Sitting of 26 April 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  SAINT BENNET FINK BURIAL GROUND (CITY OF LONDON) BILL [Lords]
  Read the Third time and passed, without amendment.
  SCOTTISH DEVELOPMENT AGENCY (OBAN SOUTH PIER) ORDER CONFIRMATION BILL
  Considered; to be read the Third time.
Oral Answers to Questions
  DEFENCE

    Montebello Agreement
    Ms. Primarolo: To ask the Secretary of State for Defence what is the time scale for deploying new tactical air-to-surface missiles under the Montebello decision.
    The Secretary of State for Defence (Mr. George Younger): The agreement by NATO Defence Ministers at Montebello in 1983 did not include specific decisions on such matters. SACEUR was asked to come forward with specific proposals, which were presented to Ministers in 1985. All these continue to be discussed with the individual nations concerned. The time scale associated with the deployment of new systems will depend in the first instance on the choice of system and on development and production decisions which have yet to be taken.
    Ms. Primarolo: Did not the Minister, in a written answer on 21 March, admit that the decision for tactical air-to-surface missiles was taken at, and dates from, the Montebello agreement? Will the Minister continue his confessions to agree that those missiles will carry nuclear warheads? Will he further agree that the carrying of those missiles by aircraft is an escalation and that, in a reply to me on 21 January, when I pointed out that the most likely form of tactical weapons would he air-launched cruise, he said that I was grossly misinformed?
    Mr. Speaker: Order. The hon. Lady must ask her question.
    Mr. Younger: There was a recommendation in principle from the Montebello meeting to consider those matters and, as I said in my answer, they are being considered.
    The objective of devising an air-launched air-to-surface missile, if it can be done, would he to deliver the missile to the target effectively. At present this is done by free-fall
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    bombs. When those become out of date a new method will be needed, and this is one possibility that we are examining.
    Mr. Whitney: Does my right hon. Friend agree that, given, particularly, the continuing modernisation of the Soviet nuclear and conventional capabilities, it remains essential that we continue to improve our capabilities in accordance with the Montebello decision?
    Mr. Younger: My hon. Friend is absolutely right and I am sure he will be well aware that the Soviet Union has vigorously been updating its equipment. For instance, longer-range, more accurate SS21 missiles are being brought into service, dual-capable aircraft are being modernised the build-up of Backfire bombers continues and short-range, stand-off nuclear weapons are also being deployed, so it is hardly an option that we can ignore.
    Mr. Denzil Davies: The Secretary of State will recall that when NATO last embarked on its modernisation proposals it led to the deployment of cruise missiles. It also adopted a dual-track system whereby modernisation took place at the same time as negotiations. If NATO has decided in principle to modernise tactical and battlefield nuclear weapons—we hope that it has not and will not do so—why not follow the same principle as last time and, if it is necessary to modernise, why not modernise at the same time as negotiating, especially as the Soviet Union appears to have a superiority in tactical and battlefield nuclear weapons?
    Mr. Younger: It is extraordinary for the right hon. Gentleman to say that we should not modernise our existing weapons because—[HON. MEMBERS: "He did not say that."] That is what the right hon. Gentleman said.. If he did not say that, perhaps he will intervene in a moment to say that he did not, but, as I understood him, he said that those weapons should not be modernised, which means that we would have out-of-date weapons. I see no argument for having out-of-date weapons.
    The dual-track decision has been immensely successful. We had the INF deal because of that decision, which the Conservative party advocated but which the Labour party denied. We are still proceeding on a dual-track decision. Although we may have to modernise some of our existing weapons, we are vigorously pursuing reductions in strategic systems, the abolition of chemical weapons and reductions in conventional weapons. All that means a very effective dual-track decision, which the right hon. Gentleman should admit is working extraordinarily well.

    Meteorological Office
    Mr. Stern: To ask the Secretary of State for Defence if he has any plans to privatise any of the services of the Meteorological Office; and if he will make a statement.
    The Parliamentary Under-Secretary for Defence Procurement (Mr. Tim Sainsbury): The Meteorological Office is a candidate for agency status within the Ministry of Defence. In the process of reaching decisions on its future operating framework we shall consider whether any of its current activities might be carried out more appropriately in the private sector.
    Mr. Stern: Does my hon. Friend agree that, although the collection of meteorological data is a monopoly,

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    interpretation of that data certainly is not? Does he agree also that the Meteorological Office could well benefit from being placed in the same position as a range of organisations, from insurance companies to racing tipsters, in having to base the reliability of current forecasts on past performance? Does my hon. Friend agree that, at the very least, something must be done about the office's appalling service to the public over the Easter break?
    Mr. Sainsbury: I am sure my hon. Friend appreciates that meteorology is an inexact science which must deal with extremely difficult and complex data. The Meteorological Office is not a monopoly in the sense that it keeps to itself all the data that it collects. As my hon. Friend will appreciate, the collection of that data is an expensive business and, if the data are to be made available to commercial organisations, that should be done on a commercial basis.
    Mr. Heffer: As the Government have been afflicted by privatisation madness, can the Minister assure us that the Government have no intention of privatising the armed forces?
    Mr. Sainsbury: I do not think that that matter arises out of a question on the Metereological Office.

    United States Forces
    Mr. Corbyn: To ask the Secretary of State for Defence what is the total number of United States forces stationed in Britain; and how many bases they have.
    The Minister of State for the Armed Forces (Mr. Ian Stewart): There are usually around 30,000 United States service personnel in the United Kingdom. We currently make available 66 bases and facilities for United States forces in this country, the majority of which are small support facilities.
    Mr. Corbyn: Is the Minister aware that the recent publication "Over Here", produced by the Campaign for Nuclear Disarmament, lists 157 such bases, not 66 that the hon. Gentleman mentioned? Will the hon. Gentleman assure us that this army of occupation of 30,000 personnel is not spying on any British citizens or political activities in this country? Will the hon. Gentleman further assure— [Interruption.]
    Mr. Speaker: Order. The hon. Member for Northampton, North (Mr. Marlow) must keep his gestures to himself.
    Mr. Corbyn: Will the Minister further assure the House that the British Government have complete control over all activities in United States bases and that they will not allow those forces to deny civil liberties to people demonstrating outside them or to those who observe cruise missiles while they are touring around this country? Will the hon. Gentleman tell the House that it is time for the United States forces to leave this country and stop harassing British citizens and making Britain a nuclear aircraft carrier for the Pentagon?
    Mr. Stewart: Contrary to what the hon. Gentleman and many of his friends in the Labour party think, the presence of United States bases in this country is the surest guarantee of American support for European defence. As
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    for the publications of CND, the activities of that body tend to be highly misleading and inaccurate and it sounds as though this latest one is no exception.
    Mr. Forth: Will my hon. Friend confirm that our friends and allies the Americans are here very much at our invitation and that we have every confidence in their activities in this country in joining us in defending not only the United Kingdom but NATO and all our other allies?
    Mr. Stewart: Yes, indeed. I warmly support what my hon. Friend has said. The removal of American bases from the United Kingdom would put at risk the whole basis of the United States commitment to the defence of Europe. I cannot think of anything more damaging for the security of this country or our Western allies than what Opposition Members propose.
    Mr. James Lamond: How many United States civilian personnel are attached to support services to the 66 bases?
    Mr. Stewart: I mentioned about 30,000 United States service personnel. I cannot give the hon. Gentleman even an approximate figure for non-service personnel, but if he tables a question on those lines I shall see what information I can give him.
    Mr. Speaker: Order. I appeal for short and single questions, rather than catalogues, which take a lot of time.

    Military Personnel (Relocation)
    Mr. Heathcoat-Amory: To ask the Secretary of State for Defence how many military personnel have been redeployed away from London and the south-east since 1983.
    The Parliamentary Under-Secretary of State for the Armed Forces (Mr. Roger Freeman): Between July 1983 and July 1987 the proportion of service personnel in the United Kingdom deployed outside London and the south-east rose from 61 to 62 per cent.
    Mr. Heathcoat-Amory: I accept that the operational efficiency of the forces must always come first, but will my hon. Friend look at ways of increasing the number of civilian and office staff that are transferred away from the south-east? Does he agree that such a transfer would bring savings in salaries and costs and would help recruitment? If that involved the sale of property in the south-east, my hon. Friend could make a profit for his Department.
    Mr. Freeman: I agree with my hon. Friend's sentiments. It is relevant to note that by the end of this year about 1,400 civilian posts will have been deployed to Glasgow, and of that number 1,000 will have been employed locally.
    Mr. Conway: Does my hon. Friend agree that the policy of concentrating military forces in a few selected areas is not a good one for the long-term future of ensuring that the armed forces not only protect the community but are part of it, over as wide an area as possible—not just a few areas?
    Mr. Freeman: I agree. However, one must bear in mind operational constraints, in the sense that many of the Army units in the south-east of England in and around London are for the reinforcement of the British Army of the Rhine, so the closer they are to Germany, the better.

    AWACS
    Mr. Wallace: To ask the Secretary of State for Defence what discussions he has had on improvements to the offset arrangements on the contract to buy the AWACS early warning system from the United States of America.
    Mr. Younger: The Boeing company has every intention of fulfilling the contractual undertaking on the AWACS offset programme. My Department keeps in close touch with the company on the detail of the arrangements.
    Mr. Wallace: I am sure the Secretary of State remembers that when he made his announcement to the House in December 1986 he said that for every £100 we spend on Boeing's E3A, £130 would be spent in contracts to British companies. Given that Plessey has said that rather than having had an expected £150 million worth of contracts in the first year it has had less than 1 per cent. of that, is not the faith of the Ministry of Defence somewhat misplaced, and were not the warnings from Opposition parties that that offset agreement should be contractually binding the correct judgment at the time?
    Mr. Younger: The offset agreement is contractually binding. The Boeing company has undertaken under contract to provide 130 per cent. of the value of the AWACS deal in work for British firms that have to compete for that business. Boeing has every intention of fulfilling that undertaking, and has set up an office in London to ensure that it does.
    Dr. Hampson: Is it not true that British companies, even on offset deals, must put forward competitively priced tenders? As we have seen the Ptarmigan problems, is my right hon. Friend convinced that British companies are not merely taking things for granted but are genuinely putting forward competitively priced efforts to win these offset deals? If they are not, there will be wide repercussions for our purchasing in this country.
    Mr. Younger: My hon. Friend is correct. I believe that British companies are well aware that that is what they must do. Many of them are doing so, and the more widely this can be publicised the better.
    Mr. Duffy: Did we not receive similar contractual commitments in respect of Trident and star wars? How much work and how many jobs resulted from them? The right hon. Gentleman goes on expressing faith in Boeing, but I was in Seattle in January and I must tell him that although I cannot be as close to Boeing as he must be— necessarily—I was in the presence of one of his hon. Friends there. Neither of us received by any means the same assurances for which he is presumably prepared to settle. How many jobs have been created so far as a result of this offset, and how many does the Secretary of State expect?
    Mr. Younger: With respect to the hon. Gentleman, those comparisons are not correct, because in neither the Trident programme nor the SDI programme is there an offset agreement. On the main previous occasion when Boeing had an offset agreement with Britain—involving the purchase of helicopters—it more than fulfilled its undertaking. That is what it intends to do this time.
    Mr. Mans: Will my right hon. Friend state the total value of offset contracts for the AWACS programme so far placed in Britain?
    Mr. Younger: The total that we have received from Boeing is a listing of contracts worth $141 million. We are still evaluating its report, but hope to make a fuller statement in the near future.
    Mr. Rogers: The Secretary of State knows very well that he told the House that, as an integral part of the Boeing deal, more than 4,000 jobs would be created as a result of offset agreements and that contracts worth £1·5 billion would be placed here. He now tells us that the total value of contracts is just over £100 million. [HON. MEMBERS: "No, dollars."] It was $141 million, so it is probably not much over £100 million. Is the Secretary of State not ashamed of that? The Under-Secretary of State said in reply to a question on 9 December:
    "Any breach of the agreement would therefore constitute a breach of the contract and … the Government would have recourse to English law in respect of any perceived damages. —[Official Report, 9 December 1987; Vol. 124, c. 214.]
    When will the Secretary of State take measures to protect British jobs and ensure that we have our side of the agreement?
    Mr. Younger: I honestly think that, in the accepted language of these days, this is much ado about nothing. The agreement is exactly the same as it originally was. In other words, 130 per cent. of the value of the AWACS contract has been undertaken to be provided in offset agreements. That is how it is expressed and that is how it will be carried out. The figures that I have quoted cover the first six months. As the whole period lasts for eight years, and as Boeing is contractually committed to giving us the work, there is no reason to think that the agreement is not proceeding extremely satisfactorily and will not be fully met.
    Mr. Favell: Jobs would flow if the surplus Nimrod airborne early warning airframes were adapted to other uses. Is my right hon. Friend able to say what has happened?
    Mr. Younger: We are examining what other uses can be found for the surplus Nimrod airframes, but we are not yet able to make a statement.

    Military Land Act 1892
    Mr. Skinner: To ask the Secretary of State for Defence what representations he has received about the implications of the Military Land Act 1892 for rights of passage on common land at or near defence establishments.
    Mr. Heffer: To ask the Secretary of State for Defence what representations he has received about the implications of the Military Land Act 1892 for rights of passage on common land at or near defence establishments.
    Mr. Freeman: In the past 10 years, when making new military byelaws under the Military Land Act 1892, the Secretary of State has received four representations that the proposed byelaws could prejudice rights of way on common land and 11 representations that they would prejudice rights of common.
    Mr. Skinner: Is it not the case that, during those years, the Government have broken the law and encouraged the arrest—and imprisonment in some cases—of several thousand people at Greenham Common and on Salisbury Plain? If the Conservative party is to masquerade as the party of law and order, why do the Government not do the decent thing and acknowledge that fact in the courts? Moreover, perhaps the Minister could ask the Secretary of State for Defence to resign in view of this carry-on.
    Mr. Freeman: I have no intention of asking my right hon. Friend the Secretary of State for Defence to resign. The hon. Gentleman is probably referring to the decision of the Reading Crown court about byelaws at Greenham Common. That decision, which the Crown Prosecution Service has appealed against, has nothing whatever to do with rights of way. It is to do with the rights of specific commoners. Byelaws affecting Greenham Common were introduced in 1985 for the proper reason of protecting the integrity of the base.
    Mr. Haffer: Is it not clear that before 1979 the Military Land Act 1892—[HON. MEMBERS: "Reading."] That is right. Unlike Conservative Members, I can read. Is it not quite clear that since the Government came into office they have been concerned only with stopping democratic protests by ordinary people, including the women of Greenham Common? Would it not be wise for the Government to do the sensible thing—wind up that base, get rid of it and give back the land as common land for ordinary people?
    Mr. Freeman: We have not been stopping the rights of individuals to protest democratically. The 300 byelaws, in particular those at Greenham common, prevent illegal trespass on to the base. In no way do they stop the right of democratic protest. Hon. Members who encourage people to enter the base do so on their own responsibility. Those who enter the base at Greenham Common will be apprehended and removed.

    Montebello Agreement
    Mr. Wareing: To ask the Secretary of State for Defence what is the time scale for deploying new dual capable aircraft under the Montebello decision.
    Mr. McTaggart: To ask the Secretary of State for Defence what is the time scale for deploying new dual capable aircraft under the Montebello decision.
    Mr. Younger: As I said earlier, the agreement by NATO Defence Ministers at Montebello in 1983 did not include specific decisions on such matters.
    The modernisation of NATO's dual-capable aircraft is a continuous process, the need for which was confirmed in the papers submitted to Ministers at Montebello and in SACEUR's subsequent proposals for the implementation of the Montebello decision.
    Mr. Wareing: The Secretary of State will be aware that I had correspondence with the Prime Minister and with Lord Trefgarne during the period leading up to the last general election. I was told constantly that no specific proposals had been made at Montebello and that the Government could not speculate on a situation that may not even arise. On a visit to the United States I was informed by people at the Pentagon that the decision was
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    taken at Montebello. The hon. Member for Dorset, North (Mr. Baker) was informed in a written answer on 21 March that a decision was taken at Montebello. Therefore, is not the Secretary of State being dual-capable with the truth? Does he not realise that a Gallup poll published today shows that 65 per cent. of the British people are in favour of negotiating and only 21 per cent. are in favour of modernisation?
    Mr. Younger: I should have thought that virtually 100 per cent. of the British people were in favour of negotiations, which the Government are pursuing successfully. It remains the case that no specific proposals were put forward at Montebello. Only general requirements were put forward. We await specific proposals, and when they arrive we shall have to consider them.
    Mr. McTaggart: Does the Secretary of State agree that there is already a substantial imbalance in the number of aircraft in NATO's favour? Does it not make sense to correct that imbalance by including them in the conventional arms talks and the parallel talks to be set against Warsaw pact imbalances?
    Mr. Younger: I do not agree with that at all. In fact, the Soviet Union is rapidly building up its dual capable aircraft. We would be foolish to stop doing the same and not to keep them up to date.
    Mr. Bill Walker rose— [Interruption.]
    Mr. Speaker: Order. The hon. Member for Bradford, South (Mr. Cryer) must not carry on conversations across the Chamber.
    Mr. Walker: Most people have never flown aeroplanes. They know nothing about them and ought not to be listened to.
    Does my right hon. Friend agree that the Royal Air Force should have its weapon systems modernised because RAF pilots and aircraft need to survive modern battlefield conditions? If they are to attack enemy bases, they have to be capable of penetrating very sophiscated Soviet air defences and therefore need to have stand-off capabilities.
    Mr. Younger: I agree with my hon. Friend that the Opposition's doctrine seems to be that we should have out-of-date and ineffective weapons. I can see no argument for that.
    Miss Widdecombe: Does my right hon. Friend agree that, in view of the success of both the negotiations to which he referred in earlier answers and the INF treaty, it is imperative that we modernise our shorter-range weapons to guarantee flexible response, which is central to NATO policy?
    Mr. Younger: My hon. Friend is correct. If proof were needed, the experience of the last three years shows conclusively that, provided we keep our weapons systems up to date and negotiate with the super-powers for reductions in armaments, we can brillantly succeed in doing that. And that is what has happened.
    Mr. Denzil Davies: Will the Secretary of State now answer the question? He says that he is 100 per cent. in favour of modernisation and negotiation. If he wants to modernise, why not negotiate at the same time? If the dual-track arrangement was so successful, why not try it

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    again for battlefield and tactical nuclear weapons? Since the Soviet Union has a superiority, why not modernise and negotiate at the same time?
    Mr. Younger: Simply because the priorities in the continued negotiations for reductions in weapons, to which we are committed, are to reduce the strategic systems, to have a worldwide ban on chemical weapons and to tackle the conventional imbalance. Those are the main priorities that threaten our security and the best ones for which we should try to achieve reductions.
    Mr. Wilkinson: Is this not a totally spurious issue? Did not the Labour party, in the bad old days when it was in office, have a consistent record of introducing new, dual-capable aircraft into service, such as the Canberra, the Jaguar and the Tornado?
    Mr. Younger: Yes, my hon. Friend is perfectly correct. I understand that the Tornado was devised originally by a Labour Government. It is a pity that the present Labour Opposition do not have such a responsible attitude as their predecessors.

    Trident Submarine
    Mr. Madden: To ask the Secretary of State for Defence what is his latest estimate of the increase in the cost of the pressurised water reactor for the Trident submarine; and what are the implications for the total cost of the Trident project.
    Mr. Sedgemore: To ask the Secretary of State for Defence what is his latest estimate of the increase in the cost of the pressurised water reactor for the Trident submarine; and what are the implications for the total cost of the Trident project.
    Mr. Younger: There has been no increase for some time in the estimate of cost for the pressurised water reactor for Vanguard class submarines and none is expected.
    Mr. Madden: Is not the Secretary of State not concerned about the widespread suspicion that the Government are concealing the true cost of Trident and that many believe that its true cost is now running at more than £11,000 million, which represents £30,000 a day over the next 1,000 years? Does the Secretary of State not recognise that many of my constituents, who face big cuts in National Health Service facilities, would much prefer to see taxpayers' money put into the National Health Service to rebuild it rather than that this enormous amount of money should be spent on Trident? If Trident is so popular and so important, why do the Government not establish a national lottery to pay for it and scrap the one that they are planning for the National Health Service?
    Mr. Younger: I am not sure where the hon. Gentleman gets his facts from. We have substantially reduced the cost of the Trident programme. In particular, there has been a reduction of no less than £376 million—a real reduction —according to the most recent calculations. I should have thought that the hon. Gentleman and his constituents would be very pleased about that. Expenditure on the National Health Service is very much greater than that on defence, and that is probably quite right, but the presence of nuclear weapons, if they maintain our security, is an essential prerequisite for the National Health Service to operate at all.
    Mr. John Browne: Does my right hon. Friend accept that the Government's prime duty is the defence of the realm and that at a time of less obvious threat the Government must never let weakness be the cause of war? Will he therefore confirm his commitment to Trident—that it is a form of insurance, and almost cheap at the price?
    Mr. Younger: I agree entirely with my hon. Friend's assessment of the position. It is worth noticing that this Government's extremely successful economic record is enabling us both to afford adequate defence and to give increased funds to the National Health Service.
    Mr. Home Robertson: If the Secretary of State wants information on the costing of submarine systems, I suggest that one of the best places to look is on the beach at Helensburgh, near the Clyde submarine base. Has he made any representations to the United States military authorities about that subject, or has he received any representations from them?
    Mr. Younger: I have had no complaints of that sort, but the Trident programme is creating a very large number of jobs in the Dunbartonshire area, and I am sure that very many people and their families appreciate that fact.

    Defence Contracts
    Mr. Latham: To ask the Secretary of State for Defence whether he will make a statement on new measures taken by the procurement executive of his Department following publication of the report, "Learning from Experience" concerning overspending on defence contracts.
    Mr. Sainsbury: The report "Learning from Experience" acknowledged the many improvements that have been made in procurement procedures in recent years and highlighted the importance of adherence to these procedures. With regard to new measures, a key recommendation—that the chief of defence procurement should extend his central scrutiny of projects to include technical issues—has already been implemented. Implementation of other measures is under way.
    Mr. Latham: After the quite abysmal waste of public money revealed by that report and other reports from the Public Accounts Committee and the Select Committee on Defence, is it not absolutely essential that Mr. Levene should be given the power to hire and fire the best commercial brains in order to bring these costs under control?
    Mr. Sainsbury: I can tell my hon. Friend that although the PAC looks at projects that have caused problems, not all the stories are of failure. 'There is an increasing number of success stories as a result of the new procedures that we have implemented and of Mr. Levene's work. Three recent examples are 3D radar—long-range air defence—new bridging for the 1990s, and a submarine electronic surveillance system. Those are all recent contracts with an aggregate value of more than £400 million; a saving against the expected budget price of more than £100 million.
    Mr. Cartwright: Is it not the case that on a number of occasions the Ministry of Defence has been required to reduce the standard of its specification for a weapons

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    system to meet what the contractor could actually provide? What extra steps are being taken to strengthen the ability of his Department to test the claims of a contractor before a contract is placed?
    Mr. Sainsbury: As the report brought out, in arriving at a satisfactory production contract it is important to observe the correct procedures in determining what can be achieved and to ensure that there is a precise specification. One of the lessons of "Learning from Experience" is the importance of adhering to those procedures. On a number of occasions when things have gone wrong it was because production was entered into before capability had been accurately determined. That was the main cause of the problem.
    Mr. Ian Bruce: My hon. Friend has given an excellent reply in terms of ensuring that the procurement executive is close to development. Does that mean that the thought of moving the sea systems controllerate away from the research establishments is now further from his mind?
    Mr. Sainsbury: As my hon. Friend is aware, we are examining the implications and any advantages that might arise from the co-location of those parts of the sea systems controllerate that are presently at three or four different locations. No recommendation has been made to Ministers at this stage.
    Mr. Sean Hughes: Why has it taken the Government nine years and four Secretaries of State to wake up to what has been called by the hon. Member for Rutland and Melton (Mr. Latham) an "abysmal waste"? Would a fraction of that waste have been tolerated in other aspects of public service, still less in a grocery chain?
    Mr. Sainsbury: The hon. Gentleman will understand that if a contract has been entered into after perhaps rushing the procedures, or without competition, it takes some time to get it back on the rails. Most of the contracts giving rise to the kinds of problems to which my hon. Friend referred earlier are those which were entered into by the last Labour Government.

    Cadet Organisations
    Sir Hector Monro: To ask the Secretary of State for Defence what financial resources are devoted by his Department towards the running of cadet organisations.
    Mr. Freeman: The Ministry of Defence devotes approximately £33 million towards the cost of running the four cadet organisations; the Army Cadet Force, the Combined Cadet Force, the Air Training Corps and the Sea Cadet Corps—which total approximately 140,000 cadets. That sum covers the cost of accommodation, staffing, travel, administration and training.
    Sir Hector Monro: Does my hon. Friend agree that the cadet forces he mentioned are most important to this country, not only as youth organisations, but as the future basis for recruitment into the services? Can he assure me that the Air Training Corps will have sufficient resources in the coming year to give as much gliding practice as possible?
    Mr. Freeman: I agree with my hon. Friend about the value of the training corps for recruitment, to say nothing of the social benefits to the country of the cadet
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    organisations. One third of all officers in the regular forces have served with the cadet organisations. As for the Air Training Corps, I can give my hon. Friend the assurance he seeks on both gliding and travel arrangements.
    Mr. Tony Banks: Is it true that the Minister's Department is currently examining a form of national service?
    Mr. Freeman: No.
    Mr. Harry Greenway: Does my hon. Friend agree that the cadet forces give young people unrivalled oppor-tunities for comradeship, discipline, adventure and training in leadership? Can he say how many girls or young ladies, as well as boys and young men, benefit from those opportunities?
    Mr. Freeman: I agree with my hon. Friend about the sense of adventure and self-reliance, and the training for playing a useful part in society, that are provided in the cadet forces. About one third of the members of the Air Training Corps are girls.

    Frigates and Destroyers
    Mr. Douglas: To ask the Secretary of State for Defence if he will make a statement on the number of frigates and destroyers currently operationally available to fulfil the United Kingdom's commitments to the North Atlantic Treaty Organisation.
    Mr. Ian Stewart: There are currently 49 destroyers and frigates in service with the Fleet, of which 42 are available for operational deployment immediately or within a short period. A number of these ships are at present outside the NATO area, but could be recalled in the event of an emergency.
    Mr. Douglas: Would the Minister care to inform the House whether he includes in those 42 the ships now deployed in the Armilla patrol? In view of their sparse numbers, will he give some indicaton of when the Government will order the next batch of type 23s? It is important to shipbuilding yards in the Clyde and elsewhere that those orders are placed.
    Mr. Stewart: The Government appreciate the importance of the orders that the hon. Gentleman has mentioned. He will know that we have received tenders for up to four new type 23s, which are currently being evaluated. An announcement will be made at the proper time.
    Certainly the figure for destroyers and frigates includes those in the Armilla patrol. They do a first-class job for the country, and I am proud that they should be included in the Fleet. However, the suggestion that that makes it impossible for our destroyers and frigates to carry out the remainder of their task is wrong. The Royal Navy has the largest fleet of destroyers and frigates of any European country in NATO, and our ships carry out all our NATO obligations in full.
    Mr. Kilfedder: What would be the effect on the defence capabilities of the North Atlantic Treaty Organisation if the ports of Northern Ireland were no longer available to NATO's vessels?
    Mr. Stewart: The effectiveness of the defence of Western Europe depends on the availability of as many

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    ports and bases as possible. I would not want to think that the proposition that the hon. Gentleman has put forward needs be taken into account in practice.
    Mr. O'Neill: Is the Minister aware that the chaos in procurement, which is resulting in the beggaring of many of the yards that should be providing type 23 frigates and others, is evidence of the total disarray in which the Government's naval planning now rests, because of the burden that has to be carried by the rest of the Fleet to finance the Trident project?
    Mr. Stewart: No, Sir. I absolutely disagree. We already have as many as eight destroyers and frigates under construction, and we expect to continue ordering to maintain the figure of around 50 frigates in our Fleet. I dispute what the hon. Gentleman has said.

    Service Women
    Mr. Mans: To ask the Secretary of State for Defence what greater roles he expects women to play in the services in the light of the declining pool of available young men eligible to join up.
    Mr. Freeman: It has been the policy of successive Governments that women in the armed forces should not be employed in direct combat roles. However, women are being increasingly employed in technical roles, as well as in support and administrative areas where they have traditionally been employed. We intend to expand these opportunities wherever practicable.
    Mr. Mans: I welcome my hon. Friend's reply. Will he give further consideration to allowing women to train as pilots?
    Mr. Freeman: No, Sir. We have no plans to use women in combat, at least in the military sense.

    Frigates
    Mr. Patchett: To ask the Secretary of State for Defence what is the total value of current contracts to build frigates; and how many jobs are involved.
    Mr. Sainsbury: Four type 22 and four type 23 frigates are currently in various stages of construction. Precise costs are commercially confidential, but the total value of those orders is in excess of £1 billion. Each frigate directly employees about 1,200 men in the shipyard over its three to four-year build programme. In addition, at least twice that number will be employed elsewhere over the same period producing the weapons and equipment to be fitted in the ship.
    Mr. Patchett: Will the Minister tell the House how many jobs will be lost in Swan Hunter, Yarrow and Cammell Laird if he refuses to order in full in this financial year the four frigates that are desperately required by the Navy, and has he decided which yards will close if he does so?
    Mr. Sainsbury: We are currently awaiting the best and final offers to the invitations to tender which we issued earlier and to which my hon. Friend the Minister of State for the Armed Forces referred in a recent answer. Clearly, we shall want to place the orders in the light of those tenders to give the Navy the best possible value for money.

  PRIME MINISTER

    Engagements
    Mr. Carrington: To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the President of Zimbabwe. In addition to my duties in the House I shall be having further meetings later today, including one with the Prime Minister of New Zealand.
    Mr. Carrington: Is my right hon. Friend aware of how delighted the nurses are at the recent pay award? Does she agree with the nurses at the Charing Cross hospital who were telling me at the weekend that they thought it would go a long way towards improving recruitment and that nurses' morale was greatly improved as a result of the Government's decision to implement the award in full?
    The Prime Minister: Yes. I agree with my hon. Friend. The award in full to nurses, doctors, dentists and professions allied to medicine has been widely welcomed. It means that we shall be able to recruit more nurses in areas where there were shortages, such as paediatric nursing and intensive care units, and that nurses will be getting about 44 per cent. in real terms above what they were getting in 1979, and doctors about 30 per cent. extra in real terms. It is a good award for those who work in the Health Service, and it is good for the patients.
    Mr. Kinnock: Two weeks ago I asked the Prime Minister whether she would amend the social security regulations to restore housing benefit and help with rates. She then replied, "No, Sir." Today, I ask her the same question. Does she give the same answer?
    The Prime Minister: We are spending far more on housing benefit now that ever was the case during the life of the previous Labour Government. We have reformed the fundamental structure. The fundamental reform was correct.
    Mr. Kinnock: Why is the Prime Minister unable to answer the question? She knows that she has been wrong. She knows that she has done wrong. Why does she stand on her dignity instead of doing what she can to help others to maintain their dignity? We know that she must make changes. Why does she not just get on with it and not unnecessarily prolong the anxiety and the hardship which hundreds of thousands of people in Britain are now suffering? The two weeks since I asked her that question might be a short time in politics, but it has already been a long time for those in poverty and in worry.
    The Prime Minister: We do not stand on dignity. We in fact provide more resources—more cash—because the economy run by this Government has enabled us to provide more resources for housing benefit, social security reform and the Health Service. If we went back to the previous Labour Government we would have to cut the social services, housing benefit, the Health Service and nurses' and doctors' pay. I am sure that not even the right hon. Gentleman would want that.
    Mr. Kinnock: May I ask the Prime Minister for a straight answer? Will she now amend the housing benefit

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    social security regulations? I ask her on behalf of people in every constituency, on behalf of her hon. Friends and on behalf of the whole humane instinct of the people of this country.
    The Prime Minister: The system was badly in need of reform. The substantial structure will, of course, stay.
    Mr. Brittan: Will my right hon. Friend take the opportunity today to make it clear that it is totally unacceptable for picketing to turn into blockade and that those who want to go to work have the right to do so and will be fully protected from violence and intimidation?
    The Prime Minister: The only right to picket is a right to peaceful picketing. Any violence is a criminal matter and people who resort to it must expect to be dealt with accordingly by the prosecuting authorities and by the courts. It is a sad day when trade unionism has come to the amount of violence which we sometimes see on picket lines.
    Mr. Steel: Will the Prime Minister confirm—Mr. Speaker not having certified the Local Government Finance Bill as a money Bill—that it would be entirely within their Lordships' constitutional right to seek to amend and improve the operation of the poll tax as contained in the Bill? Will she further accept that the more the poll tax is understood by the public, as well as by parliamentarians, the more unacceptable it has become? Their Lordships would be performing a public service by sending the whole thing back here for reconsideration.
    The Prime Minister: The matter of the constitution is not only for me; it is for their Lordships' House and for Mr. Speaker. It is for them to decide, and they have rules which must govern the decisions. It is not a matter for me.
    With regard to the community charge, I disagree with the right hon. Gentleman. The more that is generally understood about it, the fairer it is seen to be. It is far fairer than the system of rates and rating revaluation, particularly on capital values, to which the right hon. Gentleman seems to want to cling.
    Mr. Hal Miller: Now that the Local Government Finance Bill—the flagship of our programme— [Interruption.]
    Mr. Speaker: Order.
    Mr. Miller: —has navigated safely through this House, will my right hon. Friend look again at the arguments for the central financing of education, now that we have a national curriculum, national tests, and are funding centrally schools that opt out of the system?
    The Prime Minister: I think that that would mean wholly central control of education. There is no way in which a Department of Education and Science could administer the education system. The laws were set in the 1944 Education Act—and have been amended since—within which local authorities have to pursue their duties. Having been a Secretary of State for Education and Science, I do not think that the Department of Education and Science could ever run education centrally; nor do I think that it would be desirable that it should do so.
    Mr. Morgan: To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Morgan: Will the Prime Minister advise me on how I can assist one of my constituents, a lady who has an income of £76 a week, and who has, as a result of these changes, lost £11 per week in housing benefit? How can she continue to feel that she is part of the enterprise society when she is far worse off working three days a week as a shop assistant than she would be if she stayed at home? When the Prime Minister eventually administers the Admiral Byng treatment to the Secretary of State for Social Services, will she consider administering similar treatment to the Secretary of State for Employment, as he has been the architect of the mess in which the Government find themselves?
    The Prime Minister: As the hon. Gentleman is aware, it is not possible for me to deal with individual cases. Whenever I have tried to do so, I have found that when we look into them there are substantial factors which have not been fully put into the question. I remind the hon. Gentleman that if we went back to the amount spent on housing benefit in 1979 it would mean cutting the total spent by 52 per cent.
    Mr. Stokes: Did my right hon. Friend read the remarkable speech which our right hon. Friend the Member for Chingford (Mr. Tebbit) made recently, in which he praised the part which the so-called working classes now play in supporting the Government? We all agree with that. However, for the avoidance of doubt, will she confirm that there is still room in the Government and in the Conservative party for the nobility, the gentry and the middle classes?—[Interruption.]
    Mr. Speaker: Order. The whole House wants to hear this reply.
    The Prime Minister: My hon. Friend is just about the only person who could ask that question in this House, and I wish to goodness that we had more like him.
    Mr. Cohen: To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cohen: Will the Prime Minister consider the case of Mrs. Niner, a lollipop lady in my constituency, who lives with her husband, young daughter and two teenage sons in a two-bedroomed maisonette? Over and above the existing rates level, they will be faced with an extra poll tax bill of £1,138 per year. Can that be stopped, or will the Government's poll tax juggernaut run down my lollipop lady?
    The Prime Minister: If they are faced with a poll tax —a community charge—of that dimension, it must be because they have a very extravagant local authority. That is partly the trouble. Many Left-wing Labour authorities have put up the rent and rates, saying that the taxpayer can afford to pay for them, but the fact is—perhaps the hon. Gentleman will tell his lollipop lady and many others—that under this Government the amount spent on social security, in particular on health and pensions, has vastly increased beyond anything that could have been contemplated eight years ago.
    Mr. Mates: At a time when many people are working hard to repair and improve Anglo-Irish relations, was it not unhelpful, to say the least, for the Irish Prime Minister to make such a savage attack on the British Government's policies last weekend? In particular, was it not irresponsible of him to advocate a unitary state in Ireland, when his own country's Government so recently put their names to a document forswearing that until such time as the majority of people of Northern Ireland want that to happen?
    The Prime Minister: Yes, I agree with my hon. Friend. The highest priority must be the defeat of terrorism, which could be a threat south of the border, as it is in the north. The defeat of terrorism requires unstinting effort and effective co-operation across the border. We shall continue to press for that and to seek reassurance from the Irish Government that the speech to which my hon. Friend referred does not mean that they are backing away from their responsibilities under the agreement.
    Mr. Ray Powell: To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Powell: I wanted to ask the Prime Minister why the Government Whip objected to the Second Reading of my Grandparents (Adoption of Children) Bill last Friday. However, as she was not prepared to reply to my right hon. Friend the Leader of the Opposition, does that mean that the Leader of the Opposition and Opposition Members must continually badger the Government so that they realise that changes are needed in the proposals for social security? As the Prime Minister refused to answer the Leader of the Opposition, will she answer my
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    straightforward question? Is the Prime Minister going to make any changes to housing benefit in the new proposals for social security?
    The Prime Minister: I will answer the hon. Gentleman as I answered the Leader of the Opposition. This year about £46 billion is being spent on social security—a sum vastly in excess of anything contemplated seven or eight years ago. There are more pensioners, the eligibility for people who are disabled has been increased and we are concentrating more money on families, especially on low income families. It was time that we had a fundamental reform, and it was the right reform.
    Mr. Andrew Mitchell: To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Mitchell: During my right hon. Friend's most welcome visit last Friday to the thriving city of Nottingham, where many of my constituents work, did she notice two key characteristics: first, that last May the administration was taken over by a Conservative council for the first time; and, secondly, that the initiative to restore and rejuvenate those parts of Nottingham which require it are being led by a private sector initiative?
    The Prime Minister: I had a good visit to Nottingham. I saw those now responsible for the sound administration and careful finances of the city, which was flourishing. I saw excellent industries, some of which did not exist some years ago and which had taken over where there had been a dying industry and were providing new jobs, which is good. I saw excellent industries, an excellent administra-tion and excellent arts and sports facilities.

Central Ordnance Depot, Donnington (Fire)
3.30 pm
Mr. Bruce Grocott (The Wrekin) (by private notice): To ask the Parliamentary Under-Secretary of State for Defence if he will make a statement on the central ordnance depot fire in Donnington.
The Parliamentary Under-Secretary of State for the Armed Forces (Mr. Roger Freeman): The central ordnance depot at Donnington, near Telford in Shropshire, is one of the Army's two major storage depots. It has an area of over 300 acres with about 270,000 sq m of covered storage. There are nine major storage buildings on the site, with one under construction. The depot has a mixed military-civilian work force.
Yesterday, at about 11.30 hours, a small, smouldering fire was discovered in building B1, one of the six larger buildings on the site. The building was evacuated and the fire extinguished. The Ministry of Defence police were called to investigate and after a full inspection of the building the work force was readmitted at 13.30 hours. At 15.30 hours, while MOD police were still present taking statements, a second fire started in the upper part of a corner of the building, and quickly took hold. This second fire occurred on the opposite side of the building to the first.
The Army fire brigade attended, followed immediately by the local authority brigades. A maximum of 21 fire appliances were in attendance. Most of the building was destroyed. The fire is now under control and is being damped down. One fireman was slightly injured. There were no other casualties.
There was some asbestos element in the smoke because of the asbestos content of the roofing material. This was dispersed some five miles to the west of the fire. Wrekin district council staff are dealing with this, and I am advised that the danger to the public is slight.
The West Mercia police, assisted by the Ministry of Defence police, are carrying out their normal inquiries into the circumstances of the fire. The Army authorities will also be convening a board of inquiry to examine the cause of the fire and to consider what action needs to be taken. The board will include an outside expert from Her Majesty's inspectorate of fire services.
I should like to apologise through you, Mr. Speaker, to those members of the public living in the vicinity of the depot for the inconvenience and disturbance caused by this unfortunate event.
Mr. Grocott: Will the Minister join me in again thanking all those involved in the emergency services for their tremendous efforts and the staff of Wrekin district council who responded so rapidly to deal with the consequences of the fire? Does he agree that for a fire of this magnitude to happen once in a constituency, as it did in my constituency in 1983, is disastrous; for it to happen twice in five years is without precedent and unbelievable?
Is the Minister aware that this fire is of massive concern, not only to my constituents who work in the Ministry of Defence buildings, but to everyone living in the surrounding area? Will he tell the House what reassurance, in addition to what he has said already, he can give my
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constituents about their safety? In particular, will he say what dangers are associated with the dust and debris which have spread over much of the northern part of Telford?
Will the Minister confirm that many of the safety recommendations made by the Ministry of Defence inquiry following the first fire, particularly regarding the construction of fire barriers in the buildings, have not been carried out? Is he aware that many people will find totally unacceptable the excuse given by one of his officials that the reason why the safety measures were not carried out was
"because there have been factors against us such as time and money."
Will the Minister announce that there will be a full independent public inquiry into the fire? An internal Ministry of Defence inquiry would be totally unacceptable to this House and certainly to my constituents. Will he see that the inquiry addresses the following questions?
First, why was the remedial work not carried out in full following the first fire? Secondly, what was the cause of the fire and, in particular, were the same factors at work as was the case with the previous fire? Thirdly, what are the hazards from asbestos in the buildings, not only for the people who work in them but for people living in the area? The Minister will be aware that this issue has been of active concern to trade unions at the depot for many years. Fourthly, what remedial work is necessary, particularly in relation to removal of asbestos and to making the depot safe?
Will the Minister undertake to implement immediately and in full any safety recommendations that are made by the inquiry? Will he also ensure that full compensation is paid to anyone suffering direct or indirect consequences of the fire? Will he see that the local authorities, especially the Wrekin district council, which have responded so magnificently to this fire, are fully funded for the costs involved?
Any hon. Member would feel profoundly concerned if a fire of this magnitude occurred once in a lifetime in his constituency. In my constituency, it has happened twice in five years. My constituents are entitled not just to answers from the Minister but to action—and they are entitled to it now.
Mr. Freeman: I thank the hon. Member for what he said, and I join him wholeheartedly in congratulating and thanking the local authorities, the fire service and the police service. He was right to say what he did.
The hon. Gentleman asked me about safety and danger to the public. That is primarily a matter for the Wrekin district council, but I understand that it will be calling a press conference at 4 o'clock. I am advised indirectly from the Health and Safety Executive, by a senior factory inspector, that there is no significant danger to the public. The advice that The Wrekin district council will offer to local residents clearly should be heeded.
The hon. Gentleman asked about the 1983 report. That report made 12 recommendations, all of which were agreed. It might be for the convenience of the House if I gave to the hon. Gentleman, and placed in the Library of the House this afternoon, a summary of that inquiry, which was given to trades unions at the time. I am sure that the hon. Gentleman and others might find it helpful to read the report.
The hon. Gentleman has asked for an independent public inquiry. We shall follow the procedures followed by

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all Governments in setting up a military inquiry. It will incude independent experts. I have already said that a member of Her Majesty's inspectorate of fire services will serve on that inquiry. I can assure the hon. Gentleman that when the inquiry has reached its conclusions they will be communicated promptly, fairly and accurately, not only to the hon. Gentleman and to the House but to all those who are concerned and affected.
I can give the hon. Gentleman an assurance about claims. The claims of those who have been adversely affected and can show that their financial losses are directly due to this unfortunate incident will be considered.
The hon. Gentleman asked the board of inquiry to consider a number of points. I have noted very carefully what he said and I undertake to draw them to the attention of the military board of inquiry.
Mr. John Biffen: I join the hon. Member for The Wrekin (Mr. Grocott) and my hon. Friend the Minister in congratulating the local authority, the police and the fire services on the way they reacted to this disaster. Will the Army board of inquiry be able to consider whether there is any indication whatsoever that arson may have been the cause of this disaster, and will any findings on that point be made available to the public?
Mr. Freeman: I can give my right hon. Friend that assurance. We have certainly not ruled out arson as the cause of this latest fire. I have told the House that there were two separate incidents in yesterday's fire. Certainly the investigations of the West Mercia police in addition to those of the Ministry of Defence police will concentrate on the point mentioned by my right hon. Friend.
Mr. James Wallace: I join right hon. and hon. Members in paying tribute to the emergency services and the local authority. The Minister said that he would, helpfully, put a summary of the findings of the previous enquiry in the Library, but he avoided a question which the hon. Member for The Wrekin (Mr. Grocott) asked: what recommendations of that inquiry have not been implemented, and why not?
Mr. Freeman: All the recommendations of that inquiry were accepted in full.
Mr. Wallace: Were they implemented?
Mr. Freeman: The hon. Gentleman should perhaps read the summary, which I will place in the Library this afternoon, and he will find that the report makes certain recommendations. Clearly the measures needed in the short term, such as dualling the location of certain strategic army stocks, have been implemented. The reason why the fire at Donnington yesterday has not affected the operational readiness of the Army is that the strategic items were located in two separate places. Also, the water supply system at Donnington was improved immediately following the report.
A start was made immediately on the longer-term measures, and if the hon. Gentleman cares to visit Donnington he will find that, as the hon. Member for The Wrekin (Mr. Grocott) will know, the building destroyed in the 1983 fire has been replaced by a modern building in which the stocks are compartmentalised. The other buildings will take time to replace. It is interesting to note
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that the building where the fire occurred yesterday was the next building shortly to be cleared of all stock arid modernised.
Mr. Derek Conway: Is my hon. Friend aware that many of my constituents in Shrewsbury and Atcham work at the central ordnance depot at Donnington? Is it not the case that relations between the garrison and the local authority and the fire and police services are excellent? I join the hon. Member for The Wrekin (Mr. Grocott) and my right hon. Friend the Member for Shropshire, North (Mr. Biffen) in paying tribute particularly to the fire service for its very quick response.
The House should appreciate that many thousands of crucial jobs are involved in this depot, which is very important for the economy of Shropshire. In particular, the Minister's assurance this afternoon on the subject of asbestos is very welcome. It will help to calm the people, particularly to the west of Donnington, in my constituency who may feel threatened as a result of the fire.
Mr. Freeman: I thank my hon. Friend. Some 1,800 civilians are employed at Donnington, and some 400 military personnel, so it is a sizeable and important NATO logistics base. I join him in paying tribute to the work force. As I said to the hon. Member for The Wrekin, the constituency involved, we will communicate fully to the trade unions the results of this inquiry and discuss with them the recommendations that it makes.
Mr. Jeremy Corbyn: Will the Minister accept that many people in The Wrekin and other areas are concerned that he does not seem keen on having a public inquiry into this disaster? Will he reflect again on the need for a public inquiry that will include consideration of the reports made in the past and the need to remove all asbestos from the Donnington depot. which has been a source of concern for many years?
Secondly, will the Minister consider the need for long-term health checks throughout the Telford area arid that part of Shropshire where asbestos leaked out in 1983 and again this week for health damage that may be caused to people because of the asbestos that has landed in their gardens and on their homes and farmland in the district?
Mr. Freeman: I have said that we shall follow the normal procedures and shall not be holding a public inquiry. We shall be holding the normal military inquiry. With regard to communicating the substance of the inquiry and the recommendations to the House, I have said that we will make sure that the results are properly, fairly and promptly communicated.
The hon. Gentleman asked about the removal of asbestos. I have said that the building that was destroyed was the next in line to be modernised and the asbestos removed. The building that replaces the building that was destroyed in 1983 is a fine modern building in which the stock is compartmentalised, and it does not have asbestos in the roof. I can confirm that if members of the public are concerned about their health as a result of this incident they should contact the military authorities, and, if necessary, we will arrange for the necessary health checks.
Mr. Jeremy Hanley: I thank my hon. Friend for coming Io the House and answering this private notice question on this very important issue, in stark contrast to the absence of statements in the House

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after the fire in June 1983. May I ask my hon. Friend to read the correspondence between my constituent, Commander J. R. S. Engledue RN, Retired, me and his Department between 1983 and 1985 on the subject of the £174 million of uninsured loss following the last fire?
Will my hon. Friend bear in mind the fact that the Comptroller and Auditor General, the Public Accounts Committee and the Select Committee on Defence made scant comment about the previous fire which resulted in a vast loss to the taxpayer? Therefore, will he continue his admirable example of today and keep the House fully informed at each stage?
Mr. Freeman: I assure my hon. Friend that I will read the correspondence between himself, his constituent and the Ministry of Defence. Preliminary indications are that the loss of stock is relatively modest in comparison with the disaster of 1983.
Dr. Dafydd Elis Thomas: The Minister will understand that there was concern along the Welsh border and in mid-Wales about the incident in view of the prevailing winds. We are relieved to know that the damage was limited. Although it was limited, clearly the Minister needs to consider the other storage areas which may be similarly constructed. Can he tell the House how many storage facilities are of an age which may mean that they still contain asbestos covering, and how he is dealing with those?
Mr. Freeman: The report of 1983, of which I have said that I will place a summary in the Library, covered all ordnance depots of the British Army. Therefore, it related not just to Donnington but to the others, including Bicester. We were not dealing just with the problems of Donnington but were concerned about the Armywide implications.
Mr. Denzil Davies: It gives me no great pleasure to say to the hon. Gentleman that he has not been as frank with the House as he should have been. He has said that he will place in the Library the recommendations of the internal board of inquiry following the last fire. He has said that they relate to other depots and departments. How many of the recommendations have been carried out, and how many have not been carried out? Surely he can tell the House, in view of the second fire, what recommendations have not been carried out.
May I press the hon. Gentleman on the question of a public inquiry? He said that the normal practice was to have an internal inquiry. We understand that. But this was not a normal fire. It was a fire which apparently will cost the Ministry of Defence a lot of money. Will he reconsider having a public inquiry in view of the fact that not only the Ministry of Defence and its employees are involved, but people living in the area, other services and the district council? Surely there is a case for a public inquiry.
Mr. Freeman: The right hon. Gentleman has made two key points. I rebut his charge that I have not been frank with the House. As I have already said, 12 recommenda-tions were made. I have only just received the report on yesterday's incident. I have said that I will place a copy of it in the Library. When the right hon. Gentleman has a chance to read it, he will see that all the recommendations were accepted because of the nature—[HON. MEMBERS: "They have not been implemented."] If hon. Gentlemen would allow me to complete what I was saying, they would hear that there were specific recommendations about modernisation or rebuilding. I have intimated that we cannot wave a magic wand to replace buildings of the size and scale of those at Donnington. It takes years to do that. We started boldly at Donnington. If hon. Gentlemen have had a chance to visit Donnington, they will have seen the scale and expense of the rebuilding programme.
As regards a public inquiry, I have stated what our position is. I find unacceptable the implication of the right hon. Gentleman's comment that the Army has something to hide or that it does not wish to consult the various bodies which I am sure have much to offer, including the police, the fire service and a representative of Her Majesty's fire service inspectorate. I am convinced that this is the correct way to proceed.
I am sure that the hon. Member for the Wrekin (Mr. Grocott) will help allay the fears of his constituents because we are following the standard practice in military inquiries. I will co-operate with him to ensure that the trade unions at the site and his constituents are properly informed about the conclusions of the inquiry.
Mr. Alex Carlile: If there is any evidence of contamination of agricultural areas on the Welsh border and in mid-Wales, bearing in mind the very unhappy experience following Chernobyl and the fact that the movement of animals on some farms is still restricted, will the Minister agree to meet representatives of the National Farmers Union and the Farmers Union of Wales to consider such evidence and compensation arrange-ments?
Mr. Freeman: I can give the hon. and learned Gentleman that assurance. There is absolutely no evidence that the smoke from the fire has fallen other than within the immediate vicinity of the ordnance depot.

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: By leave of the House, I shall put together the Questions on the two motions relating to statutory instruments.
Ordered,
That the draft Weights and Measures (Knitting Yarns) Order 1988 be referred to Standing Committee on Statutory Instruments, &c.
That the Salmon (Weekly Close Time) (Scotland) Regulations 1988 (S.I., 1988, No. 390) be referred to a Standing Committee on Statutory Instruments, &c.)—[Mr. Ryder.]

Armed Forces (Housing)
3.49 pm
Mr. Julian Brazier: I beg to move,
That leave be given to bring in a Bill to make provision to facilitate the private housing of members of the armed forces during service and after retirement.
This Government have a good record on armed forces' pay. One of their first actions on taking office in 1979 was to implement in full the recommendations of the Armed Forces Pay Review Body. Since then, they have continued to do that in full every successive year. Nevertheless, I believe that a grave injustice exists which does not result from any deliberate policy of this or any previous Government, but arises from the nature of service itself in our armed forces.
The first priority of most married couples today, and, indeed, of many single people, is to find themselves a house to buy. Yet, in the Army, fewer than one quarter of married personnel own their own homes.
In the Air Force, the figure is two fifths, as compared with a national average of two thirds. This causes intense worry to many service men. One can imagine the position of a man in his mid-forties—perhaps a sergeant major, a colonel or a squadron leader—who has given 25 years' service to the Crown and has not yet, as he comes out of the service, made that first step on to the lowest rung of the housing ladder, when people in equivalent professions would probably be on the second or third step.
The difficulty arises because, in the Army and the Royal Air Force, service men move from base to base. The problem does not arise in the third service. Home ownership in the Navy, thanks to an excellent scheme, is not a problem. The sailors move off in their ships leaving their families static. In a nutshell, the problem is that, if a soldier or airman chooses to buy a house and is then posted—as he assuredly will be, unless he is close to the end of his service—he has two unattractive options.
On the one hand, he can leave his family behind. If he does that, it is bad for the family and for the service. One can imagine, for example, the position of a regiment in Osnabrüch or Hamelin. If all the officers' wives were living in houses in England, who would look after the junior ranks' wives—girls in their late teens and early 20s—when their husbands were away for weeks on exercise?
The other option is for the service man to move to a quarter wherever the posting is. Unfortunately, unlike what happens in every other expatriate organisation that I know, including the Foreign Office and most private companies, if a service man is posted abroad, he has to pay rent for his house there. That rent is not tax relievable, but, if he owns a house in England and lets it, he has to pay tax on that rent, if he can find a tenant in the first place. Although there is shortage of rented accommodation at the bottom end of the sector, that is not always the case, as you, Mr. Speaker, may have noticed in the Sunday papers. There is a shortage of tenants in many areas of the rented market.
However, the problems facing the service man are not only financial. If he leaves behind a house and goes to another country, the problems with tenants can be phenomenal. Just this weekend, I heard that two of my closest friends in the armed forces had their house beaten up in the most outrageous fashion by tenants and much of the damage is not insurable.
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That explains why home ownership in the Army and the Air Force is so low and why it is not in the interests of the service that it should be higher. My Bill puts forward two suggestions that could go some way towards closing the breach by assisting members of the armed forces eventually to own their own homes, without doing so during the bulk of their service.
The first is a change in the Income and Corporation Taxes Act 1970. That would enable insurance companies to offer endowment policies for service men with a view to their eventually buying houses, but on the basis that they would not be subject by law to the normal minimum period—in most cases seven years—before they could withdraw their money.
I suggest that service men should be allowed to borrow and put a capital sum into such a scheme—endowment policies are protected from taxation and grow tax-free:—and be allowed to pay off the loans like a mortgage on a house, subject to the same tax relief that the rest of us enjoy on a house. That would not conceptually be a new tax relief. My right hon. Friend the Prime Minister stressed only last week the importance of the £30,000 tax relief to families. My proposal would bring to our soldiers and airmen the same tax relief that we enjoy, but instead it would apply to a nest egg which eventually, towards the end of service, the service men would use to pay part of the price of their houses. This could lead to a net saving to I he Exchequer. It would, for example, stem the tremendous flow of Royal Air Force pilots—the cost of training is £3 million per pilot—who often cite housing as their principal reason for leaving early.
My other proposal is to do with the right-to-buy legislation. In December 1983, the Government passed a number of excellent measures which gave service men good rights to buy their council houses after a relatively short period, taking account of their time in the armed forces as well as the time that they had occupied their houses. Unfortunately, that legislation is applicable only if the service man has managed to obtain a council house.
I am afraid that some councils do not give service men fair parity. Thirty years ago, Duncan Sandys, Minister of Housing and Local Government and later Minister of Defence, said:
"That these men should be penalised in this way, solely by reason of the fact that they have been serving their country, is a most grievous injustice, which should not be allowed to continue."—[Official Report, 1 March 1955; Vol. 537, c. 1887.]
Brent council's housing policy—this is one of many examples—is:
"servicemen who enlisted from the Borough who are discharged from the Forces will only be assisted if they fall within a 'priority group' … Those who qualify for consideration will face a very long wait."
I do not ask that service men be given special privileges; I ask that they be allowed to join council house waiting lists while they are serving, so by the end of their service most will have reached the point where they are entitled to a dwelling. As well as being justice for our soldiers, sailors and airmen, this would take the strain off those councils with service bases within their areas which ultimately find themselves assisting large numbers of service men who are forced to declare themselves homeless.
In summary, the Government have a good record on armed forces pay, but this one gaping hole exists. Our soldiers and airmen are there to defend us. We must give them similar opportunities to enjoy the same housing as

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we do, but we must not do it by saying to them, "You should buy a house," in the full knowledge that it is not good for the forces for them to buy a house early in their service. My Bill will go a modest way in two respects towards filling this gap.
Question put and agreed to.
Bill ordered to be brought in by Mr. Julian Brazier, Mr. Simon Burns, Mr. Jacques Arnold, Mr. David Davis, Mr. Barry Field, Mr. David Martin, Mr. Keith Mans, Mr. Michael Irvine, Mr. David Shaw, Mr. Hugo Summerson, Mr. David Tredinnick and Miss Ann Widdecombe.

Armed Forces (Housing)
  ARMED FORCES (HOUSING)
  Mr. Julian Brazier accordingly presented a Bill to make provision to facilitate the private housing of members of the armed forces during service and after retirement: And the same was read the First time; and ordered to be read a Second time upon Friday 8 July and to be printed. [Bill 149.]

P and O (Dispute)
4 pm
Mr. Eric S. Heffer: On a point of order Mr. Speaker. In reply to a question from her right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) the Prime Minister referred to events taking place in Dover arising out of the P and O dispute. Has there been any sign from the Secretary of State for Transport or from the Secretary of State for Employment that there is likely to be a statement made tomorrow on that issue? If the matter is not resolved in an intelligent way, the lives of many people could be put at risk because they could be sailing on ships which are not properly manned and which are not subject to trade union agreement. That could lead to difficulties.
The Herald of Free Enterprise—a misnomer if ever there was one—sank because profit was put before the interests of people. Is it not clear that a statement should be made at the earliest opportunity because people's lives are at risk? It is time that we had a proper settlement of these matters through trade union machinery, rather than the imposition of employers' rights as against those of the workers.
Mr. Speaker: I have received no request for a statement to be made and have no knowledge of one. I am sure that what the hon. Gentleman has said will have been heard by those on the Government Front Bench who are responsible for these matters——
Mr. Dennis Skinner: Further to that point of order, Mr. Speaker——
Mr. Speaker: Order. I am on my feet. I am sure that what the hon. Member for Liverpool, Walton (Mr. Heffer) has said will have been heard and perhaps we shall hear something tomorrow.
Mr. Skinner: My point of order has to do with the way in which you, Mr. Speaker, were able a few days ago to grant an emergency debate on the social security regulations. It is widely recognised that you did a pretty handsome job by allowing that debate and opening up an argument that needed opening up. I suggest, in view of what has already been said about what is occurring at Dover, that you might look kindly on the possibility of an application under Standing Order No. 20 on this issue to stop P and O using ferries without proper safety measures ——
Mr. Speaker: Order. I have received no application on that matter.
Mr. David Shaw rose——
Mr. Speaker: Order. I call the hon. Gentleman, but his point of order must be a different one.
Mr. Shaw: Further to that point of order, Mr. Speaker. If at any stage it was deemed appropriate for a Minister to make a statement, although safety is obviously of paramount importance to the company and the employees who have accepted the opportunity to work, I hope that such a statement will not be obfuscated by inaccuracies and false statements from Opposition Members. I hope that the Home Secretary or the Secretary of State for

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Employment, will, when making the statement, discuss the freedom and rights of the people and seamen of Dover to go to work in their own time and in their own way.
Mr. Speaker: This is not the time to debate this matter.
Mr. Graham Riddick: On a point of order, Mr. Speaker.
Mr. Speaker: Not now; I am on my feet.

Finance (No.2) Bill
Order for Second Reading read
Mr. Graham Riddick: On a point of order, Mr. Speaker.
Mr. Speaker: Is it concerned with this Bill?
Mr. Riddick: No, Sir.
Mr. Speaker: Then I shall take it some other time.
4.3 pm
The Chief Secretary to the Treasury (Mr. John Major): I beg to move, that the Bill be now read a Second time.
This is the Government's 12th Finance Bill and it incorporates the proposals set out in my right hon. Friend's Budget last month. It was a substantial Budget and continues our strategy of tax reform and tax reduction within a framework of sound public finance, firm control of public expenditure and progressive reductions in public borrowing. Those policies have now brought us a balanced Budget.
In conjunction with other policies, this strategy has without doubt transformed the British economy. The extent of the change in performance and confidence is remarkable. In the 1960s, the British economy was clearly in a poor state. In the 1970s it worsened. We were known, with some justification, as the sick man of Europe. That label and all that went with it have now disappeared. In the 1980s the British economy has become the fastest-growing in Europe and, in 1987, the fastest-growing of all leading industrialised countries.
During the 1960s we praised and envied the German economic miracle. In the 1980s the position has been precisely reversed. The House need not necessarily take my word for that. I shall quote briefly from one of Germany's leading liberal newspapers, "Die Ziet":
"In the past the German model was praised in an almost embarrassing manner and compared with Great Britain's bad example. Now it is the other way round".
That transformation has occurred because of the policies that we have followed and continue to follow in this Finance Bill, and each and every one of them has been consistently opposed by Opposition Members, who later today will vote against tax reductions, against fair treatment for married couples and against a raft of measures designed further to improve our economic prospects. Let no one believe that economic Luddites no longer exist, for they sit opposite us and will demonstrate that fact later today.
The evidence since the Budget confirms that Britain's economic success continues. The latest figures show that between February and March unemployment fell by 28,000. It has now fallen for 20 months in succession, by 706,000 in total and by 533,000 over the past year. It is now at its lowest level for more than six years.
It is equally relevant that the numbers of those in employment, apart from demographic changes, are continuing to rise strongly. In the fourth quarter of 1987, they rose by 146,000. That means an increase of more than half a million in 1987 as a whole. Over the past four years, the United Kingdom has created more jobs than the sum total of all the rest of the European Community added together. That is the scale of the change coming over our economy.

