employees, the self-employed and persons in control of premises under the Health and Safety at Work etc Act 1974.

  The Health and Safety Executive and local authority environmental health departments are currently taking a joint initiative in north London to promote safety for window cleaners. Factory inspectors and environmental health officers are visiting the head offices of window cleaning firms and sites to provide advice and take enforcement action where appropriate.

  Unemployment Benefit
  Ms. Harman
  asked the Secretary of State for Employment how many people have been denied unemployment benefit since November 1986 because they are not available for work because they have an adult or a child to care for during working hours.

  Mr. Lee
  Some claimants to unemployment benefit have always been disallowed benefit by independent statutory adjudicating authorities in accordance with longstanding legal rules adopted by successive Governments because they were not available for work. Departmental records do not identify the reasons which lead to claimants being disallowed benefit on the grounds that they are not available for work.

PRIME MINISTER

  Civil Servants (Radio and Television Programmes)
  Mr. Spearing
  asked the Prime Minister what plans Her Majesty's Government have for permitting or facilitating members of the Civil Service to speak or appear on radio or television programmes.

  The Prime Minister
  The Government have no plans to change the present guidance on the appearance of civil servants on radio or television programmes. Civil servants are permitted to take part in broadcasts, so long as they do not engage in discussion of politically controversial matters. Whilst, therefore, they may in certain circumstances describe and explain Government policies, it is for Ministers to justify those policies and to defend them in party political terms.

  European Council (Budgetary Controls)
  Mr. Teddy Taylor
  asked the Prime Minister if she will make a statement on the application of the strict budgetary controls agreed at the European Council meeting of 4 December 1984; and if she is satisfied with the progress made in budgetary control.

  The Prime Minister
  As I said in the answer which I gave my hon. Friend on 18 November last, column 85, the control of European Community spending is a constant battle. In all discussions on this subject in the Community the Government have insisted, and will continue to insist, on the paramount need to improve budget discipline and management, taking account of the Council's conclusions of December 1984.

  I also refer my hon. Friend to the statement that I made today.

EDUCATION AND SCIENCE

  Playgrounds
  Ms. Quin
  asked the Secretary of State for Education and Science what proportion of playgrounds in schools are made of concrete.

  Mr. Dunn
  This information is not available. The large majority of school playgrounds are made either of asphalt, or of concrete over which a tarmacadam surface is laid.

  Ms. Quin
  asked the Secretary of State for Education and Science what studies have been made about the feasibility of introducing substances safer than concrete to be used in playgrounds, including wooden blocks.

  Mr. Dunn
  In 1978 my Department sent to all chief education officers, for information, a copy of a Department of Environment circular letter advising authorities of the need for improved safety in children's playgrounds and including a technical appendix on the characteristics of various impact-absorbing surfaces that were considered for use beneath park playground apparatus. Wooden blocks were not mentioned; wood chips, although soft, were regarded as being difficult to maintain and clean. Local education authorities were invited to consider at the time whether any of the advice contained in the letter was felt to be applicable to school playground areas, particulary where climbing apparatus was being installed.

  Natural Environment Research Council
  Mr. Dalyell
  asked the Secretary of State for Education and Science what help he proposes to give the Natural Environment Research Council to enable it to maintain research at the grant-aided Freshwater Biological Association Laboratories.

  Mr. Jackson
  My right hon. Friend allocates funds each year to the Natural Environment Research Council and other research councils, after the Government have determined the overall funding available. In reaching this decision he takes account of advice from the Advisory Board for the Research Councils. Within the sum provided, the council is expected to determine its own priorities for the support of relevant research within its own establishments and grant-aided institutions.

  Women's Needs
  Ms. Richardson
  asked the Secretary of State for Education and Science what are the main needs of girls and women in the policy areas within the sphere of his Department's activities; what has been done to identify and quantify these needs and to monitor services delivery; what consultation is carried out with women to ensure their views are adequately represented; and what training is given to his staff to raise their appreciation of the needs of girls and women.

  Mrs. Rumbold
  The main needs of girls and women in education are equal opportunities for study to enable them equally to benefit from the advantages education confers. My Department, drawing on advice from Her Majesty's Inspectorate, has identified areas of the curriculum in schools and of higher education in which there has been a historically low participation by girls and sought to increase it, monitoring the results by statistical means. Opportunities for consultation exist through liaison with the Equal Opportunities Commission and the Women's National Commission. Staff in relevant branches of the Department are made aware of the need to bear in mind the provisions of the Sex Discrimination Act 1975 and ensure that the needs of women are taken into account in policy formulation and administration.

  Schools (Change of Character)
  Mr. Stern
  asked the Secretary of State for Education and Science if he has any plans to seek to alter the arrangement under which local education authorities apply to him for permission to cease to maintain or to change the character of a school; and if he will make a statement.

  Mr. Dunn
  My right hon. Friend has no plans to alter the existing statutory arrangements.

  East Devon College of Further Education
  Mr. Maxwell-Hyslop
  asked the Secretary of State for Education and Science why his decision as to phase 2 of the East Devon college of further education, promised for the end of March, is still outstanding; and whether he will announce it without further delay.

  Mr. Dunn
  This project was submitted by Devon LEA as a candidate for the local authority further and higher education major building programme 1988–89. It is under consideration, together with the bids submitted by other LEAs in England. The delay in responding to LEAs' bids is regretted and an announcement will be made as soon as possible. However, my right hon. Friend will not be in a position to inform LEAs of their capital expenditure allocations for 1988–89 until the end of this year.

TRANSPORT

  Motorways (Maintenance)
  Mr. Greg Knight
  asked the Secretary of State for Transport by what date he expects the maintenance work currently in progress at and near junction 10 of the M1 motorway to be completed.

  Mr. Peter Bottomley
  The contractor hopes to complete the work by mid-October.
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  Mr. Greg Knight
  asked the Secretary of State for Transport if he will consider restricting heavy commercial vehicles to the nearside lane only when, due to maintenance work, motorways are reduced to two-lane traffic.

  Mr. Peter Bottomley
  This would not be advisable. It would lead to one lane being heavily overused and the other operating at under capacity.

  All heavy goods vehicles would necessarily have to run at the speed of the slowest vehicle. This could lead to frustration on the part of their drivers, and in turn lead to risk taking and excessive speeds when they reached the end of the works. We consider it is safer to have two lanes running more or less equally, rather than one running much faster than the other.

  Mr. Greg Knight
  asked the Secretary of State for Transport what steps he has taken to minimise disruption to holiday traffic on motorways due to maintenance and repair work being carried out during this summer.

  Mr. Peter Bottomley
  All lane closures are carefully planned to keep delay and inconvenience to a minimum. The Department's agents work to national guidelines in respect of layout and spacing between works.

  We have substantially increased the number of contracts let on a "lane rental" basis whereby contractors can earn bonuses for early completion. This has proved successful in reducing the time of occupation for works to be carried out.

  In areas known to be heavily trafficked throughout the summer holiday period, such as the south-west, only essential works are carried out at this time. Wherever practicable works are lifted from all major holiday routes at peak periods such as bank holidays.

  M4 (Partial Closure)
  Mr. Maxwell-Hyslop
  asked the Secretary of State for Transport for how long it is intended to close the London end of the M4 motorway at night; and whether there is any way by which one lane of it each way could be left open.

  Mr. Peter Bottomley
  Alternative closures of the east bound and west bound carriageways at the London end of the M4 motorway are expected to continue until Friday 17 July. The maintenance work being undertaken is the replacement of bridge expansion joints. Safety considerations require the whole carriageway in one direction to be closed while the work is in progress.

  Motorways (Service Areas)
  Mr. Forth
  asked the Secretary of State for Transport if he will indicate the Government's general policy on the development of new service areas on motorways and other trunk roads in England.

  Mr. Channon
  Our general policy for motorways is to secure service areas at strategic points roughly 30 miles apart. There are 41 such areas already open in England. A further 19 are planned. The aim is to provide the consumer with an adequate range of choice and good value for money, while upholding the highest standards of road safety and securing a return to the Exchequer. Save in exceptional circumstances, we believe that this is best achieved by promoting full and fair competition between
  89
  firms providing such services, subject to our having adequate control over the initial development and subsequent use of sites.

  Our general policy for trunk roads is to continue to rely on private initiative for the identification, development and management of such sites. It is essential for road safety and traffic reasons to exercise strict control over the new developments which involve formation or an intensified use of accesses to such roads. It is, nevertheless, apparent that there are roads on which there are not at present adequate facilities for motorists. We believe that these needs will best be met in general by a comprehensive provision of services on single sites rather than a spread of individual facilities. It is intended to promote discussions with the local authority associations and the private sector on the identification of such sites and the sort of provision to be made on them.

  We believe that these policies represent the most effective way forward to meeting the future needs of motorists on our motorways and trunk roads. I am placing in the library a fuller statement of these policies.

HOME DEPARTMENT

  Voting
  Mr. Andrew F. Bennett
  asked the Secretary of State for the Home Department for each parliamentary constituency in Greater Manchester, how many people were granted postal votes; how many applications for postal votes were refused; how many postal votes returned too late to be included in the count; what percentage of postal votes were valid and what representations he has received from returning officers about the new procedure for postal votes.

  Mr. Douglas Hogg
  Information is being obtained in respect of each constituency in the United Kingdom on the number of persons shown on the absent votes lists as entitled to vote by post, on the number of postal ballot papers returned before the close of the poll and on the number of those ballot papers included at the start of the count. This information will be published in "Election Expenses" around the end of the year. We have not yet received all the postal ballot papers returns from the constituencies in the Greater Manchester area and I shall write to the hon. Member when they are complete. Information is not collected centrally on the number of applications for postal votes which were refused, nor are electoral registration officers obliged to record this information. We have received a number of suggestions for ways in which the new absent voting procedures could be improved and we shall take these into account in our review of these procedures.

  Immigration
  Mr. Tony Lloyd
  asked the Secretary of State for the Home Department if he will give details of different waiting times for interviews by the immigration service according to the geographical area in the United Kingdom of residence of the interviewee.

  Mr. Renton
  The position varies in different areas of the United Kingdom, subject to the type of interview required, and comprehensive information is not readily available. During the peak period of traffic through the ports priority is given to immigration control on entry. Other 90
  urgent interviews, however, continue to be undertaken during the peak summer months. At the end of the summer season, additional immigration service resources are devoted to outstanding cases.

  Crime (Use of Knives)
  Mr. Winnick
  asked the Secretary of State for the Home Department (1) if he has any plans to institute a campaign against the selling and carrying of knives for offensive purposes; and if he will make a statement;

  (2) what legislative steps are being proposed regarding the sale of certain types of knives which can be used for offensive and criminal purposes; and if he will make a statement;

  (3) what representations have been made to him by the police and other authorities regarding the sale of knives which can be used for offensive and criminal purposes; and if he will make a statement.

  Mr. Douglas Hogg
  We have received a number of representations from the police representative organisations, police consultative groups, local authorities, hon. Members and members of the public about the availability of offensive weapons, including knives, and their use in crime. We have also received reports of the local initiatives to increase awareness among the public about the dangers of these weapons, which we welcome and support.

  As my right hon. Friend announced to hon. Members yesterday, we have already set in hand a study of how the law relating to the possession of knives and other sharp bladed instruments might be reinforced. He will be considering urgently how best to take matters forward in the light of that study.

  Mr. Winnick
  asked the Secretary of State for the Home Department if he will set out the figures relating to the use of knives in criminal offences which have occurred in England and Wales in the past five years and the overall percentage increase in this period.

  Mr. John Patten
  Information on the use of weapons other than firearms in recorded notifiable offences is not collected centrally, except in respect of offences of homicide. Statistics of homicides are published each year in "Criminal Statistics, England and Wales" (table 4.3 in the volume for 1985, Cm. 10)

TRADE AND INDUSTRY

  Footwear Industry (Trade Exhibitions)
  Mr. Fry
  asked the Chancellor of the Duchy of Lancaster if he will ask the British Overseas Trade Board to reconsider its decision to reduce its support for trade exhibitions in North America on behalf of the British footwear industry.

  Mr. Alan Clark
  The BOTB has decided not to support the footwear industry in 1987–88 at the National Shoes Fair in New York, as it has done in previous years. Even though it supports some 330 events each year, involving some 7,000 British companies, the BOTB cannot meet all the demands for such assistance. It has, therefore, to balance the needs of well-established sectors in a particular market with those of newcomers. As part of its extensive North American programme the board is supporting a number of other shows which include footwear, and if
  91
  circumstances permit it to add new events to the programme during the year, it will take full account of the footwear industry's views.

  Japan (Sales Duty)
  Mr. Fry
  asked the Chancellor of the Duchy of Lancaster what information he has as to which British industries, when trading with Japan, face a 60 per cent. duty on all sales to that country once the tariff quota is exceeded.

  Mr. Alan Clark
  Leather, leather goods and footwear are the only industries falling into this category.

  Furniture (Fire Resistance)
  Mr. Ward
  asked the Chancellor of the Duchy of Lancaster if he will take steps to ban the use of polyurethane foam in domestic furniture in view of the toxic fumes created when fire occurs.

  Mr. Maude
  No. As with the burning of most organic substances, the main toxic gas produced by burning polyurethane foam is carbon monoxide.

  I am today issuing a consultation document setting out a draft code of practice on ignition resistance of upholstered furniture.

  Recent developments in polyurethane technology offer foams which, when used in furniture, appear to burn less rapidly and with the production of less smoke and toxic gas. I believe that the way forward is to encourage the use of these better types of foam filling in furniture manufacture as quickly as possible, rather than banning a material which has many excellent qualities.

  Mr. Ward
  asked the Chancellor of the Duchy of Lancaster (1) if he will make it his policy to bring commercial recovering of domestic furniture within the law relating to fire resistance of domestic upholstered furniture;

  (2) when he intends to introduce regulations leading to a higher standard of fire resistance in domestic upholstered furniture; and if he will make a statement on the standards to be introduced.

  Mr. Maude
  I am today issuing a consultation document setting out a draft code of practice on ignition resistance of upholstered furniture. A number of options are proposed in that document : I am satisfied that all would provide for a degree of improved safety in their various ways, whether by requiring the use of match resistant covering fabric or by requiring the use of more fire-resistant foam or other filling.

  Following consultation, I propose to make new regulations to replace those made in 1980 and amended in 1983 in order to make mandatory the code of practice.

  The mandatory code of practice approach offers a direct way of dealing with loose covers and commercial recovering of furniture within the same regulations, which a mandatory match test for complete items of furniture cannot do.

  Mr. Ward
  asked the Chancellor of the Duchy of Lancaster if he will make it his policy to extend the controls relating to fire resistance of domestic furniture to beds and other everyday items currently outside the law.

  Mr. Maude
  I intend to make use of the general safety requirement in the Consumer Protection Act 1987 to set 92
  an acceptable standard of fire resistance for beds and mattresses. This will be done by approval of the British standard specification for the ignition resistance of mattresses when this is finalised. Equally, if other standard specifications are prepared indicating a minimum level of fire resistance for other everyday domestic items, I shall consider approving these also.

  Mr. Cryer
  asked the Chancellor of the Duchy of Lancaster if he will introduce legislation to ensure that fire safety regulations for furniture sold for use in the home are stringently applied; if he is satisfied that there are adequate safeguards to ensure that toys are not inflammable; and if he will make a statement.

  Mr. Maude
  [pursuant to his reply, 30 June 1987, c. 58]: It is for local authorities to enforce regulations cons rolling the fire safety of upholstered furniture made under the Consumer Safety Act 1978, whose provisions have now been subsumed in the Consumer Protection Act 1987. There is no need for additional enforcement legislation. The present Toy (Safety) Regulations are inadequate in respect of the flammability requirements. The draft European directive on toy safety, which will considerably extend those requirements, was accepted in principle by the Council of Ministers on 10 June and is now before the European Parliament. If the directive is adopted, regulations to implement the directive will be introduced in due course.

  Children's Nightwear
  Mr. Ward
  asked the Chancellor of the Duchy of Lancaster if he has any plans to alter the law regarding the material of, and the warnings concerned with, children's nightwear.

  Mr. Maude
  No. The Nightwear (Safety) Regulations 1985 came into force on 1 March this year. Children's nightdresses, dressing gowns and bathrobes (except bathrobes made from cotton terry towelling) for children must pass a strict flammability test. Other nightwear garments for children and adults must carry a permanent label showing their flammability performance.

  The Nightwear (Safety) (Amendment) Regulations 1987 defer until 1 September of this year the coming into force of the requirements of the 1985 regulations with respect to the labelling of garments for babies under the age of three months.

  Ferguson Group
  Mr. Hoyle
  asked the Chancellor of the Duchy of Lancaster what information he received about the sale of the Ferguson Group by its owners, Thorn EMI, prior to its public announcement.

  Mr. Butcher
  The company informed my Department of the proposed sale at the same time as it made its public announcement.

  Television Sets (Production)
  Mr. Hoyle
  asked the Chancellor of the Duchy of Lancaster what assessment he has made of the prospect for the mass production of televisions in the United Kingdom, in the light of the recent purchase of the Ferguson Group by Thomson.
  93
  Mr. Butcher
  The implications of the proposed acquisition of Thorn EMI Ferguson by Thomson Grand Public will depend upon future decisions by Thomson on how it will run the business. Although Ferguson is the single largest manufacturer in the United Kingdom, there are nine other major companies established in television manufacture here, several of which are expanding their production. Plans by at least two additional companies to enter production are also well advanced.

  Lawnmowers (Noise)
  Mr. Teddy Taylor
  asked the Chancellor of the Duchy of Lancaster how many power lawnmowers have been checked by the officers appointed by his Department to establish whether the noise they make is consistent with the Lawnmowers (Harmonisation of Noise Emission Standards) Regulations; and if he will make a statement.

  Mr. Robert Atkins
  The Lawnmowers (Harmonisation of Noise Emission Standards) Regulations 1986 do not make provision for appointing officers to carry out checks to establish whether the noise powered lawnmowers make is consistent with them.

  The regulations came into force on 18 November 1986 and introduce into United Kingdom law the European Community article 100 directive on the approximation of the laws of member states relating to the permissible sound power level of lawnmowers (84/538/EEC). The directive has to be applied as from 1 July 1987 and our regulations were introduced in advance of that date in order to give manufacturers and importers opportunity to obtain reports on the tests carried out on each type of lawnmower for the purpose of self-certification in readiness for marketing on or after 1 July 1987. I am aware that some of the nine appointed test laboratories have been making such reports for some time, but as the manufacturers apply direct to the test laboratory my Department does not get involved or record the numbers involved.

  The regulations empower the Secretary of State to carry out checks on the manufacturers continuing production, but no such checks have as yet been made.

  Director General of Telecommunications (Report)
  Mr. Lawrence
  asked the Chancellor of the Duchy of Lancaster whether he has yet received a report by the Director General of Telecommunications for the year 1986, as required under section 55 of the Telecommunications Act 1984.

  Mr. Butcher
  Yes. The third report by the Director General of Telecommunications is being published today. It covers the period 1 January to 31 December 1986. Copies of the report have been laid before each House of Parliament.

  Consumer Council
  Mr. Stern
  asked the Chancellor of the Duchy of Lancaster if he will make a statement on the Consumer Council held on 10 June.

  Mr. Maude
  The Council reached agreement on a directive to harmonise legislation prohibiting products which, usually as a novelty, are made or packaged to appear like food or drink, and could be dangerous, especially to children. The Council also reached agreement 94
  in principle on a directive to provide common rules for toy safety throughout the community. Formal adoption will not take place in June, however, as the European Parliament's opinion is still awaited.

  The Council reached agreement on resolutions responding to reports by the Commission on consumer access to justice, and on a possible general obligation at community level to produce and market only safe goods. The Commission will be undertaking further work on both subjects.

  The Council also recorded conclusions on the fundamental elements which should form the basis for a settlement of the proposed unit pricing directives; and agree that a Commission proposal for a child safety information and awareness campaign should be examined further.

ENERGY

  Women's Needs
  Ms. Richardson
  asked the Secretary of State for Energy what are the main needs of women in the policy areas within the sphere of his Department's activities; what has been done to identify and quantify these needs and to monitor services delivery; what consultation is carried out with women to ensure their views are adequately represented; and what training is given to his staff to raise their appreciation of the needs of women.

  Mr. Parkinson
  Officials in my Department act in accordance with the Government's commitment to the policy of equal opportunities for men and women. Staff receive training on equal opportunities for men and women as part of normal management training. We also seek to ensure that women are represented on advisory and consultative bodies on energy matters.

OVERSEAS DEVELOPMENT

  European Community Development Council
  Mr. Temple-Morris
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the European Community Development Council on 21 May.

  Mr. Chris Patten
  The United Kingdom was represented at official level. Conclusions were adopted welcoming the Commission's intention to propose a Community programme to combat AIDS in developing countries, in close co-ordination with the World Health Organisation's special programme on AIDS. Conclusions were also adopted on the importance of improving public awareness of development issues, and on the value of the private sector in development.

  It was agreed there should be detailed debates on the situation in sub-Saharan Africa, on the evaluation of previous aid and (at the United Kingdom's suggestion) on the environmental aspects of development projects at the next Council.

NATIONAL FINANCE

  Inland Revenue
  Mr. Nicholas Baker
  asked the Chancellor of the Exchequer if he will make a statement on the speed with which Inland Revenue offices deal with taxpayers' affairs.

  Mr. Norman Lamont
  Over the last 18 months there has been a significant improvement in the time taken to reply to taxpayers' inquiries, and most of the annual cycle of other work is being completed on time.

  Value Added Tax
  Mr. Alfred Morris
  asked the Chancellor of the Exchequer what information he has of the effect on retailers of the delay arising from the break-down of the value added tax computer at Shoeburyness in the repayments of moneys due to them; if he will take steps to ensure the earliest possible repayment of such moneys; and if he will make a statement.

  Mr. Lawson
  I shall let the right hon. Member have a reply as soon as possible.

  EC Budget (United Kingdom Contribution)
  Mr. Teddy Taylor
  asked the Chancellor of the Exchequer what was the total net contribution made by the United Kingdom to the European Economic Community in each of the previous five years; and if these figures take account of the transfer from European Economic Community to national responsibility of expenditure on agricultural policies like the disposal of butter surpluses.

  Mr. Brooke
  I shall let my hon. Friend have a reply as soon as possible.

  Liverpool Freeport
  Mr. Parry
  asked the Chancellor of the Exchequer (1) if he is satisfied with the working of the Liverpool freeport; and if he will make a statement;

  (2) if he has assessed what effects the Manx freeport will have on the Liverpool freeport; and if he will make a statement.

  Mr. Brooke
  I shall let the hon. Member have a reply as soon as possible.

WALES

  Cartrefle College
  Dr. Marek
  asked the Secretary of State for Wales what decisions were made regarding the future of Cartrefle college at the last meeting of the committee of the Welsh Advisory Board; and if he will make a statement.

  Mr. Wyn Roberts
  At its last meeting the WAB committee considered a report by a joint UGC/WAB working group which recommended the phasing out of initial teacher training at Cartrefle college which is part of the North East Wales institute of higher education. The committee advised that before final decisions are taken the Clwyd local education authority should be consulted to give it and NEWI an opportunity to comment on the implications for the institute of implementing the working group's recommendation. This is being done.

  Charity-owned Farms
  Mr. Ron Davies
  asked the Secretary of State for Wales (1) if he will estimate how many charity-owned farms there are in Wales, and in each county in Wales, and which charities are involved;

  (2) how many charity-owned farms exist within the present environmentally sensitive areas in Wales; arid which charities are involved.

  Mr. Peter Walker
  Records are not kept of the number of charity-owned farms in Wales and there is no information available on which to base an estimate.

  Mr. Ron Davies
  asked the Secretary of State for Wales if he will make a statement concerning the position of tenants of charity-owned farms in relation to the environmentally sensitive areas scheme in Wales.

  Mr. Peter Walker
  The position of tenants of charity-owned farms in relation to the environmentally sensitive area scheme in Wales depends on the particular circumstances of the tenancy agreement and each case would be treated on its merits.

  A possible conflict would arise only if the charity that owns the land has received public money in connection with the purchase or management of the land.

  If the tenant pays a full agricultural rent and has a normal tenancy agreement there should be no reason why he could not qualify for an ESA management agreement. lf, however, the tenancy agreement requires him to farm in an environmentally sensitive way, and in return he pays a lower rent, it would be necessary to consider carefully whether the further benefit of ESA payment would be justified.

  Lead Plumbing
  Mr. Ron Davies
  asked the Secretary of State for Wales what is the number of properties in Wales with lead plumbing; and what proportion of the total this figure represents.

  Mr. Grist
  The latest available estimate derived from the 1981 Welsh house condition survey is that there were 294,000 dwellings with drinking-cooking water pipes made of lead, representing 27 per cent. of the total stock.

SCOTLAND

  Illegal Fishing (River Forth)
  Mr. Dalyell
  asked the Secretary of State for Scotland what representations he has received from James Mackie, Her Majesty's Inspector of Fisheries, about an incident involving illegal drift net fishing in the Forth, in the early hours of Friday 26 June; and what action he proposes to take.

  Mr. Michael Forsyth
  My right hon. and learned Friend has received no representations from Mr. James Mackie regarding illegal fishing in the Forth on 26 June 1987.

  Community Charge
  Mr. Dalyell
  asked the Secretary of State for Scotland (1) what is his estimate of the number of canvassers required for house visits in Lothian region in order to collect the information required for the proposed community charge;
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  (2) what is his estimate of the costs of collection in Lothian region of the community charge from fully rebated persons;

  (3) what estimate he has made of the cost in Lothian region of updating the proposed community charge register each month;

  (4) what is his estimate of the cost of a postal canvass in Lothian region of all persons above 18 years of age to establish and register for the proposed community charge.

  Mr. Lang
  My right hon. and learned Friend has made no such estimates.

  Mr. Dalyell
  asked the Secretary of State for Scotland what sanctions he proposes against any individual over 18 years of age who fails to notify the authority applying a community charge of a change of abode.

  Mr. Lang
  The arrangements for the imposition of civil penalties in these circumstances are set out in section 18 of the Abolition of Domestic Rates Etc (Scotland) Act 1987.

  Mr. Dalyell
  asked the Secretary of State for Scotland what proposals he has to reimburse Lothian region for the salaries of the extra staff needed to implement his community charge proposals in Lothian region.

  Mr. Lang
  The costs to be incurred by local authorities in implementing the community charge will be taken into account when determining provision for relevant expenditure and aggregate exchequer grant for 1988–89. The distribution of provision and grant amongst local authorities is based upon the client group approach to assessment of relative expenditure need, which is developed in consultation with the Convention of Scottish Local Authorities.

ENVIRONMENT

  Air Pollution
  Mr. Fry
  asked the Secretary of State for the Environment what representations he has received seeking legislation based upon the proposals contained in the Green Paper on air pollution control.

  Mr. Moynihan
  We have received 442 responses to the proposals in the consultation paper reviewing air pollution control legislation in Great Britain. Where they gave permission, copies of these replies have been placed in the Libraries of both Houses and of the Department to which the response was sent.

  Women's Needs
  Ms. Richardson
  asked the Secretary of State for the Environment what are the main needs of women in the policy areas within the sphere of his Department's activities; what has been done to identify and quantify these needs and to monitor services delivery; what consultation is carried out with women to ensure their views are adequately represented; and what training is given to his staff to raise their appreciation of the needs of women.

  Mr. Ridley
  The policies of my Department meet the needs of men and women equally. Specific measures taken by my Department which are of particular benefit to women are set out in the Government response to the 98
  United Nations "Forward Looking Strategies for the Advancement of Women", published on 29 April. The views of women on these measures and policies are welcome and my Department actively consults women's organisations in appropriate cases. Equal opportunities training, including that designed to raise awareness of the needs of women, is included in all my Department's main management courses.

  Local Government Boundary Commission
  Mr. Arnold
  asked the Secretary of State for the Environment what information he has about the timetable of work of the Local Government Boundary Commission; and if he will make a statement.

  Mr. Chope
  Under the Local Government Act 1972 the commission has to review every 10 to 15 years the areas and boundaries of counties, London boroughs and metropolitan districts, and the boundaries of the City of London. The current round of these reviews has to end by 31 March 1992. Reviews of non-metropolitan districts and consideration of districts' reviews of parishes may be at any time, as necessary. In addition, the commission has to review the electoral arrangements for counties, London boroughs and districts, every 10 to 15 years from its last report on the area concerned. Subject to these statutory requirements and to any direction under powers conferred by the Act on the Secretary of State the commission has discretion to, and does set its own timetable.

  Stoke Gabriel (Public Inquiry)
  Mr. Steen
  asked the Secretary of State for the Environment if he will postpone the public inquiry under section 119 of the Highways Act 1980 in relation to footpath No. 2 (Part) Stoke Gabriel, Public Path Diversion Order 1986, as requested in the letter from the hon. Member for South Hams to the Parliamentary Under-Secretary of State on 23 May, following representations from the Stoke Gabriel parish council.

  Mr. Moynihan
  No. It is considered that a postponement at this late stage may be prejudiced to other objectors who have already made arrangements to attend. Should any party wish to pursue the question of a delay, they would have the opportunity at the opening of the inquiry to request the inspector to adjourn to a later date.

  Rates (Collection)
  Mr. Spearing
  asked the Secretary of State for the Environment what actual or estimated percentage of rate income to local authorities in England and Wales is expended in its collection.

  Mr. Howard
  The cost of rate collection was about 1·2 per cent of rates paid in England and Wales in 1986–87.

  Spectrum Arena, Warrington
  Mr. Hoyle
  asked the Secretary of State for the Environment if he has received any proposals on the future of the Spectrum Arena, Warrington, what discussions he has had with the Warrington and Runcorn development corporation; and what information he has as to whether the Spectrum Arena has been offered for sale to Warrington borough council.
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  Mrs. Roe
  My right hon. Friend has not received any proposals on the future of the Spectrum Arena, or had any discussions on the matter, subsequent to the closure of the arena last year. The arena is currently available for purchase, following the discontinuance earlier this year of negotiations with a prospective buyer. It is open to the borough council to make an offer.

  Albert Dock, Liverpool
  Mr. Parry
  asked the Secretary of State for the Environment if he has any plans to visit the Albert dock, Liverpool.

  Mr. Trippier
  I visited the Albert dock in Liverpool on 22 June 1986 as part of a tour of the Merseyside Development Corporation's designated area. My right hon. Friend hopes to visit Merseyside in the near future.

  Merseyside Development Corporation
  Mr. Parry
  asked the Secretary of State for the Environment if he is satisfied with the working of the Merseyside Development Corporation; and if he will make a statement.

  Mr. Trippier
  I am very satisfied with the working of the Merseyside Development Corporation. In 1981 the corporation was set up to secure the regeneration of 350 hectares of derelict docklands. Its progress has been spectacular. 166 hectares have been reclaimed, including the site of the acclaimed Liverpool international garden festival in 1984. 120,000 m3 of buildings have been refurbished for new uses, including the largest grade I listed building in the country, the Albert dock; factory units have been provided in Bootle and at the Brunswick business park in the South docks, and Wapping warehouse is being refurbished to provide flats; all in partnership with the private sector or other agencies. This successful partnership is bringing new uses and a new pride to the docklands, creating a climate of confidence in which people are prepared to invest.

  Mr. Parry
  asked the Secretary of State for the Environment if he has any plans to expand the Merseyside Development Corporation; and if he will make a statement.

  Mr. Trippier
  We have no plans to expand Merseyside Development Corporation at present.

  Merseyside Task Force
  Mr. Parry
  asked the Secretary of State for the Environment (1) if he is satisfied with the working of the task force on Merseyside; and if he will make a statement;

  (2) if he has any plans to expand the task force on Merseyside; and if he will make a statement.

  Mr. Ridley
  The Merseyside task force deals with a range of functions appropriate to a regional office of my Department, including housing matters, derelict land grant, the urban programme and the funding of the Merseyside Development Corporation. It is involved also with local authorities, the Housing Corporation and private companies in promoting special initiatives to tackle particular problems in the area. There is close collaboration at local level with the Department of Industry MSC, and other Government Departments.
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  The task force continues to make an important contribution to the Government's policies aimed at securing the regeneration of the area.

  Business Rates
  Mr. Teddy Taylor
  asked the Secretary of State for the Environment what estimate he has made of the likely level of uniform business rate which is to be established in consequence of the measure outlined in the Gracious Speech; and whether he estimates that business ratepayers in Essex and Southend on Sea, respectively, will pay more or less in rates as a direct consequence of the proposed reform.

  Mr. Howard
  The average non-domestic rate poundage in 1987–88 in England is 224·1p. Had a national non-domestic rate been fully introduced this year at that level the rate poundage in Southend would have increased by 1½per cent. In the rest of Essex changes would have ranged from an increase of 5 per cent. in Chelmsford to a reduction of 22 per cent. in Harlow.

  These figures do not take into account the effect of the revaluation on non-domestic rates, timed to come into effect in 1990.

  Community Charge
  Mr. Teddy Taylor
  asked the Secretary of State for the Environment what representations he has received from borough treasurers about the administration of the proposed community charge; and if he will make a statement.

  Mr. Howard
  The Association of District Council Treasurers and the Society of Metropolitan Treasurers responded to the Green Paper "Paying for Local Government" (Cmnd. 9714). Both accepted the need to reform local government finance, but expressed concern about the proposal for a community charge, partly on administrative grounds. It was because of such concerns that the Government published on 15 December 1986 a document setting out how the community charge will work.

  A number of other representations were received from borough treasurers writing on behalf of their councils. A summary of all the responses to the Green Paper was placed in the Library on 15 December.

  Mr. Teddy Taylor
  asked the Secretary of State for the Environment what assessment he has made of the likely cost to local authorities of collecting a community charge as opposed to domestic rates; and if he will make a statement.

  Mr. Howard
  I shall answer this question shortly.

  LDDC (Job Statistics)
  Mr. Spearing
  asked the Secretary of State for the Environment if he will tabulate for the latest convenient date the number of jobs (a) transferred from outside, (b) newly created and (c) displaced or lost in each of the three boroughs within the area of the London Docklands Development Corporation since its inception, together with their respective totals.

  Mr. Trippier
  A total of 7,897 jobs have been created between the establishment of the corporation in July 1981 and 31 March 1987. These can be broken down as follows:
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  Borough

  Number of jobs

  Newham

  1,895

  Southwark

  1,192

  Tower Hamlets

  4,810

  TOTAL

  7,897

  Of these, 5,059 jobs were in establishments transferred from outside the UDA and 2,838 were created in new enterprises. A breakdown by borough is not available.

  In the answer given by my hon. Friend the former Minister for Housing, Urban Affairs and Construction to the hon. Member for Newham, North-West (Mr. Banks) on 6 April 1987, at column 26, he explained that an estimated 85 docklands firms have been relocated outside the area; 20 of these were from Newham, 32 from Southwark and 33 from Tower Hamlets. A total of 3,355 jobs have been notified by the MSC as lost between 1981 and 31 March 1987 as a result of firm closures or other redundancies. Information by borough is not available.

  Housing
  Mr. Allen
  asked the Secretary of State for the Environment (1) whether the major reform of housing legislation foreshadowed in the Queen's Speech will include measures to empower local councils to sell off council estates, or parts thereof, to private companies; and if he will make a statement;

  (2) what information he has about the number of local councils which, under current legislation, have disposed of council estates, or parts thereof, to private companies; and if he will list the authorities concerned.

  Mr. Waldegrave
  Local authorities may dispose of housing and housing land with the consent of my right hon. Friend the Secretary of State. A general consent has been granted for the disposal of vacant housing for owner-occupation; disposals of tenanted housing, other than to sitting tenants, require special consent. Consents were granted, in 1983 and 1984, for the disposal of the Cantril Farm estate by Knowsley borough council to the Stockbridge Village trust and of the Strinesdale estate by Oldham borough council to the Irwin Group.

FOREIGN AND COMMONWEALTH AFFAIRS

  EC Policies
  Mr. Knox
  asked the Secretary of State for Foreign and Commonwealth Affairs what further proposals he intends to place before his European Community partners for the development of Community policies.

  Mrs. Chalker
  The Community's most urgent priority is to agree measures to ensure the control of expenditure. We shall play a leading role in the discussions which will now continue to introduce stabilising mechanisms for agricultural commodities and on the application of budgetary discipline to all the Community's expenditure.

  Iraq
  Mr. Madden
  asked the Secretary of State for Foreign and Commonwealth Affairs when he plans to meet the ambassador of Iraq in London to discuss Anglo-Iraqi relations.
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  Mr. Mellor
  The ambassador of Iraq will be calling on me on Wednesday 8 July.

