Sitting of 14 July 1987

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

    ESSEX BILL [Lords]
    Considered.
    Amendments agreed to.
    To be read the Third time.

    UNIVERSITY COLLEGE LONDON BILL [Lords]
    To be read a Second time tomorrow.
Oral Answers to Questions
  DEFENCE

    Departmental Legislation
    Mr. Thurnhamasked the Secretary of State for Defence what representations he has received about proposals in the Queen's Speech for which he has responsibility; and if he will make a statement.
    The Secretary of State for Defence (Mr. George Younger): I believe that the Government's defence policy as set out in the Gracious Speech has received wide support.
    Mr. Thurnham: Following the clear statement of support for Trident in the Queen's Speech and the placing of further contracts for the development of the Trident base, will my right hon. Friend tell us the value of those contracts and how many jobs can be expected to arise from them?
    Mr. Younger: The contract to which my hon. Friend refers is worth £120 million and will bring 600 jobs to the west of Scotland. That will take the total value of contracts awarded to date for the development of Faslane and Coulport to £255 million. At its peak, this development programme will create 2,500 construction jobs in the west of Scotland. It is worth recording that had the Queen's Speech reflected the views of the Opposition parties, none of that investment would be taking place and Scotland would have been robbed of thousands of job opportunities.
    Mr. Douglas: The Secretary of State will be aware of the launch of a type 23 frigate at Yarrows. Notwithstanding his comments on Trident, when does the right hon. Gentleman expect to place further orders for type 23 frigates and fulfil his commitment to order at least three frigates a year?
    Mr. Younger: I note the hon. Gentleman's questions. We shall give further consideration to the ordering of type
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    23 frigates later this year, and we have given a clear undertaking to maintain the Royal Navy at about 50 frigates, at which it has been for some time.
    Sir Antony Buck: My right hon. Friend is right to say that what was outlined in the Queen's Speech about defence caused considerable satisfaction to all Conservative Members and to many reasonable Members on the Opposition Benches, too. Does he agree that if the Opposition's defence policies were to be adopted there would be little chance of making progress with the mutual and balanced force reduction and strategic arms reduction talks and obtaining what we all want—disarmament on both sides of the iron curtain?
    Mr. Younger: I entirely agree with my hon. and learned Friend. I understand that the official Opposition would have given away all our bargaining counters before they started negotiations.
    Mr. Denzil Davies: The House will be intrigued by the Secretary of State's statement that there was wide support for the Government's defence policy. That certainly did not extend to the constituency of Ayr. However, we are pleased that after three recounts the Secretary of State was able to return to the House of Commons.
    Why is the right hon. Gentleman postponing the debate on the defence White Paper until the end of the year? Clearly there must be a major defence review, which will leave our armed forces much weaker than they were a few years ago.
    Mr. Younger: I warmly welcome the right hon. Gentleman back to his position in the House in his new role as the reluctant debutante on the Opposition Front Bench. I assure him that we shall do our best to make his stay there as pleasant as possible.
    The right hon. Gentleman knows that the Gracious Speech clearly stated the Government's commitment to a strong defence policy. That is what we propose to proceed with in future.
    The matter of a debate is for my right hon. Friend the Leader of the House.

    European Fighter Aircraft
    Mr. Jackasked the Secretary of State for Defence if he will make a statement on the progress of the European fighter aircraft project.
    The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Tim Sainsbury): The project definition phase for the European fighter aircraft ended last September. The four nations are currently assessing the outcome of this phase before deciding whether to proceed to full development. We expect to be in a position to take our decision in the autumn.
    Mr. Jack: I thank my hon. Friend for his reply, because Fylde houses the headquarters of the British Aerospace military aircraft division and it has no doubt about the benefits of the European fighter aircraft programme. Will my hon. Friend confirm that he is eager to see British firms participating in the European fighter aircraft programme? And, to that end, will he be holding discussions with Rolls-Royce, British Aerospace and the three NATO countries that are participating in the project?
    Mr. Sainsbury: I am sure that my hon. Friend—as was his predecessor—and his neighbour, my hon.

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    Friend the Member for South Ribble (Mr. Atkins), will be energetic spokesmen for their constituencies' interests. I can assure my hon. Friend that the Government are planning on the basis of the United Kingdom playing a full part in the EFA programme. Discussions with our NATO Allies and the principal contractors continue, particularly through the forum of the international programme office.
    Mr. Cryer: Will the European fighter aircraft be a better aircraft than the Jaguar or the Tornado, 49 of which have been lost since 1979 at a cost of about £430 million? Will the Minister tell us why we need these sophisticated aircraft when one can fly to Red Square in a single-engined Cessna?
    Mr. Sainsbury: The hon. Gentleman will find that the aircraft to which he refers are highly thought of, and our success in selling the Tornado overseas is testimony to the effectiveness of that aircraft.
    Mr. Stern: I congratulate my hon. Friend on his new post. Did he notice during the recent election campaign how the only substitute that the principal Opposition party could find for its defence policy was to talk down EFA at every opportunity? That was especially the Labour party's policy in constituencies such as mine where parts of the aircraft are being built. Will my hon. Friend confirm, not only that an existing engine—the RB 199—has been chosen as the pre-production engine, but that the Government have the faith in the EFA that the Opposition are determined to try to destroy at every opportunity?
    Mr. Sainsbury: I thank my hon. Friend for his kind remarks. It is regrettable that, all too often, Opposition Members seem to find satisfaction in criticising British products, in defence or other areas. The Government are determined that British firms will play a full part in the project. We believe that, both in engines and other parts, we have some excellent products to contribute to the EFA programme.
    Mr. McNamara: I welcome the Minister to the Dispatch Box and say that we think that his is a good appointment, so far as the Prime Minister's appointments go.
    The hon. Gentleman will be aware that, far from running down the EFA, the Opposition said that it was going to be a possible casualty because of the Government's foolishness in pursuing the Trident programme. How firm is the RAF's commitment to the EFA?
    Mr. Sainsbury: I thank the hon. Gentleman for his somewhat barbed compliments. He has a novel way of putting these things.
    The Government's commitment to the EFA project, which, as I said, obviously reflects the commitment of the services, is very strong indeed. It is surprising that the hon. Gentleman should think that the project might be a casualty of the Trident programme. He should recall that the Tornado programme was a larger part of the total defence procurement programme than Trident is or is likely to be.
    Mr. Wilkinson: Will my hon. Friend confirm that the European fighter aircraft is in the long-term costings? Although there has been no decision on the development
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    of the aircraft as yet, will he give some indication of the numbers that he would expect to come into the front line were an order to go ahead for the development phase?
    Mr. Sainsbury: I can confirm that the European fighter aircraft is in the long-term costings. Obviously, it is too early to forecast with certainty the eventual size of a United Kingdom purchase. However, the work-sharing agreement for development is based on our declared requirement for 250 aircraft.

    Strategic Defence Initiative
    Mr. Wallaceasked the Secretary of State for Defence if he is satisfied with the level of British participation in strategic defence initiative research funded by the Government of the United States of America.
    Mr. Younger: A sound start was made in 1986 in the first year of participation. A broadly-based series of awards were placed on contract to the value of $34 million. Vigorous efforts continue to be made to secure SDI research business, both by industry and by the academic community in the United Kingdom, with the active and day-to-day support of my staff in the SDI participation office.
    Mr. Wallace: The right hon. Gentleman's predecessor is on record as saying that he fully expected British participation to be on a scale commensurate with Britain's industrial base. Does the Secretary of State feel that the $34 million contract so far gained is on that scale, and, if not, how far does it fall short? Is is not becoming increasingly clear that the Americans were far more interested in getting a cloak of political respectability for their project through British participation than in the project having anything to do with the advancement of Britain's technological interests, which, as the Select Committee on Defence said, would be better achieved through non-military collaborative projects?
    Mr. Younger: I note what the hon. Gentleman said, but I do not agree with the latter part of his question. I am disappointed that during the last six months there have not been further announcements of contracts under the SDI programme. The participation office is making every effort to progress the other applications that are in the pipeline and that will be coming forward in the next few months. The reason for this lack of contracts is due largely to the drop in funding of the SDI programme in the United States. I very much hope that British participation will revive when that picks up.
    Sir John Farr: Is my right hon. Friend aware that British arms exporters who have been doing so brilliantly in recent months are becoming very disillusioned with the rewards from SDI? The net return now and in the immediate future seems to be negligible compared with that promised by my hon. Friend's predecessor two or three years ago.
    Mr. Younger: I do not agree with my hon. Friend that the returns will be negligible. We must remember that this is a very long-term programme stretching over many years. We made a good start in getting participation for British firms, but there has been an unsatisfactory response in the last six months. We very much hope that this will improve. My hon. Friend is perfectly correct about defence export sales generally. Our export sales are going extremely well.

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    It is worth recording that had they won the election the Opposition proposed to wind up the defence export sales organisation. That would have been very bad news.
    Mr. Heffer: Has the right hon. Gentleman taken note of the exchange in the proceedings in Washington involving Colonel Oliver North, in which he talked about some unofficial British organisation tied up with the—[interruption.]
    Mr. Speaker: Order. The hon. Gentleman should make his supplementary relevant to the question.
    Mr. Heffer: It is very relevant, Mr. Speaker, because want to know whether this has had anything to do with the discussions with the United States on this very question of SDI.
    Mr. Younger: The answer to the hon. Gentleman's question is no, I do not think that it has. I have seen the report of a press conference about this and it seems to be in the realms of pure fantasy.
    Mr. Hill: No doubt my right hon. Friend will recall that we had hoped to participate far more in the research and development programme for SDI, stretching into the mid-1990s. Will he tell his counterparts in the United States that the whole House is rather disappointed at the amount of contracts that are coming our way? Will there be any diminution in the programme if a President who is not quite so pro-SDI is elected at the next presidential election?
    Mr. Younger: I am grateful to my hon. Friend. I shall certainly draw the attention of my colleagues in the United States to the points that he has made in the House today. I do not think it likely that any United States Administration will abandon research into these important techniques, because that would leave this area entirely free to the Soviet Union, which has a large research programme in this sphere.

    Low-Flying Aircraft
    Mr. Campbell-Savoursasked the Secretary of State for Defence how many representations he has received on the question of low-flying aircraft since the beginning of June.
    The Parliamentary Under-Secretary of State for the Armed Forces (Mr. Roger Freeman): Between I June and 7 July 1987 the Ministry of Defence received 542 inquiries or complaints about military aircraft flying. This compares with 683 for the same period in 1986.
    Mr. Campbell-Savours: If the number of pilots has not increased since 1979, why has the number of low-flying sorties increased from 71,000 in 1979 to 156,000 this year? Could the answer lie in the Robson report, which suggests that morale among military pilots is collapsing and that 57 per cent. of pilots who fulfilled eight years of training have now left the service? Could it be that the Ministry is now having to train pilots far more to ensure that it has fully-trained pilots to replace those who have left? Is that why the Lake District is being plagued by low-flying exercises?
    Mr. Freeman: No, Sir. Morale in the Royal Air Force is excellent. The premature voluntary retirement rates for pilots are decreasing and are substantially lower in absolute terms than they were when the Labour Government were last in power. We need more sorties because we have introduced the Tornado aircraft into
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    service. Clearly, pilots need to be trained to use them. However, it would seem that the number of low-flying sorties needed has now reached a plateau.
    Mr. Jopling: I recognise that low-flying exercises are both militarily necessary and dangerous, but there have been reports that the recent tragic accident over Keswick in the constituency of the hon. Member for Workington (Mr. Campbell-Savours) was caused by a head-on collision. Will the Minister set up an inquiry to establish whether it is really necessary for aircraft to fly in opposite directions in these essential but dangerous exercises?
    Mr. Freeman: I can tell my right hon. Friend that the accident trend is definitely down, and that 1986 was the best year—[Interruption.] I am coming on to answer the question. As I said, 1986 was the best year for the lowest number of aircraft accidents. As regards the tragic accident in Cumbria, I have to await the board of inquiry report, but I shall bear in mind what my right hon. Friend has said.
    Mrs. Margaret Ewing: Will the Minister and the House join me in ensuring that our sympathy is extended to the family of Flight Lieutenant Hill from RAF Lossiemouth in my constituency, who was the most recent victim of such an accident, which involved a Jaguar jet? Will he advise me what prior warning is now being given to those in the direct flight path of aircraft on such exercises in the light of the incident over Orkney last year when air traffic control at Kirkwall was not notified of such an exercise taking place? Will the Minister assure me that he will reject the blandishments of the hon. Member for Workington (Mr. Campbell-Savours) to the effect that all such exercises should be directed over the Highlands and Islands of Scotland? The people in that area are just as vulnerable as people elsewhere.
    Mr. Freeman: I am sure that the whole House will join the hon. Lady in paying tribute to the loyalty, skill and bravery of Royal Air Force pilots. The Ministry of Defence writes to hon. Members, representatives of the National Farmers Union and the press to warn them of low-flying exercises, but we cannot do that for each individual sortie.
    Mr. Bill Walker: Does my hon. Friend agree that the reason why the Royal Air Force has to conduct such sorties is that in modern fighter pilot conditions and raiding environments with strike aircraft the only way to survive is to fly low and fast? It is essential that our pilots are capable of doing that in peacetime in case they are ever exposed to wartime conditions in which, if we were not prepared, the ghastly attrition rate would be far more than we could afford.
    Mr. Freeman: I am grateful to my hon. Friend. Low-flying training is the price of freedom, which the RAF has to pay on our behalf in order to defend our skies. Low-flying exercises are necessary to train our pilots to fly underneath enemy radar, and in wartime they would have to fly considerably lower than 250 ft.
    Mr. McNamara: I am sure that the Opposition welcome the Minister's statement that RAF pilots flying conventional aircraft are the price of freedom, as opposed to the Government's policy that the price of freedom is mass extermination. The Minister is reported to have said, while the House was in recess, that a certain attrition rate was to be expected in this type of training. What rate of

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    attrition in terms of men, machines and cost is the RAF prepared to accept in this context, and is the Minister satisfied with the present training procedures?
    Mr. Freeman: Yes, we are satisfied with the present safety procedures. Sadly, with military aircraft, the attrition rate will clearly be higher than with civil aircraft, but, as I have said, we have an excellent safety record. The trend is down and our record is admired by many other countries and air forces.

    Service Establishments (Dispersal)
    Mr. Heathcoat-Amoryasked the Secretary of State for Defence if he has plans to devolve more service establishments and jobs to Scotland and the north of England.
    Mr. Younger: I am anxious to improve the geographic spread of defence employment, particularly in areas of high unemployment. Such moves must, however, be justifiable in both operational and economic terms.
    Mr. Heathcoat-Amory: Does my right hon. Friend agree that moving jobs northward is helpful to the regional economy, without requiring artificial subsidies? Can he tell us what progress has been made, whether earlier plans to transfer jobs to the Glasgow area have borne fruit and to what extent the jobs have been filled by local recruitment?
    Mr. Younger: I am grateful to my hon. Friend. The Glasgow programme is a good example of the Government's dispersal policy, with 1,330 extra jobs established there, of which 1,000 have been filled by local recruitment. The overwhelming majority of the jobs were dispersed from the south of England. We recognise that those jobs should be offset against further moves from posts out of London, but the net result at the end of the programme should be a gain of 1,400 jobs for Glasgow, offset by a similar loss of posts from London.
    Mr. Cartwright: As it is Government policy to provide more rather than fewer jobs in inner London, will the Secretary of State resist the temptation to remove any defence jobs from areas such as Woolwich, which has suffered massively from the systematic transfer of defence jobs in the past few years and where unemployment is still more than 16 per cent.?
    Mr. Younger: I very much appreciate that valid constituency point. It is established policy in the Department that every effort should be made to relocate work to the regions wherever it proves economically and operationally viable, but, of course, we also take into account the interests of the other areas concerned.
    Mr. Robert Banks: Will my right hon. Friend give a categorical assurance that there are no plans to remove any service jobs from Harrogate to Glasgow or anywhere else?
    Mr. Younger: That would certainly not be in tune with the Government's policy, which is to disperse jobs to other areas from London, not from Harrogate.
    Mr. Beggs: When considering relocating jobs to the north of England and to Scotland, will the Minister bear in mind the very high rate of unemployment in Northern Ireland?
    Mr. Younger: I certainly take that very much into account. As the hon. Gentleman knows, we place a large
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    amount of defence contract work in Northern Ireland—not least the order placed by my Department with Harland and Wolff for a new auxiliary oiler replenishment vessel, which I very much hope will be completed to price and on time.
    Mr. Holt: Will my right hon. Friend take note of the Government's recent commitment to augmenting the Merchant Marine in the event of war? Does he agree that it should be based in the north-east of England, preferably on Teesside, and will he ensure that it is not based in London?
    Mr. Younger: I note my hon. Friend's comments. I am very conscious of the defence work carried out in my hon. Friend's area in the north-east of England. It is a highly valid part of our defence industry.
    Mr. Grocott: If the Minister is keen to secure defence jobs in areas of high unemployment, will he scrap the absurd suggestion to privatise jobs at COD Donnington, threatening the livelihood of more than 400 employees?
    Mr. Younger: It is a matter, not of threatening jobs in terms of the area, but of trying to obtain better value for money in the way in which existing establishments are run. That must be in everyone's interests, because if the job is done more effectively there will be more money available for other defence work.

    Bramley Camp, Basingstoke
    Mr. Hunterasked the Secretary of State for Defence if he will make a statement on the future of Bramley camp, near Basingstoke.
    Mr. Freeman: My Department is considering the retention of part of the land for use for Army dry training and disposal of the remaining portion. It will be discussing its proposals in due course with the local authority.
    Mr. Hunter: Does my hon. Friend appreciate that would were the Property Services Agency to maximise the realisation of this capital asset, there would be a wholesale housing development that would run counter to the interests of local farmers, flout the wishes of county and district planners and go against the wishes of many of my constituents, particularly those in the villages of Bramley and Sherfield on Loddon? Will my hon. Friend take those factors as well as the economic factors into account?
    Mr. Freeman: I am sure that my hon. Friend will appreciate the great pressure upon the Ministry of Defence to sell surplus land. However, I can give my hon. Friend the assurance that there will be no wholesale housing development on that land. At a date convenient to my hon. Friend, I hope to be able to visit Bramley camp with him.

    MINIS
    Mr. Forthasked the Secretary of State for Defence if he will make a statement on the progress of the management information system for Ministers programme in the Ministry of Defence.
    Mr. Younger: The MINIS programme has been evolving steadily over the four years since it was introduced into my Department in 1983. It provides Ministers and top management with an overview of organisation, costs and activities throughout the Ministry and the service commands. For the future, and in line with

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    the information requirements of the financial management initiative, we shall be further developing our management information systems to meet the information needs of top management and generally to stimulate a more systematic approach to monitoring the cost-effective use of resources at all levels.
    Mr. Forth: I thank my right hon. Friend for that most encouraging reply. What further proposals does he have for linking MINIS with further aspects of the financial management initiative to gain more benefits in efficiency and operational effectiveness?
    Mr. Younger: I very much appreciate my hon. Friend's remarks. MINIS has been only loosely linked with other financial management initiatives, staff responsibility budgets and executive responsibility budgets. Proposals are currently under consideration to encourage those management initiatives within a strategic framework spanning the Department.
    Ms. Clare Short: May I ask the Secretary of State to include in this review the wastage caused by the out-of-date and unjust rules of the Ministry of Defence that require pregnant women to resign? I understand that, in particular, nurses employed by the Ministry of Defence must resign and therefore lose their seniority when they become pregnant. Is not this regulation out of date and outrageous in this day and age? Surely this regulation should be reviewed in the case of women serving in the Secretary of State's Department.
    Mr. Younger: I appreciate the hon. Lady's question. Of course, we review any out-of-date regulations as often as we can. I might point out that ladies in such a position as outlined by the hon. Lady are perfectly free to rejoin the services if they wish.
    Mr. Conway: Has the management information system brought to my right hon. Friend's attention the fact that the Territorial Army provides more than 50 per cent. of the 1st British Corps and most of our national defence at less than 4 per cent. of the Army budget? Is that not more than enough justification for the Territorial enhancement programme to which my right hon. Friend must stick?
    Mr. Younger: I entirely agree with my hon. Friend. Last week I was extremely glad to have the opportunity to address the Council of Territorial Auxiliary and Volunteer Reserve Associations and to make some of the points raised by my hon. Friend to it. There is no doubt that the contribution, both in quantity and quality, of the Territorial Army is now an absolutely major factor in the efficiency of the British Army.

    Europe (Conventional Defence)
    Mr. Burtasked the Secretary of State for Defence what plans he has to meet the Soviet Defence Minister to discuss conventional defence in Europe.
    Mr. Younger: I have no plans to meet the Soviet Defence Minister. We are, however, taking an active and positive part in the continuing negotiations on mutual and balanced force reductions dealing with conventional forces, and in the discussions on the mandate for new negotiations on conventional stability.
    Mr. Burt: I thank my right hon. Friend for that reply. Although he has no plans to see his counterpart in the
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    Soviet Union, what progress has been made towards establishing at least a basis for future conventional arms reduction talks?
    Mr. Younger: The North Atlantic Council communiqué, which was issued in June 1987, repeated the priority that NATO Foreign Ministers attach to agreeing a mandate for new negotiations covering the whole of Europe, from the Atlantic to the Urals, The new negotiations will cover both conventional stability, that is to say lower force levels and further confidence, and security-building measures building upon the Stockholm document of September 1986.
    Dr. Owen: Does the Secretary of State support direct negotiations between the NATO and Warsaw Pact organisations, and if not, why not?
    Mr. Younger: All the negotiations between East and West take place in different fora according to the subject of the negotiations, as I am sure the right hon. Gentleman knows. Considerable difficulties were faced in finding the right forum for the part of the negotiations that the right hon. Gentleman has in mind, but I believe that they are now resolved and that the discussions can proceed.
    Mr. Ward: In any discussions on disarmament, will my right hon. Friend pay especial attention to chemical arid biological weapons? Their inclusion in any negotiations is of great importance to the West.
    Mr. Younger: I agree with my hon. Friend. The Government have long felt that there should be a complete worldwide ban on all chemical and biological weapons. We are making this a major feature of our suggested negotiating position for all further arms reduction talks.
    Mr. Denzil Davies: Is there a common negotiating position within NATO on conventional force reductions? In other words, is NATO in a position to start negotiating? Secondly, will any negotiations in respect of battlefield nuclear weapons be linked to the conventional talks, or dealt with separately?
    Mr. Younger: There is clear agreement among the NATO Allies on how to proceed with the talks. We are extremely disappointed, however, that the East has still not responded substantively to the Western proposal of December 1985 to build on areas of agreement between the two sides. Battlefield nuclear weapons will not be addressed in the current INF negotiations, but will be dealt with in subsequent negotiations.

    Falkland Islands
    Sir John Biggs-Davisonasked the Secretary of State for Defence if he will make a statement about the future defence of the Falkland Islands.
    The Minister of State for the Armed Forces (Mr. Ian Stewart): As announced in the Gracious Speech, the Government will stand by their pledges to the people of the Falkland Islands, while seeking more normal relations with Argentina. We shall continue to maintain a military presence at a level necessary to deter aggression arid defend the islands.
    Sir John Biggs-Davison: Will Ministers regularly inform the House of the progressive fall in the cost of this necessary and righteous commitment'? To what extent can the use of the unrivalled training facilities in the Falklands be set against the expense?
    Mr. Stewart: I can assure my hon. Friend that we shall keep the House informed in the normal way through the Defence White Paper and other means of our efforts in the Falkland Islands. I endorse what he said about the value of the Falkland Islands in providing training for all our armed forces. We fully appreciate the importance of that.
    Mr. Flannery: Would it not help the cause of peace in the Falklands if the Government took a far more vigorous initiative in organising discussions with the Government of Argentina? Does the Minister realise that the position of the Falklands empowers the military caste in Argentina to be a permanent threat to President Alfonsin and the democratic forces in Argentina? It is therefore a matter of real necessity for the preservation of democracy in Argentina for us to take the initiative in discussions about the Falklands.
    Mr. Stewart: Relations between the United Kingdom and Argentina are primarily a matter for my right hon. and learned Friend the Foreign Secretary. We want the restoration of normal relations with Argentina, and we hope that in due course they will come about.
    Mr. Roger King: Can my hon. Friend confirm that since the construction of the new Falklands airport the cost of defending the Falklands has been reduced accordingly?
    Mr. Stewart: It is true that the construction of the Mount Pleasant complex and the airport permits rapid reinforcement and has enabled some reduction in force numbers to be brought about. That has reduced, and will continue to reduce, the cost of maintaining the defence of the islands.
    Mr. Ashdown: For how long do the Government intend to persist in their policy of privatising the defence of the Falklands by using Bristow Helicopters and flying foreign-made aircraft to support our armed services? Are the armed services not to be excluded from the Government's obsession with privatisation? Does the Minister not realise the sense of outrage that is felt in constituencies such as mine that are suffering massive job losses because the Government will not provide the helicopters that our armed services need, while providing long-term work for private companies using foreign-made aircraft?
    Mr. Stewart: We have provided a large number of new helicopters. The hon. Gentleman made his constituency point. We shall continue to provide our armed forces in the Falkland Islands, and elsewhere, with the equipment that they need.

    Trident
    Mr. Brandon-Bravoasked the Secretary of State for Defence if he will make a statement on the ordering of a second Trident submarine.
    Mr. Sainsbury: We plan to place the order for the second Trident submarine shortly.
    Mr. Brandon-Bravo: Will my hon. Friend confirm that this second submarine, and subsequent submarines, will be at a lower price than the initial purchase? Can he add further to the comments of our right hon. Friend the Secretary of State for Defence, who, in answer to the first question, spoke about the creation of jobs in Scotland? Is there not also a case for illustrating the enormous impact on employment that that will have elsewhere in the United
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    Kingdom? Can he comment further on the cost of this programme relative to the dollar, because for many months the strong pound appears to have been making the Trident programme cheaper and cheaper?
    Mr. Sainsbury: Yes, we would expect the unit priced of follow-on submarines to be lower than that for the SSBN-05. The direct job creation effect of the second Trident order will be about 7,000 jobs, which will be concentrated mainly in the north of England, and, as my right hon. Friend said, in Scotland. Only a minority of the total cost reflects the purchase in dollars. Clearly, the stronger the pound against the dollar, the lower the cost in terms of sterling.
    Mr. Duffy: Instead of proceeding with this order, would it not be better to equip the lead ship of the type 23 frigate programme with a close-in weapon system, as was confirmed in the press last week? Is not this cheeseparing policy the result of irreconcilable objectives rather than supreme confidence in the effectiveness of the Sea Wolf anti-missile system?
    Mr. Sainsbury: The hon. Gentleman should recognise that the policies of one-sided nuclear disarmament that he and his party advocate have been decisively rejected. Therefore, there is no question of cancelling the second order for Trident.
    Mr. Franks: Is my hon. Friend aware that the parliamentary constituency of Barrow and Furness was the 326th seat to be won by the Government in the recent election? Is that not a tribute to the workers in the shipyards as well as to the Government's policy of maintaining the nuclear deterrent? If, as I understand, the negotiations for Trident 2 have been concluded, will my hon. Friend ensure that the order is placed speedily, without any further delay?
    Mr. Sainsbury: The fact that Barrow and Furness was the 326th Conservative victory was also a tribute to my hon. Friend's energetic work on behalf of his constituents. He will appreciate that such a major order takes time, but we shall certainly place the order as soon as we can.
    Mr. O'Neill: As the Minister has not returned to the question asked by my hon. Friend the Member for Sheffield, Attercliffe, (Mr. Duffy), will he concede that it is disgraceful that our most modern frigate is leaving the docks in a condition that would render it vulnerable if it had to do any service in the Gulf? Does he not agree that our men are entitled to better protection than that which
    Mr. Sainsbury: The hon. Gentleman should appreciate that the prime anti-air attack protection for the frigate is from the vertical launch Sea Wolf system, which is extremely effective. Additional protection, provided by another close-in system, which would add to the cost and the weight of the frigate, would add only little, if any, additional protection from an air attack.

    Helicopter Manoeuvres
    Mr. Wigleyasked the Secretary of State for Defence if he will restrict the extent of armed forces helicopter manoeuvres in upland sheep rearing areas; and if he will make a statement.
    Mr. Freeman: We are advised by the Ministry of Agriculture, Fisheries and Food that there is no evidence

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    that noise from low-flying aircraft has any harmful effect on sheep or lambs, during lambing or at other times. None the less, claims for damage or loss with appropriate supporting evidence are considered sympathetically.
    Mr. Wigley: Is the Minister aware that not only low-flying helicopters, but helicopters that land as part of their manoeuvres, have caused abortions in sheep and, therefore, unnecessary losses for farmers? Is he further aware that the RAF locally sometimes has ad hoc agreements with the farmers union to ensure the minimising of such losses? Will he encourage the development of such agreements to keep down the losses for farmers in uplands areas?
    Mr. Freeman: Yes, I agree with the hon. Gentleman, and wherever there are ad hoc agreements between the RAF and landowners and farmers I encourage them. There is an adequate compensation scheme, and if the hon. Gentleman writes to me about any particular incident I shall investigate it.
    Mr. Key: Will my hon. Friend give particular attention to the problem of heavily used training areas where helicopters are part of that training, such as the Salisbury Plain training area? May I thank him for the eternal courtesy and care with which he and his officials cope with complaints from members of the public on this issue? Will he have a word with our right hon. Friend the Secretary of State for Transport about the need to increase controls over microlight aircraft, which are rightly gaining the reputation of being the most unlikely and unhelpful form of recreation?
    Mr. Freeman: I shall certainly convey my hon. Friend's comments to the Department of Transport.

  PRIME MINISTER

    Engagements
    Mr. Fatchettasked the Prime Minister if she will list her official engagements for Tuesday 14 July.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. I was also present at Victoria station to mark the arrival of the King of Morocco. In addition to my duties in the House, I shall be having further meetings later today, including one with the Prime Minister of Sri Lanka.
    Mr. Fatchett: When the Prime Minister said on 27 January 1986. in the middle of the Westland affair, that she did not expect to be Prime Minister by 6 o'clock that evening, what did she mean?
    The Prime Minister: That allegation has been made many times. I have nothing further to add to the many statements and replies that I have already given.
    Mr. Gerald Howarthasked the Prime Minister if she will list her official engagements for Tuesday 14 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Howarth: At a time when teachers are widely welcoming the Government's bold reforms in education, and when the fastest growing teachers' union, the Professional Association of Teachers, is urging no-strike agreements on the Secretary of State, is it not utterly
    970
    disgraceful that a small minority of teachers in England and Wales, although happily not in Staffordshire, are going on strike? Will she condemn that and urge the Secretary of State to introduce his Green Paper as soon as possible?
    The Prime Minister: I agree with my hon. Friend that teachers' strikes are damaging to the education of children, and in some cases they are meant to do just that. My right hon. Friend the Secretary of State for Education arid Science will introduce the Green Paper on new permanent machinery for negotiations as soon as possible, and it is expected that that will include the possibility of no-strike agreements.
    Mr. Kinnock: When the Prime Minister visits the United States this weekend, will she buy a copy of "Spy catcher"?
    The Prime Minister: I thought that the right hon. Gentleman agreed that all members of the security services, present and former, have a duty of confidentiality to the Crown and that he would endeavour to uphold that duty.
    Mr. Kinnock: The duty of confidentiality is vital and it must be honoured, but does the Prime Minister seriously think that the best way to uphold it is to take action in appeal courts in Britain and Australia and to engage in action which, with the arrival of every transatlantic airliner, is being turned into high farce?
    The Prime Minister: How else does the right hon. Gentleman think that one can enforce a duty of confidentiality, except in a court of law?
    Mr. Michael McNair-Wilson: Has my right hon. Friend had a chance to study the judge's comments following the award of more than £1 million to Mr. Samir Aboul-Hosn, who suffered brain damage? Does she think that this country is in danger of entering into an era of defensive medicine? Does she think that this is the time for a Royal Commission on medical negligence and how it is treated?
    The Prime Minister: We have not considered a Royal Commission on medical negligence. The case to which my hon. Friend referred was one in which the courts decided precisely the appropriate damages to be paid. My hon. Friend is aware that we cannot interfere in any way with the decision of the courts, nor, in that case, would we wish to do so. I shall consider further what my hon. Friend has said.
    Mr. Loyden: In view of the Prime Minister's late conversion to a recognition of the crisis in inner cities, will she now consider recent reports which argue that something like £82 billion will be necessary to overcome the problems of the inner cities? Will she therefore revise the Government's non-serious approach on that matter and increase the amounts that will be available next year for local authorities to ensure that inner cities' problems are tackled by the duly democratically elected representatives of the people?
    The Prime Minister: As the hon. Gentleman is aware, one of the difficulties in tackling the problems of the inner cities is that some of the elected Left-wing councils are hostile to private enterprise and hostile to the very businesses that can bring in the extra jobs that the cities need so much. With regard to expenditure. this

    971
    Government have spent more than £2·2 billion since 1979 and that is a very considerable increase in real terms over the expenditure under the previous Administration.
    Mr. Page: Is my right hon. Friend aware that if the news regarding the reduction of gas prices or the reduction in unemployment below 3 million, or news of other benefits such as huge profits for British Steel, had come along a few weeks earlier, not only would we have needed an extension to the Tory side of the House, but the opinions polls would have been increasingly irrelevant? Will my right hon. Friend therefore either ban opinion polls at election time or, if not, will she ensure that the statistical base from which those polls are extrapolated is a little more than simply two people per constituency throughout the country?
    The Prime Minister: There has been a considerable increase in future confidence in the improvement of the economy as the figures have steadily mounted and people have seen that industry is in a very fit and healthy state. I do not think that anything would be gained by banning opinion polls. I am sure that they would still be taken and they would only be leaked. It is far better that they should be open.
    Mr. Steel: When the Prime Minister goes to Washington, will she note the contrast between the democratically elected Congress of the United States currently exposing the existence of a state within a state and her persistent refusal to allow any independent investigation of the quite serious charges raised in Mr. Peter Wright's book about covert operations against a former Prime Minister?
    The Prime Minister: I do not answer for the United States, but I ask the right hon. Gentleman to consider which has the more effective security service.
    Mr. Ward: Will my right hon. Friend reconsider her reply about the inner cities? Does she agree that the most important step to take for the inner cities is to introduce the community charge so that those who vote will be left with the financial responsibility for the way in which they have cast their vote?
    The Prime Minister: Yes. When the community charge is in place and all people properly contribute to the services given by the local authority and for which the local authority is responsible, we shall have much better accountability and that will lead to a much better use of money than at present.
    Mr. Ieuan Wyn Jonesasked the Prime Minister if she will list her official engagements for Tuesday 14 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Jones: Is the Prime Minister aware of the concern felt in Wales at the lack of resources in health and social services? Is she aware that the budget of Gwynedd health authority has been so stretched that ambulance journeys to clinics have been cut, hitting low-income families? Is she further aware that last week Gwynedd county council social services department had to cut hack on home help services, hitting the elderly, sick and disabled? Will she encourage the Secretary of State for Wales to fight in the Cabinet for more resources in those areas?
    The Prime Minister: I seem to remember that on a comparatively recent visit to Wales I went to a very new
    972
    hospital, which was one of five major hospitals in Wales. With regard to health in Wales, from 1979 to March 1988 nearly £500 million will have been invested in the capital estate of the hospital and community health services. Expenditure on the National Health Service in Wales has risen by one third, after allowing for general inflation, between 1979–80 and 1987–88. Between 1979 and 1986 the National Health Service in Wales treated 23·6 per cent. more patients than previously.
    Mr. Oppenheim: During the course of her busy day, will my right hon. Friend, when considering the Government's economic policy, give close and careful consideration to comments made by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who said that there was a race on between the economic crisis and the general election? Will she also consider the comment by the hon. Member for Dagenham (Mr. Gould) that there is no immediate prospect of an economic crisis? How does my right hon. Friend square that apparent disagreement? [Interruption.]
    Mr. Speaker: Order. That is rather wide of the Prime Minister's responsibilities.
    Mr. Winnick: Will Customs officials be authorised to take from passengers arriving from the United States copies of Mr. Wright's book? If not, what possible excuse is there for carrying on with the case in Australia? Is the Prime Minister aware that we on the Opposition Benches have no sympathy at all for Wright, a wretched man who is obviously acting out of greed and spite? Is there not now the strongest possible case for a full-scale judicial inquiry into whether MI5 officials carried out subversive and criminal activities against an elected Government in the 1970s?
    The Prime Minister: It is technically possible to introduce a ban by amending the open general import licence. My noble Friend the Secretary of State for Trade and Industry has advised his colleagues against such action, because it is likely to be ineffective. However, the question of possible legal action for an account of profits made from publication of the book in the United States is under consideration. As the hon. Gentleman knows, the purpose of the original case was to uphold the duty of confidentiality, which is necessary for the effectiveness of the service.
    With regard to the other matter, the hon. Gentleman will recall that I made an extensive statement about it on 6 May 1987.
    Mr. Harris: Has my right hon. Friend seen today's report on Trident by the Comptroller and Auditor General? The report states that the estimated cost of that project is likely to be reduced by some £1,500 million. Does that projection not show the wisdom of the Conservative party in sticking to the project? Has my right hon. Friend noticed that the SDP leadership has belatedly come round to supporting Trident?
    The Prime Minister: Yes, I saw that figure. It is good news that the price has come down. It is very effective expenditure on a deterrent for this country.

    Westland plc
    Mr. Dalyellasked the Prime Minister if she will place in the Library a transcript of the television interview on Sunday 7 June with Mr. David Frost in which she referred to the Westland crisis.
    The Prime Minister: I understand that a copy of the transcript is available in the Library.
    Mr. Dalyell: Will the Prime Minister make just one reference to the "many times" when she has said that she knew what she had done as an explanation of why she said that she might not be Prime Minister at 6 o'clock that evening?
    The Prime Minister: I have repeatedly told the hon. Gentleman that I have nothing to add. He knows full well that I am here and that I am intending to stay.
    Mr. Latham: Did not that television interview, and others over the next two or three days, help to produce an extremely satisfactory result four days later?
    The Prime Minister: Yes, Sir.
    Mr. Corbyn: Will the Prime Minister take an opportunity today—[Interruption.]
    Mr. Speaker: Order. The hon. Gentleman has clearly not read the Order Paper. Supplementaries must relate to the main question.
    Mr. Blairasked the Prime Minister if she will list her official engagements for Tuesday 14 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Blair: Whatever the original purpose of the Government's case against Mr. Wright, now that the book
    974
    has been published in the United States, is widely read and distributed in every major European capital bar one. and is no doubt available for scrutiny by the Kremlin, why should Britain suffer a unique ban on this book? Is it the nation's security, or the Prime Minister's stubbornness?
    The Prime Minister: As I have said many times, Mr. Wright, as a former member of the security services. owes a lifelong duty of confidentiality to the Crown. Most people accept that. Some people wish to undermine it. May I make it clear that this point is essential to the effectiveness of the security service. Some people wish to undermine the security service. On this side of the House, we wish to uphold it.
    Mr. Harry Greenwayasked the Prime Minister if she will list her official engagements for Tuesday 14 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Greenway: Further to the question asked by my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth), is my right hon. Friend aware that last year 24,000 teachers left the National Union of Teachers and that thousands of other teachers refused to heed its call to strike—all in the interests of children's education? Does she know that parents as well as a large number of teachers are wholeheartedly behind a no-strike deal for teachers, and will she put on all the pressure that she can to achieve such a deal in our schools?
    The Prime Minister: Parents are grateful to those teachers—there are many of them—who refused to go on strike because they put children's education first. I believe that the majority of teachers would welcome a no-strike agreement.

Points of Order
3.30 pm
Mr. Speaker: I have a brief statement to make. Following the question put last Thursday by the hon. Member for Suffolk, South (Mr. Yeo) and answered by the Prime Minister, an exchange took place which gave rise to points of order. I made reference to the supplementary question itself, which was disorderly in substantially inviting the Prime Minister to meet the Leader of the Opposition to discuss a matter that went beyond the Government's responsibility.
I undertook to reflect on the appropriate time for taking points of order, and in particular on whether my ruling of 12 February last on this subject needed amendment. Since then I have held some discussions and intend to hold others. At present, I am not minded to make any change and will make no final decision until after my consultations have been completed. In the meantime, I shall continue to deal with points of order in accordance with my ruling of 12 February.
Mr. Tim Yeo: On a point of order, Mr. Speaker, arising directly from your statement. Will you clarify two things for me? Although I appreciate the difficulty of determining in the heat of argument what is in and out of order, is it not the case that, as happened this afternoon during Question Time, you sometimes rule a question out of order immediately it has been asked? However, on Thursday, after I had asked my supplementary question, you did not rule it out of order and, in those circumstances, my right hon. Friend had no alternative but to give a very full answer.
Secondly, would it have been in order if I had confined my supplementary question on Thursday to asking my right hon. Friend whether she would discuss with the Leader of the Opposition the possible referral to the Procedure Committee—
Mr. Speaker: Order. I am not prepared to go back over that. I must say to the hon. Gentleman, who kindly wrote to me, that I did not appreciate the thrust of his question while he was asking it. Perhaps I should have done.
Mr. Tam Dalyell: On a point of order, Mr. Speaker. When you were elected, you said that you would be the protector of Back Benchers. May I put it to you that a question of ministerial behaviour is involved when those, however exalted, who claim that they have given answers many times and are asked for references to those answers, cannot point in Hansard or anywhere else to where those answers appear? Is this not a matter of parliamentary behaviour and is it not against the traditions of the House for people to claim to have given answers when they have done nothing of the sort'?
Mr. Speaker: I am afraid that I am in the dark about that. I do not know to which answer the hon. Gentleman is referring.
Mr. Dalyell rose—
Mr. Speaker: No. I think that the hon. Gentleman should come to see me, and I will try to deal with it.
Mr. Andrew Faulds: Further to your statement, Mr. Speaker. I presume that it is in order to make a comment or to put a question to you—[HON. MEMBERS: "No."] I will take Mr. Speaker's ruling. My
976
comment is that your present practice allows Ministers to get away with no questioning of their conduct until an hour, an hour and a half or two hours later. Some of us cannot hang about that long—[Interruption.]
Mr. Speaker: Order. I call Mr. Faulds—or we may indeed have to hang around a long time.
Mr. Faulds: Some of us, Sir, take our responsibilities extremely seriously and have a whole range of other things to do. My question is simple: would you care to widen your discussions to invite me, the hon. Member for Warley, East, to give you my advice on this matter?
Mr. Speaker: I am happy to receive advice from any hon. Member, especially the hon. Member for Warley, East (Mr. Faulds). But I think that the whole House agrees that attendance in the Chamber should take precedence over all other matters.
Mr. Neil Hamilton: Further to the point of order, Mr. Speaker—
Mr. Dalyell: On a point of order, Mr. Speaker—
Mr. Speaker: I will take Mr. Neil Hamilton's point of order.
Mr. Hamilton: I wonder whether you agree that, since the question asked by my hon. Friend the Member for Suffolk, South (Mr. Yeo) was not ruled out of order before my right hon. Friend the Prime Minister rose to reply last Thursday, she was perfectly in order to reply. In view of the fact that the memory of a former Member and member of the Conservative party was so comprehensively besmirched by a member of the Opposition, it was—
Mr. Speaker: Order. I do not think that we should go back over what occurred last Thursday.
Mr. Graham Allen: On a point of order, Mr. Speaker. May I seek your guidance? Is it in order for the setting up of departmental Select Committees to be delayed because of the problems encountered by the SDP-Liberal alliance in resolving its problems outside this place—
Mr. Speaker: Order. That is not a matter for me.
Mr. Gerald Howarth: On a point of order, Mr. Speaker. It is a question not only of the time when points of order are put to you but of the nature of further abuses in the House. You will know that many of us on both sides of the House can be deeply offended by remarks made by hon. Members in the House under the cloak of parliamentary privilege. If you are prepared to rule on the timing of points of order, will you please make a ruling, for the guidance of all hon. Members, that the House enjoys freedom of expression but that, if that freedom is persistently abused by the Opposition, we shall be in grave danger of losing it? [Interruption.]
Mr. Speaker: Order. This is a House in which many uncomfortable things are said. If they are in order, that is within the conventions of the House. All the conventions of the House exist for a good reason and the conventions about maiden speeches also exist for a good reason. The chair can enforce the rules but not the conventions.
Mr. Tony Banks: On a point of order, Mr. Speaker.
Mr. Dalyell: On a point of order, Mr. Speaker.
Mr. Speaker: I will take Mr. Banks' point of order.
Mr. Banks: We all appreciate the problems of my hon. Friend the Member for Warley, East (Mr. Faulds) in his attempt to make a theatrical, or indeed political, comeback. The main problem with regard to your statement which I hope you will consider, Mr. Speaker, is that, when an issue is raised on which a point of order subsequently arises, one loses the context because of the delay. On one occasion, when I was grossly offended by a statement by the Secretary of State for the Environment, you would not allow me to raise a point of order at the time, but you subsequently allowed a point of order which was raised after Questions to appear in the Official Report at the point at which the Secretary of State had made the offensive remark. Perhaps, Sir, you might like to consider extending that practice, which might get us round our present problem.
Several Hon. Members: On a point of order, Mr. Speaker.
Mr. Speaker: Order. All this is what I think the whole House seeks to avoid. [HON. MEMBERS: "Hear, hear."' As to points of order arising out of past events I have already said that I shall consider the matter further. I do not think that there is any profit in going on with it today.
Several Hon. Members: On a point of order, Mr. Speaker.
Mr. Speaker: I will take Mr. Walker.
Mr. Bill Walker: On a point of order, Mr. Speaker. I respectfully draw your attention to question No. 10 on the Order Paper. If you read that question, you will see that it deals with the ordering of a second Trident submarine. When you read the Hansard report of the questioning, including the question put from the Opposition Front Bench, you will see that it has nothing whatever to do with Trident but that it is to do with frigates and the equipment on them. When one gets into technical areas, it is difficult for those who do not understand technicalities to remain within order.
Mr. Speaker: Order. The hon. Gentleman has put his finger on an important matter, which is that, so often, points of order are raised by those who, unfortunately, were not called at Question Time. I know that the hon. Gentleman was not called on question No. 10 today and his point of order illustrates what occurs if we take points of order arising immediately after Question Time. I made a careful analysis before I made my statement of 12 February. I found that virtually all points of order were raised by those who, unfortunately, had not been called during Question Time; they were not genuine points of order at all.
Mr. Dalyell: On a point of order, Mr. Speaker. May I first apologise to you for keeping you in the dark and, secondly, raise a matter that affects the House of Commons? The system of open questions has grown up. Frankly, with open questions, it is understandable why a Minister will not give references. I was lucky enough to have a closed question—a specific question. I asked—courteously, I thought—for references. The real answer to the question was, "Because I did not have the foggiest notion whether the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) would spill the beans on me." That is the truthful answer to the question that I
978
asked the Prime Minister. Nevertheless, with substantial questions, should not references be given to those hon. Members who ask specific questions? What on earth could have caused the Prime Minister to have said that she might not be Prime Minister by 6 o'clock? That is a matter—
Mr. Speaker: Order. I can have no responsibility for the answers that are given to questions.
Several Hon. Members: On a point of order, M r. Speaker.
Mr. Speaker: Order. I will take Mr. Holt.
Mr. Richard Holt: On a point of order, Mr. Speaker. May I remind you that, last week, in response to a point of order raised by my hon. Friend the Member for Croydon, South (Sir W. Clark), you ruled that if male Members appeared in the House without a jacket or tie you would not call them. If your rulings are to be flouted so quickly when you call hon. Members in that way, how can we have standards in the House?
Mr. Speaker: The hon. Gentleman either was not here or does not read Hansard. I certainly did not say what he has put into my mouth. I said that I never give reasons why I call or do not call hon. Members in the Chamber.
Mr. James Marshall: On a different point of order, Mr. Speaker. I ask you to investigate whether the Prime Minister intentionally or unintentionally misled the House when—
Mr. Speaker: Order. The hon. Gentleman has just been re-elected to the House, and he will know that no hon. Member intentionally misleads the House of Commons. In any case, answers to questions are not matters for me. I cannot help.
Mr. Eric Forth (Mid-Worcestershire): On a point of order, Mr. Speaker. Will you give the House some guidance on a matter that gave rise to most of this exchange but has now become important in the context of what you said? A moment ago, you referred to the conventions of the House which always have value. You know better than anyone that one of the great conventions of the House is that maiden speakers should be allowed to speak uninterrupted, but on the proviso that their speeches are uncontroversial or non-provocative or do not contain the sort of substance that would normally be subject to challenge from the other side, by way of interventions or, perhaps, points of order.
You will recall, Mr. Speaker, that during the recent controversial maiden speech in the House my hon. Friend the Member for Eastbourne (Mr. Gow) sought to intervene precisely because the material in that maiden speech was not only controversial but offensive. The Chair did not allow my hon. Friend to make his intervention on a point of order.
If you, Mr. Speaker, allow maiden speeches to continue to be made which contain offensive or derisory material, but which cannot be challenged, it puts the House and yourself in a difficult position. It puts all hon. Members— particularly Conservative Members, because the offences have come only from the Opposition—in a difficult poisition, and gives rise to many of the difficulties that have arisen.
Will you, Mr. Speaker, give careful consideration to the basis upon which maiden speeches are made in the House, to their content and to the ability of other hon. Members to seek to challenge them while the speech is being made?
Mr. Speaker: I read in Hansard what occurred on that day and what Mr. Deputy Speaker said. Nothing out of order occurred. Mr. Deputy Speaker did not prevent the hon. Member for Eastbourne (Mr. Gow) from intervening. It is true that the convention of making non-controversial maiden speeches has a good basis, but if they are controversial they stand to be challenged, and that is exactly what happened. I am certainly not prepared to ask hon. Members to submit their maiden speeches to me first.

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: With the leave of the House, I will put together the five motions relating to statutory instruments.
Ordered,
That the draft Meat and Livestock Commission Levy Scheme (Confirmation) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.
That the Merchant Shipping (Light Dues) (Amendment No. 2) Regulations 1987 (S.I., 1987, No. 746) be referred to a Standing Committee on Statutory Instruments, &c.
That the Foreign Compensation (Union of Soviet Socialist Republics) (Distribution) Order 1987 (S.I., 1987, No. 663) be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Grants by Local Housing Authorities (Appropriate Percentage and Exchequer Contributions) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Bunk Beds (Entrapment Hazards) (Safety) Regulations 1987 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Ryder.]

EUROPEAN COMMUNITY DOCUMENTS
Mr. Speaker: With the leave of the House, I will put together the seven motions relating to European Community documents.
Ordered,
That European Community Documents Nos. 4083/84, 4687/84, 8599/85, 5808/86 and 6213/87 on price indicators for foodstuffs and non-food products be referred to a Standing Committee on European Community Documents.
That European Community Document No. 7194/82 on credit insurance be referred to a Standing Committee on European Community Documents.
That European Community Document No. 9592/86 on hazardous imitation products be referred to a Standing Committee on European Community Documents.
That European Community Document No. 5156/82 on legal expenses insurance be referred to a Standing Committee on European Community Documents.
That European Community Document No. 10443/86 on toy safety be referred to a 'Standing Committee on European Community Documents.
That European Community Document No. 11063/86 (Part 4) on knitting yarns be referred to a Standing Committee on European Community Documents.
That European Community Document Nos. 8006/86 and 10530/86 on health inspection of meat and poultry meat be referred to a Standing Committee on European Community Documents.—[Mr. Ryder.]

Finance Bill

  Considered in Cotninittee
  [MR. HAROLD WALKER in the Chair]
  Ordered,
  That the Bill be considered in the following order: Clauses 1 to 17, Schedule 1, Clauses 18 to 57, Schedule 2, Clause 58, Schedule 3, Clauses 59 to 63, Schedule 4, Clauses 64 to 76, Schedule 5, Clauses 77 to 95, Schedule 6, Clause 96, Schedule 7, Clauses 97 to 101, Schedule 8, Clauses 102 to 104, new Clauses, new Schedules, Schedule 9.—[Mr. Norman Lamont.]

  Considered in Cotninittee
    Clause 1

      INTERPRETATION
      3.47 pm
      Mr. Tony Blair: I beg to move amendment No. 35, in page I, line 10, leave out
      'or that part of an undertaking'.
      The first chapter of the Finance Bill deals with profit-related pay and a number of amendments on the Paper relate to the first 18 clauses. For the convenience of the Committee, I intend to adhere strictly, as no doubt, you Mr. Chairman, would want me to, to the wording of the first amendment and leave a more general debate on profit-related pay and its basic principles to a clause stand part debate.
      The amendment would omit from clause 1, line 10, the words
      "or that part of an undertaking".
      That will define an employment unit as an undertaking to which a profit-related pay scheme relates, not
      "an undertaking, or that part of an undertaking, to which a profit-related pay scheme relates".
      The amendment has been tabled to probe the Government's intentions in defining an employment unit for the purpose of deciding how profit-related pay is to be administered. I raise those particular words because they crop up in many areas of the law, and, indeed, have given rise to considerable and significant legal confusion over the years. Since we are about to administer a large tax relief on the basis of a profit-related pay scheme, it is right that we should be sure of the scope of the profit-related pay scheme so that we can adequately determine the scope of the fiscal incentive towards profit-related pay.
      Among the legislation in which the words "part of an undertaking" occur, are the Redundancy Acts and the transfer of undertakings orders which transfer the rights and obligations of employees and employers in certain employment situations where one firm takes over another. I assume—perhaps the Minister will confirm this—that the definition of part of an undertaking is supposed to be the same in the Act as it is in the industrial relations legislation more generally.
      I want to give the Minister one or two examples, so that we can see the scope of what is involved. If a firm wants to introduce a profit-related pay scheme, and has its own canteen staff. do such staff form a self-contained unit such that they are part of an undertaking? For example, would the clerical side of a firm, as opposed to the shop floor shide, form a part of an undertaking? In other words, there are certain legal cases in relation to the industrial relations laws in which part of an undertaking is sometimes defined as a self-contained part—in the sense that it could even

      981
      have its own profit and loss accounts. Presumably that would not arise in relation to the clerical side of a firm; could it be included? If so, could that apply merely to the white collar staff and not to the shop floor staff? What are the requirements that go to make up the definition of "part of an undertaking"? Has consideration been given to that? Is the Treasury satisfied that no one will be excluded from the ambit of the profit-related pay schemes by an over-tight definition of an undertaking or part of an undertaking?
      We intend to vote against the general principle of profit-related pay and a fiscal incentive, but it is important that if we are to have profit-related pay, it is accepted on a clear basis and no-one is excluded from the ambit of profit-related schemes who should properly be within it, once the initial principle is accepted. I hope that I have adequately canvassed the difficulties that we foresee. I stress that this is a probing amendment that is designed to secure an explanation from the Government.
      The Paymaster General (Mr. Peter Brooke): It may be helpful if I refer to the general subject that the hon. Member for Sedgefield (Mr. Blair) has raised. In the design of our PRP proposals, we have sought, wherever it is consistent with policy objectives, to build in as much flexibility as possible. One choice that we are allowing employers to make when preparing their PRP schemes is the nature of the employment unit. We recognise that some employers will want to have a single scheme covering the whole enterprise under which PRP is related to the profits of the whole, be it a company or group of companies, a partnership or other unincorporated business. Any employer who makes that choice may do so because he considers that his employees are likely to be better motivated if they are identified with the business as a whole. He may conclude in any event that, in his own circumstances, there would he particular disadvantages or difficulties in breaking the business down into profit centres, each with it own profit and loss account prepared in accordance with paragraphs 19 and 20 of schedule 1.
      On the other hand, some businesses already operate on a basis that provides a measure of autonomy at a level lower than the whole business. They find particular advantages in such decentralisation and we have therefore provided that the employment unit need not be the whole group, company or business but can be a sub-unit of any of those. We recognise that in some businesses employees see themselves as belonging to a particular part of a business. That may be one division or even one factory. It is right that if profit figures that meet the statutory requirements can be produced for that part of the undertaking it should he permissible for that unit to be an employment unit with its own PRP scheme. It would be wrong to require that each company in a group had to belong to a group scheme despite the fact that each company made a different product and that each employee thought of himself—and was encouraged to think of himself—as employed by his own company rather than by the group.
      The tax relief that we are providing is intended to encourage the widespread adoption of PRP schemes. In our judgment, removing the choice of size of employment unit would deter some employers from adopting PRP; but the essential condition, about which the hon. Member for
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      Sedgefield asked, is the requirement that a unit should have its own profit and loss account prepared in accordance with paragraphs 19 and 20 of schedule 1.
      Mr. Blair: I am grateful to the Minister for his reply. I am attempting to be helpful and to do that I need to probe a little further. Some units of an undertaking might be colloquially thought of as self-contained and would not have their own separate profit and loss account. The canteen or clerical staff in a company might not have profit and loss accounts hut could form self-contained parts. The reason for our amendment is to probe whether the Government have given sufficient thought to the definition of "part of an undertaking". These words are widely used in industrial relations legislation and have given rise to considerable confusion. The Government should be clear about their legislative intent, or they will find that companies will be unduly restricted in bringing in these schemes.
      Mr. Brooke: It may be helpful if I respond further to the hon. Gentleman's remarks. I should add to what I said earlier that the Bill has no specific relationship to other legislation. There is no natural read-across but, as I said before, the touchstone will be the employer's ability to produce a profit and loss account for an employment unit of the undertaking. The hon. Gentleman used the example of canteen staff. If the employer can produce accounts it is for him to make an application for a scheme. The hon. Gentleman will know from reading the rest of the legislation that it requires 80 per cent. employee participation, although I think the hon. Gentleman has another amendment about that.
      Mr. Blair: Again I am grateful to the Minister. Perhaps I could ask him to give this matter further consideration. I do not think that it is a matter of controversy between us. I appreciate what he says, that these are different parts of the legislation, but I can tell him, and no doubt his advice will he to the effect, that the words in this statute will be defined and construed by a court in the same way as words are interpreted in other pieces of legislation. Therefore, the industrial relations definitions in the redundancy and transfer of undertakings regulations about an undertaking and part of an undertaking will he the same.
      Situations can arise in which it is not possible to produce a separate profit and loss account but in which one could think in colloquial terms of a self-contained part of an undertaking. It may be worth paying some further attention to this to ensure that certain parts of undertakings will not be excluded from the ambit of these profit-related pay schemes. I can think of examples in my own constituency where for parts of a factory floor it would be impossible to produce a profit and loss account. However, they might well respond in different ways to a profit-related pay scheme. I ask the Minister to at least give some further attention to this. Otherwise, there will be difficulties that we both want to avoid. Subject to that, I am prepared to withdraw the amendment.
      Mr. Brooke: The issue that the hon. Gentleman raises was, of course, considered during the fairly lengthy gestation period that led up to this legislation. I repeat that a scheme employer will need to make an application to the board of Inland Revenue and that one of the conditions

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      that he must satisfy under this legislation in order to be registered is the production of a separate profit and loss account. That of itself will be a determining factor.
      Mr. Blair: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Question proposed, That the clause stand part of the Bill.
      Mr. Blair: As I said when I spoke to the previous amendment, the debate on clause 1 is an appropriate time to have a debate on the principle of profit-related pay and whether it is in our interests to accept as a whole the scheme that the Government intend to introduce. Profit-related pay has been much discussed among academics, and various representations were made to the Government when they first mooted this scheme. The advantages and disadvantages can be said to be in some sort of balance. We cannot be certain that the balance of advantage comes down on one side or the other.
      4 pm
      The Bill will introduce tax relief on profit-related pay for up to one fifth or £3,000 of an employee's wage—whichever is the lower—provided that that part of the wage is paid on the basis of the employer's profits. Will the Minister confirm that the effect would be to give up to £20 a week tax-free to a person who wished to take up the full benefit of the scheme? Such a person would be likely to be a senior executive or manager, although in these days he might be working on the shop floor. At first blush. that £20 a week tax cut would be given to the person taking the maximum benefit for doing no extra work whatever. It would go straight into that person's hand; he would have produced nothing more and done no extra work.
      I may be wrong, but it seems to me also that it could be possible for the £3,000 to be taken off the top rate of tax so that the person's tax relief could be greater, but at any rate a person who took the maximum could receive up to £20 a week tax-free.
      The cost of the proposal has been estimated in various ways by academic bodies as well as the Treasury. The Treasury says that the costs for the full year 1988–89 will be about £50 million, but by then the scheme will just be starting up. Sam Brittan, writing in the Financial Times about the earlier limit of £1,000, thought that the cost could be anything up to £850 million to £950 million per year if profit-related pay were taken up on a large scale. Saul Estrin, writing in The Guardian, reckoned that the cost could be anything up to £1,000 million per annum. I think that it is accepted on all sides that, if profit-related pay is taken up on the scale that the Government wish, considerable fiscal incentives will attach to it. It is clear beyond argument—the Treasury accepts this—that we are talking about a fiscal incentive that could be worth hundreds of millions of pounds.
      Therefore, before we accept the benefits of profit-related pay, we need to be sure that the scheme represents the best way of obtaining the benefits the Treasury seeks. Basically, the Government make three claims for profit-related pay. The first is that it would encourage a greater identification between workers and management; in other words, that it would eradicate what is popularly called the "them and us" attitude. The second claim is that
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      employees will not be made redundant in times of recession. They will simply take lower wages because of lower profits, and unemployment will thus be avoided. The third claim is that the marginal cost to the employer of hiring staff will be diminished because the profit-related pay element will mean that, as more workers are hired, the profits will simply be spread more thinly. Therefore, it will be in the interests of management to hire more staff and produce more goods. As I remarked on Second Reading, that theory is propounded by Professor Weitzman of the Massachusetts Institute of Technology.
      Let me take each of those claims in turn and add some further objections. When the Financial Secretary replied to my Second Reading speech, he said, I thought rather unkindly, that I had barely mentioned the Bill. In fact, I find that my remarks on profit-related pay run to two or three columns of Hansard. I did not get an answer to any of my points, so I must apologise if I appear to be repeating myself.
      The Government argue that there will be greater identification between workers and management. In its submission to the Government, the Institute of Personnel Management said, with some justification:
      "Profit-related pay is just one, and in our view, not particularly good, method of introducing flexibility into pay structures and it hardly seems equitable to grant it tax relief that is denied to other, perhaps better, approaches, like output-related productivity schemes or merit pay."
      That is an important point. We tend to be given the idea that profit-related pay schemes have some magic attendant upon them and that they are different from other schemes. In fact, profit-related pay is a sophisticated form of bonus payment: the more profit there is, the more pay an employee gets. In that respect the scheme is not dissimilar from a bonus productivity scheme, which gives the equivalent identification between management and work force and thus provides the essential ingredient of removing the "them and us" attitude. As the Institute of Personnel Management asked, why should profit-related pay be singled out for a tax incentive? I would be grateful if the Minister would deal with that point.
      The Institute of Personnel Management and the British Institute of Management made a further point. The main purpose of the profit-related pay scheme is said to be to reduce unemployment. It is very difficult to understand how the best way of reducing unemployment can be to give what could be up to £500 million to £1,000 million-worth of tax incentives for profit-related pay. There could be many better ways of spending that sum of taxpayers' money to secure a reduction in unemployment or an increase in employment. On 27 October last year, the Financial Times reported that there was no hard evidence to suggest that the profit-related pay scheme represented a good method of reducing unemployment. We are entitled to ask the Government whether they have hard evidence or empirical studies to suggest that profit-related pay will reduce unemployment, because that macroeconomic argument lies at the heart of their claims.
      Given that there are to be fiscal incentives, a further point arises. Treasury Ministers have been telling us for years that, if something is to be given away, someone must pay for it. The truth is that the general body of taxpayers will pay for profit-related pay. It will be particularly inequitable because, on the highest estimates that I have seen, 12 million workers—half the work force—will be covered by the profit-related pay scheme. That means that

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      approximately half the work force will not be covered, and the public sector accounts for most of that. The public sector, in particular will have to finance the tax relief for the private sector schemes eligible for profit-related pay.
      On the identification of managers and workers, we have also to consider the whole question of employee share ownership plans. These have been used effectively in the United States and are being pioneered in this country by Unity Trust, the trade union banking institution. It is difficult to understand why profit-related pay should be singled out. When the British Institute of Management considered the employment-creating potential of profit-related pay, it said that nearly 47 per cent. of its respondents thought that the pressures to limit recruitment and investment would not be easily resisted. In other words, almost half of those responding to the British Institute of Management survey said that, so far from increasing employment, the profit-related pay scheme would limit recruitment and investment.
      The reason is not difficult to find. This was highlighted by Professor Meade, who is an acknowledged expert on these matters and to whom I pay attention, despite the fact that he is an adviser to the SDP. There seems to be a good deal of truth in his view that a profit-related pay scheme means that those already employed by a company will have a vested interest in resisting further recruitment because it will spread the jam more thinly. If more workers are taken on, the proportion of the profit going to each worker will be diminished. Professor Meade therefore suggested a different scheme, in which a distinction was made between insiders and outsiders coming in, the latter receiving a lower return in profit-related pay.
      The marginal cost of hiring workers may be reduced for the employer, but existing employees will have an interest in resisting further recruitment so as to maximise their own slice of the profits. It may be argued that management rules and will wish to take advantage of the lower marginal cost of hiring staff, but despite some people's fantasies about the way in which firms are run, most of us appreciate that in the majority of firms there is a fairly common identity between workers and management. The "them and us" attitude can be overplayed, and the notion that workers and management will automatically take opposing views seems highly academic and unreal. In reality, management and workers—-whether unionised or not—will consider the matter together.
      It should be remembered, too, that managers are not precluded from participating in the scheme. Indeed, they will almost certainly be involved in it, so both they and the shop floor will have a community of interest in resisting further recruitment. At the very least, therefore, it is difficult to see how anyone can state with certainty that profit-related pay will reduce unemployment, because there is a clear counterweight to that proposition.
      Finally, it is argued that in a recession a profit-related pay scheme will mean that workers will take a smaller share of the profit rather than being made redundant, but I am not entirely sure that it will work like that in practice. People might well go for voluntary redundancies so as to keep the same amount of profit per worker. Moreover, from the Government point of view it is not even clear that the results that they claim will be desirable. If profits are reduced and a firm gets into difficulties, it may not necessarily be a good thing to stagnate the work force in that way. Looking at the macro-economy as a whole, the only effect of profit-related pay in a recession is to produce
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      wage cuts. That is not a novel proposition. It was tried in the 1930s and it failed. The recession then becomes deeper. I am therefore not persuaded that profit-related pay is the panacea that it is claimed to be.
      Before agreeing to the introduction of such a potentially large fiscal incentive as would be involved, therefore, we must be extremely sure that we are going down the right route. We are far from convinced that it will diminish unemployment or increase investment. We are also not convinced that it will deal with the underlying problems of the economy. In particular, we are totally unpersuaded that this is the best way to spend the potentially very large sums involved.
      Mr. Tim Smith: In my view, the speech of the hon. Member for Sedgefield (Mr. Blair) was thorougly dull, unimaginative, negative stuff.
      Mr. Austin Mitchell: You have not heard anything yet.
      Mr. Tim Smith: I cannot wait to hear the contribution of the hon. Member for Great Grimsby (Mr. Mitchell). We have just heard the spokesman from the Opposition Front Bench pouring cold water on what he claims others—presumably the Government—have described as a panacea. No one has described profit-related pay as a panacea, but it is one of a number of measures that could help reduce inflexibility in the labour market. Various schemes with the same objective are already in place, including employee share schemes and the Finance Act 1978 and other schemes which seek to bring together workforce and management.
      It was good to hear from the Labour party spokesman that there is not a great divide or a "them and us" situation in industry, as Labour Members generally spend most of their time playing on that. Nevertheless, in some companies there are divisions and we need to bring the two sides together. Profit-related pay, with other schemes, could go some way towards that, because employees who participate will take a new interest in the overall profitability of the company. The argument for greater identification is thus an important one and I certainly find it attractive.
      4.15 pm
      With regard to the argument that there will be fewer redundancies, I am not sure that the hon. Member for Sedgefield has any experience in industry but when wage costs become excessive there are very few solutions available. At present, employers simply cut the number of employees by 5 per cent., 10 per cent. or whatever percentage is deemed necessary to keep the company afloat. Redundancy is a very blunt, crude instrument to deal with the problem and I should not have expected the Labour party to find it attractive. If a tax-related scheme goes some way to meeting the difficulty and providing other possibilities for employers in that situation, I should have thought that it would be welcome.
      It was interesting to hear the various figures suggested for the cost of the scheme. They varied from £50 million by the Treasury to about £1,000 million by Sam Brittan, who apparently commented before the relief was made more attractive. If the take-up is anything like as big as that, the scheme will be a runaway success because it will mean that every eligible company is taking part. I do not believe that the costs will be anywhere near £1,000 million,

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      but I believe that the experiment is worth trying. No one claims that the scheme will be an overnight success, but many companies have already expressed interest in it. If it encourages employees to take a greater interest in the overall welfare of the company or of the part of the company in which they work, I believe that we should pursue it. I shall therefore support clause 1 and the following clauses.
      Mr. Ronnie Fearn: My question to the Minister relates to the incentive aspect of the scheme. The alliance is basically in favour of the scheme and will support it. To provide an incentive to set up the administrative and negotiating machinery needed to begin such a scheme and to promote its beneficial effects, would it not be wise to provide for a rebate of employer national insurance contributions, not just on the qualifying profit-related pay but on the basic pay? Employers will be looking for such an incentive. If the Minister can show that it exists, we shall fully support the clause.
      Mr. Austin Mitchell: I do not know a great deal about the scheme, but I have read Professor Weizman's book—I occasionally read items of SDP literature—with great interest and attended his meeting in the House of Commons. Prior to that, I had thought that profit-related pay was something to do with the Ayatollah Khomeini.
      I was not immediately attracted to the scheme by the way in which it was presented by the Government. Clearly, anyone in his right mind is sympathetic to a proposal that will produce greater involvement by workers in their firms and greater identification with the future of those firms, but we must ask whether the proposed scheme is the best way to bring about the identification that we all wish.
      The principle has widespread support. The problem is whether this proposal is the best way of serving that principle. Therefore, it is unrealistic to brush aside the objections in the way that the hon. Member for Beaconsfield (Mr. Smith) has sought to do. The question is whether, by spending a similar amount of money or even less money—the amount that we will spend has not been measured—we could get even greater benefits and produce the identification that is wanted by all sides of the House.
      The idea within the proposal springs from a half-baked analysis of the reasons for Japanese industrial success. The Japanese firms that were considered are the biggest, those that dominate a third of the economy. The smaller firms have not been considered yet it is from those that all the sacrifices are demanded when economic difficulties arise. What we are discussing is the identification between workers and management in the biggest firms that dominate a third of the Japanese economy. The argument is that, in times of economic difficulties, Japanese workers are prepared to take cuts in pay. That is true. It has been a formula for success in Japan. However, that formula for success exists because Japanese firms accept responsibility for the workers on a far wider scale than British firms.
      In Japan, indentification and commitment can be built up because firms are prepared to carry the workers through lean times. They are prepared to take risks, to diversify, to provide the work force with the real bond of identification—a successful company. The bond of identification is provided by a company that is going places and one that is attempting to provide a future for
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      its workers. Therefore, the whole system is much more integrated than in Britain. It is unrealistic to take one aspect—wage and salary cuts in times of economic difficulty—and ask how we can achieve that in the United Kingdom.
      The Government believe that the answer is profit-related pay. They believe that that will provide the formula for success that has been used by Japan in the past. That idea is totally unrealistic and half-baked. Either we accept the total commitment of firms to workers or we accept that the present proposal is inadequate.
      Although we support the principle of involvement, it is perfectly reasonable for us to raise doubts about the way in which the principle is propounded in this country. The true aim of this measure is to cut earnings. I believe that this is a proposal from a Government that have run out of solutions for Britain's economic difficulties. The Government's economic policies have ground to a halt and they are seeking a new beginning. They are clutching at straws. In the 1970s, when the Conservatives had run out of ideas, they clutched at the work of one American economist. Lo and behold, along came Friedman and all the disasters that followed. Now, the Government are clutching at another American economist, Weizman and suggesting that he holds the key. This proposal accords with a deep and distinctive prejudice on the Tory Benches—to cut wages and earnings.
      The Government speak with two tongues. In the run-up to the election it was useful that earnings and wages were increasing ahead of inflation. Indeed, I remember the mysterious advertisement with 23 reasons for voting Conservative—the Conservatives dredged round, but all they could get were 23 reasons, not even 24 and indeed, most of those were wrong—and one of those reasons was that earnings had increased by 26 per cent. or 24 per cent.—the figures are not important. The fact was that earnings had increased ahead of inflation. Then, of course, it was a cause for congratulation and a useful weapon to win the election. Now, it has become an anathema.
      Our costs, inflation rate and earnings are increasing faster than most of our competitors. For that reason, it makes it incomprehensible that the Government are now trying desperately to peg the exchange rate to the deutschmark. The Government are attempting to join the European monetary system without declaring for the EMS. The Government have said that the pound will be held to 2·80 or 3 DM. The Government's decision to peg the pound means that every time our inflation increases ahead of our competitors—each day it edges ahead of our competitors—the real exchange rate, given that the nominal exchange rate has been pegged in that fashion, increases. Our real exchange rate is now 10 per cent. up on what it was last October. We are gradually squeezing our competitors—
      The Chairman of Ways and Means (Mr. Harold Walker): Order. We are a long way away from profit-related pay.
      Mr. Mitchell: I am glad that you have brought me back, Mr. Walker. I was arriving at my point via West Germany—a most interesting excursion. However, my point was germane.
      In the Government's eyes the reason for the proposal is that it holds down wages. That is why the Government are so enthusiastic about it. However, I must point out

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      that, if the Government are, at the same time, holding down the exchange rate as wages go up, they will be putting British industry in a squeeze that will remove the last vestige of our competitiveness and strangle British industry. Therefore, there will not be any profits to be distributed as a result of the profit-related pay proposal. If competitiveness is eroded in this manner, profits will go out the window. However, at your behest, Mr. Walker, I shall return to the argument.
      This proposal is not what the Chancellor had in mind when he set out to be the great reforming Chancellor when he took over the office in 1983. Then, he wanted to be a tax reformer and wished to make the whole system neutral. This proposal does not represent neutrality. A fairly large tax concession has been produced, but the extent of that tax concession is unknown. The estimate of the cost of the scheme for 1988–89 has been put at £50 million, but the Treasury has accepted that the final cost could be substantially greater.
      As my hon. Friend the Member for Sedgefield (Mr. Blair) has already said, Sam Brittan estimated in the Financial Times that the final cost could be £800 million. The hon. Member for Beaconsfield was wrong when he suggested that Sam Brittan put the final cost at £1 billion. It was The Guardian that estimated that the final cost would be £ 1 billion, so it must be true. The Guardian's assessment is more realistic than that contained in the Financial Times. However, whether the cost is £800 million or £1,000 million it is far greater than the estimates we have had from the Government or from the Treasury.
      We are signing a blank cheque for a proposal that is not neutral in the manner in which the Chancellor set out to be neutral. There are far better ways of spending this money for the purposes of the economy—for instance, on job creation. However, for a Chancellor who wants to encourage identification between workers and firms there are far more effective ways of spending this money.
      We must also consider whether firms, given their ability under this scheme to cut wages, will keep jobs. It is interesting to consider what the Government are now putting forward as this country's future. Will we face a situation in which firms, having already shed 28 per cent. of manufacturing jobs in the period 1979–83, and gone through that bloodbath, will, in all probability, shed more jobs in the future? Is this the future that the Government arc preparing for us?
      Are the Government saying that, in the years ahead, the economy, under their management, will be so difficult that there will be a great need for firms to face the choice between shedding labour or keeping labour on lower earnings? If that is to be the future, it is rather different from the one that the Government were projecting before the general election, which took place only a few weeks ago. During the election campaign, the Conservative party offered a future of almost limitless expansion, with the British economy competing effectively with the German economy. The picture that the Government have presented is entirely unrealistic and I am sure that the Government are right when they say now that economic difficulties lie ahead. I am sure that that will be the position under their management.
      4.30 pm
      Old habits do not change overnight. If we find ourselves in economic difficulties, firms will shed everything that can be thrown overboard. That has happened in the past and
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      it will happen again. Everything that makes for non-price competitiveness will be thrown out, including research, design work, investment and labour. If life becomes difficult economically, the old bloodbath will be repeated, and a profit-related pay system will not obviate the need, as some perceive it, for that to happen. That will be the position if economic difficulties develop, and I am sure that they will.
      I do not wish to appear churlish in my response to profit-related pay, but it is the responsibility of the Opposition to ask the necessary questions. Our questions are a reaction to the high hopes that the Government have reflected in their propagation of the scheme. If the Government are selling the scheme as an answer to the economic difficulties that they will create in future, they have a responsibility to ensure that the prospects that they are presenting will become reality.
      The scheme has been oversold, as monetarism was oversold in the 1970s. There has been overselling by the Social Democratic party and the Liberal party, which have seen the scheme as a substitute for an economic policy. The Government have taken it on for the same reason.
      Mr. Archy Kirkwood: At the beginning of his remarks the hon. Gentleman said that there was a real interest across the Floor of the Chamber in trying to relate the interests of employees with those of their employers within their place of work. Unfortunately, the hon. Gentleman has not advanced any of the new thinking of the Labour party to explain how this will be achieved. Instead, he is attacking the Government. Does he intend to end his speech with some positive and constructive proposals?
      Mr. Mitchell rose—
      The Chairman of Ways and Means: Order. If the hon. Member for Great Grimsby (Mr. Mitchell) were to take up the invitation of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), I would have to remind him that we are discussing profit-related pay within the terms of clause I.
      Mr. Mitchell: It is interesting to hear that there is new thinking going on in the Labour party as against the overacting and over-emoting that is taking place within the alliance. It is surely possible to say on the basis of rational calculation that clause I is not the best approach to implementing and encouraging the greater involvement that we all wish to see. It is true that the Government see involvement as share options that are focused on top management and on the board of directors, but we want involvement within firms, which means democracy, consultation and giving unions and workers a legitimate place in the decision making that takes place within a firm. It involves also the profit-sharing proposals that Liberals have advanced for years and which were implemented only by a Labour Government during 1977–78, when the first great advance in that direction was made. I support the concept and I am sympathetic to it. I am merely saying that that is the right road and the way forward, and not the one that the Government have overpraised and for which they have made too many claims. The Government's scheme will not live up to the prospects that have been held out for it to us. It is characteristic of a Government and an alliance who have run out of ideas.
      Mr. John Redwood: Having listened to the hon. Members for Sedgefield (Mr. Blair) and for Great

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      Grimsby (Mr. Mitchell), I feel that the Opposition have run out of problems to allege that the Government are running into and not that the Government have run out of solutions to problems. It is extraodinary that profit-sharing pay should be represented as a scheme to cut wages. It is a scheme to allow employees to participate in the success of their enterprise. Profits are rising substantially because demand is good and because industrialists and those in commerce are responding to that demand. There are profits, and if the scheme is introduced employees will be better off. I am staggered that Opposition Members wish to deny people the opportunity to participate in such a scheme.
      The Opposition tell us that a different lesson should be drawn from the Japanese experience than the one that the Government have presented. The Opposition always take a selective view of the Japanese experience. They focus on the few large firms at the top of the Japanese economy that account for about 20 per cent. of output and activity and not on the 80 per cent. that is represented by small and medium-sized enterprises in a highly competitive environment without the many protections that are accorded to the privileged few who work in the large companies at the top. I think that the Opposition would be well advised to study the Japanese economy rather more thoroughly before drawing hasty conclusions from the Japanese experience.
      The Opposition tell us that it would be better to offer tax relief for merit pay than to introduce profit-related pay. Merit pay is a scheme that enables individual managers to say to individuals within the work force, "You are worth this much extra and you are not." Accordingly, a manager would have tremendous power and control over individual employees or groups of employees under that scheme. Is that really what the Opposition wish to write into the statute book? Do they not accept that merit pay would be difficult for the Treasury to control? Without firm limits it would be possible to allege that all parts of an individual's remuneration were related in some way to his merit. It would be extremely difficult to tie the net tightly around such a scheme to ensure that judgment was not involved. One of the advantages of profit-related pay is that it is relatively easy for those who frame legislation to produce a scheme that does not allow people to bend the rules too often or too regularly.
      I am delighted that the Opposition now understand the value of employee share option-type schemes. They should do a little more homework, however, because the ESOP schemes in the United States of America have produced many drawbacks for the employees who have been part of them who wish to change their jobs or who find that values are problematic when they come to value their stake when there is no ready market.
      I hope that the Government will introduce more proposals in the next Budget to strengthen share ownership for all employees in all companies. I hope, however, that they will not introduce a simple clone of the ESOP scheme. Instead, we should have a good British scheme that does not have the weaknesses and injustices that ESOPs perpetrate on employees.
      Mr. Robert Maclennan: The contributions from the Opposition Benches of the
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      hon. Members for Sedgefield (Mr. Blair) and for Great Grimsby (Mr. Mitchell) were united only in their deep conservatism. Their diagnosis of the condition of British industry and companies produced different results. The hon. Member for Sedgefield, who spoke from the Opposition Front Bench, alleged that there was no problem to be dealt with, because British firms were united and that it was artificial to talk about bringing forward a scheme to deal with the "them and us" problem. The hon. Member for Great Grimsby claimed that the position was entirely opposite to that, and that firms were so divided and managers so remote from the interests of their employees that they could not proceed along the lines of Japanese companies. It seems that there is a need for Labour Members to get together to try to work out a common approach to these problems. They do not speak with one voice.
      Profit-related pay is not a panacea for industrial relations difficulties. I should be interested to know why the Institute of Personnel Management took the view that it did. Is it defending its members' interests? Does it think that the only way to overcome management problems is through its beneficent intervention? I find its unsubstantiated arguments rather unpersuasive. The reality is that profit-related pay is not advanced as a means of resolving industrial relations difficulties or as a means of tackling unemployment. It is not a back-door method of reducing pay. It is a system that relates rewards to the returns of a business, which seems to be a profoundly sensible approach. Indeed, if one puts that proposition conversely—that pay should be unrelated to profit—the ridiculousness of opposition to that suggestion becomes obvious.
      I should like to ask the Government a more factual question about take-up.There have been suggestions that the scheme might cost about £50 million per annum from the Treasury, which seems a modest amount. If that were to be the case, will the Government reveal some of their premises about the extent of take-up? How many firms and employees do they envisage as being affected in the first years that the scheme is in operation'? That is an important question because of the range of estimates that have been canvassed in the debate and outside the House.
      The wilder suggestions by the hon. Member for Sedgefield on Labour's Front Bench have not been supported by the Government. However, I should be happier if the figures were somewhat more substantial than those that have come from the Treasury because they are not altogether satisfactory if this is purely a token scheme.
      As I said on Second Reading, the scheme seems an attractive idea. Not only would it offer encouragement to the employees through tax relief: it would also encourage the employers to go through the complexities of establishing the schemes and participating in the negotiations that will be necessary to make those schemes a success. I am not sure that the somewhat abstract advantages that the Government have deployed in support of their view that the employers will find the scheme attractive are sufficient, in practice, to make many take the initiative in setting up profit-related pay schemes.
      If one took only the evidence of the inquiries that have been made, it would be quite encouraging. I understand that between 50,000 and 60,000 inquiries have been made of the Inland Revenue. However, those are initial probing inquiries to see what lies behind the scheme. Therefore, we

      993
      cannot assume that those inquiries will necessarily be followed up by firm commitments to introduce the schemes. Perhaps the Minister can give us a little more information about the premises upon which the Treasury has based its estimate of the expected take-up.
      Mr. John Browne: I rise briefly to urge my hon. Friend the Paymaster General not to accept the amendment. I understand the argument of the hon. Member for Sedgefield (Mr. Blair). On the question of cost, the figures that he gave were roughly between £50 million and, at the top limit, £100 million, but one must consider net cost and the real cost that will affect the Inland Revenue. One hopes that, with such a scheme, activity, enterprise and productivity will increase. Therefore, profit will increase and the corporation tax take will increase in total. In his speech—I am afraid that I had to leave at the end of it—the hon. Gentleman asked for empirical evidence. Surely the evidence of the past two years, and of the past year especially, is that, despite decreasing the income tax rate, the total income tax take has increased. I hope that that will happen with this scheme.
      On the relationship between profit-related pay and bonuses, it is important for people to see the clear identification between them. This scheme would be strictly related to profit, whereas a bonus is often related to merit and sometimes involves quite a large element of subjective judgment. However, this scheme hits a different section of the market than do bonuses and would play, therefore, an important part in motivation. It would be in the interests only of the management or of the group concerned to ensure that it is successful and that it has a motivating, as opposed to a demotivating, effect.
      Therefore, I urge my hon. Friend not to accept this amendment. I know that it is a probing amendment and I do not mean to be hostile in saying this, but I feel that my points are relevant.
      Mr. Tim Boswell: I wish to take up the remarks of Opposition Members about the benefit, or the denial to the rest of the community of the benefit, of individual profit-related pay schemes. Perhaps we shall have an opportunity later to discuss the omission of the public sector from the proposals, which we understand, and on which hon. Members have already commented. It would be dangerous and churlish—perhaps characteristically churlish of certain hon. Members—to assume that, just because the benefits of such a proposal are not available to everyone—either as a matter of choice, definition or exclusion—the scheme would not, benefit the community.
      4.45 pm
      My belief, which is based on study and work that I have completed over a number of years and on my continuing interest in the subject, is that the introduction of profit-related pay could be of positive benefit to the economy. Therefore, it is directly of benefit to those who participate in it. Equally, it is indirectly of benefit to those in the public and private sectors who are not signed up on the scheme. It is in that spirit that I add my support to the proposals and hope that they will form the basis of a new look at the way in which we give new life and further stimulation to the expansion of our economy.
      Mr. Brooke: I rise to respond to the debate which, I advise my hon. Friend the Member for Winchester (Mr.
      994
      Browne) is on clause I stand part, rather than on the amendment. It may be easiest if I respond in the order in which various points were made, which means that I begin with the hon. Member for Sedgefield (Mr. Blair).
      The hon. Member raised a specific arithmetical question at the beginning, in the context of £3,000 or £20 a week. To make certain that there is common cause between us and that we are singing from the same hymn sheet, I advise him that profit-related pay would of course apply to half that figure. The application would be on the basis of £1,500 and if a person is on the top rate of tax, we should be talking about a figure of £20 a week. Profit-related pay would not apply to all the £3,000 because the relief is available on only half that figure.
      In answer to his question about a specific individual who is on that income—such a person would need to be on a particular salary level for that to apply—the hon. Gentleman knows that the purpose of the scheme is to embrace, in principle, all the people in a particular employment unit, provided that that is above the 80 per cent. figure that is required for qualification.
      The purpose of the scheme is to stimulate commitment to the activities of the business on the part of the entire work force and to stimulate also their interest in its profitability. It would be wrong to generalise in any way about specific experience, hut, having been profit-accountable for a business for 18 years, having lived in a profit-related environment during those 18 years, and having seen the payroll for which I was responsible in that capacity rise a thousandfold in cash terms during that period, I am conscious that one can achieve a community of endeavour in a business in which there is a relationship to profitability in the pay of those involved.
      The hon. Member for Sedgefield went on to ask me about costs. As the hon. Member for Great Grimsby (Mr. Mitchell) said, the hon. Gentleman was referring specifically to the quotation that appeared in The Guardian. Cost will obviously depend on take-up. The incidence of costs in financial years will depend on the growth over time in the number of employees who are covered by registered schemes, and by the amount of profit-related pay that they receive. There will be a lead time before new schemes can be operational and it is expected that costs will grow over time. Therefore, on that count alone, the estimate given in the "Financial Statement and Budget Report" of a negligible cost in 1987–88, and a cost of £50 million in 1988–89, cannot reflect the costs in the long term. I am the first to acknowledge that.
      The incidence of costs between years will depend also on the pattern of take-up between the schemes that make profit-related payments continuously, perhaps with weekly or monthly payments, and those that pay sums less frequently. As the schemes must be registered in advance of the start of the first profit period for which tax relief profit-related pay will he paid, and as firms are likely to align profit-related pay periods with their normal accounting periods, the start date of the accounting periods among the participating firms will also affect the pattern of cost between the financial years.
      For those reasons, the cost in 1988–89 is also likely to underestimate annual costs in the long term. If 2 million employees taking 10 per cent. of their pay as profit-related pay, for example, were covered by registered schemes by the end of 1988–89, the full annual tax costs would be about £300 million, but costs in 1988–89 would be much

      995
      less, as many of the schemes would not make payments until the following year or later. Long-term costings must be highly speculative and if the tax relief cost is high, it will be because there has been a valuable major change for the better in our pay systems. A tax relief which secured that would be money well spent.
      An intention of the legislation, to which the hon. Member for Sedgefield also referred, is that of greater identification, to which I have in part alluded from my personal experience. He asked about the circumstances where there was a downturn in a business and asked about the marginal cost involved. I noted that the hon. Member for Caithness and Sutherland (Mr. Maclennan) drew attention to the difference of opinion between the hon. Members for Sedgefield and for Great Grimsby, about employee identification. I do not want, the words of the hon. Member for Great Grimsby, to oversell the issue of a downturn, but imagine a business in which labour costs account for 70 per cent. of value added. Let us say that profit-related pay is 10 per cent. of labour costs which makes it 7 per cent. of value added. I find it inconceivable that it is not helpful to that business to have that margin of 7 per cent. flexibility, that it will not give some room for manoeuvre on output prices if input prices rise, and that that manoeuvring with output prices will not help to sustain output. It goes without saying that profit-related pay could be a higher proportion of pay than that, which would give more flexibility. The benefits are not just about downturns; pay flexibility can give more confidence about expansion in an upturn because of the security which it gives in a downturn. Again, I can endorse that from personal experience.
      The hon. Member for Sedgefield quoted from the Institute of Personnel Management and the British Institute of Management, as he did on Second Reading. I congratulate him on having read the submissions in response to the consultative document. I shall not remotely accuse him of selective quotation, because I am confident that he has read all the submissions. He will know that there were a large number of submissions on a whole series of different points, some of which contradicted the ones which he quoted.
      On motivation which is already secured from bonus schemes and, indeed, from share ownership, we are already encouraging share ownership successfully, but we need complementary incentives for cash profit-related pay. Bonus schemes not involving profit do not bring the external benefits that profit-related pay can. There is a need to get employees to identify with the overall commercial success of the business, and profit is the best measure of that.
      My hon. Friend the Member for Beaconsfield (Mr. Smith) made a helpful speech on flexibility in the labour market and the whole supply side issue. The hon. Member for Sedgefield had cast doubt on this issue and argued, drawing on Sir James Meade, that there would be the danger of insiders preventing extra recruitment. He will know that schemes will be able to exclude new recruits from profit-related pay until they have served for a time if that is desired. However, I doubt whether the hon. Gentleman is arguing that a union would be prepared to organise resistance to extra recruitment. I doubt if any
      996
      union would argue that as an objective. Business expansion, which is what this legislation is about, is not a zero sum game; it benefits everybody.
      My hon. Friend the Member for Beaconsfield supported the Government on flexibility and I join him in not wishing to make exaggerated claims for what the legislation will do and in believing that it will make a difference in terms of flexibility and on the supply side. We are envisaging the same sort of steady growth that has been seen in the share schemes which go back to the Finance Act 1978—that scheme was a product of the Lib-Lab pact and I pay tribute to the Liberal party for its influence on the then Labour Government—and to the all-employee share option scheme that we introduced in 1980. There are 666 schemes signed up under the 1978 Act and 647 under the 1980 Act. That is an increase which has occurred during the past decade and I envisage that we shall see the same sort of steady growth in the schemes that we are introducing on this occasion.
      The hon. Member for Southport (Mr. Fearn) raised specific questions that arise from alliance policy. Employers should need no persuading or reminding of the importance of relating pay to profits, but some encouragement—that is what this scheme is about—is appropriate to help employees see the value of linking a part of their pay to the success of the enterprise. The hon. Gentleman asked about national insurance contributions and suggested that there should be a relief from them. However, national insurance contributions are not a tax; they determine a benefit entitlement, so they are not an appropriate instrument to encourage the spread of profit-related pay.
      The hon. Member for Great Grimsby has read Professor Weitzman; I congratulate him on that. The hon. Member for Sedgefield was somewhat disparaging about American economists on Second Reading, but I remember growing up when Professor Galbraith, who started as a Canadian and only later became an American, was frequently quoted by Opposition Members. It would be a mistake if any anti-Americanism in academic thought were to creep into our affairs. We welcome suggestions from wherever they come.
      The hon. Member for Great Grimsby took up an issue which was less present in the speech of the hon. Member for Sedgefield and argued that this was a plan to cut wages and not to help profits rise and pay with them, as we intend. Certainly I would deny the hon. Gentleman's comments that the issue has been oversold. He denounced clause I as the bedrock of the legislation, but I am not sure whether he has looked at it, because clause I simply relates to interpretation. It was a slight piece of overselling to build the whole Opposition attack on that.
      The hon. Member for Caithness and Sutherland (Mr. Maclennan) asked specifically about take-up. In 1985 the organisation Industrial Facts and Forecasts carried out a survey for the Department of Employment on the use of profit-sharing and share ownership schemes by large companies. It showed that 6 per cent. of respondents had a cash-based profits scheme. It has since estimated that 8 to 9 per cent. of employees in these companies had some profit-related element in their pay in 1985.
      I have already referred to the make-up of the cost estimates. However, of the £50 million, perhaps one half may derive from companies which already have cash payment profit-related schemes. About 1 million employees out of 15 million in the private sector are in

      997
      existing schemes which might be altered for purposes of registration as profit-related pay schemes and one third of those brought into the tax relief in 1988–89 could account for the one half of the £50 million estimate that I referred to earlier. I also alluded to how we expect the figures to expand.
      5 pm
      In these matters as in others, the Social Democratic party is a little over-optimistic. The Inland Revenue received something in excess of 20,000 inquiries rather than the 60,000. However, I am delighted to say that more than 300 of The Times 1,000 largest companies in the country have shown interest at some level or another in the scheme. That is encouraging.
      My hon. Friend the Member for Wokingham (Mr. Redwood) made several most thoughtful comments in support of the scheme. My hon. Friend the Member for Daventry (Mr. Boswell) joined my hon. Friend the Member for Winchester in support of the Government's proposals. In essence,. we are aiming for an economy with high performance, high employment and high living standards. That will be achieved through a combination of measures and it is important that we get the total environment right. The proposals in the 17 clauses in the Bill and schedule 1 are a contribution to that process.
      Mr. Maclennan: Will the Minister address directly the question about inducements for employers? He has only said that he believes employers will see the advantages of profit-related pay and that they need no inducement to enter into such schemes. Does he really believe that the only obstacle to the entry to such schemes is the employees' reluctance?
      Mr. Brooke: The hon. Gentleman's question relates to an issue that was raised by the official Opposition. As the hon. Member for Sedgefield asked earlier, if profit-related pay was so beneficial, why did we need tax relief? I know that the hon. Member for Caithness and Sutherland will agree that plenty of companies run profit-related pay schemes already. The purpose of providing tax relief to secure employee interest and demand is to encourage employees to take up such schemes. Employees may be unfamiliar with the benefits. The emphasis throughout the proposals is on encouragement rather than imposition. We do not believe in dictating incomes policies and—I direct this remark to the hon. Member for Dagenham—we do not believe in the apparatus of a command economy. however disguised.
      Mr. Blair: We have had an interesting and wide-ranging debate. The hon. Member for Beaconsfield (Mr. Smith), in his usual way made an offensive point because he was unable to make a telling point. He began by saying that the scheme would bring about greater identification between employees and employers. He never satisfactorily explained what great advantage this scheme has over others. His central argument was based on the cost of the scheme. That is the heart of the argument between us.
      We are not debating whether profit-related pay is good or bad. People can enter into profit-related pay schemes now; many companies have such schemes, and their employees are free and entitled to enter them. As I explained to alliance Members, the question that we are debating is whether this scheme is the best use of public money. Is this the best way to make use of this tax incentive?
      998
      The hon. Member for Beaconsfield unwittingly put his finger on the dilemma. If the take-up of the scheme is low and the scheme is inexpensive, it has failed because the basis of the scheme's success must be that it is taken up in sufficiently large numbers to make an impact on the macroeconomy. That is the claim that has been made for the scheme. It is claimed that it will make an impact on the nation's economy. If the take-up is low and expense is low, it has failed. We are only debating the success of the scheme if the take-up is high and therefore—-by its very nature—the expense is high. If the scheme is successful, we will be talking about hundreds of millions of pounds, not £50 million.
      Conservative Members wanted to know Labour's ideas for spending the money. We have put those ideas forward constantly. Indeed, the alliance has put forward similar schemes for spending public money to create employment. We can agree or disagree about those ideas, but they exist.
      The question is whether this fiscal incentive will have the desired effect. I repeat that I remain completely unconvinced about it. This is not a question of modern ideas versus backward ideas. We should not simply take the first idea off the peg and use it just because it has a modern sounding ring to it, like profit-related pay. We should inquire—as it is our duty to inquire in the House—when debating the Finance Bill whether public expenditure is being made wisely. We remain unconvinced by the proposals.
      The hon. Member for Wokingham (Mr. Redwood) made some telling points. However, at the beginning of his speech he made a point that I must not allow to pass without comment. He said that the Opposition had run out of problems with which to tax the Government on the economy. I appreciate that the position in Wokingham is different from that in Sedgefield, but it does not lie in the mouth of any hon. Member to say that we do not have economic problems to deal with when there are 3 million unemployed.
      Being lectured on the virtues of unity by what is left of the Liberal-SDP alliance is a bit like being lectured on the virtues of being a recluse by the under-Secretary of State for Health and Social Security, the hon. Member for Derbyshire, South (Mrs. Currie). The notion that the Liberal-SDP alliance put forward any convincing argument for profit-related pay is comic. The alliance did not even deal with the objections made by its principal economic adviser, Sir James Meade, who has criticised the Government's plans for profit-related pay on the basis that I outlined.
      The hon. Member for Caithness and Sutherland (Mr. Maclennan) asked me on what basis the Institute of Personnel Management or the British Institute of Management could come forward with objections to profit-related pay. They did that on the basis of experience, and we should listen to those organisations.
      When we discuss profit-related pay and its obvious and self-evident advantages, we are told by the Treasury Minister that he cannot understand how any trade union could possibly resist recruitment to a firm on the basis that profits were to be spread more thinly. The trade union officials will not be the focus of that resistance. As anyone knows who has seen the large amount of overtime worked even in certain factories in my constituency, there is definitely a clear perception by many workers of their vested interests on the inside as against those on the outside.