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More evidence of the health of the economy was provided only this morning by the results of the CBI's latest industrial trends survey, carried out in the first half of this month. I shall illustrate some of its findings. It states:
"Business confidence remains high … The rising trend in optimism is broadly based … Strong demand has been met by increased manufacturing output … Investment intentions have strengthened substantially and 86 per cent. of firms report their capacity at least adequate to meet expected demand."
Mr. Doug Henderson: Will the right hon. Gentleman give way?
Mr. Major: In a moment. That is the way in which British industry sees itself after the Budget, and it is a tragedy that the Opposition cannot see that——
Dame Elaine Kellett-Bowman rose——
Mr. Henderson rose——
Mr. Major: I promised to give way first to the hon. Member for Newcastle upon Tyne, North (Mr. Henderson).
Mr. Henderson: I am glad that the Minister is giving way to the Opposition first. I am also glad that the Minister has itemised a number of areas in which he believes we are prosperous. If we are, how does he explain the fact that we have the second largest deficit in the balance of trade of any OECD country?
Mr. Major: The hon. Gentleman should understand that one of the significant reasons for the balance of trade deficit is that the British economy is growing noticeably faster than those of any of our European competitors. If he examines the structure of the balance of trade deficit, he will notice that a good deal of it is semi-manufactured goods that are entering the country and will be re-exported.
Dame Elaine Kellett-Bowman: Is my right hon. Friend aware that unemployment in Lancaster has fallen twice as fast as the regional and national drop? Does not the CBI survey to which he referred destroy the Opposition's pessimism, which says that every time people have more money in their pockets they will spend it on foreign goods?
Mr. Major: My hon. Friend clearly illustrates the fact that prosperity is increasingly spreading to all regions of the United Kingdom and that unemployment is now falling in every region. I appreciate that the Opposition do not know how to achieve success, but it is a shame that they cannot even recognise it from time to time.
What is vital, and unusual for post-war recoveries in the United Kingdom, is that this continued improvement in the labour market and sustained growth in the economy has been achieved without a resurgence of inflation. Retail prices in the last three months are less than 3·5 per cent. higher than a year earlier, and 1987 was the first year since 1964 when the rate of growth exceeded the rate of inflation.
It is a welcome fact, moreover, that the economic resurgence is not confined to London and the south-east. The unemployment figures show that every region is sharing in the strength of the economy. That is reflected in the fact that the steepest falls in unemployment during the
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past year have been in the west midlands, the north-west and Yorkshire and Humberside. I hope that that is exceedingly welcome to the whole House.
Throughout the country, there is increasing evidence of improving performance and a spread of the enterprise culture. Between 1979 and the first half of 1987. manufacturing productivity in Scotland increased by an average of 5·5 per cent. a year as compared with overall growth in the United Kingdom of just under 4 per cent. Over the decade to 1986, output in high technology manufacturing in Scotland increased by 170 per cent. and in electronics by 210 per cent. In Wales, the number of self-employed people has gone up by nearly one third since 1981, and now stands at more than 14 per cent. of the working population—one of the highest proportions in the United Kingdom. Since 1983, employment has risen in every region of the United Kingdom.
There is a further factor—confidence in the United Kingdom is increasingly attracting overseas investment into this country. Since 1983, direct investment in the United Kingdom from abroad—leaving aside the North sea—has grown on average by 13·5 per cent. a year in real terms. By contrast, it fell between 1974 and 1979 when the Labour party was in office. This investment is benefiting every region. The Bill is designed specifically to encourage that process to continue.
Wales now has the greatest concentration of Japanese manufacturing units in Europe. Japanese car manufacturers are a valuable part of the economy in the north-east. The west midlands has picked up fast in the plastics industry and instrument engineering. In the north-west, old industries are adapting to new technology and new industries are being introduced.
Mr. John Smith: What has this to do with the Finance Bill?
Mr. Major: The right hon. and learned Gentleman clearly does not understand the interaction between financial measures in this Bill and others and the success of the economy.
The image of the parts of the country that I have mentioned, which is sedulously cultivated by Opposition Members as scandalously depressed, is gradually being changed. Business men and investors know better than the Opposition what is now happening in the regions.
Mr. D. N. Campbell-Savours: To what extent does the right hon. Gentleman believe that the British economy is dependent on the United States economy? What would be the impact on the British economy if, for example, there was a political change in the United States next year and the budget deficit and the trade deficit were cut during the next few years?
Mr. Major: The principal impact and concern regarding the British economy is the success of our economic management, our competitiveness and our practices. Those are the matters that are wholly within our control and they are the matters which have been dramatically improved during the past few years.
Mr. John Battle: The right hon. Gentleman did not include Yorkshire in his list of regions and successes. Would he care to comment on the fact that I can guarantee that most of the jobs advertised in the window of the Bramley jobcentre are part-time, low-paid

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jobs? Is that not the reality of the increase in employment? It is not the increase in full-time, permanent work which the right hon. Gentleman suggests.
Mr. Major: As it happens, I did mention Yorkshire, several parts of which are growing exceedingly rapidly. There is growth in part-time jobs, for which there is genuine demand. Many people welcome that growth. I do, and I hope that the hon. Gentleman does. There is also substantial growth in full-time jobs which is reflected in all the available statistics.
The confidence that we can now see is the direct result of our economic management over the past nine years. The attractiveness of the United Kingdom as a place to invest was given an enormous boost by the changes that my right hon. Friend the Chancellor of the Exchequer made to corporation tax in 1984, which gave the United Kingdom what is still one of the lowest corporation tax rates in the industrial world. This Budget gives a further boost to businesses that are already here and it will make the United Kingdom yet more attractive to businesses that are still thinking of coming here.
Again, the House need not just take my word for it. ICI called it the most radical Budget since the war. The CBI said:
"This is the Budget we have been waiting for … it will promote enterprise … it will provide greater incentives for all in British business."
The Association of British Chambers of Commerce said:
"We wanted incentives. We have got them. Now let us make them work".
The Small Business Bureau's description was:
"A shot in the arm for the smaller business".
The message is crucially and critically clear—the Budget provides a challenge which British business men are ready to grasp. We look to them to do so in the months and years ahead.
That is the economic backdrop to the Bill. The Opposition may not welcome it, because economic success for Britain means political oblivion for them, but the economic success is a reality.
This is a substantial Bill. It runs to 139 clauses and 10 associated schedules. The centrepiece is the income tax changes in clauses 22 to 24 which affect all taxpayers. They create in Britain the lowest basic rate of income tax since the second world war. The basic rate is now down to the same level as the reduced rate under the last Labour Government and personal allowances are now 25 per cent. higher in real terms than they were in 1979. The United Kingdom will also have one of the simplest personal tax structures in any country and one of the lowest top rates.
The logic of these reforms is accepted throughout the world by Governments across the political spectrum. It is plain common sense that incentives are vital to improve economic performance. The Opposition do not necessarily accept that. Their anxieties about tax changes are consistent and have been with them for many years. We have been in this situation before. Last month's' ritual denunciation of the higher rate cuts had a familiar ring about it.
I remind the House of what the Opposition spokesman —the right hon. Member for Bethnal Green and Stepney (Mr. Shore)—said when winding up the debate after the Government's first Budget in 1979. He justified voting against cutting the top rate of tax from 83 to 60 per cent. with these words:
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"the Chancellor of the Exchequer is looking for … an effort, in income terms, by the existing elite of British industry, commerce and administration. For several reasons, I believe that is a nonsensical expectation. Of course, the recipients of his largesse will be pleased. However, will they work harder and more productively than at present? Will they be galvanised, to use that new and fashionable word? Will they be encouraged to invest more? … Previous experience, when Tory Chancellors cut surtax and income tax, reveals no correlation in the United Kingdom between the performance of economy and the levels of personal taxation."—[Official Report, 18 June 1979; Vol. 968, c. 1028.]
As we have cut taxation, the economy has continued to improve. The right hon. Gentleman now has his answer, which is clear to everyone. The evidence is that, far from the then Chancellor's expectations being nonsensical, the right hon. Gentleman's strictures were wrong. The result of the increased effort, high productivity and, indeed, galvanisation, is an upsurge in revenue from higher rate taxpayers. Despite the top rate cuts, and despite the abolition of the investment income surcharge, the top 5 per cent. of taxpayers paid one third more in income tax in 1987–88 than when we took office.
Now, even the right hon. Member for Islwyn (Mr. Kinnock) says that it is "highly unlikely" that Labour would reimpose a top rate of 80 or 90 per cent. It is highly unlikely, of course, that Labour would have the opportunity. It is limping along in the wake of Conservative policy. Even now, after nine years in Opposition, Labour has no coherent tax policy. All it offers is a tone of envy in general and nothing in detail.
Mr. Graham Allen: Does the Minister consider the reduction in income tax as the jewel in the Conservative crown? Has he seen the figures that his right hon. Friend the Chancellor of the Exchequer gave me in answer to a parliamentary question? The burden of taxation as a whole, including national insurance and VAT and everything else has hardly moved since 1979. It is 39·3 per cent. at the moment. It was 39·36 per cent. in 1979. In virtually every single year that the Government have been in office, the real tax burden has been higher than it was in 1979.
Mr. Major: Do I take it that the hon. Member for Nottingham, North (Mr. Allen) will encourage Opposition Members to vote for the tax reductions in the Budget and then to vote for more tax reductions? When one costs their programme, it is clear that taxes would go up beyond any capacity to pay.
I make a prediction to the hon. Gentleman. Just as no credible economic spokesman for the Labour party now proposes a return to 83 per cent. or 98 per cent. taxation, nor, after their next election defeat, will any Labour economic spokesman demand the reimposition of a 60 per cent. top rate. For by then we will have seen the economic benefits which flow from this further measure to boost enterprise, effort, productivity—indeed, as the right hon. Member for Bethnal Green and Stepney once put it, to "galvanise" our most talented and skilled people.
f by then the Labour Front Bench has still not learnt that lesson, we may find a place in our public expenditure plans to buy them one-way tickets to Australia and New Zealand for urgent discussion with their Labour colleagues who have discovered the advantages of cutting taxes. It would be money well spent to send them there. If they learn the lesson, it might even be worth paying for return tickets to bring them back.

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The controversy over the higher rate cuts has overshadowed the important measures in clauses 22 and 24 —the reduction in the basic rate of tax to 25p in the pound and the double indexation of allowances. Clause 22 means that we have achieved the target we set in 1979: to provide a marginal rate of tax of 25p not just for the 4·5 million who were in Labour's reduced rate band, but for 23 million taxpayers—94 per cent. of the total. Clause 24 takes further the increases in allowances.
The married man's allowance is now at its highest level since the war. We could have achieved our basic rate objective far earlier had we not devoted resources to increased income tax allowances. But we believed then and we believe now that allowances in 1979 were too low, and that too many people paid tax on too modest incomes and we wished to take action to alleviate that. The effect of those increases is that 1·7 million people, nearly one quarter of them elderly, who would have been paying tax if we had simply kept allowances constant in real terms, now pay no income tax at all as a result of the changes.
Lower personal income tax opens the way for further reform to the tax system. There are provisions in the Bill to clamp down on a range of unjustified tax breaks—clause 44 reduces the under-taxation of company cars. Even so, the tax valuation for tax purposes will still fall far short of the true value of the benefit.
Clause 63 will bring to an end the abuse of forestry relief as a tax shelter. In future, Government assistance to forestry will be better targeted through a new grant scheme which will better realise our environmental objectives. Under the new scheme, grants will be available for planting to improve landscape, habitat and recreational amenities as well as timber production. All woodlands will be subject to clear environmental guidelines. Some people have criticised the fact that conifer planting will continue to receive support. They should remember that broadleaves cannot be grown in all areas and that the main market for timber in this country is for soft wood.
Clause 42 abolishes mortgage interest relief for home improvement loans, thus targeting relief on the main objective of home ownership and removing the scope for abuse about which the Public Accounts Committee has expressed concern. The Bill also removes top slicing reliefs for lump sum payments such as golden handshakes, which are no longer justified with lower tax rates.
Mr. A. J. Beith: The Minister spoke about unjustified tax breaks. Does he regard higher rates of tax relief on mortgage interest as a more justified tax relief than tax relief on home improvements?
Mr. Major: The point about mortgage interest relief is that it should be put to the purpose for which it was intended. The Public Accounts Committee expressed concern that that was not necessarily the case for mortgage interest relief on home loans. I draw that distinction for the hon. Member for Berwick-upon-Tweed (Mr. Beith).
The Finance Bill also contains important measures to simplify the tax system—not least in the nightmarishly complex area of non-charitable covenants and main-tenance. Clauses 35 to 39 will sweep away a complex set of rules which involve the taxpayer in a lengthy process of claiming relief or repayments from the Inland Revenue. New covenants, apart from covenants to charity, will be
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taken out of the tax system altogether. New maintenance payments will be free of tax, and tax relief for the payer will be subject to a limit.
These changes will make the system much simpler all round. In particular, they will reduce the tax burden for separated and divorced wives on modest incomes, and limit the tax relief available to wealthy husbands. They will also remove a disincentive on wives who want to work, who will no longer have some of their personal allowance used up by their maintenance.
Clauses 31 to 34 and clause 98 introduce independent taxation for married women—perhaps the single most important innovation in the 1988 Budget. I must say that I am a touch surprised that the Opposition have given this measure so little recognition. I will not dwell in detail on the anachronisms of the present system, which treats a married woman's income and gains as if they belonged to her husband, nor shall I attempt to explain in detail the new provisions, which we shall have the indubitable pleasure of discussing in Committee.
The crucial point is that the system we propose will give all married women full independence and privacy and achieve this sooner than the other alternatives canvassed. It will continue to recognise marriage. It will give all women a personal allowance and capital gains tax annual exemption in their own right.
There is a further point. It will bring significant financial benefits to a very large number of elderly married women with small incomes who receive pensions on the basis of their husband's contributions. At present such a pension is taxed at the husband's rate. Under independent taxation it will be treated as the wife's income and elderly wives will have their own age-related personal allowance to set against it. I think that the effect has not yet been fully appreciated but, in fact, around 160,000 elderly couples —nearly 15 per cent. of the total—will be taken out of tax altogether as a result of the change.
Ms. Marjorie Mowlam: The Minister is not telling the whole story. The marriage tax allowance is still given to the man and can be transferred to the woman only with his consent. If the Minister is serious about creating equality of opportunity for women, why is there no tax incentive for workplace nurseries, as that would stop the taxing of toddlers?
Mr. Major: The hon. Lady's latter point is a non sequitur. Her first point raises the problem that to allow choice would place substantial cost on the whole system of independent taxation. That is the difficulty that we face. The rules would be more complicated for taxpayers and for the Inland Revenue and would compromise privacy and independence. Most important, it would not have been possible to implement the scheme by 1990. I understand and appreciate the hon. Lady's point, but we had to take a judgment, so we took the choice to which the hon. Lady refers. Her second point was not a matter arising out of this Finance Bill.
There is a further point concerning the penalties on marriage, which the hon. Lady nearly encouraged me to forget. As well as removing the unjust treatment of married women, the Bill also removes, for all practical purposes, the discrimination against marriage which exists in the tax system. Clause 41 will apply the limit on mortgage interest relief to the house or flat so that married and unmarried couples will get the same amount of relief.

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Under clause 29, an unmarried couple living together with children will get only one additional personal allowance between them, so that they get no more tax relief than a married couple.
In addition to these substantial reforms of the income tax system, the Bill includes a number of significant changes in capital taxation which build upon earlier reforms. Clause 91 will mean that only real capital gains are taxed, ending the injustice of taxing paper gains. This will benefit the economy by unlocking many assets acquired pre-1982 and free the resulting capital for new and productive investment.
Clause 92 will charge gains at income tax rates, reducing the incentive to convert income into gains, purely to avoid tax. It will mean that basic rate taxpayers see a reduction of five percentage points in their rate of tax, while higher rate taxpayers will see an increase of 10 per cent. on their capital gains. That reform is possible only because we have reduced the top rate of tax.
The Bill also contains provisions to reduce the burden of inheritance tax significantly. Clause 127 introduces a flat 40 per cent. rate with a threshold over twice as high in real terms as in 1979. And the number of tax-paying estates will be reduced by one quarter, allowing many more people to inherit the family home entirely free of tax.
These changes will be of particular and enormous help to those running family businesses. They are of social as well as economic importance, too, because they allow the family business, the small shop, or the small farm to be passed on intact between generations. That is critical to maintaining the social fabric of many of our small towns and villages. We have come a considerable way from the capital transfer tax that we inherited, with its threshold of only £25,000 and its 17 rates on gifts and 14 rates on bequests.
Mr. Campbell-Savours: Will the right hon. Gentleman give way?
Mr. Major: No, I shall not give way to the hon. Gentleman on that point.
The Bill makes a number of improvements to the business expansion scheme. The Opposition profess to regard the scheme as no more than a tax shelter for the rich. They ignore the boost the BES has given to investment and enterprise.
Mr. John Smith: The Minister has passed over clause 128. What is the purpose of that clause, which releases from inheritance tax gifts to political parties in excess of £100,000? Why is that change being made?
Mr. Major: The change is being made for a variety of sound reasons. If, one day, the right hon. and learned Gentleman is able to produce satisfactory policies, he may find that even his party benefits from the provisions of that clause.
Mr. Smith: For what reasons is the change being made?
Mr. Major: Because, among other reasons, it places bequests of that kind on the same sort of level playing field as bequests made by legatees to other bodies. It is no doubt a matter that we shall discuss next week in the Committee of the whole House and on other occasions.
Mr. Smith: Is one to understand from the justification offered by the Chief Secretary that this inducement to people to leave money to the Conservative party is because the Conservative party is to be incorporated into a charity?
Mr. Major: Before the right hon. and learned Gentleman grows too excited about that, I remind him that when the last Labour Government were in power charities and political parties were treated in precisely the same way for tax purposes. The position is exactly the same now. The right hon. and learned Gentleman ought to look at the history of his own party before criticising the Government's legislation.
So far, over 3,000 companies have raised over £750 million under the business expansion scheme. An independent study in 1985 by Peat, Marwick, McLintock found that only a third of BES finance would have been raised as equity without the scheme. When my right hon. Friend introduced the scheme in 1983, the venture capital industry in this country was still in its infancy, and unquoted companies of all sizes often found it difficult to raise equity finance from outside investors. Five years on, we have now reached a point where the United Kingdom venture capital industry has been so revitalised that larger companies can now readily raise equity finance without the need for special tax relief.
Accordingly, clause 50 reduces the relief available by introducing a limit of £500,000 on the total investment in a company which can qualify for tax relief in any one year under the scheme. That is intended to concentrate relief on investment in smaller local companies who find it more difficult to raise equity capital outside the business expansion scheme.
There is a further change to BES in clause 49, which extends the business expansion scheme to investment in companies specialising in letting residential property on new-style assured tenancy terms only. As the House knows, these will provide security of tenure for tenants. Landlords will be able to obtain possession on only limited grounds, broadly similar to those applied by existing Rent Acts.
The lack of a private rented sector has long been a barrier to job mobility and job creation. People who want to move to find work have been prevented by the difficulties of obtaining council housing and by the problems and cost of buying new homes. This new relief will give a kick start to the provision of readily available rented housing to help people move to new jobs more easily. Moreover, by increasing mobility around the country, it will ease skill shortages and help to reduce the disparities of regional unemployment.
We are determined that there should be a flourishing private rented sector to give people a real alternative to owner-occupation or to what is all too often simply a place on a council waiting list.
The Opposition will seek to conjure up the vision of a return to Rachman.
Mr. Alistair Darling: Precisely.
Mr. Major: The hon. Gentleman says, "Precisely." He makes the point extremely eloquently, but to do so is to trivialise the debate.
It is only in this country that the very existence of a private rented sector is a matter of political dispute. Elsewhere a choice between owning and renting in the private or public sectors is the accepted norm because it

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allows people a flexibility which our system does not permit. In Germany, the latest figures show that 43 per cent. of property is privately rented, in France the figure is 36 per cent. and in the USA it is 33 per cent. In the United Kingdom it is less than 10 per cent. because of the hostility of the Labour party to the privately rented sector. We are absolutely determined that British families should enjoy not only the right to buy but the right to move. This will provide it for them.
Mr. David Winnick: I am grateful to the Chief Secretary for giving way in his usual courteous manner. Is it not a fact that the Rent Act 1957, introduced by a Conservative Government, was supposed to lead to a far greater amount of rented accommodation in the private sector? However, it led to the Rachmanite scandal and to a reduction in the amount of privately rented accommodation.
Is the right hon. Gentleman aware that apart from the Rachmans of the past there is Nicholas Hoogstraten, a notorious landlord whom the Secretary of State for the Environment has been trying to get into court, but to no avail? It is precisely that person, and those like him, who will do best out of this legislation.
Mr. Major: The hon. Gentleman is wrong about that. I share his distaste for the Rachman-like methods of years ago. This provision applies to assured tenancy schemes only. I agree with what I take to be the hon. Gentleman's view, that the impact of Rent Acts over a period of time has severely diminished and destroyed the privately rented sector. We wish to deregulate and to provide a privately rented sector, not least to expand choice and to provide an opportunity for mobility. We hope that the Opposition will not place the same impediments in the way of success as they have placed in the past.
Mr. George Howarth: What does the Chief Secretary have to say about the view of the Institute of Housing about this matter? Its view is
"that it will not really have much of an impact in terms of meeting housing need. Our concern is its short-term nature (5 years) and the obvious incentives to obtain vacant possession at the end of that period."
Mr. Major: If the hon. Gentleman is making the case that at the end of the five-year period we should extend it, am content to listen to any representations that he has in mind, but this is a time-limited scheme. The intention is to give a kick start to the privately rented sector.
We wish to ensure that a good deal of the accommodation that could be made available is made available, to provide a better total quantity and quality of accommodation for people to live in. It is one of the great tragedies of post-war social history that for dogmatic and theological reasons the Labour party has constantly opposed the provision of privately rented property.
Mr. Darling: If the Chief Secretary is serious about increasing mobility and choice, rather than giving a tax handout to those who would speculate in providing rented property, would it not be better to restore the same amount of money to individuals by way of housing benefit so that they would have beter purchasing power and would be able to exercise choice, including being able to move to
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this part of the country where houses are so expensive? All that the Chief Secretary seems to be doing is exhuming Rachman and wishing him the best of luck.
Mr. Major: It is not so much the purchasing power as the supply of accommodation at which this measure is aimed.
Sir Eldon Griffiths: My right hon. Friend has been more than polite in pausing on this point because I know that he wishes to speak on many other matters. However, he may take it from me, as one who has lived for many years in the United States, that that very mobile society has been able to provide a rental market of a quality and price that is attractive to large numbers of ordinary people who wish to move, because the rented sector has been able to work out the market. This country has been damaged by the inability of the market to work. I wish my right hon. Friend well with his clause.
Mr. Major: I am grateful to my hon. Friend. I agree without qualification with his remarks and I am content to rest on them.
Mr. Ian Gow: Does my right hon. Friend recall that when we introduced the right to buy in what is now the Housing Act 1980, the Opposition were strongly opposed to that provision? Will my right hon. Friend reflect on the fact that now that the Opposition are opposing our measures to bring into use property that is at present empty or underused, and to attract private money into building new property for renting, they are just as out of touch about the prospective tenants whose champions they claim to be as they were about the right to buy?
Mr. Major: My hon. Friend, who is a distinguished former Minister of Housing, is entirely right. I confirm the message that he essentially gave. We need no lectures from the Labour party about how to produce good housing or about the right either to enjoy ownership or to rent. The Oposition were wholly wrong about the right to buy, and they are wholly wrong about the right to move.
The Bill contains a range of other useful measures affecting businesses. I shall mention only the most important—and I may say to the right hon. and learned Member for Monklands, East (Mr. Smith) that I am moderate by instinct. That is a virtue I offer Opposition Members as well.
In parallel with the basic rate tax cut, the small companies' rate of corporation tax falls to 25p, which is the lowest level since the war. Capital gains tax rebasing will enable many companies to unlock pre-1982 assets for new investment and reduce their tax bills by £235 million in 1989–90. Clause 132 will abolish the capital duty levied on companies being formed or expanding, so removing a significant proportion of the cost of capital issues. That is the fifth major tax to be abolished by my right hon. Friend the Chancellor of the Exchequer, who has now abolished more taxes than the right hon. Member for Leeds, East (Mr. Healey) introduced. In all the circumstances, the House may consider that to be a remarkable record.
The Bill will modernise also the rules on company residence and migration, removing the Treasury's outdated discretionary powers and replacing them with new, straightforward and objective rules. It will respond to representations from the building societies by removing the present tax obstacles in the way of societies seeking to convert to public limited companies. The Bill will improve

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administrative arrangements for taxing Lloyd's members in line with our objective of ensuring that they are taxed effectively but fairly, in a way that reflects the special features of Lloyd's operations.
The Bill contains a package of measures designed to implement reforms of tax administration advocated by the Keith committee. It is a balanced package providing for both relaxation and tighter rules where justified. Clauses 112 to 121 give the Inland Revenue appropriate powers to uncover tax defaulters. Those measures result from extensive consultation with representative bodies and with the public, and they have received overwhelming support.
Clauses 11 and 12 increase Customs and Excise powers for dealing with fraud and commercial smuggling, bringing the legislation more closely in line with mainstream criminal laws. As well as those tightening measures, the Bill includes some easements of the VAT civil penalty regime, which will be of considerable benefit to businesses.
Clause 10 updates the Customs' power of search of person contained in section 164 of the Customs and Excise Management Act 1979. That section has remained virtually unchanged for 30-odd years—a period during which drug smuggling has become a widespread and serious problem. The clause will bring Customs' power of search more closely into line with the police, with the various additional safeguards proposed by the Keith committee. It clearly defines categories of search and provides necessary powers of detention for search.
No one likes being searched—it can be extremely distasteful. Nevertheless, that power is necessary if we are to have any power over smuggling. The updated power provided by clause 10 will equip Customs officers with sensible methods of detecting and deterring smugglers while reinforcing the statutory safeguards provided for suspects.
Last month's Budget repeated 1987's economic hat trick of tax reductions, higher public expenditure and sharply reduced borrowing. This year my right hon. Friend is planning for a public sector debt repayment of £3 billion. That is a remarkable achievement by any yardstick.
Mr. Gordon Brown rose——
Mr. Major: I have given way sufficiently; the hon. Gentleman must catch your eye, Mr. Deputy Speaker. In last month's debates on the Budget—[Interruption.]
Mr. Brown: Can the Chief Secretary confirm that he has the money to relieve the suffering of pensioners as a result of the changes made to housing benefit? Can he confirm also that instead of giving tax cuts to the 1,000 richest people in the country, he could have paid the £70 million that is the cost of relieving the capital level for pensioners from £6,000 to £10,000? Can he further confirm that it is not an absence of cash that prevents the Government from acting on this important issue but a complete absence of compassion?
Mr. Major: I assume that that was a trailer for the hon. Gentleman's speech, and we shall await it with considerable interest. I may tell the hon. Gentleman that the results of the Government's economic policies have enabled us in the past few weeks to meet in full the pay
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review awards to nurses, doctors, dentists and those serving in the armed services.. That could not have been done if the public finances were not in good order.
Mr. John Smith indicated dissent.
Mr. Major: The right hon. and learned Member for Monklands, East could have spoken in this debate, had he wished to do so. Perhaps he will permit me to finish— [Interruption.] The Chancellor is not shouting like a banshee from a seated position.
In our debate on the public expenditure White Paper, the hon. Member for Dunfermline, East (Mr. Brown) said that to exclude an increase for the National Health Service from the Budget would be
"an unprecedented act of malice."—[Official Report, 24 February 1988; Vol. 128, c. 319.]
The hon. Gentleman now has his answer. More importantly, the nurses, the doctors and the dentists have their money, and the hon. Gentleman was wrong as usual. Not only will they benefit from the 2p cut in the basic rate of tax in the Finance Bill, and from the doubling of personal allowances, but they will now receive a pay increase everaging 15·3 per cent.—ranging as high as 60 per cent.
Much of that is the direct result of the agreement on the grading review reached with the nurses as long ago as last December. It is a cost that the Government will fund in full and a cost that the Government can meet in full only because of the strength of our public finances and the control we have kept over expenditure.
Only the British Labour party retains its dinosaur attitude to tax reductions. It is ironic that in the same week that the Labour party in Westminster was digging into its entrenched opposition to the higher rate cuts, one of the party's paymasters—the Transport and General Workers Union—was robbing the Scottish people of 1,000 jobs in Dundee. That is a timely reminder of Labour's priorities of increased taxation and a return to trade union restrictive practices—both calculated to destroy jobs and not create them.
Our Budget encourages enterprise and creates incentives and it stimulates success and promotes jobs. It is a Budget designed to achieve greater opportunity and prosperity. The measures to achieve them are in the Finance Bill and I commend it to the House.
4.49 pm
Mr. Gordon Brown: The one point on which both sides of the House are agreed is the fundamental importance of this Finance Bill. However, what the Chief Secretary described as an economic miracle will be unknown to 2·5 million people who are unemployed, and to 18 million who are on low incomes. In his naive belief that the nurses' settlement, however welcome, will solve the problems of the National Health Service, and in his vigorous defence of the Bill—as befits a Minister marked out as the Cabinet's fastest rising star since the Secretary of State for Social Services—the Chief Secretary seemed to go out of his way to avoid mention of the central fact that informs the entire Bill. That central fact is that, as a result of the changes in top rate tax and personal allowances——
The Financial Secretary to the Treasury (Mr. Norman Lamont): Did we mishear, or did the hon. Gentleman mention 18 million low-paid people?
Mr. Brown: I said 18 million, and I defend that figure. That is the figure published by the Department of Health and Social Security, which gave 16 million as the number of people on low incomes, on the latest figures that were available to it. When that figure is updated as a result of all the changes made because of the social security cuts, we arrive at a figure of 18 million people on low incomes. That includes mothers, children and wage earners—[Interruption.] I should have thought that Conservative Members would be concerned about the poverty and destitution throughout the country. I should have thought that, instead of laughing about housing benefit cuts and the freezing of child benefit, they would be anxious to do something about problems that affect 18 million people.
The central fact that underlies the entire Bill is this. Taking together the top rate tax reductions and other changes, the top 1 per cent.—who are uniquely privileged as a result of previous decisions by Chancellors of the present Government—gained more than the majority of people in this country put together. In one line of one sentence of one clause of the Bill, £2,100 million in a full year is given away to those who previously faced taxation at the very top rates.
Mr. Phillip Oppenheim: Can the hon. Gentleman tell me straightforwardly whether he prefers a higher top rate of tax for high earners, which none the less produces a lower return for the Exchequer, or a lower top rate of tax that produces a higher return?
Mr. Brown: I am grateful to the hon. Gentleman for intervening at this stage. I had expected the question, but thought that it might come later, when we had addressed some of the problems in the Bill. Obviously the hon. Gentleman has been told to ask it very early.
Having expected the question, Opposition Members did some research. Let me say to the Chief Secretary and the Chancellor that if the top 5 per cent. in this country are paid increases which they advocate that their own workers should not receive, but which amount to 300 per cent. over the past eight years, and if the rest of the country receives substantially smaller increases, we would expect—even with the reduction of top rate taxes in the economy—the share raised from the top 5 per cent. to be higher.
If the hon. Member for Amber Valley (Mr. Oppenheim) thinks that it is axiomatic that the reduction of top rates will raise higher revenues, let him look at the Red Book produced by the Chancellor, in which the Treasury sought to make the best estimate of the effect of the top rate tax reduction in a full year. The answer that it came up with was not an increase as a result of the change in revenues but a reduction of some £2 billion.
Mr. Norman Lamont: The hon. Gentleman has quoted the Red Book, but he has not quoted the footnote that says that the figures assume no change in behaviour.
Mr. Brown: Let the Financial Secretary give me proof of what those changes in behaviour are likely to be. I had thought that the Treasury was under some obligation to produce the best estimate that it could deliver. If the best estimate that can be delivered is that £2 billion is being sacrificed as a result of the top rate tax cuts in a full year, that is the estimate that we must go on.
Let me also say to the Financial Secretary that the last budget director who gave us the impression—in America —that top rate tax reductions would raise far higher
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revenues was Mr. David Stockman, who had to recant just about everything that he had said about the Laffer theory and everything else in a highly publicised book. He spoke the truth when he said that the agreements for top rate tax reductions that were extended on the basis of some such economic theory as the Laffer curve were simply a Trojan horse to allow the rich to get richer without making any increased contribution to the economic efficiency of the country.
Mr. David Shaw rose——
Mr. Brown: I shall give way in a minute.
The fundamental feature of this Bill is the growing gap between rich and poor that will result from the tax changes announced by the Chancellor. That commitment to widening inequality—even at the cost of those who will experience deepening poverty—infuses just about every major clause of the Bill. Only 35,000 people will benefit from changes in inheritance tax that will cost the rest of the nation £200 million. No more than 100,000 people are likely to benefit from the £235 million exemption on capital gains before 1982. Only a few hundred are likely to benefit from the changes in the business expansion scheme described by the Chief Secretary this afternoon, to which we shall return later.
I predict that the biggest gainers from what should have been a major reform in independent taxation will be couples with substantial sums of unearned income and capital gains, both of which will be disaggregated as a result of clauses in the Bill. That will be its most costly feature.
Mr. Shaw rose——
Mr. Brown: Let me finish.
The Bill widens the gap between rich and poor so much, and inequality is so much its central feature, that it is hardly surprising that a Conservative Member said on Budget day, "There are just not enough noughts on my pocket calculator to work out my winnings."
I shall give way to the hon. Member for Dover (Mr. Shaw)—and I do not take his intervention as an admission that he is the guilty Member.
Mr. Shaw: The hon. Gentleman said that the tax reductions in the United States of America had had no serious effect. Does he deny that there has been an increase of 8 million in the number of people employed in America while those tax reductions have taken place? Has not unemployment in this country fallen by 1 million because there have been tax reductions, and because those who benefit from them are the people who invest in and expand new businesses?
Mr. Brown: I do not know whether the hon. Gentleman is advising the Chancellor how he should run his economic policy. I must tell him, however, that one reason for the substantial budget deficit in the United States is that the predictions made in the early years of the Reagan revolution that top rate tax reductions would yield massively increased revenues have not proved correct.
The Chancellor is unique among Chancellors through-out the world in regard to change in the top rates of tax. We are mentioned in New Zealand, Australia and everywhere else, because he alone has chosen to cut the top rates without making any substantial impact on the number of tax loopholes that make it possible for people

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earning substantial sums to avoid tax liabilities. If the Chancellor doubts what I am saying, let him read the parliamentary answers that I have been given by the Financial Secretary.
In one instance I asked the Chancellor what would be the tax liability of someone earning £1 million who chose to use many of the tax devices invented by the Chancellor and his predecessor since 1979, such as the business expansion scheme and enterprise zones, in which unlimited sums can be set against tax. The answer that I received from the Financial Secretary was that a person earning £1 million, if he used all the loopholes available to him, could end up with a tax liability of nil. How does he defend the fact that someone earning more than £50 a week pays tax at a rate of 25 per cent., that a couple earning more than £80 a week pay tax at 25 per cent., but that a person earning £1 million a year can end up with a tax liability of nil?
Mr. John Butterfill: How could such a person obtain an income on which to live?
Mr. Brown: The Chancellor's changes have not been so inventive that they have prevented people from taking out loans on the basis of their investments and having sufficient spending power as a result, for example, of off-setting the rents that they earn from enterprise zone properties against the interest they have to pay to the banks. Uniquely, such people not only have the capital gains in the future and the tax reductions in the present, but sufficient money to live on at the same time, giving them a high standard of living.
I want to look at how the Budget will affect the majority of my constituents as well as some Conservative Members. I have to tell the Chancellor that, despite the talk that everybody will receive a 2p tax reduction, helping those at the bottom end in exactly the same way as those at the top, there are people on £100 a week, low wage earners, getting by on family credit and housing benefit, whose net gain from the Budget, after the withdrawal of housing benefit because of the tax cuts, will only be about 9p a week, or £4·68 a year. Then there is the family on £120 a week, with housing benefit not yet taken away by the Chancellor and family credit, who will receive about 30p a week as a result of the tax changes in the Budget and the resulting withdrawal of benefits.
If the Chancellor and Conservative Members believe that I am talking about special cases or isolated instances, as they thought when we first mentioned the problems of the housing benefit changes, let me tell them that, in addition to the 8 million or so people who cannot benefit from a tax cut because their earnings are so small, there are 2·5 million people throughout Britain whose average gain as a result of the Budget changes is 13p a week—a gain that is almost entirely wiped out by the electricity price rise that was ordained by the Secretary of State for Energy just before the Budget.
But the real beneficiaries of the Budget are those at the top. I do not know whether the Chancellor realises it, but if someone is earning £50,000 a year his net gain from income tax is £75 a week; on £70,000 a year it is £152 a week—more than £7,500 a year; on £100,000 a year, it is £268 a week, or more than £12,500 a year. The man on £200,000 a year is getting £650 a week as a result of the
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Budget changes and the richest earner in Britain will receive an automatic windfall as a result of the Chancellor's changes of £500,000 a year.
The real truth about the biggest beneficiaries of the Budget was admitted in an answer given to me by the Financial Secretary on 28 March when I asked him who gained most from the top rate tax reductions. It is not the scientists, the engineers, the teachers and the lecturers—the people whom the Chief Secretary continues to mention —who are the true beneficiaries of the Budget. What the Financial Secretary had to tell me was that the real beneficiaries, those who gained the most, those who received windfall sums, were the 140,000 people on the top rate tax band of 60 per cent. who cumulatively received £1,700 million in a full year as a result of the Budget. In other words, 80 per cent. of the gains from the top rate tax reductions have gone to a small number of people—140,000; less than 1 per cent. of the population of Britain.
Why did the Chancellor decide that those people were to be so uniquely privileged that they should be targeted for special help? Since 1979 they have already received more than £13 billion in tax cuts. As a result of this Budget they have received an extra £1·7 billion.
A few weeks ago I heard the Chief Secretary telling ordinary earners that, as a result of the Budget tax cuts, to keep pace with inflation they need ask for wage rises of only 2 per cent. a year. He was suggesting, as the Secretary of State for Trade and Industry did in the other place, that, the proper negotiating level for wage increases in the next year should be in the order of 2 per cent.
When the Chancellor made his decision about the top rate tax reductions, did he consider the position of those people in that 1 per cent? Did he recall—as is confirmed most recently in the top salaries review document—that those very people, at the same time as they have been telling others to mitigate their wage demands, have been awarding themselves rises of up to 20 per cent. a year? Did he look at the Treasury's own calculations that the very same people would this year be awarding themselves wage rises of about 12 per cent?
Did he then say that, as a result of the wage rises that he expected them to have in order to keep pace with inflation, there should be a levelling through the tax system? Not at all. What the Chancellor did was to accept that the top people in Britain, those earning £50,000, £70,000, £100,000, had been paying themselves wage rises of between 10 to 20 per cent. every year, and will pay themselves a wage rise of 12 per cent. in the coming year, and then he awarded them a tax cut worth 10 per cent.
Mr. Nicholas Bennett: The hon. Gentleman has been talking about high earners, but will he turn his attention to a man on average earnings with two children who, under the Labour Government, had an increase of 0·5 per cent. in real terms, compared with a 27·5 per cent. increase in real terms under this Government? Does not that underline why men on average earnings vote Conservative?
Mr. Brown: That is exactly what the Chief Secretary was suggesting to us at Treasury questions only a few days ago, and I have no doubt that his supporters have been briefing the hon. Gentleman. But let him look at the Government's record on taxation since 1979. Let him look at the cumulative effects of income tax, national insurance and VAT. He will no doubt find—this is something that

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horrified the Institute of Directors, which demanded before the Budget that the average tax rates be cut—that the total tax take from the average earner with two children has risen from about 23 per cent. to 25 per cent., despite our being told that every Budget of the past nine years has been a tax-cutting Budget. The share of the ordinary earner's income taken in income tax, VAT and national insurance has risen, and that is the real position under this Government.
Sir Eldon Griffiths: I have listened carefully to the hon. Gentleman and he is making some important points. However, as one who has had the fortune, or misfortune, to listen to some 24 Budget debates in the House, let me say that there is one big difference. The hon. Gentleman is saying that some people at the top gain too much and others at the bottom gain too little. I understand what he is saying, but does he accept that the time was, when the Labour party was in office, when everybody lost—the disabled, small businesses, pensioners and the country? Now we are arguing about who should gain. That is the big change: we are talking about gains, not losses.
Mr. Brown: Tomorrow, during the debate on housing benefit, the hon. Gentleman will realise that not everybody has been a gainer under this Government.
The issue of this debate is this. When I see that, as a result of the social security changes, an unemployed young person in my constituency will receive £26·05 a week; when I see that a pensioner will receive only £41·15 a week; when I see that a family of four will receive only £79 a week, and when at the same time I see Conservative Members defending a situation whereby people at the top are given tax cuts that are worth more in a week than such families and pensioners will receive in total benefit in a year, I ask myself what possible justification, in merit, in need, in contribution to the community, in anything to do with the ideology of incentives, there can be for such inequalities.
I find that there is no respectable evidence; there is no authority to study; there is no definitive survey. There is nothing at home or abroad that can justify the ideology of incentives producing the results that have been claimed for it by this Government.
I want to look at one of the main arguments that the Chief Secretary has used, because the Prime Minister made great play of it immediately after the Budget. We are told by the Chief Secretary and the Government that, as a result of these top rate tax cuts, people who left this country will return and people who may think of going will no longer leave. We are told that these people are doctors, scientists, engineers and university academics. We are told, further, that those people can be persuaded to stay or persuaded to return to this country.
Let us leave aside for the moment the issue that the average engineer earns £19,000, the average doctor between £25,000 and £30,000 and the university lecturer between £20,000 and £25,000. That is according to the figures that we have available. Let us also leave aside the fact that these people are not the big gainers from the Budget. The big gainers are those people earning £50,000, £60,000 or £70,000, which are salaries that engineers can never hope to have in this country.
Let us look at the argument on its own merits. We were told after 1979 that top rate tax cuts would bring all these
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people back—the engineers and the scientists. However, the evidence is that they have departed at even a faster rate. When the Prime Minister told us a few days ago that since 1983 more people than ever had returned to this country, she forgot to tell us that more people than ever were leaving. We know that the number of professional and managerial employees leaving this country has doubled. Britain contributes more scientists and engineers to what is called the transatlantic brain drain than all other European countries put together.
We also know that a former Minister with responsibilities for higher education, when writing in The Times in 1987, said quite specifically about the top rate taxes and everything else—[Interruption.] Perhaps the hon. Member for Pembroke (Mr. Bennett) will listen to me. A former Minister with responsibilities for higher education said that young scientists and engineers are refugees, not from the Treasury but from the cumulative effects on British science of educational, fiscal and cultural failing. If doctors are moving abroad, it is not because of the top rate taxes that have to be paid. It is because the facilities are not here for them to do the research that they want to do.
The House of Lords Select Committee confirmed that only a few days ago. If scientists and academics are leaving the country it is because, as the Vice-Chancellors' committee has said, they no longer have any reliable career structure and they find they have better facilities abroad. The most worrying aspect of all, as the Royal Society said recently, is that if academics in the science sector are leaving it is because they believe that cuts in basic research and scientific support mean that science in Britain is being progressively marginalised.
The answer to the problem that the Chief Secretary identifies is not that we impose top rate tax cuts on those earning more than £50,000 a year. The real answer to that problem is for that money to be used properly to fund science, technology, education and training, our univer-sities and colleges, our Health Service and our medical research. This was not a Budget for meritocracy but a Budget geared more to the aristocracy in Britain. [Interruption.] I have to say to the Chancellor that he perhaps has not looked at all the calculations that he has made.
He probably knows that, having halved the number of people, for example, liable to inheritance tax, he is proposing very substantially to reduce the numbers again. Someone who inherits an estate of £1 million would get a benefit of £150,000 as a result of this Budget. However, some of these people do not pay the tax at all. The changes in capital gains tax give substantial amounts of money to people who were the beneficiaries of the property booms of the late 1970s.
I answer the point of the Chancellor and the Chief Secretary by saying that in this Budget they have not closed the tax loopholes. If they look at the enterprise zone scheme and the business expansion scheme, and look at all the schemes that exist for people to set their earnings against their tax, they will find that for every loophole closed by the Budget, another has been opened, which the tax planners and the tax avoiders will use to the full.
Mr. Tim Smith rose——
Mr. Brown: No. I will not give way again.

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The Chancellor of the Exchequer is unable to argue that these top rate tax cuts can he justified on the grounds of incentive, because he has produced no evidence whatsoever. He cannot say that they will prevent migration. He cannot say that they will prevent evasion, which has risen sevenfold during this Government's period of office, according to the published figures. He cannot look at the figures and argue any of these things.
In that case, what is the Chancellor's new argument? His new argument was launched again on Sunday in the programme "This Week, Next Week". It is that, somehow, by top rate tax reductions, the poor will benefit through the increase in charitable donations. That seems to be the best argument that the Chancellor can put forward—as The Financial Times, in a recent headline to one of his other speeches, said,
"The moral basis of tax cuts".
The right hon. Gentleman may think that the key fact is that charitable donations have increased twofold since 1979, but to people on the Opposition Benches the key fact is that the need for charitable donations has increased as a result of this Government's policy. Charitable donations may have increased twofold, but poverty among families has increased fourfold according to the estimates of the Government. Evictions have increased tenfold.
Mr. Major: I am sure the hon. Gentleman will not wish to mislead the House. May I say to him that the definition that he is using of poverty is a definition that is distorted by rising levels of benefit that this Government have introduced. That is a matter that is demonstrably clear to anyone who cares to look at the income support levels upon which he is basing his definition.
Mr. Brown: That point will be entirely lost on the pensioners of this country, whose income support level, which the right hon. Gentleman says is generous, is £44·05 as a result of the changes in the Social Security Act. It will be entirely lost on the many thousands of pensioners who, because of the capital limit that has been imposed—imposed during the time that the Minister was a Minister in the Department of Health and Social Services—have lost housing benefit because of the removal of exemptions. The truth is, as the Chief Secretary knows, and as the Chief Secretary is ashamed of, that the numbers of people in poverty in this country are rising. The social security changes have resulted in the numbers of people in poverty rising even further.
The Chancellor says that the number of people giving to charities has doubled, and that the amount of money given to charities has doubled. I accept that point. Is he saying that, in future, charity has to bridge the gap between the rich and poor in this country? Does he believe that charitable donations can make up for the £800 million lost through all the changes in social security benefit? Does he believe that charitable donations can pay the £1 billion and more that is still needed properly to fund the National Health Service this year? Does he say to Conservative Members on the Back Benches who have troubled consciences and who have many constituents affected by the housing benefit changes, that the best hope for the future is not to ask the Government to change the wrong policy, but that these people should beg and borrow from charities and voluntary organisations?
The Chancellor of the Exchequer (Mr. Nigel Lawson)indicated dissent.
Mr. Brown: Well, if the Chancellor thinks that is not the case and that is not the policy that has been pursued by the Government, what do the new regulations that govern the social fund really mean? In the Act which governs the social fund and in the regulations, social fund officers are asked to look at how voluntary organisations and charities can help. That is exactly the position in which members of the Department of Health of Social Security have been put as a result of this Government's policies. I hope that the Chancellor—who appears to be in total ignorance of what has happened as a result of these regulations—will read the social fund regulations and respond to them in this House.
No industry is better prepared for the future as a result of this Finance Bill. No health authority is better funded as a result of the changes in the Finance Bill. Many health authorities throughout the country are waiting to know what the Government will do about increasing the number of nurses and about improving the capital programme for these hospitals. I advise the Chancellor that none of the poorest in our society are better off as a result of the Budget.
Last weekend, like many Conservative Members and many of my hon. Friends, I held constituency surgeries. In the years that I have been a Member of Parliament and involved in politics, I have never seen so many people so demoralised, so desolate and so devoid of hope—and that after the path-breaking Budget about which the Chief Secretary boasts.
A widow came to see me who has a pension of £41·15, who has received, and still receives, industrial death benefit because her husband died of asbestosis. She told me that she had counted the pennies for years and that she had made every economy that the Prime Minister had asked of her. She said that she had prepared herself for a rent rise of £1·50 but suddenly found that she was facing a housing benefit cut of more than £20. She said, "I thought that the Prime Minister had already taken from me everything that she could. I did not think that she would take any more."
What is the Government's response to the problem of poverty? The training manual for social fund officers suggests that such a pensioner lives on stale food, buys dented tins, grows her own vegetables, invests in tinfoil, avoids biscuits and jams, and states:
"Don't shop when hungry, you may be tempted to buy more than you need."
What sort of society is the Chief Secretary justifying when a widow in my constituency, on £41·15, loses £20 per week as a result of the housing benefit changes? What sort of society is he justifying when that happens and when, in one line of one sentence of one clause of this Finance Bill, so few people get so much?
In the past, Chancellors have come to the House to say that because revenues are rising, all will benefit and all will share. Other Chancellors have had to come to the House —from both parties—and say that because revenues are falling or because the economy is in difficulty, all must make sacrifices—[Interruption.] Conservative Chancellors as well—and that the sacrifices will be equally shared. No Chancellor until this one has come to this House and said that because revenues are rising as a result of North sea oil and everything else, the rich will get the benefit——
Mr. Norman Lamont rose——
Mr. Brown: No, I am not giving way—the rich will get the benefit——
Mr. Lamont: Is the hon. Gentleman not aware that North sea oil accounts for less than 2 per cent. of revenue?
Mr. Brown: Is the right hon. Gentleman aware that North sea oil accounts for around £4 billion? Is he aware that no Chancellor until this one has had £5 billion a year in privatisation revenue? Is he aware that the reason he has been able to give tax cuts, mainly to those at the top, is that revenues from North sea oil and privatisation were available to him that were not available to any Labour Chancellor in the past?
Mr. Quentin Davies rose——
Mr. Brown: No, I shall not give way.
No Chancellor until this one has come to the House and said that because of the money that is available to him, the rich will get the benefits and the poor will make the sacrifices. Past Conservative Governments have lived with a two-nation Britain. Some Conservative Governments have even sought to do something about it. However, no Conservative Government until this one, no Chancellor until this one, have so deliberately sought to make inequality and social division the main weapon of their economic and social policy. That is why we shall vote against the Finance Bill, and that is why, in so doing, we shall have the public on our side.
5.23 pm
Mr. Terence L. Higgins: It is the fate of Chief Secretaries, after the glamour of Budget day, to regale the House with the details of the Finance Bill. However, my right hon. Friend's speech had a great deal more wit and cogent argument than some of his predecessors managed to exert when going into the nitty-gritty detail of the arrangements set out in successive Finance Bills.
This debate traditionally has two themes: on the one hand, it is a discussion of the specific tax proposals and, on the other hand, it embodies a wide-ranging financial debate. As the House knows, the Treasury and Civil Service Select Committee has traditionally taken the view that it is right to concentrate on the underlying economic situation and to analyse that, rather than to go into the detailed tax measures which are more appropriately discussed either across the Floor of the House or in Standing Committee, where the matters are typically debated on party lines. None the less, although I want to say something about the Committee's report, I begin by commenting on some of my right hon. Friend's specific tax proposals and more especially on the remarks of the hon Member for Dunfermline, East (Mr. Brown).
One might reasonably say, or paraphrase, "Happy is the Opposition spokesman who has no history," because the reality is that the contrast is not between this or that group which will benefit from the Finance Bill, but between those who are benefiting under the Bill and other measures that my right hon. Friend the Chancellor has introduced on previous occasions, and what happened under Labour Governments. That contrast is remarkable.
However, I fear that in presentational terms we are not making the best of what my right hon. Friend has been doing, and not least of the fact that raising the tax threshold at which income tax becomes payable, which has risen twice as fast as is necessary to compensate for inflation, combined with the reduction in the standard rate
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of income tax, involve tax concessions for those at the bottom end of the income tax scale which are far bigger than anything that I can recall under any Labour Government. We need to get that point over strongly.
In addition, the revenue which will be raised as a result of the Finance Bill is providing massive resources on a scale that was undreamt of under Labour Governments, and which will help alleviate poverty and distress. I was astonished by a remark by the hon. Member for Dunfermline, East—that the Finance Bill does nothing to help the National Health Service. Of course, the proposals on the National Health Service were set out on a White Paper before the Budget, but they involve an extra £1 billion this year, an extra £1 billion next year and an extra £1 billion the year after that on the National Health Service.
On top of that, the full funding of the nurses' pay award, which was announced a day or two ago, amounts to about £750 million—approximately three quarters of a billion pounds. Therefore, the extra expenditure on the Health Service this year, provided for and financed by this Finance Bill, amounts to about £1·75 billion. Even allowing for inflation and everything else, there is no precedent of any Labour Government spending anything like that amount on the National Health Service as an additional amount.
Dr. John Marek: What advice would the right hon. Gentleman give to health authorities that have unfilled nursing vacancies and will now receive applica-tions from people who wish to train as nurses but do not have in their budgets the sums available to pay those nurses now that they have received their pay increase? I should add that it is very good that the Government have funded that pay award fully this year, but whether they will fund it fully next year is another question. What should health authorities do if they wish to employ extra nurses but do not have the funds?
Mr. Higgins: I advise the hon. Gentleman, in the clearest possible terms, that the success of the Chancellor's economic policy has enabled us to spend a massive record extra amount on the Health Service as a whole, including on nurses' pay and on funding that award in full, with the result that the contingency plans that have been made for reducing shortages elsewhere in the Health Service will no longer be necessary. That is something of which this Conservative Government can rightly be proud. Successive Labour Governments should have been ashamed.
I turn from that point because I want to say something about the more detailed aspects of the Finance Bill, and especially about the underlying background to it, which were set out in the unanimous report of the Treasury and Civil Service Select Committee. As I have said, the Committee eschews comments of the kind that I have just made. On the Floor of the House, one can reasonably take up such matters.
Despite the tax cuts in the Budget and the massive increases in public expenditure, my right hon. Friend has achieved a balanced budget. Not only that, but he has ensured that such public sector borrowing as is necessary can be fully funded. In addition, the means necessary to sterilise the effects of intervention in foreign exchange markets have been fully funded.

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On all previous occasions, we have been inclined to think that the effect of having a PSBR frequently not fully funded is the source of an increase in the money supply which gives cause for concern. What is interesting, after what has emerged from the analysis in the Treasury and Civil Service Select Committee's report, is that, once one draws back the curtains after balancing the budget and fully funding the operation of central Government, one sees none the less a substantial increase in credit. That is a cause for concern.
The Governor of the Bank of England pointed out in his evidence to the Committee that private borrowing since 1983–84 has continued to rise and is now estimated to be 12 per cent. of GDP. He also pointed out that domestic private sector borrowing has accelerated at over 20 per cent. a year in the past two years. Therefore, although it is unfashionable now to concentrate on the money supply as a measure of what is happening in the economy, the expansion of credit and perhaps the expansion in monetary aggregates gives us cause for concern.
Examining that more closely, as the Committee never ceases to do in pointing out that the private sector continues to borrow voraciously, how is that to be brought under control? What emerged very clearly in the evidence for instance of the Chancellor, who said that the essential instrument of monetary policy must remain short-term interest rates, or of the Governor of the Bank of England who said that the only effective instrument of monetary policy is the short-term rate, was the way in which that weapon seems to be remarkably ineffective. Therefore, because the PSBR funding point has become irrelevant in the present context, the weapon available to control the expansion of credit is not so useful as we might hope or think.
That situation gives us considerable cause for concern about future management of the economy, and the expansion of bank credit. It is particularly worrying that, despite the fact that public borrowing has been reduced to a point where the budget is balanced, there is still some concern about overheating in the economy, for the reasons that I have just mentioned.
The Committee rightly draws attention to the way in which the inflation rate has been brought down and is now flattening out. Against that background, the point that I made a moment ago is important, not least in the context of our international competitiveness. The forecast for the GDP deflator this year for the United Kingdom is 4·7. For the United States it is 3·4, for Germany 1·8 and for Japan 1·6. There is some danger, as the Governor of the Bank of England pointed out in evidence to the Committee, that we have become complacent in believing that somehow an inflation rate of 3, 4 or 5 per cent. is quite satisfactory, and everyone can be happy about it. Against the background of other countries' success in controlling inflation, we should not be complacent about that.
My third point relates to use of the exchange rate as an economic instrument. There has been much comment in the press about the differences that are said to exist—some, indeed, are admitted to exist—between the Chancellor of the Exchequer and the Prime Minister on exchange rate policy. In particular, the Treasury and Civil Service Select Committee usefully tagged on to an exotic expression of my right hon. Friend the Prime Minister, that in exchange rate policy matters one cannot "buck the market". Some of the press comment since the report was published concentrates excessively on personalities. It is a useful
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shorthand, but the Committee seeks to analyse the underlying dilemmas. I am sure that is the right approach. There are genuine dilemmas over policy. Therefore it did not seem to us in the Committee to be appropriate to come down in favour of one side of the argument or the other, in black and white terms, but rather to concentrate on the underlying issues.
Mr. Robert Sheldon: Does the right hon. Member not see that it is a great pity that the Committee did not make a clear distinction between the views of the Prime Minister and the Chancellor of the Exchequer? The Prime Minister clearly tried to pre-empt the Chancellor's discretion in dealing with the exchange rate. That is of great importance. If the Chancellor of the Exchequer, who won the election for the Prime Minister, is not the master of exchange rate policy, that is a serious matter, and I do not know what the Chancellor has left. It is a great pity that the Treasury and Civil Service Select Committee has so muddied the waters that one cannot see what it had in mind.
Mr. Higgins: The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) has intervened in every speech that I have made in the past 15 years on a Finance Bill, but he is not usually witty on these matters.
I was seeking to say that there is much in favour of the arguments on both sides. That is what the Committee has sought to point out. Our conclusion is that if bucking the market means intervening, and buying and selling different currencies, that can be done reasonably in the short term to smooth the transitional arrangements, but one cannot buck the market in that way if it becomes very costly to do so.
On the other hand, if use of the other two major instruments of economic policy—interest rates and fiscal policy—is said to be bucking the market, one can do it, because the underlying fundamentals will be affected. Essentially our view is that one can buck the market by using interest rate policy and fiscal policy.
As the Chancellor said in answering a question from the Committee, there is no doubt that if one were to cut interest rates, that would probably cause downward movement in the exchange rate. That would buck I he market. Similarly, if the tax concessions that my right hon. Friend has given in the Budget had been fewer, to that extent one might buck the market.
What worries me is a matter that was referred to in paragraph 53 of the Committee's report. The present situation gives cause for concern. When the sterling exchange rate broke through the DM3 barrier, the rise in the exchange rate would have indicated a tightening of monetary policy. It would have been possible at that point to reduce interest rates and, at the same time, achieve some exchange rate stability while maintaining —I stress that word "maintaining"—downward pressure on inflation.
What happened at first as a result of not doing that was that we were tightening inflationary pressure. We sacrificed exchange rate stability in relation to the deutschmark. It is clear from paragraph 53 of our report that we were very doubtful about that. It is not seem by industry or others as a sustainable change in the exchange rate. It is unlikely to have a long-term effect.
On the other hand, if one allows the pound to go up rather than stay in line with the deutschmark as it was it is likely to create a dangerous position when it comes down

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again. Rather than seeking a temporary tightening of anti-inflationary pressure, it would have been better to stay within the 3 deutschmark line and to maintain the undoubted downward pressure on inflation, while at the same time maintaining some exchange rate stability.
I agree with the hon. Member for Ashton-under-Lyne that it is essential to have a clearer statement of exactly what the policy is. There is some danger that we have moved from the early period when the monetary aggregates, particularly M3, were said to be all-important with the consequences which then followed in 1979–80, to a period of considerable uncertainty about exactly what the policy is. That uncertainty, combined with the difficulties associated with the expansion of credit and the ineffectiveness of the interest rate weapon in that context, causes anxiety.
We are doing all that against a favourable background, which the Government have created and which has enabled my right hon. Friend the Chancellor both to make massive tax cuts which provide tremendously important incentives, and to increase hugely the resources going to the NHS and elsewhere. Those are all signs of his success in managing the economy. It is important to ensure that we continue that progress and I believe that that is possible. I hope that this Finance Bill will be welcomed by the House and the country, and that it will mark a further step forward in the advantages, now being seen, of the attitude of the Chancellor, the Chief Secretary and other Treasury colleagues.
5.41 pm
Mr. Robert Sheldon: The House must always pay its tribute to the right hon. Member for Worthing (Mr. Higgins) for chairing the Treasury and Civil Service Select Committee which produces its reports in good time for us to consider them. On this occasion it is only just in good time and we have not had a chance to digest much of the information conveyed in the report. Nevertheless, it is valuable and we know the time constraints under which the right hon. Gentleman and the Committee and their advisers work. We are grateful to them.
It is a pity that there seemed to be greater divisions than usual in the consideration and preparation of this report. I understand the problem: Government and Opposition Members cannot always see eye to eye. But in the past they have tried to limit their differences and to come up with something that represented rather more than this cocktail.
Perhaps the most important matter facing us is the crucial central question of the exchange rate. I support the Chancellor of the Exchequer on this. My support will not do him much good, but in this place properly held views should be put across and, at least on occasion, be subject to critical assessment rather than taken as yet another attack. That might have been the attitude of the Select Committee.
The Chancellor was right when he said that it was not sensible to discuss these market-sensitive matters in public as much as they were. That is a serious criticism of the Prime Minister. The Chancellor was in a powerful position, having contributed so much to winning the general election for the Prime Minister, and he found himself pre-empted by her in a statement in this House
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about bucking the market. She laid it down clearly that she disagreed with him immediately before the Budget. By saying that, she sought to bring him into line and to carry out her views. It is to his credit that he did not follow that line or do what Francis Pym and others have done, conceding victory to the Prime Minister on a matter on which they thought she was wrong. The Chancellor contained the problem.
That was serious, because the whole international financial world knew that there was a division between the Prime Minister and the Chancellor. That made it clear that the level of the pound could rise above DM3, and it did. As soon as the disagreement was known, the financial community had an incentive to test where the upper limit was. Such arguments can take place, but they should never take place at such an exalted level in public. That was a great pity.
Paragraph 5 of the report states:
"We remain somewhat puzzled by the Chancellor's continued insistence that there has been 'no change in policy', … although … the reduction of inflation has been the overriding objective."
That refers to the monetary policy. We all know that the Committee did not need to use such muffled language.
The Government tied themselves to the dogma of impractical theorists, they were taken over and they plunged the nation into wreckless industrial decline. The three years of unparalleled austerity, so ably predicted by the right hon. Member for Shropshire, North (Mr. Biffen), meant the foreseeable and unnecessary assassination of thousands of viable companies which were liquidated by this spasm. The money supply was the touchstone, and the exchange rate, as the Committee reports, was not even mentioned in the early Red Books in which the basic philosophies of this Government were laid down.
But now the Chancellor has learnt that the exchange rate is extremely important. It lies at the heart of our economic management and it is the critical test of his Chancellorship. Getting it right will determine the balance of payments, the advance of exports, the deterrence of imports and the relationship of our economy to the world at large. It determines the outcome of more than anything else that the Chancellor can do. As I said on a previous occasion, it represents the maximum of his power and influence.
If one wanted power, one might well ask for the power to determine the exchange rate, giving the Chancellor everything else. The international effect of that kind of control is massive. The exchange rate is the precursor of future trade patterns. It determines the level of the order books of our most important industries, it affects the level of unemployment and jobs, and it anticipates the real level of industrial prosperity.
The Prime Minister, who is rather more relaxed about the pound going up or down in response to market forces, may recall what went wrong between 1979 and 1981. The pound went up sharply and it came down sharply and we paid an enormous price. By the time the exchange rate had come down again one third of the firms in my constituency had closed their doors. I am sorry to return to this, but I have to bring it into most of my speeches because it has had the greatest impact on my constituency in my 24 years of representing the people there.
That also caused my greatest political wretchedness. We do not have any large firms in my constituency. They are typically medium-sized firms which employ between 40

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and 80 people. They are valuable firms doing jobs for—example, engineering or mid-tech—such as one sees in every country, however advanced their economy. The danger is that what we are doing now is similar to what caused that disaster, although with a lesser effect.
It is important to understand that in the end our prosperity depends largely on our manufacturing industry. The trouble is that in discussing so many economic matters we need agreement in the whole House on certain essentials. We want at least to agree on the structures of our taxes. The rates will always cause divisions between us. There is some agreement. We have not changed the basic structure of income tax, except for higher rates just recently, and we all agree that income tax should play an important part, although we disagree, of course, on the levels of tax.
What worries me, however, is that there is no agreement on manufacturing industry. We believe that there should be some incentives to manufacturing industry, because it is the basis of our prosperity. The Conservative party does not believe that; far from it. So we find ourselves altering the pattern of our relationship to manufacturing industry, depending on which party is in power. We need a consensus on certain aspects of our economy. By all means let us change rates of tax and certain attitudes that apply in these matters, but there should be certain minimum areas of agreement.
As I have said, I believe that our prosperity depends in the end on our manufacturing industry. The idea that the service sector alone can provide us with a high and expanding standard of living is a fool's dream. The service sector has too often been hailed as the indicator of the sophisticated, advanced economy of the future. I read an important article the other day in the Siemens Review—that is the big electrical engineering firm. The article was called "The myth of the post-industrial economy" and it pointed out that most celebrations of the shift from industry to services compare this shift with that from agriculture to industry. But what has happened with agriculture is not that we produce less than we did 40 years ago but that we produce with fewer people. We have become more efficient; we are producing more and importing a smaller proportion.
What we are seeing in manufacturing, however, is a replacement of our industry by imports from our competitors. The next stage in the development of our economy needs to be not a movement away from manufacturing industry as a total of the amount produced and its replacement by the service sector, but the increasing efficiency of our manufacturing sector. Then the surplus labour needs to be going into more productive areas of activity. The decline in manufacturing is leading to two things: the servicing, in the widest sense, of the products of a relatively diminishing manufacturing sector, and unemployment.
It is no accident that the success of the two powerful economies of the world, those of Germany and Japan, is due to their manufacturing dominance. Nor is it an accident that the emerging nations which are successful, particularly in the far east, owe their success also to their industries. None of the countries that I have mentioned has such a dominant service sector as we have.
Much of the distortion of our economy is due to the centralisation of our industry here in London. We are an extraordinarily centralised country as far as our industries are concerned. In 1969 I went to the various regions of the
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country to look at manufacturing industry and industry generally. I went all over the country—Scotland the north-east, the north-west, the south-east, and so on. I took as my guide The Times top 100 companies in Britain.
To my surprise then, and to my surprise now, 95 of the top 100 companies had their headquarters in London. That is astonishing centralisation and a complete distortion. In America, 29 of the top 100 companies have their headquarters in New York. In Germany, the Lop companies are scattered all over the place. Even in France they are scattered. Here, even the Distillers Company, with its business in whisky in particular, has its headquarters in London. The National Coal Board has its headquarters in London.
This creates an enormous distortion. It means that things are seen from the London aspect, and particularly from the City of London aspect. I am not decrying the City of London, but it takes too high a proportion of the ability that we have in this country, and this has a distorting effect. I believe that some of the distortion is caused by our having so much of our wealth abroad. Dividends are obtained on it and it is a valuable asset, but we must be aware of the distortion it creates.
I had responsibility 14 years ago, when I was in charge of the Civil Service Department, as it then was, for the dispersion of civil servants throughout the country. I had a scheme, in accordance with the Hardman report, for sending 30,000 civil servants to various parts of the country. I believe that that was enormously important. If centres of ability, power arid influence are scattered all over the country, there will be a rather different regional approach. And if we get some of the big industries to have their headquarters outside the capital, there will be a better regional balance.
Increasing house prices are a serious matter. It is worrying that the Government have not acted to control or delay their effect or to impede it. Indeed, they have added fuel to the fire again and again. This was true of previous Governments—and it is even more true of the present Government. Home ownership has the advantages of capital gains tax, inheritance tax, absence of schedule A, mortgage relief and now the poll tax. A property-owning democracy is becoming an over-housed upper end of the market, where people join the helter-skelter to move into more and more unjustifiably expensive houses; and, because prices rise so rapidly, it is held that interest rates must also be high to dampen the rise. So we are having an argument for increasing interest rates because of the serious situation caused by the money going into housing.
This will have its effect on manufacturing industry, which will pay the price for this great trading-up process in housing. The housing ladder has now become a speeding escalator through which great damage is being caused. There is ever-increasing investment in housing— investment that should be going into industry. Interest rates are being pushed up to counter inflation, whereas they should be brought down to assist industry.
I am very sorry indeed that the highest level of income tax has been brought down to 40 per cent. I am really outraged that the difference in the taxation levels of the person near the bottom and the person at the top has been so narrowed. Twenty-five per cent. plus 9 per cent. national insurance contribution makes 34 per cent. If one is starting to pay tax, one pays 34 per cent., and if one is at the top one pays 40 per cent. This is an incredible