  Terrorism
  Mr. Wilson
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Government policy regarding the sale of arms to terrorist forces.

  Mr. Mellor
  It is our firm policy not to sell arms to terrorist forces.

  Blowpipe Missiles
  Mr. Dalyell
  asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he had during his visit to refugee camps in Pakistan in April 1986, about the provision of Blowpipe missiles to Afghan persons or organisations opposed to the Kabul regime; and if he will make a statement.

  Sir Geoffrey Howe
  As I told my hon. Friend the Member for Lewisham, East (Mr. Moynihan) on 7 May 1986, during my visit to the Afghan refugee camps in Pakistan I listened to representations from the refugees on the situation in Afghanistan and made clear our view that the key to peace is the immediate withdrawal of Soviet troops. As regards arms supplies, I have nothing to add to my statement on 26 June in the foreign affairs debate.

  Australia
  Mr. Baldry
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Australia.

  Mr. Eggar
  My right hon. and learned Friend visited Australia from the 22 to 28 April. Relations continue to be excellent. We look forward to celebrating together the bicentennial anniversary of European settlement in 1988.

  Ethiopia
  Mr. Irving
  asked the Secretary of State for Foreign and Commonwealth affairs if he will make a statement concerning relations with Ethiopia.

  Mrs. Chalker
  I visited Ethiopia from 9 to 11 April and had frank and open discussions with members of the Government. I drew attention to the European Community statement of 21 July 1986 in favour of a peaceful settlement of conflicts in the region and the encouragement of local agricultural production to prevent further famine. We have made clear our concern for human rights in Ethiopia.

  Washington
  Mr. Boyes
  asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to make an official visit to Washington.

  Mr. Eggar
  My right hon. and learned Friend has no firm plans at this stage, but would expect to visit Washington in due course as part of his regular series of meetings with Mr. Shultz.

  British Council
  Mr. Kirkwood
  asked the Secretary of State for Foreign and Commonwealth Affairs what plans he has to increase the resources available to the British Council.

  Mr. Alexander
  asked the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to increase the funding of the British Council.

  Mr. Eggar
  The British Council's requirements are considered, in the context of other priorities, in the annual public expenditure survey.

  Arms Control
  Mr. Brandon-Bravo
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress concerning arms control.

  Mr. Bill Walker
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning British policy on intermediate nuclear forces.

  Mr. Cryer
  asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet the United States Secretary of State to discuss arms control issues.

  Mr. Bellingham
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning North Atlantic Treaty Organisation policy in intermediate nuclear forces.

  Mr. Burt
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on British priorities for arms control negotiations.

  Sir Gerard Vaughan
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the North Atlantic Treaty Organisation position on arms control.

  Sir Geoffrey Howe
  There has been significant progress in recent weeks in the United States/Soviet negotiations on intermediate range nuclear missiles. The Reykjavik meeting of the North Atlantic Council last month called on the Soviet Union to accept global elimination of United States and Soviet longer and shorter range intermediate nuclear forces missiles. NATO Ministers also confirmed the direction of future arms control negotiations; 50 per cent. cuts in strategic weapons; global elimination of chemical weapons; and an agreement to redress imbalances in conventional weapons.

  On conventional weapons, informal contacts between NATO and Warsaw pact representatives have been under way in Vienna since mid-February on the terms of reference for new talks on conventional stability covering the Atlantic to the Urals. Steady progress is being made.

  Ms. Ruddock
  asked the Secretary of State for Foreign and Commonwealth Affairs what consultations he has had with the United States Government about a treaty banning intermediate nuclear forces from Europe.

  Mr. Mellor
  The United States Government is in close and regular contact with ourselves and other partners in NATO about the negotiations on intermediate nuclear forces. As part of the process my right hon. and learned Friend, discussed the INF negotiations with Mr. Shultz last month at the economic summit in Venice and at the 104
  North Atlantic Council in Reykjavik. We support the United States proposal for global elimination of US and Soviet longer and shorter range intermediate nuclear missiles.

  Mr. Wallace
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress at the arms control negotiations in Geneva.

  Mr. Mellor
  As indicated in my earlier reply to my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) there has been useful progress in recent weeks in the US/Soviet negotiations on intermediate range nuclear missiles. In the strategic arms reduction and space-defence groups significant difficulties remain. The United States has recently tabled a new draft START treaty. Both sides have made new proposals on space-defence which were discussed between Mr. Shultz and Mr. Shevardnadze in Moscow in April.

  Argentina
  Mr. Tom Clarke
  asked the Secretary of State for Foreign and Commonwealth Affairs what recent contacts Her Majesty's Government has had with the Argentine Government, directly or through intermediaries.

  Mr. Eggar
  Following my right hon. and learned Friend's statement on 29 October 1986, we have been exchanging with the Argentine Government, via the United States Government, some informal ideas relating exclusively to the co-ordination of fisheries management in the south-west Atlantic in the interests of conservation and avoidance of incidents.

  EC (Finance)
  Mr. Spearing
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning the future financing of the European Economic Community.

  Mrs. Chalker
  I refer the hon. Member to the statement given today by my right hon. Friend the Prime Minister.

  South Africa
  Mr. Caborn
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with South Africa.

  Mr. Michael
  asked the Secretary of State for Foreign and Commonwealth Affairs whether he will assess Her Majesty's Government's policy towards relations with the Government in South Africa.

  Mrs. Chalker
  Our relations with South Africa remain overshadowed by the issue of apartheid. We continue to seek an early end to this totally unacceptable system and its peaceful replacement by a non-racial, representative system of government.

  Mr. John Carlisle
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will review the policy of Her Majesty's Government towards the Government of South Africa.

  Mrs. Chalker
  Our policy towards South Africa remains unchanged. We seek an early end to the
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  unacceptable system of apartheid and its peaceful replacement by a non-racial, representative system of government.

  Mr. Nellist
  asked the Secretary of State for Foreign and Commonwealth Affairs what recent representations Her Majesty's Government have made regarding detentions of trade unionists in South Africa.

  Mrs. Chalker
  We have continued to make known to the South African Government our concern about detentions without charge, most recently on 28 May. On 19 December 1986 Her Majesty's ambassador in Pretoria raised the individual cases of nine trades unionists.

  Cyprus
  Mr. Bernie Grant
  asked the Secretary of State for Foreign and Commonwealth Affairs what plans he has to bring about the peaceful reunification of Cyprus.

  Mrs. Chalker
  We believe that the United Nations Secretary-General is best placed to achieve a peaceful, just and lasting settlement in Cyprus. His mission of good offices is supported by all parties to the dispute. We actively support his initiative. He has publicly declared the role we have played.

  Central America (Costa Rica Proposals)
  Mr. Corbyn
  asked the Secretary of State for Foreign and Commonwealth Affairs what response Her Majesty's Government have given to Dr. Arias of Costa Rica's peace proposals for the conflict in central America.

  Mr. Galbraith
  asked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with President Arias of Costa Rica about the situation in central America.

  Mr. Eggar
  We welcomed this effort by President Arias to reactivate the Contadora peace process and strengthen democracy.

  Chile
  Mr. McAllion
  asked the Secretary of State for Foreign and Commonwealth Affairs what information he has on Chileans formerly resident in the United Kingdom who are currently detained without trial in Chile.

  Mr. Eggar
  Her Majesty's embassy in Santiago is aware of one such case. I am writing to the hon. Member with details.

  Mr. Wareing
  asked the Secretary of State for Foreign and Commonwealth Affairs when he last met the ambassador of Chile; and what subjects were discussed.

  Mr. Eggar
  The last substantive meeting was on 18 February when the ambassador accompanied Chilean special envoy Ambassador Daza at his call on my right hon. and learned Friend. The discussion was specifically about human rights in Chile.

  Mr. Galloway
  asked the Secretary of State for Foreign and Commonwealth Affairs what action he has taken in response to the recent spate of killings in Chile attributed to Government forces.

  Mr. Eggar
  My right hon. and learned Friend has asked our ambassador in Santiago to seek further information 106
  on the recent shootings there. We shall be monitoring developments closely. We deplore violence from whatever source.

  Middle East
  Mr. Robertson
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's policy on arms sales to the middle east.

  Mr. Mellor
  As with our arms sales policy to other parts of the world, all arms sales to the middle east are considered individually on their merits. Each transaction is subject to strict export licencing procedures. Full account is taken of the foreign policy implications of such a sale, the regional and local tensions, and the human rights record of the country involved. We do not allow the export of arms which are likely to be used for internal repression or to violate human rights.

  Mr. Marlow
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Government policy with regard to the middle east.

  Mr. Mellor
  We remain committed to the search for a just and comprehensive settlement of the Arab/Israel dispute, based on the right of Israel to secure existence and the right of the Palestinians to self-determination. We believe that an international conference remains the most practical way forward.

  Mr. Robert Hicks
  asked the Secretary of State for Foreign and Commonwealth Affairs whether he intends taking any initiatives in conjunction with the United Kingdom's European Economic Community partners to try to resolve questions relating to the Palestinians; and if he will make a statement.

  Mr. Ernie Ross
  asked the Secretary of State for Foreign and Commonwealth Affairs what action he intends taking to pursue the decision of European Economic Community Ministers to convene an international peace conference on the middle east.

  Mr. Mellor
  As my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs said on 26 June, we and our European partners firmly support the principle of an international conference. This remains in our view the most practical way forward to negotiations between the parties that are directly concerned. We remain in close touch with the parties and will continue to encourage them to agree arrangements for a conference.

  Iran
  Mr. Home Robertson
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on British relations with Iran.

  Dr. Michael Clark
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Iran.

  Mr. Mellor
  The recent deterioration in relations with Iran was not of the United Kingdom's making.

  Our position is that Iran must understand that any constructive dialogue with us can only prosper on a basis

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  of reciprocity and provided the British diplomatic presence in Tehran is allowed to do its job without hindrance and with its safety assured.

  The hon. Gentleman and my hon. Friend will know that my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs set out our position more fully in his speech to the House on 26 June.

  Arms Exports
  Mr. Frank
  Cook asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his Department's responsibilities in relation to the control of arms exports as they affect Her Majesty's Government's foreign policy.

  Mr. Mellor
  The export of arms is controlled by the Export of Goods (Control) Order which is the responsibility of my right hon. Friend the Secretary of State for Trade and Industry. However, my Department is consulted over all export licence applications so that the foreign policy aspects of arms sales can be fully considered. In deciding whether to approve individual export licence applications my Department pays particular attention to those exports which might exacerbate regional or local tension or contribute to violations of human rights.

  As the hon. Member knows, special rules are announced from time to time in relation to certain countries.

  Fiji
  Mr. Vaz
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's relationship with the current administration in Fiji.

  Sir Geoffrey Howe
  I. expressed our deep concern about the military coup in Fiji on 14 May, calling for a return to parliamentary democracy. The Governor-General has assumed sole executive authority in Fiji. We have maintained normal contact with him through our high commissioner in Suva. Our normal commercial and trading relations continue as does our aid programme.

  US Congressional Hearings
  Mr. Darling
  asked the Secretary of State for Foreign and Commonwealth Affairs if any of the staff of the British embassy in Washington are attending the congressional hearings on the Iran-Contra affair; and if he will make a statement.

  Mr. Eggar
  No staff are attending on a regular basis.

  Korea
  Mr. Parry
  asked the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government have made to the Korean Government concerning democracy and human rights.

  Mr. Wall
  asked the Secretary of State for Foreign and Commonwealth affairs what representations Her Majesty's Government have made to the Government of the Republic of South Korea regarding recent human rights violations.

  Mr. Eggar
  We have been following closely developments in the Republic of Korea and hope that the dialogue 108
  between the parties can be constructively resumed. The Korean Government are aware of the importance we attach to human rights and democracy.

  EC Research Programme
  Sir Russell Johnston
  asked the Secretary of State for Foreign and Commonwealth Affairs whether the United Kingdom will remove its objection to the European Community 1987–91 framework research programme.

  Mrs. Chalker
  We are considering whether or not the conditions can be met for such an agreement.

  Foreign Minister's Council
  Mr. Teddy Taylor
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the European Economic Community Foreign Ministers Council meeting on 29 June.

  Mrs. Chalker
  I refer my hon. Friend to the statement given today by my right hon. Friend the Prime Minister.

  Soviet Union
  Mr. Beith
  asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet his counterpart from the USSR to discuss Anglo-Soviet relations.

  Mr. Mellor
  Mr. Shevardnadze has invited my right hon. and learned Friend to visit the Soviet Union. He hopes to take up the invitation later this year when, of course, Anglo-Soviet relations would be discussed. He may also meet Mr. Shevardnadze at the United Nations General Assembly in New York in the autumn.

  Southern Africa
  Mr. Tony Lloyd
  asked the Secretary of State for Foreign and Commonwealth Affairs what are the objectives of Her Majesty's Government's policy towards southern Africa.

  Mr. Robert Hughes
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the policy of Her Majesty's Government towards southern Africa.

  Mrs. Chalker
  Our policy towards Southern Africa was set out in the most Gracious Speech from the Throne to both Houses of Parliament and elaborated in my right hon. and learned Friend's speech in the foreign affairs debate on 26 June.

  UNESCO
  Mr. William
  Powell asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about British representation at UNESCO.

  Mr. Eggar
  Our observer section in Paris continues to monitor developments. There is as yet no clear indication of the fundamental and far-reaching reforms which are necessary if UNESCO is to work effectively in the spirit which inspired its foundation.

  Venice Summit
  Mr. Patrick
  Thompson asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the Venice summit.

  Sir Geoffrey Howe
  I accompanied my right hon. Friends the Prime Minister and the Chancellor of the Exchequer to the economic summit held in Venice from 8 to 10 June. Copies of the statements issued at the summit have been placed in the Library of the House.

  This was the ninth summit I have attended, and was a very businesslike and successful meeting. It dealt with seven principal issues: economic policy, trade and protectionism, agriculture, developing countries and debt, East-West relations, terrorism and Iran-Iraq.

  On economic policy, we acknowledged the positive developments over the past year. Growth has continued into its fifth year, inflation continues to fall, interest rates are generally declining, and exchange rates have reached more appropriate levels. But we recognised that the world economy still faced a number of challenges: large external imbalances, continued high unemployment, large public sector deficits, and interest rates that are still too high in real terms. We welcomed the clear undertakings by both surplus and deficit countries to reduce imbalances and the agreement recorded in the economic declaration on strengthened arrangements for multilateral surveillance and greater co-ordination of our economic policies to strengthen the world economy. We also agreed to continue to co-operate closely to foster stability of exchange rates.

  We noted with concern rising protectionist pressures, and reaffirmed our commitment to maintaining and strengthening the multilateral open trading system through the Uruguay round of the GATT. We agreed to table a wide range of substantive proposals in Geneva over the coming months. Progress in the Uruguay round will be kept under close political review. We regarded a strong credible GATT as essential to the well-being of all trading nations, and the best defence against mounting protectionist pressures.

  Building on the agreements reached at Tokyo last year and in particular at the OECD ministerial in May, we gave a clear commitment to work together to adjust agricultural policies in the light of world demand, both at home and trhough comprehensive negotiations in the Uruguay round. We also agreed to refrain in the meantime from actions which would worsen the negotiating climate and damage trade relations.

  The amount of time that we devoted to discussing the problems of developing countries, in particular debt, reflects the importance that we and all summit countries attach to the economic progress and stability of those countries. While underlining the continuing appropriateness of the case by case strategy, with its central roles for the IMF and World Bank, we recognised that the problems of sub-Saharan Africa were unique and deserved special treatment. The Chancellor's initiative for granting debt relief to those of the poorest developing countries undertaking adjustment efforts was given broad support, and we welcomed the proposal by the managing director of the IMF to increase substantially the resources of the structural adjustment facility, which lends on very concessional terms to the poorest countries.

  Statements were made on various political issues.

  On East-West relations, we reaffirmed our commitment to peace and security at lower levels of arms, noting with
  110
  satisfaction that the dialogue on arms control had intensified. We sought to encourage political solutions to regional conflicts, to secure improvements in human rights and to build confidence and trust between governments and peoples.

  Building on the initiative we launched at Bonn in 1985, we issued a strong statement on terrorism, reiterating our belief that, whatever its motives, it had no justification. We welcomed the progress made in international co-operation against terrorism, and in particular the initiative taken by France and Germany to convene a ministerial meeting earlier this year.

  We also urged the earliest possible negotiated end to the war between Iran and Iraq, both of whom have suffered grievously from this long and tragic conflict.

  I should like to pay a warm tribute to the skilful and effective chairmanship of the Italian President of. the Council of Ministers, Signor Fanfani, and to the Italian Government for their excellent arrangements.

  The United Kingdom played its full part in achieving a successful summit which has further strengthened our countries' determination to work closely together for the common good.

  African National Congress
  Mr. Hunter
  asked the Secretary of State for Foreign and Commonwealth Affairs what dialogue he has established with black South African politicians and spokesmen other than representatives of the African National Congress.

  Mrs. Chalker
  We maintain contact with a wide cross section of black South African opinion.

  Israel
  Mr. Janner
  asked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with relations between the United Kingdom and Israel.

  Mr. Mellor
  Yes.

  Mr. Latham
  asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the recent visit to London by the Foreign Minister of Israel, Mr. Shimon Peres.

  Mr. Alton
  asked the Secretay of State for Foreign and Commonwealth Affairs if he will make a statement on his recent meeting with the Israeli Foreign Minister, Mr. Shimon Peres.

  Mr. Mellor
  My right hon. Friend the Prime Minister and my right hon. and Learned Friend had useful discussions with Mr. Peres about keeping up the momentum towards peace, including the prospects for an international conference.

  BBC External Services
  Mr. Doran
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will increase the grant to the British Broadcasting Corporation external services to enable the BBC to restart a regular service for the Caribbean; and if he will make a statement.

  Mr. Eggar
  British Broadcasting Corporation external service programmes are widely rebroadcast by local radio stations in the Caribbean: priorities for external broadcasting by the BBC are reviewed regularly.

  NATO (Arms Control)
  Mr. Thorne
  asked the Secretary of State for Foreign and Commonwealth Affairs what action the recent meeting of the North Atlantic Council took to reinforce North Atlantic Treaty Organisation's united position on arms control negotiations.

  Sir Geoffrey Howe
  As I told the House on 26 June, the conclusions reached at the meeting of the North Atlantic Council in Reykjavik were a notable fulfilment of our efforts to promote a real improvement in East-West relations. The United Kingdom was one of the main architects of the agreement reached at Reykjavik on the double zero option on intermediate nuclear forces. We have also played a central role in preparations within the Alliance for negotiations on achieving a better conventional balance. The Reykjavik communiqué confirmed the Alliance's arms control policies that were set out last December. A copy of the communiqué has been placed in the Library of the House.

  Grenada
  Mr. Graham Allan
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's relations with Grenada.

  Mr. Eggar
  We enjoy close and friendly relations with Grenada.

  United States (Court Judgment)
  Mr. Nigel Griffiths
  asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of the United States of America about the implications for the prospect of a settlement in central America of its non-compliance with the judgments given on 27 June 1986 in the International Court of Justice on complaints brought by Nicaragua.

  Mr. Eggar
  We regularly discuss important issues, including the situation in Central America, with the United States Administration and they are well aware of our views.

  Saudi Arabia
  Mr. Colin Shepherd
  asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to visit Saudi Arabia.

  Mr. Mellor
  My right hon. and learned Friend has no plans at present to visit Saudi Arabia which he last visited in January 1986. Since then he has twice met the Saudi Arabian Foreign Minister, most recently when he accompanied King Fahd to Britain on the occasion of the state visit. There are regular exchanges of high level visitors between the United Kingdom and Saudi Arabia, which reflects the excellent state of our relations. I am myself hoping to visit Saudi Arabia later this year.

  Falkland Islands
  Mr. Sean Hughes
  asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to pay an official visit to the Falkland Islands.

  Mr. Eggar
  My right hon. and learned Friend has no current plans to visit the Falkland Islands.

  Malta
  Mr. Mills
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Malta.

  Mrs. Chalker
  Relations are excellent. Following Dr. Fenech Adami's Nationalist party victory at the 9 May elections, we look forward to a further strengthening of the traditional friendship that exists between our two countries.

  USA
  Sir Geoffrey Johnson Smith
  asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to pay an official visit to the United States of America.

  Mr. Eggar
  My right hon. and learned Friend has no firm plans at this stage, but would expect to visit the United States of America in due course as part of his regular series of meetings with Mr. Shultz.

  Cultural Relations
  Mr. Dykes
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's policy on cultural relations with other countries.

  Mr. Eggar
  Cultural diplomacy is a valuable part of our continuing promotion of British interests and values worldwide: our policy was set out in some detail in a memorandum to the Select Committee on Foreign Affairs, a copy of which is in the Library of the House.

  European Community
  Mr. Skinner
  asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet other European Economic Community Ministers regarding the future of the European Economic Community; and if he will make a statement.

  Mrs. Chalker
  I shall meet other EC Foreign Ministers at the Foreign Affairs Council in Brussels on 20–21 July.

  London-Frankfurt Bus Service
  Mr. Teddy Taylor
  asked the Secretary of State for Foreign and Commonwealth Affairs what response he has received to the reference by Her Majesty's Government to the Commission under article 14 of regulation EC 517/72 of the refusal by the German Government to authorise a British bus company to run a scheduled service between London and Frankfurt; when the reference was made; and if he will make a statement.

  Mrs. Chalker
  We referred this case to the Commission for a decision, as provided for under article 14 of regulation EC 517/72, on 4 May. I raised it with Mr. Clinton Davis, the Commissioner responsible, on 23 June and stressed the need for an early resolution. The Commission has now convened a meeting of representatives of the three Governments concerned—Germany, Belgium and the United Kingdom — to consider the issues involved.

  Bermuda
  Mr. John Mark Taylor
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations between Her Majesty's Government and Bermuda.

  Mr. Eggar
  Relations are excellent.

  Mr. Terry Waite
  Mr. Winnick
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement regarding the position of Mr. Terry Waite.

  Mr. Mellor
  Although there have been many conflicting rumours about Terry Waite's whereabouts since his disappearance on 20 January, we still have no firm leads or hard information.

  We are doing all we reasonably can to try to discover his whereabouts, as well as the fate of other British citizens held in Lebanon.

DEFENCE

  Exercise Purple Warrior
  Ms. Ruddock asked the Secretary of State for Defence (1) what will be the dates of Exercise Purple Warrior; what is the purpose of Exercise Purple Warrior; and which units of Her Majesty's armed forces will be taking part in Exercise Purple Warrior;
  (2)whether Exercise Purple Warrior will involve units of the Territorial Army and the Home Defence Force;
  (3)whether the use of ground defence areas will be simulated during Exercise Purple Warrior;
  (4)whether Exercise Purple Warrior is a North Atlantic Treaty Organisation exercise; and if he will make a statement
  (5)whether any local authorities or civil organisations will be participating in Exercise Purple Warrior;
  (6)whether the scenario for Exercise Purple Warrior will be made public; and if he will make a statement.
  Mr. Ian Stewart
  Exercise Purple Warrior is a national, tri-Service exercise planned to take place in south-west Scotland between 4 and 19 November. Although, for reasons of economy, the exercise will be held in the United Kingdom, it is not a home defence exercise and so will not involve forces in that role nor units of the Territorial Army nor will it simulate the use of ground defence areas. Local authorities and other civil organisations will not be taking part in it.

  The aim of the exercise will be to develop our concept for joint operations outside the NATO area to protect British interests. Details of the scenario remain classified but the exercise will involve the amphibious landing in Western Galloway, Arran and Kintyre of 3 Commando Brigade and 5 Airborne Brigade, to be supported by an airborne assault by a Parachute Battalion Group. Some 39 vessels led by HMS Ark Royal and HMS Illustrious and approximately 30 RAF aircraft will be taking part. Altogether some 20,000 men will be involved in the exercise, of which some 10,000 will take part ashore.

  Every effort will be made to minimise any inconvenience to the public and to the environment and full consultations have been held with the regional and district councils for the area, the local polce forces and with
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  national governmental and environmental bodies, including the Nature Conservancy Council and the Forestry Commission. Private landowners and local community, environmental and fishing groups are also being consulted closely.

  Exercise Purple Warrior will be an observable exercise under the Stockholm agreement: invitations to send observers will be issued to all states participating in the Conference on Security and Co-operation in Europe

  Cruise Dispersal Exercises
  Ms. Ruddock
  asked the Secretary of State for Defence when he expects cruise dispersal exercises to begin at Molesworth; and whether he will consider halting them whilst the INF talks are going on.

  Mr. Ian Stewart
  It is not the practice to give details of training exercises conducted by nuclear missile units.

  We have no plans at present to alter existing arrangements relating to the deployment of cruise missiles in the United Kingdom. The NATO countries concerned, including the United Kingdom, have made it clear that in the absence of a concrete INF arms control agreement with the Soviet Union, they will continue the deployment of LRINF missiles as scheduled. It is NATO's firm determination over the deployment of cruise and Pershing which has brought the INF talks to their present hopeful stage.

  Thorn-EMI Factory, Bulwell
  Mr. Allen
  asked the Secretary of State for Defence if he will make a statement on the reasons for and the effects upon the United Kingdom's defence of the closure of the Thorn-EMI factory in Bulwell, Nottingham, a principal supplier of nerve gas detection equipment to his Department.

  Mr. Sainsbury
  I will answer shortly.

  Trident
  Mr. Allen
  asked the Secretary of State for Defence what costs, at 1987 prices, would be incurred at each stage, if the United Kingdom withdrew from its contractual commitments with the United States of America on (a) the Trident submarines and (b) the nuclear weaponry to be carried by Trident.

  Mr. Sainsbury
  Her Majesty's Government remain firmly committed to the United Kingdom Trident project, and have no plans to withdraw from any of their related contractual commitments, either in the United States of America or elsewhere.

  Mr. Allen
  asked the Secretary of State for Defence what is the latest estimated cost, at 1987 prices, of the Trident programme; and how this compares with the first estimate given to the House.

  Mr. Sainsbury
  As announced by my right hon. Friend the Secretary of State on 27 January this year, the current estimate for Trident is £9·265 million, at 1986–87 prices and £= $1·50. This represents a real reduction of some £738 million compared with the original 1982 estimate, over and above the savings resulting from the decision to process missiles in the United States.
  115
  Mr. Allen
  asked the Secretary of State for Defence by which date he anticipates the Trident submarine will be armed and on patrol.

  Mr. Sainsbury
  As has been stated on a number of occasions previously, Trident is planned to enter service in the mid-1990s.

SOCIAL SERVICES

  Elderly Persons (Mortality Statistics)
  Mr. Andrew Bowden
  asked the Secretary of State for Social Services if he will state the total number of deaths among those aged (a) 60 to 69 years, (b) 70 to 79 years and (c) 80 years and over for each complete six-month period from 1 April 1977 to 31 March 1987, for England and Wales.

  Mrs. Currie
  The available information is shown in the table.

  Data for the period 1 January to 31 March 1987 have not yet been processed.

  Number of deaths registered in six month periods from 1 April 1977, persons aged 60–69, 70–79 and 80 and over years, England and Wales

  Period

  Age-group in years

  60–69

  70–79

  80 and over

  1 April 1977–30 September 1977

  56,243

  87,194

  83,608

  1 October 1977–31 March 1978

  62,822

  101,675

  100,466

  1 April 1978–30 September 1978

  54,448

  87,894

  82,065

  1 October 1978–31 March 1979

  61,382

  104,655

  103,526

  1 April 1979–30 September 1979

  52,658

  88,841

  83,997

  1 October 1979–31 March 1980

  58,348

  101,304

  100,062

  1 April 1980–30 September 1980

  52,526

  88,774

  85,433

  1 October 1980–31 March 1981

  57,706

  101,403

  104,203

  1 April 1981–30 September 1981

  51,003

  87,722

  86,298

  1 October 1981–31 March 1982

  57,808

  104,422

  110,338

  1 April 1982–30 September 1982

  51,151

  88,023

  88,605

  1 October 1982–31 March 1983

  57,482

  103,202

  110,941

  1 April 1983–30 September 1983

  50,765

  88,331

  90,264

  1 October 1983–31 March 1984

  54,512

  98,956

  106,859

  1 April 1984–30 September 1984

  49,190

  87,007

  91,720

  1 October 1984–31 March 1985

  55,657

  102,670

  117,664

  1 April 1985–30 September 1985

  48,927

  88,249

  96,511

  1 October 1985–31 March 1986

  54,149

  102,276

  121,568

  1 April 1986–30 September 1986

  49,216

  87,831

  96,419

  1 October 1986–31 March 1987

  not available

  Trade Unions (Nursing Homes)
  Mr. Rowe
  asked the Secretary of State for Social Services how many nursing homes in England and Wales are owned or managed by trade unions affiliated to the Trades Union Congress; how many beds are contained in them; and how many patients received treatment in them in the last year for which figures are available.

  Mrs. Currie
  Registration and inspection of nursing homes and hospitals in the independent sector is statutorily delegated to district health authorities. I regret that this information is not collected centrally.

  Immunisation Programme
  Mr. Alfred Morris
  asked the Secretary of State for Social Services what is his policy towards the provision by nurses of pre-school immunisation services.
  116
  Mrs. Currie
  Vaccines can be administered by a nurse on the direction of a doctor if the nurse is authorised to do so by her employing authority. Local policy on this matter is for health authorities to determine.

  Mr. Alfred Morris
  asked the Secretary of State for Social Services what is his policy towards pre-school immunisation programmes in the light of the survey of pre-school immunisation programmes in England and Wales carried out by the public health laboratory service communicable disease surveillance centre on behalf of the disabilities study unit, a copy of which has been forwarded to him.

  Mrs. Currie
  The Department has just received a copy, which will be studied with care. We understand a summary was submitted to the last meeting of the joint committee on vaccination and immunisation, which advises Ministers on immunisation matters.

  Mr. Alfred Morris
  asked the Secretary of State for Social Services if he will make it his policy that all district health authorities should appoint a single person with direct responsibility for the immunisation programme.

  Mrs. Currie
  Health authorities were asked to do this in a circular (HN(85)19/HN(FP)(85)21) sent in August 1985 and reminded about the need to do so in a CMO/CNO letter (CMO(86)13/CNO(86)12) last year. I have arranged for copies to be placed in the Library.

  Mr. Alfred Morris
  asked the Secretary of State for Social Services if he will make it his policy to establish a formal training programme for immunisation in every district to target all service providers, including general practitioners.

  Mrs. Currie
  Effective training of revelant National Health Service staff and general practitioners in immunisation is clearly very important. Central Government, health authorities, the health professions and the training bodies all have a part to play.

  Handicapped Children (Calderdale)
  Mrs. Mahon
  asked the Secretary of State for Social Services why vital treatment for children living in Calderdale, suffering from cerebal palsy and other handicaps, has been cut.

  Mrs. Currie
  We understand that because of recuitment difficulties, in particular several vacancies occuring at the same time, and the planned absence of a member of staff on a training course, Calderdale health authority has recently been unable to offer its usual community physiotherapy service to children with physical disabilities. We are assured, however, that the health authority believes the problem to be a temporary one and is confident that the situation will shortly improve. Meanwhile, steps have been taken to provide the service in alternative ways to suit the patients and their families.

  If the hon. Member would like to contact the chairman of Calderdale health authority, I am sure he would be happy to discuss with her the action being taken to overcome the current problems.

  Conductive Education
  Mrs. Mahon
  asked the Secretary of State for Social Services what plans he has to introduce conductive education, similar to that available in Hungary, for all children who need it.

  Mrs. Currie
  It has not been clearly established that the system of conductive education practised at the Peto institute in Hungary would be appropriate in the United Kingdom. However, the Government are aware of the current interest in conductive eduction in this country, and the Department of Health and Social Security and the Department of Education and Science are jointly funding a survey by the Spastics Society into the extent to which some aspects of the system are being used in the United Kingdom. An application has been received from Birmingham university for assistance towards the cost of a four-year evaluation of the conductive education project being established in Birmingham by the National Foundation for Conductive Education, and this is being considered by both Departments.

  Human Embryo Experiments (Legislation)
  Mr. Nicholas Winterton
  asked the Secretary of State for Social Services when he intends to introduce the promised legislation on human embryo experimentation.

  Mr. Newton
  I refer my hon. Friend to the reply to my hon. Friend the Member for Exeter (Mr. Hannam) on 30 June, at columns 80–81.

  Abortions
  Mr. Nicholas Winterton
  asked the Secretary of State for Social Services what is the total number of abortions which have so far been performed under the Abortion Act 1967; if he will indicate the total number of abortions performed under this Act in emergency to save the life of the mother; and if he will express the latter figure as a percentage of the former.

  Mr. Newton
  The total number of notifications of abortions to resident and non-resident women, carried out under the Abortion Act 1967, from 27 April 1968 to 31 December 1986 in England and Wales is 2,632,414. Of these, 123 were performed in emergency in order to save the life of the pregnant woman, which represents 0·005 per cent. of all abortions.

  Provisional figures for abortions in the March quarter 1987 are due to be published in September 1987.

  Christmas Bonus
  Mr. Allen
  asked the Secretary of State for Social Services what is the present value in real terms of the first £10 Christmas bonus to pensioners paid in 1972.

  Mr. Portillo
  £44·29 at December 1986 prices.

  Community Charge
  Mr. Winnick
  asked the Secretary of State for Social Services what studies have been undertaken in his Department regarding the effect of the proposed community charge on those with low incomes.

  Mr. Scott
  Illustrations of the relationship of the community charge to different household income bands 118
  were provided in the Green Paper "Paying for Local Government" (Cmnd. 9714). Officials from this Department assisted in the preparation of those illustrations.

  Income Support Scheme
  Mr. Heathcoat-Amory
  asked the Secretary of State for Social Services when he proposes to lay regulations for the 1988 income support scheme.

  Mr. Scott
  The regulations to implement the income support scheme next April will be laid before Parliament when final decisions have been taken on the benefit rates in the autumn.

  I am today placing in the Library copies of two sets of draft regulations; the Income Support (General) Regulations, and the Income Support (Transitional) Regulations. These set out the rules the Government intend will operate from next April. They are being made available in draft to assist preparations for the implementation of income support.

  The draft Income Support (General) Regulations set out the intended rules on conditions of entitlement, treatment of resources and the structure of applicable amounts of benefit payable to particular groups of claimants. They replace four complete sets of regulations and parts of others in the current supplementary benefit scheme. The rates of benefit included in the draft regulations are illustrative only. They are mainly those used in the technical annex to the White paper "Reform of Social Security" (Cmnd. 9691) published in December 1985. The illustrative rates do not take account of the Government's decision to compensate claimants for the average value of the minimum contribution to domestic rates they will be expected to meet from April 1988. This will be included in the final rates.

  Consistent with the objective of a common approach to the income-related benefits, many of the provisions mirror those in the draft Housing Benefit Regulations issued to local authorities in May and also placed in the Library. Discussions have continued with the disability organisations on detailed aspects of the treatment of disabled people.

  The draft Income Support (Transitional) Regulations provide for the changeover to the new scheme. As well as a number of mainly technical administrative matters, they provide transitional protection for claimants continuing to satisfy the conditions of entitlement who would otherwise face a reduction in support at the time of change. Normally, this will be based on a comparison between their benefit income in the week before the change (enhanced for householders by the average value of the domestic rates contribution) and their benefit entitlement after the change. Claimants without a permanent address will transfer immediately to the appropriate age-related personal allowance. There will be further transitional protection for claimants receiving large amounts by way of the domestic assistance addition. The benefit of recipients of housing benefit supplement will be reassessed in the same way as other standard housing benefit cases.

  These two draft sets of regulations will be complemented by further regulations covering claims and payments for social security benefit generally. These regulations will contain changes in the way that benefit is paid to income support recipients. From April, claimants under pension

  119
  age will normally be paid for the same period in arrears as applies in the national insurance benefits that income support will supplement or replace. Arrangements in the transitional regulations will ensure that existing claimants will continue to receive benefit without any change in the intervals between payments.

  Family Credit Scheme
  Mr. Allan Stewart
  asked the Secretary of State for Social Services when he proposes to lay regulations for the 1988 family credit scheme.

  Mr. Scott
  The regulations to implement the family credit scheme next April will be laid before Parliament when final decisions have been taken on the relevant rates in the autumn.

  I am today placing in the Library copies of two sets of draft regulations: the Family Credit (General) Regulations and the Family Credit (Transitional) Regulations. These set out the rules the Government intend will operate from next April. They are being made available in draft to assist preparations for the implementation of family credit.