      999
      We do not claim that profit-related pay is bad. I would not make that case. I know companies in my constituency that operate profit-related pay schemes and I wish them the best of luck. The question we are debating is whether this scheme, taken on the basis of it being a success—and on that basis it must be expensive—is the best way to spend public money. Unless we are persuaded of that, we will vote against the profit-related pay scheme. I must say from Labour's Front Bench that we are unpersuaded; we will therefore vote against it.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 316, Noes 197.

      Division No. 16]

      [5.10 pm

      AYES

      Adley, Robert

      Cartwright, John

      Alexander, Richard

      Channon, Rt Hon Paul

      Allason, Rupert

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

      Alton, David

      Clark, Dr Michael (Rochford)

      Amery, Rt Hon Julian

      Clark, Sir W. (Croydon S)

      Amess, David

      Colvin, Michael

      Amos, Alan

      Conway, Derek

      Arbuthnot, James

      Coombs, Simon (Swindon)

      Arnold, Jacques (Gravesham)

      Couchman, James

      Arnold, Tom (Hazel Grove)

      Currie, Mrs Edwina

      Ashby, David

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

      Ashdown, Paddy

      Devlin, Tim

      Aspinwall, Jack

      Dickens, Geoffrey

      Atkins, Robert

      Dicks, Terry

      Atkinson, David

      Douglas-Hamilton, Lord James

      Baker, Nicholas (Dorset N)

      Durant, Tony

      Baldry, Tony

      Emery, Sir Peter

      Banks, Robert (Harrogate)

      Evans, David (Welwyn Hatf'd)

      Barnes, Mrs Rosie (Greenwich)

      Evennett, David

      Batiste, Spencer

      Fallon, Michael

      Beaumont-Dark, Anthony

      Farr, Sir John

      Beith, A. J.

      Favell, Tony

      Bendall, Vivian

      Fearn, Ronald

      Bennett, Nicholas (Pembroke)

      Fenner, Dame Peggy

      Benyon, W.

      Finsberg, Sir Geoffrey

      Bevan, David Gilroy

      Forman, Nigel

      Biffen, Rt Hon John

      Forsyth, Michael (Stirling)

      Biggs-Davison, Sir John

      Forth, Eric

      Blackburn, Dr John G.

      Fowler, Rt Hon Norman

      Body, Sir Richard

      Franks, Cecil

      Boscawen, Hon Robert

      Freeman, Roger

      Boswell, Tim

      Fry, Peter

      Bottomley, Mrs Virginia

      Gardiner, George

      Bowden, A (Brighton K'pto'n)

      Garel-Jones, Tristan

      Bowden, Gerald (Dulwich)

      Gill, Christopher

      Bowis, John

      Glyn, Dr Alan

      Boyson, Rt Hon Dr Sir Rhodes

      Goodhart, Sir Philip

      Braine, Rt Hon Sir Bernard

      Goodson-Wickes, Dr Charles

      Brandon-Bravo, Martin

      Gow, Ian

      Brazier, Julian

      Gower, Sir Raymond

      Bright, Graham

      Grant, Sir Anthony (CambsSW)

      Brittan, Rt Hon Leon

      Greenway, Harry (Ealing N)

      Brooke, Hon Peter

      Greenway, John (Rydale)

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

      Gregory, Conal

      Browne, John (Winchester)

      Griffiths, Sir Eldon (Bury St E')

      Bruce, Ian (Dorset South)

      Griffiths, Peter (Portsmouth N)

      Bruce, Malcolm (Gordon)

      Grist, Ian

      Buchanan-Smith, Rt Hon Alick

      Grylls, Michael

      Buck, Sir Antony

      Hamilton, Hon A. (Epsom)

      Budgen, Nicholas

      Hamilton, Neil (Tatton)

      Burns, Simon

      Hampson, Dr Keith

      Burt, Alistair

      Hannam, John

      Butler, Chris

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

      Butterfill, John

      Hargreaves, Ken (Hyndburn)

      Carlile, Alex (Mont'g)

      Harris, David

      Carlisle, John, (Luton N)

      Haselhurst, Alan

      Carlisle, Kenneth (Lincoln)

      Hawkins, Christopher

      Carrington, Matthew

      Hayes, Jerry

      Carttiss, Michael

      Hayhoe, Rt Hon Sir Barney

      1000

      Hayward, Robert

      Mitchell, David (Hants NW)

      Heathcoat-Amory, David

      Montgomery, Sir Fergus

      Heddle, John

      Morris, M (N'hampton S)

      Heseltine, Rt Hon Michael

      Morrison, Hon C. (Devizes)

      Hicks, Mrs Maureen (Wolv' NE)

      Morrison, Hon P (Chester)

      Hicks, Robert (Cornwall SE)

      Moss, Malcolm

      Higgins, Rt Hon Terence L.

      Moynihan, Hon C.

      Hill, James

      Mudd, David

      Hind, Kenneth

      Neale, Gerrard

      Hogg, Hon Douglas (Gr'th'm)

      Needham, Richard

      Holt, Richard

      Neubert, Michael

      Hordern, Sir Peter

      Nicholson, David (Taunton)

      Howard, Michael

      Nicholson, Miss E. (Devon W)

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

      Onslow, Cranley

      Howarth, G. (Cannock & B'wd)

      Oppenheim, Phillip

      Howell, Ralph (North Norfolk)

      Owen, Rt Hon Dr David

      Hughes, Robert G. (Harrow W)

      Page, Richard

      Hughes, Simon (Southwark)

      Paice, James

      Hunt, David (Wirral W)

      Patnick, Irvine

      Hunt, John (Ravensbourne)

      Patten, John (Oxford W)

      Hunter, Andrew

      Pawsey, James

      Hurd, Rt Hon Douglas

      Peacock, Mrs Elizabeth

      Irvine, Michael

      Porter, Barry (Wirral S)

      Irving, Charles

      Porter, David (Waveney)

      Jack, Michael

      Powell, William (Corby)

      Janman, Timothy

      Price, Sir David

      Jessel, Toby

      Raffan, Keith

      Johnson Smith, Sir Geoffrey

      Raison, Rt Hon Timothy

      Johnston, Sir Russell

      Rathbone, Tim

      Jones, Gwilym (Cardiff N)

      Redwood, John

      Jones, Ieuan (Ynys Môn)

      Renton, Tim

      Jones, Robert B (Herts W)

      Rhodes James, Robert

      Jopling, Rt Hon Michael

      Rhys Williams, Sir Brandon

      Kellett-Bowman, Mrs Elaine

      Riddick, Graham

      Key, Robert

      Ridley, Rt Hon Nicholas

      King, Roger (B'ham N'thfield)

      Ridsdale, Sir Julian

      Kirkhope, Timothy

      Rifkind, Rt Hon Malcolm

      Kirkwood, Archy

      Roberts, Wyn (Conwy)

      Knapman, Roger

      Roe, Mrs Marion

      Knight, Greg (Derby North)

      Rossi, Sir Hugh

      Knight, Dame Jill (Edgbaston)

      Rost, Peter

      Knowles, Michael

      Rowe, Andrew

      Lamont, Rt Hon Norman

      Ryder, Richard

      Lang, Ian

      Sackville, Hon Tom

      Latham, Michael

      Sainsbury, Hon Tim

      Lawrence, Ivan

      Salmond, Alex

      Lawson, Rt Hon Nigel

      Sayeed, Jonathan

      Lee, John (Pendle)

      Shaw, David (Dover)

      Leigh, Edward (Gainsbor'gh)

      Shaw, Sir Giles (Pudsey)

      Lester, Jim (Broxtowe)

      Shaw, Sir Michael (Scarb')

      Lightbown, David

      Shelton, William (Streatham)

      Lilley, Peter

      Shephard, Mrs G. (Norfolk SW)

      Lloyd, Sir Ian (Havant)

      Shepherd, Colin (Hereford)

      Lloyd, Peter (Fareham)

      Shepherd, Richard (Aldridge)

      Lord, Michael

      Shersby, Michael

      Luce, Rt Hon Richard

      Sims, Roger

      McCrindle, Robert

      Skeet, Sir Trevor

      MacKay, Andrew (E Berkshire)

      Smith, Cyril (Rochdale)

      Maclean, David

      Smith, Sir Dudley (Warwick)

      Maclennan, Robert

      Smith, Tim (Beaconsfield)

      McLoughlin, Patrick

      Soames, Hon Nicholas

      McNair-Wilson, M. (Newbury)

      Speller, Tony

      McNair-Wilson, P. (New Forest)

      Spicer, Jim (Dorset W)

      Madel, David

      Spicer, Michael (S Worcs)

      Major, Rt Hon John

      Stanbrook, Ivor

      Mans, Keith

      Stanley, Rt Hon John

      Maples, John

      Steel, Rt Hon David

      Marland, Paul

      Steen, Anthony

      Marlow, Tony

      Stern, Michael

      Marshall, John (Hendon S)

      Stevens, Lewis

      Marshall, Michael (Arundel)

      Stewart, Allan (Eastwood)

      Martin, David (Portsmouth S)

      Stewart, Andrew (Sherwood)

      Mates, Michael

      Stewart, Ian (Hertfordshire N)

      Maude, Hon Francis

      Stradling Thomas, Sir John

      Mawhinney, Dr Brian

      Sumberg, David

      Maxwell-Hyslop, Robin

      Summerson, Hugo

      Michie, Mrs Ray (Arg'l & Bute)

      Taylor, Ian (Esher)

      Miller, Hal

      Taylor, John M (Solihull)

      Mills, Iain

      Taylor, Matthew (Truro)

      Mitchell, Andrew (Gedling)

      Taylor, Teddy (S'end E)

      1001

      Tebbit, Rt Hon Norman

      Warren, Kenneth

      Temple-Morris, Peter

      Wells, Bowen

      Thompson, Patrick (Norwich N)

      Wheeler, John

      Thorne, Neil

      Whitney, Ray

      Thornton, Malcolm

      Widdecombe, Miss Ann

      Thurnham, Peter

      Wiggin, Jerry

      Townend, John (Bridlington)

      Wigley, Dafydd

      Townsend, Cyril D. (B'heath)

      Wilkinson, John

      Tracey, Richard

      Wilshire, David

      Tredinnick, David

      Winterton, Mrs Ann

      Twinn, Dr Ian

      Winterton, Nicholas

      Vaughan, Sir Gerard

      Wolfson, Mark

      Viggers, Peter

      Wood, Timothy

      Waddington, Rt Hon David

      Woodcock, Mike

      Wakeham, Rt Hon John

      Yeo, Tim

      Waldegrave, Hon William

      Young, Sir George (Acton)

      Walden, George

      Younger, Rt Hon George

      Walker, Bill (T'side North)

      Wallace, James

      Tellers for the Ayes:

      Waller, Gary

      Mr. Mark Lennox-Boyd and Mr. Stephen Dorrell.

      Walters, Dennis

      NOES

      Abbott, Ms Diane

      Eastham, Ken

      Allen, Graham

      Evans, John (St Helens N)

      Archer, Rt Hon Peter

      Fatchett, Derek

      Armstrong, Ms Hilary

      Faulds, Andrew

      Ashley, Rt Hon Jack

      Fisher, Mark

      Banks, Tony (Newham NW)

      Flannery, Martin

      Barnes, Harry (Derbyshire NE)

      Flynn, Paul

      Barron, Kevin

      Foot, Rt Hon Michael

      Battle, John

      Foster, Derek

      Beckett, Margaret

      Foulkes, George

      Bell, Stuart

      Fraser, John

      Benn, Rt Hon Tony

      Fyfe, Mrs Maria

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

      Galbraith, Samuel

      Bidwell, Sydney

      Galloway, George

      Blair, Tony

      Garrett, John (Norwich South)

      Blunkett, David

      Garrett, Ted (Wallsend)

      Boateng, Paul

      George, Bruce

      Boyes, Roland

      Gilbert, Rt Hon Dr John

      Bradley, Keith

      Golding, Mrs Llin

      Bray, Dr Jeremy

      Gordon, Ms Mildred

      Brown, Gordon (D'mline E)

      Gould, Bryan

      Brown, Nicholas (Newcastle E)

      Graham, Thomas

      Buchan, Norman

      Grant, Bernie (Tottenham)

      Buckley, George

      Griffiths, Nigel (Edinburgh S)

      Caborn, Richard

      Griffiths, Win (Bridgend)

      Callaghan, Jim

      Grocott, Bruce

      Campbell, Ron (Blyth Valley)

      Harman, Ms Harriet

      Campbell-Savours, D. N.

      Haynes, Frank

      Clark, Dr David (S Shields)

      Heffer, Eric S.

      Clarke, Tom (Monklands W)

      Henderson, Douglas

      Clay, Bob

      Hinchliffe, David

      Clelland, David

      Hogg, N. (C'nauld & Kilsyth)

      Clwyd, Mrs Ann

      Holland, Stuart

      Cohen, Harry

      Home Robertson, John

      Cook, Frank (Stockton N)

      Howarth, George (Knowsley N)

      Corbett, Robin

      Howell, Rt Hon D. (S'heath)

      Corbyn, Jeremy

      Hoyle, Doug

      Cousins, Jim

      Hughes, John (Coventry NE)

      Cox, Tom

      Hughes, Robert (Aberdeen N)

      Crowther, Stan

      Hughes, Roy (Newport E)

      Cryer, Bob

      Hughes, Sean (Knowsley S)

      Cummings, J.

      Illsley, Eric

      Cunliffe, Lawrence

      Ingram, Adam

      Cunningham, Dr John

      Janner, Greville

      Dalyell, Tam

      John, Brynmor

      Darling, Alastair

      Jones, Barry (Alyn & Deeside)

      Davies, Rt Hon Denzil (Llanelli)

      Jones, Martyn (Clwyd S W)

      Davies, Ron (Caerphilly)

      Kaufman, Rt Hon Gerald

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

      Kilfedder, James

      Dewar. Donald

      Lambie, David

      Dobson, Frank

      Leighton, Ron

      Doran, Frank

      Lestor, Miss Joan (Eccles)

      Douglas, Dick

      Lewis, Terry

      Duffy, A. E. P.

      Litherland, Robert

      Dunnachie, James

      Livingstone, Ken

      Dunwoody, Hon Mrs Gwyneth

      Lloyd, Tony (Stretford)

      Eadie, Alexander

      Lofthouse, Geoffrey

      1002

      Loyden, Eddie

      Rees, Rt Hon Merlyn

      McAlhon, John

      Reid, John

      McAvoy, Tom

      Richardson, Ms Jo

      Macdonald, Calum

      Roberts, Allan (Bootle)

      McFall, John

      Robertson, George

      McKay, Allen (Penistone)

      Rogers, Allan

      McKelvey, William

      Rooker, Jeff

      McLeish, Henry

      Ross, Ernie (Dundee W)

      McNamara, Kevin

      Rowlands, Ted

      McTaggart, Bob

      Ruddock, Ms Joan

      McWilham, John

      Sedgemore, Brian

      Madden, Max

      Sheerman, Barry

      Mahon, Mrs Alice

      Sheldon, Rt Hon Robert

      Mallon, Seamus

      Short, Clare

      Marek, Dr John

      Skinner, Dennis

      Marshall, David (Shettleston)

      Smith, Andrew (Oxford E)

      Marshall, Jim (Leicester S)

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

      Martin, Michael (Springburn)

      Snape, Peter

      Martlew, Eric

      Soley, Clive

      Meacher, Michael

      Spearing, Nigel

      Michael, Alun

      Steinberg, Gerald

      Michie, Bill (Sheffield Heeley)

      Stott, Roger

      Millan, Rt Hon Bruce

      Strang, Gavin

      Mitchell, Austin (G't Grimsby)

      Straw, Jack

      Moonie, Dr Lewis

      Taylor, Mrs Ann (Dewsbury)

      Morgan, Rhodri

      Thompson, Jack (Wansbeck)

      Morley, Elliott

      Turner, Dennis

      Morris, Rt Hon A (W'shawe)

      Vaz, Keith

      Mowlam, Mrs Marjone

      Wall, Pat

      Mulhn, Chris

      Walley, Ms Joan

      Murphy, Paul

      Wardell, Gareth (Gower)

      Nellist, Dave

      Wareing, Robert N

      Oakes, Rt Hon Gordon

      Welsh, Michael (Doncaster N)

      O'Brien, William

      Williams, Rt Hon A J

      O'Neill, Martin

      Williams, Alan W (Carm'then)

      Orme, Rt Hon Stanley

      Winnick, David

      Pendry, Tom

      Wise, Mrs Audrey

      Pike, Peter

      Worthington, Anthony

      Powell, Ray (Ogmore)

      Wray, James

      Prescott, John

      Young, David (Bolton SE)

      Primarolo, Ms Dawn

      Radice, Giles

      Tellers for the Noes

      Randall, Stuart

      Mr Allen Adams and Mr Don Dixon

      Redmond, Martin

      Question accordingly agreed to.
      Clause 1 ordered to stand part of the Bill.

  Clause 2

    TAXATION OF PROFIT RELATED PAY
    Question proposed, That the clause stand part of the Bill.
    Mr. Austin Mitchell: I repeat a question to the Minister which he did not answer in the debate on clause I stand part. I should have thought that, during the past 10 years, the profits of British companies have been related not so much to the efficiency of companies, although clearly that is a factor, as to the Government's macroeconomic running of the economy. The pattern seems to be that if the pound is overvalued, as it was grievously from 1979 to 1982, profits are squeezed, firms go bankrupt and jettison everything that can be thrown overboard and a hard time is had by all. But if the pound comes down, as it manifestly has come down since 1983—by about 20 to 25 per cent. from the rate prevailing at the end of 1982—profits reemerge, especially in firms which are exporting. I am talking primarily about manufacturing, but it also affects the service sector. Profits have boomed because firms are competitive because exports pay and because they can squeeze more profits out of exports.
    In neither case is this essentially related to the performance of the firm or the work force. Therefore,

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    under this scheme, workers are being rewarded for the consequences of the Government's macroeconomic policy instead of their endeavours. The rewards are coming from increased taxation, because the burden must be spread on those in the public sector who will get no benefit from this.
    If profits increase after a devaluation, pay that is related to profits will increase after devaluation. Therefore, we shall be in a less effective position to do what is necessary after a devaluation—keep costs down. After the 1967 devaluation, the Labour Government squeezed costs to free resources for exports and to stop competitiveness being eroded. But this proposal would do exactly the opposite. We shall be pumping out more money, increasing take-home pay and accelerating the rate of inflation simply because the consequences of the Government's profit-related pay scheme will put more money in workers' pockets. How does the Minister answer those points?
    Mr. Brooke: I am delighted to welcome you to the Chair, Mr. Knox. The hon. Member for Great Grimsby (Mr. Mitchell) spent his speech on clause I stand part accusing the Government of overselling this legislation. I would be the last person to oversell this legislation or the achievement of the Government in providing the framework for the economic prosperity that we have been enjoying in recent years. But I am grateful to the hon. Gentleman for paying tribute to the Government for the success being enjoyed by the economy and by individual companies within it.
    This is a wider question than the issues covered in clause 2, so I am responding generally without notice. My recollection is that, at the microeconomic level, industrial and commercial corporations are enjoying a higher rate of return than they have enjoyed since 1964. The same is true for manufacturing companies since 1973. The quarter of a century that is embraced by the figures for industrial and commercial corporations saw several Governments of different colours, and it would be wrong to generalise about the pattern during those 25 years. All that I can say is that 1 am delighted that, within the framework which the Government have provided, the profitability and returns being secured are the highest for nearly 25 years.
    The hon. Member for Great Grimsby gave us a trailer of the issues relating to the private and public sectors which we shall debate when we come to Opposition amendments as well as an amendment from my hon. Friend the Member for Beaconsfield (Mr. Smith). It would be a mistake for me to give the hon. Gentleman a general answer. At the microeconomic level, greater profitability in corporations, accompanied by profit-related pay, will ensure a greater commitment among the entire work force to the success of the company and is likely to increase the prosperity of those who work in the company.
    Question put and agreed to.
    Clause 2 ordered to stand part of the Bill.

  Clause 3

    RELIEF FROM TAX
    Mr. Blair: I beg to move amendment No. 31, in page 2, line 39, leave out '£3,000' and insert '£1,500'.
    The amendment is drafted to probe the Government for more information on their profit-related pay schemes.
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    When we debated clause 1, the Minister said that the tax relief would allow those on higher earnings to claim tax relief off the top of their incomes. I should be obliged if he would confirm that. Those on higher rates of tax would gain more from profit-related pay than those on the basic rate of tax.
    The Minister also said, rightly, that only half the amount of profit-related pay would be eligible for tax relief. If the maximum amount of profit-related pay was £3,000, the maximum level for tax relief would be £1,500. We agreed that, at the top rate, that could give about £20 a week tax-free to those on higher pay, which is a considerable sum. We quizzed the Minister on this, and he dealt in some detail with the Government's estimate of the cost of the profit-related pay scheme.
    Various figures were bandied about. I quoted figures from the Treasury, which started at £50 million, and from various columnists and academics, who took the level much higher. I should like to probe a little on this matter. The Paymaster General thought that £3 million would be about the top amount that could be claimed under the schemes. I should be obliged if he will tell us whether the Treasury has made a precise study of the costs and what empirical evidence it has adduced so that we know exactly what sums we are considering. This is important when considering the amount of tax relief.
    5.30 pm
    When the proposals were first promulgated, the maximum relief for profit-related pay was £1,000, and it has increased considerably since then. I should be obliged if the Paymaster General will tell us why the Government felt it necessary to raise the amount. The hon. Gentleman may say that the reason was the many representations by employers to the effect that they did not want to engage in those schemes unless the relief was much higher, so it was obviously parti pris. It is very much in the interests of those who engage in profit-related pay schemes to have the highest maximum tax relief available. The Treasury has to be satisfied about what maximum limit will encourage the maximum number of people to take up profit-related pay. Plainly, there must be a balance between meeting the interests of the taxpayer and encouraging the PRP schemes. I am not sure that the balance is right. There has ben a considerable uplift in the schemes' limits. At the very least, we are owed an explanation before we let this pass without comment.
    Mr. Brooke: The hon. Member for Sedgefield (Mr. Blair) has returned to an issue to which he alluded in the debate on clause 1 stand part. It may be helpful if I specifically answer his question, because he has said that amendment No. 31 is a probing amendment. On £900 per annum, which would be 60 per cent. of the £1,500 proposed, we would be talking about £17·30 a week rather than the £20 mentioned by the hon. Gentleman. Nevertheless, the figures are obviously of the same magnitude.
    The hon. Gentleman said that those on high incomes would gain more. That is, of course, a function of a progressive taxation system, but taxation rates will have their effect.
    Mr. Blair: Is it not right that if people pay the higher tax rates they will obtain these higher amounts without doing any additional work for them? Without any greater productivity or extra work, they will get more than those on the basic rate.
    Mr. Brooke: I took that point when the hon. Gentleman made it in the debate on clause I stand part. I said that we were looking at a community of interest, with everyone working within a particular company. Of course. the income is a function of contribution. As the hon. Gentleman knows, there is a cut-off at £15,000. Although it is possible for a company to have more profit-related pay than the £3,000 limit, there would be no tax relief on it.
    I should like to avoid any misunderstanding. I did not say that £300 million was our likely long-term figure. I said that it would be perfectly reasonable to have a certain cost in 1988–89, as stated in the projections, yet have the scheme running by the end of that period at a level that, in the fullness of time—obviously it is phased—would produce a full annual cost of £300 million. That simply extends our £50 million figure to a long-term basis. Any take-up beyond the immediate projections will be speculative, just as were any projections made in the context of the 1978 share scheme introduced by the Labour Administration. I have not looked at the forecasts made by that Administration when the scheme was introduced, but it would have been difficult to predict precisely the figures expected over the 10-year period.
    Mr. Alex Salmond: Does the right hon. Gentleman accept the argument that those who will benefit to the maximum extent from the £900 possible profit-related pay, because they are likely to be near the top of the companies concerned, have less need of this general scheme to provide some incentive and some community of interest? It seems a little peverse that the Minister did not restrict the taxation benefit to the standard rate of tax.
    Mr. Brooke: The hon. Member for Sedgefield asked me why we had extended the relief in our proposals in this year's Budget as against those in last year's Green Paper. We decided on the basis of our wide-ranging consultation, which embraced organisations such as the Institute of Personnel Management and the British Institute of Management, which were not wholly favourable to the scheme. I think that the hon. Member for Banff and Buchan (Mr. Salmond) makes a slightly over-cynical suggestion. The Government's judgment in terms of the proposals arising from the Green Paper and the consultation exercise was that it was a balanced package, with the intention of securing certain objectives.
    Sir Peter Emery: Obviously, there are Conservative Members who are very much in favour of this scheme. We think that it is an excellent addition to the incentives which are necessary within taxation generally. Is my right hon. Friend able to tell the House whether there has been any prognostication about the number of people who might be affected in 1988–89 or 1989–90? This is obviously important in terms of the effects.
    Mr. Brooke: I am grateful to my hon. Friend, just as I was to the hon. Member for Banff and Buchan, for kindly ascribing right honourable status.
    Sir Peter Emery: It will come in time.
    Mr. Brooke: In the debate on clause I stand part, I said that, if 2 million employees with 10 per cent. of their pay as profit-related pay were covered by registered schemes by the end of 1988–89, the full annual tax cost would be about £300 million, but the cost that would fall in 1988–89
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    in terms of relief would be about £50 million, because many of the schemes would not make payments until the following year or later. I referred to 2 million employees.
    Sir Peter Emery: As I said, right honourable status will come in time. I am sorry to press the point. I heard my hon. Friend make that statement. But is that the estimate of take-up that the Treasury believes will come about, or does my hon. Friend think that it is likely to be much less? I am afraid that it may be much less. I hope that my hon. Friend will tell us what he believes the actual take-up will be.
    Mr. Brooke: We needed a figure to put into the forecast, and that was the one we took. There was a degree of underlying arithmetical logic to it, but I acknowledge that it was speculative. There are 20,000 employers who have said that when the Inland Revenue produces its guidance notes shortly, assuming this legislation is passed. they would like to receive a copy. That is an index of the fairly widespread interest among employers.
    Mr. Blair: The hon. Gentleman raised an important point. I do not wish to rehearse the arguments that were put earlier, but there is bound to be an element of speculation in deciding what the take-up is. If we are talking about 2 million people with 10 per cent. of their pay—that is, about £300 million—it is important to be sure of the basis upon which we are working and to ensure that there is evidence to support our view. As I made clear earlier, I have my doubts about how successful this will be in any event. It is absolutely clear from the figures that we have been given that we are talking about substantial sums of money.
    I asked the Minister for an explanation of why, when the Government first put forward this scheme, there was a maximum of £1,000 as the top amount that is able to come within the profit-related pay. It is now £3,000. He indicated that the reason was the representations that were made. I still say that that is a significant mark-up to have occurred as a result of such representations. In the initial term, profit-related pay schemes will be introduced and people will get an immediate tax-free benefit in their hand for not producing or doing anything more at all. That is why, when profit-related pay was introduced, some people suggested that it should ensure that people will not get any more money in their hands as a result of the introduction of the tax incentive. I still think that the figure is extremely high. However, we have made our position clear in the vote on clause I, so it is not necessary to divide the Committee on the amendment.
    Mr. Brooke: To avoid misunderstanding, I would say that the £1,000 to which the hon. Member for Sedgefield (Mr. Blair) referred, in terms of the original proposals, was the total available tax relief. I agree that there was a difference in the manner in which it was expressed. Therefore, half of the £3,000, which is inherent in the legislation now, is a 50 per cent. improvement and not a case of tripling.
    Mr. Blair: I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 3 ordered to stand part of the Bill.

  Clause 4

    EXCEPTIONS FROM RELIEF
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: I have a couple of brief questions on clause 4. As I understand it, the principal purpose of clause 4 is to ensure that, if an employee has more than one employment and if, in that other employment, he already enjoys the benefits of a profit-related pay scheme, he cannot, in the second employment, also have the same benefits of a profit-related pay scheme. I assume that that is to do with an anti-avoidance measure, but I would welcome the Minister's confirmation of that.
    I also assume that there are perfectly genuine cases in which people have two separate employments. I assume that, under clause 4, even though profit-related pay is not able to be enjoyed in both employments, other types of bonus scheme or productivity scheme, running in conjunction with a profit-related pay scheme will be perfectly all right. In subsection (3) of clause 4 there is a statement, the effect of which is to ensure that subsection (2) does not apply to those whose earnings are below the lower earnings limit for class 1 contributions. I assume that the purpose of that is to ensure that those on lower pay with below class I contribution levels can still enjoy profit-related pay. I should be grateful if the Minister would confirm the points that have been put to me.
    Mr. Brooke: The hon. Member for Sedgefield (Mr. Blair) has stated what he believes to be the proposals. We certainly consider that it is right to encourage the spread of profit-related pay by introducing a measure of relief, but we believe that there should be upper limits to the amount of the relief. To prevent people avoiding such limits by accident or design—I freely acknowledge that it might be either—by arranging to receive profit-related pay from more than one scheme, clause 4 provides that an employee will not be eligible for tax relief on his profit-related pay if he is already receiving such relief on profit-related pay from another scheme.
    As to bonuses or any other arrangements, I repeat what I said on the amendment that we have just discussed. We do not intend to interfere with the arrangements that employers may have. It is just that the tax relief will be limited to what is contained within the scheme. On the national insurance contribution point, I confirm that the hon. Gentleman is absolutely right.
    Question put and agreed to.
    Clause 4 ordered to stand part of the Bill.
    Clause 5 ordered to stand part of the Bill.

  Clause 6

    EXCLUDED EMPLOYMENTS
    5.45 pm
    Mr. Tim Smith: I beg to move amendment No. I, in page 3, leave out lines 41 and 42.
    The Chairman of Ways and Means: With this it will be convenient to take the following amendments: No. 32, in page 3, line 43, leave out paragraphs (c) and (d).
    No. 2, in page 4, leave out lines 1 to 3.
    Mr. Smith: Clause 6 deals with excluded employments and states that no person who has employment in an office
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    under the Crown or in the service of the Crown, or is employed by an excluded employer, can participate in a profit-related pay scheme. Sub-section (2)(b) states that an excluded employer means
    "a body under the control of the Crown".
    Subsection 3(b) states that in the case of a body having a share capital—which is what I am interested in—control means that
    "he holds more than half of its issued share capital".
    It was put to me by Price Waterhouse, to whom I am an adviser, that that would cover any plc owned by the state. For example, it would include the Rover Group. I am not sure, but I think it would include Harland and Wolff and a number of other plcs owned by the state because the Crown controls more than half of their share capital. I can understand why the Government want to exclude certain employments. It seems that, in certain cases, it would be inappropriate for employments to qualify for a profit-related scheme.
    That is not the only way in which a scheme can be excluded. To qualify, a scheme must be with an employer who is in the business of making a profit in the first place. Obviously, that would exclude many employments under the Crown. I ask my hon. Friend the Minister to look at the matter. If I am right about the matter, it is quite wrong that, just because people happen to work for plcs that are owned by the Crown, they should be excluded from the scheme.
    Mr. Blair: I have some sympathy with the amendment moved by the hon. Member for Beconsfield (Mr. Smith). Similar related points were raised in the debate on the amendments that are tabled in my name and have been taken together. Of course it is the case that, on the whole the public sector will be excluded from profit-related pay. Indeed, if clause 6 is passed as it stands at present, it will be totally excluded. One of the things that Professor Weitzman put forward—I confess that I did not totally understand the basis upon which he managed to do it—was some profit-related pay scheme for the public sector as well as the private sector. I hesitate to recommend that the Government turn their minds to that matter at this stage.
    It is of course the case that the public sector will have no such profit-related pay scheme at all and will be unable to participate in it. One of the traditional reasons for that is that the public sector has much greater security of tenure than the private sector has and, therefore, profit-related pay is a more intelligent way of rewarding in the private sector rather than in the public sector, quite apart from the fact that, obviously, public sector profits have to be made. I am not entirely sure that that traditional argument would apply so much nowadays.
    As I understand it, the question raised by the hon. Member for Beaconsfield concerns bodies under Government or local authority control with a fairly autonomous existence which can make profits. I join him in his question to the Minister about the purpose of excluding a body under central or local government control which makes profits and is therefore susceptible of engaging in a profit-related pay scheme. Why, if we wish for efficiency in the public sector and believe that that is the method of obtaining it, and if there are public sector bodies that are susceptible of being in these schemes, should not we allow them to participate?
    As well as the point raised by the hon. Member for Beaconsfield, my amendment deals with, for example,

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    local authorities' direct labour organisations which can tender for and perform contracts, and which, in certain circumstances, may be able to participate in these schemes. Once we have accepted, as the Committee has by its decision earlier, that profit-related pay schemes are to be encouraged, the net should be cast as widely as possible. If the Government believe that that is a good idea which will encourage productivity at the work place, the burden is upon them to show why certain categories of people should he excluded. At present, there seems to be doubt over at least those two categories.
    Mr. Boswell: I want to associate myself with the amendment of my hon. Friend the Member for Beaconsfield (Mr. Smith) and substantially with many of the remarks made by the hon. Member for Sedgefield (Mr. Blair).
    We have a real problem here which goes to the heart of any analysis or attempt to help stimulate profit-related pay. Where profit does not exist it is difficult, by definition, to contrive some profit-related pay scheme. Nevertheless, it gives me some concern that about one quarter of the labour force which remains within the public sector under its different heads is excluded from what is a substantial advance.
    Earlier, I had an opportunity to speak about the fact that I do not believe that the benefits of profit-related pay are purely internal to the schemes of the beneficiaries thereof. Nevertheless, an anomaly is created to which we should address ourselves. My purpose in rising is not in any sense to solve the problem, but to invite the Government to put down a marker to see what can be done in subsequent years to balance the position as far as it can be.
    There are some grades of Government-controlled bodies at rather different levels. One is the plc with a largely public shareholding, such as the Rover Group. The next level would be Government trading funds, going through to organisations partly or entirely identified with public sector bodies, such as local authorities or the Civil Service. I have recently had the privilege of working alongside the Civil Service and I see the importance of encouraging motivation. However, one or two Opposition Members have shown a marked lack of interest in the Government's attempts to introduce incentive schemes for efficency in the public sector. Without solving these problems, I invite the Government to address themselves to them and to see whether, in a subsequent Finance Bill, they can bring forward some measures which would shadow profit-related pay.
    As hon. Members have mentioned earlier, there is the problem of creating a personal incentive because of the difficulty of allocation and the invidiousness which that may sometimes bring. That may go to some of the anxieties that some hon. Members have mentioned about incentive schemes in the public sector. Nevertheless, it is unfortunate if about a quarter of the labour force cannot participate in these schemes. I understand the reason for that and the accountancy principles which make it impossible at this stage, but I hope that it will be possible to find a way to extend the benefits of what is a considerable social advance to other groups of employees in subsequent Finance Bills.
    Mr. Brooke: I am grateful to my hon. Friend the Member for Beaconsfield (Mr. Smith) for his amendments
    1010
    and for the manner in which he moved them. He asked me a specific question about the Rover Group and I can confirm that such a body would be excluded by the legislation as it is now composed.
    The exclusion of the bodies addressed in the amendment is not a reflection of prejudice but of a careful consideration of the economic merits and consequences of profit-related pay in this sector of the economy. As my hon. Friend said, many of the employees concerned would, in any event, be excluded from access to the tax relief by other profit-related pay provisions. Those provisions require that the undertaking is carried on with a view to profit; they also exclude tax relief in respect of losses. The hon. Member for Sedgefield (Mr. Blair) made similar points in the context of local authorities and I give the same observations in response.
    Some trading bodies covered by the amendment show an accounting profit and compete directly with the private sector, but even those are not generally wholly comparable with the private sector. Some public concerns can achieve profit targets by raising prices in situations where the absence of other suppliers means that they are comparatively less vulnerable to losing business. Even where conditions are similar, there are often cultural differences. The full benefits of profit-related pay will flow where a concern operates fully in the disciplines of the market economy, as, if I may remark in parenthesis, privatisation shows.
    We take the view that, wherever it can be done, such bodies should be freed from Government control through privatisation, after which they are fully exposed to the benefits and disciplines of the market, including the benefits of a registered profit-related pay scheme.
    The matter has been carefully considered. In general, the potential benefits of profit-related pay schemes in the concerns covered by the amendment are likely to be significantly less than in the private sector, and the concentration of an innovative tax relief, such as profit-related pay, on the private sector, where the benefits of pay flexibility are most likely to have the greatest impact, has been regarded as the first priority by the Government.
    The hon. Member for Sedgefield referred to local authorities. What I said about other aspects of this scheme to my hon. Friend the Member for Beaconsfield applies equally to local authority employees. There are areas in the local authority sector where there are similarities with the private sector. I am not suggesting that it is possible to make simple straightforward distinctions. But while there are similarities, there are important differences of culture and of competitive tendering in the local authority sector for all the work cannot yet be said to have been achieved.
    I said in the debate on clause I stand part that we shall be watching with interest the evolution of profit-related pay. We expect it to be a gradual process. I hope that it will be a success. We shall certainly look at its evolution, not simply in the private sector, in terms of what is achieved there, but in terms of its potential application elsewhere. I hope that in the spirit of that response my hon. Friend will feel able to withdraw his amendment.
    Mr. Tim Smith: I can see the difficulties that arise with trading funds and, to a lesser extent, with direct labour organisations of local authorities, although they are not necessarily insuperable. After all, they would have to meet various requirements in schedule I in order to qualify. Their accounts would have to show a true and fair view.

    1011
    There would have to be an independent accountant's report and they would have to be profit-making in the first place.
    But when it comes to plcs in the public sector, I am a little disappointed by my hon. Friend's reply. I was expecting him to say not that he disagreed with me in principle, but that the Government had looked at the matter and had not been able to find a practical way to deal with the problem. In most cases there would be no question of profit-related pay. For a plc such as the Rover Group, or a nationalised industry in receipt of a Government subsidy that is loss-making, the question does not arise. If it is a nationalised industry, or a plc, which has advanced beyond that and is being prepared for transfer to the private sector and making a profit, it stands wholly apart from Government; it is not in receipt of Government subsidy. Apart from ownership, I cannot see the distinction between that plc and one in the private sector or one that is listed on the Stock Exchange. I do not wish to press this, but will my hon. Friend re-examine the sector of plcs that are 100 per cent. owned by the Crown?
    6 pm
    Mr. Blair: I understood a part of the Minister's speech; then there was a part that lapsed into pure ideology. That brought to mind what I believe the noble Lord Ross said when welcoming the shadow Secretary of State for Scotland during the period of the 1974–79 Government. He said that he had read his first speech; he had not read it well; and it had not been worth reading anyway. That summed up the part in which the Minister was talking about trading plcs.
    I would put the case of Austin Rover differently from the hon. Member for Beaconsfield (Mr. Smith). If an organisation is not making a profit, the issue hides itself and there is no question of profit-related pay. However, if Austin Rover moves into profit, or if other organisations in the public sector are in profit, why on earth should they not participate in the schemes? It is extremely difficult to see how one can justify excluding bodies from profit-related pay merely on the basis that they operate in the public sector.
    We voted earlier against the principle of profit-related pay, but now that it has been accepted, it is our duty to make it as effective as possible. At the moment, those in the public sector who have to operate on the basis of profit along commercial lines will feel aggrieved if they are unable to obtain the tax perk that arises from profit-related pay while others in the private sector can do so.
    So I did not find the Minister's explanation wholly convincing. Will the Treasury keep the matter under review and bend some of its considerable resources to finding a way around the problem?
    Mr. Brooke: I say to my hon. Friend the Member for Beaconsfield (Mr. Smith) and to the hon. Member for Sedgefield (Mr. Blair) that it goes without saying that if companies such as those that were the concern of my hon. Friend can be privatised, that will of itself resolve the problem. I do not want to imply that that is the sole objective of privatisation, because the benefits that can be secured through privatisation are common cause on this side of the House.
    I tried to answer my hon. Friend the Member for Daventry (Mr. Boswell) by saying that the Government
    1012
    would keep the matter under review. It would be pleasing if, by the time we came to discuss this issue next, the problem had been solved by the privatisation of the companies concerned, but I said that we sought to take a balanced view, and that is what we shall continue to do when examining what both sides of the House have admitted is a difficult problem.
    Amendment, by leave, withdrawn.
    Clause 6 ordered to stand part of the Bill.
    Clauses 7, 8 and 9 ordered to stand part of the Bill.

  Clause 10

    CANCELLATION OF REGISTRATION
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: I have a small point to make about clause 10 that is important for anti-avoidance purposes. It may be dealt with in schedule 1. If so, I apologise for raising it here. Clause 10(4) provides:
    "If the scheme employer, by written notice, requests the Board to cancel the registration of the scheme with effect from the beginning of a profit period specified in the notice, the Board shall comply with the request."
    It seems to me that a major part of the Government's case on profit-related pay must be that the scheme exists in bad times as well as in good. There is not much point in having a profit-related pay scheme if it exists only in the good times. It must exist in the bad times, too. That is what is supposed to give firms the benefit of not needing to make redundancies when recession hits them and profitability drops. When those bad times come, what is to prevent an employer saying that he intends to cancel the profit-related pay scheme? In other words, employers obtain the benefit when times are good and profits are rising, but, as soon as profits go down, they cancel the scheme, and thus avoid any of the microeconomic benefits that are supposed to accrue under the scheme. Is that provided for anywhere else? If not, does clause 10(4) open that scheme of avoidance to them?
    Mr. Brooke: At first blush, I do not see what the attraction of making such a change would be from the point of view of the employer. Of course, there may be circumstances that call for the cancellation of the registration that arise out of the economic performance of the company, but those are dealt with in terms of the legislation as a whole. As the Government argued that potential benefits to employers and employees flow from having profit-related pay schemes at a time of downturn, I do not understand why there would be a benefit for the employer in effecting such a change at such a time.
    Mr. Blair: I appreciate that there is perhaps a difference between us as to how great a community of interest there will be between the workers and management in these profit-related pay schemes. However, if the profits of the firm drop under a PRP scheme, so the wages of the workers drop. It may be agreed between the workers and management that, rather than let their pay drop, which is the effect at present, they will engage in voluntary redundancies and keep paying at the same level and cancel the profit-related pay scheme for that reason. When it is so easily cancelled by the employer, it might be in the interests of employers and employees to do that. That would militate against the better purposes of the scheme.

    1013
    Will the Minister give consideration to the problem of those scheme employers who decide that it is in their interests to engage in a PRP scheme for a limited period and then, if it is clear that profits will accrue only over a limited period, halt that scheme and move into a different scheme with a different company? When the scheme can he easily cancelled, there is surely a risk that it will be entered into not for the benefit of the official purpose of PRP but for purposes of avoidance.
    Mr. Brooke: I have a continuing problem with the hypothesis advanced by the hon. Member for Sedgefield (Mr. Blair). The act of cancellation, just like the act of going into loss under one of the methods detailed in the schedule, produces a discontinuity of the scheme. If one found that things were improving fairly soon thereafter, one would not be able to maintain the benefit in the way in which one would if there had been continuity through the bad periods Clearly, it is possible for a company to make an application for cancellation of registration, and subsection (4) puts the board under an obligation to respond to that request.
    It may be helpful if I say something about the consequences of cancellation of registration. It obviously depends on the rules of the profit-related pay scheme, but some companies might continue to provide profit-related pay to employees even in respect of periods after the effective date of cancellation, though entitlement to tax relief would no longer exist. Payments of profit-related pay made after the effective date of cancellation may continue to enjoy tax relief where they relate to profit periods preceding the cancellation date. In respect of any such periods, the scheme employer will remain obliged to account to the Inland Revenue for the operation of his scheme. Payments of profit-related pay made after the effective date of cancellation may not enjoy tax relief where they relate to profit periods after that date. If any tax relief had been given for such periods, the employer would be liable to repay it to the Inland Revenue under the provisions of clause 11, which we shall shortly be debating.
    Question put and agreed to.
    Clause 10 ordered to stand part of the Bill.
    Clauses 11 and 12 ordered to stand part of the Bill.

  Clause 13

    OTHER INFORMATION
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: I have a short point on the detail of clause 13. It is fair to say that this clause is fairly broadly drafted. It says:
    "The Board may by written notice require any person to give them, within a period of thirty days or such longer period as may be specified in the notice, any information which is so specified and which—

    (a) that person has or can reasonably be required to obtain, and

    (b) the Board consider they need to have in order to perform their functions under this Chapter."

    The clause says that the board may require by written notice "any person" to give information. Is that provision limited to those people who are employed by the scheme employer and who are engaged in the profit-related pay scheme, or does it mean any person at all? For example,
    1014
    does it mean a customer of the employer? When we come to schedule I, we will see more clearly the computations about the profit and loss account, and we will need to ensure that we get the proper profit and loss account upon which to base profit-related pay. Before we give the Inland Revenue such broad powers, we should ask from whore it can require information. On the present drafting, the Bill appears to mean people who are not even employed by the scheme employer.
    Mr. Brooke: We have passed over a number of clauses fairly quickly, and it may be helpful if I say a brief word about the Inland Revenue's attitude to the management of the scheme as a whole. This is the background to the clause that we are discussing. As the hon. Gentleman implies, this clause empowers the board to obtain information in connection with profit-related pay schemes additional to that provided by the return and the report which are covered in clause 12.
    The Inland Revenue will not normally be involved in the day-to-day running of profit-related pay schemes. On occasions when the Inland Revenue needs to become more closely involved, adequate information powers are clearly necessary. Clause 13(1) provides a general authority to seek information.
    Specific anticipated examples of that are cited in subsection (2), and subsection (3) lays an obligation on a scheme employer to pass certain information to the hoard. The general authority permits the board to require information related to a profit-related pay scheme from any person who has that information or who can reasonably be required to obtain it, provided the requirement is in writing, allows the person at least 30 days to reply and is information which the board considers that it needs about that scheme.
    The cited examples deal with situations where such information is likely to be needed. The first case concerns information related to concellation of a scheme. Situations in which this might occur are dealt with in clause 10. The second case is about information related to employee or employer tax liability. This is to ensure access to all pay documents for profit-related pay purposes. The third case concerns information related to the administration of a scheme and this may be especially necessary where one scheme covers several employers in a group of companies. The fourth case concerns information related to changes of persons paying profit-related pay under a scheme. This may be relevant to reorganisations within groups.
    6.15 pm
    The hon. Member for Sedgefield (Mr. Blair) asked a specific question about any person giving information. A wide variety of circumstances may call into question the operation of a registered scheme and the continued entitlement to tax relief. Therefore, the powers provided are wide and permit information to be obtained from any person about a profit-related pay scheme. Such powers are especially likely to be needed in group situations. The employer who registers a scheme may be the parent company, but it will be the subsidiaries who hold details of administration and payment. I hope that it will reassure the hon. Gentleman when I tell him that this information provision is closely modelled on the equivalent authority in respect of approved share option schemes in schedule 12(14) to the Finance Act 1984. The 1984 legislation did not prove contentious in Committee and has posed no significant problems in operation.
    Mr. Blair: The Minister is right in thinking that I require reassurance. A profit-related pay scheme is different from an employee share ownership scheme because by its very nature a PRP scheme deals with the computation of profit. That exercise is different from dealing with the dividends paid under a share scheme. The powers proposed here are broad and the Revenue will be able to require any person to give it any information that it wishes. There is no requirement upon the Revenue even to act reasonably in doing so.
    Mr. Tim Smith: The person has to have the information that the Revenue is seeking or has to be able reasonably to acquire it.
    Mr. Blair: It is true that the person has to be reasonably able to obtain the information, but there is no duty upon the Revenue to act reasonably in obtaining the information that it requires. The matter of a customer has been raised. As I understand it, the Minister says that the Inland Revenue is entitled under clause 12 to require information from customers, presumably about a sale deal or a contract. That does not arise in employee share ownership schemes and they are wide powers for the Revenue.
    One of the dangers of debating the Bill in the way that we are is that things can slip through without the Committee requiring some fairly stringent limitations on the powers of the Inland Revenue. I should like to know whether solicitors or other third parties could be required by the board to give information. If they are, that constitutes a broad power for the Inland Revenue. If we are to involve people who have nothing whatever to do with the scheme, it is important that we at least get a statement of intent from the Minister that the powers will not be abused or used to require information from people who are not participating in any way in a scheme. I should be obliged to the Minister if he could give me that assurance.
    Mr. Brooke: I am not sure that I can afford the hon. Gentleman all the assurances that he wants. Effectively, he is asking whether somebody to whom the Revenue made a request for information will be able to resist that request. In this area, enforcement by means of penalties has to be sanctioned by the special commissioners of income tax, the independent appellate body. Therefore, there is an appeal against such a request if it is unreasonable. I am reluctant to accept that it would be unreasonable; that hypothesis was adumbrated by the hon. Gentleman.
    Mr. Blair: With respect, will the Minister answer my two specific questions? Do the provisions apply to customers and to other third parties such as solicitors?
    Mr. Brooke: Subject to correction, yes, but I shall certainly let the hon. Gentleman know if I have given him an incorrect answer. Earlier, I referred to the phrase "any person" and I stand by that wording.
    Mr. Austin Mitchell: This is an extremely important point. Is the Minister now saying that access to solicitors' records and a requirement on solicitors to give information about their clients are implicit in the Bill?
    Mr. Brooke: I have been seeking to say that, while the Revenue will have a relatively light control over the process, if circumstances arose in which they needed information, they could seek it. I continue to make the observation that there will be the opportunity to resist the
    1016
    provision of that information by reference to the special commissioners for income tax, should the request be regarded as unreasonable.
    Mr. Mitchell: Does the Minister realise that he is abrogating an extremely important professional principle? It is true that some of my best friends are solicitors and I would not wish to seem to be speaking in defence of their interests, but the principle of confidentiality is vital to the solicitors' profession, and, indeed, to other professions. Yet the Minister blithely tells us—with no contradictory message coming along the supply lines from the Olympian powers that usually rescue Ministers—that he is abrogating that essential professional principle. That surely cannot be correct.
    Mr. Brooke: I repeat that the information provision is closely modelled on the equivalent authority in respect of approved share option schemes in the Finance Act 1984. That was self-evidently before my time; I was not involved with the Committee on the Bill, although I dare say that the hon. Members for Great Grimsby (Mr. Mitchell) and for Sedgefield (Mr. Blair) were. I do not know what they said in similar circumstances in 1984, but I know that this was not a contentious issue in 1984. That provision has worked perfectly satisfactorily and I hope that the Committee will be confident that this provision will work similarly.
    Mr. Blair: I shall not labour the point, but I am really not persuaded by the analogy with the employee share option provision; for the simple reason that in that case the board would not be engaged in the same calculation. The whole purpose of profit-related pay schemes is to tie pay to profits; that involves a wholly different set of computations.
    I think that we very often allow the Revenue to get away with much greater powers than it needs and it is a serious matter if we are about to pass a clause which will allow the Revenue to interfere with the normal rights of confidentiality of clients and solicitors and to obtain information from people who have nothing whatever to do with the profit-related pay scheme. The Minister says that they will have a right of appeal, but they will have that right only within the terms of the statute. The board's powers are qualified only by subsections (1)(a) and (1)(b). The person can be required to give information that he
    "can reasonably be required to obtain".
    There will be a lot of information that a person can reasonably obtain, because it is to hand, but he may not want to divulge that information and perhaps should not be forced to do so.
    The second qualification is that
    "the Board consider they need to have"
    the information
    "in order to perform their functions"
    under the Bill. That is very wide indeed, and I hope that we have at the very least put down a marker to make it clear to the Inland Revenue that the provision is not intended to give it carte blanche to trawl the accounts of people who have nothing to do with the profit-related pay scheme.
    It is incumbent upon the Government and the Revenue to ensure that legislation of his nature is drawn as narrowly as possible. It should give the Revenue only the powers that it needs to perform its duties adequately. This provision is drawn much more widely than it need be.
    Mr. Brooke: As I said in my opening remarks, there is a potential marginal disadvantage in passing over a number of clauses without debate, because the framework for the Revenue's involvement has not been discussed or described.
    As I said earlier, the purpose is that there should be minimum and minimal Revenue interference and involvement in the scheme, to leave maximum flexibility and freedom to employers. As is apparent from the rest of the provisions, this is very much a employer-orientated scheme.
    The hon. Member for Sedgefield is worried lest people who could be placed in an embarrassing position with regard to confidentiality were obliged to provide information under the arrangements, although he recognises that the wording is such that the board may require a person to give it information only that
    "that person has or can reasonably be required to obtain".
    The debate has demonstrated that the Revenue would be most unlikely to ask someone for information to which a degree of controversy or drama was attached without first asking those in the employing organisation who might be expected to provide the information to do so. We are talking about an unusual case, because in a scheme intended to be run with minimum Revenue involvement and maximum flexibility and freedom for the employer, the first source of information will clearly be the employer. However, I understand why the hon. Member for Sedgefield wished to pursue the question of the wording.
    The Revenue will go to those who are most likely to have the information readily to hand. However, it needs some residual powers so that it can secure the information that the House would properly expect it to secure to ensure that the relief is provided properly. This is an unusual case, but I am grateful to the hon. Member for Sedgefield for raising it in these terms and this tone. I am sure that the Revenue will have heard what he has said.
    Mr. Kirkwood: I am sorry to prolong the debate. The Committee will be grateful to the hon. Member for Sedgefield (Mr. Blair) for raising this matter. The point had certainly not occurred to me during our cursory examination of the Bill. Will the Treasury Bench reexamine the matter and come up with a slightly more convincing series of answers on Report? As a solicitor—albeit of the Scots variety—I would like to ask the Minister what sactions he thinks the Inland Revenue will have at its disposal if a solicitor pleads professional privilege. That would put both the solicitor and the Inland Revenue in a very difficult position.
    I therefore echo the fears expressed by the hon. Member for Sedgefield and others, because I am not satisfied either. There seems little point in pressing the matter to a Division today, although if the hon. Member for Sedgefield has a mind to do so I shall certainly support him. A more positive approach might be for the Government to look at the matter in more detail and to return to it on Report.
    Mr. Austin Mitchell: I echo the remarks of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). The Minister's reply was unsatisfactory. It is in this way that liberties are thrown away—with blithe assurances that the circumstances will be highly exceptional, that the provisions will be invoked with sensitivity and that the Inland Revenue, that well-known instrument of sensitivity, care and kid-glove handling, will operate will all due
    1018
    processes in this instance. On the basis of such assurances, essential professional practices and liberties can easily be lost.
    6.30 pm
    If a Labour Government had proposed a similar provision in a Finance Bill Committee there would have been howls of outrage from the Conservative Opposition. A heart-rending, tear-jerking picture would have been painted of the demise of liberty in this country as a result of the terrible powers being invoked by Somerset house. I heard just such harangues on the Finance Bills of 1977, 1978 and 1979 until my heart bled for the poor British people subjected to such tyrannical powers. Yet a Conservative Minister now blithely invokes just such powers.
    The precedent from 1984 that the 'Minister cited is not adequate because these are more trenchant, more wide-ranging powers. The Minister may be riding them in on the back of the 1984 concession, but that concession cannot be claimed as a precedent because he is extending the circles of tyranny. Perhaps more important, the Minister's argument that the Revenue would go first to the directors of the firm and only secondarily to the legal advisers is not satisfactory either. If the Revenue does not obtain satisfaction from the directors there will be an ever-widening circle of inquiry which will lead directly to the infringement of an essential professional practice. The confidentiality of the relationship between professional adviser and client will be infringed and abrogated by the clause.
    There is not a great deal that we can do about the matter today, but I hope that we can return to it on Report as the Minister's reply was not satisfactory.
    Mr. Brooke: I am grateful to the hon. Members for Roxburgh and Berwickshire (Mr. Kirkwood) and for Great Grimsby (Mr. Mitchell) for prolonging the debate. In the context of the latter's earlier reference to overselling, I hugely enjoyed his reference to "circles of tyranny", a phrase which we shall no doubt read in other places.
    A sinister quality has been read into the clause which it does not possess, but it is absolutely right that the Committee should be vigilant in these matters. The Inland Revenue proposes to manage and oversee the scheme on behalf of taxpayers everywhere with a light touch, but feels that residual powers are necessary. The hon. Members for Great Grimsby and for Sedgefield (Mr. Blair) said that the 1984 case to which I alluded was not an adequate support for the argument that I was advancing. I can only say that the 1984 case exists and has not given rise to the dramas and ever-widening circles of tyranny to which the hon. Member for Great Grimsby has referred.
    Of course, this is an issue of public moment. The Keith committee, with which we have been concerned in other contexts, has made various proposals on professional privilege. Those proposals are still under consideration, but I accept the spirit in which the Opposition have raised this matter. I shall, of course, look at it again to see whether any greater reassurance can be given.
    Question put and agreed to.
    Clause 13 ordered to stand part of the Bill.
    Clauses 14 to 17 ordered to stand part of the Bill.

  Schedule 1

    PROFIT-RELATED PAY SCHEMES: CONDITIONS FOR REGISTRATION
    Mr. Blair: I beg to move amendment No. 33, in page 70, line 23, leave out '80 per cent.' and insert '50 per cent.'.
    This is clearly a probing amendment but it is worth discussing to ascertain the basis on which the Government have drawn up the rules on profit-related pay. At first blush, it is difficult to see why profit-related pay can operate only if 80 per cent. of the work force agrees to it. Presumably employers are able to have different pay systems for those taking part and for the remainder up to 20 per cent. Why must 80 per cent. agree?
    I could see an argument for saying that, unless everyone agreed, the scheme could not be introduced because of the administrative difficulties involved in calculating two different bases of pay, but it is plainly accepted that up to 20 per cent. of people within the same employment unit and presumably doing the same type of work under the same terms and conditions can nevertheless opt out of the scheme. So why has the figure of 80 per cent. been chosen? Why should not anyone who so wishes be allowed to participate and the others be allowed to opt out? I see no rational basis for seizing upon the figure of 80 per cent. The real distinction must be between having everyone or no one in the employment unit on profit-related pay or allowing diversity within the same unit. I should be obliged if the Minister would explain that to me.
    Mr. Tim Smith: I sympathise with the comments of the hon. Member for Sedgefield (Mr. Blair). It is not clear to me why 80 per cent. has been chosen. I am also not sure exactly what the words
    "to whom the scheme relates"
    mean. Perhaps my hon. Friend the Minister will clarify that.
    My hon. Friend the Member for Woking (Mr. Onslow) asked me to raise a number of points about schedule I which were put to him by a firm which for 15 years has operated in the specialist area of employee participation arrangements, particularly employee share schemes, and which numbers about 350 of the top 500 United Kingdom companies among its clients. One of its concerns is the 80 per cent. rule. The firm says:
    "It appears that Inland Revenue will interpret this Rule to mean not that such plans must be 'available' to at least 80 per cent. of employees but that 80 per cent. of employees must actually receive payments thereunder. Companies are very conscious that a dissident minority of 20·1 per cent. of the work force could effectively lose the tax efficacy of an otherwise splendid scheme for the majority of their colleagues."
    I rather agree with the hon. Member for Sedgefield that once one concedes the principle that 100 per cent. of employees are not needed to participate in the scheme, why not simply say that all those who wish to participate may do so regardless of the proportion?
    Mr. Brooke: The hon. Member for Sedgefield (Mr. Blair) has moved a probing amendment and my hon. friend the Member for Beaconsfield (Mr. Smith) supported him.
    The profits to which pay will be related are the profits of the whole employment unit. Therefore, as the hon. Member for Sedgefield implied, ideally all the employees of an employment unit would participate in profit-related
    1020
    pay because the profits relate to the efforts of all of the employees. However, when the Green Paper was published last year we recognised that there would be circumstances in which it would not be appropriate or possible for all the employees to be eligible. Therefore, there is a need for some flexibility for employers.
    The benefits that we believe will flow from the widespread adoption of profit-related pay will be best achieved if a substantial majority of the employees in each unit participate. That goes back to the discussions that we had on clause I stand part.
    The Government considered that 80 per cent. was a reasonable, minimum level if tax relief is to be made available. I appreciate that the hon. Member for Sedgefield was arguing that his figure of 50 per cent. was chosen simply as a probe against the Government's figure of 80 per cent., but I am puzzled that the Opposition are seeking to reduce the percentage. The lower the figure is taken the easier it is to have what I would euphemistically describe as an arrangement. The more people who are required to take part in the scheme, the less likely it is that some artificial arrangement will be reached.
    Mr. Blair: Let me explain our position straight away. I do not believe that there is any inconsistency. Indeed, it is in the best tradition of constructive opposition that, having lost the vote on clause I stand part, with the result that profit-related pay schemes will come into existence if the Bill is carried, the Opposition should try to make the scheme work as effectively as possible. It was in that spirit that I moved the amendment. I believe that it is important that we should be given a good reason why, if the scheme is to be generally available, it should not be made available on the widest possible basis.
    Mr. Brooke: The disadvantage in the proposal of the hon. Member for Sedgefield is that if the scheme were required to cover only 50 per cent. of employees to secure tax relief, the scheme would be much more selective and would not embrace the totality of the work force. I suspect that if it were the other way around, if we had come up with the figure of 50 per cent., the hon. Member for Sedgefield would have proposed 80 per cent. on the basis that the 50 per cent. could lead to artificially structured schemes.
    Essentially, I believe that the proof of the pudding is in the eating. We put the figure of 80 per cent. in the Green Paper. The hon. Member for Sedgefield will be aware that we had a wide variety of comment on all aspects of the Green Paper, but few respondents saw any difficulty with the 80 per cent. requirement.
    I agree with my hon. Friend the Member for Beaconsfield that a blocking minority of 20·1 per cent. would be a complication. However, the Government believe that that complication would apply whatever the figure as there would still be a problem regarding what would happen on either side of the line.
    The Government believe that 80 per cent. is a sensible figure to get the global advantages of the scheme within the employment unit. We did not receive significant objections to that figure during the consultation period. For that reason, we stand by that figure.
    Mr. Blair: I believe that it is unfair to say that, had the Government suggested 50 per cent., I would have moved an amendment to the effect that we should make it 80 per cent. I moved this amendment on the basis that, if it were

    1021
    thought that profit-related pay was a good idea, it would be positively beneficial for those who were not working on profit-related pay to see how well those on profit-related pay were doing. Perhaps there would be an element of contagion. I accept the Minister's arguments. It is fairly clear that the figure of 80 per cent. has been plucked out of the air. However, as that figure was not objected to extremely strongly, other than in the terms mentioned by the hon. Member for Beaconsfield (Mr. Smith), I am content to let the amendment fall.
    Mr. Brooke: I failed to answer one other question that was raised in the course of the debate regarding
    "employees to whom the scheme relates".
    That is defined in clause 1(2) which states:
    "References in this Chapter to the employees to whom a profit-related pay scheme relates are references to the employees who will receive any payments of profit-related pay under the scheme."
    Mr. Blair: I am grateful to the Minister for his reply. I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    6.45 pm
    Mr. Blair: I beg to move amendment No. 34 in, page 73, line 28, after 'must', insert
    'in the view of the Board'.
    I entirely accept that, given all the comments made about the powers of the Inland Revenue in an earlier amendment, this should demonstrate the degree of objectivity I have towards the Inland Revenue. This amendment would, if anything, give the Inland Revenue greater powers than it would otherwise possess.
    The purpose of this amendment is to ask the Minister whether he is satisfied with the Government's anti-avoidance provisions. The Institute of Personnel Management and others have recognised that one of the difficulties with the profit-related pay scheme is the potential for tax avoidance.
    I vaguely recall in my dim and distant youth—long before I got to the House of Commons—that there were debates on incomes policy and how the pay that people received could effectively be related to productivity. There were all sorts of arguments about how people could get round the rules that related to wage structures.
    With profit-related pay there is a clear potential for avoidance unless the Inland Revenue is extremely careful that the profit and loss accounts give a fair and true view. I know that there are a myriad of different arguments advanced in relation to proper auditing and accounting procedures. The hon. Member for Beaconsfield (Mr. Smith) will know more about that than I do. However, it is the case that when one is computing pay on the basis of profit and when tax relief is given, there is clear scope for avoidance.
    The purpose of this probing amendment is to ask the Minister for his assurance that the rules are drawn as tight as possible to minimise the risk of avoidance.
    Mr. Brooke: Obviously, the hon. Member for Sedgefield (Mr. Blair) has drawn attention to a central issue and I shall therefore reply at some length.
    Paragraph 19 of the schedule deals with how the measure of profit for profit-related pay purposes is to be ascertained. Essentially, a profit and loss account must be produced that follows the rules and requirements of schedule 4 to the Companies Act 1985, which governs the
    1022
    production of a profit and loss account by a company. This provision ensures a standard approach to the production of such accounts using widely accepted rules,. The Companies Act 1985 also requires a profit and loss account to show a "true and fair" view of the profit. That is broadly understood as an accounting concept and it is central to a qualified accountant's duty that he establishes that the accounts meet that requirement.
    There is no requirement in the 1985 Act that any Government body should confirm that the account produced under that legislation meets the "true and fair" criterion. To insert such a requirement in the profit-related pay legislation would have the effect of supplanting the approach adopted in these proposals for ensuring a minimum of official intervention in the day-to-day operation of registeredschemes and relying on independent accountants to verify the adequacy of profit-related pay accounts and the operation of profit-related pay schemes. It would place a major burden on the Inland Revenue and increase substantially the administrative complexity of the scheme for the employer as well as for the Revenue. In any event, the Revenue will have the power to call for a check on profit-related pay accounts under clause 13, which the hon. Member for Sedgefield will recall vividly, whenever it believes that to be necessary.
    The amendment would leave the provisions for an independent accountant's audit in place. We see the provisions as adequte. The statement that a profit is or is not "true and fair" will be made by the independent accountant, not by the employer, as such a statement cannot be made authoritatively by a person unqualified in audit matters. Who may act as independent accountant is closely constrained by clause 17. The individual must be properly qualified and must not be closely connected with the scheme. The statement of a "true and fair" view is one that we have taken pains to make independent cit. the employer concerned. The employer is responsible for all profit-related pay matters, and he must obtain and submit to the Revenue a report by an independent and properly qualified accountant.
    If the hon. Member for Sedgefield is concerned that the employer is the person who decides what is or is not "true and fair", I trust that this explanation of objective and external reference allays his fears. The Government feel that there is no point in introducing another level of checking by the Inland Revenue, which could only adopt the same principles of accountancy and audit as those that would be adopted under this proposed legislation by the independent accountant.
    Mr. Tim Smith: I wanted to hear what my hon. Friend the Paymaster General had to say about the amendment before commenting briefly upon it. I like the novel idea that is incorporated in it, that the Inland Revenue would offer its own view on whether the accounts showed a "true and fair view". Even if we were to give the Revenue that power, we would not strengthen its hand. Pretty high standards of accounting are required and the accounts will have to comply in all respects with company law.
    There will have to be an independent auditors' certificate that will state whether the auditors consider that the accounts show a "true and fair view". That happens a great deal now and I have no doubt that the Revenue takes a view on the firm of accountants concerned. Firms of accountants, like other undertakings, vary in quality and the Revenue will not rely on the accounts that are

    1023
    presented. It can always demand further information, and we know from a previous debate that it has substantial powers to do so. It will not accept unchallenged the statement that the accounts give a "true and fair view" and conclude from that that there are no further questions to be asked. It will always have the opportunity to go behind that statement, and I think that that will happen in practice. Although the amendment contains an interesting and novel idea, it probably is not necessary.
    Mr. Blair: I largely accept the statement of the Paymaster General and the comments of the hon. Member for Beaconsfield (Mr. Smith). I thought it right—this is still my view—that we should not leave our consideration of profit-related pay, and especially the schedule that deals with its implementation, without making it clear that every measure that can reasonably be taken is taken to ensure that there is not tax avoidance. It is clear that there are opportunities for tax avoidance when a scheme such as that proposed by the Government is introduced. I hope that the rules that appear in schedule 3 balance adequately the rights of individuals with the rights of the Revenue to act successfully and adequately on behalf of the taxpayer. In view of what the Minister has said, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Question proposed, That this schedule be the first schedule to the Bill.
    Mr. Tim Smith: The firm to which I referred in an earlier debate has three further concerns about the schedule. We have passed over paragraphs 13 and 14, which deal with the two profit-sharing formulae, and anyone who considers the text of those paragraphs will agree, I am sure, that they are extremely complex. Surely it is desirable that the formulae for determining profits should be as simple as possible. It is obviously desirable that participants should be able to understand them easily. The firm that is concerned about these matters considers paragraph 14 to be almost unintelligible. I wonder why it is necessary for the formulae to be so complex.
    Secondly, the firm says that the 80 per cent. rule that we discussed earlier effectively precludes the 750 or more companies that have already implemented equity-linked profit-sharing plans under the Finance Act 1978 from offering employees participation either in that plan or in the new profit-linked pay arrangements. I am not sure whether that is exactly what the firm means, and it may be that it is trying to say that if a compny participates already in the 1978 arrangements it cannot participate in these arrangements. I do not know whether that is true and I hope that my hon. Friend the Minister will be able to deal with the matter. The firm may have it completely wrong. It is alleging that there are two mutually contradictory profit-related plans on offer.
    Thirdly, the firm says that it must be appreciated that lower-paid employees who have previously participated in a trust-related profit-sharing plan under which no national insurance deductions were made will receive less cash under the new arrangement than under the old scheme. The firm contends that while a fellow of All Souls may be able to make the distinction between a national insurance deduction and an income tax liability—there may be a
    1024
    few others who are able to do so—the majority will not. I hope that my hon. Friend the Minister will be able to deal with these three issues.
    Mr. Blair: First, I wish, like the hon. Member for Beaconsfield (Mr. Smith), to draw attention to the complexity of the two formulae for determining the distributable pool of profits. I found them to verge on the incomprehensible.
    I think that I understand the basic principles in method A and method B. It appears that under method A the pool is equal to a fixed percentage of the profits of the employment unit in the profit period. Method B is based on the first profit period to which the scheme relates, or the distributable pool for the previous profit period. In other words, that method fixes a base year by which the distributable pool is to be computed.
    I should like to know what steps the Treasury intends to take to make the schemes more understandable to those who will be called upon to use them. If profit-related pay is to be encouraged, I hope that it will not be a privilege that is confined to those employed by large companies. It must be open to small companies as well. There are many small companies with 10 or 15 employees that will read schedule 3, and whatever greater productivity arises through profit-related pay will be negated immediately by the time that the firm has to spend discovering how to administer the scheme.
    I do not fully take on board the points made by the hon. Member for Beaconsfield about the employee share ownership plan. I cannot see any inconsistency, although there may be one, but that is obviously something to which it is right for us to address our minds.
    I should be grateful if the Minister could inform us of the steps that he will take to ensure that people can understand and administer the schemes easily. We may have the greatest theories and plans, but if they are difficult to implement in practice, they will be of little practical use.
    7 pm
    Mr. Brooke: My hon. Friend the Member for Beaconsfield (Mr. Smith) asked me several questions relating to correspondence that I too have had the pleasure of seeing, and I shall respond to his questions. The hon. Member for Sedgefield (Mr. Blair) asked me some specific questions in reinforcement of the profit sharing formulae.
    I shall respond first to the questions raised by my hon. Friend the Member for Beaconsfield about the overlap of the schemes and their potential complications. The Committee knows that tax incentives for share schemes already exist, but the new tax relief is for cash. For it to be effective in terms of pay flexibility, the relief must be targeted on employees in business units in which the great majority of employees participate in a PRP scheme. We discussed this point a moment or two ago. There is, of course, nothing to stop a separate share scheme from running at the same time and in that case the benefits would be complementary. However, it would be quite wrong to try to combine into a single scheme the different tax incentives for share schemes with those that are proposed for profit-related pay. The result would be a muddle and it is, and would be, unnecessary to try to do that.
    My hon. Friend the Member for Beaconsfield raised the subject of method A and method B, which are described

    1025
    in the correspondence as the complex profit-sharing formulae. The hon. Member for Sedgefield also alluded to that. There is a paradox in that the simpler and more flexible one seeks to make the arrangements, the relatively more complicated is the legislation. However, when employers have had some time to grow to know and to love this legislation, I am sure that they will acknowledge that under its umbrella, a fundamental flexibility and simplicity exists.
    The hon. Member for Sedgefield raised the question of the ways in which we could make the schemes simpler, although I do not know whether he acknowledges the paradox that I have just explained. However, we shall pay attention to that. I referred earlier to the guidance notes that the Inland Revenue is to send out. We shall seek to explore whether there is a way in which we can provide a child's guide element.
    My hon. Friend the Member for Beaconsfield returned to the issue of national insurance contribution and said that some employees would be worse off as a result of the changes. However, that is a separate issue. The decision to withdraw certain concessions that relate to trusts, which flow out of what has happened since the 1985 changes to the upper earnings limit, is unrelated to the propositions that we are now considering. Some of the literature and some of the representations that have been made have missed some of the fundamental points about the schemes in quoting the sums of money that would be at risk or that would he involved in terms of the changes that we are making. That is an unrelated issue. I hope that those companies that have a tradition of profit-related pay will feel able to embrace the arrangements that are contained in this legislation for the generality of their employees and assuming that they take the fullest advantage of the profit-related pay arrangements, they should be able to do very satisfactorily.
    Question put and agreed to.
    Schedule I agreed to.

  Clause 18

    REGISTRATION
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: With clause 18, we come to the issue of personal pension schemes. I am acutely aware that I have stumbled into an area in which there are many experts. I do riot count myself among them. I gather that we shall hear from the hon. Member for Kensington (Sir B. Rhys Williams) about some of the amendments that he has tabled. I simply want to ask the Minister—I thought that this might be an appropriate time to do so—to tell us something about the scheme outlined in this chapter.
    As I understand it, the Social Security Act 1986 has given birth to the present provisions. This tax regime follows on from the changes in pensions that were made in the 1986 Act, under which there was the right to opt out of occupational pension schemes and to have a personal pension instead. I need not rehearse the arguments about that or about whether greater mobility would be enjoyed by people being able to opt out and, on the other side, about whether that would mean that the younger people in the pension scheme would end up financing the older ones, and the difficulties that might arise for the pension schemes in such circumstances.
    1026
    As I understand it, at the present time, the provisions will come into force in January of next year—somebody who is self-employed can buy what are called section 226 policies. The provisions in the Finance Bill substantially re-enact some of those section 226 rules and ensure that the pension schemes for the self-employed and for employees are brought together. I should like the Minister to outline briefly the main changes that would be made by this part of the Bill. As I understand it, these provisions essentially reflect the changes that took place in social security legislation in 1986, together with certain new matters that have been introduced into the Finance Bill, including many that simply translate into law some procedures that are already practised by the Inland Revenue.
    The provisions also introduce the lump sum limit of £150,000 and certain restrictions on the amount of lump sum that can be paid on retirement. Obviously, that is extremely important to millions of people. I did not think it right to allow the first clause in this new chapter to go by without at least raising some of the more general matters.
    Sir Brandon Rhys Williams: I had intended to raise on clause 19 the points that I think I might equally appropriately raise under this clause, but since I did, in fact, table an amendment to line 29 of clause 18, which did not have the good fortune to be selected by the Chair, I hope that I shall not be speaking out of order if I deal in a general way with the expression "the Board" which appears at the beginning of this section.
    The amendment which I tabled—I do not wish to dwell on it in a way that will vex the Chair—which did not make the selection—
    The Temporary Chairman (Miss Janet Fookes): Order. The hon. Gentleman must not dwell on it at all. It was not selected.
    Sir Brandon Rhys Williams: I anticipated that rebuke, and I intend to comply totally with the Chair's ruling. I had intended to draw attention to the fact that "the Board" here is assumed to be the board of the Inland Revenue. However, there is the Occuptional Pensions Board, which also has status in connection with private personal schemes. I rather wonder whether here, in the Finance Bill, the Treasury is right to arrogate, as it is seeking to do, to the Inland Revenue what appears to be the primary status of controlling authority, when the Occupational Pensions Board exists and also, simultaneously with the consideration of the Finance Bill, the House has been presented with no fewer than 20 statutory instruments emanating from the DHSS, which also seek to regulate the way in which these schemes are run.
    I accept that the Revenue must be the authority which grants the tax haven status to personal pension schemes, but I wonder whether all that follows in this long chapter of personal pension schemes is the property of the Inland Revenue to decide. I rather wonder whether it is in the best interests of these schemes that it should be the Inland Revenue that takes the primary status. I believe that it would be highly desirable if the Revenue were to drop the practice of regulating pension schemes minutely and were to leave it either to the Occupational Pensions Board or to the DHSS using the different methods that have grown

    1027
    up under those Departments to regulate these schemes. Therefore, I rather wonder whether one is entirely happy with the entire tenor of clause 18.
    We should simplify the rules that operate in connection with personal pension schemes to the absolute bare minimum. That is not the Inland Revenue practice. Under its guidance, the rules affecting pension schemes have proliferated to a terribly burdensome extent over the past 50 years or more. I believe that extreme simplicity of legislation should be accepted by the House as a virtue in its own right of the greatest possible importance, particularly when dealing with small employers and private citizens, as we are when we are discussing personal schemes. It would be a great mistake if we started off by making the whole apparatus of control, which must be considered, so complex that almost everybody is likely to be frightened off unless they can afford professional advice.
    On questions of procedure, the appointment and conduct of trustees, for example, and routine management of the trust, it would be far better to leave it to the OPB as it is expert in this area and is bent on the promotion of these schemes, rather than the restriction of opportunities for saving which these schemes are intended to offer. But that is not the Inland Revenue's way.
    On the question of the various obligations of the parties—the employer and employee—I would would be happy for the DHSS to operate because it looks at these schemes on the basis of the maximum and minimum contributions which are appropriate. The Inland Revenue's way is to set limits on the benefits which emanate and that really is incompatible with the conception of the money purchase schemes which lies behind the Government's intention.
    When one speaks to professionals in this area—I am sorry to say this, but I have to—one finds that they regard the Inland Revenue as a menace to the occupational pensions movement. They regard it as a burden and wish that the dual control system which has grown up could be ended. The Inland Revenue is now more concerned to prevent people from exploiting the advantages of tax haven status than to promote thrift and a habit of saving for retirement.
    Where the two thirds limit is concerned, which is what the Inland Revenue seeks to apply to the annuities which emanate from these schemes, why should it be important what the pension is in relation to the final salary of the beneficiary? In the end the taxpayer recovers his share which has grown up in the fund, because the system on which all these schemes operate—the tax haven status which we are giving to these schemes—is the basis of save now, pay tax later. The beneficiary pays tax later on the annuity, so why do we seek to restrict these schemes?
    I know that there is a reason, and that is because the lump sum option appears in these new proposals just as it does in the occupational pension schemes, which no doubt we shall deal with in due course when we reach schedule 3. The right way for the Inland Revenue to tackle that problem is to introduce new thinking on the tax-free status of the lump sum. I have tried to make a contribution on this before.
    I would like my right hon. Friend the Minister to tell me whether he genuinely insists that it is the Inland Revenue that is the prime authority in view of the shadow
    1028
    that that will cast over the private pensions movement, and if this attitude of the Inland Revenue is not changed.
    7.15 pm
    The Financial Secretary to the Treasury (Mr. Norman Lamont): The hon. Member for Sedgefield (Mr. Blair) invited me to outline the proposals on personal pensions in this part of the Bill. I am aware that it is difficult for me to respond to his request without, by implication, going a little beyond clause 18, although it introduces the provisions of Part II. The hon. Gentleman is right about how the new provisions follow the section 226 regime but with improvements in that there are new higher contribution limits for older people and employers' contributions may be made to personal pensions, which was not possible with retirement annuities.
    The provisions implement the promises made by my right hon. Friend the Chancellor of the Exchequer in his Budget statement—first, that the new personal pensions would have the same tax treatment as is enjoyed by retirement annuities and, secondly, that much greater transferability of pension rights would be possible between different types of pension arrangement. Therefore, the legislation completes the major programme of pensions reform which was announced by the Secretary of State for Social Services.
    The provisions were originally included in the Finance Bill introduced earlier this year. Several technical amendments have been made, but it is essentially the same as was proposed in April. The new regime for personal pensions was outlined in a consultative document published by the Inland Revenue last November. I have referred to the changes that have been made, which include a wider range of pension providers, to include building societies, banks, and unit trusts in addition to the present life offices and friendly societies; the ability for individuals to contract out of SERPS through a personal pension scheme; the provision for employers to contribute, if they wish, to their employees' personal pension schemes; and the same basic limit of 17·5 per cent. of income for younger people and a more generous scale of higher limits for those over 50, as now on contributions. I hope that in outlining the bones of this section, clauses 18 to 57, I have responded to the hon. Gentleman's request.
    My hon. Friend the Member for Kensington (Sir B. Rhys Williams) has leapt straight into an area which is also referred to in a later amendment which he has tabled, so I have no doubt that he will pursue the theme and repeat some of the points that he made. He is concerned about the relationship between the Inland Revenue and the DHSS and the Occupational Pensions Board. We have discussed this on many occasions. He believes that there is a conflict between the objectives of the Revenue and the DHSS. Naturally, many Government Departments sometimes think that they are in conflict with the Inland Revenue or the Treasury and, indeed, sometimes they have different objectives.
    The Inland Revenue is responsible under the powers conferred on it by the Finance Act 1970 for administering the tax regime for pensions. As my hon. Friend always acknowleges in his speeches on this subject, these tax reliefs are extremely generous. Indeed, he has suggested that they should be called pension trusts and he frequently uses the phrase "tax haven" when referring to pension

    1029
    funds. For the reasons he gave, the Inland Revenue is concerned about the cost of these generous limits, so the tax rules set levels of maximum benefit.
    On the other hand, the DHSS rules are primarily concerned with the level of benefits which an occupational pension scheme must provide if it is to be contracted out of the additional component of the state scheme. That is to say that the Inland Revenue is responsible for the tax approval rules while the DHSS and the OPB have their own requirements for contracting out only which applies to employees in occupational pension schemes.
    The DHSS, as I have said, is concerned with the level of benefits that an occupational scheme must provide if it is to be contracted out of the additional components of the state scheme. The requirements of the DHSS concern minimum levels of benefit. Between the minimum benefits required by the DHSS and the maximum benefits imposed by the Inland Revenue, there is considerable scope for occupational schemes to offer whatever level of benefit seems appropriate without Government interference, although there is a danger that Revenue rules would restrict DHSS minimum benefits, for example in relation to preserved benefits to which Revenue rules do not apply.
    I know that my hon. Friend the Member for Kensington would prefer to see a maximum benefit requirement on all final salary pension schemes. However, that takes us way beyond clause 18. I am sure that my hon. Friend will rehearse his arguments and concern about some types of pension being limited by contributions and others limited by benefit, all of which he sees as examples of the lack of integration. He has heard my views on these matters before. I have tried to explain why that has happened and why I believe that to some extent it is still unavoidable. I know that I have not persuaded my hon. Friend about this, but I think that he understands the position and I know that he would like to see the whole area of pensions radically reformed. No doubt my hon. Friend will come to that point later.
    I know that I will not deflect my hon. Friend the Member for Kensington, but I am bound to say that, after so many changes in pensions in recent years, there are some who feel that a period of calm and stability is desirable. However, my hon. Friend has been a great campaigner on all those issues for many years. He has a very lucid and coherent view of what the whole pensions regime should look like. Basically, he believes that we should start off on an entirely different basis.
    1030
    I should not really respond to all the points made by my hon. Friend the Member for Kensington. We will have specific debates on the lump sum later and my hon. Friend can develop his philosophy about that and its tax exemption. I have tried to respond to my hon. Friend about the different roles of the Revenue and the DHSS. I do not believe that there is a great conflict which my hon. Friend has described. However, I know that he wants to see the whole system established on an entirely different basis.
    Sir Brandon Rhys Williams: I would like to take the opportunity to thank my right hon. Friend the Financial Secretary to the Treasury for his remarks. He has penetrated to the core of what I was saying. In this country we have a public sector pension scheme which is extremely handsome. However, the private sector is really paltry by comparison in all too many cases. Therefore, we ought to be accentuating the positive which will be encouraging people to put in better and better schemes rather than to think mainly in terms of ways in which we can restrict the savings habit from becoming too exuberant.
    I do not like to be critical of the board of the Inland Revenue, because the way in which it approaches its task is immensely dedicated, as it is a dry and often very detailed business. It takes the Revenue into areas that are sometimes barely comprehensible. There is an important job to be done in avoidance work with regard to fraud and outrageous abuse of well-intentioned concessions.
    Moreover, I do not think that the board ought to be eliminated entirely from the scene; it would he an exaggeration if I gave that impression. Indeed, in a later amendment I hope to use the board's discretionary power to promote the idea of transferability at long last at the full value of the beneficiary's asset. I do not want it thought that I do not want the Inland Revenue board to have a place in the regulatory scene.
    I took the opportunity to make my point because I feel that we need to put more emphasis on the positive aspects. The positive aspects are emphasised by the DHSS approach of placing minimum levels of contribution rather than maximum levels of benefit. I do not wish to pursue that matter or to stand in the way of the Committee and its further consideration of these clauses.
    Question put and agreed to.
    Clause 18 ordered to stand part of the Bill.
    Clause 19 ordered to stand part of the Bill.

  Clause 20

    ESTABLISHMENT OF SCHEMES
    Sir Brandon Rhys Williams: I beg to move amendment No. 41, in clause 20, page 12, line 5, at end insert
    'after consultation with the Occupational Pensions Board'.
    Amendment 41 requires the Treasury, before amending section 20, to consult the Occupational Pensions Board. I express reservations about the role of the Inland Revenue in the pensions scene and I have my reservations about the Occupational Pensions Board too. I am afraid that on a number of issues on which I hoped that it would speak out clearly and strongly, it has appeared to be rather pusillanimous and vacillating, possibly because it is not quite sure whether it is expected to respond to guidance from the Inland Revenue or from the DHSS. Nevertheless, that body has been set up and it has a status that is very important for occupational pension schemes and I think that it should be made to rise to its responsibilities and should be encouraged to do so.
    Clause 20(4) states:
    "The Treasury may by order amend this section as it has effect for the time being."
    That places in the hands of the Treasury a very substantial power particularly as clause 20(5) states:
    "An order under this section shall be made by statutory instrument, which shall be subject to annulment in pursuance of a resolution of the House of Commons."
    Unfortunately, hon. Members who study statutory instruments and the way in which the House deals with them know that again and again, once the statutory instrument is in print that is really the end of the matter and although hon. Members may have reservations they cannot voice them, as was the case sadly with the 20 statutory instruments tabled last week by the DHSS, and with all too many statutory instruments laid under provisions of this kind.
    I hope that, even if the House of Commons is unlikely to have any say in what the Treasury does in amending the section, proper consultations will take place with the Occupational Pensions Board. I must announce to the Committee that the example before us this week is not very optimistic. I am referring to the report from the Occupational Pensions Board in relation to statutory instrument number 1105 which is now before the House entitled
    "Occupational Pension Schemes (Disclosure of Information) (Amendment) Regulations 1987".
    I do not know how many hon. Members have gone so far as to read the comments in the report. I thought that they might have some relevance to the debate.
    Indeed, I discovered that they had relevance when I read what the Occupational Pensions Board had to say on the draft statutory instrument submitted to it for comment. The board's comments are dated 3 June 1987 and are alarmingly trenchant. The report ends as a sad story. I hope that I am not detaining the Committee too much if I read just the comments made by the board with regard to regulations 2(5) and 2(11). The report states:
    "Regulation 2(5) requires the information introduced into Schedule 2 of the principle regulations to be furnished on request to any member of a tax-approved scheme. We believe that these requirements for information about additional voluntary contributions are incapable of being met and are
    1032
    likely to prove to be completly unacceptable to the pensions industry and trustees. To determine the maximum amount of AVCs that a member may make the scheme would need to have full details of remuneration (including overtime earnings and benefits in kind) and this information would often not be available to the administrators. It could be misleading to members to quote the maximum tax-deductible AVC if payments of AVCs at this level could result in the Inland Revenue benefit levels being exceeded. There is another potential problem. The Government have announced their intention that scheme members should be free to pay AVCs to schemes other than their own occupational pension scheme. If this proposal is implemented, it would mean that scheme trustees and managers would have no control over the payment of these AVCs or of the benefits that they produce. We therefore believe the practical considerations of actually providing the information required would make this provision unworkable."
    7.30 pm
    In the same report, we read the reply, dated July 1987, on behalf of the Secretary of State:
    "As regards paragraph 7 of the Board's report, regulations prescribing the information to be provided about additional voluntary contributions will not he made until the Board of Inland Revenue have published any requirements that they may have in regard to such contributions."
    We read in the revised, summer Finance Bill, that, notwithstanding that type of extremely trenchant comment from the Occupational Pensions Board, which may presumably be regarded as the most expert in the field, the dogs may bark but the caravan moves on. So far as we can read in the Bill, the Inland Revenue has simply repeated the unacceptable recommendations which appeared before the House in the first Finance Bill this year, and which aroused a great deal of adverse comment from the professionals at that time. If, in regard to anything as important as this, the Revenue is simply not prepared to listen to the Occupational Pensions Board, and the DHSS abdicates its role and leaves the Revenue to carry on as it pleases, how much hope have we that, when the Treasury exercises the power that the Committee is about to grant it under the subsection, there will be any closer liaison in the future?
    I hope that the Committee will agree that it would be a good idea at this stage to write in the requirement for consultation with the Occupational Pensions Board when the clause is amended by statutory instrument.
    Mr. Norman Lamont: I congratulate my hon. Friend the Member for Kensington (Sir B. Rhys Williams) on his assiduity and research in digging out the report of the Occupational Pensions Board. We shall probably discuss the relationship of AVCs to scheme limits on a later amendment. It may be more appropriate then to discuss the practicalities of observing the final salary scheme limits and discussing the extent to which they are endangered by the AVC proposals, or the extent to which the proposals may be criticised on grounds of practicality.
    The purpose of the amendment is to require the Treasury to consult the Occupational Pensions Board before making an order to amend clause 20. I think that the amendment is unnecessary. Clause 20 sets out which bodies may establish personal pension schemes. The main purpose of the Treasury order would be to extend the range of personal pension providers, if and when that seems appropriate, without having to introduce primary legislation in a future Finance Bill.