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compression of the difference between the tax of the lower paid and the tax of the highest paid. The progressive tax system has been nearly eliminated.
When I asked the Financial Secretary to the Treasury a question recently, he pointed out how much more tax those with large incomes paid. But, if there were one rate of tax for everybody, that would still be true—but it would not be a progressive tax system, and all previous Governments have accepted the need for such a system. When the income tax system was brought in 200 years ago, it was based on the idea that there should be some relief for those at the bottom and some sort of progression was later adopted. This reached its conclusion in the surtax levels introduced at the beginning of this century. Up to the 1950s there were three rates of tax at the lower level before one came on to the full standard rate as it was then, and there were several rates above that. Now we have 34 per cent. for most people and 40 per cent. for the rest, whatever the income may be. I find it quite impossible to understand how anyone can accept this.
The progressive tax system was not the prerogative of the Labour party. It was confirmed by Conservative Government after Conservative Government. We used to argue it, and we still do, as an egalitarian necessity. Conservatives used to argue it on the basis that it is right that the broadest backs should bear the greatest burdens. All these arguments seem to have gone and the great principle of a fair tax system covering all the people in the country is being thrown out. This is one further measure of the extremes to which the Government have gone. It is a great pity for all parties, and a great pity particularly for the House of Commons if it passes this legislation and a great misfortune for the people who will have to bear these burdens.
5.59 pm
Sir William Clark: It is always a pleasure to follow the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). I am sure the whole House will agree that stability in exchange rates is highly desirable for the economy, but I think that the right hon. Gentleman overplayed the difference which he tried to imply there was between my right hon. Friend the Prime Minister and my right hon. Friend the Chancellor of the Exchequer.
The right hon. Gentleman believes that the future prosperity of the country depends upon manufacturing industry. I do not think that everyone would go along with him on that. I am not suggesting for one moment that our economy could be based only on service industry, but service industry contributes about £600 million a month to our balance of payments. Does it matter whether the country gets $1 in foreign exchange for a manufactured item or $1 for a service item? There is no difference: it is still the same dollar.
Of course manufacturing is important but we must consider the underlying reason why we have ceased to have manufacturing industry. Because of overmanning we could not compete. It is no good Opposition Members shaking their heads. They know that that is true. How is it that we are producing more steel today with half the labour force that we used to have? That is proof positive of what I have said.
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If the hon. Member for Dunfermline, East (Mr. Brown) were in the House, I am sure that he would agree that his speech was one more of envy than of content. It is rich for anyone on the Front Bench of such a high-tech party, with the policy which eventually led it to the International Monetary Fund, to criticise anything that we do.
I welcome the strategy in the Budget, which is a continuation of our strategy since 1979. My right hon. Friend the Chancellor has been congratulated many times by my hon. Friends. He performed a hat trick in the Budget. He got taxes down: he got public expenditure on the National Health Service, education and all the rest up, and he repaid part of the national debt. He achieved those three things in his Budget.
Consequently, we realise that what the hon. Member for Dunfermline, East said about high taxes producing higher revenue is a fallacy. In 1978–79 the top rate of tax was 98 per cent.; it was 83 per cent. on so-called earned income and 15 per cent. on investment income. In 1978–79, 24 per cent. of all the income tax collected came from 5 per cent. of taxpayers paying the top rate of tax. In 1988–89, we will have a top tax rate of 40 per cent. The same 5 per cent. of taxpayers will pay 28 per cent. of the total income tax take. No one can refute these arguments. Consequently, it is a fallacy to think that high taxes produce extra revenue. They do not. In fact, they kill initiative, and down goes our productivity and competitiveness.
The critics of the Budget originally referred to nurses' pay, but they seem to have dropped that. In an excellent speech, my right hon. Friend the Member for Worthing (Mr. Higgins) mentioned the £1·1 billion extra which the Health Service will get next year. In that there must have been some estimate for what nurses would get in their pay review. I do not know what it was—perhaps 4 per cent. or 5 per cent.—but the nurses got just over 15 per cent. on average, with some getting more and some less.
If in the £1·1 billion 4 per cent., say, was allocated for an increase in nurses' pay, that meant that someone had to find the extra money. It is not the Chancellor. I wish people would stop saying that the Government are keeping the money back, that the Government are not doing this and that the Chancellor is not spending the money which he has got. Everyone should remember that it is the taxpayers' money we are talking about. To fund fully the increase in nurses' pay the Government will have to find £600 million, £500 million or whatever, but I remind the House that in the Budget the Chancellor had a contingency reserve of £3·5 billion. It is sufficient for him to fund whatever increase the pay review body recommended.
When we came into office, the top rate of tax was 98 per cent. and the standard rate was 33 per cent. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) cut the top rate to 60 per cent. Subsequently the standard rate came down to 27 per cent. Now the standard rate is 25 per cent. and the top rate is 40 per cent. I welcome those rates of tax.
I welcome too the change in capital gains tax. As everyone knew, it was a tax on inflation. Indexation since 1982 has been welcome. Under the Labour party, inflation went up to 26 per cent. or 28 per cent. Indexation from 1982 did not take account of the inflationary build-up until 1982. Now we have a change, with the 1982 value being used for capital gains tax purposes, which meets some of the criticism of a tax on inflation.
Mr. Battle: How does the hon. Gentleman explain that taxes as a share of national income have risen from 34 per cent. to 38 per cent., if we take the fact that income tax is down but taxes on spending have gone up? How does he explain that poorer households pay almost one quarter of their income in indirect taxation, whereas richer households pay only 16 per cent?
Sir William Clark: If a household is earning more money, it will probably live better, but it is a fallacy to suggest that if a household with a low income pays 25 per cent. in indirect taxation, a household with double that income will necessarily spend 25 per cent. as well. It depends on what the hon. Gentleman is taking 25 per cent. of.
That brings me to the next point. It is wrong to suggest that cutting the income tax rate will reduce the gap between the rich and the poor. Cutting tax rates will not necessarily help the poor. It did not help when the Labour party was in power and the so-called rich were paying 98 per cent. tax.
Reference has been made to charities. I watched the television programme on Sunday. It is wrong for the Opposition to say that my right hon. Friend said that people should have recourse to charity. [Interruption.] He did not say that at all. Opposition Members should get a video of the programme and they will find that he did not. I thought that he was interviewed by a hostile person. All my right hon. Friend said was that he was helping charities, and that is a good thing.
There have been accusations about privatisation. Privatisation is not meant to balance the budget. Of course it helps, but the idea is to spread the wealth of the nation. I remind Opposition Members who grin at that remark that in 1979, when we came to power, there were 2·75 million shareholders; I am not talking about rich institutions. Today there are nearly 9·75 million shareholders. That shows the turnround in our economic fortunes. The Labour party does not realise what has happened. [Laughter.] It is no good Opposition Members laughing. This is a distribution of wealth. This is what we want to do. The trouble with capitalism is that there are far too few capitalists.
Thank goodness that, since 1979, we have increased the number of capitalists in this country. In addition, two families out of three now own the house in which they live. That is a complete turnround in the economic fortunes of this country.
I welcome the landmark in 1990 of separate assessment for husband and wife. That will not be easy. If there are to be no losers, we must add the single allowance to the married allowance. That is what a married couple receive at present, if both husband and wife work. If there is to be a single allowance for each partner, and to avoid anyone losing, the allowance should be raised to £3,350. At present, the single allowance plus the married allowance add up to £6,700 for a working couple. At today's figures, that change will cost the Exchequer about £5·4 billion.
Mr. Beith: Leaving aside the question of transitional provision so that there are no immediate losers, what does the hon. Gentleman think is the logic of indefinitely providing an additional allowance to a married couple, both of whom are earning? What is the logic of providing them with a greater allowance than two people would otherwise have?
Sir William Clark: For a married couple, both of whom are working, not to lose, we must provide them with a single allowance of £3,350. will help the married couple in those cases where only one person is working. It means that the tax threshold is that much higher. It will take more people out of the tax bracket and provide privacy between the spouses.
The other landmark that I welcome in the Budget is the target of 20p in the pound, but the real success is the management of the economy, particularly in respect of the public sector borrowing requirement. Next year we shall have a negative PSBR balance. I remind the House that, during the previous regime, the average PSBR overspend-ing as a percentage of the gross domestic product was 6·75 per cent. The average since we have been in power has been 2·75 per cent. Next year and the year after, it will be a minus percentage. As has been mentioned, the 25 per cent. rate has been a great help to business, particularly small businesses.
I wish to draw my hon. Friend's attention to the present burden on industry. We must alleviate the burden on industry, particularly the service industries, of the phenomenal number of regulations in the Financial Services Act 1986, which are expensive to operate. Let us take, for example, any small company that employs 50 or 100 people. In addition to the burden of collecting PAYE and filling in the associated forms, there is now form P11(D) which lists the various perks that an employee may obtain. In such cases, an employee is defined as a director —I accept that; it means that he is in a different bracket —or any employee earning more than £8,500 a year, including any perks that he may obtain.
The average wage is now about £200 a week. If one indexed the £8,500 figure, which was fixed in 1978, up to 1988 figures, it should be £18,200. I believe that the minimum figure for an employee should be increased. It would relieve the burden of many employers in respect of form P11(D). I remind my right hon. Friend that, recently, the EETPU did a deal with employers, so that all its members would have their BUPA subscription paid by the employer, although it would then have to go on form P11(D).
Most economic pundits, including the Confederation of British Industry and the Institute of Directors, agree that the economy is in good heart. Wage rates may be becoming too high, the estimate for production may be just a little too optimistic but, if one takes the economy as a whole, one can see that unemployment and inflation are coming down and that the reserves are excellent.
I remind those Opposition Members who criticise us about the balance of payments deficit of £1·5 billion, £2 billion or £3 billion that our reserves are at present £143 billion and that that deficit is quite sustainable on our overseas balance of payments. I remind the House that, when the Labour Government were in power, they had a massive deficit each year on their balance of payments. Since 1979, even taking into account last year's deficit of £1·5 billion to £2 billion, the total surplus of our balance of payments adds up to £20 billion. That is rather different from the deficit left by the Opposition.
The only thing that could upset our economic progress would be if we were to adopt the policy advocated by he Labour party. Our policy is working. We have been steadfast in our policy and in no circumstances should we

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change it because that would be disastrous. If we maintain our present policy, the 20p in the pound target and further prosperity is in sight during this Parliament.
Several Hon. Members rose——
Mr. Deputy Speaker (Mr. Harold Walker): Order. We have not yet had a speech shorter than 18 minutes. The House might appreciate rather shorter speeches.
6.17 pm
Mr. A. J. Beith: I shall try to comply with your request, Mr. Deputy Speaker.
I should like to comment on one point raised by the hon. Member for Croydon, South (Sir W. Clark), which has also been mentioned by the right hon. Member for Worthing (Mr. Higgins), in respect of the Government's increased expenditure on the National Health Service. The Government have increased expenditure, but the right hon. Member for Worthing, above all, should have had recourse to the report of the Treasury and Civil Service Select Committee, which he chairs, and on which I serve, and which report preceded that which features in today's discussions. In that report we pointed out how difficult it is to use those figures, because the effects of inflation, both in general and in the specific form in which it hits the National Health Service, have to be taken into account.
It is true that the Government have provided additional resources for the NHS, but those resources do not keep pace with the effects of inflation on the NHS, or even with general inflation. If we take general inflation into account, it leaves the Health Service with only a little over 1 per cent. extra, but, if we take into account the relatively higher rate of inflation which affects the NHS, we discover that that leaves the NHS with, in real terms, fewer resources than it had before, with which it has to deal with a growing range of problems, not the least of which is the increased number of people having recourse to its facilities.
The Committee has considered in detail the impact of inflation on the NHS. It is now recognised that it is a much wider issue than the general comments by the Government about increased funding suggest.
Sir William Clark: Is the hon. Gentleman aware that, since 1979, in real terms, the amount of money allocated to the NHS has gone up by 30 per cent.?
Mr. Beith: Yes. That disappears quickly, if we consider the increase in demand for the Health Service in line with the population increase, especially in the groups most likely to make use of the NHS, and the relatively higher prices in the NHS. It was this Government who came before the House with proposals for increased prescription charges, which were justified on the basis that the cost of prescriptions—one of the items in the Health Service budget—was increasing faster than costs in the economy generally. There is now a more widely recognised problem, and it means that one cannot just bandy general figures on the Government's Health Service record.
Dr. Marek: We are also getting older as a nation and we demand more money spent on the NHS. People have paid their taxes and deserve to be looked after in their old age. Does the right hon. Gentleman agree that the family practitioner committee section of the Health Service is not
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cash-limited and that an increase above the average places an even more unfair burden on the hospital and community health sector?
Mr. Beith: That is a fair point. However, I must stop these digressions, or I shall fail to meet the requirement that you have set for me, Mr. Deputy Speaker.
The Finance (No. 2) Bill incorporates a Budget strategy which is unfair, unsound and far from reforming. We must set it against a background of mounting confusion over who is in charge of economic policy. There was a stage when it seemed that the Chancellor could not put his head around the door of No. 10 Downing street for fear that the Prime Minister would bellow at him because of his latest act of intervention on the exchange rate.
The Chancellor has made some attempt to reassert his position, and it was noticeable in his radio interview on Sunday. I noted not so much what he said about charity as what he said about the undesirability of public comment by Ministers on exchange rate policy, which I presume was aimed not only at the Prime Minister but at other Ministers. The Secretary of State for Trade and Industry is not averse to getting off a train in Manchester and making a few well-publicised comments on the exchange rate over breakfast.
If the Chancellor is to be put in charge, so much the better. Nevertheless, it was perhaps too much to expect the whole Treasury and Civil Service Select Committee to agree with my amendment to the effect that it was
"unsatisfactory that the Chancellor should not … be wholly in charge of … exchange rate policy."
I suspect that, even though all members of the Committee did not vote for my amendment, many shared that view.
Quite apart from the general advantages of having the Chancellor, rather than other Ministers, in charge of Britain's economic policy, the right hon. Gentleman appeared to take the more widely supported view—that use of exchange rate policy as the primary instrument to control inflation was likely to have unacceptable consequences and that one had to have regard to the effect of exchange rates on industry. As the Select Committee has pointed out, there is no reason to assume that a stable exchange rate brings about an ineffective climate of inflation control.
Some doubt can be cast on how effective exchange rate measures are in inducing companies to take a particular line with wage settlements, as beyond any doubt is the fact that a continuing high pound causes severe problems for manufacturing and exporting industry, of the kind to which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred. Successful manufacturing and exporting industries and successful service industries producing export earnings do not want an unrealistically high pound, and that factor must be a consideration in exchange rate policy.
Matters of disagreement run wider than those aspects. In taking evidence from the Chancellor, I sought to elucidate the Government's view on Britain's entry to the European monetary system. The idea that the Government are waiting to enter when the time is right is a ludicrous myth which should be exploded. The Government are divided on this matter.
It is not wholly dishonourable to be divided; in fact, the Select Committee was fascinatingly divided on this point. When I sought to secure a vote in favour of early entry, I had the support of the hon. Member for Durham, North

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(Mr. Radice), although one other Labour Member abstained and a third Labour Member voted against me, along with no fewer than three different wings of the Conservative section of the Committee.
That illustrates the widespread division. Those most concerned with economic policy, including the Chancellor, wish that Britain could soon be brought into the exchange rate mechanism of the European monetary system, not least in time for our conclusion of the internal market.
There are other aspects on which there seems to be some division of policy, not least on the relative acceptability of inflation at about 3 per cent. At times, the Chancellor has appeared to believe that inflation at that level is probably preferable to the measures that would have to be used to drive it down below that level. It is not that it is not desirable to have inflation at that level but that the measures which might have to be used to bring it down further could he more painful and damaging than if inflation persisted at that level for a time.
The Select Committee pointed out that the Government's inflation targets have slipped badly. It is for the Government to say what they regard as acceptable measures to reach their ultimate aim of zero inflation and to say whether they include measures that could severely damage industry and growth.
The repeated message from the Budget has been its unfairness, and that message has been compounded by the effects of other measures which we have been discussing at about the same time—social security and the poll tax. When Conservative Members talk about the importance of having a no-losers approach to some of these problems —referring to the ways in which arrangements for taxation of married couples are designed to avoid creating losers —if makes us wonder why a no-losers approach was not taken to some aspects of the social security measures.
One example has been brought home to me by numerous people who have been to my constituency surgeries. Miners' widows, who receive a cash allowance in lieu of concessionary coal, because they cannot burn coal in their homes, face substantial rent increases. They will lose benefit because of the social security measures. There is no no-losers provision for them. There was no no-losers provision for the people who had saved up their mobility allowance to buy an adapted car. They have found that they have gone over the £6,000 limit and have become losers. No transitional protection was provided for them.
No transitional protection was provided for the family with a 19-year-old at school completing A-levels who had been ill for some of the time in which he would normally have completed the examinations. Because of the change in the rules, the family cannot get benefit. As a result, it will be £20 a week worse off. The no-losers doctrine did not seem to apply to those people.
As well as the manifest and widely felt unfairness of the Budget's tax cut provisions, it is striking that the Budget continued to preserve those tax breaks and benefits to the wealthiest in society, which they should not need if they were getting all the benefits of tax cuts. One of the classic examples to which reference is made in the Select Committee's report, in a different context, is mortgage interest tax relief at above the standard rate of tax.
I still cannot understand the Government's logic for arguing that, with rising house prices, it is necessary to give those who can most easily to afford to buy a house—by definition, because they are on the higher tax rates—a higher rate of subsidy to take out a mortgage than those
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on standard rates of tax. I should be grateful if the Government can explain that. The argument for it is wholly political. It does not emanate from the Treasury. Like the exchange rate policy demands, it emanates from No. 10. The Prime Minister has concluded that she wishes to retain the support of this group, but there seems to he no logic in it, and it adds to the Budget's unfairness.
Similar criticism can be made of the reform of the taxation of married women. It will give the largest advantage to the wealthy two-earner couple opting for separate taxation. Such a couple will benefit from the disaggregation of their incomes—together they would. be in the higher rate tax bracket, but separately would each be in a lower rate—and they will get the additional married couple's allowance. A massive benefit is flowing to a relatively wealthy group. It is difficult to argue that this produces any kind of fair Budget strategy, even in the context of a part of the Budget in which everyone agrees that some kind of reform is necessary.
Miss Ann Widdecombe: Will the hon. Gentleman explain why a married women who is better off is less entitled to her independence than a married women who is less well off? Is not the basic principle behind the reform that of giving dignity and independence to married women, whatever their income?
Mr. Beith: I do not disagree with that at all, but perhaps the hon. Lady can explain to me what the hon. Member for Croydon, South failed to explain; why such a married woman needs to be in receipt of a married couple's allowance—as one of a couple. One can see why, in the short term, we do not want to make losers of such couples, but why there should be an additional allowance for a married couple indefinitely into the future I cannot understand. I cannot see that it serves to increase the independence of married women. That independence is secured by ensuring that they have separate taxation.
Another area in which the Government have preserved massive unfairness and have not carried out the reforms that would seem natural and logical is national insurance contributions. People earning between £100 and £300 a week pay 34 per cent. of their income in tax and national insurance contributions, but those earning between £300 and £450 a week pay only 25 per cent. of their income. The Government's failure to tackle this mess is another illustration of the fact that the Budget is not only unfair, but is also not a reforming budget.
Shortly after the Budget, the Chancellor said that he had more or less completed his task of reforming personal taxation. If he thinks that, he does not deserve to be credited even with the ambition of being a reforming Chancellor, let alone with having achieved it. Apart from the things that I have mentioned already, he has done nothing to move towards a tax benefit system on tax credit lines, for which previous Conservative Chancellors have argued. He has not tackled one of the greatest weaknesses of the present inheritance tax system. His changes do not encourage a wider dispersal of wealth, which an accessions tax could do.
The Budget was unsound because it ignored some dangers to the economic growth and security that the Government are trying to develop. It ignored the danger to the balance of payments of a substantial increase in private consumption, and did so at a time when there was an

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obvious need for some increased expenditure in parts of the public services on which large sections of society depend.
It was unacceptable that the Chancellor could say at the time of the Budget that things had turned out much better than he had expected, that he had more revenue at his disposal than he had thought and that he would therefore give more favourable tax reductions than he had planned. Yet he felt himself precluded from saying that, because things had turned out better than he had expected, he proposed to divide what was available to him between further tax cuts and benefits to various public services in need of assistance. He argued in this way because the public expenditure White Paper was published in November.
The Treasury Select Committee tried to put forward one way in which to get over this difficulty. Where there's a will there's a way, and the Chancellor was not really precluded, in the certain knowledge that he has far greater means at his disposal, from disbursing some of these means to urgent needs in the public service——
Mr. John Watts: Will the hon. Gentleman give way?
Mr. Beith: I said at the outset that I would try to keep to Mr. Deputy Speaker's injunction.
The Budget is also profoundly worrying on the issue of inflation. The Government have not helped their own case by imposing on nationalised industries price rises that they did not regard as necessary and which bear heavily on some sections of the community. In a number of areas of the economy the Government seem to be fuelling the very inflation that they believe they should be trying to control. I mentioned the example of mortgage tax relief. In the course of this year, there will be not only the continuing effects of higher rate mortgage tax relief but the short-term push to house prices, particularly in London, from the changes that the Government are making in the multiple tax relief on a single property—changes for which I accept there is justification. Nevertheless, the alteration will fuel price increases.
Other parts of the Finance Bill deserve considerable examination in Committee and show that the Government seem to have failed to take the steps they should have taken. It is impossible to understand why the Government should seek to allow the real price of alcohol to fall year by year. That is particularly true of spirits, on which the Government have imposed no increase. It is difficult to square that with the activities of the Leader of the House in his ministerial committee on alcohol policy. The proposal on low-alcohol drinks in the Budget was meant to be a gesture towards that ministerial activity, by trying to get a concerted policy on alcohol. It is difficult to see the logic in that, given that the Government believe that alcohol consumption needs to be reduced or controlled —so why reduce its real price year by year?
Although we share the Government's objective of wider share ownership, I continue to argue that the Government maintain a hopelessly inadequate personal equity plan scheme. They could have reformed it in the Budget if they had wanted to. It does not draw in new investors to any significant extent. Its main attraction is to those who have
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used up their other tax reliefs and want the additional tax relief that the scheme offers. It is not a great attraction to investors.
There will be a great deal of examination of the business expansion scheme proposals on rented housing. There is no reason in principle why the Government should not take steps to encourage private capital into housing. With the problem as desperate as the housing problem now is —and it had got worse—we should be foolish as a nation if we did not try to attract private capital into the solution of the problem. But there are serious worries about the scheme. It is difficult to argue that relief at the higher tax rates is necessary for an investment that is primarily in property, which gives considerable security. It is difficult to imagine that the investment could be secured only by having tax relief at the higher rates.
Secondly, it is worrying that the whole scheme must be geared to the Government's new assured tenancies with no additional protection for the levels of rent charged or against any of the other worries that tenants have. It looks as if, without some modification to the scheme, it could attract capital into unsatisfactory forms of rented housing, in which the tenant is exploited. If that happened, it would be an unfortunate step to take at a time when the housing crisis is so severe.
Many people in this country want an enterprising society with a fair tax and benefit system and good quality public services. It is essential to have all those things, but they are not all provided by the Budget's strategy. Take, for example, good quality public services. It is an insult to the nurses to imply, as the Chief Secretary did, that by providing a much better pay increase for them than that of previous years, and fully funding it, the Government have dealt with the whole of their grievance. Many nurses took to the streets in orderly demonstrations in their own time not only because they were worried about nurses' pay but because they were worried about the state of the Health Service.
I have found, during my visits to hospitals, that I am much more likely to be challenged and questioned by nurses about the level of staffing in the wards and their back-up in the job than about nurses' pay. I have had far more queries from nurses about the standard of service that they can give than about their own pay. That is a sign of their dedication and professionalism.
Because it fails to meet the needs of social justice and decent public services, this Finance Bill will take the people of this country further from, not nearer to, the objective of a successful society with social justice and good public services. Inequity gives enterprise a bad name. That is tragic. It is vital to get across the fact that the benefits that we need to bring to those who are worse off in society cannot be achieved if society is not successful economically. But what is the point of economic success if it is not accompanied by an attempt to tackle those social problems?
If an advertising agency had been hired to tell the Government how to get their message across, it would have told them to repeat it day by day in a similar form. That is what the Government have done. On day one, they gave us a Budget which expressed a message of unfairness. On day two, they gave us the social security changes, which bring home in harsh terms to many hundreds of thousands of people the Government's message of unfairness. On day three, they brought before the House a poll tax, which is perhaps the unfairest tax devised for

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centuries. The message has got home. It is a sad message for a society which has an opportunity to combine success with social justice.
6.39 pm
Mr. Matthew Carrington: The House will be glad to learn that I do not propose to detain it for 22 minutes.
The continuing simplification of the taxation system is an extremely important part of the Bill. The simplification is to everyone's benefit. If the minutiae of the tax system become complicated, as they have, the whole system becomes incomprehensible to the ordinary person. Any change makes the whole edifice quiver as changes in one part of the system have a knock-on effect in others. When the structure becomes so complex, the only people to benefit are tax accountants who are paid vast sums to unravel what legislation has created. The changes embodied in the Bill are therefore much to be welcomed, except, possibly, by tax accountants.
We have already heard about the scandal of wives and husbands being taxed together and husbands being responsible for their wives' tax returns. I do not want to get involved in the argument about whether the allocation of allowances benefits or disadvantages certain groups. One tremendous advantage of the proposed change is that it creates no losers. I should like to dwell for a moment, however, on the natural justice of the change.
It seems to me axiomatic that a husband should not be responsible for his wife's tax return. I should like to give a personal illustration. My wife is rather better educated than me. She has a master of business administration qualification from one of the best business schools in Europe, she earns her own living, she is responsible for a great many other people's lives and she has much more financial responsibility than any mere Back Bencher could dream to aspire to. In short, she has all the qualifications to be able to sign my tax return, knowing far better than me what is in it. Instead, since we have been married, I have had to say that what she has written in the tax return is correct.
That is ludicrous. It is to me that the Inland Revenue has turned for assurances that we are doing everything properly. It is a monstrous system. Indeed, it is an insult to my wife. It is ludicrous and the change goes a long way towards remedying it.
One matter disturbs me, however. My right hon. Friend the Chief Secretary to the Treasury mentioned it and I know that we shall return to it. I refer to the married couple's allowance being given to the husband and the couple being unable to opt for who should take it. In many cases, no serious injustice will occur, but if a wife's marginal rate of tax is 40 per cent. and the husband's is 25 per cent., the couple will unquestionably lose out as compared with a couple in the reverse situation. That is obviously unjust, and I should like the anomaly to be ironed out, although not perhaps this year because of the cost. Husbands and wives should be taxed independently.
I greatly welcome the change in the structure for payments in kind. I greatly welcome the raised tax charge for company cars. I would like it to go further. I would like tax scales raised to the point at which an employee is indifferent as to whether he is paid in cash or with a motor car. I should like that principle applied to every other benefit in kind.
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I cannot believe that it is right, or to the advantage of employer or employee, for work done to be paid for in goods rather than money. As long as the tax system enables employees to benefit distinctly from having a car rather than cash, we shall prolong a distortion in the financial system which is greatly to be regretted.
There should be no benefit to employers paying other than in cash and employees should want to resist being paid any way other than in cash. The tax system has a great responsibility to iron out those problems. We have not yet got there with the motor car, because the scale bands are too low and because of the effects of national insurance on the employees' side of the bargain. When an employee is below the national insurance limit, it is to the employer's benefit to pay with a motor car rather than with cash.
We should have a tax system which is neutral about how people are paid. We are on the way, and I greatly welcome it. The 40 per cent. band will help in that direction. I should like to echo what my hon. Friend the Member for Croydon, South (Sir W. Clark) said. We have lived for a long time with the £8,500 limit for higher paid employees. That limit is, with a simpler tax system, unjustified. Relieving people of the need to complete a form P11(D) and a tax return each year will save much administrative time among employers, the Inland Revenue and employees. I hope that that improvement can be made soon.
My hon. Friend said that the limit should be close to £20,000. A more modest rise would achieve a major benefit. It is quite wrong, however, that people who earn less than £10,000 a year should have to go through so much administration with tax returns.
Because of the simplification which it proposes, I strongly welcome the Bill. I also welcome the greater financial strategy. Simplification, however, is of the essence.
6.49 pm
Ms. Joyce Quin: I am grateful for the opportunity to speak in the debate. I begin by referring to the report of the Treasury and Civil Service Committee on the Budget.
As a new member of the Committee, I was surprised to find that traditionally the Budget report of the Committee deals with the economic context of the Budget and not with the specific measures that involve taxation. However, I realise that those details are dealt with in the Standing Committee on the Finance Bill, which will begin its work shortly. As a result, the Select Committee's report deals with the less controversial elements of the Budget.
However, one controversy which surfaced in the Select Committee was the dispute between the Chancellor of the Exchequer and the Prime Minister about exchange rate policy. I do not apologise for putting that in personality terms. It is alarming when the Prime Minister and a senior member of the Government are seen to be at odds over such a fundamental aspect of our economy. There were discussions in the Select Committee about the over-simplified and misleading words, "You can't buck the market." The Committee looked at ways in which the market might be bucked.
I was glad that the Committee expressed concern about the effect of a high pound on industry. Like my right hon. Friend the Member for Ashton-under-Lyne (Mr.

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Sheldon), I remember the period between 1979 and 1982 when the pound was artificially high. In the European Parliament constituency of South Tyne and Wear, which I then represented, many jobs were lost and many industries disappeared completely.
We know that markets are not always rational in their views about the health of particular currencies at particular times. The Chancellor himself has been quoted as saying that very often the market is not reflecting economic fundamentals at all. We do not want British industry to he further undermined by an artificially high pound or by irrational speculative behaviour.
The report of the Select Committee deals with many other useful matters, in particular the concern of many hon. Members about our worsening balance of payments. It seems that the Treasury has estimated a deficit on the balance of payments this year of some £4 billion. Yet in the first two months of the year there was a deficit of £1·5 billion. If the Treasury forecasts are to be realised, there will have to be a dramatic improvement in the situation.
The Committee also expressed fear of a consumer boom sucking in imports, and the fear of adding to the already great burden of personal debt which may be encouraged by some of the tax reductions.
However, as I have said, the Committee report, by its very nature, does not get to grips with the real controversies and passions aroused by the Budget. It is the most unpopular and contentious Budget in recent times because of the tax reductions, and in particular the unjustifiable reduction in the top rate of tax to 40 per cent. and the allied measures which represent a dramatic shift in the distribution of wealth from the poor to the rich.
It has been pointed out many times that the Chancellor had an embarrassment of riches at his disposal. Unfortunately, he used it to embarrass the rich with his generosity—at least, he will have caused embarrassment to any rich person with even the faintest stirring of a social conscience.
Why did the right hon. Gentleman do that? One argument is that it will be an incentive and that somehow the cuts in the top rate will cause people to work harder. That argument ignores the findings of Professor Brown of Stirling university, a copy of which should be distributed to all hon. Members. It ignores, too, the evidence from Japan and from other countries where there are high top rates of taxation. It also ignores the fact that people often work because they are interested in their work. When I was a university lecturer, the salaries were not high, but many of my colleagues worked flat out for all the available hours, not because of the income they received but because they had a passionate interest in the subject in which they worked.
Another argument is that higher top rates of taxation encourage people to evade taxation. The argument is that most people seem to evade taxation. I do not know whether the Government are saying that the top people are uniquely dishonest, but I find that argument very unconvincing.
The consequences of the Budget measures are unequal in their effect. A financier earning £100,000 a year will gain an extra £4,000, a qualified nurse earning an average of
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£7,800 a year will benefit by just £26, or 50p a week, and a low-income worker on £90 a week will have his pay packet increased by only 27p.
The Low Pay Unit estimates that about 550,000 families caught in the poverty trap will face effective marginal tax rates of more than 70 per cent. due to the withdrawal of means-tested social benefits. It is absolutely vital that we look not only at the Budget measures but at their overall economic context. The benefit provisions have lagged very much behind the growth in incomes. That is absolutely clear if we consider pensions, child benefit and housing benefit. The hardships caused by the cuts in housing benefit will be highlighted effectively later this week.
A telling argument in The Guardian yesterday shows that the Treasury has managed to save £4 billion—just about the same figure as its privatisation receipts this year —by its niggardly and mean approach to benefits. That is disgraceful, especially when we know that money is available.
The word "unfairness" will be long associated with the Budget, but it will also be remembered for its short-sightedness and short-termism. The tax cuts will fuel imports at a time when public capital expenditure has been falling. Therefore, we have failed to lay the basis for the renewal of our infrastructure and of our industries which will be vital in future. The long-term bill for refusing to take the necessary action now will be very heavy indeed.
The Budget and the Finance Bill will be remembered for their unfairness and for their tragic short-termism. The Chancellor will be remembered not as a great reformer but as a wrecker and destroyer of the hopes of creating a fairer tax system properly related to ability to pay. He will be remembered as a destroyer of the hopes of creating conditions for genuine long-term economic prosperity in this country.
6.57 pm
Mr. Tim Smith: I do not think that the Budget can sensibly be described as a short-term Budget as the hon. Member for Gateshead, East (Ms. Quin) sought to describe it. It is important to consider the Budget as one of a series, starting with the 1979 Budget, all of which sought to create the climate and conditions for long-term economic growth, for the improvement of Britain's economic performance and for the increase in industrial investment which is now happening.
The background to this debate is one of strong economic growth at a sustainable pace. It is not altogether surprising that the hon. Member for Dunfermline, East (Mr. Brown), speaking from the Opposition Front Bench, did not devote much of his speech to the state of the economy today. Instead, rather uncharacteristically, he made a number of doubtful statistical assertions, including the extraordinary assertion that 18 million people in Britain are living in poverty. When questioned on that, he revealed that he was including children in his calculations of people on low incomes.
Mr. Battle: I am sure that the hon. Member will recall the debate on child benefit when the hon. Member for Kensington (Sir B. Rhys Williams) put a question to the Minister and received the reply that 18 million people in Britain live on or below the bread line. Is the hon. Gentleman disputing a fact given by his own Government?
Mr. Smith: The difficulty about assertions of poverty is that, every time the income support level is increased, we increase the level of poverty, so 18 million people are asserted to be living in relative poverty. If we compare their incomes 10 years ago under a Labour Government with their incomes today, we see that everybody is far better off. We should be looking for an absolute rather than a relative yardstick, because the Government are the victims of their own success. It is important that people should understand what is meant by poverty and that they should also understand that, year in, year out, the threshold is being raised as social security benefits are raised.
The second extraordinary assertion of the hon. Member for Dunfermline, East is that tax evasion is rising. He can have no evidence to support that statement, since nobody knows the size of the black economy. He probably meant that the Inland Revenue is now having considerably more success in detecting tax evasion, with the result that more tax revenue is now being received from people who formerly were part of the black economy. That is a very satisfactory state of affairs.
The third extraordinary statistical or factual assertion by the hon. Gentleman is that North sea oil revenue is rising. He is three, four or probably five years out of date. Anybody who looks at the Red Book can see that the income from petroleum revenue tax now forms only a very small proportion of total Government revenues.
The assertion that the background to this debate is a strong economy has widespread support. The Japanese ambassador told us so not so very long ago. Today the magazine Fortune has said the same. The CBI's industrial trend survey has reported today more good news from industry.
There is another report, also today, about the visit of the Chancellor of the Duchy of Lancaster to the city of Leeds. The article explains that his tour coincides with new business confidence and continues:
"Economic pointers look favourable not only in Leeds, but over large areas of the Midlands and the North-West. There are real signs that those parts of the country that seemed left lagging by the booming South-east are beginning to share in the recovery."
Even the hon. Member for Leeds, Central (Mr. Fatchett) said:
"The city is doing fairly well, with quite a bit of investment coming in."
The good news is that economic recovery is moving slowly north, through the midlands and now, as the hon. Gentleman told The Times today, to the city of Leeds.
Mr. Derek Fatchett: I am grateful to the hon. Gentleman for giving way and for sending me a note saying that he intended to quote that passage from The Times. However, he will recognise that that was not an endorsement of the Government's economic policies. My argument in The Times and the one that I make in this place is that the success of Leeds is due largely to the partnership between the public and the private sector that has helped to refurbish and redevelop various sectors of the inner city. I suspect that the difference between us in this debate is about the role of the public sector. Leeds's Labour-controlled council has played a crucial part in stimulating inner city investment. Unfortunately for the hon. Gentleman, his problem is that that success comes from a cause that he finds it difficult ideologically to understand and appreciate—the role of local authorities.
Mr. Smith: I have no difficulty about that whatsoever. I am very glad to know that there is a sane Socialist authority in Leeds. There are sensible local authorities all over the country that have done a great deal to attract investment, including the one in which I live, the Conservative-controlled London borough of Wandsworth. News of that kind is obviously welcome to those who live and work in Leeds. I gave that only as an example of the way in which economic prosperity is making its way through the country.
The result of the successful economic management over which my right hon. Friend the Chancellor of the Exchequer has presided is substantially rising tax revenues. Buoyant tax revenues have enabled my right hon. Friend the Chancellor of the Exchequer at one and the same time not just to balance the Budget but to budget for a surplus and substantially to cut taxes.
The 25 per cent. standard rate of tax is most welcome and should not be underestimated. In the nine years since 1979, there has been a reduction of one quarter in the standard rate of income tax, from 33 per cent. to 25 per cent. Every taxpayer in the United Kingdom will benefit from the Budget. Of course there will be major beneficiaries of the reduction in the top rates of tax, but no Government should pursue a policy of penalising success. They should set a top tax rate that will ensure that revenue is maximised. We heard earlier that during the last nine years the top 5 per cent. of taxpayers paid a larger proportion of the total amount of income tax than was previously the case. I am sure that in two or three years that process will be repeated with the new top rate of tax.
There are, nevertheless, two aspects of the income tax changes that cause me concern. The first was mentioned by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). He said that the top rate of tax is now 40 per cent., that the marginal rate of tax, taking into account national insurance contributions, is now 34 per cent. and that the differential is too narrow. I agree. The Treasury should give the highest priority to reducing further the standard rate of income tax from 25 per cent. to whatever is seen, in all the circumstances, to be a reasonable figure. I was glad that in his Budget speech my right hon. Friend the Chancellor of the Exchequer said that he intended to do that during the lifetime of this Parliament.
Dr. Marek: Does the hon. Gentleman intend to recommend to the Treasury that the national insurance contribution should run all the way up the income scale and that it should not be cut off arbitrarily halfway up it?
Mr. Smith: The difficulty about that proposal is that it would further undermine the contributory nature of the national insurance scheme, which it is important to retain. If the hon. Gentleman is suggesting that earnings-related pensions should rise by an equivalent amount, I might agree with him, but as I know that he is not suggesting that, I do not think it that would be a reasonable step to take. I hope that it will be possible soon to reduce the standard rate of income tax to the 20 per cent. target that has now been set.
My other concern about the income tax changes is the position of retired people who are able to take advantage of the age allowance but who find themselves in what is called the clawback area of income of between £9,000 and £11,000 when the age allowance is clawed back from them. The rate at which age allowance is clawed back is 41·6 per

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cent. It is unfortunate that that rate of clawback should be higher than the top rate of tax. I hope that it will be possible to widen the income band from which the age allowance is clawed back, to ensure that, at the maximum, it is 40 per cent., and preferably less.
There are two changes in the Finance Bill that I particularly welcome. My right hon. Friend the Chief Secretary to the Treasury referred to changes in the business expansion scheme and mentioned that my right hon. Friend the Chancellor of the Exchequer had decided to introduce a limit of £500,000 for any one company's investment in any one year and to introduce tax relief for business expansion scheme funds at the time when the cash is invested in the fund. Those two changes will do a great deal to focus tax relief on investment opportunities that involve a higher degree of risk.
Those who have taken advantage of this relief have naturally taken the least possible risk. However, if one is offering a substantial tax relief of that kind, it should be focused on riskier areas of investment where there may be an equity gap, which is in the £75,000 to £250,000 area. With that in mind, those two changes to the BES are particularly welcome and should do much to ensure that money is invested in riskier, high-tech projects.
The second change I wish to mention is that to chapter II of the Bill, relating to clause 79. I shall not go into detail, but I commend my right hon. Friend the Financial Secretary to the Treasury for the manner in which those provisions were devised. There is always a degree of mutual suspicion between tax practitioners and the Inland Revenue, which is not surprising given that they have diametrically opposed objectives in life. However, my right hon. Friend went about making changes by setting up a working party that comprised representatives of the Inland Revenue and of taxpayers, which has had a most satisfactory outcome—something that is both workable and practicable.
The bottom line for the average taxpayer—my hon. Friend the Member for Pembroke (Mr. Bennett) referred to this earlier—is whether or not he personally is better off. At Treasury Question Time the week before last, my right hon. Friend the Chief Secretary to the Treasury said, in answer to a question from my hon. Friend the Member for Harrow, West (Mr. Hughes), that the contrast between the performance of the Labour Government between 1974 and 1979 and that of the Conservative Government between 1979 and the present day was that a married man on average earnings with two children had seen a rise in his real take-home pay of one half of 1 per cent. in a five-year period. In the following nine-year period, the corresponding figure was 27·5 per cent.—55 times better. For as long as my right hon. Friend the Chancellor of the Exchequer is able to preside over the economy in such a way that we see continuing improved performance leading to rising tax revenues, falling tax rates and rising standards of living, we shall continue to have a Conservative Government that will be widely supported by all taxpayers. That is most welcome.
7.12 pm
Mr. David Winnick: There is a general feeling that in the next 18 months to two years, this country will be faced with sharp economic difficulties,
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particularly arising from what is likely to happen in the United States after the presidential election. The Government boast about the recent growth in the economy, but manufacturing output has just about reached the level of 1979. The economy basically remains in a fragile state, but has been much boosted by consumer spending and by domestic credit expansion.
I shall concentrate my remarks on the changes in income tax to which the Bill gives effect. I am one of those who shouted, perhaps more than once, "Shame!" when the right hon. Gentleman the Chancellor of the Exchequer made his Budget speech and announced that the top rate of income tax would be reduced to 40 per cent. I believe that I was right to do so, and I offer no apologies.
The feelings of the Labour Benches on that development are undoubtedly shared by the majority of the people of this country. At a meeting with the Chancellor during the Treasury and Civil Service Select Committee, I asked him about the lack of popularity for that measure. He told me it was not designed to secure a response in the opinion polls. However, his decision doubtless received a positive response among the richest and most prosperous in the country.
At that same meeting on 30 March, I asked the Chancellor what he would say to a pensioner, no matter on whatever limited income, whose housing benefit had been withdrawn because of the new capital limit of £6,000. In view of the widespread stories in the press to the effect that Ministers are looking at that provision again, it is of some interest that the Chancellor fully justified the cut-off point for housing benefit. He said:
"I think it is perfectly fair that somebody who has £6,000 or more of free capital—free capital"——
the emphasis on "free capital" is his—
"should not be in receipt of housing benefit."
That view is not shared by many right hon. and hon. Members on the Conservative Back Benches. They know from their own surgeries, postbags and meetings with constituents how unpopular is that decision. It is nonsense that people who have saved during their lifetime—and at present-day levels, £6,000 does not add up to much, particularly if it includes redundancy pay—should be penalised by the Government and denied housing benefit. One compares that situation with the way in which the most prosperous members of the community will benefit.
A lead story in The Daily Telegraph yesterday, repeated in today's newspapers, reported that senior Ministers, including those from the Treasury, are hurrying around in an attempt to put together a package for our debate on housing benefit tomorrow that may not satisfy the Opposition but might at least satisfy their own Back Benchers. Tomorrow, we shall learn the outcome of those talks. I say to the Financial Secretary and to the Economic Secretary to the Treasury, both of whom are present, that if they believe that some modest tinkering with housing benefit will satisfy their Back Benchers and the rest of the country, they are wrong. Drastic changes need to be made to the arrangements for housing benefit, including those which penalise the many people—my own constituents among them—who have no savings.
One must compare the situation of others earning £150,000 a year, rather than having £6,000 capital or less and a modest retirement income. They will enjoy a total tax gain of £23,000—almost double the average earnings of male employees in this country. Someone earning £100,000 a year will gain more than £13,000. Half of all the

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Budget tax cuts will go to the top 10 per cent. of taxpayers. Is there a single Conservative Member who really believes that substantial cuts in taxation will act as an incentive to the wealthy to work harder? Does anyone really believe that? Are we to believe that the most prosperous people in the country will now say to themselves, "I have not worked hard enough. I do not get out of bed early enough in the morning and put in enough working hours. But I will now work harder. I shall get up earlier and stay longer at the office before leaving for the golf course. I shall not take Fridays off because of the tax concessions"? To believe that people will think that way is to believe in a fantasy world.
Mr. Tim Smith: Is the hon. Gentleman aware that when the top rate of tax was 83 per cent., or 98 per cent. on unearned income, the people to whom he is referring spent most of their time trying to devise schemes to avoid paying tax? Today, they spend most of their time creating wealth.
Mr. Winnick: There is very little evidence that they are creating wealth. As to avoiding tax, the hon. Gentleman may be more expert in that field than I can claim to be. Like the poll tax, the purpose of the Budget tax cuts has nothing to do with incentives. Everyone, including Conservative Members, knows that to be true. Their purpose is simply to reward the rich: no more, and no less. It is understandable that, throughout the country, the Government are increasingly seen as being of the rich, by the rich and for the rich.
Those on small incomes, certainly our constituents outside London and probably those in the London area as well—people earning £5,000, £6,000 and £7,000 a year—will gain a very modest amount from the reductions in the standard rate of taxation. It should not be overlooked, moreover, that the amount that can be inherited will now be taxed at only 40 per cent. instead of 60 per cent., and it will he much easier to pass on substantial private fortunes. There will be further tax loopholes to assist the wealthiest.
In my view, the rich should pay a much higher rate than 40 per cent. When I pressed the Chancellor on the subject in Committee, I asked a simple question: could he name the European countries in which the top rate of tax is 40 per cent? The Chancellor thought for a moment, and then told me that that applied in Switzerland. Switzerland! One might expect it there.
I believe—and my view is clearly shared, not merely in the parliamentary Labour party but in the country at large —that those who earn substantial sums, and certainly those who have inherited them, have a duty and a responsibility to pay their fair share in taxation. While I cannot deny that reducing the standard rate has a populist appeal—[HON. MEMBERS: "A popular appeal."]—I believe that it is not always right for that rate to be reduced. That is particularly so, in view of the requirements for essential public expenditure.
Of course Conservative Members sneered when I said that reducing the standard rate had a populist appeal. In France, for example, the Fascist Le Pen has two main planks to his policy. One is to limit and chuck out those who come from abroad, particularly from the African and Arab countries; the other is the reduction of income tax.
If hon. Members believe—as I strongly do—in adequate funding for the National Health Service, proper rates of benefit, including uprated child benefit and adequate provision of essential public services such as
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housing, education and transport, it is nonsense and economically illiterate for them to argue at the same time, for the repeated reduction of the standard rate of tax. That is a contradiction in terms. I am being consistent. I should like more tax concessions for those on limited incomes, and I believe that those on very modest incomes, certainly those in retirement, should pay no tax at all. I am glad to see that the Financial Secretary at least approves of that. But if we believe that the National Health Service and other essential services are underfunded, it is inconsistent to say that the standard rate should be repeatedly reduced.
Mr. James Arbuthnot: If it could be shown that the reduction of tax rates produces more money for the National Health Service and the other benefits mentioned by the hon. Gentleman, would he vote for such a reduction?
Mr. Winnick: The point that I am making is that the reduction in the standard rate has led to a starvation of essential services. I do not know about the hon. Gentleman's constituency, but in mine, far from there being adequate funding, a large extension to the general hospital which will be completed later this year will not be fully operational next April—as it should be— because there are not enough funds. That is not denied, and the position of other essential services strengthens my argument rather than the hon. Gentleman's.
The business expansion scheme will now include tax relief for private landlords. It will provide a tremendous tax shelter. Although some landlords may be responsible people, there will be quite a few Rachmans among them. In my borough there has been no building of council houses or flats for nine years, and it is not likely to occur as long as the present Government remain in office. Yet there remain a large number of people—I am sure that the same is true of other constituencies—who are on the waiting list and desperate either to be housed in the. first place by the local authority, or to be rehoused.
That applies to many of my constituents—some of them with two children—in multi-storey blocks, who have been waiting for years to be offered a house. When they write to me or come to my surgery, I cannot respond, "Get a mortgage." They simply have not the means to do so. It is highly irresponsible for the Government to pursue a policy of ensuring that no council accommodation is built. They are indifferent to the hardship being caused, but they are happy to give nice business expansion schemes to potential Rachmans.
We know that public services are being starved of funds. We know of the public squalor and neglect. It is not even necessary to go to our constituencies: half a mile from the Palace of Westminster, an increasing number of people can be seen spending their nights in wooden boxes—far more than in previous years. They are not all tramps or irresponsible people. Some, undoubtedly, have been faced with matrimonial and other personal problems. But obtaining rented accommodation is out of the question for them.
Do we want what we see in America? I concede that many ordinary people there live in comfortable conditions, far more no doubt than here. I have been to the United States, and I know the standard of living. Accompanying that, however, is so much squalor and neglect. In some parts, certainly in New York, one sees the sort of

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conditions that are more associated with the less-developed world. I do not want to see that here. The counter-revolution of the past few years has tried to reverse all the beneficial changes that have taken place since 1945—to a large extent, until 1979, under successive Governments. All those changes are being eroded and undermined by the present Administration.
Although the Labour party has been unsuccessful in recent years in winning the public argument—if we had won it, we would not be sitting on these Benches—it is encouraging that the opinion polls have demonstrated, as I believe the approaching local elections will demonstrate, that people are beginning to recognise that what we say is right. We have a Government who are of the rich and dedicated to their cause. They are indifferent to those in need, and to the public services. They are a selfish and a hard Government, made up of hard people whose concern —as the Budget has shown—is to reward the wealthy. That is why, with my right hon. and hon. Friends, I shall take much pleasure in voting against the Bill.
Several Hon. Members rose——
Mr. Deputy Speaker: Order. I believe that 11 hon. Members are still seeking to take part in the debate. I understand that the Front Bench speakers wish to reply at about 9.10 pm. The arithmetic is obvious.
7.28 pm
Mr. John Watts: Only the hon. Member for Walsall, North (Mr. Winnick) could describe the present condition of our economy as fragile and then go on to suggest that a Labour Government would return to a high-tax economy in the hope of squeezing in the pounds to spend more on public services. It is clear that the hon. Gentleman and his colleagues have learnt nothing from their sad experiences when exactly those policies brought Britain to its knees and them politically to their knees. Long may they remain there.
In the debate on the public expenditure White Paper, I suggested to my right hon. Friend the Chancellor three priorities for his Budget—first, to eliminate the need for any public sector borrowing requirement, secondly, to reduce income tax at every level, and, thirdly, to tackle at long last the reform of the taxation of married women. His Budget and the Finance Bill meet all three of my requirements. Indeed, he did much better than merely eliminating the need for borrowing. He plans a £3 billion debt repayment this year, as for the past year—two years in a row. He announced the much overdue reform of the taxation of married women, he has achieved the 25p target for the standard rate of income tax set by his predecessor in the first term of this Administration, and he has exceeded my hopes by achieving a 40p top rate of income tax.
The envious and malicious tendency of Socialism was much in evidence in the remarks of the hon. Member for Dunfermline, East (Mr. Brown). I regret that that was echoed in the contribution of other Opposition Members. We have heard a great deal about the scandalous benefits which will accrue to the rich. Anyone not listening too closely to the hon. Gentleman might have thought that he was describing some enormous state pensions that were being dished out to the idle and undeserving rich. He
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enunciated once again the Socialist view that every penny of income and wealth should belong to the state and that it should be for the state to decide how much of it should be doled out to various deserving categories among our people.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) came near to falling into the same trap with the implication that there is something intrinsically good about raising taxes and then the Government deciding how those moneys should be spent. There was no hint from the hon. Member for Dunfermline, East that the so-called largesse that was being distributed to the rich was just a matter of allowing individuals to keep a little more of what was already their own. Tax cuts do not involve giving away; rather, they involve taking less away from those to whom it already belongs. That is an essential truth which one day Opposition Members might recognise.
It would be churlish of me to criticise the hon. Member for Dunfermline, East for making so much of the benefits accruing to the higher income groups because it became increasingly apparent as his speech unrolled that he had few arguments to deploy. The bogus pre-Budget argument that the Budget should have been about NHS spending has now given way to the rather strange notion that the nation's resources are being squandered on tax cuts for the rich.
I was not surprised that the hon. Gentleman was reluctant to be tempted by the intervention of my hon. Friend the Member for Pembroke (Mr. Bennett) to consider the effects of tax cuts on taxpayers on average incomes. Few, if any, of my constituents are among the undeserving rich who have been castigated so roundly by the hon. Gentleman. Nor, indeed, are many of my constituents as well off as the average Labour Back Bencher. Therefore, they have a rather close-to-home attitude to the importance of the impact of tax on their incomes and the lifestyles of their families. But with a booming local economy, largely the result of nine years of sound economic management and tax changes which have restored incentive and freed enterprise, many of my constituents prosper on the much higher level of average earnings which we now enjoy under the Government.
If one looks back at the changes that have been made over nine years of Conservative Government, both in the over-indexation of tax allowances and in reductions in the standard rate from 33p in the pound to 25p, one finds that a single man on average earnings receives an extra £15·90 a week in his pocket, over and above the amount that he would have had if the previous tax regime had continued with the Labour Government's 33p in the pound basic rate and personal allowances merely indexed in line with the retail price index. For a married man, the figure is over £18 a week.
Those are not insubstantial benefits for my con-stituents. They understand when they are better off. They understand such basic facts of life rather better than Opposition Members who are cosseted on income levels of twice average earnings. My constituents remember what life was like under a Labour Government's high tax regime. That is why they continue to send me to the House and not a representative of the Labour party. Because I and many of my hon. Friends have constituents who are prospering on average earnings and are allowed to retain more of those earnings in their own pockets to spend on themselves and their families, they vote for us, not for the defeated colleagues of Opposition Members.

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Several Opposition Members poured scorn on the proposals to stimulate the expansion of the private rented housing sector through the business expansion scheme. My right hon. Friend the Chief Secretary was right to argue that an expanded private rented sector is essential for greater labour mobility. Every week one of my local newspapers, the Slough Eton and Windsor Observer, has a supplement of job vacancies which runs to between 30 and 40 pages. Clearly, that offers many job opportunities for those who are unemployed in parts of the country where the low rates of unemployment that we enjoy in Slough have not yet been reached—perhaps refugees from the constituency of the hon. Member for Walsall, North.
I had a letter recently from a man who had come from the midlands and had secured a good job in Slough but whose wife and children remained in the midlands. He cannot buy a house in Slough for the amount that his house in the midlands would realise and he has no prospect of council housing—[interruption.]—nor would he even if there were a much bigger public housing programme, because we have always known that local authorities favour those with local connections and will continue to do so. An expanded private rented sector could offer a solution to the problems of that man and his family and others who face similar circumstances.
Similarly, Opposition Members have been critical of the raising of the threshold for inheritance tax. My right hon. Friend explained that that would mean that in many cases the family home could not be inherited without attracting any tax burden. However, as property prices continue to rise, particularly in the south-east, that will increasingly not be the case. The impact of inheritance tax could give rise to serious problems. I do not speak hypothetically but as a result of a case drawn to my attention by a constituent.
Some people—usually single women who have devoted themselves to looking after aged parents—have no home apart from that which belongs to their parents. On the death of the surviving parent they will be faced with the prospect of finding a substantial sum of money to meet an inheritance tax bill or they will have to leave the family home. There may be a strong case for some further measure of relief when the property that a person is inheriting is his or her only home. I understand the argument that, as there will probably already have been one tax-free inheritance from, say the father to the mother, that cannot continue indefinitely and eventually the Exchequer must get its slice. If that is the case, there could be a good case for deferring the payment of tax until the property is subsequently disposed of, either by its sale or on the death of the person who inherits.
The Finance Bill is but one part of the Budget hat trick to which some of my hon. Friends have referred. The public finances are in robust good health, with a more than balanced budget. The strength of the economy has allowed further increases in public expenditure. For example, the full cost of the restructuring of nurses' pay has been accommodated easily within the reserve which was set by my right hon. Friend the Chancellor. I hope that some Opposition Members, including the Leader of the Opposition, will hang their heads in shame at their despicable campaign in advance of the Budget, when they suggested that nurses and the Health Service were being sacrificed on the altar of tax cuts. We know that the truth
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is that we are able to provide both for tax cuts and increases in expenditure and. indeed, for the Government to pay their way and to repay debt.
Opposition Members have argued that the burden of taxation is too high. However, paradoxically, they still intend to vote against the Bill and the tax cuts which it embodies. I agree with the Opposition that the burden of taxation is still too high, even with the reductions embodied in the Bill. However, unlike them, my vote will be consistent with the argument that I have deployed. I shall vote enthusiastically for the Second Reading and for the tax cuts in the Bill. In so doing, I shall urge my right hon. Friends not to rest on their laurels, but to press on with all speed to achieve the next target of a 20p standard rate of income tax.
7.41 pm
Mr. Doug Henderson (Newcastle-upon-Tyne, North): I think I can say without fear of contradiction to any reasonable person in this House—and, although all my hon. Friends may not agree, I believe that some of the dissidents on the Government Benches are reasonable people—that this is the most regressive Budget that we have had this century. It marks the complete abandonment by the Conservative party of any belief in the ability to pay as a means of taxation. I am not the only one who says that. The day after the Budget the Financial Times also agreed that the Budget was far too one-sided. Further, there is nothing in the 139 clauses of the Bill to suggest that it is any different from the Budget.
Many of my hon. Friends have already pointed to the social injustice in the Budget and in the Finance Bill. I want to concentrate on the impact on our manufacturing industry. Employers and employees alike have complained that the Government have sold manufacturing industry short. As my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said so eloquently, the fundamental problem of our economy in the manufactur-ing sector goes back to 1979 and 1980, when the pound was drastically overvalued, killing off more than 2 million jobs in two years. Companies in my constituency have made it clear that, although a few extra jobs have been found in the past two or three years, nothing like those 2 million jobs have been replaced.
It is not only the Labour party that is saying that; the CBI is also saying it. In the March edition of the magazine that all Members receive, the CBI made it clear that it believed interest rates were far too high for manufacturing industry to compete in the world market. It further stated in this month's edition of the magazine, with the hindsight of the Budget, that, unless we get training right in this country, with levels comparable to those in Europe, there is not much hope for the future.
People in manufacturing industry, particularly in the north-east, say that, welcome as the 2,000 new jobs are at Nissan in Sunderland, they do not compensate for the 30,000 jobs lost during the 1980s in the shipbuilding and engineering industries.
The Government tell us that there is money in people's pockets, and that that proves that there is prosperity. Of course there is prosperity in some parts of the country and in particular sections of the community. What the Government do not tell us is that the increased consumption has been satisfied only by an increase in imports. The trade figures tell that story. As against a

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surplus in manufacturing products in 1979, we now have an £8 billion deficit. What is equally alarming is that from 1979 to 1988, when we should have been investing for the future and using our oil revenues productively, we have paid for unemployment with the oil revenues.
Since the Budget there have been further signs of a weakening of the British economy. The continued overvaluation of the pound—I am glad that the Chancellor and the members of his team understand this, even if the Prime Minister does not—threatens our exports and encourages the growth of imports. The overvaluation of the pound, combined with excessively high interest rates, has begun to have an impact on our manufacturing output. It is not welcome news to any of us that manufacturing output has dropped 3 per cent. in the last month. Such unwelcome developments have other serious consequences.
The Chancellor has made estimates in his Red Book of the tax revenue for his financial year. However, if the other sums are wrong, it raises questions about whether public expenditure targets can be met. Other questions are raised on the timetabling of privatisation measures. More seriously, as I tried to point out to the Chief Secretary earlier in the debate, what really worries me is that the deficit on our balance of trade is the second largest of any OECD country, at a time when we are supposed to be prosperous, and it shows further signs of increase. Exports last month were 5 per cent. below the level of 12 months ago. The January and February trade figures show that, contrary to Treasury estimates, the deficit will be £8 billion and not the £4 billion previously forecast.
The key question that this country faces, and that we should be facing in the Finance Bill, is what we shall do when our North sea oil revenues run out. It is not only a question of revenue; it is also a question of the effect on the balance of payments. How do we pay for our future consumption? How do we control our balance of payments? How can we finance future investments, when today manufacturing investment is still 11 per cent. below the level of 1979? The Prime Minister said, "You can't buck the market." I say to the Prime Minister that we cannot duck the real economy. Some people say that it is alarmist to argue this point. Some people in the City will argue that when the oil revenue runs out, the revenue from the City will bridge the gap.
Mr. Butterfill: The hon. Gentleman referred to manufacturing output. I wonder whether he has looked at the Red Book. On page 30, he will see that, between 1973 and 1979, output per head increased by three quarters of 1 per cent., whereas between 1979 and 1987 the annual rate was 4 per cent. The latest figure for 1986 to 1987 is 6·5 per cent. Does not that show an overall strengthening of the economy, which is what everyone else in the world seems to believe, rather than the weakening which he is suggesting?
Mr. Henderson: The hon. Gentleman is taking up the time of his hon. Friends by intervening. He misses the point that the increase in output between 1974 and 1979 was at a higher rate per annum than the increase between 1981 and 1988. That is the real test, if one discounts the period between 1979 and 1981.
The Economic Secretary to the Treasury (Mr. Peter Lilley): To set the record straight, if the hon. Gentleman is talking about output, the fact is that, under the previous Labour Government, output fell, whereas it has risen under this Government.
Mr. Henderson: I do not accept that as being statistically accurate—[Interruption.] Well, I can provide figures to show that growth and output were at a better rate during the period that I mentioned than in the period post-1981. I shall be happy to exchange those figures with the Minister at a later date.
It has been alleged in some newspapers that Labour Members spend most of their time in the bars of the House of Commons. Most of us recognise that we have a duty to do other things. I recognise that part of my duty is to be a missionary. I have been in the City for lunch on a few days in the recent past. I put it to some of my friends in the City, and perhaps to some of your friends——
Madam Deputy Speaker (Miss Betty Boothroyd): Order. I do not have any friends in the City.
Mr. Henderson: I can introduce you to some, Madam Deputy Speaker.
The question that I put to my friends in the City was, how long will that invisible income compensate for the loss in manufacturing income and for the loss in oil income? In 1986, the deficit in manufacturing products was £5·5 billion—I accept that the surplus on invisibles was £8·5 billion—but the dramatic change between then and now tells another story. Those are the figures that the Chancellor included in the Red Book. By 1988, the manufacturing deficit was £8·5 billion and the invisible surplus was still only at the same level. What happens when the deficit in manufacturing is greater than the surplus on invisibles? What will happen to our balance of payments? What will happen to our interest rates? They will be too high even for the Prime Minister. Can domestic deflation be avoided? What are the other implications for our manufacturing sector?
It is said that we should be preparing for the single market in Europe, but unless there is a turn in our economic fortunes and our economic policy, the challenge will not be how much we shall gain, but how much we stand to lose; and what alternatives would we then have to get any benefit from the single market?
I know that time is limited, Madam Deputy Speaker, so I shall draw my remarks to a conclusion. I want to make some positive points about what could have have been included in the Budget and the Finance Bill.
I should have looked for assistance to industry in the north. It is nonsense that we should be continuing to encourage economic activity in the south with the ridiculous business expansion scheme and the extension of rented accommodation, which even the director of the CBI in the north has pointed out is ridiculous. What we really need are positive measures to bring real jobs to the north so that we can have greater efficiency in the country as a whole from greater labour mobility. What we should have been debating this evening is how we would introduce things such as regional differentials in national insurance contributions to encourage employers to move their business to the north and to encourage employees to move to the north.
We could have been discussing things such as rebates in national insurance for companies and institutions which

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are good trainers, because we all recognise that in this country training is dreadful. Of course there should be penalties for those who are not prepared to do what is necessary on that. The same could apply to research and development. We all recognise how little we spend in this country on research and development in comparison to others. We could have been debating what the Finance Bill could do to give incentives to institutions throughout the country to improve their R and D.
The wealth of our country, and especially of the north where my constituency is, has always depended on our ability to use our labour talents to make things that people in other parts of the world want to buy. We cannot survive any other way.
A Second Reading of this Finance Bill will further dent our already damaged economy. Far from the financial prudence that the Chancellor claims, this Bill is nothing more than a rich man's profligacy. I urge Conservative Members, especially those thinking Members who have been prepared to stand up for standards of decency in this country, who share our belief in the need to retain Britain as a manufacturing nation, and who care about economic development in areas other than the south of England, to join us this evening in the Lobby in voting against the Second Reading of the Bill.
7.54 pm
Mr. James Arbuthnot: This is the first Finance Bill debate that I have had the privilege of hearing from the Floor of the House. I have listened to many Budget debates on the radio, and I must say that this year's was quite the best Budget that I have ever heard.
Most hon. Members will have welcomed the sudden emancipation of women and the removal from tax of woodlands, covenants and maintenance payments. The slashing of the higher rates of tax was more controversial, but those of us who are concerned about regenerating the growth of this country, and those of us who would like to see an end to the philosophy of, "It does not matter how much money one gives to the poor; what matters is how much money one can take away from the rich," will also have welcomed the slashing of the higher rates as a brave and necessary step.
In his Budget speech, my right hon. Friend the Chancellor said that it would be a tax reform Budget, and so it was. He has a reputation for wanting to be a tax-reforming Chancellor and we can see from the Bill that he is very good at it. However, there is a niggling worry that it might not go far enough because there is a fear—there is always a fear—that the Inland Revenue may produce Bills that need a second bite at the cherry because the reforms do not quite reach the conclusions that they should. In the changes to capital gains tax, which I welcome, adding such gains to a person's income and taxing them at the marginal rate of tax are excellent moves but they produce the opportunity for further amendments to the capital gains tax legislation.
I wonder whether it is necessary to continue with the disincentives that prevent people from converting income into capital. If income is to be taxed at the same rate as capital gains, the conversion of that income is no longer nearly so beneficial. It is true that there will be some benefits—for example, the additional threshold of £5,000 for capital gains tax and the indexation of capital gains tax.
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Two points can be made about that. First, the threshold of £5,000 is likely to have been used already by people who are interested in conversion of income to capital. Secondly, if the Government are serious about reducing inflation to nil, as I hope and expect they are, the indexation of capital gains should become increasingly irrelevant.
It seems a little odd that indexation should continue to exist, partly because this Government have abolished stock relief, presumably on the ground that they have inflation nearly under control. That ground is valid. Continuing with hideously complicated schemes for the indexation of capital gains seems a pity, especially when one has the simplification of adding capital gains to income tax, about which I have already spoken.
One of the changes introduced by the Bill, that of rebasing capital gains to 1982, is welcome because it deals with the largely inflationary gains of pre-1982. One factor about indexation is that it was introduced pre-1982, at roughly the time when inflation began to come under control. I believe that exactly the same thing happened with gilt-edged stock and national savings. Just when inflation was coming under control, indexation was introduced—just when it became a little less valuable to the investor.
That is the reason for re-basing the tax to 1982. That is done in clause 91, which also states that the clause may not be used either to create or to increase a loss if the loss would have occurred under the previous legislation. That may have been thought to be necessary, but in many cases it will mean that people will need to do two computations of tax, one under the old system and another under the new system. That will be a pity.
It also means that pre-1982 shares which were pooled cannot be combined with post-1982 shares. That is also a pity, because, as my hon. Friend the Member for Fulham (Mr. Carrington) said, the simplification of tax ought to be one of the major aims of the Bill.
Coming back to the main thrust of my speech, I should love to see a reduction in the number of measures dealing with tax, so that ordinary people can understand it. In particular, I should like to see the removal of disincentives to convert income into capital. For example, is it necessary for the controlled foreign companies legislation to continue to exist? Is it necessary for the offshore funds legislation to continue? Can we do away with what used to be section 460 of the Income and Corporation Taxes Act 1970, which is now clause 703 of the Income and Corporation Taxes Bill 1988? Can we also legislate on the basis of the marine Midlands case, as I believe is contemplated? Do we need to apportion the income of closed companies?
All those things and many more could now be looked at because of the brave reforms that my right hon. Friend the Chancellor has made. This is an excellent Budget, but I ask whether it goes quite far enough.
8.1 pm
Mr. Tony Worthington: In looking at the Budget, I am struck, as so many of my hon. Friends have been, by the fact that the world really is divided into two. What is particularly intriguing is the way in which the human race is divided in two in relation to what motivates it. Psychology textbooks usually deal with

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sticks and carrots. In this context there seems to be one breed needing carrots, which is basically the rich, and another needing sticks—basically, the poor.
The combination of the Budget and the social security reviews is the most regressive approach to the poor of any Prime Minister. I could go back further than most, and say that we need to go back to the time of Walpole for a comparison. He was the last Prime Minister of whom I am aware who did not believe in progressive taxation. He thought that the country needed regressive taxation in order to encourage people to escape from taxation. That is what we have here.
No-one has succeeded in convincing the Opposition that the tax concessions given to the well-off will spur them to further activity. The concessions given so far, if they were designed to be the spur, should have encouraged people to be very active. No-one has been able to demonstrate how the extra money in the pockets of wealthy people will spur them into extra financial activity.
Since the social security rules have changed, constituents have been mobbing our surgeries. One cannot explain to them the psychology of the Chancellor of the Exchequer or the Department of Health and Social Security. What can I say to them? I should like the Minister to answer.
What do I say, for instance, to Sergeant William Hemphill, formerly of the Argyll and Sutherland Highlanders, who led his platoon with conspicuous gallantry in the north Africa campaign, and in doing so lost an arm? Since then, he has received a war disability pension. Because of that, in the recent social security changes, he has to pay £38 a month extra in rent. What do I say to him? Why has he been targeted in this way? Why has he been chosen to receive less income, whereas the wealthy young man who was referred to by my hon. Friend the Memberfor Walsall, North (Mr. Winnick) has been chosen to receive extra income?
In whose interests is that? I cannot find an answer to give to Sergeant Hemphill. Is the reason that the loss of an arm has been fully paid for now? Is it because he is, at the age of 76, too dependent upon his pension and needs to be taught a lesson? What has he done, and what is wrong with his behaviour that merits his being singled out now to pay nearly £10 a week extra in rent? We receive no answer from the Minister in that case. But that £10 is part of Sergeant Hemphill's extra taxation under the Budget and the social security changes. He has to pay the poll tax in addition.
The Government have broken the link between earnings and pensions and they are perhaps £4 billion better off now as a result. Why has Sergeant Hemphill been singled out in this way? Why does he not need incentives in exactly the same way?
I am delighted that many of my hon. Friends who have spoken in the debate have been concentrating upon the decline in manufacturing industry. This was done earlier particularly eloquently by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). He saw the same article as I did, published in Siemens Review, which is a valuable illustration of the point that we are making.
We believe that the Government have taken the wrong model. In a simplistic way, the Government think that there was an agricultural revolution, followed by an
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industrial revolution. Now they think that they are moving to a services revolution. But it is not like that at all. As my right hon. Friend says, people certainly moved away from living directly on the land, but many people still live by the land. The food processing industry and parts of the chemical industries, and many people, are still dependent upon the produce of this earth for their living.
Similarly with the industrial revolution. We need to demonstrate that fewer people will be employed in manufacturing industry in future. The Labour party accepts that, and that it is necessary to get maximum productivity. But the health and strength of that manufacturing industry is absolutely the key to development of the service industry. These are services, but for what? This is marketing, but for what? What are the legal services and accountancy services for? They cannot simply take in all their own washing all the time. There has to be a very healthy manufacturing base in this country; otherwise our current growth will fizzle out. When the oil revenues go and there ceases to be income from privatisation, and when all the one-off benefits have gone, what will this country live on?
The obvious question to ask is why are we so confident that we shall hold on to our services industry. Like my hon. Friend the Member for Newcastle-upon-Tyne, North (Mr. Henderson), I have been trying to understand the City. I know that they are scared stiff of the Japanese moving in at present and taking an ever-increasing market. But certainly we need to follow the example of the West German and Japanese economies to ensure that we have a strong manufacturing base to keep this country going.
As my right hon. Friend the Member for Ashton-under-Lyne was saying, parts of the country that we represent have never recovered from the slaughter of 1979–82. We really cannot understand why the Government are so blasé and indifferent towards manufacturing industry. We plead with them to look afresh at this issue.
I also agree with my hon. Friend the Member for Newcastle, North about the importance of education. No sane country with our bad record on education and training would be cutting our universities or failing to press ahead with an expansion of nursery education. We have the worst record in Europe.
The Government must answer those key issues. Why do they divide the population into those who need sticks and those who need carrots, and why are the sticks always administered to those at the bottom and the carrots to those at the top? Why do they neglect manufacturing industry? Why do they not see how far they lag behind our competitors in providing an education system from cradle to grave and of the highest possible quality?
8.10 pm
Miss Ann Widdecombe: I feel considerable gratitude for at least one measure in this Budget—the independent taxation of man and wife. It is perhaps somewhat overdue, for the present tax system dates back 180 years to when not only was a women's property regarded as her husband's, but she herself was regarded in some way as his property. From then until the mid-1970s, when the equal opportunities legislation was passed, a women's right to vote, to earn her living and to be hanged was recognised, but not her right to be taxed independently.