  The draft Family Credit (General) Regulations set out the intended detailed rules on the qualifying conditions, the treatment of resources, and the relevant amounts, etc. to be used in the calculation of entitlement to family credit. The amounts shown are illustrative only: they are those used in the technical annex to the White Paper "Reform of Social Security" (Cmnd. 9691) published in December 1985. The final amounts will not be decided until the autumn when the general uprating of social security benefit is announced. Consistent with the objective of a common approach in the new income-related benefits, many of the provisions mirror those in the draft Income Support (General) Regulations, and in the Housing Benefit Regulations issued to local authorities in May, both of which have also been placed in the Library.

  The draft Family Credit (Transitional) Regulations provide for the changeover from family income supplement to the new scheme. They provide for existing FIS recipients who are not excluded under the new capital rules to receive family credit, calculated on the earnings and other circumstances at the time of the claim for FIS, and for the award to last for the remainder of the period for which FIS would have been payable but for the introduction of the new scheme, that is up to 51 weeks. They also provide transitional protection for such claimants in the event that the amount of their family credit entitlement is less than the total of the FIS they were receiving before the changeover, plus an additional amount for each child reflecting the fact that FIS families were also entitled to free school meals and free welfare milk.

  These draft Family Credit Regulations will be complemented in due course by regulations covering the rules on claims and payments for social security benefits generally. These regulations will provide that in two-parent families family credit should normally be claimed by, and paid to, the mother. It is also intended to provide that, in line with income support, family credit will be paid weekly in arrears. The transitional regulations will provide that there will be no break in weekly payments for existing recipients of FIS in the transition to family credit.

  Disabled Drivers (Cash Allowances)
  Mr. McLoughlin
  asked the Secretary of State for Social Services what plans he has to encourage disabled drivers of cars and three-wheelers loaned under Departmental vehicle schemes to switch to one of the cash allowances; and if he will make a statement.

  Mr. Scott
  I am anxious that disabled drivers who still have departmental vehicles should appreciate the advantages of choice and ownership they would enjoy if they switched to one of the cash mobility allowances and used it to obtain a car. I am grateful to the disabled drivers' organisations which have expressed willingness to give independent advice to those considering making this switch.

  Drivers transferring to the mobility allowance or the war pensioners' mobility supplement are able to use it to obtain cars privately or through Motability. Drivers of invalid three-wheelers who wish to buy departmental cars will be able to do so if surplus cars are available. War pensioner drivers of Departmental cars have been able to buy them for a lump sum at preferential prices since November 1983, and I now intend to enxtend this arrangement to civilian drivers of departmental vehicles. To encourage the remaining drivers in both groups to switch to the appropriate allowance a scheme of extended payments is to be introduced. A purchaser of a departmental car will be able to buy it by foregoing all or part of the allowance until it is paid for.

  The Department will meet certain costs in connection with the adaptation of cars for civilian drivers of Departmental vehicles who switch to the mobility allowance on or after 1 July 1987 and obtain a car through Motability. This parallels provisions which already apply to war pensioners.

  Any drivers who switch to the mobility allowance and then find they are unable to pass a driving test will be able to revert to a three-wheeler. Repairs of remaining three wheelers will be arranged through the Disablement Service Authority, acting as the agent of DHSS.

  No replacement cars will be supplied to civilian drivers after March 1989, thus bringing them into line with war pensioners, whose loan cars have not been replaced since 1983.

  Ambulance Service (London)
  Mr. Spearing
  asked the Secretary of State for Social Services if he will make a statement concerning the recent disruption to emergency ambulance services in east London and the reasons for reductions in non-emergency ambulance services in the Greater London area.

  Mrs. Currie
  [pursuant to her reply, 30 June 1987, c. 76]: We are not aware of any disruption to emergency ambulance services in east London. We also understand that the London Ambulance Service is meeting all non-emergency ambulance demands that it receives.

AGRICULTURE, FISHERIES AND FOOD

  EC Payments
  Mr. Teddy Taylor
  asked the Minister of Agriculture, Fisheries and Food if he will seek clarification from the European Economic Community Commission on whether the 19 million lire paid by the Italian authorities to

  121
  organisations linked to the Mafia organisation, for the alleged delivery of non-existent fruit juice to bodies including North Atlantic Treaty Organisation headquarters in Sicily, qualified for reimbursement by the European Economic Community; and if he will make a statement.

  Mr. MacGregor
  I shall reply to my hon. Friend as soon as possible.

  Mr. Teddy Taylor
  or asked the Minister of Agriculture, Fisheries and Food what estimate he has made of the additional sums which will be spent by his Department in the current year in making payment for, or advancing money subject to payment in the future by the European Economic Community, for policies previously funded directly by the European Economic Community; and if he will make a statement.

  Mr. MacGregor
  The Commission has estimated that the 1987 budget for the EAGGF guarantee section falls short of requirements by some 4·1 billion ecu (£2·9 billion). No decision has yet been taken on how the budget shortfall should be dealt with. If it were decided that guarantee payments should be funded nationally once the budget was exhausted, additional provision would be needed for the Intervention Board for Agricultural Produce to make up the shortfall in EC receipts. The amount concerned cannot be estimated with any accuracy at this stage.

  Intervention Stocks
  Mr. Teddy Taylor
  asked the Minister of Agriculture, Fisheries and Food if he will publish a table showing the various amounts of particular foodstuffs held in private and public intervention stocks within the European Economic Community; and if he will also publish the comparable totals for each commodity at the same time in each of the previous five years.

  Mr. MacGregor
  I shall reply to my hon. Friend as soon as possible.

  EC (Food and Wine Exports)
  Mr. Teddy Taylor
  asked the Minister of Agriculture, Fisheries and Food if he will publish a table showing the amount of food and wine exported by the European Economic Community to the Soviet Union and East Europe, respectively, in the most recent annual period for which figures are available.
  122
  Mr. MacGregor
  The information relating to 1986 is set out in the table.

  European Community exports to the Soviet Union and the eastern bloc 1986

  '000 tonnes

  To Soviet

  To eastern

  Union

  bloc1

  Wheat

  4,990

  623

  Barley

  1,510

  811

  Wheat flour

  2—

  8

  Rice

  2—

  7

  Malt

  0

  2—

  Whole milk powder

  10

  5

  Skimmed milk powder

  0

  1

  Condensed milk

  2—

  2—

  Butter (including butteroil)

  105

  18

  Beef and veal

  141

  70

  Pigmeat

  2—

  1

  Poultrymeat

  23

  2—

  Raw sugar (converted to white equivalent)

  7

  2—

  Refined sugar

  2—

  2—

  Olive oil

  12

  2—

  Wine

  4

  130

  1 German Democratic Republic, Czechoslovakia, Hungary, Poland, Romania, Bulgaria, Albania.

  2 Denotes trade under 500 tonnes.

  Source: EUROSTAT.

  Common Agricultural Policy
  Mr. Teddy Taylor
  asked the Minister of Agriculture, Fisheries and Food if he will publish a table showing the estimated spending on the common agricultural policy in 1987 and in each of the previous four years.

  Mr. MacGregor
  The information requested is as follows :

  Year

  CAP expenditure (mecu)

  1983

  16,637

  1984

  19,093

  1985

  20,549

  1986

  23,104

  11987

  24,174

  1 Budget provision.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Newcastle
His Royal Highness the Duke of Kent His Royal Highness the Duke of Kent—Took the Oath.
Several Lords Several Lords—Took the Oath or Affirmed.

Prime Minister's "Panorama" Interview
2.42 p.m.
Lord Hatch of Lusby: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to take any legal action against the Prime Minister on the ground that she encouraged the Chiefs of Staff to resign in the event of the Labour Party winning the general election.
The Lord Chancellor (Lord Havers): My Lords, I assume the noble Lord's Question refers to an interview with the Prime Minister on 8th June 1987 on the BBC television programme "Panorama". Remarks made by the Prime Minister during that interview did not begin to constitute any encouragement to the Chiefs of Staff to resign.
Lord Hatch of Lusby: My Lords, I owe an apology to the noble and learned Lord on the Woolsack. When I asked my first Question last Monday I omitted to welcome him to his new office, and I do so today unreservedly. Perhaps I may also add that many noble Lords and I personally will very much miss his predecessor, the noble and learned Lord, Lord Hailsham of Saint Marylebone, and that we hope that the present Lord Chancellor will possess a similar sense of humour to that to which we have become accustomed over the past few years. The noble and learned Lord said something which concerned some of us, on which we should like enlightenment and that was his comment that he had been briefed on the action and attitude—
Noble Lords: Order!
Lord Hatch of Lusby: My Lords, I ask for comment from the noble and learned Lord that he had been briefed on different Members of this House, which sounds somewhat peculiar—
Noble Lords: Question!
Lord Hatch of Lusby: My Lords, the noble and learned Lord is quite correct in his reference to my Question—
Noble Lords: Order!
Lord Hatch of Lusby: My Lords, I ask whether the noble and learned Lord is aware that the words spoken by the Prime Minister on the occasion to which he refers consisted of these words—I am reading because this is a quotation:
"The chiefs of staff have to make up their own mind—each person is responsible for what he decides".
That is fair. She went on to say:
"I know what I would do. I could not be responsible for the men under me in these circumstances"—
that is, if there were a non-nuclear policy.
"It would not be fair to put them in the field if we did not have nuclear weapons—I know what I would do".
Does the noble and learned Lord recall that during the 1920s Mr. Saklatvala, who was then the Member of Parliament for Battersea North, was tried, convicted and imprisoned for encouraging the Armed Forces to refuse to break a strike?
Noble Lords: Order!
Lord Hatch of Lusby: My Lords, can the noble and learned Lord tell the House—
Noble Lords: Order!
Lord Hatch of Lusby: —what is the difference in principle between the case of Mr. Saklatvala and the case of the Prime Minister in 1987 as regards encouraging the Armed Forces to disobey the orders of the elected government?
The Lord Chancellor: My Lords, I must say that I am grateful to the noble Lord for the kind words that he spoke. So far as concerns my being briefed, I think there would be no predecessor or successor of mine who would not be curious about the people he would be working with, and I was very well briefed. In regard to the noble Lord's last remarks quoting from a "Panorama" interview, I regret very much that the noble Lord left out the vital answer that the Prime Minister gave. He said:
"I know what I would do",
and stopped. The Prime Minister went on:
"But they are free to make their decision."
I regret that that was not made clear.
Lord Nugent of Guildford: My Lords, is my noble and learned friend aware that as a matter of order for the Order Paper this Question would have been a not very welcome one in any circumstances, but it would have been more formally correct if instead of the word "encouraged" there had been the word "invited"?
The Lord Chancellor: My Lords, the noble Lord has perhaps rewritten something that is now part of history. But it was a Question which I must say I regretted had to be asked.
Lord Mellish: My Lords, is the noble and learned Lord aware that yesterday the noble Earl, Lord Longford, a very prominent and devout member of the Labour Party, made a speech in which he said that if the Labour Party's present defence policy

243
continues it will never get office again? Personally I support that. That being so, would it not be a good idea if the noble and learned Lord was good enough to get a copy of that speech made by the noble Earl, Lord Longford, and let the noble Lord, Lord Hatch, have it?
The Lord Chancellor: My Lords, I think that the noble Lord is inviting me to do something which is not within my power. I somehow wish it were.
The Earl of Longford: My Lords, all I would say about that speech, which was quite short and no worse than my usual efforts over 40 years, is that I asserted that the distinctive doctrine of the Labour Party is that everybody is of infinite value in this house of God. That was the point of the speech. The noble Lord seems to have missed that one.
Baroness Nicol: My Lords, will the noble and learned Lord accept that though I regret the way in which this Question has been discussed, nevertheless I think that there is a question to be answered? Is the noble and learned Lord aware that a number of politically uncommitted people were worried by that interview, and by the tone in which the questions were answered? I think we would do well not to dismiss it too lightly.
Lord Hailsham of Saint Marylebone: My Lords, have we not had enough of it?
The Lord Chancellor: My Lords, I assure the noble Baroness that I have nothing but the transcript. I was fortunate enough to be abroad when it was broadcast.
Lord Hatch of Lusby: My Lords, the noble and learned Lord—
Noble Lords: Next question!
Lord Hatch of Lusby: —was unfair to me. Will he accept from me that I deliberately quoted the beginning of that interview where the Prime Minister said:
"The chiefs of staff have to make up their own mind—each person is responsible for what he decides"?
That is exactly the same as the additional quotation which the noble and learned Lord gave. I was perfectly fair in this. But he has not answered my question as to what is the difference in principle between what the Prime Minister did in 1987 and what Mr. Saklatvala did in 1926, for which he was imprisoned.
Is the implication of what the noble and learned Lord is saying that now all those who are opposed to nuclear weapons are entitled to do as the Prime Minister did, and to try to persuade members of the Armed Forces to resign from those forces or to disobey orders if they are ordered to use nuclear weapons? Are we entitled to the same rights as the Prime Minister?
The Lord Chancellor: My Lords, the noble Lord read out an entirely different part of the right honourable lady's answer. What I complained of, and I maintain my complaint, is that he then said:
"I know what I would do",
but forgot to continue:
"But they are free to make their decision'",
which was in—
Lord Hatch of Lusby: My Lords—
The Lord Chancellor: My Lords, will the noble Lord forgive me and not interrupt me? That was in an entirely different part of her long answer. So far as concerns any comparison, I doubt whether the noble Lord's view is shared by anybody in this noble Chamber.
Lord Hatch of Lusby: My Lords—
Noble Lords: Order! Give way.
The Lord President of the Council (Viscount Whitelaw): My Lords, I am sorry. I do not think that the noble Lord saw me rise. I know that it is difficult not to see me sometimes, but I do not think that he saw me on this occasion. I hope that he will realise that he is testing the feelings of the House a very long way and that on the whole he has had a very good run. Many of us disapprove deeply of what he has tried to do but we have been at our most patient. I hope that he will realise that and will not proceed further with his question.
Lord Hatch of Lusby: My Lords, I accept what the noble Viscount says, but all I was doing was to point out that my second question had not been answered.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord for accepting and understanding what I said to him. I hope that he will not put any further glosses on that understanding.

Servicemen: Pension Anomalies
2.53 p.m.
Lord Chelwood: My Lords, I had almost forgotten that this was Question Time. I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will carry out and publish a thorough review of the system of pensions for retired servicemen and their widows to enable any disparities and anomalies that are found to he eliminated.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, while the Government have no plans for a formal review, my noble friend may be assured that Ministers keep these matters under regular study, not least in response to approaches from the representative bodies concerned.
Lord Chelwood: My Lords, is it not a serious anomaly that the longest retired, who are often the most needy, have the smallest pensions, or, for example, that all our major NATO allies treat their Armed Forces' widows more generously than we do, with pensions unrestricted either by the date of marriage or the date of their husband's retirement? Are not these powerful arguments for a full review. Will the Government consider such a review?
Lord Trefgarne: My Lords, I cannot deny that there are some anomalies in the pension scheme to which my noble friend refers. The fact remains, however, that the cost of correcting all those anomalies—and such correction could not be confined to the Armed Forces' pension scheme—would be very considerable. If it were necessary to make such correction retrospective, as I believe my noble friend has in mind, I do not believe that we would ever make any improvements at all to those schemes.
Lord Strabolgi: My Lords, in view of what is a very considerable need can the noble Lord give the House some figures?
Lord Trefgarne: My Lords, it depends to which anomalies the noble Lord is referring, but if we were to take all the ones currently under discussion the cost would be several hundred million pounds.
Lord Molloy: My Lords, the Minister said that there were representations from associations. Can he tell the House whether that includes the Royal British Legion? When did he last receive representations on this vital issue from the British Legion? Would he be prepared to see a delegation at national level of the British Legion?
Lord Trefgarne: My Lords, the Officers Pension Society is the principal body which makes representations on these matters. The society was quite recently received by my honourable friend the Under-Secretary for the Armed Forces. I know that he is in constant touch with the Royal British Legion on this and other matters, but I am certain that he would be willing to receive a further delegation if it wished to bring one.
The Earl of Onslow: My Lords, is it not an unfortunate admission to make that the anomalies are costing several hundred million pounds? That surely means that there is several hundred million pounds worth of injustice going around?
Lord Trefgarne: My Lords, there is no injustice, because everyone under the scheme receives what they are entitled to receive. The difficulty is that if when we make improvements, as we do from time to time, we are to make them retrospective then naturally we should have to take the cost of doing that into account in reaching our decision. The result would be that some of the desirable improvements could not then be made, even for the future.
Lord Graham of Edmonton: My Lords, will the Minister confirm that one of the aggravations stems
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from the 1973 review? Does he agree with me that it is anomalous that a widow of a man who was killed in the Second World War is worse off than the widow of a man who was killed in the Falklands war? I take the Minister's point about the cost of retrospection, but if the House and the country agree that it is unfair, surely the cost, while not secondary, needs to be taken into account? Would the Minister care to tell the House how many people are at a disadvantage, and will he be more precise than saying several hundred million pounds? Surely he has a better figure than that to give to the House.
Lord Trefgarne: My Lords, there are a number of anomalies, as they are called, which are drawn to our attention from time to time, no doubt from a real sense of concern about those matters. Different people of course raise different difficulties. If we were to take all of the difficulties into account,—and some of them are not as serious as others—and put right the apparent grievance retrospectively, the cost would be huge. We could not confine the correction of the anomalies just to the Armed Forces' pension scheme. Clearly similar aspects would have to he corrected, if they existed, in the pension schemes, for example, of the civil servants. Thus the cost would be astronomic—several hundred million pounds. That would be money that we would not in future be able to provide for other most well deserved improvements, and that is why we cannot proceed as the noble Lord would wish.
Baroness Seear: My Lords, will the Minister agree on reflection that he told his noble friend Lord Onslow that he was perfectly correct in saying that it would not be illegal, for example, but that does not mean that the system is not unjust, which was the point made by the noble Earl? It can still be very unjust.
Lord Trefgarne: My Lords, many people draw attention to what they see as the injustice in their particular case. Other people sometimes take a view different from that which one might take about one's own circumstances. We do our best to maintain the position as far as the future is concerned, but to correct some of the anomalies—and they undoubtedly exist—in a retrospective way, which is what we are being asked to do, confronts us with the difficulties to which I have referred.
Lord Avebury: My Lords, will the Minister agree that any fair-minded person would think that it is wrong that the longer ago one retired the worse off one is? If the Minister is saying that the Government or the country cannot afford the up-rating of pensions so as to make them more equal irrespective of the date of retirement, can he not at least do something for the people—who must now be getting extremely old—whose service dates from the First World War? That must be a very small group of people, and up-rating them would cost a comparatively small amount of money.
Lord Trefgarne: My Lords, I am not certain to which group of people the noble Lord refers. As I have explained, the cost of retrospection is very

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considerable. The fact remains that everybody is getting the pension to which he was entitled in accordance with the rules applying on the date of retirement.
Lord Morris: My Lords, in the context of this Question, would it not be worth recalling the parable of the vineyard?
Lord Trefgarne: My Lords, I do my best to keep all such parables in mind.
Lord Graham of Edmonton: My Lords, blessed are the meek! Will the Minister attempt not to use one reason for inaction as a general reason for inaction? The Minister seized upon the cost of retrospection. Retrospection is not the only anomaly. If the House agrees with the Minister that there are other anomalies, then the Question simply asks for a review to examine and iron out, where possible, anomalies that have been revealed. We understand the matter of a limited budget. However, injustice exists and I can assure the House that the British Legion feels very passionately about the anomaly which it drew to my attention—that the widow of a man killed in the Second World War is at a disadvantage compared with the widow of a man killed in the Falklands War.
Lord Trefgarne: My Lords, if I may say so, that is a question of retrospection. What is being asked, in the context of the particular point raised, is that we should apply the improvements which were allowed just prior to the Falklands campaign to those people who were affected by the Second World War. That means retrospection, and that is the difficulty to which I have referred.
Lord Chelwood: My Lords, are the Government willing to look at the worst of these anomalies, and thus make a start in the right direction?
Lord Trefgarne: My Lords, as I said earlier, the Officers Pension Society saw my honourable friend the Under-Secretary of State for the Armed Forces recently, and I understand that he plans to receive it again in the near future.
Lord Molloy: My Lords, does the Minister agree that many of the associations do not regard the matter as a question of retrospection but rather as a question of up-dating?
Lord Trefgarne: My Lords, I dare say there are a variety of ways in which the matter can be described. However, the difficulty is the one to which I have referred.

VAT: New Buildings
3.4 p.m.
Lord Bruce of Donington: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now cause to be placed in the Library a copy of their pleadings in case No. 416/85 brought against them in the European Court of Justice concerning, among other measures, the requirement that the United Kingdom should levy VAT on new building construction.
The Secretary of State for Trade and Industry (Lord Young of Graffham): No, my Lords. As I stated in my replies to Questions from the noble Lord, Lord Stoddart of Swindon, on 6th October 1986 and on 16th October 1986, infraction proceedings are a legal issue and the pleadings are strictly confidential to the parties in dispute.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the registrar of the European Court of Justice has made it quite clear that the parties to the dispute are under no restriction as regards making their own pleadings public? Is the noble Lord further aware that in so far as those pleadings contain a reference to the case of the Commission, the Commission has no objection to their publication? In view of the fact that the imposition of, say, 15 per cent. VAT on all new building would add very significantly to building costs in the United Kingdom, will the noble Lord take steps to ensure that the public is aware of the arguments which the Government have put forward in this connection? What are the Government afraid of?
Lord Young of Graffham: My Lords, as regards disclosure by the parties concerned, there is nothing in the rules of the court regulating the disclosure by them either of their own pleadings or the pleadings of others. However, there is a convention, recognised equally by the Commission and by member states, that the confidentiality of the other party's pleadings is to be respected as being in the best interests of the conduct of cases. The key point is that the Commission's legal agent, who has the responsibility for the conduct of cases before the European Court, has categorically said that the Commission will not consent to the disclosure of the pleadings themselves. Without that authorisation, we are bound to respect the confidentiality of pleadings.
However, a summary of the pleadings is made available by the court about a week before the oral hearing in the report for the hearing itself. The oral hearing is open to the public and it is also normal practice for the pleadings to be summarised by the court when it issues its judgment some months later.
Lord Denning: My Lords, is the Minister aware that at present, under our value added tax as of 1983, some of our goods and services—notably new houses—are zero-rated and are not liable to pay VAT? In these proceedings before the European Court, the European Commission seeks to overrule our statute of 1983 and require the goods and services which I have mentioned and which are presently zero-rated to be liable to VAT.
Is it not desirable that the Members of this House and the people of this country should know what the

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arguments are that are being put before the European Court, so that they can be supplemented, added to and improved, if need be? I do not say that the Government will not put the arguments properly. However, the British taxpayer and all of us ought to know the arguments which are being put before the court.
Lord Young of Graffham: My Lords, I am grateful to the noble and learned Lord. However, I wonder what would have happened if, during his long and distinguished career, any person had attempted to change the rules of the court over which he presided with such distinction. I believe that we are bound by the position we have at the moment. The Question has only to do with the production of pleadings. The case will be fought, and fought vigorously, by the Government.
Lord Wedderburn of Charlton: My Lords, will the noble Lord place in the Library the communication, apart from that with the agent, upon which his argument rests?
Lord Young of Graffham: My Lords, I shall certainly see if I can obtain such a communication.
Lord Broxbourne: My Lords, having regard to what my noble friend has said concerning the confidentiality of pleadings, does he not think that there may be a proper distinction to be drawn between actions involving private parties and actions brought under Article 164 by the Commission against a member state? In view of the absolute obligation imposed on a member state to abide by the decision of the court and to take the necessary remedial measures under Article 171, does the Minister not think that there is great force in what was said, with such authority, by the noble and learned Lord, Lord Denning?
Lord Young of Graffham: My Lords, I am grateful to my noble friend. However, at the moment we are bound by the conventions relating to proceedings before the European Court, and as the Commission's legal agent has stated categorically that the Commission will not consent to disclosure of the pleadings, there is little we can do.
Lord Bruce of Donington: My Lords, I am sure that the noble Lord does not wish to mislead the House. However, is he aware that a disclosure by the United Kingdom of its own pleadings in the case would not be in breach of any rule of the European Court? That was confirmed by the registrar, who said:
"There are no rules as to what the parties say out of court and there are no contempt procedures".
Is the noble Lord further aware that, in contradiction to what he has said concerning the Commission, a Commission representative, Mr. Etienne Reuter, said:
"We have not put pressure on the British Government and they have not put pressure on us"?
He also stated that he had no objection to the publication of the pleadings.
Lord Young of Graffham: My Lords, I said two or three minutes ago, in answering a supplementary question to the Question of the noble Lord, Lord Bruce, that there is nothing in the rules of the court which regulates the disclosure by a party of either its own pleadings or the pleadings of others. However, there is a convention which is recognised equally by the Commission and by member states that the confidentiality of the other party's pleadings is to be respected as being in the best interests of the conduct of cases. I repeat that the key point is that the Commission's legal agent, who has responsibility for the conduct of cases before the European Court, has stated categorically that the Commission will not consent to disclosure of the pleadings.
Lord Bruce of Donington: My Lords, I am sorry to return to the point again; but in the light of the noble Lord's observations, will he cause to be placed in the Library an authenticated copy of the convention to which he has referred?
Lord Young of Graffham: My Lords, I have already said I shall endeavour to do so.

Research Workers: Emigration
3.10 p.m.
Lord Taylor of Blackburn: 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 steps they are taking to combat the migration of key professional research workers to the United States and other countries as stated in the report of the Royal Society published on 30th June 1987.
The Parliamentary Under-Secretary of State, Department of Education and Science (Baroness Hooper): My Lords, we welcome the report which refutes the myth of an exodus of scientific talent from Britain and we believe that the policies which the Government have adopted for higher education will encourage our best scientists to stay in this country. We have agreed a very substantial pay increase for academics with new arrangements for discretion to pay the best more: and our policy of selectivity and concentration will mean that outstanding people will increasingly be able to find the highest quality facilities for their work in the United Kingdom.
Lord Taylor of Blackburn: My Lords, I welcome what the Minister has said concerning the additional salaries for academics in higher education. However, I should like to ask whether she feels and thinks that the Government have gone far enough in this direction, and will such increases stop the brain drain as indicated in the report?
Baroness Hooper: My Lords, we are by no means complacent about this subject. However, the pay award has only recently come into effect—in December 1986. As the Government's policies on selectivity and concentration become increasingly

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effective, more of our outstanding scientists will have access to first rate facilities. The Government believe that those moves will strengthen our whole research effort through the ability to attract and retain good quality staff across a range of disciplines. However, we intend to study the report and see what further lessons can be drawn from it.
Lord Boyd-Carpenter: My Lords, would it not help to restrain the brain drain of high grade scientists and engineers if they did not have to contrast a tax rate of 60 per cent. on their higher earnings in this country with 28 per cent. in the United States?
Baroness Hooper: Yes, my Lords, that is obviously a consideration which the Government keep under review.
Baroness Seear: My Lords, surely the noble Baroness recognises that the brain drain had started long before the change in the tax system to which the noble Lord, Lord Boyd-Carpenter, referred? Therefore, that cannot be the reason.
Baroness Hooper: My Lords, in terms of the fact that the brain drain has been going on for a long time, I can in fact quote the authors of the Royal Society's report in an article in Nature which pointed out that in the 1960s a high emigration rate coincided with what today would be considered a very high rate of real annual growth in Government expenditure on research. The figure of people emigrating in the 1960s was around 35 per cent. as far as concerns new PhDs as opposed to 9 per cent. today.
Lord McIntosh of Haringey: My Lords, I appreciate that the noble Baroness was not in her place at the time yesterday afternoon, but I should like to ask if she has had an opportunity to read the devastating speech made by her noble friend Lord Beloff? The speech attacked the Department of Education and Science proposals for the contract funding of our universities. Will she agree that nothing can be more calculated to spread alarm and despondency among our academic research community than the proposals to which the noble Lord referred?
Baroness Hooper: My Lords, I have had regard to the comments made by my noble friend and we will indeed be following that particular point when a question immediately related to that matter is on the Order Paper.
Lord Nugent of Guildford: My Lords, is my noble friend aware that this is not entirely the responsibility of government? Is she aware that it is also the responsibility of industry and commerce? While fiscal policies generally in this Government are helpful in this direction, can further thought be directed to giving additional incentives to industry and commerce in order to build up their own research facilities? Such additional incentives can make attractive careers for our top grade scientists which we wish to see in this country.
Baroness Hooper: My Lords, the Government are committed to maintaining and enhancing the quality of the science base in any way possible. It is interesting to note that the United Kingdom Government spend more on university and research council research as a proportion of gross domestic product, than some of our competitors, notably Japan and the United States. In those countries industry spends more on research than industry in the United Kingdom. The science budget has increased by 14 per cent., more than general inflation, since 1979. That is not a bad record.
Lord Beswick: My Lords, does the noble Baroness remember that on 19th February this year, her noble friend who sits next to her gave evidence of how well industry was doing in this country and that so many scientists were coming here for jobs? How does she relate that to the criticisms being made?
Baroness Hooper: My Lords, the Royal Society report shows that the emigration figures of scientists and academics are almost equated by the immigration figures of people coming in from other countries.
Lord Beswick: My Lords, would it not have been better if on 19th February the noble Lord had given us not only the truth but the whole truth on the figures?
Baroness Hooper: My Lords, I must say that there has been an enormous myth in this area which has been fanned by a number of perhaps improper questions, even in your Lordships' House. That is why we particularly welcome the results of the report, which actually provide sound facts which were not available before.
Baroness Lockwood: Is the Minister aware that Sir Mark Richmond, the chairman of the Committee of Vice-Chancellors and Principals, in welcoming the report of the Royal Society said that the report also showed that scientists leave because there is no longer any reliable career structure in the academic world? He went on to say that this, combined with the universities' increasing reliance on short-term contracts, drives these talented men and women to countries where their expertise will be more greatly valued. Will she comment on that?
Baroness Hooper: My Lords, I should like to repeat that the Government's intentions concerning the policy of selectivity and concentration of research—when they have had time to bite—will mean that outstanding people will increasingly remain in this country and find opportunities here.
Lord Beloff: My Lords, I think there is general agreement in the universities, in industry, in this House and on the part of the Government that we wish to see science talent retained in this country. Will the Minister accept that what we are complaining about is that the Government seem to take little account of the views of these other bodies as to how this desirable end is to be obtained? If the

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Government were to consult rather more they might get things right.
Baroness Hooper: My Lords, in my very short experience as a departmental Minister in the Department of Education and Science I have to say that the Government seem to be consulting non-stop about everything in sight. I take note of my noble friend's remarks, and I shall draw them to the attention of my honourable friend who is responsible for this particular area.
Lord Taylor of Blackburn: My Lords, in incurring the displeasure of the Government Chief Whip because we are going on a little longer, perhaps I may remind him that the reason we are going on a little longer is because we spent 15 minutes with Members taking the Oath and that has now been taken off Question Time—
Noble Lords: No, no!
Lord Taylor of Blackburn: —which many Back-Banchers value very much indeed. May I thank the Minister? We must remember that the report was published only yesterday, and the Government have not yet had time to study it properly. Perhaps I may ask the Minister when studying the report to take account not only of salaries but also of conditions and all the other matters concerned.
Baroness Hooper: My Lords, yes indeed. In the arrangements that have been made and previously announced, the policies for higher education, it is the all-round picture that is being taken into account and not just pay structure.

Business
3.19 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is being made in another place on the European Council, Brussels.