    1033
    If such an order were being made, we should naturally consult the OPB, and any other interested body, if appropriate. But the OPB would not always be the appropriate body to consult. The hoard is responsible for certain aspects of occupational pension schemes, in particular contracting-out rules and the preservation of deferred benefits. It is not a general pensions watchdog and it is not necessarily equipped to act as such.
    We might, for example, be dealing simply with pensions for the self-employed, in which event it might not necessarily he appropriate for us to consult the board. In many cases, we would consult the board, but I would resist the idea of writing such consultation into the legislation.
    The regulations are primarily a DHSS matter, concerning the requirement on scheme administrators to disclose information to members about the scope to pay AVCs. They are not strictly tax matters, although, as my hon. Friend the Member for Kensington spotted immediately, they have some relevance to the relationship between AVC's and benefit limits. We shall discuss that later.
    Sir Brandon Rhys Williams: My right hon. Friend is right in saying that some of my remarks were wide of the immediate context of clause 20. I took the opportunity of pointing to a place where it seemed to me that the relationship between the OPC and the Revenue had already broken down, which could not possibly refer to the particular interests found in clause 20.
    I do not wish to press the amendment, because I hope that what I have said may have had a small effect, at all events, in advancing the cause of the OPB as a body that ought to be taken seriously and should play a serious role. This was the first opportunity that presented itself in the Bill for me to make the points that I have sought to make, and if they went somewhat wide of the clause, I apologise.
    Having made that point—I see that my right hon. Friend has taken it on board—I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: I should like clarification of one small point. There may be a very straightforward answer. The purpose of clause 20, as the Financial Secretary rightly said, is to give a list of new pension providers. I understand that some of those—for example, the banks—are already engaged indirectly in the provision of pensions. How much real change does the clause make regarding the bodies able to provide pensions? Are many of these institutions, albeit indirectly, already providing pensions, or is the measure of a much wider nature?
    Mr. Norman Lamont: It is a considerable change. In future, direct providers will include not just banks—the hon. Gentleman suggested that they were already providing pensions indirectly, and I suppose that that is right—but building societies and authorised unit trusts. The clause also provides for other types of provider to be authorised subsequently by the Treasury. For example, it is possible that investment trusts may provide personal pensions in the future. At present, the business can be carried out only by life assurance companies and certain friendly societies.
    1034
    This considerable change is very much in keeping with the breaking down of divisions that we are seeing in the City and in financial markets generally. However, I do not think that its significance can be underestimated.
    Mr. Blair: I am grateful to the Financial Secretary. I was uncertain about how far some of the institutions were already engaged in providing pensions, but it is clear that there will be considerable changes.
    The Financial Secretary spoke about investment trusts. Has the Treasury certain types of institution already in mind which it might allow, using its power under subsection (4), to carry on such business, or is the power to be held in reserve?
    Mr. Norman Lamont: The power will be used largely in response to representations. I referred to investment trusts only as an example. We made several changes in the clause in response to representations, and I imagine that any further widening will be based on representations from those in the market place who wish to get into this business. It is not a question of us wishing to impose it; it is more a question of the people who wish to join the pensions industry—one can think of many institutions—coming to us. We have not yet worked out the plans.
    Question put and agreed to.
    Clause 20 ordered to stand part of the Bill.

  Clause 21

    SCOPE OF BENEFITS
    Question proposed, That the clause stand part of the Bill.
    Sir Brandon Rhys Williams: I think that I am right in saying, but I ask my right hon. Friend to reassure me, that the provisions of clause 21 cover Government approved personal pension schemes, provided that they comply with the conditions laid down in paragraphs (a) to (e)—that is, the conditions elaborated in clauses 22, 23, 24, 25 and 26. Would I be right in thinking that if they are contracted-out schemes, they are also regulated by the 20 statutory instruments which emanated last week from the DHSS? If I am making an ignorant mistake, I hope that my right hon. Friend will forgive me, but I think I am right in saying that contracted-out schemes would fall under both sets of conditions. If that assumption is correct, may we hear to what extent these provisions have been agreed with the DHSS so as to make certain that there is no risk of incompatibility with the conditions laid out in the 20 statutory instruments?
    Mr. Norman Lamont: The answer to my hon. Friend's question is yes. They are controlled in this double way. Clause 21 is just an introductory provision. The answer to my hon. Friend's second question is also yes. These matters have been discussed and agreed with the DHSS.
    Sir Brandon Rhys Williams: Can we take it that there is no risk of any of the provisions in the clauses of this Finance Bill producing any friction or incompatibility with what has emanated from the DHSS?
    Mr. Norman Lamont: That is what I was seeking to imply to my hon. Friend. That is the objective, and we hope that it has been achieved.
    Mr. Blair: As I understand it, the Financial Secretary is saying that there would be no conflict between the

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    statutory instruments and the provisions in the statute. If there was such a conflict, I presume that the provisions of the Finance Bill would prevail.
    Subsection (2) states that nothing in subsection (1) will prevent the approval of a scheme
    "which makes provision for insurance against a risk related to the non-payment of contributions."
    Does that refer to cases where, for example, due to illness someone is unable to contribute for a period? Is that insured against under the terms of the scheme? Does that represent a change from the present law?
    Mr. Norman Lamont: I am advised that the answer to the second part of the hon. Gentleman's question is yes. I am afraid that I do not know whether it is a change. Clause 21 relates to benefits from voluntary contributions only. Protected rights from minimum contributions is a separate matter for the DHSS. There is no incompatibility.
    Question put and agreed to.
    Clause 21 ordered to stand part of the Bill.

  Clause 22

    ANNUITY TO MEMBER
    Question proposed, That the clause stand part of the Bill.
    7.45 pm
    Mr. John Greenway: I declare an interest as a practising insurance broker. What advice will the Treasury give to life assurance companies with regard to clause 22(2) in respect of existing retirement annuity contracts? If in this legislation we are introducing a new minimum retiring age of 50, which I greatly welcome, what will happen to existing retirement annuity contracts? Some guidance on the question will be necessary either today or in the future.
    Mr. Norman Lamont: Subsection (2) stipulates that a member's annuity must normally commence between the ages of 50 and 75. But subsection (3) permits commencement before the age of 50 if a member retires early through ill health or incapacity, or if the board is satisfied that his occupation is one in which people customarily retire early.
    Mr. Greenway: Perhaps I have not made the point clear. As my right hon. Friend will know, under the 226 and 227 1970 regulations, the minimum pension age is 60. We are now introducing a new concept. I greatly welcome the fact that we are reducing the age to 50, but it will create a dilemma with regard to practice between now and 4 January next year. Should people be advised to wait until next January to obtain an earlier age, or will the Inland Revenue accept an earlier retirement age applied to existing retirement annuity contracts?
    Mr. Lamont: Existing retirement annuities will continue on the same basis, but I am advised that they will be able to convert to personal pension plans. That is all that I can tell my hon. Friend at this stage. But I understand his point about whether the new conditions should apply to those who invest in annuities between now and January next year and what advice they should be given. I shall try to make available more precise information to my hon. Friend.
    Mr. Greenway: I am most grateful.
    Mr. Blair: The hon. Member for Ryedale (Mr. Greenway) has made an important point. The present age limit is 60, and subsection (2) would change it to 50. Will subsection (3), which allows the annuity to commence even before age 50, translate into legislation what already exists in practice? My understanding is that it does not. As a result of subsection (3), the annuity will commence before age 50 if it is payable on the person becoming incapable through infirmity of body or mind of carrying on his work or if the board is satisfied that the occupation is one in which people customarily retire before that age. I understood that if the board could be persuaded that people normally retired young in an occupation, it would allow the annuity to be paid before age 60.
    Mr. Norman Lamont: I am sorry that I cannot answer the point put by the hon. Member for Sedgefield (Mr. Blair). I undertake to make the position clear to him.
    Sir Brandon Rhys Williams: Subsection 22(5)(a) refers to the marriage of the annuitant as being one of the reasons why an annuity may terminate after the death of a member. Clauses 24 and, I think, 25 refer to what happens to annuities after the death of a member. I do not want to rule out the possibility of my raising a point concerning clause 24 by failing to put down a marker here. This matter appears to be foreshadowed in clause 22(5)(a)
    Question put and agreed to.
    Clause 22 ordered to stand part of the Bill.

  Clause 23

    LUMP SUM TO MEMBER
    Sir Brandon Rhys Williams: I beg to move amendment No. 40, in page 13, line 15, leave out subsection (4).
    The Temporary Chairman: With this, I propose to group amendment No. 39, in page 13, line 15, leave out '£150,000', and insert '£156,000'.
    Sir Brandon Rhys Williams: I am grateful for the generosity shown by the Chair in allowing me to move so many amendments. I hope that I can deal with amendment No. 40 as quickly as possible and that I shall not weary the Committee too much. This matter concerns lump sums emanating from the new personal pension schemes. A similar matter arises in schedule 3 in respect of existing schemes which may in future give lump sums of more than
    I am not happy with this provision. Although there are not many people who are able to reach a salary of £100,000 a year, and therfore qualify for a lump sum of £150,000, I do not like introducing discrimination against any particular group in the way clause 23 undoubtedly does, for no evident moral purpose. I tabled amendment No. 39, which proposes that the sum be £156,000 rather than £150,000. I think that my right hon. Friend the Financial Secretary would be hard put to explain why £150,000 is the chosen figure and why £156,000 would not be almost equally good.
    I did not pluck the figure of £156,000 out of the air. I suggested it because it corresponds to £2,000 a week, a round figure. The Treasury has to explain why it decided that this is the point after which people become second-rate citizens. Not withstanding the conditions of their

    1037
    scheme, they will not be allowed the benefit of a tax-free lump sum such as that given to someone who has arranged his affairs in such a way that the tax-free sum is £149,000.
    I do not like discrimination against the better-off. It is not a particularly Conservative principle. I am horrified to find this arbitrary and sudden recommendation appear in a Conservative Budget. That does not mean to say that I am happy with the tax-free lump sum. I spent a great deal of time in Standing Committee on the previous Finance Bill explaining how I thought it should be phased out. I do not think that a tax-free lump sum should have a place, because it attracts all kinds of consequences. It encourages people to commute their annuity for a lump sum, which they may not spend wisely. If they do spend it, it may simply force up house prices, because people have the benefit of a tax-free bonus which they can use in conjuncion with house purchase finance schemes of various kinds. They may do other things with this enormous tax-free lump sum which are not in the public interest.
    The Inland Revenue is approaching this difficult matter in the wrong way in trying to victimise the top echelon of salary earners. I happen to be the Member of Parliament for Kensington and I dare say that there may be people in my constituency who will be affected by this clause. If so, they have not been in touch with me. In my opinion, this recommendation should not have appeared in the Budget. I should be very much happier if it did not appear in the part of the Finance Bill that refers to these new personal pension schemes. It is a pity that it is there. I hope that the Treasury agrees to think in other terms about the tax treatment of lump sums.
    Sir William Clark: I support my hon. Friend the Member for Kensington (Sir B. Rhys Williams), although I do not necessarily congratulate the powers-that-be on selecting his amendments but not mine. I do not understand why amendment No. 3 was not selected because, as far as I know, it was not out of order. As I have some short experience of Finance Bills, I should have thought that that amendment could easily have been taken with my hon. Friend's amendments. I congratulate him on getting so many amendments covered. I must talk to him later to find out how he exercises the influence to effect that.
    I agree with my hon. Friend the Member for Kensington that £150,000 is an arbitrary figure. I do not know why the Revenue has thought of £150,000. Why not make it £200,000? Since the average national wage is £10,000 a year, I should have thought that a salary last year of £100,000 was an extremely low amount to be considered in respect of lump sums. I disagree with my hon. Friend the Member for Kensington about the amount of the pension that should be commuted. Spending the lump sum does not necessarily put up house prices. Normally, when a pension is commuted, the individual's mortage liabilities are immediately paid off and the balance of the money is then put into some sort of annuity or investment, so the commuted sum carries on after the individual dies.
    I deplore the idea of reducing the commuted ceiling to £150,000. I accept the question of my hon Friend the Member for Kensington as to why the sum was not £156,000. I should have thought that, if the Government are to be logical—although they have plucked this figure out of the air with no logic—they could adopt the
    1038
    same logic as they do with personal allowances. The Rooker-Wise amendment—or, as I remind the Committee, the Rooker-Wise-Lawson amendment—gave us indexation at the beginning. My amendment, which as you realise, Miss Fookes, was not selected, called for the indexing of the £150,000 lump sum each year so that it does not decrease in value. My hon. Friend the Member for Kensington has suggested that the figure should be £156,000. I appreciate his logic in saying that it corresponds to £2,000 a week. I think that most Committee members would have worked that out. Actually, it is £3,000, not £2,000, a week.
    Sir Brandon Rhys Williams: By my reckoning, £2,000 a week comes to £104,000 a year. As the lump sum is one and a half times the final salary, that brings it to £156,000.
    Sir William Clark: That is right. I think that we have unaminity. Taking a basic sum of £2,000 a week, one and a half times that must make £3,000 a week, so the £156,000 lump sum equals £3,000 a week. I do not think that we should become involved in any more arguments about that. I assumed that my hon. Friend intended having some form of indexation in respect of the £150,000.
    Why have the Government plucked this £100,000 out of the air, giving the £150,000 commuted amount? Why is the sum not indexed, as per the Rooker-Wise-Lawson amendment? Clause 23 states that the lump sum
    "must not exceed £150,000 or such other sum"
    as the Treasury may prescribe. Will my right hon. Friend the Financial Secretary confirm that, if the £150,000 is changed, it will only be changed upwards and not downwards?
    8 pm
    Mr. John Greenway: I endorse the remarks made by my hon. Friend the Member for Croydon, South (Sir W. Clark). Will the Minister assure the Committee that the £150,000 will not be reduced by Treasury order? I disagree with my hon. Friend the Member for Kensington (Sir B. Rhys Williams) on people taking all their money in tax-free cash. That is not the purpose of the provision. We see a reduction in the amount that can be commuted. Clause 23 (3) states:
    "The lump sum must not exceed one quarter of the total value".
    That is somewhat less than the present practice under the existing retirement annuity arrangements, and it is to be regretted.
    Mr. Blair: I wish only briefly to disturb the argument that is going on between the Government Back Bench and Front Bench and to defend the Chancellor against the accusations of Socialism that have been made against him in introducing the £150,000 limitation. On Second Reading of the Finance Bill, the Financial Secretary described the lump sum as a tax-free perk. That seems to sum up the position. The generosity is in having such a high limit at all. In some ways, it is difficult to see how one justifies it.
    Hon. Members are perfectly entitled to press the Minister on how the Treasury intends to use the powers that it will be given. The Treasury is given a completely free hand to decide what it wants to do—it could raise it, reduce it, or do whatever it wants. We should at least have some outline of how it intends to exercise that power.

    1039
    I do not promise that the Opposition will support the Treasury if it decides to give that outline, but it is a little unsatisfactory to leave the matter as open and vague as it is at present.
    Mr. Norman Lamont: On Second Reading, I described our thinking on the lump sum. No doubt Hansard will clarify whether I described it as a tax-free perk, but I made it clear that the Government and I regard pension funds that qualify for extremely generous tax reliefs as being primarily for the provision of pensions. The lump sum has been debated many times before; it has its critics and supporters, particularly in the industry. I recall that, on one occasion, my right hon. Friend the Chancellor used the phrase
    "the much loved lump sum".
    My hon. Friend the Member for Kensington (Sir B. Rhys Williams) thinks that we should tackle the anomaly, problem or tax-free perk—however one wants to describe it—in a different way. His view is that it should be taxed. We have left it alone, and various assurances were given in the past by my right hon. Friend about what would or what would not constitute Green Paper territory.
    There is no doubt, as my hon. Friend the Member for Kensington said in Committee during pre-election deliberations on the Finance Bill, that people use the lump sum provision in all sorts of ways, particularly when combined with accelerated accrual provisions. Notwithstanding the changes that we are making, it is still possible to use different accelerated accrual provisions in combination with the lump sum. People are getting tax deductions for contributions to pension funds, and they get a tax-free sum at the end. We certainly felt that it was not wrong that there should be a cap on the lump sum.
    My hon. Friends have perfectly fairly asked me why £150,000, why not £150,000·02, or something like that.
    Mr. Blair: It is a round number.
    Mr. Lamont: It is a round number, says the hon. Member for Sedgefield. By any standard, it is a generous figure. My hon. Friend the Member for Croydon, South (Sir W. Clark) suggested that, perhaps, it should be indexed. Notwithstanding what happens to personal allowances, it is our general stance, in a time of low inflation and at a time when we intend that inflation should remain low, to resist general indexation provisions. It is our intention to keep on top of inflation rather than to build indexation into large parts of fiscal legislation.
    In response to the point that is worrying my hon. Friends, I repeat the assurance that I gave before the election. I said that, from time to time, we shall examine the limit and that we did not wish to see the limit eroded. I repeat that statement for the benefit of the Committee, and I hope that it will satisfy my hon. Friends, even if my hon. Friend the Member for Kensington is not entirely at one with me on the approach to the problem.
    Sir Brandon Rhys Williams: I am sure that the House is grateful to my right hon. Friend. I intervene in the debate again because he made one remark about my own position which I cannot allow to stand. He said that I am against the tax-free lump sum—just in so many words. I do not believe in retrospective legislation for pension schemes. When someone has already served 20, 30 or more years in a pension scheme in the confident expectation
    1040
    that, on retirement, he or she will be eligible for a commuted annuity to be taken in the form of a tax-free lump sum, we should not intervene. That was suggested by the Treasury some three or four years ago, when it received an extremely negative response from the public.
    I do not think that we should say that, notwithstanding the fact that they have worked all those years in that expectation, that expectation should now be taken away. That is why I made the suggestion, which I elaborated at some length in Committee during consideration of the Finance Bill before the election. It is only in so far as entitlement accrues in future years that the ability to apply the tax provisions when a pension is commuted for a lump sum should apply.
    I hope that my right hon. Friend will look again at my suggestion that the amendment is the right solution and that clause 23 is the wrong one. We should give everybody equal treatment. We should not discriminate against people on high salaries. That is an absolutely wrong principle. If the Treasury were to adopt my approach, it would be 40 years before we reached the stage at which the lump sum option became totally taxable. In my estimation, that is a long enough period for people who have relied on the tax-free lump sum to make their adjustments. That is why the Treasury is entirely wrong in proceeding in this way. I do not feel able to withdraw my amendment.
    Amendment negatived.
    Clause 23 ordered to stand part of the Bill.

  Clause 24

    ANNUITY AFTER DEATH OF MEMBER
    Sir Brandon Rhys Williams: I beg to move amendment No. 44, in page 13, line 26, at end insert
    `or, in the event that the member is not survived by a spouse, to an employee of his.'.
    The Temporary Chairman: With this it will be convenient to take the following amendments: No. 42, in page 14, line 3, leave out subsection (6).
    No. 43, in page 14, leave out line 25.
    Sir Brandon Rhys Williams: I think I am right in supposing that the significance of the surviving spouse is connected with the decision to move towards unisex treatment of pensions, so that a balance is found between the claims of a male employee, or a male member of the scheme, and the claims of a female employee. I certainly welcome that move. I should not want to do anything to upset it. In fact, I am only too anxious to do everything I can to support it.
    I am grateful to the Chair for taking, in conjunction with amendment No. 44, my amendments Nos. 42 and 43. They raise a slightly different point, but the amendments are so fully related that the Chair's discretion in grouping them is perfectly right.
    My intention in amendment No. 44 is rather narrow, but it arises from the general principle that, as I understand it, when a man reaches the normal age of retirement he will have a certain life expectation, whereas if a woman retires at the same age she is likely to have a much longer life expectation. Therefore, her claim on the fund for an annuity will extend over a longer period and have a greater value than that of a man with an identical career record or other form of entitlement under the

    1041
    scheme. Therefore, women have the advantage over men in so far as they are likely to benefit for longer from the annuity which they are entitled to claim under the scheme.
    On the other hand, men have an advantage over women in the actuarial tables in that they are more likely to leave a surviving spouse for the obvious reason that, a man's expectation of life being shorter, it makes it more likely that the woman will survive him. If we are to recognise that the benefit to the survivor is part of the entitlement which has been acquired through the earnings achievement of the member of the scheme, it is not right that the subsequent conduct of the spouse should be relevant in the calculation. Equally, where there is no spouse in the case where a man's wife has died before he does, or where the reverse might be the case, it is not right that the scheme should benefit and the household should suffer.
    The amendment seeks to deal with the case of a man whose wife has died who may take a caretaker or some other person to look after him for a salary. That is not uncommon and the rules should not exclude that person being designated by the original member of the fund as the person who is entitled to continue to draw the benefit which we have decided should be allocated to the survivor under the standard rules. That is why I have moved that we should acid the words "to an employee" of the member when deciding what to do about the residual annuity after the original member has died.
    The other amendments in the group refer to the conduct of the survivor. It is objectionable, if I have interpreted the clause correctly, that the annuity should be shut off if the surviving spouse remarries. The surviving spouse's conduct in deciding to get married again should not determine what the member's asset was worth when he ceased employment and the benefit of the pension scheme was awarded to him.
    I have often thought it a most disagreeable condition that where a wife in particular remarries after her husband's death, the scheme shuts off her benefit. It is a vindictive clause and the woman should not be expected to remain single after her husband has died in order to obtain the benefit of his assets.
    It may be that there is something else to this which I have not detected, but it appears to suggest that if the surviving annuitant does not go through a marriage ceremony to another party but continues to live in the same house with that person, the scheme has to go on paying. It is only if there is marriage that the scheme is entitled to dry up the annuity.
    If I am straying from the correct interpretation of the clause, I can only apologise, but the Bill has not been before us long enough for hon. Members interested in such points to consult experts who can explain such provisions.
    If one looks at the comparable statutory instrument No. 1100 emanating from the DHSS called "The contracting out widowers' guaranteed minimum pension regulations" we find something different. The DHSS goes further in considering the conduct of the survivor and deals with the question of where a widower has entered into a new relationship with another woman. Paragraph 33(2)(b) provides:
    "There is excluded from the periods prescribed … any period during which he is under pensionable age and a woman to whom he is not married are living together as husband and wife"
    Paragraph (c) says:
    1042
    "If after he has attained pensionable age if immediately before he attained that age he and a woman to whom he was not married were living together as husband and wife."
    That is more specific than the clause we are discussing and it is an example of where liaison between the DHSS and the Inland Revenue has not been complete.
    I am not trying to score points in respect of that, but I want to understand the nature of the provision. I hope that my right hon. Friend will tell me whether I am right in thinking that these provisions have the effect that the subsequent conduct of the surviving spouse can reflect on the value of the asset which has been earned by the member of the scheme during his lifetime.
    8.15 pm
    Mr. Blair: Unfortunately, I cannot support the hon. Member for Kensington (Sir B. Rhys Williams) in his amendment, for two reasons. First, as I understand il, amendment No. 44 would considerably change and, indeed, widen the scope of the annuities that would be permissible under clause 24. The annuity would be payable not only to a surviving spouse of a dependant, but even to an employee of his. The employee may be a person in the category to which the hon. Gentleman referred, but the term "employee" can be much wider. It may well be that if the person was self-employed and employed several people it could extend to them. That is going way beyond the purpose of the original legislation.
    Secondly, sub-paragraph (6) does not insist that the annuity cease to be payable on the marriage of the annuitant; it simply allows that the annuity cease to be payable on the marriage of the annuitant. The word is "may" not "shall", and that is probably a critical distinction. Therefore, it is entirely up to those who are phrasing the terms of the annuity to decide whether they want that annuity to cease on the marriage of the annuitant. That is perfectly rational. They may decide that if the person remarries it is not necessary for him to have the benefit of the annuity in the ordinary way.
    It may be helpful if I raise at this stage a purely drafting point. It is only if one looks at the annotations at the side of clauses 24 and 25 that one realises that they refer to annuities after the death of members. Otherwise, one has to read clause 24 in conjunction with clause 21. Clause 24 simply follows on the conditions already laid out in clause 21. That is slightly unsatisfactory; perhaps the Minister will have somebody look into that, because there have been difficulties in construing statutes where there are qualifications on the scope of a particular clause which are placed in annotations rather than the body of the clause.
    Mr. John Greenway: I cannot support the amendments of my hon. Friend the Member for Kensington (Sir B. Rhys Williams). It is important that the House should realise that we are dealing with personal pensions acquired by the individual on a money purchase basis. From an actuarial viewpoint the real issue is the provision of a pension for a member of a scheme—the person who is buying the pension policy. The more people and conditions one puts on the payment of benefit after the member's death, the less pension benefit the individual will obtain in his retirement. The actuaries would have great difficulty in dealing with a position in which one carried on paying an employee an annuity after the death of a member.
    Mr. Norman Lamont: I want first to apologise to my hon. Friend the Member for Kensington (Sir B. Rhys

    1043
    Williams) for misrepresenting his views during discussion of the previous amendment. I know from long experience that my hon. Friend has not only an answer to most problems, but a detailed answer. In fact, I was completely aware of the solution that he had to the problem that we were discussing—the long transitional period. I apologise for describing his views in shorthand, which led him to think that I was not familiar with them.
    Clause 24 sets out the conditions applicable to annuities payable under a personal pension scheme to a surviving spouse or dependant of the member after his or her death. I should stress that those conditions reflect current law and practice as they relate to retirement annuities. There are no changes; these are the existing practices. Persuasive as I find my hon. Friend on many issues, I do not find him quite so persuasive on this one, for the reasons given by the hon. Member for Sedgefield (Mr. Blair) and by my hon. Friend the Member for Ryedale (Mr. Greenway), who rightly emphasised the difficulty for the whole personal pensions and annuity markets if one went on adding conditions.
    I shall come to amendments Nos. 42 and 43 in a moment; I had more sympathy with them initially than with amendent No. 44, which would allow an annuity to be paid to an employee of the member—even, as the hon. Member for Sedgefield emphasised, if he was not a dependant and there was no surviving spouse or dependant of the member. As my hon. Friend the Member for Kensington knows, at present, such annuities can be paid only to someone who is a dependant. Revenue practice has been, I think, to accept a reasonably broad definition of "dependant", and I can confirm that that will continue to be the case. My hon. Friend is proposing to widen this scope for annuities to be paid even to people who have only the most tenuous connection with the member.
    I return to the point about the generous tax reliefs upon which the whole subject that we are discussing is based. Given that we have such generous tax reliefs, I can see no justification fo enabling someone who was not a dependant to benefit in that way. If the position were as my hon. Friend described it for amendments Nos. 42 and 43, he would have been entirely right and I would have shared his feelings, but, as the hon. Member for Sedgefield grasped—I congratulate him on doing so—the present rules are permissive.
    At present, an annuity paid to a surviving spouse or dependant may cease if the person receiving the annuity subsequently marries or remarries; but there is no objection to such an annuity being payable for the whole life of the annuitant in the normal way. The amendment would prevent an annuity payable in these circumstances from ceasing on the subsequent marriage of the recipient. That would remove an element of choice. It is entirely right that we should have a market that allows people to choose annuities or personal pensions providing for either circumstance. I share my hon. Friend's feelings that the provision would be insensitive if it were as inflexible as he thought it was. However, it is not, and we have a market here that can meet many different circumstances.
    Sir Brandon Rhys Williams: I fear that my right hon. Friend the Minister has not quite got the point that I wish to make. I am not happy with provisions that appear to
    1044
    drive people into cohabitation rather than formal marriage. It appears to me that that is permissible as one of the options that the clause would make available. My primary concern is to protect the unisex quality of the pension asset so that, at the date of award, whether the person is male or female, his or her expectation of the benefit that he or she would draw from the scheme would be the same. Since, as I pointed out earlier, the man has to rely on the fact that the scheme provides assets in one form or another that continue after his death, in order to have the equivalent value from the scheme that a woman would get in otherwise similar circumstances at the same age—of course, she would expect to live longer—I do not want the man to lose that asset for any reason.
    The scheme should not be able to treat the man badly because he has died younger than the woman would have done in the same circumstances, and has therefore got less benefit from an asset for which he has saved. If there is no surviving spouse, I want the asset that we allocate to the survivor to be available to go to someone else, or to some other objective. It might not be a large one, and it would probably taper. If a man lived to be 99, the benefit for the survivor need not be large, but if he died a year after he qualified for his pension, the asset that the pension scheme would hold on his behalf ought to be large and should not be forfeited because he does not have a surviving wife, or because she has chosen to remarry.
    It is not right to undermine the attempt to put men and women on the same footing in pension schemes. I hope that my right hon. Friend will give further consideration to that matter. I do not seek to press him on it now, but if he studies what I have said he will realise that we are potentially reintroducing inequality of the sexes, and that does not seem right.
    Mr. Norman Lamont: My hon. Friend is making the point that, as a woman has a longer life expectancy, the annuity costs more. He wants the system to be unisex. There is nothing to prevent the annuity lasting for the widow's lifetime, but the system allows it to stop if she marries again, and there is an element of choice for the person who takes out the contract. The Government require contracted-out personal pensions to be unisex. Annuities from voluntary contributions allow a choice to the member. However, I shall look at what my hon. Friend has said to determine whether the position is unsatisfactory.
    Sir Brandon Rhys Williams: In view of my right hon. Friend's helpful assurance, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 24 ordered to stand part of the Bill.
    Clause 25 ordered to stand part of the Bill.

  Clause 26

    RETURN OF CONTRIBUTIONS ON DEATH OF MEMBER
    Question proposed, That the clause stand part of the Bill.
    Sir Brandon Rhys Williams: Will my right hon. Friend enlighten me on a point that I raised on a similar clause in the Finance Bill before the election? At that time, unless I am much mistaken, I tabled a probing amendment at the end of subsection (2) to add the words
    "whichever provides the greater amount",

    1045
    the object being to elucidate what appears to be somewhat ambiguous. Subsection (2) says:
    "the lump sum must represent no more than the return of contributions, together with reasonable interest on contributions or bonuses out of profits."
    I may not have understood that correctly, but it seems to me that an option is available there and I would not want it to be possible for the option to be exercised—if I have read it correctly—in such a way that it is a disadvantage to the beneficiary. Perhaps my right hon. Friend could explain that or, if I have misunderstood the way that the clause ought to be read, perhaps he would say so.
    8.30 pm
    Mr. Blair: Perhaps I can assist. I do not think that there is a difficulty in clause 26 of the type that the hon. Gentleman suggests. That is partly because it seems that subsection (2) will simply ensure that a lump sum does not represent any more than the return of the contributions together with reasonable interest on the contributions or bonuses out of profits. It is almost a form of anti-avoidance provision to ensure that what is returned is not more than what should have gone into the scheme under the rules. As such, the clause is necessary to ensure that the rules of the scheme are not abused.
    Mr. Norman Lamont: The hon. Member for Sedgefield (Mr. Blair) is perfectly correct and he has summed up the position. No surplus will arise in this instance and we are talking about two different forms of contract—one unit linked and the other guaranteeing the annuity.
    Question put and agreed to.
    Clause 26 ordered to stand part of the Bill.

  Clause 27

    SCHEME. ADMINISTRATOR
    Sir Brandon Rhys Williams: I beg to move, in page 15, line 6, after 'Kingdom', insert
    `or in another member state of the EEC.'.
    I was rather surprised when I saw this provision because I do not know why it is there. I thought that I would ask my right hon. Friend to expand and give him an opportunity to do so. I have a particular interest here in that when I was a member of the European Parliament in 1981, I had the honour to be made the Rapporteur for the subject of the integration of the European market for capital. In the course of my work as Rapporteur I became totally convinced of the necessity for us to proceed as far as possible to regard Europe as a single capital market.
    Of course, a pension scheme is pre-eminently a capital project, and it seems a little jarring and out of tune with the Government's stated policy of supporting the conception of the integration of the European market for capital to say that where personal pension schemes are concerned we will have this "United Kingdom only" label attached to them. There must be more to this clause than meets the eye, because it seems such a petty and unsuitable restriction to insert. I trust that my right hon. Friend will be able to explain just what benefit is likely to accrue if we retain this clause in the Bill.
    Sir William Clark: I trust that my right hon. Friend will resist this amendment. We are dealing with annuities, and pensions paid by institutions in this country enjoy certain tax advantages. That is the main thing. How can we say,
    1046
    if a pension scheme is operated in Greece or France or Portugal, that the same fiscal system will be applied to those pension funds? No doubt this amendment is well-meaning, but it is highly impracticable. In any case, we are dealing with our own fiscal system and complete harmonisation with the EC may never come. Until it does, it would be ridiculous to try to transfer some of the operations, and certainly the operation of our pension funds or annuities, to any other member state. I hope that my right hon. Friend will not waste much time on this amendment.
    Mr. Norman Lamont: I agree with my hon. Friend the Member for Croydon, South (Sir W. Clark) but in the interests of making progress I am not sure that a summary dismissal of the amendment would be the appropriate thing to do. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) is always pushing integration with Europe and he brings the same care, drive and point of detail to the pension fund debate. I am afraid that I must agree with my hon. Friend the Member for Croydon, South—
    Sir William Clark: What are you afraid of?
    Mr. Lamont:—even though I am afraid of my hon. Friend the Member for Kensington. Given the very generous tax reliefs that seem to dominate debates of this kind, it is essential that we have people within the United Kingdom jurisdiction accountable to the Inland Revenue. I should stress that it has always been a requirement of an occupational pension scheme that it has an administrator resident in the United Kingdom. We are simply proposing for personal pensions the same rules as apply to occupational schemes. They do not discriminate unfairly against the nationals of other EC states. As I say, someone within this jurisdiction must be accountable to the Revenue in order to ensure that the reliefs are not abused. A similar rule is contained in the Department of Health and Social Security regulations. My hon. Friend the Member for Kensington has been following those and will find that the rule is mirrored there.
    Sir Brandon Rhys Williams: My right hon. Friend has explained that, as I understand it, the Inland Revenue would need to have someone living within the United Kingdom in order to proceed against that person if the scheme were to be improperly conducted. Obviously, in the same way that we do not like overseas landlords misconducting themselves behind foreign frontiers, we would not want scandalous abuse of the rules of pension schemes. It would seem to be a pity if there was no opening for competition and if the people providing facilities for personal pension schemes were to be excluded from doing so unless they were substantially British companies or British institutions.
    I hope that the meaning of the clause does not preclude other institutions from other financial centres entering into competition, because that would be highly undesirable. On the other hand, if it is necessary for them to establish one of their managers here as a kind of Aunt Sally, the clause seems rather a small-minded provision and I am bound to say that I regret it. However, I do not think that it is of such serious importance that we need to divide on it. Unless my right hon. Friend has further remarks to make, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Question put and agreed to.
    Clause 27 ordered to stand part of the Bill.

  Clause 28

    TRANSFER PAYMENTS
    Sir Brandon Rhys Williams: I beg to move, in page 15, line 14, at end add—
    ` (3) Regulations made under this section shall provide that the rules of the scheme shall require the trustees in respect of any member withdrawing from pensionable service before the normal pension age under the rules of the scheme at the withdrawing member's option either—

    (a) to pay an approved scheme a transfer payment in respect of the withdrawing members' entitlement of the sum that would be required by the withdrawing members' scheme for the purpose of admitting a new member of the same age, sex and pensionable remuneration as the withdrawing member in order to credit him with the same number of years of pensionable service as the withdrawing member (but subject to modification in accordance with (4) below, or

    (b) to award preserved benefits to the withdrawing member of the same actuarial value as that sum.

    (4) In a case where an actuary certifies that on the date of the certificate the scheme under this section is not fully funded, (which is to say that the scheme does not have sufficient assets to meet its liabilities in respect of the whole or any specified part of the accrued rights to benefit of its members), the transfer payment, or as the case may be, the part of the transfer payment which corresponds with the specified part of those accrued rights, may be reduced at the discretion of the trustees by the percentage by which the scheme is so shown to be deficient.
    (5) It shall be permissible for the pension trustees of an approved pension scheme under this section to amend the rules of the scheme in regard to the calculation of transfer payments and of preserved benefits on behalf of any member ending pensionable service before the normal age of retirement under the scheme in accordance with the provisions of this section.
    (6) An approved pension scheme which by 1st January 1988 does not have rules such that the transfer payments and the preserved benefits payable under the scheme are to be calculated on terms at least as favourable to the beneficiaries as those specified in this section shall not qualify as an approved pension scheme in repect of liabilities incurred after that date except by the permission of the Occupational Pensions Board.
    (7) The pension trustees of an approved pension scheme may apply to the Occupational Pensions Board for deferment of the latest date for the amendment of the rules of their scheme if necessary to accord with this section and with the approval of the Board the scheme may retain its status as an approved pension scheme in respect of its liabilities incurred after that date to a date not later than 1st January 1989.
    (8) The Secretary of State for Health and Social Security shall lay before Parliament regulations under this section subject to affirmative resolution of the House of Commons which shall specify the grounds on which the Occupational Pensions Board may approve applications for deferment under subsection (8), above.'.
    Before I embark on this I should like to say that this provision is not a new recommendation of mine but is new in the context of the newly available personal pension schemes. I shall be tabling a new clause to the present Finance Bill which would have the effect of applying a similar method of valuation for transfer values or preserved benefits in schedule 3 or wherever it is appropriate in regard to schemes already in existence. I want to say the minimum at this point in moving this amendment because I do not want to make myself ineligible to move a similar one at a later stage in the proceedings of the Committee.
    There is merit in having the same rules across the board where valuation of transferred or preserved assets is concerned. Therefore, I do not think it is wrong that we
    1048
    should seek to apply this particular formula to the new schemes just as much as to the old. I have to move this amendment at this point if I am right in thinking that there is room for it where the private personal schemes are concerned. I realise that, for the most part, in a money purchase scheme, the proposals that I have drafted, which were intended to relate primarily to final salary schemes, would seem to have only rather tangential relevance. However, I think that it might well happen in the competition which is arising already to attract the interest of people who may decide to take out personal pension schemes, that systems will be devised which will allow a measure of latitude in assessing the transfer I Lie, or at any rate the preserved value, of the assets. of one who decides to terminate his connection with the scheme before the normal age of retirement. Therefore, I believe that I may be serving a useful purpose if I present this method of valuation so that the same regime would be applicable right across the occupational pensions and the private pension schemes.
    I emphasise that, I refer only to the new schemes set up under this chapter. In order not to say too much on this point and to come to the central feature, what I am suggesting here—I have suggested it on previous occasions in the House—is that the transfer payment should be calculated by a formula which would be precisely the same if the movement of the employee was reversed. If the employee or the person taking out the pension were moving into the scheme and buying himself in, that would be a method of valuation of what I think should be the appropriate transfer or preserved value when the member leaves the scheme.
    I have to say that the result of using that formula—which I have set out in the amendment and which I do not need to read out in detail—would be very different indeed from what is often recommended even by highly competent and actuarially trained people and in normal practice now. It is difficult to estimate what people who leave schemes early leave behind and how much they lose by changing their jobs. However, over the whole field of pension provision in approved schemes, it is a very substantial amount and, after all the years for which I have been pressing this on successive Governments, I find it rather disappointing that I still have to make this point. Everyone agrees that the early leaver gets a raw deal, whether he takes a transfer payment or leaves behind a preserved asset; yet the House does not act.
    If my right hon. Friend the Financial Secretary does not think that the formula that I have adopted here for assessing the early leaver's assets is the best possible and the fairest, I trust that he will come forward with an equally specific and better provision. If he is not able to come forward with anything better, I strongly recommend that he should accept this, because it is not only in the interests of fairness and the good reputation of the private scheme institutions which are springing up that they should be seen to be giving a fair deal to someone who severs his connections before the normal age of retirement; it is also all-important to the Government's policy of encouraging the mobility of labour, particularly among senior executives. It is when a man is a senior executive that his pension asset is likely to be worth most. Therefore the fact that he is very likely to be cheated if he changes his plans and leaves his scheme early under existing normal practice makes the mobility of labour argument so important.
    I have said enough on this. The Committee can see precisely what I am aiming at in my amendment. I trust that my right hon. Friend will welcome it and that, by suggesting this again tonight I shall have got a stride nearer to a genuine system of statutory fair treatment for the early leaver. That is why I hope that the Government will accept my proposal.
    8.45 pm
    Mr. Norman Lamont: Clause 28 sets out certain basic conditions relating to transfer values and personal pension schemes. My hon. Friend said that, in a sense, his amendment anticipates the broader assault that he intends to make on this problem in relation to occupational pension schemes. The amendment appears to relate primarily to transfer values paid by occupational pension schemes. My hon. Friend acknowledged that the benefits under a personal pension scheme will be based on money purchase and will be attributable to the individual. Therefore, I am confident that the problem outlined by my hon. Friend will not arise in the same precise way with transfers from personal pension schemes. I suggest that we might debate this more widely when we come to schedule 3. That would perhaps be more appropriate than discussing it during a debate which is narrowly focused on personal pensions.
    Sir Brandon Rhys Williams: My right hon. Friend rightly pointed to the fact that, in private pension schemes that we envisage at present, my proposals might not be especially relevant. However, I think that we have to work with the ingenuity of the market, and I imagine that schemes which will be eligible for approval—which have not yet been envisaged, at any rate by me—will come into existence. Therefore it would be a good thing from the start to have a simple uniform regime for valuation of the early leaver's asset which would become applicable from the beginning.
    We have this catastrophe that in the occupational pension schemes nothing was laid down from the beginning as to the valuation of the early leaver's assets and it has done untold harm in this country that early leavers have been cheated year in year out, since the start of the private occupational pensions movement. It does not apply in the public sector, mercifully, and a very farseeing civil servant, Mr. Herbecq, whom I had the pleasure of knowing some 15 or 20 years ago, did manful work to ensure that people moving in the public sector within a very wide range of occupations were able to protect their pension rights. But this does not apply in the private sector and there is a real problem.
    I do not think that we want to start a whole new type of scheme without provision from the beginning for the early leaver to have a fair deal. Even if my particular recommendations here are not entirely appropriate, I hope that I am asking my right hon. Friend to move in a direction in which he is willing to go and that he will provide some valid protection for the early leavers asset from the very start. In the circumstances, as I accept that, in this case, I am on a rather narrow point, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Question put and agreed to.
    Clause 28 ordered to stand part of the Bill.

  Clause 29

    EXCESS CONTRIBUTIONS
    Question proposed, That the clause stand part of the Bill.
    Mr. John Greenway: Will my right hon. Friend consider how life assurance and pension companies can meet the provisions of clause 29 for self-employed scheme members? I understand that it is intended that, where an employee is setting up a pension scheme, perhaps with the co-operation of an employer, there should be arrangements to ensure that the contributions paid are not excessive in relation to the employee's salary. However, unless I have read this wrongly, it seems to me that we are asking a pension scheme to include in its arrangements the means to ensure that contributions are not excessive. I am at a loss to understand how the Revenue expects the life assurance industry to police the provisions with regard to people who are self-employed. Perhaps this matter needs further thought.
    Mr. Blair: On a similar point, I assume that the purpose of the clause is to determine what happens to excess contributions above the permitted maximum. Under the new personal pension schemes. the employer as well as the employee will be able to contribute. A novel situation therefore arises if the aggregate amount contributed by employer and employee exceeds the maximum. As II understand it, the purpose is to repay any excess to the employee up to the extent of his contributions and for the rest to be paid to the employer. I do not see how that affects the situation in relation to the maximum amount allowable, which seems to be governed by clause 32, but I should be grateful for confirmation that clause 29 merely determines what happens to excess contributions.
    Mr. Norman Lamont: The hon. Member for Sedgefield (Mr. Blair) is right. Nevertheless, my hon. Friend the Member for Ryedale (Mr. Greenway) has hit upon a point which requires further investigation. It is the subject of consultation with the pensions industry and I will see whether anything more can he said on Report. The matter is being explored and my hon. Friend is right in saying that it is recognised as an area in which there may be problems.
    Question put and agreed to.
    Clause 29 ordered to stand part of the Bill.

  Clause 30

    RESTRICTION OF CONTRIBUTORS
    Question proposed, That the clause stand part of the Bill.
    Sir Brandon Rhys Williams: Unfortunately, it was brought to my notice only this morning that there could be a most unfortunate interpretation of subsection (2)(b), which reads:
    "in an office or employment to which section 36 below applies."
    This is a technical area and I may be misinformed, but it appears that paragraph (b) adds a restriction in that members of an occupational pension scheme may not arrange for minimum contributions arising under the Social Security Act 1986 to be paid to a personal pension scheme. If that is correct, it will effectively prevent a

    1051
    member of an occupational pension scheme which is not contracted out from using a personal pension scheme to opt out of SERPS.
    My right hon. Friend the Minister knows that I am not particularly well disposed towards SERPS and I think that it ought to be wound up, but while it continues every employee should be entitled to opt out of it if he or she so wishes. It seems completely contrary to Government policy to prevent employees from opting out. If my interpretation of paragraph (b) is correct, will my right hon. Friend give an assurance that it will be amended so that it does not have that unfortunate implication?
    I recognise that I am trespassing on a very technical area and raising a point which I was not able to cover in an amendment because it was brought to my notice only today. Nevertheless, it is a serious point and I trust that my right hon. Friend will consider it.
    Mr. Norman Lamont: I am advised that my hon. Friend may have a point. I undertake to look at it and to report back to the House on Report.
    Question put and agreed to.
    Clause 30 ordered to stand part of the Bill.
    Clause 31 ordered to stand part of the Bill.

  Clause 32

    LIMIT ON DEDUCTIONS
    Question proposed, That the clause stand part of the Bill.
    Sir Brandon Rhys Williams: Subsection (2) sets out a scale allowing older people to benefit from a higher percentage limit on deductions, but in subsection (3) the figure of 5 per cent. appears not to be graduated according to age. I wonder whether it would be fairer and simpler to say that whatever subsection (2) entitles the individual to receive the provisions of subsection (3) may amount to one quarter of that figure. That would bring into subsection (3) the age scale already present in subsection (2).
    Mr. Norman Lamont: My hon. Friend is bowling me out with every ball. I am informed that the 5 per cent. is not graduated but merely follows the existing rules, so there is no change. I note what my hon. Friend says, however, and will certainly look at it to see whether there is purpose behind what he says, as he has clearly raised a serious point.
    Question put and agreed to.
    Clause 32 ordered to stand part of the Bill.
    Clauses 33 and 34 ordered to stand part of the Bill.

  Clause 35

    MEANING OF "RELEVANT EARNINGS"
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: This point might have been raised on a starred amendment but it can probably be raised just as easily in this debate. The importance of clause 35 is in the definition of "relevant earnings" in terms of the amount of contributions that can be made under earlier clauses and thus the amount on which tax relief applies.
    Subsection (7) provides:
    1052
    "For the purposes of this Chapter, a married woman's relevant earnings shall not be treated as her husband's relevant earnings, notwithstanding that her income chargeable to tax is treated as his income."
    I wish to probe the Government's thinking on this. If the wife's and husband's earnings were aggregated, the amount of contribution would be much larger, so they must be disaggregated to ensure that the husband can contribute only the relevant percentage of his own earnings and cannot top up his contributions by aggregating his wife's earnings. I assume that that is the only purpose, but I should be grateful for the Minister's confirmation that clause 35 merely translates into legislative effect what is already customary practice.
    Sir Brandon Rhys Williams: I should be grateful if my right hon. Friend the Minister would reassure me about the effect of subsection (7), as it appears to reintroduce an element of inequality between the sexes. I should like to feel that we are preserving the unisex character of our legislation across the board, but I cannot see how that will apply if we insist on retaining this provision.
    If the subsection was read the other way round, it would read:
    "a married man's relevant earnings shall not be treated as his wife's relevant earnings, notwithstanding that his income chargeable to tax is treated as her income."
    Is the clause intended to be read as applying equally in both senses? I may be showing my ignorance with this remark, but I believe that the Committee should express some uneasiness about that provision and that we are entitled to ask my right hon. Friend for an explanation.
    Mr. Norman Lamont: My hon. Friend the Member for Kensington (Sir B. Rhys Williams) is certainly not showing any ignorance of the subject, but rather a remarkable knowledge of it. My hon. Friend's summary was correct, as indeed was what the hon. Member for Sedgefield (Mr. Blair) said. The clause follows the existing rules for retirement annuities under which the wife's annuity is treated as earned income. I shall read what my hon. Friend said to consider whether there is anything that I can add to it. If there is, I shall write a note to my hon. Friend.
    Question put and agreed to.
    Clause 35 ordered to stand part of the Bill.
    Clauses 36 and 37 ordered to stand part of the Bill.

  Clause 38

    EMPLOYER'S CONTRIBUTIONS
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: I simply want to make sure that I have understood the effect of the clause that we are about to pass. As I understand it, it is a necessary consequence of the changes that have been made that the employers' contributions to the personal pension schemes should not constitute a taxable benefit. If that is the purpose of clause 38 it is no more than following on the changes to the rules that have been made.
    Question put and agreed to.
    Clause 38 ordered to stand part of the Bill.

  Clause 39

    EXEMPTION FOR SCHEME INVESTMENTS
    9 pm
    Sir William Clark: I beg to move amendment No. 47 in, page 21, line 27, at end add—
    `(5) In respect of income which is exempt from tax under subsection (1) above or section 314 of the Taxes Act 1970, notwithstanding the provisions in section 240(5) of the Taxes Act 1970, the board shall make regulations providing for the repayment of income tax and tax credits to come into effect on or before 4th January 1988.'.
    I believe that it is well known that I am a consultant to the Life Insurance Association.
    The investment income of pension funds and insurance companies, as far as it refers to pension funds, is tax-exempt. The present rules relating to the repayments of tax deducted at source are anomalous and tend to penalise insured pension business in comparison with the self-administered pension schemes and new pension providers approved under the Bill. My amendment is an endeavour to obviate that difference.
    The amendment intends—I trust that the wording is correct and I trust that my right hon. Friend will not resist the amendment because of faulty wording—the repayment of tax on investments and tax credits, deducted at source, to all providers of approved pension schemes in respect of investments that are only attributable to the pension business. If the amendment is effective it will enable competitive distortions, which exist against life insurance companies, to be removed by permitting all providers of pensions to receive prompt tax repayment on an equal basis.
    This is a technical amendment and it affects the cash flow position of pension funds. As this anomaly exists, I hope that my right hon. Friend will feel able to accept the amendment or, if not, to give an undertaking that, on Report, he will return to this matter in order to eliminate that anomaly. The wording of the amendment may be slightly faulty, but I hope that my right hon. Friend will accept its spirit.
    Mr. Norman Lamont: I have considerable sympathy with my hon. Friend. I would not like to accept the amendment at this stage and I am not sure that, on Report, I will be able to return to the matter. However, I am entirely sympathetic to my hon. Friend's case.
    The purpose of my hon. Friend's amendment is to provide a mechanism for insured pension funds to secure monthly repayments of income tax and tax credits. That matter is already a matter of discussion between the Revenue and the Association of British Insurers. Some detailed information has still to be made available to us.
    We must take account of the cost to the Exchequer, which could be substantial. I understand what my hon. Friend has said. He wishes these pension funds to be on the same basis as self-administered pension schemes and not to be at a competitive disadvantage. I assure my hon. Friend that I entirely understand that and I am sympathetic to that suggestion.
    I cannot give an unconditional commitment, but we are certainly well aware of my hon. Friend's argument. Indeed, we are discussing the matter with the industry.
    Sir William Clark: I am grateful to my right hon. Friend for that reply. I do not know whether it was a slip
    1054
    of the tongue, but this change would not cost the Exchequer anything, because tax will be repaid at some time. It is merely a cash flow problem because payments are made monthly rather than quarterly or annually. If vve want to extend the number of pension schemes throughout the country—that is the Government's philosophy and I go along with it—all pension funds should be treated on an equal footing. The amendment will ensure that when repayment of tax is due—this will not cost the Revenue a scrap—the pension fund will receive the money sooner than at present. It will be able to reinvest the money and compete effectively with other pension funds.
    In the light of what my right hon. Friend the Minister has said, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 39 ordered to stand part of the Bill.

  Clause 40

    UNIT TRUSTS
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: As I understand it, the clause makes a technical adjustment for unit trusts to ensure that there are no untoward tax consequences for them in running personal pension schemes. I understand that the clause is in the Bill because there is anti-avoidance legislation that could lead to injustice unless the clause is enacted.
    Mr. Norman Lamont indicated assent.
    Mr. Blair: I am grateful for that confirmation.
    Question put and agreed to.
    Clause 40 ordered to stand part of the Bill.
    Clauses 41 to 43 ordered to stand part of the Bill.

  Clause 44

    TAX ON UNAUTHORISED PAYMENTS ETC.
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: I wish merely to raise a query that has been put to me. I understand that the purpose of the clause is to ensure that if a pension fund makes a payment that it should not make and the payment is therefore unathorised, there will he a tax on the payment. In other words, tax relief will be lost. It would seem that this is a method of ensuring that there is compliance with the rules that involves placing a penalty on pension funds that pay out when they should not do so. I am sure that this is a negligible or rare practice, but I shall be grateful for the Minister's confirmation.
    Mr. Norman Lamont: That is correct.
    Question put and agreed to.
    Clause 44 ordered to stand part of the Bill.
    Clauses 45 to 51 ordered to stand part of the Bill.

  Clause 52

    REMUNERATION OF MINISTERS AND OTHER OFFICERS
    Question proposed, That the clause stand part of the Bill.
    Sir Brandon Rhys Williams: Virtually all the provisions in the clause are new. They did not appear at all, or did

    1055
    not appear in this form, in the Bill that we considered in March. As the clause reflects on the remuneration of Ministers and other officers, perhaps it would be appropriate for the Committee to ask my right hon. Friend the Minister to give us a brief explanation of what it portends. These provisions are rather complex but presumably they have a meaning, and I think that the Committee should know what it is.
    Mr. Norman Lamont: As my hon. Friend the Member for Kensington (Sir B. Rhys Williams) has said, this clause has been amended because of the provisions in the Parliamentary and Other Pensions Act which was enacted just before the general election. I do not believe that there are consderable changes of substance. Members of Parliament who are holders of qualifying offices may elect not to participate in the parliamentary pension scheme in relation to their salary from that office. In such cases, the clause enables the salary from the qualifying office to be treated as relevant earnings for personal pension purposes.
    Question put and agreed to.
    Clause 52 ordered to stand part of the Bill.
    Clause 53 ordered to stand part of the Bill.

  Clause 54

    RETIREMENT ANNUITIES
    Question proposed, That the clause stand part of the Bill.
    Sir Brandon Rhys Williams: Since my right hon. Friend is being so obliging in Committee and is helping us all so much, I hope that he will not object if I ask him to explain the import of clause 54 which, as I understand it, is new in the Bill and did not appear in the previous one. I imagine that my right hon. Friend will be able to enlighten the Committee with a brief explanation of what the clause means. This, too, is a very technical clause and an explanation of it would be helpful to the occupational pensions movement.
    Mr. Norman Lamont: When personal pensions are introduced in January next year, retirement annuities will cease to be available—this was the point that my hon. Friend the Member for Ryedale (Mr. Greenway) touched on earlier—although existing arrangements will be able to continue under the present tax rules. The purpose of the clause is to make two changes in the retirement annuity regime for the period between the Budget of last March and next January.
    The first of those changes is to introduce the same higher contribution limits as will apply after next January for personal pensions, and, secondly, to impose the same cap of £150,000 on lump sums, to which my hon. Friend the Member for Kensington (Sir B. Rhys Williams) took exception earlier, with effect from 17 March of this year for new occupational pension schemes and new members of existing schemes.
    The provisions concerning the lump sum limit in subsections (3) to (7) of the clause are new, but the rest of it is not. It was not possible to include them in the preelection Bill, but I can assure my hon. Friend that it was our intention to introduce them in Committee.
    Question put and agreed to.
    Clause 54 ordered to stand part of the Bill
    Clauses 55 and 56 ordered to stand part of the Bill.

  Clause 57

    MINOR AND CONSEQUENTIAL AMENDMENTS
    Question proposed, That the clause stand part of the Bill.
    Mr. Blair: I simply want to check that schedule 2 follows the pattern of our earlier discussions and that its only consequences are to make either minor changes or those that are already consequential to the provisions that we have passed earlier.
    Schedule 2 refers to personal pension schemes. Since we have considered a large number of clauses on personal pension schemes in a fairly short time, I simply wanted to make sure that what happens in schedule 2 is nothing more than was stated as giving effect to minor and consequential amendments, and that there was nothing of substance or moment that would mean any change was occurring. I thought it right to raise this point, otherwise we would have passed the schedule without comment.
    Mr. Norman Lamont: I am happy to give the Committee the assurance that that is so.
    Sir Brandon Rhys Williams: It would not be right for the Committee to pass from this important chapter without my taking the opportunity of saying that this embodies some of the most far-reaching new provisions on pensions that we have had for many years. My right hon. Friends are doing an inspired and imaginative thing in introducing these proposals. Although I may have appeared to be critical tonight, it is only in respect of certain details, which I am sure can be improved. I think that the Committee should give the warmest possible welcome to this chapter of the Bill.
    Clause 57 ordered to stand part of the Bill.
    Schedule 2 agreed to.

  Clause 58

    OCCUPATIONAL PENSION SCHEMES
    9.15 pm
    Mr. Tony Marlow: I beg to move amendment No. 4, in page 29, line 9, at end add—
    '(2) Any benefit received under any scheme approved under Chapter II of Part II of the Finance Act 1970 shall be exempt from income tax on the first £5 per week, when the recipient is aged 65 or more.'.
    The Temporary Chairman (Mr. Donald Coleman): With this it will be convenient to take the following amendments: No. 5, in page 29, line 9, at end add—
    '(2A) Any benefit received under any scheme approved under Chapter II of Part II of the Finance Act 1970 shall be exempt from income tax on the first £10 per week, when the recipient is aged 65 or more.'.
    No. 6, in page 29, line 9, at end add—
    '(2B) Any benefit received under any scheme approved under Chapter II of Part II of the Finance Act 1970 shall be exempt from income tax on the first £20 per week, when the recipient is aged 65 or more.'.
    Mr. Marlow: General elections are useful. They give the public the opportunity to say yet again, time after time, that they prefer our lot to that lot on the other side of the Committee. But it is also three weeks of high profile

    1057
    politics when the electorate as a whole can give prospective Members of Parliament a right royal ear-bashing about the issues which they think are most important.
    Apart from the fact that I was often told, "If the other lot get in, then, your Honour, we'll have to emigrate," and, "For goodness sake, do something quickly about the rates and introduce the community charge," the issue that was brought to my attention more than any other was the position of some old-age pensioners.
    As you know, Mr. Coleman, many of those who have recently retired have supplementary pensions, earnings-related supplements and savings. People in that position are much better off as a result of eight years of Conservative Government than they were when the Labour Government were in power. Those on the basic state pension are also often entitled to supplementary benefit in many of its forms, including the various forms of housing benefit. They, too, are better off than they were in 1979 when the Government took office.
    But somewhere in the middle there is a slice of people with limited personal savings and a limited occupational pension of perhaps £5, £10 or £15 a week. They are God's Conservatives—Thatcherites. When they were younger, in employment and creating wealth, they put a bit by for their old age so that they could be better off and enjoy some privileges and advantages in their old age. They have found that they are scarcely better off than their neighbours down the road who did not save and who do not have an occupational pension, but who receive supplementary benefit. This matter was brought to my attention on copious occasions during the election campaign and more than virtually anything else. I know from having spoken to many colleagues that it was also brought to their attention and I know that Ministers are worried about these people.
    We as a nation are much better off than we were in 1979. We have a great deal to be thankful for and there is a great deal that we have worked for together that we have achieved. But this particular section of our community who no longer have the opportunity to generate more wealth for themselves—they have had their working life and put their savings on one side—are not benefiting. If the rates increase and they do not get a rate rebate, some find that they must cash their savings, which they hoped would stretch until they were in their 80s or 90s, to pay the rates. These people feel, not only that they are not better off, but that they are worse off than when they first retired and worse off than they deserve.
    I know that the Government have done a great deal for pensions and pensioners as a whole, but this particular group has slipped through the net. The amendment seeks to allow that group of people with small savings and small supplementary pensions to have tax-free a slice of their pension which they have saved for during their working life. Amendment No. 4 seeks to allow £5 a week to be tax-free, amendment No. 5 £10 a week and amendment No. 6 £20 a week. I do not know how generous my right hon. Friend is inclined to be today. I should like my right hon. Friend to go the whole hog. I know that he is sensitive to the issue, and I am sure that the Committee will be very interested to hear what he has to say.
    Mr. Blair: I want to respond briefly to the amendments. The hon. Member for Northampton, North (Mr. Marlow) is to be congratulated on drawing our attention to the plight of pensioners in the United Kingdom. The Labour
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    party drew attention to that plight regularly during the election campaign, during which, I understand, people such as the hon. Member for Northampton, North described how well the pensioners were doing. However, he is right to raise the plight of pensioners and the difficulties that they face. I am not at all sure that it is appropriate to deal with the matter in the way that the hon. Gentleman suggests.
    Mrs. Elaine Kellett-Bowman: Why not?
    Mr. Blair: If the hon. Lady wants to force a Division on the issue, that would be delightful and interesting.
    I used to think that the hon. Member for Northampton, North was one of those hon. Members who thought that everything that came before us should be adequately costed and put together in financial terms. However, he has not given us any information about the costings of his proposals.
    Mr. Marlow: It is late at night and I know that the Committee has a lot of business that it wants to attend to. I am grateful to the hon. Gentleman. To go as far as the first amendment would cost the taxpayer £150 million a year. The second amendment would cost £290 million and the third amendment would cost £510 million. Those figures were kindly provided for me by my right hon. Friend the Financial Secretary to the Treasury. If we consider the first figure and compare it with taking 1p off income tax, it represents about 15 per cent. or 20 per cent. of the reduction. As we know, the Government are contemplating reducing income tax and that might be one way forward.
    Mr. Blair: I am grateful for the figures. If the amendments do not find favour with the Government tonight, at the very least perhaps the hon. Member for Northampton, North can join us in voting for a larger increase in the pension later. I do not think that this is the time to introduce what would be a fairly novel tax regime, although we have deep sympathy with the plight faced by pensioners.
    Mr. Norman Lamont: The amendments would provide for part of the occupational pension paid to a pensioner over 65 years of age, varying from £5 to £20 in the different amendments, to be exempted from tax. In other respects, the amendments are identical.
    My hon. Friend the Member for Northampton, North (Mr. Marlow) is correct to identify a particular slice of the pensioner population who often have difficulty in making ends meet, as they have put money by for their retirement, but none the less find that the small occupational pension is even smaller than they had expected. My experience mirrors that of my hon. Friend and I have come across many people who feel that they face difficult circumstances notwithstanding the fact that they have contributed to an occupational pension scheme for some years.
    Unfortunately, there are a number of objections to the amendments, which would represent a significant departure from the general principle that all income, whatever its source, should be subject to income tax. An exemption of this kind would create unfairness between occupational pensioners and pensioners with different kinds of income. There is no obvious reason why a pensioner receiving a pension under an occupational pension should receive such generous treatment while someone not fortunate enough to receive an occupational

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    pension, but who has had to rely either on the national insurance retirement pension or has simply saved and has an investment income does not receive similar treatment. He may be in that category described by my hon. Friend, but instead of contributing to an occupational pension, he may have put money into a savings account or a few stocks and shares. That pensioner may find himself in the position described by my hon. Friend.
    We must recognise the circumstances of all elderly taxpayers. That, of course, is why we have provided for the age allowance, subject to an income limit giving them a higher level of personal allowance.
    My hon. Friend the Member for Northampton, North knows the cost of the amendment already, as he said, because I gave it in a written answer. I think that he would agree that I cannot easily just concede such sums in a debate late at night, persuasive though my hon. Friend is. For the reasons that I have given, much as I sympathise with my hon. Friend, I think that help ought to be targeted more broadly. I entirely agree about the category of people whom my hon. Friend is trying to help, but they are not only people in occupational schemes. They may also be people with a savings income, not from a pension scheme as such. The best way to help those people is to try, by means of the age allowance, to increase the proportion of their incomes that is exempt from tax.
    Mr. Marlow: I am grateful for the sympathetic hearing that my right hon. Friend has given the amendment, and the understanding way in which he has approached it. I appreciate that such an amendment raises all sorts of issues of great complexity, and that to do anything about that would require a more sophisticated measure than can be put forward by a modest Back-Bencher late at night. I am grateful for my right hon. Friend's acceptance, in large measure, of a problem that many hon. Members on both sides of the Committee came across during the election campaign, and I hope that before long a more generous measure than we have experienced so far, along the lines suggested by my right hon. Friend, can be introduced.
    I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    To report Progress and ask leave to sit again.—[Mr. Norman Lamont.]
    Committee report Progress; to sit again tomorrow.

Licensing (Northern Ireland)
9.27 pm
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Richard Needham): I beg to move,
That the draft licensing (Northern Ireland) Order 1987, which was laid before this House on 2nd July, be approved.
Let me begin by welcoming the hon. Member for Kingston upon Hull, North (Mr. McNamara) to the Front Bench, and say how much we appreciate and understand the deep and abiding interest that he shows in Northern Ireland affairs. Conservative Members will be extremely interested in everything that he has to say. We know how much concern and care he feels for all the people of Northern Ireland. There are those who say that to receive a post on either Front Bench is a poisoned chalice, but I have never found that. I have always found it an honour— and, of course, a challenge. We all know the dedication and concern that the hon. Gentleman brings to his post, and we look forward to his contributions.
Both this order, which amends the liquor licensing legislation contained in the Licensing Act (Northern Ireland) 1971, and the one that follows it owe much of their parentage to the Blackburn report. Mr. Blackburn was an extremely distinguished Clerk to the Stormont Parliament and later in the Assembly, and I know that he was highly respected by hon. Members in this House. The two orders owe much to him and his committee, and should be seen as a package of measures designed to bring greater control over the regulation of clubs and to make the licensing law fairer and more easily enforceable.
That is about as far as agreement on this order is likely to go. Now I wish to discuss whether public houses in Northern Ireland should be allowed to open on Sundays, as they do in the rest of the United Kingdom. I have read with the greatest care the views put forward from all sides for many years, and I have especially taken into account the views expressed in the Assembly and by hon. Members of this House. If there has been a delay in introducing these orders during the past 18 months, I am the culprit, as I wished to consider for myself all the options and the proposals that I had inherited from my predecessor. I have considered the case for banning all drink in Northern Ireland on Sunday; a Provincewide referendum on Sunday opening; districtwide referendums on Sunday opening; bringing the law into line with that in England and Wales, which those who back integration would support; bringing the law into line with that of Scotland, which those who support devolution would support; keeping the law as it is in Northern Ireland; and doing as we propose in the order.
I share hon. Members' anxiety about the way in which primary legislation for Northern Ireland is made. All that I can say is that no one can accuse me of not having considered every permutation and laboured over every variant of this order.
My starting point for what needs to be done is the same as that of the right hon. Member for Strangford (Mr. Taylor). I am sorry that he is not here tonight because he is a considerable expert in these matters. He was the architect of the 1971 legislation. On 24 May 1983, in the Assembly, he said:
"Since our consolidating legislation in 1971 the situation in the licensing trade in Northern Ireland has got out of control … This is yet another argument in favour of devolved Government for Northern Ireland."

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Having wrestled with the problem for the best part of two years, I heartily agree with the right hon. Gentleman on both counts.
A review of the history of licensing in Northern Ireland must start with the major cut in 1923, which was followed by a series of amending measures in 1927, 1959, 1971 and 1978. The right hon. Member for Strangford said:
"In the early 1920s there were very stringent controls introduced in Northern Ireland, but since 1923 we have seen a gradual relaxation of these controls which were introduced to combat the excesses experienced at the turn of the century."
The questions before the House tonight are as follows. Do we continue the relaxation? Do we stay where we are? Do we return to the draconian rules of the 1920s? Some would wish all liquor sales banned in any outlet in Northern Ireland on Sundays. Of course, I respect the depth of their feelings, but I think that they are wrong. Circumstances are changing in Northern Ireland, and it is impossible to ignore the changes in social behaviour that are now taking place. Many people choose not to worship on Sundays, and no amount of persuasion would make them do so. They do not deny the right of people to observe the Sabbath strictly, but they ask why they should be denied their right to enjoy themselves as they want because of other people's moral principles.
I hope that the hon. Member for Antrim, North (Rev. I. Paisley) will not mind me praying him in aid in my view of the matter. During the Assembly debate in 1985, the hon. Gentleman said:
"Everybody knows where I stand on this particular issue. I do not run away"—
no one would ever accuse him of that; he might be accused of running into things, but not of running away—
"some people say I would like to—but I meet it head on and say that if I had it my way, I would want this Province to be obedient to God's law, but I do not have it my way. I can only speak to people and try to morally persuade them … I am not saying to the Member for West Belfast (Mr. Glendinning) that he must not drink on Sunday. I am telling him that he has to make a choice. I have made my choice."
In the 1983 debate on the same subject, the hon. Member for Antrim, North accepted that Northern Ireland is a pluralistic society and must be treated as such. I agree with him. We have a pluralistic society in Northern Ireland and we need to reflect the differing aspirations of the different strains in our society. This was well put in the Blackburn report. Paragraph 12 states:
"If on the one hand the law is more restrictive than a significant proportion of the people wish it to be, then it is likely to be widely disregarded. If on the other hand the law is more permissive than the prevailing climate of opinion wants, then the public is needlessly offended and society incurs unnecessary cost."
Paragraph 13 continued:
"We do not think, therefore, that the operation of the law can be confined to limiting or influencing the individual's use of alcohol. We think that to be successful it must also to some extent reflect the demand for alcohol within the community."
Our present problem, as the right hon. Member for Strangford said, is that the licensing law is out of control. Can we therefore do something more to enforce the existing law? The answer given by the police is no. I have some sympathy with them, because the present law is extremely difficult to interpret.
I shall give the House an example. The hon. Member for Antrim, North said during the same debate during 1983 that he was not against the provision of drink on Sunday provided it was taken with a proper meal. But what is a proper meal? I know what a proper meal means to the hon. Gentleman. It means the same as it does to me
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—quantity and quality, perhaps in my case accompanied by a pint of Guinness. But that is not everyone's view. There are those who believe that a lettuce leaf resting lightly on some small unbuttered square of brown bread is a proper meal. Those who would consume such a meal would no doubt feel entitled to a glass of chilled white wine with such a feast. Are they to be denied?
Is each constable in the RUC to be left to determine the definition of a proper meal upon his own preference or palate, or will the matter be left to the whim of the magistrate and the preferences of their clerks? Is police and court time to be spent fruitlessly deciding how much fruit constitutes a meal or on interrogating a customer as to what he is about to eat or what he has just eaten? It would certainly make no sense to try to bring greater equity to this by bringing clubs and pubs into line with hotels on the provision of food. Why should the middle class who can afford to buy meals on Sunday have a drink while the ordinary working man in his club or pub would be denied?
I do not believe either that we should succeed if we decided on outright prohibition. The precedents of prohibition are hardly encouraging. There is enough gangster activity in Northern Ireland without encouraging any more. Shebeens would no doubt sprout like shamrock. How would we check that each tonic, each tomato juice, each orange cordial served in each hotel and each golf club on a Sunday was free of anything more exciting than lemon peel and ice? The present rules are ridiculous, but it is exactly because we have stumbled down this alley that we now have the law as an ass, unenforced and unenforceable.
The question is, if we accept that there is nothing in principle against a person purchasing liquor on a Sunday, or visiting a leisure centre or an ice rink, when and where should he or she be allowed to buy drink? What will be the effect on society? Will it, for example, increase the consumption of alcohol? Will it lead to greater alcoholism, or to increased public nuisance? As to increased consumption, of course I have carefully considered this aspect, but under the reforms in this order and the Registration of Clubs (Northern Ireland) Order, which go together, I do not believe that that will happen. Under this order, not all pubs will open on a Sunday—the publican will have the choice. Under the registration of clubs order, clubs will lose four hours a week. Under this order, bringa-bottle clubs, where drinking goes on at 3 o'clock in the morning, every morning, will be banned. I am confident that the effect of the Sunday opening of pubs on the overall availability and consumption of alcohol is likely to be small.
I have also been influenced by the finding of the surveys carried out in Scotland on the changes in the licensing laws since 1976, which included the Sunday opening of pubs. The overall conclusions were that the changes had not directly led to an increase in drinking, any adverse health effects, more alcohol-related crime, or more drunken driving.
That is not to deny the danger that alcohol abuse poses to health or, of course, the need to control and to treat it, but I do not believe that keeping pubs in Northern Ireland shut on a Sunday will make any impact on the health problems that are brought about by excessive drinking. We are legislating in support of a social custom that is enjoyed by the majority of the population in Northern Ireland—about 80 per cent. of men and 60 per cent. of

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women—very few of whom commit offences as a result of their drinking habits and very few of whom have related health problems.
As to nuisance, I am not convinced that the alterations will make life for the ordinary citizen any different. I spend many Sundays in Northern Ireland, where pubs are closed, and many Sundays in England, where pubs are open. I have noticed no great difference between the Province and the rest of the United Kingdom except the greater churchgoing of the Ulster people. I certainly do not take the view—to me it is insulting—that was taken by the former Assemblyman, Jim Wells, who said to my predecessor that most people go into pubs in Northern Ireland to get drunk. I just do not believe that. There are those who have said that Northern Ireland pubs are not like those in England and Wales. That statement conjures up the image of the "spit and sawdust" pub as being the norm in Northern Ireland, and there is the implication that people are satisfied with that. I reject that also.
Obviously those who say that have not been in many Northern Ireland pubs recently, or observed the large number of pubs that have been extensively refurbished. I hope that the changes that are being brought about by the order will lead to a better quality of pubs and perhaps, as has been experienced in Scotland, encourage a move from clubs to pubs.
There is also the matter of consultation. Why did we not decide to test opinion either through a Provincewide referendum or through district council referendums? I considered the matter carefully. First, I am not convinced that, even if a majority were opposed to Sunday opening of pubs, we should necessarily not allow the minority their wishes. As the hon. Member for Antrim, North said, this is a moral issue to be decided in a puralistic society. Secondly, it would be impossible to frame a question that would cover all the issues relating to the availability of drink on a Sunday. It would require the ingenuity of the general council of the TUC to wrap all the possible variations into a single composite question. The same difficulty would apply to local referendums, with the additional problems that we all know about with cost and wet and dry areas.
Mr. William Ross: Does the hon. Gentleman realise that another way of testing opinion through the elected representatives in Northern Ireland is by introducing a Bill in the House? All the serious matters that he is treating so flippantly could be explored with the depth and seriousness that they deserve rather than be treated with the hon. Gentleman's flippancy.
Mr. Needham: I assure the hon. Gentleman that I do not take the matter flippantly. I take it with the greatest possible seriousness. He is well aware that I wrote to him in October, putting forward the proposals that the Government intended to introduce. Until his intervention, I had not heard a single bleat or murmur from him. In fact, if it is his view that the matter should be considered in greater depth, there are ways, even now, to do so. For example, the hon. Gentleman could have utilised the Northern Ireland Committee if he had so wished. He did not undertake to do that. I am delighted to hear his intervention. I look forward to his continued interventions. The House takes the matter seriously, and so do I as the responsible Minister.
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I now refer to the order. I apologise for the difficulty in following the amending legislation. The order, while substantially altering the 1971 legislation, leaves a large part of it unaffected, and its provisions have to be read in the context of the principal 1971 Act. In due course the licensing laws will be consolidated in a single piece of legislation. I hope that we shall be able to do that over the course of the next year.
I shall deal quickly with the main provisions of the order. The effect of article 3 is to ban bring-a-bottle clubs.
Mr. Barry Porter: I appreciate and understand the anomalies and defects in the present law in Northern Ireland, but it would be helpful for the House to know whether there has been any pressure from a majority or a minority of the people of the Province to change that particular law which may or may not suit them.
Mr. Needham: The fact that the law in Northern Ireland on Sunday opening is widely abused and is unenforceable, and, as I said, I think before my hon. Friend took his place, has made the law appear a complete ass is one of the reasons why we feel that we should take this action. We cannot, as I said earlier, return to the draconian rules of the 1920s. We have spent most of the past 60 years making sensible amendments to them. It is because of the nonsense of the present laws, which many in Northern Ireland do not accept, that we are considering doing what we are tonight to bring the law into an enforceable and acceptable state for the majority of those who want to drink on Sunday.
Mr. Seamus Mallon: Has the Minister been aware of a substantial active lobby over the years against the 1971 legislation as it applies to the licensing of clubs? That is a crucial question.
Mr. Needham: As is usually the case in Northern Ireland, as the hon. Gentleman knows only too well, there are lobbies on everything and he is right to say that there have been fierce lobbies for and against what we intend doing in this order and what we are proposing to do in the next order on clubs. This order, as the hon. Gentleman is aware, deals with licensing provisions and the next order deals with clubs and their registration.
Mr. Mallon: I probably have not made myself clear and the Minister has misunderstood me. I have lived in the north of Ireland all my life and I have never been aware of a substantial lobby against the licensing laws as they apply to clubs. What is the difference between the licensing laws as they apply to clubs and as they apply to pubs? It was the answer to that question that I was trying to elicit from the Minister.
Mr. Needham: I apologise for not understanding the hon. Gentleman's point and I accept what he says.
Let me continue with the effect of article 3 which is to ban bring-a-bottle clubs. These clubs run until 3 am or 4 am and are largely supported by young people. Because they do not sell drink or supply it, they are completely outside the terms of either the licensing or clubs law. They cause law and order problems and are open to profiteering by criminal and paramilitary bodies. I am satisfied that the only answer is to ban them.

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Article 4 will allow pubs to provide overnight accommodation, provided that they meet certain requirements. I am sure that that will be welcomed as another aid to tourism in the Province.
Article 5 makes changes in the application procedure for licences. The most important of these is to allow the individual publican to decide whether he wishes to open on a Sunday.
Article 6 allows a court to grant up to 13 occasional licenses on one application. At present, a separate application is needed for each. The new provision is designed to help bodies such as the Royal Ulster Agricultural Society which run a large number of exhibitions. This should reduce the work of the courts and save both the licensee's and the court's time.
Article 7 refers to extension licences which allow a licensee to sell drink at certain functions after normal hours. As under the existing law, there will be no restriction on the number of these which can be granted for any licensed premises in any one year. However, the extension licences will now stop at 1 am instead of of 1.30 am as at present and will be granted only for premises that a court regards as suitable for functions.
Article 8 provides the rules covering Sunday opening. The permitted hours will be from 12.30 pm to 2.30 pm and from 7 pm to 10 pm. On that day no off-sales will be allowed for pubs, hotels or off-licenses. Neither hotels nor pubs will be required to serve a meal as a condition of serving a drink. However, the meal and other conditions will apply to licensed restaurants.
Article 9, paragraph 1, amends the provisions of the 1971 Act relating to alternative hours for off-sales. The Government are worried about the growing problem of late night drinking in public, especially by young people. They have received many complaints on that subject and there is no doubt that some of the problem is due to the fact that young people can get their drinks from off-licences as late as 11 pm. The amendment means that off-sales shops will now be able to open only from 9.30 am to 9 pm, except in the case of off-sales that are attached to pubs.
Article 10 bans young people under the age of 18 from off-licence premises, except when they are with their parents. That, I am sure, will be welcomed by everyone. Apart from drink, off-licences in Northern Ireland can sell only cigarettes, tobacco, matches and fizzy drinks. Article 4, at their request, adds corkscrews. Generously, we have also added items such as crisps, pork scratchings and lighters, and that will also apply to public houses.
Article 9, paragraph 2, amends section 45 of the 1971 Act. The new provisions of the amendment will put pubs on a par with hotels and restaurants when applying for additional hours orders. However, pubs will still have to satisfy the conditions that apply to hotels and restaurants, and will also have a certificate from the tourist board stating that the premises are well equipped, run by competent staff and provide a high standard of catering. Here again, we are trying to improve the quality of public houses.
Article 11 substitutes a new section 67 for sections 67 and 68 of the 1971 Act and provides for new rights of entry and inspection by the police. Articles 12 and 13 contain miscellaneous amendments to the 1971 Act, and article 13, paragraph 6, brings ballrooms and horse and dog racing tracks within the range of facilities that can now apply for licences.
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Article 14 substantially increses the maximum penalties for a number of offences. For example, the fine for permitting minors to be on licensed premises will go up from £400 to £1,000. The penalty for selling drink to a minor on licensed premises or purchasing it for his consumption on those premises goes up from £400 to £2,000 or imprisonment for six months, or both.
That concludes my detailed description of the provisions of the order. I thank hon. Members for their attention and patience. As I have explained, the order is the first part of the package of reform which we are here to discuss; we shall debate the second part later tonight.
Public debate in Northern Ireland on this order has focused almost exclusively on the issue of Sunday opening of public houses. The key question on that issue is whether to take the route advocated by some and abandon Sunday opening altogether, or move closer to the pattern of the rest of the United Kingdom. In an increasingly pluralistic society, we could not agree to closing everything. nor could we, for the overwhelming practical reasons I have given, either stay where we are, or impose further piecemeal restrictions. I believe that what we are suggesting this evening creates a more sensible balance and introduces a law which at last is enforceable and will be enforced.
Rev. Martin Smyth rose—
Mr. Needham: I commend the order to the House.
Rev. Martin Smyth: I thank the Minister for giving way. He referred to the increased fines or penalties for selling drinks to teenagers. Can he say how many people have hitherto been brought before the courts for such offences? What difference will increasing the penalties make if the law, as it stands, has not been in operation?
Mr. Needham: The whole point of what we are trying to do this evening is to ensure that the law that we introduce is more capable of enforcement than that of the past.
As I was just about to sit down, I shall cover the hon. Gentleman's point when I reply. For the second time, I commend the order to the House.
9.53 pm
Mr. Kevin McNamara: First, I thank the Minister for the kind words that he addressed to me at the beginning of his speech. I appreciate them greatly and I look forward to my work shadowing him and his right hon. and hon. Friends. The Minister used the phrase, "the poisoned chalice of Northern Ireland". I do not regard it as such, but I wondered what sort of vessel I was being given when I went to the Library this evening having suddenly been given this work to do in the space of two hours, and was presented with all these documents. I was left with the feeling that perhaps the best thing to do would be to sit out most of this order and listen to what was said by the rival parties.
The Minister covered the whole of the ground set out in the arguments by both sides and examined very fairly the cases for and against the alterations. Within half an hour of being appointed I was lobbied by the hon. Member for Antrim, North (Rev. Ian Paisley) on this matter. I toyed with the idea of the local option and thought, "Why not?" Then my mind went back to the time when I lived

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in Liverpool and looked at what was happening in Wales about local options. They just did not work there and that was for the reason that the Minister has given.
If a person belonged to a golf club or to a branch of the Royal British Legion or some other institution, he could get a drink on Sunday anywhere in Wales. That did not drive to drink people who did not want to have a drink. It did not stop people going to chapel or church if they wished to do so and it does not stop people in any locality who do not wish to have a drink on Sunday from attending any of the places that sell drink on that day. If such places are not allowed to sell drink on Sundays, they will not open on Sundays.
I am concerned about minors being prohibited from certain premises and about preventing under-18-year-olds buying drink from off-licences. This may be an important reform being introduced in Northern Ireland and it will be watched carefully by people on the mainland to see the effect that it has on under-age drinking and on some of the unfortunate things that many of us see in our constituencies. We see young people, some under-age and some over-age, going into off-licences, purchasing drinks and then going away and getting drunk and disturbing innocent residents and passers-by.
One of the problems associated with this matter is the responsibility of the person controlling the premises. When the Under-Secretary of State replies to the debate, perhaps he will tell us whether the defence will be that of unknowingly selling to people under the age of 18, or will it be a question of absolute prohibition? Will the defence of not knowing be applicable in this case? I am conscious of the fact that I have not carried out as much reading as I should have liked of the Assembly report, although I did manage the Blackburn report. On balance, we think that this measure ought to be supported because it can do away with some of the problems. It can help the police in Northern Ireland and make the law more enforceable and may introduce important reforms on sales to minors. We support the measure.
9.58 pm
Rev. Ian Paisley: I regret that I was not present at the beginning of the debate. I am sorry that I did not hear what the Minister said about remarks that I made. However, I think that I received a true and accurate report from my hon. Friend the Member for Belfast, East (Mr. Robinson). Before I come to that matter, I should say that we in Northern Ireland must enter the strongest possible protest about the way in which this matter has been dealt with in the House. Scotland had a similar problem. Liverpool has been mentioned and so has Wales.
When the matter came before the House every consideration was given to there being a drastic change in the opening hours of public houses on the Christian Sabbath. Hon. Members from those parts of the United Kingdom had every opportunity to put before the House amendments giving the reasons why certain matters should be taken into account. We should keep in mind the effects of our legislation on majority and minority interests.
If I had been in this House when it debated the legislation for the rest of the United Kingdom I could have moved amendments and had them voted on. Northern Ireland hon. Members now find themselves considering a
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matter that runs into the very heart and gut of the Northern Ireland community, yet we are not to have the opportunity of a democratic debate. We cannot move any amendments and we shall not be given the opportunity to vote on any amendments. An unamendable Order in Council will be put through this House with the overwhelming support of a majority of hon. Members who will probably never be in Northern Ireland on a Sunday. They will probably never enter a public house in Northern Ireland on a Sunday or partake of alcohol in Northern Ireland on a Sunday.
That is what we protest against tonight because it goes against the very principle of democracy. That is what the people of Northern Ireland find obnoxious. I do not think that I need to reiterate that point, because others in this House are beginning to realise at long last that the long series of protests made by hon. Members from Northern Ireland has a great deal of credibility; our protests have their own authority.
As the House votes on these orders it should remember how it dealt with the legislation affecting other parts of the United Kingdom. It is wrong to suggest that every part of this kingdom is the same and therefore that all the laws should be the same. England has different laws from Scotland and, in some cases, Wales has different laws from England and Scotland. Whatever their attitude on this matter, the people in Northern Ireland have the right to insist that their elected representatives should enjoy the same rights as the elected representatives of other parts of the United Kingdom—to state and argue their case, to move amendments, to vote and to seek the satisfaction of their wishes in a democratic way in this democratic House.
Let me come to the point which has to do with legislating for morality. Everybody agrees that the House cannot legislate for morality. Of course we cannot make people do things that they do not want to do. But in its legislation this House puts up certain markers to morality. Take the matter of prostitution, for instance. Certain laws in this country provide markers on that and possibly deterrents to it. It is no use the Minister instantly dismissing this point and saying, "Well, as I cannot legislate for morality, I am on firm ground in introducing this order." If we said that we could not legislate on any matter that would intrude into the morality or choice of individuals, no Government would have a case for making any laws at all. But we legislate on such matters all the time.
Something else needs to be said to the Minister. I do not understand his view that in these circumstances we cannot have a choice in law to say that certain places should be closed on Sundays. That is not what successive Governments have done on this issue. The people of Northern Ireland are perfectly entitled, through their representatives, to say what they think should be done and what should not be done. The Government have already made decisions in various matters of this kind.
Some people have the strange philosophy that this is a purely Protestant issue, that those who do not want the public houses opened are all Protestants and that the Roman Catholic community is unanimous in wanting the pubs of Northern Ireland to he open on Sundays. Ulster Marketing Surveys Limited carried out some research into this matter. It showed that 39 per cent. of the total population strongly opposed Sunday opening, 19 per cent. were strongly in favour, 24 per cent. were slightly in favour, 13 per cent. were slightly opposed and 6 per cent.