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The equal opportunities legislation recognised financial discrimination against women. It gave women, for the first time, the right not to be discriminated against in such areas as the provision of mortgages and hire purchase arrangements, when hitherto they had often been required to have a male guarantor sign any financial agreement. Yet the Labour Government, who were implementing legislation which gave greater financial independence to women, did not see fit to extend it to taxation. A woman was still regarded as a second-class citizen in terms of taxation and has been until this major, significant, reforming Budget.
One would have thought that Labour Members would have given a rousing welcome to this measure. Perhaps their lukewarm reception stems partly from their envy, which they always seem to postulate, of the financially successful, partly from their envy of a Government who have their act together, and partly from shame that they did not implement this long-overdue measure. When they seek to decry it, they do so saying, "Ah well, it favours the rich and the better-off because you will now disaggregate" —that is the fashionable word for the good old-fashioned word "separate"—"the income of male and female; thus higher taxation will not be applied when previous aggregation was subject to higher taxation." That is a good reason for this measure. The old system undoubtedly constituted a tax on marriage in exactly the same way as the former allowance of double tax relief on mortgages for unmarried persons was a tax on marriage.
The removal of those taxes on marriage is important, not just because it may make some women or couples better off—that is not the aim—but because of the social recognition, first, of a woman in her own right and, secondly, of the independent role of a wife. That is the crucial philosophy behind removing taxes on marriage. It is not merely an encouragement of the family or the sorting out of an anomaly, but a long overdue social recognition of the role of a woman.
Furthermore, the measure allows for the first time privacy between the partners in a marriage. In many marriages that is not regarded as necessary, and financial privacy is seen to have no role. But there are marriages in which one partner is a more prudent saver than the other, and marriages which are perhaps going wrong and one partner wants to start making provision for an inevitable break. Frequently, the woman has been the partner in either of those two categories. This reform not only preserves privacy, but helps women in those difficult circumstances.
Above all, the measure recognises a simple truth: that the person who is responsible for earning money, saving it, putting it towards a pension, winning it or whatever, is also responsible for its taxation and for paying the dues on it.
This is the most significant fiscal and social reform for well over a decade. I believe that I speak not only on behalf of married women who are my constituents, not only on my own behalf, but for married women everywhere and, indeed, for single women who will hail this measure as one of the greatest steps forward this century in social justice and the recognition of women.
8.16 pm
Mr. Nigel Griffiths: Neither the nation nor most people will benefit measurably from the
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Bill. The Government are practised at making up proportions of gainers and losers. They have been rumbled by their own Back Benchers on their claims for housing benefit; they will be found out by the country on their claims for this Budget.
We know what sort of average the Chancellor has targeted. The hon. Member for Halesowen and Stourbridge (Mr. Stokes) gave the answer when he spoke during questions to the Prime Minister in strong support of the nobility and gentry as against the interests of working people. The Budget gainers are people like Mr. and Mrs. N.L., who profit from an income tax cut of more than £70 a week. While their neighbours, with whom they are hardly on speaking terms, also gain nearly £4,000 a year, millions of people on low incomes will take home only a few pence more, only to lose what little they have gained from direct taxation in rises in the cost of gas, electricity and petrol forced on them by the Chancellor. While the Chancellor and his Cabinet colleagues have gained almost £80,000 a year from the Budget's tax cuts, 1 million people have lost housing benefit.
The Chief Secretary mentioned a raft of economic measures. He did not say that his raft is buoyed up by pensioners, the low-paid, the poor and the unemployed. The Chancellor has found a new seam to mine to finance tax cuts for the well-off, and that seam is the poor. He has taken £4 billion from pensioners alone to provide for the 40 per cent. tax ceiling and for incentives to landlords—in short, for this year's tax cuts. All that has been made possible by the Chancellor fixing the weekly retirement pensions of individuals and couples at £9 and £14 below what the rates would have been if the pensions had remained pegged to salary rises. The Government have struck it rich by mining the poor.
Conservative Members may be sceptical, but they need only look at page 6 of the Red Book to see that the Government have raised over £2 billion more than they spent, not to help the Health Service and not to reimburse the pensioners or to give them a raft—to use the Chief Secretary's phrase—but to prepare the way for helping those who have, at the expense of those who have not.
Nor have the poor been protected by increased social security spending. The rise in social security spending has been forced on the Government by their own policies, which have doubled unemployment and tripled the numbers who depend on slate benefits. Of course the Government are spending more money on state benefits than the last or any other Labour Government, because the present Government are the first to drive people into poverty and then to boast about it, and at the same time they have increased the burden of taxation on everyone else. It is shameful that the Chancellor should claim to have reduced the burden of taxation in Britain when he has hoisted it to some 4 per cent. above the rate that existed a decade ago.
The saddest thing about the increased tax burden is that the poor have to pay disproportionately more than the well-off in tax, and it is they who have suffered from day one of the first Budget of this Government. That sacrifice has not helped to improve our manufacturing base or our home investment and production. Instead, we have seen the economy built on the shifting sands of North sea oil, national asset-stripping and a credit explosion, with a massive trade deficit as a direct result.
Some of the microeconomic aspects of this Bill have been raised; others require to be stressed. Personal credit

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has never been more readily available, nor has it ever been so irresponsibly given. Appendix 12 of the Treasury and Civil Service Committee report details the mushrooming of buying on the never-never. Not that the £30 billion currently being borrowed by individuals is being used for British goods; the Government's policies have left our home-based industries ill-prepared to meet consumer demand. We can expect to see imports continue to soar as a result of the Budget.
The continuation of the high pound will serve only to exacerbate the trend. Indeed, the Government's official prediction of the trade deficit given in chapter 3 of the Red Book as £4 billion appears to be highly optimistic when compared with the predictions of all respectable economic forecasters.
We know that the Budget will fuel an irresponsible credit boom. We see with sorrow the likely increase in imports, to the detriment of home-based industries. We wince at the "kick start" for private landlordism—an unfortunate metaphor used by the Chief Secretary today —since my experience when chairing the housing committee in Edinburgh was of unscrupulous private landlords kicking tenants. Exploitation is rife in the private sector and any attempt to strengthen the rights of private tenants has been frustrated by the Secretaries of State for the Environment, for Scotland and for Wales.
We can also predict that the Budget, with its disproportionate tax benefits to the better-off, will stoke up spiralling house prices, and not just in the south-east. Many of my constituents in Edinburgh are appalled as house prices rocket. Three-bedroom flats are regularly changing hands at £60,000 and more, and these, as well as smaller flats, are beyond the purchasing power of very many of my constituents, especially couples starting out on modest incomes—incomes which, sadly, merit little support from this Budget.
The Budget not only aims to refuse help to those on modest incomes, but does not seek to reinvigorate British industry. It does nothing to regenerate our tattered economy. That is why I and my hon. Friends will join the country in rejecting it.
8.23 pm
Mr. Quentin Davis: The more I look at the Bill, the more I feel that we are facing a most distinguished piece of potential legislation. There are three aspects of the Budget that I believe deserve the cliché "historic" and I think that in retrospect they will be recognised in that way.
The first aspect is the removal of the existing discrimination in our taxation system against women and against marriage. My hon. Friend the Member for Maidstone (Miss Widdecombe) has already spoken very eloquently about that. Suffice it to say that I believe that within a generation or two it will seem quite as unbelievable and primitive that in the late 20th century we discriminated against women and marriage in this way as it seems to us now that until the last century married women were not allowed to own property of their own and until this century women did not have the vote.
The second momentously historic feature of the Budget is the tax cuts, and particularly the cuts in the standard rate and higher rates of income tax. Those higher rate
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reductions have already generated a great deal of emotion among Labour Members and I am afraid that much of that emotion may have been expended rather needlessly, indeed rather wastefully.
The hon. Member for Dunfermline, East (Mr. Brown) who opened the debate for the Opposition, said that he regarded the tax cuts as representing—I hope that I am quoting him correctly—the widening of inequality at the expense of the deepening of poverty. If I really believed in that analysis of this Budget, I should be delighted to follow the hon. Gentleman into his Lobby after the debate—at least I do not know that I should do it delightedly, but I should certainly feel that it was my duty to do so. However, I believe that the Budget represents precisely the opposite case, where it is pre-eminently right to use fiscal action to make the rich richer, because that is the most effective way of making the poor richer too.
Perhaps it is a little difficult for Opposition Members who have little experience of business and commerce to appreciate to the full the psychological effect on a business of reducing taxes in the way that we are about to do: the effect on motivation, the effect on work and the effect, above all, on risk-taking. Perhaps that effect is most powerful on those people who are contemplating setting up a new business or those businesses that are contemplating new ventures.
If Opposition Members do not like anecdotal evidence of this kind, I refer them to orthodox financial theory, which tells us that, if we increase the reward while the risk remains the same, more investment will take place. It is as simple as that, and surely a reduction in tax rates, whatever else it may be, is incontrovertibly an increase in the potential reward.
If Opposition Members do not like standard financial theory either, perhaps I could refer them to some of the empirical work that has been done on this subject and particularly to a study completed in the last few weeks by the macroeconomic research unit of Liverpool university, which has calculated that the effect of the higher rate tax cuts being brought in by my right hon. Friend will be an increase in national income of some one full percentage point in a given year; and that the effect of the reduction of the standard rate to 25 per cent. will be an increase in national income of some £1 billion a year. That would imply an increase in the resources available to the country as a whole of some £4 billion to £5 billion in a year—a very remarkable achievement.
The third aspect to the Budget which I believe deserves the epithet "historic" is the fact that we have now achieved a budget surplus. We have not only achieved a balanced Budget, but have gone into surplus. For those of us of my generation that is something that has not happened before, at least in our memory, although it may have in our lifetime. In order to get the measure of the achievement one has to set it in its international as well as its historical context. I am sorry that, so far as I know, no one referring to this matter has yet done that in the House or, indeed, in the media.
I believe that I am right in saying that we are the only one of the principal developed Western countries currently to have a balanced budget or a budgetary surplus. Other Governments have been equally, perhaps they would say more, committed to financial rigour—the Germans, for example—but they have certainly not yet achieved a balanced budget. If there was an international Olympic

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games for Finance Ministers, the Chancellor of the Exchequer could not in my opinion under any circumstances be denied the gold medal.
Dr. John Marek: Which is better—to achieve a balanced budget and satisfy a Chancellor from the Conservative party, or to have a better standard of living and a better economy, as they do in Germany?
Mr. Davies: The hon. Gentleman falls right into the trap. He demonstrates by his intervention that the Labour party still believes that there is some trade-off between growth and a balanced budget or, in other words, that there is a positive correlation between a fiscal deficit and the rate of growth. We have proven in the best way possible, in practice, that that relationship does not exist. We have proved that the relationship is negative because we now have the fastest growth rate in Europe and also the only budget surplus.
The achievement of the balanced budget brings me to a few reflections about fiscal policy. It has been a general consensus in the academic world, widely subscribed to on the Government Benches for the past 10 years or so, that the fiscal policy pursued by Governments of both parties in the 1950s, 1960s and 1970s, which sought to smooth the fluctuations of the economy, was fundamentally miscon-ceived and that such fine tuning, as it was known, was at least as likely to exacerbate volatility as to reduce it.
A second consensus existed on the Government Benches for many years before 1979. After 1979 we were able to do something about it. The consensus was that there was a great danger in a fiscal deficit or PSBR—the phrase that we lived with for so long in political debates and in the media—and that that inherent danger existed because, even under the best circumstances, if a PSBR was fully funded, it would crowd out borrowing, and therefore investment in the private sector.
And there always was the danger, which over the years was ever more likely to become a certainty, that a time would come when full funding could no longer take place, that the borrowing Government would lose the confidence of the markets, and that that Government would therefore only be able to face the growing burden of debt service by resorting to a destructive and indeed disastrous inflation. So we took it as an autonomous aim of our policy, to be pursued for its own sake, to reduce that deficit. We have done that, and it is a magnificent achievement.
Where do we go from here? What will be the role of fiscal policy from now on? That is not a purely academic question. As we discuss the matter today, we know that monetary policy has been used in recent weeks to address the danger felt in some quarters of overheating in the economy. The effect of using monetary policy by increasing interest rates to address that problem brings about two perverse consequences.
The first effect of raising interest rates is to draw in capital across the exchanges from abroad, pushing up the parity of sterling. That means that any dampening of demand achieved through that mechanism falls particularly hard on the internationally traded sector of the economy, including manufacturing. That is a major problem with that approach, which has been generally recognised.
The second perverse effect of the use of monetary measures in those circumstances is to exacerbate a balance of trade deficit, which was probably one of the signals that
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appeared to indicate the existence of potential overheating in the first place. Had fiscal measures rather than monetary measures been used to address the problem, those perverse consequences would have been avoided. I leave aside for the moment whether other perverse consequences would have occurred.
There are good reasons for what I understand, without inside knowledge, to be the hesitation of the authorities to use fiscal measures in this way. There is the fear of reverting to the old bad days of fine tuning. That fear also is somewhat misconceived, because the difficult decisions of what one might call market management—the decision whether to intervene and, if so, in what direction and to what extent—has to be taken whether one is adopting fiscal or monetary measures.
There is the psychological principle to which many of us are committed, that it is a major element of the new confidence that has been established that we have clear annual budgets which are kept to and we do not have sudden emergency fiscal measures, which were a speciality of the Labour party when it was in power. There are also the technical factors that monetary measures appear more flexible and have always been regarded as such.
This is not the place to answer those questions. I merely set them down. I have no doubt that my right hon. and hon. Friends on the Treasury Bench and their officials have been giving these matters considerable deliberation over a long time, but perhaps with particular intensity over the last few months. Whether now or on another appropriate occasion, I hope that we may hear from them what they think about these important matters and how they will address the future of fiscal policy in the new age which we have reached and for which I salute the Government, in which we have got rid of that terrible British institution, the PSBR, and have a fiscal surplus.
8.36 pm
Mr. John Battle: That is not the first sermon that I have heard from the hon. Member for Stamford and Spalding (Mr. Davies) on the perfect working of the market, but it assumes a mathematical and calculus model of society which ignores the people. It is the view of the Labour party that Budgets should deliver social justice to all the people.
When my hon. Friend the Member for Dunfermline, East (Mr. Brown) mentioned that 18 million people in Britain were on the breadline, Conservative Members thought it unbelievable and challenged his figure, despite the fact that the hon. Member for Kensington (Sir B. Rhys Williams) drew the attention of the House to the figure when speaking in the debate on child benefit.
Conservative Members have no concept of the scale and extent of poverty. Do they realise that over 3 million wage earners do not benefit at all from the tax cuts in the Budget because they earn too little to pay tax? Effectively the Budget is writing off one third of the population-18 million people. It is writing the poor into the margins of society.
Conservative Members accuse us of preaching the gospel of envy when we make challenges on behalf of the poor. What do we get? We were told earlier that we needed more capitalists. Perhaps we should all emulate the 20,000 millionaires in Britain. There is an assumption that everyone wants to be a millionaire. I am tempted to reflect on the example of Howard Hughes who lived alone in his

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castle, wandering around eccentrically in the dark in his carpet slippers. He was to be pitied rather than envied. What everyone wants is the opportunity to live a decent and happy life.
Do Ministers know that officers who will administer the social fund will advise claimants to obtain from a library the "Charities Digest" to see whether they can ring up charities for the bare necessities that they need? Do Ministers know that the advice in a leaflet handed out to claimants at social security benefit offices instructs them to look more carefully at how they spend their money? Under the heading "Shopping on a Budget", it gives people the following advice:
"1. Shop around—if necessary, visit a number of stores and compare prices …
4. Some shops reduce goods at or near the 'sell by' date, or if the packaging is damaged. These may still be worthwhile buys if used quickly …
5. Remember—special offers are good but only if you really want the item …
6. Read and compare labels to check prices and amounts, eg a 400 g pack of biscuits @ 28p … 7p/100 g, 300 g pack of biscuits @ 24p … 8p/100 g. Don't be deceived by bulky packaging.
7. Use a shopping list and keep to it as far as possible." And finally, worst of all—
"8. Don't shop when hungry—you may be tempted to buy more than you need."
I suggest that those people who pay the price for the cuts in social security can well do the arithmetic when it comes to shopping. I wish to try and warm the heart of the hon. Member for Stamford and Spalding by reading to the House a brief poem, called, "The Shopper". It reads:

"I am an old woman …

Pension rates were cut. My children

Gave me the pennies they could spare. But

I could hardly buy anything now. So at first

I went less often to the shops where I'd gone daily,

But one day I thought it over, and then

Daily once more I went to the baker's, the greengrocer's

As an old customer.

With care I picked my provisions

Took no more than I used to, but no less either

Put rolls beside the loaf and leeks beside the cabbage and only

When they added up the bill did I sigh

With my stiff fingers dug into my little purse

And shaking my head confessed that I didn't have enough

To pay for those few things, and shaking my head I

Left the shop, observed by all the customers,

I said to myself:

If all of us who have nothing

No longer turn up where food is laid out

They may think we don't need anything

But if we come and are unable to buy

They'll know how it is."

In 1979, the Prime Minister took the famous shopping basket and held it up, suggesting that it contained the basic budget of society. I invite the Government to take up that shopping basket again and to go around the supermarket with a pensioner on £41 a week or with a family on less than half the average weekly income and show whether one can put the provisions to live on for a week in that same shopping basket.
Just before Christmas 1983, the Prime Minister said:
"There is no Government definition of poverty …".
That remark has been echoed today.
"The fact remains that people living in need are fully and properly provided for."
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That is manifestly untrue and the Budget builds the untruth of that statement into the structure of our economy and the people of this country are now increasingly aware of that.
8.43 pm
Mr. Alistair Darling: I am no poet, but the points made by my hon. Friend the Member for Leeds, West (Mr. Battle) are well made.
When the Chancellor of the Exchequer introduced his Budget, he set himself four basic principles on personal taxation. The first was to reduce tax rates where, he said, they were clearly too high. He appears to have failed in that objective. If one studies the Inland Revenue booklet "International Comparisons of Direct Taxation on Employment Income", published at the end of last year, one finds that, before the Budget, the marginal tax rates for a married man on, for example, £75,000 per annum were lower than those in France, Germany, Italy, Japan and the Netherlands. They are now also lower than those of the United States. But if we contrast that with a man earning £5,000 a year, we find that his marginal rate of tax was the highest of those countries and that is still the case.
When we consider tax and national insurance as a percentage of earnings, we see, for example, that a married couple with two children, on half the average earnings, in 1978–79, when the Government took office, were paying 14·5 per cent. The figure is now 15·4 per cent. However, if we contrast that with somebody on 1,000 per cent. of average earnings, we see that his rate has fallen from 65·6 to 37 per cent. A minority of the population has benefited. The tax rates are too high for the low-paid and too low for the highly paid. In addition, the balance is going the wrong way. That is the main reason why we object to the underlying philosophy of the Budget.
When we consider national insurance, which is quite a substantial burden on the low-paid, we again see anomalies. There are no allowances set against national insurance. They are raised on gross income and, for some reason, they stop at the magic figure of £15,860. We know that there is a disincentive at a certain stage when one goes from 7 per cent. to 9 per cent. of contributions. Many people working regular overtime meet that problem.
We also have to consider how badly those on low incomes have been hit as a result of the benefit changes and Government-inspired inflation. Electricity prices have been driven upwards to fatten up the electricity industry for privatisation. From that, as well as increased rents and the introduction of the poll tax, we can see that those who are worse off have a higher marginal tax rate and have to meet other costs. At the same time, the better-off are paying less tax in real terms.
Dame Elaine Kellett-Bowman: Will the hon. Gentleman explain how he he has the nerve to refer to Government-inspired inflation, when, under his party—admittedly, before he came to this place—inflation did not need to be inspired? It just went on and on and up and up. This is the first Government who have curbed it.
Mr. Darling: With respect to the hon. Lady, my recollection is that inflation went up quite dramatically shortly after her Government assumed office in 1979. However, I concede that it has come down since then. The

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Government-inspired electricity price rises will have an effect on industry and on the price of goods, as well as a direct effect on those who use electricity in their homes.
Many of my colleagues found very upsetting the laughter from Conservative Benches when my hon. Friend the Member for Dunfermline, East (Mr. Brown) said that 18 million people were living in poverty. When he said that that figure included children, there were roars of laughter from Conservative Benches. Surely it is common sense that, if a person's mother and father are poor, the chances are that that person is poor too. That is quite obvious.
I cannot understand why—no Conservative Member has made this point—a rich person needs more money to make him work harder, whereas a poor person needs less money to make him work harder. That is one of the great mysteries that no Conservative Member is prepared to explain.
The second objective that the Chancellor set himself was to reduce or abolish unwanted tax rates. I refer yet again to the business expansion scheme. It is ironic that a subsidy has been given to those who want to invest in property speculation when, at the same time, the poorest people in society, who have to live in rented accommodation, find that their subsidy from the state, by way of housing benefit, is being reduced, if not taken away. It is common sense that, if one is serious about helping people who are looking for accommodation, the subsidy should be paid to them so that they can shop around. They can then exercise the choice that the Government say is so important.
It was said earlier that there are plenty of jobs in Slough. The most important thing that we can do is to encourage jobs to move away from the south-east; therefore, encouraging more people to come to the south-east appears to be counter-productive. I thank my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) for his remarks on decentralisation of industry. We in Edinburgh know only too well the difficulties of encouraging firms to move their headquarters and the control of their businesses from the south-east to Scotland and other regions.
The third objective which the Chancellor set himself was to make life a little simpler for the taxpayer. Again, there is a contrast. For the richest in society there certainly has been simplification—simplification of the capital gains tax and inheritance tax. We are told that these steps are necessary because, if they are not taken, accountants will ensure that tax is avoided or evaded.
Surely we are not saying that, just because some people do not pay tax, we should make life even more simple for them. If that is so, surely there would be a deputation of accountants coming to see us to complain that they were being done out of business. The more the well-off are helped, the more the accountants will carry on burrowing away to ensure that their clients benefit even more.
At the same time as matters are made simple for the better-off, they are made simple, I must confess, for the poorest. Housing benefit has been made simple for a large number of people—they simply do not get it. That is the simplest form of benefit that one can contemplate. Why, when the Government say that they are concerned about fringe benefits, do they not impose a tax on them? Why do they not tax them in the hand of the employer? That is what Australia and New Zealand are doing—countries constantly held up to the Opposition as examples to which
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we should look. That is a fine example of something at which the Chancellor might look. It is an easy and efficient method.
The fourth objective set by the Chancellor was to remove some of the manifest injustices from the system. Far from removing them, he has created more. We should look, for example, at the treatment of capital for tax purposes and for benefit purposes. A pensioner with savings of £3,500 is deemed to receive £1 per week for every extra £250 in savings. If we disregard the £3,000, that is an investment rate of 21 per cent. That is what the pensioner is supposed to be getting from each extra £250. Under the present regulations there is a disincentive to save.
That pensioner may be contrasted with a well-paid company director who invests £3,000 a year in a personal equity plan. He is provided with a concession because tax is not paid on reinvested dividends and he is exempt from capital gains tax. A press release handed out on the day of the Budget said of the personal equity plans:
"Investors do not need to keep records, or declare their dividends and gains on their tax returns—hence a personal equity plan does not give rise to any involvement with the Inland Revenue whatever."
That is very nice indeed—as Arthur Daley would say, "A nice little earner." It is available only to the better-off, not to those who need it.
If the Government are interested in equity and are genuinely interested in reforming, they should give tax breaks to the poor and not to that small, narrow band on whom the Government's economic policy seems to concentrate. We would do well to remember that those whose standard of living has improved over the past seven or eight years owe that not just to our improved balance of payments, because of North sea oil, or to privatisation proceeds but to the large amount of money that has been plundered from the worse-off, through fewer benefits and the change in pension arrangements.
We are living off the poorest in society. Anyone who has gained the advantages that this Government extol must remember that. It is wrong. The hon. Member for Croydon, South (Sir W. Clark) said that privatisation was spreading popular capitalism. We should remember that, outside the south-east of England, about 9 per cent. of the population bought shares. That does not take account—because it cannot be readily calculated—of how many unloaded the shares at the first opportunity.
We would also do well to remember that, although many individuals are better off, we as a country are all the poorer because part of the tax handouts is funded through a steady and relentless cut in public services. Why is the value of public services so denigrated by the Government? All of us, especially the better-off, benefit from public services—education, both at schools and universities, the use of our roads and our hospitals. If one has enough money, one can purchase a private hospital plan, but the private hospitals live off the NHS.
All of us use public services. It is not just the province of the poor. The Government have a very short-term policy towards public services. They are being systematic-ally run down, and the Government will rue the day that they embarked on that policy. They seem to have a Brazilian idea of the economy: pour money into the hands of the few and just forget the rest and hope that they will survive.

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We must make a contrast in this land of plenty where there have been gainers and there are people doing well. Often not very far away from the man who is spending another few hours on the golf course is the pensioner who is presenting himself or herself at the local DH SS office for a payment from the social fund—the latter-day soup kitchen of the 1980s. That is an indictment of the Government.
We do not dispute that this country is doing better than it was five or six years ago. Indeed, it is perhaps doing better than in Gladstonian times, but so what? The question is how the division of spoils is made. It is in that division that the Government are found sadly wanting. The better-off are getting more and those who are not are losing out. That makes this country as a whole much the poorer, and that is the indictment of the Bill.
8.55 pm
Mr. Pat Wall: The Budget, the poll tax, the social security changes and the other Bills which we shall discuss this Session are a culmination of nine years of redressing the balance in British society and of redistributing wealth and power away from working people and their families in favour of privileges for the wealthy. The Government have created a yawning gap between rich and poor, between the industrial inner cities and the more prosperous suburbs.
Families in Yorkshire and Humberside spend, on average, £60 a week less on goods and services than families in the south-east. When we consider that the south-east figures include some of the most deprived areas, in terms of the inner-London boroughs, we can see the enormous gap between the standards of living in, say, the Thames valley and in northern industrial towns.
During the Budget debate, the right hon. Member for Chesham and Amersham (Sir I. Gilmour), whose ideas and understanding of social and economic processes are far superior to the present incumbents of the Government Front Bench, with some understatement, said:
"I believe that it is more than a little insensitive to hand out quite so much money to the rich … especially at a time when next month quite a lot of people will find their social benefits markedly reduced."
More tellingly, the right hon. Gentleman went on to say:
"The Government are taking some unwarrantable social risks."—[Official Report,16 March 1988; Vol.129, c.1143.]
I have had several letters from pensioners and others in my constituency about the social conditions of today, and I had intended to read them. Instead, I shall refer to one small incident from my constituency.
A woman lived in a council flat that caught fire. A single parent with children, she lost all her possessions in the fire. The woman was rehoused immediately, humanely and helpfully by Bradford council, but she is now in a flat with no furniture, curtains, carpets, cooker or beds. What are her options? Is she to go cap in hand to the social fund and obtain a loan when she cannot even pay for insurance to protect her property? How on earth can she repay a loan like that? That is modern Conservatism; it is Disraeli's one nation stood on its head. That shows the compassion of Ministers who benefited personally by £80 a week from the tax cuts in the Budget.
The Government have not done much for people on average or somewhat above average income, either. Fifty
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per cent. of the tax cuts went to the top 10 per cent. in society, while only 10 per cent. of those tax cuts went to the bottom 50 per cent. of income earners. Overall taxation, including indirect taxation and National Insurance contributions, has increased from 34 per cent. to 38 per cent. under the Government. That taxation hits working people and the poorer members of society much harder than others.
Manufacturing investment is now between 9 and 11 per cent. below what it was in 1979, and manufacturing production is now only equal to its peak of eight years ago. The increase of between 4·5 and 5 per cent. in the past financial year must be set against the decline of the pound against the dollar in the preceding period, a process that has now been reversed as against the dollar and the deutschmark. That will hit British exports and British manufacturing industry hard in the near future.
Michael Prouse in the Financial Times made the point that the much-vaunted increase in productivity still leaves Britain with between one third and one half of the level of the individual productivity of its major competitors. The Government's most notable achievement has been to be the first in British history to preside over a net deficit of trade in manufacturing, which is now predicted to reach £14 billion.
When the Chancellor's predecessor removed hire purchase restrictions in 1982, the volume of national credit was £9 billion. In the first seven months of 1986, it had risen to £17·75 billion. In May last year, the Bank of England commented on the sharp increase in personal debt. It stated, for instance, that the number of houses taken into possession in 1985 was seven times the number so taken in 1979. That shows that in any sort of recession even those who benefited slightly from the Budget and who feel that they are a little better off than their fellow citizens would face a nightmare, with unemployment going hand in hand with large personal debts from the recent credit boom.
In recent months, Conservative Members have repeatedly raised the idea that the service sector of the economy can somehow replace manufacturing. That is a profound error. In a report entitled, "Services—The Second Industrial Revolution", the Institute of Manpower Studies questioned the view that more service jobs could compensate for the loss of manufacturing employment. The report predicted that the process fo technological advance, mergers, economies of scale and the desire to reduce unit labour costs would accelerate, and inhibit job creation in much the same way as has already happened in manufacturing.
The report examined seven growth areas, including distribution, banking, hotels, catering and professional services. The conclusion was that, although those industries will grow, their job-creating potential is diminished and their wealth-generating potential is not on the same scale as that of manufacturing. That was said before the stock exchange recession and before the disastrous bank profit figures that arose from the Third world debt were announced.
The world trade in services is only one quarter of that in physical goods and it cannot easily turn to foreign markets if home demand slows. More and more service jobs depend on manufacturing, a point that was made brilliantly by Akio Morita, the chairman of Sony Corporation. Conservative Members have trumpeted the remarks of the Japanese ambassador, Mr. Yamazaki, but

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not those of Mr. Morita. His speech in London in late November was summarised in the February issue of the Director. I can assure the Guardian columnist, who paid me the kind tribute of describing me as Bradford's distinguished Trotskyist, that the Director, together with The Wall Street Journal, is part of my bedtime reading. Perhaps at my age there is little more I can hope for.
Mr. Morita said:
"There is no doubt that this shift from manufacturing to services is now well advanced in the United States. Since 1950, the United States has lost half of its manufacturing jobs, while three-quarters of all jobs are now service oriented."
So much for the eight million extra jobs in America to which Conservative Members have referred this afternoon.
"The UK trend is similar. What I would like to suggest is that this trend, far from being the matured progression of a maturing economy and something to be encouraged, is destructive. For in the long run an economy that has lost its manufacturing base has lost its vital centre. A service-based economy has no engine to drive it. Thus, complacency about moving from manufacturing to a haven of hi-tech services, where workers sit at computers and exchange information all day, is entirely misplaced.
This is because it is only manufacturing that creates something new, which takes raw materials and fashions them into products that are of more value than the raw materials they are made from. It would seem obvious that the service elements of an economy are subsidiary and dependent upon manufacturing. When manufacturing prospers, all industries connected with it prosper—not only are more components, parts and salesmen needed, but more accountants, more dentists, more gasoline stations, more supermarkets and more schools.
When the manufacturing engine of an economy stalls, all these things are in less demand. You do not build dentists' offices or department stores unless you have a population with the resources to take advantage of them—and these resources in the long run can only come from jobs that add value to goods—that is, manufacturing jobs."
That is what Mr. Akio Morita, chairman of the Sony Corporation—one of the world's most successful manufacturing firms—said.
Michael Prouse of the Financial Times wrote:
"Future living standards in the UK will depend in large measure on the success of manufacturing. This is both because the sector is the main source of productivity growth and because further substantial improvements in the non-manufacturing trade balance are improbable. The food and raw material balances are unlikely to strengthen further, the fuel balances will deteriorate as North Sea fields mature."
That is a damning condemnation of those who are responsible for the rundown of manufacturing industry in Britain during the past nine years.
The Chancellor of the Exchequer mentioned in passing that the biggest danger to the British economy is a world recession and the volatility of exchange rates. I return to what Mr. Morita said:
"It is perfectly clear that the world economy is now in crisis. The burgeoning federal and trade deficits of the US are still out of control. Three-digit inflation rages throughout the Third World, whose own debt continues to grow unabated. The recent terrible wrenches in the stock market reflect everyone's uncertainty as to what lies ahead. There are cries for protectionist legislation from those who seek easy solutions, while there is a realisation from others that protectionist laws would only smash our system of international trade, quite probably tipping us over into a worldwide recession."
Mr. Quentin Davies: Will the hon. Gentleman give way?
Mr. Wall: I should like to, but I have only two minutes.
Dame Elaine Kellett-Bowman: What is the hon. Gentleman reading?
Mr. Wall: I am reading quotations which I imagine are of interest to anybody who takes a serious interest in the future and our economy.
The trouble is that, for America to solve its problems, it has to cut both its trade and its budget deficits. It can do that only by cutting its trade with the rest of the world. The effect of that in Britain would not be as great as in America or Japan, but it would have an effect. In such circumstances, however, the Japanese and the Americans would seek increased trade in Europe, especially Britain, and that would present a nightmare for the British economy.
In the past nine years, there has been a political, social and economic swing to the Right in British society. I believe that these measures mark the end of the swing. The pendulum will now begin to swing back. We may not swing the vote in the Chamber tonight, but we shall swing the votes in next week's local elections. I warn Conservative Members that their move to the Right will be countered by a move to the Left.
9.9 pm
Dr. John Marek: We have had a good debate this evening. I listened with particular interest to my hon. Friend the Member for Bradford, North (Mr. Wall), to my hon. Friend the Member for Edinburgh, Central (Mr. Darling) who spoke before him and to my hon. Friend the Member for Leeds, West (Mr. Battle) who spoke before him. Therein lies a most interesting aspect of the debate. The Conservative party has no speakers who wish to defend this iniquitous Budget. Indeed, more Labour Back Benchers than Conservative Back Benchers have spoken.
I listened with interest to the right hon. Member for Worthing (Mr. Higgins), the Chairman of the Treasury and Civil Service Committee, to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) the Chairman of the Public Accounts Committee, and to the hon. Member for Wanstead and Woodford (Mr. Arbuthnot). I hope that hon. Members will forgive if I dlo not reply directly to many of the points that were made, with some of which I agree. I even agree with some of the points made by the hon. Member for Beaconsfield (Mr. Smith)—and that is saying something. My hon. Friend the Member for Gateshead, East (Ms. Quin) made some excellent points, and my hon. Friend the Member for Walsall, North (Mr. Winnick) was absolutely right when he said that this is government by the rich, of the rich and for the rich.
My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) spoke about manufacturing arid made the very important point that Budgets should be about the creation of wealth and the creation of income and not just about the distribution of income. This Budget had nothing to say about that. My hon. Friends the Members for Clydebank and Milngavie (Mr. Worthington) and for Edinburgh, South (Mr. Griffiths) also made some very useful comments.
In stark contrast to the attitude of some Conservative Members who have been servile to the wishes of the greedy and the super-rich and unrepentant in trying to justify the tax bonanza that has been given away, the Labour party has shown that we are concerned about the lack of finance

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for the Health Service, the cuts in social security and housing benefit and the increasing number of our citizens who are committed to living in poverty.
Mr. Higgins: Come on.
Dr. Marek: It is not a question of coming on. [Interruption.] The hon. Member for Lancaster (Dame E. Kellett-Bowman) could have made her own speech. She is very good at making interventions from a sedentary position. We could have more respect for her if she intervened correctly.
Dame Elaine Kellett-Bowman: I agree substantially with the Budget that the Government have brought in. What is the point of disagreeing with it?
Dr. Marek: The Budget is iniquitous and certainly needs some defending. It has had a conspicuous lack of defence from Conservative Members, and that speaks for itself.
The Budget does nothing for the unemployed, the ill or the poor. It does nothing for those on average earnings. [Interruption.] The hon. Member for Lancaster can interrupt from a sedentary position as much as she likes. Her behaviour speaks for itself.
The Budget does nothing for those on average earnings or below average earnings. It is true that the basic rate of income tax has been reduced from 27p in the pound to 25p in the pound, but that has been at the expense of the neglect of our schools over such things as the provision of books, the maintenance of buildings and the availability of good, nutritious and cheap or free school meals. It has been at the expense of our road maintenance programme and at the expense of the National Health Service. In spite of what the right hon. Member for Worthing said, waiting lists are increasing and wards are closing down. Emergency units are refusing admission at certain times to cut costs. Patients are dying for lack of treatment. Above all, the Budget has been at the expense of the poor.
Mr. Higgins: On what conceivable basis can the hon. Gentleman argue that this Budget is at the expense of the Health Service? This year, an extra £1·75 billion will be spent on the Health Service. Next year an extra £1 billion will be spent and another £1 billion will be spent the following year. The hon. Gentleman cannot conceivably argue that more is not being spent on the Health Service.
Dr. Marek: I respect the right hon. Gentleman, who is an expert on finance, but he must agree that simply saying that so much extra in real terms will be spent on the National Health Service is not the end of the story. He must consider the change in the demography of the country and the fact that as a nation we are older. He must have regard to the RPI for medical costs and he must consider the extra costs due to illness because of the doubling and trebling of unemployment. He must consider the fact that the family practitioner committee is not cash-limited and that any extra money it spends must inversely come off the hospital and community health sector budget. He must have regard to all that.
It is not true that the Government have spent more on the National Health Service and that everything is all right. It is not all right. Instead of giving money to the super-rich, the Opposition's charge, as has been
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demonstrated adequately tonight, is that the Government could have put some of that money into public services and that it is to their shame that they have decided not to do so.
The average man and woman in the street have been hit in two ways by the Chancellor and his Budget. First, their moral integrity has been assaulted because of poverty. Officially, 18 million people are living in poverty.
Sir William Clark: Including children?
Madam Deputy Speaker: Order. The House has suffered long enough from remarks made from a sedentary position. If hon. Members wish to intervene, it is high time that they asked the hon. Member who has the Floor for permission to intervene.
Dr. Marek: Thank you, Madam Deputy Speaker. Perhaps you will allow me to say that that is typical of the loutish tendency of Conservative Members of Parliament.
Sir William Clark: Will the hon. Gentleman give way?
Dr. Marek: I shall allow the hon. Gentleman to intervene.
Sir William Clark: I am most grateful to the hon. Gentleman. Will he explain to the House how he makes out that 18 million people are on the poverty line?
Dr. Marek: These are official Government figures, and the hon. Gentleman can look them up if he wishes.
The second way in which this Chancellor of the Exchequer has hit, in his Budget, the ordinary man and woman in the street——
Sir William Clark: Will the hon. Gentleman give way?
Dr. Marek: I shall allow the hon. Gentleman to intervene for the last time, but I hope that it will not be about those figures. He can look them up; they are available. Children are human beings, the same as adults.
Sir William Clark: Of the 18 million, would the hon. Gentleman be kind enough to say how many are children?
Dr. Marek: I do not know. I could make an estimate, but it would be better for the hon. Gentleman to look up the figure. I apologise to him for not having it. I would not want to mislead him by making an estimate.
Besides assaulting the moral integrity of the average person in the street, the Chancellor of the Exchequer has attempted an enormous act of deception. The average man and woman is told that 2p will come off income tax but the Government do not tell them that that could and should have gone towards rebuilding our public services, the National Health Service and the decaying infrastructure, which is visible everywhere from Land's End to John O'Groats. His attempted deception does not end there. Even reasonably prosperous people do not get very much out of the Budget, a point to which I shall turn later.
It would be sensible to comment on the Chancellor's macroeconomic strategy, as it is obvious that there continues to be an argument between the Chancellor and the Prime Minister over exchange rates and bucking the market. It may have been true to say that the stronger an economy is growing the stronger the pressures of inflation, but that is not true now and it is misleading of the Chancellor so to claim. He claims it by boasting that it is an unusual achievement to have a period of steady growth without any rise in inflation, but any Government's

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powers of interference are much more limited now than they were. Importers will readily meet at short notice unfilled demand in the United Kingdom market. That will act as a downward pressure on inflation, but it will also have a horrible effect on our balance of payments.
Dame Elaine Kellett-Bowman: Will the hon. Gentleman give way?
Dr. Marek: Yes, but for the last time.
Dame Elaine Kellett-Bowman: The CBI statement, referred to by my right hon. Friend the Chief Secretary when he opened the debate, exactly countered that point by pointing out that we are fulfilling more of the orders that are coming to this country from home production than we are from imports.
Dr. Marek: We might be, but in that case the hon. Lady should explain why the balance of payments problem is getting worse.
Dame Elaine Kellett-Bowman rose——
Dr. Marek: I shall not give way again. Conservative Members have had a good innings and I hope that they will forgive me. I am sure that the hon. Lady will wish to serve on the Standing Committee on the Finance Bill, when I shall he happy to debate with her at length every point that she seeks to make.
The country's balance of payments is a serious issue that the Chancellor cannot duck for very long, and it should not simply be dismissed in the way that it was by the hon. Member for Croydon, South (Sir William Clark). I am not attacking him, but the hon. Gentleman said that the balance of payments was a minor matter and did not play a large part in the present economy. I beg to differ with him. It is right that the Opposition should ask the Chancellor what he intends to do, but the only answer in the Budget seems to be that the spending spree about to be undertaken by the super-rich will make matters worse.
The Government have abandoned their monetarist dogma and their primitive belief that inflation can be controlled solely by controlling broad money. I am sure that it is only a matter of time before the Government realise that high interest rates alone are insufficient to control inflation. Last week's money supply figures showed a 20 per cent. increase in broad money, which will give rise to serious problems. It will exacerbate the balance of payments deficit and encourage an increased rate of inflation.
If steps are not taken to correct the balance of payments, there will, some time, be an economic crisis in this country. Interest rates can be kept high to fund the deficit but that means an over-valued pound with consequently fewer exports and an even larger balance of payments deficit. That is a problem not just for the Chancellor but for the whole country. It is something that any responsible Treasury Minister would have addressed by now. It is a pity that the Budget is concerned only with redistributing money to the rich, with greed, with avarice, and with making the rich richer still.
I turn to the Bill's fiscal measures and to the way in which the Tory Administration have treated their citizens over the past nine years or so. How could the Government, when they first came to office, double and then treble the
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number of those out of work? Even now they preside over an unemployment rate that would have been thought beyond belief 10 years ago.
How could the Government cut the link between the old-age pension and rises in average earnings, so that a pensioner couple are £14 worse off every week than they would have been under a Labour Administration? [Interruption.] It is no use Conservative Members complaining, because under a Labour Administration a pensioner couple would be better off.
How is it that the Government have failed more than once fully to uprate child benefit in line with inflation? How is it that they have made unemployment benefit taxable? Earnings-related supplementary benefits have also disappeared. The cost to the Government of single parents as part of income support has just been halved; how can the Government defend that? It is an attack on the poorest sections of society. Board and lodging allowances for the under-25s have also been abolished. The list seems almost endless.
The House will recognise that all that amounts to a well-planned policy by the Treasury of cutting benefits and increasing taxes on the poor in the unsubstantiated belief that it will make the poor grateful to their mistress for the crumbs once the loaf has been taken away. In the recent social security changes, more than 2·25 million people received not a penny more but are worse off because there will be no uprating. Another 2·5 million people will receive an increase, but it w ill not catch up with, or compensate for, inflation. A further 1 million people will be worse off. In other words, two thirds of the 8·5 million people I mentioned will be poorer as a result of the changes.
On the other hand, a family of four with an income of £100 weekly and claiming family credit and housing benefit will receive only 5p more a week as a result of the tax cuts. The tax cuts may apply to them, but all the other changes will mean they will gain by only 5p a week. That is the measure of the Government's generosity towards some of the poorest sections of society.
I compare those people with others at the opposite end of the socio-economic spectrum. Let us consider what will happen to people who already have money and wealth. Without any substantiation being made or attempted, the Government clearly believe that the super-rich need extra money in order to be of more benefit to the country. My hon. Friend the Member for Edinburgh, Central (Mr. Darling), was right in what he said on that subject.
Let us consider what it implies in respect of the Budget. First, the top rate of tax was cut from 60 per cent. to 40 per cent., which means that half of all the tax cuts went to the top 10 per cent. of taxpayers. The hon. Member for Croydon, South shakes his head. If he does not agree, lie should give his figures. With the reduction of income tax from 60 per cent. to 40 per cent., some £2 billion was given to 3·7 per cent. of taxpayers—about 700,000, give or take a few; I am not being absolutely accurate. I am glad to see some measure of agreement from the hon. Member for Croydon, South at last.
Lord Hanson gets £4,728 a week, cash in hand, in notes. Sir Ralph Halpern gets even more: £5,134 a week. [Interrruption.] The hon. Member for Tatton (Mr. Hamilton) is now trying to barrack me. I wonder whether he has any morality at all, and whether he can appreciate what the average old-age pensioner on £40 or £50 a week net thinks of that. The gentleman to whom I referred receives more in a week than old-age pensioners get in a

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year. I do not see much morality in that, and I do not think that any Conservative Member would dare to stand up and justify it now. What evidence is there that the rich need incentives to work harder, and that the poor need to be repressed and taxed harder to work harder? What Conservative Member can justify that?
The hon. Member for Slough (Mr. Watts) said that the tax cuts meant individuals keeping a little more of what is already owned. I do not think that it was their own in the first place. I think that they hijacked it from the companies for which they work—[HON. MEMBERS: "Shame!"] I do not think that they earned it. There is no question of Sir Ralph Halpern earning £5,134 a week.
Mr. Quentin Davies rose——
Dr. Marek: I am sorry; I must make progress. I hope that the hon. Gentleman will forgive me. Because of all the interventions, I have used up 15 minutes of my speech, and I am only half way through it. I do not wish to take up any of the time available to the Financial Secretary.
Let me bring the facts home to Conservative Members. A single person on 10 times average earnings, earning about £127,000 a year, will receive £369·40 a week in income tax cuts. By contrast, someone on the average income of £244 a week will receive only £4·36 a week. Not many of my constituents earn £244 a week. Many would be glad of that salary. Moreover, that £4·36 a week is at the expense of the National Health Service, the schools and all the other services that the Government should be looking after. This is only the latest in a long line of giveaways to the super-rich.
That is not all. The Tories have decided to cut the top rate of inheritance tax from 60 per cent. to 40 per cent. They have done that despite halving the number of estates liable for the tax over the past two years. In 1986–87, the number was about 39,000; in 1988–89, only 20,000 are expected to pay. But each estate will now benefit by an average of about £30,000. It can readily be seen that that is a measure on behalf of the super-rich. Only 5,200 taxpayers paid inheritance tax at rates above 40 per cent. last year. That demonstrates the length to which the Government will go to please their masters and mistresses.
Capital gains tax cuts will also help the well-off.
Sir William Clark: Who wrote this?
Dr. Marek: I wrote it, and I am prepared to stand by it. The obvious discomfiture of Conservative Members only shows that I am stating some home truths.
There are not many payers of capital gains tax in my constituency. In fact, less than one taxpayer in 100 pays the tax. Yet, again, a large measure of the Finance Bill is concerned with capital gains tax, although only a small section of society pays it.
The Budget has abolished capital gains tax on pre-1982 gains. The Chancellor says, and to some extent I agree with him——
Mr. Neil Hamilton: It was a tax on Labour inflation.
Dr. Marek: The hon. Gentleman makes the point. He follows the line of the Chancellor at the Dispatch Box a few weeks ago. However, the hon. Gentleman has not thought hard about the problem. In reality, those gains
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were not just inflationary. There were real gains, especially in the property market. Conservative Members must remember that schedule A tax was abolished in the early 1960s, resulting in real gains in property. For that reason, it is wrong that capital gains tax should not have been completely abolished before 1982. I am glad that Conservative Members are silent on this issue.
Those gains were real gains and what the Chancellor has done in the Budget will not help the ordinary citizen who owns and lives in his or her house, because that has always been exempt from capital gains tax, but it will help —wait for it yet again—the super-rich, the property speculators, and there were plenty of them 20 years ago, and the neo-Rachmans of this world who are about to be given a new lease of life with the changes in the business expansion scheme.
Then there is the disaggregation of investment income for married couples [yet another measure for the super-rich. It is worth as much as £1 billion in all, but only to the very few in Britain who do not make the mistake of thinking that women will have independent taxation. They will not have independent taxation, as can be seen from page 21 of the Finance Bill, which says:
"If the claimant proves that for the whole or any part of the year of assessment he is a married man whose wife is living with him, he shall be entitled to a deduction from his total income of £1,490."
A relevant paragraph follows later. That talks about the man, not the man or woman. It could have been drafted in such a way that there was equality between the sexes.
The Government maintain that all the giveaways in income tax, capital gains tax and inheritance tax are necessary to motivate the rich to work harder or to attract to or keep in Britain the internationally mobile. Our scientists, engineers and researchers do not have the incomes necessary for them to benefit from this Budget. The top scale for university lecturers is about £20,000 a year, and the average salary for a professor is about £28,000 a year. I do not see how such people in our universities will pay top rates of tax and so benefit from the Government's handouts in the Budget.
Even if our scientists and engineers were to benefit from the Budget, it is equipment, resources and funding that are important for their research. That is what will make them stay in Britain, not the amount of money that they get in their pockets as a result of the Budget.
A constituent of mine paid £140 out of his own pocket to attend a day-release course in his spare time. He was made unemployed and the unemployment benefit office paid him for four days a week for about four or five weeks, then stopped his money. He tried to get income support, but was unsuccessful. My constituent had been trying to improve himself, but he was unable to do so because he could not obtain support from the Government.
Contrast that constituent of mine with a reasonably prosperous or average middle-class family with a son or daughter wishing to educate himself or herself. They will have a little more money with which to keep their son or daughter at home. They can even pay for him or her to go to university. But covenants have been stopped, which shows that the Government are not really worried even about the average prosperous family. They have stopped covenants for non-charitable purposes and there is no way that such families can, in a tax-efficient way, help their offspring.

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Contrast such people with the super-rich. They will be able to continue to transfer taxable income from a parent to a student by means of a settlement of capital or a capital trust. They will not suffer. The Chancellor leaves them unscathed and again shows clearly that this Government are in favour of the super-rich. They do not care too much about the people on average earnings. They are keen to repress the poor. The Chancellor cannot deny that in the first case I cited, he is intent on keeping the poor in poverty. Where is his sense of fair play with regard to this matter?
The House will not be surprised to learn that there are even more benefits for the super-rich in this Budget. Each spouse will have a separate £40,000 annual limit in the business expansion scheme. The transferable allowances will not just be transferable allowances for earned income. There will he two sets of allowances for capital gains tax exemptions as well.
A further tax dodge for the super-rich will be the two zero-rated band for one family. The really wealthy will be able to pass on wealth on the death of the first spouse. It will not pass to the other spouse, but on to the offspring. That is another tax dodge opened up by this Budget. [Interruption]" If hon. Members will give me just one more minute, I hope to finish.
There are other points worth noting. There is the rise in electricity prices, which hits the ordinary man in the street. There are the car taxation scale increases—which I support —which hit the average man with a company car and not the really wealthy executive. There is the fact that national insurance has not been made more progressive, that services have been downgraded elsewhere, and that housing benefits have had a capital limit imposed. All these things serve to underline my theme.
This Budget has not reduced the overall burden of taxation; it has merely given vast amounts to a few super-rich at the expense of the poor. In 1988–89 taxes, as a share of GDP, are forecast to remain the same as in 1987–88–37·9 per cent. However, in 1978–79 taxes accounted for just 33·9 per cent. of GDP. Which is the taxing party? It is the Conservative party.
This Budget has done nothing for the poor and the unemployed. It has done precious little for the average man or woman in the street. It has done nothing for industry. Yet this Government have had all the benefits of North sea oil, selling the family silver and obtaining money by crucifying the poor. It is this Government who are the taxing party. The poll tax will be seen to be a Tory tax when the next election comes along.
This Chancellor has the cheek to say that the gap between the rich and poor is not something to be determined. He has determined the gap between the rich and the poor. He is continuing to determine the gap between the rich and the poor in favour of the rich getting richer at the expense of the poor getting poorer. For that reason I hope that all the hon. Members of the Conservative party will join me in voting against this iniquitous and immoral measure tonight.
9.37 pm
The Financial Secretary to the Treasury (Mr. Norman Lamont): I agree with the hon. Member for Wrexham (Dr. Marek ) that this has been an interesting debate. A number of speeches have gone rather wider than the Finance Bill, and I hope that my hon. Friend the Member for Stamford
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and Spalding (Mr. Davies), who made a most interesting speech on wider issues, and my right hon. Friend the Member for Worthing (Mr. Higgins) will forgive me if I do not comment on some of the points that they made, but comment only on the points about taxation.
The hon. Member for Dunfermline, East (Mr. Brown) spoke about the interaction between taxation and the economy when he said that the Chancellor of the Exchequer was awash with money. He implied that my right hon. Friend had been over-cautious and, perhaps, should have borrowed rather more money as opposed to repaying debt. The hon. Member, with some of his hon. Friends, seemed to show no understanding of how the buoyancy of revenue has been achieved.
The hon. Gentleman seems to forget that he said that other Chancellors had not always found themselves in as fortunate position as my right hon. Friend. He is quite right; Labour Chancellors did not find themselves in the same fortunate position as my right hon. Friend. As my hon. Friend the Member for Croydon, South (Sir W. Clark), and my right hon. Friend the Member for Worthing said, it is precisely because we have controlled public expenditure, and we have had tax cuts and measures to improve the supply side in the past, that we are in the fortunate position of having buoyant revenue, which has enabled us to cut taxes and to increase spending.
The hon. Member for Dunfermline, East may prefer to forget this, but perhaps he will remember when I remind him that he gave himself away when he said from the Dispatch Box that all the tax cuts were due simply to North sea oil and that it was North sea oil that had produced the revenue. North sea oil not only represents under 2 per cent. of revenue, but it has halved since 1985–86, so what the hon. Gentleman said was completely ridiculous.
Other hon. Members, including the hon. Member for Nottingham, North (Mr. Allen), made much of the point that the burden of taxation has not been reduced. That is hardly a state secret, as my right hon. Friend the Chancellor announced in the Budget that the burden of taxation was not being reduced as a proportion of GDP. Therefore, I find that an interesting point for hon. Members to make.
I agree that we should like the burden of taxation to be reduced further, but two points need to be emphasised. First, the fact that the burden of tax overall in the economy has not been reduced shows precisely what we always say: one can cut tax rates and keep up revenue. Secondly, it shows that Opposition Members do not know which way they are facing because they have opposed every tax cut that has ever been made by this Government.
Mr. Battle: Does the Minister accept that, in the shift from direct to indirect taxation, the burden of indirect taxation falls hardest on the poorest in our society and is grossly unjust?
Mr. Lamont: The answer to that is shown in the figures for take-home pay and living standards, which take account of increases in indirect taxation. Those figures show that in every multiple of average earnings there have been substantial increases in living standards.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) doubted whether this was a reforming Budget. In that, he disagrees with many observers, including, for

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example, The Independent, which is not always a supporter of the Conservative party and which, although awarding the prize for tax reform to New Zealand, stated:
"We certainly now have a superior tax system to almost any country in Western Europe."
Yes, tax reforms should be judged by the criteria of equity, but also by simplicity, neutrality and what they do for the supply side of the economy. My hon. Friend the Member for Fulham (Mr. Carrington) talked about what has been achieved in terms of simplicity. We have a much simpler system now. We have no tax rate over 40 per cent. We have a single rate of inheritance tax, whereas previously we had seven. Indeed, it requires something of a feat of memory to recall that in 1979 we had no fewer than 11 rates of tax on earned income and a further two rates of tax on investment income. Other changes such as those relating to maintenance and non-charitable covenants will also greatly simplify the system.
When it comes to neutrality, I again suggest that much more has been done than Opposition Members have acknowledged.
I believe that the strategy should be to reduce marginal rates, increase incentives and increase average rates by blocking artificial loopholes. Opposition Members have not woken up to some of the provisions in the Bill that block some of those loopholes. We have heard about forestry and cars. I noted that my hon. Friend the Member for Fulham said that he felt that we should increase that tax even further.
Other steps have been taken which should be close to the hearts of Opposition Members. We have increased the tax on golden handshakes, and we have increased the tax on capital gains for higher rate payers. We have also reduced markedly the incentive to convert income into capital, which was one of the greatest avoidance devices. We have increased the tax on share options for higher rate payers. Normally one simply needs to mention share options to get the Opposition jumping up and down like a lot of war-fevered dervishes.
The alignment of capital gains tax with income tax was not mentioned by the hon. Member for Dunfermline, East or by the hon. Member for Wrexham, or by the right hon. and learned Member for Monklands, East (Mr. Smith) when he spoke the other day. The Opposition have not once mentioned the alignment of capital gains and income tax.
I confess that perhaps the silence of those sitting behind me shows that the rapture of my hon. Friends for the measure is somewhat modified, but when it was introduced, I should have thought that Opposition Members would cheer it to the rafters. It sharply reduces the incentive for the better-off to arrange matters to their own convenience. The fact that Opposition Members did not mention it shows all too clearly that they are determined to caricature the Budget and to make it fit their image rather than describe what it really does.
I agree very much, once again, with my hon. Friend the Member for Fulham that many of the accountants who have been employed, I dare say gainfully, in converting income into capital will find something more productive to do elsewhere.
Another measure of reform is that of independent taxation, which again the hon. Member for Dunfermline, East chose to dismiss. He implied that the measure, and
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indeed the Budget as a whole, is just for pipe-smoking rich women. The Opposition do not seem to realise that this radical step towards independent taxation is of benefit to millions of ordinary people. The hon. Gentleman concentrated his remarks on women with large investment incomes, but does he not think that there is an important principle here? Is it not wholly wrong, in all the circumstances, that a woman's income should be aggregated with that of her husband and, if so, is the hon. Gentleman for or against it or does he think that the principle can be divided?
The hon. Member for Dunfermline, East is not only equivocal on the principle but wholly wrong on the facts. The facts are that married women with small incomes from savings will gain, and 1·2 million wives with incomes of less than £5,000 will gain. The elderly will be major beneficiaries of this measure, and about 900,000 elderly wives who are almost all on low incomes will gain from the disaggregation of savings. A considerable number of pensioners who have earned their pensions through their husbands' contributions will also gain.
The hon. Member for Redcar (Ms. Mowlam) raised the question, as did my hon. Friend the Member for Fulham, why the married couple's allowance was not given to whom the couple chose. It has already been explained that that would certainly delay the implementation of our reform, and a good feature of the reform is that it will be implemented in 1990, which advances the date previously thought possible. Although I recognise the validity in principle of what my hon. Friend says, and perhaps the problem can be addressed one day, in only a tiny number of families—about 0·25 per cent.—will the wrong result be achieved by our proposals in the Bill.
Several Opposition Members, including the hon. Member for Dunfermline, East, criticised and repeated their hostility to the business expansion scheme. It was all very different from the reaction of the Leader of the Opposition two years ago when we expanded the scheme. Then, he thought that it was very good.
I should have thought that hon. Gentlemen would welcome the limitation and capping of the size of project that can be financed by the scheme. We have undertaken the measure for precisely the reason that Opposition Members have criticised it in the past: there have been too many asset-backed investments of a kind that could easily get finance from the capital market.
We make no apology for extending the business expansion scheme to encourage investment in rented property. We need a supply of decent rented property. Other countries in Europe have a large amount of it, and it is only the dogma and political threat from the Labour party that has prevented us from establishing it.
Mr. Henderson: The Minister was not in the Chamber earlier. Is he aware that the regional CBI in the north-east of England is bitterly opposed to the scheme to extend the BES to rented accommodation and wants the money spent on jobs in the north of England?
Mr. Lamont: I do not know what the regional CBI feels, but I remain firmly in favour of this measure because we need a supply of decent rented accommodation.
At present, for many local authorities, choice, where it exists, is in the hands of bureaucrats. That is how Opposition Members prefer it. They prefer planners to choose the location, architects to determine the style and

297
the housing department to determine the number of rooms. When one want to move or take up a new job, there is a waiting list, complexities and delay in arranging a transfer. The country needs to encourage rented property; that is in the interests of all British people.
This Bill is unambiguously for tax cuts and growth. Britain now has one of the lowest tax regimes in the world. Overnight we have become more competitive and a better place in which to do business. The point on which Opposition Members seem to be mostly silent is that the previous cuts in the higher rates, which were larger than those in this Budget, have more than paid for themselves. The top 1 per cent. of taxpayers, 3 per cent., 5 per cent. or even all higher rate payers are paying a higher proportion of income tax than they did in 1979, and they will continue to do so after this Budget.
In that sense, higher earners as a class are more heavily taxed than previously. When Opposition Members say that the rich should shoulder a greater proportion of tax, they should face the fact that that is precisely what has happened. We have cut top rate taxes and we have generated more revenue. The hon. Member for Dunfermline, East put this down simply to people paying themselves more, and he produced some extraordinary statistic that the top 5 per cent. had increased their salaries by 300 per cent. A more accurate figure would have been 30 per cent., which is not out of line with the general rise in living standards for most of the population.
The Opposition can never understand that. They always view wealth as finite, so they are interested only in its distribution, never in its creation. They want wealth, yet they hate wealth creators. A few weeks ago we had many newspaper articles about the 200 wealthiest millionaires in the country. What struck me was how many of those people had started their business or expanded it, and how many represented new names in our high streets. Hon. Members have referred to them and the high salaries that they command, but we have not heard of the jobs that they have created or the businesses that they have started.
It has been pointed out that many countries are moving towards lower taxation at the top end. Fewer and fewer countries equate social justice with confiscatory marginal rates. Why do Opposition Members think that the United States, New Zealand and Australia are all following the policy that we are following? Presumably because they, like us, believe that confiscatory taxes are counter-produc-tive and easily evaded. They, too, believe that lower taxes increase competitiveness, attract managers, encourage entrepreneurs and create new businesses. Opposition Members do not believe that. The hon. Member for Dunfermline, East said that there was no study, survey or academic research to show it, but there is. That is not the point. [Interruption.] The evidence is all around us. It is in the tax cuts that we made in 1979 and in the United States.
The hon. Member for Dunfermline, East, when he makes such remarks, reminds me of the Bishop of Durham, who, when he was opposing the deregulation of buses, said that he was against it as an act of faith. Good Lord, whatever next?
Mr. John Smith: The hon. Gentleman reminded us that there was an academic study. Will he tell us what it was and what it concluded?
Mr. Lamont: I was referring to Professor Lindsay; the right hon. and learned Gentleman perhaps had in mind
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Professor Brown. That simply shows that there are two studies, not one, and that one is worth while and one is not.
The Opposition do not understand about wealth creation. The British people know that they do not understand. We know that they do not understand. Furthermore, they themselves, in their heart of hearts, know that they do not understand.
I was fascinated to read in The Guardian earlier this week about the leaked document from the Labour co-ordinating committee, of which the hon. Members for Islington, North (Mr. Corbyn) and for Dagenaham (Mr. Gould) are members:
"The state of political education in the party and the trade unions is appalling. Many party activists are positively hostile to the idea that the party should have something to say about productivity, competitiveness, efficiency or enterprise."
Those are wise words, and there are even wiser words to come, because it goes on:
"In so far as the electorate remembers Labour's rule in the Seventies, they associate the decade with economic crisis, strikes and hyper-inflation. In contrast, Thatcherism projects an image of economic strength."
Those are wise and realistic words. We should simply like to see them followed up by wiser policies from the Opposition.
The Opposition, particularly the hon. Member for Wrexham, keep contrasting the gains from this Budget for the highest paid with losses from the social security reform, as he puts it, for those on the lowest incomes. They assume that tax and social security are just alternative ways for Government to confer benefits on people. But the two are not the same. The tax system is there not to give people benefits but to take money from them in a way that does the least damage to the economy. The object of reductions in tax rates is to improve the performance of the economy by encouraging and rewarding enterprise. The reason is that if one encourages enterprise one will get more of it. The evidence is that this is precisely what has happened since this Government first began cutting taxes in 1979.
Opposition Members remind us of the poorest, and they have a right to do that, but their case would be more persuasive if occasionally they reminded us that there is also quite a bit of prosperity around as well, and a lot more prosperity than when they were in office. They used statistics and language as though they were describing Ethiopia rather than England, but much of the prosperity has reached the poor as well. Yes, the rich have got richer, but many of the poor have also become better off.
The real take-home pay of a single person on half average earnings has gone up by 26 per cent. under this Government. Under Labour, it fell. What happened to the burden of tax for the lowest paid under Labour? The Labour Government increased the number of taxpayers by 10 per cent. They brought into tax almost 3 million low-paid people who had not paid tax before. How can they claim to be the guardians of the poor when they wrecked and bankrupted our economy and it was the poor who suffered most?
This Bill cuts by significant amounts taxes for all taxpayers. The Opposition scoff at 2p off the basic rate, but I do not remember when the Labour Government were ever able to cut tax by 2p in the pound. Twenty-three million people will benefit from the basic rate cut; 750,000 people will be taken out of taxation. When the Opposition say that this Budget is predominantly a Budget for the rich, they should remember that 75 per cent. of the cost of

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the changes in the Budget has gone on basic rate and allowances. They used to have a 25p reduced rate band. We have got everyone on 25p and eventually we will get everyone on 20p.
The British people have rejected the politics of redistribution because they were tried and have failed. They want growth rather than redistribution because that will do most for the poor and give the greatest opportunity to the majority of the people. This is a Finance Bill for all the people, whatever they earn and wherever they live.
Question put, That the Bill be now read a Second time:—
The House divided: Ayes 251, Noes 201.