"Today" Newspaper: Future
3.20 p.m.
Lord Young of Graffham: My Lords, with the permission of your Lordships' House, I should like to make a Statement about the future of the Today newspaper.
Under the Fair Trading Act 1973 my consent is required for all newspaper mergers which concentrate into the hands of one newspaper proprietor newspapers having a paid-for circulation of 500,000 per issue. My consent cannot normally be given without a report from the Monopolies and Mergers Commission. I can, however, give consent without such a report where I am satisfied that the newspaper concerned in the transfer is not economic and a going concern, is to continue as a separate newspaper, and that the case is one of urgency.
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I have received such an application for the transfer of the Today newspaper from Lonrho plc to News International plc. I am satisfied that this application meets the criteria I have outlined, and taking account of all the relevant circumstances it is right for me to give my consent to it. I have accordingly consented to the transfer.
Lord McIntosh of Haringey: My Lords, in thanking the Minister for making that Statement to the House, I must first of all declare a relatively minor interest, in that both Mirror Group Newspapers and BPCC, who were also bidders for the Today newspaper, are clients of mine. I also have to explain on behalf of my noble friend Lord Williams of Elvel that he did not feel able to stand at the Dispatch Box today because he is a director of Mirror Group Newspapers and of Pergamon Press, whereas my interest is relatively minor.
Will the Minister accept that it is the consistent view of Her Majesty's Opposition that this matter ought to have been referred to the Monopolies and Mergers Commission? All such matters should be referred to the Monopolies and Mergers Commission if the intention of the Act is to be complied with. In what circumstances does the Minister think that we can restrict the growing concentration of power in the newspaper industry of this country? Newspapers are nearly all of one political persuasion, and not of our political persuasion. The Act must he enforced and matters such as this must be referred.
The Minister has no doubt taken full account of the legal implications of his decision and I have no doubt that he is legally correct in the Statement. Can he tell the House how we are to preserve the freedom of the press above all from the concentration of power of newspaper magnates unless we stand firm on this principle?
Lord Bonham-Carter: My Lords, I thank the Minister for his Statement on this matter. Perhaps I may ask him whether he really believes it is in the interests of this country that News International, which at present has 40 per cent. of the national daily sales, should acquire control of yet another paper? News International is controlled not by a British citizen but by an American citizen. Does the Minister think that is in the interests of this country in the circumstances?
Is the Minister also aware that the same man also controls a satellite which will have considerable impact on this country? Does he have any evidence to persuade us that handing over this additional paper to News International will raise journalistic standards in this country—the standards of impartiality which noble Lords on the opposite side of this House have been so insistent upon in the past few days for television but which they appear totally to neglect where they affect the press?
Does the Minister consider that the record of News International, at the top end of the market with The Times and at the bottom end of the market with the Sun, has raised journalistic standards in this country? Does he therefore think that this change will be to the advantage of journalism in this country? Does he also believe that yet another devoted supporter of the

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Conservative Party in the national press is in the best interests of political discourse in this country? Does he further think that he should have been asked to make up his mind by four o'clock today?
Lord Young of Graffham: My Lords, I am very grateful to the noble Lord and to the noble Lord, Lord McIntosh. This is of course a matter in which my position is regulated by the Fair Trading Act 1973. I have to be satisfied that the newspaper itself is not economic as a going concern—and I have been so satisfied—that it will continue as a separate newspaper and that the case is one of urgency. The case is not one of urgency just because there was a particular deadline, as the noble Lord, Lord Bonham-Carter, seemed to feel, but because I was satisfied in the circumstances that the newspaper would not have continued in existence if there had been a reference. In those circumstances I took my powers as they exist under the Act and exercised them in favour of the continuance of Today as a newspaper.
Other matters have been raised where noble Lords opposite agree or disagree with the contents of newspapers and with journalistic standards, but those are matters purely for them. They are not matters for me because they are entirely outside my discretion and I believe I have exercised my power correctly.
Lord Ardwick: My Lords, perhaps I ought to declare an interest as a humble pensioner of the Mirror Group. I wonder if the noble Lord is aware that C. P. Scott, the owner-editor of the Manchester Guardian, put it in a nutshell when he said that a newspaper is a business but it is a business unlike any other business. I should like to ask the noble Lord whether this means that a multi-newspaper owner can freely buy any national newspaper provided it is not making a profit and that he can go on indefinitely adding to his quasi-monopoly. I should like also to ask whether in this case any safeguards have been agreed to protect editorial freedom.
Lord Young of Graffham: My Lords, I am very grateful to the noble Lords. I hope your Lordships will appreciate that what I am doing is consenting to an application for a transfer from one newspaper proprietor to another. If I read my morning newspapers correctly, as I have read them over the past few days, it might well have been that yet another name would come up this afternoon. In similar circumstances I suspect I would not have heard quite the same comments as I have heard from noble Lords opposite. That is a matter for them to decide, but we shall have to see.
Within the test of this particular section I have applied the test properly. I am satisfied that the newspaper is not economic as a going concern and I am satisfied that it will continue as a separate newspaper with a separate editor. I am also satisfied that the case is one of urgency.
Lord Harmar-Nicholls: My Lords, the only interest I declare is an interest in the proper working of
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parliamentary government. If Parliament in its wisdom gives discretion to the Minister to make a decision on these matters instead of automatically sending them to the commission, it expects him to use that discretion. No one will object in this case that my noble friend has used his real view without fear or favour. It would be a departure from proper parliamentary procedure if he did anything different.
Lord Peston: My Lords, I find the Secretary of State's answer most disturbing. Those of us who regard competition policy as the central issue in this field and who have had some experience in these matters are fully aware that it is always a matter of urgency. That is one of the tricks of the trade. I am disturbed that a senior and powerful Minister such as the Secretary of State in a government with a strong majority should already have been pushed into a matter which I believe is a matter of principle. As the noble Lord, Lord McIntosh, said earlier, it ought to go to the Monopolies and Mergers Commission.
The point which disturbs me most of all is: in what circumstances would such a matter ever get to the Monopolies and Mergers Commission and be properly analysed? The case is always going to be made that the matter is urgent, that the paper is going to go out of business, and one ends up with a disturbing concentration of power. It has nothing to do with the politics of the matter and nothing to do with the owners; it is the concentration of power and it is a competition policy issue. I am extremely disappointed at the speed with which the Secretary of State has acted in this case.
Lord Young of Graffham: My Lords, I wonder how many of your Lordships would have been disappointed if other circumstances had prevailed. I must tell your Lordships that the board of Lonrho confirmed by way of a formal resolution that if the application for consent were referred to the Monopolies and Mergers Commission the paper would be closed forthwith. In those circumstances, I judged it right to exercise my discretion in the way that I did.
3.30 p.m.
Lord Bonham-Carter: My Lords, I am most grateful to the noble Lord for the answers he has given to the questions that I and others have put to him. I am particularly interested in his last answer to the noble Lord, Lord Peston, because in reply to my question the noble Lord said that the deadline of 4 o'clock today was a matter of no importance. He is now saying that the threat of closing the newspaper was a factor that led him to his conclusion. I want to put a rather wider question to him. In the case of other newspapers which have been referred to the Monopolies and Mergers Commission it has insisted, in the public interest, that an independent board be appointed to maintain that newspaper's independence. We may or may not believe that those independent boards have been effective, but in this case does not the noble Lord think that he has a duty to protect the public interest and to see that the newspaper's independence is preserved under its new ownership?
Lord Young of Graffham: My Lords, I am grateful to the noble Lord, Lord Bonham-Carter. I mentioned the deadline because the noble Lord mentioned 4 o'clock and I wished to point out that there was no deadline by hour but that there was urgency if the newspaper were to continue. In those circumstances, I judged it right that consent be given unconditionally because Today is a relatively new newspaper; its circulation in relation to that of other national dailies is fairly small and there is therefore no reason to impose conditions in this case.
Lord Ardwick: My Lords, are we to take it that there were no editorial safeguards at all?
Lord Young of Graffham: My Lords, I have already said that I have imposed no conditions in this case. I have of course heard from the intended purchaser that it intends to keep the newspaper separate with a separate editor, but I have imposed no conditions.
Lord Glenamara: My Lords, was the noble Lord's decision made as a result of the threat to close the paper, which many of us would regard as sheer, unadulterated blackmail, or was there a proper investigation into the viability of the newspaper? If the latter, how long did it take? How long did the Government's investigation take? How many hours? When did it begin and when did it end?
Lord Young of Graffham: My Lords, I have today announced the result of the exercise of my discretion. I do not think that it would be proper for me to go into the detailed reasoning behind it at great length.
Lord McIntosh of Haringey: My Lords, in answer to a supplementary question, the noble Lord implied that there were Members of this House who would have felt differently about the matter if another bidder had been successful in the hid for this newspaper. Let me make it absolutely clear that the Opposition's view would have been exactly the same had the successful bidder been Mr. Robert Maxwell; and that we are opposed to the concentration of power in the newspaper industry regardless of who the bidder is. I hope that he will recognise that that is the view of all Members of the Opposition and that we show no fear or favour in this matter as between one newspaper proprietor and another.
The question still remains: how has the noble Lord satisfied himself that there were no other appropriate bids for the Today newspaper? We read in this morning's newspaper that the proprietors of Sunday Sport were prepared to make a bid but that Lonrho would not talk to them. Under those circumstances, how can it be said that Lonrho behaved honourably in forcing this deadline by saying that the Today newspaper would close, when it was not willing to listen to bids from other people? How can the Minister he satisfied that all the procedures into which he should go before making such a decision have been gone into? In my earlier question I said that I did not question the legality of what he said. I seriously question the propriety of it in the light of the concentration of power in the newspaper industry.
Lord Young of Graffham: My Lords, this is happening in a free society. My responsibility is to consider an application for the transfer of the Today newspaper from its present owner to a new owner. It is not for me to determine whether there was fair and open competition among a number of other proprietors. Presumably a willing bargain was made between two parties. For all I know, another application may be sent to me this afternoon or tomorrow. This matter may or may not proceed. All I have to do is look at the circumstances as they apply in this case and at the application from Lonrho to sell the Today newspaper to News International plc. I am satisfied that I am within my discretion under the Act. I have exercised my discretion. My remarks were not in reply to the noble Lord, Lord McIntosh, but other comments were made in your Lordships' House about journalistic content and other matters. Those are not matters which apply in this instance.
Baroness Seear: My Lords, the noble Lord must accept that he has not answered the questions put by my noble friend Lord Bonham-Carter or the question put by the noble Lord, Lord Ardwick. During this discussion he has merely fallen back again and again on saying that he has exercised his powers. Surely he recognises that it is the job of the Opposition to probe the exercise of those powers. That is what we have been attempting to do. The Minister has given us no satisfaction in the exercise of our duties as the Opposition.
Lord Young of Graffham: My Lords, I accept what the noble Baroness, Lady Seear, has said, but the questions put by the noble Lord, Lord Bonham-Carter, and other noble Lords are not relevant in this case. I have to look at an application that comes before me from the proprietor of a newspaper and the intended purchaser of a newspaper. I have to look to see whether the newspaper involved is economical and a going concern, whether it will continue as a separate newspaper and whether the matter is urgent. It may well be that in another world people would have wanted to debate this matter for the days, weeks or months that the referral would have taken, but then I suspect that the newspaper may not have been in existence.
Lord Diamond: My Lords, may I put another point of view on this difficult issue to the Minister? Is he aware that I have had a great deal of experience of having a pistol put to my head at about 4.30 p.m. on a Friday for further government funds to meet that week's wages, and that that is a normal ploy? Would the Minister have preferred to have taken more time if he had not judged the matter to be of such urgency? Further, did he reach his conclusion on his expectation of what future circumstances would be in six or 12 months? If that is so, would it not be reasonable for the Minister, if not attaching conditions, to have some form of monitoring as to what happens after he has given his consent, because otherwise, as the House clearly fears, all the paraphernalia about the protection given by the Office of Fair Trading and the Monopolies and

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Mergers Commission will mean absolutely nothing? This is a wide open way of getting around all the protection that this House thought appropriate.
Lord Young of Graham: My Lords, I am sure that your Lordships' House will be fascinated to know what happened to the noble Lord, Lord Diamond, at 4.30 p.m. on Friday afternoons, but I do not think that it is relevant to this point. I received a formal resolution from the present owner of the newspaper. I am satisfied that if it were referred to the Monopolies and Mergers Commission for the three months that that takes, the owner would forthwith close the newspaper. It is my decision, and I decided that, having regard to that and all the other circumstances, I would consent to the transfer. I am glad that we shall see the newspaper continue.
Lord Winstanley: My Lords, the noble Lord told the House that the intended purchasers have undertaken to maintain the newspaper in its present form. Will he tell the House what powers he will have to intervene if that undertaking is not fulfilled?
Lord Young of Graffham: My Lords, no. I have not asked for any powers. I have said that I saw no reason to impose conditions in this case.Today is a relatively new newspaper. Its circulation is small in relation to that of other national dailies. It is entirely different from other cases and other circumstances.
Lord Wolfson: My Lords, in a force majeure situation such as this, what else could my noble friend the Secretary of State do other than give his consent? The paper is reported to have lost £30 million. It told the Secretary of State that it was going to close down. If it had done so, would not noble Lords opposite have asked him why he was shilly-shallying with giving a decision and allowing it to close?
Lord Young of Graffham: My Lords, I am very grateful to my noble friend.
Lord Sefton of Garston: My Lords, did Lonrho have the ability to close the paper down at 4 o'clock this afternoon or was its ultimatum that it would withdraw its bid for the paper?
Lord Young of Graffham: My Lords, I have never mentioned 4 o'clock this afternoon. I have seen a resolution of the board of Lonrho which said that, if this matter had perforce to be referred to the Monopolies and Mergers Commission, it would take steps to close the newspaper forthwith. That is the advice to which I listened before exercising my discretion.
Lord Sefton of Garston: My Lords, I take it from what the noble Lord has said that Lonrho had already bought the paper. Is that so?
Lord Young of Graffham: My Lords, Lonrho are the owners of the paper. Lonrho acquired the paper some months ago when consent was given under this provision in equally speedy time. I did not notice any worry at that time.

European Council Meeting, 29th–30th June
3.41 p.m.
Viscount Whitelaw: My Lords, with the leave of the House I shall now repeat a Statement about the European Council meeting in Brussels which is being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement about the European Council held in Brussels on 29th–30th June. I was accompanied by my right honourable and learned friend the Foreign and Commonwealth Secretary.
"The main issues before the Council concerned the future financing of the Community. These issues were: to improve budget discipline and management; to reform the operation of the common agricultural policy; the structure and size of the Community's resources; continued progress towards the completion of the single European market; and more effective use of the Regional and Social Funds.
"In addition, the Council dealt with three important immediate questions: the 1987 budget, the agricultural price package and the proposed oils and fats tax.
"The task of this Council was to agree on guidelines which would lead to the necessary decisions at the next meeting of the Council in December.
"There was a considerable measure of agreement on the steps which have to be taken if we are to resolve the problems of the Community's finances. There were two points, however, with which we could not agree. First, we were not prepared to accept that there should be a decision now on the size of Community resources.
"We have made clear throughout the discussions that it is necessary, before that question is addressed, to have agreement on effective and binding control over Community spending, including in particular agricultural spending. Secondly, we could not accept that the level from which we start to calculate agricultural spending for the future should be simply revised upwards to include every element of over-spending in the current year.
"These are substantive points, on which we have both to protect the taxpayer and to take sound and considered decisions for the long-term health of the Community. They also go to the root of whether or not the Community is really prepared to tackle the problem of agricultural over-spending.
"We agreed, however, first, that the use of the Community's resources should be subject to effective and binding budgetary discipline; and that this must apply to all expenditure and to all the institutions: the Council, the Commission and the European Parliament. Secondly, on agriculture, that additional measures are required to stop surplus production, and so to reduce costs and keep expenditure within the budget framework. These reforms could be accompanied by measures to ensure some setting aside of agricultural land, less intensive farming and in certain circumstances

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by selective financial aids within a Community framework. Thirdly, that arrangements for the United Kingdom to receive an abatement will continue. So far as we are concerned, they must be at least as favourable as those in effect now.
"During the rest of this year the Community has the opportunity—indeed the task—of translating the guidelines on budget discipline and on agriculture into draft decisions and regulations for our consideration at the December Council.
"The Council reaffirmed the importance which we attach to meeting the target of removing by 1992 the remaining barriers to trade within the Common Market.
"We should look for decisions by the end of 1988 on product standards; the wider opening of public contracts; the liberalisation of capital movements; insurance; and the mutual recognition of qualifications. These measures, by leading to a freer flow of goods and services and opening up a genuine single market, would help the creation of wealth and jobs.
"On reasearch and development, in order not to hinder work on agreed programmes, we agreed that spending could continue at present levels. The question of additional funds falls to be settled later, along with other decisions on future financing.
"I made clear that the United Kingdom would not agree to the new tax on oils and fats, proposed by the Commission and supported by France and others. I am glad to tell the House that it was not adopted.
"Some detailed, not to say abstruse, questions on monetary compensatory amounts on agricultural products were submitted to the Council.
"There was concern about how some aspects of these would operate in practice. It was therefore agreed that they should be re-examined by 1st July next year. My right honourable friend the Minister of Agriculture will deal with these matters more fully in his Statement.
"On the 1987 budget, the Council agreed to a solution on the lines we have advocated: Community funds for agricultural support, instead of being paid in advance will now be paid in arrears. The Commission's proposal for an Inter-Governmental Agreement to raise additional funds outside the Community budget was rejected.
"Mr. Speaker, we went to this Council determined to make progress in bringing Community spending under more effective control than in the past and thus to ensure that the Community lives within its means. There are now clear guidelines for better control of the Community's finances. The priority task is for the Community to do the detailed work necessary to make these guidelines enforceable. The United Kingdom, and especially this House, has been the driving force behind this approach. We shall continue our efforts to achieve the necessary decisions in the interests of a soundly-financed and strong Community."
My Lords, That concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, the House will be grateful to the noble Viscount for repeating the Statement. I should say at once that we agree with much of it. There are two or three questions that I should like to put to the noble Viscount.
When the Fontainebleau agreement was reached in 1984, it was hoped that the economic problems of the Community, and most especially the common agricultural policy, would be tackled realistically thereafter. The contrary has proved to be the case. Unfortunately the Community is once again in a major economic crisis as it continues to support the burden of what is really an impracticable and impossible agricultural policy.
As I and others said in the debate on Monday, technically the Community became insolvent at the beginning of May and emergency measures have had to be agreed. First, can the noble Viscount clarify what agreement was reached to resolve the immediate economic problems? I did not see that emerging from the Statement. How is the £3·5 billion deficit for this year being financed? What settlement has been reached concerning the dispute on farm reforms and prices described in one newspaper this morning as weak and somewhat costly?
Secondly, despite the agreements reached to deal with the immediate problems for this financial year the right honourable lady the Prime Minister went against all the other member states on the programme for a long-term solution of the financial crisis. Can the noble Viscount state the sticking point that convinced the Prime Minister, despite the views of all other member states and the urgent need to resolve community finances, that it would not be in the interests of this country to agree with the proposals?
Will the 11 other member states now begin to implement the decision to discuss reform proposals? Where will Britain stand on these discussions; and what will be our involvement? It is very important that we should know that. Does the noble Viscount agree that the next summit which is to be held in Copenhagan in December will be certain to fail unless Britain continues to participate in the negotiations?
Thirdly, the Statement refers to the EC research and development programme. The Government have continued to refuse to agree the budget here. Were we also alone in this? Again, will the noble Viscount state the sticking point here? Is it not the case that up to now Britain has been a net beneficiary of the programme? What will happen to the research projects presently engaged in and financed by the EC research fundings?
Lastly, can the noble Viscount make some comment on the dispute with Spain over Gibraltar; and the agreement on air fares which members failed to achieve? Where does the Community go from here? What is the nature of the tax on food agreed at the summit early today? What will be the impact of this on British food prices?
Baroness Seear: My Lords, we on these Benches also wish to thank the noble Viscount the Leader of the House for repeating the Statement. We agree that something has urgently to be done to deal with the financial position of the Community. We are also

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glad that we resisted the propsoal for a tax on oils, which would be a further protectionist measure and would have an adverse impact on developing countries.
Having agreed with that, at the same time we deeply deplore the outcome of this session which has seen us once again as the anti-communautaire member of the Community; we have been one against 11. Although the Statement says that a number of agreements have been reached for control over budgetary matters, we have refused to go along with our partners. We have refused to continue negotiations and have therefore fallen out once again. In the gracious Speech it was said that we hoped to exercise leadership in the Community. This seems to be an extraordinary way to exercise leadership when we finish a session of this kind with 11 against one.
We particularly deplore the fact that the Government have not gone along with the additional payment for the framework agreement for research. The attitude reflected in this Statement is that of a narrow accountancy, rather than a political and economic, approach to the great achievements that full development of the Community can bring. That research programme is being held up because of us.
We need research at the level of the Community in order to hold our own against the Americans and the Japanese in developing technology. We are behind already and if we do not go on with this research we shall fall still further behind. This is the little Englander approach which we have deplored for so long and which is repeated again and again.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, for their comments on the Statement. I am also grateful to the noble Lord, Lord Cledwyn, for saying that he agreed with much of it.
First, he raised the question of what is to happen between now and the Copenhagen Summit. I understand that there will be substantive discussions in which this country will take a full part in trying to find a means whereby sensible control of the budget can be achieved. My right honourable friend the Prime Minister was not prepared to give a blank cheque at this stage until she appreciated exactly how the finances would be kept under control. She therefore did not give that blank cheque. But she is of course prepared to consider at Copenhagen the exact proposals which are then put forward as a result of the very substantive discussions that have to take place. I think I can give an absolute assurance that this country will be fully involved in all those discussions with the purpose and determination to achieve a sensible result.
I am surprised at the comments of the noble Baroness. It surely is in the long-term interests of the Community that anybody who is, to use her expression, communautaire, should wish to see that the Community has proper control over its own finances. If it fails to do that it will not continue. I should have thought that it was therefore wise to try to make sure that before we proceeded further we had
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a sensible control over our own finances. That implies control over the whole question of agricultural spending. I do not think that at this stage I can give the noble Lord any estimate of the exact position with regard to food prices. However, if there is anything I can say I shall be very pleased to do so.
I am grateful to the noble Baroness, Lady Seear, for what she said about the oils and fats tax. There can be no doubt that that would have been a very protectionist measure, very unsatisfactory for this country, and would therefore have been a very bad proposal if we had accepted it. Thank goodness it has now been put out of the way.
I do not think that I can accept the argument, for the reasons I have just given, about being anti-communautaire. I cannot believe that it is in the interests of the Community, or of any of its members to put off decisions time after time when seeking to control their own finances on a sound basis. There are many people who will believe that my right honourable friend the Prime Minister was right to stand out and to say that proper procedures must be taken and proper plans made before final decisions are taken. That is after all what she did on this occasion.
The R&D proposals were raised both by the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear. I understand that the Government have said that we shall continue to provide the finance necessary for the present programmes to continue. We have made that perfectly clear. However, we also believe that if we are to provide the extra money in December which is asked of us it should be made perfectly clear to us exactly how this will be achieved, what are the budgetary plans concerned, and how it will all work. That is the basis on which we have gone forward.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that one sentence in his reply to the last question could be a little disturbing? He used the phrase "not prepared to give a blank cheque at this stage". Does that mean that there may be a stage when we could give a blank cheque? The decision on this ought to have been taken before we weakened. When we agreed to give 1¼ per cent. instead of 1 per cent. to the contribution charge we weakened. If we had stood firm at that stage the Community might well have put its house in order and it would have saved the money which would have avoided the contributions. I should like an assurance that, whether it is in Copenhagen in December or beyond, until the Government have looked at their own concerns no blank cheque will be given.
Viscount Whitelaw: My Lords, if my words had the construction which the noble Lord chooses to put upon them I obviously said something which was incorrect. What I was trying to say—and perhaps my noble friend will appreciate it—was that if one gave an agreement at this stage, before all the necessary preparatory work had been done, and the exact arrangements for controlling the budget had been reached, then one would be giving a blank cheque. But of course at the moment that one comes to Copenhagan there should be clear plans, clear

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budgets and clear proposals. One is not then giving a blank cheque because they are clear proposals that are being put forward.
4 p.m.
The Earl of Onslow: My Lords, is my noble friend aware that some of us are concerned about the agricultural surplus problem, which if we are not extremely careful will get very much worse very quickly? Spanish and Portuguese agriculture are ripe for a revolution such as we have seen in Chinese and Punjabi agriculture. If the Russians get their growing deficit right, then God knows where the surpluses will go. If we go on increasing our own agricultural surpluses the Common Market will go absolutely bust, and that will be very serious indeed. Is my noble friend aware that my right honourable friend the Prime Minister is completely and utterly right to insist upon doing something about this, because if we do not do something that will be the end of the Common Market and other bad things will also flow from it?
Viscount Whitelaw: My Lords, without necessarily following all the various hypotheses put forward by my noble friend, I think there are very good reasons why it would be wrong at this stage to make clear commitments without having examined in great detail many of the problems, some of which arise from what he said.
Lord Gladwyn: My Lords, further to what my noble Leader said, does it not emerge from this deplorable incident that the Prime Minister is left in a minority of one on a highly important issue involving the whole future of the Community? Does it not emerge that it is her belief that the Community should be run on the lines of a successful shop, whereas in practice in a collection of 12 sovereign states common decisions can only be reached for the common good, provided they are reached at all, on the basis of hard fought political compromises some of which will not always be acceptable to other members of the Community?
Viscount Whitelaw: My Lords, in the first place I do not accept for one moment that this is a deplorable incident. I can imagine the views that would have been expressed from many parts of your Lordships' House and from many parts of the country if the Prime Minister had come back having accepted a whole lot of proposals which were thoroughly unsatisfactory and which would have put grave burdens on this country to the detriment of our economy. I cannot concede that a compromise of that nature, however pleasing it might be to the other countries or to anybody else, would have been in any way right in our national interest or indeed in the interests of the whole Community. I cannot understand how, with his great experience, the noble Lord can suggest that a Community which is totally broke is likely to be successful.
Lord Bruce of Donington: My Lords, is the noble Viscount aware, and will he agree, that to be in a minority does not necessarily mean that one is wrong? Will he accept our assurance that the Prime
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Minister's stand on this matter, provided it is not temporary, will receive support from most parts of the country and indeed most parts of this House? Will he inform the House in relation to the 1987 budget, preferably in pounds sterling, the extra cash burden that will fall on the United Kingdom as a result of the settlement to which the Prime Minister has agreed?
Viscount Whitelaw: My Lords, on the noble Lord's first point, I was trying to work out while he was speaking whether I have spent more of my time in politics in a minority or in a majority. I think that perhaps recent events have put me just on the winning side of being in a majority, but I still have clear memories of being in a minority and I shall never forget them. I hope that I can conduct my thoughts on that basis.
The noble Lord will be delighted to know that I am afraid I cannot give him an answer to his question about the 1987 budget. I do not expect he thought that I could, but I shall find the answer and write to him.
Lord Mackie of Benshie: My Lords, is the noble Viscount aware that some very severe measures to contain agricultural spending have been proposed by the Commission? I understand that some of them have been accepted. It is very difficult for us to judge whether the Prime Minister is absolutely right in what she says and that the other foolish profligate fellows, who are throwing about their citizens' money, are wrong without knowing which of these agricultural measures have been taken. If they are proposing to make some of the cuts, certainly that will save a great deal of money.
Viscount Whitelaw: My Lords, I think I am right in saying that my right honourable friend the Minister of Agriculture is making a Statement in another place some time in the near future in which he will outline the results of the agreements which were reached. This Statement was not taken in your Lordships' House but it will be repeated and will be available tomorrow.
Lord Stoddart of Swindon: My Lords, can the noble Viscount arrange for a message to be sent to Mr. Chirac informing him that in this country "housewife" is a term of respect and not one of abuse?
Viscount Whitelaw: My Lords, I am delighted to hear that from the noble Lord. Of course it always depends on what the housewife is doing as to whether it is a matter of satisfaction to the male occupant of the house.
Lord Banks: My Lords, do the Government accept that the completion of the internal market will increase the disparities among the different regions of the Community and that this will lead to the need for increased expenditure in order to help the poorer regions? Subject to the controls, which the noble Viscount says the Government want, are the Government ready to accept that increased expenditure is necessary beyond the present very low level of less than 1 per cent. of the gross domestic product of the Community?
Viscount Whitelaw: My Lords, I think I am right in saying that it was in order to study some of those questions—particularly the position of some of the countries that have recently acceded to the Community—which had not at that stage been fully worked out that it was necessary to proceed to the next summit at Copenhagen with a clear understanding of what was proposed as far as these matters were concerned.
ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
Debate resumed on the Motion moved on Thursday last by the Baroness Young—namely, That a humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".
4.6 p.m.
Lord Young of Graffham: My Lords, this is the fourth year in which I have been privileged to speak in the debate on the Address: four years of continued consistency of purpose, four years of consistent policies and four years of economic success.
Two aims have been central to our strategy: first, to create a climate for steady growth with low inflation; secondly, to encourage enterprise in our society—and we have seen the results of that strategy.
Last year some noble Lords opposite thought that I was too optimistic; phrases such as "exceptionally euphoric" and the "usual glowing account of the state of the nation" were used. Events have proved the critics wrong. They underestimated the continued strength of the economy, they overstated the likely balance of payments deficit and their accusation that the Government wanted to maintain unemployment at 3 million was a misleading travesty.
We now see that the combination of steady growth and low inflation is set to continue. We see industry more confident and competitive than for many years. In short we see all the signs of a sound economy.
No one could be more delighted than I am that this growth in the economy has created jobs and has now reduced unemployment. We have seen more than a million extra jobs since 1983, the largest continuous growth in jobs for a generation. Now we have seen a substantial fall in unemployment, down by over a quarter of a million over the last 11 months. That fall in unemployment has been widespread, falling in all regions of Great Britain.
Last summer I departed from my usual caution and predicted that long-term unemployment would fall. Recent events which affected another place somewhat obscured the fact that we have seen a significant fall in long-term unemployment—a fall in the number of people unemployed over a year by more than 60,000 in the year to April. I am sure that here in this one fact all in your Lordships' House will join me in welcoming that news.
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We have given a high priority in our employment programmes to the long-term unemployed. That priority reflects our recognition that the fruits of economic success may not go automatically to all members of our society. We recognise that we have a responsibility to people who suffer particular disadvantages and who are presently excluded from the process of wealth creation. The recognition of that responsibility underlies our approach to inner cities.
That approach is based on two fundamental philosophies. The first is that the process of wealth creation is the way to create the goods, services and jobs which people in the nation, and in the inner cities, need. The second is that the process of wealth creation comes from individuals, from their initiative and enterprise, and particularly from their ownership of their own destiny. For too long we have seen "solutions" handed down to the disadvantaged in our society. Yet those so called "solutions" seem to have passed them by.
Our response is not to offer ready-made solutions but to give people responsibility to help them equip themselves with skills and to help them to find the best way to use those skills. That response can be seen in a whole range of policies ranging from parental involvement in education, to home ownership and to the right of tenants to transfer in housing, to the enterprise elements of our employment programmes.
Our inner-city taskforces are essentially experimenting in new ways to encourage people in the inner cities to get involved in the whole process of wealth creation. We have just expanded those initiatives and will be looking at their effectiveness and whether lessons can be learnt which could be applied far more widely.
We must never forget that policies designed to help particular groups and particular areas make sense only if they are backed by a sound economy, just as we should not forget that the compassionate society which we all want to see depends on a strong and competitive economy.
We shall not let up in the fight against inflation, without which our other policies will have little value, and we shall continue to control the growth of public expenditure. The continued success of our economy depends on the world economy too. The possibility of slower growth in the world economy and the possible spread of protectionism remains a cloud on the horizon.
Free trade is vital to the health of the world economy. We are working with our Community partners in GATT in the Uruguay round of trade negotiations. We are pressing countries like Japan, whose markets are very hard to penetrate, to open their markets and bring a better balance of world trade. Free trade is vital within the European Community too. We will keep up the pressure to develop a more unified market following the record 48 measures introduced during our presidency last year. Such policies of financial stability and free trade provide the essential foundation for all that we do.
Policies to create the enterprise culture are much more diverse and long-term yet ultimately, I suspect, much more far-reaching. Fundamental to those

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policies is the need to encourage wealth creation. I see that as the central aim of my Department of Trade and Industry. Indeed I hope that we shall be seen as the "Department of Wealth Creation", not creating the wealth by our direct efforts but creating the climate in which wealth will be created. As part of that climate lower taxation is essential, for higher taxation reduces the stimulus of individual enterprise and commercial reality. We have already substantially reduced personal income tax and simplified business taxation. We will be bringing forward pension reforms to increase the freedom of choice of individuals.
An efficient but reduced role for the public sector in economic decisions is crucial too. How different is the role of the DTI compared to when I joined it back in 1979. Then British Steel was making a loss of £1·8 billion; now it is expected to make a profit—a profit of more than £170 million. Then Cable and Wireless was in the public sector; now it is in the private sector producing profits five times the size of those it then produced. Then British Telecom was a public monopoly; now it is in the private sector facing open competition from Mercury.
Since 1979 we have privatised more than one-third of what had become the state sector of industry. Those that were privatised have flourished from their new-found responsibility and freedom. Those that now remain in the public sector have become far more efficient. We shall continue to open more industries to economic reality and give employees and the public more opportunities to buy shares in British industry.
Efficient, enterprising industries need the co-operation and involvement of their employees as well as the wind of economic reality. I hope we shall soon see profit-related pay schemes on the statute book to help break down further the "them and us" culture which so bedevilled industry in past decades.
Competition and deregulation are important for they are essential in the process of wealth creation. Businesses which are competing strongly and concentrating on the needs of their customers will be able to adapt to change and to win markets. The benefits of greater competition have been seen in a number of sectors ranging from coach services to conveyancing, from spectacles to telecommunications. Encouraging greater competition by opening up markets will be a hallmark of our approach in the future. Cutting red tape too remains a vital part of the approach. The enterprise and deregulation unit has moved with me to the Department of Trade and Industry and I assure the House that we will keep up the momentum.
Deregulation has also played a vital role in the development of the City of London as one of the three international financial centres. The new framework for investor protection has helped to create an efficient, competitive financial market in which investors can have confidence. Deregulation must always be tempered by the need to protect the investor and the consumer. We have in the Financial Services Act the powers to give that protection. It is essential that we should not over-regulate and so keep London a growing international market; but it is essential that we regulate sufficiently to protect.
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Innovation is yet another important element in creating wealth and competing in the world economy. The Select Committee on Science and Technology of your Lordships' House produced a most important report on civil research and development earlier this year. The Government will give their considered response shortly. It was an important report and I look forward to an opportunity of developing that reply.
Attitudes to industry and to the enterprise of our people are just as fundamental as the competitive structure of our industries. If we do not motivate young people in school we shall have real difficulties. We must train them in enterprise so that when they first enter the world of work they recognise what advantages and opportunities they have before them; and equally we must work to develop the enterprise of our managers. I greatly value the role my department is playing in linking the worlds of education and industry, in developing mini-enterprises in schools and in encouraging links with universities. I hope very much that we will see the further development of management education in our economy. I hope too that the training element and encouragement of management education is spread throughout the working structure of our industry and commerce.
If we are to establish the firm foundations of an enterprise culture which values industry and commerce, which sees wealth creation as the source of wealth consumption, then we must continue to tackle the education and training system in this country. And so we shall.
The last eight years have seen a transformation in the British economy. The performance of industry shows that we can achieve economic success. The recent fall in unemployment demonstrates that such economic success can and will create jobs. We hold firm to the belief that a sound economy is the essential foundation for all our policies.
Of course much more remains to be done. We are giving priority to the inner cities. We seek to ensure that all our citizens have the opportunity to enter the process of wealth creation. The last eight years have also seen a profound change in attitudes to wealth creation—a recognition that wealth creation is essential for the compassionate society which I know that all sides of your Lordships' House want to see created in our land.
It really is simple. Wealth creation was the basis of our past prosperity. Alas, our country lost sight of that. We will concentrate on wealth creation in the years ahead, and we will move towards a compassionate, caring society with the wealth we thus create.
4.21 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Lord, Lord Young, for introducing this part of our debate on the Address. He painted on a wide canvas in his speech and I hope he will forgive me if I do not follow him right across the whole picture. I would say, however, that what he said on the proposed government response to the research and development report is something that

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we would welcome if it is positive, and we hope that the Government will give a positive response.
We of course agree with what the noble Lord says about the regulation of the financial services industry. After all, we supported the Bill when it was in front of your Lordships' House. We agree with a lot of what he said on management training throughout the whole of industry and indeed the services. Lastly we agree with what he said about employee participation, because we believe that that is an important element in the future development of our industry.
Having said that, I must enter a slight note of scepticism about what the noble Lord said about the development of the economy in the future. He was good enough to say that there is perhaps a slight cloud on the horizon in the international context. I should like to look at that for a moment, and then I should like to examine the Government's proposals for the containment and reduction of inflation and to look at what the Government are proposing for different regions and localities in the United Kingdom, which we must now learn to refer to as inner cities. Then I shall again return to the measure of agreement, or disagreement, that may exist between ourselves and the Government on the proposals that they are putting forward.
I put it in this way because I believe that in the gracious Speech the agenda has been set out not just for this Session but for the whole of this Parliament. And it is on the policies that have been set out and that we are now debating that the Government will be judged when the reckoning comes round again, as it surely will.
The gracious Speech sets out the Government's aim to,
"continue to pursue policies of sound financial management designed further to reduce inflation and to promote enterprise and increased employment".
Those are very laudable objectives and ones with which everybody is bound to agree. Unfortunately, as the noble Lord slightly hinted at but did not elaborate on, the circumstances in which these objectives are to be achieved have perceptibly changed for the worse over the last few months. The June economic outlook of the OECD notes that the general economic situation has deteriorated. The projections to the end of 1988 point to little improvement. Slow growth, high unemployment, large payment imbalances, it says, are likely to persist.
Furthermore, recent downward movements in the United States dollar have led to rising inflation expectations and higher interest rates in the United States. In other words, the risks of a worsening world economic situation, and perhaps even a world economic downturn, have increased. It is this heightened risk of course that has given the London money markets the jitters, from which they have been suffering since the general election.
Nor do the payment imbalances to which I have referred show much sign of correction. Banks are now having to provide enormous sums against their holdings of third world debt where a few months ago
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they were relatively sanguine. Officials action to resolve the international debt position seems now to be in a state of near paralysis.
So against this background, which is somewhat more sombre than the noble Lord described and which some believe—and they must be taken seriously—may well lead to some form of world recession, to achieve the objectives mentioned in the gracious Speech will need mechanisms which go beyond the mechanisms that the Government have adopted to date.
We can no longer talk about targeting monetary aggregates. That policy was thrown in the wastepaper basket a year or two ago. We cannot talk about shifting the balance between public and private expenditure. That only shifts a few pieces of furniture. The answer—and I suspect that this is the answer the Government would give—can only lie in the management of the exchange rate, because it is this above all which is the prime short-term factor in influencing the rate of inflation. Here we have the first contradiction in government policy.
The other part of the objective is to promote enterprise and increase employment—not, we notice, to reduce unemployment, which may be something different—but if the exchange rate, and inevitably interest rates, are to be kept at levels that reduce inflation, in the light of the world outlook there is little hope of a sustained increase in the level of employment, let alone of reducing unemployment. That, as the arithmetic seems to lead us, means that the rate of unemployment is going to stay more or less where it is for the time being, and that time may be a long one, which is not a happy prospect.
There is also facing the Government the problem of structural change, as would have faced any government, and particularly in the balance of payments. Between now and 1991, if we take the mean point of current Department of Energy forecasts for oil production from the North Sea, we are facing a decline in output of around one-third. Whatever the price gyrations that may take place between now and then, this is going to leave a gaping hole in our balance of payments.
Your Lordships will be aware that we have debated this matter many times since the publication of the report of your Lordships' Select Committee on Overseas Trade, but we have yet to be convinced in any way that the Government have recognised the arguments, or indeed developed any policies to counteract what will be a growing difficulty over the next few years. Therein lies the second problem with government policy. There appears to be no preparation for that adjustment. In short, on the general policy we are inclined to rather greater scepticism than the noble Lord, Lord Young. Whether this is justified or not time will tell.
Let me turn now to the Government's proposals at regional and local level—as it were, the topic of the moment—to which the noble Lord referred. After the general election it must now be quite clear even to previous doubters that there are major political and economic imbalances within the United Kingdom. Many of your Lordships will have been watching the BBC election results on 11th June and will have