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did not know. The breakdown of those strongly opposed showed that 45 per cent. were Protestant and 30 per cent. were Roman Catholic. It is therefore quite wrong to suggest, as I have heard from Members whom I have lobbied on the subject, that this is merely a Protestant interest and that the Protestants do not want the Roman Catholics to be allowed to drink on Sundays.
The Secretary of State smiles, but I must tell the House that anyone who wants a drink on Sunday in Northern Ireland can get one. I challenge anyone to claim that some poor thirsty souls cannot get a drink anywhere in Northern Ireland on a Sunday. The Minister and I do not often agree, but he will agree with me that those with that particular type of thirst can always find a drink on Sunday in Northern Ireland. I am sorry that their thirst is not for that water of which a man drinks and will never thirst again, but that is their misfortune. I hope that no one will be so foolish as to say that a person who wants to drink on Sunday in Northern Ireland cannot do so because that is totally untrue.
I cannot understand why Northern Ireland cannot be treated in the same way as other parts of the United Kingdom were treated when this was an issue there. It was an issue in Scotland and, indeed, in Wales.
I welcome the new Opposition spokesman on Northern Ireland—the hon. Member for Kingston upon Hull, North (Mr. McNamara)—to his post. He will probably have a rough ride from Ulster Unionists, but he has been used to that through the years and it will not make any difference to him. The hon. Gentleman mentioned Liverpool.
Sir John Biggs-DavisonI do not quite follow the argument of the hon. Gentleman. I feel that he has begun to destroy his argument. The hon. Gentleman says that someone can get a drink on a Sunday in Northern Ireland. Why is it all right to get a drink in an hotel, restaurant or even a club but wrong to get it in a pub?
Rev. Ian Paisley: That is not what I am saying. I am sorry that the hon. Member does not know a little bit more about Northern Ireland and about drinking in Northern Ireland. All those in Northern Ireland who have studied alcohol abuse, no matter what their religion—no matter if they have no religion—say that there are far too many outlets for alcohol in Northern Ireland.
If we pass this order, there will he 10,000 additional hours for alcohol consumption. I do not know of a stronger argument that could be put against this order.
It is a pity that the Government did not take the bull by the horns and dealt with drinking clubs in the way that they should have been dealt with. That is the trouble.
Sir John Biggs-Davison: They have dealt with those clubs.
Rev. Ian Paisley: The drinking clubs have got away with a coach-and-four with regard to the sale of alcohol. I can understand the views of publicans—I have been lobbied by them. They must have a certain standard of premises, their trade must be carried on to a certain standard and the public house is open to inspection by the police at all times during opening hours. However, the drinking clubs do not have those restrictions and publicans cannot understand that. I can understand the concern of publicans.
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The Government have not moved to shut the other outlets for alcohol and they will continue to exist. However, as a result of this order, the Government will allow an additional 10,000 hours for alcohol consumption.
The hon. Member for Epping Forest, who said that I was destroying my argument, should come with me to parts of Northern Ireland where both sides of the community do not want the public house to be opened on a Sunday. They want the peace and quiet that is hard to get and they want that peace and quiet to continue.
I have also been lobbied by people who work in public houses who say that they deserve a day of rest—I am talking about people in the trade union movement. They say that it is all right for the publican, but they want a day of rest.
Mr. Jerry Hayes: I am a little confused by the hon. Gentleman's argument. A moment ago he suggested that the Government had done nothing about illegal drinking clubs. I believe that the essence of this order is that it would ban, as much as any legislation can, the bring-a-bottle clubs and place restrictions upon them. They will give the police rights of entry and the right to search those establishments. In all honesty, I should have thought that the hon. Gentleman would welcome this legislation.
Rev. Ian Paisley: I am afraid that the hon. Gentleman must have been sleeping. I never mentioned illegal clubs. I am talking about legal clubs that should have been dealt with long ago.
I am talking not about the shebeens, but about the legal clubs that are supposed to be recreational clubs. However those clubs spend £14 million a year on liquor. Why were the drinking hours on Sundays not restricted? Why say to the publican that he can open for a few hours but say to the licensed club owner that he may open for as many hours as he likes, well into the early hours of Monday? I am not talking about illegal clubs that should have been closed a long time ago. I am talking about legal clubs, but at long last a deterrent has been introduced to restrict the number of illegal clubs. It is necessary now to produce audited accounts.
I invite the hon. Member for Harlow (Mr. Hayes) to visit Northern Ireland. I shall arrange for a Roman Catholic to meet him and take him to the Roman Catholic district to hear the views of Roman Catholics. I shall arrange for a Protestant to take him to a Protestant area. Arrangements can then be made for a Jew to take him to a Jewish area. If it is possible to find an agnostic area, arrangements will be made to take him there. After that, he will have a proper knowledge of feelings in Northern Ireland. Anyone who intervenes in these debates should try to ascertain exactly what is happening in Northern Ireland. In these days of alcohol abuse, and when the police in Northern Ireland are strained to the utmost in dealing with terrorism, does anyone say that it is sensible to add 10,000 hours to the opening times that outlets for alcohol already have? Hon. Members should search their consciences. The issue before the House should be considered seriously.
Why were restrictions introduced in other parts of the United Kingdom? Why are the restrictions that operate in Northern Ireland all to be swept away in an hour and a hall's debate? We are debating an issue that affects the

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young people of Northern Ireland and the future of society generally in the Province. It affects the well-being of families in Northern Ireland.
I believe that the Lord's day should be a special day. I believe that the human body was so created by God that it requires a day of rest. A Sunday that is kept in the proper manner will bring a week of contentment afterwards. Apart from that, there are arguments that can be advanced showing why we should not proceed in this manner.
There are hon. Members who do not understand the way in which opening hours are arrived at for pubs in Northern Ireland. One hon. Member was amazed when he was told that our system is entirely different from that which applies elsewhere in the United Kingdom. He thought that after the passage of this measure the licensing magistrates would have a say about every public house that is to be opened on Sundays. Hon. Members should not believe that. After this measure passes through the House all public houses that currently have a licence to open during weekdays will be able to open on Sundays.
First, we must ascertain what we are arguing about, and then we can come to our own conclusions. Every reputable authority says that longer opening hours and greater consumption will bring additional problems. I do not think that the House wants to add more problems to a system that is already teeming with problems.
The House should not pass this measure. We should have a further opportunity to consider the safeguards that were given to other parts of the United Kingdom. Why have these safeguards not been given to Northern Ireland? Why cannot people have a say about what is happening in their area in respect of public houses? Why should we be faced with this blanket measure that will lead to Sunday opening?
A publican said to me, "If the public house down the street opens, I must open if I am to keep my business." That position is not helpful in Northern Ireland. We should proceed this evening in dealing with Northern Ireland as we proceeded when dealing with other parts of the United Kingdom.
10.19 pm
Mr. Seamus Mallon: The way in which this debate is taking place puts its context into perspective. I do not have to reiterate that in the North of Ireland more than 2,500 people have died and a large number of our young people are in gaol. We have social deprivation, an economic situation and unemployment that is unequalled anywhere else in this country. Yet one of the biggest issues that is facing us is whether I shall be able to have a pint before my lunch on Sunday.
Does not that put the nature of this entire debate into context? I believe that it sharpens totally the context in which the debate is taking place and highlights the fact that with this legislation the Government are trying to do something which, quite frankly, should have been done years ago. Perhaps that view is too cynical. I hope that it is not, because I know that there are many genuine and sincere people who hold the opposing points of view on this to me, and who wish to retain Sunday closing. I accept the sincerity of their position and of their point of view.
However, this issue goes beyond the issue of the opening or closing of pubs. It even goes beyond the question of the licensing of clubs of any type. It raises two
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questions. It asks questions about the nature of people in Northern Ireland and about the type of people that they want to be. It also asks about the type of society that we want to create in the North of Ireland and about the type of society that we might be able to create. This debate probably tells, and will tell, more about our attitudes, in the broader sense, than many of the debates in which we shall take part. What do we want in the north of Ireland where, on an ongoing basis, we have nothing but closures? The swings on which children could play on a Sunday are closed. The swimming pools in which people could enjoy themselves are closed and the pubs in which people could relax are also closed. Is it a coincidence that those closures are accompanied by probably the greatest conglomeration of closed minds of any country in western Europe? I believe that there is a connection and that we must consider the nature of society in Northern Ireland, and its politics and structures when we engage in this debate.
We have been told, and we will be told, that it is a question of morality. We will be told, in no uncertain terms, that it is a question of one person's belief taking precedence over that of another person. I do not believe that God gives anyone the right or the duty to legislate for my conscience or for the conscience of anybody else in the north of Ireland on such a matter. One could not do so successfully in any case because the hon. Member for Antrim, North (Rev. Ian Paisley) has confirmed something that most people in the north of Ireland know, which is that, once there is this type of legislation in a modern society, one creates the opposite effect to that intended.
I ask, because this question should be asked, whether as a result of the licensing law changes in Scotland, any village or town there has gone to the dogs? Perhaps we should take Bickley, that haven of depravity, as an example of the results of the licensing laws that pertain in England. It is an insult to the people of Northern Ireland to suggest that because they have the right and the ability to go for a drink before their lunch on a Sunday, all of a sudden the North of Ireland will become a terrible place, that it will be worse than it is now and that people will indulge in depravity. The people of Northern Ireland are not like that. In my view, they will respond to this type of legislation positively and responsibly. They will be no more depraved than the people in Kirkcaldy, Bickley or any other part of western Europe.
This also poses the question: what type of ethic do we want to live by in the north of Ireland? Is it a completely authoritarian ethic where we are told we may or may not do something depending on the moral attitudes of the majority of people there or is it an ethic based on freedom of choice? Do we have the strength to accept and live respectfully with the differences, political, cultural and moral, that exists in the north of Ireland? Or are we simply so weak that we demand one set of rules and the denial of choice because at the end of the day in such matters if we have the choice to be right, we also have the right to be wrong, if that is our choice? That must be the essential view regarding morality.
Rev. William McCrea: Is not the basis of the hon. Gentleman's argument rather false and hypocritical, particularly when one considers that he wants the Unionists to join a united Ireland which legislates on divorce, abortion, the sale of contraceptives and other such matters?
Mr. Mallon: The profundity of that question eludes me—[Interruption.]—and, judging from the reactions of most other hon. Members present, it has also eluded them.
Rev. William McCrea: Is it not true that the Government of the south of Ireland do not allow people the right to divorce, if they want it, or the liberty to choose to have contraceptives? Is that the sort of society which he speaks of as a liberal society and which we should all wish to live in?
Mr. Mallon: That is not the type of society that I want in a united Ireland. It is very much the type of society that I do not want. I want people to be able to live by their own consciences, not by any piece of legislation, whether in the Republic of Ireland, the north of Ireland or here. I ask the hon. Gentleman to make a serious attempt to help to create on the island of Ireland a proper legislative basis which allows that freedom of choice.
What type of people do we want to be? What type of society do we wish to have? In the north of Ireland I often hear people saying that they admire "the British way of life". I do not hear that among those I represent because we are not enamoured of the British connection. We wish to live in the type of united Ireland that I am trying to describe to the hon. Member for mid-Ulster (Rev. William McCrea). What about this "British way of life", so admired by the hon. Gentleman and his colleagues? It would be much more beneficial if they were to adopt it, to live it and to introduce it into their legislation. That is the acid test of that phrase.
Mr. Porter: Does the hon. Gentleman accept that the British way of life accepts diversity? Does he further accept that the Scots and Welsh in their own time determine whether public houses should be open on Sundays for their own reasons, whether for tourism or economics? It appears that there is no evidence yet that the Northern Irish people want their somewhat archaic laws changed.
Mr. Mallon: The fact that there has never been a substantial lobby against the licensing laws available to clubs shows that the majority of people in the north of Ireland do not hold this moralistic view about licensing laws. They are worried about the legalities and the potential for abuse. That is why I would dispute whether a majority of people oppose this legislation.
What type of society do we want? Do we want to be totally isolationist? Do we want to be introverted, or out of step with the rest of Ireland, Britain and Europe? Are we to be the oddities of the western world where we say no to everything, and where everything is closed including our minds? Is that the type of Northern Ireland that we want? Do we want to be out of step with our Johnnies over there? Do we want to be the oddities of the western world without allowing ourselves the ability to relax and enjoy that little bit of relaxation? A little bit of human frailty might get us away from many of the problems that we face and many of the terribly absolute positions that we adopt.
I praise the Minister for bringing the legislation forward. It is a recognition of the terrible injustices that publicans have suffered in the north of Ireland down through the years. They had to compete with clubs and hotels because the publicans were being under-cut in the prices that they were charging. So many of the clubs were de-rated while the publican was, and still is, paying very heavy rates. The publican was unable to deal with his
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overheads in the same way as the clubs and hotels. The competition was unfair and unjust and I am glad that it has been put right.
There was also social discrimination to which the hon. Member for Kingston upon Hull, North (Mr. McNamara) referred. If people can afford it, they can go to a hotel and have a meal. If they can afford it, they can become members of a club. People can have drinks at both. If people cannot do either of those things, if they live in a village in any part of the north of Ireland or in the towns, they cannot do that. That cannot be right in any man's language. The people who are suffering and being deprived are those who simply cannot afford to have a meal in a hotel or join a club.
The legislation governing clubs and hotels is one of the factors that has forced people to drink and drive. Invariably in the north of Ireland people get in their cars and drive to hotels and clubs. Would it not be much better for the whole of society, if a person feels that he wants a drink, for him to be able to walk down the street, drop into his pub and have his pint or two—and perhaps even three—and then walk home again? That factor is worth considering.
I welcome the legislation. I hope that I may indulge in a little whimsy at the end of my speech. For many of us, the legislation marks the end of an era. It is well known that forbidden fruit always tastes sweeter. There will be many in the north of Ireland who will remember with nostalgia the knock at the back door, the dim lights, walking in and then that feeling of excitement because one was going to enjoy oneself so much more because one was not allowed to do something.
10.32 pm
Mr. Michael Colvin: I congratulate the hon. Member for Newry and Armagh (Mr. Mallon) on extending this debate to more of the social issues of the day in Northern Ireland, because a pub is a very social place. It is a meeting place where people discuss the issues of the day and where opinions are formed. It is a sensible meeting place. Even my right hon. Friend the Member for Castle Point (Sir B. Braine)—who I know has very important views on the licensed trade generally and on drink—would concede that the British pub is unique. Any legislation that will enhance its standing and improve facilities in the pub, even to the detriment of other outlets for alcohol, is to be commended. I agree with my hon. Friend the Member for Newry and Armagh that this legislation should have been brought forward many years ago.
Nevertheless, my hon. Friend the Minister is to be congratulated because the Blackburn report was produced in 1978 and it has only taken the Northern Ireland Office nine years to get around to amending the law in Northern Ireland. It is now 15 years since the Erroll report was published on reforming the licensing laws in England and Wales and we are still waiting for action. I am glad to say that, following the manifesto commitment to that end, we are likely to see a change in the law for England and Wales quite soon.
I wholeheartedly welcome the measure, because it appears to bring more into line the licensing laws relating to pubs and clubs, which over the years have manifestly become more out of line. It provides for all hotels, restaurants, clubs and pubs to share the same opening hours seven days a week. Extension hours will also be the

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same for all. There will be no overall increase in the number of opening hours, as there will be a reduction of 13 minutes in the normal daily opening hours for clubs. All public house extensions will be reduced by 30 minutes, and club extensions by two hours. I do not know where the hon. Member for Antrim, North (Rev. I. Paisley) finds the extra 10,000 drinking hours which he says will be available.
There are more flexible features in the licensing orders for pubs to allow for greater development of tourist and food business, and that is to be commended. The two principal points are the provision for accommodation in pubs, which will allow a new style of outlet to develop, and the provision to allow a pub the same extended hours as a hotel or restaurant if it has a full restaurant facility.
The proposals do not force Sunday opening on those who do not wish to avail themselves of it. At licensing renewal, the option of a six or seven-day licence is at the publican's discretion. Even with a seven-day licence, opening on a Sunday may not be economically viable because of location, and the publican need not open.
I should like to ask my hon. Friend a question about the permitted-hours clause in the lease that most licensees sign with their brewers. That clause, if ultimately enforced, means that the publican must open for all the hours permitted by the local licensing courts. In some parts of the United Kingdom, the permitted-hours clause is not onerously enforced, but in other parts the brewers can be pretty heavy-handed. They say to the publican, "You will open for every hour that you are permitted by law to do so. If you do not, we shall evict you and tear up your lease."
Should there be any provision in the law to protect publicans if the law is relaxed so that permitted hours cannot onerously be enforced on publicans? The question is particularly relevant to Sunday opening. If the law says, "You may open on Sunday," and the licensing courts say the same, and if the publican chooses not to do so—after all, freedom of choice is an important principle in our party—can the brewer force him to?
The most controversial issue relates to the Sunday opening of pubs. The present laws, in my view, are a bit of a nonsense, and have fallen into disrepute. They seem to work unfairly against pubs as compared with clubs, hotels and restaurants, and many pubs have closed, with loss of employment and amenity. I am told that directives have been sent out by one bank to its branches saying that publicans are a poor credit risk. Perhaps changing the law will make them a better risk and enable them to obtain the credit that they require to improve their facilities, which will assist tourism and the economy of Northern Ireland generally.
The present laws on Sunday opening are almost unenforceable, save at disproportionate cost. The principle of Sunday drinking has long been established in clubs, hotels and restaurants, and anyone in Northern Ireland who wants to get a drink on Sunday can do so. As a pub is probably the most sensible place in which to drink, why can he not get that drink in a pub? Under this legislation, Northern Ireland will come more into line with the rest of the United Kingdom. I agree with my hon. Friend the Member for Antrim, North that we do not want to be exactly the same, but this is a united kingdom, and the more our laws are in line, the better. He also
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referred to public opinion and produced some interesting statistics, but I believe that opinion is pretty evenly divided on this issue, as shown by the attitude surveys and the response to the Government's proposal.
Mr. Geraint Howells: Perhaps the hon. Gentleman is not aware that the licensing laws in Wales are different from those in other parts of the United Kingdom. The people of Northern Ireland should have the right to decide for themselves; it should not be done through an order tabled in the House. Perhaps the hon. Gentleman is unaware that, for the past 30 years in Wales, we have had the right to vote every seven years to say whether we are in favour of Sunday opening. I am the only Member in the House who represents a dry district council area. Whether that is a good thing or not, the people of Northern Ireland. like the people of Wales, should determine whether they want pubs to open on Sunday.
Mr. Colvin: That was an interesting intervention. In a sense, it was a speech, so the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) can now go and have a drink and leave the answer to that question to my hon. Friend the Minister. A strong measure of local control over licensing hours is wise. That is why the Government are trying to lay down the broad parameters for licensing hours but will not force anyone to open. Even in Northern Ireland, there will he some control by the licensing courts. I agree that the law is different in Wales, but the hon. Gentleman will agree that the Welsh are very different from the rest of us.
Public opinion on this matter is pretty evenly divided. In response to the published proposals, 16,500 letters were in favour and 10,500 were opposed, and a couple of church petitions also opposed it.
There has been much discussion of the health aspects of the proposals, because some have said that they will undoubtedly lead to more drinking hours. My hon. Friend the Member for Antrim, North mentioned the example of Scotland. I shall quote some of the figures from the experience in Scotland. There is no reason why a similar experience should not pertain in Northern Ireland.
The law was changed in Scotland in 1976. Between 1979 and 1982, convictions for drunkenness in Scotland fell by 28 per cent., whereas in England and Wales they fell by only 9 per cent. The figures for under-21s were even better. Although consumption of drink has increased in Scotland, the extra drinking is done in pubs rather than elsewhere. Not so many people are buying drink at off-licences and taking it home, which is a bad place to drink. The pub is a sensible place in which to drink. That is what has happened in Scotland. The health aspects have been totally beneficial in Scotland—
Sir Bernard Braine: My hon. Friend has just said that everything in the garden is rosy as regards health. Since he has the figures there, can he tell us the statistics in respect of cirrhosis of the liver? Is he aware that those people who were drinking hard before the reforms are now drinking harder? What has been the effect upon women in Scotland? Let us have the whole story.
Mr. Colvin: The debate is about Northern Ireland. I am drawing a comparison with Scotland because I think that it is relevant. My right hon. Friend has asked particularly about liver cirrhosis. Liver cirrhosis mortality trends have

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not changed because of the altered licensing laws in Scotland, nor has there been an increase in alcohol-related mortality. There has been a downward trend in admissions to psychiatric hospitals for alcoholism and alcohol dependence. Relative risks from drunk driving have declined in Scotland compared with England and Wales. Overall, the trends in Scotland compared with England and Wales have proved to be favourable. In 1979, there were 13,628 charges in Scotland for drunkenness. Following the experience of the change in the law, there were only 6,618 in 1984. The experience has been beneficial, and I hope that the same will happen in Northern Ireland.
We are trying to equalise the law as between the pub and the club. The Brewing Review published in 1986 shows that in 1976, the year in which the law was changed, 23 per cent. of drinking occurred in public houses and 23 per cent. in licensed clubs. By 1984, consumption in public houses had increased to 28 per cent. and consumption in licensed clubs had decreased to 18 per cent. Experience will show that, if we equalise the law as between pubs and clubs and make the market more equal, the trend will be in the right direction.
Although I have not drunk much in pubs in Northern Ireland, I have a son who served in the same regiment in which I served and who has just returned from Northern Ireland. He said that the experience of drinking in pubs there was to be commended. He found outside one pub a ditty which I have stuck up outside my pub, which reads:
"Who comes here?
A grenadier.
What do you want?
A pot of beer.
Where's yer money?
I forgot!
Get you home you drunken sot."
In other words, tick, or credit, in Northern Ireland is no easier than in this country here. I am sure that that notice outside my pub will encourage my hon. Friends who go there for a drink to ensure that they take enough money with them and not expect credit at The Cricketers Arms in Tangley.
I congratulate my hon. Friend the Minister on bringing forward this measure. I wholeheartedly commend it to the House and I hope that it will be passed.
10.47 pm
Mr. David Alton: The slip of the tongue at the end of the speech of the hon. Member for Romsey and Waterside (Mr. Colvin) was revealing when he talked about the difference between Northern Ireland and "this country here". Northern Ireland is part of this country here. It is worth reminding the House that two separate issues are before us. One is whether pubs should be open on a Sunday and the other concerns the way in which we go about making decisions for the different parts of the United Kingdom.
On the first issue, I freely admit that, like probably many hon. Members, I enjoy a drink, not least after church on a Sunday evening. If I were voting for provisions in my region, I would be one of those who argued, like the hon. Member for Newry and Armagh (Mr. Mallon) did, for the opening of public houses each day. It is a matter of choice. It is a matter of moderation. I accept that the overuse of alcohol undoubtedly leads to not only physical but
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emotional problems. Much violence and brutality can be associated with it. The overuse of alcohol in cities such as mine, Liverpool, can have dire consequences.
The second issue is about the differences of opinion in different parts of the United Kingdom. Clearly, there are differences of opinion in Northern Ireland. The Lord's Day Observance Society, the Presbyterian Church of Northern Ireland, people from all parts of the religious equation and the trade unions have given their opinions, suggesting that public houses should not be able to open on a Sunday.
I find it ironic that Northern Ireland hon. Members should be able to amend proposals for drinking laws in Scotland, England and in Wales, but, when we consider such matters, Northern Ireland Members cannot move amendments because of the ways in which we consider such proceedings. That is why I signal a warning to the Government that, unless we do something about the over-use of Orders in Council and the constant resort to one-and-a-half hour debates to ram through Government proposals, we shall have no choice but to—[AN HON. MEMBER: "You?"]—Yes, we and other hon. Members from other political parties. We shall have no choice but to vote against the Government when they bring forward proposals that are clearly unacceptable to many people in Northern Ireland.
Such matters would be far better considered by a Northern Ireland committee, which could be established under Standing Order No. 99. They would be far better considered by Northern Ireland hon. Members. It would be far better if we could consider Bills in the normal way, with their being open to amendment. It is for the second of those reasons—it has nothing to do with the drinking laws in Northern Ireland—that my right hon. and hon. Friends and I shall call a vote. We may find ourselves in the Division Lobby with some hon. Members from Northern Ireland. It is time that such issues were considered in the Chamber, on their merits, open to amendment and not simply put to the House for black and white yes-no decisions which force polarisation. It is quite obvious that people are constantly forced to take decisions on issues and are not given a chance to vote for the shades of grey that often exist or to vote for amendments.
For those reasons—not the ones that were advanced! earlier about Sunday opening—of diversity and choice, and bearing in mind the differences of opinion that exist in many parts of our islands and people's rights to decide for themselves in the places where they live, that we shall be with those who choose to divide the House tonight.
10.51 pm
Sir Bernard Braine: I wish to approach the matter from a somewhat different angle and perhaps to sound a somewhat different warning. From what we have heard, it is quite clear that the licensing law in Northern Ireland is in disarray. One can understand the Government wishing to put it into better order, although it is exceedingly doubtful whether making it possible to drink more rather than less will improve matters. The licensing law is broken daily in this country. There has been a failure to deal with the rising tide of under-age drinking that is taking place all over the kingdom, the full facts of which were revealed to the Government by their Office of Population Censuses and Surveys about three years ago. Its report was withheld from publication for at least a year.

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The facts exist, and they demonstrate not only that there is a serious rising tide of under-age drinking in our public houses but that an overwhelming proportion of boys from the age of 13 upward had their first drinks not at home, not as a result of buying liquor from supermarkets, but in public houses. The law here is not being properly enforced. In short, that is why we should be concerned not merely with legal consequences but with the social and health consequences of any change in the licensing law of any part of the United Kingdom. I fervently believe that, as long as the majority of its people wish it to remain part of the United Kingdom, that should be the case. Northern Ireland should not be treated in a different way. We are all concerned about the matter. We cannot sweep aside the strong objections that are coming from the Province.
There is another good reason why we should not sweep those objections aside. There is no justification for tampering with the licensing laws anywhere in the United Kingdom before the full implications of the rising levels of consumption are understood. In addition to under-age drinking, we have the carnage on the roads and a clear link between alcohol abuse and marital break-up, non-acccidental injury to children and crime of every kind. Before any increase in drinking hours, in pubs or in clubs, is allowed, the full social and health implications should be properly understood.
The order comes to us hot-foot on the announcement in the Queen's Speech that licensing hours in England and Wales are to be extended. All this flies in the face of expert opinion. I am speaking not of the drink and tourist trades but about the views that have been expressed by doctors and magistrates.
I received a letter from Dr. Havard, secretary of the British Medical Association, when we were discussing the Bill affecting England and Wales. He wanted me to make it clear to the House that his association was opposed to any tampering with the licensing laws until the health implications were grasped. He wrote:
"There is no conclusive evidence that a change in licensing hours would decrease the health and social costs of alcohol abuse and every reason to fear that it would exacerbate an already deteriorating situation."
The Government must take note of the request by the World Health Organisation that by the 1990s all member states should reduce the level of alcohol consumption by at least 25 per cent., so great is the cost on a global scale. What has been the British Government's response? It has been to increase licensing hours, to do nothing about the proliferation of outlets, to make no moves to deal with under-age drinking in public houses and to do nothing about the link between alcohol drunk to excess and crime.
No wonder Dr. Havard wrote in his letter to me:
"Why, when other countries are desperately tightening up on the availability of alcohol, are we taking up parliamentary time relaxing things?"
Mr. Gorbachev has had the honesty to deal publicly with this problem in the Soviet Union. He has done it in a way one would never have thought possible in that country. All civilised countries are concerned about the problem, yet here we are tampering with the licensing laws before any of the other issues to which I have referred have been considered.
On 1 July The Times published a letter from Dr. Douglas Acres, a constituent of mine who is the chairman
1080
of the council of the Magistrates' Association, in which he made it clear that any tampering with the licensing laws was a mistake. Not only are all the caring agencies opposed to any extension, but I am astonished to note that the only published statement by any British Government since the 1930s on the subject of alcohol abuse was that produced by the Department of Health and Social Security entitled "Drinking Sensibly." What does that tell us? It tells us repeatedly that, if anything, there is a case for increasing the restrictions, not lessening them. Why is the Department of Health so silent on this matter? We have had evidence from that Department—the only evidence that we have ever had from it—that grave health harm is being caused and that there are risks in tampering with the licensing laws. The Minister responsible for roads and traffic has courageously drawn attention to the carnage on the roads. So why is there no co-ordination on these matters? Why did the Government see the light in the area of drug abuse? They appointed an interdepartmental coordinating committee under the then Minister of State that has worked well. It has brought together all the facets of prevention, treatment and so on. However, they have not done that on the issue of alcohol. Why? The House will find its own answer. Just as the proposed Licensing (Amendment) Bill is a mistake, the order is a mistake until such time as the Government demonstrate that they understand the totality of the problem. They must act soon, because the harm is mounting all the time.
11.2 pm
Rev. Martin Smyth: I welcome the opportunity to follow the right hon. Member for Castle Point (Sir B. Braine), who stressed the health factors that are involved. Traditionally in Northern Ireland, licensing laws have been dealt with by the Department of Health and Social Services. Unlike England, where we deal with the problem largely through the Home Office, in Northern Ireland alcohol is reckoned to have a direct impact on the health of the community.
The health factors are important. I was fascinated by the concluding comment of the hon. Member for Newry and Armagh (Mr. Mallon), who spoke of the days when the "knock knock" would be over. I put it to him, and the House, that even with these laws, the "knock knock" and after-hours drinking will continue. I am worried that the Minister has put forward nothing to show us how the law as amended will be implemented any better than previous legislation.
When facts and figures are adduced to show that, since the change of licensing laws in Scotland, there has been a decrease in convictions for crime and traffic accidents as a result of drinking offences I wonder whether any examination has been conducted into whether constables have merely said, on many occasions, "Get a grip on yourself; away home and don't let that happen again." How many cases have not been pursued because of a tendency to have a little compassion on a person who is under the influence, if not downright inebriated?
When the hon. Member for Newry and Armagh talked of the more relaxed opportunities that now exist for walking down to the village pub, did he, or any hon. Member, really believe that people in Northern Ireland will not still drink and drive, with the consequent calamity of road accidents? If so, I refer them to yesterday evening's Belfast Telegraph, in which there is an article entitled
"Government slammed over summer drink-drive move".

1081
Perhaps it is an act of midsummer madness to introduce extended licensing hours tonight, when, yesterday evening, two groups that are particularly concerned with fighting alcohol abuse criticised the Government for introducing a summer drink-driving campaign while passing laws to make Sunday drinking easier. That can be added to the point made by the right hon. Member for Castle Point. As we have been reminded in the debate, it is a tragedy that the House can only reject or accept the order. The Government have brought this forward and I imagine that the Whips will be in position and that there will be enough payroll votes to get the measure through. That is not a proper example of democracy in action.
Mr. Will Glendinning of the Alliance party in Northern Ireland was quoted last night as saying that it has been recognised that increased availability can lead to increased consumption and increased harm. The Government act quite rightly against drinking and driving, but perhaps they should realise that there are things other than an advertising campaign and the breathalysing of people. One of those things is the use of the law as a marker to discourage certain practices.
It is possible to quote from various statistics, but if one examines the statistics presented by the Central Policy Study Group and by others, one will discover that not only is there a difference in the rate of alcoholism between the citizens of England and Wales and those of Scotland, but that there is an increased level of alcoholism in Northern Ireland. When one examines the statistics even more carefully in terms of the health problem, one sees that an increasing number of people in Scotland suffered from cirrhosis of the liver between 1950 and 1985.
I realise that we are required to finish the debate shortly and for that reason I find it difficult to deal with all the points that have been raised in the debate. We welcome to the post of shadow Secretary of State for Northern Ireland the hon. Member for Kingston upon Hull, North (Mr. McNamara). He may discover that he will have to play many tunes over the years. He mentioned the Assembly report. In reply to my hon. Friend the Member for Londonderry, East (Mr. Ross) the Minister was rather testy and told my hon. Friend that my hon. Friend had not spoken to him or been in touch with him. It is a little like a dialogue with the deaf where one has to watch the other's lips.
The representatives of Northern Ireland were lobbied and then met in the Assembly to draw up a report. It is rather interesting to note that if the Assembly suggested something that was in keeping with the plans of the Government, they accepted it and said, "Well done." If a suggestion did not fit in with their plans they ignored it.
The report by the Assembly was an in-depth one and was produced on 6 March 1985. It recommended that current Sunday opening laws should be retained and rejected the suggestion that Sunday opening should be allowed during the same hours as in England, which was what the Government wanted.
Provision was to be made for objections along the Scottish lines and for objection on the grounds of public nuisance. That was rejected. It is nice for all of us to have certain facilities in society—as long as they are not too near where we live. We are not unduly worried about a nuisance that affects other people—as long as we have a reasonably relaxed and calm time. That was one of the reasons why objection on the grounds of public nuisance
1082
was suggested, but it was rejected by the Government. The Assembly Committee recommended the provision of a country-wide referendum or deed poll such as used to happen in Scotland. That, too, was rejected. It recommended that registered clubs should be brought into line with the provisions for Sunday drinking in hotels and restaurants. That was rejected and tinkering with the powers of the police and the registration of clubs was offered instead.
It will be interesting to see how the laws are implemented. I specifically asked about under-age drinking, and I have a specific recommendation to make. We shall never deal with the problem of under-age drinking until we adopt the practice of our American cousins and ask for identification. It is utterly impossible to be clear about under-age drinking unless some means of identification is provided. The offence relates not simply to the sale but to the serving of alcohol, and it is extremely difficult to prove. Furthermore, often it is not simply a question of under-age people going in to wine houses and purchasing alcohol; others purchase it and bring it out to them. Time after time, we have had experience of local police overlooking such offences. I suspect that that happens in the rest of the kingdom, too—partly because of the pressures on the police, who claim that they must devote their attention to much more serious crime. I doubt whether the modernisation of the laws will have any great effect. The Committee also recommended the tightening up of legislation relating to clubs to reduce the inequities between clubs and pubs, and the Government seem to have been rather half-hearted about that.
The hon. Member for Antrim, North (Rev. Ian Paisley) said that he had been lobbied by publicans; I suspect that all of us have. All that I can say is that every South Belfast publican who spoke to me said, "We are not asking that our pubs should be open. We are asking that the clubs should be restricted." I find no clear evidence in the new legislation to suggest that that will happen.
I suspect that this order is a foretaste of Home Office thinking, which favours an open season for everybody and no real restrictions. The arguments advanced tonight could equably be advanced for having no licensing laws a t all. Therefore, I ask the House to think seriously about joining those of us who will be voting in the Lobby against the order. The order will affect employment, too. It will provide more casual employment but fewer full-time working opportunities and will divide more families on yet another day of the week, which is contrary to the best interests of our nation.
11.8 pm
Mr. James Kilfedder: I know that there is very little time left for this debate, and I deeply appreciate the fact that you, Madam Deputy Speaker, should have called me. I intend to restrict my remarks, although I am sorry that I have to do so because very important issues have been raised.
I wish to put it on record that I deeply resent the fact that the Government have introduced this draft order to enable public houses to open on a Sunday. Why has the order been introduced? It does not have the support of the majority of the people in Northern Ireland, and that includes Roman Catholics as well as Protestants, despite what the hon. Member for Newry and Armagh (Mr. Mallon) said. Some people have said that the reason for the order is to bring the law into line with that pertaining

1083
to the rest of the United Kingdom. It has been said, too, that it is being introduced in the interest of liberty. If we had liberty, the public houses would never close. Is that what hon. Members advocate?
The hon. Member for Romsey and Waterside (Mr. Colvin), said that his son, who serves in the Army in Northern Ireland, is glad that he will be able to go to public houses on a Sunday. Having spoken to the police, I can assure the hon. Gentleman that they have endless trouble when young soldiers from the barracks in my constituency get drunk and engage in assaults, causing tremendous bother for police and local residents. I wish to put that on record in view of what the hon. Gentleman has said.
Mr. Andrew MacKay: That is disgraceful.
Mr. Kilfedder: Yes, it is a disgrace that people in my constituency have to put up with conduct of that kind. The Government should have heeded the decision of the Assembly with regard to the extension of pub hours.
Mr. MacKay: Will the hon. Gentleman give way?
Mr. Kilfedder: No, I will not give way.
Despite what the Minister said in introducing the order, it will cause extra trouble for the police, who are already hard pressed. They have difficulties enough, but the order will increase their difficulties. It is not just the difficulties of dealing with intoxicated people. When the public houses disgorge their parties at closing time there is a considerable amount of unruly behaviour which in some cases unfortunately ends in criminal behaviour. Damage is caused to property, the peace of the area is disturbed by drunks, innocent bystanders are insulted with obscenities and so forth, and from time to time there are muggings as well.
My constituents and I have a problem, especially with young people drinking to excess in Bangor and in Holywood. On behalf of those who are already incensed at the behaviour which takes place, I say that there should be no extension of drinking hours on Sundays.
Mr. MacKay rose—
Mr. Kilfedder: I regard the introduction of the order as dictatorial because we are being treated differently from the rest of the United Kingdom. I shall not rehearse what has already been said, but I support the views of the Father of the House, my right hon. Friend the Member for Castle Point (Sir B. Braine), and of the two Liberal Members who spoke. The way in which the order has been introduced constitutes discrimination against the people of Northern Ireland. Late as it is, I urge the Government to let the people of Northern Ireland decide. Let them have a referendum. Or are the Government afraid that their proposals will be rejected?
This measure will increase the problems in Northern Ireland. People there resent the fact that the order cannot be amended. We can only vote for or against it, and I certainly intend to vote against it. Debate is limited to one and a half hours. That is no way to treat people in a democracy. I have heard talk about British standards, but that is nothing like the British standards to which I have been accustomed.
11.18 pm
Mr. Needham: With the leave of the House, I shall try to deal with all the points raised as quickly as I can in the 12 minutes before the debate closes.
I was distressed to hear some of the comments made by the hon. Member for North Down (Mr. Kilfedder). He called the police in aid of his cause, but I must tell him that we discussed everything in the order very carefully and closely with the police. It was clear that the existing law was neither enforced nor enforceable, so we clearly wished to ascertain the views of the police on the matter. They did not tell us that they had to deal with drunken young soldiers in the hon. Gentleman's constituency as a result of existing licensing laws in Northern Ireland. The hon. Member for North Down should be more careful in his words when he talks about young soldiers who go to Northern Ireland to risk their lives in the defeat of terrorism.
Mr. William Ross: Will the Minister give way?
Mr. Needham: No I am afraid that I do not have the time.
The hon. Member for Antrim, North (Rev. Ian Paisley) was the first of many hon. Members who questioned the way that this order has come before the House. I appreciate that the hon. Member for Antrim, North was unable to be present at the start of the debate. The hon. Member for Liverpool, Mossley Hill (Mr. Alton), was also absent but I tried to cover that matter then.
My right hon. Friend the Secretary of State has said that the Government are prepared to consider changes to legislative procedures and are anxious to consider them in the context of the wider arrangements for the government of Northern Ireland. My right hon. Friend has also said that we are willing to consider changes in arrangements to determine whether it is possible to agree ways to improve the difficulties that we perceive.
When I opened the debate I quoted the right hon. Member for Strangford (Mr. Taylor), who said that if anything showed the case for a devolved Administration in Northern Ireland it was orders as complicated and as difficult as these. I heartily agree with that. I only wish that the hon. Friends of the right hon. Member for Strangford were as clear in their views.
In the Assembly debate in 1985 the hon. Member for Antrim, North said that licensing must be looked at in the context of a pluralistic society. It is a moral issue. The Government and myself do not believe that an issue of this nature is best legislated for by controlling the large number of people who wish to be able to pursue on a Sunday what they consider to be their perfectly reasonable and harmless habit of the six other days. They cannot understand why they should not be allowed to pursue that habit on Sunday. The hon. Member for Antrim, North rightly said that people are able to get a drink in Northern Ireland on a Sunday. The problem is that those people obtain that drink outside the law. The exisiting law is not enforceable.
Too many people obtain drinks in clubs over which we would like to see much tighter control. The order that follows this order goes into great detail about such clubs. I am sure that the hon. Member for Antrim, North will welcome the next order and will recognise that it will go a long way to deal with the problems of the clubs.
Many hon. Members, including the hon. Members for Antrim, North and for Belfast, South (Rev. Martin

1085
Smyth) mentioned the number of outlets for drink. I am sure that hon. Members are aware that when it comes to applying for a new licence for a public house in Northern Ireland an old licence must be delivered. In 1985 the number of public houses in Northern Ireland stood at 1,832 and that is 39 less than the number of public houses in 1978. The number of off-licences has increased from 200 to 250; the number of hotels has gone down from 177 to 165. I hope that the House will be pleased to learn that the number of restaurants has risen by 82 to 208. Registered clubs, with which we are concerned, have risen from 483 to 625.
The views of the people of Northern Ireland have changed since the Blackburn report of 1978. The opinion of the people of Northern Ireland is much more evenly divided, even though there is still a small majority for closing public houses on Sundays. As I said at the outset, I do not believe that, given the present circumstances, the Government can legislate on Sunday opening when any law that they try to introduce is unenforceable. The law has been unforceable because of the problem of the availability of meals.
Mr. Alton: In the constituency of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) and elsewhere in the United Kingdom it is possible to exercise a local opt-out. Why cannot that option he made available in Northern Ireland?
Mr. Needham: The hon. Gentleman was not in his place when I dealt at considerable length in my opening remarks with local referendums. We would not be dealing with a simple "Can you?" or "Can't you?". We must deal with existing law, which allows drinking in clubs and in hotels with the availability of a meal. We would be faced with having to use the genius of the entire general council of the TUC to find a question that we could put to the people of Northern Ireland. It is not a simple issue.
The hon. Member for Ceredigion and Pembroke, North (Mr. Howells) proudly represented to us that he is in a dry area. What happens to all those people in a dry area who wish to have a drink on Sunday? As the hon. Member for Newry and Armagh (Mr. Mallon) said, they drive to a wet area and return in the condition to which the hon. Member for Belfast, South referred. The hon. Member for Belfast, South did not deal especially well with the argument of the hon. Member for Newry and Armagh that people should be able to walk to their local instead of having to drive elsewhere, which raises the very issue that my right hon. Friend the Member for Castle Point (Sir B. Braine) brought to our attention about drunk driving.
Rev. Martin Smyth: The Minister has said that my argument was not valid. People will continue to travel to the seaside, whether it be Newcastle, Warrenpoint or Port-rush. They will travel on a Sunday and return with drink.
Mr. Needham: We are talking about what the majority do on a Sunday when they are deprived of the opportunity of walking to their local. We are not discussing whether they will go to the seaside.
I turn to the deeply held views and the powerful arguments that were expressed by my right hon. Friend the Member for Castle Point (Sir B. Braine). As the Minister with responsibilities for health in Northern Ireland, I am concerned about the health of people in the Province and with ensuring that the proposals in this measure will not
1086
make the position worse. My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) produced accurate figures about the Scottish experience, and in Northern Ireland, as in Scotland, there are fewer people drinking than hitherto, and those who drink are drinking less. The problem is that those who are at the margin and are extreme drinkers drink more, and there is a greater incidence of alcohol abuse. It is a problem that lies at the margin, and the incidence of cirrhosis of the liver in Northern Ireland is much lower than in Scotland, and lower than it is in England and Wales. We want to know why that is so.
In Northern Ireland and Scotland, alcohol consumption is concentrated in fewer days. It appears that a greater proportion of Scottish men and Ulster men than men elsewhere in the United Kingdom have at least one heavy drinking day a week, which makes the alcohol abuse problem worse. I acknowledge that there is a problem of alcohol abuse, but I do not see that opening the pubs on Sunday—other experience shows that it will not lead to increased consumption—when taken alongside what we are doing in reducing the hours during which clubs can open and reducing the time that hotels can remain open, will exacerbate the problem. There will not be a nil increase in the number of opening hours, but the increase will be half that suggested by the hon. Member for Antrim, North. I do not believe that that will lead to an increase in consumption and, therefore, an increase in alcohol abuse. We have had no representations from any doctors about this.
Rev. Ian Paisley: Will the Minister give way?
Sir Bernard Braine: Will my hon. Friend give way?
Mr. Needham: I give way to my right hon. Friend the Member for Castle Point.
Sir Bernard Braine: I mentioned earlier a letter that appeared in The Times on 1 July from the chairman of the Magistrates' Association, which read:
"All the evidence in this country and overseas indicates that the degree of harm resulting from inappropriate drinking is directly proportional to the total consumption in terms of absolute alcohol."
If there is an increase in opening hours either in Northern Ireland or England, overheads will increase. As a consequence, sales of alcohol will increase. All the evidence supports my view and not the suppositions that the Minister is making.
Mr. Needham: I understand what my right hon. Friend has said, but none of his points have been made to me by those who are concerned with health in Northern Ireland.
I realise that this matter is of great significance and importance to the people of Northern Ireland, and I realise how strong feelings in the House are, but the Government take the view—
It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 ( Exempted Business).
The House divided: Ayes 179, Noes 22.

Division No. 17]

[11.30 pm

AYES

Aitken, Jonathan

Arnold, Jacques (Gravesham)

Alexander, Richard

Arnold, Tom (Hazel Grove)

Allason, Rupert

Ashby, David

Amess, David

Baker, Nicholas (Dorset N)

Amos, Alan

Baldry, Tony

Arbuthnot, James

Banks, Robert (Harrogate)

1087

Batiste, Spencer

Hayward, Robert

Beaumont-Dark, Anthony

Heddle, John

Bennett, Nicholas (Pembroke)

Hicks, Mrs Maureen (Wolv' NE)

Benyon, W.

Hind, Kenneth

Bevan, David Gilroy

Holt, Richard

Biggs-Davison, Sir John

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

Boscawen, Hon Robert

Hunt, David (Wirral W)

Boswell, Tim

Hurd, Rt Hon Douglas

Bottomley, Peter

Irvine, Michael

Bowden, A (Brighton K'pto'n)

Janman, Timothy

Bowis, John

Johnson Smith, Sir Geoffrey

Brazier, Julian

Jones, Gwilym (Cardiff N)

Bright, Graham

Jones, Robert B (Herts W)

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

King, Roger (B'ham N'thfield)

Brown, Nicholas (Newcastle E)

King, Rt Hon Tom (Bridgwater)

Browne, John (Winchester)

Kirkhope, Timothy

Bruce, Ian (Dorset South)

Knapman, Roger

Buck, Sir Antony

Knight, Dame Jill (Edgbaston)

Burns, Simon

Knowles, Michael

Burt, Alistair

Latham, Michael

Butler, Chris

Leigh, Edward (Gainsbor'gh)

Carlisle, John, (Luton N)

Lennox-Boyd, Hon Mark

Carlisle, Kenneth (Lincoln)

Lester, Jim (Broxtowe)

Carrington, Matthew

Lightbown, David

Carttiss, Michael

Lilley, Peter

Colvin, Michael

Lloyd, Peter (Fareham)

Conway, Derek

Lord, Michael

Coombs, Simon (Swindon)

Lyell, Sir Nicholas

Cope, John

McGrady, E. K.

Couchman, James

MacKay, Andrew (E Berkshire)

Dorrell, Stephen

McLoughlin, Patrick

Durant, Tony

Malins, Humfrey

Emery, Sir Peter

Mallon, Seamus

Evans, David (Welwyn Hatf'd)

Mans, Keith

Fallon, Michael

Marland, Paul

Flannery, Martin

Marshall, John (Hendon S)

Forman, Nigel

Marshall, Michael (Arundel)

Freeman, Roger

Martin, David (Portsmouth S)

Garel-Jones, Tristan

Maxwell-Hyslop, Robin

Gorman, Mrs Teresa

Miller, Hal

Gower, Sir Raymond

Mills, Iain

Greenway, John (Rydale)

Mitchell, Andrew (Gedling)

Gregory, Conal

Mitchell, David (Hants NW)

Griffiths, Peter (Portsmouth N)

Monro, Sir Hector

Ground, Patrick

Morris, M (N'hampton S)

Gummer, Rt Hon John Selwyn

Moss, Malcolm

Hamilton, Hon A. (Epsom)

Moynihan, Hon C.

Hamilton, Neil (Tatton)

Needham, Richard

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

Neubert, Michael

Hargreaves, Ken (Hyndburn)

Nicholson, David (Taunton)

Harris, David

Nicholson, Miss E. (Devon W)

Haselhurst, Alan

Page, Richard

Hayes, Jerry

Paice, James

Hayhoe, Rt Hon Sir Barney

Parry, Robert

1088

Patnick, Irvine

Stewart, Allan (Eastwood)

Peacock, Mrs Elizabeth

Stewart, Andrew (Sherwood)

Porter, David (Waveney)

Summerson, Hugo

Portillo, Michael

Taylor, Ian (Esher)

Powell, William (Corby)

Thompson, D. (Calder Valley)

Raffan, Keith

Thompson, Patrick (Norwich N)

Raison, Rt Hon Timothy

Thorne, Neil

Redwood, John

Thornton, Malcolm

Rhys Williams, Sir Brandon

Thurnham, Peter

Riddick, Graham

Tracey, Richard

Ridsdale, Sir Julian

Tredinnick, David

Roe, Mrs Marion

Twinn, Dr Ian

Rooker, Jeff

Viggers, Peter

Rowe, Andrew

Waddington, Rt Hon David

Ryder, Richard

Walden, George

Sackville, Hon Tom

Waller, Gary

Sainsbury, Hon Tim

Warren, Kenneth

Shaw, David (Dover)

Watts, John

Shaw, Sir Michael (Scarb')

Wells, Bowen

Shelton, William (Streatham)

Whitney, Ray

Shephard, Mrs G. (Norfolk SW)

Widdecombe, Miss Ann

Shepherd, Colin (Hereford)

Wiggin, Jerry

Short, Clare

Wilkinson, John

Skeet, Sir Trevor

Winterton, Mrs Ann

Smith, Tim (Beaconsfield)

Winterton, Nicholas

Soames, Hon Nicholas

Wood, Timothy

Speller, Tony

Young, Sir George (Acton)

Spicer, Jim (Dorset W)

Stanbrook, Ivor

Tellers for the Ayes:

Stanley, Rt Hon John

Mr. Kenneth Carlisle and Mr. David Maclean.

Stern, Michael

Stevens, Lewis

NOES

Alton, David

McCusker, Harold

Beggs, Roy

Maginnis, Ken

Beith, A. J.

Meale, Alan

Braine, Rt Hon Sir Bernard

Molyneaux, Rt Hon James

Carlile, Alex (Mont'g)

Paisley, Rev Ian

Cryer, Bob

Robinson, Peter (Belfast E)

Dixon, Don

Skinner, Dennis

Duffy, A. E. P.

Smith, Cyril (Rochdale)

Forsythe, Clifford (Antrim S)

Smyth, Rev Martin (Belfast S)

Howells, Geraint

Hughes, Simon (Southwark)

Tellers for the Noes:

Kilfedder, James

Rev. William McCrea, Mr. William Ross.

Kirkwood, Archy

Question accordingly agreed to.
Resolved,
That the draft Licensing (Northern Ireland) Order 1987, which was laid before this House on 2nd July, be approved.

Registration of Clubs (Northern Ireland)
11.41 pm
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Richard Needham): I beg to move,
That the draft Registration of Clubs (Northern Ireland) Order 1987, which was laid before this House on 2nd July, be approved.
This is the second and, I hope, less controversial part of the package of reforms. However, it is equally important and I am glad that this measure had the support of the Assembly when it was debated there.
The order repeals the existing Northern Ireland law contained in the Registration of Clubs (Northern Ireland) Act 1967. It deals with the registration of clubs to permit them to supply alcohol to members. It contains many new provisions to consolidate some of the existing law. Like the previous licensing order, this order has its roots in the recommendations of the Blackburn report for improving the law. The Government have accepted most of those recommendations in this order.
Blackburn identified a phenomenal growth in registered clubs compared with licensed premises in the Province. That growth has continued in recent years, as has the amount of drinking that takes place in clubs. I would like to give some figures. In 1975, there were 370 registered clubs. There are now more than 600. In 1975, they spent over £9 million on purchasing drinks for their members; in 1985, that figure had risen to £34 million.
I can be more specific. I know of one club whose members on the face of things spend about £40 each a week on drinks. That is about five bottles of scotch or 45 pints of Guinness each. Strangely—or perhaps not so strangely—its membership is now down to 66. If someone happens to be the member of a certain old age pensioners social club, his limit is a mere two bottles of scotch or 17 pints of Guinness a week.
However, the more worrying still is the scope for profiteering in some clubs by criminal and paramilitary elements. In some cases this has already happened. We must have adequate measures to combat this grave situation.
Mr. William Ross: On a point of order, Madam Deputy Speaker. The Minister has said that the people were drinking scotch all the time. Why was it not Blackbush?
Mr. Needham: Madam Deputy Speaker, I did not wish to insult the name of Blackbush in the kind of clubs to which I was referring.
There are two main prongs to the Government's strategy for dealing with these problems. The first is to make it harder for clubs to become registered and to keep their registration. There are stricter criteria on which courts can determine whether or not clubs applying for registration are bona fide. District councils will now have a say in registration procedures. In addition, the advantages that registered clubs have over pubs are largely removed by bringing such things as their drinking hours, and the law on the presence of minors and on drunkenness generally, into line with requirements for pubs. Penalties for offences are also greatly increased. The second is to make the affairs of clubs more open to detailed examination, and to limit the uses to which they apply
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their money. To assist in that, police powers are strengthened, particularly regarding examination of clubs' accounts and records.
Those, in broad terms, are the reasons for the order. Most clubs in Northern Ireland are respectable, well-run organisations. They have nothing to fear, and will, I hope accept the additional controls brought in by the order as necessary for the protection of the community.
Let me now quickly deal with what the order does, concentrating on the main provisions, especially those that are new or depart in some way from the 1967 Act. Part I is introductory; part II deals with the registration of clubs. Article 4 describes the genera] requirements for registration, and brings in schedule 1, which sets out the provisions which must be included in club rules.
Paragraph (4) provides that the court must take account of any arrangement that restricts the club's freedom to purchase alcohol. It must also have regard to any provision in the club's rules or other arrangement under which it can spend money except for its own benefit or for charitable purposes. Through that provision, and the increased police powers of investigation, the Government aim to prevent any clubs from giving financial support to paramilitaries out of club profits.
Article 6, with schedule 2, deals with the grant of registration of new clubs and the issue of a certificate of registration. Under the 1967 Act, all registration business is administered by magistrates courts. The order introduces a two-tier registration system comparable with the licensing system. The county court will now deal with the initial grant of an application for registration, and the magistrates courts will continue to deal with renewal applications. In future, a club intending to apply for a new registration must give the court notice two years in advance, and must copy the notice to the police and the appropriate district council. That provision should allow the courts to be satisfied whether such clubs can exist without having to rely on income from the supply of drink. Applicants will be required to give more information than at present.
The court will now have no discretion to accept late applications. It must also be satisfied that planning permission to use the premises as a club is in force, and that the club has been conducted in good faith as a club for two years, and not for one year as at present.
A court will be able to turn down an application if the club is used for an unlawful purpose or by persons of bad character, or is conducted so as to cause disturbance, or if any club official is not a fit person to hold office or the club has been convicted of an offence. All these provisions are aimed at stopping the undesirable clubs from being registered.
Article 8 deals with the renewal of registrations, and the renewal procedure is set out in schedule 3. The existing clubs will have to meet just as stringent requirements to have their registration renewed. Again, considerably more information will be required. Article 8 paragraphs (5) and (6) list the various grounds on which the court must or may refuse an application. There is no provision for late renewal. The court must also satisfy itself that the club is conducted in good faith as a club and not mainly for the supply of drink, and the additional information to which I have referred should be strong evidence of whether a club comes into that category.
There are several new grounds on which renewal can be refused. They relate to the conduct of the club, the nature

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of its clientele, the fitness of a person to hold office in it and whether it has been convicted of an offence under the order.
Part III of the order provides for the hours during which clubs may supply drink. The flexibility given under the 1967 Act goes, and is replaced by the same fixed hours as for other licensed premises. The effect is that all clubs will lose four hours each week in their total permitted hours—half an hour each weekday and an hour on Sunday. Article 25 largely reflects existing law relating to police authorisations extending club hours on special occasions. The limit on 12 on the number of these allowable in a year is increased to 20, but the hours are reduced so that drink cannot be supplied after 1 am, compared with 3 am at present.
Part IV relates to the conduct of registered clubs. Article 28 provides that intoxicating liquor can only be supplied to or obtained or consumed by a member or his guest or an employee of the club. Article 30 is especially important. Some clubs are engaging in what are almost commercial enterprises, such as dinners, dances and discos or other entertainment which members of the public attend. I will not embarrass the clubs by reading out some of the advertisements which they have been putting in the papers. They go far beyond the spirit of the clubs law, and those abuses must be stopped.
Therefore, article 30 prohibits, with certain exceptions, the holding of functions in club premises which are not for the benefit of the club as a whole or controlled or run by it. Functions must relate clearly to the objects of the club and be run exclusively for members and their guests. However, charity functions or private functions for the benefit of members will be permitted. Further, under article 39, it will be an offence to advertise in the media any function to be held on a club's premises.
Articles 32 and 33 contain provisions with respect to young people. At present, no one under 18 can be employed in a club or be admitted to club membership, except in the case of a sporting club. Club rules must also contain a provision that drink must not be supplied to anyone under 18. The original intention was to mirror licensing law by excluding minors from bar areas of clubs, as the Blackburn committee recommended. Sporting clubs and the Sports Council for Northern Ireland told me that this ban would seriously harm the activities of sporting clubs and the involvement of youngsters in sport. The Government have recognised the difficulties which many sporting clubs would face, not least of which would be the major structural alterations needed to many of the premises, were the ban to go ahead. They have decided that young people will be allowed until 7 pm in the drinking area of a sporting club. It does not mean that they can be supplied with drink. Any registered club which supplies drink to someone under 18 or allows him to drink on its premises will be liable to a fine not exceeding £2,000, or to imprisonment. Also, club premises could be disqualified from being used by any registered club for up to five years.
Enforcement of the new law is all-important, and the police must have adequate powers. Therefore, article 37 contains significant changes to police rights of inspection and entry into registered clubs. These provisions demonstrate the Government's determination to strengthen the hand of the police in investigating club
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accounts. They have been designed in consultation with the police and should help them to investigate a club's affairs and, in particular, to establish where the money goes and whether it is putting it to proper use.
Article 38 strengthens the powers of the court to disqualify club premises when a club has been convicted of an offence under the order. Part V contains miscellaneous provisions. Article 41 deals with the accounts of registered clubs. Clubs will have to keep proper books of accounts and maintain a satisfactory system of control of accounts, cash holdings and receipts and remittances.
The remaining provisions deal with items such as proceedings against clubs, proof of consumption of liquor, appeals, amendments, transitional and savings provisions and repeals.
That concludes my outline of the main provisions of the order. As hon. Members will recognise. this is a substantial tightening of the law, but given the background which I have explained I hope that they will accept that it is a much-needed reform.
Mr. Robert Banks: I warmly welcome the provisions of the order, which are long overdue, and I commend my hon. Friend for bringing them forward. But the period of two years before a new club can register seems to be rather restrictive and could jeopardise the club getting off the ground. Will he justify the period of two years?
Mr. Needham: The reason for the two-year period is that the Government wish to ensure that a club which sets up in Northern Ireland does not do so for the main purpose of supplying alcohol, and that the club can exist and thrive without the supply of drink. The Government's opinion is that, if a club can set itself up with a sufficiently large membership and exist for two years without drink, drink will not be the main reason for the club's existence.
As I said earlier, we deal with particular difficulties in the enforcement of club registration law in Northern Ireland and we are determined to crack down and to eliminate the disreputable club. I am reassured by the fact that almost all the letters which we have received from the public at the consultation stage have strongly supported the Government's proposals. I know that some clubs are concerned that the new controls will work unfairly against them, but I am sure that hon. Members will recognise that it is just not possible to have one law for the good and another for the bad. I believe that the new laws are vital and that they will go a long way toward the two main objectives of curbing the growth of drinking clubs and cutting off an important source of paramilitary funds from a minority of clubs.
I remind hon. Members that this order is the other half of our overall package of reform. I hope that the House will accept that, together with the licensing order, it represents a sensible codification of the law which provides a new and improved structure covering both licensing hours and the relationship between licensed clubs and licensed premises. I commend the order to the House.
11.56 pm
Mr. Kevin McNamara: On behalf of the Opposition, I welcome the spirit of the order's contents. It is perhaps not as controversial as the licensing order, but in many ways it is much more

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important. It does much to deal with one of the major scourges of Northern Ireland—the financing of paramilitaries on both sides by illicit drinking, often of stolen liquor. It enables the police to control that drinking and those activities and to prevent those funds from getting into the hands of paramilitaries. Therefore, it is of the utmost importance.
However, some problems arising from the measure must be carefully considered. Many social and sporting clubs depend on profits from the sale of liquor to maintain some of their services to their members. From the way in which the order was presented to the House—perhaps this was done unwittingly by the Under-Secretary of State—one could gain the impression that what in many clubs in the United Kingdom would be regarded as legitimate sources of revenue to facilitate the purposes of, for example, a sporting club might be lost while a club awaited registration.
The powers given to the police in article 37 are very wide, both with and without warrant. Those powers, if used in an oppressive or harassing manner, could be seen to be resting unfairly on particular bodies in the community. Therefore, those powers must be applied with sensitivity and finesse, so that this order is not seen as providing an increased police power to harass people otherwise going about their lawful business. Legitimate and respectable clubs might suddenly become flashpoints if a heavyhanded policeman went in there. Neither the Secretary of State, the Government nor the Opposition would like that to happen. We want the police to have these powers, but we want them to be used sensibly and with great sensitivity.
Equally, that applies to the power which is given to local authority, which is one of the groups to which an application must be made. A local authority may object to the creation of a particular club. One club may be denied permission because there is within the locality another club which belongs to another tradition and group of people. It would be wrong if the location of one club were used to prevent the creation of a second one dealing with other people and traditions. They are some of the problems.
The other problem that worries me arises from the nature of many clubs—the legitimate ones and the respectable ones. They are run by eminently respectable and law-abiding people, but some of the provisions in the order, for proper reason, demand greater knowledge, accountability and observance of the law by ordinary citizens. In some ways, that could weigh heavily upon respectable people who conduct voluntary organisations. The Government could be seen to be over-bureaucratic in the way in which they deal with them.
Again, I trust that, in the operation of the rules, the police will look on such matters with flexibility. We are not seeking to catch the person who perhaps makes an error, does not get his papers in on time or does not always produce his account directly on the dot. The main purpose behind the proposals that we welcome is to catch the evildoer, get rid of the shebeens in east Belfast and in west Belfast, and get rid of the people who supply funds for paramilitaries. That is the main purpose of the order. If we can achieve that and, at the same time, enable ordinary people in Northern Ireland to carry out their business and social activities without fearing the contents of the order, we welcome it.
12 midnight
Rev. William McCrea: I am sorry that I did not catch the Chair's eye during the previous debate. As the Minister said, many matters in this debate relate to the previouss debate. There is one reason why my colleagues and I must divide the House. Although we accept some of the recommendations, the House must appreciate that we are witnessing a sham. We had a one and a half hour debate, but not one word against the legislation mattered one iota. The Order in Council and the manner in which debates are carried on and legislation is passed will ensure that any hon. Member who opposes Government legislation for Northern Ireland may present a rational argument that the Government may accept as rational. Yet not one comma in the legislation will be changed. It will be passed. The Government will make sure that there are enough hon. Members to pass through the Division Lobby to vote for it. What we witnessed during the previous debate proves that the House does not care what the people of Northern Ireland want or what they have to say.
It is interesting that, in this debate, the Government are quick to quote statistics and tell us about the letters that they have received supporting their attitudes. But they dismiss letters concerning Sunday opening. They are irrelevant—they do not matter—because they are against the Government and their way of thinking in regard to this legislation.
No one can say that drink-related problems in Northern Ireland are a joke. Drunkenness in any part of the kingdom cannot be treated as a joke. Under-age drinking and alcohol-related illnesses cannot be treated as a joke. There are social problems. Many parts of Northern Ireland suffer from poverty. One must accept that the cause of much poverty can be traced to alcohol. Family funds are spent on the consumption of alcohol, and children are left to go without. Such matters should not be treated in a light-hearted manner.
The voting power of the Government is being used in such a way that, whether or not the people of Northern Ireland want this change, it will be made. That is no way, in a democracy, to treat the people of the Province. They are not children. They have minds of their own and if they want to be different from the rest of the nation in matters such as these, why not permit them that difference?
I shall not detain the House for long, because nothing I say—any more than what my hon. Friends said in the previous debate—will have any effect when we vote on this issue soon, and the Minister, like most hon. Members in the House tonight, hopes that it will take only a few minutes to get yet another piece of legislation concerning Northern Ireland out of the way.
Rev. Ian Paisley: But the problems will not be out of the way.
Rev. William McCrea: My hon. Friend is right. The problems related to this legislation will not be dismissed as easily as the legislation is being passed. I warn the House that the way in which the people of Northern Ireland are being treated proves that, no matter what an Ulsterman wants, an Englishman thinks he knows better.
The Government seem to have got themselves on the hobby-horse of sabbath-bashing. Having dealt with the Sunday opening of shops, we now have Sunday drinking. Such legislation will not bring prosperity to Northern

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Ireland. Peace, reconciliation and stability are, we are told, the Government's aim. What they are doing tonight will help none of those objectives, and let it not be forgotten that many Opposition Members are supporting the Government tonight.
In opposing this order, my hon. Friends and I are registering our abhorrence of the way in which the Government are legislating for the Province. God speed the day when Ulstermen and Ulsterwomen can once again legislate for Northern Ireland and right the great wrong that is being done tonight.
12.9 am
Mr. William Ross: By an accident of the business of the House, the previous order took not an hour and a half but two hours and three minutes. But as has happened in the past, all the words that were spoken did not make one jot of difference to the outcome of the vote. I have no doubt that the outcome of the debate on the order that is now before us will be the same.
It was interesting that in the last debate—on the first half of the legislation before the House—something happened that has happened time and time again over the years. The Minister said, in reply to points that were put to him by hon. Members, that he did not have the answers then, but that he would reply when he came to wind up. However, if my memory serves me correctly, he did not answer those points. No doubt he will write in the fulness of time to the hon. Gentlemen in question—in two or three months—giving them the answers to the queries that they made publicly in the House. When the hon. Gentlemen receive their answers, no doubt they will be delighted to receive them. The point that troubles me, as it should trouble all hon. Members, is that that information, which should be available to all hon. Members and the public, will be available only to the hon. Members concerned. It will be entirely up to them whether to publish; whereas all hon. Members who took part in the debate would be interested to hear the Minister's reply. That is a little thing that highlights the shortcomings in the procedure that we are following this evening, and which we have followed now for 15 years too long.
This evening I have listened to the Minister and other hon. Members quoting from the work of the late Northern Ireland Assembly. That Assembly was able to debate these issues, but as it lacked the ability to put its own views on Northern Ireland legislation into action, it was left in a position in which the Government, under the procedures that are being followed this evening, could accept or reject anything that it desired.
The only way in which to overcome the difficulties that I have touched on so briefly this evening is to bring in Bills, to pass them through the House in the proper manner so as to hear what the various factions in the House have to say about them, to put down amendments for all to see and to discuss them, either in Committee of the whole House and or in Standing Committee. In that way, those who sometimes treat what hon. Members from Northern Ireland have to say about the society in which they live—and the legislation that affects it—rather lightly would have a clearer and deeper understanding of the ills that we are trying to cure, the fears that we have, and the cures that we would propose, which I believe would be far wiser than
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many of those that are so cheerfully passed through the House by hon. Members who are not even here for the debate.
I also noticed that the Minister took umbrage, when winding up the last debate, at what the hon. Member for North Down (Mr. Kilfedder) said about young soldiers. The Minister will know, of course, that North Down is a seaside resort that attracts large numbers of young people, who occasionally become unruly in pubs, or when coming out of them. That would apply whether they were in uniform or out of it, whether they were soldiers or members of other security forces, or whether they were just young fellows out for an evening. However, the Minister did not say who had rendered the legislation that we have just replaced unworkable. Who rendered it unworkable? Who is responsible for the build-up in the drinking clubs of Northern Ireland, to the extent that they have competed on such unfair terms with the traditional pub owners there? Why were we not given the answer to that question? It was because the Government do not want hon. Members to hear the truth, which is that it was the activities of the paramilitaries and the drinking shebeens that are run principally in Belfast and, at various times, throughout other parts of Northern Ireland, which led to the enormous increase in the consumption of alcohol right across the Province and, inevitably, to these changes in the law. If hon. Members on the Minister's own side of the House had had that put clearly before them, as they should have had, they might not have been willing to support him so blithely.
The hon. Member for Newry and Armagh (Mr. Mallon) talked about knocking on the pub door. I live close to a village but I do not go to pubs. However, that is a personal preference. I remember being told when I tasted whiskey for the first time that I would get to like it. I figured that if it was that hard to get to like I would not bother with it, and I am glad that I did not. The hon. Gentleman talked about knocking on the pub door and about the thrill that one got when one was in getting a drink. He said that stolen fruit was sweet.
When Mr. Speaker was being elected for this Parliament the hon. Member for Antrim, North (Rev. Ian Paisley) drew attention to the danger of making partial biblical quotations. I think that the hon. Member for Newry and Armagh was referring to a section from Proverbs. Perhaps he should look at the end of the passage about forbidden fruit. If he does that, perhaps he will not be so happy with the quotation that he gave. It is a passage that I recall very clearly because I read it many years ago.
I do not have the same objection to the content of this order as I had to the content of the last one. My objection is to the principle of legislating for Northern Ireland in such a way that we cannot have the in-depth, detailed examination that is needed to enable us to give an explanation to other hon. Members about the attitude that we adopt to these matters. If these things were presented as Bills, the hon. Member for Newry and Armagh and I might find a common meeting place occasionally. We might not have found that in the first order but we might have found it in this one.
Rev. William McCrea: Earlier in the debate the Minister said that the previous legislation could not he easily policed. Perhaps the hon. Member for Londonderry,

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East (Mr. Ross) would like to hear the Minister tell us how this legislation will be policed. It is also complex legislation.
Mr. Ross: This debate may not run the full one and a half hours and the Minister may have more than the 12 minutes that were allotted to him because of speakers over-running during the debate on the last order. No doubt if he has an hour or so he will be able to give us a detailed explanation about how the legislation will work in practice. Perhaps he will also give way when he makes one of his frequent mistakes. If that happens those few hon. Members who are here will have a clearer understanding of the complexities of the legislation that is before us.
I was speaking about my objection in principle to the whole procedure that is followed in Northern Ireland legislation. The evident annoyance of many hon. Members who support the Government, never mind the hon. Members who support the Opposition, is clear to all who take part in these debates and to those who stand at the Doors of the Lobbies. I hope that as the months and years of this Parliament roll away and as we have several of these orders being debated for an hour and a half at a time, that annoyance will increase until, to adapt another biblical quotation, even the unjust judge will bow to the reasonable request by Northern Ireland Members to produce legislation by Bill so that we can have the detailed scrutiny that all legislation passing through the House deserves.
12.18 am
Mr. Seamus Mallon: When I spoke earlier I was remiss in not extending a welcome to the hon. Member for Kingston upon Hull, North (Mr. McNamara) in his new post. We look forward to working with him and to his success.
In general, I welcome this legislation, and for one reason in addition to the reasons that I gave before. It ends the unfair competition between clubs and public houses and in addition it allows people to get to grips with the situation in which paramilitary groups are running clubs in the North of Ireland in order to further their own causes. I woonder how many young men—whether nationalist or unionist—would not be in prison, or, indeed, dead, had these places not existed. For that reason alone, this must he a good piece of legislation and in general terms, I support it. I support the provision concerning the bring-a-bottle clubs, which seem to be unique to the North of Ireland; I have never heard of them anywhere else. Those clubs were a nonsense, and I am delighted that the legislation will deal with them. Those who operate such clubs do not have staff to pay and they have no overheads or responsibilities. The arrangements made no sense from any point of view.
There are dangers inherent in the order. Like the hon. Member for Kingston upon Hull, North, I have reservations about the sweeping powers that it gives a constable. Under the order, a constable of 18 years of age can, on his own initiative, demand to see not only the structural plans of a club but its membership list and its books. There is something wrong there. That decision should be made at a more senior level—for example, by a superintendent. It is a serious decision which could have great ramifications in terms of the law and would put a tremendous onus on the club. If that decision has to be taken, it should be taken by a senior police officer so that
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it has the full weight of his seniority behind it. Then it could not be misinterpreted, as might be the case were the decision made by a young police constable.
I also have reservations about the role of district councils in relation to applications and the registering of clubs. We need some clarification on that. What are the checks and balances? Knowing the prejudices that exist in the North of Ireland, can the House imagine the kind of attitudes that might be displayed by, for example, Craigavon council, which has already cost its ratepayers £500,000 by refusing to act fairly towards St. Peter's club in Lurgan? Twice in the courts the council has been found guilty of that; it is a matter of court record. What checks and balances will protect clubs or personal licensees applying for a licence under the order from being subjected to such prejudice? That requires some explanation, because it is potentially a dangerous state of affairs.
I have reservations about the two-year rule as well. In some circumstances it might well prevent a bona fide club from developing its facilities properly. I am thinking especially of golf clubs and sporting clubs whose overheads on equipment are very high. The two-year rule could create problems for them.
I am puzzled, too, by the distinction between a sporting club and a social club. I simply cannot get to grips with it. Paragraph 22(c) does not make the distinction and the legislation becomes even more ambiguous when it goes on to define the position of young people. The Minister has clarified it to some extent by saying that young people under the age of 18 could be in the drinking section of the club until 8 o'clock. However, if that young person happens to be playing at Muirfield—and many of those playing at Muirfield this week are under the age of 18—does that mean that he cannot go on to the premises to eat once he has finished his round?
That is the kind of situation that could arise. Football matches in summer may not end until 10 pm. Will some members of the team be able to go into the club for a meal afterwards while others may not? As the Minister knows, golf competitions often do not end until 9 pm or 10 pm. Is it suggested that people under the age of 18 should not take part or that if one of them wins a major trophy he cannot go into the club to receive it? That kind of ambiguity requires clarification.
I repeat that I support the order on the grounds that it sets out to create equality between the public house and the club and it gives the Government power to deal with illegal drinking clubs supporting paramilitary groupings, but I have reservations about the way in which it will be operated. Some Members from the North of Ireland may be surprised to know that I agree with them that there should be a system allowing far more scrutiny and a proposal for change. I suggest that one way for them to achieve that would be to involve themselves in the search for legislative devolution—then we could blame nobody here.
12.26 am
Rev. Ian Paisley: I should welcome the statement of the hon. Member for Newry and Armagh (Mr. Mallon) if he would join other Members of the House in wanting legislation to be dealt with in this House in the proper manner, but I have heard no protest whatever from him about it. He raises a whole series of matters that he does not like but then says that he intends to vote for the order. The hon. Gentleman's speech conclusively proves

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what unionists have been saying for years. To hear the Liberals, who are no longer present, one would think that they first carried the banner to have legislation for Northern Ireland done in a proper way, but how many times have unionist Members stood up and insisted that Northern Ireland should be treated like any other part of the United Kingdom?
As the unionist spokesman, I welcomed the hon. Member for Kingston upon Hull, North (Mr. McNamara) to the Opposition Front Bench today. I had to get in before the SDLP, but I am glad that the hon. Member for Newry and Armagh came under conviction outside and returned to apologise. I am glad that we showed him the way, but he well knows—
Mr. Mallon: Will the hon. Gentleman give way?
Rev. Ian Paisley: There is plenty of time. There will be time in this debate for a great reply from the Minister. He will have time to answer the whole debate without having to do any writing. I shall not talk for too long as I want to give him plenty of time.
The hon. Member for Newry and Armagh knows that unionists have stood up not only in this Parliament, but in the last Parliament and in those which preceded it, and argued that this is no way to do legislation. The hon. Gentleman has made our case today in saying that the Minister should clarify so many points. But what use are the Minister's clarifications? They do not alter anything.
Mr. Mallon rose—
Rev. Ian Paisley: The hon. Gentleman should possess his soul with patience. He may not know the end of the matter. When he gets his nightcap in a certain place he should go to the Book of Proverbs and begin with chapter 1. He will come to the part about how the stolen fruits are sweet and he will learn about the matter that was in the fertile mind of the hon. Member for Londonderry, East (Mr. Ross). I am sure that that will provide the hon. Member for Newry and Armagh with a most edifying thought on which to sleep and I am sure that he will not have nightmares.
Mr. Mallon: Will the hon. Gentleman give way?
Rev. Ian Paisley: I will give way in a minute or two.
If there was a devolved Government in Northern Ireland and if the majority in that Assembly voted for legislation that the hon. Member for Newry and Armagh did not like he would boycott the Assembly. He would knock at the door of the Government and say, "Please let me in." The hon. Gentleman has advocated the joy of law breaking.
I do not understand how the Minister will police this legislation. He knows perfectly well that he cannot do so. To take the example given by the hon. Member for Newry and Armagh, a boy of 18 may win a trophy, but he will not be allowed inside the door of a club for the presentation. Who will police this legislation? It will not be policed. Everybody knows that this legislation is meaningless in its practicable application.
Mr. Mallon: I am grateful to the hon. Gentleman for giving way at last. I took the opportunity—a fairly unique one—of taking part in the deliberations of a
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Standing Committee that dealt with a Northern Ireland Bill. It was a valuable experience because it gave an insight into the thinking of people within this House.
I believe that there is something hypocritical about people adopting a quasi-integrationist position and demanding such legislative approach while, at the same time, portraying themselves as devolutionists. They cannot have it both ways. In effect, they are putting a foot in both camps. If they made up their minds about whether they were integrationists or devolutionists, this House might more easily come to a decision about how to deal with legislation for Northern Ireland.
Rev. Ian Paisley: The hon. Gentleman—
Mr. Deputy Speaker (Sir Paul Dean): Order. I would like to hear a little more about the registration of clubs.
Rev. Ian Paisley: The club that the hon. Member for Newry and Armagh would wish to register with is the united Ireland integration club. He does not want the people of the United Kingdom to legislate properly for the whole of the United Kingdom.
At present, there is no devolved government in Northern Ireland. We have the farce of the Intergovernmental Conference, supported by the hon. Member for Newry and Armagh. He makes his representations to Dublin Ministers and Dublin Ministers make representations of his views to the Ministers on the Front Bench. That illustrates what the hon. Gentleman thinks about devolution.
We are totally opposed to any form of devolution that is not based on proper, democratic British principles. The hon. Member for Newry and Armagh was elected to the Assembly in Northern Ireland and then took the deliberate step of becoming a senator in the Irish Republic to get himself out of that Assembly. That is what he thought about legislation for Northern Ireland.
I do not wish to run foul of you, Mr. Deputy Speaker, and I know that you want me to speak to this order. The Minister got away with saying that this order is the second half of the first order and that both halves go together. However, one point has been missed by the House. If we had been given proper legislation, it would have been impossible for the Minister to get this order before the House. With the general election, all that went before it would have fallen and we would be starting again. Ministers love Orders in Council because they can be introduced regardless of general elections. I searched the Order Paper to discover what orders were coming before us, and suddenly the orders that we have discussed this evening seemed to jump from nowhere. It was only a few hours before business questions last Thursday that we were told by the Government Whips, "Perhaps they will be brought before the House next week. That is just a word in your ear."
Perhaps there are good reasons for some "generosity" to be extended to Northern Ireland Members. Perhaps it was generous to alert us in the way that I have described. If that is the Government Whips' generosity, I do not know what their charity would be.
Mr. David Harris: That is how they treat Conservative Back Benchers.
Rev. Ian Paisley: If that is the way that the hon. Gentleman allows himself to be treated, I am prepared to enter into an intergrationist compact with him to fight

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such treatment to show that Ulster people will help the English in their battle against the Patronage Secretary, but I do not want to fall out with the right hon. Gentleman.
Many provisions in the measure that is before us are good and I am not condemning it out of hand, but it cannot be policed. I shall be interested to know how the Minister intends to police it and how the police have told him that they can police it. A serious measure is before the House and if it could be implemented it would be helpful, but I do not believe that that is possible. The Minister has told us that he could not provide the necessary policing to keep the pubs closed on Sundays, and it would be far easier to keep the pubs closed than to implement the intricate legislation that is now before us. The hon. Member for Newry and Armagh knows that, and some of his colleagues know it even more that he does.
Many of us are aware of the problems that come from drinking and the Minister must answer our questions fully and take up the issues raised by the hon. Member for Newry and Armagh. The Minister congratulated the hon. Gentleman on his previous speech, so let him provide all the clarification that the hon. Gentleman sought. I shall listen with great interest to what the Minister says.
The Minister knows that he cannot do more than provide the dots and the commas. Even if he makes statements tonight, they will be worthless in a court of law, and the Minister knows it. He is smiling because he has all the winners in his hand. He can laugh at us while the order is accepted by the House.
This legislation will not sleep away the problems. It is extremely difficult for the best ordered drinking club or bar to keep persons under 18 years of age outside the doors. Is the management to ask for birth certificates? Flow is it to be done? The answer is that it is almost an impossibility to keep young persons under 18 from these premises. We in Northern Ireland will reap what the House decides to do during what could be two one-and-a-half-hour debates. We shall reap the broken homes, the broken hearts, the broken families and the broken lives. The problems are already with us, but they will increase as a result of the decisions of the House.
12.39 am
Mr. Needham: As the hon. Member for Antrim, North (Rev. Ian Paisley) moved down the Bench towards me I wondered, before he resumed his place, how close to me he would finally arrive. I congratulate the hon. Member for Newry and Armagh (Mr. Mallon) on some of his remarks this evening and so I congratulate the hon. Member for Antrim, North on some of his. I agreed with some of the things that the hon. Member for Antrim, North said about the previous measure.
The hon. Members for Kingston upon Hull, North (Mr. McNamara) and for Newry and Armagh (Mr. Mallon) spoke about the two-year difficulty. I have considered the matter long and hard. It will be more difficult for clubs to show that they can survive for two years without the benefits of the profits from drink, but the basis of the legislation is the need to show that a club can exist in good faith for purposes other than the supply of liquor.
It is therefore absolutely right that there should be a gestation period in which clubs can thrive without relying on profits from selling drink to achieve reasonable
1102
membership. We make no apology for that. We have taken this course of action because we have problems with clubs and their objectives in Northern Ireland.
The hon. Member for Newry and Armagh asked about the difference between a social and a sporting club and said that he did not see the distinction laid out clearly in the order. He did not see the distinction laid out because it is not there. A club has to show that it exists in good faith for social, sporting or purposes other than for purely the supply of intoxicating liquor. Social intercourse is such a reason.
The hon. Member for Kingston upon Hull, North asked about the breadth of police powers and mentioned his concern about the possibility of a heavy-handed constable. I accept the necessity of the police administering the order properly and sensibly. In England and Wales, rights of entry without a warrant to inspect a club which has applied for registration are similar to those in Northern Ireland. The circumstances in which a constable can enter under the powers of a search warrant arc also similar except that, in England and Wales, a constable needs a search warrant to obtain evidence that grounds exist for cancellation of a club's registration. In Northern Ireland, a constable would be able to enter club premises without a warrant in those circumstances. In Scotland, I understand that there is no statutory right given to the police to enter and inspect the premises of a club which is applying for registration, although that can happen in practice.
The hon. Member for Newry and Armagh spoke of the possible age of a constable and his experience. The phrase "a contable" is defined in the Interpretation Act (Northern Ireland) 1954 and means any member of the Royal Ulster Constabulary or reserve constable. A young constable at present has powers to arrest people for far more serious crimes than are likely to arise out of his seeing whether a club is operating illegally. I agree that the order will have to be policed sensibly, and I am sure that the police are aware of that.
The hon. Member for Mid-Ulster (Rev. William McCrea) spoke of the sham way in which the order is proceding through the House. I have already stated the Government's position on that matter. I assure the hon. Gentleman that I take no great pleasure in having to bring forward Orders in Council as a result of the direct rule legislation, which does not allow for proper and full debate of these issues. I would welcome an opportunity to see the hon. Member for Mid-Ulster about that. Since last October, I have asked him to discuss this matter but, for reasons which I fully understand, he has declined my seductive invitation, which does not make amending legislation any easier. The Northern Ireland committee could be set up to discuss these matters, but it has not been operating. All I can say this evening is that I hope that we shall all find the discussions that may be about to take place will prove to be a more satisfactory way of conducting our affairs.
Rev. Ian Paisley: Surely the Minister must admit that it is for this House and the usual channels to take up these points about how we should work for Northern Ireland with the various parties. The Government should be prepared to meet us. We have heard representations from the Liberal party and from the various unionists in this House. Other hon. Members sitting behind the Minister have expressed the same view. Surely the Minister should

1103
be interested, not in talks with him, but in talks with the usual channels to find out whether the House wants to proceed in this way.
Mr. Needham: It may well be a matter for the House, and the usual channels will no doubt be fully involved. They always are in such matters. I have replied to several debates on such measures and I concede that there could be better ways to proceed, one of which might be through a devolved Administration in Northern Ireland to tackle these issues, as we said in our manifesto.
The hon. Member for Londonderry, East (Mr. Ross) pointed out that in the 12 minutes available to me in the preceding debate I was unable to answer all the points raised and that no doubt in many months time some joyful letters would arrive in the post which would not be publicised throughout the Province. That is not unique to debates of this sort. He will know as well as I do that in many debates reply speeches must be curtailed for one reason or another and that when it is impossible for Ministers to answer all the points involved, letters are sent. This Order in Council is no different in that respect.
The hon. Gentleman asked who made the legislation unworkable. It became unworkable because the Licensing Act (Northern Ireland) 1971 and the previous order were flawed as public opinion altered and the legislation was not in tune with what the public was prepared to accept. The Registration of Clubs Act (Northern Ireland) 1967 did not have the teeth to control the clubs which is why we have this order.
The hon. Members for Antrim, North and for Newry and Armagh asked about the policing of the order. Once again, in the preparation of the order we asked the police for their advice on what they felt they could enforce. We have stiffened the penalties considerably, so that if clubs do not take account of the rules in the order, they will face stiff penalties. To return to the point of the hon. Member for Newry and Armagh, if a young man wins a prize after 7 pm and goes into a club, providing he goes into a part of the club which does not have a bar he can be presented with the prize. If he goes into a part which has a bar and is presented with the prize, the club is in breach of the criminal law. I do not share the hon. Gentlemans' view that in those circumstances the police will refuse to act. It is a clear breach of the criminal law and police would have to act. We have no evidence to believe that that would not be the case.
Mr. Mallon: The Minister has quite a number of points to deal with. I am sure that he would not want to overlook the point that I raised in relation to the checks and balances concerning the role of district councils. I would not like to think that he would overlook that.
Mr. Needham: I apologise to the hon. Gentleman. The point about district councils is that they have right to object to the registration of a club as laid down in the order. However, the objection must be placed before the court. It is for the court—and in the initial stage of the registration, for the county court—to decide whether the objections have validity on the grounds laid down in the order. I suggest that it is perfectly fair and right to ask district councils their opinion of what is happening in their localities.
Of course the court will determine and it will clearly have the evidence of the club if the club claims that it is
1104
being penalised or objected to by a district council purely on the grounds that it comes from the other tradition. In those circumstances, the court will make the determination and the district council has no power other than to put before the court any objection laid down in the order. However, the court must decide. Indeed, one of the reasons for the introduction of the order is to ensure that the county court will make the initial determination.
I hope that I have been able to allay hon. Members' fears. The district council will rightly be involved. Beyond that, it will be for the court to determine.
Mr. Mallon: Surely one of the specified points is that the district council will have a role to play in deciding whether the person who submits the application is a fit person to hold a licence. It is difficult to see how such an objective decision could be made in a district council where there are so many varied interests and attitudes.
Mr. Needham: The hon. Gentleman is wrong. One of the grounds on which a court can determine not to register or renew a club's registration is that it is being run by unfit people. If a district council or a member of the public—and it was argued in the Blackburn report that members of the public did not simply roll off the street to make such objections—put forward a view that someone was unfit to run a club for some reason, or if that objection was made by a member of the police, it is up to the court to determine the matter. The determination will be made by the court, not by the district council.
I hope at this early hour of the morning that I have answered as many questions as possible without needing to have recourse to letter writing. I want to conclude by stating that I believe that the order—and I was glad that the hon. Member for Mid-Ulster at least appeared to agree with the contents of the order—is sensible. It will deal strongly with the small number of disreputable clubs which must be dealt with. The order this evening signals a very bad day for those clubs. I am sure that the people of Ulster have suffered enough from the paramilitaries of one sort or another and the whole House should welcome and support the order.
Question put:—
The House divided: Ayes 134, Noes 8.

Division No. 18]

[12.55

AYES

Alexander, Richard

Colvin, Michael

Amess, David

Conway, Derek

Arbuthnot, James

Coombs, Simon (Swindon)

Arnold, Jacques (Gravesham)

Couchman, James

Ashby, David

Dixon, Don

Baker, Nicholas (Dorset N)

Dorrell, Stephen

Baldry, Tony

Durant, Tony

Bennett, Nicholas (Pembroke)

Evans, David (Welwyn Hatf'd)

Bevan, David Gilroy

Flannery, Martin

Boscawen, Hon Robert

Foster, Derek

Boswell, Tim

Garel-Jones, Tristan

Bottomley, Peter

Gorman, Mrs Teresa

Bowis, John

Greenway, John (Rydale)

Brazier, Julian

Gregory, Conal

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

Griffiths, Peter (Portsmouth N)

Brown, Nicholas (Newcastle E)

Ground, Patrick

Browne, John (Winchester)

Gummer, Rt Hon John Selwyn

Bruce, Ian (Dorset South)

Hamilton, Neil (Tatton)

Buck, Sir Antony

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

Burns, Simon

Hargreaves, Ken (Hyndburn)

Butler, Chris

Harris, David

Carlisle, John, (Luton N)

Hayes, Jerry

Carlisle, Kenneth (Lincoln)

Heddle, John

Carrington, Matthew

Hicks, Mrs Maureen (Wolv' NE)

1105

Holt, Richard

Patnick, Irvine

Hunt, David (Wirral W)

Peacock, Mrs Elizabeth

Irvine, Michael

Porter, David (Waveney)

Janman, Timothy

Portillo, Michael

Jones, Gwilym (Cardiff N)

Prescott, John

Jones, Robert B (Herts W)

Rattan, Keith

King, Roger (B'ham N'thfield)

Redwood, John

King, Rt Hon Tom (Bridgwater)

Rhys Williams, Sir Brandon

Kirkhope, Timothy

Riddick, Graham

Knapman, Roger

Roe, Mrs Marion

Knowles, Michael

Rowe, Andrew

Latham, Michael

Ryder, Richard

Leigh, Edward (Gainsbor'gh)

Sackville, Hon Tom

Lennox-Boyd, Hon Mark

Shaw, David (Dover)

Lilley, Peter

Shaw, Sir Michael (Scarb')

Lloyd, Peter (Fareham)

Shephard, Mrs G. (Norfolk SW)

Lord, Michael

Shepherd, Colin (Hereford)

Loyden, Eddie

Smith, Tim (Beaconsfield)

Lyell, Sir Nicholas

Stanbrook, Ivor

McGrady, E. K.

Stanley, Rt Hon John

Maclean, David

Stern, Michael

McLoughlin, Patrick

Stevens, Lewis

McNamara, Kevin

Stewart, Allan (Eastwood)

Malins, Humfrey

Stewart, Andrew (Sherwood)

Mallon, Seamus

Stradling Thomas, Sir John

Mans, Keith

Summerson, Hugo

Marshall, John (Hendon S)

Taylor, Ian (Esher)

Martin. David (Portsmouth S)

Thompson, Patrick (Norwich N)

Maxwell-Hyslop, Robin

Thorne, Neil

Meale, Alan

Thurnham, Peter

Miller, Hal

Tredinnick, David

Mills, Iain

Twinn, Dr Ian

Mitchell, Andrew (Gedling)

Viggers, Peter

Mitchell, David (Hants NW)

Waddington, Rt Hon David

Moonie, Dr Lewis

Waller, Gary

Moss, Malcolm

Warren, Kenneth

Needham, Richard

Watts, John

Nellist, Dave

Wheeler, John

Neubert, Michael

Widdecombe, Miss Ann

Nicholson, David (Taunton)

Wiggin, Jerry

Nicholson, Miss E. (Devon W)

Winterton, Mrs Ann

Paice, James

Winterton, Nicholas

1106

Wood, Timothy

Tellers for the Ayes:

Young, Sir George (Acton)

Mr. David Lightbown and Mr. Alan Howarth.

NOES

Beggs, Roy

Robinson, Peter (Belfast E)

Forsythe, Clifford (Antrim S)

Smyth, Rev Martin (Belfast S)

Kilfedder, James

Maginnis, Ken

Tellers for the Noes:

Molyneaux, Rt Hon James

Mr. William Ross and Rev. William McCrea.

Paisley, Rev Ian

Question accordingly agreed to.
Resolved,
That the draft Registration of Clubs (Northern Ireland) Order 1987, which was laid before this House on 2nd July, be approved.

HOUSE OF COMMONS MEMBERS' FUND
Ordered,
That Sir Geoffrey Finsberg, Sir Peter Hordern, Mr. Geraint Howells, Mr. Alfred Morris, Mr. Gordon Oakes and Sir Gerard Vaughan be appointed Managing Trustees of the House of Commons Members' Fund in pursuance of section 2 of the House of Commons Members' Fund Act 1939.—[Mr. David Hunt.]

PARLIAMENTARY CONTRIBUTORY PENSION FUND
Ordered,
That Sir Geoffrey Finsberg, Mr. Ted Garrett, Sir Peter Hordern, Mr. Geraint Howells, Mr. Alfred Morris, Mr. Gordon Oakes, Sir John Stradling Thomas and Sir Gerard Vaughan be appointed Managing Trustees of the Parliamentary Contributory Pension Fund in pursuance of section 1 of the Parliamentary and Other Pensions Ad 1987.—[Mr. David Hunt.]

Urban Renewal (Birmingham)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]
1.4 am
Mr. Jeff Rooker: This Adjournment debate is about the lack of urban renewal in three small parts of the Handsworth ward in my constituency. I congratulate the hon. Member for Broxbourne (Mrs. Roe) on her appointment as Minister. I think that this is her third Adjournment debate in a few short days.
I shall deal first with the easy point—the London housing action area based on part of Aston lane. The area consists of 246 dwellings for which a scheme of enveloping is proposed in respect of only 163 dwellings. The tenure mix, about which the Minister will be interested; is owner-occupation, 52 per cent.; private landlords, 21 per cent.; local authority, 19·4 per cent.; and the housing association, 6·6 per cent.
The London housing action area is one of seven schemes currently submitted by Birmingham city council to the regional office of the Department of the Environment. The Minister will know by now, I think—if she does not, she will soon—that, under the terms of enveloping circular 26/84, the Department of the Environment is given 30 working days to approve such schemes. In reality, only schemes that will be approved are submitted. By yesterday, a decision on the London housing action area was outstanding by 77 working days, having been submitted as far back as 16 March. It was planned that work on that small area would go out to tender on 1 July. I understand that it has now been put off until about October. Notwithstanding the great concern caused to my constituents living in the area, such a delay means that contracts cannot start on time, forcing Birmingham city council to underspend on its housing investment programme, thus creating further cash flow problems. Of course, at the end of the year, the council gets the blame for the delay and the underspend. That is grossly unfair.
As the scheme is an agreed scheme—if it is not, I hope that the Minister says so—my constituents in Aston lane and Railway, London and North roads want to know why there has been a delay in the regional office of the Department of the Environment in deciding whether the enveloping scheme Should go ahead. They want to know what is holding up the London housing action area work. So far as they know, there is no technical problem. They are unhappy, annoyed and unsure because of the rumours that are associated with a delay of this kind.
That is the easy point. Unlike the London housing action area, Charles and Turville—both named, as they normally are, after a local road—are proposed housing action areas. They are larger than the London one, the Charles area consisting of 447 dwellings and the Turville area of about 250. They happen to adjoin and together there are about 700 dwellings.
At present, those proposed housing action areas are an island of unhappiness for my constituents in respect of their housing. It is an island of unhappiness in the Handsworth ward in Birmingham. My constituents feel left behind, as they see the effects of all the urban renewal in nearby roads. I shall name just two. People see work done on the other side of Putney road and on the other end
1108
of Westminster road. But, by and large, their homes are falling apart. They point out at public meetings that most people who are well housed tend to complain about the renewal parts of their area, such as about getting the grass verges cut, the trees planted and the dog mess cleaned up, but the people of Charles and Turville are mainly concerned about the roofs on their homes. They are concerned about the struggle for the work that is needed to keep the very fabric of their homes in good order—enveloping. At recent meetings, I promised them that, if I was successful in the ballot, I would raise the matter in the House of Commons.
The two housing action areas, as I hope the Minister has discovered, are special cases. I do not say that they are ordinary areas like London. Indeed, they have been treated as special cases by Birmingham city council's urban renewal team—a team of first-rate people that has led the way in urban renewal in this country. Many cities in this country have followed the experiments that have begun in Birmingham. The two areas are special cases basically because of the variation in dwelling size and the special mix of tenures. Indeed, those two reasons have caused 700 dwellings to be left behind for so long in the urban renewal programme. If it were easy to deal with long rows of terraced houses, virtually all the same size, they would have been done a long time ago, as indeed nearby roads have been done. Because of the tenure mix and the size of the dwellings, they have been left and chopped off the end of the programme year after year.
A detailed survey is required before an enveloping scheme can take place. One has been completed for Charles but not for Turville. The Charles area survey was completed in July 1986. The problem relates partly to the tenure mix. In Charles, the tenure mix is: owner-occupation 57 per cent.; private landlords 9·6 per cent.; local authority 4·3 per cent.; and housing associations 38·9 per cent. We are talking about 447 dwellings. Only 27 per cent. are classed as satisfactory. It will not be easy to conduct an enveloping scheme because of the size of the dwellings and their tenure. However, it is the considered professional judgment of the Birmingham housing urban renewal team, which invented enveloping, that enveloping provides the best option. The problem is that the Minister does not like the plan and the reginal office will not approve it. Like all good things that were invented in Birmingham, enveloping has been ruined by Whitehall. It could not resist writing a circular about enveloping. The minute the circular was written, the concept of enveloping was killed stone dead. The same thing happened with half-and-half shared housing ownership.
In the heads of households count in the Charles area, 45 per cent. are unemployed, and 45 per cent. are on supplementary benefit. The majority—68 per cent.—are euphemistically classed as ethnic minorities. Old-age pensioners comprise 18 per cent. of the count.
The neglect that has been caused in the small area of Handsworth by delaying the decision—which amounts to a flat refusal by the Minister—is causing the area to deteriorate fast. The city council housing department cannot now let its own dwellings in the area without great difficulty. Basically, only homeless families will accept dwellings in the area. For one of the major housing associations in the area, the average tenancy turnover is three months. Many large houses in the area are being

1109
converted into flats by housing associations. That got so bad that the city council has put a block on that type of policy. There is now some reconversion to family housing.
There are advantages and disadvantages in such a policy. On the one hand, the housing association brings about renewal and more homes are created—housing associations get the same subsidy for a flat as they do for a house. On the other hand, flats definitely mean a more transient population and can dislodge community spirit. That is not a criticism of housing associations. Indeed, the financial structure is such that that is bound to happen in an area in which there are many large houses and where there is a shortage of local authority capital funds. Because local authorities lack funds, the housing associations move in at their request, and larger houses are ripe for such development. The tragic result is that public investment by housing associations in their refurbishment programmes is wasted if other properties in an area—mainly the owner-occupied sector—are not to be dealt with.
I invite the Minister during the summer recess to visit St. Peter's road, Rodhut road, Crompton road and Churchill road, where she will see almost derelict homes alongside homes that have been refurbished following flat conversion programmes. She will see pepper-potting at its worst. It is crazy and it does not make any economic sense.
For some reason, the regional office of the Department of the Environment disagrees that enveloping is the required option for the area. On the evidence of my experience in the city of Birmingham, I back the view of the professional Birmingham urban renewal staff against the regional office, which seems to be running rather a vendetta against the city of Birmingham.
I corresponded briefly on this issue just prior to the election with the former Minister for Housing. The new Minister will have seen his letter to me of 14 May in which he pointed to the difficulty of too many housing association dwellings. He also said, unfairly in my view, that the blame lay partly with Birmingham city council because it had not sent any housing action area declaration documents to the Department. Of course it had not. As I said about the London situation, the only documents and applications sent in were those for which approval had been organised in negotiations with city council officials and regional civil servants. The system will not work in any other way.
If a housing action area made a submission and it was rejected, it would require to be redefined geographically, and that would put the programme back at least a couple of years. How could a little pocket of 700 dwellings—two housing action areas, an island, as it were, in the middle of Handsworth—be redefined geographically when all the areas around it had been dealt with by way of enveloping schemes? There would be no practical way of redefining it, so that is not an option for the regional office or the city council.
The detailed study of Charles was completed a year ago. My constituents in the Charles and Turville proposed housing action areas have suffered considerably because the area of Handsworth in which they live—the vast majority of them live there from choice; they like living in the inner city, where there is a vibrancy of life that is missing from the outer suburbs—is mixed by size of dwellings and ownership. It is the very tenure mix that Ministers, and I as Labour party spokesman on this
1110
subject for some years, have sought to promote. Yet that mix is being held against the sort of enveloping scheme that has been proposed.
Ministers, not Birmingham, wrote the enveloping circular. Department of the Environment officials do not make themselves available at public meetings, both before and after proposals are submitted for urban renewal. That sort of consultation is left to the city council's urban renewal teams. Those teams also take the blame, and in this situation it is unfair that they should bear that blame. That is why I decided to raise this matter on the Adjournment. I want to stop the buck-passing.
I appreciate that a difficulty exists and I do not deny that there is a special case. Certainly we do not want to create another special case, since there is only this island of two small proposed action areas in this part of Handsworth, although others may exist in other parts of Birmingham. I am speaking tonight only for my constituents. Others can speak for the rest of the city, though I appreciate that the Minister must take a more strategic view of the position.
My constituents have every right to feel frustrated, annoyed and angry. They are not receiving full information about who is making the decisions and the basis on which those decisions are made. One of those decisions represents the rejection of the proposed action areas, with Birmingham not yet having been able to submit the relevant documents. If they were submitted, it is known that they would be rejected. For that reason I hope the Minister will answer the questions I have asked tonight.
1.20 am
The Parliamentary Under-Secretary of State for the Environment (Mrs. Marion Roe): I thank the hon. Member for Birmingham, Perry Barr (Mr. Rooker) for his kind remarks on my appointment. I am grateful to him for this early opportunity to speak on a subject that I know is dear to his heart and one that is right at the top of the Government's agenda—housing in the inner cities.
The hon. Gentleman has rightly drawn the attention of the House to the housing conditions in the Charles, Turville and London areas in the north of Birmingham, and to the strong wishes of the residents in those areas that those conditions should be improved. I shall deal later with these specific areas and explain how improvements to the housing stock may be achieved. I think, however, that that needs to be viewed in the context of the many housing and inner-area initiatives which have been instigated or supported by this Government since 1979. Many of them have benefited inner-city authorities, and Birmingham is no exception.
The hon. Member has, for example, mentioned enveloping and has rightly pointed out the many benefits of that technique. For those hon. Members who may not be completely familiar with the term, enveloping is a technique pioneered in Birmingham that secures the wholesale improvement of the external fabric and frontages of private housing that is old and has fallen into disrepair. Work is carried out by the council, with the consent of the owners and at no cost to them. It involves the replacement or repair or roofs, chinmeys, guttering, windows and doors; and work to external walls and curtilages. Whole terraces or blocks of houses are dealt with at a time. Indeed, during the course of the work, the

1111
whole street takes on a quite extraordinary appearance—the houses are shrouded in scaffolding, to emerge a few weeks later in something like pristine condition.
The point that I would make about enveloping is that, whilst Birmingham undoubtedly pioneered the technique, the Government have consistently provided the council with backing and financial resources. In the early days when enveloping was in the experimental stage, Government funding was provided under the urban programme through the Birmingham inner-city partnership. In 1982, when the scheme had been evaluated and had been found to have proved itself, we acted to incorporate enveloping as an important component of mainstream policy for the improvement of private sector housing. As a result, housing authorities throughout the country that wish to adopt enveloping as a means of securing the improvement of private sector stock in housing action areas may do so, and may apply to the Department for Exchequer subsidy to cover 75 per cent. of eligible costs. One hundred and thirteen such schemes have now been approved, 38 of them in Birmingham.
More substantial in cash terms has been the urban programme itself. Birmingham has benefited to the tune of approximately £160 million under the programme since 1979. Handsworth has been a priority from the start and has received urban programme funding in the order of nearly £30 million. Apart from enveloping, Birmingham urban programme has supported many innovative and exciting housing projects and many of these have been directed towards privately owned housing in the inner areas. Recently, for example, the Department has approved a pilot project of security works to houses in the Westminster road area, some of which are in the proposed Turville housing action area; and the Broughton road local labour project in Handsworth has involved the collaboration of Government Departments with the city council and Tarmac in an extraordinary housing improvement scheme designed to provide training and employment, and housing for inner-city residents. The scheme, which involves enveloping and other internal and external improvements, will provide about 100 units of accommodation, and will create 40 local jobs and 24 additional places for local trainees. The overall cost of the scheme is approximately £1·6 million, of which the DOE will fund about £1 million covering house refurbishment costs.
Mr. Rooker: I should make it absolutely clear that Broughton road is not in Handsworth ward and is not in the Perry Barr constituency. It would be quite irrelevant for me to go back to people in Charles and Turville and tell them to look at what is happening in Broughton road in the Ladywood constituency.
Mrs. Roe: I shall come to the points raised by the hon. Gentleman. I said that I would come to them, but it is fair to put into context the Birmingham scene as a whole.
However, there is more to helping inner-city residents with repair and improvement than total resources allocated to housing. In November the Government announced that they would meet half the costs of a new £6 million scheme to help poorer home owners identify and secure repairs and improvements. Fifty new agency service schemes are to be established in partnership with Neighbourhood Revitalisation Services and Care and
1112
Repair Ltd. I expect a number of these to be in the inner cities, but this is not an initiative exclusive to them. They will provide a total service, if one is needed, including advice on what work needs to be done, what builder to use, how to finance the work and how to ensure that it is done properly. We believe that this important initiative will not only help to target better the standard local authority grants towards those who need them most, but will also succeed in attracting other sources of finance. We shall be monitoring the initiative closely to assess its success in meeting these objectives.
I shall now return to the particular points raised by the hon. Gentleman in relation to the proposed Charles and Turville housing action areas and the London housing action area in north Birmingham. I will deal with London first. Birmingham declared this a housing action area on 17 November with a view to improving the area through a variety of means in a concerted plan of action over five years. This would include enveloping, internal and environmental improvements, traffic management and clearance of substantial numbers of unfit houses. Although the area contains a high proportion of local authority and housing association dwellings—about 26 per cent.—we decided in the circumstances that the housing action area should be allowed to stand. Birmingham was notified of this and, on 16 March, the council submitted an enveloping scheme for 120 dwellings at a total cost of £906,780, or £7,557 per dwelling. We had been awaiting from Birmingham clarification of the cost of works to the curtilages to some of the houses. That information has just been received, and we shall so be in a position to issue a decision very soon.
Enveloping schemes are only considered within the 30 working days set down in the enveloping circular and when they meet all the criteria. The majority of Birmingham's proposals and the schemes currently with the Department are outside the criteria on a number of counts, and it is considered that in its enveloping applications Birmingham has not fully justified these schemes being approved at the level of subsidy applied for.
The position with Charles and Turville is slightly different in the sense that the city council has not yet declared the areas as housing action areas. Last year Birmingham informally approached the Department with a view to declaring both areas housing action areas in order to carry out enveloping. It was felt that this approach was not really appropriate and that Birmingham should consider an alternative strategy to secure the improvement of these areas. Housing action areas are intended to deal with the improvement of private sector housing and both Charles and Turville contain a high proportion of local authority and housing association property for which there are other more appropriate sources of funding such as, for example, housing association grants. In addition, the dispersed nature of the private sector properties would probably have led to ineffective enveloping proposals. Accordingly, the Department wrote to the city council suggesting that it should rethink its strategy for these areas. We have seen no further proposals from Birmingham to date, but the Department is willing to discuss a range of options with the city council if it so wishes. They might include, for example, the declaration of smaller areas as housing action areas or general improvement areas, individual improvement grants, limited block repair schemes, and the selective employment of agency services to encourage

1113
effective take-up of grant or loan facilities. I must emphasise, however, that the decision whether or not to declare a housing action area, and over what area, is for the city council to take. The Secretary of State does, of course. have the last word on declarations, even if he chooses to exercise his right to intervene very occasionally.
Mr. Rooker rose—
Mrs. Roe: I shall be happy to follow up further points in a letter, but I want to conclude my remarks and answer the questions that the hon. Gentleman has asked.
I do not underestimate the difficulties that the council faces or the size of the problems to be tackled. It is worth remembering, however, that enveloping represents a substantial public investment in private housing. Birmingham's schemes approved so far have cost over £50 million at an average cost per dwelling of over £8,000. By any acount that is a substantial commitment of public subsidy to the individual owners. That is why each scheme needs careful scrutiny. The House would not wish it to be otherwise. Schemes must be cost effective and represent good value for money. I make no apology, therefore, for this level of scrutiny, or the care with which we examine the council's future proposals. Although the residents of Charles, Turville and London have made plain their desire to have their houses and areas improved — and I understand and respect those wishes—as taxpayers, like all of us, they would I am sure be equally concerned that the Government should spend public money wisely and carefully.
Earlier, I mentioned some examples of the work that is being undertaken by the Government to improve housing in the inner areas of Birmingham and elsewhere. As to the future, we intend to strengthen local authorities' ability to direct resources at the areas of worst housing need. The Government's Green Paper on home improvement, published in May 1985, proposed that a single form of
1114
statutory designated area should replace the present housing action areas and general improvement areas. We intend to legislate, as part of the general reform of the improvement grant system, to give more freedom to local authorities to designate renewal areas. Both renovation and redevelopment will feature, depending upon a full appraisal of the different options available.
We also intend to tackle some of the shortcomings of enveloping. At present, this is carried out in housing action areas only under environmental works powers. We shall build upon the lessons learnt over the past years in using these powers, and introduce new powers of group repair which will enable local authorities everywhere to carry out the renovation of blocks of poor quality housing. Provided that schemes meet certain basic criteria as to stock condition and tenure, authorities will be free to exercise such powers without requiring the specific approval of the Secretary of State. This will greatly strengthen Birmingham's and other local authorities' ability to tackle serious disrepair in the private sector in co-operation with owners, occupiers and financial institutions.
In order to make progress, I suggest that the hon. Gentleman should encourage Birmingham city council to submit to the Department of the Environment regional office fresh proposals on the Charles and Turville areas as soon as possible so that they can be scrutinised without delay.
Mr. Rooker: Is there a minimum size of housing action area? I have seen a housing action area in the north which consisted of only about 15 houses in a terrace. Would that kind of thing be acceptable?
The motion having been made after Ten o'clock on Tuesday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-six minutes to Two o'clock.