Division No. 277]

[9.59 pm

AYES

Adley, Robert

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

Aitken, Jonathan

Davis, David (Boothferry)

Alexander, Richard

Dorrell, Stephen

Alison, Rt Hon Michael

Douglas-Hamilton, Lord James

Amery, Rt Hon Julian

Evans, David (Welwyn Hatf'd)

Amess, David

Fallon, Michael

Amos, Alan

Favell, Tony

Arbuthnot, James

Fenner, Dame Peggy

Arnold, Jacques (Gravesham)

Field, Barry (Isle of Wight)

Arnold, Tom (Hazel Grove)

Forman, Nigel

Ashby, David

Forsyth, Michael (Stirling)

Aspinwall, Jack

Forth, Eric

Atkins, Robert

Fox, Sir Marcus

Atkinson, David

Franks, Cecil

Baker, Nicholas (Dorset N)

Freeman, Roger

Baldry, Tony

Garel-Jones, Tristan

Batiste, Spencer

Goodhart, Sir Philip

Beaumont-Dark, Anthony

Gow, Ian

Bellingham, Henry

Gower, Sir Raymond

Bendall, Vivian

Grant, Sir Anthony (CambsSW)

Bennett, Nicholas (Pembroke)

Greenway, Harry (Ealing N)

Benyon. W.

Greenway, John (Ryedale)

Bevan, David Gilroy

Gregory, Conal

Biggs-Davison, Sir John

Griffiths, Sir Eldon (Bury St E')

Blackburn, Dr John G.

Griffiths, Peter (Portsmouth N)

Blaker, Rt Hon Sir Peter

Grist, Ian

Body, Sir Richard

Ground, Patrick

Bonsor, Sir Nicholas

Hamilton, Hon Archie (Epsom)

Boscawen, Hon Robert

Hamilton, Neil (Tatton)

Bottomley, Peter

Hampson, Dr Keith

Bottomley, Mrs Virginia

Hanley, Jeremy

Bowden, A (Brighton K'pto'n)

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

Bowden, Gerald (Dulwich)

Hargreaves, Ken (Hyndburn)

Bowis, John

Harris, David

Boyson, Rt Hon Dr Sir Rhodes

Haselhurst, Alan

Braine, Rt Hon Sir Bernard

Hawkins, Christopher

Brandon-Bravo, Martin

Hayhoe, Rt Hon Sir Barney

Brazier, Julian

Hayward, Robert

Bright, Graham

Heathcoat-Amory, David

Brittan, Rt Hon Leon

Heseltine, Rt Hon Michael

Brooke, Rt Hon Peter

Hicks, Robert (Cornwall SE)

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

Higgins, Rt Hon Terence L.

Browne, John (Winchester)

Hind, Kenneth

Bruce, Ian (Dorset South)

Hogg, Hon Douglas (Gr'th'm)

Buchanan-Smith, Rt Hon Alick

Holt, Richard

Burns, Simon

Howard, Michael

Burt, Alistair

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

Butcher, John

Howarth, G. (Cannock & B'wd)

Butler, Chris

Howell, Ralph (North Norfolk)

Butterfill, John

Hughes, Robert G. (Harrow W)

Carlisle, John, (Luton N)

Hunt, David (Wirral W)

Carlisle, Kenneth (Lincoln)

Hunter, Andrew

Carrington, Matthew

Hurd, Rt Hon Douglas

Carttiss, Michael

Irvine, Michael

Chapman, Sydney

Jack, Michael

Clark, Sir W. (Croydon S)

Jackson, Robert

Conway, Derek

Janman, Tim

Cope, John

Jessel, Toby

300

Jones, Gwilym (Cardiff N)

Riddick, Graham

Jones, Robert B (Herts W)

Ridley, Rt Hon Nicholas

Kellett-Bowman, Dame Elaine

Ridsdale, Sir Julian

Key, Robert

Roberts, Wyn (Conwy)

Kilfedder, James

Rossi, Sir Hugh

King, Roger (B'ham N'thfield)

Rost, Peter

Kirkhope, Timothy

Rowe, Andrew

Knapman, Roger

Rumbold, Mrs Angela

Knight, Greg (Derby North)

Sayeed, Jonathan

Knowles, Michael

Scott, Nicholas

Knox, David

Shaw, David (Dover)

Lamont, Rt Hon Norman

Shaw, Sir Giles (Pudsey)

Lang, Ian

Shaw, Sir Michael (Scarb')

Latham, Michael

Shephard, Mrs G. (Norfolk SW)

Lawson, Rt Hon Nigel

Shepherd, Colin (Hereford)

Lee, John (Pendle)

Shepherd, Richard (Aldridge)

Lightbown, David

Shersby, Michael

Lilley, Peter

Skeet, Sir Trevor

Lloyd, Sir Ian (Havant)

Smith, Tim (Beaconsfield)

Lloyd, Peter (Fareham)

Soames, Hon Nicholas

Lord, Michael

Speed, Keith

Luce, Rt Hon Richard

Speller, Tony

Lyell, Sir Nicholas

Spicer, Sir Jim (Dorset W)

Maclean, David

Squire, Robin

McLoughlin, Patrick

Stanbrook, Ivor

McNair-Wilson, M. (Newbury)

Steen, Anthony

McNair-Wilson, P. (New Forest)

Stern, Michael

Major, Rt Hon John

Stevens, Lewis

Malins, Humfrey

Stewart, Allan (Eastwood)

Maples, John

Stewart, Andy (Sherwood)

Marlow, Tony

Stokes, John

Marshall, John (Hendon S)

Stradling Thomas, Sir John

Marshall, Michael (Arundel)

Sumberg, David

Martin, David (Portsmouth S)

Summerson, Hugo

Maude, Hon Francis

Tapsell, Sir Peter

Mayhew, Rt Hon Sir Patrick

Taylor, John M (Solihull)

Mellor, David

Taylor, Teddy (S'end E)

Meyer, Sir Anthony

Tebbit, Rt Hon Norman

Miller, Hal

Thatcher, Rt Hon Margaret

Mitchell, Andrew (Gedling)

Thompson, Patrick (Norwich N)

Mitchell, David (Hants NW)

Thorne, Neil

Moate, Roger

Thurnham, Peter

Monro, Sir Hector

Townend, John (Bridlington)

Montgomery, Sir Fergus

Tracey, Richard

Morris, M (N'hampton S)

Tredinnick, David

Morrison, Hon Sir Charles

Trippier, David

Morrison, Hon P (Chester)

Trotter, Neville

Moss, Malcolm

Twinn, Dr Ian

Moynihan, Hon Colin

Vaughan, Sir Gerard

Neale, Gerrard

Waddington, Rt Hon David

Nelson, Anthony

Walden, George

Neubert, Michael

Walker, Bill (T'side North)

Newton, Rt Hon Tony

Waller, Gary

Nicholls, Patrick

Ward, John

Nicholson, David (Taunton)

Wardle, Charles (Bexhill)

Nicholson, Emma (Devon West)

Watts, John

Oppenheim, Phillip

Wheeler, John

Page, Richard

Whitney, Ray

Paice, James

Widdecombe, Ann

Patnick, Irvine

Wilkinson, John

Patten, John (Oxford W)

Wilshire, David

Pattie, Rt Hon Sir Geoffrey

Winterton, Nicholas

Porter, David (Waveney)

Wolfson, Mark

Portillo, Michael

Wood, Timothy

Powell, William (Corby)

Young, Sir George (Acton)

Raffan, Keith

Rathbone, Tim

Tellers for the Ayes:

Redwood, John

Mr. Mark Lennox-Boyd and

Renton, Tim

Mr. Tony Durant.

Rhodes James, Robert

NOES

Abbott, Ms Diane

Barnes, Harry (Derbyshire NE)

Adams, Allen (Paisley N)

Barron, Kevin

Allen, Graham

Battle, John

Alton, David

Beckett, Margaret

Archer, Rt Hon Peter

Beith, A. J.

Ashdown, Paddy

Bell, Stuart

Ashley, Rt Hon Jack

Benn, Rt Hon Tony

Banks, Tony (Newham NW)

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

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Bermingham, Gerald

Foster, Derek

Bidwell, Sydney

Foulkes, George

Blair, Tony

Fraser, John

Blunkett, David

Fyfe, Maria

Boateng, Paul

Galbraith, Sam

Boyes, Roland

Galloway, George

Bradley, Keith

Garrett, John (Norwich South)

Bray, Dr Jeremy

Garrett, Ted (Wallsend)

Brown, Gordon (D'mline E)

George, Bruce

Brown, Nicholas (Newcastle E)

Gordon, Mildred

Buchan, Norman

Gould, Bryan

Buckley, George J.

Graham, Thomas

Callaghan, Jim

Grant, Bernie (Tottenham)

Campbell, Ron (Blyth Valley)

Griffiths, Nigel (Edinburgh S)

Campbell-Savours, D. N.

Griffiths, Win (Bridgend)

Carlile, Alex (Mont'g)

Hardy, Peter

Clark, Dr David (S Shields)

Heffer, Eric S.

Clarke, Tom (Monklands W)

Henderson, Doug

Clay, Bob

Hinchliffe, David

Clelland, David

Hogg, N. (C'nauld & Kilsyth)

Clwyd, Mrs Ann

Holland, Stuart

Cohen, Harry

Home Robertson, John

Coleman, Donald

Howarth, George (Knowsley N)

Cook, Frank (Stockton N)

Howell, Rt Hon D. (S'heath)

Cook, Robin (Livingston)

Hoyle, Doug

Corbett, Robin

Hughes, John (Coventry NE)

Corbyn, Jeremy

Hughes, Robert (Aberdeen N)

Cousins, Jim

Hughes, Roy (Newport E)

Cox, Tom

Hughes, Sean (Knowsley S)

Cryer, Bob

Illsley, Eric

Cummings, John

Ingram, Adam

Cunliffe, Lawrence

Janner, Greville

Cunningham, Dr John

John, Brynmor

Dalyell, Tam

Jones, Barry (Alyn & Deeside)

Darling, Alistair

Kaufman, Rt Hon Gerald

Davies, Rt Hon Denzil (Llanelli)

Kennedy, Charles

Davies, Ron (Caerphilly)

Kinnock, Rt Hon Neil

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

Kirkwood, Archy

Dewar, Donald

Lamond, James

Dixon, Don

Leadbitter, Ted

Dobson, Frank

Leighton, Ron

Doran, Frank

Lestor, Joan (Eccles)

Douglas, Dick

Lewis, Terry

Duffy, A. E. P.

Litherland, Robert

Dunnachie, Jimmy

Livsey, Richard

Dunwoody, Hon Mrs Gwyneth

Lloyd, Tony (Stretford)

Eadie, Alexander

Lofthouse, Geoffrey

Eastham, Ken

Loyden, Eddie

Evans, John (St Helens N)

McAllion, John

Ewing, Harry (Falkirk E)

McAvoy, Thomas

Ewing, Mrs Margaret (Moray)

McCartney, Ian

Fatchett, Derek

McFall, John

Faulds, Andrew

McKelvey, William

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

McLeish, Henry

Fisher, Mark

Maclennan, Robert

Flynn, Paul

McNamara, Kevin

Foot, Rt Hon Michael

McTaggart, Bob

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McWilliam, John

Rogers, Allan

Madden, Max

Rooker, Jeff

Mahon, Mrs Alice

Ross, Ernie (Dundee W)

Marek, Dr John

Rowlands, Ted

Marshall, David (Shettleston)

Sedgemore, Brian

Marshall, Jim (Leicester S)

Sheerman, Barry

Martin, Michael J. (Springburn)

Sheldon, Rt Hon Robert

Maxton, John

Skinner, Dennis

Meacher, Michael

Smith, Andrew (Oxford E)

Meale, Alan

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

Michael, Alun

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

Michie, Bill (Sheffield Heeley)

Snape, Peter

Michie, Mrs Ray (Arg'I & Bute)

Soley, Clive

Millan, Rt Hon Bruce

Spearing, Nigel

Mitchell, Austin (G't Grimsby)

Stott, Roger

Moonie, Dr Lewis

Strang, Gavin

Morgan, Rhodri

Straw, Jack

Morris, Rt Hon A. (W'shawe)

Taylor, Mrs Ann (Dewsbury)

Morris, Rt Hon J. (Aberavon)

Taylor, Matthew (Truro)

Mowlam, Marjorie

Thomas, Dr Dafydd Elis

Mullin, Chris

Thompson, Jack (Wansbeck)

Murphy, Paul

Turner, Dennis

Nellist, Dave

Wall, Pat

Oakes, Rt Hon Gordon

Wallace, James

O'Neill, Martin

Wareing, Robert N.

Patchett, Terry

Welsh, Michael (Doncaster N)

Pendry, Tom

Williams, Alan W. (Carm'then)

Pike, Peter L.

Wilson, Brian

Powell, Ray (Ogmore)

Winnick, David

Primarolo, Dawn

Wise, Mrs Audrey

Quin, Ms Joyce

Worthington, Tony

Randall, Stuart

Wray, Jimmy

Redmond, Martin

Young, David (Bolton SE)

Rees, Rt Hon Merlyn

Reid, Dr John

Tellers for the Noes:

Richardson, Jo

Mrs. Llin Golding and

Robertson, George

Mr. Allen McKay.

Robinson, Geoffrey

Question agreed to.
Bill accordingly read a Second time.

FINANCE (No. 2) BILL (COMMITTAL)
Ordered,
That clauses Nos. 22, 23, 26, 27, 28, 31, 42, 49, 91, 98, 127 and 128 and schedule 7 be committed to a Committee of the whole House;
That the remainder of the Bill be committed to a Standing Committee;
That, when the provisions of the Bill considered, respectively, by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill be proceeded with as if the Bill had been reported as a whole to the House from the Standing Committee. —[Mr. Norman Lamont.]
Committee tomorrow.

Nuclear missiles (Inspections)
10.15 pm
The Minister of State, Foreign and Commonwealth Office (Mr. David Mellor): I beg to move,
That the draft Treaty on the Elimination of Intermediate-Range and Shorter-Range missiles (Inspections) (Privileges and Immunities) Order 1988, which was laid before this House on 28th March, be approved.
The order is to be made under section 1(2) of the Arms Control and Disarmament (Privileges and Immunities) Act 1988 and was laid before the House in draft on 21 March. The Joint Committee on Statutory Instruments has considered the order and made no comment other than to draw the attention of Parliament to the explanatory note prepared for the Committee by the Foreign Office. As the House knows, the Arms Control and Disarmament (Privileges and Immunities) Act is principally concerned with the granting of diplomatic privileges and immunities to observers and inspectors carrying out functions in the United Kingdom under the terms of the Stockholm agreement, but it also provides for the extension by means of an Order in Council of such privileges and immunities to inspection personnel involved in other future Arms control agreements.
The Government made it clear at the time that the INF treaty was one such agreement for which recourse to this provision of the Act was envisaged. The verification provisions of the INF treaty are detailed, as befits an agreement of its importance. One of its essential features is that United States and Soviet inspectors, while fully complying with the terms of inspection protocol and respecting the sovereignty, laws and regulations of the countries in which they operate, should be able to carry out their functions effectively. Hence the requirement for diplomatic privileges and immunities which this Order in Council is designed to provide.
The aim of the order is to enable the British Government to fulfil the obligations that we have undertaken in respect of the verification of the INF treaty. The House is familiar with the nature of those obligations and the reasons why they take the form they do, and I shall not rehearse the background again now. Suffice it to say that the basing country agreement that we and other NATO partners have signed with the United States and the exchange of notes with the Soviet Union contain comprehensive and detailed provisions defining the basis on which access is permitted for INF inspections and protecting the United Kingdom's sovereign rights on our territory.
The privileges and immunities to be conferred on Soviet inspectors and aircrew for the protection of their official functions when conducting INF inspections will cover only activities carried out in the United Kingdom. That is for the period from their arrival at the point of entry until their departure from the United Kingdom. The Order in Council also confers certain privileges and immunities on the equipment and aircraft used by the INF inspectors and aircrew. Naturally, those privileges and immunities are no more extensive than those required under the basing country agreement——
Mr. Tam Dalyell: I do not want to be pedantic, but the order refers to
"Inspectors and aircrew members"
and goes on:
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"except articles the import or export of which is prohibited by law or controlled by quarantine regulations".
Surely that implies some sort of basic inspections; or have I got it wrong?
Mr. Mellor: The hon. Gentleman is as perspicacious as always. He is absolutely right. We are entitled to exercise the normal controls even over people who come on official visits, just as we do with other visitors. For instance, the list of people must be submitted to us and we would have the right to object if we chose.
The privileges and immunities that are conferred are no more extensive than those required under the basing country agreement and they correspond directly to the privileges and immunities annex to the basing country agreement, which has been in the Library for some time. That reproduced verbatim the relevant parts of the protocol between the United States and the Soviet Union. Nor do the privileges and immunities exceed those conferred by the Vienna convention on diplomatic relations.
The United States Senate will vote on the ratification of the INF treaty in the next few weeks. There has been extensive debate there and, indeed, throughout the rest of the NATO Alliance on the merits of the treaty and its verification and inspection provisions. All the indications that we have are that the vote in the Senate will be overwhelmingly in favour of the treaty. We expect United States and Soviet instruments of ratification to be exchanged during the President's visit to Moscow at the end of May.
Sir Eldon Griffiths: I strongly support the order, but can my hon. and learned Friend explain why it is wise to take this step before the United States Senate has voted on the ratification? If, perchance and unhappily, the vote there goes the wrong way, we shall have ratified an order which is unnecessary.
Mr. Mellor: Parliamentary time does not permit this to be done and later if the treaty comes into force, as it is likely to do, immediately after the President and Mr. Gorbachev have exchanged the instruments of ratification. The treaty comes into force as soon as that is done. The order has to go to the Privy Council. If the treaty does not come into force, the House will have wasted one and a half hours. It wastes a lot of time, and an extra hour and a half will probably not make much difference.
The order will enable us to fulfil our part of the obligations in respect of the treaty as soon as it comes into force. On that basis, I commend it to the House.
10.21 pm
Mr. George Robertson: It goes without saying that we welcome the order, just as we welcome the treaty from which it flows. We welcome the Bill which led to the order and we, unlike many Conservative Members, have been real enthusiasts for Arms control and disarmament measures. We congratulated the President and the General Secretary when the treaty was signed and, all along, we have been keen supporters of this and other aspects of nuclear disarmament.
This is a fascinating order. It is important in itself and for its details, but it also raises the issue of the intermediate nuclear forces treaty. Since the day it was signed in Washington, there have been developments to which the House's attention should be drawn.

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On page 22 of the protocol referred to in the order regarding immunities and privileges for inspectors, subsection 6 of item VI states the general rules for conducting inspections, which I consulted in some detail. An interesting phenomenon occurs there. We learn there —we did not learn it from the Minister—that the Red Army inspectors and their aircrew
"shall be allowed to travel within 50 kilometres from the inspection site with the permission of the in-country escort".
The size of the party can range between 10 and 30, accompanied by a maximum of 10 aircrew, who presumably will have to drive along the M4 as well as pilot the aeroplane from Moscow airport. Subsection 6 also says that the party
"shall be accompanied by the in-country escort."
It goes on:
"Such travel shall be taken solely as a leisure activity."
I took the trouble of getting a map of the south of England—an area of the country of which I am not vividly aware. That circle of 50 km takes in the countryside from Oxford to Southampton, from Swindon to Reading, and includes the constituency of the right hon. Member for Woking (Mr. Onslow), who is the chairman of the Conservative 1922 committee, and the constituency of the hon. Member for Devizes (Sir C. Morrison), who is the vice-chairman of that committee, as well as other outposts of civilisation such as Beaconsfield, Chippenham, Salisbury and Aldershot.
Mr. Mellor: I do not want to take up much of the hon. Gentleman's valuable time. He has raised a point of such obscurity that I did not know about it. Apparently, he spent time reading when he could have been eating porridge. The ruling applies only to continuous monitoring inspection and will not apply to the United Kingdom.
Mr. Robertson: That is not the case. I cannot believe that that would be the intention of Her Majesty's Government and of the civil servants who so fortuitously supplied that bit of information to the Minister, who should be eating humble pie. I do not understand why Soviet Red Army escorts and inspectors should be denied the opportunity of going to Guildford and Swindon. The protocol says:
"Such travel shall he taken solely as a leisure activity."
We look forward to the interchange of Red Army and United States air forces fighting over the pubs of southern England.
Those inspectors, enjoying the immunities and privileges accorded by the order, will be ensuring compliance with a treaty explicitly designed to eliminate —I emphasise the word "eliminate"—an entire class of American and Soviet land-based nuclear missiles with a killing range of between 500 km and 5,500 km. We are told that that was the successful culmination of a process known as the twin-track decision of 1979 pursuing the deployment of cruise and Pershing II missiles as a means of stopping and reversing the deployment of Soviet SS20 land-based missiles on our continent.
In the autumn, flags flew and bands played in Washington, the signatures were appended, and according to the famous words of Mr. Larry Speakes, the world was a little safer as a consequence. Even the Prime Minister, who departed the moment that the Minister came to the Dispatch Box, concluded that that was a historic Arms control measure. [Interruption.] The idea that the Prime
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Minister trusts anybody, least of all the Minister, is a matter of considerable speculation. Perhaps she trusts him in the House, but I do not think that she will allow him out of the country again.
The architect of an historic Arms control measure—the world's first and only nuclear disarmament treaty—reckoned without the cynicism of the military minds and their political shadows who never believed in the negotiating back of the twin-track decision and merely wanted an excuse to fill in yet another rung in the ever-extending ladder of escalation with yet another breed of unusable mass extermination weapons. Having disposed of cruise, Pershing II and all the SS20s, out of the backwoods they troop, led by the Prime Minister, waving the flag of modernisation in front of them to hide the new parade of nuclear artillery that they intend to inflict on the world. That is the real tragedy of the present disarray within NATO.
Instead of celebrating the new treaty and the progress that it represents in reducing the threat from Euro-missiles and instead of taking the progress and getting rid of the existing unstable and dangerous short-range battlefield nuclear weapons across Europe, we are now to engage in a new western internal battle over what new weaponry can cover the targets in the East, so recently relieved from that threat.
Out of the NATO council's 1983 communiqué from Montebello comes a blizzard of interpretations of the word "modernisation." Chancellor Kohl and a range of German opinion, that extends from the far Left of the SPD and the Greens to Franz Josef Strauss, have no intention of putting Germany, either West or East, back in the killing fields, by not just updating the battlefield Lance missile that Lord Carrington said, referring to modernisa-tion, would simply make them
"less destructive in power but more accurate"
but by doubling or nearly trebling their range so that the missiles will be within spitting distance of the limits laid down by the INF treaty, whose provisions we are to reinforce tonight.
My hon. Friend the Member for Clackmannan (Mr. O'Neill) and I have just returned from a trip to East and West Germany. We can vouch for the considerable feeling there about being landed, yet again, within range of those short-range missiles. Even President Mitterrand supports Chancellor Kohl and the Germans. Only our Prime Minister stands alone, as ever, isolated in her hawkishness, ready to embrace any and every additional nuclear pipe dream that the military can invent.
In resisting the third zero and implacably opposing the chance to abolish battlefield weapons, which can hit only the two Germanys—hence their understandable lack of enthusiasm for their modernisation at this stage—the Prime Minister hands a major propaganda weapon to the Soviet Union and at the same time loses the chance to reduce a clear and overwhelming Soviet superiority in this area.
Sir Peter Blaker: Is the hon. Gentleman not aware that the Soviet Union is modernising its nuclear weapons?
Mr. Robertson: The right hon. Gentleman knows from his experience that the Soviet. Union has 1,400 missiles in this class, compared with only 88 Lance missile launchers in the West. A third zero option would remove a 14:1 Soviet superiority. If we took up the chance of the third

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zero, we should eliminate the Soviet Union's modernisation of that generation of missiles. We are looking a gift horse in the mouth and handing to the Soviet Union a major propaganda victory.
The Prime Minister was quoted in Die Welt a couple of weeks ago as telling a
"small group of listeners in Brussels"
that British troops on the Continent must not be "stripped of their clothes." They, with their 88 Lance launchers, are facing an array of 1,400 short-range battlefield Soviet missiles, yet they are to be stripped of their clothes, if we agree to the third zero option.
If resistance to an agreement on battlefield weapons kills the spirit of INF, much worse is afoot to undermine and subvert the INF treaty. However much the Montebello decision on modernisation is perverted and misinterpreted, the sudden appearance on the agenda of a new air-launched stand-off missile—a cruise missile carried half the distance to target by a plane—clearly circumvents the INF treaty.
Even the otherwise enthusiastic nuclear supporters in The Economist on 19 March asked:
"Is modernisation a dodge? The air launch cruise missile, when its range is added to that of the delivering aircraft, raises a half-justified eyebrow."
That is the understatement of this part of the decade. Of course it does more than that. On 26 January the Secretary of State for Defence said that the Montebello decision
"related to updating and modernising the existing nuclear weapons."—[Official Report, 26 January 1988; Vol. 126, c. 155.]
I emphasise the words "existing nuclear weapons".
Any stand-off, air-launched cruise missile would be a new, untried generation of weapon. In no way can its development and our own agreement with the French to proceed with a joint development—reputedly reached in December 1987 between the Secretary of State for Defence, the right hon. Member for Ayr (Mr. Younger), and M. Andre Giraud, the temporary French defence Minister—be seen, nor should it or will it be seen, as being modernising existing weapons, because they are the invention of brand new weapons themselves.
On 21 March, the Minister of State for the Armed Forces stated in a written answer that SACEUR was recommending
"the depolyment of a tactical air-to-surface missle."— [Official Report, 21 March 1988; Vol. 130, c. 8.]
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That is a volte-face on what was said by the Secretary of State. Speculation in the press yesterday and today, and answers given at Question Time today by the Secretary of State for Defence suggest that such a missile plan is on the table for the Nuclear Planning Group in Brussels today.
The consideration of those new, powerful, long-range missiles is clearly and unmistakably a circumvention of the INF treaty. In this debate of all debates we should condemn it for the dangerous and fraudulent evasion of responsibilities to the world that it represents.
The inspectors coming to this country with the diplomatic protection and immunities that the order will confer will be visible evidence in the leafy lanes of temporarily Tory southern England of the capacity of political will to triumph over mindless logic. A move towards sanity and safety was started by President Reagan and Mr. Gorbachev in Reykjavik and it came to fruition in the form of the INF treaty in Washington. It could and should have started an escalation of Arms control deals for which the world is crying out. Instead, the constant belligerents, with whom the Prime Minister is in the front rank, are not trying to find ways of evading and undermining any progress made and of rebuilding stockpiles and systems.
Meanwhile, in all the forums of disarmament throughout the world, no real progress is being made. The chemical weapons talks are bogged down because the Americans object to the reasonable verification provisions that the Minister's own Government have proposed. The conventional stability talks have been halted before they even started because the unrealistic conditions laid down sharply hinder the dialogue—a dialogue that could easily provide answers to many problems.
The non-existent talks on a comprehensive test ban treaty have been aborted by those who want better and better, bigger and bigger, and more and more accurate and nastier weapons. The anti-ballistic missile treaty—the last major Arms and nuclear control treaty—is under a microscope as people squabble about the minutiae of interpretation, simply to justify one president's obsession with an unworkable and expensive system, which can lead only to escalation of the arms race.
Our debate might have been a cause for celebration and for welcoming the Red Army inspectors who have come, not for war but to ensure peace. It is sad that they have come amidst squandered chances of making a safer world for us all.
10.39 pm
Mr. Michael McNair-Wilson: I am sorry that the Opposition had to be so churlish in their welcome of the document. I know that it must be rather bitter for them to accept that the first step in the reduction of the nuclear armouries of East and West should be the result of the Government's efforts, but that is the fact of the matter, and it would behove them better and do them more honour to give credit where credit is due. Any reduction in the nuclear armoury of the world must be to the good of all the people of the world, and I feel that party politics should be left out of the matter.
However, there is a second reason for my welcoming this draft statutory instrument. It is one more step along the road of arms reduction that started with the signing of the INF treaty in Washington last December by President Reagan and Secretary-General Gorbachev. As I told the House in a previous debate, I was given a conducted tour of RAF Greenham Common earlier this year, and was shown by the United States officers the three areas of the base that will be open to the Soviet inspection team who will be coming to verify the departure of cruise missiles.
I was told about the Portakabin-type structures which were being built for the Soviet aircrew—estimated to comprise 10 people—and for the five inspection teams of two inspectors each. I was told that the inspection teams would have the right to inspect any room in the three areas within the base which could house an object 11 ft long and 21 in in diameter: in other words, a cruise missile. They would also have the right to look into the hangars in which the missiles are currently stored. I was also told that as soon as the treaty had been ratified by the United States Senate and the Supreme Soviet, the Russian team could be expected between 30 and 90 days later. I welcome the indication from my hon. and learned Friend that that ratification is now imminent.
I was further told that, when the reduction in cruise missiles begins, they will go—one flight of missiles plus launcher vehicles at a time—from Greenham to the Davies Montham air force base in Arizona, where they will be met by another Soviet verification team responsible for seeing them cut up. The missiles will be split down the middle; the wings will be clipped off and crushed, and the warhead immobilised. The launch vehicle will be cut up and the guidance system removed. That is what will happen when the INF treaty comes into effect.
In this brief debate, I wish to raise some questions that arise, at least in my mind, directly from the statutory instrument and the agreement. I am immediately struck by the fact that neither the agreement nor the instrument refers to intermediate-range nuclear missiles; both refer simply to intermediate-range missiles. Similarly, they both refer to shorter-range missiles, the word "nuclear" being left out.
I was of the opinion that INF stood for "intermediate-range nuclear forces". I wonder why the word "nuclear", which seems so crucial, has been omitted. If I understand the significance of the words as currently printed, both the agreement and the statutory instrument relate to any missiles, whether they have nuclear or conventional warheads.
Mr. Mellor indicated assent.
Mr. McNair-Wilson: I am glad that my hon. Friend the Minister confirms that. It seems to make the treaty far
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more wide-reaching. By the same token, there seems to be no reference to whether the missiles should be land-based, sea-based or air-based. Again, we seem to be ruling out all those missiles, conventional or nuclear, whether based on land, sea or air.
Perhaps I have not understood the document correctly. In that case, I ask my hon. and learned Friend to say something about this when he winds up the debate. But in the papers before us tonight there is no definition of the word "missile", or of the limitations to the statement relating to intermediate-range and shorter-range missiles.
Mr. Mellor: Perhaps I can help my hon. Friend. The answer is that the payload that missiles carry is quite another matter. It is the missiles themselves, as we have already determined, that are treaty-limited. I would say, on my hon. Friend's other point, that it is wrong to look for definitions in this document. This document is a subsidiary document. The document before the House is simply to permit us to facilitate the inspections of the two facilities. For the real definitions, we have to go to the master treaty itself.
Mr. McNair-Wilson: I am grateful to my hon. Friend for that guidance. I thought when I picked up the document, which described itself as "the Agreement", that that was in fact a definitive document. Therefore, what he has said is most useful guidance.
May I return to the statutory instrument, and ask whether my hon. Friend would clarify these words in subsection 2 of clause (1), at page 2:
"that a person refused continued recognition by the United Kingdom as being entitled to privileges and immunities under the circumstances provided for in article IV, paragraph 4 of the Agreement shall thereupon cease to be regarded for the purpose of this Order as an inspector or aircrew member, as the case may be."
Do those words mean that the United Kingdom has the power to refuse diplomatic entry to either a Soviet inspector or aircrew member—and I am quoting from the agreement—
"if they have ever committed a criminal offence in the United Kingdom, or been sentenced for committing such an offence, or been expelled from the UK".
Would it also apply, if one of those people, either in the inspection team or in the aircrew, was a person who had been guilty of those same offences in any other NATO country, or at least in countries which are signatories to the treaty? It appears to me that it would simply relate to whether the person concerned had been guilty of an offence in the United Kingdom. I must say that, if one of the members of the Soviet inspection team had been expelled from another NATO country—for the sake of argument, for spying—I would consider him an unwelcome guest at RAF Greenham Common. I wonder, therefore, whether it is more embracing than appears to be the case.
What if a Soviet inspector or aircrew member misbehaves at Greenham or at Molesworth? Suppose, for example, he is caught taking photographs of something outside those three areas to which I have already referred. Does the United Kingdom have the right to insist that such a person shall be asked to leave, or would that be a matter for the Governments of the United States and the Soviet Union? Again, that does not seem entirely clear from the documents before us.
By the same token, because the aircraft bringing the Soviet team is not subject to our Customs procedures, and

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to those responsible for quarantine, what would be the position of a member of a Soviet aircrew if he brought in a pet animal and kept it in a cage, or, in the case of a dog, he allowed it to stay in the aeroplane but it ran outside the aircraft? Would he come within the quarantine rules or do those rules apply only if the Soviet inspectors and aircrew leave Greenham Common and go outside the base area?
Those are just a couple of questions that have occurred to me from the statutory instrument, which I hope my hon. Friend will be able to answer. They are very small and insignificant points when set against the consequences of this document. I would not wish them in any way to detract from the great importance which I place upon this instrument.
10.48 pm
Mr. Bob Cryer: I welcome the Arms Control and Disarmament (Privileges and Immunities) Act 1988 under which this statutory instrument is made and I welcome the statutory instrument. I suspect that all the members of the Joint Committee on Statutory Instruments who have reported the measure would also extend a welcome to it.
The Joint Committee has reported the measure simply on the grounds of elucidation. There is no criticism of, indeed there is implied praise for, the Foreign and Commonwealth Office because it provided the Joint Committee with a memorandum with the statutory instrument and we thought it of sufficient use to other Members that it should be printed and drawn to the attention of the House in our 21st report, which was published on 29 March.
Because the procedure for the statutory instrument is fairly unusual and invokes the Diplomatic Privileges Act 1964, which implements the Vienna convention on diplomatic relations, we thought it useful that the table provided by the Foreign Office, which shows the articles of the draft order, the parallel article in the Vienna convention on diplomatic relations and the section of the basing country agreement which was provided in a table at the end, should be made available in addition to the rest of the memorandum. I hope that the House thinks that that is a useful sort of reference. The hon. Member for Newbury (Mr. McNair-Wilson) might wish to refer to it at his leisure as a useful guide which would otherwise not be available.
I want to speak for two or three minutes on something which has nothing to do with the Joint Committee because the Joint Committee does not consider the merits of a statutory instrument. It considers only whether, for example, the Government have exceeded their powers and whether in this case something needs elucidation in order to help the House and other members of the public.
The hon. Member for Newbury was rather churlish about my hon. Friend the Member for Hamilton (Mr. Robertson). He clearly welcomed the measure, but it covers only about 4 per cent. of nuclear warheads and therefore cannot, by any stretch of the imagination, be seen as other than a beginning on the road to nuclear disarmament. That is a road for which the Labour party has been arguing for many years, so we welcome it when
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the Soviet Union and the United States embark on an agreement which, of necessity, invokes the United Kingdom because some of the missiles are stationed here.
We very much welcome demonstrations at Greenham Common and Molesworth—which I have joined—to protest about the presence of those missiles here. When negotiations produce an agreement, and subsequently a statutory instrument, which provides for the verification of the dismantling and removal of those missiles, we welcome them enthusiastically.
The Government try to claim credit, but the credit really belongs to the United States and the Soviet Union. The Government should recognise that the initiative was taken by the Soviet Union.
Mr. Mellor: A farrago of nonsense.
Mr. Cryer: The Prime Minister described Mr. Gorbachev as a bold and courageous leader when she met him at Brize Norton. She has taken a different view of him since, but none the less she praised Mr. Gorbachev for taking this sort of initiative. That should be recognised.
Sir Peter Blaker: Is the hon. Gentleman saying that, if Britain had followed the Labour party's policy and got rid of the missiles in Britain in a one-sided manner, the Russians would have responded by saying, "Absolutely splendid. We shall throw away ours too."?
Mr. Cryer: When the right hon. Gentleman was a Minister in the Ministry of Defence his view was that the Russians were ready to come and take us over. That view is not shared by other people; it is not shared by me. Therefore, the argument is clearly that if we had got rid of cruise missiles first, that would not have impeded the Soviet Union in its quest for negotiated agreements. [Interruption.] The Government Chief Whip says that all this talk is silly. I must ask him and the Minister, if this talk is silly, and if all nations want or need nuclear weapons in order to stave off the threat of the Soviet Union, why was the United Nations nuclear non-proliferation treaty signed by 133 non-nuclear nations? Under the treaty those nations are pledged not to manufacture or deploy nuclear weapons. Why do that number of nations worldwide take that stance if it is silly for us to do so? Is it not silly for them to do so? That question has never been satisfactorily answered.
Does the Minister agree that that statutory instrument and the arrangements for inspection, dismantling, general verification and removal of cruise missiles will help to strengthen and reinforce the United Nations nuclear non-proliferation treaty, which has been signed by 133 non-nuclear nations? If the Minister thinks that, and he agrees that the statutory instrument is a step towards strengthening that treaty and persuading those nations not to follow our example and manufacture and deploy nuclear weapons, does he not think that that step would be even further reinforced by the cancellation of Trident, which increases our nuclear power by 4 per cent. to 10 per cent.?
Madam Deputy Speaker (Miss Betty Boothroyd): Order. The hon. Gentleman is going very wide of the instrument. Perhaps he would contain his remarks.
Mr. Cryer: Certainly, Madam Deputy Speaker. I shall conclude this section by saying that the parallel is very clear. I am interested in the Minister's comments, because

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I am sure that he recognises the importance of the nuclear non-proliferation treaty, as he recognises the importance of the statutory instrument, and he would not wish to prejudice the United Nations agreement.
My next point concerning modernisation was also mentioned by my hon. Friend the Member for Hamilton from the Front Bench. We welcome the fact that the Minister has put the statutory instrument before the House, but we have strong reservations about moves by the Prime Minister to undertake modernisation. They seem to many people to be a replacement by other means of the cruise missiles that are being removed by the very means set out in the statutory instrument. Therefore, we must express clearly to the Minister our objection to modernisation. It is an act of very bad faith by the Government and is against the aims and objectives of the United States and Soviet Union in the agreement.
The statutory instrument and its associated agreement, which is available from the Vote Office, set out the terms and conditions in great detail. The hon. Member for Newbury said that he is not quite clear about one or two things. Perhaps that is partly because the instrument and the agreement are so detailed and make every visitor the subject of such scrutiny.
The immunities and privileges can be withdrawn, and rightly so. But I must ask the Minister whether he is satisfied that the Visiting Forces Act 1952, which allows 30,000 United States soldiers here a fair amount of immunity, for example from our legal system, should not be reviewed in the light of this sort of treaty and statutory instrument, with the aim of reducing the immunities and privileges. They were granted far too widely in a moment of cold war tension, by a Government who had not taken the people into their confidence fully at the time.
I accept that the process started by a Labour Government, but the legislation was embarked upon by a Conservative Government in 1952. I accept that there was a consensus view of the cold war, although it was not entirely shared by the whole of the Labour party. Is it not time for a review in the light of discussions that have resulted in an agreement and in this statutory instrument, which lays down certain conditions?
We welcome the measure, but those of us on the Labour Benches will he working very hard to press the Government to go further down this road of nuclear disarmament. More important, so too will the millions of people who recognise that nuclear expenditure is wasteful and potentially disastrous, and who want to get rid of Trident.
11 pm
Sir Eldon Griffiths: I do not know anything that will bring home so clearly to the British people the immense achievement of the INF agreement than the arrival of Russian service men engaged in inspecting the bases of the United States air force. That fact—a remarkable one when one considers the history of the past 30 years—is by any measure a dramatic achievement which, I would think, would receive the unanimous support of the House.
The headquarters of the United States third air force is in my constituency. Of my constituents, 23,000 are Americans, and I have known them intimately for the past 25 years while I have had the pleasure to be in the House. In a sense, this treaty is a tribute to them, for they have
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contributed the essential portion of the Western nuclear deterrent which has brought the Soviets to the conference table.
I have some experience in this. When I worked for Mr. Macmillan at No. 10 Downing street, I was a modest observer of his achievement when, as Prime Minister, he went to Moscow and broke the mould of the cold war. There followed from that the first test ban treaty, signed by Lord Hailsham. Following that, work was done on the Antarctic treaty. This is not the first but the second denuclearising treaty, for there was agreement on preventing the establishment in the Antarctic of nuclear weapons many years ago. There was the work done by Lord Mulley—I pay tribute to him—who, among others, worked for a Labour Government and went a long way towards achieving an agreement on nuclear weapons, which still unfortunately eludes us. Most of all, there is this intermediate treaty.
Over the decades, the one common theme in all these efforts to achieve a measure of balanced and credible disarmament has been the policy so well expressed by Churchill when he said, "We arm to parley." The whole object of Western policy has been to maintain our strength in order to provide a deterrent, not for war but for peace. If anything has been demonstrated by this treaty, it is that that policy is now paying off.
In what I hope is an uncontentious speech, I must say that it would have served neither our country nor the cause of world peace so well if we had taken the advice of those, not necessarily on the Labour Front Bench, who would have had us, the Americans and British alike, abandon our nuclear weapons in the hope that the Soviets would follow suit. There is no evidence to support that; the evidence is that by arming to parley we have achieved a result.
Mr. Harry Cohen: If the hon. Gentleman's theory is that we have armed to parley, how is it that we end up with more Arms at the end of the parley than when we started?
Sir Eldon Griffiths: There is no theory about it; we have armed, we have parleyed, and we have achieved a result. I hope that the whole House will welcome that.
I wish to comment on the practical aspects of this, following on from my hon. Friend the Member for Newbury (Mr. McNair-Wilson), who has Greenham Common in his area, just as I have Mildenhall and Lakenheath in mine. The task of maintaining the American bases and providing for cruise missiles has never been easy. It has fallen to me all too often to be at the receiving end of the violent attacks on our American allies. At the time of the Libyan strike there was posted through the letter box of virtually every home in the area around Mildenhall, which I have represented for 20 years or so, a leaflet which showed a great arrow arching down from space and exploding across my villages, with the suggestion that something called Reagan-Thatcher had placed the people of Suffolk in the front line and that there would be blood in the streets. That was the legend.
The Americans have been vilified and attacked, not least by the BBC in programmes such as "Airbase". There have been total and monstrous attacks on the young American service men who work in Britain. It has never been easy to maintain the American presence here, but I know that it has helped us to negotiate together the first step towards nuclear disarmmament.

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I hope that we shall continue with the double-track policy that has served us so well. It is vital—this will not be easy to maintain—to keep the Americans committed here in the United Kingdom. With the low dollar and pressures on Congress and the American Administration generally to reduce their forces overseas, there will be voices urging American service men to go home.
I hope, too, that the NATO Alliance will stay solid. There can be no doubt that a measure of nervousness is creeping into the Federal Republic of Germany. If we are to achieve peace, it is essential that the NATO Alliance remains united, strong and resolute. It is because that has been achieved so far that we have the treaty before us and will be having Soviet inspectors on our soil. The second achievement is dramatic and is the pay-off for the sensible policies that have followed by the Conservative Government. They have been followed by some Opposition Members, and it is only unfortunate that far too many of them have sought to abandon them.
11.7 pm
Mr. James Wallace: On behalf of my right hon. and hon. Friends—[Interruption.] I think that proportionately there are as many of us in the Chamber as there are representatives of any other party —I join the welcome that has been given to the order. The momentous treaty which was agreed in December 1987 —the INF agreement—was achieved in spite of the policies of the Government rather than because of them.
The treaty is the first to eliminate a class of nuclear weapons, and that is of enormous significance. Secondly, it represents a considerable breakthrough in terms of verification. As the hon. Member for Bury St. Edmunds (Sir E. Griffiths) illustrated, Soviet service personnel will be coming to Britain to inspect American bases and to ascertain the number of missiles that are to be found within them. In years to come, the purpose of the procedure will be to seek the elimination of these weapons. This is an important breakthrough, and I hope that it can be added to and built upon when we come to deal with other areas of weaponry where verification procedures are important in securing agreements.
When we are intent on eliminating a class of nuclear weapons, the process of verification is that much easier. It is comparatively easy to spot whether someone is cheating if only one missile is discovered after a date when all such weapons are supposed to have been eliminated. If, as we hope, we arrive at an agreement to reduce strategic nuclear weapons—it is clear that not all categories of them will be reduced—there will be many problems in estimating numbers of warheads permissile. However, we hope that the breakthrough on verification that is represented by the INF treaty will provide a worthwhile starting point.
It is my understanding that warheads are not to be destroyed under the treaty, which seeks to eliminate missiles. Can the Minister confirm that the fissile materials in the warheads will not remain in the United Kingdom but will, along with the missiles, be taken back to the United States?
Will United Kingdom officials accompany Soviet and United States officials when the inspections take place at Molesworth and Greenham Common? Can the Minister confirm that the order brings into being with regard to the
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inspection teams the normal rules of diplomatic privileges and immunity? That should also mean that we will have power to object to, and indeed expel, any inspectors if there is good reason for doing so.
Two other points have already been touched on, principally by Opposition Members. First, it will be regrettable if what has been heralded as a major breakthrough in disarmament turns out to be the catalyst which leads to a new generation of more sophisticated nuclear weapons. If we have nuclear weapons—nuclear deterrence is accepted by my party—there is a need to ensure that we do not have disarmament by obsolescence, but that we update existing weaponry. But there is a fundamental difference between that and, under the guise of modernisation, entering on a new generation of nuclear weapons which, to all intents and purposes, undermine the whole basis of the INF treaty.
The second point is slightly off the straight and narrow, but perhaps the Minister will say a few words about it. I know that the Government give a high priority to trying to achieve agreement on the production and deployment of chemical weapons. Important verification problems are involved. The Americans asked for mandatory inspections and I understand that the Soviet Union has now acceded to that. Yet the problems of trying to conclude a treaty on chemical weapons still exist. Up to now, the Government have made considerable efforts to try to bring about agreement. Is there anything in the procedures agreed under the INF treaty which would be useful in trying to achieve acceptable verification by all sides for chemical weapons?
As we have seen from recent events in the Iran-Iraq war, trying to pursue verification to the point of perfection on chemical weapons should perhaps take second place to trying to stop their proliferation. It is an important issue and I should be glad if the Minister would say something about the current standing of talks.
11.12 pm
Sir Peter Blaker: I join my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) in paying tribute to Lord Mulley, although on a slightly different point from the one he mentioned. It was Lord Mulley, when he was Secretary of State for Defence in 1979, who started the process of introducing cruise missiles into this country, leading to the twin-track policy, which has led to the document which we are now considering. It is strange that the Labour party has been so reluctant to take the credit which is due to Lord Mulley and, therefore, to the party for this result.
What would have been the effect of the Labour party policy of one-sided nuclear disarmament if it had been adopted? We would not have this document before us tonight because we would not have achieved it. NATO would have been thrown into disarray. The Soviet Union would have stood back and watched, chuckling, the process of NATO destroying its own capability. For 10 years or more I have repeatedly, in debate, asked people who support the one-sided disarmament policy what country they think would have followed Britain's disarmament policy if it had been so foolish as to disarm in a one-sided manner. I have never had an answer.
Mr. Mellor: Perhaps I might say to my right hon. Friend, whose speech I am greatly enjoying, that we have before us the example of chemical weapons referred to by

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the hon. Member for Orkney and Shetland (Mr. Wallace). We laid down chemical weapons 30 years ago, but the Soviet Union has used the intervening 30 years to build up massively its capability.
Sir Peter Blaker: My hon. Friend makes an excellent point that I have frequently made.
One has only to ask oneself whether the Soviet Union would have followed our example to know the answer. Indeed, Mr. Andropov, when he was General Secretary in the Soviet Union, said that the Soviets did not believe in one-sided disarmament.
Mr. Jeremy Corbyn rose——
Sir Peter Blaker: I hope that the hon. Gentleman will forgive me if I do not give way. Other hon. Members wish to speak.
Mr. Andropov said that the Soviets did not believe in one-sided nuclear disarmament. They were not naive people. One has only to ask whether China, France or the United States would have followed our example to know that the question answers itself.
This document is the result of NATO standing firm and that has led to the process of negotiation. Negotiation is precisely the opposite of the process advocated by the Labour party in recent years.
Negotiations have centred on two points, the first of which is reciprocal and balanced reductions. As I have been explaining, it is ridiculous to imagine that by one-sided nuclear disarmament we can obtain balanced and reciprocal reductions. One cannot achieve from one-sided disarmament an agreed measure of disarma-ment. It defies logic to suggest such a result.
Secondly, this document is about the process of verification. As the West has insisted for many years, verification is at the heart of Arms control or Arms reduction. Both the reciprocal reductions and the verification can be obtained only by a process of negotiation. Both Mr. Andropov's statement and the reality of the process which has led to the formulation of this document make nonsense of Labour party policy.
11.16 pm
Ms. Dawn Primarolo: I shall try to make my comments brief, although some things need to be said.
There is no doubt that the Labour party welcomes both the INF agreement and this order as part of that agreement, hut, as my hon. Friend the Member for Hamilton (Mr. Robertson) said, it is a tragedy that we are not discussing more this evening and that we have not progressed further down the path of negotiation. Opportunities are being lost and it appears that the Government, as a result of the Montebello agreement, are taking action that circumvents the INF agreement and puts the agreement on Arms reduction at risk.
Hon. Members are aware that, through defence questions over the past few months, I have sought to obtain clarification from the Minister on exactly what is happening with the upgrading. I am told that it is a modernisation programme. It is not a question of being churlish, or not giving credit where credit is due, or putting the blame at people's door, unless it deserves to be there. It is a question of discussing in a mature and responsible way an agreement vital for our future and for our children's future.
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The Minister referred to our "full obligations" in complying with the treaty and to access for verification. Our full obligations are those of continuing negotiation, to put meaning into the agreement, to fulfil the requirements of that agreement, and to use it to progress arms reduction.
As we have been told, the term "modernisation" has suddenly taken on numerous different meanings. Modernisation implies replacement or upgrading of new systems that are broadly similar to our present systems. However, that is not true of the systems agreed at Montebello which we are told will be deployed. They are a new class of nuclear weapons which offer great challenges and undermine the INF agreement. We are talking about the air-launched and the sea-launched cruise missiles and the new Lance missiles.
When we have a modernisation programme with the potential to circumvent an important treaty, we should think carefully about it in developing our commitment to Arms reduction. It is clear that the new deployments will boost NATO's nuclear capabilities. That is not in doubt. Many descriptions of the new types of missiles which are being developed demonstrate that point clearly.
An advertisement in the Washington Post for the McDonnell-Douglas aircraft was headed:
"In 1982, America started building a framework for INF. It's rolling off the assembly line now."
The advertisement continued:
"Just as some of our missiles in Europe are being marked for dismantling, the first new F-15E Eagles are being built.
The timing is perfect. Independent defense experts say the fit with America's post-INF strategy is perfect. And yet procurement of this valuable deterrent has been reduced."
The advertisement went on to explain how this aircraft could be used to keep the same capabilities in a climate of supposed nuclear reduction.
There is great strength of feeling in the House and in Britain generally about negotiations for Arms reductions, of which the order is a part. A Gallup poll commissioned by an organisation not well favoured by the Government —the Campaign for Nuclear Disarmament—was carried out between 14 and 19 April. It showed that 65 per cent. of those polled opposed NATO's plans to modernise nuclear weapons.
So that Conservative Members can be assured that the questions are not loaded to give the response that we would like, I shall read them. First, the poll asked:
"The United States has agreed to remove nuclear cruise missiles from Greenham Common as part of an agreement with the Soviet Union. Do you approve or disapprove of replacing them with new sea or air launched cruise missiles based in Britain?"
That provision was part of the Montebello agreement. Thirty-three per cent. approved and 51 per cent. disapproved. Secondly, the poll asked:
"The United States and the Soviet Union have just agreed to remove 1,000 nuclear warheads from Europe. Do you think that NATO should modernise its nuclear weapons that are left, or should they start negotiations for further reductions in their numbers?"
Sixty-five per cent. wanted further reductions through negotiation, not escalation.
Although we welcome the order's possibilities, it does not fulfil, as the Minister said it would, our obligations to attempt through modernisation to circumvent the agreement which we unanimously welcome. We ask the Government to reconsider their position, especially on modernisation, and to give true meaning to all our responses on nuclear weapons and ensure that future

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negotiations on reductions add to the INF agreement. We ask the Government to do this quickly, as we all seem to agree on this strategy.
11.24 pm
Mr. Tam Dalyell: I begin with one pedantic question. It refers to paragraph 4 of the annex, which I mentioned during the Minister's speech. If quarantine regulations are to be enforced and prohibited goods looked for, presumably some powers of search are needed. If we are not careful, things could develop sourly into some sort of fiasco. Those who welcome the agreement would find that regrettable. So what is the position in relation to search?
Like many of my age group, I was in the Army of the Rhine from 1950 to 1952. The House will forgive me if I say that this is a moving moment. That was the time of the Korean war, and there were two or three days when many of us thought that we could easily be frizzled in tanks. It was an ugly period, and only those who have been through such a experience can understand how welcome tonight is, and what a dramatic change it represents.
I agree with the hon. Member for Bury St. Edmunds (Sir E. Griffiths): 30 years ago no one would have thought that this would happen. It would have been a pipedream for the service men of that generation and for those who entered the House at the time of the spine-chilling Cuban missile crisis. This is no more than a start, but it is a significant start.
I was grateful for the tributes paid by Conservative Members to Fred Mulley, who was a much underrated Secretary of State for Defence and member of the national executive committee of the Labour party.
As for chemical weapons, I refer the Minister to the report by David Fairhall in The Guardian of 25 April, and ask two questions about it. Fairhall says:
"The Ministry of Defence is expected to announce the visit within the next 10 days".
That is the visit of the Soviet delegation concerned with chemical weapons. Is that so? Can the Minister say anything about the British visit to Shikhani on the Volga, described by Fairhall as the centre for Russian chemical weapons?
I promised my hon. Friend the Member for Leyton (Mr. Cohen) that I would share the time with him, so I end with this question: given this sort of negotiation with the Russians, is there not some advantage in the Government pursuing their scientific problems with them? Those in the Kremlin must have at the forefront of their minds the general problem of the Aral sea and what to do about the Siberian rivers. If we are to be positive, should we not tell the Russians that we recognise their problem, which involves feeding the burgeoning population of Uzbekistan and a possible ecological catastrophe? We should ask what help we can give. I am glad that a Foreign Office Minister is to answer the debate. I should like to know, by letter if not tonight, what attitude we are adopting to this major problem of the Russians.
The hon. Member for Bury St. Edmunds is right: this is the second treaty; the Antarctic treaty was the first. With the ever-increasing number of scientific reports on the ozone layer above the Arctic as well as the Antarctic, should not there be co-operation on that problem, too?
11.29 pm
Mr. Julian Brazier: I am glad that hon. Members on both sides of the House have said that, 10 years ago, nobody would have thought such an order possible. We have a fully verifiable treaty involving inspection teams to ensure that missiles are being destroyed.
It worries me a little to hear the hon. Member for Bristol, South (Ms. Primarolo) mentioning two questions in a poll sponsored by CND. I would have liked those questions to start not only with a rider about our dismantling missiles, but with a reference to the fact that the Soviet Union is modernising all its nuclear and conventional weapons.
There has been much comment about one weapon system. I should like to make one simple and obvious point that has been made often, but which seems to be lost sight of, especially on the Labour side of the Chamber. It is that, as long as the Soviet Union has overwhelming conventional superiority, the West cannot afford not to have up-to-date tactical nuclear weapons.
11.30 pm
Mr. Jeremy Corbyn: I warmly welcome the order and the treaty. The order shows that the treaty has happened and that something will be achieved. I find it rather strange that Tory Members are desperately searching for proof that the Government had something to do with the treaty. Having condemned all Soviet peace proposals for the past five years, they now favour everything in the treaty.
As far as I can see, the only practical contribution made by the British Government was the provision of Chablis and salmon for Mr. Gorbachev when he came to Brize Norton and the eternal saving of the village school because it was visited by Mrs. Raisa Gorbachev.
The Government's actions since the treaty was agreed have been the very antithesis of a welcome for it. The Prime Minister has said that she pressed the NATO Council of Ministers to agree an upgrading and modernisation of nuclear and non-nuclear weapons. She agreed a further Arms race in Europe and the stockpiling of weapons outside INF, thus putting another treaty further away.
We are entitled to ask the Government what practical steps they are taking to ensure that a further treaty, which includes sea and air-launched missiles, is made. It is important to note that the diplomatic immunity that is being granted is necessary only because we have US bases here. Inspection is necessary because, apparently, there is so little British Government control over them. We are entitled to know what steps the Minister is taking to ensure that there can be British inspection of what goes on in American bases.
Earlier today, we were told that there are only 66 United States bases here. That figure is hotly contested. A CND publication shows that there are 157 United States installations and more than 30,000 service men. As my hon. Friend the Member for Bradford, South (Mr. Cryer) said, those service men enjoy diplomatic immunity through the Visiting Forces Act 1952. We are entitled to know what control there is over such bases and what goes on in them.
We live in a world where 133 countries have renounced the use of nuclear weapons and do not feel it necessary to

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have them. We live in a world where a large number of countries feel able to cut Arms expenditure. Indeed, some do not even have standing armies. Yet apparently we need to spend £19 billion on defence when there is no perceivable enemy. We find it necessary to spend vast sums of money on nuclear weapons outside the terms of the INF treaty and we have a Government who are busy promoting the nuclear and conventional arms race.
I find it obscene, wrong and vile that in a world racked with hunger, poverty and division between industrial and non-industrial countries, we should have a Government obsessed with spending so many resources on a weapons system and on armaments that can lead only to further imbalances in the world, which cannot bring peace, but can bring the likelihood of war nearer.
Mr. Hugo Summerson: Will the hon. Gentleman give way?
Mr. Corbyn: No. I am about to finish.
I hope that the Minister will tell us what plans he has for a further stage of nuclear disarmament talks, for the removal of nuclear weapons from this country, and above all to promote worldwide nuclear disarmament which is desperately needed.
11.35 pm
Mr. Mellor: By leave of the House, I should like to reply to some of the points raised in the debate, which once again has shown the extraordinary degree to which the Labour party is unable to command any confidence whatsoever on the issue of defence. Labour Members seem incapable of learning anything from their crushing defeats in the last two general elections which, as much as anything, were about the inadequacies of their defence policy.
The objectionable thing that stood out in all the speeches of Labour Members, except that of the hon. Member for Linlithgow (Mr. Dalyell), is their willingness to be sceptical about the Government of the United Kingdom and to be sceptical almost to the point of paranoia about the United States Government, and their toe-licking subservience to every argument that falls from the lips of Mr. Gorbachev. I read in my telegrams from Moscow what Mr. Gorbachev is saying and then, lo and behold. a couple of weeks later it is parroted back from the Opposition Benches.
I shall deal with some of the serious contributions to the debate and answer some of the questions. Then, in the time that is left, I shall deal with the points made from the Labour Front Bench.
Once again I congratulate my hon. Friend the Member for Newbury (Mr. McNair-Wilson) and his constituents on their forbearance in the national interest in standing firm at Greenham Common against all the efforts of those on the Left to disrupt any possibility of getting a genuinely consensual agreement with the Soviets instead of giving the Soviets what they wanted without them having to bargain away a single missile.
The USSR, in its exchange of notes, undertakes to comply strictly with the inspection protocol. It must remove immediately any inspector objected to by the United States or ourselves. It has no right to bring in anything prohibited by the quarantine regulations in paragraph 4.
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I would say to the hon. Member for Linlithgow that there is no power of search. The inspectors are inviolable, as are diplomats, because the order, in effect, gives them temporary diplomatic status. [Interruption.] I see that the hon. Member for Hamilton (Mr. Robertson) repeats from a sedentary position the question about the Visiting Forces Act 1952 that was raised by the hon. Member for Bradford, South (Mr. Cryer), who, with the charm that we have all come to love, gives his opinion to the House and then leaves before the Minister has a chance to reply.
The Visiting Forces Act removes from United Kingdom jurisdiction only service men who are subject to the jurisdiction of their own national authorities and those who have diplomatic immunity. The inspectors will have diplomatic immunity and, in effect, will be diplomats.
The hon. Member for Orkney and Shetland (Mr. Wallace) asked me three questions. The answer to each of them is yes.
The hon. Member for Hamilton said that he was speaking about the disarray within NATO. He was really paying tribute to the disarray within the Labour party. The hoops through which even some of the more moderate Labour Members are expected to jump to maintain their positions on this issue are quite extraordinary. It appears that the brave attempts of the right hon. Member for Manchester, Gorton (Mr. Kaufman), who leads for the Opposition on foreign affairs, to rewrite Labour's defence policy have failed—hence the fact that the hon. Member for Hamilton has been standing on his head, like a younger version of Father William but not being particularly convincing about it.
The hon. Gentleman began by referring to the south of England as "temporarily Tory". That would have provoked hilarity in a normal speech, but it was about the most sensible thing that he said because it was the least removed from reality. He referred to the present disarray within NATO, but NATO has never been better able to cope with the strains and pressures of the future than it is at the moment.
In November 1986, the Prime Minister met President Reagan and the next four stages of the Western strategy were agreed: INF, START, conventional talks, chemical talks. That was followed by the Reykjavik NATO Council at which that strategy was endorsed as NATO policy. The first leg of that endorsement has been satisfactorily concluded with the signing of the INF treaty. The START treaty is under way and talks are in progress to establish a conventional stability mandate. All that was further ratified and endorsed by a highly successful and unanimous NATO summit two months ago. If that is a definition of disarray, it is the kind of disarray in which the Labour party, because of its problems, would like to find itself.
Although the hon. Member for Hamilton attends conferences and has studied this matter for a number of years, he still seems to be astonishingly wayward with the facts. He claims that the German politicians to whom he referred are in favour of a triple zero. That does not begin to be the case. The hon. Gentleman knows only too well that the Federal Republic of Germany subscribed to the agreement, as did all the other NATO members. at the North Atlantic Council meeting in June 1987, which referred to it being
"in conjunction with the establishment of a conventional balance and the global elimination of chemical weapons,

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tangible and verifiable reductions of American and Soviet land-based missiles, nuclear missile systems of shorter range, leading to equal ceilings."
It is understood throughout the NATO Alliance that the question of shorter-range missiles will be determined at the end of the process for reducing the conventional imbalance that heavily favours the Soviet Union.
That is the problem with which Opposition Members completely fail to come to terms. They refer to circumvention of the INF agreement', but that is legal nonsense, because that which is treaty-limited is treaty-limited, and that which is not treaty-limited is not treaty-limited and cannot be treated as such by the use of slack words such as "circumvention".
What about the Soviet increases? When do the Opposition condemn those increases? There will be complete modernisation of all their ground-based strategic missile forces in the next 10 years. During the 10 years in which Montebello led to a reduction in NATO's nuclear forces from 7,000 warheads to 4,600, the Soviets built up their missile systems. The number of Fencer nuclear-capable attack aircraft has been increased from 240 to 1,000. Even in the era of glasnost——
It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 ( Exempted business).
Question agreed to.
Resolved,
That the draft Treaty on the Elimination of Intermediate-Range and Shorter-Range missiles (Inspections) (Privileges and Immunities) Order 1988, which was laid before this House on 28th March, be approved.