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noticed that tall gentleman, whose name I cannot quite remember but who looks for all the world like Mr. John Cleese in a party political broadcast for the Social Democratic Party—and perhaps it would have been better for the Social Democratic Party if it had been Mr. John Cleese—in front of that great map where we saw Scotland, Wales and the North turning red and the South turning progressively more and more blue. In front of our eyes we saw the divided nation.
The Government have responded to this situation by proclaiming a programme for inner cities, and I shall come to that in a minute. But it seems odd, as I think the noble Lord, Lord Grimond, remarked yesterday, that Scotland is only mentioned in the gracious Speech almost in passing, with relatively minor measures on rented housing and the management of education. Wales of course is simply tagged along with England, but that has been the fate of the Welsh for many years.
But worse is to come. It was Mr. Kenneth Clarke who in Monday's debate in another place, commented on the general election campaign in Scotland. He remarked that an English visitor to Scottish platforms can have no doubt that the terms in which the economic and political debate is conducted in Scotland are still some years behind those that pertain in England. By any standards that is a provocative remark from a British Minister. Scotland, after all, has a powerful financial community—indeed, it was the birthplace of the investment trust movement; it has its own international banks; it has its own centres of learning and a healthy press. To suggest that the level of debate in Scotland is still some years behind that of England seems—and I put it at its mildest—somewhat insulting. It is also very illuminating, because it reflects certain attitudes of Ministers, particularly those who live and have their being in London.
I have no doubt that if Mr. Clarke had turned his attention to Wales he would probably have said the same about Wales, because the Conservatives were defeated almost as badly there. I suppose he would say that the level of debate in Wales was some years behind that pertaining in England. I have no claim to speak for Scotland; my noble friends from Scotland can speak for themselves. However, I have some claim to speak for Wales. In English eyes we may be people who cover ourselves with woad and dance on Plynlimon at the summer solstice, but we are people; we are a community, we are there as are the Scots, Yorkshiremen, Lancastrians and others. We do not like being patronised.
This is the first message that we have for the Government on their inner cities programme. The regeneration of local communities must come from, and indeed must be driven by, the communities themselves. There can be no suggestion that central government can work without the active co-operation of those local communities and the local authorities which democratically represent those communities. Whatever the razzmatazz, whatever name one gives to it—inner-city task forces, enterprise zones, urban development corporations or whatever—there must be a clear perception in Wales,
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in Scotland and in other communities that what is being done is being done to help people regain their self-confidence; to be part of life as it is and not as some London bureaucrat might like it to be.
The second message is, I devoutly hope, unnecessary and I hope that the noble Viscount the Leader of the House will tell me that it is when he comes to wind up. However, I must send it all the same. I am afraid that there is a deep and dark suspicion that the motive behind the inner cities programme is party political. I am afraid that the Prime Minister herself has encouraged that suspicion. The suspicion runs like this. The Conservatives have a problem in the inner cities. It is not just that Mr. Michael Heseltine came back from his visit to Liverpool in a state of catatonic shock; it is that the Conservatives have a roll call of cities in which they have no representation in the House of Commons at all: Liverpool, Manchester, Newcastle, Glasgow, Hull, Stoke, and they were marginalised in Sheffield and Edinburgh.
The suspicion is that the object of the inner cities exercise on this line of thinking is to try to regain the Conservative positions in those areas, and that foot soldiers from the Government will infiltrate to be followed quickly by the Panzer divisions of Conservative Central Office. If that is what it is all about the story is quite different. As I say, I hope that that is not the right interpretation and that the noble Viscount will assure me it is not. However, if that is the motive then I have to say that I fear there will be trouble not through our volition but because some situation somewhere, sometime, will go out of control with consequences that are unpredictable. This is something that we shall all deplore but it will occur unless the Government respect the rights, aspirations and economic needs of the communities that they are purporting to help.
The third message is more cheerful. Provided that the objective of the inner cities programme is genuinely to work with regional and local communities and their elected representatives of whatever colour, we shall support it and co-operate. It goes without saying of course that proper funding must be available. I agree that the problem of urban areas cannot be solved by throwing money at it. I think that the noble Lord and I would agree. Nevertheless, neither can it be solved by financial starvation. If the Government are prepared to allocate £60 million a year to London docklands and £30 million a year to the Merseyside Development Corporation, they presumably recognise this.
I am sorry that the Chief Secretary to the Treasury seems to be making rather difficult noises about the applications that certain Secretaries of State appear to be making, according to the press, for extra funds for the inner cities. I hope that if the Government recognise both facts, the need to work with regional and local communities and the need for public funds, they will also find that there are many organisations, from the Scottish and Welsh development agencies on a regional scale to local enterprise boards on a local scale, which are ready and willing to work with them. That is the way it should be and that is what we will support.
Before I conclude, the House may wish to know how the Opposition propose to conduct themselves

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in this Parliament in this House on the range of issues for which the noble Lord, Lord Young of Graffham, is responsible as Secretary of State for Trade and Industry. On a number of occasions since the general election it has been said that, because of the large and generally docile majority that the Conservatives have in the House of Commons, the main burden of opposition will fall on us. I am fully confident that my right honourable and honourable friends in another place will provide an effective and adequate opposition. However, if opposition is to rest with us, because the Secretary of State is a Member of our House, then so be it. In that case the opposition starts right now and right here.
Whatever the nature of the electoral mandate, we do not believe that there is a majority in the country for polarisation and division. There is no majority to dismantle the social services or to destroy local democracy. There is no majority for a systematic attack on the poorest and most disadvantaged in our society. In so far as we believe that the Government's economic trade and industry policies lead, whether by deliberation or through incompetence, in those directions, we shall oppose them root and branch.
However, there is a second level on which we shall conduct the opposition. We recognise that although we won in Scotland, although we won in Wales, we won in the North and in large parts of the Midlands, our policies were not accepted in the southern part of the North-South divide. Clearly during the course of this Parliament we shall be rethinking those policies in the light of events and of our experience. As this process takes place we shall as opposition and the only alternative government be countering government proposals as they come forward with ideas of what we would be doing were we in their place. Nevertheless, although we shall rethink the way in which our policies are articulated and presented there should be no doubt that our philosophy will not change. We shall continue to assert that economic efficiency can, should and indeed must march hand in hand with social justice.
Furthermore, it is an object of government at all levels to strive toward this objective. That was the philosophy of the Labour Party that I joined 30 years ago and it remains the philosophy of the Labour Party today. It was Martin Luther at another time, in another country and on another issue who said: "Ich kann nicht anders"—I can do no other. We echo those words. Here we stand. We can do no other.
4.40 p.m.
Lord Diamond: My Lords, I want to start by thanking the Secretary of State, the noble Lord, Lord Young of Graffham, for introducing this debate with such care and so fully. I understand very well that he is no longer able to be present in the Chamber. He has been good enough to send me a note of explanation. I am sure it is to the benefit of us all that there should be a Member of your Lordships' House who is such an important Cabinet Minister. It is of nett benefit to us and we have to take the disadvantages with the advantages. We understand that from time to time he has to withdraw from the Chamber when he would otherwise wish to be present.
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Of course we welcome some of the improvements to which the noble Lord has alluded; but when he made some remarks about the state of the economy, although I imagine that he was referring to the economy of this country, I found it very difficult indeed to recognise. I shall come to that topic later on.
As we are now debating the Queen's Speech, which looks forward over a period of time, we too take the view that one is not limited to discussing individual items, and I want to glance at what would be the Government's stance. The noble Lord, Lord Williams, has wisely told us what would be the stance of the official Opposition and I should like to state what would be the stance of the Alliance.
There has been a general election and we recognise that a great number of the items that appear in the gracious Speech were set out in the manifesto. The Government therefore received a kind of national approval for what they are proposing. It is for that reason that after this recent general election we have not thought it wise, appropriate or wholly democratic to put down an amendment to the gracious Speech and to seek the views of your Lordships, albeit there are many parts of the speech that we find wholly unwelcome.
We recognise that at the end of the day the Government must have their way but that is after the Opposition has had their say. By "the Opposition" I mean the official Opposition and the unofficial opposition that we shall continue to provide. We hope to play our full part in a constructive way. As hitherto, on these Benches we shall be guided by the liberté of the Liberals, the égalité of the Social Democrats and the fraternité which characterises the relationships between the two parties.
With regard to the gracious Speech, we notice that for the eighth time running unemployment does not enjoy a position of first priority. Should there be any doubt about that, it should be noted that it is mentioned in the gracious Speech and was repeated with the greatest clarity by the Prime Minister when she opened the debate in another place on 25th June. In her Statement she said:
"Control of inflation through sound financial policies is and will remain our top priority".—[Official Report, Commons, 25/6/87: col. 53.]
That has been the Government's case throughout. It is still the Government's case and we must not be surprised therefore if the hopes of the unemployed are less bright than they otherwise would have been. At no time have the Government been prepared to give unemployment the first priority that we think it should have.
The cost that has been incurred in order to enable the Government to give effect to their intention that the control of inflation should remain their main priority is simply enormous. I have recently been reminded of the figures for bankruptcies which have been rising year after year since the Government took office. In 1979 there were 4,500 insolvencies. Every year saw a new record total until 1985 when the total reached nearly 15,000. In 1986 by contrast the number fell to 14,400 and improvement continued in the first quarter of this year. We are still left with a figure for bankruptcies which is three times or 300 per

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cent. greater than was experienced by this country prior to the Government taking office. That has been part of the cost of achieving a modest level of inflation—not an enormously creditable level but a modestly successful level. It is not all that good by comparison with the figures for our main competitors, though I recognise immediately that it is somewhat better than the figure which the Government inherited.
I am glad to see the noble Lord, Lord Peston, in his place because, with his great academic and administrative authority and the authority of one who has advised Downing Street for many years he put the situation very well. I cannot remember his exact words but in a recent debate he referred to the way in which the Government had achieved a measure of success in dealing with inflation and expressed the view that had he been given the latitude of incurring an extra 2 million people unemployed, he thought that he could have done a great deal better. Putting it the other way around, a higher reduction in the level of unemployment could have been achieved without incurring any higher a level of inflation. The Government merit but little credit for what they have done in the field of holding down inflation.
The gracious Speech says nothing whatever to give us encouragement about the manufacturing sector. I am bound to dwell on this subject because the Secretary of State (who is not in his place at the moment) has made statements to this House that worry me greatly. They lead me to believe that he thinks that an increase in services is an equal alternative to the falling off of manufacturing capacity. It is no such thing. There is no way in which an increase in services, however much we welcome it—and we on these Benches do recognise and welcome it, as well as the increase in financial services and whatever the City can do—can make up for the drastic fall in the manufacturing sector. We hope that the Minister will take that knowledge on board. It is a very serious matter that has been repeated time and again in this Chamber but which seems to have made very little impact on the Government.
We are unhappy that the Statement on Europe, welcome as it is, does not go so far as to include the determination to integrate fully within the European Monetary System. When the noble Viscount winds up the debate, perhaps he will tell us the Government's plans in that regard.
There are two items in the Queen's speech which clearly will merit very careful examination indeed. First, I refer to privatisation measures and we all know that the Government rest their case for privatisation on the grounds of providing further competition and breaking down public monopolies, although I cannot recollect that they were very successful in establishing their argument when it came to the privatisation of gas. So we shall look and listen very carefully to the arguments that the Government will produce on establishing the benefits of competition in the disposal of sewage as being one of the reasons for privatising water supply and sewage disposal.
We shall also look extremely carefully at the proposals for replacing the domestic rates. Here I
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notice that the Prime Minister—again on the same occasion at col. 56 of the Official Report of 25th June—stated:
"We shall abolish the domestic rates—a grossly unfair tax—and replace them with a community charge".
We are therefore led to expect that these will be replaced by a tax that is immensely fair. Far from that, they are proposed to be replaced by a tax which is nothing more nor less than a poll tax and you have to go back to the Middle Ages to find a precedent for such a proposal.
Not only does it offend all our feelings of what is right and fair, in the sense that the broadest shoulders and the narrowest shoulders are being asked to carry the identical burden, but it also offends against all the tenets of good taxation. It is estimated that it will cost twice as much as the rates to collect, it is estimated that the evasion will be 10 times as great as in the case of collecting rates and of course it is wholly regressive.
In those cases—although we are not able to oppose the principle in view of what I have said, and in view of our usual stance with regard to Second Readings of Bills introduced from another place—we shall want to participate in the "late evenings" to which the noble Lord, Lord Strathclyde, referred in his excellent speech, much to the pleasure of his Chief Whip. I do not know whether it was—I am sure it was not—an intentional rebuke, but I must say that my conscience pricked me and I took it to be a rebuke for the way in which some of us failed to attend to our duties adequately during the last Parliament.
I shall try to see to it in future that, so far as I am here, I am available to assist your Lordships, notwithstanding the lateness of the hour, throughout those late evenings which our previous experience has told us may only continue until the middle of the following morning, when the Leader of the House comes along and finds what we are up to. That deals with those matters.
But I hope that the noble Lord, Lord Young, will not mind my continuing to say in his absence—he said that he will be good enough to read the report of my speech when he sees Hansard tomorrow—that we shall continue to press for less propaganda and more facts, especially so far as he is concerned. We do not welcome the continual shifting of the goalposts; the continual use of starting dates for comparative purposes which are irrelevant; the continual mixing of cash and real expenditure; the continual confusion between full-time and part-time jobs and the continual attempted comparision of like with unlike and all the other paraphernalia of propaganda. If the Minister insists on continuing to give us that, at all events let him be kind enough—having regard to the intelligent audience which he is addressing and the ability which is spread among your Lordships' Benches—to give us the facts first and the propaganda afterwards.
One example which I put before your Lordships at the moment is the claim which the Government make once more for what is virtually inevitable, and they do this time and time again. At col. 54 of the Official Report in the same speech the Prime Minister said:
"Our policies have brought record living standards".

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That is a statement that could have been made by any government in any year. Of course living standards increase year after year. It was wholly exceptional until this Government came to office in 1979, and during 1980 and 1981, for there to be anything other than a growth in the national product and an increase in living standards. For the Government to claim that as a record is totally misleading and pure propaganda.
What the Government should have addressed their mind to is not whether there has been an increase, but how much the increase has been. What the Government should have pointed out is that the long-term trend over the past 30 years has been an average growth of 2·6 per cent. per annum in our national income, whereas during the Government's seven years from 1979 to 1986 the growth has been 1·4 per cent.—just over one-half of the average growth. I took all those figures from Written Answers given by the noble Lord and his department.
What the Prime Minister should have said was not:
"Our policies have brought record living standards",
But, "If it had not been for our policies, the likelihood is that our living standards would have risen by pretty well twice what they have risen by during the whole period that this Government have been in office." We have only to compare with what was happening abroad to see how other countries have passed us by, other countries which had a standard of living markedly below ours and which now have a standard of living markedly ahead of ours. It is that kind of propaganda which we shall seek to highlight and oppose.
I shall certainly continue to oppose the Government's practice of selling the family silver to pay for the groceries. I appeal to any of your Lordships who are familiar with trusts or who are lawyers, to agree with me immediately that, if any trustee came along and asked for advice as to whether it was right for him to sell assets of a trust to realise the capital and use the proceeds for the benefit of the life tenants, he would have a very clear answer. He would be told no, it is quite unlawful. My Lords, why is that? It is because the duty of the trustees is to have regard to future generations as well, and the duty of the Government as trustees of the national assets is to have regard to the needs of future generations which they have totally failed to do.
Of course, there is nothing against a government selling assets and replacing them with other assets, and it is the same with trustees, but that is not what has happened. The Government sell their assets by way of privatisation, use the proceeds as a deduction from public expenditure or to enable reductions of taxation to be made, and there is nothing about the creation of new assets. Quite the contrary—they do not even see that the existing assets are maintained. We are told that there is a backlog of no fewer than £55 billion in the maintenance of our housing stock and that has to be made good before we can even think about increasing our assets.
I have two final points. The Queen's Speech refers to public expenditure and taxation in the following terms. It states of the Government:
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"They will maintain firm control of public expenditure so that it continues to fall as a proportion of national income and permits further reductions in the burden of taxation."
What that really means is that the Government will continue their policy of making the rich richer and the poor poorer, because the effect of reducing the burden of taxation in the way that the Government have done it is to help most those at the top levels of income, and the containment of public expenditure, so far as that affects welfare expenditure, results in harming the benefits to the poorest members of our society. It simply means continuing that trend to inequality which is the unique mark of this Government.
For virtually the whole of this century there has been a continual movement—sometimes very slow—towards greater equality in incomes. That has been reversed, and is acknowledged by the present Government to have been reversed, through the policies that they have taken.
The second point that we shall continually press on the Government is the lack of parliamentary democracy. To use those terms with regard to this Parliament, one Chamber of which depends mainly on heredity and exclusively male heredity at that, and the other Chamber depends—
Noble Lords: Order!
Lord Diamond: My Lords, did I say exclusively? I beg your Lordships' pardon. I meant to say that one Chamber depends mainly on heredity and almost exclusively on male heredity. The number of females entitled to be Members of your Lordships' House by virtue of heredity is minimal. A Chamber which is based on that principle and another Chamber which is based on disproportional representation can hardly be called the constituent parts of a democratic Parliament.
The present position is that, whereas it takes about 40,000 votes to produce a representative Member of Parliament if one votes either Conservative or Labour, it takes 16 times that number of votes to achieve a representative Member of Parliament if one votes Social Democrat. We bitterly resent being 16th class citizens. We feel that very strongly indeed and we shall continue to press on your Lordships as hard as we can that they should withdraw from the path of inequity in our financial affairs and iniquity in our parliamentary ones.
5.4 p.m.
Lord Harris of High Cross: My Lords, I am glad to join others in debating the merits of the gracious Speech, which I judge to be quite considerable. Unlike the noble Lord, Lord Diamond, I commend the opening commitment to sound financial policies aimed at reducing inflation and increasing employment. In particular I commend the extension of the youth training scheme in place of benefits for school-leavers under 18, at least as a first step. Here we are following the example of countries as different as socialist Sweden and capitalist Switzerland which offer lower inducements for their citizens to become unemployed and therefore have much lower unemployment figures. Thus in both those countries

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young people under 20 are offered not benefits but education, training or community work. Nor does either country contemplate for those aged over 20 benefits of unlimited duration, which in Britain have reinforced an unemployment culture of indefinite dependency which renders the often ill-educated victims increasingly unemployable.
I recently had good reason to study various statistics on unemployment in Britain and other countries and I must say that I became quite appalled at the nonsense we have talked ourselves into on this issue. My findings suggest an urgent need to prick the bubble of verbal compassion which in this and other aspects of policy has come to swamp rational discussion on how best we can help those least able to help themselves.
Let me proclaim my earnest belief that involuntary unemployment is a terrible scourge and indeed a personal tragedy. It certainly darkens the daily lives of hundreds of thousands of people who are today trapped in areas where jobs are not available, nor in early prospect. But I insist that the plight of such victims of industrial change is not helped but hindered by being lumped together with large and diverse groups of claimants who register as available for work when they are busy working at home, or in the black economy, or are better off on benefits, or are disabled, or have retired early, or are simply resting between jobs. Whatever the exact number of those categories the headline figure of 3 million unemployed is neither a true indication of social distress nor a useful measure of idle resources.
A lesson for the Government is that they should go on stubbornly resisting the temptation to stimulate demand, at least until more has been done to remove obstacles to mobility, flexibility and job seeking. The danger in my view remains that increasing spending beyond the Treasury's present targets will push up prices rather than increase real output and employment.
Unlike the noble Lord, Lord Diamond, I also welcome the Government's emphasis on continuing to cut income tax, which too often reduces the value of take-home pay to little if any more than that of social benefits. If taxes on earnings could be significantly cut each year, while inflation is kept edging downwards, everybody could share the gains of rising prosperity without agitating for wage and salary rises unearned by productivity. If we could thereby break the postwar habit of annual pay demands, we would not only hold down labour costs per unit of output and keep unemployment falling; we would also confine wage and salary negotiations to their proper economic function of periodically adjusting relative rewards to attract workers with skills in short supply.
I believe that a better functioning labour market would also be helped by early action to liberalise controls on rented accommodation. I hope that the brief reference in the gracious Speech means that the Government at long last propose to free all new lettings from the malignant veto of rent control and lifetime tenancy.
I urge Her Majesty's Government, in this one respect only, to display a little coalition spirit by
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adopting the ingenious Alliance device of allowing home owners and tenants to rent out a room or two and to keep up to £60 a week free of tax. Such an innovation would assist mobility and improve the deployment of labour as well as providing a welcome source of income for people with spare rooms but no spare cash.
I am also anxious to help the Government fend off opposition to what I regard as the laudable principle of a community charge for local services. To keep this new tax low, I suggest that they take a leaf out of the recent manifesto launched by the Committee for a Free Britain, with which I must declare some association. The question posed is whether or not we really need all the accumulated ragbag of local services. After all, councils do not run pet shops, holiday resorts, video libraries or many other valuable services. Why then should councillors neglect their families and gardens to read agendas that apparently block their letterboxes and attend endless meetings on schools, libraries, housing, swimming pools, allotments, residential care, harbours or abattoirs? I suspect that those could all be better managed in the market place and so be taken off the community charge.
I feel that the noble Lord, Lord Cledwyn, if he were here, would not be alone in thinking me overenthusiastic for privatisation. In opening our debate last Thursday, he lamented, at col. 17 of the Official Report, that:
"The concept of the mixed economy is fading fast".
I think it would be more true to say that the concept of socialism has faded, is fading and ought to fade faster. Pretty well the entire world, outside Albania and darkest Africa, is turning away from government and towards markets to help solve problems of adjustment to unprecedented technical and structural change. It is no longer plausible to blame Thatcherism for turning Labour's old world upside down. The plain truth is, in the words of the old song, that everybody is doing it now. Mr. Gorbachev is doing it. China is doing it. Socialists in Australia and New Zealand are doing it. Even the EC has been trying to do it in farming and air fares.
What they are all trying to do is to escape from the fixing and faking of prices, the control of supply and the restriction of choice. I shall go so far as to say that a new consensus is being forged which accepts a larger role for markets, freer competition and dispersed initiative. I believe that this emerging consensus helps to explain the tensions in the Alliance, since Dr. Owen senses these trends better than the weary old Liberal leaders, with the honourable exception of the noble Lord, Lord Grimond. I suspect that this emerging consensus, before it is fully born, will, at least for a time, sharpen frictions in the Labour and Conservative Parties and even perhaps on these Cross-Benches. However, I believe that the emerging consensus will prevail, because markets can serve our changing times better than bureaucrats, councillors and party politicians. I congratulate Her Majesty's Government on leading the way and urge them to keep well in front of Mr. Gorbachev.
5.15 p.m.
Lord Boyd-Carpenter: My Lords, it is always encouraging to hear a highly Conservative speech from the Cross-Benches, just as it is sometimes discouraging to hear a Cross-Bench speech from the Conservative side of the House. I am sure that all your Lordships have enjoyed the robust common sense of the noble Lord, Lord Harris, and will reflect upon what he has said.
The noble Lord, Lord Diamond, has deprived me of ever again being surprised by what he says. I really thought that his mature and experienced intellect could go a little further than to trot out the old, overworked, overworn cliché about selling the family silver. The noble Lord himself would not claim originality for that phrase. Nor, I think, would he claim—
Lord Diamond: May I interrupt the noble Lord? I do. I anticipated the noble Earl whom the noble Lord no doubt has in mind.
Lord Boyd-Carpenter: My Lords, I am sure that the noble Lord has anticipated all sorts of things. I believe that he has also anticipated what I shall say about him. I hope that he has. That phrase has been trotted out for years and it has lost any validity that it ever had. It is said that we have sold those industries and not put the money back but used it to reduce taxation or, he might have added, to reduce borrowing.
The noble Lord omitted to refer to two aspects of the matter. The first is that the reduction, for example, in government borrowing has been facilitated and the greater availability of capital in the free market has contributed to the remarkable and satisfactory situation in which this country has the second largest body of overseas investment in the world, second only to that of Japan. I am sure that the noble Lord, with his experience at the Treasury, will reflect on the immense advantage that such investment has in case of any economic trouble or trouble with our balance of payments. If we have massive overseas investments, as we had before the war—and we had to liquidate them during the war—it gives our economy a strength and stability which nothing else can equal. The noble Lord did not mention that.
Nor did he mention that every one of the industries which has been privatised as a result of the process has done conspicuously better since privatisation. Those industries which were jogging along on a modest profit or a modest loss are all, without exception, highly profitable and contributing to the strength of our economy and the growth of employment. I hope that your Lordships' House will not have to listen in future to such vieux jeu remarks as the jibe about selling the family silver.
The noble Lord, Lord Williams of Elvel, who has left his place for the moment, made a speech full of gloom, which suits his oratorical style. Listening to him, I often feel that his style of speaking, elegant though it is, is largely appropriate to the kind of speech one would deliver at a memorial service for someone whose life had not been wholly satisfactory.
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The noble Lord added to the gloom by foreseeing a world depression. If the noble Lord is right about that, and he is a merchant banker with, I accept at once, very considerable knowledge in the area, I suggest to your Lordships that that is an even stronger argument in favour of making our economy efficient and effective so as to be more able to resist the ill-effects of a world depression if it comes. I myself do not see many signs of that world depression. Perhaps my noble friend the Leader of the House may refer to that when, many hours hence, he winds up. However, surely the conclusion to be drawn, if the noble Lord, Lord Williams, is right, is that it is even more urgently important to make our economy efficient.
The noble Lord, Lord Williams, then indulged in a bit of rhetoric. He said (I should have thought wholly unnecessarily) that nobody had any mandate to dismantle the social services or to oppress the poor and weak. That is a comment on a government who, over the past eight years, have built up the social services, done their utmost for the relief of poverty and hardship and announced further policies to that end. Perhaps it is taxing your Lordships' patience a bit to think it necessary to make an observation of that kind. It may be the sort of observation one would make on an election platform. To make it to your Lordships' House seems an unnecessary use of your Lordships' time.
The noble Lord ended with the resounding platitude:
"Economic efficiency … must march hand in hand with social justice".
He said that that had been the policy of Labour Governments. The trouble about that observation is that one did not get economic efficiency under Labour Governments. On the contrary, one got economic inefficiency and indeed the necessity, which your Lordships may well remember, about 10 years ago to call in the IMF to relieve our distressed economy. The truth of the matter, which the noble Lord, Lord Williams, was trying to dodge, is that we do not get the resources to maintain good social services, to relieve poverty and to cure hardship unless we have an economy which is efficient at wealth creation. That is the basis of all development, of all good social developments we want to see.
The late Iain Macleod put it so well when he said that money is proverbially the root of all evil, but it is also the root of everything else. That is true. You cannot maintain the standards of social services which all noble Lords wish to see sustained, namely the high level of relief for poverty, the highly expensive and expanding health service, a good level of pensions, unless your wealth creating machinery is efficient enough to create the wealth that is needed to sustain the ever-increasing financial load.
The noble Lord, Lord Williams of Elvel, referred rather bleakly to the fact that the Labour Party's policies had not been accepted by the electorate at the recent general election. However, he did not touch on—as indeed no one has, except for the noble Earl, Lord Longford in yesterday's debate—one of the reasons why those policies proved wholly unacceptable to the majority of the electorate. Basically, the reason is that those policies were based

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on a complete failure to understand the change in the structure of our society which has taken place over the past few years.
To a considerable extent the Government, and the Government's policy, have contributed to this change because we have had a government who have not only avowed Conservative policies (as many previous governments have done) but a government who have actually put them into effect.
Lord Graham of Edmonton: My Lords, perhaps the noble Lord will give way.
Lord Boyd-Carpenter: My Lords, I am not referring to the noble Lord at the moment. We have had a government who have applied Conservative policies and actually put them into effect. We have not produced the situation which caused Disraeli to comment on a government many years ago, as your Lordships may recall, when he said:
"A sound Conservative government. I see Tory men and Whig measures."
We have seen a government who have applied Conservative measures and we have seen those measures having an enormous effect on the whole structure of our society. It is because, with respect, the party of noble Lords opposite fails to understand this tremendous change which has taken place in recent years that its election campaign—slickly and efficiently presented as it no doubt was—failed, and failed completely to achieve any substantial improvement in its electoral position over that in the previous Parliament.
It always seems to me that the Labour Party still sees the scene in a great deal of this country as being full of cloth-capped workers, living in grinding poverty, oppressed by hardhearted and brutal employers and only occasionally rescued by the gallant self-sacrificing efforts of trade union leaders. That is not what our society sees itself as. This is a society in which a very high proportion of the population have cars or motor bicycles. An even higher proportion have television sets, often colour. It is a society where they have washing machines, where two-thirds own their own home, where over one-fifth are shareholders and where more and more have holidays, not at Blackpool but in the Mediterranean. This society has achieved what used to be regarded as middle-class standards—or more than middle-class standards.
Therefore the electorate did not like or wish to support the kind of argument which the noble Lord's party opposite tried to put to them, particularly the suggestion which the noble Lord, Lord Williams of Elvel, did not refer to; namely, that the tax cuts proposed in this year's Budget should be reversed—
Lord Graham of Edmonton: My Lords, will the noble Lord give way?
Lord Boyd-Carpenter: My Lords, I will this time; the noble Lord is so persistent.
Lord Graham of Edmonton: My Lords, in referring to my noble friend Lord Williams, the noble Lord
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dismissed much of what he said on the basis that we had failed to get a majority of the people to support us. Will the noble Lord comment on the fact that for the third election running, although gaining more seats the party of the noble Lord has failed to secure a majority of the votes in the country? In other words, it is a minority government by any yardstick.
Will the noble Lord also deal with the point that if indeed the policies of the Conservative Party are so well received why they were utterly rejected in major regions of this country, not least in Scotland, Wales and great areas of the North? When the noble Lord talks in terms of all that the Government have done, will he also acknowledge that those who were poor when this Government came into office are poorer now after eight years?
Lord Boyd-Carpenter: My Lords, the noble Lord has enjoyed making that party political speech in the form of an intervention. I say to him only that we obtained a large majority in the House of Commons under the electoral system which this country has enjoyed for many years, and which noble Lords opposite have been only too happy to take advantage of when the larger part of the vote went to them. It is only when it happens to go this way that people like the noble Lord opposite develop a conscience about the matter.
I wish to return to my argument because the noble Lord interrupted me at the very point when I was talking about the majority of people in this country and the change which I beg the noble Lord, in his own interests, to try to understand. The change in the structure of our society has not applied throughout the country as a whole. There are areas which are still areas of distress, poverty and unemployment. It is no purpose of mine to try to get away from that fact.
Indeed, it is a purpose of mine to point out that, to a very considerable extent, the wounds of those areas are self-inflicted. Many such areas are presided over by local authorities that are anti-entrepreneurial and anti-employer. They have high rates and the prospect of even higher rates because as a result of borrowing in order to avoid government restrictions they are building up enormous financial obligations for the future. Their attitude to those who wish to introduce employment is by no means always helpful.
I put to your Lordships that the problem is that any businessman, however public spirited, who wants to introduce a new business somewhere, in justice to his shareholders really cannot place it in areas where he knows that they will encounter high rates, obstruction from the local authority and every sort of opposition. Therefore although I agree very much with what was said earlier today, that the reconstruction and rebuilding of these areas must involve local participation and local help, the problem is how to get local authorities that are prepared to co-operate and help in this situation, and are not content to indulge in the extreme doctrinal absurdities of the loony Left, regardless of the consequences which those policies have already visibly inflicted on their fellow citizens. That is the problem—just as, if I may say in parenthesis, I often feel in connection with overseas aid that the best

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thing we could give to countries such as Ethiopia and Mozambique is not so much food parcels as decent governments.
That is the problem which confronts my noble friends in dealing with our own depressed areas. In so far as noble Lords opposite have influence with those who control the local authorities, I hope that they will try to persuade such authorities to co-operate not only with the Government but also with the individual entrepreneur. They should give encouragement and a friendly welcome to entrepreneurs who want to set up business in those areas, and who know that the workforce there is basically able and efficient but who are deterred by the knowledge of the political atmosphere and the financial situation which they will find there.
I intended to devote the main point of my speech to another matter; that is, the question of taxation. My noble friend Lord Young of Graffham said rightly, I am sure, that wealth creation was what. mattered. Wealth creation, I suggest to your Lordships, can be very much assisted and encouraged by reductions in taxation, particularly in direct taxation. I know my noble friend will say, and your Lordships will say, that the last two budgets have reduced modestly the standard rate of income tax. It is only fair to set against that the increases which have been made in national insurance contributions which are collected—unhappily, I think, nowadays—by the Inland Revenue together with income tax.
In the days when I was responsible for these matters, which was a good many years ago, there was a separate system of collection. A book had to have stamps put in it and people realised that they were contributing to an insurance scheme which was of great benefit to them because they were obtaining, as a result of it, a heavily subsidised pension. Now that it is collected simply with income tax as a deduction from their pay there is very little such appreciation and therefore the welcome reductions in the standard rate of income tax are, I am afraid, in people's minds somewhat offset by the very high level of the national insurance contributions. It is unfortunate from the point of view I am trying to put forward about wealth creation that these reductions were applied only to the standard rate and have not applied to the higher rates of tax.
At Question Time today a Question related to the brain drain. It is surely clear that one of the factors that causes able young engineers, able young scientists, able young men or even middle-aged men of high earning capacity who have done a tour of duty, say, in the United States, to stay there rather than to return here in the knowledge that if they continue to work in the United States they will pay only up to 28 per cent. on the highest tranche of their earnings whereas in this country they will keep only 40 per cent. If you desire to keep those people here and encourage them to be here it is folly to impose these very high rates of taxation.
Lord Ezra: My Lords—
Lord Boyd-Carpenter: My Lords, to take 60 per cent. of any part of anybody's earnings is
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undoubtedly a form of confiscation. I am sorry; of course I will give way to the noble Lord if he wishes.
Lord Ezra: My Lords, the report on the brain drain which was published today pointed out that one of the major factors leading to it—in so far as it occurs; and apparently it occurs less than it was at one time thought—was the lack of career prospects and research facilities in this country. The question of taxation was not mentioned as a major factor.
Lord Boyd-Carpenter: My Lords, there are a number of factors and the noble Lord can quote as many reports as he likes. However, anyone with any knowledge of human nature will know that someone with a high earning capacity which he knows is not going to remain with him indefinitely, or for many years, and who knows that he has a period with a high capacity to earn and is therefore able to build up reserves for his old age, is going to be very much affected by the knowledge that a large proportion of his high earnings will be taken away in taxation. No reports which deal with other matters, no doubt perfectly sensibly, are really going to persuade thinking people that there is not a great deal of force in that argument. Of course it is not the only matter; there are half-a-dozen others. However, it is a factor that lies in the hands of Her Majesty's Government to remedy and to do so very easily.
If one is doubtful about this I quote from a leading article in The Times which refers to a radio phone-in undertaken by the Leader of Her Majesty's Opposition during the general election. Mr. Kinnock was spoken to by a small employer during one of these sessions. The article states:
"He pointed out to the Labour leader that higher taxation would inevitably reduce his profitability, restrict his investment and ultimately force him to cut his workforce. It would therefore not be employment-creating, but unemployment-creating.
"Mr. Kinnock's response was to say that his questioner surely did not run his business just in order to make money. The questioner insisted that he did not go through all the trouble for any other reason. Mr. Kinnock's incomprehension was complete. He did not seem to understand, or believe, that lessening the head of the firm's incentive to work also lessened the firm's contribution to employment."
That, I am afraid, is characteristic of the attitude of noble Lords in the Labour Party. I have no idea what the attitudes are in the various amalgams of parties which sit above the Gangway. This is surely the point which your Lordships should consider. Do not high rates of taxation, particularly at the higher levels, discourage investment and discourage, therefore, the whole of the wealth creation which I think all your Lordships agree is the basis of future development and of future social services?
There is only one other tax point which I should be grateful for my noble friend to deal with. I refer to the very wrong treatment by the Inland Revenue of married women and their earnings. It seems to me quite outrageous that if a couple are married they receive a lower combined allowance than if they were living together unmarried. This is not merely theoretical. I happen to know, but I will not mention any names, a couple who lived in my own part of the world not long ago. She had inherited a considerable estate and he was a Queen's Counsel with a large practice. They lived together as an unmarried couple

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for many years. They went about together and they openly admitted that they could not afford to marry because if they did so it would cost them a considerable further amount in taxation.
Deliberately to discriminate against marriage in this way, in an age when a very large proportion of married women work and contribute to the household, really amounts to subsidising sin. I doubt whether even the right reverend Prelate the Bishop of Durham would necessarily agree with that. I ask my noble friend and his colleagues to consider two points. Are they going to give the lift to our economy which we need by substantial reductions on direct taxation, including the higher rates? I point out that when earlier reductions in taxation were made in the 1950s the same amount of reduction was applied and the same number of pennies were taken off at the higher rates as well as the basic rates. It is only on this occasion that the whole of the improvement has been concentrated on the basic rate. Secondly, I ask them to consider the extremely unfair treatment of married women and the need, therefore, to tidy up this situation.
I only add to this appeal, which again The Times points out in the leading article to which I have already referred, that high and penal rates of taxation encourage every sort of tax dodging. They encourage people to go abroad and to settle abroad. They encourage people with large investment incomes to go to the Channel Islands or elsewhere. They discourage people from settling here. They encourage every sort of device and, as The Times points out—and this should appeal to the noble Lord, Lord Bruce of Donington—if this can be abolished we should,
"create a new deprived class of out-of-work accountants and tax lawyers and encourage firms to pay their employees properly rather than giving them perks."
5.40 p.m.
Lord Lever of Manchester: My Lords, I shall not follow the noble Lord in detail, but I can at least congratulate him on an improvement on Dr. Johnson who said that marriages would probably turn out just as happily if they were made by the Lord Chancellor and not by the individuals concerned. The noble Lord's amendment is that the Chancellor of the Exchequer should be the major determinant of those unions. Although I am sometimes startled by the lack of realism shown by my colleagues on certain matters, I must confess that it is something new to me to suppose that the majority of marriages, even of those not endowed with large estates, proceed only with such impetuousness as their chartered accountants will permit. Although I am very much with the noble Lord on the principle that we should not be penalised by entering into that noble and I hope normally happy state of marriage, it shows the kind of imbalance of the noble Lord in relation to the problems of wealth taxation and wealth creation.
The air of continuous and agreeable self-congratulatory optimism which marked the noble Lord's speech puts me in mind of my younger days when, immediately after the war, I was a Back-Bench Member of the Labour Party in the other place where the noble Lord was also a Back-Bencher. I well remember his springy walk into the Chamber,
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confident that we were going to be displaced. I remember in 1945 and the years following, the enormous satisfaction felt by my colleagues that a wise, benign and skilful Labour Government had ensured the unprecedented experience of continuous full employment. It convinced them that from then on the Labour Party was inevitably the country's predicted government. Unhappily they were unaware that in the Bundestag there were Right Wing Members of Parliament going around equally convinced, as they saw continous high employment and growth on at least the scale that was taking place in Britain, that extreme Right Wing policies were the recipe for post-war prosperity.
Indeed, over the globe, in all kinds of areas, among all kinds of governments, a similar process of congratulation was going on. They were all blissfully unaware that we had moved into a new era in which our prosperity or misery is overwhelmingly determined by what happens in the global economy of which we are all a part.
I do not share the noble Lord's confident optimism about the international situation. On the contrary, the situation in the global economy, upon which our economic and political safety will depend, is in a state of financial and economic disequilibrium many times more severe and more dangerous than anything that has been experienced in the post-war period. That is not the fault of any one particular government, least of all that of the noble Viscount who is to reply on behalf of the Government. That is the fact; not the absence of anxiety that the noble Lord mentions.
As a result of that prolonged disequilibrium, we are suffering from unemployment; we are threatened by a black cloud of a near insoluble imbalance of trade, affecting the greatest of the Western economies—the American economy—and we see a drive for protectionism such as has not been seen in recent years. I am troubled about that. I hope that I can have your Lordships' indulgence when I focus exclusively on that, although I concede that the appetite for continuing the dialectical combat of a general election has not been abated even by the saturation of television and press coverage to which we have been subjected in recent weeks. If I exempt myself from it, I hope that it will not be thought to be a lack of party political piety or respect for the debating points which have been made on both sides of the House.
Why do we have what to me is the most menacing situation in the world economy of the post-war period? I shall say briefly why I think that that has happened and why we must put it right. As I said, every government were able to preen themselves on their triumph of social amelioration, wage standards, employment and the like. The global economy enjoyed that for 25 years after the war because there was a unique advance in wealth creation throughout the entire globe. That was because we were working a global economy with the minimum structures of co-operative discipline that are required to maintain it. We did so well under it, that the dominance of the United States, which had made that co-operation possible after the devastation of war, was eroded, and other countries started to chafe at the discipline required to enable that global economy to be viable.