AGRICULTURE, FISHERIES AND FOOD

  CAP (Surpluses)
  Mr. John
  asked the Minister of Agriculture, Fisheries and Food (1) if he will set out the amounts of common agricultural policy surplus production held in each of the stores used for that purpose in the United Kingdom;

  (2) what is the location, by town. of the stores used for the storage of common agricultural policy surpluses in the United Kingdom.

  Mr. Donald Thompson
  I shall reply to the hon. Member as soon as possible.

  Milk Quota
  Mr. Livsey
  asked the Minister of Agriculture, Fisheries and Food if, in view of the effects of delay on United Kingdom dairy farmers, he will immediately allow the Milk Marketing Board to organise milk quota leasing in the United Kingdom.

  Mr. Donald Thompson
  I shall reply to the hon. Member as soon a possible.

  Council of Agriculture Ministers
  Mr. Boswell
  asked the Minister of Agriculture, Fisheries and Food what was the outcome of the Council of Agriculture Minsters' meeting held in Luxembourg on Monday 13 July; and if he will make a statement.

  Mr. MacGregor
  I represented the United Kingdom at this meeting. The Council agreed, subject to the opinion of the European Parliament, on arrangements for the funding of agricultural expenditure from the Community budget. The decision implements the conclusions reached by Heads of Government at their meeting on 29 and 30 June that the present system of advance payments should be changed.

  Instead of member states making guarantee payments to farmers and others after they have received funds from the Community budget, they will make the payments in advance, out of their own finances. There will be a delay of two months before member states are reimbursed from Community funds and this will have the effect of removing the budget deficit for agriculture in 1987. This system will continue until such time as final arrangements are made for the future financing of the Community.

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  January

  —

  1,461

  —

  107

  71

  5

  53

  337

  February

  —

  —

  —

  201

  189

  —

  56

  315

  March

  —

  —

  —

  415

  146

  2

  16

  332

  April

  —

  —

  —

  296

  13

  89

  139

  211

  May

  —

  —

  —

  353

  21

  26

  114

  324

  June

  —

  —

  —

  340

  37

  51

  154

  506

  July

  —

  —

  —

  269

  —

  47

  214

  408
  Payments to farmers and other recipients will not be affected by the change.

  It was important to establish that the adjustment of the advances system will result in no extra cost to the Community budget in 1988 and subsequent years, and this has been achieved. Provision is made for limited interest payments to be made in the short-term to certain member states.

  This year's price fixing and budget are finally settled. We must continue to focus on finding longer term solutions to the problems of budgetary discipline in the interests of farmers and taxpayers as a whole. Britain has already put forward ideas which the Commission is considering.

HOME DEPARTMENT

  Detained Persons
  Mr. Cox
  asked the Secretary of State for the Home Department (1) what rights and conditions apply to people (a) being held on remand in police cells and (b) serving a prison sentence;

  (2) what are the rights of people being held on remand in police cells as to visits; and if he will make a statement as to his Department's policy in this matter.

  Mr. John Patten
  The conditions under which sentenced and unsentenced prisoners are held in prison department establishments are laid down in "The Prison Rules 1964" as amended. These do not extend to prisoners held in police cells. However, such prisoners are covered by the relevant sections of the code of practice for detention, questioning and treatment of persons by police officers issued under the Police and Criminal Evidence Act 1984.

  Mr. Cox
  asked the Secretary of State for the Home Department what was the number of (a) men and(b) women being held in police cells in the United Kingdom on I July; and what was the longest period of time a person on remand had been held under such conditions on that date.

  Mr. John Patten
  On 3 July, the nearest date for which reliable figures are available, the number of men being held in police and court cells in England and Wales was 511 and the number of women was 109. The longest period of time that a person on remand had been so held was 65 days.

  Mr. Cox
  asked the Secretary of State for the Home Department what has been the number of people held in police cells in the United Kingdom for each month since January 1965.

  Mr. John Patten
  The readily available information relates to the last Friday of each month when the numbers of prisoners held in police cells in England and Wales were as follows:
  409

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  August

  —

  —

  —

  233

  —

  55

  89

  September

  —

  —

  119

  250

  1

  28

  188

  October

  3,497

  —

  41

  259

  13

  13

  106

  November

  3,494

  —

  170

  568

  18

  42

  195

  December

  3,454

  —

  —

  33

  —

  —

  59

  There are no records available prior to 1980 and information relating to the years 1980 and 1982 is incomplete.

  Mr. Cox
  asked the Secretary of State for the Home Department why people, whose homes are in London and who have been remanded in custody by courts in London, are being held in police cells many miles away from London.

  Mr. John Patten
  The continuing rise in the prison population, particularly those remanded in custody, has led to the increasing use of police cells to accommodate some remand prisoners. The pressure on police cells in the Metropolitan police district has made it necessary for the police to look outside London for short term accommodation.

  Entry Clearance
  Mr. Cohen
  asked the Secretary of State for the Home Department on how many occasions since 1979 visa officers have appealed against an adjudicator's determination to allow an application for entry clearance; and if he will give a breakdown (i) by post of application in the subcontinent and (ii) by year.

  Mr. Renton
  The available information compiled from statistics maintained by the independent appellate authorities is given in the table. No record is kept for individual posts and prior to 1984 no separate figures were kept for the Indian sub-continent.

  Appeals to the Immigration Appeal Tribunal from decisions by adjudicators to allow appeals against refusal of entry clearance

  Commonwealth

  Non-Commonwealth

  EC

  1979

  47

  50

  0

  1980

  33

  21

  1

  1981

  21

  19

  0

  1982

  28

  20

  0

  1983

  23

  18

  1

  India/Bangladesh

  Pakistan

  Other Commonwealth

  EC

  Others

  1984

  32

  3

  10

  0

  0

  1985

  20

  10

  4

  0

  5

  Indian

  Bangladesh

  Pakistan

  EC

  Others

  1986

  12

  24

  27

  0

  10

  Mr. Cohen
  asked the Secretary of State for the Home Department how many people have been refused visitor's entry clearance, since the new system was introduced, on the grounds that the immigration officer was not satisfied that the applicant was genuinely seeking entry for only the period of the visit stated by him; and if he will give a breakdown by each post considering applications in the sub-continent.
  410
  Mr. Renton
  Information is available centrally only on all applications refused for a visit visa, irrespective of the reason for refusal, and is given in the following table:

  Applications refused initially in the Indian sub-continent for a visit visa to the United Kingdom

  Number of persons

  1986

  1987

  14th quarter

  1st quarter

  April

  Dhaka

  600

  370

  180

  Bombay

  100

  120

  90

  New Delhi

  360

  590

  260

  Calcutta

  2—

  10

  —

  Madras

  30

  40

  30

  Islamabad

  440

  590

  410

  Karachi

  290

  400

  150

  1 Including applications refused for a visit entry clearance in the period 1 to 14 October.

  2 5 or fewer.

  Remand Centres
  Mr. Pike
  asked the Secretary of State for the Home Department what proposals his Department has to improve conditions at remand centres.

  Mr. John Patten
  In the short term implementation of proposals in "A Fresh Start" and the court escort scrutiny will allow staff to be deployed more flexibly and to better effect, providing a sound organisational base for improvements in regime standards for prisoners. In the longer term we are giving priority to measures designed to reduce overcrowding and modernise old buildings throughout the prison estate, including remand centres. The current prison building programme will provide over 17,000 additional places by the mid-1990s in existing and new establishments and we are undertaking extensive modernisations and refurbishment at about 100 establishments, including almost all the Victorian prisons.

  Offenders (Hostels)
  Mr. Irving
  asked the Secretary of State for the Home Department what is the average cost to his Department of a place in a voluntary after-care hostel for offenders.

  Mr. John Patten
  About £1,000 per annum, but there is considerable variation around this figure according to the type of hostel and the facilities provided.

  Feltham Youth Custody Centre
  Mr. Ground
  asked the Secretary of State for the Home Department what progress he has made towards reaching an agreement with the Prison Officers' Association concerning staffing and security at the new remand building due to open at the Feltham youth custody centre on 12 July.

  Mr. John Patten
  Progress has been made towards reaching agreement with the Prison Officers' Association on matters connected with the new remand building at
  411
  Feltham youth custody centre. The opening date of 12 July has been postponed for a few days to allow further talks to take place.

  Inner-City Crime
  Mr. Heddle
  asked the Secretary of State for the Home Department what additional measures he proposes to take to combat crime in the inner cities.

  Mr. John Patten
  We are developing a range of measures to make our cities safer places. We are evaluating the lessons learned from our "Five Towns" local crime prevention initiative with a view to establishing similar arrangements in other urban areas. For this purpose, we shall again be working with the police and seeking the cooperation of local authorities and the private and voluntary sectors. We shall continue our efforts to encourage and support chief police officers in their endeavours to put more police officers on the streets. We will work with other government departments to build on the valuable contribution they are already making to the prevention of crime through the policies and programmes for which they are responsible.

EDUCATION AND SCIENCE

  Play Areas (Surfaces)
  Dame Peggy Fenner
  asked the Secretary of State for Education and Science if his Department issues recommendations or guidelines on safe surfaces in children's playgrounds or recreation areas for schoolchildren; and if he will make a statement.

  Mr. Dunn
  I refer my hon. Friend to the reply I gave on I July to the hon. Member for Gateshead, East (Ms. Quin) at column 86.

ENERGY

  Electricity Industry
  Mr. Lord
  asked the Secretary of State for Energy what part of the electricity supply system and ancillary companies will he privatised; and if he will list them.

  Mr. Parkinson
  Detailed proposals for the privatisation of the electricity supply industry are still being developed.

  Nuclear Installations Inspectorate
  Mr. Lofthouse
  asked the Secretary of State for Energy what effect he estimates the limited resources and understaffing of the Nuclear Installations Inspectorate identified by the Chief Inspector in evidence to the Energy Committee on 6 May have on (a) the safety of nuclear installations and (b) the development of the nuclear industry.

  Mr. Parkinson
  The legal responsibility for the safety of a nuclear installation lies with the site operator. The responsibility of the NII is to see that appropriate standards are developed, achieved and maintained by the licensee to ensure that the necessary safety precautions are taken and to monitor and regulate the safety of the plant by means of its powers under the licence.

  Although the NII has had staffing shortages, it has nonetheless been able to maintain the required standards
  412
  of safety, by giving priority to the inspection and assessment of operating plant, but with the consequent risk of some delay to other projects. However, following a special salary increase a recruitment campaign is now under way which is expected to bring the NII up to full strength.

  Mr. Lofthouse
  asked the Secretary of State for Energy if he will make a statement on the recommendations contained in paragraph 17 of the second report and paragraph 3 of the third special report of the Energy Committee, Session 1986–87, with regard to the implications for the nuclear industry of the understaffing of the Nuclear Installations Inspectorate.

  Mr. Cope
  I have been asked to reply.

  Two substantial increases in the salary scales for all nuclear installations inspectors have recently been agreed and it is expected that this will enable the inspectorate to attract recruits with the expertise and skills required and to bring its staff up to the numbers planned for 1987–88. A recruitment competition is now under way.

  Energy Committee (Second Report)
  Mr. Lofthouse
  asked the Secretary of State for Energy when he intends to respond to the second report of the Energy Committee, Session 1986–87.

  Mr. Parkinson
  With regard to the Committee's recommendation on NII staffing, the Government have agreed to a further pay award for nuclear inspectors to make Nil salaries fully competitive with the rest of the industry. An extensive recruitment campaign is now under way and has attracted considerable interest.

  I hope to be able to respond shortly to the Committee's recommendation on decommissioning costs.

  Small Businesses
  Mr. David Shaw
  asked the Secretary of State for Energy if he will make a statement on the achievements of his Department in helping small businesses over the last three years; and if he will publish the performance indicators by which his Department monitors those achievements and the statistical results of such monitoring.

  Mr. Parkinson
  My Department takes full account of the needs of small businesses in considering the adoption or revision of measures for which it is responsible.

  Small businesses, like larger ones, will have benefited from measures to encourage competition and stimulate efficiency in energy supply and use. They will also have shared in the benefits from a range of measures, including:

  —information and advice schemes to help firms use energy
  more efficiently;

  —support for research and development in new energy technologies; and

  —promotion of the offshore supplies industry.

  Because the span of these activities is so wide, it is not possible to single out their impact on different sizes of company: some individual measures have, however, been of particular benefit to small business. An example of this is the Energy Efficiency Office's support of projects to draughtproof the homes of low-income groups. Much of the new and expanding market for the materials concerned, worth perhaps £10 million in the current financial year, will be supplied by small companies.

  In addition, £40 million has been made available to British Coal Enterprise to help create jobs in coalfield

  413
  areas. This has contributed directly to the creation of 18,506 new job opportunities in 1,399 individual projects, many in new, often small, businesses. The company's investment of £31·5 million so far has attracted additional finance from other sources of almost £200 million.

WALES

  Ogwr Health District (Staff Shortage)
  Mr. Win Griffiths
  asked the Secretary of State for Wales what representations he has received from the chief administrative nursing officer of the Mid Glamorgan health authority about the shortfall of staff for health visitor and community nursing services in the Ogwr health district based on the Telford guidelines; and if he is prepared to provide extra funds to make up this shortfall in the Ogwr health district.

  Mr. Grist
  None. The distribution of manpower and other resources to the various units of the district health authority are matters falling to its own operational and managerial responsibility.

  S4C (Viewing Audience)
  Mr. Alan W. Williams
  asked the Secretary of State for Wales (1) if estimates are available county by county of the average viewing audience of Welsh-language television programmes broadcast by Sianel 4 Cymru;

  (2) what are the latest estimates of the average number of viewers of Welsh-language television programmes broadcast by Sianel 4 Cymru.

  Mr. Wyn Roberts
  This information is not held centrally.

  ADAS (Welsh Language)
  Mr. Geraint Howells
  asked the Secretary of State for Wales how many of the employees of the Agricultural Development and Advisory Service in each of the Welsh counties speak Welsh; and if he will make a statement.

  Mr. Peter Walker
  The number of employees of the Agricultural Development and Advisory Service in the Welsh counties who speak Welsh is:

  Number

  Gwynedd

  20

  Dyfed

  18

  Clwyd

  9

  Powys

  4

  Mid Glamorgan

  5

  South Glamorgan

  West Glamorgan and Gwent

  In addition, there are a further 60 Welsh speakers located at the centralised specialist establishments in Wales, that is ADAS headquarters, sub centres and veterinary investigation centres.

  Housing
  Mr. Wigley
  asked the Secretary of State for Wales what was the current and capital expenditure per head on housing in Wales during the last year for which figures are available.

  Mr. Grist
  Local authorities current and capital expenditure per head for 1986–87 is:
  414

  £ per head

  Current

  49·32

  Capital

  62·68

  Current expenditure relates to both the housing revenue account and rate fund revenue account but excludes any expenditure on advances under the Housing and Small Dwellings Acquisition Acts, expenditure by the Housing Corporation, any Housing Benefit expenditure and Debt charges.

  Capital expenditure is shown gross of receipts but excluding leasing, and Housing Corporation expenditure.

  Capital expenditure including Housing Corporation is £81·00 per head.

  Community Charge
  Mr. Win Griffiths
  asked the Secretary of State for Wales if he will estimate how many second homes in each borough in Wales will not be rated when the poll tax is operating in full; and what will be the loss of revenue on present charges for each borough as a result of this.

  Mr. Peter Walker
  All domestic hereditaments, including second homes, will cease to be rated when the community charge is in full operation. Owners of second homes will instead pay a standard charge to the local authority where the property is situated. The standard charge will normally be equivalent to two units of community charge; but local authorities will have power to set lower standard charges.

  Mr. Win Griffiths
  asked the Secretary of State for Wales (1) if he will estimate what is the current rates revenue received from private and local authority establishments catering for old people as residents by each local authority in Wales;

  (2) what is the estimated revenue for each local authority in Wales when the new business rate is levied in full on private and local authority residential establishments catering for old people and the poll tax is levied in full on the residents.

  Mr. Peter Walker
  The information needed to make these estimates is not available centrally. Final decisions on the treatment of such establishments under the new system have not yet been taken. However, we have already made it clear that residents of old peoples homes will be exempt from the community charge.

  Rates
  Mr. Wyn Griffiths
  asked the Secretary of State for Wales (1) if he will estimate what is the current rates revenue received from religious establishments with permanent residents by each local authority in Wales;

  (2) what is the estimated revenue for each local authority in Wales when the new business rate and poll tax are levied in full on religious establishments and their residents.

  Mr. Peter Walker
  The information needed to make these estimates is not available centrally.

ATTORNEY-GENERAL

  Polling Register
  Mr. Allen
  asked the Attorney-General if the Lord Chancellor will make it his policy to make available free

  415
  on request to any hon. or right hon. Member one copy of the marked polling register for his or her constituency; and if he will make a statement.

  The Attorney-General
  No.

PRIME MINISTER

  Insurance (Northern Ireland)
  Mr. Kilfedder
  asked the Prime Minister what information she has as to how insurers' overheads in Northern Ireland compare with those in England.

  The Prime Minister
  None.

  Data Processing (Duplication)
  Mr. Michael Marshall
  asked the Prime Minister (1) to what extent the Home Office's data processing activities are duplicated by (a) the Inland Revenue, (b) Her Majesty's Customs and Excise and (c) the Department of Health and Social Security;

  (2) to what extent the Department of Health and Social Security's data processing activities are duplicated by (a) the Inland Revenue, (b) Her Majesty's Customs and Excise and (c) the Home Office.

  The Prime Minister
  Government Departments do not, in discharging their own responsibilities, deliberately duplicate data processing activities of other Departments.

  The Department of Health and Social Security exchanges approximately 40 million data items with the Inland Revenue each year in the process of collecting national insurance contributions and income tax, and in relation to pensioners working and paying income tax; duplication of data processing activities takes place only in that this common information is shared.

  Western Sahara
  Mr. Corbyn
  asked the Prime Minister what is Her Majesty's Government's policy towards recognising the Moroccan annexation of Western Sahara; and if she will convey this policy to King Hassan during his forthcoming visit.

  The Prime Minister
  The Government recognise neither the "Saharan Arab Democratic Republic" nor Moroccan claims to sovereignty over the Western Sahara. The Government fully support the efforts made by the United Nations Secretary General to bring about a peaceful solution. I look forward to discussing this and other international issues with King Hassan.

  Engagements
  Mr. John Mark Taylor
  asked the Prime Minister if she will list her official engagements for Tuesday 14 July.

  Mr. Thomas
  asked the Prime Minister if she will list her official engagements for Tuesday 14 July.

  Mr. Wigley
  asked the Prime Minister if she will list her official engagements for Tuesday 14 July.

  Mr. Pike
  asked the Prime Minister if she will list her official engagements for Tuesday 14 July.

  The Prime Minister
  This morning I had meetings with ministerial colleagues and others. I was also present at 416
  Victoria station to mark the arrival of the King of Morocco. In addition to my duties in the House I shall be having further meetings later today, including one with the Prime Minister of Sri Lanka.

TRANSPORT

  BR (Punctuality)
  Mr. Pawsey
  asked the Secretary of State for Transport if, pursuant to the answer of 6 July, Official Report, column 14, he will specify the benefits which his Department derives from the quarterly information on punctuality by sector supplied by British Rail; and if he will publish the latest such information in the Official Report.

  Mr. David Mitchell
  This information forms part of our general monitoring of the board's performance against the objectives that we set it last October. The latest available information on train punctuality is for the last quarter of 1986–87 and is as follows:

  Trains arriving within 0 to 5 minutes of right time

  Per cent.

  Intercity

  77

  Network Southeast

  91

  Provincial

  90

  Mr. Pawsey
  asked the Secretary of State for Transport if, pursuant to the answer of 6 July, Official Report, column 14, he will publish in the Official Report the evidence upon which he based his statement that British Rail's punctuality had improved over the last six months; and if he will now take steps to monitor punctuality regionally.

  Mr. David Mitchell
  My statement was based on train punctuality figures for all the passenger railway sectors covering the last six months of the 1986–87 financial year. They are the most recent figures for a six-month period and are as follows:

  Trains arriving within 0–5 minutes of right time

  Sector

  3rd quarter 1986–87 per cent.

  4th quarter 1986–87 per cent.

  Intercity

  75·0

  77·0

  Network SouthEast

  89·7

  91·0

  Provincial

  90·0

  90·0

  I do not propose to monitor punctuality regionally, but I have asked the board to send me information broken down by sub-sector.

  British Rail (Derelict Land)
  Mr. Pawsey
  asked the Secretary of State for Transport, pursuant to the answer of 6 July, Official Report, column 14, what information he has about British Rail's intentions with regard to maintaining the trend and pace of disposal of derelict land during the next five years.

  Mr. David Mitchell
  I understand from British Rail that it aims to dispose of its present vacant and under-utilised land by the end of 1989. Where further sites are released from operational use, British Rail would intend to dispose of these where possible within the same times scale.

  British Rail (Repair Work)
  Mrs. Dunwoody
  asked the Secretary of State for Transport, if, when next he meets the chairman of British Rail, he will raise with him the concentration of repair work in regional depots and the work available to BREL in Crewe, in the light of the accelerated redundancies there since March 1987.

  Mr. David Mitchell
  No. The allocation of repair work is a management matter for the Railways Board.

  Leeds
  Mr. Fatchett
  asked the Secretary of State for Transport what assessment his Department has made on the prospects for the economic development of south-east Leeds in its deliberations on the proposed M1-A1 link.

  Mr. Peter Bottomley
  Consulting engineers are carrying out the east of Leeds study. They must be satisfied that traffic forecasts take account of the prospects for economic development.

  Mr. Fatchett
  asked the Secretary of State for Transport when he expects to publish his Department's report on the study of traffic in east Leeds; and if he will make a statement.

  Mr. Peter Bottomley
  We hope to make an announcement during the autumn. This should end the present uncertainty.

  A423 (Maidenhead Thicket)
  Dr. Glyn
  asked the Secretary of State for Transport when a decision can be expected on the A423 through Maidenhead Thicket; and how soon after a decision he expects work to commence.

  Mr. Peter Bottomley
  I hope to be able to announce a decision on the A423 Maidenhead Thicket to Burchetts Green improvement during the summer. This scheme is in the national trunk road programme for a start of works in the period to March 1989. The actual start will be dependent on the satisfactory completion of the statutory procedures.

  Privately-owned Aircraft
  Mr. Snape
  asked the Secretary of State for Transport if he has any plans to introduce legislation to require those flying or operating privately-owned aircraft to be insured for third party and passenger liability; and if he will make a statement.

  Mr. Peter Bottomley
  It is for aircraft owners who carry passengers on private flights to decide the appropriate levels of both passenger and third party insurance to meet their potential liabilities. Under section 76 of the Civil Aviation Act 1982 they are strictly liable for injury or damage caused to persons or property on the ground.

  There are no plans to introduce legislation.

  Lighthouse Tender Vessels (Report)
  Mr. Ward
  asked the Secretary of State for Transport whether he will announce the results of studies undertaken into the tender vessel requirements of the general lighthouse authorities.

  Mr. Channon
  In June last year my right hon. Friend, jointly with the three general lighthouse authorities,418
  commissioned Arthur Young Management Consultants to review the authorities' tender vessel requirements. I have now received their report and I am placing copies of it in the Library.

  I believe that this is the first joint comprehensive appraisal that has been made of the authorities' tender vessel requirements, and I am grateful to the consultants for undertaking it. Their report makes a wide range of recommendations which I shall be considering carefully in close consultation with the authorities, the Lights Advisory Committee (which represents shipowners, shippers and port authorities) and the Irish Government.

  Channel Tunnel
  Mrs. Dunwoody
  asked the Secretary of State for Transport what information he has as to the steps being taken by the promoters of the Channel Tunnel project to ensure more than 50 per cent. of the contracts required to build the trains for use in the Channel Tunnel will go to British Rail Engineering Ltd., particularly in the northwest region; and if he will make a statement.

  Mr. Atkins
  I have been asked to reply.

  British Rail Engineering Ltd. has been given the lead in the design contract for the shuttle trains to be used in the Channel fixed link. The subsequent manufacturing contract will be subject to open and competitive tendering.

TRADE AND INDUSTRY

  IHV Industrial Investments Ltd.
  Mr. Rooker
  asked the Chancellor of the Duchy of Lancaster on what date IHV Industrial Investments Ltd., Reg. No. 1102274, went into liquidation.

  Mr. Maude
  No notice of the appointment of a liquidator nor a copy of a winding up order has been filed with the Registrar of Companies in respect of IHV Industrial Investments Ltd.

  Doorstep Sales
  Mr. Fraser
  asked the Chancellor of the Duchy of Lancaster when he will introduce legislation to reform the law relating to doorstep sales.

  Mr. Maude
  My Department will shortly be consulting interested organisations on the text of draft regulations to implement the EC directive on doorstep selling. We expect to lay the regulations before Parliament in the autumn.

  Task Force Projects (Leeds)
  Mr. Fatchett
  asked the Chancellor of the Duchy of Lancaster if he will list for each of the projects supported by task force money in the Chapeltown area of Leeds the amount of money (a) allocated in 1986–87, (b) spent in 1986–87 and (c) allocated for 1987–88.

  Mr. Kenneth Clarke
  The information requested is as follows:
  419

  Funds allocated in 1986–87

  Spent in 1986–87

  Funds so far allocated in 1987–88

  £

  £

  £

  Hendrickson Feasibility Project

  500

  500

  Headstart in Business

  12,883

  12,883

  PATH

  93,349

  20,000

  Chapeltown Community Workshops

  3,000

  —

  APEX Trust

  1,000

  1,000

  Action Resource Centre (ARC)

  23,241

  —

  WTOTO Nursery

  35,575

  17,575

  Jamaica Society Leeds/ Sight & Sound Education Ltd.

  132,000

  102,000

  Leeds West Indian Centre Ltd.

  9,100

  9,100

  Palace Youth Project

  1,094

  —

  Community Enterprise Trust

  249,000

  100,000

  Computer assisted learning project

  68,000

  —

  Burton Group Training

  25,000

  —

  TFDF

  50,000

  50,000

  Industrial Society

  3,500

  —

  NACRO

  26,774

  —

  Project Fullemploy

  12,000

  Police Foundation Crime Prevention

  25,000

  Harehills Lane Baptist Church

  1,546

  Apex Trust

  12,524

  TOTAL

  734,016

  300,175

  51,070

  There are a number of projects under development which are expected to commit further substantial sums in 1987–88.

  Ferguson Group
  Mr. Hoyle
  asked the Chancellor of the Duchy of Lancaster if, pursuant to his reply of 1 July, Official Report, column 92, he has had any discussions or contact with Thomson since its purchase of Ferguson; and what information he has on Ferguson's current share of the market for television (a) in the United Kingdom and (b) in the European Economic Community.

  Mr. Butcher
  Neither my right hon. and learned Friend, the Chancellor of the Duchy of Lancaster, nor I have been in contact with Thomson Grand Public since the announcement of its proposed acquisition of Thorn EM I Ferguson. Information collected by my Department about the market share of individual companies is commercially confidential. However, the proposed acquisition would qualify for consideration under the Fair Trading Act 1973, and the Director General of Fair Trading will no doubt take account of market share considerations in advising my right hon. Friend the Secretary of State, on the question of a reference to the Monopolies and Mergers Commission.

  Mr. Ivor Williams
  Mr. Chapman
  asked the Chancellor of the Duchy of Lancaster when Mr. Ivor Williams, a constituent of the hon. Member for Chipping Barnet, will receive a substantive reply to his letter dated 12 January to the Office of Fair Trading regarding his complaint about the
  420
  conduct of his estate agent; why the reply has not yet been given; and why the Office of Fair Trading has not yet acted on the complaint.

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

  Redundant Steel Workers (Payment)
  Mr. Cryer
  asked the Chancellor of the Duchy of Lancaster what representations have been made to the EEC Commission to ensure that applications under article 56 of the European Coal and Steel Community programme for payments to redundant steel workers are approved without delay.

  Mr. Atkins
  [pursuant to his reply, 13 July 1987]: Representations about delays in approving article 56 ECSC readaptation aid payments were made to the Commission recently, followed up last week by a letter from the United Kingdom permanent representation. If understand that approvals in a number of outstanding cases should be given shortly.

  Regional Development Grant
  Ms. Quin
  asked the Chancellor of the Duchy of Lancaster if he will make a statement as to the reasons for the decline in regional development grant assistance to the north-east of England, as detailed in the reply to the right hon. and learned Member for Monklands, East (Mr. Smith) on 2 February 1987, Official Report, column 501.

  Mr. Atkins
  [pursuant to his reply, 13 July 1987]: Expenditure on regional development grant is a function of the rates and scope of grant, the coverage of the development areas and the level of demand. The decline in RDG payments in the north-east appears to have resulted mainly from changes in the development and special development areas in the early 1980s and a fall in investment by manufacturing industry in the region, notably the capital-intensive petrochemicals and steel industries, as well as from changes in the scheme itself. However, the region's share of RDG payments in 1986–87 was higher than in the preceding four years.

ENVIRONMENT

  Bathing Water Quality
  Mr. Win Griffiths
  asked the Secretary of State for the Environment what steps will be taken that all the beaches currently designated as bathing areas for the purposes of meeting the water quality standards of directive 76/160/EEC in the United Kingdom will meet these standards by 1992 at the latest.

  Mr. Moynihan
  It is not possible to give the assurance the hon. Member seeks. The scale and cost of the necessary works makes it impossible to complete the task by 1992. However, it remains our target that all identified waters should meet the directive's standards, and we are spending nationally some £70 million on improvement schemes.

  Rating Reform
  Miss Widdecombe
  asked the Secretary of State for the Environment what assessment has been made of the effect of the community charge on small businesses in the

  421
  Maidstone area; and what steps he will consider taking to alleviate the adverse consequences of any sudden increase in payments due from minor but viable concerns with small profit margins.

  Mr. Howard
  The community charge will replace domestic rates and should not affect businesses directly. The proposal for a national non-domestic rate on present figures would initially increase rate poundages in the Maidstone area, but thereafter restrain further increases to the rate of inflation. My right hon. Friend has already announced generous transitional arrangements to phase the impact of this proposal and the revaluation of non-domestic properties over five years, or longer in the case of those properties with the largest increases from the revaluation.

  Mr. Win Griffiths
  asked the Secretary of State for the Environment what is the estimated revenue for each local authority in England when the new business rate and poll tax are levied in full on religious establishments and their residents.

  Mr. Howard
  The information needed to make such estimates is not collected centrally.

  Mr. Trotter
  asked the Secretary of State for the Environment if, pursuant to his answer of 29 June, Official Report, column 44, he will publish additional information exemplifying the community charge proposals, to show specifically the effect on each of the illustrative community charge figures of the difference between the amount of revenue likely to be obtained by each local authority from a centrally fixed non-domestic rate and the amount of revenue from locally determined non-domestic rates projected for 1987–88 under the existing system.

  Mr. Howard
  I shall write to my hon. Friend.

  Mr. Win Griffiths
  asked the Secretary of State for the Environment if he will estimate how many second homes in each borough in England will not be rated when the poll tax is operating in full; and what will be the loss of revenue on present charges for each borough as a result of this.

  Mr. Howard
  All second homes will be liable for a standard community charge, which will be set by each local authority as a multiple of the personal community charge, up to a maximum of two units of personal charge.

  Mr. Win Griffiths
  asked the Secretary of State for the Environment what is the estimated revenue for each local authority in England when the new business rate is levied in full on private and local authority residential establishments catering for old people and the poll tax is levied in full upon the residents.

  Mr. Howard
  The information needed to make such estimates is not collected centrally. Final decisions on the treatment of such establishments under the new system have not been taken. However, we have already made it clear that residents of old people's homes will be exempt from the community charge.

  Mr. Nicholas Winterton
  asked the Secretary of State for the Environment whether he intends to make special provision under the community charge for ministers of religion.

  Mr. Howard
  [pursuant to his reply, 6 July 1987, c. 56]: The community charge will be paid by all adults, with only limited exceptions. As a result, local accountability will be
  422
  restored, because the cost of local spending will be spread much more widely than at present among those entitled to vote in local elections and who use local services.

  Against this background, the Government believe that it would be difficult to justify any special provision which resulted in ministers of religion being treated more favourably than their parishioners.

  Housing Expenditure
  Mr. Wigley
  asked the Secretary of State for the Environment what was the current and capital expenditure per head on housing in England during the last year for which figures are available.

  Mr. Waldegrave
  Current expenditure by English local authorities and new towns on their housing revenue accounts in 1986–87, including debt charges, represented on average £124 per head of population. Capital expenditure by local authorities, new towns, the Housing Corporation and central Government in England represented on average £71 per head of population.

  Mr. Wigley
  asked the Secretary of State for the Environment what was the total public expenditure on housing in the United Kingdom as a proportion of the gross domestic product in each year since 1977 to the last year for which figures are available.

  Mr. Waldegrave
  Total public expenditure on housing in the United Kingdom from 1977 to 1985 is shown in the table as a percentage of gross domestic product at factor cost. The definition is the same as in the answer given to the hon. Member on 23 May 1986, at columns 370–71, and on 2 April 1987, at columns 606–7. The figures for public expenditure on housing are taken from the annual national income accounts, which are usually published in September of each year. 1986 figures are, therefore, not yet available.

  Public Expenditure on Housing as percentage of gross domestic product at factor cost

  per cent.

  1977

  3·1

  1978

  3·3

  1979

  3·4

  1980

  3·5

  1981

  1·6

  1982

  2·6

  11983

  2·9

  1984

  3·0

  1985

  2·5

  1 Discontinuity between 1982 and 1983 is due to introduction of housing benefit and consequent exclusion of rent from supplementary benefit paid to tenants.

  Old Persons' Establishments (Rates)
  Mr. Win Griffiths
  asked the Secretary of State for the Environment if he will estimate what is the current rates revenue received from private and local authority establishments catering for old people as residents by each local authority in England.

  Mr. Howard
  This information is not collected centrally.

  Religious Establishments (Rates)
  Mr. Win Griffiths
  asked the Secretary of State for the Environment if he will estimate what is the current rates revenue received from religious establishments with permanent residents by each local authority in England.

  Mr. Howard
  This information is not collected centrally.

  Canary Wharf
  Ms. Gordon
  asked the Secretary of State for the Environment, pursuant to his answer to the hon. Member for Newham, South (Mr. Spearing) of 8 July, whether (a) a certificate from an independent valuer was obtained in respect of the prospective sale of Canary wharf by the London Docklands Development Corporation or (b) specific consent from his Department was sought or given.

  Mr. Trippier
  I refer the hon. Member to the answer I gave to the hon. Member for Newham, South (Mr. Spearing) on 9 July 1987, at column 228.

  Housing Associations
  Mr. O'Brien
  asked the Secretary of State for the Environment how many dwellings are operated by housing associations in the Normanton constituency; and if he will break down the number into categories and type of dwellings.

  Mr. Waldegrave
  [pursuant to his reply, 10 July 1987, c. 296]: There are nine units operated by housing associations in the Normanton constituency and a further 47 under construction. The former are extra care units for the frail elderly and the latter are also designed to accommodate elderly people.

NORTHERN IRELAND

  Housing
  Mr. Kilfedder
  asked the Secretary of State for Northern Ireland how many Housing Executive houses in each of the housing executive districts have been sold to tenants up to the latest convenient date.

  Mr. Needham
  The number of homes sold by the Executive to its tenants in the 43 districts up until 30 June 1987 were as follows:

  Region

  Total

  South

  Armagh

  1,250

  Banbridge

  595

  Craigavon

  772

  Kilkeel

  426

  Lurgen

  1,685

  Newry 1

  921

  Newry 2

  1,180

  Portadown

  956

  7,785

  Belfast

  District 1

  1,115

  District 2

  581

  District 3

  362

  District 4

  528

  District 5

  499

  424

  Region

  Total

  District 6

  423

  District 7

  461

  3,969

  North East

  Antrim

  1,430

  Ballymena

  1,108

  Carrickfergus

  1,292

  Lame

  1,000

  Newtownabbey I

  985

  Newtownabbey II

  1,122

  Ballymoney

  553

  Ballycastle

  285

  7,775

  North West

  Londonderry I

  303

  Londonderry II

  693

  Londonderry III

  322

  Limavady

  642

  Strabane

  569

  Coleraine

  551

  Magherafelt

  527

  3,607

  West

  Omagh

  675

  Dungannon

  783

  Enniskillen

  734

  Cookstown

  417

  2,609

  South East

  Lisburn I

  986

  Lisburn II

  806

  Lisburn III

  156

  Bangor

  905

  Castlereagh I

  993

  Castlereagh II

  1,143

  Downpatrick

  1,195

  Newtownards I

  1,060

  Newtownards II

  606

  7,850

  Mr. Alton
  asked the Secretary of State for Northern Ireland why he has changed his policy towards the receipts from the sale of houses owned by the Northern Ireland Housing Executive; and if he will make a statement

  Mr. Needham
  There has been no change in the policy which allows the Housing Executive to apply its capital receipts fully in support of its expenditure programmes. It has always been Government policy to take account of the Executive's estimates of income from rents and receipts in determining the overall level of expenditure by the Executive which includes its borrowings and grant-aid from Government.

  Mr. McGrady
  asked the Secretary of State for Northern Ireland what action he proposes in respect of houses in the ownership of the Northern Ireland Housing Executive without central heating.

  Mr. Needham
  This is a matter for the chairman of the Housing Executive who has advised me that it is the Executive's long-term aim to provide central heating in all of its properties.
  425
  Mr. McGrady
  asked the Secretary of State for Northern Ireland what is the policy of the Northern Ireland Housing Executive with regard to the repair or replacement of steel-framed windows in its houses.

  Mr. Needham
  [pursuant to his reply, 13 July 1987]: This is a matter for the chairman of the Housing Executive who has advised me that the policy in respect of galvanised steel window frames in existing housing stock is to retain them until the cost of repair and maintenance is so excessive as to merit replacement, of until repairs are no longer feasible.

  Hospitals
  Mr Kilfedder
  asked the Secretary of State for Northern Ireland how many elderly people are waiting for admission to geriatric beds in the hospitals in the North Down area.

  Mr. Needham
  The number of people waiting for admission to geriatric beds in the hospitals in the North Down area at 31 December 1986 was 107.

  Mr. Kilfedder
  asked the Secretary of State for Northern Ireland what is the waiting list for patients who seek admission to (a) the Ulster hospital, Dundonald, (b) Royal Victoria hospital, Belfast, (c) City hospital, Belfast, (d) Mater hospital, Belfast and (e) the Bangor and Newtownards hospitals.

  Mr. Needham
  the numbers of patients seeking admission to the relevant hospitals at 31 December 1986 were as follows:

  Number

  Ulster hospital

  2,978

  Royal Victorial hospital

  5,862

  Belfast City hospital

  3,340

  Mater hospital

  72

  Bangor hospital

  386

  Ards hospital

  668

  Beaches
  Mr. Kilfedder
  asked the Secretary of State for Northern Ireland which beaches in Northern Ireland satisfy the requirements of the European Economic Community and are classified as beaches safe from pollution.

  Mr. Needham
  In Northern Ireland 14 waters have been identified under the EC directive on bathing-water quality. The directive applies to waters where bathing is traditionally practised by large numbers of people. Non-identification under the directive does not mean that water is unclear or unsafe. Of the five Northern Ireland bathing waters tested for compliance with the directive standards during the 1986 season, Portstewart, Portrush and Groomsport passed while Bangor (Ballyholme) and Newcastle failed. The cause of the failure at Bangor is being investigated and a new sewerage scheme for Newcastle at a cost of £2 million is nearing completion. I am advised that there is no evidence associating illness with bathing in Northern Ireland waters.

  Sewage
  Mr. Kilfedder
  asked the Secretary of State for Northern Ireland when the work to prevent sewage spillage at Orlock, County Down, will be completed.
  426
  Mr. Needham
  The spillage of sewage which occurred at Orlock, County Down, in April-May 1987 resulted from the simultaneous failure of both the normal and stand-by pumps at Coastguard lane. Replacement pumps were installed in mid-May are are now working satisfactorily. To avoid the possibility of future spillages the feasibility of laying an emergency overflow pipe from the pumping station to the sea is currently being investigated.

  Pensions
  Mr. Kilfedder
  asked the Secretary of State for Northern Ireland how many persons in Northern Ireland are in receipt of retirement pension at the last available date; and how many receive supplementary benefit to augment their pension.

  Mr. Needham
  The number of persons in Northern Ireland in receipt of retirement pension at 30 November 1986 was 208,406. At 18 November 1986, 45,969 people were in receipt of supplementary benefit to augment their retirement pension.

  Labour Statistics
  Mr. Kilfedder
  asked the Secretary of State for Northern Ireland whether he will provide an estimate of the cost of unemployment in Northern Ireland for the last full financial year.

  Mr. Needham
  During the 1986–87 financial year a total of £227·9 million was paid to the unemployed—£53·7 million by way of unemployment benefit and a further £174·2 million by way of supplementary allowances. Information on expenditure on agency benefits (for example, free welfare foods, school meals, Health Service charges, hospital fares, prison visits) and supplementary benefit single payments received by the unemployed is not readily available.

  Clandeboye Shopping Centre (Fire)
  Mr. Kilfedder
  asked the Secretary of State for Northern Ireland whether the fire at the Clandeboye shopping centre has revealed any shortcomings in measures to protect customers in an emergency.

  Mr. Needham
  No. The Clandeboye shopping centre complied with all the required measures to allow the safe evacuation of all occupants of the building in the event of a fire. On the day of the incident all customers and staff were evacuated safely and without casualty.

  Cancer
  Mr. McGrady
  asked the Secretary of State for Northern Ireland whether the Department of Health and Social Services investigation into the incidence of cancer in Northern Ireland is completed; and when he expects it to make its final report.

  Mr. Needham
  The expert committee examining patterns of disease in Northern Ireland which have a possible association with radiation has not yet completed its work. I hope to receive the committee's final report by the end of 1987.

  Warrenpoint Harbour
  Mr. McGrady
  asked the Secretary of State for Northern Ireland what are the plans of the Warrenpoint harbour authority with regard to the expansion or development of the harbour area in Warrenpoint.

  Mr. Needham
  [pursuant to his reply, 13 July 1987]: Planning approval for a proposal by the Warrenpoint harbour authority, for development of the area known as the Old Town dock, has recently been refused by the Department of the Environment for Northern Ireland. I understand that the authority has no other current plans for expansion or development of the harbour area.

  Water Rates
  Mr. Clay
  asked the Secretary of State for Northern Ireland if he will publish a table showing the average household bill for water rates for each regional water authority in Northern Ireland for each year separately between 1979 and 1987.

  Mr. Needham
  [pursuant to his reply, 13 July 1987]: A separate water bill is not levied in Northern Ireland, but is subsumed in the regional rate levied at a uniform poundage across the Province. From 1983–84 onward,
  428
  however, it is possible to identify the portion of the regional rate attributable to provision of water and sewerage services, and the implied average rate demand per household for these years is shown in the table.

  Average household water and sewerage rate demand

  Year

  £

  1983–84

  61·65

  1984–85

  67·85

  1985–86

  70·74

  1986–87

  71·60

  1987–88

  77·15

  Water Supplies (Disconnections)
  Mr. Clay
  asked the Secretary of State for Northern Ireland if he will publish a table showing the figures for the numbers of households where water supplies have been disconnected, showing where possible the reasons for disconnection, for each year separately between 1979 and 1987.

  Mr. Needham
  [pursuant to his reply, 13 July 1987]: Since domestic water supplies are paid for through the general rating system in Northern Ireland, the need to disconnect premises used solely as household residences does not arise.

FOREIGN AND COMMONWEALTH AFFAIRS

  Sex Data
  Mrs. Dunwoody
  asked the Secretary of State for Foreign and Commonwealth Affairs if he will list the guidelines dealing with use of data separated by sex for base line studies or other research within his responsibilities.

  Mr. Eggar
  There are no guidelines dealing with use of data separated by sex in either the diplomatic wing or the aid wing of the Foreign and Commonwealth Office.

  Dr. Kurt Waldheim
  Mr. Latham
  asked the Secretary of State for Foreign and Commonwealth Affairs what instructions were given to Her Majesty's ambassador in Amman regarding attendance at official functions given in honour of Doctor Kurt Waldheim during his visit to Jordan; and whether he will make a statement.

  Mrs. Chalker
  Her Majesty's ambassador at Amman was authorised, in consultation with his European Community colleagues, to attend, as appropriate, events connected with the visit.

  UN General Assembly Resolution 41/16
  Mr. Corbyn
  asked the Secretary of State for Foreign and Commonwealth Affairs why the United Kingdom abstained on the United Nations General Assembly resolution 41/16 of 18 December 1986.

  Mr. Eggar
  We abstained both on this resolution and on a similar one in 1985 in accordance with our policy of strict neutrality in the Western Sahara dispute.

  Western Sahara Refugees (Algeria)
  Mr. Corbyn
  asked the Secretary of State for Foreign and Commonwealth Affairs what steps Her Majesty's Government are taking to help relieve the suffering of the 165,000 Western Sahara refugees in Algeria.

  Mr. Eggar
  The Western Sahara refugees in Algeria receive assistance from European Community funds and from multilateral aid agencies to which we contribute.

  Morocco
  Mr. Corbyn
  asked the Secretary of State for Foreign and Commonwealth Affairs if Her Majesty's Government will make it their policy to oppose any fishing agreement between the European Community and Morocco which extends to the territorial waters of Western Sahara; and if he will make a statement.

  Mr. Eggar
  Responsibility for the conduct of the negotiations for a fisheries agreement between Morocco and the European Community lies primarily with the Commission. We continue to monitor closely the progress of these negotiations.

  Mr. Corbyn
  asked the Secretary of State for Foreign and Commonwealth Affairs what steps Her Majesty's Government are taking to encourage peace between
  430
  Morocco and the Polisario Front in Western Sahara; what contacts Her Majesty's Government have had with the parties concerned with a view to advancing the prospects for peace in the region; and what proposals Her Majesty's Government will be putting to King Hassan during his state visit to help bring about peace.

  Mr. Eggar
  We fully support the United Nations Secretary-General in his efforts to bring about a peaceful solution of the Western Sahara dispute. We look forward to discussing this and other international issues with King Hassan during his state visit.

DEFENCE

  Cruise Missiles
  Mr. Sedgemore
  asked the Secretary of State for Defence if he will make a statement on the number of cruise missiles to be based at Molesworth.

  Mr. Nigel Griffiths
  asked the Secretary of State for Defence if he will make a statement on the number of cruise missiles to be based at Molesworth.

  Mr. Stewart
  As has been stated previously it is planned that 64 cruise missiles will be based at Molesworth.

  Conventional Weapons
  Mr. Gerald Bowden
  asked the Secretary of State for Defence if he will make a statement on the proportion of the defence budget spent on conventional weapons since 1979.

  Mr. Younger
  Over 97 per cent. of the defence budget since 1979 is estimated to have been spent on programmes other than the strategic nuclear force.

  Nuclear Arms Control
  Mr. Harry Greenway
  asked the Secretary of State for Defence if he will make a statement on verification procedures for enforcing nuclear arms control agreements.

  Mr. Ian Stewart
  Any arms control agreement must be effectively verifiable, but precise procedures will depend upon the terms of any agreement which may be negotiated.

  Binary Chemical Weapons
  Mr. Boyes
  asked the Secretary of State for Defence what discussions he has held with the United States Secretary for Defence on the possibility of basing binary chemical weapons in the United Kingdom.

  Mrs. Clwyd
  asked the Secretary of State for Defence what discussions he has had with the United States Secretary for Defence on the possibility of basing binary chemical weapons in the United Kingdom.

  Mr. Ian Stewart
  None.

  Trafalgar Class Submarines
  Mr. Cartwright
  asked the Secretary of State for Defence what steps he is taking to assist the sale of Trafalgar class submarines by Vickers Shipbuilding and Engineering Ltd. to the Canadian Government; and if he will make a statement.

  Mr. Sainsbury
  Following the recent announcement in the Canadian defence White Paper of its requirement for
  431
  a fleet of nuclear powered submarines Vickers Shipbuilding and Engineering Ltd. has proposed the Trafalgar class submarine. Officials from the Ministry of Defence will shortly be visiting Canada for preliminary discussions of this requirement with their Canadian counterparts.

  Trident
  Mr. Hayward
  asked the Secretary of State for Defence if he will make a statement on the progress of the Trident programme.

  Mr. Sainsbury
  The United Kingdom Trident programme is making satisfactory progress and remains on time and to budget.

  Mr. Frank Cook
  asked the Secretary of State for Defence what talks he has had with his French counterpart on co-operation on operational aspects of the deployment of Trident and the French submarine deterrent.

  Mr. Younger
  The British and French Governments maintain a close and fruitful dialogue on a wide range of defence and security matters.

  Mr. Andrew F. Bennett
  asked the Secretary of State for Defence how it is proposed that communications will be maintained between Ministers and Trident submarines, and between Trident missiles and those deciding on targeting, without reliance on United States' extremely low-frequency systems and United States' satellites.

  Mr. Ian Stewart
  Effective and independent communications under the control of Her Majesty's Government will exist for all aspects of United Kingdom Trident submarine operations. Details of these are naturally classified.

  Mr. Franks
  asked the Secretary of State for Defence when he plans to place officially the order for the second Trident submarine.

  Mr. Sainsbury
  I refer to the answer I gave my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) earlier today.

  Frigates
  Mr. Duffy
  asked the Secretary of State for Defence how many type 23 frigates have been ordered; and if he is satisfied with progress on the type 23 frigate building programme.

  Mr. Sainsbury
  Four type 23 frigates are currently on order. The First of Class HMS Norfolk was launched by Her Royal Highness The Princess Margaret on 10 July and the other ships are making satisfactory progress.

  Purple Warrior Exercise
  Mr. Foulkes
  asked the Secretary of State for Defence what representations he has received concerning the Purple Warrior tri-service exercise to be held in southwest Scotland in November.

  Mr. Ian Stewart
  As part of its normal exercise planning activity, my Department has consulted the regional and district councils for the area, the local police forces and national governmental and environmental bodies, including the Nature Conservancy Council and the Forestry 432
  Commission. Private landowners and local community, environmental and fishing groups are also being consulted closely. That apart, my Department has received no representations, other than recent correspondence from the hon. Gentleman and the Questions tabled by the hon. Member for Lewisham, Deptford (Ms. Ruddock) at column 113.

  Polaris
  Mr. Atkinson
  asked the Secretary of State for Defence if he remains satisfied with the performance of Polaris missiles.

  Mr. Ian Stewart
  Yes.

  Intermediate Nuclear Forces Agreement
  Mr. Ernie Ross
  asked the Secretary of State for Defence when he next intends to hold discussions with his North Atlantic Treaty Organisation counterparts on the implications of an intermediate nuclear forces agreement.

  Ms. Ruddock
  asked the Secretary of State for Defence when he next intends to hold discussions with his North Atlantic Treaty Organisation counterparts on the implications of an intermediate nuclear forces agreement.

  Mr. Ian Stewart
  My right hon. Friend, the Secretary of State for Defence, next expects to meet his Alliance colleagues collectively at the autumn meeting of NATO's nuclear planning group when a wide variety of nuclear policy issues will he discussed.

  Willsworthy Firing Range
  Mr. Steen
  asked the Secretary of State for Defence if he will make a statement as to the progress in his plans for accommodation for troops on the Willsworthy firing range on Dartmoor.

  Mr. Freeman
  Willsworthy Camp provides important facilities for regular and TA forces using the Dartmoor training areas, including the Willsworthy range. The camp is, however, in need of early replacement. Rather than rebuild on this site, which occupies a prominent position on the moor, the Ministry of Defence has recently purchased a suitable alternative small area of land at Higher Beardon farm, near Lydford. With new accommodation provided there the site of the present camp would be returned to moorland. The Dartmoor national park committee are aware of our plans in general terms and we will shortly be submitting our proposals through the normal planning consultation procedures.

  F111 Aircraft
  Mr. Allan Roberts
  asked the Secretary of State for Defence in what military circumstances it is envisaged that American F111 aircraft would be used in Europe at a time of conflict.

  Mr. Ian Stewart
  The F111 is a long-range dual capable aircraft which is assigned to SACEUR for use in the event of a conflict involving NATO in Europe. In accordance with the practice of successive Governments, I am not prepared to comment on the details of particular operational plans.

  Training Activities
  Mr. Stevens
  asked the Secretary of State for Defence if he will make a statement on the resources made available to the armed forces for training activities.

  Mr. Freeman
  I refer the hon. Member to tables 2.3 and 4.2–4.4 of volume 2 of the "Statement on the Defence Estimates 1987" which give details, respectively, of the financial and manpower resources devoted to training. In 1987–88 £1,277 million was spent by the three services and service colleges in training.

  Central Ordnance Depot, Bicester
  Mr. Baldry
  asked the Secretary of State for Defence if he will make a statement on the progress being made in the consideration of contracting-out certain activities of the Central Ordnance Depot, Bicester.

  Mr. Sainsbury
  We are currently preparing statements of requirements for those tasks which are to be exposed to competition. These will form the basis of the tender documents which we are aiming to issue to potential contractors later this year.

  Local Overseas Allowance
  Mr. Colvin
  asked the Secretary of State for Defence what is the saving to the defence budget deriving from his proposed cuts in the local overseas allowances for the British Army of the Rhine.

  Mr. Freeman
  Local overseas allowance is a tax-free payment intended to compensate for the extra cost of serving overseas. It is examined annually to ensure that it continues to meet that objective. In Germany the 1987 examination demonstrated that the sums required to compensate service personnel for the extra costs were lower than in 1986. Accordingly, LOA in Germany will be reduced from 1 August 1987, providing savings of about £25 million in a full financial year.

  Small Firms (Contracts)
  Dr. Twinn
  asked the Secretary of State for Defence how many small firms were awarded contracts by the Ministry of Defence in 1986–87.

  Mr. Sainsbury
  The collation of this information is a considerable task. I expect to have the necessary details around the turn of the year and will write to my hon. Friend at that time.

  Northern Ireland
  Mr. Kilfedder
  asked the Secretary of State for Defence if he will make a statement about the number of troops stationed in Northern Ireland and the extent of the liaison with the Irish security forces.

  Mr. Ian Stewart
  The number of troops operating in support of the RUC in Northern Ireland as at 31 March 1987 (the most recent available figure) was 17,694. Liaison with the Irish security forces is achieved through the close and growing co-operation between the RUC and Garda.

  Mr. Michael McNair-Wilson
  asked the Secretary of State for Defence what are the lengths of the tours of duty of Army units serving in Northern Ireland.

  Mr. Freeman
  The six resident infantry battalions in Northern Ireland undertake tours of duty of about two 434
  years and the four roulement infantry battalions undertake short tours of about four and a half months. These tour lengths, which also apply to most other units in the Province, have remained unchanged for some years. Personnel who are posted to the Province as individuals and not as part of a unit change over—for example, headquarters staff—also serve on tours of about two years.

  Rosyth Dockyard
  Mr. Allan Stewart
  asked the Secretary of State for Defence if he will make a statement on the progress of orders won by the private contractors at Rosyth dockyard.

  Mr. Sainsbury
  I am satisfied with the work which has been done by Rosyth dockyard since 6 April, since which time some 27 ship and submarine contracts and some 51 for other work have been placed with the dockyard. Of these, two were ships not already in the yard when the commercial managers took over.

  IEPG Meeting
  Mr. Greg Knight
  asked the Secretary of State for Defence if he will make a statement on the recent IEPG meeting.

  Mr. Younger
  My IEPG colleagues and I met in Seville on 22 June. The main business of the meeting was to consider proposals for increasing the competitiveness of Europe's defence industries and we set in hand detailed work aimed at establishing a framework within which we might move ahead in this vital area.

  We also re-emphasised the fact that the activities of the IEPG are aimed at producing a stronger and more cohesive European contribution to the Alliance.

  Royal Navy (Fuel Supplies)
  Mr. Patrick Thompson
  asked the Secretary of State for Defence if he will make a statement on supplies of fuel to the Royal Navy.

  Mr. Freeman
  We have now decided that the amount of fuel available to the Royal Navy this year should be increased, and so enable activity levels to be broadly comparable with those of recent normal years.

  Research Budget
  Mr. Thomas
  asked the Secretary of State for Defence if he will state the proportion of his Department's research budget, for the last year for which figures are available, spent in each of the English regions, Scotland and Wales.

  Mr. Sainsbury
  Defence research expenditure is not accounted for on a regional basis.

  NATO (Defences)
  Mr. Kirkhope
  asked the Secretary of State for Defence when he plans to meet the United States Defence Secretary to discuss North Atlantic Treaty Organisation defences in the North Atlantic.

  Mr. Ian Stewart
  My right hon. Friend has frequent meetings with his United States colleague, when a range
  435
  of Alliance defence issues are discussed. He next expects to meet the United States Defence Secretary at the autumn meeting of NATO's nuclear planning group.

  RAF North Luffenham
  Mr. Latham
  asked the Secretary of State for Defence whether he will make a statement on the future of RAF North Luffenham.

  Mr. Freeman
  I wrote to the hon. Member on 2 July to inform him that we envisage a long-term future for RAF North Luffenham and no loss of employment prospects there.

  An announcement to the personnel at the station to this effect has recently been made.

  Low-flying Operations
  Mr. Geraint Howells
  asked the Secretary of State for Defence how many fatalities have resulted from low-flying operations over the past five years; and if he will make a statement.

  Mr. Freeman
  Since 1 July 1982, the deaths of five RAF personnel have occurred in the United Kingdom during low-level flying operations by fast jet aircraft. A further 10 such deaths have resulted from crashes at sea around the United Kingdom. No civilians have been killed in these accidents. As is well known, a certain amount of low-level flying training is essential to the readiness of our aircrew. A degree of risk to those aircrew and of disturbance to the public is, regrettably, inevitable. However, all possible steps are taken to reduce this to a minimum.

  Mrs. Margaret Ewing
  asked the Secretary of State for Defence what plans he has to review safety procedures applicable to Royal Air Force low-flying exercises in light of recent accidents.

  Mr. Freeman
  The regulations governing the low-flying system are kept continuously under review and are altered as necessary. When the reasons for an accident are known these will be taken into account in our ongoing examinations of safety procedures.

  Co-operative Ventures (France)
  Mr. Ward
  asked the Secretary of State for Defence if he plans to meet the French Defence Minister to discuss co-operative defence ventures.

  Mr. Younger
  I expect to meet M. Giraud later this month to discuss a range of issues of mutual defence interest.

  Strategic Defence Initiative
  Mr. Simon Hughes
  asked the Secretary of State for Defence what is the latest estimated total of strategic defence initiative contracts awarded to British companies.

  Mr. Sainsbury
  $34 million. This figure includes United States-funded SDI contracts placed with British academic institutions and through the Ministry of Defence. In the last case all but about $3 million of the work has been subcontracted to industry.

  Nuclear Weapons
  Mr. Tony Lloyd
  asked the Secretary of State for Defence if he will consider moving to an explicit policy of no first use of nuclear weapons in the light of current arms control negotiations.

  Mr. Ian Stewart
  No. It is long established NATO policy, to which we are fully committed, that no NATO weapons, either conventional or nuclear, would ever be used except in response to attack. That is a more fundamental commitment than renunciation of the option of first use of nuclear weapons. As has been only recently reaffirmed, nuclear weapons remain an essential component of NATO's policies of deterrence and flexible response. The current arms control negotiations do not alter our commitment to these important principles which will continue to remain valid for the foreseeable future.

  Helicopter Procurement
  Mr. Ashdown
  asked the Secretary of State for Defence if he will make a statement on future helicopter procurement.

  Mr. Sainsbury
  I refer the hon. Member to the statement made by my right hon. Friend on 9 April, at columns 470–1, about orders which, subject to the satisfactory resolution of contractual and other issues, he intends to place for the utility version of the EH101 and for Lynx and Sea King helicopters: we are discussing the details with Westlands Helicopters accordingly.

  In addition, we are participating with Italy, the Netherlands and Spain in a two-year study into the feasibility and cost of developing the Agusta 129 to meet the future light attack helicopter requirements of the four nations: Industry began work on the study at the beginning of last month.

  European Fighter Aircraft
  Mr. Gerald Howarth
  asked the Secretary of State for Defence if he will make a statement on progress on the European fighter aircraft.

  Mr. Sainsbury
  I refer my hon. Friend to the reply I gave earlier today to my hon. Friend the Member for Fylde (Mr. Jack).

  Territorial Army
  Mr. Conway
  asked the Secretary of State for Defence if he will make a statement on recruitment to the Territorial Army.

  Mr. Freeman
  The annual levels of recruitment into the Territorial Army have continued to show a steady improvement over the past five years. The figures are as follows:

  Training year

  Officers

  Soldiers

  Total

  1982–83

  715

  23,218

  23,933

  1983–84

  989

  20,032

  21,021

  1984–85

  920

  23,931

  24,851

  1985–86

  1,848

  24,048

  25,896

  1986–87

  1.919

  24,579

  26,498

  Conventional Weapons
  Mr. Caborn
  asked the Secretary of State for Defence if he will make a statement on his Department's response to the latest Warsaw pact proposals contained in the Berlin statement covering conventional armaments.

  Mr. Ian Stewart
  I read the Warsaw pact communiqué with interest, and would draw the hon. Gentleman's attention to the communiqué issued by NATO Foreign Ministers after the meeting of the North Atlantic Council in Reykjavik on 11 June, a copy of which is in the Library of the House. This reiterated the Alliance's determination to pursue its initiatives for achieving a comprehensive, stable and verifiable balance of conventional forces at lower levels. It indicated that work on draft mandates to be tabled in the CSCE meeting and in the conventional stability talks would be pressed ahead. It also reiterated the West's desire to achieve a meaningful agreement in the MBFR talks, calling upon the Warsaw pact to respond positively to the very important proposals made by the West in December 1985.

  Defence Committee (Report)
  Mrs. Mahon
  asked the Secretary of State for Defence whether he will make a statement on the recent Defence Committee report on the implications for the United Kingdom of ballistic missile defence.

  Mr. Sainsbury
  The Government's response to this report is currently under consideration, and will be presented to Parliament in due course.

  Tank Gunnery (Standards)
  Sir Geoffrey Johnson Smith
  asked the Secretary of State for Defence if he is satisfied with the standard of British tank international gunnery demonstrated in recent competitions; and if he will make a statement.

  Mr. Ian Stewart
  I do not believe that the performance of tanks in the artificial circumstances of a competition, such as the recent Canadian Army Trophy, is a proper indication of their capability in war. Challenger's gun gives the best penetrative performance against the tanks of a potential enemy. The tank itself is arguably the best protected in the world and has excellent mobility. It carries an advanced thermal imaging system which is much admired by our allies and ensures that Challenger can fight effectively by night and by day. Participation in international tank gunnery competitions is one useful option in the complete spectrum of training opportunities available in preparing our tank crews for war, but it is not on its own a basis for judgment of overall capability.

  Single Role Minehunter
  Sir David Price
  asked the Secretary of State for Defence when he expects to be able to announce the results of the tenders for the single role minehunter order.

  Mr. Sainsbury
  Tenders are still being evaluated and we expect to be in a position to announce the results before the summer recess.

  Destroyers and Frigates
  Mr. Trotter
  asked the Secretary of State for Defence if he will list by class the destroyers and frigates presently
  438
  serving in the Royal Navy showing for each vessel the current age and the dates between which they have undergone major refits.

  Mr. Sainsbury
  The destroyers and frigates currently serving in the Royal Navy, their ages from commissioning. and the dates between which they have undergone refits are as follows. Those vessels listed in the "Statement on the Defence Estimates" as due to join the Fleet this year, but which have not yet done so (Coventry, Cornwall and Sheffield) are not included.

  Age (years)

  Refit dales

  Type 82

  Bristol

  14

  Refit July 1976 to December 1977. Refit September 1984 to February 1986.

  Type 42

  Cardiff

  8

  None to date.

  Glasgow

  8

  None to date.

  Exeter

  7

  None to date.

  Birmingham

  11

  Refit April 1981 to March 1982. Restorative refit July 1985 to May 1987.

  Southampton

  6

  None to date.

  Nottingham

  5

  None to date.

  Liverpool

  5

  None to date.

  Manchester

  5

  None to date.

  York

  2

  None to date.

  Gloucester

  2

  None to date.

  Edinburgh

  2

  None to date.

  Newcastle

  9

  Refit February 1982 to July 1982. Restorative refit begun April 1986 continues.

  Type 22

  Broadsword

  8

  None to date.

  Battleaxe

  7

  None to date.

  Brilliant

  6

  None to date.

  Brazen

  5

  None to date.

  Boxer

  3

  None to date.

  Beaver

  3

  None to date.

  Brave

  2

  None to date.

  London

  1

  None to date.

  Type 21

  Amazon

  13

  Refit July 1978 to May 1979. Restorative refit August 1983 to September 1984.

  Arrow

  11

  Refit October 1982 to September 1983.

  Ambuscade

  12

  Refit March 1980 to January 1981. Restorative refit October 1984 to December 1985.

  Active

  10

  Restorative refit July 1985 to August 1986.

  Alacrity

  10

  Refit begun April 1986 continues.

  Avenger

  9

  Restorative refit begun September 1986 continues.

  Leander

  439

  Age (years)

  Refit dates

  Euryalus

  23

  Refit August 1966 to November 1966. Refit January 1969 to July 1969. Special refit May 1973 to May 1976. Refit November 1979 to October 1980. Refit November 1984 to November 1985.

  Penelope

  24

  Refit February 1966 to July 1967. Refit February 1969 to December 1969. Refit May 1972 to January 1973. Refit October 1974 to April 1975. Major refit January 1978 to January 1982. Refit January 1986 to September 1986.

  Arethusa

  22

  Refit November 1967 to March 1968. Refit May 1970 to October 1970. Special refit September 1973 to April 1977. Refit May 1980 to March 1981. Comparator refit May 1985 to February 1986.

  Phoebe

  21

  Refit August 1968 to November 1968. Refit January 1971 to April 1971. Major refit August 1974 to April 1977. Refit February 1981 to July 1982. Refit May 1986 to February 1987.

  Sirius

  21

  Refit August 1969 to December 1969. Refit January 1972 to May 1972. Major refit March 1975 to February 1978. Refit May 1981 to July 1982. Refit April 1985 to December 1985.

  Argonaut

  20

  Refit January 1970 to July 1970. Refit October 1972 to March 1973. Major refit February 1976 to March 1980. Refit August 1982 to November 1983.

  Minerva

  21

  Refit July 1969 to October 1969. Refit March 1972 to July 1972. Major refit December 1975 to April 1979. Refit July 1983 to March 1984.

  Danae

  20

  Refit March 1970 to July 1970. Refit February 1973 to August 1973. Major refit August 1977 to April 1981. Refit October 1985 to July 1986.

  Andromeda

  19

  Refit July 1971 to October 1971. Refit September I974to March 1975. Major refit January 1978 to February 1981. Refit September 1985 to April 1986.

  Hermione

  18

  Refit March 1972 to November 1972. Refit October 1975 to October 1976. Major refit January 1980 to July 1983. Refit begins July 1987.

  Scylla

  17

  Refit July 1972 to January 1973. Refit July 1976 to March 1977. Major refit November 1980 to December 1984.

  Achilles

  17

  Refit February 1973 to August 1973. Refit March 1978 to October 1978. Refit July 1984 to April 1985.

  Charybdis

  18

  Refit September 1971 to January 1972. Refit April 1975 to March 1976. Major refit July 1979 to July 1982. Refit April 1986 to December 1986.

  Diomede

  16

  Refit November 1973 to May 1984. Refit October 1978 to May 1979. Refit September 1983 to August 1984.

  Apollo

  15

  Refit March 1976 to October 1976. Refit May 1979 to February 1980. Refit July 1984 to May 1985.

  Ariadne

  14

  Refit January 1976 to September 1976. Refit February 1980 to September 1980. Refit January 1985 to November 1985.

  Cleopatra

  21

  Refit December 1967 to April 1968. Refit July 1970 to November 1970. Special refit July 1973 to December 1975. Refit October 1978 to May 1979. Refit January 1982 to April 1983. Refit begun March 1987 continues.

  440

  Age (years)

  Refit dates

  Jupiter

  18

  Refit April 1972 to September 1972. Refit December 1975 to July 1976. Major refit January 1980 to October 1983. Refit December 1986 due to finish July 1987.

  Juno

  20

  Refit January 1970 to May 1970. Refit January 1973 to June 1973. Refit February 1977 to November 1977. Restorative refit January 1982 to February 1985.

  Type 12

  Rothesay

  27

  Refit September 1961 to December 1961. Refit October 1963 to January 1964. Special refit July 1966 to July 1968. Refit December 1970 to April 1971. Refit August 1973 to July 1974. Major refit October 1977 to May 1980. Refit August 1984 to May 1985.

  Plymouth

  26

  Refit September 1962 to December 1962. Refit July 1964 to September 1964. Special refit August 1966 to February 1969. Refit August 1971 to December 1971. Refit May 1974 to November 1974. Major refit January 1979 to January 1981. Refit August 1986 to April 1986.

  Morocco
  Mr. Corbyn
  asked the Secretary of State for Defence if any restrictions are imposed by Her Majesty's Government on the use of British-supplied military equipment beyond Morocco's internationally recognised frontiers in Western Sahara; and if he will make a statement.

  Mr. Sainsbury
  Successive Administrations have not answered detailed questions of this kind. In general, however, the British Government consider all relevant political, strategic and security factors before issuing any export licence for defence equipment.

  Mr. Corbyn
  asked the Secretary of State for Defence (1) what is the policy of Her Majesty's Government towards the sale of Tornado aircraft to Morocco;

  (2) what was the value of United Kingdom arms sales to Morocco in each of the last 10 years; what contracts exist for British arms sales to Morocco; and what negotiations are currently taking place.

  Mr. Sainsbury
  It has been the policy of this and previous Administrations not to comment on matters of this kind.

  USAF (Mid-air Refuelling)
  Mr. Kirkwood
  asked the Secretary of State for Defence whether any notice has been given by the United States Air Force of its intention to continue mid-air refuelling exercises at low level, using B-52 bombers, in the United Kingdom; and if he will make a statement.

  Mr. Freeman
  There has been no such activity and n one is planned.

EMPLOYMENT

  Wages (Statistics)
  Mr. Pike
  asked the Secretary of State for Employment if he will publish a table showing (i) on a national basis and (ii) on a regional basis the average weekly wage for (a) full-time male employees, (b) part-time male employees, (c) full-time female employees and (d) part-time female employees in both cash terms and real terms based on 1987–88 prices for each year since 1979.

  Mr. Lee
  I am sending the hon. Member the information requested, which is also available in the Library.

  MSC Schemes (Rules)
  Mr. Hargreaves
  asked the Secretary of State for Employment if he will make available to the National Association of Citizens Advice Bureau a full and comprehensive set of rules governing all aspects of the Manpower Services Commission schemes.

  Mr. Lee
  All the leaflets published by the Manpower Services Commission on the schemes which it operates are freely available to the National Association of Citizens Advice Bureau. These set out the main eligibility criteria. It would not be appropriate to provide more detailed information since the rules are designed to be applied flexibly to meet particular circumstances. The leaflets advise on where further information can be obtained.

  Labour Statistics
  Mr. McLeish
  asked the Secretary of State for Employment if he has any plans to alter the publication

  Per cent.

  In a full time job

  In a part time job

  On another YTS scheme

  On a full time course

  Doing something else

  Unemployed

  Great Britain

  53

  4

  7

  3

  6

  28

  Scotland

  47

  3

  7

  3

  4

  36

  Dunfermline and Kirkcaldy

  44

  4

  9

  2

  5

  36

  Note Percentages are rounded to whole numbers.

  Mr. Tom Clarke
  asked the Secretary of State for Employment if he will state the number of unemployed people in Monklands, West constituency (a) 16–18 years of age, (b) 18–21 years of age, (c) 21–25 years of age, (d) 25–45 years of age, (e) 45–55 years of age, and (f) over 55 years of age, giving the latest available figures.

  Mr. Lee
  Following is the available information, which is also in the Library.

  Unemployed claimants—Monklands West constituency 9 April 1987

  Number

  Aged under 18

  540

  Aged 18–19

  589

  Aged 20–24

  1,029

  Aged 25–44

  1,944

  Aged 45–54

  664

  Aged 55 and over

  391

  442
  of the monthly unemployment figures; and what plans he has for a quarterly labour force survey as is used in the United States of America.

  Mr. Fowler
  My Department continually assesses the quality of its published statistics and seeks ways to improve them, but I have no present proposals for specific changes.

  Mr. McLeish
  asked the Secretary of State for Employment if he will provide, for the last full year for which information is available for the United Kingdom, Scotland and Fife, Central constituency (a) how many 16 and 17-year-olds entered the YTS, (b) what percentage gained employment at the expiry of their period on the scheme and (c) how many 16 and 17-year-olds remained unemployed.

  Mr. Cope
  Information about YTS entrants and leavers is not available in the form requested, but is available for Great Britain, Scotland, and Dunfermline and Kirkcaldy local authority districts, which together are representative of Fife, Central constituency.

  During the period of April 1985 to March 1986, the last full year for which information is obtainable, 406,332 young people started YTS in Great Britain, 46,398 in Scotland and 3,212 in Dunfermline and Kirkcaldy local authority districts.

  The MSC conducts a regular follow-up survey of YTS leavers three months after young people leave the programme. The table shows the destinations of young people who left YTS in the period April 1985 to March 1986.

  Mr. Martlew
  asked the Secretary of State for Employment if he will publish the latest unemployment figures for Carlisle in the Official Report by district ward boundary.

  Mr. Lee
  The following information is in the Library. The table shows the number of unemployed claimants in each electoral ward in Carlisle local authority district.

  Unemployed claimants at 14 May 1987

  Number

  Carlisle No. 1

  246

  Carlisle No. 2

  382

  Carlisle No. 3

  514

  Carlisle No. 4

  373

  Carlisle No. 5

  436

  Carlisle No. 6

  349

  Carlisle No. 7

  338

  Carlisle No. 8

  433

  Carlisle No. 9

  267

  Carlisle No. 10

  464

  Carlisle No. 11

  89

  443

  Number

  Carlisle No. 12

  49

  Carlisle No. 13

  42

  Carlisle No. 14

  76

  Carlisle No. 15

  56

  Carlisle No. 16

  163

  Carlisle No. 17

  146

  Carlisle No. 18

  38

  Carlisle No. 19

  108

  Carlisle No. 20

  61

  Nuclear Installations Inspectorate
  Mr. Lofthouse
  asked the Secretary of State for Employment if he will make a statement on the extent to which salaries paid to the Nuclear Installations Inspectorate are adequate to recruit employees with experience of the Central Electricity Generating Board and the South of Scotland Electricity Board.

  Mr. Cope
  The salary scales of recruitment grade nuclear installations inspectors have been increased by £4,000 per annum since April 1986 and a further pay award of £5,000 per annum has been agreed for 1 September 1987. Recruitment to the inspectorate is continuing and in the latest competition a number of candidates from the Central Electricity Generating Board and the South of Scotland Electricity Board have been invited for interview.

  Mr. Lofthouse
  asked the Secretary of State for Employment which tasks the Nuclear Installations Inspectorate (a) is not able to fulfil at all, (b) has delayed fulfilling and (c) has fulfilled to an inadequate extent, due to understaffing.

  Mr. Cope
  Her Majesty's Nuclear Installations Inspectorate of the HSE has always carried out essential tasks, giving priority to the inspection and assessment of operating installations.

  Mr. Lofthouse
  asked the Secretary of State for Employment (1) what steps are being taken to increase recruitment to the Nuclear Installations Inspectorate;

  (2) whether he will make a statement on the recommendations of the second report of the Energy Committee, Session 1986–87, insofar as they relate to his responsibilities for the Nuclear Installations Inspectorate.

  Mr. Cope
  The Select Committee on Energy, in its second report, made recommendations about the recruitment and retention of Nuclear Installations Inspectorate staff. The resources and staffing of the inspectorate are the responsibility of the Health and Safety Commission and Executive, subject to the limits set by Government on their total manpower and running costs. The Government, the commission and the executive recognise the importance of ensuring that the Nil is adequately staffed. Two substantial increases to salaries for all nuclear installations inspectors have recently been agreed and Health and Safety Executive expects that this will enable the inspectorate to attract recruits with the expertise and skills required to bring its staff up to the levels planned for 1987–88. A recruitment competition for inspectors is now under way and there are indications that the number of good quality applicants has increased.

  Sellafield (Monitoring)
  Mr. Lofthouse
  asked the Secretary of State for Employment if sufficent nuclear inspectors are now in post to be able to monitor the Sellafield complex adequately; and what backlog of work currently exists at this site.

  Mr. Cope
  The level of inspection and examination at the Sellafield complex is adequate to ensure the safety of the public and site personnel. The large concentration of effort during the Sellafield audit diverted some resources from assessment work and routine inspection. Any interruption of routine inspection was outweighed by the benefits arising from increased surveillance during the audit.

  Hotels (Costs)
  Mr. Wood
  asked the Secretary of State for Employment if he will make it his policy to establish a code of conduct for British hotels in respect of charging clients for telephone and similar non-accommodation costs.

  Mr. Lee
  The Government support the hotel industry's voluntary code of booking practice, which was updated and revised in 1986. This code of practice stipulates that special charges for telephone and other non-accommodation costs should he drawn to the attention of guests. The Government do not, however, have any plans to introduce a code in respect of the charges themselves. Pricing policy, including charges for telephone and similar non-accommodation costs, is a matter for the hotel industry.

  Tourism
  Mr. Steen
  asked the Secretary of State for Employment what representations he has received from the tourist industry on the further development of tourism.

  Mr. Lee
  I have continuing contact with representatives of the industry and have received correspondence on a variety of subjects relating to the development of tourism in England.

  Nuclear Inspectors
  Mr. Lofthouse
  asked the Secretary of State for Employment what studies his Department has made of the future numbers of nuclear inspectors who will be required if the electricity industry is privatised.

  Mr. Cope
  None.

  Enterprise Agencies
  Mr. John Mark Taylor
  asked the Secretary of State for Employment if he is satisfied that enterprise agencies are sufficiently well advertised and visible for persons with spare premises suitable for new-start businesses to be able readily to notify those agencies of the availability of such premises; and if he will make a statement.

  Mr. Cope
  Local enterprise agencies are independent organisations and therefore responsible primarily to their own boards and supporters for their activities, including their visibility in the local community. Information on local enterprise agencies will be available through a wide range of sources, including libraries, local authorities, and the Government's small firms centres and jobcentres. The
  445
  Department of Employment, through its local agency grant scheme, is encouraging greater professionalism in LEA management; LEA business plans, an integral part of the grant application, should address, as appropriate, the availability of small business premises.

  Unemployment Benefit
  Mr. Martlew
  asked the Secretary of State for Employment what is the total number of people in receipt of unemployment benefit in the Carlisle constituency.

  Mr. Lee
  On 14 May 1987 the number of unemployed claimants of benefits in the Carlisle constituency was 3,802.

THE ARTS

  Museums
  Mr. Butler
  asked the Minister for the Arts if he will undertake a review of the use of volunteers in museums.

  Mr. Luce
  Volunteers have always had an important and valuable role to play in British museums. A comprehensive survey of the use of volunteers in museums and galleries was undertaken in 1984 by the volunteers centre under the sponsorship of the Museums and Galleries Commission and with funding from the Office of Arts and Libraries.

  Consideration is currently being given to developing guidance for museums on the use of volunteers.

NATIONAL FINANCE

  National Economic Development Office
  Ms. Armstrong
  asked the Chancellor of the Exchequer what plans the Government have for the future of the National Economic Development Office.

  Mr. Lawson
  I informed the National Economic Development Council on 1 July of the Government's conclusions that in future the council would meet four times a year and that the work of the economic development committees and similar activities could not be justified on their present scale. A list of those EDCs which the Government consider would justify public funding after the current financial year has now been sent to the NEDC parties. The Government will take final decisions in the light of their comments. As a consequence of these changes there will be a corresponding reduction in the size of the National Economic Development Office.

  Income Tax
  Mr. McCrindle
  asked the Chancellor of the Exchequer if he will estimate the cost of raising the income tax threshold to £4,000; how many people this would take out of tax altogether; and if he will make a statement.

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

  Married Man's Tax Allowance
  Mr. McCrindle
  asked the Chancellor of the Exchequer what estimate he has made at the savings to the Exchequer of abolishing the married man's tax allowance; and if he will make a statement.
  446
  Mr. Norman Lamont
  I shall let my hon. Friend have a reply as soon as possible.

  VAT
  Mr. McCrindle
  asked the Chancellor of the Exchequer what estimate he has made of the increase in the rate of inflation from current levels if value added tax at 15 per cent. were imposed on all goods and services; and if he will make a statement.

  Mr. Brooke
  The direct effect of imposing value added tax at 15 per cent. on all these goods and services which are currently zero rated would be to raise the level of retail prices by 4 per cent. The Government's medium term financial strategy ensures that there would be no lasting effect on the rate of inflation.

  Mortgage Interest Tax Relief
  Mr. McCrindle
  asked the Chancellor of the Exchequer if he has any plans to review the availability of mortgage tax relief; and if he will make a statement.

  Mr. Norman Lamont
  As my right hon. Friend the Prime Minister has reaffirmed on several occasions, the Government remain committed to continuing mortgage interest relief.

  New and Expanding Companies
  Mr. McCrindle
  asked the Chancellor of the Exchequer if he will consider expanding the range of investment and capital relief for investment in new and expanding companies; and if he will make a statement.

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

  Clydesdale Bank
  Mr. Salmond
  asked the Chancellor of the Exchequer when the Bank of England was informed of the sale of the Clydesdale Bank to the National Australia Bank; when the Treasury was informed of the matter; whether either sought or received any guarantees as to employment, investment and autonomy of operation; and when the Bank of England gave its approval to the sale.

  Mr. Lilley
  The Bank of England was informed at an early stage of the negotiations. The bank considered the proposed acquisition of Clydesdale Bank and Northern by National Australia Bank and, against the criteria in the Banking Act 1979, indicated to Midland Bank and National Australia Bank before the announcement on 7 July that it had no objection in principle. The Treasury was also informed before the announcement.

  Discussions with the National Australia Bank did not include the question of guarantees of the kind to which the hon. Member refers, as such guarantees were neither necessary nor appropriate to meet the Banking Act criteria.

  Customs Officers (Dispute)
  Mr. Waller
  asked the Chancellor of the Exchequer if he will make a statement about the effects of the dispute involving customs officers in terms of delays to goods imports.
  447
  Mr. Brooke
  [pursuant to his reply, 13 July 1987]: The Civil Service trade unions' industrial action which involved customs officers has been suspended. All customs officers are now working normally and there are no abnormal delays to goods imported.

SOCIAL SERVICES

  Young People (Benefits)
  Mr. Battle
  asked the Secretary of State for Social Services how many young people have had their benefit reduced or suspended for either (a) refusing a YTS place or (b) leaving a scheme early in the Leeds, West constituency and in the Leeds metropolitan district council areas.

  Mr. Portillo
  The table sets out the number of young people whose supplementary benefit has been reduced by local offices serving the Leeds, West constituency and in the Leeds metropolitan district council area for the period from December 1983 to April 1987. The youth training scheme started in April 1983 but records were not kept from the outset.

  Numbers Whose Benefit was Reduced

  Leeds, West

  Leeds Metropolitan District Council

  (a) for refusing to take up a youth training scheme place

  5

  12

  (b) for leaving a youth training scheme place early

  75

  150

  NHS (Scientists' Pay)
  Mr. Steel
  asked the Secretary of State for Social Services if he will make it his policy to ensure that graduate scientists working in the National Health Service receive pay awards that are comparable to those gained by similarly qualified people in the private sector.

  Mr. Newton
  The pay of graduate scientists is a matter for the Whitley Council. I understand that negotiations are in progress on the 1987 pay claim.

  "What To Do After a Death"
  Mr. Hargreaves
  asked the Secretary of State for Social Services (1) if he will reissue the leaflet, "What To Do After a Death".

  (2) why the leaflet "What To Do After a Death", has been out of print since 1979.

  Mr. Portillo
  The current edition of Social Security leaflet D49 "What To Do After a Death", is still available. The August 1979 date on the cover of the leaflet is an indicaton of the original production date for that edition. Since that date the leaflet has been amended and reprinted several times. Half a million copies were printed and distributed by the Department last year. A new edition of the leaflet is in the final stages of preparation and will be available later this year.

  Pensioners (Incomes)
  Sir Brandon Rhys Williams
  asked the Secretary of State for Social Services if he will publish a table for the latest date for which the figures are available, showing the
  448
  numbers of pensioners with gross weekly incomes other than the state basic pension of £0–£5, £5–£10, £10–£15, £15£20, £20–£30, £30–£40, £40–£50, £50–£60, £60–£70, £70–£80, £80–£90, £90–£100, £100–£150, £150–£200, £200–£250, £250–£300, £300–£350, £350–£400, £400–£450, £450–£500, and over £500 also distinguishing between single and married pensioners.

  Mr. Scott
  The table shows the number of pensioners' with income, other than retirement pension of any category or supplementary pension, at the levels specified.

  Thousands

  Gross income excluding pension (£ per week at 1985 prices)

  Single pensioners

  Married couples

  Less than £5

  430

  110

  5–10

  440

  130

  10–15

  410

  190

  15–20

  590

  210

  20–30

  1,070

  460

  30–40

  320

  240

  40–50

  170

  180

  50–60

  100

  140

  60–70

  70

  80

  70–80

  90

  90

  80–90

  50

  70

  90–100

  50

  40

  100–150

  160

  240

  150–200

  50

  100

  200–250

  20

  50

  250–300

  10

  70

  300–350

  2—

  20

  350–400

  2—

  10

  400–450

  2—

  10

  450–500

  2—

  2—

  Over 500

  2—

  10

  Total

  4,030

  2,450

  1 Pensioners are defined as individuals in a tax unit which receives some form of retirement pension. Figures are for single pensioners or married couples where the husband is over 65.

  2 Indicates less than 10,000 cases.

  Source Family Expenditure Survey 1985.

  Benefits
  Mr. McLeish
  asked the Secretary of State for Social Services what was the total number of people in receipt of supplementary benefit in the Fife, Central constituency at (a) June 1979, (b) June 1983 and (c) June 1987.

  Mr. Portillo
  Fife, Central constituency is served by Kirkcaldy, Cowdenbeath and Leven local offices, although the local office and constituency boundaries are not conterminous. The table shows the number of people receiving supplementary benefit for the years requested and, as the information is made available on a quarterly basis, May figures have been produced as the nearest alternative to June for each year:

  May 1979

  May 1983

  May 1987

  Kirkcaldy local office

  5,377

  8,714

  11,035

  Leven local office

  2,746

  4,335

  5,234

  Cowdenbeath local office

  2,168

  3,352

  4,452

  TOTALS

  10,291

  16,401

  20,721

  Source: 100 per cent. count of cases in action.

  Hip Operations
  Mr. Janner
  asked the Secretary of State for Social Services what is the minimum, maximum and average time that he estimates that a person living in Leicester and requiring a hip replacement operation under the National Health Service would have to wait, from the date when his or her general practitioner originally recommended such surgical intervention.

  Mr. Newton
  I am sorry I cannot give the hon. and learned Member the information he seeks. It is not held centrally. The hon. and learned Member may wish to write to the chairman of the Leicestershire district health authority who may be able to provide the information requested.

  Electoral Statistics
  Mr. Grocott
  asked the Secretary of State for Social Services if he will list in order of size those constituencies in England whose electorates are above the quota.

  Mrs. Currie
  The information requested is given in the table.