Hazardous Waste Disposal (Greater Manchester)
Motion made, and Question proposed, That this House do now adjorn. —[Mr. Lennox-Boyd.]
11.45 pm
Mr. Robert Litherland: I am grateful for the opportunity to raise a matter of considerable concern to the Greater Manchester area. What prompted me to apply for the debate was anxiety at increased imports of hazardous waste into the United Kingdom and into the Greater Manchester area in particular. Concern has been expressed by the general public, by the media and by the Greater Manchester waste disposal authority, which has taken the trouble to write to 30 Members of Parliament expressing its anxiety.
Also of concern is the air of mystery and mystique that surrounds so many aspects of the disposal of the materials, where they originate, what is in the sealed containers, the routes designated for transporting hazardous waste, and the lack of communication with the local authority and the general public. A report and correspondence from the Greater Manchester waste disposal authority points out emphatically the difficulties of policing the increasing levels of hazardous waste coming from Europe. Imports of material into the Greater Manchester area have increased from 5,000 tonnes in 1981 to at least 170,000 tonnes in 1986. Some estimates suggest an even higher figure.
What is the reason for that increase? The Greater Manchester authority explains the reason and draws attention to the restrictive practices of other European countries and local authorities towards hazardous waste disposal within their own boundaries. It draws attention also to the use of an international brokerage system which allocates the movement of waste. It is also the job of the brokers to identify countries willing to import hazardous waste material. The United Kingdom falls into that category. In other words, other European countries are refusing to import such waste and are using brokers to dump the material in other people's backyards.
The trend towards more imports and fewer exports is placing great stress on the United Kingdom's internal system for waste control. At present, the system can cope with home-produced waste, but it is grossly inadequate in respect of imported material. The system is also vulnerable to abuse because of the complexity of commercial arrangements for handling waste produced on the continent. There is also growing worry that fringe operators, or cowboys, who are not always known to the waste disposal authority and whose equipment and practices leave much to be desired, are undertaking hazardous waste disposal.
That leads me to the air of mystique and mystery that shrouds all waste disposal. The report of the chief officer of the Greater Manchester waste disposal authority refers to the transport of hazardous or scheduled waste throughout the area and advises that only the originating production point and the receiving waste disposal authority are provided with any information. No details of movements are given to authorities through whose areas the material passes. The chief officer states that such information would be relatively simple to provide, but he recognises that it would place a great volume of extra work

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on their resources. It is not really the information that is required; the real answer is control of that extra traffic of waste material which is now prevalent.
It can also be appreciated that a large volume of potentially hazardous material, such as industrial materials, petroleum products and so on, is transported by our road and rail network, and that fairly stringent controls are in being. We also know, however, that there can be no guarantee of absolute safety. At least in the event of accidents, the material that I have mentioned can be identified by the emergency services. The fire brigade can use the correct equipment, and apply the necessary means to deal with the problem. However, with waste coming from abroad, there appears to be little knowledge of how much and what type of material is being transported. It prompts the question: how would emergency services know just what they were dealing with if there was a serious accident? They could be dealing with an unknown substance.
My information is that, after arriving in the United Kingdom, the waste falls within the scope of the special waste regulations, under which it is deemed that the waste is produced at the point of entry, normally by an importing agent. Whereas the home-produced waste can be checked fairly easily, the imported waste handler has to rely on information that may not be accurate, and may have been dealt with by any number of agencies. In other words, the handler does not know what is inside the containers. The waste disposal authority can object if it wishes. However, the chief officer of Greater Manchester authority points out the flaw in the procedure.
First, the hazardous waste is shipped in sealed containers. There is considerable risk in opening the containers. In practice, they are sealed at the point of production abroad, and not opened until they reach the intended site in Greater Manchester. Only at that point can any discrepancy be detected. The chief officer's report tells us:
"It is not until that stage has been reached that there is any possibility of detecting any mis-description, whether wilful or not, of the material. It is at this stage that problems can start to arise. First, if the receiving WDA has not received its copy of the consignment note (this is a fairly common occurrence) it is unaware of the situation and cannot, therefore, take any preventative action. Secondly, it is possible that the site operator will not check the composition of the waste actually received against the information given on his copy of the consignment note and improper and perhaps even dangerous disposal of the material can follow. Thirdly, if the material is actually examined (and this does happen in the majority of cases, although there is no strict legal requirement to do so), and found not to conform with its description, or not to be a type for which the disposal site is licensed, then the site operator has considerable problems. The obvious course of action would be to return the material to its producer but, it is reported, there seem to be considerable difficulties in doing this and the United Kingdom waste disposal operator is therefore under considerable commercial and financial pressure to resort to some improper and inappropriate form of disposal. It is not suggested that improper disposal, arising from the reasons briefly described above, has assumed serious proportions but, from a number of reported cases, there is cause for serious concern and, because of the expanding nature of this traffic and its very considerable financial implications it is unlikely that the position will improve in the near future."
The chief officer does not assume that improper disposal has reached serious proportions. However, the worrying thing is that he does warn that there is cause for serious concern. All this waste, including aqueous acids,
326
alkalis, inorganic and organic materials and asbestos, is processed by three privately owned firms in Greater Manchester before its final disposal.
The Government's policy to discourage imports of hazardous waste into Britain to be used for such things as landfilling may be welcome, but it has not been supported so far by legislation. It is difficult to estimate what effect the Government's policies have had. However, taking into consideration the ever-increasing quantities that are now arriving on our shores, it would appear to be very little indeed. It is getting to serious proportions, and that is why the Greater Manchester waste disposal authority is calling for urgent action to tackle the problem of imported waste into the county.
It would appear that the Government have taken a rather neutral attitude and have even been complacent about what is happening. The Government must be made aware that their judgment is now being questioned. Their opinions on the matter are being regarded with concern by the public. The Government should start addressing the seriousness of the situation, realise the extent of today's traffic in hazardous waste and cease to have a blinkered approach.
The Government must realise that safety controls and the notification procedure need tightening up. The Government must also address themselves to the proper licensing of waste hauliers and bring in the necessary legislation.
The February edition of "ENDS" says:
"There is a growing gap between public and ministerial opinion on this matter which should be the subject of general concern. Ministers continue to use the same language as they did a few years ago when waste imports into Britain were tiny by comparison with today's traffic: no objection could possibly be raised, they insist, to the 'legitimate' trade in waste."
Meanwhile, the public are naturally becoming sensitive to suggestions that Britain is becoming a dumping ground for other people's filth. Industrialists, who rely on landfills, are relatively cheap disposal outlets, and disposal contractors who make a living from them should be taking note, because it might take only an incident or a consignment or two to disrupt those established relationships.
The Government should recognise above all that we are rapidly becoming a dumping ground for other people's filth, and urgent action is now called for.
Doing little or nothing could have far-reaching consequences for future generations. We have witnessed complacency relating to hazardous material and the effects on the health of people who have become contaminated. It is for the future that I urge the Government to take action now.
11.58 pm
Mr. Peter Thurnham: I am grateful to my hon. Friend the Minister and to the hon. Member for Manchester, Central (Mr. Litherland), for giving me the opportunity to intervene to ask the Minister whether he is aware that I have urged the Secretary of State for the Environment to close down the Greater Manchester waste disposal authority's tip at Hypatia street in my constituency which I visited on Friday and which I can only describe as a stinking volcano threatening the health and well-being of the neighbouring residents.
11.59 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): I begin by responding to the specific point raised by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham). I have asked my officials to look into the issue of the Hypatia street quarry tip as a matter of urgency and to report back to me by the end of the week.
I appreciate the concern that my hon. Friend has expressed on behalf of his constituents, particularly Mrs. Hardman and Mrs. Williams, and the 350 signatories to the petition that was brought to the attention of my right hon. Friend the Secretary of State. I shall be in touch with my hon. Friend on that specific point in writing by Monday evening of next week at the latest.
I am grateful to the hon. Member for Manchester, Central (Mr. Litherland) for drawing the attention of the House to the general question of the need for improvements to the system for dealing with imports of hazardous waste into the United Kingdom. From the general, the hon. Gentleman moved to the specific and to his serious concern about the problems of hazardous waste being brought into Greater Manchester.
I appreciate the conviction that lies behind the hon. Gentleman's wish to see the introduction of tougher controls and his wish to see the concerns and fears of his constituents allayed—a view which receives a sympathetic response from the Government, who are reviewing methods of improving controls, for example, by extending the specific waste regulations to cover all pollution risks, thus bringing a much wider range of wastes within the documentary pre-notification requirements, improving the consignment note procedure, to which the hon. Gentleman referred, and introducing a statutory code of practice to place greater responsibilities on the producers of waste to ensure its safe disposal. The hon. Gentleman will also be aware that we are examining the possibility of registering waste carriers and extending the powers of licensing authorities.
Those issues pose complex problems requiring appropriate solutions in the near future, but I accept that it is no longer satisfactory simply to answer hon. Members' worries by pointing to the long history of waste control as opposed to the rash of short-term reactive measures which have characterised the response of some of our trading partners to their domestic disposal practices.
However high the standards we rightly boast for our treatment and disposal operators, we cannot shirk understandable public anxiety which has led to calls for tougher controls over what is already an effective, well-managed and highly proficient domestic industry.
Before dealing with the specific problems referred to by the hon. Gentleman about hazardous waste disposal in the Greater Manchester area, I want to set the debate in context. All imported wastes are subject to precisely the same controls as wastes generated within the United Kingdom. The United Kingdom has the right facilities and capacity to handle hazardous wastes and is geologically better suited to safer disposal than many of our European colleagues.
The maxim that waste is better safely disposed of here than dangerously elsewhere remains valid in many cases. As with the release of CFCs and halons into the atmosphere, the central point is not whence these ozone-depleting chemicals come; their effect on the ozone
328
layer is equally significant. In one respect the same applies to waste. There is only one environment and it is better that disposal and treatment should take place where the highest standards required are practised.
However, the debate should not conclude on that point. While we can rightly argue that imports are, once within the United Kingdom, subject to the same controls as United Kingdom-generated waste, it is the Government's view that if the United Kingdom can safely landfill the material, there is a corresponding duty on exporting countries wherever possible to develop an expertise to do the same.
We recognise that there exists increased environmental awareness. Public opinion throughout the western world is more conscious of the risks and environmental hazards that can arise if waste is not dealt with properly. In a number of countries there are legacies of thousands of sites where wastes have been dumped in an uncontrolled manner for many years, causing major pollution problems.
Only since the early 1970s have countries such as the United States, Denmark, Netherlands, West Germany and France begun to regulate and control landfill. The United States has a super fund of $8·5 billion to clean up old sites, and in the Netherlands and Denmark large sums have also been earmarked for that purpose. The result has been widespread public reaction in those countries against waste disposal in general, and landfill for hazardous wastes in particular, even though in practical terms there is very little alternative for the vast majority of these wastes. Governments have responded by denouncing landfill and many have constructed high-tech incinerators, which of course still require landfill for disposal of ash.
Placed in context, the United Kingdom imports some 53,000 tonnes per annum of special wastes, compared to about 3 million tonnes per annum in international trade within Europe. In total, waste imports comprise about 0·5 per cent. of the total waste disposal in the United Kingdom. Disposal facilities for special wastes in the Greater Manchester area comprise three private sector chemical and physical treatment plants whose purpose is to detoxify special wastes so that the resultant treatment residues may be safely landfilled.
Currently there is not a landfill site within the Greater Manchester waste disposal authority area that is licensed to take special wastes. In 1986, 155,000 tonnes of special waste were treated in the Greater Manchester area, including 12,000 tonnes that were brought from Europe. Of the 78,000 tonnes of special waste that was generated in the Greater Manchester area, 46,000 tonnes were disposed of elsewhere in Britain.
These treatment and disposal facilities are regulated by the Greater Manchester waste disposal authority. The facilities are licensed and pre-notification requirements of the special waste regulations apply to all movement of special wastes.
I can well understand the concern of those living in the area at the suggestion that their locality and area should be a focus for the disposal of special waste that comes from elsewhere in the United Kingdom, let alone from overseas. Waste disposal is rarely regarded as an attractive neighbour, particularly when special wastes are involved.
However, two points have to be borne in mind. First, waste disposal is a necessary industry. The many products that modern technology demand and that we demand as consumers unfortunately produce difficult wastes as a

329
by-product. We have to recognise that the disposal of these wastes is part of the price that we have to pay for our high standard of living.
Secondly, it follows that we must have increasingly sophisticated methods and techniques for dealing with these wastes. This means that we must have, among other things, chemical and physical treatment plants that can detoxify wastes so that they can be disposed of without risk to the environment. It would be unrealistic and a misuse of resources to expect every area and locality to provide such sophisticated facilities. It makes economic and environmental sense to make full use of the three facilities that are available in the Greater Manchester area.
I can understand, indeed I sympathise with, those who ask, "But why in my backyard?" The most that any Government can do is to ensure that the necessary treatment and disposal processes, wherever they are carried out, are done safely with a minimum effect on the local population and without risk to the environment.
Towards that objective, the Greater Manchester waste disposal authority has recently taken steps, in co-opera-tion with the three private sector companies involved, to improve control over imported waste by modifying the licences so that all imports of waste, whether special or not, are notified to the authority. Movement of waste to other countries for disposal is a well established phenomenon in western Europe. Figures are not collected on a regular basis, but as long ago as 1983 the OECD estimated that 2·2 million tonnes was traded in Europe, and in that year only 5,000 tonnes came to the United Kingdom.
We believe that trade has increased substantially worldwide since then, but the United Kingdom continues to accept rather less than many of our neighbours, and certainly less than might be expected for our relative size. Waste can move between countries to benefit from the use of specialised disposal facilities. All the special waste that is accepted by firms in the United Kingdom falls into this category. Three of these specialised facilities are those alluded to in this debate and are in the Greater Manchester area.
I am informed by the Greater Manchester waste disposal authority that these three firms took 24,000 tonnes of imported waste last year, in comparison with the capacity of more than 150,000 tonnes per annum. I do not believe, therefore, that the additional amount of imported waste places a strain on these facilities, or in any way endangers the availability of capacity for United Kingdom waste arisings.
Nevertheless, I am aware of the concern caused by waste imports. Therefore I am pleased to have this opportunity to emphasise firmly that the United Kingdom's disposal methods bear comparison with those of any other country. Our system of control—licensing of the facilities and extra attention to the movement of special waste—is similar to the systems employed in most industrialised countries.
All industrialised countries landfill special waste, but where we differ from some countries is that we do not entomb special waste, storing the problems of disposal for future generations, that is, rightly, of great concern to the
330
hon. Gentleman and the House. A significant proportion of our special wastes are treated at facilities such as those in Manchester. A greater proportion are landfilled together with putrescible wastes, so that natural biological processes work on the waste to make it safe. This is a method of disposal preferable to entombment, not inferior, which in no way warrants any description of the United Kingdom as anyone's dustbin.
The Government have recognised the importance of responding to the lack of information about trans-frontier shipment of waste. For that reason we were instrumental in promoting the implementation of the EC trans-frontier directive. We are committed to it because it will provide waste handlers and regulatory authorities with more opportunities to obtain the detailed information on process origin and the nature of the waste proposed for import since they will be in receipt of 28 days' notification of intent to import specific waste for disposal.
That will go a long way towards overcoming the present doubts about the lack of information about imported special waste. I accept that several aspects of that are not specifically covered in the directive, however welcome and important a step in the right direction it is. For that reason, I emphasise the importance that we attach to considering other points raised and additional points which I highlighted as priorities at the beginning of my speech.
The Department's hazardous waste inspectorate has drawn attention to the scope for improvement in waste disposal licensing, monitoring and enforcement. the measures I have outlined are designed to redress these deficiencies. In addition, the Department is preparing a radical revision of the waste management paper concerned with disposal site licensing: this is intended for publication this summer, and will provide Greater Manchester waste disposal authority with clear and unequivocal guidance on the licensing of facilities handling all controlled wastes, including those imported for disposal.
I strongly reject any argument that the Government are in any way complacent. I am confident that at present volumes, imports of waste for disposal in the United Kingdom do not compromise the capacity available for waste generated by United Kingdom industry. Neither do I believe that they offer any technical or environmental problem different from that presented by the United Kingdom waste. Our system of control by disposal site licensing ensures that only wastes suited to a particular disposal regime can be accepted. We are not complacent. and I am keeping closely in touch with this issue, and pursuing the programme of action which I have outlined. I shall be considering whether any further controls are necessary.
I hope that having had this opportunity to place on record those points, I can keep all hon. Members closely in touch with developments as we make progress on the specific issue of how best we can move forward with more effective controls, should the Government feel that these are necessary.
Question put and agreed to.
Adjourned accordingly at fourteen minutes past Twelve o'clock.

HOME DEPARTMENT

  Police officers (Assaults)
  Mr. Evennett
  To ask the Secretary of State for the Home Department whether his Department maintains any central record of assaults on police officers in England and Wales.

  Mr. Douglas Hogg
  Information is published annually in "Criminal Statistics, England and Wales", (supplementary tables volumes 1 and 11) copies of which are in the Library, of assaults on police officers which result in proceedings for that specific offence.

  Mr. Evennett
  To ask the Secretary of State for the Home Department whether police forces in England and Wales are required to maintain records of assaults on police officers; and in what format.

  Mr. Douglas Hogg
  There is no requirement for police forces to maintain records of assaults on police officers. The majority of forces do keep such records though in differing formats, and HMCI constabulary is now considering with ACPO the possibility of standardising recording practice.

  Mr. Evennett
  To ask the Secretary of State for the Home Department how many Metropolitan police officers were assaulted in the execution of their duty in each of the last five years.

  Mr. Douglas Hogg
  I understand from the Commissioner of Police of the Metropolis that the number of Metropolitan police officers recorded by the force as having been assaulted in the execution of their duty in each of the last five years was as follows:

  Number

  1987

  4,534

  1986

  3,400

  1985

  3,009

  1984

  2,765

  1983

  3,150

  Asylum
  Mr. Goodlad
  To ask the Secretary of State for the Home Department how many applications for asylum were received in each of the last five years; of which countries the applicants were citizens; and which applications were successful.

  Mr. Renton
  Information on applications for refugee status and their outcome, by nationality, for 1979 to 1984 was published in tables 5A–5F of Home Office statistical bulletin "Refugee Statistics United Kingdom, 1985" (issue 12/86). The corresponding figures for 1985 (which have been revised since the issue of that bulletin) and 1986 were published in tables 6 and 7 of the corresponding bulletin for 1986 (issue 13/87). Copies of these publications are in the Library. The figures for 1987 are not yet available.

  Police Pay
  Mr. Hood
  To ask the Secretary of State for the Home Department what has been the percentage increase in police pay for each year since 1974.

  Mr. Douglas Hogg
  The increases in the pay of police officers below the rank of superintendent have been as follows:

  per cent.

  1 September 1974

  16·7

  1 September 1975

  30

  1 September 1976

  15

  1 September 1977

  10

  1 September 1978

  239

  1 May 1979

  1 September 1979

  13·5

  1 September 1980

  21·3

  1 September 1981

  13·2

  1 September 1982

  10·3

  1 September 1983

  8·4

  1 September 1984

  5·13

  1 September 1985

  7·5

  1 September 1986

  7·5

  1 September 1987

  7·75

  Notes:

  1 Subject to a minimum increase of £2·50 a week and a maximum increase of £4 a week.

  2 Implemented in two phases, with half being paid on 1 September 1978 and the remainder on 1 May 1979.

  Mr. Hood
  To ask the Secretary of State for the Home Department what is the present annual salary of a police constable in his or her first year of work(a) in London and (b) outside London.

  Mr. Douglas Hogg
  The basic annual salary for police constables in all forces during their first year of service is £8,352 for those who were under the age of 22 on joining the service and £10,512 for those who were aged 22 or over. All officers receive free accommodation or rent allowance in lieu, which varies from force to force. Police constables in London get an additional £945 in London weighting and £1,011 in London allowance.

  Document Loss (Prosecution Policy)
  Mr. Livingstone
  To ask the Secretary of State for the Home Department pursuant to the answer to the hon. Member for Brent, East of 14 March,Official Report, columns 423–24, if he will call for a report from the Commissioner of Police of the Metropolis as to when a decision was taken not to refer the matter of the loss of documents to the Director of Public Prosecutions.

  Mr. Hurd
  No; in the circumstances set out in my reply to the hon. Member on 14 March the question of referring the matter to the Director of Public Prosections did not arise.

  Firearms
  Mr. William Ross
  To ask the Secretary of State for the Home Department if he will publish tables in the Official Report to show for the area covered by the Cheshire constabulary for each calendar year since 1 January 1979 the number of and types of firearms certificates issued by the Cheshire constabulary itemising (a) rifles up to ·230in or 6mm, (b) rifles over ·230in or 6mm, (c) rifles over ·22in which are of self-loading rifle type, (d) rifles over ·22in of

  83
  non self-loading rifle type, (e) pistols and revolvers up to ·230in or 6mm, (f) pistols and revolvers over ·230in or 6mm, (g) pistols and revolvers over ·22 in non-semiautomatic, (h) pistols and revolvers over ·22in semi-automatic, (i) humane killers, (j) signal pistols and mini-flare projectors, (k) smooth bore guns of under ·24in barrel length, (l) rifle/shotgun combinations and (m) dangerous air weapons and CO2 guns.

  Mr. Douglas Hogg
  Statistics on the issue of firearm certificates are published by the chief constable of Cheshire in his annual reports, copies of which are available in the Library. More detailed information is not held centrally.

  Mr. William Ross
  To ask the Secretary of State for the Home Department (1) in relation to the administration of the Firearms Act 1968 in Gwent as it affects the issue of firearms certificates, how many(a) applications were received for grant, (b) applications were subsequently withdrawn by the applicant, (c) applications were received for renewal, (d) applications were subsequently withdrawn by the applicant, (e) certificates were in force on 1 January, and (f) certificates were granted for each calendar year since 1979, inclusive;

  (2) in relation to the administration of the Firearms Act in Gwent as it affects the issue of shotgun certificates, how many (a) applications were received for grant, (b) applications were subsequently withdrawn by the applicant, (c) applications were received for renewal, (d) applications were subsequently withdrawn by the applicant, (e) certificates were in force on 1 January, and (f) certificates were granted for each calendar year since 1979, inclusive;

  (3) how many shotgun certificates were cancelled in Gwent in each calender year since 1979 inclusive on each of the following grounds (a) did not wish to renew, (b) no longer required, (c) transferred to other forces, (d) renewal applications refused, (e) deceased, (f) failed to apply for renewal, for example, moved, unable to trace, and (g) revoked;

  (4) how many applications for grant of shotgun certificates under the Firearms Act 1968 were refused in Gwent in each calendar year since 1979, inclusive;

  (5) how many temporary shotgun certificates were issued in Gwent in each calendar year since 1979; inclusive;

  (6) how many shotgun certificates were transferred to Gwent from other forces in each calendar year since 1979, inclusive;

  (7) how many firearms certificates were cancelled in Gwent in each calendar year since 1979 inclusive on each of the following grounds (a) did not wish to renew, (b) no longer required, (c) transferred to other forces, (d) renewal applications refused, (e) deceased, (f) failed to apply for renewal, for example, moved, unable to trace, and (g) revoked;

  (8) how many applications for grant of firearms certificates under the Firearms Act 1968 were refused in Gwent in each calendar year since 1979, inclusive;

  (9) how many temporary firearms certificates were issued in Gwent in each calendar year since 1979, inclusive;

  (10) how many firearms certificates were transferred to Gwent from the forces in each calendar year since 1979, inclusive;

  (11) how many applications for shotgun certificates resulted in appeals against a decision of the chief constable
  84
  in Gwent because of (a) a refusal to grant, (b) refusal to renew and, (c) revocation in each year since 1979, giving in each case the name of the appellant and the date of the appeal;

  (12) how many appeals against a decision of the chief constable in Gwent relating to applications for shotgun certificates were withdrawn by (a) the police and (b) the appellant prior to hearing in each calendar year time 1979, inclusive, and in how many cases the certificate was granted;

  (13) how many orders of mandamus or judicial review were (a) threatened and (b) served in relation to appeals against decisions of the chief constable in Gwent relating to applications for shotgun certificates in each calendar year since 1979, inclusive;

  (14) how many appeals against a decision of the chief constable in Gwent relating to applications for firearms certificates were withdrawn prior to hearing by (a) the police and (b) the appellant in each calendar year time 1979, inclusive, and in how many cases the certificate was granted;

  (15) how many orders of mandamus or judicial review were (a) threatened and (b) served in relation to appeals against decisions of the chief constable in Gwent relating to applications for firearms certificates in each calendar year since 1979, inclusive;

  (16) how many applications for firearms certificates resulted in appeals against a decision of the chief constable in Gwent because of (a) refusal to grant, (b) refusal to renew, (c) refusal of variation to firearms, (d) refusal of variation to ammunition, (e) refusal of variation to conditions of use and (f) revocation in each calendar year since 1979, inclusive;

  (17) how many (a) revolvers and pistols, (b) rifles, (c) shotguns, (d) air weapons, (e) humane killers and (f) flare guns, were (i) voluntarily surrendered and (ii) confiscated, in Gwent in each calendar year since 1979 inclusive.

  Mr. Douglas Hogg
  Statistics on the issue of firearm and shotgun certificates are published by the chief constable of Gwent in his annual report, copies of which are available in the Library. More detailed information is not held centrally.

  Mr. William Ross
  To ask the Secretary of State for the Home Department if he will list the principal recommendations of the McKay report on firearms.

  Mr. Douglas Hogg
  I refer the hon. Member to my answer to his question of 7 March 1988 at column 5.

  Police Officers
  Mr. John
  To ask the Secretary of State for the Home Department if he will list the number of police officers in service in England and Wales at the beginning of each decade; and what proportion of police officers to population this represented.

  Mr. Douglas Hogg
  The information conveniently available, save that for 1987, is taken from reports of Her Majesty's Inspectorate of Constabulary and is as follows:

  Position at

  Authorised Establishment

  Population

  Police/Population Ratio

  29 September 1929

  157,677

  37,884,950

  1:657

  29 September 1939

  163,228

  39,950,637

  1:632

  85

  Position at

  Authorised Establishment

  Population

  Police/Population Ratio

  30 September 1949

  71,827

  42,750,000

  1:595

  31 December 1959

  78,711

  45,386,000

  1:577

  31 December 1969

  107,934

  48,826,000

  1:452

  31 December 1979

  118,322

  48,970,000

  1:414

  31 December 1987

  122,648

  50,079,000

  1:408

  1 Does not include women officers.

  Computer Hacking
  Mr. John
  To ask the Secretary of State for the Home Department what steps he intends to take to amend the Forgery Act, or to introduce legislation in the light of the decision of the House of Lords on 21 April that computer hacking is not a criminal breach of the Forgery Act.

  Mr. John Patten
  My right hon. Friend is awaiting the Law Commission's report on computer-related crime before reaching any conclusion on whether further legislation is necessary.

  Alcohol Misuse
  Mr. Colvin
  To ask the Secretary of State for the Home Department when he will publish the report of the ministerial group on alcohol misuse on young people and alcohol.

  Mr. Douglas Hogg
  I refer the hon. Member to the reply given by my hon. Friend the Minister of State to a question from my hon. Friend the Member for Lancashire, West (Mr. Hind) on 19 January at columns 646–47. Action has since been taken to amend the Licensing Bill to tighten the offence of selling alcohol to under-age drinkers, to increase penalties for those found guilty of doing so and to make it an offence for wholesalers to sell alcohol to people under 18. Consultations are in progress on implementing in the United Kingdom the European Community directive requiring strength labelling of alcoholic drinks. The IBA and the Advertising Standards Authority are reviewing in conjunction with the industry their codes of practice on advertising alcohol. The BBC and IBA are reviewing the portrayal of alcohol in general TV programming. Consideration is being given to various longer-term measures.

  Cyrille Regis
  Mr. Nellist
  To ask the Secretary of State for the Home Department when he will be answering the letter from the hon. Member for Coventry, South-East, sent to his private office of 14 December 1987, regarding the application of registration as a British citizen by Mr. Cyrille Regis; if he expects the application to be completed by 4 May; and if he will make a statement.

  Mr. Renton
  We do not appear to have received the hon. Member's letter. Mr. Regis's application has been granted, and his certificate of registration will be sent to him this week.

  Refugees (Hong Kong)
  Dr. Marek
  To ask the Secretary of State for the Home Department if he will make it his policy to allocate an 86
  increasing priority for resettlement to refugees from closed camps in Hong Kong in proportion to the increasing length of their internment; and if he will make a statement..

  Mr. Renton
  Policy on the admission of Vietnamese refugees from Hong Kong remains as set out in the reply my right hon. Friend gave to questions from my hon. Friend the Member for Rochford (Dr. Clark) and the then hon. Member for Battersea, Mr. Alf Dubs, on 8 May 1987 at column 549.

  Consultancy Contracts
  Mr. Tim Smith
  To ask the Secretary of State for the Home Department if he will list each management or computer consultancy contract awarded by his Department in 1987, giving in each case the name of the consultancy firm and the subject of the assignment.

  Mr. Hurd
  [holding answer 30 March 1988]: The following contracts were awarded to management or computer consultancy firms by the Home Office in 1987:

  Firm and subject of assignment

  Admiral Computing Ltd. — Automatic Handwriting Recognition-technical support.

  Arthur Young — Manpower Division — financial strategy review.

  Arthur Young— Police National Computer upgrade-user requirement survey.

  Arthur Walton and Partner—Procurement in Home Office Science and Technology Group.

  Artificial Intelligence — Crime Auto Index-technical support.

  Atkins MC.—Rental invoicing.

  Bechtel UK Ltd.—Assist in WARC purchasing.

  Bell Software Systems—Bootle Bureau Computer-technical support.

  Mr. Bickersteth—Writing new test material for CSSB.

  BIS Applied Systems—Bootle Bureau Computer disaster-planning report.

  Mr. P. Blake — Probation Information Service-technical support.

  CAP Industry Ltd.—Automatic Fingerprint Recognition-design support.

  Mr. A. Cheers— Probation Information Service-technical support.

  Claymore Services — Area Mapping System-technical support.

  Computer Services Company—Policy National Computer upgrade-technical-management.

  Coopers and Lybrand—Study on the future provision of staff training in the magistrates court service.

  Coopers and Lybrand—Staff training in Prison Service.

  Data Logic—Crime Auto Index-technical support.

  Electronic Facilities Design — Automatic fingerprint recognition-operational requirement support.

  Ernst and Whinney ML — Procurement and charging review.

  Ewbank Preece Ltd.—Survey for Fire Service.

  Express Computers—Financial management system-technical support.

  Fraser Williams — Bootle bureau computer-technical support.

  Huddart Security Consultancy—Research into major crime investigation.

  Mr. A. Iliffe—Writing new test material for CSSB.

  International Computers Ltd. — Private Office Correspondence-technical support.

  IO Research — Electronic Facial Recognition-technical support/development.

  Mr. B. James—Magistrate's court-business analysis.

  JSB—Immigration Service-SSADM support.

  Lear Month & Burchett — Bootle Computer Bureau-SSADM support.

  Logica Space and Defence — Automatic Fingerprint Recognition-design support.

  McPherson Associates— Research on reliability of a new

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  personality test.

  MOM International—Project Management-technical support.

  Mr. K. Murray — Review of past work of Home Office Unit at CSSB.

  PA Management Consultants—Assist with implementation of "Fresh Start" to Prison Service.

  PA Consultants—WARC Project.

  Procom Ltd.—WARC Project.

  RIPA Consultancy Services — Probation Information Service-technical support.

  Roston Ltd.—Assist in WARC purchasing.

  Scientific Business Systems—Police staff college computer-technical support.

  Smith Associates — Automatic fingerprint recognition-technical support.

  Software Sciences—Immigration Service-technical support.

  Systems Designers—Intelligent Knowledge Based Systems-technical support.

  System Designers—Facial Recognition System-technical support.

  System Designers — PNCO Interim system arrangement study.

  Technical Support Consultants Ltd. — File transfer MCS facility project.

  Touche Ross MC — General Ledger System design and implementation.

  Touche Ross MC — Police National Computer Upgrade-project management support.

  Touche Ross MC — Police Administration Support Unit-business analysis.

  VNG Professional Services — Bootle Bureau Computer-technical support.

  White Waghorn—Financial Management System-technical support.

  Mr. Tim Smith
  To ask the Secretary of State for the Home Department what was the total amount spent by his Department in 1987 on management and computer consultancy contracts, excluding hardware and software purchases.

  Mr. Hurd
  [holding answer 29 March 1988]: The Home Office spent approximately £3,316,000 on management and computer consultancies in 1987.

TRANSPORT

  Severn Bridge
  Mr. Butler
  To ask the Secretary of State for Transport what is his estimate of the accumulated deficit on the Severn bridge by 31 March.

  Mr. Peter Bottomley
  The estimated accumulated deficiency at 31 March 1988 was about £75 million.

  Concessionary Travel
  Mr. Cohen
  To ask the Secretary of State for Transport what information he has about the level of the administrative charge made for issuing retirement pensioners concessionary travel passes in London; what is the reason for the charge; how it is calculated; by how much it has changed since the last review; and if he will make a statement.

  Mr. David Mitchell
  The present concessionary travel arrangements for pensioners on LRT services in London are provided by agreement between LRT and the London local authorities. Permits continue to be issued free of charge to pensioners. I understand that certain of the administrative costs incurred by LRT and the Post Office are reimbursed by the participating local authorities who also fund the cost of the concession.

  Airedale Route
  Mr. Waller
  To ask the Secretary of State for Transport when he now expects construction work to be completed on stages 1 and 2 of the A629-A650 Airedale route.

  Mr. Peter Bottomley
  The terms of the contracts provide for works to be completed on stage 1 in September this year and stage 2 in January 1989. Good progress is being made. I hope that the roads will be open to traffic in advance of these dates. It is too early yet to give firm opening dates.

  Driving Instructors
  Mr. Summerson
  To ask the Secretary of State for Transport whether he has any plans to change the current standard of the entry examination for the register of approved driving instructors; and if he will make a statement.

  Mr. Peter Bottomley
  We are discussing with the national associations that represent driving instructors, ways of making the training and testing of driver instructors as effective as possible. We have reviewed the standard and raised the pass mark required for the initial written knowledge test. Those who propose to teach road skills and behaviour must themselves he thorough masters of the subject matter.

HOUSE OF COMMONS

  Televising of Proceedings
  Mr. Bermingham
  To ask the Lord President of the Council if he will seek assurances from ITN in view of the policy document "ITN Into the Nineties", that current practices regarding use of the outside broadcast unit in televising of proceedings will be maintained, with particular regard to the implications of new policy affecting transmission from the House of Commons; and if he will make a statement.

  Mr. Wakeham
  I will draw the hon. Member's concern to the attention of the Select Committee which is now considering the arrangements for the experiment in the televising of our proceedings. The manner in which this experiment is conducted will be a matter for decision by the House.

ENERGY

  Nuclear Reactors (Tests)
  Dr. Thomas
  To ask the Secretary of State for Energy what information has been provided to the European Commission by(a) his Department and (b) the Nuclear Installations Inspectorate in regard to the Environment Commissioner's stated concern to the European Parliament on 10 February that the Commission lacked details of past and planned test experiments at United Kingdom nuclear reactors under European Treaty article 34.

  Mr. Michael Spicer
  Since 10 February my officials and the chief inspector of the Health and Safety Executive's Nuclear Installations Inspectorate have had discussions with members of the staff of the European Commission.
  89
  The Commission concluded that the United Kingdom has not carried out or planned experiments falling within the scope of article 34 of the Euratom treaty.

  Coal Industry
  Mr. Illsley
  To ask the Secretary of State for Energy what representations he has received from British Coal with regard to amendments to legislation currently on the statute book, affecting the mining industry.

  Mr. Michael Spicer
  The British Coal Corporation maintains regular contact with the Department on a wide range of issues covered by legislation.

  Uranium
  Dr. Thomas
  To ask the Secretary of State for Energy, pursuant to his reply to the hon. Member for Meirrionnydd Nant Conwy, 29 February,Official Report, column 482, what quantities of unsafeguarded uranium are present at each United Kingdom Atomic Energy Authority site; why unsafeguarded uranium is present at non-mixed facility civil nuclear sites; and whether the Euratom and International Atomic Energy Agency safeguards authorities hae been informed of the arrangements in detail.

  Mr. Michael Spicer
  The UKAEA carries out contract R and D work for customers; that for MOD involves the presence of small quantities of unsafeguarded materials at UKAEA sites, details of which cannot be disclosed for reasons of national security. The relevant safeguards authorities are kept informed of movements into and out of safeguards.

  Dr. Thomas
  To ask the Secretary of State for Energy if, pursuant to his reply to the hon. Member for Meirronnydd Nant Conwy, 29 February,Official Report, column 482, on nuclear materials, he will set out the procedures under which civil safeguarded uranium is co-processed with unsafeguarded defence uranium in compliance with the specific safeguards arrangements for civil uranium at Springfields.

  Mr. Michael Spicer
  A reporting regime has been agreed whereby the necessary movement and accountancy reports of civil material are submitted to Euratom. The inspectors have access to this material for verification in accordance with chapter 7 of the Euratom treaty.

  Dr. Thomas
  To ask the Secretary of State for Energy if any of the uranium imported from Durban, South Africa, on 28 February 1987 has since been withdrawn from safeguards under article 14 of the terms of the UK/Euratom/International Atomic Energy Agency safeguards agreement.

  Mr. Michael Spicer
  No.

  Plutonium
  Dr. Thomas
  To ask the Secretary of State for Energy if any plutonium from safeguarded electricity board Magnox reactors has been exported to the United States of America since May 1979 under(a) the United States —United Kingdom mutual defence agreement of 1958, under 1959 amendment, (b) International Atomic Energy Agency safeguards and (c) Euratom safeguards.

  Mr. Michael Spicer
  I refer the hon. Member to my reply to the hon. Member for Newport, West (Mr. Flynn)90
  on 11 March 1988 at column 362. Since 1979, there have been no transfers to the United States of plutonium derived from safeguarded electricity board Magnox reactors under the United Kingdom — United States defence agreement.

  Aluminium Industry
  Mr. Bermingham
  To ask the Secretary of State for Energy what representations he has received on the secure supply of electricity at reasonable cost to the aluminium industry; and if he will make a statement.

  Mr. Michael Spicer
  I have received one representation in recent months from the aluminium industry about the cost of electricity.

  Berkeley Magnox Reactor Power Station
  Mr. Roy Hughes
  To ask the Secretary of State for Energy what information he has received from the nuclear installations inspectorate concerning safety measures at the Berkeley Magnox power station on the River Severn; what action he proposes; and if he will make a statement.

  Mr. Michael Spicer
  I refer the hon. Member to the answer given to the hon. Member for Leyton (Mr. Cohen) on 21 April 1988 at column 530. I have received a copy of the report and the CEGB is now considering its findings.

OVERSEAS DEVELOPMENT

  Mozambique
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will give for each year from 1979 the level of aid, in constant 1988 prices, made available to Mozambique.

  Mr. Chris Patten
  The information requested is given in 1987 prices. This is the latest year for which figures are available.

  Gross bilateral aid (£'000)

  Year

  £'000

  1979

  11,500

  1980

  7,000

  1981

  7,300

  1982

  2,400

  1983

  2,200

  1984

  4,800

  1985

  9,100

  1986

  7,800

  1987

  122,800

  1 Provisional

  Mozambique also receives aid from multilateral agencies to which Britain contributes.

TRADE AND INDUSTRY

  Voluntary Restraint Arrangements
  Mr. Fallon
  To ask the Chancellor of the Duchy of Lancaster if, pursuant to his answer to the hon. Member for Darlington on 30 March,Official Report, column 478, he will set out in tabular form (a) the date on which each inter-industry voluntary restraint arrangement listed is believed to have come into effect, (b) the date on which

  91
  it was first known to his Department and, when appropriate, (c) the date on which his Department informed the industry concerned that it saw no case for continuation and (d) the date on which it lapsed.

  Date Started VRA

  Date wrote

  Date to end VRA

  Monochrome TVs

  Singapore

  1976

  1 October 1985

  31 December 1985

  Korea

  1979

  1 October 1985

  31 December 1985

  Taiwan

  1976

  1 October 1985

  31 December 1985

  Thailand

  Unknown

  1 October 1985

  31 December 1985

  Colour TVs

  Japan

  1972

  1 October 1985

  31 December 1987

  Singapore

  1984

  1 October 1985

  31 December 1987

  Korea

  1985

  1 October 1985

  31 December 1987

  Taiwan

  1976

  1 October 1985

  31 December 1987

  Music Centres

  Japan

  1979

  1 October 1985

  31 December 1985

  Korea

  1979

  1 October 1985

  31 December 1985

  Taiwan

  1976

  1 October 1985

  31 December 1985

  Pottery

  Japan

  1968

  16 November 1987

  31 December 1987

  Stainless Steel Cutlery

  Japan

  1966

  16 November 1987

  31 December 1987

  Korea

  1977

  16 November 1987

  31 December 1987

  Pottery Taiwan

  11977

  Footwear Taiwan

  11981

  1 Lapsed 1985–86.

  Mr. Fallon
  To ask the Chancellor of the Duchy of Lancaster (1) whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangement covering the import of special steels from Spain.

  (2) whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangement covering the import of music centres from (a) Japan, (b) the Republic of Korea and (c) Taiwan;

  (3) whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangements covering the import of stainless steel cutlery from (a) Japan, (b) the Republic of Korea;

  (4) whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangements covering the import of colour televisions from (a) Japan, (b) Singapore, (c) the Republic of Korea and (d) Taiwan;

  (5) whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangements covering the import of pottery from Japan;

  (6) whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangements covering the import of (a) fork lift trucks, (b) machinery centres, (c) numerically controlled lathes, (d) cars and (e) commercial vehicles from Japan;

  (7) whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangement covering
  92
  Mr. Alan Clark
  The information under(a), (c) and (d) is listed in the table. It is no longer possible to identify the date when the Government first became aware of the arrangements in each case.

  the import of monochrome televisions from (a) Singapore, (b) the Republic of Korea, (c) Taiwan and (d) Thailand.

  Mr. Alan Clark
  I refer my hon. Friend to my written answer today to a similar question raised by my hon. Friend the Member for Tatton (Mr. Hamilton).

  Mr. Fallon
  To ask the Chancellor of the Duchy of Lancaster whether he will estimate the effect on prices, employment, domestic output and import volumes of the inter-industry voluntary restraint arrangements that covered the import of(a) pottery and (b) footwear from Taiwan.

  Mr. Alan Clark
  As explained in the written answer of 30 March,Official Report, column 478–89, the inter-industry voluntary restraint arrangements on imports of pottery and footwear from Taiwan lapsed. It was unnecessary for the Government to carry out a full examination of the impact of the arrangements of prices, employment, domestic output and import volumes.

  Mr. Neil Hamilton
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 18 March,Official Report, column 1365, what estimate his Department has of the effects of specific voluntary restraint arrangements on employment, prices domestic output or import volumes; and if he will publish the figures for each of the voluntary restraint arrangements named in his answer on 30 March, Official Report, columns 379–80.

  Mr. Alan Clark
  [holding answer 22 April 1988]: When reviewing the inter-industry voluntary restraint arrangements, estimates are made of the impact of these arrangements on the protected industries, on customers

  93
  and the United Kingdom economy as a whole. The advice I received contained commercially confidential information and I am not therefore in a position to make it available. In all cases where the Governmemt advised the industry concerned that it saw no case for continuing the inter-industry restraint arrangement, I was satisfied that the net cost to the economy outweighed any benefit to the industry of continuation.

  Mr. Neil Hamilton
  To ask the Chancellor of the Duchy of Lancaster, pursuant to the written answer of 30 March,Official Report, columns 478–9, whether Her Majesty's Government has sought to discourage the United Kingdom footwear industry from signing a renewed voluntary restraint arrangement with the Republic of Korea.

  Mr. Alan Clark
  [holding answer 22 April 1988]: No. The position is under review. But the industry is aware the Government also has wider concerns including the net impact of such arrangements on consumers and on the United Kingdom economy as a whole.

  Pillows
  Mr. Kirkwood
  To ask the Chancellor of the Duchy of Lancaster (1) why feather and polyester pillows have been included in the draft Furniture and Furnishings (Fire) (Safety) Regulations;

  (2) what evidence he has to suggest that feather-filled pillows and polyester pillows are toxic when burning;

  (3) when he expects the BSI flammability committee TCM/30 to report its findings on the flammability of pillows;

  (4) if he will list in the Official Report any research findings which identify pillows as a particular fire hazard.

  Mr. Butcher
  Pillows with little or no fire resistance can contribute to bed fires in much the same way as scatter cushions on upholstered furniture can pose a hazard. Accordingly the draft Furniture and Furnishings (Fire) (Safety) Regulations propose identical requirements to improve the fire performance of pillows and scatter cushions. Combustion-modified foams will be the only permitted foam filling in furniture and these ancillary items.

  Non-foam fillings in furniture, cushions, and pillows also pose a fire hazard, and the regulations should address this. Feather and polyester pillows are readily ignitable. Account has also to he taken of their propensity to produce smoke and toxic gases. The fillings can give rapid rates of smoke obscuration, and, in the case of polyester, black smoke. They also give off significant amounts of carbon monoxide. In addition, feathers give off toxic gases of hydrogen cyanide and of nitrates.

  The British Standards Institution is considering a flammability specification for pillows, but this will not be completed in time to call it up in the regulations.

  Public Purchasing
  Mr. Blair
  To ask the Chancellor of the Duchy of Lancaster what he estimates will be the effect on industry of the changes in public purchasing provisions by 1992.

  Mr. Butcher
  [holding answer 25 April 1988]: Completing the single market by 1992 will mean that purchases by Governments and public bodies should reflect fair competition not national identity. United
  94
  Kingdom firms will have greater access to a European-wide public sector market which accounts for 15 per cent. of the European Community's gross domestic product, but they should also be prepared for increased competition here.

ATTORNEY-GENERAL

  Crown Prosecution Service (Policy)
  Mr. Frank Field
  To ask the Attorney-General what is the policy of the Crown Prosecution Service concerning the institution of prosecutions against police officers(a) in cases where criminal charges against others are subsequently dropped and damages are awarded against the police and (b) in cases where a defendant is acquitted and subsequently brings an action for wrongful arrest, false imprisonment or malicious prosecution and is awarded damages against the police.

  The Attorney-General
  The policy of the Crown Prosecution Service concerning the institution of criminal proceedings against police officers follows the criteria contained in the code for crown prosecutors, issued under Section 10 of the Prosecution of Offences Act 1985. Staleness occasioned by the time occupied by earlier court proceedings may acquire particular significance.

  Public Records (Copies)
  Mr. Peter Robinson
  To ask the Attorney-General what are the costings figures used, and assumptions made, in respect of(a) and A3 copy and (b) an A4 copy of a document at the Public Record Office.

  The Attorney-General
  Photocopies of documents at the Public Record Office are made on A3 size paper only. Reprographic fees are calculated to recover in full the running costs and capital charges attributable to the service, and are based on past levels of costs and volumes of business, with allowances for expected future variations. The current fee of 26p per copy, inclusive of 3·39p VAT, is based on figures for 1986–87 when 683,526 copies were made at a cost of £154,347.

  Crown Prosecution Service
  Mr. Evennett
  To ask the Attorney-General what steps he is taking to assess whether the current levels of pay for legally qualified staff of the Crown Prosecution Service are sufficient to maintain an effective service.

  The Attorney-General
  I take great interest in the development of a proper pay structure for those employed in the Government legal service. I consider that the proposed pay award to legally qualified staff in the Crown Prosecution Service, referred to in my answer of 21 April 1988 to the hon. Member for St. Helens, South (Mr. Bermingham) is sufficient, together with allowances that are available, to maintain the effectiveness of existing services and to improve the attractiveness of such posts to potential recruits.

  Mr. Evennett
  To ask the Attorney-General how many legally qualified staff are currently employed by the Crown Prosecution Service; and how many vacancies for such staff currently exist.
  95
  The Attorney-General
  On 31 March 1988 the Crown Prosecution Service employed 1,311 legally qualified staff as lawyers and had 459 vacancies for such staff.

  Mr. Evennett
  To ask the Attorney-General what steps are being taken to encourage lawyers to join the Crown Prosecution Service.

  The Attorney-General
  The Crown Prosecution Service intends to supplement the existing recruitment arrangements with a number of new initiatives. The current monthly programme of competitions will continue but will focus on specific locations where staffing shortages exist.

  In addition to this the other main initiatives under consideration are:

  (i) sponsorship of non-qualified staff through legal training,

  (ii) the provision of short term contracts of employment,

  (iii) improved careers publicity,

  (iv) research of the market for part-time working,

  (v) secondments from outside organisations.

  It is hoped that these initiatives, combined with the recent pay offer to legal staff, will increase the success of the current procedures which have resulted in the recruitment of around 500 lawyers since the inception of the Crown Prosecution Service.

  Mr. Evennett
  To ask the Attorney-General whether any persons have been appointed by the Crown Prosecution Service to conduct criminal investigations; and whether there are any plans to make such appointments.

  The Attorney-General
  All criminal investigations are undertaken by the police, who are aided by specialist assistance as and when required.

  Within the headquarters of the Crown Prosecution Service is the fraud investigation group, which undertakes the investigation and prosecution of serious and complex cases. The sixteen FIG lawyers control the cases from the outset and co-ordinate specialist assistance on a case by case basis in support of the police investigations. This specialist assistance includes investigative accountants within the fraud investigation group, the companies investigation branch of the Department of Trade and Industry, HM Customs and Excise, private sector accountants, liquidators, receivers and computer experts.

  The fraud investigation group has no statutory power to investigate, unlike the newly created serious fraud office, which will be responsible from this month for the investigation and prosecution of the largest fraud cases in England, Wales and Northern Ireland.

PRIME MINISTER

  Nigeria
  Mrs. Clwyd
  To ask the Prime Minister, pursuant to her answer of 30 March,Official Report, column 466, what account she took of the recommendations of the Justice Awoniy commission of inquiry into malpractices and wastages in Niger State that Nigeria repudiate the Biwater loan, blacklist the company for 10 years and report it to organisations involved in the United Nations water decade during the negotiations leading to Nigeria's request for finance to complete the project.
  96
  The Prime Minister
  The ECGD has seen no evidence that the recommendations of the commission of inquiry which met in 1984 were accepted or acted upon by the Nigerian authorities.

  Since then the Niger State Water Board (the buyer), Niger State Government (borrower of the United Kingdom loan) and the Federal Ministry of Finance and Economic Development on behalf of the Federal Military Government have reviewed the project and decided upon a basis for completion of the water scheme by Biwater Projects Ltd. In response to a specific request from the Nigerian federal authorities ECGD has been able to enter into negotiations in respect of support for a further loan to assist project completion.

  Hughes Committee
  Mr. Livingstone
  To ask the Prime Minister whether the dossier of information submitted to her on 1 November 1984 by Mr. Colin Wallace was passed to the police for investigation; and which documents from the dossier were made available to the Hughes committee of inquiry into children's homes and hostels.

  The Prime Minister
  I refer the hon. Gentleman to the reply given by my hon. Friend the Parliamentary Under-Secretary of State for the Armed Forces on 20 July 1987 to the hon. Member for Linlithgow (Mr. Dalyell) at column 93–94.

  Mr. Colin Wallace
  Mr. Livingstone
  To ask the Prime Minister what action was taken relating to the case of Mr. Colin Wallace following information forwarded by the Treasury and Civil Service Select Committee in 1986 relating to false job descriptions, psychological warfare and propaganda.

  The Prime Minister
  Following consideration of the papers by the Ministry of Defence and other Departments involved, I wrote to the Chairman of the Treasury and Civil Service Select Committee explaining that the various allegations made by Mr. Wallace over many years had been fully and carefully investigated and no evidence had been found to substantiate any of them.

  Security-Sensitive Posts
  Mr. Livingstone
  To ask the Prime Minister what is the practice of the Civil Service Commission towards the advertising of security-sensitive posts.

  The Prime Minister
  Recruitment schemes for which the Civil Service Commissioners are responsible have to be sufficiently publicised to the satisfaction of the commissioners. Normal practice is for these schemes to be advertised in the national press or appropriate professional publications. The information sent to applicants indicates whether security requirements apply to a particular scheme.

  Civil Servants (Vetting)
  Mr. Livingstone
  To ask the Prime Minister what is Her Majesty's Government's policy relating to the renewal of positive vetting for civil servants convicted of criminal offences.

  The Prime Minister
  In reaching a decision as to whether positive vetting clearance should be given, a
  97
  Department takes into account all information which might have a bearing on the person's suitability for access to highly classified material.

  Civil Servants (Press Briefings)
  Mr. John
  To ask the Prime Minister if she will set out the guidelines under which departmental civil servants are allowed to conduct press conferences or press briefings upon politically sensitive matters.

  The Prime Minister
  Civil servants are advised that in dealing with the media they must act on the advice of their Department's chief information officer who consults Ministers as necessary. Subject to this advice, officials may explain Government policy and give the factual background to it. They may also discuss the balance of consideration which led to a choice of policy. They must not trespass on the responsibilities of Ministers, and at all times they should preserve the political neutrality of the Civil Service. Press conferences or briefings on party political matters should be given only by Ministers.

  Freemasonry
  Mr. Madden
  To ask the Prime Minister if she will make it her policy to require all Ministers to disclose to Parliament membership of any Masonic order.

  The Prime Minister
  No.

  Mr. Madden
  To ask the Prime Minister if she will make it her policy that any Home Secretary she may appoint in future must not he a member of any Masonic order.

  The Prime Minister
  No.

  Voluntary Organisations
  Mr. Madden
  To ask the Prime Minister if she will make it her policy to list all those national and international voluntary organisations to which she belongs.

  The Prime Minister
  No.

  Common Market (Funding)
  Mr. Teddy Taylor
  To ask the Prime Minister if the provisional agreement made at the recent meeting of the European Council to increase the funding of the Common Market has now been finalised; and if she will make a statement.

  The Prime Minister
  Work is continuing on the legally binding texts required to implement the conclusions of the European Council in Brussels on 11–13 February.

  Engagements
  Mr. Flynn
  To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.

  Mr. Wigley
  To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.

  Mr. Ieuan Wyn Jones
  To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.

  Mr. Andrew Smith
  To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.

  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Tuesday 26 April.
  98
  The Prime Minister
  This morning I had meetings with ministerial colleagues and others including one with the President of Zimbabwe. In addition to my duties in the House I shall be having further meetings later today including one with the Prime Minister of New Zealand.

EDUCATION AND SCIENCE

  Students Union Presidents
  Mr. Nicholas Bennett
  To ask the Secretary of State for Education and Science what information he has as to the number of student union presidents who are given a sabbatical year by their college or university; and what estimate he has as to the cost to public funds in 1987–88 or the latest year for which figures are available.

  Mr. Jackson
  The Department does not hold this information.

  Further and Higher Education (Codes of Practice)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Education and Science (1) how many institutions of higher and further education have drawn up codes of conduct since the enactment of the Education (No. 2) Act 1986; and if he will make a statement;

  (2) if he is satisfied that section 43(1) of the Education (No. 2) Act 1986 is being properly adhered to; and if he will make a statement.

  Mr. Jackson
  The provisions of section 43 of the Education (No. 2) Act 1986 came into effect on 1 September 1987. Institutions were required to have issued by that date the codes of practice specified by the section; but they were not required to inform the Department that they had done so. The Government plan to evaluate the working of the section in its first year.

  Students (Funding)
  Mr. Ernie Ross
  To ask the Secretary of State for Education and Science what additional funding will he made available for mature and non-standard entry students at Dundee university.

  Mr. Jackson
  Financial support is available to students at Dundee university on the same basis as to students elsewhere. Mature students may be eligible for additional allowances. Entitlement to mandatory grant depends on the course attended and is not determined by reference to entry qualifications.

  GCSE (Mathematics)
  Mr. David Martin
  To ask the Secretary of State for Education and Science whether he has any plane to improve the checking procedures for establishing the accuracy of mathematics examination papers set for the general certificate of secondary education; and if he will make a statement.

  Mrs. Rumbold
  The GCSE examining groups are responsible for the content of GCSE examinations, including the accuracy of examination papers. The Secondary Examinations Council is responsible for scrutinising the groups' procedures to ensure that the relevant GCSE national criteria are met. The Government look to the groups and the SEC to review procedures in the light of the first GCSE examinations this summer.

SCOTLAND

  M8 (Newhouse and Baillieston)
  Mr. Tom Clarke
  To ask the Secretary of State for Scotland what progress is being made with improvements to the M8 motorway between Newhouse and Baillieston; and if he will make a statement.

  Lord James Douglas-Hamilton
  I have nothing to add at present to my answer to the hon. Member on 4 March, at column 666.

  Baby Care Nurses
  Mr. Wigley
  To ask the Secretary of State for Scotland if he will list for each year since 1981 the number of whole-time equivalent nurses working in Scotland in(a) hospital maternity units and (b) in special care baby units.

  Qualified midwives in Scotland Whole-time equivalent at 30 September

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  Qualified midwives Total

  3,273·7

  3,412·3

  3,452·8

  3,464·5

  3,392·4

  3,424·2

  3,487·0

  Hospital maternity units

  2,384·8

  2,503·7

  2,534·7

  2,553·6

  2,472·1

  2,532·2

  2,604·0

  Teaching

  48·4

  52·6

  60·1

  63·1

  66·3

  59·2

  67·3

  Community Total

  840·5

  856·0

  858·0

  847·8

  854·0

  832·8

  815·7

  Midwives

  142·8

  154·9

  155·4

  161·8

  186·3

  187·2

  193·3

  Combined duty nurses

  697·7

  701·1

  702·6

  686·0

  667·7

  645·6

  622·4

  Scottish Courts Administration
  Mr. Robertson
  To ask the Secretary of State for Scotland what procedure exists for the Scottish Courts Administration to notify housing authorities if their tenants have been given custodial sentences.

  Lord James Douglas-Hamilton
  No such procedure exists.

  Annual average local authority rents at 1987–88 prices

  1985–86

  1986–87

  1987–88

  1988–89

  SCOTLAND

  651·14

  709·26

  758·03

  809·51

  Berwickshire

  776·25

  785·98

  797·86

  836·48

  Ettrick and Lauderdale

  741·03

  717·59

  721·89

  721·53

  Roxburgh

  829·70

  894·56

  877·00

  903·16

  Tweeddale

  639·55

  693·13

  683·03

  701·53

  Clackmannan

  657·66

  702·26

  745·46

  807·12

  Falkirk

  654·81

  684·69

  722·36

  764·33

  Stirling

  651·04

  743·86

  783·45

  798·16

  Annandale and Eskdale

  781·09

  831·21

  857·40

  901·17

  Nithsdale

  647·09

  717·16

  720·55

  783·23

  Stewartry

  794·49

  843·54

  855·50

  892·71

  Wigtown

  890·14

  911·40

  868·56

  871·31

  Dunfermline

  685·24

  734·70

  764·52

  826·03

  Kirkcaldy

  710·18

  756·12

  796·79

  836·98

  North East Fife

  779·33

  866·57

  887·88

  957·89

  Aberdeen

  632·13

  685·44

  763·96

  797·17

  Banff and Buchan

  777·87

  817·94

  811·66

  852·40

  Gordon

  768·76

  814·07

  785·88

  798·16

  Kincardine and Deeside

  733·59

  756·09

  745·52

  744·92

  Moray

  765·54

  766·14

  814·54

  867·33

  Badenoch and Strathspey

  761·23

  837·90

  796·79

  840·96

  Caithness

  713·27

  747·50

  771·66

  820·06

  Inverness

  743·94

  765·52

  830·09

  896·19

  100
  Mr. Michael Forsyth
  I regret that groups of nurses cannot readily be identified from the statistics held centrally on the basis requested.

  Midwives
  Mr. Wigley
  To ask the Secretary of State for Scotland if he will list for each year since 1981 the number of whole-time equivalent qualified midwives working in Scotland(a) in hospital maternity units,(b) in special care baby units, (c) in education and (d) as community midwives.

  Mr. Michael Forsyth
  It is not possible from the statistics held centrally readily to separate midwives working in hospital maternity units and those working in special care baby units. In the table a single figure is given for both groups under the heading hospital maternity units. Midwives working in the community may undertake health visiting and/or home nursing duties. They are shown separately in the table as combined duty nurses.

  Rents and Rates
  Mr. Tom Clarke
  To ask the Secretary of State for Scotland if he will publish a table in the Official Report, for each district authority in Scotland, for each of the years from 1985 to 1988, showing the average council rent and district rate in constant 1987 prices.

  Lord James Douglas-Hamilton
  The tables show the average council house rent and the average domestic rate bill in each local authority area.
  101

  1985–86

  1986–87

  1987–88

  1988–89

  Lochaber

  731·94

  780·08

  833·56

  843·94

  Nairn

  763·10

  801·69

  821·02

  860·36

  Ross and Cromarty

  717·82

  804·01

  824·45

  868·82

  Skye and Lochalsh

  840·88

  935·30

  778·53

  868·33

  Sutherland

  721·71

  773·55

  750·15

  774·28

  East Lothian

  698·41

  729·19

  764·76

  795·87

  Edinburgh

  752·93

  730·97

  791·71

  853·89

  Midlothian

  667·24

  696·45

  713·00

  731·98

  West Lothian

  664·09

  689·68

  703·53

  738·95

  Argyll and Bute

  863·56

  835·39

  821·53

  895·69

  Bearsden and Milngavie

  686·29

  776·97

  861·99

  903·16

  Clydebank

  687·38

  821·34

  887·23

  959·89

  Clydesdale

  685·16

  710·85

  719·94

  779·25

  Cumbernauld and Kilsyth

  718·36

  805·27

  853·90

  899·67

  Cumnock and Doon Valley

  626·30

  663·50

  707·61

  744·42

  Cunninghame

  499·03

  573·33

  676·71

  736·46

  Dumbarton

  529·08

  637·48

  759·43

  899·67

  East Kilburn

  760·51

  848·88

  859·57

  869·82

  Eastwood

  648·37

  652·01

  647·22

  678·74

  Glasgow

  600·28

  688·23

  760·63

  843·44

  Hamilton

  617·55

  698·79

  772·48

  792·19

  Inverclyde

  636·89

  677·23

  692·92

  718·05

  Kilmarnock and Loudoun

  597·31

  678·09

  720·27

  738·45

  Kyle and Carrick

  686·64

  730·05

  747·95

  774·78

  Monklands

  638·41

  746·81

  806·13

  845·44

  Motherwell

  635·18

  680·36

  733·42

  750·89

  Renfrew

  553·22

  627·88

  675·65

  702·12

  Strathkelvin

  654·97

  774·42

  795·92

  853·89

  Angus

  713·79

  751·99

  757·99

  732·98

  Dundee

  553·62

  634·86

  707·62

  805·13

  Perth and Kinross

  672·60

  705·93

  721·70

  729·99

  Orkney Islands

  742·21

  791·10

  831·49

  871·81

  Shetland Islands

  757·42

  817·14

  828·14

  872·80

  Western Isles

  872·50

  900·65

  911·22

  930·03

  Note: Rent figures for 1985–86 to 1987–88 are as at 30 September, those for 1988–89 are from local authority housing revenue account returns.