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In particular, they assaulted the structure of co-operation at its most essential and crucial point—monetary co-operation. They broke down the Bretton Woods system.
That system had obviously come to need amendment and repair, and when it needed that repair nations were faced with a choice. They could make the benign choice which was to say, "Look, let us repair the system which has served us so well" or they could say, "Now is our chance to escape from the rigid disciplines imposed upon us by the system, and break it down." That was the malign choice. The nations' leaders pretended to make the benign choice. As they tore down Bretton Woods, they declared themselves urgently as being about to build the new monetary system which the world required. Of course, they never fulfilled that pledge or made any serious move to do so.
From then on, we were landed with a monetary system which turned every major currency into a yo-yo rather than a serious, solid means for investment and exchange. Although I have it here, I shall not recite to the House the extraordinary convolutions of the dollar against the deutschemark and the yen in the period after 1971. For the first few years the dollar went down by 35 per cent. Then for two and a half years it hovered about 10 per cent. up and down. It then dropped another 35 per cent. and, finally, from 1980 onwards it started its rapid ascent by doubling in value against the deutschemark, the yen and many other currencies. Since 1985, the dollar has halved against those other currencies.
How on earth do we expect to have reliable and sustained progress in the world economy when we have at its centre money as unstable as that? Needless to say, it threatens free trade. That, as the noble Lord rightly stressed, is one of the essentials of our welfare. How can we have liberal trade when it is undermined by the violent and capricious changing values of currencies? I named the absurd convolutions of currency values. Even more absurd are the explanations to which we have been treated for those changes by conventional wisdom. I do not have time to recite those to the House.
When we broke down Bretton Woods we moved from modest co-operative preservation of the global economy to unilateralism at its most central point—on currencies. The result is that we are now facing chronic unemployment, the serious improvement of which is not in prospect either in this country or on a world scale, and the grave danger of vast cataclysmic changes in the relationships between the United States, Japan, Europe and the like.
What is the remedy to protect against these dangers? The answer is that we need to co-operate again on the central point of money, and many other points on which I have not focused today. In other words, the model for us should be the EMS covering Europe. I very much hope that we will join the EMS in the near future although, judging from the Statement of the noble Lord this afternoon, the auguries are not immediately favourable. That is where we must go. It must be an EMS that is not inward-looking, not merely attempting to achieve an oasis of stability among the European currencies; it
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has to relate to the dollar and the yen. We need an EMS which is outward-looking—and it has a better chance of being outward-looking if we are in it—and which sees the protection of world trade and world politics from the world economy as being in effect an IMS, that is to say, the EMS speaking for Europe, America speaking for the dollar and the South American world and the Japanese yen speaking, as it were, for Asia. Unless that is brought about, far from sharing the noble Lord's optimism, I am deeply pessimistic that the world economic convolutions which we are witnessing, however well we may prepare ourselves here in our own country, will be inadequate to protect not only our standard of life but our whole social structure.
I said that I would refrain from continuing election combat. I acknowledge that we have a Prime Minister decided upon by the majority voting in our electoral system. However, I must disappoint my noble friend: Manchester did not vote in favour of the lady, but then Manchester has not voted in favour of anything but a Labour Government for the last half century. Much as I love the place of my birth, I do not think that we can claim the right to dictate to the rest of the country continuous government meeting with our approval. The Prime Minister and the Chancellor of the Exchequer, whatever differences we may have over their policies or pronouncements, are both persons of outstanding ability.
My real anxiety is this. Why can we not hear from them in a sustained and well articulated public sense their recognition of these dangers, and not just in the way that the Chancellor in his Budget speech referred to a saving fall-back position; that is, that, all these buoyant hopes will be endangered with a world recession? I want to know what he has done about avoiding that world recession. I know that we are not a great power in the way that we were, but Britain still is one of the great financial centres of the world; we still carry potentially an enormous intellectual weight in the deliberations of the world. I do not hear our voice raised in recognition of the points that I have been making today—and, by the way, not merely in currencies because, should I have the privilege to do so on another occasion, I could extend this debate to the whole question of international debt which is running up in the world and equally is threatening the economies of the world. It would be encouraging if the noble Lord could give me the assurance that we shall hear coherent and sustained articulation by the Prime Minister and the Chancellor of the Exchequer of Britain's willingness to make a contribution to solving these problems. I do not preach doom, but doom will come if we do not tackle these problems successfully. All these problems can be dealt with, but I have to say that they are not being dealt with.
Party differences apart, I admire both the Prime Minister and the Chancellor of the Exchequer. He is a very gifted Chancellor who knows his way round all these subjects. I am deeply disappointed that our role, instead of being a leading one in creating the repairs required to the international system, if anything has been a negative one. Britain and Germany have been the least constructive in contributing to thought on the subject of solving the debt problem, and so far I have not heard anything

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very reassuring about the contribution that we intend to make to stabilising the monetary system. It is true that, when the pound looked like falling through the floor in relation to the dollar, we temporarily took a favourable view of co-operation instead of merely parroting the market price—clearly an absurd series of market prices—as the one on which we should rely.
I hope that the noble Lord will be able to say that in future we shall hear positively from the Government about the role that they intend to have in these international questions of currency stabilisation and greater economic co-operation between nations on central policies. If everybody had done what the Germans and the British did, for example, at the time when the Americans were being accused of profligacy, we should have had a world slump. It could equally be said, to be fair, that if everyone had done what the Americans had done, we should have had a wild world boom followed by a crash. But that is a second question. I want to know whether we can hear something real and positive from the Government; or are we to have parrot cries that the market knows best even when the consequences of that are devastating?
I hope that I have not implied by my speech that I belittle the efforts made by colleagues on both sides of the House who have been looking to improve our domestic preparedness. I suppose that, had I been a passenger on the Titanic, even if I had had prevision of the danger of an iceberg, I should have been very much in favour of having excellent domestic sanitary arrangements so that we could have had our party political arguments about what they should be, but, of paramount importance. I should want the captain of the ship to look to the icebergs.
5.58 p.m.
Lord Ezra: My Lords, I believe it is the task of those in opposition to probe behind the glowing statements of Ministers. We have had such a glowing statement today from the noble Lord, Lord Young of Graffham, vigorously and eloquently supported by the noble Lord, Lord Harris of High Cross, and the noble Lord, Lord Boyd-Carpenter. I think that our most valid contributions could take the form of asking a few leading questions designed to see whether the statements made by the noble Lords who represent the Government at a particular time are justified in the event.
I start by following on the important remarks made by the noble Lord, Lord Lever of Manchester, who is acknowledged throughout the world as an expert in international financial affairs. He has rightly referred to the fundamental, critical situation now arising throughout the world in financial and, indeed, in economic matters, the massive unbalance through which we are living. As a major trading nation. as a leading nation in the world, we cannot just ignore that situation. We cannot just introduce it casually in speeches about our affairs and say "Of course, this is all subject to what might happen in the rest of the world and, if that goes wrong, it is too bad; all options are then off".
I do not think that we can just shrug these matters off in that way, given our status in world and
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European affairs. I therefore join with the noble Lord, Lord Lever, in hoping that the noble Viscount the Leader of the House in replying to the debate will tell us a little more about the Government's policies in regard to these deep-seated international problems.
However, there are not only basic problems, but very real, immediate difficulties facing us in the international scene. Those who have read the recent OECD report published on 18th June will have seen the rather discouraging statement referring to the OECD countries. It deals with the most wealthy countries in the world; it is not talking about the world as a whole. The OECD report states:
"the economic situation has deteriorated in recent months, and OECD projections to the end of 1988 point to little improvement. Slow growth, high unemployment and large payment imbalances are likely to persist".
The same rather bleak report has come out of the Bank of International Settlements. It expresses its unease about,
"the continuing weakness of the dollar, whiffs of protectionism in the air, the Sovereign debt problem, rising unemployment and the spectre of world recession".
Only today the World Bank came out with similar statements. Therefore if one puts all this together it looks as though, in addition to the underlying problems in world affairs to which the noble Lord, Lord Lever, referred, there is the possibility not only of a fairly rapid decline in the economic situation in the world at large—affecting the developing countries—but that major imbalances and difficulties are also likely to arise in the developed countries.
It must therefore be a matter of concern to us in this debate in this House to know the Government's attitude to these matters. Do they feel that it is something that we should just let happen and see what comes out of it? Do they feel that there are policies to be pursued and, if so, with what countries and with what ends?
I should like next to turn to our internal affairs and to probe a little there also. The Government always put great emphasis on financial viability. That is the test of all matters to which they turn their mind. Indeed, the Prime Minister in talking about the European Community has said words to the effect that one cannot put money into a bankrupt institution. In other words, financial viability was the test. By that test there is no doubt that we in Britain have in recent years achieved a degree of success. The internal books have been balanced; and the external books have been balanced.
However, when one probes behind that balancing process certain features emerge. We have been exceptionally aided by two items of receipts, of resources, which are unlikely to be repeated and which are of limited duration; namely, the benefits derived from the North Sea and the sale of assets, both of which are likely to be of short duration.
The noble Lord, Lord Williams, referred to the reports on the likely rundown of the reserves in the North Sea. It is certain that there is only a limited amount of public assets that can be sold. Whether the present rate of sale can be maintained for the next two, three or four years is a matter of uncertainty. But there is no doubt that beyond that kind of period,

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receipts from that source are bound to diminish. Yet it is resources from those two activities which have buoyed up our financial situation.
What is worrying, and what worried the Select Committee chaired by the noble Lord, Lord Aldington, is the longer term. In this country we seem to suffer from a short-term outlook. This has been referred to by many, including the Governor of the Bank of England and the Chancellor of the Exchequer himself. I believe that that short-term outlook has been very largely due to the position that is constantly taken up by the Treasury, which is seeking to balance the books from day to day and shows very little concern about the longer term growth of the economy.
In this country we very badly need a countervailing department. Whether the Department of Trade and Industry under its new leadership will be taking on that role remains to be seen. We need to have a countervailing Ministry which will take a longer-term view of the growth of the economy than that taken by the Treasury, whose main task appears to be day-to-day viability. That short-term approach has unfortunately translated itself into industrial affairs.
As many noble Lords no doubt are, I am involved in a number of aspects of business. Inevitably we are being driven into a short-term position with quarterly reports of our results, and with everyone in the City watching our pre-tax profit figure, and the earnings per share. Every boardroom before it announces results is concerned to show a good short-term position. This of course inevitably means that the build-up for the future in terms of investment, research expenditure and training tends to suffer.
There is very little doubt that when one makes comparisons about investment in this country with that of our competitors one finds that we have invested less. We are investing in industry about 20 per cent. of GDP compared with 30 per cent. in Japan, 25 per cent. in Germany, and so on. The fact is that we are still investing less in manufacturing industry today, in spite of recent increases, than we were in 1979. The capacity of manufacturing industry in Britain—exceptionally, compared with all other major industrialised countries—is less than it was in 1979.
The size of manufacturing has diminished. What is extremely worrying in looking at the longer term is the report in The Times of 29th June on this morning's meeting of the NEDC. No doubt the noble Lord, Lord Young, was present at that meeting and will therefore be able to tell us whether or not this occurred, but this was a foretaste of what was going to occur at that meeting. It was reported that Mr. John Cassels, the Director General of NEDO, was going to demonstrate that, due to the big redundancies and factory closures in recent years, the country may soon run out of capacity to fuel rising demand for British goods abroad. He has drawn attention to the diminution in our investment in industry which has resulted, according to his calculations, in the fact that we are now beginning to reach the limit of our productive capability, that we shall soon be losing potential export orders, and that increased home demand would have to be met from
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abroad. We should very much like to know whether that is the situation because that throws a slightly different slant on the situation from the impression that we were given earlier today.
If the country's financial affairs are as strong as the Government tell us they are—and I have no doubt that they are telling us exactly what the facts are—I should like to suggest that we have certain priorities for the use of those resources which we have been fortunate enough to accumulate.
While I fully support everything that the Government want to do about the inner cities, that does not solve the whole economic problem of Britain. To some degree I fear it might be a bit of a diversionary tactic to suggest that we should concentrate everything on the inner cities and that everything else will look after itself. But there are other things to be done. I should like to suggest that there are three priorities in particular for which we should be using the financial resources which we now have very clearly at our disposal. I do not only mean public resources, but I talk about private resources; the combined financial resources of the nation.
First, we should see whether we can stimulate greater investment in manufacturing industry, whether we can catch up with other countries in this respect. We have lagged behind for too long. There are ways of doing this. There can be fiscal incentives. There can be projects such as successfully worked in Docklands, which I hope will be repeated elsewhere, with substantial infrastructure, up-front expenditure by government, attracting more private sector investment. There could be joint developments of various sorts.
But this greater investment in industry should not only be taken as investment in hardware. We need to invest more in research and in training to make sure that we have available the people to do the skilled jobs as the economy improves. I have been involved in export promotion almost since the end of the war. I can only say that every time the British economy has turned up, we have run short of skilled labour. This has been quite exceptional among the countries of Western Europe. So I believe we should try to repair that omission.
Secondly, the time is now almost past when we should be seriously tackling the problem of repairing and renovating the built infrastructure. I am horrified at the estimates which I now see have been made—my noble friend Lord Diamond referred to some—of the totality of estimates, many of which emanate from government departments. They indicate the extent of the expenditure needed just to repair the physical fabric of the nation.
The last estimate I saw amounted to over £90 billion. I am perfectly willing to show it to the noble Lord, Lord Young, who expresses surprise. I have it all itemised but I shall not read it out. It comes from a valid source and involves houses, school buildings, hospital buildings, water supply systems, sewerage systems and main and secondary roads in many parts of the country. All that totalled up comes to something of that order. We cannot achieve that overnight, but we ought to make a start.
Thirdly—this I believe came out very clearly in the recent election campaign—we need to improve the

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state of our public services, particularly in education and health. The Government always tell us about all the money they are spending in these sectors, but I think what people now want to see are results. They want to see standards improved. If we can afford to do that now we should be doing it.
I conclude my remarks by saying that this is the time when we should be taking a wide view of the problems facing us. The facts as they stand today may appear as the noble Lord, Lord Young, has presented them. But we need to consider our affairs in the context of the wider world economy and also to consider our affairs in the context of the future. We should devise policies that take those two major aspects into account.
6.15 p.m.
Lord Campbell of Alloway: My Lords, I should like to introduce a new topic into your Lordships' discussions and to go down another road, for as yet in this important and highly informed debate on economic affairs your Lordships have considered aspects of the inter-action between wealth creation and employment at both international and national levels. One of the factors—not the only one, but an important one—affecting both wealth creation and employment at national level in our own back yard is the essential contribution which the trades unions have to make to the economy.
My noble friend Lord Boyd-Carpenter referred to the speech of the noble Lord, Lord Williams of Elvel—to which I do not refer because he did not mention the subject with which I deal and it is therefore not within my province to comment upon his speech. In the noble Lord's absence—it was a pity it was in his absence, because it was most amusing—my noble friend Lord Boyd-Carpenter made certain mild comments about the speech and it would be quite otiose for me to enter into that at all. My noble friend was making a point in that context about the importance of understanding the changes in the structure of society. This has a particular relevance to the changed status of trades unions.
What is to be the changed status? What are to be the changed functions of trades unions? Trades unions provide part of the motive power in the engine room of national wealth creation and employment—an important part, which needs some tuning to achieve full efficacy. The problem of the status of trades unions is not one of those divisible problems between North and South, between England and Scotland, or between England and Wales, such as the type of problem to which the noble Lord, Lord Williams referred. This problem is a general, indivisible problem. The gracious Speech heralds legislation within this Session of Parliament to establish a new fundamental freedom—the right of a trade union member to work as he wills—so as to shift the balance of power in the unions back to the individual members. My noble friend Lord Thorneycroft made this point the other day as only he can make a point. This is a mere extension of the policies already pursued by this administration. It is a policy wholly justified by past abuses of trade union power.
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Stripped down to brass tacks, the establishment of this right to work involves no strike call without a secret ballot, no disciplinary action for refusal to strike and no legal immunity for industrial action to establish or maintain a closed shop, not as such rendered unlawful. Some 3 million workers work under this system, but it is a system which encourages a variety of restrictive practices which impinge upon the right to work. What work shall be undertaken or not undertaken? By whom? How many? In what manner may goods be produced or handled or services provided? Here, freedom of choice is to be given to each individual member as to whether he will obey that ordinance of the union. At present if he does not obey it he is exposed to sanctions. In future if he refuses to obey he may not be disciplined and if he is disciplined the commissioner as part of his wider functions will seek the protection of the courts.
If I may anticipate the speeches of the noble Lord, Lord Basnett, and the noble Baroness, Lady Turner of Camden, I say with respect to them that it is understood that in principle the Labour Party opposes any dilution of concentration of power in the hands of the trades unions. It is understood but it is not accepted on this side of the House. The problem is that this power in the hands of the unions, a divisive power which has all but rent the fabric of our society on more than one occasion in the past, has been massively abused. There is the block vote; there are the disciplinary sanctions; there are the victimisations; the rigged elections; there are restrictive labour practices, some of which even maintain ghost labour on the pay roll; there is the misuse of funds, and even recently, as one read in the newspapers, the misuse of pension funds—all this to the great distress of the membership, at great cost to the state and at times at great peril, as we have seen in the past, to the maintenance of law and order. Now it will be open to individual members to put their own house in order without fear of loss of jobs and indeed without fear of expulsion or any other form of direct or indirect pressure.
During the debate on the Green Paper, the noble Lords, Lord Basnett and Lord Murray, questioned—and I have taken this from their most impressive contributions—whether there was any need and any general support for this curb on the concentration of power. That question has since been answered by the electorate. As to the trade union vote, according to the MORI survey published in The Sunday Times, about 30 per cent. went to the Conservatives, about 40 per cent. to Labour and about 30 per cent. to the Alliance. I do not want to be unkind about the Alliance. All parties have difficulties at times. But it is fair to say that the Alliance vote in its composite or disparate form would not readily be transferable to Labour. Therefore it would seem that there is an impressive trade unionist vote in favour of the Conservative manifesto proposals.
During the debate on the Green Paper the noble Lord, Lord Rochester, who is to speak later, took a stance—and I assume he will take the same stance today—that was rather difficult to appreciate, because he supported all the Government proposals but he said that some of them did not go far enough

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and that anyway we had cribbed some from the Liberal Party. Then he said, supporting Labour, that this was not the time for legislation at all. Then, having taken a sideswipe at what was called speculative capitalism—although I do not know what sort of capitalism is not, or what that means—he concluded without reaching a conclusion. Perhaps the electorate failed to understand the approach on this. I certainly did, and I hope I do the noble Lord no injustice. The policy may be very plain at a later stage in this debate.
During that debate, the noble Lord, Lord Chapple, whose name I am sorry to say is not on the list of speakers, warned that the proposal might be seen as a punishment for past misconduct. In view of the activist threat of extra-parliamentary action—and there is a threat that is repeated daily and has been repeated daily since the result of the election—the proposal may also be seen perhaps as a reasonable measure of safeguard against future misconduct. Why? If the right to work is established with effective means of enforcement—and that is the proposal—there is scant prospect of any sufficient muster to man any viable boarding party to strand yet again the ship of state on the shoals of anarchy. This threat of confrontation with government by resort to extra-parliamentary action is not only unconstitutional but unlawful, even if concerted industrial action were to be dressed up in the trappings of a trade dispute.
This threat of extra-parliamentary action and confrontation with the Government was kept well under wraps by those in charge of the "red rose" campaign, but now the activists have slipped their muzzles and having paid the Labour Party, their piper for parliamentary purposes, that same ilk calls its old tune of extra-parliamentary action. It is anathema to the electorate, it is an insult to the trade union movement and it is wholly unacceptable to all noble Lords, irrespective of where they may sit.
If it takes a long spoon to sup with those who would confront any duly elected government, nonetheless sup we must. A bridge of understanding of sufficient strength must somehow be built to carry some of the stresses and strains of the design load of proposed legislation. Before the draftsman cuts his quills and the mould of the Bill is set, the hope must be that we may debate a White Paper in which views expressed as sought in the Green Paper are taken into account and that there shall be consultation, real consultation, not only on aspects of principle but on ways and means of implementation. Is it not essential to ensure that the lawful and responsible conduct of trade union activities of vital consequence to the well-being of the state shall not be inhibited? Legislative reform in this regard as envisaged by the gracious Speech is not only welcome but is requisite as relevant to the needs of modern society. But surely we ought to listen before we leap.
6.30 p.m.
Lord Peston: My Lords, let me start with a word of apology to the noble Viscount, Lord Whitelaw. I shall not be here to hear him reply to the debate. I
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hope that he will accept that it is an extension of my normal incompetence as an economics forecaster that I was unable to forecast that there was going to be an economics debate this evening. No discourtesy of any kind is intended to him.
By way of preliminary remarks, there are two rather acerbic statements I want to make. One concerns the subject of taxation and incentives. I have spoken on this before and I promise to impose on myself a self-denying ordinance and after today not to speak on it again this year. But I must repeat the point that analytically within economics there is no presumption that high rates of taxation are a disincentive. This is a subject which has been studied in enormous depth and extensively empirically, and no one has established empirically as a matter of fact that those disincentive effects exist.
Given the effort that has gone into this over something like 50 or 60 years, were there any truth in the blanket proposition of the disincentive effects of taxation, that would have been established by now. I say that but I promise not to say it again, at least until 1988.
My second acerbic remark is in response to my old friend Lord Harris of High Cross, who I am glad to see has returned to his seat so that I can say it to him while he is in your Lordships' House. I read his remarks on unemployment and his view of the figures in the paper a couple of weeks ago. I thought it was some kind of elaborate joke. But since he has repeated those views in your Lordships' House today I assume that he expects us to take them seriously. I think he is profoundly wrong on both the social aspects of unemployment and the economic, but more on the social.
My view of the unemployment figures is that, far from exaggerating the social cost and misery of the people involved, they underestimate it. The fact that, like most British people, the unemployed do the best they can in adverse circumstances should not lead them also to have to accept the insult that they are not really unemployed or that they are voluntarily unemployed. They do the best they can but they would rather be in work.
On the economic and resource side of course the problem of unemployment—and this is widely accepted—is that it is destructive of the individual as a producer—as, I think the expression is now, a wealth creator. Certainly I agree that 3 to 4 million men and women are not immediately available for productive work, but that is a measure of the costs of creating that unemployment.
It is also indicative of why those of us who have argued consistently for some time that we should not have done it in the first place but that we should get rid of it as rapidly as we possibly can are right. That is why many of us continue, despite our difficulties with other aspects of government policy, to support all the measures of retraining and increasing employability that the Secretary of State himself has been so involved with for so many years.
Mostly I wanted to speak this evening on the theme that the noble Lord, Lord Lever, introduced, which is the international context in which we must place economic policy. Increasingly not to place these

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matters in an international context is to be in danger of getting almost everything wrong. To refer to my point on forecasting, suppose when all the major institutions are warning us of a major slump in the world perhaps we ought to say that they are all consistently wrong, but at least we ought to take it seriously into account.
The key issue will be timing, and to some extent the other danger I see is that the Americans will take too seriously this proposition that they ought to put their house in order and get rid of their current account deficit. If they did that they would really place the Western world in peril. Happily I do not think this will happen before the next American election, and we can face that when we get there.
Let me say in this regard that one aspect of the speech of the noble Lord, Lord Young, which I particularly applauded—and of course, as he knows, I shall be moaning at him continuously for the next few years and even making the occasional acerbic remark—was his view (and I take it to be the view of Her Majesty's Government) that we would not go down a protectionist path in dealing with these international matters. I hope strongly that he sticks to the view that whatever the problems are we will not be a party to increasing protection in the world. There are too many other forces in that direction.
Having said that, I should like now to turn to the role of the EC and also go on to the question of the EMS. On the EC itself I should like to echo the remarks of the noble Lord, Lord Ardwick, in the debate on Monday. Those of us who have been in favour of the EC are somewhat disenchanted by its inability to take any kind of leadership role in the world. He was referring of course to political matters but I should like to refer to economic matters.
In the political field the EC leaders simply enjoy themselves blaming the Americans and the Russians for everything that is wrong in the world, and that somehow excuses them. But in the economic sphere, because the Russians are not that important, they simply concentrate on blaming the Americans for everything. The time has come to stop this squabbling. Certainly I should like to see our Government start to take a lead in simply saying that the EC ought to be a body for influence in the world and particularly in the world economy.
On that I should like to say a word on the EMS, and I suppose I ought to say that I am speaking entirely for myself as a Back-Bencher. The noble Lord, Lord Diamond, certainly said that he favoured an early move into the EMS, and the noble Lord, Lord Lever, said that as well.
I hope I am not embarrassing the Government. For all I know there may be subtle negotiations going on at this very minute and we shall get an announcement very soon that we are about to join. There is a major case for us to join at this time and to get out of the weaseling thing—and I am just as good as anybody else at weaseling—and say that we will join when conditions are right. My general view is that we would do almost anything when the conditions are right; the real point is to do it. In this case I think that the arguments are compelling that we ought to be in.
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Obviously it will complete whatever moves we have in the European direction economically. It is a vital cog in the whole European economic movement. It will certainly help us towards policy co-ordination, which we certainly need in the first instance in Europe. If we cannot get it in Europe then how can we expect to get it worldwide? I emphasise that point. I very much favour the possibility of the encouragement of more central bank operations for stabilising, with the Bank of England playing an important part in this, and also, as it were, using our joint capital funds for those purposes.
Another aspect of this—I hope not too minor—in the gracious Speech is that reference was made to freeing the market for financial services, something that I strongly support if for no other reason than that I believe that we in this country have a comparative advantage in this area. If we can free such markets, there is money for us to make. Since we are quite open in creating freedom for the Europeans to get into our markets in some ways, I would very much support—and I take it the Government will press ahead strongly with this—the proposals for freeing financial service markets in this way. Surely we shall be aided in doing that if we are in the EMS rather than not in the EMS. I think that will undoubtedly help.
I add on a narrower view that in so far as sterling is one of the currencies which somehow we are not sure where it is, it will take the pressures off sterling that are likely to emerge if there is any other adverse economic international effect. I reiterate that I am speaking for myself but I favour our joining the EMS. I favour more generally internationally of course our moving back to a kind of fixed rate system within broad bands rather than the rather narrow Bretton Woods system, which is no longer applicable. But the EMS is the first step and would be an important one.
I turn lastly to the future of domestic policy just to make one or two remarks which I do not make in a critical spirit. The problem that the Secretary of State has to address is one that has been with us for quite some time. I raise one or two questions about it rather as the noble Lord, Lord Ezra, also asked questions.
I remember as a student that one of the standard examination questions was, "Do you take work to the workers or do you take the workers to work?". I suppose I got a reasonably good degree because I was able to answer, "Yes, but", to each bit. That suitably balanced answer is what used to score high marks at the London School of Economics. I then learnt to lecture in exactly the same way, to give both things. But the difference between being a student and an academic on the one hand and then being in government on the other is that you have to do something. You cannot say, "Yes, you do this, and you also do the opposite".
What concerns me—and I do not know the answer but we have to probe into this a bit more—is that, as I understand it, policy is in the direction (and I would support it) that on the whole we shall try to take work to the workers in this case. In other words, we are going to try to invigorate and reinvigorate the North, the inner cities and all those areas. If that is policy, on the whole I support it particularly because the reverse

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would be to intensify the divisions and pour everything down to the South.
The difficulty here is a clash between what one might call the broad interest and how the market mechanism would work. My guess is that markets left to themselves, in so far as they deal with the problem at all, would pour everything down to the South and in a sense make the problem worse rather than better. Therefore we have the curious problem—the paradox—that the Secretary of State must be somewhat of an interventionist, although he will also wish to use market forces to help him, if we are to take the work to the workers. If he does that I support him.
I make a final remark to the noble Lord. He is Secretary of State for Trade and Industry and nowadays it is an interesting department. It has been so for some time because, on the one hand, it is trade and some of his officials will be pushing market forces to him. On the other hand, those on the industry side tend to be much more interventionist. Perhaps we shall achieve the right balance if we put the two together. Whatever happens, the actual criterion by which we shall assess the noble Lord, and I hope eventually cease to moan, is if the workers get back to work.
6.41 p.m.
Lord Raglan: My Lords, I think that the Government have treated the post of Secretary of State for Trade and Industry rather cavalierly. I read somewhere that there have been six Secretaries of State in eight years and perhaps the noble Viscount the Leader of the House will put me right on that point when he winds up. Whatever the figure, the Government have shown a certain lack of awareness of the importance of the post. That seems odd in an administration which rightly proclaims the paramount importance of the good health of trade and industry.
I congratulate the noble Lord, Lord Young, on his appointment and I hope it signifies that government thinking has changed. I am glad that the noble Lord sees his department as wealth-creating. I hope that he will be left there for several years in order to show what he can do.
I know him as a practical man. Years ago he advised me on the sale of new town assets. Today I offer him some thoughts arising from my own experience in that new town. I remember that in the mid-1970s we in the new towns saw their momentum running down and we would discuss among ourselves how well the new town mechanism would be suited to inner city renovation. In due course our ideas became manifest in the London docklands and on Merseyside, but not through a Labour Government. The Labour Government was stymied by its own local councils.
Lewis Silkin, the architect of the original new town legislation, would have been perplexed by that. Here was a way of getting money and jobs into the run-down areas, and it was opposed just as this Government's latest inner-city corporations and task forces are being opposed. One of the reasons for that
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is fairly simple. There could be problems if a local councillor has become used to being the most important person on the patch, projecting himself as the one from whom all blessings flow; but the voter sees jobs and economic salvation coming through an inner city corporation task force, or other central government agency. It is important that those in charge of these agencies have a clear-eyed appreciation of that situation. While they will need firmness of purpose they will have no room for arrogance, quite a lot for diplomacy and a great deal of need for a philosophical attitude because in some circles nothing that the agency can do will be deemed to be right. Therefore, in my view, choosing who is to head these agencies needs to be undertaken with the greatest of care. A wrong choice will create unnecessary difficulties, while a good choice will enormously assist in opening the path to getting things done.
I also concur with the noble Lord's reported remarks that the best that the task forces or inner-city corporations can do is to help cities to help themselves. That in turn is not something which can come about in a short while. The process of our industrial decline has been a long one, much longer than many people think or perhaps care to think. It will take a long time to reverse. By 1970 in the town for which I was responsible the old staple industries of coal and coke, wire making, tin plating and brick manufacture had gone and newly introduced industries, such as nylon spinning and automotive brakes, were reducing their workforces. A year later in 1971 an iron foundry which had employed 1,000 men for 170 years was closed down.
It was lucky for us that the M.4 from London was completed by that time, so we in South Wales could look to the South East as a source of footloose industry rather than to the Midlands, which at that time was having difficulties. We built advanced factories to tempt firms to move and settle in with us. Some firms did so, and very good ones too. However, there were not enough to take up the increasing unemployment. We then began to do what a number of people declared would fail. I had been advised by the ministry that we should build small factories, but when I asked how big a small factory should be I was told that it should be about 10,000 square feet. At that time it was enough of an area to employ about 70 people. Yet I could not envisage from where firms of that size could possibly materialise so we built units of one-tenth that size or less. In that way we began to create the kind of facilities in which local people in their ones and twos could start businesses. That was 15 years ago. I may say that it made no difference which government was in power; we continued this policy with their full approval.
Now well over half the businesses in that town have originated locally. It is no longer so dependent upon a few large employers and therefore it is no longer so vulnerable to slump in one trade or another, for there are scores of different trades. We should make no mistake that there is still a lot of unemployment there but the town and the area are prosperous compared with many, and furthermore are well placed to take immediate advantage of any general improvement in the economy. In addition, the earlier feeling of utter hopelessness is not there. If your grandfather and