  Parliamentary constituency

  1987 electorate (as first published)

  Amount by which electorate is above the electoral quota

  England

  36,393,203

  *69,585

  Isle of Wight

  99,760

  30,175

  Milton Keynes

  98,215

  28,630

  East Berkshire

  88,884

  19,299

  Eastleigh

  88,664

  19,079

  East Hampshire

  87,476

  17,891

  Horsham

  87,229

  17,644

  Huntingdon

  87,195

  17,610

  Devizes

  87,145

  17,560

  Swindon

  87,140

  17,555

  Wokingham

  86,587

  17,002

  Westbury

  85,708

  16,123

  South Colchester and Maldon

  85,302

  15,717

  Peterborough

  85,244

  15,659

  Cirencester and Tewkesbury

  85,181

  15,596

  Crosby

  85,099

  15,514

  North West Surrey

  84,295

  14,710

  Ryedale

  84,205

  14,620

  The Wrekin

  83,796

  14,211

  Chelmsford

  83,696

  14,111

  Woking

  83,453

  13,868

  North Colchester

  83,391

  13,806

  South Suffolk

  83,143

  13,558

  Waveney

  82,920

  13,335

  Dudley West

  82,884

  13,299

  South West Cambridgeshire

  82,692

  13,107

  Stroud

  82,340

  12,755

  Stratford-on-Avon

  82,255

  12,670

  Feltham and Heston

  81,999

  12,414

  Chichester

  81,862

  12,277

  Harrow East

  81,842

  12,257

  Aldershot

  81,791

  12,206

  Mid Bedfordshire

  81,697

  12,112

  North Wiltshire

  81,670

  12,085

  Mid Worcestershire

  81,581

  11,996

  Portsmouth North

  81,350

  11,765

  Brigg and Cleethorpes

  81,214

  11,629

  Mid Sussex

  81,138

  11,553

  Hornsey and Wood Green

  81,122

  11,537

  Bridlington

  81,072

  11,487

  South Derbyshire

  81,041

  11,456

  Billericay

  80,588

  11,003

  Grantham

  80,366

  10,781

  South Staffordshire

  80,336

  10,751

  Windsor and Maidenhead

  80,272

  10,687

  Richmond (Yorks)

  80,255

  10,670

  450

  Parliamentary constituency

  1987 electorate (as first published)

  Amount by which electorate is above the electoral quota

  Central Suffolk

  80,204

  10,619

  Langbaurgh

  80,201

  10,616

  Romsey and Waterside

  80,179

  10,594

  York

  80,159

  10,574

  Cheltenham

  80,121

  10,536

  Faversham

  80,062

  10,477

  Beverley

  79,958

  10,373

  South West Bedfordshire

  79,927

  10,342

  West Hertfordshire

  79,886

  10,301

  North Hertfordshire

  79,689

  10,104

  Northavon

  79,610

  10,025

  Chorley

  79,514

  9,929

  Arundel

  79,468

  9,883

  Meriden

  79,436

  9,851

  South Norfolk

  79,359

  9,774

  South Hams

  79,356

  9,771

  Basingstoke

  79,116

  9,531

  West Gloucestershire

  78,982

  9,397

  Halesowen and Stourbridge

  78,979

  9,394

  Rutland and Melton

  78,921

  9,336

  Solihull

  78,855

  9,270

  Houghton and Washington

  78,821

  9,236

  Guildford

  78,783

  9,198

  North Shropshire

  78,240

  8,655

  Blaby

  78,155

  8,570

  Bosworth

  78,131

  8,546

  South Worcestershire

  78,129

  8,544

  Braintree

  78,025

  8,440

  Tonbridge and Malling

  77,956

  8,371

  Honiton

  77,942

  8,357

  Lincoln

  77,939

  8,354

  Aylesbury

  77,933

  8,348

  Fareham

  77,910

  8,325

  Gloucester

  77,899

  8,314

  Harwich

  77,827

  8,242

  Worthing

  77,719

  8,134

  Rugby and Kenilworth

  77,640

  8,055

  Bury St. Edmunds

  77,615

  8,030

  Winchester

  77,527

  7,942

  Poole

  77,481

  7,896

  Wallsend

  77,465

  7,880

  Havant

  77,412

  7,827

  Erewash

  77,381

  7,796

  Woodspring

  77,255

  7,670

  Warrington South

  77,245

  7,660

  Sheffield, Hillsborough

  77,236

  7,651

  Tunbridge Wells

  77,205

  7,620

  Weston-Super-Mare

  77,172

  7,587

  West Lancashire

  77,054

  7,469

  Rochford

  77,048

  7,463

  Salisbury

  77,045

  7,460

  Macclesfield

  77,018

  7,433

  Northampton South

  76,948

  7,363

  Canterbury

  76,931

  7,346

  Portsmouth South

  76,814

  7,229

  Tottenham

  76,713

  7,128

  Harrogate

  76,607

  7,022

  Suffolk Coastal

  76,547

  6,962

  South West Hertfordshire

  76,535

  6,950

  Warrington North

  76,517

  6,932

  Sunderland North

  76,503

  6,918

  Hertford and Stortford

  76,470

  6,885

  Witney

  76,221

  6,636

  St. Albans

  76,206

  6,621

  Dudley East

  76,154

  8,569

  Newbury

  76,145

  6,560

  Stockton South

  76,136

  6,551

  Wandsdyke

  76,108

  6,523

  Boothferry

  76,084

  6,499

  Exeter

  76,053

  6,468

  Bournemouth East

  75,906

  6,321

  Rossendale and Darwen

  75,894

  6,309

  New Forest

  75,780

  6,195

  Sunderland South

  75,762

  6,177

  451

  Parliamentary constituency

  1987 electorate (as first published)

  Amount by which electorate is above the electoral quota

  Harborough

  75,666

  6,101

  Ealing, Southall

  75,660

  6,075

  Scarborough

  75,628

  6,043

  Blackburn

  75,586

  6,001

  Don Valley

  75,452

  5,867

  Torridge and West Devon

  75,373

  5,788

  Batley and Spen

  75,334

  5,749

  Staffordshire Moorlands

  75,318

  5,733

  Bournemouth West

  75,290

  5,705

  North Luton

  75,270

  5,685

  Tynemouth

  75,180

  5,595

  South West Norfolk

  75,152

  5,567

  Taunton

  75,035

  5,450

  Stoke-on-Trent North

  75,029

  5,444

  North East Cambridgeshire

  75,026

  5,441

  East Lindsey

  74,915

  5,330

  Eddisbury

  74,882

  5,297

  Sheffield, Hallam

  74,868

  5,283

  Halton

  74,853

  5,268

  Mid Norfolk

  74,778

  5,193

  Harrow West

  74,771

  5,186

  Southampton, Test

  74,711

  5,126

  Eastbourne

  74,705

  5,120

  Sheffield, Heeley

  74,688

  5,103

  Loughborough

  74,622

  5,037

  North West Norfolk

  74,605

  5,020

  North Bedfordshire

  74,506

  4,921

  Welwyn Hatfield

  74,435

  4,850

  Birmingham, Perry Barr

  74,413

  4,828

  Watford

  74,314

  4,729

  Kingston upon Hull North

  74,258

  4,673

  Calder Valley

  74,238

  4,653

  Halifax

  74,201

  4,616

  Burton

  74,151

  4,566

  Slough

  74,147

  4,562

  Hertsmere

  74,142

  4,557

  Saffron Walden

  74,093

  4,508

  Leicester South

  74,074

  4,489

  Sevenoaks

  74,047

  4,462

  South East Cambridgeshire

  74,031

  4,446

  Wealdon

  73,984

  4,399

  South West Surrey

  73,983

  4,398

  Birmingham, Northfield

  73,956

  4,371

  Maidstone

  73,952

  4,367

  Doncaster North

  73,944

  4,359

  Lewes

  73,941

  4,356

  Worsley

  73,918

  4,333

  Kingswood

  73,888

  4,303

  Liverpool, Walton

  73,826

  4,241

  North Dorset

  73,790

  4,205

  Glanford and Scunthorpe

  73,764

  4,179

  Spelthorne

  73,751

  4,166

  Crewe and Nantwich

  73,711

  4,126

  Warwick and Leamington

  73,684

  4,099

  Gravesham

  73,671

  4,086

  Bristol North West

  73,630

  4,045

  South Dorset

  73,607

  4,022

  Rushcliffe

  73,581

  3,996

  Dartford

  73,520

  3,935

  Hastings and Rye

  73,515

  3,930

  Nottingham South

  73,472

  3,887

  Stafford

  73,421

  3,836

  Southampton, Itchen

  73,412

  3,827

  Crawley

  73,356

  3,771

  Truro

  73,327

  3,742

  Mid Kent

  73,223

  3,638

  North Cornwall

  73,202

  3,617

  Hove

  73,154

  3,569

  South Ribble

  73,133

  3,548

  Sutton Coldfield

  73,128

  3,543

  Skipton and Ripon

  73,063

  3,478

  Reading East

  73,007

  3,422

  Bishop Auckland

  72,936

  3,351

  North Durham

  72,934

  3,349

  452

  Parliamentary constituency

  1987 electorate (as first published)

  Amount by which electorate is above the electoral quota

  Wycombe

  72,852

  3,267

  Wigan

  72,842

  3,257

  Bristol West

  72,837

  3,252

  Birmingham, Selly Oak

  72,821

  3,236

  Gillingham

  72,790

  3,205

  Chesham and Amersham

  72,747

  3,162

  Reigate

  72,733

  3,148

  Tatton

  72,701

  3,116

  Bootle

  72,659

  3,074

  Broxtowe

  72,618

  3,033

  Teignbridge

  72,578

  2,993

  Derby North

  72,548

  2,963

  Pudsey

  72,531

  2,946

  Brentford and Isleworth

  72,371

  2,786

  Ellesmere Port and Ncston

  72,332

  2,747

  Ealing North

  72,321

  2,736

  Mid Staffordshire

  72,289

  2,704

  Selby

  72,289

  2,704

  Chertsey and Walton

  72,241

  2,656

  Sherwood

  72,221

  2,636

  Southport

  72,210

  2,625

  Luton South

  72,037

  2,452

  Shoreham

  71,994

  2,409

  Penrith and Border

  71,93

  2,345

  Dewsbury

  71,838

  2,253

  Ashfield

  71,826

  2,241

  North Warwickshire

  71,671

  2,086

  Christchurch

  71,626

  2,041

  St Helens North

  71,624

  2,039

  Wyre Forest

  71,619

  2,034

  West Derbyshire

  71,609

  2,024

  Stoke-on-Trent South

  71,585

  2,000

  Shrewsbury and Atcham

  71,582

  1,997

  Bradford West

  71,577

  1,992

  North West Leicestershire

  71,564

  1,979

  Makerfield

  71,549

  1,964

  Stamford and Spalding

  71,520

  1,935

  Broxbourne

  71,472

  1,887

  Epsom and Ewell

  71,458

  1,873

  Wcllingborough

  71,403

  1,818

  Yeovil

  71,226

  1,641

  North East Derbyshire

  71,184

  1,599

  Harlow

  71,181

  1,596

  Hackney South and Shoreditch

  71,167

  1,582

  Torbay

  71,151

  1,566

  Reading West

  71,131

  1,546

  Westmorland and Lonsdale

  71,110

  1,525

  Stockton North

  71,069

  1,484

  Colne Valley

  71,057

  1,472

  Buckingham

  71,046

  1,461

  South East Cornwall

  71,036

  1,451

  Chesterfield

  71,020

  1,435

  Ashford

  70,986

  1,401

  North West Hampshire

  70,916

  1,331

  Holborn and St. Pancras

  70,901

  1,316

  High Peak

  70,819

  1,234

  Gainsborough and Horncastle

  70,780

  1,195

  Leominster

  70,760

  1,175

  Bolton West

  70,722

  1,137

  North Norfolk

  70,546

  961

  Nottingham North

  70,480

  895

  Doncaster Central

  70,467

  882

  Wakefield

  70,465

  880

  Stevenage

  70,393

  808

  Bradford South

  70,372

  787

  North Thanet

  70,342

  757

  Banbury

  70,335

  750

  Bromsgrove

  70,328

  743

  St. Helens South

  70,254

  669

  Denton and Reddish

  70,218

  633

  Enfield North

  70,190

  605

  Barrow and Furness

  70,175

  590

  Northampton North

  70,163

  578

  453

  Parliamentary constituency

  1987 electorate (as first published)

  Amount by which electorate is above the electoral quota

  Daventry

  70,144

  559

  Elmet

  69,975

  390

  Oxford West and Abingdon

  69,963

  378

  Leigh

  69,925

  340

  Carshalton and Wallington

  69,906

  321

  Cambridge

  69,895

  310

  Newcastle upon Tyne North

  69,889

  304

  Worcester

  69,823

  238

  Dover

  69,807

  222

  Somerton and Frome

  69,661

  76

  Hartlepool

  69,802

  17

  1 Electoral quota for England.

  Small Businesses
  Mr. David Shaw
  asked the Secretary of State for Social Services if he will make a statement on the achievements of his Department in helping small businesses over the last three years; and if he will publish the performance indicators by which his Department monitors those achievements and the statistical results of such monitoring.

  Mr. Moore
  Details of the Government's measures designed to help small businesses are given in the White Papers "Lifting the Burden" Cmnd. 9571 (July 1985), "Building Businesses … not Barriers" Cmnd. 9794 (May 1986) and in the progress report "Encouraging Enterprise" published May 1987, copies of which have been placed in the Library. These publications include details of those measures to help business introduced by my Department over the last three years.

  Considering ways of helping small businesses and encouraging enterprise remain important elements in the work of my Department. The Department has a system to monitor proposals which impact on business to ensure that the needs of small businesses are fully taken into account. Specific performance indicators would not be of practical assistance in monitoring achievements in this area.

  Crown Immunity
  Mr. Ashley
  asked the Secretary of State for Social Services (1) what information he has sought or been offered by health authorities regarding the effect of the lifting of Crown immunity; how many authorities have had to increase their expenditure on food hygiene and health and safety; and what requests for increased funding he has received as a consequence;

  (2) if he will take steps to ensure that the accounting system for health authorities will enable identification of the extent to which the lifting of Crown immunity has increased hospital spending on food hygiene and health and safety in the first year without immunity;

  (3) if he will request from regional health authorities information on the additional costs so far incurred or predicted in their regions because of the lifting of Crown immunity; and if he will seek a breakdown of the nature of the costs.

  Mrs. Currie
  I shall let the right hon. Member have a reply as soon as possible.

  Disablement Services Authority
  Mr. Hannam
  asked the Secretary of State for Social Services how many members of the new Disablement Services Authority are disabled.

  Mr. Scott
  Two. One amputee, and one wheelchair user.

  Mr. Hannam
  asked the Secretary of State for Social Services when the new Disablement Services Authority plans to meet.

  Mr. Scott
  I understand that at the first meeting of the Disablement Services Authority on 1 July the following meeting dates were agreed for 1987:

  30 July

  26 August

  6 October

  5 November

  1 December

  Thereafter, starting on 7 January 1988, I understand that the authority intends to meet on the first Thursday of each month.

  Cancer Screening
  Mr. Hoyle
  asked the Secretary of State for Social Services how many women have been tested for cervical cancer in the Warrington district health authority area in the last six months; how many of these tests have been fully processed; how many of the results have been sent out; and what is the average waiting time for these results.

  Mrs. Currie
  I am sorry I cannot give the hon. Member the information he seeks. It is not available centrally. The hon. Member may wish to write to the chairman of Warrington district health authority for the information requested.

  The health authority did experience some difficulties in keeping within the one month target for sending out results. However, with the engagement of an additional medical laboratory scientific officer, the health authority expects to achieve a three-week turn round time from the end of August.

  Community Care
  Mr. Irving
  asked the Secretary of State for Social Services what assessment he has made as to whether mental illness patients with a hospital stay of less than a month, who cannot return to their previous accommodation, can be provided for on discharge by local housing authorities under the Housing Act 1985.

  Mrs. Currie
  Clinicians are expected to pay regard to the circumstances and needs of patients when arrange ments for discharge are being made. Health and local authorities should work together, in collaboration with the voluntary and private sectors, to provide a range of services, including accommodation, to meet the needs of former patients.

  Local housing authorities have a statutory duty under the Housing Act 1985 to secure accommodation for those whom they judge to be in priority need. The definition of priority need includes mentally ill people and housing authorities are recommended by my right hon. Friend the Secretary of State for the Environment to consult health and social services authorities in assessing individual cases.

  Community Charge
  Mr. McCrindle
  asked the Secretary of State for Social Services what arrangements he proposes to make to enable those on supplementary benefit to receive compensation for their 20 per cent. contribution to the community charge; how long they will be required to wait before compensation is paid; and if he will make a statement.

  Mr. Scott
  The Government have made it clear that the decision to compensate those on income support, for the average minimum contribution towards domestic rates, will be carried through on introduction of the community charge. Details will be announced in due course.

  Mr. McCrindle
  asked the Secretary of State for Social Services if he will estimate the cost of (a) collecting from supplementary benefit recipients their 20 per cent. contribution to the community charge and (b) the cost of paying compensation to those on supplementary benefit for their 20 per cent. contribution to the community charge; and if he will make a statement.

  Mr. Scott
  The Green Paper "Paying for Local Government" (Cmnd. 9714) discusses in paragraph 3.43 the operational issues and cost of collecting the community charge. The cost of taking account of the minimum contributions in benefit rates will depend on the detailed arrangements yet to be announced.

  Mr. McCrindle
  asked the Secretary of State for Social Services if he will estimate the total sum to be collected from those making the 20 per cent. contribution to the community charge; and if he will make a statement.

  Mr. Scott
  The amount of community charge to be collected from those eligible for maximum rebate of the charge cannot yet be known. It will depend on the level of charges set by local authorities and the numbers of people qualifying for income-related benefits.

  National Health Service (Cost Monitoring)
  Mr. McCrindle
  asked the Secretary of State for Social Services what measures he proposes to take to monitor the relative costs and performance of National Health Service regional health authorities, individual hospitals, hospital and community based services and medical procedures; and if he will make a statement.

  Mr. Newton
  A number and variety of measures have already been devloped to monitor the relative costs and performance of the National Health Service. A foremost example is the performance indicator package which provides managers at all levels with the means of comparing the performance of their own services with those in other authorities.

  Analysis of performance indicators, together with the results of other forms of monitoring (such as scrutiny of regions' strategies, annual short-term programme implementation reports and financial and statistical returns) are channelled into the anual accountability review process. Introduced in 1982 between the Department and regional health authorities, the review process has since extended through the service and brings to an annual head the continuous process of monitoring, appraisal and review of NHS performance. Work on improving the existing arrangements continues.
  456
  The Department is also exploring new measures, like involving professional staff directly in resource management, aimed at helping all those working in the service to improve the quantity and quality of services provided to the public.

  Private Contractors
  Mr. McCrindle
  asked the Secretary of State for Social Services if he will make a statement on progress made by health authorities in contracting out ancillary services.

  Mr. Newton
  The initiative launched by the Government in September 1983 was competitive tendering for domestic cleaning, catering and laundry services in the National Health Service. In England, health authorities continue to make good progress in putting these services out to tender thereby testing their cost effectiveness. By 31 March 1987, 78 per cent. of these services had been put out to tender.

  Total annual savings generated as a result in England are estimated at £93·3 million — an increase of £7·3 million over the figure reached at 31 December 1986. £26·1 million of the total savings generated have been realised from 194 contracts let to private contractors and £67·2 million from 1046 tenders secured by in-house organisations.

  Information for Scotland and Wales is for my right hon. and learned Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Wales, respectively.

  Low-income Families
  Mr. Frank Field
  asked the Secretary of State for Social Services if, pursuant to the answer given to the hon. Member for Birkenhead on 7 July, Official Report, column 115, on low income families, he will detail the reasons for and the nature of the technical review being undertaken.

  Mr. Scott
  The technical review is being conducted by officials from the Department of Health and Social Security and the Central Statistical Office. Since the methods and assumptions underlying the low-incomes statistics have never been systematically reassessed, the review is considering a range of bases of measurement, for example, the income-unit (the individual, the family and the household), the income-period (annual, current or normal), and how adjustments are to be made for the size and composition of income units. In addition, ideas in the academic literature are being reviewed. Some alternative approaches to the measurement of low income were outlined in the Green Paper "Reform of Social Security" (Cmnd. 9519).

  Mr. Gordon Brown
  asked the Secretary of State for Social Services when he hopes to publish the 1985 low-income families tables and the figures showing the number of children living in low-income families.

  Mr. Scott
  I refer the hon. Member to my reply to the hon. Member for Birkenhead (Mr. Field) on Tuesday 7 July, at column 115.

  Supplementary Benefit
  Mr. Gordon Brown
  asked the Secretary of State for Social Services if he will publish a table showing the value of the long-term supplementary benefit scale rates,

  457
  excluding housing costs, for a single person and a married couple as a proportion of average net earnings for all males for each year from November 1978 to April 1986.

  Mr. Scott:
  The information is as follows:

  Scale rates as a percentage of average net earnings of all males1

  Uprating date

  Single non-householder

  Single householder

  Couple

  November 1978

  24·4

  30·4

  45·8

  November 1979

  23·7

  29·7

  45·0

  November 1980

  23·2

  29·1

  44·4

  November 1981

  23·4

  29·3

  44·9

  November 1982

  24·3

  30·4

  46·5

  November 1983

  23·6

  29·5

  45·0

  November 1984

  22·7

  28·4

  43·1

  November 1985

  22·3

  27·9

  42·4

  July 19862

  21·2

  26·5

  40·3

  Supplementary benefit rates are more usually compared with male manual earnings.1 The equivalent percentages are as follows:

  Uprating date

  Single non-householder

  Single householder

  Couple

  November 1978

  26·5

  33·0

  49·5

  November 1979

  25·9

  32·4

  48·9

  November 1980

  26·2

  32·8

  49·7

  November 1981

  26·7

  33·4

  50·9

  November 1982

  27·9

  34·9

  52·9

  November 1983

  27·1

  34·0

  51·4

  November 1984

  26·2

  32·8

  49·4

  November 1985

  26·0

  32·4

  48·9

  July 19862

  24·8

  31·0

  46·7

  1 Net average earnings is gross average earnings less tax and national insurance contributions at the non·contracted out rate.

  2 Provision. The comparison is based on July benefit rates, when the uprating took place in 1986.

  Mr. Gordon Brown
  asked the Secretary of State for Social Services if he will estimate (a) the total savings, (b) the number of people affected, and (c) the average loss per person resulting from the changes in the regulations for the payment of mortgage interest for people on supplementary benefit.

  Mr. Scott
  Our latest estimates of the effect of the changes made in January to the amount allowed for mortgage interest in supplementary benefit for new claimants under 60 are:

  (a) savings of £38 million in the year 1987–88;

  (b) just over 70,000 claimants affected at any one time;

  (c) an average amount of mortgage interest of £170 would not be met for someone staying on benefit the full 16 weeks.

  Regional Health Authority Chairmen
  Mr. Hayward
  asked the Secretary of State for Social Services whether he will announce the appointment of regional health authority chairmen from 1 August.

  Mr. Moore
  The terms of office of three of the 14 regional health authority chairmen expire on 31 July 1987. On the retirement of Sir Arthur South JP. I have appointed Mr. Colin Walker OBE to succeed him as chairman of East Anglian RHA. The chairmen of South East Thames and North Western RHAs have accepted my invitation to continue to serve in this most important position.

  The appointments are as follows:

  East Anglian—Mr. Colin Walker OBE until 31 July 1991.

  SE Thames—Sir Peter Baldwin KCB reappointed until 31 July 1989.

  458

  N Western—Sir John Page OBE reappointed until 31 July 1988.

  AIDS
  Mr. Favell
  asked the Secretary of State for Social Services what steps he is taking to enable those undertaking research into the treatment and care of people with HIV or AIDS to learn from experiences in the United States.

  Mr. Newton
  The Department, with funds generously donated by Abbott Laboratories, is able to offer a number of travel fellowships to the United States of America for those undertaking research relevant to the care of people with HIV infection or AIDS in hospital or the community. The fellowships are designed to provide an opportunity to meet others working in the same field and to study their research methods.

  Advertisements will be placed shortly inviting applications. The fellowships, of up to three months' duration to meet travel and subsistence expenses, will be available in late 1987 or in 1988.

  Health Service Commissioner (Report)
  Mr. Roger King
  asked the Secretary of State for Social Services when he expects to receive the annual report of the Health Service Commissioner for 1986–87.

  Mr. Newton
  The Health Service Commissioner has, as in previous years, made a single report on the performance of his functions in England, Scotland and Wales. My right hon. Friend, my right hon. and learned Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Wales presented the report to the House yesterday. It is being published today (House of Commons Paper No. 31) and copies are available from the Vote Office.

  Departmental Publications (Languages)
  Mr. Andrew Bowden
  asked the Secretary of State for Social Services which of his Department's publications are produced in languages other than English, and which are the additional languages used.

  Mr. Portillo
  The leaflet "Which Benefit" has been reproduced in Gujerati, Bengali, Punjabi, Urdu, Hindi and Chinese.

  Implied Marginal Tax Rates
  Sir Brandon Rhys Williams
  asked the Secretary of State for Social Services if he will publish tables showing (a) implied marginal tax rates as a result of income tax, national insurance contribution and withdrawal of housing benefit (or equivalent) in each year since the introduction of rent rebates, and (b) implied marginal tax rates as a result of income tax, national insurance contribution, housing benefit and family income supplement/family credit withdrawal, for each year since introduction of family income supplement; and if he will include estimates for 1988 on the assumption that national insurance contribution and income tax rates will remain as at present.

  Mr. Scott
  The information requested is shown in the table. In practice, the impact of the highest theoretical
  459
  marginal tax rates may be mitigated by the duration of benefit award (FIS awards run unchanged for a period of one year).

  Implied marginal tax rates from April 1972

  HB taper

  Based on tax, NI and withdrawal of HB

  Based on tax, NI and withdrawal of HB and FIS

  Comments

  July 1972

  (a)

  57·64

  96·14

  (b)

  67·64

  101·14

  October 1972

  (a)

  57·89

  96·39

  Change in NI rates

  (b)

  67·89

  101·39

  April 1973

  (a)

  57·75

  96·25

  Change in basic rate of tax

  (b)

  67·75

  101·25

  October 1973

  (a)

  58·00

  96·50

  Change in NI rates

  (b)

  68·00

  105·50

  April 1974

  (a)

  61·00

  99·50

  Change in basic rate of tax

  (b)

  71·00

  104·50

  August 1974

  (a)

  61·50

  100·00

  Change in NI rates

  (b)

  71·50

  105·00

  April 1975

  (a)

  63·50

  102·00

  Change in basic rate of tax

  (b)

  73·50

  107·00

  April 1976

  (a)

  63·75

  102·25

  Change in NI rates

  (b)

  73·75

  107·25

  April 1977

  (a)

  62·75

  101·25

  Change in basic rate of tax

  (b)

  72·75

  106·25

  April 1978

  (a)

  54·50 or 62·50

  93·00 or 101·00

  Different rates correspond to 25 per cent, tax band and basic rate of tax respectively

  (b)

  64·50 or 72·50

  98·00 or 106·00

  April 1979

  (a)

  54·50 or 59·50

  93·00 or 98·00

  Different rates correspond to 25 per cent, tax band and basic rate of tax respectively

  (b)

  64·50 or 69·50

  98·00 or 103·00

  April 1980

  (a)

  59·75

  98·25

  Change in NI rates

  (b)

  69·75

  103·25

  April 1981

  (a)

  60·75

  99·25

  Change in NI rates

  (b)

  70·75

  104·25

  April 1982

  (a)

  61·75

  100·25

  Change in NI rates

  (b)

  71·75

  105·25

  April 1983

  (a)

  67·00

  103·00

  Changes in HB Taper and NI rates

  (b)

  72·00

  105·50

  April 1984

  (a)

  74·00

  106·50

  Change in HB Taper

  (b)

  72·00

  105·50

  November 1984

  (a)

  77·00

  108·00

  Change in HB Taper

  (b)

  72·00

  105·50

  April 1985

  (a)

  77·00

  108·00

  (b)

  72·00

  105·50

  October 1985

  (a)

  73·00, 75·00 or 77·00

  104·00, 106·00 or 108·00

  Different rates correspond to NI rates of 5, 7 and 9 per cent, respectively

  (b)

  68·00, 70·00 or 72·00

  101·50, 103·50 or 105·50

  November 1985

  (a)

  77·00, 79·00 or 81·00

  106·00, 108·00 or 110·00

  Different rates correspond to NI rates of 5, 7 and 9 per cent, respectively; Change in HB Taper

  (b)

  68·00, 70·00 or 72·00

  101·50, 103·50 or 105·50

  April 1986

  (a)

  76·00, 78·00 or 80·00

  105·0, 107·00 or 109·00

  Different rates correspond to NI rates of 5, 7 and 9 per cent, respectively; Change in basic tax rate

  460 461

  HB taper

  Based on tax, NI and withdrawal of HB

  Based on tax, NI and withdrawal of HB and FIS

  Comments

  (b)

  67·00, 69·00 or 71·00

  100·50, 102·5 or 104·50

  April 1987

  (a)

  78·00, 80·00 or 8200

  105·00, 107·00 or 109·00

  Different rates corrspond to NI rates of 5, 7 and 9 per cent, respectively; Change in HB Taper; Change in basic tax rate

  (b)

  65·00, 67·00 or 69·00

  98·50, 100·50 or 101·50

  Key:

  (a) Assessable Income above the housing benefit Needs Allowance.

  (b) Assessable Income below the housing benefit Needs Allowance.

  Implied marginal tax rales for April 1988

  Rate of National Insurance

  Comments

  5 per cent.

  7 per cent.

  9 per cent.

  Based on current tax and national insurance rates and withdrawal of housing benefit

  86·4

  86·8

  87·2

  Assumes a housing benefit taper of 80 per cent. of net income and a family credit taper of 70 per cent, of net income

  Based on current tax and national insurance rates and withdrawal of housing benefit and family credit

  95·92

  96·04

  96·16

  Notes:

  1. Implied marginal tax rates are given for private and local authority tenants only.

  2. The tables start from July 1972 when the national rent rebate and allowance scheme was introduced.

  3. Changes in tax rates, national insurance contributions and housing benefit tapers have been included since July 1972.

  4. Precise rates for the reformed social security system have yet to be set. The marginal tax rates for April 1988 are based on the illustrative assumptions included in the Technical Annex accompanying "Reform of Social Security" (Cmnd. 9691).

  Child Benefit
  Mrs. Maureen Hicks
  asked the Secretary of State for Social Services what is his policy with regard to the future of child benefit payments; and if he will make a statement.

  Mr. Scott
  There are no plans to reduce the scope of child benefit. All families will continue to get child benefit and it will be paid to the mother. Its rate will be determined as a part of the annual social security uprating exercise, when the need for a balanced programme of family support is considered.

  Invalid Care Allowance
  Mr. David Martin
  asked the Secretary of State for Social Services what representations he has received concerning the system that when a child is at a special boarding school invalid care allowance is paid only in holiday periods and not as a retainer to the person responsible for the caring; and if he will make a statement.

  Mr. Scott
  Invalid care allowance is paid to a carer for each week he or she spends at least 35 hours caring for a severly disabled person who is living at home and receiving an attendance allowance. We have not received any representations about these rules which preclude payment of the allowance when the disabled person is living away from home at a special boarding school or other residential accommodation.

  Nursing and Residential Care Homes
  Dr. Moonie
  asked the Secretary of State for Social Services (1) what rates of board and lodging benefits are payable to persons in private, charitable or voluntary old people's homes; and when they were last reviewed;

  (2) when he next proposes to review the levels of benefits payable to persons in old people's homes; and whether he will be taking full account of the real cost of accommodation and support in such homes.

  Mr. Scott
  Supplementary benefit claimants in independent residential care and nursing homes for the elderly can have their fees met in full up to maximum weekly amounts which are currently £130 in a residential care home (£145 where the elderly claimant is blind or very dependent), and £175 in a nursing home. An extension of up to £17·50 is payable in homes in the Greater London area. Claimants also receive a personal expenses allowance of £9·25. Increases were last made on 6 April 1987, following a review which took account of a range of information on costs and charges including a report on changes in costs by management consultants Ernst and Whinney, which has now been placed in the Library. The next general uprating of benefits will he in April 1988, and the position of people in homes will again be considered, taking account of similar factors, in advance of that date. The Department would welcome any fresh information from hon. Members or other sources which might assist that process.

  Regions (RAWP Allocation)
  Mr. Dobson
  asked the Secretary of State for Social Services if he will give for each region for each year since 1979–80 its capital resource allocation working party allocation as a percentage of its weighted population share.

  Mr. Newton
  [pursuant to his reply, 30 June 1987, c. 79–80]: The information requested is set out in the table. The RAWP (resource allocation working party) formula uses regions' populations weighted to take account of age and sex distribution and mortality rates, and the value of capital stock in relation to the weighted population as indicators of relative need.

  From 1979–80 to 1984–85, 85 per cent. of the national RAWP sum was distributed on a weighted population basis, the remaining 15 per cent. serving to reduce the inherited disparities in the value of regional health authorities' capital stock. A review in 1983 concluded that the stock equalisation element did not provide a fair measure of relative need and regional health authorities

  463
  agreed to move, progressively from 1985–86 to 1991–92, to capital RAWP allocations based solely on weighted population shares.

  Regional health authorities

  Capital allocation—RA WP share as percentage of weighted population share

  Percentage

  Regional health authority

  1979–80

  1980–81

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  1. Northern

  105

  101·3

  98·2

  96·0

  92·9

  86·8

  88·7

  90·6

  92·5

  2. Yorkshire

  105

  104·7

  105·8

  106·7

  107·7

  107·6

  106·2

  105·3

  104·3

  3. Trent

  114

  105·2

  97·9

  91·9

  91·1

  90·4

  90·5

  93·2

  94·5

  4. East Anglian

  128

  117·5

  105·3

  94·1

  85·0

  85·0

  87·2

  89·1

  91·6

  5. North West Thames

  85

  85·0

  85·0

  85·0

  85·0

  85·0

  87·2

  89·4

  91·2

  6. North East Thames

  85

  85·0

  85·0

  85·0

  85·0

  85·0

  88·5

  89·4

  91·4

  7. South East Thames

  85

  85·0

  85·0

  85·0

  85·0

  88·9

  90·8

  92·0

  93·1

  8. South West Thames

  85

  85·0

  85·0

  85·0

  85·0

  85·0

  86·9

  89·1

  91·5

  9. Wessex

  103

  110·5

  120·5

  129·2

  136·1

  140·0

  134·2

  128·7

  122·3

  10. Oxford

  85

  85·0

  85·0

  85·0

  87·0

  85·0

  87·2

  89·3

  91·6

  11. South·Western

  96

  95·6

  98·5

  103·0

  107·2

  111·8

  112·7

  108·3

  106·8

  12. West-Midlands

  85

  93·7

  100·6

  107·2

  113·0

  119·4

  115·9

  113·8

  111·1

  13. Mersey

  123

  110·7

  100·3

  90·4

  85·0

  85·0

  87·5

  89·0

  91·5

  14. North-Western

  123

  132·0

  137·0

  138·3

  132·6

  1227·7

  119·6

  116·4

  113·8

  Mentally-Handicapped Children
  Mrs. Virginia Bottomley
  asked the Secretary of State for Social Services how many children were placed in long-stay mental handicap hospitals for short-stay or respite care in the last 12 months; for how long they stayed there on average, for every health district; and what alternative community provision, including specialist fostering, is available to such children in each health district and each social services authority.

  Mrs. Currie
  [pursuant to her reply, 7 July 1987, c. 129]: I am sorry I cannot give my hon. Friend the information she seeks. Statistics are collected centrally on admissions to, and discharges from, mental handicap hospitals and units, but these cannot be linked to individual people. Figures on discharges by age and length of stay are contained in the set of booklets "Mental Health Statistics for England", available in the Library. Comprehensive information is not collected centrally on alternative community provision, including fostering arrangements.

SCOTLAND

  Psychiatric Hospitals
  Mr. Tom Clarke
  asked the Secretary of State for Scotland what is the population of Scottish psychiatric hospitals; and if he will state the percentage of the psychiatric hospital population aged between each of (a) 0 to 25 years, (b) 25 to 35 years, (c) 35 to 50 years, (d) 50 to 65 years and (e) over 65 years.

  Mr. Michael Forsyth
  The latest information available is as follows:

  Age distribution of residents1 in Scottish psychiatric hospitals2: 1985

  0–24

  25–34

  35–49

  50–65

  65+

  Total

  Number

  1,693

  1,767

  2,943

  3,959

  9,557

  19,919

  Per cent.

  8

  9

  15

  20

  48

  100

  1At 31 December

  2 Mental Illness and Mental Handicap

  Mentally Handicapped and Disabled Persons
  Mr. Tom Clarke
  asked the Secretary of State for Scotland what is the number of purpose-built accommodation units for disabled people completed in Scotland in each of the years 1979 to 1985.

  Lord James Douglas-Hamilton
  Information covering this period is not readily available.

  Mr. Tom Clarke
  asked the Secretary of State for Scotland what is the number of full-time day centres and the average number of places within them for each of the (a) mentally ill, (b) mentally handicapped and (c) physically handicapped.

  Mr. Michael Forsyth
  The latest available information is as follows:

  Day Centres for Handicapped Adults at 31 March 19861

  Type of Centre2

  Number of Centres

  Number of Places

  Average Number of Places per Centre

  Mentally Ill

  2

  92

  46·0

  Mentally Handicapped

  107

  6,995

  65·4

  Physically Handicapped

  30

  1,362

  45·4

  Multiply Handicapped

  4

  129

  32·2

  1 Provisional

  2 Day centres are classified according to the main group attending.

  All centres provide for handicapped persons to attend on a full-time basis but a number of clients may attend only part-time.

  Mr. Tom Clarke
  asked the Secretary of State for Scotland what was the number of purpose-built accommodation units for disabled people completed in Scotland in 1986.

  Lord James Douglas-Hamilton
  Returns submitted by housing authorities indicate that 52 dwellings purpose-built to accommodate disabled people were completed during 1986.

  Central Computer Service
  Dr. Moonie
  asked the Secretary of State for Scotland whether he is satisfied with the performance of the Central Computer Service in the National Health Service in Scotland.

  Mr. Michael Forsyth
  The Scottish Health Service Common Services Agency operates a computer centre whose role is limited to support of the agency itself (including payroll and preparation of all-Scotland health statistics) and of the Lanarkshire health board. It is not a central computer for the service as a whole since the health boards also operate large computer installations, either individually or in consortia.

  In order to improve the collection, co-ordination and use of information to benefit the service my right hon. and learned Friend has recently authorised the formation of a new directorate of health service information systems, within the Common Services Agency.

  Common Services Agency Building Division
  Dr. Moonie
  asked the Secretary of State for Scotland what steps he proposes to take to improve the efficiency and effectiveness of the Common Services Agency building division, with regard to the period between design and completion for hospitals.

  Mr. Michael Forsyth
  I am making arrangements for a review of the Common Services Agency building division's current activities in hospital building.

  Care in the Community
  Dr. Moonie
  asked the Secretary of State for Scotland what steps he proposes to take to ensure that adequate short term funds are made available to health boards and local authorities, to meet the high cost of setting up properly funded community care schemes for elderly, mentally ill, mentally handicapped and physically disabled people.

  Mr. Michael Forsyth
  The level of funding for particular health and social work services is a matter for decision by individual health boards and local authorities in the light of local circumstances and subject to any general guidance they may receive through my Department. Both health boards and local authorities have been made aware of the need to give high priority to community care facilities for the elderly, mentally ill, and mentally and physically handicapped. I see no case for reducing their discretion in the use of resources available to them by earmarking some of them for particular purposes.

  Elderly People
  Dr. Moonie
  asked the Secretary of State for Scotland what steps he is taking to promote the setting up of joint funded homes for elderly people with mental disability in Scotland.

  Mr. Michael Forsyth
  Arrangements for joint funding of these and other projects providing persons with appropriate care outside the hospital environment have existed since 1980 and were revised and extended in 1985. The allocation of resources to particular projects is
  466
  matter for decision by individual local authorities and health boards in the light of established priorities and local circumstances.

  Psychiatry (Registrar Posts)
  Dr. Moonie
  asked the Secretary of State for Scotland when he proposes to correct the situation of imbalance in registrar posts in psychiatry between teaching and non-teaching health boards in Scotland.

  Mr. Michael Forsyth
  A full review of hospital medical staffing is currently being conducted in Scotland with a report expected in the autumn. Thereafter it is expected that discussions will take place with the profession and health service management on a whole range of issues on medical manpower including deployment of registrars in different specialties.

  Cervical Cytology
  Mr. McLeish
  asked the Secretary of State for Scotland what is the average length of time taken to provide results from cervical smears for each of the health board areas in Scotland; and if he will allocate extra resources to improve cytology services.

  Mr. Michael Forsyth
  Information on the average length of time taken to provide results from cervical smear tests is not available centrally. I am currently considering the report of a working group set up under the chairmanship of Professor John Strong to review the cervical cytology screening service in Scotland and will announce the Government's response in due course.

  Higher Education
  Mr. Galbraith
  asked the Secretary of State for Scotland what representations he has had from Scottish universities about the proposed Scottish committee for planning of higher education in Scotland; and if he will make a statement.

  Mr. Michael Forsyth
  I have seen the representations made to my right hon. Friend the Secretary of State for Education and Science by the Standing Committee of the Scottish Universities on behalf of all the Scottish universities in support of the proposal for a Scottish committee of the new Universities Funding Council. Individual universities have also made representations.

  Glasgow Airport
  Mr. Galbraith
  asked the Secretary of State for Scotland if he will hold a public inquiry into the proposed extension to Glasgow airport; and if he will make a statement.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend is still considering whether he should call in the relevant planning application so the question of holding a public inquiry does not yet arise.

  Housing
  Mr. Wigley
  asked the Secretary of State for Scotland what was the current and capital expenditure per head on housing in Scotland during the last year for which figures are available.

  Mr. Rifkind
  Current expenditure on the housing revenue accounts of local authorities, new towns and the
  467
  SSHA was £175–80 per head of overall population in 1986–87. Information on the current expenditure of housing associations is not available. Gross capital expenditure by all public housing bodies in 1986–87 was £127–27 per head.

  Radioactivity (Dounreay)
  Mr. Wallace
  asked the Secretary of State for Scotland whether, in the light of the recent report of R. F. Wheaton of Edinburgh Radiation Consultants, a copy of which has been sent to him, he intends to review the pattern of monitoring of radioactivity in the vicinity of the Dounreay nuclear establishment.

  Lord James Douglas-Hamilton
  No. The report, apart from one set of readings, does not contain information which is out of line with previously published data. The anomalous results will he followed up.

  High Court of Justiciary
  Mr. Menzies Campbell
  asked the Secretary of State for Scotland what progress has been made in the provision of additional accommodation in Glasgow for the High Court of Justiciary; and if he will make a statement.

  Lord James Douglas-Hamilton
  Several options have been examined for the provision of additional court and ancillary facilities in Glasgow for the High Court of Justiciary; and consultations have been undertaken. My right hon. and learned Friend is considering in the light of these consultations how best to meet the future accommodation needs of the High Court in Glasgow.

  Court of Session
  Mr. Menzies Campbell
  asked the Secretary of State for Scotland what proposals there are to provide additional accommodation in Edinburgh for the Court of Session; and if he will make a statement.

  Lord James Douglas-Hamilton
  Plans are being prepared to provide a rear extension to Parliament House comprising three additional civil courts with ancillary facilities, accommodation for the Court of Session's public offices, for its clerks of court and for the Supreme Court's staff training unit.

  Local Authority Accounts (Access)
  Mr. Allan Stewart
  asked the Secretary of State for Scotland if he has any proposals to amend the statutory provisions governing public access to local authority accounts, in the light of the High Court judgment in the case of Olivers v. Northampton borough council.

  Mr. Lang
  My right hon. and learned Friend is aware of the Scottish implications of the English High Court judgment, concerning the public right of access to personal information in local authority accounts about an authority's employees. A consultation paper is being issued today inviting comments on a proposal that at the next convenient opportunity amending legislation should be introduced to limit this right of access to information about gross pay, allowances, bonuses and overtime payments. A copy of the paper has been placed in the Library.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Leicester
The Viscount of Oxfuird—Sat first in Parliament after the death of his kinsman.
Several Lords—Took the Oath.

The Lord Chancellor: Leave of Absence.
The Lord Chancellor (Lord Havers): My Lords, before the commencement of business, I take the opportunity to inform the House that I have accepted an invitation from the Prime Minister to attend a lunch in honour of His Majesty King Hassan II of Morocco on Wednesday, 15th July. Accordingly, I trust that the House will agree to grant me leave of absence for Wednesday, 15th July.

Guinness Inquiry Report: Publication
2.37 p.m.
Lord Williams of Elvel: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they expect to publish the report of the Department of Trade and Industry inspectors' inquiry into Guinness plc.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, the question of the publication of the inspectors' report on Guinness plc cannot be considered until the report has been received. The Government are aware of the strong public interest in the investigation and wish to publish the report as soon as possible but publication may have to be delayed if criminal proceedings are either being considered or pending.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord, the Secretary of State, for his response and for his assurance that the report will be published. Is he aware that it is now fairly common knowledge that sections of the report are being shown by the inspectors to interested parties —as is correct procedure—and therefore it must be getting near the publication date? Will he also take the opportunity of giving the House the assurance that any wrongdoers will be properly pursued?
Lord Young of Graffham: My Lords, I can assure all in your Lordships' House that when I receive the report I shall read it carefully and take such action as seems to me appropriate at that time.
Lord Taylor of Gryfe: My Lords, may I declare an interest in this matter since I am associated with one of the companies concerned in the inquiry. However, can I invite the Minister to take on board the urgency of the matter since uncertainty hanging over companies and individuals does no good to them or to the reputation of the City?
Lord Young of Graffham: My Lords, yes, I am grateful to the noble Lord. I am fully aware of the urgency of this matter. I am fully aware of the effect it will have on the reputation of the City. I believe that it is a matter which should be dealt with as expeditiously as is consistent with justice.
Lord Bruce of Donington: My Lords, will the noble Lord give the House an assurance that if the results of the inquiry show prima facie evidence of wrong-doing, the Government will make adequate resources available to the Director of Public Prosecutions thus avoiding the disgraceful situation that arose in the consideration of the Cameron-Webb case where it was stated from the Woolsack that prosecution was not proceeded with because of lack of resources?
Lord Young of Graffham: My Lords, I shall fully accept responsibility for all matters concerning my department or under my control. In the matter of the inquiry into Guinness plc, I can assure all your Lordships' House that everything will be dealt with, I hope, in the true interests of all parties involved.
Lord Graham of Edmonton: My Lords, when the report is finally published, does the Secretary of State expect it to contain recommendations which will give the public any confidence that the derisory fine enjoyed by Mr. Collier, convicted of insider dealing, will not be repeated?
Lord Young of Graffham: My Lords, I do not think it appropriate that I should comment on a judicial sentence.
Lord Harmar-Nicholls: My Lords, will my noble friend resist—as I know he will—the sublimation behind these questions which make certain that there are wrongdoers on any great scale? Perhaps he will consider the matter as though he had not heard the implication behind the questions that have been put.
Lord Young of Graffham: My Lords, my noble friend has that assurance.
The Earl of Halsbury: My Lords, is the noble Lord aware that, as an ex-director and shareholder concomitantly of Distillers Company and now a shareholder in Guinness, I await the development of events with equanimity?
2.40 p.m.

Zeebrugge Ferry Disaster: Inquiry Report
Lord Underhill: 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 when the report of the inquiry into the Zeebrugge ferry disaster will be published.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara: My Lords, I understand that Mr Justice Sheen intends to read the report of the inquiry in court on 24th July.
Lord Underhill: My Lords, I am grateful for the information which has been given by the Minister. The fact is that Parliament will be rising for some 12 weeks. May we have an assurance from the Government that their response to the report will also be published as soon as possible? Should the report indicate that certain matters are serious enough for action to be taken, will that action be taken before Parliament resumes towards the end of October? Moreover, if the report should indicate that an additional inquiry should be conducted into the superstructure, will the Government have such an inquiry instituted? If the report does not mention that, do the Government believe that there ought to be an additional inquiry into the superstructures of ferries?
Lord Brabazon of Tara: My Lords, I can assure the noble Lord that it is not any fault of the Government that the report will be issued on 24th July. That is a matter entirely in the hands of the judge. We have not sought to influence him in any way other than that he was well aware that we wanted the report to be published as soon as possible. As regards any matters which arise from the report, we shall act as speedily as we possibly can, bearing in mind the great public interest and concern for the safety of ferries. I can give the noble Lord the assurance that although Parliament may not be sitting, Ministers will not all be on holiday during those few months.
As regards the structure of ferries, already research has been commissioned into the matter. That will be going forward whether or not the report makes any recommendations on that matter.
Baroness Ryder of Warsaw: My Lords, in the light of this disaster and as one who is a frequent traveller on ferries because of the work that I do in other countries, will it become obligatory for passenger lists to be published? It has always seemed incredible to me that for all these years the making of passenger lists has not been an essential part of the duties of these different ferries and other ships.
Lord Brabazon of Tara: My Lords, it is clear that on the short haul ferries passenger lists will not always be completed. Nevertheless, if when the court reports, it makes any recommendations on the matter I shall consider it carefully. What is absolutely essential is that the correct numbers are accounted for. That is something that has not been done properly and must be done in the future.
Lord Boyd-Carpenter: My Lords, in considering that matter, will my noble friend bear in mind—as I am sure he can in his other capacity in the department—that civil aircraft flying the shortest of domestic flights leave a full passenger list behind? If it is possible for them, what is the difficulty for the ferries?
Lord Brabazon of Tara: My Lords, of course we shall indeed be considering this. We are talking about very many more people on ferries than on aircraft. There are difficulties in compiling an accurate list.
Lord Cledwyn of Penrhos: My Lords, will the noble Lord confirm that the Government themselves, and particularly the Department of Transport, have direct and considerable responsibilities in this case?
Lord Brabazon of Tara: Yes, my Lords, we have our statutory responsibilities for the safety of shipping.
Lord Annan: My Lords, can some sense of proportion be retained in respect of the question asked by the noble Lord, Lord Boyd-Carpenter? Is everyone now who travels on British Rail to be asked to give his name and be listed? Surely in this case the ferries and the rail service are alike?
Lord Brabazon of Tara: My Lords, that is one of the difficulties in attempting to get a full passenger list on the short sea crossings. I am tempted to ask, if it were made appropriate for cross-Channel ferries, whether it would be necessary for instance on the Isle of Wight ferry which I know from personal experience would be extremely difficult to organise?
Viscount St. Davids: My Lords, as one who for a number of years has studied the design and stability of hulls, is the noble Lord aware that the redesign of these ferries will be necessary because they are not capable of totally safe operation at all times? Is he further aware of the need to redesign and considerably alter the harbours that the ferries use? That will cost an enormous sum of money. Will the matter be taken carefully into consideration so that some provision can be made for it, for we shall have to do it?
Lord Brabazon of Tara: My Lords, we shall of course be studying the recommendations of the court very carefully. As I said in answer to an earlier supplementary question, research has already been commissioned to consider the viability of the different options available and this will have to be taken into account in any decision. I take note of what the noble Viscount has said.
Lord Molloy: My Lords, on this point would the Minister be prepared to accept proposals and submissions—if they should be made available as I am sure they will be—from the design engineers who have examined in detail this tragic disaster? They believe that they have a contribution to make towards averting such a disaster in the future.
Lord Brabazon of Tara:: My Lords, I am not sure that I understood from the noble Lord who in particular had evidence to give, but I am sure that they would have given it at the inquiry. This whole matter was dealt with in great detail at the inquiry. No doubt that will be taken into account when the inspector submits his report.
Lord Diamond: My Lords, in view of the responsibilities of the Minister, which he has already acknowledged, can he assure us that everything practicable is already being done in advance of study of the report to secure the safety of passengers on this method of transport?
Lord Brabazon of Tara: My Lords, I can assure the noble Lord that we have not been idle. We have recommended the fitting of warning lights and television cameras to the ferries. I understand that nearly all the ferry companies have done so. We shall of course be considering in the light of the report whether these should be made a mandatory requirement. Marine surveyors have also inspected all cross-channel ferries and have made certain that the procedures for closing the watertight doors are being complied with properly.
The Countess of Mar: My Lords, is not the distinction between air and sea travel and travel by other means that bodies can easily be traced following an accident on land but cannot so easily be traced if the accident happens in the air or at sea? Therefore, is not a passenger list more essential in those cases?
Lord Brabazon of Tara: My Lords, there is very little more I can say about passenger lists. There would be benefits in having a full passenger list; it is just a question of its practical application.
2.51 p.m.

Official Secrets Act
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 repeal any part of the Official Secrets Act.
The Minister of State, Home Office (The Earl of Caithness): My Lords, we have no such proposals at present.
Lord Hatch of Lusby: My Lords, will the noble Earl agree that when a particular law is applied either partially or with partiality it brings the law itself into disrepute? Will he not further agree that in view of the prosecution of Clive Ponting and Sarah Tisdall and the decision not to prosecute either Lord Rothschild or Chapman Pincher in the light of evidence produced before the Australian court in the Wright case, there is a danger that, again, the law itself may be brought into disrepute?
The Earl of Caithness: My Lords, the decision on prosecution is for my right honourable and learned friend the Attorney-General.
Lord Gladwyn: My Lords, would not the Government at least admit that some revision of the Official Secrets Act is now really necessary in the public interest?
The Earl of Caithness: My Lords, we admitted that at the beginning of our first Parliament after coming to office in 1979 when we introduced a Bill.
Lord Jenkins of Putney: My Lords, in support of the view that something now ought to take place, is the noble Earl aware that according to the memoirs of a senior MI5 official now being serialised in the Sunday Times, the CIA told MI5 in 1964 that a Soviet agent had become Prime Minister of Great Britain? According to the report, instead of dismissing this nonsense out of hand, MI5 proceeded to contemplate the possibility of destabilising its own government. In those circumstances, is it not the case that it is high time that this can of worms was opened?
The Earl of Caithness: My Lords, I think that is slightly wide of the Question on the Order Paper.
Lord Elwyn-Jones: My Lords, is it not the case that experience recently both in the courts and in Parliament has confirmed the view expressed in the Franks Report that Section 2 is a mess? Is that not now generally acknowledged? As to whether, to some extent, I may have some responsibility for it, I know not. But, given the present position, is it not high time that we repealed Section 2 of the Official Secrets Act and replaced it with a protective measure more narrowly defined than Section 2 which is absurdly wide in its potential application?
The Earl of Caithness: My Lords, I do not think I can add to the answer I gave to the noble and learned Lord when he asked a similar question on 31st March this year. Of course we would look at any proposal, and we keep the matter under consideration.
Lord Wigoder: My Lords, per contra, is there not something to be said for having an Act which is so sweeping as to be totally ineffective?
The Earl of Caithness: My Lords, I think that all of us including the noble Lord, would prefer an Act that was effective.
Lord Mellish: My Lords, as Mr. Peter Wright's name has been mentioned in this House, is the Minister aware that some of us regard him with contempt and find what he has done in writing the book despicable and deplorable? Are the Government aware that, because of their own stupidity, the book will in time be a best seller? If the man is a liar—and I think he is— why not let him publish? Let us all see what a liar he is and hold him in the contempt he deserves, instead of having all this fuss and fighting to get books?
The Earl of Caithness: My Lords, the important thing we must remember when considering the legal proceedings both in the United Kingdom and Australia is that the Government are seeking to uphold the principle that Wright, as a former member of the security service, owes a life-long duty of confidentiality to the Crown. That principle is essential to the effectiveness of the security service.
Lord Hutchinson of Lullington: My Lords, will the Minister spell out to the House why the Government resist all requests for an inquiry into reform of the Official Secrets Act? If the citizens of this country are subject to a law which is held in contempt by everybody, including a distinguished High Court judge in the Sunday Telegraph case more than 15 years ago, why is it that the Government in those circumstances resist having some form of inquiry—by Select Committee or some such method—to try to reform this legislation?
The Earl of Caithness: My Lords, as the noble Lord will be aware, the Franks Committee made a very detailed report on this subject and as a result we introduced legislation which, alas, did not proceed through this House or another place. We will look very carefully at any suggestion put forward.
Lord Campbell of Croy: My Lords, will my noble friend confirm that when that Bill was introduced in 1979 there was a Second Reading debate in this House in which the noble and learned Lord, Lord Elwyn-Jones, and other noble Lords took part? There was general agreement that Section 2 should be removed but unfortunately there was great disagreement about what should take its place.
The Earl of Caithness: My Lords, my noble friend is absolutely right, and that appertains today as well.
Baroness Seear: My Lords, surely the noble Earl will agree that because your first attempt at reform is not satisfactory that does not mean that no reform will be satisfactory.
The Earl of Caithness: My Lords, the noble Baroness and I have crossed on that particular point before. I say to her once again that until there is more consensus as to what should replace Section 2 it would be inappropriate to go down the same road we went before.
Lord Annan: My Lords, will the noble Earl agree that the noble Lord, Lord Jenkins of Putney, should not believe everything that he reads? Secondly, the noble Baroness, Lady Seear, is entirely right. If at first you don't succeed, try, try, try again. Why do not the Government reconsider the matter and bring proposals before the House which may well have a far greater chance of success now, with all the recent experience, than they had when they were introduced in 1979?
The Earl of Caithness: My Lords, I am sure that the whole House is agreed that there is a problem relating to Section 2. But, as my noble friend Lord Campbell of Croy said, the difficulty is what you put in its place.
Lord Cledwyn of Penrhos: My Lords, noble Lords opposite have had eight years in government and probably, if unfortunately, have another four and a half years or so ahead of them. Can the noble Earl give an assurance to the House that something will be done during the next four and a half years?
The Earl of Caithness: My Lords, as the noble Lord the Leader of the Opposition knows, I cannot give him that assurance. We keep the matter continually under review. If any noble Lord has an idea how this could be done that would satisfy Parliament, we would be anxious to look at it.
Lord Diamond: My Lords, if the noble Earl insists on surrendering the responsibilities of government, why does he continue to sit on that side?
The Earl of Caithness: No, my Lords.
Lord Jenkins of Putney: My Lords, will the noble Earl be kind enough to inform the noble Lord, Lord Annan, that I certainly do not believe everything that I read, nor even everthing that I hear, even in this Chamber?
Lord Hatch of Lusby: My Lords, if the noble Earl is telling the House that he is not able to answer for the Attorney-General, who has the responsibility for prosecutions, why is it that a member of the Government who can answer for the Attorney-General has not answered my Question? If he is concerned, as he says he is, with Section 2 of the Act, and has been concerned for eight years and is looking for consensus, why will the Government not take the suggestion made from in front of me to set up an inquiry in order to reach the consensus when Members on all sides of the House know that Section 2 is a nonsense and would like something better to replace it? Is this not the way to do it?
The Earl of Caithness: My Lords, with regard to the noble Lord's first point, I answered the Question that he put down on the Order Paper.

Crown Suppliers: Privatisation Studies
3.1 p.m.
Lord Dean of Beswick: 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 place in the Library copies of the studies by Coopers and Lybrand/Samuel Montagu on the feasibility of the privatisation of the Crown Suppliers.
Lord Hesketh: My Lords, the report on these studies was prepared for internal use and is currently under consideration.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that reply. Is he aware that this report is the latest in a series of reports relating to this

929
subject? Is the Minister also aware that the staff are greatly concerned that information regarding their future is not being made available to them? I therefore ask the Minister whether he will urge the Secretary of State in another place to accept that this is a matter of urgency. Will he ensure that the fullest information regarding this report is made available to the staff as quickly as possible? Finally, may I say that if there are any proposals on this matter—
Noble Lords: No!; Question!;
Lord Dean of Beswick: My Lords, may I impress on the Government—
Noble Lords: No!;
Lord Dean of Beswick: My Lords, perhaps I may ask the Minister whether the Government will take on board the fact that the employees involved are deeply concerned as to whether there will be any guarantees regarding their pension rights in the future.
Lord Hesketh: My Lords, first, no decision has yet been taken. This is only one of the options. However, my right honourable friend the Parliamentary Under-Secretary of State is considering the result of the studies.
Lord Graham of Edmonton: My Lords, does the Minister recall that over the past three years successive reports—the Barrow Report, the Cup Report and the Turton Report—have all declined to come up with the answer the Ministers were hoping for? Indeed, in the Turton Report of 1985 it was reported that the Crown Suppliers were an example of value for money and that privatisation would not be in the overall public interest. Why do the Government persist in spending good public money, now more than £150,000, in searching for a recommendation the independent consultants refuse to give?
Lord Hesketh: My Lords, the purpose of a report is to discover, and not to provide a hoped-for answer.
Baroness David: My Lords, would the Minister agree that there have been a number of reports over the past few years, and that it would appear that none of them recommends privatisation so far as we can make out? The employees are anxious to know what is going to happen. Industrial relations will not be very good in the light of this constant anxiety and doubt as to what the future will be.
Lord Hesketh: My Lords, I must first repeat that no decision has been taken. If such a decision were taken, my right honourable friend would fulfil his commitment to meet the departmental trade unions before making any decision.
Lord Dean of Beswick: My Lords, I am reluctant to come back to the Minister; but is he aware that these reports date back three years, and that three years is a long while to hold loyal employees in suspense as to their future? That is why I am asking whether the Minister will impress on his colleague in another
930
place the urgency of the matter as they are dealing with loyal workers who are very worried indeed about their future.
Lord Hesketh: My Lords, I shall certainly pass on the message of the noble Lord, Lord Dean of Beswick.

Masonic Trust for Girls and Boys Bill
Read a third time, and passed, and returned to the Commons with amendments.

Criminal Justice Bill [H.L.]
3.5 p.m.
The Earl of Caithness: My Lords, I beg to move that the Bill be now read a second time.
It is not yet three months since we had a similar debate on this Bill's predecessor, whose progress was sadly interrupted by the general election. That debate remains fresh in many of our minds, and your Lordships will not expect—nor indeed wish—me to give you a lengthy catalogue of the contents of the Bill this afternoon. I therefore propose to speak briefly and to concentrate on two respects in which the Bill differs from its predecessor, and several other matters to which the Government are giving attention and to which we may want to return at the Committee stage.
The most important respect in which the Bill differs from its predecessor is that it does not contain the provisions on fraud which were enacted before the dissolution. It was in our view very much to the credit of your Lordships' House that we were able to give these provisions serious attention in those few days before the dissolution, and to bring them on to the statute book improved by our scrutiny.
The other significant difference between the Bill and its predecessor is that we are proposing in Clause 40 that the maximum penalty for offences of cruelty to children should be increased from two years to ten years. The most appalling cases of abuse of children usually involve some more serious violent offence, which can be punished accordingly. But sometimes, where for example the child has been starved or neglected over a long period, the charge of cruelty is the only one that is available. The maximum penalty did not seem to us adequately to reflect the seriousness of the worst cases of that kind.
Child neglect and abuse have been much in the public eye in recent months. Clearly an adequate response to this distressing problem involves the full range of agencies within and outside government; but the increase in maximum penalty is a modest but important step to give the courts the powers they need to combat this evil.
I turn now to other matters. The subject which most exercised your Lordships in our debate in April was the proposal that the Attorney-General should be able to refer sentences which raised questions of public importance for the opinion of the Court of Appeal. This subject is one with which we have wrestled in your Lordships' House on several occasions over the last few years. The problem, as the

931
Government have seen it, is not that sentences are generally unduly lenient, far less that there is any great crisis of confidence which calls for radical changes in our system of sentencing. We owe a debt of gratitude to our judges. Sentencing is a difficult and sensitive task and it is a tribute to them that the vast majority of sentences accord very well with the expectations of the public.
The problem is rather that from time to time, in a serious case where public emotions are understandably engaged, a sentence is passed which arouses widespread concern. That is why we brought forward the proposal which is now in Clause 38. It seemed—and seems—to us a sensible means of ensuring that the issues raised by the occasional sentence which genuinely troubles the public could be taken further, and lessons learnt for the future.
Noble Lords opposite have argued that since the Court of Appeal already takes opportunities to lay down general guidance on sentencing principles, there is nothing to prevent it doing so directly in response to such cases. That is of course true and we have very much welcomed the increasing willingness of the court in recent years, under the leadership of the noble and learned Lord, Lord Lane, the present Lord Chief Justice, to expand its practice in that way. But it is surely rather artificial that the court's officials should have to comb their lists to find a suitable appeal by a defendant, whose case probably has very little in common with the one which has given rise to the concern.
Nevertheless, it would be a singularly impervious Minister who concluded from our debate in April that our proposal had been enthusiastically received by your Lordships. My right honourable friend the Home Secretary has therefore been considering the alternatives. In our debate in April the noble and learned Lord, Lord Lane, supported by several noble and noble and learned Lords who speak with great authority on these matters, argued that it should be possible, when an unduly lenient sentence has been referred to the Court of Appeal, for the court to substitute a more severe one. As the noble and learned Lord, Lord Lane, said, such schemes are by no means unknown in Commonwealth jurisdictions whose systems are comparable to our own.
The Government have so far hesitated to adopt that course, because it would involve the prosecution more directly in the process than under our original proposal. My right honourable friend has never regarded such involvement as objectionable in itself. But he has been conscious that others have seen objections of principle, and has realised that it would be a major departure for our system which would require very careful thought. He has also been anxious to avoid placing on the Crown Prosecution Service a new task which was unduly burdensome at a time when the service is still finding its feet.
My right honourable friend has, however, concluded that the time may be ripe for a more radical change. As I announced in the debate on the gracious Speech, he is looking actively at schemes in which it would be possible for the Court of Appeal to substitute a more severe sentence in a case referred by
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the Attorney General. I hope to be able to announce our conclusions during the Committee stage of the Bill. We shall want to pay close attention to the contributions which your Lordships make to this debate.
At the same time, my right honourable friend recognises that the whole question of the proper limits on the role of the prosecution in sentencing is one on which opinion is changing and strong views are held. He therefore proposes to publish a discussion paper before very long to stimulate debate on these important matters, both publicly and within the legal profession.
On the central question of lenient sentences, we are convinced that some change—either the provision in the Bill or the more radical possibilities we are now studying—is necessary and inescapable. It greatly weakens confidence if, when there has been a sentence which causes public disquiet, the system appears unresponsive to that disquiet. Our institutions are at their most vulnerable when—however mistakenly—ordinary people feel that they will grind on regardless of what the public thinks. We ignore that kind of feeling at our peril.
I should like to turn now to another matter raised in our debate in April. Several of your Lordships argued that the Court of Appeal should have a wider power than it has at present to order a retrial. The Government have a good deal of sympathy with that point of view, and had in fact issued a consultation paper some weeks earlier. There are several questions which would need to be resolved in framing a wider power. How wide should it be? Should it be a power to order or to authorise a new trial? Should it be possible to add new charges to the indictment? Again, we hope to make conclusions known before the Committee stage, and will take account of any comments your Lordships may make in the course of today's debate.
A problem which is increasingly a source of concern to us is the extent to which offensive weapons are routinely carried and all too frequently used in crime. We are committed to taking action on the sale of offensive weapons which have no legitimate use. My right honourable friend has also set in hand a study of how the law relating to the possession of knives and other sharp-bladed instruments might be reinforced. Your Lordships will understand the difficulty in framing the law in such a way as to deal effectively with the problem while not interfering with entirely legitimate possession—the housewife taking a carving knife home from the shop is the obvious example that springs to mind. We have not yet completed our work on this, but hope that the Criminal Justice Bill may prove an acceptable vehicle for change.
Another issue on which we touched in our debate in April was the arrangements for custodial sentences for young offenders. The Bill contains, in Clause 114, a provision which would allow greater flexibility in the use of detention centres, without interfering with the basic structure which was provided by the Criminal Justice Act 1982. However, there is a growing body of support for the idea that the detention centre order and the youth custody

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sentence should be amalgamated into a single custodial sentence.
The Magistrates' Association's strong public support for a single sentence is clearly a new factor of some significance. Since magistrates' sentencing powers are involved, we are bound to be much influenced by their views. I cannot yet say whether we shall want to embark on such a major change, but we certainly do not regard the pattern of sentencing powers provided by the 1982 Act as set in concrete. We are giving active consideration to the idea of a single sentence and will return to the matter at a later stage.
I promised not to treat your Lordships to a long speech about the contents of the Bill, and I shall not do so. But it is right that before sitting down I should remind your Lordships of the range and weight of the proposals which—assuming, as I hope, the Bill is granted a Second Reading—we shall be debating in the Committee and which we debated only recently. It contains a major reform of the law of extradition, which I believe is in its essence, if not perhaps in every detail, warmly supported on all sides. It liberalises the law on documentary evidence, and enables children to give evidence through a live video link, thus sparing them the ordeal of attendance in the courtroom. It contains measures to help the victims of crime. It removes peremptory challenge, which has the potential to distort the jury system, and in a whole variety of ways it sharpens and strengthens the courts' powers to deal with offenders.
In our debate in April, several noble Lords opposite argued that the Bill was irrelevant to the attack on crime. I do not believe that argument to be well-founded. One merely needs to look at some of the provisions I have mentioned to realise that their contribution to our efforts against crime will be real and substantial. But, with great respect to those who made it, the premise on which the criticism was made also seems to me to be false. If crime could be legislated out of existence, our predecessors would have done so years ago. In fact it needs to be tackled on the widest possible front, and that is what the Government are doing through their policies on crime prevention, a strong police force and a whole range of other measures.
What legislation can do, and what this Bill does, is to home in on areas where changes in the law would make a real difference—the weaknesses in our present extradition procedures, for example, or the absence of the comprehensive powers which the Bill would create to allow the confiscation of the proceeds of profitable crime. That seems to us to be both realistic and valuable.
In the debate in April my noble friend Lord Campbell of Alloway generously described the earlier Bill as the great criminal procedure reform Bill of this century. I am not sure that I would make quite such a large claim. But I do agree that the changes which the Bill proposes are important and far-reaching in their effects, and in several respects long overdue. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(The Earl of Caithness.)
3.17 p.m.
Lord Elwyn-Jones: My Lords, I venture to call this a lucky dip of a Bill; there are some good things in it but, unhappily, there are some things which are not so good. From what we have been told by the Minister, this debate is a kind of preliminary canter. I say without complaint that many of the most material matters for decision will be left until a later stage when the House resumes after the Summer Recess. I should like to join with the Minister in recollecting that during the first run of the Bill through this House we at least passed some of the important provisions relating to fraud. I was very happy that co-operation across the Floor made that possible and that it is already on the statute book.
As I see the matter, we are faced with two major problems in the field of criminal justice: first, the rising crime rate; secondly, the dangerously high and rising prison population. I fear that the provisions in the Bill will do little to cope with either of those problems. The Second Reading of the Bill is clearly not the occasion on which to examine the underlying causes of our burgeoning crime. Last year nearly 4 million crimes were recorded by the police. However, I feel entitled to ask this question. Is there any reason to question the conclusions of report after report of commissions—such as those of the most reverend Primate the Archibishop of Canterbury and the Commission for Racial Equality—that the problems of crime are worse in many of our great cities where the conditions breed despair, violence and, in the end, crime; those conditions being poverty, unemployment, slum homes and homelessness.
Turning to the conditions in our prisons, this weekend the number of prisoners in gaols in England and Wales exceeded 51,000 for the first time. Today's press reports that the Association of Chief Police Officers wants immediate steps to be taken to ease the constant drain on police manpower as a result of prisoners being held in police cells because prisons are too crowded. Mr. James Anderton, the Chief Constable of Greater Manchester, has been reported as saying "policemen are not gaolers"; yet vital police resources are still being diverted to this task. A record of 648 remand prisoners were being held in police cells yesterday in spite of a government pledge, four years ago I think, to end their use. It is a serious situation indeed. In my submission, the Bill makes no attempt to reduce it.
In proportion to our population, the United Kingdom has more people in prison than any other European Community country: yet fewer than one in five prisoners have been guilty of crimes involving violence, sex or robbery. That is presumably the field the noble Earl had in mind in discussing the question of leniency or severity, as the case may be. It is to that limited category, if there is a case for making new provision to deal with lenient sentences, that attention clearly has to be directed.
One of the tragedies of the prison scene is that 60 per cent. of male offenders and 38 per cent. of women leaving gaol are back within two years. This is even more likely to happen with young offenders. Two-thirds of them are reconvicted within two years of release. It means that we really need to look deeply into the whole prison scene. As the Home Secretary

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himself has said, the general idea that a period of incarceration in overcrowded conditions will create a better man is not credible.
The overwhelming weight of research now indicates that longer sentences—I am now talking of the generality of crime and not that limited category I mentioned—do not produce greater benefits in preventing or reducing further offences than shorter sentences. Any impact a custodial sentence may have occurs in the early stages. Those conclusions point to the value of a reduction now, in view of the crisis in our prisons, in the length of sentences except—I repeat this—for the minority of offenders who are a serious danger to the public.
I ask: why was the supervised release scheme introduced by the then Home Secretary, the noble Viscount. Lord Whitelaw, in May 1981, abandoned later that year? Under that scheme, which would reduce the prison population by many thousands, prisoners would serve a shorter period in prison, followed by a period of supervision in the community similar to parole supervision, with the threat and sanction of recall to prison if they misbehaved.
Yesterday's Guardian newspaper reported that the Government are now considering action similar to the Whitelaw proposal, proposing increased remission of sentences and releasing offenders earlier, with the threat and sanction of recall as a means of dealing immediately with this emergency crisis. I ask the Minister: is that going to be done? Perhaps at the conclusion of the debate he will tell us whether that report in the press is accurate or not.
As I have said, certainly the police and most others seriously concerned in this field hope that something like that will be done. In this context I ask: what is the justification of Clause 125 of the Bill empowering magistrates' courts to remand offenders in custody for over eight days and up to 28 days? Is there not a danger, as the National Association of Probation Officers fears, that 28 days will become the norm for a custodial remand? Could not this provision lead to many defendants remaining in custody for excessively prolonged periods in cases where a court reviewing the cases at more regular intervals would have granted bail at an earlier date?
There has already been a dramatic increase in the number of untried defendants remanded in custody from an average of 3,213 in 1974 to 8,170 in 1985, adding to the crowding of our prisons to a very substantial degree. Yet the disturbing fact is that those eventually acquitted or receiving non-custodial sentences averaged 38 per cent. More than a third were dealt with either by acquittal or by means which avoided imprisonment, so that they will have been kept in prison for month after month to add to our problems. Therefore is it unreasonable to assume that a very large number of those defendants imprisoned on remand need not have been remanded in custody at all?
It is said that making remand hearings more frequent will add to the burdens of escorting prisoners to and from the courts; but surely the problem of excessive demands on the prison service of court duties could and should be tackled more
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effectively by measures which would not erode the rights of accused persons and fill our prisons unnecessarily.
When the House considers the state of our prisons and their appalling nature, as we have done frequently from all sides of the House, is it not high time that a statutory code of minimum standards for penal establishments should be introduced? This has been urged by prison governors and the Prison Officers' Association more than once. Indeed, in June 1982 the Government promised to draw up a draft code of standards for penal establishments, to be published during 1983, as a basis for discussion and indeed for decisions. However, by 1983 apparently the Government had retreated from that decision. Why was that?
Another provision in the Bill which could increase the prison population is that contained in Clause 39, which increases from 14 years to life imprisonment the maximum penalty for two offences under the Firearms Act 1968 of carrying firearms in furtherance of crime. In the view of the police and of others, that provision could have very serious and damaging consequences for them. To provide the same maximum penalty for carrying firearms and for actually using and firing them would disregard proportionality as between one offence and another. The Police Federation—and after all the police are liable to be in the front line in this situation—has expressed concern over that proposal in the Bill, as it may reduce any incentive in the armed criminal to refrain from using his gun and firing it at the police as a means of escape. I submit that it would present the police with fresh dangers.
The proposal to which the Minister has already referred, and which could have the effect of increasing sentences, is found in Clause 38 of the Bill. We discussed this matter on the previous occasion, and as your Lordships may recollect it provides that:
"If it appears to the Attorney-General that a sentence passed by the Crown Court on a trial on indictment raises a question of public importance, he may, with the leave of the Court of Appeal, refer the case to them to obtain their opinion on the principles which should be observed in sentencing in similar cases in the future".
It was clear from the speech of the Minister that this is a matter that will receive further consideration, but it seemed to be the case that far more stringent ideas were now operating and that what may well emerge will be a power to increase sentences where it is thought by the Court of Appeal that the sentence passed was too lenient.
I venture to remind the noble Earl, Lord Caithness, that at Second Reading he said that the Government would hesitate to go down the path of a prosecution right of appeal. In my opinion the Government are indeed right to hesitate. He said:
"The main reason is that to do so would represent a major change in the role of the prosecution".—[Official Report, 27/4/87; col. 13443.]
I agree. A power to increase the sentence in a given and identified case would compromise the longstanding impartiality of the prosecution, especially the Attorney-General, in the matter of sentencing. In this country the duty of the prosecution is to lay all the evidence dispassionately before the court. It is true that some prosecutors do so more vigorously than others. There was one such on my circuit. When

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defending counsel protested at the vigour and vehemence of his presentation of the prosecution case, he replied, "I have come to this court to prosecute the accused, not to present him with a bouquet". That was rather characteristic of the counsel in question, and the noble and learned Lord, Lord Edmund-Davies, will no doubt understand whom I have in mind.
However, by practice and tradition it has been left to the courts to decide on the question of guilt and on sentence within the limits prescribed by Parliament. The prosecution does not present a partisan view of the sentence that the offender should receive. I concede, as was suggested by the noble and learned Lord the Lord Chief Justice, that there is something to be said for permitting the prosecution to draw the attention of the judge to such statutory provisions as may guide him in his task of sentencing, although I am bound go say that I should not always like to be the counsel who had the effrontery to do so, bearing in mind some of the reproaches addressed by some of the judges in the old days to counsel who ventured upon so dangerous a course. However, there may be something to be said for it.
In my submission on any view we should ponder most carefully whether to bring to an abrupt end the well-established principle in our courts that the prosecution takes no part in the sentencing process and that the principle that a defendant should not be exposed to double jeopardy should be maintained.
On this aspect of the Bill the approach which I commended but which did not find favour in this House was that contained in the White Paper entitled Criminal Justice—Plans for Legislation; namely, that the Judicial Studies Board should be given a statutory duty to assemble and publish for the benefit of judges, magistrates and the public the Court of Appeal's guidelines in a single, regularly updated and effective document. I believe that that would be useful as guidance to the judges. It would also be a corrective to leniency where the protection of the public or the outrageous nature of the crime that had been committed called for severity. On the other side, it would also correct the excessive use of imprisonment when one of the many alternatives to prison would be appropriate.
Lastly, I turn to the right of peremptory challenge, which in view of the long list of speakers in this debate I shall not examine in detail. I oppose the abolition of that right because I believe that its existence makes an important contribution to the perceived fairness and justice of our criminal procedure.
3.36 p.m.
Lord Wigoder: My Lords, I have already made a Second Reading speech on this Bill. It is enshrined for posterity in the columns of Hansard and I know that my words are deeply imprinted on the minds of all Members of this House; so it is totally unnecessary for me to repeat today anything that I said some months ago. All I desire today is to concentrate on one aspect of this Bill in the hope that, as the Minister indicated, it may have some effect on the Government's thinking over the next few weeks. I shall try hard not to make a Committee stage speech.
938
I propose to devote the few minutes at my disposal to speakng about Clause 38 and the question of lenient sentences; or, to be more precise, excessively lenient sentences, because I ask your Lordships to take the view that every sentence passed by every judge ought to be lenient. It ought to be as lenient as the judge can find it proper to pass in the circumstances of the case. In discussing this issue therefore we must talk not about lenient sentences but about excessively lenient sentences.
Clearly during the next few weeks we shall be discussing at some length what should be done about this problem, so perhaps it would be helpful if we start by considering whether there is a serious problem at all. I say that because all the indications that 1 can find tend to show that the extent of the problem has been grossly exaggerated. When one comes to talk about excessively lenient sentences one word springs to mind straight away; and that is "rape". There is a kind of Pavlovian reaction to the mention of excessively lenient sentences in that one instantly calls to mind the Ealing vicarage case and that nauseating, disgusting, despicable and depraved behaviour.
In relation to that case none of the media pointed out and very few of the public realised that when a judge has to deal with a charge of rape and a charge of burglary he can pass a sentence of five years for the rape and five years for the burglary and make those sentences consecutive, in which case the sentence amounts to 10 years' imprisonment. On the other hand, the judge can pass a sentence of 10 years for the rape and five years for the burglary and make those sentences concurrent, in which case the sentence still amounts to 10 years' imprisonment.
I have a very strong feeling that if the judge in that case, who was a very distinguished criminal judge and not considered to pass excessively lenient sentences, had chosen to pass the full sentence—and the decision was not easy because the practice as to whether to make sentences consecutive or concurrent is somewhat involved—on the rape charge and a concurrent sentence on the burglary charge, one should have heard very little more about that case as a demonstration of excessively lenient sentencing. Indeed, when the case finally came to the Court of Appeal, as it did eventually, the noble and learned Lord, Lord Lane, the Lord Chief Justice, went no further than to say that in total he thought it was possible that the sentences were a little on the light side, not that they were excessively lenient in the way that we are now considering in terms of Clause 38.
Why is it that for some reason it is always the offence of rape that leaps to mind whenever the question of excessively lenient sentences is considered? I think there are two reasons. First, it so happens—I am not crticising the people concerned; of course not—that there are organisations in existence whose members believe passionately that rape is for all practical purposes the only offence of any gravity in the criminal calendar. They scrutinise every offence with care—rightly so—and they proceed to take every advantage they can of getting publicity about the sentence that has followed.
I accept—I say this immediately, I do not want a mountain of anonymous and abusive mail in my

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letterbox in the next few days—at once that rape can be a disgusting, depraving and very serious offence and that very often it calls for the most severe punishment. I am not departing from that for one moment. At the same time, I cannot help thinking that it is perhaps sometimes wrong to regard the offence of rape, as committed by a young man who has been petting with his girlfriend, has gone too far against her will and has committed the offence of rape, as being quite as serious as that of a young man who has been in a public house, got drunk, smashed a beer glass and put it into someone's face. It just so happens that there are no organisations that stand up for the rights of innocent bystanders in public houses. Therefore, 1 do not think that we should get too far led astray by the publicity that is sometimes given to offences of rape when we come to talk about over-lenient sentences.
I add this, if I may, because I said that there are two factors at work. The other factor is the media. No self-respecting family newspaper would dream for one moment of indulging in pornography. It is therefore with a sigh of relief, I suspect, that it comes across a really disgusting rape case which it can report in great detail and pretend to its readers that it is carrying out a public duty by disclosing every word of something that is going on in our courts of law. I therefore suggest that the amount of hysteria that has been whipped up about over-lenient sentences has been greatly exaggerated and very much increased the true extent of what I suggest is a comparatively small problem.
Assuming that there is a problem in occasional cases—and I can see that there is; I do not pretend that it is not there—what are the possible solutions? One possible solution sometimes advocated by those who perhaps are not thinking very clearly about the matter is to say that, when an appellant goes to the Court of Appeal asking that his sentence should be reduced, the Court of Appeal should have the power to increase it as, indeed, it used to have once upon a time. A moment's thought will make it clear that that is not in any way an answer to-the question of over-lenient sentences. No one who has been fortunate enough to receive an over-lenient sentence is going to go to the Court of Appeal and ask that it should be still further reduced, so the fact that the Court of Appeal may have the power to increase it in such circumstances is quite irrelevant to the problem that the Government are dealing with in Clause 38.
The only effect of giving the Court of Appeal the power to increase sentence to an existing appellant would be that it might act as something of a deterrent to the number of appellants who come forward, often with very frivolous appeals. However, that is not what we are talking about. There is in any event the power of the Court of Appeal to allow time spent in custody awaiting appeal not to count against the sentence, and that is a more than adequate deterrent. The only reason why this course of giving the Court of Appeal power in those cases to increase sentence ever began to be considered in the last year or two was that there was some fears that the European Court might rule as improper the existing practice of the Court of Appeal in ordering time spent in custody
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not to count pending the appeal. The European Court has not taken that view. I think therefore that that is a matter which we ought not to pursue, and one which should not be confused with the issues that we are considering in Clause 38.
On Clause 38 as it stands, there is perhaps very little that needs to be said on the power that the Attorney-General should have to refer a sentence when an issue of principle is involved for an opinion—an ineffectual opinion—from the Court of Appeal to be obtained. That proposal was defeated the last time that it came before your Lordships' House. It was vigorously attacked last time on Second Reading of the Bill. The Minister indicated this afternoon that the Government are not enthusiastic about going down that line. It was made perfectly clear last time, I think, and accepted by your Lordships' House, that that sort of academic exercise, indicating that a sentence is inadequate but not having the power to increase it, can only bring justice into disrepute and is totally unnecessary, given the power of the court anyway to lay down guidelines for appropriate cases. If I may, I assume that we are not going to hear any more of Clause 38 in its present form when we come to a later stage in the Bill.
What are the Government going to put in its place? The indications are that they are going to put some sort of power in the Court of Appeal to increase the sentence. If that could be done, there are two possible ways of doing it. One way might be to give the prosecution a right of appeal just as the defence has a right of appeal now to enable prosecuting counsel at the end of any case to say: "I regard this sentence as inadequate, I will apply for leave to appeal to a single judge and see whether I can get the sentence increased." Again I doubt very much whether the Government will wish to go down that path. I say that for two reasons. First, counsel involved in conducting cases for the CPS are very often people of limited experience; they are often people who are seeking to make their way as prosecuting counsel by showing that they have zeal and enthusiasm for the cases in which they prosecute. There will be a very real temptation upon those young men to advise appeals in all sorts of cases one after the other. That would be quite disastrous. I think that it would be particularly disastrous so far as the judiciary is concerned because the Court of Appeal does not want to have to deal with this vastly increased number of applications.
The second alternative—and, if the Government are going to choose one of the two, I hope they choose this one—is to give the power to the Attorney-General in one way or the other to be able in the occasional case to approve an appeal to the Court of Appeal so that the Court of Appeal may be invited to increase the sentence. That would at least have the advantage of limiting the numbers of such applications. One could rely upon the Attorney General, whoever he might be, to show considerable discretion.
It would, however, have other disadvantages, which I believe outweigh the possible advantage. First, it is sometimes asked why, if the defence has a right of appeal, should the prosecution not also have the right of appeal, the suggestion being that it is the

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same thing in principle. I do not believe that it is the same thing in principle. I believe that there is a vast difference in principle. It is one thing to say to a man: "Six months ago you were tried at the Old Bailey, you have been in prison, you were sentenced to two years' imprisonment, but I am happy to tell you that in the Court of Appeal today we take a more lenient view of your offence—you may go today a free man back to your wife and your job".
The alternative, which is what the Government will be proposing if they go forward along this line, is quite another matter. It is that that man will be set free, perhaps given a suspended sentence or fined heavily at, let us say, the Central Criminal Court. He will go back to his wife and children, back to his job, and will start to rebuild his life. Then, six months later or thereabouts, he will be called back to the Court of Appeal and told, "We are very sorry. The trial judge made a mistake and you are to go straight off to prison for 12 months". That I described last time we debated this issue as being a piece of sheer cruelty, and I am sure that that is what it would be. It is the first objection to the proposal that the Court of Appeal should be given power to increase the sentence in any particular case and make that increase effective.
The second objection is the one to which the Minister and the noble and learned Lord, Lord Elwyn-Jones, referred. It involves prosecuting counsel, inevitably, in advising and in arguing merits in order to try to urge upon the Court of Appeal that it should increase a sentence. As the noble and learned Lord, Lord Denning, said in a memorable phrase, it would not be a plea in mitigation; it would be a plea in aggravation of sentence. That is something which I think none of us would want to see.
I come to my third objection to this proposal. I speak now with the disadvantage that it is, I think, some seven years since I tried a jury case, though I am consoled by the thought that many of the noble and learned Lords who are to follow me will have to overcome an even greater disadvantage when they come to address your Lordships today. But my recollection of those cases is that, in a perfectly straightforward criminal case with a plea of guilty, a speech by the prosecution, a speech by the defence and the sentence, it is possible for the Court of Appeal in effect to re-try the case, to look at the documents, to hear counsel and to say, "Yes, we think that the appropriate sentence is twice what was passed at the court below".
But there are a very large number of cases where it would be quite impracticable for the Court of Appeal to take such a view. There are a very large number of cases, particularly long, contested cases and where there is more than one defendant, where the trial judge is the only judge who will be able to pass the right sentence, because he is the only person who has seen the defendant and his co-defendants over a period of weeks or months.
He is the only person who will be able to form an opinion on whether the defendant was perhaps very much more under the influence of one or two of his fellow defendants than might otherwise appear to have been the case; whether some prosecution
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witness, although basically speaking the truth, has been exaggerating viciously out of some sort of malice towards the defendant; whether the defendant is really sincere in his protestations of his repentance at what has happened. All those issues and many more are issues that a trial judge can adjudicate upon. They are crucial to the length of sentence and it would be totally impossible for the Court of Appeal to adjudicate upon them with anything more than very rough justice.
In those circumstances, I hope that we will take a serious look at whether there really is a problem here of quite the extent that some people are suggesting. If we do that, and then look at the methods that are being proposed to deal with it, I believe that we shall come to the conclusion that no methods that are being proposed are better than our existing system.
I only add one final word. What we are debating on this issue is in many ways one side of the coin, the other side of which has already been referred to particularly by the noble and learned Lord, Lord Elwyn-Jones. It is the extraordinary belief that the British have that if only you can increase maximum sentences beyond what appears to be feasible, if you can only then pass the maximum sentence on the maximum number of people on the maximum number of occasions, you will somehow solve the problems of law and order and crime in our streets. Experience has proved this repeatedly to be wrong, but, my Lords, we never learn.
3.55 p.m.
Lord Allen of Abbeydale: My Lords, it makes me feel what I can only describe as slightly nostalgic when I think of all the previous criminal justice Bills in which I have taken part over the years, starting with one which had to be abandoned at the outbreak of war in 1939. The present Bill has, happily, only had the hiccup of a general election and serves the desirable purpose, like its predecessors, of providing a somewhat mixed bag of what on the whole are very useful reforms.
Unlike previous speakers, I did not contribute to the Second Reading debate on the previous Bill, but out of the variety of subjects which this Bill covers I shall limit my remarks to three. First, I should like to welcome the amendments to the extradition law and to the fugitive offenders legislation—two sets of procedure which are, alas, often confused. But there is one question that I should like to ask on what is not in the Bill. The question—and I appreciate that it was raised at the Committee stage of the earlier Bill in another place—is: what will happen if another country asks for the return of an individual for an offence which in that country is a capital offence? Are the Government able to give us an assurance that they would not be prepared to extradite in such circumstances, unless a guarantee was forthcoming from the requesting state that if the offender were returned he or she would not be liable to execution?
I am well aware that in the United States, for example, the federal government are in considerable difficulties in giving any undertaking about what happens under state law. But there is also the special problem in that country that the protracted legal processes could mean that an offender might have to

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wait five, six or more years before knowing his fate—a singularly unattractive prospect, given our own traditions. Is it possible for the Government to put on the record some reassuring statement on this issue?
I turn, secondly, to the provisions in the Bill about the criminal injuries compensation scheme and the board. I confess I have the initial difficulty that the various misprints in the Bill and in the schedule—at any rate, in the version I had—made it rather difficult to follow just what was happening, but I think I have worked it all out. I recall that on 14th December 1983, starting at col. 283 of Hansard, I initiated a short debate urging that the scheme should at long last be made statutory, and we now have before us clauses which implement the undertaking then given by the Government that this would be done. For this I am grateful. In general, what is proposed seems perfectly acceptable but I have just one or two points.
In the debate to which I referred, the question was raised as to whether it might be appropriate to provide for the possibility of the Government being able to appeal to the courts if they thought that an award was excessive. But I see that following the conclusion of an interdepartmental working party the Government have decided not to accept this proposal. Perhaps I may ask what would happen if the Government thought that the board had gone wrong on a point of law or had exceeded its powers. Would it then be open to the Attorney-General to go to the courts under some procedure not covered by this Bill?
I say next how much I welcome the provision in a statute—for the first time, I think—whereby the full amount of future social security benefits is to be deducted from an award, as has been the practice under the non-statutory scheme, in substitution for the procedure in the civil courts of deducting half the value over five years. I believe that the Government accept that the 1948 Act under which the courts do that has outlived its usefulness. I remember some comforting words on this point from the noble and learned Lord who was then on the Woolsack and I hope that the precedent established by this Bill will soon be followed elsewhere. At the same time I think that without some of the other changes suggested by the Pearson Commission it will be far from easy to implement these provisions in the Bill with any degree of accuracy. The correspondence that I have had with Ministers and the board does not altogether reassure me.
Mr. Justice Hirst, in the brain damage case in which he awarded £1 million damages the other day, reminded us yet again that an overall review of the law of compensation is long overdue. But I appreciate that that does not fall within the province of the noble Earl and I shall content myself this afternoon with asking him whether he has cleared with the DHSS that, between them, they think that these provisions in the Bill are reasonably workable under the law as it still regrettably remains. Also I cannot resist the temptation to take the opportunity to say that I simply cannot understand why the Government so resolutely continue to refuse
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even to discuss the possibility of reforming the law of compensation.
I have one other point to make on the criminal injuries compensation scheme. I notice that in its present non-statutory form the scheme provides that in assessing compensation the rate of net loss of earnings to be taken into account is not to exceed twice the gross average industrial wage, but in the Bill the figure is put at one and a half times. That prompts me to ask whether in this or any other way the Home Office hopes to stem what on the face of it looks like an open-ended commitment and in that context is it contemplated that the figure to be specified under Clause 103 as the minimum which can be paid is likely to be the present figure of £500? Finally on this topic, will the Minister say whether the board is having any success in catching up on its considerable backlog?
My third and last point is a more general one and echoes to some extent some of the points which have been made by the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Wigoder. We are discussing the Criminal Justice Bill against a background of rising crime, although it is important not to place too much reliance on the figures of crimes known to the police as conveying an accurate picture of what is happening. I think it is right that increased maximum penalties should be provided for the offences specified in the Bill although I have some sympathy with the point that the noble and learned Lord made about carrying firearms and I for one am sorry that these provisions are not accompanied by much more stringent provisions about shotguns. But in general we have to be very careful about where we are going.
Let us take Clause 38, of which we have already heard a good deal and of which we are bound to hear a good deal more. It raises to my mind one aspect of the future role of the prosecution on which I should like to seek some enlightenment. Does it mean that if this clause or something more on the lines outlined by the noble Earl is enacted it will then be expected of prosecuting counsel that he should remind a court, before it passes sentence in a particular case, that the Court of Appeal passed such and such a sentence in a rather comparable case perhaps a year ago? Are we really beginning to depart from our traditions and move towards the prosecution suggesting to the courts what the penalty should be?
All this comes at a time when the insatiable public appetite for reading and hearing about crime is already tending to encourage a general stepping up of penalties, and not just for the very grave offences which all agree should be severely punished. It is the impact of what the noble Lord, Lord Windlesham, very appropriately referred to in his article in The Times this morning as:
"the volume and intensity of public protest".
The public seems always to need to be anxious about one type of crime. At one stage it was muggings, then rape, then child abuse and now I suppose it will be firearms. The events on Saddleworth Moor drove other news off the front page; and those who have to endure what the BBC for some reason chooses to describe as the "South-East News" between the end of the "Nine O'Clock News" and the weather

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forecast know that it is mainly and sometimes exclusively concerned with crime. Other things do occasionally happen in the South-East. It is so easy in this tide of opinion for the impression to get around that sending more people to prison for rather longer must be the right course but that is really a counsel of despair.
As regards the individual offender, one has to think of what happens when he or she comes out of prison and returns to the community. There is precious little evidence for thinking that longer sentences for the less serious crimes will lead to more honest lives. As regards the state, it is unacceptable just to go on building more and more expensive prisons to cope with numbers which are already in excess of those in most civilised countries, although certainly our Victorian heritage in respect of the prison world should be replaced.
I think I am right in saying that an extra month on the sentences passed by the Crown Court on adult males of itself means an addition of 1,000 to the prison population. A percentage point on the proportionate use of immediate imprisonment imposed on such offenders represents 350 to 400 more in prison. The records show that there was a five point increase between 1981 and 1985—from 50 to 55—and I feel pretty doubtful whether that trend has been reversed.
The Criminal Justice Bill may do a little here and there to reduce crime but I go along very much with what the noble Earl said in his introduction—that one cannot legislate crime out of existence. I should have been happier if the Bill had been accompanied by a much more vigorous exposition of what non-custodial penalties involve, in addition to the efforts which I can only applaud which are being made to further crime prevention.
In conclusion, I cannot help thinking that the Second Reading of the Bill would have been a very suitable occasion on which to have announced a firearms amnesty. On 26th November of last year in col. 538 of Hansard I asked about the possibility of an amnesty—and there was a good deal of support throughout the House for that proposal—not in the naive belief that hardened criminals would queue up to hand in their sawn-off shotguns, but in the expectation that it must be a good thing to reduce in any way possible the number of firearms at large in the community which are waiting to be stolen and misused. When I ventured to write to the noble Earl reminding him that we were still awaiting an announcement, he very courteously thanked me for being so patient; but now that eight months later the other place has got round to the idea, I hope that the Home Secretary will conclude that it is a step worth taking.
4.10 p.m.
Lord Elton: My Lords, I was sadly not able to take part in the Second Reading debate on the predecessor to this Bill. Nevertheless, I have for my noble friend the Minister a considerable fellow feeling. It is five years and five weeks almost to the day since 1 stood at the same Dispatch Box and asked your Lordships to give a Second Reading to a Bill with the same title and addressed to many of the same problems.
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Then, as now, our prisons were under great pressure of population from the flow of convicted prisoners out of the courts and from the increasing crowd of unconvicted prisoners waiting to go for trial in the courts. Not only does my noble friend stand on the same spot and address the same problems; he is subject also to the same conflicting pressures, turned one way by the need to catch and punish more offenders and turned the other by the need to reduce the number of offenders who are sent to prison.
Better than punishment is deterrence. And better than deterrence is the removal of the motivation to commit criminal offences. There is one motivation which is bad not only for criminal statistics but also for the morale of the law enforcement agencies and indeed the blood pressure of the normal public. That is the sight of known and convicted criminals enjoying the fruits of their crimes. I therefore greet with three hearty cheers Part V of the Bill relieving the convicted criminal of the proceeds of his crime. Others will test the detail of that; but there is obvious and satisfactory—one might almost say Gilbert and Sullivan—justice in the principle that we have to applaud.
On the same theme, I am glad to see that we have at last undertaken modernisation of the extradition law. Extradition is a reciprocal arrangement and defects in our own law have prevented other countries signing extradition treaties with us. I hope that my noble friend will tell us that putting Part I of the Bill on the statute book will sweep every bronzed British embezeller off the beaches of the Costa del Crime.
A good deal of the pressures on the prison system comes from the very large numbers of untried and therefore unconvicted prisoners who are held on remand awaiting trial, as the noble Lord, Lord Allen of Abbeydale, has, not for the first time, drawn to your Lordships' attention. Remand prisoners naturally have greater privileges than those who have been convicted, since they may be innocent. Not all of them, therefore, are eager to come to trial. Some of the backlog arises from lawyers acting for the guilty and acting slowly so as to get as much as possible of the inevitable sentence served on remand and with privileges. Their privileges also make such prisoners expensive, in staff terms, to look after. It would therefore be disproportionately helpful to reduce that part of the prison population, even if it is not to be handed over to private enterprise en bloc, as my noble friend Lord Windlesham suggested. I hope that my noble friend will look at that carefully.
The reduction can be made by expediting court procedures, and I am glad to see that the Bill aims to take some of the load off the Crown court. But its approach seems tentative. May I ask my noble friend and his right honourable friend to consider whether the Bill might not go further by, for instance, classifying petty theft as a purely summary offence? That would reduce the Crown court load by no less than 10 per cent. at a stroke.
Nevertheless, given that only about 6 per cent. of remand prisoners are acquitted and that 60 per cent. of them receive custodial sentences in any case, I ask your Lordships not to expect too much from reducing the waiting time in prison for trial. The total

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yield is limited by those statistics. In fact, I believe that the only really significant reduction will come in a change outside the prison system, in the whole attitude and conduct of our society. It is to that matter that at some stage your Lordships should address your reflections.
There is another matter which has long been before your Lordships and which the Bill at last resolves. I was one of a succession of Ministers who said that it would be resolved when the funds were available. I am glad to see that the undertaking has now been fulfilled. I refer to the putting of the Criminal Injuries Compensation Board on a statutory basis. The board used to have to wait, like somebody's mistress, for non-statutory largess from year to year. I join the noble Lord, Lord Allen of Abbeydale, in congratulating my noble friend on making an honest woman of it. My only regret is that his fellow campaigner, the noble and learned Lord, Lord Gardiner, a former Lord Chancellor, is not here to mark the happy day. I think he became at one stage to criminal injuries what the noble Baroness, Lady Burton of Coventry, has become to airline overcharging. He would be very glad to see this day dawn.
I should not to have departed so quickly from the subject of keeping people out of prison. That is a matter of grave importance. Because of the lack of places to house more prisoners, overcrowding, even in cool weather, can create conditions that are bad for prisoners and bad for the morale of prison officers alike. In the sort of weather we are now experiencing, the conditions can be appalling. There is also the necessity of holding prisoners in police cells, to which the noble Lord, Lord Allen of Abbeydale, referred. That is important and I hope that my noble friend will look closely from time to time at the length of time individual prisoners are kept in unsuitable conditions. But the most important aspect, as the noble and learned Lord, Lord Elwyn-Jones, correctly pointed out, is that nothing makes it more likely that a person will go to prison than the fact that he has been there before.
For most who undergo it, imprisonment is not a constructive experience. It is not a rehabilitating experience, and it does predispose to re-offending. As for its deterrent effect, we can argue about that deep into the night. My firm and subjective opinion is that that is directly proportionate to the perceived likelihood of being caught. Clear-up and conviction rates for imprisonable offences will have to be sharply improved before the present tide of criminality is even reduced, let alone reversed, by that effect. Yet, for as long as we have no effective alternative to custody for serious crimes, we cannot escape from the need to use it.
I beg my noble friend and anyone else who will listen to pursue with the greatest vigour any form of disposal that offers an alternative to custody. That plea is relevant to one of the central issues to which the Bill is addressed. In particular, I ask my noble friend to look with close attention at the range of options known as intermediate treatment, or IT, which at the moment is apparently the concern solely of the Department of Health and Social Security.
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Bringing a first offender to court and there registering a contract with a social worker or a probation officer, for breach of which contract the penalty is a custodial sentence, offers at that stage the deterrence of a certain loss of freedom if there is a breach. Performance of the contract puts the young person, often for the first time in his or her life, in a structured organisation, engaged in purposeful work and in constant contact with an adult who actually cares about him as a person and who is prepared to offer him counsel as well as the essential discipline.
That course costs the merest fraction of the cost of custodial care. Much of that cost can be borne by voluntary agencies, and experience so far suggests that it results in appreciably less re-offending. I find it difficult to imagine a better definition of what is cost effective. The Government pay less for it, do less of the work and incur fewer subsequent charges as a result. Both economic and humanitarian considerations force us to recognise it as a development of real importance because it not only saves public money but appears actually to save some people from a life of crime interrupted by periods in custody.
Will my noble friend therefore undertake in terms to ask his right honourable friend the Home Secretary to consider how the valuable pilot work done by the DHSS relates to his own responsibility and whether it is not an initiative of which his own department stands in urgent need? Would it not, more widely applied, have a significant impact on his department's Vote? Is there not therefore good reason to consider backing it with the resources of his own department and ensuring that the work done is uniformly of a quality to replace prison sentences in suitable cases?
As I am on the subject of young people, let me turn to younger people still. It is now many years since the tragic and poignant death of Maria Caldwell. Since then to our sorrow and shame other children have also died at the hands of those from whom they had a right to expect only love and protection. Our chief concern, of course, must be with the prevention of these horrors. I am advised that we should await the findings of the Kimberley Carlisle inquiry before we consider what more can be done.
If that were not so, I should want to raise the whole question of access by qualified social workers and others to children at risk of non-accidental injury. To the layman at least, it seems extraordinary that people with a duty to watch over a child can, for long periods, be denied a chance even to see the child. Whether the remedy lies in legislation or training, or both, a remedy there must certainly be.
However, given that such a remedy does not lie within this Bill, we can, I believe, be glad that it goes some way to ensure fair trial after an alleged offence of violence or sexual abuse has been committed. It will let the victims give evidence by television from outside the courtroom so that they do not, by confrontation, reinforce the horrors of the experience they have undergone. If we can go further, and refer to what everyone already calls closed circuit television, as closed circuit television, I am sure that will help the layman to know what we are talking about. Incidentally, that reminds me very much of

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other technicalities which we discussed across the Despatch Box in earlier legislation. I can promise my noble friend many happy hours' discussion with the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Mishcon, if he is to join us, because of their formidable experience in discussing the tape-recording of police interviews. I am sure that that will be the focus of great interest and difficulty.
It is a feature of the Bill that my noble friend will be addressing not only many of the same issues, but also many of the same people that I addressed in 1982. I am sure he will listen to them with the same close attention that I did, and like me, find that even in the most rigorous of differences with them they almost always have something of value to add to his knowledge, and just occasionally something of value to add to the Bill. I give warning that when noble Lords opposite start referring to a matter as "a non-party issue" that is a sure signal that there is going to be a Division, because it is to encourage people behind to go into the wrong Lobby.
In conclusion, I have said so much about things being the same now as they were in 1982 that I ought to correct the balance in one respect in case noble Lords have drawn the wrong conclusions. For a start, the achievements of the prison service, have been phenomenal. When I was given oversight of it, I could say that more than half the places had been built before this century began and that not one brick had been placed on another in any building designed as a secure prison from the end of the First World War until well after the end of the Second World War—and very few were added then. Since 1982 four new prisons have been opened, with 1,531 places; five more, with a further 2,428 places will be on stream by June of next year. In none of those will there be a need for slopping out. To those 3,959 modern places must be added 1,042 further new places provided by the Department of Works refurbishment programme in 1986, and 1,030 due to be provided by them this year.
Noble Lords will be glad to acknowledge the improvement in conditions that the department has so far achieved by its campaign to do away with the revolting practice of slopping out. At the same time as all this the staff and management of the prison service have come together after decades of bickering to bring into a modern framework the way in which prison officers work and are paid. I take this opportunity to give my warm congratulations to those on both sides who have achieved this improvement, which seemed far off when I left. They will need to continue their commitment to the good of the service in the months ahead if they are to make it finally stick.
There is much else of great merit in the Bill but I have said enough to show why I, in particular, welcome its main provisions. I wish my noble friend luck on referral of excessively lenient sentences. In my day we did not have any luck on that matter. The noble Lord, Lord Wigoder, says that the whole issue has been grossly exaggerated by hysteria in the press and elsewhere. It is necessary for government to sustain public confidence in the judicial system. I will not go into the merits of the case now, except to point out that, if an apparently excessively lenient sentence is so referred and is borne
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out— in other words, the comment is favourable—surely that does a great deal to sustain the credibility of the judge who gave the sentence. It will bring to light the reasons for which the sentence was given.
I do not wish to be drawn into Committee stage points. My noble friend has my sympathy in the not inconsiderable task in front of him. I remember once going into a restaurant with a hearty appetite, ordering a big steak and then finding, when it was placed in front of me hanging over the edge of the plate, that I lost my appetite. This Bill hangs over both sides of the plate, but it is all good meat. Therefore, I wish my noble friend the best of appetites. It certainly deserves a Second Reading, and for the reasons I have given it will certainly have my blessing, at least.
4.26 p.m.
Lord Irvine of Lairg: My Lords, the House will wish to be especially careful in its scrutiny of criminal justice legislation to ensure that none of our civil liberties is removed unless for sound reason. Part I of the Bill deals with extradition. It plainly aims to remove a civil liberty which has been guaranteed by statute since 1970; that is, the prima facie requirement.
Under Section 10 of the 1870 Extradition Act, the state requesting extradition must produce to the English court such evidence as would, according to the law of England, justify the committal for trail of the prisoner if the crime with which he is accused had been committed in England. The combined effect of subsections (4) and (8) of Clause 6 of the Bill is that by Order in Council made in respect of a specific state the prima facie requirement may be removed. Then, subsection (4) states:
"the court of committal shall not consider whether the evidence would be sufficient to warrant the trial of the arrested person if the extradition crime had taken place within the jurisdiction of the court".
The evidence which the requesting state must put before the English court at present to satisfy the prima facie requirement is such as would justify a reasonable jury, properly directed, convicting of the extraditable crime if the act complained of had been committed in England.
The prima facie requirement has a very long history. It was recommended by the 1868 Select Committee on Extradition. It has been guaranteed by statute since 1870. The protection was approved by the Royal Commission on Extradition in 1878. It is a safeguard which also exists in our extradition arrangements which Commonwealth countries under the Fugitive Offenders Act 1967.
In another place the Minister of State, Mr. Mellor, made it plain when he said that Orders in Council discarding the prima facie requirement would be made in respect of the countries:
"with which we work within the Council of Europe",
but he added:
"We shall be paying attention to the United States too".
The Minister then gave the following assurance when he said:
"When we decide to conclude a fresh treaty which abrogates the prima facie case requirements, that should be laid before Parliament so that it can by prayed against and debated in the House".