  Average domestic rate bills at 1987–88 prices

  1985–86 £

  1986–87 £

  1987–88 £

  1988–89 £

  AVERAGE SCOTLAND

  425

  438

  474

  477

  Berwickshire

  289

  312

  335

  337

  Ettrick and Lauderdale

  292

  317

  335

  340

  Roxburgh

  292

  320

  337

  338

  Tweeddale

  300

  328

  354

  357

  Clackmannan

  346

  364

  406

  429

  Falkirk

  363

  365

  389

  408

  Stirling

  477

  502

  537

  558

  Annandale and Eskdale

  302

  327

  347

  364

  Nithsdale

  323

  341

  361

  379

  Stewartry

  322

  338

  358

  380

  Wigtown

  282

  306

  318

  338

  Dunfermline

  412

  392

  420

  441

  Kirkcaldy

  416

  398

  420

  438

  North East Fife

  457

  449

  479

  496

  Aberdeen City

  373

  397

  390

  412

  Banff and Buchan

  256

  290

  296

  328

  Gordon

  295

  319

  355

  374

  Kincardine and Deeside

  301

  332

  344

  378

  Moray

  255

  286

  294

  321

  Badenoch and Strathspey

  324

  348

  388

  360

  Caithness

  237

  268

  314

  296

  Inverness

  351

  388

  428

  406

  Lochaber

  291

  321

  361

  340

  Nairn

  376

  406

  437

  403

  Ross and Cromarty

  269

  332

  366

  345

  Skye and Lochalsh

  198

  218

  248

  237

  Sutherland

  201

  224

  248

  235

  East Lothian

  469

  483

  549

  603

  Edinburgh City

  482

  476

  553

  612

  Midlothian

  460

  463

  515

  565

  West Lothian

  402

  408

  470

  521

  Argyll and Bute

  369

  389

  439

  425

  Bearsden and Milngavie

  762

  803

  897

  847

  Clydebank

  441

  448

  471

  448

  Clydesdale

  413

  445

  504

  482

  102

  103

  1985–86 £

  1986–87 £

  1987–88 £

  1988–89 £

  Cumbernauld and Kilsyth

  456

  480

  544

  521

  Cumnock and Doon Valley

  376

  389

  430

  411

  Cunninghame

  445

  466

  512

  490

  Dumbarton

  530

  550

  582

  557

  East Kilbride

  479

  503

  563

  543

  Eastwood

  719

  718

  803

  758

  Glasgow City

  473

  485

  511

  483

  Hamilton

  520

  542

  557

  526

  Inverclyde

  469

  476

  515

  493

  Kilmarnock and Loudoun

  436

  459

  484

  463

  Kyle and Carrick

  514

  526

  578

  553

  Monklands

  465

  487

  522

  500

  Motherwell

  460

  473

  502

  479

  Renfrew

  513

  527

  561

  517

  Strathkelvin

  545

  579

  622

  580

  Angus

  332

  339

  378

  405

  Dundee City

  411

  414

  451

  464

  Perth and Kinross

  370

  370

  420

  442

  Orkney

  181

  180

  181

  183

  Shetland

  199

  203

  194

  367

  Western Isles

  197

  204

  206

  211

  Crime Prevention
  Mr. Wray
  To ask the Secretary of State for Scotland what urgent measures are being implemented in order(a) to prevent further increase in crimes involving personal violence in Strathclyde; and (b) to give communities and voluntary groups more participation in the prevention and detection of crime, and in the rehabilitation of offenders.

  Lord James Douglas-Hamilton
  [holding answer 22 April 1988]: Through our general support for the police service and crime prevention measures, including the recently launched campaign "Crime—Together We'll Crack It", the Government are committed to creating a climate which minimises the opportunites for crime, including violence against the person. We also give a high priority to the expansion of the number of neighbourhood watch schemes and crime prevention panels within Strathclyde and elsewhere.

  Council Property (Glasgow)
  Mr. Dunnachie
  To ask the Secretary of State for Scotland what information he has about the level of interest shown by private landlords or companies in assuming responsibility for council property in Glasgow, and if he will name the companies and individuals and the areas they have shown interest in.

  Lord James Douglas-Hamilton
  [holding answer 25 April 1988]: Since private landlords or companies interested in assuming responsibility for council properties in Glasgow would be in the first instance approach the owners of the property, I refer the hon. Member to the city of Glasgow district council for information about level of interest. However, as my right hon. and learned Friend announced in the House on 29 March 1988, he is aware that initiatives seeking to involve the private sector in the development of property at Castlemilk and Barlanark are being pursued.

  Timber
  Mr. Ron Davies
  To ask the Secretary of State for Scotland if he will state the area of land approved for forestry grant-aid in each of the six years to 31 March in each of the conservancies in Scotland; and if he will state 104
  the area of land afforested or restocked by the private forestry industry in each conservancy in each of those years.

  Lord James Douglas-Hamilton
  [holding answer 22 April 1988]: The information is as follows:

  Year ended 31 March and conservancy

  Area of new planting and restocking approved for grant-aid (hectares)

  Area of new planting or restocking grant-aided by the Forestry Commission (hectares)

  1983

  North

  12,166

  2,767

  East

  5,818

  2,152

  South

  6,504

  3,007

  West

  9,931

  3,128

  1984

  North

  10,254

  4,800

  East

  5,932

  2,396

  South

  10,287

  3,565

  West

  7,623

  4,387

  1985

  North

  13,544

  4,134

  East

  3,535

  2,356

  South

  8,803

  4,357

  West

  7,385

  4,465

  1986

  North

  11,768

  8,646

  Mid

  16,421

  6,761

  South

  9,686

  3,444

  1987

  North

  27,219

  7,398

  Mid

  17,140

  7,474

  South

  21,576

  3,895

  1988

  North

  32,864

  7,046

  Mid

  17,823

  7,268

  South

  18,416

  8,532

CIVIL SERVICE

  Monitoring Surveys
  Mr. Butler
  To ask the Minister for the Civil Service whether he will seek the advice of a professional physical
  105
  anthropologist on the categories of human groups used in Civil Service monitoring surveys; and if he will make a statement.

  Mr. Luce
  No.

THE ARTS

  Expenditure
  Mr. Fisher
  To ask the Minister for the Arts what advice he gives to the Arts Council or regional arts associations on the economic multiplier that would be most appropriate to use to estimate the economic impact of arts expenditure.

  Mr. Luce
  It is for the Arts Council to make its own case, using whatever data it wishes.

NATIONAL FINANCE

  Civil Servants (Yorkshire and Humberside)
  Mr. Robert Banks
  To ask the Chancellor of the Exchequer what proportion of all civil servants were working in Yorkshire and Humberside in(a) 1979 and (b)

  Mr. Brooke
  The proportion of all civil servants working in Yorkshire and Humberside was 5·2 per cent. in 1979 and 5·8 per cent. in 1987.

  Treasure Trove
  Mr. Key
  To ask the Chancellor of the Exchequer whether he is now in a position to announce his conclusions following the review of ex gratia awards to finders of treasure trove; and if he will make a statement.

  Mr. Lawson
  I have carefully considered the report of this review (a copy of which I am today placing in the Library), in consultation with ministerial colleagues in the Home Office, the Department of the Environment and the Office of Arts and Libraries.

  Her Majesty's Government accept all the report's recommendations. I am sure it is right that the objective of making ex gratia awards to finders of treasure trove should be to encourage the prompt and proper reporting and handing-in of finds. Finders who act properly and lawfully will continue to receive ex gratia awards equal to the full value of their finds, as assessed by the independent treasure trove reviewing committee, or, if no public museum wishes to acquire them, will have their finds returned to them. Awards will, however, continue to be made only to finders of treasure trove, and not to landlords or employers who are not themselves finders.

  Where, as happens in a small minority of cases, there is evidence of illegal activity in relation to a find, I agree with the report's conclusion that the criminal law should be seen as the principal sanction. But, in making decisions about ex gratia awards in those cases, Ministers will wish to take account of criminal convictions of finders arising from the circumstances of a find. Ministers will also wish to consider whether an ex gratia award should either be refused or abated where:

  there is evidence of illegal activity in relation to a find but, for whatever reason, no prosecution has been mounted;

  there was unreasonable delay between making and reporting a find;
  106
  all the relevant circumstances surrounding a find were not reported;

  there is evidence that only part of a find has been handed in;

  there are reasonable grounds for believing that a find was made elsewhere than on the alleged site; or

  there are other factors which it is appropriate to take into account in individual cases.

  Decisions about the level of awards in such cases will be taken in the light of the particular circumstances of each case. The intention, however, will be to reflect a balance between the objective of those awards to encourage the prompt and proper reporting of finds, and the need for those awards not themselves to provide an incentive for illegal or improper behaviour.

  The report makes a number of recommendations for speeding up the handling of treasure trove. These are designed to achieve a target time of no more than nine months, and ideally less, between the reporting of most finds and the payment of ex gratia awards. I believe that target strikes a reasonable balance between finders' legitimate expectations that they should receive their awards promptly and the work involved, not least by national and local museums and by coroners, between reporting a find and payment of an award. We are taking steps to inform those involved in each stage of the process, and I hope that they will do everything in their power to meet the suggested targets. I shall wish to review performance in about 18 months. I accept the report's administrative recommendations and these will be implemented. I understand that, as also recommended by the report, the Home Office intends to review and update its advice to coroners about treasure trove inquests.

  European Monetary System
  Mr. Blair
  To ask the Chancellor of the Exchequer what are the impications for Her Majesty's Government's policy towards the European monetary system of the completion of the internal market in 1992.

  Mr. Lilley
  [holding answer 25 April 1988]: The Government's policy remains that the United Kingdom will join the exchange rate mechanism of the European monetary system when the conditions are right.

  Official Hospitality
  Mr. Tony Banks
  To ask the Chancellor of the Exchequer how much was spent by his Department on official hospitality in the financial year 1987–88.

  Mr. Brooke
  [holding answer 18 April 1988]: The amount spent on official hospitality was £53,457 in 1987–88.

WALES

  Homelessness
  Mr. Goodlad
  To ask the Secretary of State for Wales how many homeless people in Wales have previously been admitted to mental hospitals; and what this figure represents as a percentage of the total number of homeless persons.

  Mr. Grist
  This information is not collected centrally.

  Privatisation
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he has had discussions with the trade unions regarding (i) water privatisation, (ii) privatisation of the electricity industry and (iii) local government services privatisation legislation; and if he will make a statement.

  Mr. Peter Walker
  I have formally sought the views of the Wales TUC and the trade unions on the proposals contained in the Local Government Act and on detailed aspects of implementation. I have met representatives of the Wales TUC to discuss the competition provisions contained in the Act, but I have not discussed with the trade unions either water privatisation or the privatisation of the electricity industry. The latter of course is the responsibility of my right hon. Friend the Secretary of State for Energy. The trade unions and the Wales TUC have had the opportunity to comment on the various documents setting out the Government's proposals in these areas.

  Towyn (Road Crossing)
  Ms. Walley
  To ask the Secretary of State for Wales if he will take steps to alert all visitors to Towyn that the Sandbank road crossing is unsafe for pedestrians and therefore a danger to the public; and if he will make it his policy to advise such visitors to avoid this area until such time as British Rail erects a pedestrian bridge.

  Mr. Wyn Roberts
  I shall write to the hon. Lady and place a copy of my letter in the Library of the House.

EMPLOYMENT

  London Docklands
  Mr. Leighton
  To ask the Secretary of State for Employment what response he has made to the report of the docklands liaison group of the DE-Manpower Services Commission of October 1987; and if he intends to implement recommendation 3.6 of the report.

  Mr. Nicholls
  The docklands liaison group report on employment and training services in docklands was prepared for regional management in the Employment Service and the Manpower Services Commission.

  With regard to recommendation 3.6 of the report, the Employment Service accepts the need to improve the accessibility of its services to unemployed people in some parts of London docklands.

  We are examining the possibility of relocating the Isle of Dogs jobcentre from its current sit in the Cubitt Town library building. But in the meantime we shall be looking to maintain the best possible service to local residents from that site.

  We have set up a new-style office at Bermondsey to locate all our services for unemployed people together in one place. In order to bring the opportunities available in docklands to a greater number of people, we are considering a range of outreach measures, including:
  —a mobile facility to take services and information about vacancies and other employment and training opportunities to local communities, and
  —the use of new technology to provide a wider network of information points, giving access to details of job and training opportunities, across the whole area.
  108
  Mr. Leighton
  To ask the Secretary of State for Employment what is the budget of the docklands liaison group; and if any additional resources to fund the work of the group have been made available.

  Mr. Nicholls
  The docklands liaison group acts as a single contact point to enable the Employment Service and the Manpower Services Commission to co-ordinate their programmes and services with other interested bodies and the private sector in London docklands. Sufficient funding for this task is made available from the local budgets of the Employment Service and the MSC.

  In 1987–88 the Manpower Services Commission spent around £17·3 million on training-related programmes in the docklands boroughs. The Employment Service has a network of nine jobcentres and six benefit offices in the docklands area, employing 280 staff at a cost of about £2·8 million in the last financial year.

  Self-Employment
  Mr. John Marshall
  To ask the Secretary of State for Employment if he will make a statement about the trends in self-employment in the past five years.

  Mr. Lee
  Between December 1982 and December 1987 there was an estimated net increase of 727,000 in the number of self-employed people in Great Britain.

  Tourism
  Mr. Barry Field
  To ask the Secretary of State for Employment what steps he is taking to improve the data and statistics available to the tourist industry; and if he will make a statement.

  Mr. Lee
  My Department has, together with the British Tourist Authority, commissioned a review of the statistical needs of the tourism industry. We expect the report from the consultants in early summer.

  Mr. Harry Greenway
  To ask the Secretary of State for Employment what is the current level of employment in(a) Greater London and (b) Ealing, North in numerical and percentage terms; what was the comparable figure (i) one year and (ii) two years ago; and if he will make a statement.

  Mr. Lee
  The available information is as follows:

  Greater London

  December of each year

  Civilian employed labour force

  Civilian employed labour force as a percentage of the civilian working population

  1985

  3,861,000

  90·6

  1986

  3,859,000

  90·6

  19871

  3,937,000

  92·2

  1 The latest date for which figures are available.

  Information for parliamentary constituencies covers only estimates of the numbers of civilian employees in employment, excluding self-employed people, and the unemployed. At September 1984, the latest date for which the figures are available, there were 24,800 employees in employment in the Ealing, North constituency. The sum of this September 1984 estimate and the numbers of unemployed claimants in the constituency at the same date gives a total figure of 28,600.
  109
  Mr. Fisher
  To ask the Secretary of State for Employment what was the level of employment in each of the last five years in(a) publishing, (b) printing, (c) the record industry, (d) the film industry, (e) broadcasting (radio), (f) broadcasting (TV and cable) and (g) hotels and catering.

  Employees in employment in Great Britain

  December of each year

  Printing and publishing1(475)2

  Record industry3

  Film production, authors, etc.4 (9711, 9760)5

  Radio, Television, Theatres, etc.6 (9741)5

  Hotels and catering (66)

  1983

  340,100

  ..

  35,400

  68,600

  915,600

  1984

  349,400

  ..

  39,200

  70,200

  970,600

  1985

  353,600

  ..

  39,600

  73,400

  1,010,400

  1986

  345,200

  ..

  40,600

  78,800

  1,035,500

  19877

  342,200

  ..

  40,600

  81,200

  1,076,900

  1 Not available as separate industries.

  2 Figures in brackets denote classes, groups, and activity headings of the Standard Industrial Classification 1980.

  3 Not separately available.

  4 Separate figures for the film industry are not available.

  5 These estimates are subject to considerable potential estimation error due to the relatively small number of employees in the industries.

  6 Radio and television are not available separately.

  7 The latest date for which figures are available.

  Mr. Fisher
  To ask the Secretary of State for Employment what was the level of employment in each of the last five years in(a) the arts, (b) sport and (c) recreation and leisure.

  Mr. Lee
  Figures are not available for precisely the categories specified. The available information is as follows:

  Employees in Employment in Great Britain

  Recreational and Cultural Services (97)1

  Of which Sport and other Recreational Services (9791)

  December of each year

  1983

  418,100

  263,100

  1984

  424,700

  270,800

  1985

  448,800

  280,300

  1986

  468,600

  287,900

  19872

  476,200

  294,700

  1 Figures in brackets denote classes and activity headings of the Standard Industrial Classification 1980

  2 The latest date for which figures are available.

  The figures have not been adjusted for the effects of seasonal variations.

  Northern Region
  Mr. Trotter
  To ask the Secretary of State for Employment how many new jobs have been created in the northern region in the last three years; and how much unemployment in the region has fallen in that time.

  Mr. Lee
  There are no figures for job losses and job gains. Between December 1984 and December 1987 (the latest date for which comparable figures are available) the civilian employed labour force in the northern region has shown a net increase of 42,000. In the same period the number of unemployed people including school leavers has fallen by 39,000. The figures have not been adjusted for the effects of seasonal variations. The civilian employed labour force is the sum of employees in employment and the self-employed.
  110
  Mr. Lee
  Figures are not available for all the industries specified.

  The available information is as follows:

  Mr. Trotter
  To ask the Secretary of State for Employment if he will list the measures currently being taken by his Department to provide training and employment in the northern region.

  Mr. Lee
  The following measures are available in the northern region:

  YTS: High-quality training and planned work experience for school leavers.

  New job training scheme: training for adults who wish to add to or learn new skills.

  Training for enterprise: training for business owners and managers.

  Open learning: provides access to training, particularly for

  supervisors and technicians.

  Other adult training: a wide range of full and part-time courses offering training closely matched to local opportunities.

  Training grants for employers: practical and financial help for training employees and recruits.

  Restart programme: counselling and courses to help long-term unemployed people.

  Community programme: community-based work and training.

  Jobclubs: coaching, facilities and support for people looking for work.

  Jobstart allowance: helps long-term unemployed people back into work.

  Community industry: work experience for disadvantaged young people.

  Travel to interview scheme: financial help for those who need to travel to job interviews.

  Jobshare: an incentive to employers to create part-time jobs.

  Voluntary projects programme: experience from working on voluntary projects.

  Enterprise allowance scheme: financial help for unemployed people wishing to become self-employed or start their own business.

  Small firms service: free information and counselling for new or existing small businesses.

  Tourism: advice and financial support for tourism projects.

  Loan guarantee scheme: guarantees for bank loans made to businesses.

  Special needs: specific help for the disabled and ethnic minorities.

  All these measures are listed in the "Action for Jobs" booklet, available from any of my Department's offices.

  My Department is the lead Department in the Tyne and Wear city action team, set up to assist with regeneration

  111
  in the Tyne and Wear area, and in a co-ordinating team in Cleveland, and is also participating in task forces in Hartlepool and Middlesbrough.

  Youth Employment
  Mr. Boyes
  To ask the Secretary of State for Employment what measures are being considered to boost youth employment prospects in Houghton and Washington.

  Mr. Cope
  [holding reply Monday 25 April]: The employment prospects of young people in Houghton and Washington as elsewhere are being boosted by the high quality training and work experience offered by YTS. From September, the Government are extending their guarantee of a YTS place to all 16 and 17-year-olds who are not in work or further education. As a result, no young person under 18 need be unemployed.

  Family Income Supplement
  Mr. Leighton
  To ask the Secretary of State for Employment what percentage of the Labour force in part-time employment were in receipt of family income supplement at the latest date for which figures are available.

  Mr. Scott
  I have been asked to reply.

  Part-time work is defined, in the employment statistics, as 30 hours a week or less. Family income supplement was normally available only to those working at least 30 hours a week. However, single parents could claim FIS if working not fewer than 24 hours a week. It is estimated that in March 1986 (the latest date for which information is available) single parents working 24 to 29 hours a week and receiving FIS represented under 1 per cent. of all employees working 30 hours a week or fewer (including those working fewer than 24 hours).

FOREIGN AND COMMONWEALTH AFFAIRS

  Cyprus
  Mr. Anthony Coombs
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the United Kingdom's contribution to the cost of the United Nations peacekeeping force in Cyprus; and what proportion of the contingent is manned by British forces.

  Mrs. Chalker
  Figures for the financial year 1987–88 are incomplete. The outturn for 1986–87, the last year for which figures are available, was £20,169,594 net of recoveries. The British contingent is, according to the latest available figure, 741 officers and men out of a total United Nations force in Cyprus of 2,122.

  Warsaw Pact (Military Data)
  Mr. Morgan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent exchanges of military data on (i) conventional force deployments and (ii) battlefield and tactical nuclear weapons have taken place with the Warsaw pact.

  Mr. Parry
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent exchanges of military data on (i) conventional force deployment and (ii) battlefield and tactical nuclear weapons have taken place with the Warwaw pact.
  112
  Mr. Mellor
  At the Stockholm conference on confidence and security building measures NATO delegations proposed exchanges of information on conventional force levels and dispositions. Warsaw pact delegations rejected this proposal. The September 1986 Stockholm agreement is therefore limited to exchanges of information on certain military activities in the field.

  As for nuclear weapons, the United States and the Soviet Union have exchanged information on systems covered by the intermediate nuclear forces treaty. We and other NATO Governments regularly publish detailed information on both our conventional and nuclear capabilities. We have passed this information to Warsaw pact representatives during arms control discussions and urged them to reciprocate. So far they have not done so.

  Namibia
  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has had any meetings with, made approaches to, or received approaches from, the Transitional Government of National Unity in South West Africa—Namibia since 1985.

  Mrs. Chalker
  We do not recognise the Transitional Government of National Unity. However, on 5 February 1987 I met Mr. Shipanga and Mr. Katjiuonga in their capacity as leaders of internal Namibia parties.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is Her Majesty's Government's policy towards the Transitional Government of National Unity in South West Africa—Namibia.

  Mrs. Chalker
  We do not recognise the Transitional Government of National Unity, nor any unilateral attempt by South Africa to transfer power in Namibia.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what is his policy on recent announcements by the South African Government that the South African administrator-general in South West Africa-Namibia is to be given additional powers;

  (2) What assessment he has made of South Africa's policy towards South West Africa-Namibia in the light of recent developments.

  Mrs. Chalker
  We wish to see Namibia independent. This will not be furthered by granting the South African administrator general new powers. What is needed is prompt implementation of the United Nations plan.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has had any meetings with, made approaches to, or received approaches from, Mr. Peter Kalangula, the Owambo leader, or his representatives, since 1983.

  Mrs. Chalker
  No, but members of the British embassy, including the ambassador, maintain contact with Mr. Kalangula. Most recently Her Majesty's ambassador saw Mr. Kalangula in Windhoek last month.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy on Mr. Kalangula's position with regard to attempts to find a political solution in South West Africa-Namibia.

  Mrs. Chalker
  We commend Mr. Kalangula's support for the early implementation of Security Council resolution 435.

  South West Africa People's Organisation
  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has had any meetings with, made approaches to, or received approaches from the South West Africa People's Organisation, since 1983.

  Mrs. Chalker
  Meetings with SWAPO representatives take place from time to time. Most recently I met Mr. Sam Nujoma on 26 October 1987.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is Her Majesty's Government policy towards the South West Africa People's Organisation.

  Mrs. Chalker
  SWAPO is a party to the negotiations for a Namibian settlement. We do not recognise its claim to be the"sole authentic representative of the Namibian people"
  and we oppose its use of violence.

  Chile
  Mr. Dunnachie
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he is considering sending observers to monitor the plebiscite in Chile.

  Mr. Eggar
  We will consider whether to send observers to the plebiscite if invited to do so by the Chilean Government.

  Israel
  Mr. McAllion
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Government policy towards the action of the Israeli Government on the West Bank and the Gaza Strip during the weekend beginning 15 April.

  Mr. Mellor
  We deplore the deaths and injuries inflicted on 16 and 17 April and again call on the Israeli authorities, pending their withdrawal, to administer the occupied territories in accordance with international law and human rights standards.

  Israel (Nuclear Weapons)
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs if, in the light of the conviction in the Israeli courts of Mordecai Vanunu on charges of leaking secrets of the Israeli nuclear weapons production facility at Dimona, he will initiate a renewed evaluation of Israeli nuclear weapons capability.

  Mr. Mellor
  No. Israel's ambiguous position will continue to give rise to suspicion until it signs the non-proliferation treaty and opens its nuclear facilities to international inspection.

  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his reply to the hon. Member for Meirionnydd Nant Conwy, 31 March,Official Report, column 628, as corrected on 12 April, Official Report, column 34, on representations made to the Israeli Government to sign the non-proliferation treaty, what response was received in October 1987; and if any further communication took place as a result.

  Mr. Mellor
  The permanent under-secretary of the Foreign and Commonwealth Office was told at the talks referred to by the hon. Member that the Israeli 114
  Government saw no prospect of Israeli signature of the non-proliferation treaty before the conclusion of a general peace settlement in the region. We have received a similar response, most recently in April, when we have raised the non-proliferation treaty with the Israeli Government.

  Nuclear Materials (Safeguards)
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs what are the implications for safeguards arrangements under the 1970 treaty of Almelo, between the United Kingdom, the Netherlands and the Federal Republic of Germany, of plans for URENCO to collaborate with Duke Power Company of the United States of America on a nuclear fuel plant in the United States of America.

  Mrs. Chalker
  If these plans come to fruition, the Governments of the United Kingdom, Federal Republic of Germany and Netherlands will ensure that appropriate safeguards procedures are applied at any facility constructed in the United States pursuant to article VII of the treaty of Almelo.

  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs what safeguards arrangements exist to cover nuclear materials processed by the Anglo-Dutch-Federal German URENCO company for Boston Edison Co. and Sacramento Municipal District Utility in the United States of America.

  Mr. Michael Spicer
  I have been asked to reply.

  Material processed by URENCO in the United Kingdom is subject to Euratom safeguards and to the terms of the United Kingdom/Euratom/IAEA agreement. Similar arrangements apply to URENCO Dutch arid German plants.

  Western European Union
  Mr. Gale
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress he has made in his discussions relating to the enlargement of the Western European Union to include Spain and Portugal.

  Mr. Mellor
  The Western European Union ministerial meeting in the Hague on 18–19 April invited Spain and Portugal to open discussions on how they would meet the obligations of Western European Union membership contained in the modified Brussels treaty and the Western European Union platform.

  Malaysia
  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met representatives of the Malaysian Government.

  Mr. Eggar
  My right hon. and learned Friend visited Malaysia, Singapore and Brunei from 5 to 10 April. We enjoy close and developing relations with all three countries. In Malaysia he had valuable discussions with the Deputy Prime Minister, the Foreign Minister and the Minister for Education on bilateral links and a range of regional and international issues.

  As part of our common stand on drugs issues, we agreed in principle to work for a reciprocal agreement on the confiscation of drug traffickers' assets.

  Tigre and Eritrea
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussion he or his ministerial colleagues has had with the Ethiopian government and others about resolving peacefully the conflicts in Tigre and Eritrea; and what is his assessment of the prospect of peace talks taking place in either area, as a result of United Nations or EEC initiatives.

  Mrs. Chalker
  The most recent occasions were when I visited Ethiopia in April 1987 and when my hon. Friend the Minister for Overseas Development did so in January this year. My hon. Friend had planned to return this month but has postponed his visit at the request of the Ethiopian Government.

  We have also discussed the conflicts in Tigre and Eritrea with our European partners. The Community agreed a declaration last week urging a peaceful solution. We earnestly hope that all parties in this tragic situation will put humanitarian before military considerations.

  Defence Equipment (Sales)
  Mr. Lawrence
  To ask the Secretary of State for Foreign and Commonwealth Affairs what arms sales are under way to Israel's Arab neighbours; and whether he proposes to resume arms sales to Israel.

  Mr. Mellor
  It is not our practice to disclose details of sales of defence equipment overseas. We maintain restrictions on arms sales to Israel because of the continuing Israeli military presence in Lebanon.

  Refuseniks
  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will seek a further opportunity of raising with the Soviet Foreign Minister the plight of the long-term refuseniks Michael Kremen, Boris Chernobilsky and Oscar Menoelev, who are still waiting for exit visas.

  Mr. Mellor
  Michael Kremen and Boris Chernobilsky are among those cases about which we have expressed concern to the Soviet authorities. We shall continue to take suitable opportunities to raise these cases, together with that of the Mendeleyevs and others about which representations have been made to us. Bilateral talks on human rights between officials, which we hope will take place soon, will be one such opportunity.

  Chemical Weapons
  Mr. Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information is being made publicly available by Her Majesty's Government on protection and decontamination equipment for those affected by chemical weapon attacks in northern Iraq.

  Mr. Mellor
  It is not our practice to make such information available publicly. Information or equipment suitable for protection or decontamination is available from commercial sources although the supply of any such equipment from the United Kingdom to Iran or Iraq would be subject to export control. With our agreement a number of chemical weapon victims have received private medical treatment in the United Kingdom.

AGRICULTURE, FISHERIES AND FOOD

  Wheat and Barley
  Mr. Paice
  To ask the Minister of Agriculture, Fisheries and Food what would be the effect on the United Kingdom intervention price of(a) wheat and (b) barley of a devaluation of the green pound by: (a) 5 per cent., (b) 9 per cent., and (c) to parity.

  Mr. Donald Thompson
  Feedwheat and barley have the same intervention price of 170·47 ecu per tonne which, at the present green rate, is equivalent to £111·85 per tonne.

  Devaluations sufficient to reduce the cereals monetary compensatory amount by the amounts specified and to parity would give the following intervention prices:

  (a) £116·99 per tonne

  (b) £121·46 per tonne

  (c) £127–29 per tonne

  European Community (Assistance to Farmers)
  Mr. Nicholas Bennett
  To ask the Minister of Agriculture, Fisheries and Food what information his Ministry has as to the assistance given by other European Community Agriculture Ministers to their farmers; and if he will make a statement setting out the comparisons between aid provided in other European Community countries and the United Kingdom.

  Mr. MacGregor
  Responsibility for ensuring that national aids are in conformity with the treaty of Rome rests with the European Commission, and member states are required to notify such aids to it for approval.

  When we are informed of a national aid which appears to contravene Community law we do not hesitate to bring the matter to the attention of the Commission.

  Sheepmeat
  Mr. Nicholas Bennett
  To ask the Minister of Agriculture, Fisheries and Food what is the sheepmeat production ceiling for the United Kingdom in 1988–89 set by the European Community; what it was in 1987–88; and if he will make a statement.

  Mr. Donald Thompson
  The Community has not set sheepmeat production ceilings for either year. However, agreement has been reached on a budgetary stabiliser for this sector, as for many other CAP commodities. This is to be based on maximum guarantee thresholds set at the 1987 ewe flock in Great Britain and the rest of the Community and provides for 1988 and beyond a 1 per cent. cut in the basic and derived support prices for sheepmeat for each 1 per cent. overshoot in the MGLs. The detailed regulations are being finalised in discussions in the Council and elsewhere.

  Mr. Nicholas Bennett
  To ask the Minister of Agriculture, Fisheries and Food what changes have been announced by the European Commission in the mechanism for calculating the premium payments on ewe headage; and if he will make a statement.

  Mr. Donald Thompson
  In its proposals for the review of the sheepmeat regime, the European Commission envisages new methods of calculating annual ewe premia throughout the Community based on EC-12 market prices. No decisions have yet been taken on these or other aspects of the Commission's proposals.

  New Zealand (Lamb Imports)
  Mr. Nicholas Bennett
  To ask the Minister of Agriculture, Fisheries and Food whether he will make a statement on Her Majesty's Government's position regarding New Zealand's lamb imports under the forthcoming general agreement on tariffs and trade talks.

  Mr. Donald Thompson
  In its proposals for reform of the EC's sheepmeat regime, the Commission has proposed discussions with third countries with a view to stabilising their import quantities of both frozen and chilled products, and of improving prices. The trade is currently controlled by voluntary restraint agreements negotiated between the EC and the main third countries. These set annual import quantities in exchange for a halving of the EC import duty to 10 per cent. When the Commission has developed a draft mandate for these discussions, we shall study it closely.

  Lean Meat Prediction System
  Mr. Win Griffiths
  To ask the Minister of Agriculture, Fisheries and Food if he will make it his policy to follow the example of the Dutch Government and finance the adoption of the Fat-O-Meater lean meat prediction system by the processing industry in the United Kingdom; and if he will make a statement.

  Mr. Donald Thompson
  The optical probe, already widely used in the United Kingdom, will be authorised for use here under the EC Pig Carcase Grading Regulations, which will take effect on 1 January next year. Slaughterhouses will, therefore, be able to continue to use their existing equipment for the lean meat prediction of pig carcases which will be required by these regulations.

  Pig Industry
  Mr. Anthony Coombs
  To ask the Minister of Agriculture, Fisheries and Food what representations he has received from representatives of the British pig industry regarding their current economic situation.

  Mr. Donald Thompson
  We are keeping in close touch with representatives of the pig producers over the weak state of the market and monetary compensatory amounts. In recent weeks prices appear to have stabilised, while United Kingdom pigmeat MCAs have fallen from —10·9 to — 6·1 per cent. due to the strengthening of sterling. Our objective continues to be the elimination of United Kingdom MCAs in this sector.

  Sheep (Radioactivity)
  Ms. Walley
  To ask the Minister of Agriculture, Fisheries and Food whether environmental health officers throughout Staffordshire have been advised to look out for radioactive sheep from Cumbria and north Wales in the 1988 lambing season.

  Mr. Donald Thompson
  [holding answer 25 April 1988]: In line with arrangements agreed with district and county councils, my officials have kept the chief emergency planning officer of Staffordshire county council fully informed about the introduction and development of the scheme under which sheep may be moved out of the restricted areas of Cumbria and north Wales. This includes
  118
  details of the arrangements for this season's lambs. It is for the authority itself to ensure that the information reaches all the appropriate council officials within the county.

  Ms. Walley
  To ask the Minister of Agriculture, Fisheries and Food if he will take steps to introduce the sample monitoring for radioactivity of sheep which have been moved from Cumbria and north Wales to Staffordshire for further fattening.

  Mr. Donald Thompson
  [holding answer 25 April 1988]: Additional sample monitoring is unnecessary. Sheep moved out of the restricted areas of Cumbria and north Wales must either already have satisfied a monitoring test or been paint-marked to show that they may not yet be slaughtered. These marked sheep will be released for slaughter only when national re-monitoring data show that it is safe to remove the restriction on all sheep painted with the particular colour.

  Badgers
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food how many applications were made, by parish, in 1986 and 1987, respectively, to the consultative panel on badgers and tuberculosis for removal of badgers; and how many were granted.

  Mr. Donald Thompson
  [holding answer 25 April 1988]: The number of applications made to the consultative panel on badgers and tuberculosis for removal of badgers during 1986 and 1987, listed by parish, are as follows:

  1986

  1987

  Applied for

  Approved

  Applied for

  Approved

  England

  Avon

  Pucklechurch

  1

  1

  —

  —

  Cornwall

  Davidstowe

  —

  —

  1

  1

  Kenwyn

  —

  —

  1

  0

  Menheniot

  —

  —

  2

  2

  St. Martin

  —

  —

  1

  1

  Devon

  Holsworthy

  —

  —

  5

  5

  Milton Damerol

  —

  —

  3

  3

  Sutcombe

  —

  —

  2

  2

  Thornbury

  —

  —

  2

  2

  Gloucester

  Brookthorpe

  —

  —

  1

  1

  Duntisbourne Rouse

  —

  —

  1

  1

  Moreton Valence

  1

  1

  —

  —

  Somerset Rodney Stoke

  —

  —

  1

  1

  Westbury sub Mendip

  —

  —

  1

  1

  Wiltshire

  Brokenborough

  —

  —

  2

  2

  Malmesbury St. Paul without

  —

  —

  1

  1

  Sherston

  —

  —

  1

  1

  Wales

  Dyfed

  Llanddarog

  —

  —

  2

  2

  Llanwinio

  —

  —

  1

  1

  Total

  2

  2

  28

  27

  Animals (Tuberculosis)
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food how many incidences of herd breakdown due to tuberculosis were notified in each of the last five years; and if he will give the information by parish and list, in each case, the number for which the cause was unexplained.

  Dunnet Report

  MAFF 11th Report

  1982

  1983

  1984

  1985

  1986

  Number of new confirmed breakdowns

  113

  93

  90

  77

  83

  Number for which the cause is unknown

  23

  22

  26

  24

  35

  120
  Mr. Donald Thompson
  [holding answer 25 April 1988]: Information cannot be provided for individual parishes without disproportionate cost. The table gives the total figures for Great Britain for the last five years for which information is available.

SOCIAL SERVICES

  Patient Expenditure (Nottingham)
  Mr. Allen
  To ask the Secretary of State for Social Services if he will give the average annual expenditure per patient in 1986–87 by the Nottingham district health authority.

  Mr. Newton
  For patient treatment costing purposes all hospitals are classified into a series of standard types which reflect the principal use to which their beds are allocated and an overall average cost or expenditure per patient is thus not determined. For figures on average annual treatment costs of in-patients and out-patients by type of hospital for the Trent region as a whole, I refer the hon. Member to the Department's annual publication "Health Services Costing Returns" (the latest being for 1985–86)—copies of which are held in the Library. For similar information detailed to individual hospitals and units the hon. Member way wish to contact the chairman of the Trent regional health authority who may be able to assist.

  Hospital and Community Health Services
  Mr. Robin Cook
  To ask the Secretary of State for Social Services if he will list those district health authorities or regional health authorities, which are due to receive money from the allocation for hospital and community health services announced by the Chancellor of the Exchequer in his Autumn Statement.

  Mr. Newton
  All health authorities in England have benefited from the increase in spending on the hospital and community health services announced by my right hon.

  Revenue Expenditure on hospitals categorised as "Mental Illness"

  Expenditure (£)

  District

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  Blackburn, Hyndburn and R.V.

  0

  0

  0

  0

  0

  Blackpool, Wyre and Fylde

  0

  0

  0

  0

  0

  Bolton

  421,463

  435,586

  461,313

  488,433

  597,916

  Burnley, Pendle and Rossendale

  0

  0

  0

  0

  0

  Bury

  0

  0

  0

  0

  0

  Central Manchester

  0

  0

  0

  1,420,171

  1,658,503

  Chorley and South Ribble

  0

  0

  0

  0

  0

  Lancaster

  876,038

  884,737

  923,538

  1,254,329

  1,304,985

  North Manchester

  0

  0

  0

  0

  0

  Oldham

  0

  0

  0

  0

  0

  Preston

  13,318,178

  13,583,528

  13,439,427

  13,106,404

  13,356,038

  Rochdale

  326,400

  369,529

  410,166

  446,303

  84,626

  Salford

  13,955,531

  14,784,169

  15,343,857

  15,970,384

  17,632,609

  South Manchester

  0

  0

  0

  0

  0

  Stockport

  488,102

  512,560

  555,080

  572,547

  587,401

  Tameside and Glossop

  0

  0

  0

  0

  0

  TrafTord

  0

  0

  0

  0

  0

  West Lancashire

  0

  0

  0

  0

  0

  Wigan

  0

  0

  0

  0

  0

  Total

  29,385,712

  30,570,109

  31,133,381

  33,258,571

  35,222,078

  Revenue Expenditure on hospitals categorised as "Mental Handicap"

  Expenditure (£)

  District

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  Blackburn, Hyndburn and R.V.

  11,306,933

  11,596,281

  12,390,289

  12,841,570

  12,906,979

  Blackpool, Wyre and Fylde

  0

  0

  0

  0

  0

  122
  Friend the Chancellor of the Exchequer in the Autumn Statement. My statement to the House on 16 December 1987 was followed by the publication on 23 December of a circular (HC(87)37) describing how resources were to be distributed among regional health authorities; this was followed in turn by the issue of more detailed initial cash limits to each RHA on 14 January. Allocations to districts based on those cash limits have since been made by regions.

  Mentally Ill and Mentally Handicapped
  Mr. Pike
  To ask the Secretary of State for Social Services if he will publish the levels of spending on(a) the mentally handicapped and (b) the mentally ill in each of the health authorities in the area of the North West regional health authority for each year from 1979 to 1987, inclusive.

  Mr. Newton
  Information on health authority expenditure by type of patient is not collected centrally. However, hospital costing returns submitted to the Department do show expenditure on hospitals of different types. Costing returns in respect of community health services show expenditure relating to the major areas of activity only. Thus we have information on expenditure by hospitals categorised as "Mental Handicap" and "Mental Illness", but not on expenditure on the growing volume of activity in psychiatric units in general hospitals etc. or within the community health services. Such costs are not separately identifiable centrally.

  The following tables, derived from the hospital costing returns give the expenditure by hospitals categorised as mental handicap and mental illness in each of the district health authorities in the North Western region since their establishment on 1 April 1982.
  123

  District

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  Bolton

  68,307

  101,917

  109,924

  121,225

  125,379

  Burnley, Pendle and Rossendale

  11,437,991

  11,470,320

  11,963,090

  12,536,561

  12,361,525

  Bury1

  0

  0

  80,416

  0

  0

  Central Manchester

  0

  0

  0

  0

  0

  Chorley and South Ribble

  0

  0

  0

  0

  0

  Lancaster

  7,915,547

  7,961,773

  8,538,286

  8,737,825

  8,999,434

  North Manchester

  0

  0

  0

  0

  0

  Oldham

  0

  0

  0

  0

  0

  Preston

  0

  0

  0

  0

  0

  Rochdale2

  340,278

  0

  428,104

  472,163

  522,087

  Salford

  1,230,982

  1,564,140

  1,636,176

  1,662,257

  1,791,605

  South Manchester

  0

  0

  0

  0

  0

  Stockport

  1,502,798

  1,624,270

  1,787,572

  1,786,305

  1,872,426

  Tameside and Glossop

  136,108

  139,352

  172,553

  175,723

  160,679

  Trafford

  0

  0

  0

  0

  0

  West Lancashire

  364,627

  373,033

  345,164

  310,304

  150,090

  Wigan

  0

  0

  0

  0

  0

  Total

  34,303,571

  34,831,086

  37,451,574

  38,643,933

  38,890,204

  1 Cambeck Close was reclassified as a Community Mental Handicap Unit from 1985–86.

  2 For 1983–84 only, the health authority included expenditure incurred at Scott House within Community Health Services.

  Disabled People
  Mr. Alfred Morris
  To ask the Secretary of State for Social Services, pursuant to the answer of 29 March,Official Report, column 445, if he will report on progress within the United Kingdom on implementation of the United Nations world programme of action concerning disabled persons.

  Mr. Scott
  As I said in my earlier reply on 29 March at column 445 the two reports are by the Secretary General of the United Nations. Report A/42/551 was in response to a request to the Secretary General for information on (a) the establishment and reinforcement of national committees as focal points for the United Nations decade (6) bilateral assistance relating to projects concerning the prevention of disabilities, rehabilitation and equalisation of opportunities and (c) the voluntary fund. Report A/ 42/561 sets out an evaluation by the Secretary General of the implementation of the world programme of action during the first half of the decade 1983–92.

  The United Kingdom Government support the overall objectives of the United Nations world programme of action and takes them into account when developing policies for disabled people. The Government, the statutory authorities and the voluntary sector are involved in the development of policy and services within the United Kingdom for disabled people. We also participate at the international level in activities undertaken by the European Community, the Council of Europe and Rehabilitation International. Therefore, given these involvements, we do not feel that a national committee specifically related to overseeing the United Nations programme would serve any useful purpose.

  With respect to overseas aid, rather than contribute to the voluntary fund we support the general aims of the world programme by assisting specific projects under our bilateral aid programmes administered by the Overseas Development Administration. We also jointly fund, with various British charities, rehabilitation programmes and projects to assist disabled people.

  With regard to the recommendation of the governing council of the United Nations development programme that a global campaign be promoted to raise awareness and mobilise resources in support of the objectives of the
  124
  world programme of action, we would like to await specific proposals from the Secretary General on how this could proceed.

  Electoral Register (Isle of Wight)
  Mr. Barry Field
  To ask the Secretary of State for Social Services how many voters there are on the new electoral register for the Isle of Wight.

  Mrs. Currie
  There are 100,785 parliamentary electors on the 1988 register for the Isle of Wight.

  Electors
  Mr. Barry Field
  To ask the Secretary of State for Social Services what is the English electoral quota for 1988–89.

  Mrs. Currie
  The electoral quota for England—that is, the total electorate divided by the number of parliamentary constituencies — is 69,688 based on the 1988 register.

  Mr. Barry Field
  To ask the Secretary of State for Social Services which are currently the five largest and five smallest parliamentary constituencies showing in each case the number of registered electors on the new registers.

  Mrs. Currie
  The information requested is as follows:

  Parliamentary constituency

  1988 Electorate

  (i) Five largest

  Milton Keynes

  103,210

  Isle of Wight

  100,785

  East Hampshire

  90,013

  Huntingdon

  89,657

  Swindon

  89,138

  (ii) Five smallest

  Surbiton

  45,320

  Kensington

  45,998

  Chelsea

  46,763

  Newham North West

  47,814

  Hammersmith

  47,888

  Shenley Hospital
  Mr. Livingstone
  To ask the Secretary of State for Social Services what is his policy on the future of Shenley
  125
  hospital; if there is a closure date; what is the most recent figure for the population in Shenley; and how many patients have been there for more than five years.

  Mrs. Currie
  The aim of our policy in the mental health field is that every health district should provide a comprehensive range of services for mentally ill people, from long-term in-patient care for the severely and chronically ill to domiciliary support for those who can live near normal lives at home.

  The latest figures held centrally for the numbers of in-patients in Shenley hospital is 805, as at 31 December 1986. Figures are not available centrally on the length of stay of resident in-patients. The hon. Member may wish to contact the chairman of Parkside health authority for information on plans for the future of Shenley hospital, and detailed local statistics.

  Eye Tests
  Mr. Moss
  To ask the Secretary of State for Social Services how many people in Wisbech and West Norfolk district health authority had eye tests in the last year for which figures are available; and what estimate he can make of how many would not have received free tests if his Department's new regulations had applied at the time.

  Mr. Newton
  I assume that my hon. Friend is referring to the eye tests carried out under the general ophthalmic services. These are the responsibility of the family practitioner committee and it is not possible to provide information for particular district health authority areas. However, in the Norfolk FPC and Cambridge FPC, each of which includes part of the area covered by the Wisbech and West Norfolk DHA, the numbers of sight tests carried out during the year ended 31 December 1987 were 156,122 and 144,810 respectively. When implemented, the provision of the Health and Medicines Bill will still permit NHS sight tests to be provided for children under 16, full-time students under 19, those on low incomes, the registered blind and partially sighted and people with diabetes or glaucoma who are referred for a test by the doctor managing their condition. It is estimated that these groups currently account for a little over one third of sight tests.

  Tobacco
  Mr. Michael Brown
  To ask the Secretary of State for Social Services (1) what studies his Department has carried out on the effectiveness of the Protection of Children (Tobacco) Act 1986 in preventing the purchase of tobacco products by children under the age of 16 years;

  (2) what evidence there is of levels of usage by children under the age of 16 years of tobacco products of the type he recently announced his proposals to ban.

  Mrs. Currie
  Biennial surveys are carried out by the Office of Population Censuses and Surveys of the smoking habits of schoolchildren aged I1 to 16. In 1986 it was found that 89 per cent. of regular smokers in this age group claimed that shops were a regular source of their cigarettes. In the same year there were 17 prosecutions of shopkeepers for selling cigarettes to children. Figures are not available on the use of oral tobacco products.

  Mr. Forth
  To ask the Secretary of State for Social Security (1) what monitoring procedures were set in hand 126
  to assess the effectiveness of the voluntary marketing agreement entered into by United States Tobacco International on 18 April 1985;

  (2) if he has any evidence of breaches by United States Tobacco International of that company's voluntary agreement with his Department;

  (3) what data on unit sales figures and numbers of users are available in respect of those oral tobacco products he proposes to ban.

  Mrs. Currie
  No special arrangements were set in hand to monitor the voluntary agreement with United States Tobacco International or to gather evidence of breaches, although we are aware of allegations concerning the marketing of Skoal Bandits to children which are the subject of court proceedings. Figures on the use of oral tobacco products are not available.

  AIDS
  Mr. Butler
  To ask the Secretary of State for Social Security what is the size of the budget devoted to the fourth medical and health research programme from European Community resources connected with the use of chimpanzees in AIDS research.

  Mr. Newton
  In conformity with a recommendation of the European Parliament 5 million ecu have been committed to the European Community's fourth medical and health research programme to support centralised facilities for primates used in AIDS research. A separate figure for chimpanzees has not been identified.

  Mr. Carrington
  To ask the Secretary of State for Social Services what help he is giving to local authorities in London towards the costs of providing personal social services for people with AIDS or HIV infection.

  Mr. Newton
  I announced in February that £2 million is being made available in the current financial year to help towards the AIDS-related personal social services expenditure incurred by those local authorities in inner London where the greatest demands are faced. The borough councils are being informed today of the allocations they are to receive which are as follows:

  £

  Hammersmith and Fulham

  474,180

  Kensington and Chelsea

  467,170

  Westminster

  245,000

  Wandsworth

  195,000

  Lambeth

  160,000

  Camden

  107,000

  Southwark

  92,500

  Lewisham

  89,500

  Tower Hamlets

  60,000

  Islington

  30,000

  Hackney

  30,000

  Greenwich

  27,200

  I have been greatly encouraged by the consideration which the authorities have put into their bids and the sensitivity to the special needs of people with AIDS which they show. I hope that, in the light of our response, health and local authorities in inner London will continue to develop, on a jointly planned basis both the services necessary to ensure people with AIDS receive the care and support they need, and local initiatives to prevent the further spread of the disease.

  Wakefield Health Authority
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services what are the reasons for the delay in the replacement of the university of Leeds nominee on Wakefield district health authority; and if he will make a statement.

  Mrs. Currie
  The appointment of members to Wakefield district health authority is the responsibility of the Yorkshire regional health authority.

  Social Work
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services (1) what is his assessment of the ability of local authorities with unfilled social work posts to fulfill their statutory duties; and if he will make a statement;

  (2) what information he has about the current figure for unfilled vacancies in social work posts in local authority social services departments.

  Mr. Newton
  Such information is not held centrally, but we are aware of a recent report concerning problems in London. The social services inspectorate, which is keeping the position under review, is seeking to assist London authorities to ensure that staff are deployed to best effect and is paying particular attention to the management of child protection services.

  Compulsory Removals
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services how many compulsory removals under section 47 of the National Assistance Act 1948 were undertaken during 1987.

  Mrs. Currie
  I regret that this information is not available centrally.

  Cot Deaths
  Mr. Thurnham
  To ask the Secretary of State for Social Services if he will give the number of cot deaths in the north-west region during 1983, 1984, 1985 and 1986, and any subsequent period for which figures are available.

  Mrs. Currie
  The information requested is shown in the table, which gives the total number of deaths at age under one with any mention of cot death, sudden infant death syndrome or similar term on the death certificate, irrespective of whether it was the underlying cause of death, for usual residents of the north-west standard region.

  Number of infant deaths with mention of cot death to usual residents of the North West Standard Region 1983–871

  Year

  Number

  1983

  175

  1984

  167

  1985

  182

  1986

  217

  11987

  155

  1 Provisional data to end October.

  Breast Screening
  Dame Peggy Fenner
  To ask the Secretary of State for Social Services (1) what guidance has been given as to 128
  whether the proposals of the South East Thames regional health authority in respect of breast screening and assessment centres in the Medway comply with his Department's policy for identifying regional specialties;

  (2) what is his policy on whether breast screening service and assessment centres should be a regional service or devolved to combined districts.

  Mrs. Currie
  The Department's policy for implementing the breast cancer screening service is that regional health authorities should plan their services on a supra-district basis according to the model recommended in the Forrest report, a copy of which is in the Library. The model proposed basic screening units each serving a population of about half a million (equivalent to two average-sized districts) and specialist assessment teams each taking referrals from up to three of the basic units, in order to maintain very high standards for the assessment of the abnormalities detected by mammographic screening, particularly the very small impalpable lesions. Copies of the guidance circulated to health authorities and family practitioner committees (DA(87)14 and EL(88)P/48 ) have been placed in the Library.

  Plans for the breast cancer screening services to cover the whole of the South-East Thames region have not yet been received in the Department.

  Medical Appeal Tribunals
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services if he will detail the average waiting time for appeal hearings at each of his Department's medical appeal tribunals within the Yorkshire area.

  Mr. Portillo
  Reliable estimates of average waiting times for medical appeal tribunal hearings are not currently available. The president of social security appeal tribunals and medical appeal tribunals has advised that a revised management information system is being established for medical appeal tribunals which will enable the accurate measurement of waiting times, but that reliable estimates will not be available until later this year. I would be happy to refer any specific concerns of the hon. Member to the president.

  Cancelled Treatments
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services how many planned admissions for in-patients treatment in hospitals within the Wakefield district health authority were cancelled during 1987; and for what reasons.

  Mrs. Currie
  I regret that this information is not collected centrally. The hon. Member may wish to contact the chairman of Wakefield health authority to ascertain whether such information is available locally.

  Family Credit
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services if he will encourage local authorities to include an application form for family credit when they distribute housing benefit application forms.

  Mr. Portillo
  Many local authorities already do send the claim form for family credit to those housing benefit claimants likely to be eligible for it. Some local authorities
  129
  may not be able to do this for operational reasons but all will be aware of the importance we attach to encouraging the take-up of family credit.

  Mr. Hinchliffe
  To ask the Secretary of State for Social Services if he will take steps to enable local authorities to disregard the element within family credit assumed to cover free school meals when assessing housing benefit.

  Mr. Portillo
  No. An award of family credit cannot be disregarded in assessing housing benefit entitlement.

  Stanley Royd Hospital, Wakefield
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services whether the recommendations of the committee of inquiry into the outbreak of salmonella at Stanley Royd hospital, Wakefield have been implemented.

  Mrs. Currie
  All health authorities have received copies of the committee of inquiry's report. Consideration has been given to each of the recommendations. Management guidelines have been published on hygiene and building issues, whilst further guidelines on hospital infection control and standard recipes will be circulated shortly.

  Prisoners of War (Japan)
  Mr. Teddy Taylor
  To ask the Secretary of State for Social Services what recent representations he has received from bodies representing prisoners of war in Japan during the second world war; if he has any plans to change present pension policy for prisoners or dependants of prisoners; and if he will make a statement.

  Mr. Portillo
  We have received no recent representations, and have no plans to change the current long-standing war pension policy for far eastern prisoners of war. Under the war pensions scheme, a war disablement or widow's pension is payable where an ex-service man suffers any disability or illness or dies as a result of service in the armed forces, which includes periods spent as a prisoner of war. The Government fully recognise the great hardship and suffering endured by far eastern prisoners of war and their claims to war pension are given special and very careful consideration. All far eastern prisoners of war are offered a free tropical disease investigation to ascertain whether they are suffering any residual effects of disease suffered whilst a prisoner.

  Tranquillisers
  Mr. Wareing
  To ask the Secretary of State for Social Services if he will list those drug companies which supplied benzodiazepines to the National Health Service during each of the years 1978 to 1986 inclusive; and what was the amount of payments made to each of these companies.

  Mr. Newton
  [holding answer 31 March 1988]: In 1986, £28·2 million of benzodiazepines were dispensed in Great Britain in the family practitioner services of which £7·8 million were proprietary products. In 1985, the comparable figures were £33·1 million and £14·0 million. Information for earlier years is available only at disproportionate cost and information by company is not available. Companies supplying benzodiazepines to the FPS in 1986 were:

  Abbott Laboratories Ltd.

  Astra Pharmaceuticals Ltd.

  Beecham Group plc

  130

  DDSA Pharmaceuticals Ltd.

  Eli Lilly & Co. Ltd.

  Farmitalia Ltd.

  Fisons plc

  Glaxo Group Ltd.

  Hoechst Pharmaceuticals Ltd.

  Janssen Pharmaceuticals Ltd.

  Leo Laboratories Ltd.

  Lundbeck Ltd.

  May & Baker Ltd.

  Norgine Ltd.

  Pfizer Ltd.

  Roussel Laboratories Ltd.

  Roche Products Ltd.

  Sandoz Products Ltd.

  Schering Chemicals Ltd.

  Searle & Co. Ltd.

  Smith Kline and French Laboratories Ltd.

  Smith & Nephew Pharmaceuticals Ltd.

  Steinhard Ltd.

  Sterling-Winthrop Group Ltd.

  Upjohn Ltd.

  Wyeth Laboratories Ltd.

  Housing Benefit
  Mr. Barry Jones
  To ask the Secretary of State for Social Services if he will list the latest numbers of winners and losers as a result of changes in housing benefit in Alyn and Deeside district council area, Clwyd; and if he will make a statement.

  Mr. Portillo
  I regret that the information is not available.

  Mr. Wray
  To ask the Secretary of State for Social Services if he will list the number of people claiming housing benefits in each housing authority in Scotland.

  Mr. Portillo
  [holding answer 14 April 1988]: The information available is given in the table. The figures represent the estimated number of benefit recipients in each authority.

  The number of unsuccessful claims is not available.

  Authority name

  Rent rebates

  Rent allowance

  Rate rebates

  Orkney Island Council

  778

  225

  1,236

  Shetland Island Council

  970

  154

  1,605

  Western Isles Council

  1,822

  292

  4,909

  Borders Regional Council

  0

  0

  11,130

  Berwickshire DC

  1,384

  321

  0

  Ettrick & Lauderdale DC

  2,145

  450

  0

  Roxburgh DC

  3,000

  370

  0

  Tweeddale DC

  750

  310

  0

  Regional Totals

  7,279

  1,451

  11,130

  Central Regional Council

  0

  0

  39,034

  Clackmannan DC

  5,620

  260

  0

  Falkirk DC

  16,800

  1,030

  0

  Stirling DC

  7,800

  1,110

  0

  Regional Totals

  30,220

  2,400

  39,034

  Dumfries and GallowayRegion

  0

  0

  16,103

  Annandale and EskdaleDC

  2,720

  335

  0

  Nithsdale DC

  4,050

  640

  0

  Stewartry DC

  1,450

  250

  0

  Wigtown DC

  3,000

  400

  0

  Regional Totals

  11,220

  1,625

  16,103

  131

  Authority name

  Rent rebates

  Rent allowance

  Rate rebates

  Fife Regional Council

  0

  0

  41,579

  Dunfermline DC

  11,716

  762

  0

  Kirkcaldy DC

  15,915

  1,448

  0

  North East Fife DC

  4,850

  1,240

  0

  Regional Totals

  32,481

  3,450

  41,579

  Grampian Regional Council

  0

  0

  52,982

  Aberdeen City Council

  18,400

  5,000

  0

  Banff and Buchan DC

  6,152

  499

  0

  Gordon DC

  2,651

  722

  0

  Kincardine and Deeside DC

  1,645

  490

  0

  Moray DC

  6,500

  950

  0

  Regional Totals

  35,348

  7,661

  52,982

  Highland Regional Council

  0

  0

  17,888

  Badenoch DC

  650

  240

  0

  Caithness DC

  1,890

  243

  0

  Inverness DC

  3,976

  497

  0

  Lochaber DC

  1,574

  274

  0

  Nairn DC

  678

  143

  0

  Ross and Cromarty DC

  3,596

  549

  0

  Skye and Lochalsh DC

  498

  306

  0

  Sutherland DC

  1,037

  111

  0

  Regional Totals

  13,899

  2,363

  17,888

  Lothian Regional

  Council

  0

  0

  94,496

  Edinburgh DC

  31,500

  25,600

  0

  East Lothian DC

  7,900

  670

  0

  Midlothian DC

  5,850

  1,020

  0

  West Lothian DC

  11,080

  750

  0

  Regional Totals

  56,330

  28,040

  94,496

  Strathclyde Regional Council

  0

  0

  408,542

  Argyll and Bute DC

  4,835

  1,275

  0

  Bearsden and Milngavie DC

  1,099

  79

  0

  Clydebank DC

  7,479

  432

  0

  Clydesbank DC

  5,100

  250

  0

  Cumbernauld DC

  2,381

  63

  0

  Cumnock and Doon DC

  5,511

  241

  0

  Cunninghame DC

  13,759

  924

  0

  Dumbarton DC

  7,220

  570

  0

  East Kildbride DC

  815

  193

  0

  Eastwood DC

  1,073

  215

  0

  Glasgow

  120,500

  23,000

  0

  Hamilton DC

  14,600

  440

  0

  Inverclyde DC

  12,100

  1,130

  0

  Kilmarnock DC

  10,679

  214

  0

  Kyle and Carrick DC

  10,515

  918

  0

  Motherwell DC

  25,271

  640

  0

  Renfrew DC

  23,100

  2,100

  0

  Strathkelvin DC

  5,364

  280

  0

  Regional Totals

  289,090

  33,174

  408,542

  Tayside Regional Council

  0

  0

  59,034

  Angus DC

  7,500

  1,000

  0

  Dundee DC

  22,915

  3,985

  0

  Perth and Kinross DC

  8,500

  1,800

  0

  Regional Totals

  38,915

  6,785

  59,034

  Cumbernauld (Dev C)

  4,800

  0

  0

  East Kildbride (Dev C)

  7,500

  0

  0

  Glenrothes (Dev C)

  4,000

  0

  0

  Irvine (Dev C)

  2,400

  0

  0

  Livingston (Dev C)

  5,000

  0

  0

  132

  Authority name

  Rent rebates

  Rent allowance

  Rate rebates

  Scottish Special HA

  47,200

  0

  0

  New Town Totals

  70,900

  0

  0

  Scottish Totals

  589,252

  87,620

  748,538

  Notes:

  1. Derived from local authority housing benefit subsidy estimates for 1987–88.

  2. DC = District Council.

  (Dev C) = Development Corporation.

  3. Some claimants receive a rent rebate or allowance and a rate rebate. It is not therefore possible to calculate the number of people claiming housing benefit by adding the figures together.

  Cervical Cancer
  Mr. Wareing
  To ask the Secretary of State for Social Services what plans he has to assist in the funding of the final testing of the HDA method of screening for cervical cancer; what is his assessment of the importance of the HDA procedure; and if he will make a statement.

  Rev. Martin Smyth
  To ask the Secretary of State for Social Services if he will make a statement about funding for a hydrolysed DNA assay procedure for early detection of cervical neoplasms; and what is his Department's current position regarding such funding.

  Mrs. Currie
  [holding answer 25 April 1988]: One of the 13 applications for funding of research and development in the field of automated cervical cancer screening that were reviewed in February by an ad hoc expert working group chaired by the Department's chief scientist was from Dr. Sincock of the Middlesex hospital and related to hydrolysed DNA assay. The expert group did not recommend that Dr. Sincock's project as submitted should be funded by the Department. Officials are now exploring with commercial interests the possibility of a joint funding venture that could pave the way for commercialisation of Dr. Sincock's assay.

  Prescribed Drugs (Dependency)
  Mr. Nigel Griffiths
  To ask the Secretary of State for Social Services what current reviews his Department is undertaking or has commissioned concerning prescribed drugs which lead to dependency; what advice has been given to doctors and patients on this issue; what estimate he has of the number of people regularly receiving the drug Lorezepam; what information he has as to any side-effects of Lorazepam, Valium and Librium; if he will take steps to establish an investigation into any detrimental sid-effects of the drug Lorazepam; what guidelines are issued by his Department to general practitioners relating to Lorazepam; and if he will take steps to encourage Wyeth Laboratories to compensate people who have become dependent on Lorazepam.

  Mrs. Currie
  [holding answer 22 April 1988]: The Committee on Safety of Medicines has recently completed a review of the problem of dependence on benzodiazepines, and has issued advice to doctors and pharmacists in "Current Problems No. 21", which is in the Library. The Department is not currently conducting any specific reviews on dependence in relation to other prescribed drugs, but advice on the risks of dependence on certain drugs is contained in the British National

  133
  Formulary which the Department sends regularly to all NHS doctors and pharmacists. It is for doctors to decide what advice to give to patients about the risk of dependence on prescribed medicines.

  Over 3 million prescriptions for Lorazepam were issued in 1986 by general practitioners in Great Britain. It is not possible to estimate reliably how many patients were involved.

  Information about side effects of Lorazepam, Valium and Librium is available in the ABPI data sheet compendium and in the BNF, copies of which are in the Library.

  We have no current plans plans for a further investigation into the side effects of Lorazepam. In addition to the guidelines for all benzodiazepines, including Lorazepam, in "Current Problems No. 21" and the BNF, the data sheet provided by the manufacturer of A tivan, the leading brand, has recently been revised to the satisfaction of the CSM.

  The issue of compensation is a matter for the parties concerned.

ENVIRONMENT

  Telford Development Corporation (Housing)
  Mr. Grocott
  To ask the Secretary of State for the Environment (1) what are his proposals for dealing with the future of those houses which are empty during the planned ballot on the future of Telford development corporation houses;

  (2) hat are his proposals for dealing with the future of those houses where there is a change of tenant after the planned ballot on the future of Telford development corporation houses but before ownership is changed;

  (3) hen he now expects to ballot Telford development corporation tenants about the future ownership of their houses;

  (4) hat are the financial terms for the transfer of Telford development corporation houses to (a) Wrekin district council, (b) housing associates and (c) tenants.

  Mrs. Roe
  We remain committed to consulting the tenants before any decisions are made about transferring the ownership of the new town housing in Telford, and it remains our policy to respect any individual preferences expressed through the consultation process. It is therefore essential that tenants be given all the information they need to make a considered choice.

  In particular, it will be important that potential new landlords present tenants with realistically costed options, and in this connection I have had very much in mind the concern of Wrekin district council that the terms of transfer of the stock should be the same for local authority and other potential purchasers. This would require primary legislation, so transfer will not be possible for some time.

  In the circumstances, tenant consultation now would be premature, and it would not be fair on the tenants to ask them to commit themselves now to a change which could not be implemented, perhaps for a couple of years. The best way to reduce the difficulties the hon. Member addresses in his other questions is to reduce as far as possible the interval between consultation and transfer. That is what we plan to do.

  Gipsy Caravan Sites
  Mr. Gareth Wardell
  To ask the Secretary of State for the Environment (1) if he will publish in the Official Report the location of any official gipsy caravan sites within an area of outstanding natural beauty in England;

  (2) if he will list those cases in which a local authority has compulsorily purchased land within an area of outstanding beauty for the purpose of establishing a gipsy caravan site; and if he will make a statement.

  Mrs. Roe
  The following local authority gipsy sites are in areas of outstanding natural beauty:

  Southerham, East Sussex, (South Downs)

  Redland Depot, Robertsbridge, East Sussex, (High Weald)

  Hawkhurst, Kent (High Weald)

  Pendle Camp, Merstharn, Surrey (Surrey Hills)

  Foster Down, Caterham, Surrey (Surrey Hills)

  Chiseldon Camp, Swindon, Wiltshire (North Wessex Downs)

  Copperkins Lane, Amersham, Bucks (Chilterns)

  Whites Hill, Beaconsfield, Bucks (Chilterns)

  I understand that in none of these cases were compulsory purchase powers used to acquire the sites.

  Rates
  Mr. Bright
  To ask the Secretary of State for the Environment what information he has on the impact of the non-domestic rates levied by local authorities on small firms as defined by the Bolton committee of inquiry in 1971; and what was the total amount raised from them in the 1987–88 financial year.