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your father have worked in the same firm and you also expect to do so but then suddenly it is closed down, the bottom falls out of your world. That has happened on a large scale in parts of the country and people there must be forgiven for believing that the world has forgotten them.
I have seen how, with the right kind of encouragement, that outlook can change, although I repeat that it is likely to change only slowly; there is no magic wand solution. It is only to a limited extent that the problem can be palliated by importing ready-made firms. Enough of them simply do not exist, and if they are free to come one also finds that they are equally free to go.
In my view the economy of a city or a region of a city must be based on the firm grounding of indigenous firms. That means one or two people starting to do or make anything that is honest or legal, with no pompous value judgments as to whether or not it is deemed useful. Through impatience or incomprehension there will be resistance to the Government's initiative. No doubt there will also be doctrinal opposition in some places, for much the same reason that Stalin liquidated the kulaks: because they were small businessmen of independent means and therefore of independent mind. However, in taking these initiatives the Government have themselves abandoned a doctrinal, free-wheeling, non-interventionist approach and are being positive. I see the whole economic prosperity and political wellbeing of the country as bound up with the encouragement of small business. It behoves the Government to encourage it in any way that they can, and it ill behoves big business to look down upon it, because they were all small once.
I have always been deeply interested in macro-economics, about which we have had several interesting speeches this afternoon. I have sometimes wondered why Marx called capitalism a system, because if it were a system, surely someone would have found out by now how it worked and we could all agree about what to do next. At such times my mind goes back to a man who occupied a factory unit in my town and who made toasted coconut squares. He devised the mix for the correct stickiness and bite, invented the toasting machinery, obtained some second-hand sweet wrapping machinery and fulfilled a number of orders. At one time he was despatching no fewer than seven tons a week of the stuff from that factory all round the country to places from Fortnum and Mason down. Who would have thought of it? He did. He found a niche in the market. He made a lot of people happy and himself moderately prosperous. Given the right conditions, many more such people will appear in what now seem to be run-down areas and as they do so more prosperity and better conditions will materialise around them. I hope that the Government will go ahead with great energy in encouraging those right conditions.
6.53 p.m.
Lord Simon of Glaisdale: My Lords, your Lordships have been favoured today with speeches from famous economists, former Treasury Ministers and persons accomplished and experienced in public and private affairs, and those are overlapping
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categories. I propose to address your Lordships on two matters only: first, regional policy, which I approach, as I have done on previous occasions, from the circumstances of the industrial constituency with which I was formerly associated; and, secondly, the alarming correlation which has now appeared between unemployment and illiteracy and innumeracy.
As I believe that the Government are open to criticism on both those matters, on the second one sharing it with a number of previous governments, I ought to set the matter in its proper perspective so far as I am concerned by saying that I think that the last government—the one that went to the election—and the previous one have run the economy very well indeed. If I may say so without seeming impertinent, I thought that the noble Lord who is now the Secretary of State for Trade and Industry produced resourcefully and vigorously precisely the kind of measures that were needed. I thought that the Government were right to put at the head of their priorities the reduction and containment of inflation. Inflation is still much too high and dangerously high for social justice and economic competitiveness. But if inflation is not contained, one has to rely immediately on higher interest rates.
The last time this Chamber seriously discussed these matters—and I say "seriously" because before the election we had some very entertaining knockabout from the noble Lord, Lord Williams, and the noble Lord, Lord Brabazon, in which statistics were hurled about rather like bouncers at a batsman's head—there was a general consensus, put with particular force by the noble Lord, Lord Ezra, that the great hampering element that was preventing growth and particularly re-growth in manufacturing industries was high interest rates. Of course if inflation is not kept under control, one of the specifics that historically and theoretically is required is a higher interest rate.
The other step that government took, quite rightly in my respectful opinion, was to set a firm control over public expenditure. They were repeatedly urged to borrow more money. Even today, before we began this debate, there were three issues on which clamant voices were raised praying for greater expenditure, which at the moment means more borrowing. During the debate, the noble Lord, Lord Ezra, produced a most attractive shopping list of items on which more could be spent. If money is borrowed by the Government from the public it can only be by virtue of rewarding the lenders through interest rates. So if the Government had not controlled expenditure, interest rates would have risen further, to the detriment of industry.
We all see it quite clearly in the American economy but we are rather reluctant to admit it to ourselves. If we are to eat bread and honey, a firm hand and a firm mind are needed in the counting house and that is what we have had from the First Lord of the Treasury and the Chancellor of the Exchequer.
I turn now to the matters on which I think the Government are open to criticism, the first of which is regional policy. When I last spoke on this subject I protested against the over-simplification which makes a division between North and South and I

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think that that view has been borne out by the results of the election.
The noble Lord, Lord Williams, taking up a theme that the noble Lord, Lord Cledwyn, adumbrated on the first day of this debate, drew a picture of the electoral map on television, showing blue in the South and red in the North, in Scotland and in Wales. That is not only an over-simplification but a dangerous one, because it leaves out of account specific areas in the South where there is economic stagnation—they are few but they exist—and leaves out of account areas in the North of economic expansion.
I live in the North of England and both south of where I live and north of where I live the Government actually won a seat. So it is quite wrong to say that there is this economic division between South and North. Nor is it true to say that Scotland is a case by itself as I think the noble Lord, Lord Graham, said in an intervention. Indeed I have heard it said, and have read it, that since the election the Government have no mandate to govern Scotland. With all respect that is nonsense. Between 1832 and 1922 there was only one election in which the Conservatives had a majority in Scotland, but nobody suggested that they had no mandate to govern Scotland. The mandate exists in the Act of Union which puts on your Lordships, as part of the Westminster Parliament, the duty of governing Scotland and the right to do so. What one wants to look at in detail is the particular regions where there is economic stagnation.
Let me start by saying that even the most non-interventionist government —and I think that this Government have been right in restricting intervention—intervene powerfully in the economy. One has only to think of the Channel Tunnel and the vast expenditure, both public and private, that that engenders in the South. One can think of the M.25 and the way that engendered more traffic, more business, until hardly had it been completed than it had to be increased and enhanced.
But, in fact, the Government's regional policy has compounded that drawing of North to South. There are signs already that there is a shortage of skilled labour in parts of the South of England—I think that the noble Lord, Lord Raglan, referred to this—with the result that trained skilled workers are actually commuting from the North to work in the South. That seems to me to be very dangerous. A boiling economy is just as inefficient as a stagnant one. One has only to think of the economic situation of this country in the late 'forties, when there was continual shortage of skilled labour, with the result that the popular catchword was "bottleneck".
What the Government have done—and the noble Lord, Lord Young, confirmed this the last time I raised the matter—is to try to relax planning procedures in the South to make it easier for new businesses to be established there. That, as I say, merely compounds the cyclical effect and it is precisely the wrong policy—directly contrary to what is required. What is required is the relaxation of planning procedures in such a way as will encourage the new businesses to open in the area where industry is stagnating.
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I do not think that the policy of inner-city restoration, desirable as it is, is sufficient. It is not sufficient for the reason that was indicated by the noble Lord, Lord Williams, when he enumerated the towns likely to be affected. But they excluded a number of rare areas of very high unemployment indeed and of extreme stagnation. So though I welcome the policy as regards the inner cities, it is inadequate in itself as a proper regional policy.
I turn finally to the question of illiteracy, which is indeed alarming. The noble Lord, Lord Young, instituted the new Job Training Scheme. It was reported that of the applicants to that, 25 per cent. had difficulties in literacy and numeracy—one-quarter. Those are young people. So it is tempting to say that they were discouraged and inhibited by the various curious items that seem to have crept into the school curriculum at the expense, no doubt, of teaching reading, writing and arithmetic. But that is not so. It cannot be so, because that same figure of 25 per cent. illiteracy and innumeracy is found in applicants to the Restart programme which suggests that there is a long-standing problem.
Perhaps I may give an example from my own experience. When over a generation ago I became a Home Office Minister I was responsible for the fire service. I went down to the London Fire Brigade which had found that it was having to refuse a number of desirable recruits who had once learned to read and write but who had lost the skills in the short time since leaving school. In other words, they had not been soundly and thoroughly taught. In fact, the fire brigade instituted their own system of schooling. So I hope that the noble Viscount will tell us the Government's policy on that.
My own view is that one thing that ought to be considered is whether we can make English more easy to read and write. I know that the Department of Education and Science has an inveterate hatred of that and has refused even to allow it public discussion in the way of a royal commission or a departmental committee. But the figures of illiteracy in relation to unemployment, which I mentioned, reflect very adversely on that ministry and I see no reason why it should be allowed to carry the cause at the expense of the unemployed.
As I say, those are two areas of criticism. By and large, I found myself in agreement with my noble friend Lord Harris and the noble Lord, Lord Boyd-Carpenter, that the Government have managed the economy not only well intrinsically, but more favourably than comparable foreign economies. I trust however that the two particular matters that I have mentioned will have the specific attention of the Government as they now, to my mind deservedly, enter on their third term of office.
7.10 p.m.
Lord Sandford: My Lords, about this time a year ago I was concluding a correspondence with the Secretary of State at the Department of the Environment, Mr. Nicholas Ridley. (May I say incidentally what a welcome innovation it is to allow a Secretary of State for the Environment to survive across a

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general election). The correspondence that I was conducting with him was on behalf of the planning authorities of London and the South-East and has resulted in an up-to-date regional strategy for London and the South-East, the first since the Greater London Council disappeared from the scene and the only regional strategy that is in force in any part of the kingdom.
The strategy has three strands: fostering economic growth, which is the topic for our debate today; revitalising the older urban areas, which is the main strategy and priority for the Government throughout this Parliament; and accommodating development while conserving the countryside. The progress towards achieving the aims of that strategy has been monitored throughout the last year and I have today received the report of that monitoring process. That report will be considered by the planning authorities that make up the South-East regional planning conference on 15th July and I shall thereafter be able to draw the attention of Members of Parliament and other people concerned with the region to it.
I thought that I might share some parts of that report with your Lordships today. I begin by reminding your Lordships of some of the special characteristics of the South-East. It is one of the more prosperous areas of the kingdom, making a major contribution to the United Kingdom's reviving economy and enjoying the benefits of that. It contains the financial services, comprised in the City of London, and it provides homes and houses for those who work there. In the Thames Valley the South-East has probably the greatest concentration of the sunrise and service industries in the kingdom. It is the nearest part of the kingdom to the markets of Europe and it contains the world's busiest airport, so it is no wonder that it is thriving. But nevertheless it is like every other industrial region of the kingdom in that a large part of it is still engaged in a massive and arduous process of restructuring from the earlier industries that originally sustained it.
I should like from now on to invite your Lordships to concentrate with me on the problems and the opportunities remaining in that part of the South-East which can be described as East London and the Thames estuary below it. That area has already been subject to massive changes and these are still being encountered today. It is indeed an old urban area, far greater in extent than any other in the kingdom, stretching for 50 miles from Tower Bridge right down to Sheerness; and it is the revival of that part of the South-East which people in the other parts of the region regard as a matter of the highest priority. That is not just the docklands, not just the inner London boroughs but the whole Thames estuary, all 50 miles of it.
That area is still littered with phantoms from the past: early brickworks, chalk pits, cement works, power stations (some of them still in service, some of them derelict) decaying jetties, slips, wharves, docks—not just the commercial docks of London but the closed naval dockyards of Chatham and Sheerness. All those have gone. On top of that there was the pre-war slum clearance, the bombing during the war and the post-war reconstruction which led enormous amounts of talent to leave London and
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settle in the new towns surrounding it, such as Crawley, Stevenage, Hemel Hempstead, Harlow, and so on. Since then there has also been the collapse of the commercial docks in London.
There is in this area that I am now describing the highest concentration of joblessness in the whole kingdom. So do not let us talk about the North-South divide as though none of those problems existed in the South-East. They do exist, and where they exist they are more concentrated and severe than anywhere else.
But right athwart the Thames estuary now strides the M.25, providing enormous opportunities for regeneration. Right outside the estuary lie the huge markets of Europe. There has already been the spectacular success in the London Docklands under the urban development corporation there. That was a costly exercise and not I think exemplary in the sense that it could be adopted in many other places.
In Medway, where Chatham dockyard has been closed with a further huge increase in unemployment, there are now enterprise zones and business parks which are proceeding satisfactorily. I was pleased when I recently visited that area to see the church of the barracks which I remember well as a former naval officer now serving as the headquarters of the Medway towns enterprise agency—a thoroughly satisfactory conversion. The authorities both sides of the Thames downstream seem to me to be making considerable progress in establishing a better environmental image. Gillingham, for instance, is engaging consultants to help it change the appearance and attractions of the borough. Labour Thurrock on the other side of the river is using the Ground Work Trust which has helped so much in the North to improve the image of industrial dereliction, and Gravesend in Kent is engaged in an imaginative scheme with Kent County Council in improving its image.
All of them are attracting private sector building and private sector enterprise into their areas, and as a result since September of last year they have succeeded every month in reducing their unemployment figures by 500. That is not a large figure in the macro terms in which we have been discussing things earlier today but it means to say that one of the blackest spots of unemployment outside London in the South-East is now improving faster than many other areas in that thriving region.
So what about the prospects, policies and priorities for East London and the Thames estuary from now on? The South-East regional planning conference undertook a survey of that area, East London and the Thames estuary, in January last year. It identifies those areas which would be capable of commercial development but which are constrained by the existence of heavy dereliction, absence of roads and other environmental factors of that sort. Those factors are being overcome and the monitor to which I referred records that.
However, it is clear that the housing authorities must develop further strategies with private sector builders and enterprise agencies for providing good supplies of low-cost housing—a subject which received very full treatment in our debate

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yesterday—low-cost workshops for new productive capacity, and also develop co-operative schemes for improving their environmental image. It is necessary for the counties and the London boroughs, as highway and education authorities, to ensure that the lack of adequate road links and the lack of skills do not hinder economic growth as it begins to pick up in those areas.
That leads me to a question which I should like to put to my noble friend on the Front Bench. The Government must be ready to help adjust the priorities in departments in Whitehall, in bodies like regional water authorities, in British Rail, among health authorities and in bodies such as the Central-Electricity Generating Board, all of which have activities and hold land in those areas, to help make them conform more specifically to the regional strategy for the South-East (now that we have one), especially as it applies to East London and the Thames estuary where assistance is chiefly needed, where joblessness is greatest but where the potential is also greatest too. The bodies such as those I have mentioned should be required actively to support and not to hamper or to hinder the implementation of the strategy.
The question I should like to ask my noble friend is this: Can be confirm that there is going to be some new structure or machinery, either in the Cabinet or in Whitehall, which will be able to respond more effectively than it has, in my experience, in the past, in order to encourage and not to hamper the enterprise-led growth and development which we all want to see and are so glad to see emerging at last?
Lord Basnett: My Lords, a regrettable feature of our society and one mentioned by my noble friend Lord Williams of Elvel is its polarisation and division. That polarisation and division will widen if the Government fail to repair an omission or to reconsider a commitment made (despite the promise of consultation) in the gracious Speech. The commitment was to introduce—and I repeat the words for the benefit of the noble Lord, Lord Campbell—the unsought, unjustified and unnecessary legislation which can only be designed to harass the trade union movement. The omission is of any acknowledgement of even the word "unemployment" or any commitment to give priority to its reduction.
To the individual who is unemployed, that is both an economic and a social disability. During the course of last year, a series of articles appeared in the British Medical Journal on health and unemployment. The general thrust of those articles was that unemployment is not good for your health. In one of the articles there was a quote from an article in the British Medical Journal in the 1930s which said that an unemployed man was typically one who sat and stared out of his kitchen window at an untended garden. That lack of motivation and removal of social status which the absence of work brings divorces the unemployed from society and creates a source of polarisation and division.
That is a commonly held view and one which is certainly held collectively in industry. National
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employers' organisations, including the Confederation of British Industry, who are associated with the OECD—that is, all the representatives of all the employers in the world's industrial nations—hold that view. With the trade unions, they signed a statement supporting it. That statement, Full Employment and Growth as a Social and Economic Goal, presented to the OECD Finance Ministers, including Nigel Lawson, and reiterated in March of this year, said:
"Work provides dignity. A society that does not consistently offer meaningful, productive and remunerative job opportunities to all who are able and willing to work cannot avoid social instability.".
Employers throughout Europe and throughout the industrial nations of the world acknowledge the dangers of unemployment. The gracious Speech does not. Nor does it contain any indication of the priority being given to its solution. That is against the background of certain knowledge that with current policies large-scale unemployment will continue. Even while some speakers during the election claimed success in the battle against unemployment, they knew that between 7,000 and 10,000 jobs would disappear from manufacturing industry during that period. They knew that reports being prepared or issued by the OECD and the London Business School would show that in real terms unemployment would not depart significantly from 3 million for the rest of this century.
That portrays a tragedy and poses a challenge to all of us to produce policies targeted at reducing unemployment. In the gracious Speech, such policies are curiously absent. On the part of industry, however, there is no doubt about what is needed. Among their proposals to the OECD which have particular applicability to the United Kingdom they say:
"A strengthening of the manufacturing base is in many countries essential. This will also provide better opportunities for the sustainable growth of services. Consequently, increased investment is of strategic importance.".
For industry to undertake that investment, there must be a steady climate of confidence—a climate whose creation should be the responsibility of all of us, the Government, employers and trade unions. But the pattern must be set by Government. It is they who can more readily increase infrastructure investment, provide the educational and training facilities which overcome the bottlenecks and mismatches, ensure the reduction of uncertainty, introduce appropriate tax policy and, most of all, inspire a reduction in interest rates. For there to be involvement of the employers and trade unions in the creation of that climate, there must be confidence in the objectives of government policies and some consensus on how they are introduced. That consensus does not exist.
The only OECD countries with strong trade union movements which have achieved higher levels of growth over a long period and avoided our catastrophic levels of unemployment are those which have that consensus, from Germany to Japan and from Sweden to Holland.
The policies of which I have spoken are not those of any particular party, nor particularly those of the trade union movement. They are policies of both

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sides of industry throughout the world's industrial nations. They could provide a basis for confidence and success.
Perhaps I may briefly connect the issue of trade union legislation to the argument for consensus. Our society, whether between North and South, the employed and the unemployed, the rich and the poor, yearns for cohesion and consensus. It is a strange time to harass and unnecessarily discomfort the trade union movement with legislation for which the Government have been unable to demonstrate justification or need. Not only is this legislation unsought by concerned organisations, it is opposed—or supported only with reservations—by any of the concerned organisations. No concerned organisation, including the Conservative trade unionists in their conference, have sought this legislation. No concerned organisation welcomes, or wholeheartedly welcomes, it.
Our new ally, the Freedom Association, welcomes it only with reservations. The CBI has reservations and noble Lords can search in vain through the opinion polls and through the Green Paper for evidence of significant support from trade unionists. I am sure that the noble Lord, Lord Campbell, would have found it easier to find a needle in a haystack than a voter in the last election who voted for the Government simply to support these proposals. There is no justification for the proposals.
How can you justify proposals which are the antithesis of democracy? On the one hand, the Government insist on legislation which will give a majority vote before a strike. Now, they propose to support those who ignore that majority decision. I should like to remind noble Lords that immediately after the election the Prime Minister attacked (as has happened here) those who talked of extra parliamentary activity. I agree with her. But what she went on to say was that observance of majority decisions was a cornerstone of democracy. What is good enough for the Prime Minister is good enough for the trade union movement.
How can we justify requiring the trade union movement to have its books inspected by its members at any time, when at the same time a shareholder who invests his life savings in a company has no such right, or an employee who invests the whole of his working life in a company has no such right? How can we justify establishing a commission to advise and give legal support to trade unionists complaining against their union when no other members of any other organisations in this country have any such right? How can we justify further action on the closed shop? On this matter I should like evidence of statements during this debate of continuing abuse.
Closed shops are matters of agreement with protection for the individuals. They have industrial relations advantages. They provide a single channel of communication, and there is an absence of shop floor friction. But most of all, how do you justify the continued attack on that most precious freedom that affects the working people of this country, the collective freedom for which they have fought over the centuries?
The noble Lord, Lord Campbell, pointed out that I made my maiden speech on this subject. Then I had
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to be non-controversial. If I was to be controversial now I would say that these proposals were arrogant and vindictive. When we need to unify in order to conquer unemployment the Government divide us. When we need to conciliate they harass, when we need to concentrate they divert. The Government's failure to give priority to the solution of unemployment, and the attack on trade unions are not two aspects of policy they are one policy. It is that policy which will deepen the divisions in our nation.
Lord Campbell of Alloway: My Lords, before the noble Lord sits down perhaps I may say that I did not wish to interrupt his speech for I thought that it would be discourteous. He did in fact refer to me three times. How do I justify? I justify because of the history of massive abuse of power. That charge has not been answered in your Lordships' House tonight.
7.38 p.m.
Lord Rochester: My Lords, I should like to follow the noble Lords, Lord Campbell of Alloway and Lord Basnett, in commenting briefly on that part of the gracious Speech which deals with trade unions and their members. If I did not make my views plain to the noble Lord, Lord Campbell, in an earlier debate, I hope to do so now.
In the gracious Speech there is a single sentence which reads:
"Legislation will be introduced to improve the rights of individual members with respect to their unions and to provide further protection against trade union enforcement of closed shops.".
The Conservative Party's election manifesto was not much more forthcoming, but the intention seems plain from what the newly appointed Secretary of State for Employment is reported to have said recently—namely, that the Government intend their legislation in this field to follow closely the proposals contained in the Green Paper Trade Unions and Their Members. Therefore, it is on that assumption that I should like to make a few comments this evening. I put it like that because, speaking on behalf of my noble friends in the debate on the Green Paper to which the noble Lord, Lord Campbell, earlier referred, I responded at some length to the Government's specific proposals.
I briefly remind your Lordships of our attitude to three of the most important of those proposals. On that occasion I welcomed the Government's belated conversion to our view that trade unions should use fully postal voting procedures under independent supervision for elections to their principal executive committees and that this should extend to the distribution, the receipt and the counting of ballot papers. I further said that we thought it right that the chief officers of the unions should be required to submit themselves for reappointment at regular intervals either by the same electoral means or at the very least by the votes of members of the principal executive committees who had themselves been properly elected.
I expressed sympathy with the Government's proposal that individual union members should be enabled to take legal action to restrain their unions from authorising or endorsing industrial action which had not been validated by a ballot. On the

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other hand I said that, like the CBI, my noble friends and I disagreed with the proposal that individual union members should be protected from disciplinary action by their unions if they refused to take industrial action even if that action had been endorsed by a prior secret ballot. This was largely because it could, in our view, undermine the balloting process itself in so far as it would be seen to provide a form of statutory protection for those refusing to be bound by the results of a ballot. A cynic might go further and say that the Government seem to be in favour of secret ballots only when they produce the result that the Government want.
In replying to that earlier debate, the noble Lord, Lord Young of Graffham, was honest enough, if I may say so, to acknowledge on this difficult question of the balance to be struck between individual and collective rights that what a number of us had said then stood up, save in one respect. He said:
"With a pre-entry closed shop, it is difficult to say to an individual who does not believe in a strike in which the majority does believe, 'If you go out on strike you run the risk of being dismissed but you can maintain your union card and perhaps try to get another job. However, if you go in to work to protect your job then you can lose you union card and not be permitted to work anywhere else'."—[Official Report, 29/4/87; cols. 1550–1].
The noble Lord recognised the problem, but he seemed to shrink from providing the answer, which surely is to work towards the elimination of the restrictive, illiberal and outdated practice of the pre-entry closed shop.
In our earlier debate I also expressed misgivings about the role envisaged for the new Commissioner for Trade Union Affairs whom the Government propose to appoint to assist individuals in pursuing complaints against their union. That is a matter to which the noble Lord, Lord Basnett, has just referred. Unlike existing commissions concerned with equal opportunities and racial equality, no limits appear to be set on the extent to which this new commission could be called in aid. I do not see why trade union members should be singled out from other citizens as recipients of this new kind of institutional help.
So much for the proposals themselves. Today my main purpose is again to challenge the Government's basic view that this is the time for a further round of union legislation. I say that as one who, on behalf of my noble friends, has given broad support to much that the Government have done in this field over the past eight years. Like the Institute of Personnel Management, we take the view that more time should be afforded to make a fair assessment of the present laws before adding to them. In a growing number of companies, employers, unions and their members have been developing initiatives to improve industrial relations. We believe that these should be allowed to progress further within the existing framework rather than embarking on new legislation which will be seen as unnecessarily controversial and indeed adversarial.
In our earlier debate I said that we fear that in planning to introduce further legislation the Government are less concerned with the need to encourage co-operation between management and employees than with a desire further to cripple the
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effectiveness of trade unions. On these Benches we believe in trade unions as an essential means of enabling employees to join together to protect themselves from unscrupulous employers and generally to keep management up to its job. Moreover, why are the Government so discriminatory in this matter?
If there is need now for further union legislation, surely there is no less need for more regulatory action in other fields; for example, for some further statutory limitation to be placed on the current excess of speculative activities—if the noble Lord, Lord Campbell, does not like the phrase "speculative capitalism"—in the City. These are activities which are too often directed towards short-term gain rather than to the long-term improvement of our industrial performance.
Again, if there is thought to be this immediate need for further detailed regulation of the conduct of trade unions, why do not the Government demonstrate their even-handedness by building at the same time on what is already the practice of our best employers and giving employees the statutory right to be informed on matters of concern to them and consulted in the making of decisions which affect their interests?
To sum up, we think there should now be a breathing space in which the trade union legislation of the past few years can be digested and management and employees can increasingly develop the interests that they have in common. Even at this late stage I take leave to urge the Government to heed the warnings of employers who speak for those bearing responsibility for handling human relations in the front line of industry. We have to recognise that the Government are now committed to introducing further legislation in this field, but let it at least be balanced in some of the ways I have ventured to suggest.
7.50 p.m.
The Earl of Onslow: My Lords, it may be possible to give the noble Lord, Lord Basnett, a little history lesson. In his previous existence as Prime Minister, the noble Lord, Lord Wilson of Rievaulx, is reputed to have said to the noble Lord, Lord Scanlon, "Get your tanks off my lawn, Hughie." That is why trade union legislation has been necessary. People should not be allowed to put metaphorical tanks on Prime Ministers' lawns. It is bad for everyone and above all it is bad for the economy. One could continue down that road of abuse, but there has been serious abuse of power, although not in an anti-citizen way, by the monolithic trade unions. However, that was not what I wanted to talk to your Lordships about.
I wish to complain about the 35 per cent. tax rate on low incomes. Before my noble friend leaps to his feet and says that it is not 35 per cent., but 27 per cent., he will be aware that a decree went forth from the other place that an 8 per cent. national insurance contribution should be added to the figure. There is no way in which one can avoid paying it. It may not call itself a tax, but it is a tax by another name, as my noble friend Lord Boyd-Carpenter pointed out.
I happen to know a young man of 19 or 20 who earns £90 a week. The deductions from his pay packet

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amount to just over £19 a week. That is the level of tax at which we should seriously complain. It is ridiculous to tax someone earning at that level at the rate of 35 per cent. My noble friend Lord Chelwood told me about one of his friend's employees who takes home £100 a week. His gross wage is £123. There is too much tax at that level. Why would anyone want to be a hospital porter, a lavatory cleaner in Dulwich or do such humble, fairly low paid jobs, when they are taxed at that rate? It is for those people that we should get at and reform the system.
There was an article in the Independent newspaper a week or so ago which said that there were tax shelters amounting to £13·5 billion. The greatest of those are obviously pension allowances and mortgage tax relief. For a Government who like to support the family, it has always struck me as ironic that two cohabiting homosexuals on high incomes can have a joint mortgage of £60,000 on a joint house whereas a perfectly respectable married man and his perfectly respectable hardworking wife can have a mortgage of only £30,000. That is not the policy of the family. If I may be slightly cynical, it seems to be the policy of AIDS.
The black economy takes a great deal of the strain, especially in the South-East. I accept that the position is different in northern parts of the country where there are wadges of serious unemployment. In the South-East it is much easier for a young man or woman to obtain a dead-endish job in a pub for four of five evenings or four of five days a week and go on the benefit. Their net spendable income is what counts. Their net spendable income for doing something "iffy" is the same. We know that it is sinful and illegal. We know that they will be prosecuted if they are caught, but I do not think that they regard it as morally wrong. It is an awfully silly tax system which allows them to do it.
"SS" should be taken out of the "DHSS" and put into the Treasury. The tax and benefit systems will then merge. We will then be looking at net spendable income, so that whatever someone earns he will always be better off than under the present system. We do not have that at the moment.
I have nothing else to say except to congratulate my right honourable friend the Prime Minister on following the excellent example set by Henry VIII who dissolved the monasteries. He took the church lands and sold them to his various supporters. The church lands then became more prosperous. What has my right honourable friend the Prime Minister done? She has dissolved the statute of Mortmain. The dead hand of the church, in the form of state industries, has been sold. Henry VIII became popular and his economy prospered. It seems that my right honourable friend has had the same effect.
It is nice to be speaking in a debate when one is not being convinced that we are facing an economic crisis. There are things wrong with this country at the moment. The noble Lord, Lord Basnett, said that it was a disunited country. He does not know what a disunited country is. He should try Sri Lanka or Ulster. This is a united country. It is a country with much greater social cohesion than any other country in Europe.
Lord Basnett: My Lords, will the noble Earl accept that I did not say "disunited".
The Earl of Onslow: My Lords, the noble Lord may not have said that, but I understood him to say that it was not united.
Lord Basnett: My Lords, no. I did not say that.
The Earl of Onslow: My Lords, if I am wrong, I apologise. I beg my noble friend on the Front Bench to draw the attention of the Chancellor of the Exchequer to the iniquities of the tax system at the bottom end of the market.
7.56 p.m.
Baroness Turner of Camden: My Lords, I welcome the opportunity to comment on this important debate, although I had hoped that I should not have to make the type of speech that I am making. When we discussed the Green Paper on trade unions in your Lordships' House on 29th April, it came under considerable criticism from all sides of the House. My recollection of that debate is somewhat different from that of the noble Lord, Lord Campbell of Alloway. A number of your Lordships said that there had been enough legislation and that we should let it all settle down.
I remember that the noble and learned Lord, Lord Denning, said:
"To sum up, as I said earlier, perhaps the hest way is not to interfere with the present legislation. Let it settle down and let us go into the next Parliament, whenever it is, without this again being made a subject for political controversy."—[Official Report, 29/4/87; col. 1526.]
Unfortunately it would appear from the gracious Speech that that is not to be.
I had the opportunity recently to participate in a delegation from the TUC General Council which went to talk about the Government's proposals to the new Secretary of State for Employment. As is to be expected, the TUC is not in favour of them and said as much to the Secretary of State. However, we made an attempt to find out just how committed the Government are to the Green Paper. It appeared that they are very committed and intend to proceed because they have a mandate.
I regret to say that at that meeting there was no common ground or meeting of minds. The Government told us that they believed in individual rights and we said that we believed in collective representation. The Government had no perception that for poor and vulnerable people the only way in which they could enforce individual rights is through some form of collective representation, and that is what trade unions are there to provide.
Moreover, I do not think that the Government have a mandate for what amounts to another round of union bashing. Of course, it is not described as that. It is described as giving the unions back to their members. But that is the way it appears to those of us who are active in the trade union movement.
We have legislation, which is being widely obeyed, and which involves balloting members in advance of any industrial action. Unions are also bound to tell their members that they may be breaking their

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contracts of employment if they take industrial action. However, if a majority of members vote for strike or any other form of industrial action in a properly constituted ballot, it seems to me absurd that further legislation should permit those who are in a minority to get away with what may be a breach of their union rules by not complying with that majority decision.
There is nothing to stop such people from not participating. But why should the union not have powers under its own rules to deal with those who breach collective action? If people do not like the rules, they need not belong.
As my noble friend Lord Basnett has already said, why have ballots at all if the minority does not have to abide by the majority decision? Why bother to go through balloting in the first place? I raise these issues because I want to know from the Government how they now stand in relation to trade union legislation. Does the Green Paper represent the Government's considered view or are the Government willing to listen to those—and they are not only trade unionists—who say that the proposition to which I have referred is nonsensical? The people who have opposed it include the CBI and the Institute of Personnel Management. These are the people who are concerned about stable industrial relations and the sanctity of agreements. If the minority are to have some special sanction or privileges, it strikes at the root of these collective arrangements.
Secondly, why is it that protection should be given only to the minority who do not want to take industrial action? Why should not the majority, who have properly carried out the requirements of the legislation, not have equal protection against loss of employment if they abide by the majority decision? Why should action automatically terminate an employment contract? Why could we not at the very least have provision, as exists in some European countries, for the contract simply to be suspended if the proper actions have been carried out and there has been a properly constituted ballot?
However, the Government do not seem interested in that kind of protection for employees. We on this side of the House have repeatedly sought to raise the whole issue of employee rights relative to employers. Those are the kind of rights that matter most to employees, and they are the reason why people join unions in the first place.
We have accepted for many years in this country that collective bargaining is a right and proper way to deal with industrial issues. As long ago as 1968 the Donovan Commission reported that effect and indicated that even for people at managerial level collective representation was often desirable and better able to deal with their interests as employees. We now have a Government who appear to be against this whole concept. Legislation that existed prior to 1979 and that helped towards the orderly resolution of industrial disputes and differences has disappeared. We have said this many times from this side of the House.
Certain groups of public employees, as we know, have had their right to negotiate—teachers of course
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are a case in point—taken away from them. It is not therefore surprising that to many trade unionists and potential trade unionists the Government appear to be basically hostile to trade unionism, no matter how much they may claim that this is not the case and that they are only attempting to give unions back to their members. Moreover, to the ordinary member, the Government appear much more anxious to interfere in the way that Mr. Arthur Scargill is elected than to have concern about the unbridled power of newspaper tycoons, who do not have accountability to anybody. The Government in fact appear to be concerned to protect the right of employers to pay people at low rates of pay but are not concerned about the rights of employees to react against such sweatshop conditions.
The industrial relations policy of the Government can be summed up as follows: a pool of unemployment plus weak unions equals low wage costs. That is what I believe it to be about, and the talk of further reform or further democratisation of trade unions is simply a blind.
I have no doubt at all that it will be said from the government side that there are fewer industrial disputes now than at any time since 1979. We have heard this many times before in the House. However, surely no one can deny that there is widespread disaffection and discontent in the public services, for example. In manufacturing industry, particularly in Scotland and in the North of England, the workforce to some extent has been cowed because of unemployment, although even there there have been examples of action, for example, in the Caterpillar plant, where workers occupied the factory to try to save jobs. In the public services, as we have seen, teachers have had their nogotiating rights withdrawn and in the Civil Service there is discontent even though there may be differences of view among the unions as to the strategy to be followed.
In a situation of sullen discontent in the public services, with large sectors of the economy on very low wage rates—in particular those paid to women—and, on the other side, the Government attempting still further to weaken the ability of unions to respond to those conditions, I do not think that this is a reasonable or suitable industrial relations policy to be followed in the country.
I ask the Government whether they would be good enough in their reply to the debate to explain exactly where they stand in relation to the Green Paper. Is it a matter still for consultation, or are they absolutely committed to the provisions that it contains?
8.5 p.m.
Lord Wolfson: My Lords, the result of the general election demonstrated that the electorate wants a market economy based on enterprise and choice, one in which an ever-increasing number of people can participate as investors and owners of capital assets. There is a desire to see the creation of wealth that will bring broadly based personal benefits, with an enhanced and efficient investment programme in the National Health Service, education and housing.
Government policies have made a significant contribution to encouraging the modernisation and competitive improvements that have taken place in

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the business world, which itself has faced a period of unprecedented structural and technological change. While there is certainly no room for complacency, there is a more confident and positive spirit, and for the businessman the essential pre-requisites for long-term success are confidence and continuity. We now have a combination of sustainable growth and lower inflation and of rising profits and productivity, allied to the improved design of marketing techniques; and we have a climate to much better human relationships. We know from experience that stop-go policies in the past had a damaging effect on future business planning. It is demand-led expansion that in time reflects itself in a most appropriate and profitable form of investment.
British research work is renowned, but too much of its development has gone overseas. It is necessary for industry and the financial institutions to target more investment into research that has business potential both directly and through the universities. The Government have offered matching grants to promote this policy, and it is a powerful encouragement. I should like to see research teams participate as equity holders in their work, and perhaps a university investment agency might be established on business lines to seek research funds.
I should like to refer to four areas of official policy designed to strengthen the enterprise infrastructure which has been taking shape in the last eight years. First, as my noble friend Lord Boyd-Carpenter pointed out, there is the need to carry further a reform of the direct personal taxation system on lines similar to the corporation tax changes already enacted. These have enabled companies in the United Kingdom to be fully competitive in international terms.
Talented people in all aspects of creative life can use their skills anywhere in Western Europe or the English-speaking world. The United States in particular offers powerful incentives in providing better facilities and, as a result of its own recent reforms, much higher after-tax salaries. Yesterday's report by the Royal Society and the engineering policy unit demonstrates the international competition that we have to meet.
It has been shown that lower rates of tax can lead to higher revenue receipts, to the retention and attraction of talent and to the faster creation of wealth. This in turn would give the opportunity that we all wish to see for more capital investment in health and social services. The right incentives will motivate creative men and women in all facets of the national economy and the benefits will be widely spread.
Secondly, to generate the inner cities, they have to be made attractive for people to live in. This means gradually replacing badly designed concrete tower blocks with tasteful homes built on a human scale, where people feel less exposed to the criminal element in today's society. We should accelerate the marketing of empty homes and bring back to residential occupation houses and flats that were given temporary commercial use many years ago. A variety of schemes are required to provide tourist and recreational facilities, modern workplaces, improved access roads and parking facilities.
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The broadly based programme contemplated in the gracious Speech, with all its multiplier potential, is based on the imaginative combination of urban development corporations in partnership with the private sector and local authorities. This partnership has already proved its worth. The policy outlined envisages a dynamic quickening of activity, which is good news indeed.
While I am not technical, I should imagine that the development corporations will consider the increasing use of industrial systems capable of modifying inadequate housing stock by the creation of new facades and the carrying out of essential internal repairs. Quite clearly the accelerating programme proposed is required urgently. It is one that can be financed responsibly and has to be based on durable quality standards. We must never again make the tragic error of replacing poor quality housing with a low standard equivalent or of putting experiments in social engineering above the natural aspirations of people who wish to live as part of a closely knit community.
As an important contribution to improving both employment and self-employment prospects in inner cities I welcome the concept of moving towards a uniform business rate, which should help to attract more investment in less prosperous regions of the country.
Thirdly, in addition to the improvements required in literacy and numeracy, there is a strong case for the expansion of business and vocational training courses in schools, which would be taken further in higher educational establishments. Of course we need an education system with a broadly based curriculum but, as my noble friend the Secretary of State pointed out, we have neglected for too long the skilled requirements associated with business expansion and widely based wealth creation.
Finally, I refer to the need for business managed central buying methods in the health, education and arts areas, for buildings and equipment and for supplies and services. I have experienced a number of relevant instances where the opportunity occurred to obtain better buying values and to invest in energy and other cost saving ventures with a rapid payback. Government matching loans or grants could act as a catalyst in stimulating the latter type of investment.
A number of important leading indicators and economic reviews show that the British economy is in good shape and expected to maintain a steady rate of growth. While we cannot fully control external forces—and I listened carefully to the expert warnings of the noble Lord, Lord Lever—the authorities must continue to emphasise the need for responsible lending policies and strong accountancy standards to guard against the kind of speculative and inflationary excesses that contributed to the undermining of previous growth initiatives.
Efficient manufacturing and service industries are of equal importance to the future prosperity of this country and there are many world leaders in both sectors. We have one of the world's largest portfolios of overseas investments, bringing a substantial contribution to the balance of payments. At the same time there is a growing desire to invest in this country