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The European Convention in Extradiction does not make provision for a prima facie case requirement and it appears that the object of these provisions is to pave the way for the United Kingdom to sign the convention without reservation. It would of course be perfectly possible for the United Kingdom to accede to the convention, while making a reservation on the prima facie case requirement. That is exactly what Israel did. It insists on the prima facie evidence in all cases. On the other hand, Norway and Denmark reserve the right to require such evidence in any particular case.
The intention behind the provisions of the Bill is obviously that the Government are bent on abandoning this requirement, at least so far as concerns extraditions requested by most Western European countries. I invite the Minister when replying to the debate to state the Government's precise intentions and in relation to what countries. What precisely are the Government's intentions in relation to Turkey, which is a member of the Council of Europe?
I am sure we all agree that it is our duty to look critically at any provision which would remove a long-standing civil liberty. First, I shall put before your Lordships the reasons why the prima facie requirement is an important civil liberty and then I shall invite your Lordships to consider the arguments for its removal.
Let us consider what extradition entails. It entails physical removal from the United Kingdom to custody abroad, there to be subject to enforced custody awaiting trial, interrogation, delay and perhaps thereafter conviction and imprisonment in a foreign country. These experiences in a foreign country are distinctly different from and more burdensome than the same experiences in one's own country. I emphasise this, because I am not expressing a "little Englander" disregard for the judicial systems of our European friends or any lack of confidence in their capacity to do justice.
Those who aim to do away with the prima facie requirement claim that we who would uphold it are contemptuous of the judicial systems of others. That is not so. We have a high regard for the judicial systems of our Continental neighbours. We simply say that before this country imposes, particularly upon its own citizens, the burdens of ejection to a foreign country where a foreign language is spoken, with custody interrogation, delay awaiting trial, trial in unfamiliar surroundings and possibly imprisonment there—all experiences which are evidently more burdensome than similar experiences here where lawyers, family and friends are readily at hand to assist—there should be in this country a judicial examination of the evidence to see whether it justifies the imposition of these burdens. I suggest that there may be many Members of this House, whatever party or none, who will be startled once they appreciate that they are being asked to endorse the removal of this safeguard.
A prima facie case was made out in our courts against the football fans who will now have to face trial on manslaughter charges in Belgium. There will
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be many who will think it entirely acceptable that they should stand their trial in Belgium, where the English courts have decided after examining the evidence that there is a prima facie case against them. The tragedy at the Heysel stadium raised the strongest public feelings in Belgium, and naturally so. But since Belgium is one of the countries for which we can expect an Order in Council doing away with the prima facie requirement, I submit that public opinion in this country would be utterly opposed to a law which allowed Belgium, in a case where there is such strong public feeling in Belgium, to have extradition on demand of those British citizens whom it would have to do no more than identify and name, as well as specify the crime alleged; that is, manslaughter.
It is no answer to submit that there will be no extradition for political offences, nor where the request is made for the purpose of prosecution or punishment by reason of race, religion, nationality or of political opinions. Neither is the discretion of the Home Secretary any answer. There will simply be no evidence put forward on which he could exercise any discretion.
Therefore, none of these protections meets the point that no one should be extradited from this country and exposed to a foreign legal system unless a judge in this country is persuaded that there is evidence against him that amounts to a prima facie case. If these amendments go through, what we are doing is sanctioning the extradition of our citizens to foreign countries on the executive request of these countries, without any requirement on these countries to state the evidence on which they rely so that it can be judicially scrutinised here. All that the requesting state essentially has to do is name its target and give bare particulars of the extradition crime alleged.
I appreciate that it will be said that every time an Order in Council is to be made abrogating the prima facie requirement in the extradition arrangements between the United Kingdom and a particular country, Parliament will be given the opportunity to say no. This procedure is subtly designed to suggest that the only relevant question will then be whether the legal system of the country in question can be trusted. This is simply not the point. The point that I respectfully put before your Lordships for consideration is whether the prima facie requirement, because of its obvious merit, should continue to apply to requests made for extradition by all countries with which we have extradition arrangements, including our European neighbours.
Every extradition treaty made by this country since 1815 has been on terms requiring the production of evidence against the accused sufficient to justify his committal for trial had the offence been committed in this country. The experience of the United States has been the same. The fact that similar provisions have applied since 1843 between the United Kingdom and the Commonwealth countries demonstrates that the rule does not reflect any distrust of foreign judicial systems. It applies equally to Commonwealth countries, which share our common laws and institutions. The question simply is whether we should sanction what is effectively extradition on demand or continue to say no, only after a judicial

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examination of the sufficiency of the evidence to see that there is a real case to answer.
The prima facie requirement applies to every domestic criminal prosecution in England. For my part, I am wholly unpersuaded that our citizens should be granted a lesser standard of justice when a foreign state requests their extradition than is their right when facing criminal prosecution here. Therefore, what are the reasons advanced for removing this important civil liberty on a country-by-country Order in Council basis?
I have read what the Minister of State, Mr. Mellor, said in another place on 5th March about the equivalent provision in the previous Criminal Justice Bill. He said:
"whether we like it or not, our law on extradition is resented to a degree by our near neigbours and causes us the gravest embarrassment".
He went on to assert that one Western European country which he did not name had,
"not submitted a single extradition request to the United Kingdom for 10 years because of the prima facie requirement".
He continued:
"Let us compare our extradition traffic with that of West Germany from 1980 to 1985. West Germany received 1599 requests for extradition, of which 1486–93 per cent.—were successful. During the same period, the United Kingdom received only 153 requests, of which 101–66 per cent.—were successful. So the United Kingdom dealt with one-tenth of the number of cases, but with a failure rate of more than four times that of West Germany".—[Official Report, Commons, Standing Committee F, 5/3/87; cols. 938–9]
None of the assumptions on which that kind of argument is based can he accepted. Extradition traffic is not to be equated with trade so that the more, the better. If the figures show that it is easier to be extradited from West Germany than the United Kingdom, this says nothing whatever about which system is preferable. What is plain, we say, is that the Government have decided to submit to pressure from foreign governments to lower our standards of justice by removing an important civil liberty. I acknowledge that some governments complain that the English test is too hard to satisfy. If they have evidence to make out a prima facie case they can satisfy the requirement; and if they do not there should be no extradition. British citizens should not be extradited to languish in foreign gaols while the case against them is being prepared.
The Criminal Bar Association has condemned these provisions in a conspicuously well argued paper, which I commend to the House. I read two passages from it:
"The crucial question … is whether the UK, like the Commonwealth and the United States, is to continue to regard extradition as a judicial process whereby persons are to be surrendered by one country to another for trial, or whether it is going to allow it to degenerate into an executive act, presided over by the Home Office and used for the purpose of furthering criminal investigations abroad".
The paper concludes:
"An English citizen and a foreigner, at least one not of the requesting state, will have a justifiable sense of complaint if he is surrendered merely on the statement of a requesting officer of what is alleged against him. It may be entirely unsupported by evidence. It may have been issued at an early stage with a minimum of investigation. The abolition of the rule may lead to requests solely for that purpose. If the proposal is adopted, the requested state will have no means of knowing whether there is in fact evidence, or of examining the factual basis of the request and be powerless to refuse extradition on that basis.".
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For my part I would endorse all that. The Minister of State in the other place did not. He said:
"A deeply conservative position has been taken by the Opposition. They have fallen hook, line and sinker for the lowest common denominator of Temple caution".
Not so, my Lords! An important civil liberty is at stake and is about to be removed for insufficient reason. The Criminal Bar Association has got it right and the Government have got it wrong. I regret that I cannot give these provisions the general welcome which the noble Lords, Lord Allen of Abbeydale and Lord Elton, have afforded to them. Perhaps they did not have this point in mind.
In opening the debate the Minister said that the extradition provisions were, he understood, in essence if not in every detail supported on all sides. I have been speaking on what is surely a major issue of principle, not detail. There is emphatic opposition to the principle of the provisions. I hope that many noble Lords from all parts of the House will be ready to unite to defeat a change of principle so obviously inimical to our civil liberty.
4.42 p.m.
Lord Hutchinson of Lullington: My Lords, it is always a pleasure to follow the noble Lord, Lord Irvine. Perhaps for those noble Lords who have not entirely followed the very learned dissertation that he has given on the law of extradition I may bring it down to the simple situation which may obtain if this law goes through. A noble Lord in this Chamber may go off on a holiday, on a package deal. He may stay in room 62 in a nice Spanish hotel. The gentleman who is staying in room 63 fills up his trunk with the hotel linen, knives and forks, and perhaps even commits an indecent assault on the chambermaid. If the manager makes a mistake in identification, if he looks at a photograph of the gentleman who was in room 62 and thinks that it was the gentleman in room 63, it will be no good any noble Lord in this Chamber coming to me and saying, "Please represent me at Bow Street. This is a terrible injustice". It will be extradition on demand. The noble Lord will receive a notice to say that he shall appear at Bow Street. If the papers are in order, if there is some evidence on a piece of paper in Spain, saying, "I have looked at this photograph and this is the gentleman," he will be whisked off to Madrid. There he will be incarcerated for some weeks before he employs a Spanish barrister—and good luck to him. That is the simple situation. I hope that all noble Lords will read the words of my noble friend Lord Irvine in Hansard.
The contents of this Bill have been debated at length in this House and in the other place. We on these Benches welcomed much of it. It would be a waste of valuable time to rehearse yet again the powerful arguments for the abandonment or amendment of those clauses which many of us have already indicated are unacceptable in their present form: the abolition of the hearsay rule, the abolition that has been referred to of judicial examination of evidence in extradition, the right to challenge jurors, the criminalisation of truancy; and the 28-day remand, to name but a few. Sitting under his umbrella somewhere north of Inverness during the Recess the noble Earl will have many a long week in

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which to brief himself thoroughly to meet the arguments with which he must now be only too familiar. However, I hope that in particular he will read and digest the words which have fallen from the noble Lords, Lord Wigoder and Lord Allen of Abbeydale, both of whose speeches seemed to me to be admirable in every way.
When we discussed this Bill some three months ago some of us were reproved for speaking about the omissions from the Bill instead of concentrating on what is in it. Yet when the heavy artillery on the Cross-Benches was wheeled out calling for new powers for the Court of Appeal the Minister ran for cover. Today the noble Earl tells us that the Government are considering bringing forward new provisions to give judges the power to increase sentences at the behest of the Attorney-General. In the face of the Cross-Bench barrage on that occasion they look as though they are ready to sweep away at a stroke what the Minister in the other place described only a few months ago in these words—and they are not the words of the noble and learned Lord, Lord Elwyn-Jones— as:
"the long established and proper principle of the English criminal justice system, that the prosecution concerns itself only with an objective presentation of the facts and it does not interest itself in the question of sentence".
Those are indeed strange words if, as the noble Earl said this afternoon, the Home Secretary himself could see no objection in principle to the prosecution taking part in the question of sentence. The Government's attitude looks as though it is, "Hands up and surrender to the heavy artillery"—the alleged posture, according to Saatchi & Saatchi, if I remember rightly, of the party on my left during the election campaign.
In 1986, 89,000 Crown Court sentences were passed. As the Minister then pointed out, the Crown Prosecution Service would have to have its own sentencing policy if this retrograde power were given. It would have to consider every sentence and see how it fitted in with its own guidelines. It would have to delve into the social inquiry reports which, in the word of the Minister for the Government at the time, would be "objectionable", and it would have to weigh up the mitigation put forward to the court by the defence. It would create, I would suggest, an unacceptable and entirely inappropriate further burden on the CPS—which, as it is, is still in very great disarray.
The Minister spoke of public emotion as lying behind this change of view. Surely public emotion is no basis for legislation of criminal law. I cannot help but feel that one strong reason for the demand for this increase of power is that the judges, who cannot reply to criticism, want some method of being able to do so. I cannot help feeling also as has already been mentioned by noble friend Lord Wigoder, that it would have the spin-off effect of greatly reducing the lists in the Court of Appeal. With the delays in hearing appeals stretching out to many months, would it be desirable or proper to indulge in a resentencing exercise that involved the dragging back of defendants—settled once more into society, with their families, and in employment—and imposing on
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them perhaps a year after the trial a sentence of imprisonment? The effect of granting such a power will of course be to increase the length of sentences all round because judges will wish to avoid being the subject of appeal. The Minister would surely be the last person to want such an effect.
The big guns demanded even more. There were further rounds in their locker. The Bill makes no mention, it was said, of a power to order a new trial—a power not to be exercised only when fresh evidence has come to light (which, very properly, should be assessed by a new jury) but when a defendant has had the misfortune to be tried by a judge who has messed up his summing up.
The noble and learned Lord, Lord Ackner, hoped that such an amendment would sail through the House unopposed. I remember the noble and learned Lord at the Bar in the old days as a reformer. He was a great trade unionist. He was one who never was frightened of standing up to the establishment. It saddens me greatly that in his two contributions in this Chamber so far he has so quickly become a conformist. Indeed, I suspect that he is a strong candidate for the job of shop steward to the Lords of Appeal in Ordinary.
The general power to order a retrial would indeed require the closest scrutiny in Committee. To order the rerun of a trial months or years after witnesses have given evidence, to have a rejigged prosecution case based on knowledge gleaned at the previous trial, is indeed a daunting power and one that can so easily lead to a dreadful miscarrige of justice, and all because of a mistake for which the defendant carries no whit of blame himself. My plea to the Minister is to listen with equal attention to what I might describe as the light artillery, the light brigade, the machine gun fire which emanates from this side of the House, even if—as I must admit at the moment in an airy internecine sort of way—the fire seems a little wayward.
When we assisted the Minister to get his Bill through the House, in relation to fraud we negotiated some important concessions. I very much hope that he will adopt an equally conciliatory non-partisan stance without the incentive of an impending election. We too have suggestions for a much improved Bill. We too consider that there are important omissions. The Government are about to launch an intensive crime prevention campaign, a very welcome initiative.
For the past 10 years NACRO, the national association concerned with the care and resettlement of offenders and the prevention of crime, has put crime prevention in the forefront of its programme. I hope that the Government's first act in their campaign will be to allocate new resources to NACRO's tested and highly successful projects in this field and to build upon them.
I ask the noble Earl what contribution is made to crime prevention by abolishing the hearsay rule, incarcerating truanting children, increasing the time of remands in custody and abolishing jury challenges. I suggest that the first target in a campaign for crime prevention should be the under-21s. In this country the peak age for all offending is 15 for males and 14

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for females. Over 20 per cent. of the prison population is under 21 years of age. In 1985, 54 per cent. of all indicatable offences were committed by persons under 21. Only five of the 139 clauses in the Bill deal with young offenders and not one of those clauses is directed towards the prevention of crime.
What is needed is a coherent strategy for dealing with young offender crime. In every local authority there should be a crime consultative committee bringing together in one unit all the relevant agencies to attack the problem as one—the police the magistrates, the teachers, the social workers, the probation service, the non-statutory organisation— to co-ordinate and to keep under constant review an agreed prevention policy. The purpose would be to get at the very roots of crime and to keep young people out of the courts, because, as has already been said this afternoon, once they get into the courts and are sent into custody the reconviction rate is about 80 per cent. At present the Home Office has no power to make grants to voluntary organisations which run crime prevention schemes. A clause to make this possible could so easily be added to this Bill.
Surely we could legislate to prohibit once and for all the scandal of remanding juveniles to adult prisons and remand centres and to introduce—I was very glad to hear what the noble Earl said about that in his opening words—a single generic sentence for young people. Indeed, should we not prohibit once and for all the sending of any person on remand to a police station cell? Yesterday 650 such people were kept in police cells. In London alone 80 of those people were women refused entry into Holloway.
All debates on criminal justice lead in the end to the question of overcrowding and the plight of the remand prisoner. I should have liked, if I had had time, to discuss the suggestion of the noble Lord, Lord Windlesham, about the privatisation of remand homes and hostels. Although I personally am opposed in principle to any form of privatisation of institutions where people who have been convicted are held, to solve an appalling problem which the Government have shown themselves totally unable to solve the privatisation of remand hostels or remand homes for members of the public who have not been convicted of anything, and who in the eyes of the law are innocent persons, seems to me to be a suggestion very much worthy of discussion and consideration.
The heavy artillery has not ventured very much on to the battle grounds of the Central Criminal Court or of the Crown Courts round the country, nor is its experience of the penal institutions in any way superior to that of those of us of the light brigade. I ask the Minister to listen to the suggestions that have been made and which will be made from this side of the House and to bring some of them before the House at the Committee stage on his own initiative. If he is not prepared to do that, perhaps he will look upon such amendments as we may put down with a favourable and impartial eye.
4.58 p.m.
Lord Roskill: My Lords, the Minister must, I venture to think, resemble a jockey in the Grand National as he starts to go round the course the
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second time remembering what were the dangers last time round. But happily for him, for the noble Lord, Lord Benson, and for myself some of the riders have been excused from the second round, for with cooperation between the Opposition Front Bench and the Government a great part of the recommendations of the Fraud Trials Committee are happily already on the statute book. That is a matter for great congratulations. But there is much more still to be done.
I ventured to say on the occasion of the Second Reading of the now extinguished Criminal Justice Bill that nothing that had happened since we reported in January 1986 had diminished in one single respect the need for an effective, efficient and swift criminal law to get the guilty convicted and to ensure that the sentences when people are convicted are adequate, drastic and deterrent.
A moment ago the noble Lord, Lord Hutchinson, asked why it was necessary to alter the hearsay rule. Let me give him in as short an explanation as I can the reason, though if he has read the Fraud Trials Committee report it is there staring him in the face. I want him to imagine that there is a prosecution involving the most appalling Lloyd's fraud or fraud on investors and that there is in the hands of the prosecution a perfectly good copy of a bank account from some salubrious island in the West Indies where laundered money so often ends up. The noble Lord is perhaps appearing for the defence. He will object to that copy being used. "This is hearsay", he will say. And yet every businessman would act on it and every court ought to he able to act on it.
It is common knowledge—I am very surprised that the noble Lord does not know this or, if he does, that he has not revealed his knowledge—that a very large number of badly needed Lloyd's prosecutions have not taken place for the simple reason that the original documents cannot be brought to this country and proved. People will not come; they cannot be forced to come. And the guilty, the obviously guilty, escape.
One of the tasks arising from the report that remains to be done—reaction from criminal lawyers must not be allowed to prevent it—is to simplify and modernise our rules of evidence in the criminal courts. That is what we recommend. That is what I hope these clauses achieve. I trust that the Government, without fear or favour, will press on so that prosecutions which have been delayed and which it is still not too late to bring may be effectively brought and the guilty punished.
I venture to add a word of congratulations to the new Director of Public Prosecutions and the new director of the Serious Fraud Squad. I have long experience of both. Mr. Allan Green is one of the most effective prosecuting counsel in serious fraud cases at the Bar. We had much help from him on the Fraud Trials Committee. We also had much help from Mr. John Wood when he was assistant Director of Public Prosecutions. The noble Lord, Lord Hutchinson, had a gentle crack at the alleged inexperience of Lords of Appeal in Ordinary in the criminal law. Perhaps their experience is not as out of date as the noble Lord likes to think. Some of us have kept closely in touch with that law in one form or another. I earnestly hope that the remainder of the

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provisions which we recommended will go through, including the provisions regarding jury challenge.
I know that many people have a warm sentimental regard for jury challenge. My noble and learned friend Lord Elwyn-Jones is among them, dating from his days in Wales. I can only say—the noble Lord, Lord Hutchinson, may remember this from the days when he used to appear in front of me at the old Hampshire Quarter Sessions—that in 22 years as either chairman or deputy chairman of those sessions, I do not think I recall a single case of jury challenge. You go to the Old Bailey and it happens in almost every case.
I have a vivid recollection, as a fairly new Queen's Bench judge, quite a long time ago, of Lord Parker sending me to do a very long fraud case at Bury St. Edmunds. There were seven or eight prisoners. There were seven challenges in those days and virtually a whole panel was challenged before we could get to trial. Mr. Sebag Shaw, as he then was, prosecuted and the present Lord Chancellor was junior counsel for the prosecution. In the end there was only one wrong acquittal. Jury challenge is out of date. It distorts the pattern of jury service. Before noble Lords become influenced by sentimental considerations, I urge them to look at what was said about this in the Fraud Trials Committee report and to realise how the present system of challenge hopelessly distorts and defeats the whole principle of random selection.
Enough of that, my Lords. Without usurping what I know my noble and learned friend Lord Ackner is going to say on new trials and increasing sentences, I want, if I may, to say a word or two about that. I am not sure that I am properly described as being "wheeled out" now that I am no longer a Lord of Appeal in Ordinary or whether I am "a big gun" or "heavy artillery". But whatever the right pejorative term to be used in the language of the noble Lord, Lord Hutchinson, one has had some experience of this. With respect, that is as real as it is profound. I venture to doubt whether the noble Lord, Lord Wigoder, is right in saying that this problem is very small.
It is a good many years now since I spent a lot of my time presiding in the Court of Criminal Appeal during the lamented illness of the late Lord Widgery. But at that time it was a real problem. One saw not only inadequate sentences about which one could do nothing but also inequality of sentences which is another difficulty. Jones is tried at Maidstone, Robinson at Southwark and someone else at one of the north London courts—the same crime, different judges, different sentences. The first accused gets a year; he is lucky. The next gets three years. He comes along and says "Oh, but the other chap only got a year. It is most unfair".
The whole purpose, contrary to what the noble Lord seems to have suggested, is not a judicial desire to get sentences increased. The whole purpose is to get the right sentence in the right way, in the right place, at the right time. Many of us have spent a large part of our judicial lives trying to reduce prison sentences. The idea that the judiciary at any level is always anxious to pass the maximum sentence is
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nonsense. It is axiomatic. If you are trying crime and passing sentence and you decide that an immediate custodial sentence is necessary, you should start by asking yourself, "What is the least sentence I can properly pass?" and then pass that sentence.
I had the privilege 21 years ago of helping the noble Lord, Lord Hunt, to start the Parole Board. I was the first judge to join it and I had the privilege of being his first vice-chairman. The noble Lord, Lord Windlesham, has carried that torch since. The parole system at that time was very different. In a debate earlier this year, the nole Lord, Lord Windlesham, complained that there was nothing in the Bill about parole. That is true. The system now is under attack. It must, I fear, be questionable whether, ever since parole became available and there was equalisation for practical purposes of sentences between 18 months and six months, the system, as the noble Lord, Lord Hunt, and I used to know it, is still workable in anything like its present form. But it is essential that we should have a system that will help reduce sentences when people are fit to go back into the community. It is essential that we should have a system whereby, if a judge makes a mistake, the accused does not take advantage and get away with it and that the right sentences should be passed at the right time.
As I think some of your Lordships know, I spent the months of May and June in Australia. My visit had nothing to do with the criminal law though the fact that I was there enabled me to renew many old friendships and make some new ones and to have a number of discussions with members of the judiciary on their problems. Do not let it be thought that horrific crime is the sole prerogative of England and Wales and Scotland! You cannot open a newspaper in Melbourne or Sydney without reading accounts of crimes that are every bit as horrific as those we suffer in this country. Indeed there were two cases in Sydney while I was there of which the cruelty and horror involved beggar description.
It so happened that on two successive days, reading the Melbourne paper, The Age, I observed that the Court of Criminal Appeal in Victoria had increased sentences and had done so very substantially. I ventured to ask the Chief Justice, Sir John Young, how that system worked. He said that they did it with reluctance but he regarded it as absolutely essential that the power should exist. They do not have a mandatory life sentence for murder; nor, I think I am right in saying, do any of the states. The result is that you may get comparatively short sentences for murder in horrific circumstances or for rape. It is a power which I have no doubt would be exercised with care if it were given to the Court of Appeal. I have no doubt that if it is left to the Attorney-General who has to get leave before he can move, he will exercise the power of seeking leave with great care.
However, I am quite convinced from my own experience, and from what I have observed in travels in other parts of the Commonwealth, that this is a power that is sadly needed, and that we shall never get a proper administration of the criminal law so long as the Court of Appeal has its hands tied behind its back and is unable to put right that which is so manifestly wrong.

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It is not because judges fear criticism. Anybody who has been on the Bench for a long time has had his fair share—and possibly his unfair share—of criticism. It is no use accepting judicial office unless one is prepared to accept the criticism when it comes. No one worth his salt worries too much about the criticism unless it is grossly unfair.
But one way of stopping the criticism is to restore a media-built lack of confidence in the judges because from time to time sentences are criticised as inadequate. Sometimes they are, sometimes they are not, but the power to put right what is wrong is of the essence of the administration of justice, and that is the power that should be sought now. I urge your Lordships, when the Government come up with a considered proposal, to take these thoughts well into account.
5.11 p.m.
Lord Hailsham of Saint Marylebone: My Lords, anyone who takes part in a Criminal Justice Bill has a choice between two alternative courses. He may take a canter round the whole field of criminal law, and nobody can complain if he does. My maiden speech in the House of Commons in 1938 pursued that very course. This one is intended to confine itself to a single issue which has already been ventilated by different speakers and in different senses.
I would only say to the noble Lord, Lord Hutchinson of Lullington, who described himself, I think, as a light cavalry man, that although the charges of the Light Brigade may excite admiration for their rashness and courage they usually end by them having to admit that someone has blundered, and they turn out in practice to have really no ability to get much blood out of the heavy guns when they really come into play.
I do not think that anybody after listening to the speech of my noble and learned friend Lord Roskill would doubt that those on the Cross-Benches who speak from a lifetime of judicial experience really have the variety, the humanity, and the sheer professionalism to be able to take on noble Lords like the noble Lord, Lord Hutchinson of Lullington, any day of the week and beat them silly.
I propose simply to say a word or two about the much-discussed Clause 38 of the Bill. I do so because it seemed to me that on the last occasion, when I sat silent for about five hours in another geographical position within this physical Chamber, the case had not really been fully argued. Anybody reading the Hansard of that debate would, I think, come to the conclusion that the proposal, in its slightly different but broadly similar form, had been greeted with a chorus of disapproval and hardly a word was spoken in its support. But this disregards what took place.
The critics of the clause formed two quite inconsistent clauses. There were the doves, represented by the noble and learned Lord now sitting on the Front Bench of the Opposition; there were the doves as represented by the noble Lord, Lord Wigoder, now sitting on the Bench of the Alliance (if it can still so be called); and there were the hawks represented by my noble and learned friend
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Lord Roskill and the noble and learned Lord the Chief Justice who gave us a valuable contribution.
However, nobody pointed out that although they all criticised what is now Clause 38 of the Bill they did so for precisely opposite reasons and for exactly opposite objectives. The doves objected to it, broadly speaking, for reasons I shall not rehearse in detail but on the basis that it was unfair to the successful accused and it would interfere with the traditional role of the prosecution. The hawks did so for the reasons that we have just heard cogently expressed by the noble and learned Lord, Lord Roskill, who said that it was important to see that justice was done in the shape of imposing an adequate sentence for an adequate crime.
I tend to be more favourable to my noble and learned friend than to the doves, but I occupy a position not exactly intermediate between the two but without going to the extreme length of either. As I see it, the case for Clause 38 can be argued round three broad issues. The first is judicial independence; the second is the role of the prosecution; and the third is consistency of sentence.
As regards judicial independence this is a subject upon which I can give evidence. For some reason, which I think totally inadequate, the attack upon judicial independence normally takes the form of letters by Members of Parliament from all quarters of the other place to the Lord Chancellor of the day. This is a new and, I may say, unwelcome development because it assumes, what is not the case under our constitution, that the Lord Chancellor has some responsibility for disciplining judges who are insufficiently severe in cases of various kinds.
I must say to the noble Lord, Lord Wigoder, whose speech I listened to with great respect, as I always do, that in fact although he spoke strongly of the hysteria of the media and of the concentration on the part of some of them and of some Members of Parliament on emotionally sensitive issues like rape, in fact one of the reasons for the hysterial attacks on judges for undue leniency is precisely that there is no remedy open to anybody. Our constitution is based on the independence of the judiciary. That is a rock upon which it has been built ever since 1702, and before 1702 it was a failure to recognise its importance which largely led to the abdication of James II.
The fact of the matter is that the only people who can control sentencing policy, which is essentially a judicial function, are the judiciary themselves. If, as is the situation in a minority of cases, the Lord Chancellor, or whoever it be, is in receipt of complaints of undue severity it is quite easy for him to reply that that is a matter for the Court of Appeal, Criminal Division. That disposes of the matter, and I suppose it is for that reason that the complaints of undue severity are relatively rare; I should think about one in 10.
The others are complaints of undue leniency. The Lord Chancellor, or whoever it is, then has to reply, "Well, unfortunately this is a matter for which nothing can be done because I, the Lord Chancellor, am not responsible for the behaviour of judges or for their judicial decisions, and you, the Members of Parliament, must not try to substitute your own

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emotive concepts for a proper hearing in front of an adequate court of law".
Therefore, what is to be done? In my judgment the independence of the judiciary requires that they should have some say when cases of undue leniency are alleged. I agree with the noble Lord, Lord Wigoder, that the instances in which a sound case of undue leniency can be made are relatively rare. Complaints are relatively frequent. They are relatively frequent because there is no remedy even though they be rare.
I would not agree with the noble Lord, Lord Wigoder, that they are mainly concentrated on rape. I shall give an example later in my short remarks which has nothing whatever to do with rape but has something to do with fraud, although rape certainly enters into it. Until there is some means of looking at the allegations of leniency in front of a properly constituted court the business of hysterical condemnation of the judicial Bench will continue.
What is to be done? It is wrong to suppose that nothing is done. The noble and learned Lord the Lord Chief Justice, when he spoke on a previous occasion, made it quite clear that on occasions guidelines can be given. I remember that in one of his previous speeches the noble Lord, Lord Wigoder, said as much. Guidelines are valuable in their way but they are not enough. To begin with, they can be given only when some unfortunate criminal makes a complaint to the Court of Appeal, Criminal Division, on the basis of undue severity. No criminal who has been treated with undue leniency is likely to go to the Court of Appeal with a claim of undue severity. However, that is the only way in which the matter can be dealt with.
It is also the case that when a judge, notoriously and to the knowledge of his fellow judges, habitually undersentences, perhaps out of fear of successful appeals against his judgment to the Court of Appeal, Criminal Division, and knowing that no appeal can be made against cases of arguably undue leniency, he has been known consistently to err. As the noble and learned Lord the Lord Chief Justice said, this is certainly not enough. The rebuke, if it is such, is never administered in public and it is of doubtful value in encouraging others to see the error of such ways.
The truth is that the only way in which a body of case law can be built up, indicating what the proper lines of sentencing should be and imposing a degree of consistency of sentence, must lie in the direction now proposed. There must be a way in which the Court of Appeal can have seisin of cases where it is arguably true that serious questions ought to be discussed in public, and ought to be analysed in public in the light of an actual matrix of facts presented by an actual case. That is what is presented here. Whether one adopts the hawkish position of the noble and learned Lord the Lord Chief Justice, or whether one adopts the intermediate position recommended by the Government, there must be a means of bringing a concrete case, or occasional cases where the case is arguable, before the Court of Appeal so that the two sides may argue and point out what are the relevant factors of the sentence in a particular class of case.
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It so happens that this happened in one recent case, which would have been ideal from the point of view of Clause 38. I mention it with a blush on my cheek because it was a rape case, and in particular it was the Ealing rape case to which one speaker from the Alliance Benches made reference. It only came before the Court of Appeal because a third or fourth defendant, I forget which, who had nothing whatever to do with the rape, appealed on the grounds of the excessive severity of his sentence. That enabled the noble and learned Lord the Lord Chief Justice to do exactly what is proposed here; namely, to analyse the facts of the case and to say, as I think the noble Lord, Lord Wigoder, suggested, but which he obtained from the noble and learned Lord the Lord Chief Justice, that when dealing with three or four different charges all for serious crimes, the real point of the case was how to allocate the sentences between concurrent and consecutive sentences.
I believe that the noble Lord, Lord Wigoder, with the noble and learned Lord the Lord Chief Justice joining the heavy brigade on this occasion, hit upon the right answer. There would have been relatively little complaint had the sentence for rape been 10 years, which would have been precisely the same as the totality of the consecutive sentences, and had the other sentences been adequate but concurrent. As to whether the sentence was adequate—the noble and learned Lord the Lord Chief Justice thought it was not—or whether it was about right, I shall express no opinion because it is not relevant to the line of argument that I am pursuing.
The other case to which I promised to refer, but to which I must do so with greater trepidation, is the recent case of Collier at the Old Bailey. To my mind it is perfectly clear that a great deal of public disquiet was expressed at the time that that sentence was passed. I make no comment as to whether the disquiet was well-founded or ill-founded. It is not my business to criticise sentences and I hope it never will be.
However, the fact is that disquet was expressed on the ground of general public importance—that if one is serious about repressing fraud it is not right to suspend any part of the sentence on the first occasion on which a serious case comes before one. If Clause 38 had then been in place, instead of being only a blush on the Government's cheek, the situation would have been that the Attorney-General could certify that a general question arose, the court could have had seisin of the matter as to whether it gave leave to ventilate the general question, and we should have had an authoritative ruling which would be valid as part of the case law for future sentencing policy.
That leads me to comment upon the situation of prosecuting counsel. I agree with every word which fell from the Minister of State in another place. I have prosecuted in a vast number of cases since 1932—I think that my first murder case was in 1934—and I have never once departed from the tradition of the Bar, which is that it is not for prosecuting counsel to suggest to the judge what sentence he should impose.
On the other hand, the House will recollect that in his speech on the previous occasion the noble and learned Lord the Lord Chief Justice made clear the

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fact that that duty of prosecuting counsel had not been rightly stated from the Liberal and Alliance Benches. It was rather more restricted than was generally thought. It is the business of prosecuting counsel to draw attention to relevant facts and principles. From my own experience I can say that when one is prosecuting in a Companies Act case, one sometimes draws the attention of the court to the various options which may be open to it without suggesting which options should be taken; for instance, the disqualification of a director. I have known that happen, I have done it myself and I think that it is perfectly proper.
When a Clause 38 reference comes to court, it will be the function of counsel for the Crown simply to lay out the facts, point to any general issues of principle and ask the court for its guidance as to which way that should be exercised in future cases.
I should like to add one comment on the subject of the intermediate and the hawkish positions. As regards the hawkish position, it is important that the criminal should serve the sentence which is said to be right after discussion by the Court of Appeal. I confess to a certain sympathy with both the Government and the noble Lord, Lord Wigoder, on that point. I do not like cat and mouse. I do not think that it matters what happens to the particular man, but it matters that for the future the courts should pursue a straight course in their sentencing policy.
I shall sit down after having commented on the impartiality of the judiciary and its independence of the media, Members of Parliament and, I add with a sly glance at the Government Bench, of some Members of the Cabinet. That independence is at the foundation of our constitution and this proposal, or some other proposal on like lines, is a necessity because we cannot go on as we are. Secondly, I do not believe that the role of the prosecution is being seriously upset. Thirdly, as regards consistency of sentencing policy, guidelines and quiet rebukes are not enough. There must be the open ventilation of issues calmly and objectively expressed, in front of a properly constituted tribunal, which is the Court of Appeal, Criminal Division.
5.30 p.m.
The Earl of Longford: My Lords, I rise with some trepidation, speaking after four eminent lawyers and preceding three others. I hasten to say what a pleasure it is to debate, after so many years, on more or less equal terms with the noble and learned Lord, Lord Hailsham. I say "more or less equal terms" because someone who has performed the duties of Lord Chancellor for a record number of years and with the utmost distinction is not quite on the same footing even now as the rest of us, but he comes among us untrammelled and is perhaps, I think, all the better for that. Of course it was Gladstone who said, "I come among you untrammelled". After admiring the noble and learned Lord for 65 years or more, with every year that passes I think he resembles Mr. Gladstone more and more, and I say that by way of a very high compliment.
Lord Hailsham of Saint Marylebone: My Lords, an old man in a hurry!;
The Earl of Longford: However, my Lords, we are discussing this Bill and my attitude towards it has been most effectively explained and expressed by the noble and learned Lord, Lord Elwyn-Jones. I have no doubt that anything he left unsaid that I should wish to say will be dealt with effectively by the noble Lord, Lord Mishcon, when he replies. I also take this opportunity of saluting the very expert addition to our ranks in the form of the noble Lord, Lord Irvine.
I have tried to put myself in the position of the Home Secretary, in fantasy of course. I never came within 100 miles of that office although the late Evelyn Waugh, a great friend though rather a caustic gentleman, seemed to be under the impression that there was some danger of that. When the noble Lord, Lord Wilson, then Mr. Wilson, was about to form his government he wrote a letter to the wife of Lord Dalton saying he was glad I was not going to be Home Secretary: otherwise we should all have been murdered in our beds. So it would appear that I was perhaps regarded as a potential menace. However, we must come to the situation as we find it.
People have been talking about lifelong experience and that sort of thing. I first became a prison visitor in Oxford 50 years ago and there were then 10,000 people in prison. That was about the time when the noble and learned Lord, Lord Hailsham, was becoming very active at the criminal Bar. When I opened the first debate in this House 30 years ago there were 20,000 people in prison. Now for the first time there are over 50,000; so from that point of view perhaps I cannot be said to have been a very successful penal reformer but it has not all been my fault. That is the story of the last 50 years of penal reform.
We are fortunate in having the situation faced very starkly by the present Home Secretary, and I shall quote one thing that he said in a speech about 10 days ago. He said:
"The main reason for the recent surge in prison population has been the increased volume of cases handled by the courts and a rise in the average period of custody handed down".
I hope I am not disturbing confidence in the judges, which is clearly one of the deadly sins, if I say that that is a lamentable reflection upon the judges having passed these more severe sentences. I am glad that the noble Lord who spoke earlier said he did not mind criticism so long as it was not malicious, or words to that effect. Here it seems that the Home Secretary was apparently complaining about the increased sentences—and if they have not been passed by the judges I do not know who has passed them. I am afraid that must be laid at the door of the judges; so let us consider the matter in the light of that.
We can rely, I hope, on the Home Secretary to do what he can about it. He went on to say:
"It is not my job to tell judges what the right sentence in any one case should be".
I must emphasise that he said he was not referring to any particular case; but having issued that warning to himself he went on not exactly to ignore it but to speak in a rather different sense. The Home Secretary gave some very positive guidance and said, among other things;

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"For less serious offences custody should be used sparingly and as a last resort … I hope the courts will make increasing use of these tough but constructive sentencing options".
That is the official sentencing policy, stated recently by the Home Secretary. It has a rather ironic ring for some of us old-timers in this House because we remember in 1981 the then Leader of the House saying much the same thing. I do not know whether the same speechwriter was at work but at any rate the old things were said and said quite often by the noble Viscount, Lord Whitelaw, in 1981. It is perhaps rather cruel to labour the point now but after that he went before the Conservative Conference and got the bird. I do not think that in recent times anybody has got the bird quite so blatantly as he did. The whole policy was abandoned; and then came the unfortunate Mr. Brittan, who had to deal with other troubles later; and I do not want to hit him when he is down. The fact is that he introduced a new policy more suited to the temper of the Conservative Conference, and we have discussed that often enough in this House. We now have a Home Secretary who is showing some signs at least of returning to the earlier wisdom of the noble Viscount, Lord Whitelaw.
I am glad to see the noble Lord, Lord Windlesham, in his place. It pains me to say this because I have expressed several times, publicly and privately, my high regard for the noble Lord, who is chairman of the Parole Board. But I am afraid I found his last report profoundly depressing. It appears that now it is being made harder, I suppose by deliberate policy, to obtain parole. The noble Lord is sitting there and if he thinks that is an incorrect statement I will give way to him, although he may feel inhibited in taking part in this debate by virtue of his office; but the Minister may speak for him. That must be the clear meaning to be placed on his words and on the report.
To take only one figure, in 1985 63 per cent. of prisoners were released on parole. In 1986 this figure had dropped to 60.7 per cent. That seems to be part of a trend, so far as I can study it, over the past year. At the same time as we have the Home Secretary making these enlightened noises, we are having the Parole Board—which is very much under his control: let us not beat about the bush—stating precisely the opposite policy. It was once said of a philosopher that, having started from both ends of the road at once, he never met himself in the middle. I am afraid that seems to be the unhappy situation at the moment of the Home Secretary. I sympathise with and respect him—
Lord Elton: My Lords, if the noble Earl will forgive me, I do not think my noble friend can intervene in this debate. He has put his name down to speak and he occupies an office. But if the noble Earl is suggesting that the Home Secretary has the policy of the Parole Board at his beck and call, I can assure him that he is wrong.
The Earl of Longford: My Lords, I think "beck and, call" would be exaggerating but nobody who knows the situation as well as the noble Lord would deny that the Home Secretary very great influence over
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the policy pursued by the Parole Board. I am afraid I cannot accept any contradiction of that statement after many years of debates in this House and elsewhere. If the noble Lord wants to go on about it—
Lord Elton: My Lords, the noble Earl says he cannot accept it. I have observed the relationship fairly closely. It is a very sensitive one, and the Home Secretary is not in a position to dictate to the Parole Board: nor in fact to steer it.
The Earl of Longford: My Lords, in fact, as the noble Lord must be well aware, the policy introduced by Mr. Brittan when he was Home Secretary had a big effect on what the Parole Board did and on the course of action it pursued, so to say that the two things are moving quite separately, if the noble Lord will forgive my saying so, is wildly remote from reality.
However, let me just return and finish quickly. As I say, I am full of respectful sympathy for the Home Secretary, a man with a brilliant academic record. He is a Newcastle scholar, like the noble and learned Lord, Lord Hailsham. I do not know whether there are any more Newcastle scholars here—or scholars from Newcastle or from anywhere. If so, let them rise and compare their records with those of the noble and learned Lord, Lord Hailsham, or the Home Secretary. He is a Christian, like the noble and learned Lord, Lord Hailsham and like the noble and learned Lord, Lord Denning, who is to follow. That may be the case with everyone else who is speaking, of course. Here he is, enlightened and knowing exactly what ought to be done, yet how far is he in a position to do it?
On the one hand, there is public opinion, so called, which has been stirred up in the most odious way by the tabloid press. In February I opened a debate in this House to call attention to the general deterioration of the tabloid press. Anyone who has read those newspapers in the past few days cannot fail to be aware that I understated the evils that they represent in our present society. That is one part of the Minister's trouble: the tabloid press inflaming public opinion in some cases and indeed generally.
On the other hand, we have a Prime Minister who is in favour of hanging. I am not inventing that opinion; she has declared herself to be in favour of hanging. Poor Mr. Hurd has come out against hanging. He is caught between the upper and the lower millstones. He is an object of respectful sympathy, but we must leave him for the moment.
Like the noble and learned Lords, Lord Hailsham of Saint Marylebone and Lord Denning, and other noble Lords, I approach these matters from a Christian standpoint. That does not mean that all wisdom is delivered to Christians in these matters. No individual has done so much for penal reform in our time in the domain of policy as has the noble Baroness, Lady Wootton. Anyone who believes she is a Christian was not here when I introduced her into this House and she asked for the alternative form of words to take the Oath. It was a long time before they could be produced. She has a wonderful record and my thoughts go out to her at this moment because she

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has not been well for some time. She has a wonderful record but she is not a Christian—not yet, anyway, so far as I have heard; but there is time. It is possible to be a great humanist and a great penal reformer.
Other great Christians, such as the noble and learned Lords, Lord Hailsham and Lord Denning, will not agree with me about the application of Christian principles in any kind of detail, nor perhaps even on what is called principle. They will not agree with me on how Christian ideas can be translated into effective action. However, if they have any conception of what the founder of Christianity stood for, they and everybody in this House must agree that He would find the state of our prisons today absolutely intolerable. I regard the present state of our prisons, the conditions for our prisoners and the sentences passed on our offenders a disgrace to a society that still tries to be Christian.
5.42 p.m.
Lord Denning: My Lords, when the Bill came before your Lordships' House on a previous occasion we all welcomed it. Indeed, there were only a few outstanding points of difference to be discussed. Perhaps this evening I may mention two or three important points that have been raised so far.
On the subject of sentencing, the question has been asked whether there ought to be a power of appeal against over-lenient sentences. I was most impressed as I listened to the arguments put forward by the noble Lords, Lord Wigoder and Lord Hutchinson of Lullington. I thought that they must be right. However, I then heard the speech of my noble and learned friend Lord Hailsham of Saint Marylebone, which brought me right round again, as he has so often done when speaking from his long experience.
In fairness to the judge there should be the procedure available of an appeal to the Court of Appeal—only with leave of course and on the application of the Attorney-General. I should not for one moment allow the prosecution to have any say in the sentence. The prosecution should present the facts objectively and leave the sentence to the judge. Nor should the judge be tempted to ask the prosecutor for his views on what the sentence ought to be. The prosecution should not be permitted to answer any such question.
There have been two cases in my experience which I should like to relate to your Lordships. I tried a case at the Old Bailey in which the driver of a big Rolls-Royce (I think it was an ambassadorial car), a man of great reputation and distinction, overtook another car on the wrong side of the road and in doing so killed two young girls. I listened to the plea in mitigation, I saw the sorrow and repentance on his face and I sentenced him to nine months' imprisonment. That evening I asked myself whether I had been right. I came to the conclusion that I had been wrong and that I had not had sufficient regard to the victims of that manslaughter. I for one would have welcomed an appeal to the Court of Appeal, with leave of course, if it was thought proper. That was one case.
Another point arises in connection with the Ealing vicarage case and from reading the newspapers with
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their sense of outrage and condemnation of the judge, as though he were an ignorant man doing an injustice and not someone administering justice. Indeed, he was one of the most experienced judges of the Central Criminal Court, who had given reasons for his sentences which he hoped would be satisfactory. I should have welcomed a power of the Court of Appeal to hear that case in justification of the judge, and for the Attorney-General, with leave, to have been able to bring it to the Court of Appeal. I rather fancy that the Court of Appeal may have pronounced that the sentences were right in the long run but that the judge did not apportion them properly.
In another recent case concerning insider dealing, the press came out with expressions of outrage that the sentence should be suspended so that the offender did not go to prison at all. One of our best and most capable judges, experienced in the criminal law, tried that case and gave the man a suspended sentence. Having been so criticised by the media, in fairness to the judge would it not have been right for that case to have gone before the Court of Appeal so that the confidence of the judge and the confidence of the people in the judges could have been restored? For those reasons I have been swayed by the words of my noble and learned friend Lord Hailsham of Saint Marylebone.
I should like to say one or two words on other matters. Peremptory challenges must go. They are long out of date. It is most welcome to see them proscribed in this Bill. As regards retrial it is right that the Court of Appeal should have the power to order a retrial in some circumstances but it must be in carefully defined circumstances, because occasionally the accused goes free on a technicality, which is not right. There should be a power for the Court of Appeal to retry cases.
I come to my main point. I congratulate the noble and learned Lord, Lord Roskill, and his committee on their report and I am sorry that the Government do not intend to implement one of its most important recommendations; namely, that in cases of complicated fraud there should be a special tribunal consisting of a judge and two expert laymen to sit with him. Looking at the matter in principle, the report points out the complexity of such cases. On page 153 it states:
"The complexity lies in the fact that the markets, or areas of business, operate according to concepts which bear no obvious similarity to anything in the general experience of most members of the public, and are governed by rules, and conducted in a language, learned only after prolonged study by those involved".
Are these cases such as can be tried by 12 jurors who are selected at random, ignorant and unlearned?
In the old days, before the Juries Act 1974, there was a qualification for jurors. They had to be householders. It was a rough and ready test. Nevertheless, it meant that on the jury one had tradesmen, businessmen and the like, who were capable of understanding figures and so forth. I tried a complicated fraud case in the Old Bailey many years ago. I do not know how it happened but I expect whoever was arranging the panel was able to look down the list of occupations, and in this way there were accountants, bank clerks, insurance clerks

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and so on. It was a first-rate jury that could understand and try the case. After six weeks it came to what I thought was a completely right decision.
Now that has all changed. Youngsters of 18 and 19, or even older people who have not the first understanding of accounts and figures, market dealings, what happens on The Stock Exchange, insider dealings, Lloyd's and the like, are jurors. No wonder the prosecution hesitates to prosecute when the case is to be tried by a jury—I do not say this offensively—of ignoramuses, who will not know anything about it.
That is why Lord Morris's committee in 1965 said that it was essential that jurors should understand the English language and be able to speak it. That is the only qualification. There is no need for them to be able to read or write, to understand figures or accounts, to pass their O-levels or A-levels—or to have failed them all. There is no qualification of education, literacy or accountancy for any juror. In the United States many states have tests of education, literacy and so forth. In our country there is no test whatever.
A random jury selected as it is now from those on the electoral role is quite an unsuitable tribunal to try complicated fraud cases that require expert knowledge. That is why I suggest that the recommendation of Lord Roskill's committee is right and that there should be a special tribunal of a judge and experienced assessors for these complicated fraud cases. However, as the Government have not taken it up, I suggest that it is for some of us to say something.
The judge himself—he is allowed to do this and does so—should make a few inquiries of each juror—"Can you read? Do you understand accounts? Can you add up or substract? Do you know anything about the Stock Exchange? Do you know anything about bears and bulls, the insurance market, the premium that has to be paid?". I suggest that in the case of nearly every juror called to the Old Bailey in a complicated fraud case the answer would be no; he is just an ordinary chap like the rest of us, never did arithmetic at school, never passed any examination, but can do his job all right, whether it is driving a lorry or whatever else it may be. For these complicated fraud cases there should be a jury or another tribunal that can understand the evidence and the accounts and come to a just and right conclusion upon them. If there is not a special fraud tribunal, a judge at least shall be able to make inquiries of the jurors as they come up as to whether they are suitable to try the case.
I beg that these matters be reconsidered when we reach Committee stage.
5.55 p.m.
Lord Campbell of Alloway: My Lords, I ask your Lordships to be good enough to accept my apology for not being in my place for the opening speeches. I shall of course read in Hansard everything that has been said.
While I welcome the Bill, I rise to suggest that there are four omissions of importance. First, there is no
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power to increase an over-lenient sentence—I speak of course of the sentence imposed. There is no power to order a retrial where the interests of justice so require and, I say in the broadest terms, in the interests of justice. There is no provision to curb the growing menace of jury nobbling, which saps the essence of the due administration of justice. There is no amendment to the criminal law proposed to accommodate the assumed jurisdiction of the High Court to authorise the sterilisation or the termination of pregnancy of a woman unable to give her informed consent or informed refusal. This is a matter of general public importance and of special importance to the medical profession, having regard to the provisions in particular in the Abortion Act 1967 and the incidence of criminal assault.
There are problems arising under what is now Clause 30—the former Clause 21—about video links in child molestation cases. There are two matters upon which some assurance is sought to avoid a conflict between the Executive and the judiciary on two aspects of extradition.
The problem of over-lenient sentencing and consistency of sentence is of course the lodestar for reform—reform based on actual case law decisions building up a body of precedent. There is no substitution for the actual case. Of course, the only body that can control sentencing is the judiciary itself. It has only to be stated by my noble and learned friend, but, once stated by him, it is axiomatic. It is equally axiomatic that that is the only effective way in which the independence of the judiciary, which is so thoroughly essential, is to be maintained.
It appears that Her Majesty's Government have moved away from the paper placebo proposals reflected in the former Clause 29 and now in Clause 38 and, if so, in this they are much to be congratulated. Last time round I gave notice to oppose Clause 29 and introduced an amendment in substitution, then Amendment No. 62, on which I gave notice that I should, if necessary, take the opinion of your Lordships' House. It was designed to enable the Court of Appeal to increase the sentence if over-lenient either on referral by the Director of Public Prosecutions or on any appeal by the accused against conviction or sentence. The argument appears in Hansard at col 1299 and other passages. This is no occasion for repetition to weary your Lordships. Rather, I wish to put down a marker for an amendment in precisely the same terms as the original Amendment No. 62, and to express the hope that the Government will withdraw Clause 38 and will introduce their own amendment to give full effect to the principles embodied in the amendment. Listening to the noble Lord, Lord Hutchinson, which is always a very great pleasure, and from my understanding of the speech of the noble Lord, Lord Wigoder, which I unfortunately missed, it would appear that whatever amendment is proposed it is inevitable that the opinion of your Lordships' House will be sought on this issue and, if so, so be it.
On the power to order a retrial, there is no provision in the Bill. An amendment to this effect—former Amendment No. 66—will be tabled. That amendment, which is the marker for the new amendment to be tabled in the same form, provided

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that the conviction must be quashed on grounds of misdirection or procedural irregularity, and I accept that perhaps "procedural" was an unnecessary qualification of irregularity.
Secondly, the power by order of the court was to authorise a new trial—not to order a new trial, but by order of the court to authorise a new trial—and it was only exercisable if the interests of justice so required. The power to order a retrial by reason of fresh evidence would of course be retained. But, if the conviction were quashed on grounds of misdirection or irregularity, fresh evidence would be taken into account as affecting the interests of justice as required for the authorisation of the new trial.
The new indictment on re-trial could include counts upon which the accused had not been charged, counts on which he had been arraigned and to which he had pleaded, but which by leave of the court were not to be proceeded with until further order, or counts identical or similar to those charged in the first indictment. Such was the effect of the former Amendment No. 66 and of the amendment which I propose to table.
But it is well understood that the Home Office might well wish to produce a more comprehensive draft, having regard to such representations as have been received and to the form of such amendments as may be tabled between now and the middle of October. If at Committee stage the principle were to be acceptable with a view to carrying in a Government amendment, there would of course be no question of taking the opinion of the House.
I am delighted and relieved to see the noble and learned Lord, Lord Ackner, in his place, as there is a complication because, as I understand it, a view is taken that the first element— that the conviction must be quashed on the grounds of misdirection or irregularity—should be excluded, but if an amendment were tabled to that effect I should respectfully suggest that it went far too wide. On the other hand, if an amendment tabled were to limit the indictment only to the original charges, I would suggest with respect that the amendment was far too narrow.
Quite clearly, there ought to be some time limit for re-trial. I should be against any statutory provision as to limitation, but would think that the Court of Appeal should be given the duty to order some time limit when authorising a new trial, leaving it entirely to the discretion of the court as to what that time limit should be.
On jury nobbling, on Second Reading on the previous occasion I drew the attention of your Lordships to the evils of this menace. Since then your Lordships will have read The Times of 2nd July, page 1, which reads:
"Millions paid to nobble … juries. Police say Mafia money used to subvert justice."
The article set out in some detail the views of Mr. John Dellow, the assistant commissioner of the Metropolitan Police. It is a very serious subject. I said before that I do not know the answer. I have thought about it a lot since and spoken privately to many noble Lords and still do not know the answer.
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All I know is that some steps must be taken as a matter of some urgency and if in this Bill, directed to assist in the fight against rising crime, it is not possible for the Government to introduce an appropriate amendment, then perhaps this question could be referred as a matter of extreme urgency to the Law Commission for consideration and report. In the meantime, some provision might be made to supplement police manpower and to provide extra financial resources to ensure that jurors are protected in those trials, particularly down in the Old Bailey, where protection is not only appropriate but totally necessary.
On video links, time runs on and I merely wish to suggest that the law of corroboration simply must be changed as regards child molestation cases; that the law on admissibility of complaints in these child molestation cases must be changed, but that never should the accused or his counsel be deprived of the right to cross-examine the child, for children are susceptible to suggestion—whether or not, as in some cases, these curious models are used—and children can build up a picture based on suggestion which they believe to be true in all sincerity, but which is untrue and is not founded on any recollection of fact.
We have always to know in court what happened between the time of the alleged assault and the time when the child gives the video recorded evidence. Why? To make sure in fairness to the accused, who, after all, is innocent till found guilty, that the video recorded evidence, which has the total semblance of veracity because the child believes it, is truly founded upon recollection of fact.
Lastly, I come to extradition. The provisions of Clauses 96 to 113 of the first Bill are now reflected in Part I, Clauses 1 to 26, but there has been a very substantial redraft and a very considerable improvement. The provisions bring our law into line with the European Convention of Extradition, and that is much to be welcomed.
There are, however, two questions, and only two questions, arising. Is there provision to ensure that the Secretary of State may not consent to extradition where the magistrate has ordered a fugitive's discharge? Article I of the convention in this context precludes extradition for the questioning of a suspect.
Secondly, is there provision to ensure that the Secretary of State shall not be able to consent to prosecution of a non-indictable offence? It would be preferable to carry safeguards into the Bill rather than to rely on habeas corpus or judicial review.
I conclude with one point on the problem of the criminal law and the new jurisdiction. That is a form of extended jurisdiction which is exercised now, for example to declare that the termination of a pregnancy may be lawful in the case of an unfortunate woman who can give no informed consent or refusal. This is a very sensitive grey area where age or wardship creates anomalies, where the inherent jurisdiction is in doubt and the statute is not explicit. I refer to Section 34 of the Mental Health Act, the guardianship provision, and Section 8 of the Act of 1983. If it is not possible to include in the Bill some provision to regularise and define that situation, could consideration be given to referring this matter also to the Law Commission?
6.12 p.m.
Lord Ackner: My Lords, repetition is not the spice of debates although it is often unavoidably a common ingredient. When I had the privilege of addressing your Lordships' House three months ago on this very subject I made two points. I shall refer to them again with the minimum of repetition and I shall devote my comments to seeking to repel some of the criticisms that they have caused.
The first suggestion was that there should be a right given to the Court of Appeal to order a retrial and that that should not be limited as it is now only to those cases where there is fresh evidence. Those of your Lordships who have had the privilege and pleasure, as I have, of hearing the kindly observations made by the noble Lord, Lord Hutchinson, will appreciate that he is one of my oldest friends at the Bar. That impression will be reinforced if your Lordships turn to the issue of Hansard in which his compliments on my maiden speech are recorded. That speech was devoted, in wholly uncontroversial terms, to criticising the then Lord Chancellor for his dealing with criminal legal aid for the Bar.
I was not aware that that speech showed deep establishment mindedness, but perhaps in time things change. I had hoped that the noble Lord might have used part of his retirement from a busy practice at the Bar to travel and broaden his mind, or at least to read about what happens in other countries, since he must have time.
Had he done so, either by travel or by merely reading the excellent report produced by the Law Commission, whose function is reform—something for which my zeal is meant to have evaporated—he would have learnt the following, which is stated in the report.
So far as can be ascertained, in every jurisdiction that was within the former British Empire the criminal appeal court has the power to order a retrial where appropriate. This includes every state in Australia, every province in Canada, New Zealand, India, South Africa, Nigeria, Kenya and Hong Kong. It seems of particular significance that in these jurisdictions the power existed well before 1907 and at a time when the common law of the Empire was controlled from London. The power also exists in every state in the United States and in the Republic of Ireland. The position in England and Wales seems now to be unique.
Moreover, it would now be impossible to say that there is a principle of the common law that once a jury has given its verdict a man cannot be subjected for a second time to the ordeal of a criminal trial. If there is such a principle, it is limited to England and Wales. The near-unanimity of other common law jurisdictions on the point may tend to the conclusion that what has on occasion been perceived as a principle could now more accurately be described as a peculiarity. It has been perceived as so much of a peculiarity that in the 25 years since the matter was debated in this House that power has been given to Scotland and to Northern Ireland.
If my attempts, with others, to seek that is the very reverse of reform, then the noble Lord, Lord Hutchinson, and I speak a different language. It is a
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great privilege to be categorised by him as a member of the heavy brigade. Lighter I am no doubt in avoirdupois, in age and in seniority in your Lordships' House. Perhaps the noble Lord may ascribe to me weightierness in thought.
The reason for the desirability of this change is quite simply that in the recent past a sensible process has grown up where, if there is an issue as to the interpretation of a statute or the admissibility of evidence, the ruling of the judge is taken at the earliest stage. If the ruling is adverse to the defendant he changes his plea, is convicted and then has a right of appeal. If he succeeds in that appeal there can be, as it stands at present, no retrial.
There was such a case recently in your Lordships' House, the case of R v. Hunt, where a man was clearly in possession of drugs that he should not have had. The analysis report was accepted in evidence but it did not set out the exact proportion of the morphine that he had in his possession. There was a technical submission at the end of the prosecution case that it had not proved its case. The judge rejected that, a plea of guilty was entered and then a subsequent appeal was made to the Court of Appeal, which dismissed it. But we in your Lordships' House were obliged to allow it. It was a pure technicality and in no other country would that nonsense have been permitted.
I now turn to the suggestion that the prosecution should have a right of appeal against inadequate sentences. I do not follow the strictures of the noble Lord, Lord Wigoder, that there is a significant difference between giving a right of appeal to the defence against an excessive sentence and giving the prosecution a right of appeal against an inadequate sentence.
Perhaps I may quote the words of a judge who is now the Chief Justice of Australia but who was then Mr. Justice Mason. In 1984 he said:
"Just as consistency in punishment—a reflection of the notion of equal justice—is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under the law, is calculated to lead to an erosion in the public confidence in the integrity of the administration of justice".
If the noble Lord, Lord Hutchinson, had travelled further than Spain, he would have discovered that in Australia, Canada and New Zealand for years (in Canada, for over 60 years) the right of appeal has existed without any complaint and without any suggestion that the prosecution fails there to carry out its obligations as they are carried out in this country.
Let me deal now with the specific criticisms which have been made. It has been said by a number of your Lordships that such a proposal would involve a departure from the traditional role of the prosecution not to play any part in the sentencing process. With deep respect, that is a misunderstanding of what the prosecution does at present. The prosecution takes a very material part in the process of sentencing. From the outset it decides what charges are to be brought. For example, it decides whether the charge should be the serious offence of wounding with intent, which carries a sentence of life imprisonment, or the lesser offence of unlawful wounding.

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Secondly, it is the prosecution that puts the facts before the judge upon which the judge acts in all cases—which is the majority of cases—where there are pleas of guilty. If the facts are not acceptable to a defendant who is going to plead not guilty, then the judge has to determine those facts. Many years ago, I had to try a case at Winchester. The plea was to an offence of indecent assault. The prosecution case was that it was a near rape. The defence case was that it was technical indecent assault and should warrant the smallest possible punishment. There was nothing to be done but for me to invite the prosecution to call the evidence upon which it relied and to allow the defence to cross-examine and call whatever evidence it wished. It was the prosecution that set out to establish the seriousness of the offence and, as I recall, it did so.
Thirdly, the prosecution puts before the court the antecedents or criminal record of the accused. That is not merely limited to a catalogue of the offences committed. It frequently involves leading evidence via the police officer as to the precise circumstances of the last two or three offences. Those circumstances may be very relevant indeed to whether the accused is a danger to society or whether he has learnt his lesson to any extent.
Finally, the prosecution may call evidence with regard to the medical position. In your Lordships' House we recently had a case upon which we are due to give judgment this week—although not on this point—in which a person was convicted of manslaughter. After the conviction, the prosecution not only called evidence as to the criminal record of the accused but also called a doctor to put before the court the proposition, through medical evidence, that the accused suffered from gross personality defects (although not psychiatrically ill) and that he was a danger to women. As a result of that evidence, which was challenged by the defence, the judge in the case had to ask himself: "Do I impose a determinent sentence of so many years or an indeterminent sentence of life?" He decided the latter on the basis of the medical evidence, because he could not be satisfied that if he imposed a determinent sentence the accused would either not be in too long or not long enough, depending on his medical condition.
As your Lordships know, from time to time the Lord Chief Justice lays down sentencing guidelines. For the life of me, I cannot see that there would be any objection if the trial judge, realising that there had been a recent statement of guidelines on a particular offence, turned to prosecuting counsel and said: "Mr. Brown, I believe that there has been a recent pronouncement by the Lord Chief Justice on this type of offence. Can you remember its name and tell me where it is reported?". I cannot conceive that defending counsel could get up, either with the support of the judge or his professional society, the Bar Council, and validly object to such a request.
The principles have been laid down and they have been published. Why on earth should the judge not inquire what the principles are if he realises that they may be relevant? To take that a stage further, which is all that this proposal would do, counsel could say to the judge: "My Lord, there are some sentencing guidelines on the subject. No doubt your Lordship
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knows them. If not, I have a copy of the report here". Neither I, nor the Lord Chief Justice, who spoke on the last occasion, nor anyone else suggests for one moment that the prosecution should suggest to the court a particular sentence or the quantum.
The next point, which I think is easier to deal with, is the point made by the noble Lord, Lord Morton of Shuna, with such persuasiveness that the noble Earl, Lord Caithness, thought that it merited consideration. It has been made again by the noble Lord, Lord Wigoder. It is the question of how the Court of Appeal can deal with increasing a sentence by looking at the papers, the transcript of what was said and the reports. As your Lordships have been told, there were 90,000 convictions in the Crown Court in 1985, the last year of criminal statistics. There were 1,100 successful appeals against sentence. No one has suggested that the Court of Appeal is not capable, merely by looking at the papers and hearing submissions, of reducing the sentences. I cannot see where the problem arises in regard to increasing them.
The noble Lord, Lord Morton, said that the judge would not have the benefit of seeing and hearing the witnesses. Neither does he in every case where there is a plea of guilty, which is the majority of cases. Where it has been a case which has been fought, of course the Court of Appeal would have the greatest respect for the observations of the judge and for the fact that he has had the pleasure—doubted or undoubted—of presiding over a lengthy trial.
The next matter, which was raised by the noble Lord, Lord Wigoder, on the last occasion (although not in such a harrowing way as on this occasion), was his experiences, which some of us have shared, of appearing before the former Lord Chief Justice, Lord Goddard, in the optimistic frame of mind that his Lordship might be inclined to reduce the sentence, only to go away with the sentence increased. I do not suggest for one moment that that power should be retained. However, I suggest that if there is an appeal, it should be open to the Attorney-General, with the leave of the Court of Appeal (Criminal Division) to put in a cross-appeal. The appellant would then know perfectly well that he was at risk and could proceed accordingly, and the traumatic shock which the noble Lord, Lord Wigoder, and I suffered from time to time could not occur.
The last point, which was made both by the noble Lord, Lord Meston, on the last occasion, and by the noble and learned Lord, Lord Elwyn-Jones, on this occasion, was that there was some element of double jeopardy. With the deepest respect, that is to misunderstand a well-established phrase. The double jeopardy principle is that you cannot be punished twice for the same crime. But if an adequate sentence is substituted for an inadequate one, that is being punished only once and punished properly. That is no more double jeopardy than a person who has been convicted and whose conviction has been quashed being open to a new trial.
Finally, with regard to new trials perhaps it will reduce some of the strictures of the noble Lord, Lord Hutchinson, if I merely say how the suggestion was received by the noble Lord, Lord Wigoder, on the last

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occasion. I read from Hansard, Vol. 72, col. 1337, where the noble Lord said:
"The other matter upon which I wish to say one word is that much has been said about one omission from the Bill, and that is the possible power of retrial that should be given to the Court of Appeal. It has met with widespread support, particularly from the noble and learned Lord the Lord Chief Justice and from the noble and learned Lords, Lord Ackner and Lord Denning. I entirely agree, if I may very respectfully do so, that the Court of Appeal should have an extended power of retrial. But we must draft that power with some care".
I finally take my departure of my main critic on this matter by saying what many have said of him:
"Habit with him was all the test of truth.
It must be right, I've done it from my youth".
I apologise to your Lordships for not being able to stay for the whole of the debate as previously but I have a long-standing commitment.
6.32 p.m.
Baroness Faithfull: My Lords, I speak briefly on four matters concerning children and young persons and their families. Under the definition of speakers given by the noble Lord, Lord Hutchinson, I do not know whether I am lightweight, middleweight, or heavyweight!;
However, I profoundly agreed with him when he said that we should have a positive policy for prevention of juvenile crime. I believe that the principles of child care, which should surely include inculcation of a sense of responsibility on the part of each and every child and young person; of support and encouragement for parental and family responsibility and to instil a sense of responsibility to and by the community for young people should be incorporated in a policy for children and families.
In considering these principles I refer to the breach of supervision order requirements in Clause 113 and Schedule 7 referred to by both the noble Lord, Lord Hutchinson, and my noble friend Lord Elton. The Criminal Justice Act 1982 gave courts the power to include specified activities in supervision orders on juvenile offenders. As my noble friend Lord Elton said, these specified activities included intermediate treatment projects. However, in this Bill a breach of the supervised activities orders gives courts the power to send a child into custody for the breach.
I hope the Minister will reconsider this clause because surely we should be working against sending children into penal custody, which in my submission tends to perpetuate crime. This is shown both by research and by experience. If the courts, probation officers and social workers feel they can take a child back not for an offence but simply a breach of the supervision order, then very possibly in some cases a number of children will go into custodial care when, with a lot of effort, patience and thought, such children could be kept out of custodial care. I hope very much that the Minister will reconsider this matter.
Secondly, in his opening speech the Minister spoke about the single custodial sentence. Again, he said that the Government were reconsidering this matter. There are social workers, probation officers and, as the Minister said, magistrates, who now plead for a single custodial sentence. This would give a wider sphere. Many young people would be able to be
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placed nearer to their homes and so be visited by, and kept in contact with their families. Furthermore, it would do away with the detention centres—the short sharp shock—which have not proved to be the success it was hoped they would be.
I am not sure from my noble friend's opening speech whether or not the Government are still unsure which way to jump. I hope very much, and I am sure I will be supported by the noble Lord, Lord Hunt, that the Government will have the one custodial system.
Thirdly, I hope to move an amendment at Committee stage for a change in the juvenile justice system. For many years we have looked at the Scottish system with envy. We have felt that the Scottish panel system has been a success and has helped parents to feel their responsibilities. Although it may not be possible to introduce that system in its entirety to this country because of our legal system, nevertheless we hope that the principles may be considered.
Lastly, I refer to a matter mentioned by the noble Lord, Lord Campbell of Alloway, concerning child abuse cases. The Government have already accepted the closed circuit television principle for cases appearing before the court. Video-taped interviews are in dispute at the moment. Of course, we believe that children must be treated with humanity, a humane attitude, and with methods which will not disturb them. We also believe that justice for the defendant must be seen to be done. Having dealt with many such cases myself I should say that children change over the years over time. Usually they tell the truth directly an event has occurred. They do not make it up; they simply repeat it.
Between an event occurring and the time a child appears before the court, time passes. During that time the child is treated therapeutically and medically. I submit that gives a different picture. If we adopted the video-taped interview that would give us a true picture of what in fact happened. There again, it would be up to the courts to say whether or not they accepted the video-taped interview. The principles and practices of videos and closed circuit television are in their early stages and I have to congratulate Her Majesty's Government for the money they are spending on research. I hope that this will be incorporated into the Bill so that we are able to perfect the methods by which small children who have been sexually and cruelly abused can be given a fair hearing and at the same time be treated with humanity while also ensuring that defendants receive justice.
6.41 p.m.
Lord Gifford: My Lords, on considering any criminal justice Bill we are concerned with trying to strike a balance between the interests that society has in securing conviction of the guilty and an appropriate sentence for them. On the other hand, there are the interests of society in securing a fair trial that avoids conviction of the innocent and also avoids the oppressive treatment of those who have been found guilty.

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I shall concentrate on three areas in which I believe that balance is going to be seriously changed, or may be changed, against the interests of the individual and in favour of the interests of the state. The first is the abolition of the right of peremptory challenge. I feel a certain responsibility in speaking on this issue. In the course of my own professional practice, I exercise frequently on behalf of clients the right which they have of peremptory challenge. I do so after consultation with them as to the principles on which that might be done. I believe that it frequently assists in the obtaining of a fair trial, normally—I shall come to the exceptional cases later—without objectionable features.
To try to illustrate the matter, I want to show the difference between cases involving only one defendant or a small number of defendants and those where there are many defendants on trial. Where there are one or two defendants, there can be two reasons why it is important to consider the exercise of the right to challenge. The first is to rectify imbalances which inevitably arise through the exercise of the random selection of jurors in the community. Those are imbalances of age, sex or race. It is quite wrong to suppose that defence lawyers habitually challenge everyone over 50, or everyone wearing a tie in order to obtain an ignorant jury. Recently, in a serious case of conspiracy to murder involving prolonged investigation of documents, I recall looking at the reserve jurors who had not been picked to see if I could find people of age, experience and apparent education in order to provide a more random sample than those who had been selected.
In the case of a woman on trial, there might be an initial panel of eight, nine or 10 men, and it can be seen among those who have not been selected one, two or three women. Surely it is right to have some means of rectifying imbalances of that kind. Where a black defendant is on trial in a racially mixed area and where the knowledge and experience of black people in that area is important, it is quite common not to have any black jurors on the initial panel but to see among the reserve jurors one or two who could be added to that jury. With the greatest respect to the noble and learned Lord, Lord Roskill, that is not distorting randomness; it is often restoring randomness and restoring a fair selection of people to exercise that right.
The second type of occasion on which a right of challenge might be exercised is where, for some reason or another, one's client or oneself believes, rightly or wrongly, that the person coming into the jury box will be unable to give a fair hearing of the case. Some people swagger into the jury box, obviously wanting to be foreman and thinking they know all the answers. Sometimes people seem to be so frightened by the whole appearance of the proceedings that one feels that they will be overwhelmed by the majority and will be unable to exercise any independent judgment. Those beliefs can be right or wrong; they are only ascertained from superficial appearances. But if the belief is correct the right of challenge will have resulted in securing a more open-minded jury. If the belief is wrong, it will still assist the fairness of the proceedings by enabling a defendant not to have to stand trial before someone
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whom he may, for good reason, feel is biased against him.
Of course, it is a rough and ready method, but I am not one of those who wish to go into more sophisticated ways of questioning jurors, as happens in the United States, in order to secure some perfect impartiality. I believe that if we do away with the right of peremptory challenge it is inevitable that there will be more challenges for cause and challenges to the array in cases where the initial panel selected conspicuously does not represent either the age balance, the racial balance or the sexual balance of the community.
I have referred to another kind of case—that in which there are many defendants on trial. I remember some years ago one case where there were 15 defendants. The present right of three challenges per defendant allows defence counsel, if they get together, to change completely the composition of the initial jury. There seems to be an anomaly in that possibility which could, and sometimes does, distort the randomness of the selection process.
If the Government proposed that in trials of between one and four defendants the present right of three peremptory challenges should remain; in trials of five or six defendants, two peremptory challenges should be allowed per defendant; and in trials of more than six, one peremptory challenge, so that in virtually no case could one completely overturn the initial panel or create a completely new panel, that would not be a grave departure from the present procedure. There would be some basis of rationality behind it. It would be dealing with those cases where it is possible to create an imbalance by the use of many challenges in a single trial.
Please, let us not throw out the whole idea of the peremptory challenge. When, with one person on trial, one sees that the first 12 of 15 people coming into the court room are unbalanced in ways I have suggested, it does conduce to confidence in the proceedings—not solely on the part of the defendant but, I suggest, society as a whole—if this very limited right to challenge three people is retained. In theory it is three, but in practice usually two because one is never quite sure what the third challenge might bring.
I pass to a second area where the balance is being shifted. I start at Clause 21 where the Government desire to widen greatly the power of the courts to receive as admissible evidence matters which are contained in documents. As I understand it—and I say this with the greatest respect to the noble and learned Lord, Lord Roskill—in Part II we are not talking of the kind of situation which he described where a bank statement emanating from the Cayman Islands could not be put in evidence, as evidence of the account, unless the person from the Cayman Islands came to court. My understanding is that that situation has already been dealt with by Parliament in the Police and Criminal Evidence Act 1984. Section 68 deals specifically with documents which form part of records compiled by people acting under a duty in circumstances where, among other things, the person who compiled the record is outside the United Kingdom and his attendance cannot practically be secured.

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This Bill introduces the possibility of documentary evidence being used as evidence of the truth of its contents without calling the maker of the document in far wider circumstances than that. Section 22 allows for statements in documents to be admissible if the document was either created or received by a person in the course of a trade or occupation. With a complaint received by the police or any other public agency—no matter how full of rumour and malice it might be—the documentary complaint could be put in evidence without calling the maker of the complaint if it was, in the opinion of the court, in the interests of justice so to do. It cannot, and should not, be left to the courts to decide whether such statements should be admitted or not.
There was to my knowledge a recent case where Mr. Justice Kenneth Jones was asked to admit statements which were hotly disputed, made to the police by people who had avoided being subpoenaed to come to court, who had escaped from the jurisdiction. He had no powers to allow that application as the law then stood. He refused it. However, the spectre was raised, and is raised by this Bill, of people being tried on the basis of documentary statements made by people who cannot be cross-examined.
I add my voice to those who are urging the Government not to go further than the provision in Clause 38 in giving power to the courts to increase sentences in specific cases. In my view, Clause 38 as it now stands would not in any way tilt the balance unfavourably against individual liberty.
I was very persuaded by the arguments of the noble and learned Lord, Lord Hailsham. I may have the freedom to go a little further than him in my comments upon the Collier case. I was very disturbed by the sentence in the Collier case. There was certainly much legitimate public concern expressed at the fact that someone who made large sums of money by insider dealing was able to retain his liberty while people who made equivalent sums by other forms of dishonesty normally do not. It was a sentence which cried out for some kind of review. However, I do not want Mr. Collier hauled back from America, or wherever he may be, in order to face the ordeal of an appeal from which he might then be sent to prison.
That situation is not right for three reasons. First, it gives far too much scope to the press not just to raise issues of public concern but to hound particular individuals until first, the Attorney-General and later the Court of Appeal are put under enormous pressure to put those individuals behind bars. If the Attorney-General and later the Court of Appeal stand out against a clamour from the media to send to jail someone who has allegedly been leniently treated they will be accused of being out of touch with public opinion. If they give way to that clamour the process of justice will not, I suggest, be enhanced by the spectre of a press campaign against an individual leading eventually to the overturning of a non-custodial sentence in favour of a custodial one.
Finally, the introduction of such a power as may be envisaged by the Home Secretary is wrong because it is unhuman. The argument was well expressed by the noble Lord, Lord Wigoder. On grounds of humanity,
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it is not just those cases where there is a successful appeal by the Attorney-General and someone who has been released goes into prison. There is the suspense felt by everybody whose case would be treated in that way.
I have seen the Continental jurisdictions at work where almost as a matter of routine public prosecutors appeal against sentences to appeal courts. There is never any finality. The person who has been through the ordeal of a trial never knows until the final appeal court what his sentence will be. I believe that we should stay with the much more rational and reasonable proposal contained at present in Clause 38 where it is possible for an issue to be considered without the emotion and pressure that would be involved in the suggested change.
References by the Attorney-General have been useful in dealing with cases where there has been a suggestion of a conviction obtained after a wrong direction in law by the judge. It is not suggested that that power should be extended into a right of a prosecution appeal against an acquittal. In the same way the Attorney-General's reference could have a limited place in considerations of sentence.
6.55 p.m.
Lord Hunt: My Lords, I rise with a sense of modest pride as a member of the Light Brigade, always on the assumption that my noble friend Lord Hutchinson in introducing this military analogy into our discussions had in mind the glorious and effective operations of riflemen fighting on their feet and brigaded as the Light Brigade in the Peninsular War and not the glorious follies of the mounted cavalry in the Crimea. I hope that my noble and learned friend Lord Roskill will assure his noble and learned friend Lord Hailsham—whom I hope I can call in a very special sense my noble friend as well—that he, representing the heavy brigade, never saw me off (if that was the expression of the noble and learned Lord, Lord Hailsham) during our years of happy co-operation and combination on the Parole Board.
I propose to comment only on Part IV of this Bill, which bears on sentencing policy, and, risking the reproaches of the Government and the Cross-Benches, on one omission in that part of the Bill. The Bill in that part is strong on retribution, and I hasten to say quite rightly so, in regard to certain prevalent and heinous crimes such as the carrying of firearms in pursuit of other crime, corruption, insider dealings, cruelty to children, and trafficking in drugs. I use the word "retribution" advisedly because I most certainly believe, in the right circumstances, that retribution is appropriate rather than a deterrent, about which I have strong doubts.
In the whole history of crime and penal policy there is quite insufficient evidence that stronger punishment in the form of very long sentences on the UK model are an effective deterrent to others. This Bill is woefully deficient in one crucial aspect of penal policy. It fails to address the most serious product of our whole prison system: the results of excessive resort to imprisonment. I do not need to expatiate on what has already been said by other Members of your Lordships' House this evening and before, and so often outside this House, about the crisis created in

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our prisons. That is due in no small measure to our penal policy, to the appalling conditions in our local prisons and remand centres as a result of gross overcrowding—about which I can speak with some authority—and to the resultant prolonged detention of numerous untried prisoners in police cells.
All these have been mentioned this evening. The nation has had enough warning from a number of prison riots and lesser disturbances, from the statements of prison governors and staff, from many bodies and individuals who are closely informed about the situation, and not least by the chief inspector of prisons in all five of his annual reports to date. Recently I have made a number of prison visits with colleagues on the All-Party Penal Affairs Group. We asked one prison governor at the end of one of those visits what improvement in the service he would most like to see made. His answer came out immediately. There are Members of your Lordships' House present who can confirm that. It was: "Keep more offenders out of prison. Shorten the time they spend inside".
There is really no excuse for the Government to ignore all this testimony. I am very glad that the noble Lord, Lord Mishcon, dealt so effectively with the subject during his address on the gracious Speech. I was glad to hear the most reverend Primate take a strong moral stand about it recently when he was talking on this subject. It is deplorable that the Government should be reluctant—in fact, I am looking at the noble Earl and challenging him—to display the necessary political courage to tackle it in the way it should be tackled.
The Government are not afraid to risk public displeasure on other policy matters, so why not on this one? It is not good enough for Ministers to fall back on public emotion stirred up by the press, nor on the well-accepted fact that the judiciary is independent from the executive and legislature, and should be, and simply to go on building more and more prisons at vast public expense. It costs between £250 and £350 per week per prisoner to keep pace with the decisions of the courts.
Given that the perpetrators of a great range of lesser offences comprise the majorty of inmates of our prisons; given that imprisonment for most of them is not only ineffective, as the noble and learned Lord, Lord Elwyn-Jones, has said, but counterproductive as the noble Lord, Lord Elton, also said; and given the logjam in our local prisons created by ignoring these facts, it surely is the duty of any government—I am not only pointing at this one—to have the courage to change course, even at the cost of some public popularity, and to amend the law so as drastically to reduce the maxima for most prison sentences (I do not say all but most) and to extend the range of offences which are not imprisonable while at the same time making more provision for measures to deal with offenders within the community. The noble Lord, Lord Elton, gave a very good example when talking about intermediate treatment, about which he and I know a great deal and on which we are totally in agreement. Incidentally those measures taken within the community would cost far less to the community at large.
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I shall not expand on all this. It has been said so many times with so little effect that I anticipate that amendments to the Bill will be moved designed to reduce resort to imprisonment and the length of prison sentences. From these Benches I shall not spell them out now but we shall gladly support amendments to the same end from whatever quarter of your Lordships' House they may come.
In conclusion, I hope that the noble Earl will not only have listened—which he has most assiduously throughout this debate— but will heed what has been said about the need for a radical rethink of our penal policy, bearing on imprisonment, and consider sympathetically amendments to that end which will be put to your Lordships' House.
7.4 p.m.
Lord Benson: My Lords, the tentacles of this Bill are widely spread, but I wish to speak to only a small part of it. I had the privilege of being a member of the Roskill Committee. I am pleased to observe that some of the recommendations made by that commitee have been incorporated in the Bill. If they are carried into effect they will help to streamline the criminal procedures of this country and to bring them towards the present century. The effects will be three in number in that area of the Bill. The first effect will be to enable documentary evidence to be brought before the court much more readily than has been the case in the past. This will help the cause of justice and save a great deal of time and cost.
The second effect is that instead of dragging evidence out word by word and sentence by sentence orally, rather like the plucking of Sir Winston Churchill's porcupine, quill by quill, it will at last be possible to present evidence to the court and the jury by modern methods. This means that there will be available experts' written reports, charts, diagrams, summaries, glossaries, videos, overhead projectors and all the modern equipment which is necessary if it is to be possible to explain to a jury and to a court how complex fraud cases were committed, where the crime took place, and to help them to remember the basic facts on which they will have to make a decision.
The third effect will be to make it much more simple to make evidence available from abroad. In the past the prohibitive cost of bringing witnesses to this country, the objections to their coming and the refusal to come were great impediments. When the provisions of the Bill come into force in this respect it should ease that position a great deal.
If the Bill is put into force in this form together with the Criminal Justice Act there will be wide implications. I do not think it has been recognised yet in this country that serious fraud is a prosperous industry and it is a growth industry. Particular steps are necessary to deal with it. Three administrative matters will have to be taken in hand. First, our criminal procedures will have to be tightened. Secondly, judges, barristers and solicitors will need an intensive period of training in commercial matters and in the preparation and presentation of cases. Thirdly, the judges allocated to these cases will require to have special qualities. It would be pleasing if we could have some assurance that the radical

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changes in administrative procedure which are necessary will be brought into force so that the effect of the Act and this Bill can be made to apply properly.
It was also pleasing to observe that the right of peremptory challenge is, I hope, to be abandoned. The law is slow to change. Some might even feel that it is sometimes reluctant to change. This particular right is shrouded in cobwebs. It dates from the time when an accused person had no right to be represented by counsel and when he himself was unable to give evidence on his own behalf. It began with the accused person being allowed to have 35 peremptory challenges. In the year 1509 that was reduced to 20. In 1974 it was reduced to 7. In 1977 it was reduced to three; so that in accordance with the long tradition of the law progress has been slow, but some at least might feel that it has been steady.
We examined this matter with great care on the Roskill Committee and we found after looking at all the facts that this right of peremptory challenge can be and sometimes is abused. We looked at all the other factors and came to the conclusion that it was time to abolish it. I have no wish to argue the point now. I am merely expressing a wish that when we come to the Committee stage Clause 107 will not be tampered with so that one more anachronism can be exterminated from our criminal proceedings.
I conclude by saying that I hope the Bill and the other measures which are necessary to bring our procedures up to date will be pursued with all dispatch.
7.10 p.m.
Baroness Macleod of Borve: My Lords, the hour is late. Unfortunately I was not able to take part in the first of the Second Readings of the Bill. Perhaps I may begin, and I shall be brief, by thanking my noble friend Lord Caithness for so lucidly explaining the Bill to us. It is one of the most difficult and wide-ranging Bills to come before your Lordships for some time. It is also one of the most important. I shall not be long but there are one or two points which I should like to take up. I hope that I shall not be treading on anybody's toes.
As the noble Lord, Lord Benson, has said, it is very important that the right of peremptory challenge should be done away with. However, having sat with Crown Court judges, I would make one stipulation. It should be beyond all doubt that every member of the jury understands the language which is spoken in the court. This is by no means always so and when some years ago it was suggested that the oath should be done away with I thought it was the worst thing that could possibly happen. If one is sitting on the Bench and one can hear a juror read an oath rather than repeat it, one at least knows that he has some semblance of knowledge of the English language or the language in which the court is being conducted.
I agree most sincerely with what the noble Lord, Lord Wigoder, said about Clause 38. When we come to the Committee stage we shall once again have a long argument on Clause 38. I am a dove on the issue and I shall have an opportunity to speak on it at
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Committee stage. It is interesting that only two cases which might possibly have come before the Attorney-General under Clause 38 have been mentioned today. Those were both well known cases but I submit that the media are very much responsible for whipping up the public's sympathy and support. Perhaps the media had nothing else to write about at that time. I was asked by the BBC to comment on the judges ruling. I absolutely refused because I had not been in court and nor had I read verbatim what has been said in court. I therefore felt that I could not possibly take part. In any case, as a humble magistrate, I would never criticise a judge.
Clause 30 deals with children's evidence, and the noble Lord, Lord Hutchinson, and my noble friend Lady Faithfull were particularly helpful on this. As a former chairman of a large and difficult juvenile court I realise that children frequently experience great difficulty in being brought into a large room where they have never been before. When we are talking about these particularly difficult circumstances I feel that the Government are on the right track. I wonder whether one could make more use than is perhaps envisaged of one-way mirrors which would enable people to see what was going on in the next room without the child being aware of it.
With regard to Clause 39, I warmly welcome life imprisonment as a maximum for possessing firearms or carrying them with criminal intent. If a man goes out carrying a firearm and he is then arrested, it is likely that he thought to himself when he went out, "I might need a firearm either in my defence or to attack somebody". If he is arrested for carrying a firearm with intent, part of the deterrent is that he might be sent to prison for life.
Clause 40 increases the maximum sentence for the offence of cruelty to children. I also agree with the idea of a single placement for juvenile offenders. Over the years it has been very difficult to know where a juvenile offender might fit in best serving a sentence away from his home. It would be an enormous help to have one well regulated and well organised placement. I have been asked by the Magistrates Association to assure the Government that magistrates will comply with Clauses 32, 33 and 34 to the best of their ability, which means that at least common assault and battery will be triable at the magistrates' court. I agree with my noble friend Lord Elton that petty theft should be included in this provision.
I am sure that, like me, noble Lords who have had the doubtful privilege of trying to administer justice in the fairest possible way have asked themselves, "What is a deterrent? What deters people?" When I was on the Parole Board I felt sincerely that if an eye for an eye had been a possibility it would certainly have deterred many of those who took other people's lives. I came to the conclusion that the greatest deterrent was the loss of liberty and being cut off from the outside world.
I proved I was right only once in all my many years of trying to adjudicate. I put a child into a remand home for three weeks because I wanted reports on his home conditions. This procedure is frequently used, as your Lordships will know. I remember the boy very well. I said "Billy, how did you manage the last

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21 days on remand?". He said "Oh, very well thank you, Miss, it was a lovely place. We had a beautiful swimming pool and lots to do. It was lovely". I asked, "You're telling me that you really enjoyed being on remand?" He replied, "Oh no, Miss, I didn't enjoy it at all". "Why not?" I asked. "I missed Mum's cooking", was the reply. Whether missing Mum's cooking will be a deterrent to a child in the future I do not know, but taking someone away from home and putting him in prison behind walls is one of the things that one could perhaps think about. I warmly support the Bill.
7.20 p.m.
Lord Monson: My Lords, after so many compelling, fluent, and indeed brilliant legal expositions this afternoon, any layman who rises to his feet must do so with some trepidation. Perhaps I may start by congratulating the noble Earl, Lord Caithness, for his clear exposition of this lengthy and wide-ranging Bill. Leaving aside the obvious need to scrutinise in great detail something which is so comprehensive, a number of major changes are proposed in the Bill, some of which are clearly going to be fiercely contested; so we are demonstrably in for a long, hot autumn, in this Chamber at any rate.
Parts of the Bill are virtually non-controversial and, as such, can be warmly welcomed. One thinks of Parts II, III, VI and IX dealing with evidence, compensation, and probation respectively. Some other parts of the Bill I shall reserve judgment upon for the time being. However, I should like tentatively to dip my oar into the controversy inevitably surrounding Clause 107, which provides for the abolition of the right of the defence to challenge jurors.
It may be worth pointing out, despite all the evidence to the contrary this afternoon, that this is not strictly a party political matter. Indeed, one of the most powerful speeches opposing abolition made in another place earlier this year was the speech of the honourable and learned Member for Burton, who is of course a Conservative. As a blundering layman, I wonder whether a compromise solution might not only be possible but positively desirable as the best option.
Suppose that defence counsel were limited to making only one or possibly two peremptory challenges, instead of three as at present, for an experimental period of, say, two years. If this were to produce a marked improvement from the point of view of the administration of justice, then the arrangement could be made permanent. If, on the other hand, it failed to produce the desired effect then the Government could proceed to abolish the peremptory challenge in its entirety. This cautious style, this experimental step-by-step approach, is after all the way in which this Government have carried out their trade union reforms so successfully.
Having got this excursion into Part VII off my chest I should like to concentrate on Part IV, which deals mainly with sentencing policy. Some of the proposed changes are logical, modest and non-controversial: for example, Clause 50, which increases the maximum fine for the illegal burning of crop residues other than straw or stubble. But some
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of the other proposed changes do not seem so logical and are certainly less modest. For example, in Clause 32 the maximum sentence for taking another person's motor car is reduced to only 16⅔ per cent. of the previous maximum, while also in this clause and in Clause 33 the sanctions against driving while disqualified, or causing up to £2,000 worth of criminal damage, are effectively and substantially reduced. In sharp contrast the maximum penalties in Clauses 40, 41, and 42 are raised by a staggering three and a half to five times.
There is no real evidence that the first group of offences are becoming less prevalent or the second more so, despite the current transient media obsession with the latter group. Nor, with one exception, is there any correlation between the reduced or increased maxima for these offences and the degree of individual suffering caused to the victims. Taking and in the process quite possibly wrecking somebody's new car, smashing up a person's house or driving while disqalified and hence uninsured and then knocking somebody down surely causes more individual suffering than does insider trading.
The one exception is Clause 40, which covers that aspect of child cruelty which does not involve physical violence, because physical violence is already covered by other statutes. Without a doubt two years must be too low a maximum for such an offence and some increase is clearly necessary, yet are not most of the perpetrators of such crimes educationally subnormal if not actually mentally defective? If so, one wonders whether 10 years—six years and eight months with full remission—in a conventional prison is the appropriate sentence.
As to Clauses 41 and 42 surely the right response to white-collar crime, other than white-collar crime which causes enormous loss and suffering to individuals—for example, the Cameron-Webb and Norton Warburg swindles—is not long and hence costly prison sentences, but massive fines combined with a short, sharp non-suspended custodial sentence. Anything else must be wasteful and unnecessary.
As to the extraordinary proposal in Clause 39 that the maximum sentence for carrying but not using a gun should be exactly the same as that for killing somebody with that gun, a more powerful incentive for criminals to shoot their way out of trouble could hardly be imagined. The noble Lord, Lord Harris of Greenwich, who I see is not here today, powerfully argued against this last time round, and no doubt we shall return to it with a vengence at Committee stage.
Suspicious people—among whom, of course, I am not numbered—might be forgiven for wondering whether all these astronomically higher maximum sentences not only in this Bill but in much other legislation passed since 1979 may not be wholly unmotivated by populist considerations; in other words, that the Government are essentially trying to show how macho they are, to demonstrate that "something (with a capital S) is being done (with a capital D)".
In fact these sharply higher maxima—I do not object to some increase—to the limited extent that they are actually utilised contribute to the present

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severe prison overcrowding to which the noble and learned Lord, Lord Elwyn-Jones, referred while seemingly doing little, if anything, to reduce the present crime wave. The noble Lord, Lord Wigoder, made the point much better than I can.
I very much agree with the noble Lord, Lord Elton, that we ought to be looking to alternatives to long prison sentences. There are many interesting innovations being tried out in the United States at this moment. Your Lordships may have read within the last 48 hours of an American slum property owner who has just been sentenced to spend 30 days in one of his rat-infested apartments. That is a far better, and cheaper, punishment, one would have thought, than sending him to prison.
This brings me to one of the few regrettable omissions from this Bill. There may be legitimate differences of opinion over the desirability of longer prison sentences for people convicted of causing death by reckless—and I stress reckless rather than careless—driving, if only because of prison overcrowding. But surely nobody would dispute that people, whether they be drunk, drugged or sober, who kill other road users by driving recklessly ought to be kept off the roads for a very long time indeed.
Bearing in mind that the principle of a minimum disqualification period is already well established by earlier legislation, I intend to move an amendment at a later stage—assuming this Bill is given a Second Reading—to provide for a longer minimum period of disqualification, which I hope will be acceptable to the Government, and if not to the Government then possibly to the House as a whole. I know that there will be plenty of support in another place for such a move. In particular the honourable Member for South Staffordshire, Mr. Patrick Cormack, feels just as strongly as I do on this subject.
There is another omission from the Bill which ought to be rectified. Three years ago there was strong and on occasion passionate opposition in all quarters of your Lordships' House to some of the intimate search powers conferred on the police by what has now become the Police and Criminal Evidence Act 1984. As a result of your Lordships' protestations police powers in the matter of intimate searches were whittled down and a good many useful safeguards were introduced. However, all this time, unbeknown to most of us I suspect, Her Majesty's Customs and Excise were carrying out intimate searches on an enormous scale and strip searches falling short of intimate ones on a more massive scale still. The great majority of those subjected to this humiliation, discomfort and, in some cases, danger were found to be wholly innocent of any crime. Your Lordships may have recently read of the Customs officer who threatened intimately to search a baby if the baby's mother refused to be searched intimately. I hope that your Lordships will agree that those abuses must be curbed and that more stringent safeguards and monitoring must be introduced.
There is one final omission from the Bill which may be worth mentioning, even if by its very nature it is incapable of being formally included in the Bill. It seems to me that over the past few decades the
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Continental doctrine of the crime passionnel has insidiously crept in to English law, in practice if not in principle. All kinds of killings which 15, 20, 30 or 40 years ago would have resulted in a murder charge and probably a murder conviction now result in a manslaughter conviction, either because that is all that the accused are initially charged with or because juries refuse to convict for murder and instead bring in a verdict of manslaughter. This is despite the abolition of capital punishment many years ago. The sentences subsequently imposed are often, if not always, surprisingly low. I am talking not only of crimes of sexual jealousy but also those which arise from boundary disputes, the worrying of livestock by dogs, the reactions of children against domineering parents and so on.
This major development may be a good thing, or a bad thing: I for one cannot make up my mind. However, it seems strange that it has occurred without any parliamentary debate, without any debate in the press, as far as I know, and without any public debate. It is curious to think that if Ruth Ellis had been born 30 years later and had done today exactly what she did 30-odd years ago, far from being hanged she would probably spend no more than three or four years actually in prison, the majority of that time quite possibly in an open prison.
With the sanctity of human life in mind, one cannot help wondering if perhaps we have swung from an unacceptably harsh extreme—and the execution of Ruth Ellis was certainly an unacceptably harsh extreme—to an unacceptably lenient extreme—unacceptably lenient for the purpose of restraining or discouraging people from giving violent physical and sometimes fatal expression to the passions, tensions, frustrations and resentments that we all feel from time to time.
7.33 p.m
Viscount Brentford: My Lords, I welcome the Bill, although I am intrigued by the fact that the planners of the programme decided that we should discuss prisons on Bastille Day. I am not quite sure of the implication of that.
I should like to emphasise what the Minister said in his opening. As I see it, this is a Bill not to eradicate crime but to improve the workings of justice in criminal matters. It is important that we should arrange matters so that the general public will be able to see more clearly that justice is being done in criminal cases. I therefore particularly welcome the confiscation provisions of Part V, together with the stiffening of financial penalties. All too often financial penalties are so small as to be irrelevant. I hope that these increases are going far enough in the right direction.
I agree with the wording of Clause 39 in respect of the carrying of firearms. In the light of the arguments made that it is wrong that the same penalty of life imprisonment is imposed for carrying or for using a firearm, it seems to me that the person carrying the firearm will not be scrutinising Clause 39 while he is doing so, but will have a gut reaction that the penalty will be worse if he uses it than if he does not. I believe that the extra flexibility which this clause gives to the judge is well worth while.

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I should also like to endorse the point made by my noble friend Lord Elton, and upon which other noble Lords commented in relation to taking further steps to cut back the jam in the Crown Courts. He suggested making petty theft a summary offence, and if that could be considered it would be advantageous. He also said that there could be more scope for intermediate treatment. I firmly believe, particularly in the case of young offenders, that if they find somebody who will care for them and show that, it may make all the difference between an individual living a life of crime and not doing so. The more the Government can do to encourage that the better.
Finally, I am unhappy with a few words in Schedule 8, which removes the protection of the City of London probation service. It is an effective, efficient and economic service for the community. I hope that the Minister will reconsider paragraph 2(b) of the schedule and perhaps delete it.
7.36 p.m.
Lord Mishcon: My Lords, I was denied the pleasure of listening to the opening speech of the noble Earl, and also to subsequent speeches, until that which was made by the noble and learned Lord, Lord Hailsham. I should like to apologise to the Minister, who knows that I was engaged on certain professional matters. I know that your Lordships will also accept my apology.
I had the pleasure of listening to the speech of the noble and learned Lord, Lord Hailsham. He seems to me to have been completely rejuvenated, and some 10 or 15 years seem to have been taken off his age since gracing the Privy Council Bench. The noble and learned Lord made a spirited defence, as one would expect, in regard to a certain position relating to a clause that, without any doubt, is one of the most important and controversial in the Bill that we are now discussing.
I am glad that the noble and learned Lord, Lord Denning, is back in his place. If we are to be guided by the views of the noble and learned Lords in our midst, we shall find ourselves in some difficulty in obtaining a constant view as to what will be achieved by Clause 38, and the old Clause 29, or any amendment to it. I noticed that on this occasion the noble and learned Lord, Lord Denning, said that he had listened to the speeches from the Front Bench of the Alliance Party and to the somewhat more spirited speech of the noble Lord, Lord Hutchinson, from the Back Bench of the Alliance Party. He said that he had listened and agreed with them until the noble and learned Lord, Lord Hailsham, spoke, but suddenly changed his mind as a result of that speech.
I happen to have a memory of the speech made by the noble and learned Lord, Lord Denning, on the Second Reading of this Bill during the last Session. On that occasion he said:
"on balance and in order to keep the confidence of the public in the administration of justice in the face of attacks by the media, I have changed my mind and now think, as does the Lord Chief Justice, that there should be a right of appeal".—[Official Report, 27/4/87; col. 1324.]
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On another occasion when he graced your Lordships' House with a speech he said, at col. 1322 of Hansard on 27th April:
"I must say that like my noble and learned friend Lord Ackner I have altered my mind about the question of appeals by the prosecution when it is said that too lenient a sentence has been passed".
I hope that at the Committee stage when my noble and learned friend Lord Elwyn-Jones and I address your Lordships—I much more humbly than my noble and learned friend—the noble and learned Lord may change his mind for a third time. Then of course, if I may say so, we shall have a conclusion devoutly to be respected. It suddenly occurred to me that I know in our legal history we have had somebody who was called the hanging judge. The noble, learned and merciful Lord, Lord Denning, could never have that title but he is in danger of having the title of the swinging judge.
Clause 38 and the old Clause 29 have not been looked upon with the greatest of favour by the noble and learned Lords who sit in your Lordships' House, and deservedly so, in a judicial capacity and indeed by those who have sat in that capacity and who sit in your Lordships' House to guide us. They have been dealt with very trenchantly in the past.
If I may turn again to the Second Reading of the Bill in your Lordships' House in the previous Session, looking at col. 1295 the noble and learned Lord, Lord Lane, a very respected Lord Chief Justice, said:
"The present Clause 29 has the inestimable disadvantage of providing the worst of both worlds. It will draw attention to faults without remedying them".
The noble and learned Lord, Lord Ackner, also referring to this clause, said at col. 1207:
"I shall spend little time on the merits of Clause 29 because I cannot find them. It is a hollow, empty clause".
So the clause which reproduces Clause 29 in the present Bill—namely, Clause 38—seems to have incurred a great amount of judicial disfavour, if I may put it that way. One obviously asks: is there any necessity at all to change a situation which seems to have gone on for quite a few centuries without too much trouble? As I understand it the Minister did not regard as a terribly serious or frequent problem too lenient sentences being given by our judges. I believe I am correctly quoting him. I have a note of what he said although I did not have the privilege of hearing him. He said:
"Sentencing is a difficult and sensitive task and it is a tribute to them [referring to the judges] that the vast majority of sentences accord very well with the expectations of the public. The problem is that from time to time in a serious case where public emotions are understandably engaged, a sentence is passed which arouses widespread concern".
Is it really necessary to alter that old tradition and have an entirely new situation about the power of the Court of Appeal to increase sentences in individual cases purely because of the odd case that might turn up where indeed the media, the public or the Attorney-General think that too lenient a sentence has been imposed?
If we had example after example of inconsistent sentences, I should be moved to say that the consideration of this House ought to be given after all this length of time to an alteration; but as I understand it in your Lordships' debate two cases in

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recent history, and two cases only, have been brought to your Lordships' attention. Indeed, if I remember correctly the part of the debate I had the privilege of hearing, in one case it was said, "Ah, yes, the sentence might well have been right and everyone would have thought it right if you look at the consecutive sentence that was given—a total of 10 years—and you do not look at the individual sentences that were given".
In regard to the other case, which if I may say so respectfully also caused me some concern—that of Collier—I wonder whether the learned judge had in mind, rightly or wrongly—but nevertheless it is a very reasonable thought—that insider trading was not a criminal offence in this country until a matter of a year ago when with some pride from our Benches here, and supported throughout the House, we said it was about time that it was made a criminal offence; and indeed it has been made a criminal offence. He might well have thought: "This is something which has gone on for years, where people have made dishonest fortunes out of insider trading and here is the first man who has come before the court convicted of what was not previously a crime. I wonder whether he ought to be sent to prison or whether he should have a suspended sentence".
Your Lordships may not agree with the conclusion that was reached but I hope your Lordships will be reasonable enough to say in your own minds that that was not a completely unreasonable thought for the learned judge to have. So we are in no crisis whatsoever but are merely tantalisingly—as on occasions it must be for many judges—the victims of so many editorials and headlines in the national press, which talk about unreasonable and wrong sentences without, as the noble Baroness, Lady Macleod, said so rightly, having been present in court in many or nearly all of the cases, to see the demeanour of the defendant, to hear the evidence and to hear the plea in mitigation.
Is it right that in throwing aside the old Clause 29, which is Clause 38 in the new Bill, we introduce for the first time—and this to me is the most powerful argument of all—the dreadful sword of Damocles hanging over a defendant's head? He has had his case tried. He may have been honourable enough to plead guilty and someone has pleaded in mitigation on his behalf. The judge has said, "I am not going to send you to prison" and he has gone back home, hopefully to say, "I can go back to work and make a new start". But some lawyer has got to say to him, "Be careful: you may not be able to tell your employer that, you know. The prosecution may appeal against the sentence and you may be sent to prison". And is there not another thought that ought to be in ourminds?—
Lord Hailsham of Saint Marylebone: My Lords, that is not in Clause 38 as it stands. The noble Lord is fantasising about what is in Clause 38.
Lord Mishcon:: My Lords, I thought I had made it clear—though possibly not to the noble and learned Lord, for which I apologise—that I was finished with Clause 29 and Clause 38 with the remarks that had
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been made by his colleagues, the noble and learned Lords who have spoken, that it is not even worth criticising because it is such nonsense that it achieves no end at all. I was dealing with the alternative—and I said it quite clearly—that if you set aside Clause 29 or Clause 38 and you put as an alternative the power of the Court of Appeal to increase sentences in individual cases, are you not doing something terribly wrong in the face of a problem which is almost non-existent?
I was going on to ask whether that is the tradition that we want. I am not moved by the fact that other courts do things differently in other countries. I well remember addressing the noble and learned Lord, Lord Hailsham of Saint Marylebone, when he sat in his exalted place—and we shall always think of him as sitting there. I tried awfully hard to prove to him that there was something much more sensible north of the Border than there was south of the Border in our own land. He reprimanded me and said that Scots law was one thing and English law another and that our experiences were very different. On that occasion I thought that he was not very much in favour of Scots law. I shall not necessarily be moved by what happens in Canada, New Zealand or elsewhere. I am content with our own great tradition which people throughout the world have regarded as the leading tradition in the cause of justice.
With that in mind, I turn to the judge. One can imagine him, moved by various humane considerations, saying to himself, "I do not think that I shall send this man to one of our overcrowded prisons, and that for more than one reason. Mind you, if I don't give him at least a short sentence, I have an idea that in a case of this kind the prosecution will appeal. I don't want an appeal for the sake of this man and possibly for my own credit as a judge. I had better give him a short sentence of imprisonment". Is that what is wanted?
Perhaps I may finish the point with one more thought. Are we really possessed of judges who are not capable of observing guidelines? During the course of this debate it has been suggested that before sentence is passed prosecuting counsel should have the right to refer the judge to the guidelines that exist. I say amen to that, and I believe that my noble and learned friend, Lord Elwyn-Jones, in the light of his vast experience will also say amen. In those circumstances what is the problem and what are we talking about?
I turn very briefly, because it is late and in a winding-up speech one ought to have some consideration for the Minister who is to reply, to the issue of peremptory challenge. I add only one thought which I do not believe has been expressed; and if it has been mentioned I am sorry not to have had the privilege of hearing it. It is that very often embarrassment results from having to challenge for cause.
It has been mentioned many times in the course of this debate that the defendant may think that he will be unfairly tried by a jury. It seems to me wrong that if I am white there should be seven members of the jury who are black and if I am a defendant who is black that there should be nine members of the jury

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who are white and only three who are black. 1 do not know why it is wrong, but so it seems. It takes a great deal of courage and may even cause the greatest embarrassment to the challenger, quite apart from the person who is the recipient at the end of the challenge, to have to say, "I am objecting to the jury consisting of so many black and so many white people". Is that the way to improve race relations in this country? Should we not rather keep the right of peremptory challenge and not have to give the cause for challenge?
Before I sit down I should like to make one final observation. The House always listens with great respect to the noble Lord, Lord Benson, especially when he talks with such distinction about matters of fraud. He has sat on many government committees and we listened to him tonight with great respect. The serious fraud squad is a very necessary element in our criminal administration. In the main we were happy to support that part of the Bill which dealt with fraud and which was passed as an Act during the previous Session.
I made a plea then to the Government and I repeat it now: do not make the same mistake as was made when the very desirable prosecution service was set up. If one wants really experienced people who are able to deal with serious fraud investigations, pay proper salaries to retain them so that they do not use the service as a training ground possibly for subsequent practice in my own profession or entry into accountancy, in order to earn very much more.
There are many parts of this Bill that deserve the favour of the House. I hope that I shall not be misunderstood in drawing attention to those parts of the Bill which ought not to meet with favour in this House.
Lord Campbell of Alloway: My Lords, before the noble Lord sits down, perhaps your Lordships will allow me to say a few words. I think that on one aspect quite inadvertently the noble Lord was not quite fair to the noble and learned Lord, Lord Ackner, who is not in his place. The noble and learned Lord, Lord Ackner, suggested only that if the judge wanted assistance he might ask counsel to provide him with a reference to the guidelines. He went no further than that. In case the noble Lord, Lord Mishcon, thought that he went further, in fairness to the noble and learned Lord I thought it was right for me to rise.
Lord Mishcon: My Lords, I am most grateful to the noble Lord, Lord Campbell of Alloway. The noble and learned Lord, Lord Ackner, is the last person in the world to whom I should want to be unfair. I did not refer to him in my speech. When I mentioned guidelines being brought to the attention of the judge by prosecuting counsel, I spoke in favour of it and said that I personally support it. I thought—and happily I had a word of assent from behind me—that my noble and learned friend Lord Elwyn-Jones, with his vast experience, would also support it.
7.57 p.m.
The Earl of Caithness: My Lords, any fears that may have arisen that this debate, coming so soon
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after the Second Reading debate on the earlier Bill, would not match the distinction of its predecessor have been dispelled by experience. It has been a fresh, lively and thought-provoking debate and I am grateful to all noble Lords who have participated. I am grateful not least for the willingness of many of those who have spoken to respond to the comments that I made in my opening speech about those matters on which our minds are not yet fully made up. It has been immensely useful to me, and I know it will help my right honourable friend the Home Secretary, to have the views of so many Members of this House.
Perhaps I may deal first with the subject that has most diverted our attention this afternoon; namely, the reference to the Court of Appeal of unduly lenient sentences. That matter is dealt with in Clause 38 of the new Bill. I have listened with great care to everything that has been said today about the treatment of lenient sentences. There has been a powerful and memorable speech in defence of Clause 38 as it stands from my noble and learned friend Lord Hailsham, who was ably supported by the noble Lord, Lord Gifford. The noble and learned Lords, Lord Ackner, Lord Roskill and Lord Denning, and my noble friend Lord Campbell of Alloway have made eloquent speeches in favour of a power for the Court of Appeal to increase sentences.
The noble and learned Lord, Lord Elwyn-Jones, and the noble Lords, Lord Wigoder, Lord Hutchinson of Lullington and Lord Mishcon, have expressed misgivings. They were supported by my noble friend Lady Macleod of Borve. Of course we have to take those misgivings seriously.
I set out the Government's present position at the beginning of the debate and noble Lords will not expect me to respond in detail to the arguments that have been put forward, even if there were time to do so. I shall simply respond in particular to the comments made by the noble Lords, Lord Wigoder and Lord Mishcon. The noble Lord, Lord Wigoder, asked bluntly whether there really was a problem. My right honourable friend and I are in no doubt that there is, not in the sense that many sentences are unduly lenient but, as my noble and learned friend Lord Hailsham of Saint Marylebone said, because the absence of any remedy whatever when something goes wrong does great damage to public confidence.
I turn now to a subject which receives my daily attention; namely, prisons. Several of your Lordships—the noble and learned Lord, Lord Elwyn Jones, supported by others—referred to the difficulties with which we are now faced due to the rising prison population. Your Lordships will not expect me to go into detail; nor do I wish to comment on recent press speculation. However, I assure your Lordships that my right honourable friend and I are keeping the matter under close review. In the short term, our efforts have been concentrated on making best use of the existing prison estate, where necessary by changing the functions of establishments so as to improve the match between the accommodation available and the composition of the prison population. In addition, the building programme progresses. As my noble friend Lord Elton said, five new prisons will be available in the next year.

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For the longer term, I agree with much of what my noble friend Lord Elton, in particular, said today about the importance of developing and encouraging the use of satisfactory alternatives to custody. The intermediate treatment schemes supported by the DHSS have great achievements to their credit in dealing with juveniles; so, too—lest my noble friend's comments be interpreted otherwise, as I am sure he would not wish—do the various schemes that the probation service has developed for older offenders.
My right honourable friend and I deeply regret the need to hold some prisoners in police cells. We readily accept that these are inadequate for prolonged detention of prisoners. I am conscious that prisoners held in police cells do not receive the full range of facilities to which they would be entitled in prison although I am aware that the police are doing everything possible in most difficult circumstances to provide the best conditions they can. The need to hold prisoners in police cells is a direct consequence of the steady rise in the prison population, especially in the South-East. Of the 1986 average prison population of nearly 47,000, 8,500 were untried prisoners. Their number has more than doubled over five years because 40 per cent. more people spend some time in custody before trial: on average, they spend 50 per cent. longer there. Since 1980 the average period in custody for males has risen from 36 to 57 days.
A major factor in this increase is the high proportion of business taken in the Crown Court. Between 1979 and 1985 the number of cases coming before the Crown Court generally rose by as much as 65 per cent. The rate of committals for trial disposed of per day has risen from 0·8 in 1979 to 1·2 in 1986 and average waiting times between committal and trial have been reduced in this period. It was there that I thought the suggestion of my noble friend Lord Elton backed up by my noble friends Lady Macleod of Borve and Lord Brentford, about taking petty crime out of the Crown Court into the magistrates' court might help to ease some of the backlog. I noticed that the noble Lord, Lord Wigoder, shook his head in disgust.
Lord Wigoder: No!;
The Earl of Caithness: If the Crown Court is under such pressure, what one can try to do to alleviate that without impairing our system of justice must be considered. The point raised by my noble friend I should like to discuss with my right honourable friend the Home Secretary.
As I said in debate on the earlier Bill, I cannot accept my noble friend Lady Faithfull's argument that the widening of the range of sanctions for breach of the requirements of a supervision order as proposed in Clause 113 would lead to greater use of custody for young offenders. The power to re-sentence will be available only in relation to a narrow category of supervision orders used directly as an alternative.
The noble Lord, Lord Hutchinson of Lullington, was under a misapprehension about the scope of the power. It would not apply to education requirements;
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so his reference to the incarceration of truanting children, colourful as it was, is somewhat wide of the mark. The present sanctions are indeed inadequate. We hope that by providing wider sanctions we may encourage the courts to make greater use of supervision as an alternative to custody. That is something that we all ought to applaud where it is appropriate.
The noble and learned Lord, Lord Elwyn-Jones, raised the possibility of a supervised release scheme. The idea of a scheme along the lines of that described by the noble and learned Lord, was, as he knows, considered by the Government in 1981 but not then taken forward. We decided instead to activate an existing power to impose partly suspended sentences and to reduce the minimum qualifying period for parole. But these are not matters on which our minds are irrevocably closed. They will be able to be considered in the course of the thorough review of parole to which we are committed.
Lord Elwyn-Jones: My Lords, a great deal of publicity was given to an apparent announcement of intention to give effect to those supervisory release proposals. Can the Minister not go a little further? This is beginning to sound like one of those programmes of the two civil servants. "Giving it consideration" means that he lost the file.
Lord Hailsham of Saint Marylebone: My Lords, I do not think that he lost the file!;
The Earl Caithness: My Lords, I assure the noble and learned Lord that that is not the case. It is a matter that can be properly taken into account in the parole review, promised in our manifesto.
Before leaving prisons, I was heartened by a welcome given to our thoughts on the single generic sentence for young offenders. I should like to thank particularly my noble friend Lord Elton for his kind remarks about the prison service. Whatever the difficulties and the overcrowding at present, the fact that the prison service is now holding over 3,500 prisoners more than at this time last year is a tribute to the whole of the service and, indeed, to the civil servants at headquarters. I shall gladly pass on my noble friend's remarks.
I listened with close attention to what the noble Lord, Lord Benson, the noble and learned Lord, Lord Roskill, and the noble Lords, Lord Gifford and Lord Hutchinson of Lullington, said about the Bill's proposals for readier admissibility of documentary evidence. These are matters that we can discuss in geater depth in Committee. However, there are one or two points that I might make by way of immediate reponse.
I do not believe that the proposals threaten the oral tradition on which our system of trial is based. Their purpose is to make it more likely that relevant first-hand "historic" documents, by which I mean those, like a murder victim's diary, which have not been prepared with criminal proceedings in view, and "business" documents will be capable of being received and evaluated by the court. In each case the court will have discretion to exclude particular documents if it thinks it ought to do so in the interests

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of justice. Its attention will be directed to a range of relevant factors, including any likelihood of unfairness to the accused if the document is admitted. Where the document has been prepared in connection with criminal investigations or proceedings —a statement to the police is a good example—the presumption will be against admissibility.
I believe that, taken together, these proposals strike the right balance. They will not alter the fundamental character of the English criminal trial as an occasion on which witnesses give evidence in person from their direct experience and can then be cross-examined on it. However, the proposals should allow relevant material, including the business material which, as the Roskill Committee noted, was so crucial in fraud trials, at least to be received by the court and given the weight that it deserves. I hope that the noble and learned Lord, Lord Roskill, and the noble Lord, Lord Benson, who served on the committee with him, will be present for the Committee stage to give us the benefit of their knowledge. The noble Lord, Lord Benson, welcomed another part of the Bill to make evidence from overseas easier to obtain.
On evidence, my noble friend Lady Faithfull mentioned video evidence by children. As she acknowledged, allowing evidence to be given by child witnesses by live video link is a substantial step forward. That is contained in Clause 30. The discussion paper we issued in May invites views on the admissibility in evidence of a video recording of a child. The Bill will permit such recordings to be admitted in certain circumstances as documents, and we have asked for views on whether it would be right to go further, as my noble friend suggested. We will be reflecting carefully on the comments received. I can confirm that our minds are by no means closed on this important subject.
I turn to peremptory challenge. I cannot follow the noble and learned Lord, Lord Elwyn-Jones, in his argument that the abolition of peremptory challenge would constitute the removal of an important right of defence. The noble Lord, Lord Gifford, suggested a compromise, as did the noble Lord, Lord Monson, and I should like to look at both of those when I see them in the Official Report. I accept immediately that the ability of the defence to remove jurors without giving reasons has a long history. In the early 16th century, each defendant could challenge up to 35 potential jurors. This was reduced to 20 in 1509 and in the late 19th century an attempt further to reduce it to 12 was unsuccessful. In 1948, the number of challenges was reduced from 20 to seven per defendant and in 1977 from seven to three.
These figures are in themsleves significant, because they illustrate the extent to which there has over the years been a move away from peremptory challenge as a natural part of the system of selecting jurors. In earlier times, the defendant was often on trial for his life, the jury was drawn from a very narrow section of society and—contrary to our present way of thinking—there seems to have been an assumption that the members of the jury would be personally known to the accused. Consider the position now, my Lords. The capital penalty has effectively gone. The
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privilege of jury service is open to virtually the whole adult population under 65, and in this Bill we are increasing the upper limit to 70.
We must ask ourselves in these circumstances whether it makes sense to keep peremptory challenge. We must also, I think, ask ourselves whether an instrument which is so arbitrary and uncertain in its effects is actually a protection for the defence. Times have changed and I would suggest to your Lordships' House that the reasonable expectations of the public—and indeed the accused—have changed, too. I was pleased to note that we were supported in our view by the noble and learned Lords, Lord Denning and Lord Roskill, the noble Lord, Lord Benson, and my noble friend Lady Macleod of Borve.
The noble Lord, Lord Allen of Abbeydale, raised the question of extradition to countries which retain the death penalty. This is a matter to which, as he said, much thought was given while the Bill was under consideration in another place. The Bill allows the Secretary of State to decline to extradite someone charged with a capital offence to a country which retains the death penalty. It would, in our view, be wrong to go further and preclude extradition in such cases. This would offer the real prospect of allowing those accused or even convicted of murder to go free.
I can, however, give the noble Lord the assurance which I understood him to seek. At present, our practice is to seek assurances in such cases that if the offender is extradited the death penalty will not be imposed. In response to arguments in another place, we considered whether the Bill might be amended to preclude extradition where satisfactory assurances had not been received. But the difficulty here is that the United States and one or two other countries are limited by their constitution in the sort of assurances they can give. These assurances have in practice proved satisfactory, but if the procedure were enshrined in law it is doubtful if the courts would regard them as a sufficient basis for a decision to extradite.
Various noble Lords expressed concern that the increased penalty available for carrying firearms in furtherance of crime provided by Clause 39 may weaken the deterrent against pulling the trigger. We think that that understandable fear is misplaced. Again, 1 was supported by my noble friends Lady Macleod of Borve, Lord Brentford and, indeed, the noble Lord, Lord Hunt.
The life sentence is a maximum applying only to the worst case. It may be only accident or swift police work which prevents the actual discharge of the gun and the offender may have a record of using firearms. But courts will no doubt continue their existing practice of passing longer sentences where a gun has been used and where it causes injury; and of course, for murder, life imprisonment is a mandatory penalty. Such considerations also weigh heavily with the Home Secretary and the Parole Board in authorising the release of such offenders from the long prison sentences they will receive. So there will still be a deterrent against pulling the trigger even if the criminal is carrying a gun. The proposal serves rather to increase the incentive not to carry one in the first place.

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The noble Lord, Lord Irvine of Lairg, raised the question of extradition, but as he is not in his place perhaps at this stage I may say only that I thought his maiden speech on the last occasion very much clothed what was underneath. He has shown this afternoon that he has sharpened his claymore, but my targe will be burnished when we come to Committee stage.
My noble friend Lord Campbell of Alloway referred the House once again to jury nobbling, emphasising what an extremely serious matter this is, because it strikes at the integrity of our system of criminal trial. There are few of us in this House tonight who would not agree with him. Those who try to interfere with juries commit the offence of attempting to pervert the course of justice, the penalties for which are unlimited. The law therefore seems to us to be equal to the task of dealing with jury nobbling, where it is detected. But it is by its very nature difficult to detect.
I noted that my noble friend suggested that the matter might be referred to the Law Commission. As I have said, I rather doubt whether the law itself is in need of change. I am therefore not entirely sure that there is an issue which could usefully be the subject of a reference to the Law Commission, which, as it happens, considered the matter some years ago. I should like to read exactly what my noble friend said when it appears in the Official Report. But I acknowledge the helpful spirit in which my noble friend's suggestion was made, and my right honourable friend and I will reflect upon it.
My noble friend Lord Brentford drew attention to the provision in Schedule 8 which would enable the City of London to be combined with the Inner London Probation Area. My right honourable friend the Home Secretary has received representations from the City and, following a meeting with the then Lord Mayor towards the end of last year, he asked HM Inspector of Probation to arrange for an inspection of the City of London service. My right honourable friend is considering the report arising from that inspection. My honourable friend the Minister of State will shortly be meeting the honourable Member for the City of London and Westminster South to discuss this matter, and at Committee stage we might be able to take it a stage further.
I hope that I have covered the more significant of the matters raised by your Lordships. But the debate has ranged very widely and, if I have failed to pick up any particular points which seem to call for a reply, I shall try to do so in a letter. Although there are clearly several issues on which conflicting views are strongly held in different parts of your Lordships' House, I am encouraged by the degree of support which the debate has shown for so much of what we are trying to achieve.
As I said in opening the debate, the Bill is, I believe, a hard-headed attempt to identify and correct weaknesses in the law as it stands. The improvements it makes are real and should sharpen our efforts to tackle crime and improve the position of those who suffer as victims at the hands of criminals. I am sure
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that the constructive spirit that has informed our debate today will be present when in Committee in the autumn we go into the provisions of the Bill in greater detail. For my part, I very much look forward to doing so and I ask your Lordships with confidence to grant the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Consolidated Fund (Appropriation) Bill
Brought from the Commons, endorsed with the certificate from the Speaker that the Bill is a Money Bill; read a first time.

Electricity Supply(Amendment) (Northern Ireland) Order 1987
8.18 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland (Lord Lyell): My Lords, I beg to move, That the draft order laid before the House on 30th June 1987 be approved. The order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974.
As your Lordships will be aware, the future ownership of the electricity industry in Great Britain has recently become a matter of wide public debate. We as a party recognise the benefits of private enterprise and are fully committed to privatisation of the industry, and your Lordships will be aware that my right honourable friend the Secretary of State for Energy is taking this matter forward with all possible speed. But I have to tell your Lordships that there is no connection between the Government's new initiative in Great Britain and the draft order that we have before us this evening. Rather the draft order has two quite distinct purposes.
First, we hope that it will facilitate the private generation of electricity in Northern Ireland. Its second distinct purpose is to effect a number of amendments to the Electricity Supply (Northern Ireland) Order 1972 which have become necessary since it was made. As your Lordships will appreciate, 15 years is a reasonable amount of time and we should like to make one or two amendments.
With your Lordships' permission I should like to deal first with those provisions in the 1987 draft order which facilitate the private generation of electricity. The electricity system in Northern Ireland differs in a number of respects from that in Great Britain. The Northern Ireland system does not enjoy the benefits of interconnection with any other system. Also it is considerably smaller in scale and it is nearly 90 per cent. dependent on oil for generation. It is particularly vulnerable to increases in the cost of that fuel such as those experienced in the late 1960s and the late 1970s. As a result the cost of electricity in Northern Ireland has in the past been considerably higher than in the rest of the United Kingdom. However, in 1981, following a major tariff policy review, the Government introduced the present subsidy arrangements. They ensure that electricity

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charges in Northern Ireland are aligned to the highest prevailing tariff in England and Wales.
In introducing the arrangements before us this evening we recognised that there was still a need to remedy the basic problem of over-dependence on oil for electricity generation. Northern Ireland is fortunate in having substantial reserves of high quality lignite, and that resource naturally featured prominently in the review of future generation strategy undertaken in 1984. The review concluded that the Province's future generation requirements could be met through the construction of a lignite-fired power station at a mine-mouth location. The review also recommended that a more immediate reduction in oil dependency could be achieved through the conversion of the Kilroot power station to dual coal/oil firing, and that recommendation has since been adopted. Work on the conversion of the station is well advanced and should be completed by the summer of 1989.
In addition to authorising Northern Ireland Electricity to proceed with the initial planning of a new lignite-fired power station, it was decided to explore the possibility of private sector involvement in such a project. As a result two private investor groups have submitted proposals for the construction and operation of a lignite-fired station and these are currently being examined, together with Northern Ireland Electricity's options, which in addition to a lignite-fired station include the completion of Kilroot power station as additional dual-fired capacity or coal-fired plant. Interconnection with the Scottish electricity system is also being considered.
Private sector generation of electricity offers many potential benefits for Northern Ireland, not least the possibility of lower cost electricity through private sector efficiencies. The provision of a new power station would also give a welcome boost to the construction industry and to the economy in general in Northern Ireland, and such a substantial investment by the private sector would represent a significant demonstration of confidence in the future of Northern Ireland. However, I must stress to all noble Lords that no decision has yet been taken on the various future generation options and I should like to make it quite clear that our eventual decision will be made in the best interests of electricity consumers right throughout the spectrum in Northern Ireland.
Private sector generation therefore is a real option but existing Northern Ireland legislation prohibits the generation and supply of electricity as a main business by any undertaking other than Northern Ireland Electricity and forms an obstacle to private investment in the industry. In seeking to remedy this position the 1987 draft order is designed to bring Northern Ireland more into line with the situation in Great Britain.
The detailed arrangements which might govern the purchase by Northern Ireland Electricity of electricity supplies from a private generator do not come within the scope of this draft order. In the event that the Government should give their consent to the construction of a private sector power station such
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arrangements would be contained in a power purchase agreement between the two parties. That agreement would also contain appropriate provisions to ensure the continuity of electricity supplies to Northern Ireland Electricity.
I should now like to deal in more detail with the provisions contained in the draft order which facilitate private sector generation. Articles 4 and 5 on pages 2 and 3 of the order, make provision for the introduction of private generation of electricity in Northern Ireland and empower Northern Ireland Electricity to enter into agreements with a private generator to purchase privately generated electricity for sale to consumers. As Article 5 makes clear, Northern Ireland Electricity will not be obliged to purchase electricity from a private generator and it is envisaged that it would only do so in circumstances where the terms of supply were favourable. Article 10 (page 9) actually removes the existing statutory bar on the supply of electricity as a main business by anyone other than Northern Ireland Electricity, while Article 11 (also on page 9) enables Northern Ireland Electricity, on request, to permit the use of its transmission and distribution system by a private generator.
Noble Lords will also note that the draft order contains a number of safeguards which are intended to ensure the continuity of electricity supplies should we decide to go down the private sector route. Article 5, for example, which I mentioned earlier, empowers Northern Ireland Electricity to acquire, hold and dispose of shares in or make grants or loans available to a private generator in the interests of safeguarding supplies. Article 7 (on pages 4, 5 and 6) empowers the Department of Economic Development, where necessary for the maintenance of continuity of electricity supplies, to acquire and dispose of any land required for a privately owned generating station. In order to ensure that proper controls are exercised over the provision of future generation capacity, Article 12 (on page 9) provides for the consent of the Department of Economic Development to be obtained for the construction, extension or operation of all generating stations in excess of 2 megawatts. This article also requires that notice of all such proposals be given to Northern Ireland Electricity.
I should now like to turn to the other more general provisions contained in the draft order, the majority of which simply represent an updating of earlier legislation and are designed to bring Northern Ireland more closely into line with the position of Great Britain. The remainder of the provisions aim to clarify or strengthen the existing law in the light of Northern Ireland Electricity's operational needs and experience.
If I may, I shall restrict my comments to the more significant provisions of the draft order. Article 6 (on page 3) makes it compulsory for Northern Ireland Electricity to support and adopt schemes for the use of heat produced by the generation of electricity, provided that such schemes meet with Northern Ireland Electricity's normal financial criteria.
Article 8, which is on page 6 of the order and which is labelled "Powers of Entry", extends Northern Ireland Electricity's existing powers of entry to bring

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these into line with legislation in Great Britain. The draft order clearly sets out those circumstances under which authorised Northern Ireland Electricity personnel may enter lands or premises. In the event that that right of entry is refused, Northern Ireland Electricity may apply to a justice of the peace for a warrant to enter. However, the draft order also provides that premises entered must be left secure and any damage repaired. It also makes it an offence to obstruct an authorised person in the exercise of such rights or entry.
Article 17 (on page 11) extends the time limit for prosecution of certain offences, such as the unlawful interference with meters, from six months from the commission of the offence to six months from the time it comes to the knowledge of Northern Ireland Electricity, subject to an overall time limit of two years.
Article 18 (on page 11) deals with a small procedural amendment to the arrangements governing the making of certain orders by the Department of Economic Development and is being proposed on the recommendation of the Examiner of Statutory Rules in Northern Ireland. The orders in question relate to the granting of permission to a resident of Northern Ireland who wishes to obtain a supply of electricity from outside Northern Ireland—from the Republic. Such instances are rare. Only two such orders have required to be made during the past seven years. They normally arise where someone residing in the vicinity of the border with the Irish Republic finds it cheaper to obtain a supply of electricity from the Electricity Supply Board in the Republic rather than Northern Ireland Electricity. The department of Economic Development can only make such orders where Northern Ireland Electricity consents to the proposed supply arrangement.
Finally, Article 20 (on page 12) effects a number of minor amendments to the electricity supply code and makes it an offence to permit someone to commit an offence, such as the unauthorised reconnection of electricity supplies. Article 20 also makes it an offence to resell or supply electricity without Northern Ireland Electricity's consent and prevents the use of any electrical fitting which causes interference to any electrical supply or affects any electrical or telecommunications equipment.
The draft order is important to both the private and public sectors in Northern Ireland. It removes the existing statutory bar on private generation, while at the same time it amends and updates the legislation governing the activities of Northern Ireland Electricity. As such it forms an important milestone in the continuing development of the electricity supply industry in Northern Ireland. I commend the order to your Lordships.
Moved, That the draft order laid before the House on 30th June be approved.—(Lord Lyell.)
8.35 p.m.
Lord Prys-Davies: My Lords, substantial deposits of lignite have recently been discovered not far from Belfast. That must be very good news for Northern
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Ireland, because it has no gas, oil or coal deposits. The Government, for their part, are greatly interested in encouraging private rather than public sector involvement in the development of lignite-based electricity for the Province. However, as the noble Lord has acknowledged, there is at least one initial obstacle in the way of the Government. If private sector involvement is to become a reality in the electricity law which has served Northern Ireland well for many years, it must be changed. That is the reason for the order which is before the House.
I do not propose to pursue the subsidiary objectives of the order. I propose to deal with its main objective, which is to facilitate the private generation of electricity by a commercial company which seeks primarily to serve some commercial end of its own and to enable, if not to dictate to, the public electricity service to purchase its supplies from that private generator.
That objective raises many questions which are left unanswered by the order. A lignite-based power station producing from 25 per cent. to 40 per cent. of the electricity needs of the Province is a profound development in which all Northern Ireland people have a right to be interested. Our approach to the order is governed by two main and closely related considerations. There is the need to protect the electricity customer and the need to ensure that the capacity of the public electricity service to discharge its statutory duty is not damaged or weakened by the provisions of the order.
Those two main considerations should also have weighed upon the Northern Ireland Office. But have they? Let us take the case of customer protection. The Minister has told the House that parts of the order are drafted on the lines of the Energy Act 1983, which currently governs the position in Britain. However, this order, unlike the 1983 Act, fails to provide that the price to be paid by the Northern Ireland electricity service to the private generator shall not increase the price payable at the end of the day by the customer.
Will the Minister explain to the House why the Northern Ireland customer is denied that protection which is available in Britain under the 1983 Act? I understand that the Consumer Council has expressed some concern to the department about the absence in the order of provisions that would strengthen its hand and enable it to fulfil more effectively its obligation to the electricity consumer. That desire could easily have been achieved by inserting a few obvious words into Article 14 of the Electricity Supply (Northern Ireland) Order 1972. Will the Minister tell the House why that has not been done?
There is yet another aspect to consumer protection. Consider what will happen if the commercial company generating 25 per cent. to 40 per cent. of the supplies needed goes bankrupt at some future time. The liquidator may not want to accept responsibility for running the power station. He may therefore repudiate the power purchase agreement, as he is entitled to do. What will happen in those circumstances? This order fails to address itself to that situation.

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The Minister, on instructions, may say that that is unlikely to happen. Nevertheless, it is a possible situation. Would it not have been sensible to include in the order a statutory duty which would be binding on the liquidator to continue to supply electricity on the terms of the power purchase agreement, at least until alternative arrangements could be agreed?
If that solution is thought not to be feasible, should the order not have conferred upon the electricity service—for example in Article 5 paragraph 6—a specific right to take over or to purchase the lignite station upon terms to be specified in the article in the event of the liquidator repudiating the power purchase agreement? On these Benches we think it is unbelievable that the order fails to provide a formula to ensure the uninterrupted supply of electricity in the event of the liquidator repudiating the power purchase agreement.
The second main consideration is related to the duty currently placed on the electricity service by virtue of the 1972 electricity supply order. The public service has a statutory obligation to maintain an efficient and economic supply of electricity. However, this order places no such duty on the private generator. Nevertheless, the statutory obligation of the electricity service does not cease with this order, even though henceforth there may well be practical limitations on the extent to which the electricity service can really control the position. Again we ask, would it not have been sensible and fair to extend the statutory duty to maintain an efficient and economic supply of electricity to the private generator itself?
The Minister may say on instructions that this should be a matter of contract between the parties. To that we reply that it should be a matter on which Parliament insists. In any event, as 1 have indicated, if the liquidator were to repudiate the agreement there is no way on earth that one can enforce contractual conditions which no longer exist. I understand that the power purchase agreement will be a very complex document. Indeed, it has been suggested that the contract may be of 30 years' duration.
The terms upon which the private generator will sell, and the public electricity authority will buy, the supply of electricity are to be agreed between the parties, subject to the approval of the department. Can the Minister explain to the House what will be the role of the department in relation to the negotiation of this agreement?
I notice that in the debate on this order in another place a week ago the Minister contemplated that the Government would even assist in the negotiation of the agreement. Those could be ominous words, but I have been unable to find any authority in the order for the Minister's statement that the department might assist in the negotiations of the terms. The department's power by virtue of this order is merely to withhold its consent to the agreed terms. Of course, the power to grant or withhold consent is in itself an important power, particularly where there is no right of appeal against the department's refusal to give its consent—and there is no such right of appeal according to this order. This situation comes very close to giving the department the power in practice to issue a directive by refusing to give its consent.
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The non-appealable right to withhold consent raises the important question of the criteria which the department will apply in deciding whether or not to give its consent. Will the Minister give an indication of what are the criteria? The order is strangely silent on this matter. It fails to specify any criteria. We ask for the third time: would it not have been sensible and fair to the electricity service and to all concerned, that the order should prescribe the criteria which are to be satisfied instead of leaving the department completely at large?
There is a feeling among people who are knowledgeable about the subject matter of this order—and tonight we shall hear from noble Lords who have a wealth of knowledge in this field—that the department will have firm views of its own about the terms of a power purchase agreement which it will approve, and that in practice the public electricity service will find that it has to negotiate within very narrow parameters. There is also a feeling that at the end of the day the department, the Northern Ireland Office, will be saying to the electricity board, "This is how it is going to be".
The reference in the other place a week ago to the department assisting in the course of the negotiations between the parties merely reinforces one's growing conviction that the department proposes to adopt an active and dominant role. We have no idea what criteria it will apply while discharging that role. Can the Minister tell the House who, henceforth, will be in charge of the electricity supply industry in Northern Ireland? Will it be the Northern Ireland electricity service or the department?
It is well known that the department has held many meetings with at least two commerical companies which are anxious to win the prize of being allowed to develop the substantial lignite deposits. They believe that there are profits to be made out of the lignite. In the year ended last March there were no less than 17 private meetings between the department and the Antrim Power Company to discuss future electricity generating capacity in Northern Ireland.
If the contract is awarded to a commercial company such as the Antrim Power Company——whose calculations of costs and prices and methods of accounting will have been taken into account by the department in awarding the contract to it—what assurance can the Minister give to the Northern Ireland electricity service that its negotiations with the company will not have been hopelessly prejudiced by secret understandings previously come to between the department and the commercial contractor?
There are many risks in having a contractual agreement whereby 25 per cent. to 40 per cent. of the electricity needs of the Province is generated by a single power station operated by private generator and supplied under a long-term agreement to a public undertaking which has to ensure efficient and economic electricity for all the people of Northern Ireland year by year and day by day. One does not require much foresight to envisage that things can go seriously wrong, possibly at short notice, for the private generator which would be to the detriment of the entire electricity system in Northern Ireland, and its customers. A prudent department, a prudent

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Northern Ireland Office should seek to avoid the possibility of trouble by seeing to it that the legislation has already foreseen the potential difficulties and provided a framework for the answer. From these Benches we say that the Northern Ireland Office has failed to do this. It has failed to build into the order reasonable safeguards to protect the consumer against foreseeable risks. To be fair to the civil servants who are in the Box, I believe that they have been working in great haste and under great pressure from the Secretary of State and probably from the head of the Government herself. They may have created a trap for themselves.
Therefore, what do we say to the Government? We urge the Minister to press his right honourable friend the Secretary of State in another place not to proceed with this draft order until it has been withdrawn to incorporate fair and sensible precautions. It appears to me that the Minister is saying that he cannot respond constructively to this request and he merely throws up his hands. If his right honourable friend cannot reply constructively we will urge the Secretary of State to set up a public inquiry, as has been suggested by the Northern Ireland Economic Council, to advise as to how the lignite deposits can best be developed to the entire advantage of the community in Northern Ireland. For the reasons which I have tried to develop, we are unable to give our consent to this order.
8.52 p.m.
Lord Ezra: My Lords, the draft order before us comes at a time when the whole energy scene in Great Britain, and now in Northern Ireland, is being looked at again. It is therefore of great importance that we should be clear about the implications of this order. Following upon the intervention of the noble Lord, Lord Prys-Davies, I should like to put a number of questions to the noble Lord, Lord Lyell, on this subject.
My first question relates to the Energy Act 1983. When this draft order was debated in another place the noble Lord's honourable friend stated that it works broadly on the lines of the Energy Act 1983. I should like to know whether in fact it departs from it in any material way. The noble Lord, Lord Prys-Davies, referred to one area where there was a departure. We are entitled to know whether the object of this order is to apply to Northern Ireland the provisions of the Energy Act 1983—that would be reasonably justified because it would bring Northern Ireland into line with what already applies by law in Great Britain— or whether it goes further. It would be most helpful if the noble Lord, Lord Lyell, could enlighten us on that aspect.
My second question relates to the Kilroot power station. As we know, that was constructed as an oil-fired station in the early 1970s. At that time I was personally involved in the affairs of the British coal industry and I must say that that project did not have my support. In due course it emerged that it was mistaken because the price of oil increased substantially, as we know, in 1973, shortly after the decision had been made to go ahead with it.
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Subsequently and very wisely, it was decided as the noble Lord, Lord Lyell, mentioned, to convert the station to dual firing, coal and oil, so that it could use oil when it was suitable or coal when it was less expensive. The noble Lord referred to the present conversion process, which will be completed towards the end of 1988 or the beginning of 1989. It will, as I understand it, affect two of the four generating sets. There is a further proposal for converting the other two. It was not clear to me whether this further process of conversion will go ahead. I understand that the Northern Ireland electricity authority would like to proceed with this. The infrastructure is in place and it would therefore seem desirable that all four sets, with the services that exist, should be converted to dual firing. Will the noble Lord kindly indicate whether or not that is intended?
My third question relates to the Northern Ireland electricity board. I am not quite sure what to call it. Northern Ireland Electricity suggests to me that there is something missing—board or authority.
Lord Lyell: NIE, my Lords.
Lord Ezra: My Lords, it is NIE, and there is no word missing. We now know where we stand. It is of course very much affected by this order. It has served the Northern Ireland economy well over the years, operating all the power stations. Was NIE brought into consultation in the formulation of this order and is it quite satisfied of its implications so far as its future operations are concerned? I think that is a reasonable question for us to put to the noble Lord.
Fourthly, I should like to bring in my old friends at British Coal. We regarded—and I presume my colleagues still in the coal industry regard—Northern Ireland as a very important market for coal. We fought very hard to retain it. We were supplying large quantities for the domestic market and also considerable quantities for the electricity market. I have been advised by British Coal that in conjunction with the conversion of the Kilroot set to dual firing, it has offered to supply substantial quantities of competitively priced coal from open-cast sites in Ayrshire. Obviously it is hoping that the further two generating sets will be converted to dual firing so that they can also use coal.
British Coal has a concern of course in that the Belfast West station, which takes currently about half a million tonnes of coal from Britain, is coming to the end of its natural life. Therefore, it would very much like to feel that there will be additional potentially coal-fired capacity for which it can compete when this goes.
I put it to the noble Lord that there are a number of important questions associated with this order on which we would very much welcome elucidation to see whether what is happening in Northern Ireland is, as the noble Lord himself said, in the best interests of the Northern Ireland consumers of electricity.
8.58 p.m.
Lord Blease: My Lords, I suppose it would be a cliche to start by saying that energy supplies in Northern Ireland have been a burning issue as long as

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memory can recall. We have heard very eloquent arguments from the noble Lords, Lord Prys-Davies and Lord Ezra, on the supply of energy to Northern Ireland. They have argued their points with skill, knowledge, understanding and great forthrightness. 1 certainly support the points put forward by both noble Lords in this debate. I do not propose to deal with matters concerning lignite. In my opinion it will be many light years before we have electricity generated by lignite fuel in Northern Ireland.
With other noble Lords I have on numerous previous occasions in this House made known my views about the insensitive and undemocratic way in which Northern Ireland business is laid before this House and before this United Kingdom Parliament. This crucial issue was again mentioned in some detail during the debate in this House last Thursday, 9th July, on the extension order of the Northern Ireland Act 1974. Notwithstanding the Minister's expressed views that the order before us this evening does not arise from the current debate, I contend—and I think that it has been forcibly put forward by the noble Lords, Lord Prys-Davies and Lord Ezra—that the legislative measures before us this evening are highly complex and controversial not only in the context of the difficulties in Northern Ireland but also in direct relation to the current contentious political issues concerning the future of energy and electricity supplies throughout the United Kingdom.
This order makes miscellaneous amendments to the Electricity Supply (Northern Ireland) Order 1972 and not, as the Minister said, only one or two amendments. There are various aspects of the order which amend the Electricity Supply (Northern Ireland) Order 1972. That order was a very complex piece of law embracing legislation governing the critical areas of civic rights, including property, powers of entry to premises, legal proceedings, local government powers, the environment and safety, as well as accountability for public finance and borrowing powers. Surely the Government and the Northern Ireland Office had the opportunity to give genuine thought and consideration to the importance of upholding credible parliamentary participation as well as an adherence to party political management machinery and to its policies. This order could, and in my opinion should, have been considered suitable for submission to a duly appointed parliamentary Select Committee.
Arising from the outcome of the debate on the order in another place at midnight last Tuesday, 7th July, the order was approved by a relatively narrow margin in the Division Lobbies with 236 for and 201 against. The outcome is a clear indication of the controversial nature of this legislation and the widespread concern about some of the measures being enacted. It may have been necessary, if not important, to have the opportunity to challenge some of the main amendments in the order by debate and in the Division Lobbies if fairness and parliamentary consensus are to mean anything worth while in representative terms and in the best interests of good government. However, the Government thought otherwise and we are saddled tonight with considering this unamendable order at this stage.
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There are a number of articles in the order of which the precise meaning and intention might have been accepted after reasoned explanation and clarification. However, the declamatory process across the Floor of this Chamber imposed by the Order in Council procedure prevents this reasoned and sensible way of conducting the business effectively and gives rise to much unnecessary misunderstanding. In an effort to obtain some clarification and ministerial commitment on parts of the text of this amending order, I wish to put a few points to the Minister in the hope that he may provide some helpful explanations and replies.
I invite the Minister to turn to page 2 of the order. Article 3 concerns Northern Ireland Electricity and states:
"The Northern Ireland Electricity Service established under Article 4 of the Electricity Supply Order is renamed Northern Ireland Electricity".
We have already heard in the exchanges on this order of the confusion arising from this renaming of the Northern Ireland Electricity service. Perhaps I may say that the removal of the word "Service" continues under Article 5. Under the heading, "Additional functions of Northern Ireland Electricity", Article 5 states:
"The Service, with the consent of the Department, may enter into an agreement with a private generator to acquire supplies of electricity from that private generator".
I wish to ask the Minister where we find a definition of the use of the term "Service" in this order? Who or what comprise these services? Are we to assume that Northern Ireland Electricity is "the Service", or could Northern Ireland Electricity and the Department of Economic Development combined be "the Service"? Perhaps the Minister can clarify that point. It is giving rise to considerable debate and confusion in Northern Ireland.
In Article 6 under the heading "Combined Heat and Power" the order says:
"The Service shall adopt and support schemes",
and continues to enumerate some of the proposals in such schemes. In paragraph (2) it states:
"Nothing in Paragraph (1) shall require the Service to undertake expenditure in connection with a scheme which does not meet the financial criteria applied by the Service in relation to other expenditure of the Service".
This again raises questions. Are the financial criteria stipulated in Article 6 applicable only to combined heat and power schemes or do they apply to all other expenditure of the service? Surely it would have been more forceful and to the point if the word "all" had been included in that paragraph.
If we turn to page 4 under the heading of "Compulsory acquisition of land" paragraph (a) of Article 7 states:
"In order to facilitate the provision in Northern Ireland of an efficient and economical system of electricity supply, the Department may, for the purpose of selling land to a private generator for the construction or extension of a private generating station to which Article 33 applies, being a generating station which generates or will generate electricity which the Service intends to purchase",
and it continues to deal with the acquiring of land and the disposal of land by the department.
I ask the Minister again: do the words "the Service intends to purchase" give the sole right to Northern

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Ireland Electricity to make a contract with a proposed private generator prior to the decision by the department on the acquisition or disposal of land? Where have the Government set out the rights of the service, if by "Service" is meant Northern Ireland Electricity, to have effective consultations about such matters? Where is this undertaking by the department? In other words, I am asking how does the service know that it intends to purchase unless there is prior knowledge of the price and capability of privately-generated electricity? This has already been dealt with at some length by my noble friend Lord Prys-Davies.
I invite the Minister to turn to page 6. Article 9 is headed: "Powers of entry, etc." I am not sure that the word "etc." is a useful descriptive word for any legal document. However, if we accept the words as written Article 9 reads:
"Subject to Articles 9A and 9B, a person authorised in writing by the Service may, on production if required of his credentials, at any reasonable time enter"—
and a list is given of the purposes of entry. Among these reasons and conditions, paragraph (iii) reads:
"to cut off or disconnect the supply of electricity … or to remove the electric fittings belonging to the Service which are on the premises".
I now invite the Minister to turn to page 8, where the heading reads: "Warrant to authorise entry", and the article says:
"Where a justice of the peace is satisfied by complaint on oath"—
and there is a list of reasons and conditions—
"he may issue a warrant under his hand authorising any authorised person to enter the premises".
There are two authorisations: an authorisation by the service and an authorisation by a justice of the peace. Under what authority may a complaint be tabled? Will a JP have the necessary instruction on approved forms? Will a JP be able to identify the authorised person to assess the relevance of the complaint or will he have an approved warrant that will stand up in any legal proceedings? This issue raises many sensitive points in connection with the role and duties of a justice of the peace in Northern Ireland.
The justices of the peace in Northern Ireland derive their authority from the Lord Chancellor's Office. They are called upon to carry out their duties as JPs in difficult and sensitive areas concerning debt as well as criminal and terrorist matters. Many, indeed I believe all, JPs in their experience depend a great deal on the thoroughness of the preliminary work undertaken by the Royal Ulster Constabulary. This part of their work concerning warrants to cut off supplies, perhaps to old-age pensioners or others, gives rise to contentious and serious problems in relation to the terms as set out in the order.
Like other noble Lords I have had an opportunity to consult FUSE—that is, the Federation of Unions Supplying Electricity—and its secretary Pat McCartan. This is a very important body to Northern Ireland Electricity. FUSE —may be an amusing word, but I can assure your Lordships that its objectives are certainly clear and taken seriously by the trade unions involved. In the consultations I have discussed a number of points which FUSE
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considers relevant to the order. I want to put them in the form of words that have been duly considered. I realise that the Minister has covered some of these matters that were raised by my noble friend Lord Prys-Davies and by the noble Lord, Lord Ezra, but I believe they were put succinctly in the terms in which the trade union body would like them to be recorded in this debate.
Can the Minister confirm that nothing in this Electricity Supply (Amendment)(Northern Ireland) Order 1987 is designed to or will enable the Government to impede an early decision on the comprehensive proposals submitted by Northern Ireland Electricity to the Government in November 1986 which recommended the completion of Kilroot Phase 2 as a dual coal and oil-fired plant and that the station will be fully commissioned by 1992?
My second question is: does the Minister agree that this amending order brings the legislation in Northern Ireland into line with the Energy Act 1983 and is designed to facilitate the generating of electricity in Northern Ireland for private profit; also that the order provides for enabling legislation that allows the payment of public finance for the acquiring of sites and property to develop the generation of electricity for private profit?
Thirdly, will the Minister confirm that this amending order, together with the primary legislation—the Electricity Supply(Northern Ireland) Order 1972—does not allow Northern Ireland Electricity to abrogate its overall statutory duty to acquire, nor to be directed by the Government to acquire, electricity unless under strict commercial standards, at the most advantageous price to consumers, and ensuring reliability of supply and services to the various needs of domestic, farming, commercial and industrial consumers throughout the Province.
The Minister has referred to an interconnector supply system with Scotland. Will the Minister comment on the North-South electricity supply interconnector service and the possibility of its again being made operational? Have any private investors expressed an interest in the development of the Camlough hydro-electric station? I understand that turbines for this project are still available in Northern Ireland.
Perhaps I may conclude by complimenting Northern Ireland Electricity on its successful year. If I may quote the chairman's remarks in his published review:
"Financially, Northern Ireland Electricity enjoyed the best year since its formation in 1973, resulting in the elimination of any recourse to Government contribution. This achievement is particularly notable at a time when electricity prices have been reduced in real terms".
It is rather sad that this order has been brought forward at a time when morale in Northern Ireland Electricity is riding very high. I consider that workers, management and others involved in Northern Ireland Electricity require some reassurance that what they have sought to achieve is being built upon by the Government. Perhaps I may add that the way the accounts have been presented for the year ended March 1987 is excellent and deserves commendation. They are a model to other private and public enterprise bodies.

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I have to concur with the remarks made by my noble friend Lord Prys-Davies. At this stage I must record that I cannot support the order.
9.15 p.m.
Viscount Hanworth: My Lords, this order has been some time in draft and is, or at any rate at the start was surely, a stalking horse for much wider privatisation of electricity generation. In fact as the proposed new lignite burning station at Crumlin could provide up to 40 per cent. of Northern Ireland's electricity needs, it therefore would represent a major step in privatising the whole industry.
In last Wednesday's debate I gave the reasons why I was opposed to privatisation of our own electrical generation and distribution industry. I suggested what were the real, as opposed to the Government's declared reasons, for wishing to do so. I think that your Lordships would not wish me to repeat that tonight. However, I should make the further point that any sensible government should not rush ahead with privatisation in difficult and debatable areas until they have gained experience from British Telecom and from the gas and water supply industries.
We used to talk about the unacceptable face of capitalism, the advantages of a mixed economy and so on. All this has gone out of the window. We seem to have fashions in which some new idea is pursued quite regardless of common sense and moderation. Just remember high rise flats and unit construction, now discredited as an expensive folly. So was nationalisation and so today is excessive privatisation when an organisation is working efficiently and well.
Returning to this order, there is no justification whatever for the privatisation provisions, and this policy raises major difficulties as to how the system could possibly work, let alone provide any benefit to the consumer. Northern Ireland Electricity is legally responsible for providing a reliable and continuous service to customers and for the distribution network. How can it do so with a private generation station of such a size which it will not control?
Moreover, to maintain a reliable service it must provide some excess capacity, no doubt counted unfairly against it when the Government try to justify on accountancy grounds their privatisation policy. In this instance there are good reasons for supposing that the authority's proposals for its new power station are economically a better solution.
I can imagine the Government arguing that the merit of this case will be decided by competition. What nonsense, because the privatised lignite power station cannot be financed from private capital without an agreement that the existing authority will take most of the power it generates during its lifetime. In no way can a formula applicable over 30 years or so be devised which would be fair or promote real competition.
This is fundamentally an ill-considered piece of legislation, which unfortunately we cannot amend. It would be more logical and sensible to privatise the whole industry rather than have this creeping paralysis, much as I would deplore such greater
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privatisation. Are we once again witnessing trying it on the dog first, as we are doing with the poll tax in Scotland? The analogy is not quite true, because the Government seem unwilling to find out how the dog reacted, only whether the public can be persuaded to accept their legislation.
9.23 p.m.
Lord Fitt: My Lords, I rise for only a few minutes to reinforce what has been so ably said by my noble friend Lord Blease. My noble friend Lord Blease lives in Northern Ireland. He is aware of the concern of all sections of those involved in the industry over this order. Northern Ireland Electricity has serious reservations. All the trade unions involved representing all the manpower employed in the industry have expressed serious reservations. The Department of Economic Development has expressed serious reservations. Four speakers in this House tonight have expressed reservations about the order.
Most salient of all is the fact that the order will have tremendous repercussions in Northern Ireland on its whole economic development and on the use of electricity for commercial and domestic purposes. The ramifications of the order will affect everyone in Northern Ireland, private and business.
One of the first orders promulgated by the Government in 1972 after the imposition of direct rule was the electricity order that we are now about to amend. I know that the Government cannot at all times bow to the wishes of an opposition, but it is in the interests of a government in promulgating legislation to listen to voices other than those on their own Back-Benches. I ask here tonight: why the urgency for this order? There does not seem to be any devastating reason why the order has to be pushed through before the Summer Recess.
As my noble friend Lord Blease mentioned, one night last week 16 representatives from Northern Ireland—there are 17 seats, but one seat has not been taken up by the Sinn Fein Member of Parliament for West Belfast—stretching right across the political and religious divide, from the Democratic Unionist Party and the Official Unionist Party to the SDLP, went into the Lobby to express their opposition to the order. Unfortunately, we cannot do that tonight. We are not elected representatives. I feel bitterly resentful about the fact that nothing can be done about the order.
I should like to reinforce what has been suggested by my noble friend Lord Prys-Davies. Over the past two years elected representatives from the Unionist community in Northern Ireland have been boycotting discussions with Ministers and have not been attending Parliament to represent their constituents as a means of expressing their opposition to the Anglo-Irish Agreement. The Government showed great anxiety in trying to reinvolve those elected representatives. They pleaded with them to come and speak on behalf of their constituents and to carry out their full parliamentary duties. What thanks did they get when they decided to come back? What thanks did they get when they decided to attend Parliament to voice the views of their constituents, all of them affected by this order?

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At 11.34 p.m. last Tuesday, they were told, "You have an hour and a half to discuss this order. You cannot do anything about it. This is what the Government think and we shall treat your representations with contempt and arrogance. We know best; this order will be implemented".
I rarely agree with the leader of the Democratic Unionist Party. In order to show his opposition to the arrogant attitude adoted by the Government he said that his party would take no part in that debate. Five Members of Parliament representing English consituencies spoke during the course of that one-and-a-half-hour debate and, as in this House tonight, four of them voiced opposition to it. Only two speakers have spoken in favour of the order—the Minister who put it forward in the House of Commons and the Minister here tonight. That must be an indication that the Government are removed from the feelings of the people of Northern Ireland.
We have heard about the two nations theory; there are very few Conservative MPs in Scotland. We now have a three nation theory. Northern Ireland has been totally isolated by this Government. Again I challenge the Government to explain the reason for the headlong rush into this matter. Is it to satisfy some egomaniacal craving for justification of privatisation? The Government want something on the statute book as regards privatisation and have chosen a place vulnerable to the imposition of their wishes.
Even though the Government will get the order through this House tonight, they should not think that this is the end of the story. They pushed the order through the other place in an hour and a half without a single vote being cast in its favour by the elected representatives from Northern Ireland. We cannot vote against the order tonight. I plead with the Government to have regard to the circumstances which now prevail and the atmosphere which surrounds the order. I noticed that the noble Lord, Lord Ezra, listened intently to my noble friend Lord Prys-Davies and his contribution tonight should be sufficient to make the Minister realise that this is not an easy order. There are lots of ramifications contained within it. Many apply only in Northern Ireland and to the political, religious and economic circumstances in that part of the United Kingdom.
I would again appeal to the Minister to talk to his right honourable friend in another place and see whether it would not be possible to set up some form of committee in that House so that the elected representatives of Northern Ireland can involve themselves—as the Government have been pleading with them to do over these last 20 months—and express their views, based on the innermost knowledge that they have of this most controversial order.
9.30 p.m.
Lord Lyell: My Lords, as is always the case with Northern Ireland debates, your Lordships will appreciate that this has been a relatively short but very important debate. I assure your Lordships that I have listened with great interest to all the remarks that have been made.
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I think that this evening we have had, if I may say so, some notable contributions. Indeed, there has been a certain gain in emotion compared to the normal workmanlike discussion of orders. I was warned—indeed, your Lordships were kind enough to suggest to me—that the order before us this evening would be controversial. Nevertheless, I think that your Lordships have dealt with the order in a lively, thorough and professional fashion.
Perhaps I may preface my concluding remarks by repeating what I said when introducing this draft order. It is being debated against the background of the consideration by the Government of a number of private and public sector proposals for the next phase of generating plant which we hope will be provided in Northern Ireland. In setting out a future generation strategy for the province the clear aim of the Government is the identification of any proposal which represents the best possible solution to the energy needs in the future in Northern Ireland. I think that is the common thread that ran through all my remarks and also through the remarks of all your Lordships who have spoken this evening.
The second point I make at the outset is that in the draft order before us this evening—the noble Lord, Lord Fitt, referred to what had gone on in 1972 and I see that he is not in his place but no doubt he will return—your Lordships will note that there are constant references to the Electricity Supply (Northern Ireland) Order 1972. I will forbear to take your Lordships from the 1972 order to the 1987 order because I know that is a fruitful area for confusion. I note that the noble Lord, Lord Blease, is agreeing with me and I will endeavour to answer succinctly the questions that he raised.
However, presenting the draft order this evening has naturally fuelled speculation that a decision in favour of one of the private proposals—I think your Lordships will be aware that there could be a number of such speculations—is imminent. I hasten to add that the reality is that, largely owing to the complexities of power generation in Northern Ireland, which has been raised by all your Lordships this evening, the Department of Economic Development has not yet completed its evaluation of all these proposals. I want to assure your Lordships that the eventual decision of the Government will be taken in the best interests of Northern Ireland consumers. That is the main point that I want to make tonight.
Once any remarks that have been made this evening are consigned to the Official Report, or indeed to other reports and discussions in Northern Ireland, the main thread of my remarks and indeed of the remarks of all your Lordships this evening is that any decision that will be taken by the Government will be taken in the best interests of Northern Ireland's consumers of electricity.
I thought that the noble Lord, Lord Prys-Davies, made a notable speech. I was fascinated to hear that he felt that I was under some sort of dictation. The noble Lord put it in his traditionally courteous style. I hasten to reply that I am under no dictation whatsoever and I stress to him and all your Lordships that the order that is before us this evening merely

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gives permission. I am sure that the noble Viscount, Lord Hanworth, will take that on board as well.
I also want to stress to the noble Lord, Lord Prys Davies, and to your Lordships that he and the Government are indeed at one. I should like to repeat a very short portion of my opening remarks. I referred to the review undertaken in 1984 entitled The Future Generation Strategy, which concluded that the future generation requirements of the province could be met through the construction of a lignite-fired power station at a mine mouth location. I went on to say—and I hope that the noble Lord will take my comment to heart, because it shows that he and the Government are at one on this particular aspect—that the review also recommended that a more immediate reduction in oil dependency could be achieved through the conversion of the Kilroot station to dual coal/oil firing and that this recommendation has since been adopted.
I ended with the following very important passage:
"Work on the conversion of the station is well advanced and should be completed by the summer of 1989".
I am sure that the noble Lord, Lord Ezra, of all people, will be aware of that, and I understand that British Coal has a large input into this particular conversion strategy.
Lord Ezra: My Lords, I should like to ask the noble Lord for elucidation. Is he referring to the first two sets only or to the conversion of the four sets at the station?
Lord Lyell: My Lords, as the noble Lord heard me say, at this stage I am only referring to the fact that work on the station is well advanced and should be completed by the summer of 1989. That is the first stage. Whatever else may happen at Kilroot has not yet been fully decided. It is under consideration. That is all part of my observations. It is the first stage, and I think that the noble Lord knows what I am referring to.
Lord Stoddart of Swindon: My Lords, if the noble Lord would give way——
Lord Lyell: My Lords, as the noble Lord heard me Lord Stoddart, must wait. I must first try to answer his colleague and the noble Lord, Lord Prys-Davies. If the noble Lord, Lord Stoddart, wishes to say something before I finally sit down, I shall try to deal with it. I know that he is a specialist in energy matters.
The noble Lord, Lord Prys-Davies, raised a number of interesting points, the first of which concerned his fear that Northern Ireland Electricity would be overdependent on one particular generator. I stress again that no decisions have yet been taken on the various proposals for future generation. Any decision in favour of private generation of electricity will be strictly conditional on strong contractual provisions being put into effect to safeguard the continuity of electricity supplies to Northern Ireland Electricity on fixed and binding terms, thereby ensuring that Northern Ireland Electricity can carry out its statutory duty.
Secondly, the noble Lord, Lord Prys-Davies, asked me about the criteria for the selection of a
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private sector generator. In my opening remarks I tried to explain that no decisions have yet been taken on the various options for future generation. The principal criterion that the Government will apply in their evaluation of the options before them will be the identification of whichever option will achieve the cheapest possible electricity supply for all consumers in Northern Ireland. I think that your Lordships will certainly be at one with us on that aspect.
The noble Lord asked who would be in charge of the Northern Ireland Electricity Service in Northern Ireland. Under the 1972 order, what is known as the parent order, Northern Ireland Electricity is a body corporate with the statutory duty to develop and maintain an efficient and economical system of electricity supply in Northern Ireland. I stress that this duty is not affected in any way by the amending order now before us.
The noble Lord, Lord Blease, raised a number of points. I wish to put his fears at rest about the name of Northern Ireland Electricity Service being changed merely to Northern Ireland Electricity. The draft order continues to refer briefly to "the Service". We are amending the 1972 order on the advice of the draftsmen. Because of that, we have to use the term "Service" throughout the 1987 order. In the event that the opportunity is taken at some later date to consolidate all the legislation, the name of the body corporate will be changed.
The noble Lord asked about the financial criteria applied by the service in Article 6A of the order. In that article the only reference is to financial criteria. The answer to his query is therefore yes. The article in question mirrors a similar position in the Energy Act 1983. The 1972 order imposes a general duty on the service to develop and maintain an economical system of electricity supply to all the consumers in Northern Ireland.
The noble Lord asked whether Northern Ireland Electricity would be consulted before the exercise of compulsory purchase powers proposed in Article 7 of the order. In accordance with the normal procedures, the Department of Economic Development will ensure that there is full consultation with Northern Ireland Electricity and all other interested parties. I assure him that notice will be given of any proposed vesting order. This will be duly published in the local press. I hope that we will obtain suitable coverage in the local press and media in regard to all vesting matters.
The noble Lord asked about the problems of disconnection under Article 7 and Article 20 at page 12 of the order. The powers of entry for the purpose of effecting disconnection reflect similar powers in the Electricity and Gas (Rights of Entry) Act 1954 and, more recently, the Gas (Northern Ireland) Order 1977. I hope that your Lordships will accept that the powers of entry are on the basis of previous legislation when considering what are known as the public utilities.
The noble Lord went on to ask about the status of justices of the peace in Northern Ireland in connection with the operation of Article 8 on powers of entry and also about methods by which warrants are served. In enacting this order we follow a recent

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provision in the Rights of Entry (Gas and Electricity Boards) Act 1954 to which I referred. We believe there is no reason why in operation it will be any less effective in Northern Ireland. I stress once more that the future procedures in Northern Ireland will follow those already in operation throughout the whole of the electricity industry in Great Britain.
The noble Lord was kind enough to warn me that he might ask one or two other questions. The noble Lord, Lord Blease, will be happy to know that I can confirm there is nothing in this draft order which would in any way impede a decision by the Government on the various future proposals for electricity generation which are currently under discussion. These include NIE's preferred option of the completion of Kilroot station as additional coal-fired capacity.
I wish to stress to the noble Lord that Article 7 is merely a reserve power. It is the intention of the Government that any public expenditure incurred in relation to the vesting of land for a private sector power station should be recovered from the private generator concerned. This has merely to do with obtaining a compulsory purchase order. This is a matter for lawyers and the noble Lord will know that it is necessary to go to court. But certainly there should be no expenditure from the public purse so far as Article 7 is concerned.
I stress that one would want to facilitate private generation in Northern Ireland, but this draft order does not place any obligation on NIE to acquire such power. Consequently, we envisage that Northern Ireland Electricity would do so only when the terms of supply of power from a private generation source were favourable to Northern Ireland Electricity and above all to electricity consumers in Northern Ireland.
I apologise for missing out one question of the noble Lord, Lord Prys-Davies, when I explained the arrangements by which we might provide for the purchase by Northern Ireland Electricity of power supplied by a private generator. Quite rightly, this would be the subject of a separate legally binding contract between the two parties concerned and such a provision is not appropriate for inclusion in this draft order. The order seeks simply to remove the present statutory bar to the private generation of electricity in Northern Ireland.
Lord Mackie of Benshie: My Lords, I have been following closely what the noble Lord has said. Am I to understand him now to be saying that the Northern Ireland Electricity Service would be the sole judge of whether privately generated electricity which it bought would be better than publicly generated electricity? Is the service the sole judge of that or will the economic department come into this in any way at all?
Lord Lyell: My Lords, I think that the overall criterion would be which is cheaper. My noble neighbour Lord Mackie, if I may call him that, asked whether it would be better. I think he is asking whether the terms would be cheaper for the supply of current over two megawatts. I think that Northern
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Ireland Electricity would be empowered by this order to use privately generated electricity if it wished, which up until now it has not been able to do.
The order does not in any way oblige Northern Ireland Electricity to take up this privately generated power. The criteria about which the noble Lord asks would be quite clear. I am sure that his colleague will be able to advise him on that point. I shall write briefly to the noble Lord, Lord Mackie, on the criteria for Northern Ireland Electricity taking power from a private source. That may be the wish of your Lordships, rather than going into all the criteria this evening. The noble Lord used the word "better". As a true Scot I am sure that he would agree that it is better if it is cheaper to the consumer. So far as I am aware that means Northern Ireland Electricity.
Lord Prys-Davies: My Lords, may I interrupt to state what I believe is the position? Is it not the position that it is for the department to decide whether or not the lignite-based power station contract will be given to a private contractor or to the electricity service? Secondly, whatever terms are agreed between the electricity service and the generator they will have to be approved by the department and we do not know upon what criteria the department will give or withhold its consent.
Lord Lyell: My Lords, the answer to both the noble Lord's queries is that the department is still undertaking studies as to what the possible benefits of future power generation that the province would be concerned with may or may not be. I stressed, and I repeat, my opening remarks where I covered the possibility of expanding Kilroot, both phase 1 and phase 2 and the production of lignite. That is certainly one of the options that we are discussing. I stress to the noble Lord that no firm decisions have been taken.
The noble Lord, Lord Blease, made one other point about the Northern Ireland/Republic of Ireland interconnector. It is the Government's intention to restore the Northern Ireland/Republic of Ireland interconnector and to maintain it in use as soon as it is practical to do so. I am afraid that I cannot go further than that this evening. The noble Lord raised one more query about the Camlough pump storage scheme. I am sure that South Armagh will be pleased that it has been mentioned this evening. The answer that I can give the noble Lord is no. The private sector has not expressed an interest in that particular scheme.
The noble Lord, Lord Blease, finally raised a point about the happily named FUSE. He will not be unaware of the excellent journal the Belfast Telegraph, which apart from covering a whole lot of information contained the following:
"Shane's Castle sets scene for record Game Fair Turn-out".
On the same page it has an article stating:
"Debate set to shape energy strategy".
I do not think that I am quoting out of context but there is a sub-heading entitled "Victory".
The article continues:
"The Federation of Unions Supplying Electricity has welcomed changes made in the draft order as a victory for its organisation".

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The FUSE secretary, Mr. Pat McCartan, finishes by saying that legislation will be similar to that in Britain and FUSE has no reservations about NIE competing with the private sector on an equal basis.
I think that Mr. McCartan is a fair-minded judge of these matters and I hope that the noble Lord, Lord Blease, will accept that the fears of FUSE in this particular matter can be set at rest.
We were grateful that the noble Lord, Lord Ezra, stayed to take part in the debate. I shall address the noble Lord by saying that the fundamental difference between the Energy Act 1983 and the draft order before us this evening is that unlike the Energy Act 1983 this draft order does not place any obligation on NIE as an electricity undertaking to purchase privately-generated power which is offered for sale. It permits that but it in no way obliges NIE to purchase that power. Also, the Energy Act goes on to provide that every offer by an electricity board to purchase privately generated electricity should be on such terms and conditions as to ensure the board's control so that the system is not impaired. Your Lordships will find that in Section 5(4).
Such terms and conditions as may be necessary to ensure that NIE's operation of the electricity system is not impaired will be provided for in any contract between Northern Ireland Electricity and any private generator. I stress that certainly Northern Ireland Electricity's marginal costs would be based on either coal-or oil-fired generation. That would be a factor in the cost of electricity in Northern Ireland.
The noble Lord, Lord Ezra, raised one other inquiry concerning whether Northern Ireland Electricity was involved in any discussions with the Antrim Power Company. Certainly the provision of any new generating capacity by privately owned lignite-fired power stations is one of several options which we are currently examining. We seek the lowest cost to provide any new capacity and we have promoted competition between Northern Ireland Electricity and private sector interests. We wish to respect the confidentiality of each proposal. But it is necessary in any competition like this for the department to take the lead.
The noble Lord also asked briefly about the situation regarding Kilroot 2, if I may call it that. I think that the noble Lord understands that that is the filling of the two extra sections of the Kilroot power station. We are considering proposals submitted by Northern Ireland Electricity involving the provision of additional dual oil- and coal-fired capacity or, alternatively, mere coal-fired capacity at Kilroot power station. I stress once again the possibility of interconnection with Scotland. We are also examining that option.
The noble Viscount, Lord Hanworth, referred to what he called the stalking horse of privatisation. I made passing mention in my opening remarks of the privatisation initiative upon which this Government have embarked. I went on to explain that the order is not connected with that particular initiative. It
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simply removes the present statutory bar to private generation being incorporated in Northern Ireland Electricity's supplies. It brings Northern Ireland legislation further into line with the rest of the United Kingdom.
The noble Lord, Lord Fitt, asked why there was such urgency in the case of this particular order. The order is merely permissive legislation which updates the 1972 order to which he referred and takes into account the passing of the Energy Act 1983. I suggest that 15 years have elapsed since the 1972 order and that certainly this amending order is, if anything, overdue. I mentioned consolidation, but perhaps that can wait for another night.
I shall now attempt to answer the noble Lord, Lord Mackie, whose patience and fortitude in staying through the debate this evening I salute. He asked whether NIE would be the sole judge of whether they did or did not take power from a private generating source. Any decisions concerning future generating capacity in Northern Ireland will be taken by the Government. However, the main criterion will be to seek the cheapest possible electricity. I hope that when the noble Lord says "better" he will accept that that means the cheapest possible supply to the consumers of Northern Ireland.
I hope I have covered most, if not all, of the points raised by your Lordships this evening. The draft order that I have moved seeks to remove the present statutory bar to private sector generation which we feel is an unnecessary constraint on the future development of the electricity supply industry in Norther Ireland. In this and in many other respects the order is intended to bring Northern Ireland legislation more into line with that in the rest of the United Kingdom. Therefore, though fairly modest, the order is important to the future development of the electricity industry in Northern Ireland.
The Mackie of Benshie: My Lords, before the noble Lord sits down, he has been very patient with me, for which I am most grateful. I thought in his first answer he said that the judge of whether to purchase electricity from a private source would be the Northern Ireland Electricity Service. Now in his subsequent reply he says that the judge must be the department. I am assuming that the second is correct and that the department will be the judge, not the service.
Lord Lyell: My Lords, I have to admit, and I am proud to admit to a Kirriemuir man, that I was wrong the first time. The noble Lord is quite right; it will be the Government who will be the judge as to which is the cheapest form of electricity. I am glad to confirm that. Once again I salute the noble Lord for his fortitude in sitting through the debate. I commend the draft order to your Lordships.
On Question, Motion agreed to.
House adjourned at two minutes past ten o'clock.

  NORTHERN IRELAND: CERTIFIED-OUT TRIALS
  NORTHERN IRELAND: CERTIFIED-OUT TRIALS
  AGRICULTURE COUNCIL MEETING, 13th JULY
  AGRICULTURE COUNCIL MEETING, 13th JULY