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by overseas companies, emphasising the beneficial aspect of two-way capital formation.
As the impetus of the consumer age gathers momentum, production has to be related even more closely to customer demand and product preference both at home and overseas. The world of yesterday has been transformed and cannot be brought back. Indeed, the Soviet Union has recognised that it has to change direction in order to cater for its own market demand.
The consumer society of the future, based on the inventive genius of those engaged in science and technology and the flair of the businessman, will provide splendid new opportunities for Great Britain to be in the forefront of the industrial and commercial countries of the world. There is a burgeoning spirit of enterprise in the United Kingdom. I am confident that among the nations with which we compete we shall play a leading role.
8.15 p.m.
Baroness Seear: My Lords, I should like to add my congratulations to the noble Lord the Secretary of State on his new appointment, should he regard it as promotion from the Department of Employment to Trade and Industry—or perhaps he regards it as new fields to conquer.
The noble Lord is a great optimist. There is nothing wrong with that if he can justify his optimism. Perhaps not surprisingly the gracious Speech reflected his optimism. However, we should not be too carried away by his optimism. There is another side that we should examine if we are attempting to make a serious assessment of the present economic position and the future problems that we shall encounter.
It is true that our growth rates have improved and are relatively better now than those of our competitors. However, we have to say if we are to be honest about it that we are improving from an extremely low level. During the last 10 years we have fallen behind our competitors in standards of living. We are now doing something to begin to improve on that. This is desirable but it is not a matter for great self-congratulation that we are now not falling behind, as we have for so long, and are slowly beginning to achieve a better position in growth rates.
However, growth rates are by no means the whole of the story. The noble Lord frequently tells us that unemployment is falling. Perhaps it is falling, but our level of unemployment is grossly high in comparison with that of our competitors. It is still in the region of 11 per cent. If he looks at our major competitors, there are very few of them who are in that category. The noble Lord shakes his head. He knows perfectly well that very few other countries have anything like that level of unemployment.
Furthermore, a considerable number of new jobs have been part-time. With the exception of Denmark, there is no country in which so much employment is concentrated at the part-time level. Although there is nothing wrong with that, and for many people it may be desirable, many others are part-time not because they wish to be but because they have no option.
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Part-time employment is unlikely to maintain as good a standard of living as satisfactorily as full-time employment. We should not rest satisfied with an employment improvement, slight though it is, which depends to such an extent on part-time employment.
Inflation has come down. But the Government should hesitate before claiming that so much of this is due to the policies that they have adopted. Inflation has come down in all countries. It has come down very largely because of the fall in commodity prices. Inflation has fallen but the fact remains that ours is higher than that of most of our competitors. The most recent report from the OECD, which came out only this week, shows that our inflation level is at least 1 per cent. higher than is anticipated in the OECD report for the OECD level generally. We then have considerable reason for anxiety about inflation and our competitive position. There is no question but that the rate of increase of hourly earnings, and therefore of level of costs, in this country is higher than that of our competitors.
Last but not least, our interest levels are still alarmingly high. When we talk about new development, investment, the establishment of new businesses and revival in inner cities and elsewhere, surely one of the outstandingly important questions is getting down the level of interest rates. If all those matters had been attended to the level of optimism of the noble Lord, and the optimism reflected in the gracious Speech, might well be justified. But as it is, it is difficult to see that this is so.
The anxiety is not only about what is going on in this country and in the economy here, but the fact is that today, and surely in the foreseeable future, the economy is global. It is only by accepting that it is a global economy and adapting to that that we shall improve our position and hold our own. The tendency today is that, while we have an economy which is global, we have economic and indeed political policies which are excessively and increasingly national and nationalistic.
Here I also join the noble Lord, Lord Basnett. There was one matter on which I entirely agreed with the noble Lord and very much hope that the Government will continue to support, as I am sure they will. It is the fight against protectionism in every form. Given the situation that we have in a global economy, given the shifts and changes that are going on and given the threats that beset many countries, the temptation to fall into protectionism (which would be a disaster) is perhaps one of the most important issues with which we are confronted. We give overwhelming and wholehearted support to all attempts to avoid that.
What I had hoped to see reflected in the gracious Speech was the realisation that this country should be taking a much more positive lead in international economic affairs. Unfortunately I was unable to be here—there are one or two little temporary difficulties going on inside the Alliance to which I belong—
Noble Lords: Oh!
Baroness Seear: They are temporary difficulties, my Lords, temporary difficulties. I had to be away

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from here for a little while and sadly missed the speech of the noble Lord, Lord Lever, which I am sure from previous experiences would have been most illuminating. I had the opportunity to discuss with him some of the things he said and he undoubtedly reflected the point, put far better than I can, which greatly concerns me; that is, what is likely to happen in the international economy, which is of the greatest importance to what happens to our economy and in which we ought to be taking a leading part.
There is no question about it. But both the Bank of International Settlement and the OECD in their most recent reports do not reflect the optimism of the noble Lord the Secretary of State. They are throwing out a number of warning signs about what is likely to happen. As I think the noble Lord, Lord Lever, said—if I picked up correctly the point when we were discussing it later—the danger is that there might be a considerable collapse in the United States, which could lead to serious repercussions throughout the international economy from which we should not in any way be immune. I had hoped to see more signs that the Government would accept much greater responsibility for trying to see that the international economy was getting on to a healthier footing than it has been in the past.
There is at least one thing which the Government could do very easily and quickly. All the reports stress that nothing is more important at the moment—in the short run at any rate—than that we get greater equilibrium and greater stability of exchange rates. We talk about investment and its importance. Who will invest when there is so much uncertainty about exchange rates? It is in the Government's hands to do something towards the improvement and towards achieving greater stability of exchange rates by entering the EMS. I know we have said this again and again from these Benches, but again and again we have been right.
Again and again the Government have told us that when the time is ripe they will go in. Times have changed. The dollar has been up and the dollar has been down. Every conceivable element that one can think of has altered. Will the Government at least tell us today, if they cannot tell us that they are going in to the EMS to increase the stability of the exchange rate, by what criteria they will decide when the time is ripe? Surely after at least two years of pressing to know about this we are entitled to be told by what standard the Government arrive at their conclusions.
So much for the overall economic position. There are only two other points that I should like to make. Along with many other speakers I am sad that the attempts to tackle unemployment are seen in such slight terms in the gracious Speech. The noble Lord has a tendency to believe that by encouraging enterprise in the inner cities we shall make a great impact on unemployment. Of course this needs to be done, but it is one very small part of what needs to be undertaken. The noble Earl, Lord Onslow, said that we were not a disunited country. I agree with him that we have a tradition of unity, but if he had been around in the North of England during the election campaign as much as I was he would have been deeply concerned.
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There is a great deal of hostility. There is a great deal of apathy. There is a strong belief that people do not care. I do not believe it is true that they do not care. But this is thought to be so. Unless the Government can show that they care in a practical way, in a way which produces results, the degree of disunity which is already too great will undoubtedly get greater. Of that there can be no doubt whatsoever. We need strong regional programmes with a great deal of local co-operation, with a great deal of grass roots input, encouragement and money. Encouraging investment in the inner cities is a nice idea, but I wonder how much of his own money the noble Lord would put into the inner cities. If I had any myself the answer would be none. The noble Lord knows much more about this than I do, but much more has to be done before people will voluntarily invest in the inner cities. That is part of the job but it is only a small part.
The other point I want to make—the noble Lord will not be surprised that I say this—is about training. He and I very much agree on the importance of training. But I make one specific point. I see in the gracious Speech that it is said that for 16 to 18 year-olds it will be made a condition of benefit that they should accept YTS training. If we had for all 16 to 18 year-olds a fully worked out and satisfactory scheme of training and education, with appropriate grants, so that we could move into a period of learning for up to 18 year-olds, whether training for skills or academic subjects, that would be one thing.
I am second to none in my belief that YTS is essential and that it is greatly improving. I believe that what is being done for the second year of YTS may be one of the most important changes to take place to give us at last a trained labour force. But it is not yet at the level at which you can put your hand on your heart and say that it can offer to everybody who goes into it the kind of training that they are entitled to have.
What also is the point of forcing someone to undertake training in something that they do not wish to go into? In my experience moreover employers do not want to be presented with people who do not want to be there. It is difficult enough to get employers to collaborate to give this training at the level needed. If they are to have conscripts sent in I think we shall find that their reluctance greatly increases. I beg the Government to think again about this. We must give every possible encouragement, yes, but compulsion, no.
8.29 p.m.
Lord Bruce of Donington: My Lords, I should like to take this opportunity to welcome the noble Lord, Lord Young of Graffham, to his new appointment. We have been fortunate enough over the past two or three years to have the occasional confrontation with him in his position of Secretary of State for Employment, and he comes to his new post with a reputation of statistical virtuosity.
Viscount Whitelaw: Success!
Lord Bruce of Donington: My Lords, he has been enabled by presentation and by redefinition to make the figures for the registered unemployed slightly more respectable than they otherwise would have been had they conformed more generally to the real state of unemployment in the country. When the noble Lord was appointed to his new post—we congratulate him on that—I wondered immediately what precautions we ought now to take when examining the DTI figures that are issued from the new Ministry.
Lord Young of Graffham: My Lords, the noble Lord will forgive me if I remind him very gently that the largest fall in unemployment recorded since records were first kept occurred some four or five days after I left my old post.
Lord Bruce of Donington: My Lords, I am not trying to deny the noble Lord his moment of triumph in that regard. I am merely indicating that, as a sensible precaution and bearing in mind what has happened to the ever-changing basis of the calculation of the registered unemployed, it will behove us to take extra care when examining the new figures that emanate from the Department of Trade and Industry.
Undoubtedly one of the most vulnerable figures from the political standpoint for the noble Lord will be the ever-increasing deficit on visible trade. I immediately looked at the definitions of visible trade and wondered how they could be altered by any modifications to them that may be presented to us in the next two to three months. For example, would the noble Lord decide to include tourism in our visible exports on the ground that tourists were visible? There are infinite possibilities for redefinition, even including the transmission of cash by optical cable; but we shall have to see how that goes on in due course.
I do not for one moment intend to underrate the importance of the decision at which the electorate recently arrived. The Government are secure in another place with a majority of more than a hundred. For the next four or possibly five years there is the prospect of Thatcherite as distinct from traditionally Conservative government. In those circumstances no responsibility can lie on the Opposition, on the Liberal Party or the Social Democratic Party for anything that happens in the country after the election. The Government are responsible. It is a good thing therefore that we take stock of where we are now.
As time unfolds I should not like the noble Lord, Lord Young of Graffham, to come up every now and again with the explanation, "Well of course in common with other countries we have since been blown off course. In common with other countries we have suffered from X, Y or Z". I would not want there to be any excuses for any shortcomings that occur which the Government cannot reasonably foresee.
According to the noble Lord this afternoon—and it was echoed from the Benches behind him—we now have a sound economy. I would not disagree for one moment that there are sections of our population
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who think that the economy is sound. For individuals who are getting regular salary increases of between 20 per cent., and in some case 180 per cent., who are living in very comfortable circumstances and who are assured of making speculative gains on privatisation issues, or for people who deal in the foreign exchange rooms of the City, the economy is sound. A sound economy for them means that their costs, particularly in terms of labour costs, are kept low and that their profits and incomes continuously rise. The power that accrues to them by the sheer possession of money and the privilege that attaches to it makes them feel very comfortable.
Of course the trade unions have been cowed; of course the rights of trade unionists have been limited; of course the working people now know their place; of course the right of management to manage without reference to anybody else has been established—the right to make their profits how they can, when they can and where they can. From that point of view soundness has been achieved.
The Earl of Onslow: My Lords, perhaps I may—
Lord Bruce of Donington: My Lords, if the noble Earl will excuse me, I did not interrupt him when he was speaking and my time is limited.
The Earl of Onslow: My Lords, the noble Lord left out one point. The wages of hourly-paid workers have increased by 7½ per cent. in the past year while inflation has risen by 4 per cent. Therefore those people have also done better.
Lord Bruce of Donnington: My Lords, I was talking in relative terms about what is sound. I am saying that in this modern age to talk of a sound economy with 3 million unemployed people, with about 10 million to 12 million people living under conditions of poverty, makes the use of the words "sound economy" almost obscene. The purpose of an economy is to ensure so far as is humanly possible that all the abilities and strengths of people who are able and willing to work are used. They should not be denied by caprice or by excess power in the hands of others. To call it a sound economy in those circumstances is a complete misuse of those words. Those of your Lordships who listened to what my noble friend Lord Basnett said about unemployment know it perfectly well in their own hearts of hearts.
It is quite unnecessary at this time to go through the pre-election speeches relating to the economy. I was hoping that the party political terms in which the pre-hustings debates were conducted would not be repeated this afternoon. I certainly do not intend to repeat them here. The responsibility for what happens is the Government's from now on, but perhaps I many venture to draw the attention of your Lordships to the last occasion when a serious and critical review of the economic position of the country was undertaken in your Lordships' House.
As your Lordships will recall, the Select Committee on Overseas Trade made its report on 18th July 1985 and it was debated in this Chamber in December 1985. The committee's conclusions were set out in pungent but non-controversial terms. It is

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very necessary to say that it was a report produced in unanimity by its members under the chairmanship of the noble Lord, Lord Aldington, and that it contained within it members of all the political parties and the independents represented in your Lordships' House. That was an objective review.
I want to suggest to your Lordships this evening that we may perhaps find it necessary to return to it, because it drew to the attention of the House and of the country the perilous state of the national predicament. I make no apology whatsoever for drawing your Lordships' attention to page 83 of the report and refreshing your Lordships on the conclusions to which your Lordships' Select Committee came.
It said this:
"Unless the climate is changed so that steps can be taken to enlarge the manufacturing base, combat import penetration and stimulate the export of manufactured goods, as oil revenues diminish the country will experience adverse effects which include:

(i) a contraction of manufacturing to the point where the successful continuation of much of manufacturing activity is put at risk;

(ii) an irreplaceable loss of GDP;

(iii) an adverse balance of payments of such proportions that severely deflationary measures will be needed;

(iv) lower tax revenue for public spending on welfare, defence and other areas;

(v) higher unemployment, with little prospect of reducing it; and

(vi) the economy stagnating and inflation rising, driven up by a falling exchange rate."

Those were the conclusions.
Lord Young of Graffbam: My Lords, will the noble Lord give way for just a moment? Within a matter of months of that report coming out we did lose about half of our oil revenues and not one of those forecasts came to pass.
Lord Bruce of Donington: My Lords, that was one of the factors that was mentioned in the report itself. But the prospect still remains, and is accentuated by the fact that in 1984, which was the year when the visible trade deficit was discussed, the deficit in manufactured goods was £6·2 billion. By 1986—last year—it was up to £8·6 billion, as against the favourable balance in 1979 of £1·86 billion.
Since that time—since the report was considered—import penetration, which at the time of the Select Committee's report was put at 31·4 per cent., rose by the end of 1986 to 34·5 per cent. When it comes to the output of manufactured production, it is still now 1·8 per cent. below what it was in 1979.
It is often said—and it has been said from the government Benches—that manufactures and our manufacturing industries have no longer the same importance as they had. There is one international comparison that the noble Lord, Lord Young of Graffham, has not been able, or has not seen fit, to make, and that is that manufacturing production in Japan has gone up by 30 per cent. since 1979, in the United States by 19 per cent., and in West Germany by 11 per cent.
Therefore, what is happening is that, although our requirements in manufactured goods in this country
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remain very much the same as they have always been as a percentage of our normal expenditure, what we have done is half destroy our manufacturing industrial capacity here and have imported substantially from Germany. I suggest that this presents a future menace on the lines described in the Select Committee's report to the future of our country over the next two or three years. Although unemployment may be marginally going down in certain areas, in manufacturing industry, as the noble Lord knows quite well, it is remaining reasonably stable.
What is really at stake over the next few years is how we regard the future of the nation state. When questions of national defence are concerned the Government always wrap themselves in the flag, as they are entitled to do, and take complete control of the whole question. Any question of national defence is a matter for governmental action, for governmental planning, and quite properly so. But what do the Government do when it comes to economic defence?—because economic defence is just as important to the United Kingdom as its military ability to defend itself.
Either all these stories about national defence and the vital part it should play in our country are bogus—in which case much of the expenditure on it is unnecessary—or they are real. If they are real, then who is taking care of the economic defence of the United Kingdom, which in every way is just as vital?
I listened to what was said this afternoon about the virtues of free trade and protectionism. I am in favour of the extension of free trade wherever this can be accomplished and under whatever fair conditions can be established. But what is the point of surrendering one's economic defence in favour of a principle that is not being widely adopted?
The fact is that the Government have completely abdicated from the economic defence of the country, because the economic affairs of the country are being left entirely to market forces. Market forces provide where money shall be invested; market forces ensure where capital flows go and from which countries they come. Blind market forces or informed market forces, it matters not. In fact the Government have emphasised many times their detachment in the matter. Many times from the government Benches the Government had disclaimed any responsibility for doing anything other than providing the climate in which free enterprise can flourish. Therefore, the fate of investment, the fate of movements of capital, the fate even of movements of trade, the fate of inter-company dealings within multi-national companies irrespective of any national interest that is involved, or irrespective of any country in which these take place, is deliberately outside the control of the Government. Moreover, the Government have (and they intend to continue the process) divested themselves even of the power of influencing wide sections of industry. The privatisation of companies originally undertaken with a view to increasing their efficiency, and all the rest of it, has involved the Government distancing themselves from being in any way involved in the making of decisions. These have become important in regard both to purchasing policy and pricing. Therefore the country is at the mercy of market forces.

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"Market forces" is a very impersonal term for they are carried out in a very personal way. In practice it means that, instead of the country's economic destinies, instead of the country's industrial and manufacturing future, instead of the fullness or otherwise of employment being in any way influenced by a government who have washed their hands of the whole affair, the real decisions are made by a few hundred very wealthy and powerful individuals in the United Kingdom, most of them fortunate enough to have access from time to time to the Prime Minister. The Government have abdicated from their responsibilities of government in all these respects.
They believe in market forces except, once again, in the field of agriculture. In the field of agriculture all the market forces arguments go out of the window; all the protectionist arguments come in all over again. That of course is not entirely unconnected with the fact that their political interest in the rural constituencies in party terms is significant indeed.
This cannot go on for very much longer. It is all very well to say, "Well, we shall inject new life into the inner cities". The first reaction of the Prime Minister after winning the election was to say, "We must pay attention to the inner cities". I thought to myself that if one wants government attention the only thing that one has to do at present is to vote Labour in vast numbers and one is bound to get government finance. It is a moral which I am quite sure is not lost on the electorate.
We on this side of the House will support all the endeavours that have been made by the Government to regenerate the inner cities. We shall do all that we possibly can to facilitate any legislation dealing with increased trading and the like. We shall co-operate in all these things. However, in the case of the inner cities we have a suspicion. We have a suspicion that the resources made available to the noble Lord, Lord Young of Graffham—aside from those put in for purely information or propaganda purposes—will be very small. We have the feeling that there are divisions of opinion, particularly between his own department and the Department of the Environment which is concerned to bring in the local authorities as much as possible, whereas the right honourable lady the Prime Minister is determined, at the earliest opportunity, to get rid of as many Labour councils as she can on purely political grounds. What is required, and must be required, is a co-operation between all interests; between private firms, trade unions, the local authorities and the new development bodies that are formed. This is the way in which we shall proceed. I am hopeful that during the course of this Session, or perhaps of this Parliament, your Lordships' House may be able to play the same constructive part that it has on many occasions over the last three or four years, to the understandable occasional discomfiture of the Leader of the House, in getting the Government to pause and reflect more accurately the public will. I sincerely hope that those days will occur again, but in any case we on these Benches know precisely where our duty lies and we shall not hesitate to discharge it.
8.54 p.m.
Viscount Whitelaw: My Lords, I fully agree with the noble Lord, Lord Bruce of Donington, that this House should pursue a constructive position throughout the Sessions ahead. I know that we will and I know that he will do the same. As regards some of the points that he has raised, I should like a little time to digest them. I shall return to some of them when I have been through the rest of the debate because he has covered a very wide field. Being the accountant that he is, he is quicker at figures than I, so I shall take some time to appreciate it all.
In rising to wind up today's debate, it is right to look not only at today's speeches from all sides of the House but also at our debates earlier in the week on foreign affairs and defence, and on home affairs and the environment. I do so because I believe that the economic foundations we have laid—here I must apologise to the noble Lord, Lord Bruce of Donington, because I shall use words he does not like—through the sound policies of this Government are the basis of success. Indeed, they are a precondition of success in these other fields as well.
It is impossible to pursue successfully the foreign policy goals of this country unless we earn the respect of other countries. I believe that over the past few years we have gained a renewed respect in the world for the determined way in which we have addressed our past economic decline and taken measures—sometimes very difficult ones—which were necessary to reverse it. I claim that the results are clearly emerging. We are entering our seventh successive year of economic growth. At the end of this year we shall have registered the longest period of steady growth that we have known since the war, yet inflation remains low and unemployment, while still too high, continues to fall.
I come back to the points made by the noble Lord, Lord Basnett, and other noble Lords about references in the gracious Speech to unemployment, because I feel that we have a story to tell and there is no question of leaving it out of the many efforts in the many fields that we set out in the gracious Speech.
The economic success which I claim is also crucial, as my noble friend Lord Boyd-Carpenter has said, to the success of our social policies, policies for the health service, for education and for the social services, can only be pursued successfully if economic policies are followed which generate the resources needed and do so without undermining the very process of wealth creation on which these particular resources depend. I believe that the people of this country recognised the necessity for this balance and I think that they recognised it in our verdict at the election.
In our debate this afternoon from all sides of the House we have looked at how to maintain and build upon that economic performance. This time, contrary to what has happened in many of the other debates that I have had to wind up in your Lordships' House, I have had fewer speakers with whom to contend, if that is the right word. Therefore I hope to be able to deal in some detail, as I know noble Lords will wish, with those speeches that have been made in the debate.

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First, the noble Lord, Lord Williams of Elvel, seemed to seize somewhat on any opportunity for gloom. I understand that. After all, I have had a very long experience of being in opposition, as I have of being in government. I know how difficult it is to make speeches in opposition—and this one does bring in a bit of gloom here and there. The only pity, I think, was—I am sorry if I provoke the noble Lord. I must give way to him.
Lord Williams of Elvel: My Lords, I am not provoked by the noble Viscount. I should just like to apologise to him and to the noble Lord, Lord Boyd-Carpenter, for not being in my place when the noble Lord made his speech. In expiation I repeat the advice, which I have preserved, that was given to me by one of the noble Viscount's noble friends on his side when I came into this House. It goes like this: "You will never make an impact in this House unless you get yourself attacked by the old sweats on our side".
Viscount Whitelaw: My Lords, I do not know whether the phrase "old sweats on our side" refers to my noble friend Lord Boyd-Carpenter or to me. I suppose that it could refer to either of us.
Before I broke off I was going on to say that my noble friend Lord Boyd-Carpenter made the points when, alas, quite understandably the noble Lord was not there. The noble Lord raised the question of the debate in Scotland and mentioned a phrase attributed to one of my friends in the other place that that debate had been behind that of England. I can only say to him that, while I am one of those strange Scotsmen about whom the Scots are always dubious now because we have moved to England, I went to Scotland during the election and certainly did not find the debate there behind that of England. I was given a thoroughly good going round the course, which was extremely good for me. I was dealt with very well. I could not accept for one moment any idea that the debate there was behind that of England.
The noble Lord raised the point about the inner cities programme and asked whether this was entirely a party political matter. It is a little unfair to suggest that. After all we had some inner city initiatives of considerable standing well before the election—for example, the initiative of my noble friend Lord Young and Mr. Clarke in the other place. We had over 100 projects approved in 1986–87. The total cost of all the Department of the Environment's inner city initiatives and the urban programme et cetera was some £650 million a year. That was all well before the election. To refer to them as simply party political initiatives would not be right.
I now turn to the remarks made by the noble Lord, Lord Diamond. He is very fond of a phrase which he now claims to be his: selling off the family silver. He is so fond of it that he rather forgets one other aspect of the privatisation programme to which he gives that phrase; namely, as my noble friend Lord Boyd-Carpenter said, many of those firms which have been privatised have been noticeably successful. My noble friend Lord Young also made that point. Therefore, whether or not it is a good thing to sell off the family silver, if the money obtained for it can be
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better employed and attract better service, there may be some value in doing it. So I am rather surprised that he takes that position.
As for his anxieties about inflation and his fear that we should concentrate too much on that aspect—he used a rather surprising phrase for someone who was Chief Secretary to the Treasury and if I may say so a very distinguished one—surely it must be true that keeping our costs down in this country enables our industries to compete in the world and therefore to provide jobs. If we do not keep down our costs we should very quickly lose the jobs. I am sure that the noble Lord, Lord Diamond, accepts that truth.
The noble Lord, Lord Harris of High Cross, referred in the main to what he described as the "escape from socialism" which was being undertaken with some considerable success all over the world. He gave some very good examples of countries which were turning from bureaucratic government controls towards market forces. He urged this country to continue with the tasks that have been undertaken and to show the way, as we have been doing, at the same time making quite certain that we kept ahead of Mr. Gorbachev. I think that that is very good advice for us indeed.
My noble friend Lord Boyd-Carpenter, apart from many other points that he made to which I have already referred, also raised the question of taxation and the need for wealth creation. He said that tax should continue to come down. In particular he referred to the problem of tax and the married woman's earnings. Those are clearly matters which I shall make perfectly certain are brought to the attention of my right honourable friend the Chancellor of the Exchequer. He will pay great attention to my noble friend—a good deal more than he would pay to me—so I shall make certain that he gets that message. At the same time my noble friend Lord Onslow referred to the taxation point in much the same terms and I give him the same assurance.
The noble Lord, Lord Lever of Manchester, made a very important speech about the international situation, the dangers to the global economy, the dangers of protectionism and in fact the fear that he had about monetary co-operation in the world. He speaks with such great authority and has been very instructive to me in so many ways over the years, so I found his account somewhat depressing, because I have come to a time when I believe what the noble Lord says. I hope he is wrong on this occasion. Still, I absolutely accept that there are dangers to which we must pay attention. But surely that underlines the need to make sure that our economy—and again I must use this phrase—is conducted on a sound basis. If it is not, we shall be far less able to meet such troubles if, alas, they were to come.
The noble Lord referred to our joining the EMS, as did the noble Baroness, Lady Seear, later in the debate. If I were to give an answer to either of them I would have to give the answer that has been given so often in the past by the Government. I think that they would prefer to be spared that answer so I shall not give it at all. I shall simply say that I appreciate what they have said and again I shall make certain that my right honourable friends are well aware that once again I have been put in the position of giving

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the answer which I have long since been prepared to give. I realise the strength of the feeling so far as that is concerned. Indeed, the noble Lord, Lord Lever, said that he believed in the value that would come from being outward-looking at the time of world dangers. Equally, I shall pass on that point to my noble friends.
The noble Lord, Lord Ezra, also joined the noble Lord, Lord Lever, in some of the rather gloomy reports on the world economy and on what he feared to be the short-term view of the Treasury. He believed that we should do more for investment in manufacturing industry, which is a point he has consistently taken for some time. I would claim to him that we are seeking to do a great deal in the training schemes, which he wished to see conducted, and also in the physical reconstruction of the nation and in standards of education and services, to all of which he referred.
The noble Lord, Lord Raglan, asked me how many Secretaries of State there had been in recent years and I think I am right in saying that there have been some five since 1983. But there are two Cabinet Ministers now, including my noble friend Lord Young, in that department. I am sure he will welcome that with his knowledge of the department, and equally his past association with my noble friend Lord Young, which seems to have been very successful from his point of view. He is not the only person who has had a successful association with my noble friend and no doubt will encourage him in that position.
The noble Lord spoke interestingly from his experience of the new towns and about the work which will be required in the inner cities. He made a point about which I think one must feel fear in certain cases, but I hope that noble Lords opposite will do everything—I am sure that they will—to make sure it does not happen. In many cases I do not think it will, but it might. I refer to the fact that some of the initiatives, particularly of development corporations and government agencies at the centre, can be and sometimes are stymied by local councillors.
On the other hand, I have heard recent reports which I trust are true from some areas where new development corporations, or enterprise zones, have been set up and where they have been welcomed by the local councillors. I very much hope that that will continue to be the case. It would be tragic if not, because many of these development corporations can do a great deal of work, provided that they have the co-operation of all the people on the spot. It should be up to us in this House, if we possibly can, to do everything possible to that end.
My noble and learned friend Lord Simon of Glaisdale made some generous remarks about the running of the economy by my right honourable friends. I am grateful to him for that, coming as they do from one who, as I very well remember, was a Treasury Minister, not long after I went into another place, which seems a very long time ago now. So words from him on the running of the economy are extremely welcome.
My noble friend mentioned the question of regional policy and said something on which I agree
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with him about the over-simplification of the North-South divide. I think there is some oversimplification. I have lived in the North of England myself. As noble Lords know, I had a constituency in the North of England for a very long time. It will no doubt be said, in order to debunk any arguments I might derive from it, that it was not a typical one because my successor there got more votes than I ever got throughout the entire time that I was there. That must prove something—I am not quite sure what—but at least it shows that people in that part of the world seem to be satisfied with a Conservative Government. So there are certain areas in the North which are doing well and some which must do better, in which we have a great deal to do.
My noble friend Lord Sandford made very much the same point about regional policies in the South and in some parts of Kent where unemployment is very high. I think one has to remember that. He also mentioned, as well as the points on regional policy of which I have taken note and which I shall certainly pass on, the job training schemes in which 20 per cent. of young people, and even those in the Restart programmes, are illiterate and innumerate. He thought that that was a very serious matter as regards getting jobs in the future. I hope he will feel when they are fully unveiled that the education plans we have, as outlined in the Queen's Speech, will be directed to this end, and I trust that we shall get his full support in carrying through what will undobutedly be some very major reforms, and in some cases some very controversial reforms as well.
My noble friend referred to the planning authorities in London and the South-East and the regional strategy which has been set out. He set out much of what had been done in Kent and the London docklands, and then said he hoped I could confirm that there would be studies and groups in Whitehall which would respond more effectively to the particular requirements in the South-East. He from his experience in government will know that I am not entitled altogether to say exactly what those particular agencies will be, but there will certainly be those who will work very closely in remedying those particular problems.
I now come to the questions on the trade union reforms which were raised by my noble friend Lord Campbell of Alloway, the noble Lords, Lord Basnett and Lady Rochester and the noble Baroness, Lady Turner. My noble friend Lord Campbell of Alloway was strongly in favour of the trade union reforms as set out in the Green Paper and wanted to see a further extension of the balance of power being given back to the individual member.
The noble Lord, Lord Basnett, on the other hand, believes that that legislation is unnecessary and will lead to polarisation and division and, therefore, he was very much against it. The noble Baroness, Lady Turner, took very much the same view and the noble Lord, Lord Rochester, took what, if I may say so, was a somewhat surprising view. He was strongly in favour of some of the proposals that were put forward but was not in favour of introducing them just yet. I can see the argument in that—
Lord Lever of Manchester: My Lords, like the EMS he is waiting for the time to be right.
Viscount Whitelaw: My Lords, it is always wise to take care with such wise people around one. That can only be described as an incautious remark of mine but I was well picked up on it and I accept that.
First, I say to the noble Baroness, Lady Turner, yes, the Government's commitment to legislate was set out in their manifesto. I must say to her, however, that exactly what will be in the legislation must await the publication of the Bill and I should be wrong to commit myself before that, even if I did know what it contained, which I do not. But we certainly shall legislate although I cannot tell the noble Baroness exactly what the legislation will be.
I hope that the noble Lord, Lord Basnett, and the noble Baroness, Lady Turner, will reflect a little on what I believe to have been the success of some of the measures taken over the years in trade union reform and indeed the welcome that has been given to them by many members of trade unions themselves. At a time of an election one does not care too much for the reasons why people vote as they do. It may have nothing to do with trade union reform, but I think that a good many trade union members voted for us in recent elections for the first time and the noble Lord and the noble Baroness would be wrong not to recognise that fact.
I should not like to say whether that fact had anything to do with the trade union reform, but I hope that they will reflect on that. If there are some measures which would seem to them reasonable, I hope that they will give them their support. I have known the noble Lord, Lord Basnett, for a very long time and I have known of his involvement in the trade union movement. I can well understand the anxieties which have been expressed; but I hope that the Bill will be looked at very carefully when it is published.
The noble Lord, Lord Wolfson, with his undoubted and immense experience in industry welcomed the enterprise that we have seen under this Government. He welcomed what had been done for the economy. He believed it was right. He had a great many obviously good and important ideas about the inner cities and he made the very valuable point that if we really want to regenerate them we must make them attractive places in which to live. A great deal of work needs to be done on that and I am sure that that work is very important. He welcomed the unified business rate. It is always good to hear someone welcoming some part of the proposals of the new rate reform and therefore I was very grateful for the welcome that he gave to that.
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The noble Baroness, Lady Seear, gave one or two cheers to the Government for their various achievements in the economy but at least she went a little bit of the way towards praising the Government. She was modest in her praise and I am therefore modestly grateful to her for what she said. On the other hand, I very much welcomed what she said against protectionism. That was much appreciated and her support in that regard and indeed the support of the House, is extremely valuable.
I have now considered the speech of the noble Lord, Lord Bruce of Donington. He ranged over a very wide field. He said that as regards various aspects he did not wish to be grudging in his comments about my noble friend Lord Young. If I may say so, he did not sound absolutely full-hearted in his praise, but we have come to know him well and we know that sometimes praise which is not quite full-hearted is actually meant very kindly because he is, above everything else, an extremely kind man. Therefore when he says things, however he puts them, I always put the kindest possible construction that I can on them and that is what I most certainly did.
In conclusion, I return to where I began. During the debate your Lordships have made many important proposals about improving life in our inner cities, about developments in various industries, about trade union reform and about world economic problems and generally about the handling of the economy. That was very important and I think that we had a valuable debate. I am grateful for all the points that were made.
At the same time, I hope that the House will allow me one partisan and, as I find it, somewhat pleasing reflection. Your Lordships have been able to make these points and put them forward in a very important way in the sure knowledge that they were speaking, whether they admitted it altogether or not, from a firm base of a strong economy. It is an economy which has been transformed since 1979, an economy more firmly based than that of 1983 and an economy which provides us with great opportunities in the year ahead. That is the achievement of Conservative governments in the last eight years and it is an achievement which is clearly recognised and admired both in this country and throughout the world.
On Question, Motion agreed to nemine dissentiente: the said Address to be presented to Her Majesty by the Lords with White Staves.
House adjourned at twenty-two minutes past nine o'clock.

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