  Mr. Howard
  Information on non-domestic rates paid is not collected in a form which allows the identification of small firms.

  Mr. Bright
  To ask the Secretary of State for the Environment if he has conducted an analysis of the possible effects of the introduction of a national non-domestic rate from April 1990, coupled with revaluation, on small firms; and if he will make a statement.

  Mr. Howard
  I expect to receive an analysis of the effects of the revaluation from the Inland Revenue once it has considered the information about rents it is currently collecting. I expect the results for small businesses to vary widely depending on their location and the nature of their business. My right hon. Friend has, of course, already announced that he intends to take powers to allow a more generous transition for small businesses.

  Mr. Bright
  To ask the Secretary of State for the Environment if he will publish in tabular form what estimates he has of the shares of non-domestic rates paid by large, medium and small businesses as defined by the size of their labour forces, or under the fourth EEC directive on company disclosures, for each of the last five years.

  Mr. Howard
  I regret that no general estimates of this sort are available. Some information about rates paid by industry groups is available for years up to 1986.

  Local Authority Expenditure
  Mr. Hunter
  To ask the Secretary of State for the Environment by how much in money terms, real-terms and as a real-term percentage increase or decrease on 1979,
  135
  the level of spending by local authorities under non-housing revenue current expenditure has increased or decreased in each year since 1979.

  Net current expenditure on the rate fund revenue account1: 1979–80 to 1987–88 English local authorities

  Cash

  Year on year increase

  Real2

  Year on year increase

  Percentage in-crease in real terms since

  £ million

  £ million

  £ million

  £ million

  1979–90

  1979–80

  13,000

  22,794

  1980–81

  15,682

  2,682

  23,191

  397

  1·7

  1981–82

  17,472

  1,790

  23,511

  320

  3·1

  1982–83

  19,051

  1,579

  23,932

  421

  5·0

  1983–84

  20,258

  1,207

  24,305

  373

  6·6

  1984–85

  21,600

  1,342

  24,819

  514

  8·9

  1985–863

  22,300

  700

  24,179

  -640

  6·1

  1986–873

  24,171

  1,871

  25,380

  1,201

  11·3

  1987–8834

  26,512

  2,341

  26,512

  1,132

  16·3

  1 Including a very small proportion (about 1½ per cent. in 1987–88) of non-housing revenue account expenditure, on housing and housing benefit.

  2 Real expenditure has been derived by adjusting cash values to constant 1987–88 prices, using the GDP deflator.

  3Excluding London Regional Transport levy (just over £200 million in 1985–86).

  4 Budget information.

  Homelessness
  Mr. Hunter
  To ask the Secretary of State for the Environment by how much in money terms, real terms and as a real term percentage increase or decrease on 1979, local authority expenditure on the provision of accommodation for the homeless has increased or decreased in each year since 1979.

  Mrs. Roe
  The information requested is given in the table. It is based on information supplied by authorities in England and Wales to the Chartered Institute of Public Finance and Accountancy. Because of variations in the authorities responding the figures for different years are not strictly comparable.

  Net Expenditure Per 1000 Population on Hostel and Bed and Breakfast Accommodation England and Wales

  Current prices £

  1986–87 percentage prices change £

  1979–80

  282

  472

  1980–81

  281

  396

  -16

  1981–82

  242

  310

  -22

  1982–83

  306

  366

  18

  1983–84

  350

  400

  9

  1984–85

  415

  454

  14

  1985–86

  653

  674

  48

  1986–87

  1,697

  1,697

  152

  Mr. Hunter
  To ask the Secretary of State for the Environment if he will make a statement on his policy with regard to the provision of bed and breakfast accommodation for the homeless.

  Mrs. Roe
  I refer my hon. Friend to the answer given by my hon. Friend the Minister for Housing and Planning to my hon. Friend the Member for Fulham (Mr. Carrington) on 24 March at column 191–92.

  Housing Subsidy
  Mr. Hunter
  To ask the Secretary of State for the Environment if he will produce statistical evidence for any
  136
  Mr. Chope
  The available information is as follows:

  year since 1979 to show which housing authorities over-claimed housing subsidies with a resulting over-provision in the supply estimates.

  Mrs. Roe
  I shall place the information in the Library.

  Mr. Hunter
  To ask the Secretary of State for the Environment what measures he has taken, or proposes to take, to ensure that housing authorities do not over-claim housing subsidies.

  Mrs. Roe
  For the financial year 1988–89, any authority overclaiming in two of the three audited years (1984–85 to 1986–87), whose advance final claim for 1987–88 is late or reveals a third overclaim will have its instalments for the remainder of 1988–89 abated. The abatement will take into account the size of the latest overclaim.

  The Department is also monitoring national movements in interest rates against those used by local authorities in their claims. High interest rates will be queried and, where appropriate, advance instalments of subsidy will be abated.

  Similar measures were taken in the previous three years.

  Housing Action Trusts
  Mr. Hunter
  To ask the Secretary of State for the Environment if he will make a statement about the £5 million increased provision for housing action trusts, clarifying what has led him to conclude that this additional provision is needed.

  Mrs. Roe
  The Government consider that the size of some areas of poor quality local authority housing, and the nature and extent of their problems, require novel and radical approaches beyond the normal run of local authority housing activity. They therefore propose to set up housing action trusts to tackle these problems; and have allocated £125 million (£5 million in 1988–89, £50 million in 1989–90 and £70 million in 1990–91) for this purpose.

  Forestry
  Mr. Alan Williams
  To ask the Secretary of State for the Environment what is his policy on the Countryside Commission's proposal that all afforestation schemes over five hectares should require specific planning permission under Town and Country Planning legislation and for the amendment of section 22 of the Town and Country Planning Act to bring afforestation of sites over 0·25 hectares within the meaning of the term development.

  Mr. Waldegrave
  We have no plans to bring forestry or afforestation within the scope of the planning system.

  Housing Investment Programme
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he will publish in the Official Report, for each London borough, for each year since 1980–81 (a) total housing investment programme expenditure (out-turns) and (b) housing investment programme expenditure funded by capital receipts.

  Mrs. Roe
  Capital receipts, borrowing and revenue funding form a pool from which capital expenditure on each service is funded. Housing capital expenditure funded from capital receipts cannot, therefore, be separately identified.

  Housing capital receipts of London boroughs

  £ thousands

  1985–86

  1986–87

  1987–88 (nine months)

  Land1

  Dwellings2

  Other3

  Land1

  Dwellings2

  Other3

  Land1

  Dwellings2

  Other3

  City of London

  0

  8,281

  749

  0

  14,402

  783

  0

  11,069

  1,136

  Barking and Dagenham

  0

  9,196

  3,692

  403

  12,707

  6,749

  113

  9,430

  4,944

  Barnet

  940

  9,577

  2,615

  1,961

  11,957

  4,151

  202

  10,831

  2,711

  Bexley

  55

  2,793

  2,664

  226

  4,074

  4,153

  193

  4,542

  2,308

  Brent

  282

  4,510

  770

  154

  6,005

  390

  471

  4,777

  388

  Bromley

  497

  10,481

  3,784

  605

  12,631

  6,895

  101

  14,595

  3,883

  Camden

  14

  1,556

  1,790

  0

  4,138

  301

  90

  3,854

  393

  Croydon

  846

  10,582

  4,378

  853

  13,440

  8,737

  569

  13,009

  3,887

  Ealing

  692

  7,023

  5,226

  526

  10,283

  7,988

  114

  5,210

  5,993

  Enfield

  195

  7,506

  4,150

  284

  11,022

  10,602

  40

  10,709

  3,080

  Greenwich

  635

  6,685

  2,219

  1,479

  7,894

  2,124

  310

  4,876

  1,354

  Hackney

  113

  1,690

  663

  0

  3,107

  676

  0

  4,280

  2,290

  Hammersmith and Fulham

  1,264

  6,022

  2,444

  2,291

  5,469

  3,032

  n.a.

  3,586

  1,871

  Haringey

  92

  5,774

  1,897

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Harrow

  0

  3,864

  283

  0

  4,986

  3,145

  0

  5,542

  2

  Havering

  357

  3,608

  6,698

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Hillingdon

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Hounslow

  514

  4,092

  1,479

  33

  4,916

  3,509

  34

  6,834

  2,355

  Islington

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Kensington and Chelsea

  541

  1,850

  3,384

  283

  4,825

  6,356

  2,020

  2,935

  4,356

  Kingston upon Thames

  1,277

  1,971

  3,167

  632

  2,561

  3,375

  271

  1,470

  1,559

  Lambeth

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Lewisham

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Merton

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a

  Newham

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a

  Redbridge

  939

  1,335

  6,042

  790

  2,406

  7,601

  526

  2,003

  5,491

  Richmond upon Thames

  0

  3,177

  1,104

  378

  2,624

  2,283

  12

  4,463

  1,533

  Southwark

  1,950

  4,699

  451

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Sutton

  2,056

  5,274

  1,846

  485

  5,984

  3,158

  153

  5,491

  828

  Tower Hamlets

  n.a.

  n.a.

  n.a.

  206

  3,406

  95

  n.a.

  n.a.

  n.a.

  Waltham Forest

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  n.a.

  Wandsworth

  537

  25,406

  7,189

  1,300

  26,352

  12,089

  662

  27,354

  8,572

  Westminster

  258

  7,174

  371

  514

  8,656

  580

  n.a.

  n.a.

  n.a.

  Notes:

  1 Land and sales of assets other than dwellings.

  2 Initial receipts from sales of dwellings. (Selling price net of discount less mortgage lending.)

  3 Includes repayments of mortgages on earlier council house sales, other repayments of mortgage lending.

  n.a. = not available.

  Local Authorities (Capital Receipts)
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he will publish in the Official Report, for each London borough, the present accrued total of capital receipts.

  Mr. Chope
  I refer the hon. Member to the information placed in the Library of the House of 9 March 1988 in reply to the question from my hon. Friend the Member for Canterbury (Mr. Brazier).

  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he will publish figures in the Official Report indicating, for each London borough, the amount gained in capital receipts from (a) right to buy, (b) other house sales and (c) other sales, for each year since 1980–81.

  Mrs. Roe
  Information on housing capital receipts in 1985–86, 1986–87 and the first three quarters of 1987–88 is given in the table: corresponding figures for earlier years are not readily available. Receipts from right-to-buy sales are not reported separately from other dwellings.

  Council House Sales
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he will publish in the Official Report the latest available figures for each London borough for (a) the average selling price of council dwellings under (i) right to buy and (ii) other sales and (b) the average percentage discount on the sale of council dwellings under (1) right to buy and (2) other sales.

  Mrs. Roe
  Information on selling prices and discounts is not available separately for right-to-buy and other sales. The figures in the table have been derived from those quarterly returns for 1987–88 so far received from the boroughs.

  Sales of council dwellings, 1987–88 London boroughs

  Average selling price (net of discount) £

  Average discount per cent

  City of London

  79,500

  21

  Barking and Dagenham

  17,600

  —

  Barnet

  20,300

  51

  Bexley

  21,600

  53

  Brent

  —

  —

  Bromley

  20,200

  54

  Camden

  30,000

  41

  Croydon

  23,500

  50

  Ealing

  —

  —

  Enfield

  23,500

  52

  Greenwich

  —

  48

  Hackney

  —

  —

  Hammersmith and Fulham

  26,000

  45

  Haringey

  27,300

  46

  Harrow

  24,300

  50

  Havering

  —

  —

  Hillingdon

  —

  —

  Hounslow

  25,700

  45

  Islington

  33,500

  39

  Kensington and Chelsea

  41,400

  38

  Kingston upon Thames

  23,300

  49

  Lambeth

  —

  —

  Lewisham

  —

  —

  Merton

  20,900

  53

  Newham

  —

  —

  Redbridge

  20,100

  54

  Richmond upon Thames

  24,900

  51

  Southwark1

  23,900

  41

  Sutton

  24,100

  50

  Tower Hamlets

  —

  —

  Waltham Forest

  —

  —

  Wandsworth

  24,200

  47

  Westminster

  —

  —

  — not available.

  1 excluding 228 sales of vacant dwellings.

  King's Cross Goods Yard
  Mr. Dobson
  To ask the Secretary of State for the Environment what consideration he has given to establishing a development corporation or trust to oversee the development of King's Cross goods yard; and if he will make a statement.

  Mr. Trippier
  [holding answer 25 April 1988]: My right hon. Friend is satisfied that the normal mechanism of the
  140
  planning system is the proper way to resolve the future of this site. However, in view of the scale and importance of the proposals, he wishes to have an opportunity to consider whether any major application for the site should be called-in for his decision. He has therefore made a direction requiring Camden council to consult him before any planning application of over 100,000 sq ft is decided.

  Mr. Dobson
  To ask the Secretary of State for the Environment whether his Department has met with either of the consortia proposing to develop the King's Cross goods yard.

  Mr. Trippier
  [holding answer 25 April 1988]: My right hon. Friend has not discussed the proposals with either of the consortia.

  Opencast Mining
  Mr. Hood
  To ask the Secretary of State for the Environment if, pursuant to his written reply to the hon. Member for Clydesdale, 17 February,Official Report, column 663, he will now publish the proposals for the protection of the environment and the quality of life of communities affected by opencast mining and other similar activities; and if he will make a statement;

  (2) how many representations were received about the revised draft planning guidelines for opencast coal mining issued for consultation in April 1987.

  Mr. Trippier
  [holding answer 25 April 1988]: Revised guidelines on planning control over opencast coal mining will be issued shortly. These will aim to help mineral planning authorities ensure that the right balance is struck between environmental considerations and economic benefits when planning applications for opencast working are considered. Sixty letters of representation were received in response to the consultation document.

  Hampstead Heath
  Mr. Tony Banks
  To ask the Secretary of State for the Environment when he expects to reach a decision on the future of Hampstead heath; if he will take into account the views expressed by the Association of London Authorities; and if he will make a statement.

  Mr. Chope
  [holding answer 25 April 1988]: Any representations made by the Association of London Authorities or any other organisation or individual will be taken into account by my right hon. Friend in reaching his decision on the future of Hampstead heath. I expect the decision to be taken in good time for an orderly transfer of responsibility with effect from 1 April 1989.

  Lime Dust (Cheriton)
  Mr. David Shaw
  To ask the Secretary of State for the Environment what representations he has received in respect of lime dust released into the atmosphere in the Cheriton region of Folkestone; and what action he proposes to take.

  Mr. Allan Roberts
  To ask the Secretary of State for the Environment what information he has about the circumstances which led to the problems caused by lime spraying by the Eurotunnel consortium and its subsequent effects on the residents of Cheriton, Kent; and if he will make a statement.
  141
  Mrs. Roe
  [holding answers 19 and 21 April 1988]: My hon. and learned Friend the Member for Folkestone (Mr. Howard) drew this incident to the Department's attention immediately on 6 April. Shepway district council contacted Eurotunnel, which is responsible for the work and the operation was suspended while the adverse weather conditions prevailed. This particular phase of the work was completed without a further recurrence of the problem.

  Shepway district council has served a notice on Eurotunnel under the Public Health (Recurring Nuisances) Act 1961 to prevent similar incidents from occurring. In future the contractor will use lime granules, which are much less prone to wind disturbance.

  Mr. Allan Roberts
  To ask the Secretary of State for the Environment what steps he is taking to monitor the construction works being carried out by the Eurotunnel consortium works, particularly in respect of dust levels in the Cheriton area of Kent; and if he will make a statement.

  Mrs. Roe
  [holding answer 21 April 1988]: I refer the hon. Member to the answer I gave to my hon. Friend the Member for Dover (Mr. Shaw) today. As required by the terms of the concession, an independent body, Maitre D'Oeuvre, has been appointed to monitor the design of the works and the detailed operation of the contract on behalf of the IGC. In addition, a joint consultative committee has been set up under the chairmanship of my hon. Friend the Minister for Public Transport, with representatives of Government Departments, local authorities in Kent, Eurotunnel and British Rail to consider any matters of concern to Kent in relation to the Channel tunnel project.

  Palace of Westminster (Toilets)
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what action he will take to ensure that male toilets in the Palace of Westminster are labelled as such.

  Mr. Chope
  [holding answer 21 April 1988]: If the hon. Member has been experiencing any particular difficulties in identifying such toilets, I shall be happy to provide him with details of their location.

  European Environment Year
  Dr. Thomas
  To ask the Secretary of State for the Environment if he will list the achievements sponsored by Her Majesty's Government to date, in support of the European Year of the Environment; and if he will make a statement on the major initiatives known to his Department achieved by other European countries participant in the European environment year.

  Mr. Moynihan
  [pursuant to the reply, 16 February 1988, c. 525–26]. I am today placing in the Library and the Vote Office "Protecting Your Environment—A Guide"—the general guide to environmental protection.

  We are making this guide widely available to environment groups, schools and members of the public.

  Playgrounds
  Mr. Thurnham
  To ask the Secretary of State for the Environment what instructions are given to local authorities about the design of playgrounds to ensure that children are properly protected from injury; and if he will be making proposals to ensure that adequate safeguards are available.
  142
  Mr. Moynihan
  The Health and Safety at Work etc. Act 1974 imposes a general duty on local authorities to take resonable measures to ensure the safety of all non-domestic premises, including playgrounds, which are under their control. Duties under this Act are enforceable by the Health and Safety Executive to whom all serious injuries occurring in playgrounds must be reported. The Department issued guidance to local authorities on safety in children's playgrounds in 1978. This guidance was consolidated in British Standard 5696 and a new British standard on playground safety is currently being drawn up. In addition, the National Playing Fields Association provides an independent advice service on playground safety for local authorities and other playground operators.

DEFENCE

  Skyguard Radar
  Miss Widdecombe
  To ask the Secretary of State for Defence if he will make a statement on the outcome of the trials of Skyguard radar equipment to monitor low-flying military aircraft movements.

  Mr. Freeman
  Field trials of the Skyguard radar system as an aid for monitoring low-flying military aircraft movements were carried out in July 1987, during Exercise OSEX 14, and March 1988, during Exercise Mallet Blow 88/1. Analysis of the results is still continuing.

  AWRE Aldermaston
  Mr. Squire
  To ask the Secretary of State for Defence if he has any plans to improve the security arrangements at AWRE Aldermaston.

  Mr. Sainsbury
  Yes. Improvements are planned to the boundary fence.

  Service Personnel (House Purchase)
  Mr. Couchman
  To ask the Secretary of State for Defence what incentives his Department offers to service men to purchase their own homes.

  Mr. Freeman
  The Ministry of Defence is very much aware of the desirability of encouraging service men to purchase their own homes, subject to the Services' operational needs. Details of the current arrangements are given in the pamphlet "Housing: a Guide to Servicemen and Servicewomen", a copy of which I have placed in the Library.

  Chemical Weapons
  Mr. Simon Hughes
  To ask the Secretary of State for Defence when he next expects to discuss chemical weapons with the other Defence Ministers of the North Atlantic Treaty Organisation countries.

  Mr. Ian Stewart
  My right hon. Friend has regular meetings with his NATO colleagues to discuss a wide range of defence and security issues.

  Mr. Boyes
  To ask the Secretary of State for Defence what recent discussions he has had with the North Atlantic Treaty Organisation about the Alliance's chemical warfare capability.
  143
  Mrs. Clwyd
  To ask the Secretary of State for Defence what recent discussions he has had with the North Atlantic Treaty Organisation about the Alliance's chemical warfare capacity.

  Mr. Ian Stewart
  My right hon. Friend has regular discussions with his NATO colleagues concerning our common objective of the achievement of a comprehensive and verifiable global ban on chemical weapons. There are no chemical weapons declared to NATO.

  A90 Building
  Mr. Hood
  To ask the Secretary of State for Defence what is his latest assessment of the degree of slippage in the programme for the A90 building at AWRE Aldermaston; and if he will make a statement.

  Ms. Walley
  To ask the Secretary of State for Defence what is his latest assessment of the degree of slippage in the programme for the A90 building at AWRE Aldermaston; and if he will make a statement.

  Mr. Sainsbury
  As the Comptroller and Auditor General's report published last June stated, there has been slippage in the A90 building programme at AWRE Aldermaston and our assessment is that this building will now come into full operation in early 1992.

  Trident
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence how much has been spent on the Trident programme for every year since its inception.

  Mr. Sainsbury
  The expenditure each year since beginning of the United Kingdom Trident programme is as follows:

  Financial Year

  Current (outturn) prices £ million

  1980–81

  3

  1981–82

  31

  1982–83

  71

  1983–84

  95

  1984–85

  165

  1985–86

  268

  1986–87

  377

  11987–88

  550

  1 The figure for 1987–88 is, at this stage, a forecast.

  Mr. McFall
  To ask the Secretary of State for Defence what is his latest estimate of the increase in the cost of the pressurised water reactor for the Trident submarine; and what are the implications for the total cost of the Trident project.

  Mr. Younger
  I refer the hon. Member to the answer I gave earlier today to the hon. Member for Bradford, West (Mr. Madden).

  Mr. Tim Smith
  To ask the Secretary of State for Defence what representations he has received about the latest estimate of the cost of Trident in relation to the original estimate.

  Mr. Younger
  One representation, in the form of a letter from a member of the public, has been received since I announced the revised Trident estimate in January this year.

  Cruise Missiles
  Mr. Allen McKay
  To ask the Secretary of State for Defence what recent discussions he has had with other North Atlantic Treaty Organisation Ministers about the possible deployment of further sea-launched cruise missiles.

  Mrs. Fyfe
  To ask the Secretary of State for Defence what recent discussions he has had with other NATO Ministers about the possible deployment of further sea-launched cruise missiles.

  Mr. Strang
  To ask the Secretary of State for Defence if he has had any discussions with his European North Atlantic Treaty Organisation counterparts about the modernisation of battlefield nuclear weapons in central Europe.

  Mr. Ian Stewart
  I refer the hon. Members to the reply I gave to the hon. Member for Edinburgh, East (Mr. Strang) on 23 February 1988 at column 165.

  Defence Commitments
  Mr. Marlow
  To ask the Secretary of State for Defence when he next anticipates a major review of Britain's defence commitments.

  Mr. Ian Stewart
  We have no plans for any review of our defence commitments beyond the annual appraisal made in connection with the public expenditure survey.

  Nuclear Submarines
  Mr. Galloway
  To ask the Secretary of State for Defence when he expects to be in a position to announce his Department's plans for (i) decommission and (ii) disposal of obsolete nuclear submarines.

  Ms. Ruddock
  To ask the Secretary of State for Defence when he expects to be in a position to announce his Department's plans for (i) decommission and (ii) disposal of obsolete nuclear submarines.

  Mr. Harry Barnes
  To ask the Secretary of State for Defence when he expects to be in a position to announce his Department's plans for(a) decommissioning and (b) disposal of obsolete nuclear submarines.

  Mr. Sainsbury
  It is intended that all Royal Navy nuclear submarines will be defuelled at the end of their operational lives in the same way as Dreadnought has been. No decision has yet been taken on the method of disposal for defuelled nuclear submarines.

  West Germany (Low Flying)
  Mr. Stott
  To ask the Secretary of State for Defence what proportion of low flights over the Federal Republic of Germany is accounted for by the Royal Air Force.

  Mr. Chris Smith
  To ask the Secretary of State for Defence what proportion of low flights over the Federal Republic of Germany is accounted for by the Royal Air Force.

  Mr. Freeman
  During 1987 the RAF flew approximately 16,000 low-level sorties over the Federal Republic of Germany. Other low-flying activity in the Federal Republic is a matter for their Government.

  Long-range Missiles
  Mr. Duffy
  To ask the Secretary of State for Defence if he is satisfied with progress on the Trigat programme in view of recent developments in armour capability.

  Mr. Younger
  Yes, I am pleased to announce that I have now signed the memorandum of understanding indicating formally United Kingdom participation with France and Germany in the collaborative full development of both medium and long range Trigat weapons. Contracts with industry for this development work are currently being finalised. Trigat will be developed to meet the threat in the mid-1990s and beyond.

  Cyprus
  Mr. Cox
  To ask the Secretary of State for Defence what plans he has to visit Cyprus.

  Mr. Younger
  I have no plans to do so at present. I visited the sovereign base areas in Cyprus in April last year.

  Anglo-French Co-operation
  Mr. Cartwright
  To ask the Secretary of State for Defence whether he will make a further statement about Anglo-French defence co-operation.

  Mr. Ian Stewart
  I have nothing to add to the reply I gave to the hon. Member on 22 March at column 114.

  Mr. Dykes
  To ask the Secretary of State for Defence when he next plans to hold one of his regular meetings with his French counterpart to discuss defence matters of common interest.

  Mr. Younger
  I last met M. Giraud at the WEU meeting on 18–19 April when a wide range of matters of mutual interest was discussed. I have no immediate plans for a further meeting.

  Defence Contracts
  Mr. Darling
  To ask the Secretary of State for Defence when he expects to be in a position to assess the effectiveness of his Department's implementation of the recommendations contained in the report, "Learning from Experience", in relation to overspending on defence contracts.

  Mr. Grocott
  To ask the Secretary of State for Defence when he expects to be in a position to assess the effectiveness of his Department's implementation of the recommendations contained in the report, "Learning from Experience", in relation to overspending on defence contracts.

  Mr. Sainsbury
  The report "Learning from Experience" acknowledged the many improvements that have already been made in procurement procedures in recent years. Implementation of recommendations from the report is under way and progress will be kept under continual review.

  Mr. Day
  To ask the Secretary of State for Defence what progress has been made in the initiative to publicise defence contract opportunities in France and the United States of America in order to encourage mutual purchases of equipment.
  146
  Mr. Sainsbury
  Discussions with the French have led to the publication of a French contracts bulletin similar to that in the UK. The US Government also publish their own contract opportunities, and local US requirements are publicised from time to time in the British contracts bulletin. In addition, Anglo-French equipment con-ferences are held to discuss forthcoming requirements.

  Listed Buildings
  Mr. Greg Knight
  To ask the Secretary of State for Defence what is his policy towards the care and ultimate disposal of surplus listed buildings in the defence estate.

  Mr. Freeman
  The Property Services Agency is responsible, on behalf of the Ministry of Defence, for the maintenance of the majority of historic listed buildings on the Defence Estate. It is its duty to ensure that such buildings are properly protected, even if surplus to requirements and awaiting disposal. The Ministry of Defence and Property Services Agency follow the Department of the Environment's guidelines which stipulate that disused historic buildings should continue to receive regular inspections and a normal standard of maintenance in order to keep the property fit for further use, or to maintain its disposal value. Such buildings can, however, create special problems and they may be difficult to sell. Despite this, every effort is made to keep them in a fit state and the MOD has recently established a historic military buildings committee, with expert outside representatives, to advise on ways in which such properties can best be preserved or disposed of in the most sympathetic manner.

  Frigates
  Mr. Galbraith
  To ask the Secretary of State for Defence what is the total value of current contracts to build frigates; and how many jobs are involved.

  Mr. Ted Garrett
  To ask the Secretary of State for Defence what is the total value of current contracts to build frigates; and how many jobs are involved.

  Mr. Sainsbury
  I refer the hon. Members to the answer I gave earlier today.

  Firing Ranges
  Mr. Barry Field
  To ask the Secretary of State for Defence how many small arms and rifle ranges his Department has responsibility for in the United Kingdom; and how many of these are electronic.

  Mr. Freeman
  The Ministry of Defence is responsible for a total of 2,020 small arms and open ranges. Of these 45 are equipped with electric targets. In addition, a number of firing positions on field firing ranges are capable of accepting electric targets on a temporary basis when training requires.

  United States Forces
  Mr. Clay
  To ask the Secretary of State for Defence what proposals have been made for the deployment of additional United States strike aircraft in the United Kingdom.
  147
  Mr. Canavan
  To ask the Secretary of State for Defence what proposals have been made for the deployment of additional United States strike aircraft in the United Kingdom.

  Mr. Ian Stewart
  The level and composition of United States forces based in the United Kingdom is the subject of regular exchanges between the British and United States Governments at both ministerial and official levels. Details of these exchanges are classified.

  Training Land
  Mr. Chapman
  To ask the Secretary of State for Defence if he will make a statement about the type, amount and geographical position of additional training land needed by his Department, pursuant to his answer to the hon. Member for Chipping Barnet on 22 March,Official Report, columns 110–11.

  Mr. Freeman
  The principal need is for land for "dry" training, that is training without the use of live ammunition. It is Ministry of Defence policy to seek to acquire such land in any suitable area but preferably where this will allow us to extend existing training areas if and when adjoining land becomes available for purchase.

  Environmental Protection
  Mr. Tony Banks
  To ask the Secretary of State for Defence what is his policy towards the protection of the environment on lands owned or used by his Department.

  Mr. Young
  To ask the Secretary of State for Defence what is his policy towards the protection of the environment on lands owned or used by his Department.

  Mr. Freeman
  The Ministry of Defence regards conservation and the protection of the environment as integral parts of both the management and use of its estate. Since 1973 the Ministry has appointed a conservation officer to promote and co-ordinate conservation activity throughout the estate and most MOD establishments are covered by a conservation group which typically includes representatives of local communities, environmental bodies and conservation specialists. The Ministry works closely with the Nature Conservancy Council — particularly in relation to the 176 sites of special scientific interest on the estate — and has recently signed a joint declaration with the NCC on the approach to be adopted to conservation on defence land.

  AWACS
  Mr. Rogers
  To ask the Secretary of State for Defence what is the latest value of offset contracts created in relation to the AWACS contract with Boeing.

  Mr. Younger
  The value of contracts claimed by Boeing in its first report is in the region of $140 million. This report is currently being evaluated.

  Defence Resources
  Mr. Allan Stewart
  To ask the Secretary of State for Defence what progress has been made towards shifting defence resources from support areas to the front line; and if he will make a statement.

  Mr. Ian Stewart
  Substantial progress has been made in transferring resources from the support area to the front line since we came into office in 1979. The Royal Navy has 148
  pared back its support area so that some 70 per cent. of its uniformed manpower is now devoted to the front line and personnel spend more time at sea; the army is saving some 4,000 posts in the support area to facilitate enhancement of the front line, including the formation of two new front line regiments with no addition to total manpower; since 1984 the RAF has released 1,700 posts from the support area in the fields of catering, aircraft servicing and supply. Civilian manpower in the Ministry of Defence has declined by some 40 per cent. since 1979. We shall continue to improve value for money in defence spending.

  Irish Defence Minister
  Sir John Biggs-Davison
  To ask the Secretary of State for Defence when he last met the Irish Defence Minister.

  Mr. Younger
  I have never met the Irish Minister for Defence.

  Aerosols
  Ms. Walley
  To ask the Secretary of State for Defence if there are any plans to ban the use of aerosols within the buildings of his Department; and if he will make a statement.

  Mr. Allan Roberts
  To ask the Secretary of State for Defence if there are any plans to ban the use of aerosols in his Department's buildings; and if he will make a statement.

  Mr. Freeman
  There are no such plans.

  Defence Establishments (Visits)
  Mr. Hind
  To ask the Secretary of State for Defence what is his policy toward promoting visits by Members of Parliament to defence establishments at home and abroad.

  Mr. Freeman
  I welcome the interest which has been shown by hon. and right hon. Members in visiting defence establishments. Opportunities exist for hon. and right hon. Members to undertake such visits as part of all-party parliamentary groups, whose planned visits are periodic-ally drawn to their attention.

  Hon. and right hon. Members are also encouraged to visit defence establishments within their own constituency by prior arrangement with the armed forces units concerned.

  Tucano Jet Trainer
  Mr. Colvin
  To ask the Secretary of State for Defence what progress is being made towards Controller Aircraft release of the Tucano jet trainer aircraft for the Royal Air Force.

  Mr. Sainsbury
  An initial controller aircraft release is expected to be issued very soon.

  Defence Expenditure
  Mr. McAllion
  To ask the Secretary of State for Defence what has been the growth in expenditure on(a) conventional defence and (b) nuclear defence since May 1979.

  Mr. Ian Stewart
  Since 1978–79, in real terms about £21·5 billion more has been spent on defence (of which
  149
  about £2·5 billion has been on strategic nuclear defence) than would have been the case if expenditure had continued at the 1978–79 level. (Figures are cumulative to the end of 1987–88 and are at constant 1987–88 prices.)

  Reserve Forces
  Mr. Andrew Mitchell
  To ask the Secretary of State for Defence what steps his Department proposes to take to give greater national publicity to the role of the reserve forces.

  Mr. Freeman
  In addition to the regular cycle of recruiting compaigns which bring the role of the reserve forces to the attention of the public, this year will see a major innovation in the form of the publicity campaign recommended by the national employer liaison committee, the funding for which was recently announced in the House. The precise details of this campaign have yet to be finalised but its central theme will be the promotion of general public awareness of the reserve forces by means of stressing the advantages of membership to both the individual and employers and by clearly setting out the vital role occupied by these volunteer forces.

  Mr. Jessel
  To ask the Secretary of State for Defence if he will make a statement on the progress made in expanding the volunteer reserves.

  Mr. Freeman
  Since 1979, when expansion measures were first set in hand by the Government, the combined strength of the volunteer reserves, not including the Ulster Defence regiment, has increased by about 32 per cent. to some 87,500. Since 1979 the strength of the TA has increased by some 15,900, with a further 3,200 for the Territorial Army's Home Service Force. During a similar period the combined strength of the Royal Auxiliary Air Force and the Royal Air Force Volunteer Reserve has risen by some 1,320, and the Royal Marines Reserve by about 520. Finally, since the decision to expand the Royal Naval Reserve in 1984 the strength of that reserve has risen by over 400.

  Trust Fund
  Mr. Ashley
  To ask the Secretary of State for Defence what representations he has received regarding the establishment of a trust fund to assist ex-members of the forces who cannot either sue for damages or receive ex-gratia payments in respect of injuries by the date on which such injuries occurred.

  Mr. Freeman
  A number of representations have been received from the right hon. Gentleman and others.

  Royal Dockyards
  Mr. Fearn
  To ask the Secretary of State for Defence if he will make a statement concerning the progress of commercial management of the royal dockyards.

  Mr. Sainsbury
  I refer the hon. Member to the speech I made in the Navy debate on 3 March 1988.

  Franco-German Brigade
  Mr. Graham
  To ask the Secretary of State for Defence what are the implications of the proposed new Franco-German brigade for Her Majesty's Government's150
  defence posture, with particular reference to the United Kingdom's contribution to the North Atlantic Treaty Organisation.

  Mr. Cohen
  To ask the Secretary of State for Defence what are the implications of the proposed new Franco-German brigade for Her Majesty's Government's defence posture, with particular reference to the United Kingdom's contribution to the North Atlantic Treaty Organisation.

  Mr. Ian Stewart
  The formation of a joint brigade, as announced at the Franco-German summit on 22 January, has no foreseeable implications for United Kingdom defence policy or our contribution to NATO.

  Service Hospitals (NHS Patients)
  Mr. Patrick Thompson
  To ask the Secretary of State for Defence what further steps his Department has taken to ensure that the maximum possible number of civilian National Health Service patients are admitted to service hospitals.

  Mr. Freeman
  My hon. Friend, is, I am sure, referring to the national financial arrangement between the MOD and DHSS which I announced in my answer to my right hon. Friend the Member for Scarborough (Sir M. Shaw) on 30 March 1988 at column 465. The Ministry of Defence will continue to treat NHS patients up to a baseline, which broadly equates to the defence training requirement, as a charge to the defence votes. Any spare capacity above that baseline will be offered to health authorities, on a marginal cost basis, to relieve their waiting lists and maximise the number of NHS patients treated in service hospitals. The MOD and DHSS are actively developing a plan of implementation to ensure that the health authorities and general practitioners are aware of what facilities the service hospitals have to offer. Progress in implementing these new arrangements at local level will be monitored by both Departments.

  Warsaw Pact Defence Posture
  Mr. Evans
  To ask the Secretary of State for Defence what account recent and proposed NATO military exercises have taken of changes in Warsaw pact defence posture.

  Mr. Bill Michie
  To ask the Secretary of State for Defence what account recent and proposed NATO military exercises have taken of changes in Warsaw pact defence posture.

  Mr. Ian Stewart
  NATO military exercises are planned with due regard to the currently perceived threat. Details of the scenarios are, however, classified.

  Lance Missile
  Mr. Vaz
  To ask the Secretary of State for Defence what is the time scale for deploying a follow-on to the Lance missile under the Montebello decision.

  Mr. Flynn
  To ask the Secretary of State for Defence what is the time scale for deploying a follow-on to the Lance missile under the Montebello decision.

  Mr. Ian Stewart
  I refer the hon. Members to the reply given earlier today by my right hon. Friend the Secretary of State to the hon. Member for Bristol, South (Ms. Primarolo).

  Montebello Agreement
  Mr. Terry Lewis
  To ask the Secretary of State for Defence what is the time scale for deploying new nuclear artillery shells under the Montebello decision.

  Mr. Younger
  The agreement at Montebello in 1983 did not include specific decisions on such matters. Detailed proposals for implementing the Montebello agreement were submitted to Ministers by SACEUR in 1985 and continue to be pursued with the individual nations concerned. The time scale for the introduction of new artillery rounds will vary in practice from country to country. The United States has, I understand, already deployed some improved artillery shells, designated W79, with its forces in the Federal Republic of Germany but no decisions on modernisation as it affects British forces have yet been taken.

  Mr. Wray
  To ask the Secretary of State for Defence what is the time scale for deploying new nuclear artillery shells under the Montebello decision.

  Mr. Ian Stewart
  I refer the hon. Member to the reply given earlier today by my right hon. Friend the Secretary of State to the hon. Member for Worsley (Mr. Lewis).

  SDI Programme
  Ms. Mowlam
  To ask the Secretary of State for Defence what recent discussions he has had with his United States counterpart about the strategic defence initiative programme.

  Dr. Moonie
  To ask the Secretary of State for Defence what recent discussions he has had with his United States counterpart about the strategic defence initiative programme.

  Ms. Armstrong
  To ask the Secretary of State for Defence what recent discussions he has had with his United States counterpart about the strategic defence initiative programme.

  Mr. Sainsbury
  None recently, but there have been several ministerial and senior official contacts with the United States Department of Defence in recent months on various aspects of the SDI programme.

  NATO
  Mr. Favell
  To ask the Secretary of State for Defence when he last met the secretary general of the North Atlantic Treaty Organisation; and what subjects were discussed.

  Mr. Younger
  I last met Lord Carrington at the meeting of the defence planning committee in December 1987, when a wide range of issues of mutual interest was discussed.

  Disarmament (Stockholm Conference)
  Mr. Michael McNair-Wilson
  To ask the Secretary of State for Defence if he is satisfied with the working of the procedures agreed at the Stockholm conference on disarmament in Europe; and if he will make a statement.

  Mr. Ian Stewart
  Yes. The provisions of the Stockholm agreement for notification and observation of exercises have in general worked well. There were eight observable 152
  Warsaw Pact exercises in 1987 and there have been two to date in 1988; nine NATO exercises in 1987, of which two were United Kingdom exercises, and one so far this year; and Finland has just become the first neutral and non-aligned country to host observers. The United Kingdom sent observers to all the relevant exercises.

  The inspection procedures, which are designed to clarify any doubts about compliance with the provisions of the agreement and are a significant way of achieving greater confidence on all sides, have also been successfully implemented. Inspections have been carried out by the USSR on three NATO exercises; by the GDR on one NATO exercise; by the United States of America on three Warsaw Pact exercises;, and by the United Kingdom on two Warsaw Pact exercises. No evidence of noncompliance with the Stockholm agreement has been found.

  Defence Expenditure
  Mr. Geraint Howells
  To ask the Secretary of State for Defence what is the proportion of quantifiable defence spending in Wales.

  Mr. Ian Stewart
  Defence expenditure is not accounted for on a regional basis. However, so far as procurement expenditure is concerned, I refer the hon. Member to the reply given by my hon. Friend the Under-Secretary of State for Defence Procurement to the hon. Member for Merionnydd Nant Conwy (Dr. Thomas) on 18 April at column 334.

  Departmental Facilities (Relocation)
  Mr. Ian Bruce
  To ask the Secretary of State for Defence if he will make a statement on his policy on planning the relocation of Ministry of Defence facilities with regard to local levels of unemployment.

  Mr. Sainsbury
  In considering proposals for relocation of defence work unemployment levels are among the factors taken into account and, of course, any move would have to be justifiable in both operational and economic terms.

  Deep Space Tracking Station
  Mr. Cohen
  To ask the Secretary of State for Defence to which unit of the United States Air Force the proposed deep space tracking station at RAF Feltwell will be assigned; what is the estimated cost for the construction of this facility; what is the source of funding for this construction; what is the proposed date of commencement of construction; and if he will make a statement.

  Mr. Freeman
  The deep space satellite tracking facility which the USAF plan to construct at RAF Feltwell will be under the command of USAF Space Command. It is estimated that the construction of this facility will cost about US$ 17 million and this will be funded by the USAF. Subject to planning approvals it is hoped to begin construction work in the summer of this year.

  Air-to-Surface Missiles
  Mr. Mullin
  To ask the Secretary of State for Defence what is the time scale for deploying new tactical air-to-surface missiles under the Montebello decision.
  153
  Mr. Younger
  I refer the hon. Member to the reply I gave today to the hon. Member for Bristol, South (Ms. Primarolo).

  Mr. J. L. Imrie
  Mr. Livingstone
  To ask the Secretary of State for Defence if any financial assistance or advice has been given by his Department to Mr. J. L. Imrie, in respect of recent instructions given by Mr. Imrie to Kingsley Napley Solicitors.

  Mr. Sainsbury
  None. Mr. lmrie's legal costs are being met by those who made allegations against him without the protection of parliamentary privilege.

  Low-flying Aircraft
  Dr. Thomas
  To ask the Secretary of State for Defence what is the average duration of a fast jet low-level sortie over the United Kingdom.

  Mr. Freeman
  The average duration of a fast jet low-level sortie over the United Kingdom is approximately 42 minutes.

  Chemical and Biological Weapons
  Mr. Robertson
  To ask the Secretary of State for Defence if any restrictions have been placed on the export of protection and decontamination equipment for use in response to chemical and biological weapons; and if he will make a statement.

  Mr. Sainsbury
  All protection and decontamination equipment for use in response to chemical and biological weapons is subject to export licence under group 1 of the Export of Goods (Control) Order 1987. Each of these exports is carefully considered on a case by case basis.

  Statement on the Defence Estimates
  Mr. Wilson
  To ask the Secretary of State for Defence on what date the Statement on the Defence Estimates 1988 will be published.

  Mr. Ian Stewart
  I refer the hon. Member to the reply I gave to the hon. Member for Leyton (Mr. Cohen) on 25 April.

  Japanese Prisoners of War
  Mr. Teddy Taylor
  To ask the Secretary of State for Defence what recent representations he has received from bodies representing prisoners of war in Japan during the second world war; and if he will make a statement.
  154
  Mr. Freeman
  None, although we have recently received approaches on behalf of ex-prisoners of war held elsewhere in the far east.

  Professors and Lecturers (Pay and Expenses)
  Dr. Marek
  To ask the Secretary of State for Defence what are the rates of pay and expenses paid by the Army for lectures and other short courses of instruction by visiting professors and lecturers.

  Mr. Freeman
  The following rates of pay, effective from 1 March 1988, are paid by MOD to visiting civilian lecturers. The rates are set centrally by Her Majesty's Treasury and apply to all Government Departments.

  Part day session £

  Full day session £

  a. For academic lecturers

  Professor

  80–162

  160–216

  Senior lecturer

  63–117

  125–155

  Lecturer

  36–100

  71–133

  b. Status equivalent to:

  Professor

  85–208

  167–271

  Senior lecturer

  71–144

  157–198

  Lecturer

  37–119

  74–157

  Although minor incidental expenses are covered in the fee, more substantial expenses that are unavoidably incurred, notably travel or subsistence costs, may be reimbursed in addition to the fee.

  Hong Kong
  Dr. Marek
  To ask the Secretary of State for Defence if he will make a statement on the future division of defence costs between the Hong Kong and United Kingdom Governments.

  Mr. Ian Stewart
  Discussions are continuing between the British and Hong Kong Governments on the details of arrangements for sharing future defence costs in Hong Kong.

  Horseshoe Barracks, Shoeburyness
  Mr. Teddy Taylor
  To ask the Secretary of State for Defence what plans he has for the Horseshoe barracks at Shoeburyness; and if he will make a statement.

  Mr. Freeman
  I wrote to my hon. Friend on 18 April on this matter, and I shall be meeting him shortly to discuss future plans for the site.

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

TGWU and Ford Plant at Dundee
Lord Taylor of Gryfe Lord Taylor of Gryfe asked Her Majesty's Government:
Whether the threat of the Transport and General Workers' Union to refuse to handle the products of the proposed Ford electronic plant at Dundee is a restrictive practice which should be referred to the Office of Fair Trading or the monopolies commission.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, the Fair Trading Act 1973 makes provision for restrictive labour practice references to the Monopolies and Mergers Commission, but the kind of action mentioned by the noble Lord cannot be referred under the terms of this Act. Only existing practices, not those threatened for the future, can be so referred.
Lord Taylor of Gryfe: My Lords, does the Secretary of State agree that the threat of the Transport and General Workers' Union was a critical factor in the withdrawal of the Ford Motor Company from Dundee, with the loss of approximately 1,000 jobs? Does he also agree that it might have been wise for the Secretary of State to have warned the TGWU that in the event of it carrying out its threat there could possibly have been a reference to the Monopolies and Mergers Commission under the 1973 Act, which he has just quoted?
Lord Young of Graffham: My Lords, I suspect that the Transport and General Workers' Union received many warnings, since Ford had carefully considered other sites for this plant—namely, in Spain, Portugal and Austria—before deciding to go to Dundee. Part of the package which I am told attracted Ford was the single union agreement with the AEU. Such was the way in which this matter developed that I suspect no warnings in the world would have changed the mind of the TGWU leadership.
Lord Wyatt of Weeford: My Lords, does the noble Lord agree that the threat of the TUC to expel the engineers and electricians if they agree to single union working is something that ought to or could be referred as a restrictive practice to the MMC?
Lord Young of Graffham: My Lords, I very much wish that that could be the case. However, we can only refer existing practices under the terms of the Fair Trading Act and not threats for the future, no matter what their nature.
Lord Mason of Barnsley: My Lords, in the Question the word used is "threat", and that is not a restrictive practice. Had the act taken place and the products not been handled, would that have been a restrictive practice? What action could then have been taken by the Secretary of State?
Lord Young of Graffham: My Lords, that is a hypothetical situation. However, had such a threat been carried out, I suspect it would have been open to anyone to refer the matter to the MMC or to ask for it to be considered. Should that unlikely situation ever arise, I hope that it is referred to the MMC.
Lord Campbell of Alloway: My Lords, does my noble friend the Minister agree that the nub of the problem is not the restrictive practice issue but the fact that there is no effective machinery whatever for the orderly resolution of inter-union rivalry disputes? If that is so, does he agree that it is incumbent upon any government to take appropriate steps in the national interest if the TUC cannot put its own house in order?
Lord Young of Graffham: My Lords, this is not an inter-union dispute. It was quite clear that in this instance Ford had agreed with a union to provide a factory. What happened afterwards was that another union threatened that it would take action against the other plants of that company. On that point I do not know what the Government can do except to study the position. If we can find a way through, I have no doubt that my right honourable friend the Secretary of State for Employment will be taking steps.
Viscount St. Davids: My Lords, is the noble Lord really saying that the threat is not an offence and only the actual commission of the act is? Is he really saying that to point a pistol at a man's head is not an offence and it only becomes one when the man is actually shot dead?
Lord Young of Graffham: My Lords, though I am intrigued by the way in which the noble Viscount puts this question, we are talking of restrictive practices, and they are not offences. The question is whether this is a restrictive practice. A restrictive practice does not become one until it actually comes into being.
Lord Basnett: My Lords, I should like to hear evidence that the Transport and General Workers' Union itself actually issued this threat. I should also like your Lordships to be aware—
Noble Lords: Question!
Lord Basnett: My Lords, I shall come to the question afterwards. Is the noble Lord aware that any such threat can only have been issued by the negotiating body? Does he not agree that in this situation, which we all regret, it is difficult to ascribe the blame to one of the parties alone? Many people are to blame. Does the Minister further agree that what is really needed is backing for effective TUC guidelines for reconciling union differences and allowing the peaceful introduction of single union agreements? That is what is needed, and not mischievous questions.
Lord Young of Graffham: My Lords, what I suspect is needed is the peaceful introduction of single union agreements. I suspect that all Members of your Lordships' House will agree with the noble Lord in that. When it comes to ascribing blame for the unfortunate occurrences which cost about 1,000 jobs in Dundee, it seems fairly clear to those who live in Dundee where the blame lies.
Lord Broxbourne: My Lords, following on from the previous questions and the answers thereto, will my noble friend, with his customary cogency and modesty, make it clear that it is for the courts and not for Ministers to interpret the statutes?
Lord Young of Graffham: My Lords, I am grateful to my noble friend for his compliment, as I interpret it. It is not even so much for the courts but for the company itself. It was Ford that became aware of what the working conditions would be like; it was therefore Ford that decided in the circumstances it had no option but to withdraw.
Lord Williams of Elvel: My Lords, is the noble Lord aware that we fully agree that the alleged threat of unspecified action at a future time could not possibly be referred to the Office of Fair Trading and that it does not constitute a restrictive trade practice as defined in the present law? Will he further agree that my noble friend Lord Basnett had a serious point when he asked for proper TUC machinery for sorting out single union deals? Have not too many noble Lords spent too much time shedding crocodile tears for Dundee?
Lord Young of Graffham: My Lords, those tears are not crocodile tears: they are real, 1,000 times or more. In this instance it is not a matter for the Government but very much one for the TUC. There has been enough time—some five months—for the TUC to deliver. I hope very much that it will do so before another five months pass.
Lord Harmar-Nicholls: My Lords, will my noble friend pay special attention to the question asked by the noble Lord, Lord Wyatt? If the situation is allowed to fester on as it is now, it could well stop other people who would want to bring investment to this country in order to service Europe. That makes it a problem for the nation quite apart from an immediate problem for Dundee.
Lord Young of Graffham: My Lords, there are many examples of inward investors who have invested in this country successfully and with single company agreements. In the particular case of Ford, the company was bringing a new plant to an existing infrastructure of many plants in this country. That becomes very difficult when it is alleged that the Transport and General Workers Union threatens certain action. But this should not deter new investors in this country. They have found that, even without government assistance, it is by far the best country in Europe in which to invest.
Lord McCarthy: My Lords, does the noble Lord have time to answer the question of my noble friend Lord Basnett about the evidence of the alleged
116
threats from the Transport and General Workers Union? Will he not confirm the fact that if a threat had been carried out it would have been a secondary action, unlawful under the terms of the 1980 and 1982 legislation, and no investigation would have been needed?
Lord Young of Graffham: My Lords, that may be some comfort to the lawyers. But the great test here is Ford. Ford decided that the threat was real enough; so it withdrew.
Lord Taylor of Gryfe: My Lords, will the Minister accept that it was common knowledge during the negotiations that there was a threat, implied or otherwise, that other Ford workers would black the products of the Dundee factory in the event of it being opened? I am concerned not about inter-union disputes but about inward investment. Will the Minister please confirm that the 1973 Act provides for a Monopolies and Mergers Commission investigation if a labour practice operates against the public interest? Can he confirm that any such threat, or implied threat, if carried out, would come within these provisions?
Lord Young of Graffham: My Lords, I suspect that it is a matter of interpretation, if not by the lawyers, then certainly by the courts, whether a threat of a restrictive practice is in fact a restrictive practice. It is my advice that it has to come into being before it exists. Until then the Fair Trading Act does not apply.

Scotland: Education Reform
2.47 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What effects or consequences they foresee for Scotland of the national curriculum proposed for England and Wales in the Education Reform Bill.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, the national curriculum proposed in the Education Reform Bill applies only to England and Wales. The Government's proposals for curricular reform in Scotland are contained in the consultation paper Curriculum and Assessment in Scotland: a Policy for the 90s, issued by my right honourable friend the Secretary of State on 19th November 1987. A copy of this document has been placed in the Library of the House.
Lord Campbell of Croy: My Lords, I thank my noble friend for his reply. As Scotland has for some time been moving towards a standard curriculum, and as the Education Reform Bill does not apply to schools in Scotland, are the Government aware how confusing the term "national curriculum" is to the members of the public in Scotland?
Lord Sanderson of Bowden: My Lords, I take due note of what my noble friend says on that matter. The fundamental purpose of our reforms is the same. We

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in Scotland will be building on the traditional strengths of Scottish education.
Lord Carmichael of Kelvingrove: My Lords, does the Minister accept that I agree fully with the noble Lord, Lord Campbell of Croy, who asked about the confusion that exists when we talk about the national curriculum? Is he also aware that Scotland has for some time had its own wide national curriculum for secondary education which leads to the SEC examinations, embracing English, arithmetic, a language and social studies, and that in primary education we have had our own curriculum since 1965? The strength of Scottish education, as I think the Minister hinted, is due to its breadth, which we certainly would not want to change.
Lord Sanderson of Bowden: My Lords, I am grateful to the noble Lord. I agree entirely with what he said. We have gone a long way in secondary education. Our study deals with the primary area. We have brought forward a consultation document, and we look forward to the responses.
Lord Molloy: My Lords, is the Minister aware that many of us in the House have had correspondence from Scottish local authorities and Scottish professional educational associations? Before any change to the constitution is made, do the Government intend that there will be discussions with Scottish representatives in both Houses, Scottish local authorities and Scottish professional associations?
Lord Sanderson of Bowden: My Lords, a consultation document has been issued. An analysis of the responses is taking place at the moment. At the appropriate time my right honourable friend the Secretary of State will come forward with proposals.
Lord Campbell of Croy: My Lords, what coordination, if any, is proposed between authorities in England and Wales and the Scottish Consultative Committee on the Curriculum (CCC), which recently issued that document to ensure that curricula north of the Border are on the same lines as those south of the Border?
Lord Sanderson of Bowden: My Lords, I thank my noble friend for raising that point. We are looking closely at what is proposed for England and Wales. If I may give an example, the Gallic and Welsh languages is one area at which we are looking most closely in order to see what is happening in Wales and what we should be doing in Scotland in that connection. As the noble Lord, Lord Carmichael said, the situation is different north of the Border. Our consultation document differs in many respects from what is proposed in England and Wales.
Lord Glenamara: My Lords, may I add my congratulations, and I imagine those of many people, to the Minister on handling this matter much more sensibly than his counterparts in England?
Baroness Carnegy of Lour: My Lords, does my noble friend agree that there is perhaps some scope for us in Scotland to learn from the discussions on the
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English so-called national curriculum? Is he aware that the Scottish Consultative Council on the Curriculum has recommended that it should be possible for pupils to drop all foreign languages after two years in secondary schools in Scotland? That conflicts with aspirations of the national curriculum for England and Wales and its response to the coming single European market. Ministers may feel inclined not to accept the recommendation in view of the considerations south of the Border.
Lord Sanderson of Bowden: My Lords, in answer to my noble friend's first point, yes, we are always prepared to learn from those south of the Border if the point is worth learning. On the question of foreign languages, yes, indeed, my right honourable friend is well aware of that difference. We can offer two languages for the first two years of secondary education. That is the difference between north and south of the Border. My right honourable friend is currently considering a further decision paper from the Consultative Committee on the Curriculum.
Lord Campbell of Croy: My Lords, with reference to what my noble friend said, is he aware that I support the fact that the curriculum work north of the Border is being done separately and is different because I was the Secretary of State who started it? Is he also aware that it is important to have coordination because of the families who have to move due to the mobility needed for industry and business and the service families who move to RAF stations or barracks? If children of such families find themselves with a completely new system it is most disruptive to their education.
Lord Sanderson of Bowden: My Lords, I thank my noble friend for that remark. We will take that matter into account. With regard to testing we are looking closely at the dates for testing in primary education in Scotland. The age is slightly different from what is proposed in England. There is the 14-year-old test in England which we do not propose to have in Scotland. We already have the standard grade at 16.

Namibia: Uranium Contract
2.55 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
Whether, when the Minister of State for Defence Procurement stated on 22nd March 1988 that he was unable to identify the 1976 contract for the supply of uranium oxide from Namibia (H.L. Deb., col. 91) he was unaware of the option in the original contract of 1968, whether this option has ever been taken up and, if so, when.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, no UOC has been delivered to the UK for defence purposes since 1973 under agreements which pre-dated the 1968 agreement to which the noble Lord refers. All deliveries since then have been for civil purposes.
Lord Hatch of Lusby: My Lords, when the Minister answered my Question on 22nd March saying that he could not trace the contract to which I was referring, had he read the diaries of Mrs. Barbara Castle? She wrote about a Cabinet meeting on 29th January 1976 and said that it considered whether we should take up:
"our option for British Nuclear Fuels to get another 1,100 tonnes of uranium from Namibia in 1977 to 1982"?
Has that option been taken up? If so, when?
Lord Trefgarne: My Lords, I am afraid that I cannot vouch for the accuracy or otherwise of Mrs. Castle's diaries. The problem is that the events to which she referred took place in 1976, when of course there was a Labour Government in office. I am afraid that I do not have access to the Cabinet papers of that time.
Lord Hatch of Lusby: My Lords, that is not an answer to my Question. I asked the Minister whether, when he answered me on 22nd March and said that he could not trace the 1976 contract about which I was asking, he was aware that there had been a Cabinet discussion in 1976 on the taking up of the option under the 1968 contract. I am still asking whether that option has ever been taken up and, if so, when it was taken up. Does he agree that his Answer on 22nd March was at least misleading the House?
Noble Lords: No!
Lord Trefgarne: My Lords, as I said on 22nd March, there was no contract let in 1976 as far as I know. As the noble Lord has indicated, there was a contract in 1968 to which I understand there were no fewer than nine variations at various times. I am advised that none of those was in 1976.
Lord Cledwyn of Penrhos: My Lords, I wonder whether the noble Lord will tell the House whether the contract to which he has just referred is classified information.
Lord Trefgarne: My Lords, the details of the contract certainly are.
Lord Harmar-Nicholls: My Lords, is my noble friend likely to come to any conclusions from reading Mrs. Castle's—
Noble Lords: Lady Castle!
Lord Harmar-Nicholls:—diaries? Will he take care to read Dick Crossman's diaries also so that he can get the proper balance on that particular see-saw?
Lord Trefgarne: My Lords, I have in fact read both diaries at various times. I enjoyed them both, but it may be that Lady Castle's memory was slightly in error.
Viscount Hanworth: My Lords, does the Minister agree that uranium oxide is used for military and civilian purposes, and that it is pointless to decide which portion of the uranium has gone where? One might just as well mix it up and say that some has gone to one place and some to the other.
Lord Trefgarne: My Lords, unfortunately, to do as the noble Lord suggests would contravene the nonproliferation treaty.
Lord Hatch of Lusby: My Lords, is the noble Lord seriously suggesting that Mrs. Castle, as she then was, who wrote her diary each day, misinterpreted a discussion in the Cabinet of that day, in January 1976? The Minister says that he has read that diary and the diaries of Richard Crossman, so why did he give me the misleading Answer that he gave on 22nd March? I ask the Leader of the House to look into this, because it seems to me that this was a deliberate attempt to mislead the House.
The Lord Privy Seal (Lord Belstead): My Lords, I am normally very ready to help the House, but on this occasion I see no reason to interfere.
Lord Hatch of Lusby: My Lords, will the Minister answer the question? If he had read Mrs. Castle's diaries and those of Richard Crossman when he answered my Question on 22nd March, did he pretend that there had been nothing to discuss in 1976?
Lord Trefgarne: My Lords, I know that the noble Lord thinks that there has been some secret contract for the supply of this material which somehow we are trying to conceal from the House and from Parliament. I assure the noble Lord that, given the fact that this was in 1976 and I do not have access to the papers, so far as I can tell that is not the case. If the noble Lord would like to call on me at the Ministry of Defence, I should be happy to try to discuss the matter with him in more detail to see whether I can set his mind at rest.

Teachers: Initial Training
3.2 p.m.
Lord Taylor of Blackburn Lord Taylor of Blackburn asked Her Majesty's Government:
What is their reaction to the recently published report by HM Inspectorate of Schools entitled Quality in Schools: Initial Training of Teachers.
The Parliamentary Under-Secretary of State, Department of Education and Science (Baroness Hooper): My Lords, this report was welcomed when it was published in April last year. It has been followed up by a national conference and a series of regional conferences stressing the partnership between the providers of initial teacher training, the local education authorities and practising teachers in schools. There have also been follow-up discussions between the department, HMI and representatives of the main teacher training associations.
HMI will shortly be publishing a further report of initial teacher training in universities. This means that over the past five years we have had a 100 per cent. survey of the institutions involved in teacher training.
Lord Taylor of Blackburn: My Lords, I thank the Minister for that reply. Perhaps I may go a stage further and ask whether, when the second report of

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HMI is published, the Minister will again go through the same procedure of holding consultations with the various bodies concerned, taking into account the changes that have taken place over the past few years in the teaching profession and the anticipated changes in the Education Reform Bill.
Baroness Hooper: My Lords, yes. In fact, my right honourable friend the Secretary of State for Education and Science announced in another place in November last year that he intended before the end of 1989 to review the criteria for the approval of courses which were set out in DES Circular 3/84 and to consider what the future arrangements should be for the review and approval of courses of initial teacher training. This will take into account both the HMI reports.
Baroness David: My Lords, perhaps I may ask the Minister whether either of these reports will help encourage more secondary teachers to go into training. I understand that there has been a significant drop, in particular in the shortage subjects: 17 per cent. in maths; 18 per cent. in biology and 20 per cent. in physics.
Baroness Hooper: My Lords, we hope that it will encourage a number of new entrants. The Government are doing a great deal in connection with encouraging mature students to enter teacher training.
Lord Orr-Ewing: My Lords, can my noble friend say whether at the completion of the course the examination is now of the right standard so that teachers are fully qualified to teach special subjects and also at the same time to keep order in classes? Are we sure that the standard should not be steadily improved so that we get a better type of teacher, better qualified to teach the coming generations?
Baroness Hooper: My Lords, I think it is the policy of this Government always to try to improve upon the best. Certainly, so far as concerns accreditation, the then Secretary of State, my noble friend Lord Joseph, set up the Council for the Accreditation of Teacher Education in 1984 to advise the holder of his office on whether individual courses met the criteria which were set out in the DES circular to which I have referred. Some of these criteria are designed to eradicate the deficiencies which were noted in the first HMI report. So we are seeking to improve the situation the whole time.
Lord Molloy: My Lords, does the Minister not agree that the HMI report of last year which she quoted stated that 80 per cent. of Britain's schools were well disciplined and well organised?
Baroness Hooper: Yes, my Lords. there are a number of good things which go on in the education system which are predominant. It is the minority of difficult cases which always attracts publicity. Certainly it is that minority of cases which the Government are dealing with in the Committee of Inquiry into Discipline in Schools which has recently been set up.

Business
3.5 p.m.
Viscount Davidson: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Housing (Scotland) Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and that during this adjournment the Church Commissioners (Assistance for Priority Areas) Measure and the Church of England (Ecumenical Relations) Measure will be taken.

Local Government Finance Bill
Brought from the Commons; read a first time, and to be printed.
Court of Session Bill [H.L.]
Report received.

Housing (Scotland) Bill
3.7 p.m.
Lord Sanderson of Bowden: My Lords, I beg to move that the House to now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Sanderson of Bowden.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 12 [Assured tenancies]:
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 17:
Page 9, line 15, at end insert—

("(3) (i) It shall be the duty of the landlord under an assured tenancy to provide a written lease at the commencement of the tenancy, containing such information as may be prescribed by the Secretary of State.

(ii) In subsection (3)(i) above "prescribed" means prescribed by regulations made by the Secretary of State by statutory instrument, and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(iii) Regulations under this section may make different provision in relation to different circumstances.").

The noble Lord said: We opened the batting yesterday on this Bill at a late hour on an amendment which affects the provision of accommodation for the homeless. I regarded that amendment as extremely important. Today we are similarly addressing very important matters in Amendments Nos. 17 and 18 which are being taken together.
Perhaps I may say at the beginning of our proceedings that it is our intention to be as helpful as possible in the passage of this Bill. This is not a serious matter of party political conflict. Some aspects of the Bill are extremely welcome. We support the setting up of Scottish Homes, so I suspect that we can discuss the Bill in a fair, reasonable way this afternoon.
That should apply particularly to the amendment which is now before the Committee. Its purpose is to ensure that future housing association tenants' rights are not less than those conferred on housing association tenants by the Tenants' Rights Etc. (Scotland) Act 1980. I suspect that this cause is dear to the heart of the Minister because of his own interest and experience in housing associations. Indeed, at the Second Reading of this Bill the Minister of State, Scottish Office, Lord Sanderson, said:
"The Bill builds on the policies successfully introduced in the Tenants' Rights Etc. (Scotland) Act 1980. That Act gave public sector tenants rights … which they had not had before. This Bill safeguards those rights and adds to them".—[Official Report, 11/4/88; col. 935.]
But, sadly, this does not apply to housing association tenants. This Bill does not add to their rights at all nor does it build on the important rights in the 1980 Act. For future housing associations the Bill in fact undermines the cornerstone of the principles on which those rights were founded, and future housing association tenants will be specifically excluded from those statutory rights which have been enjoyed since 1980 by existing housing association tenants.
Future housing association tenants will be assured tenants under the terms of Part II of the Bill, which represents a substantial reduction in the rights of the future tenants of housing associations and certainly diminishes the rights which they presently enjoy. The statutory rights which were given to housing associations in 1980 are at risk of being lost to any tenant who rents his home on an assured tenancy, and the Scottish Federation of Housing Associations feels very strongly about this issue.
One of the features of this right of security of tenure was the test of reasonableness with regard to proceedings for recovery of possession. In the 1987 Act there are 16 grounds on which a court may order possession against a secure tenancy. The Committee will be glad to know that I do not propose to read the 16 provisions that are mentioned, but there is a provision that the sheriff shall only make an order if it is reasonable to make an order and if suitable alternative accommodation will be available or if both the above factors apply in the case of ground No. 16 being satisfied.
The sheriff acts as the final arbiter and can only make an order for possession subject to certain conditions. The safety net of the test of reasonableness is one of the cornerstones of the security of tenure granted under the 1980 Act. This safety net would largely be lost if the Bill is enacted in its present form. I shall be happy to hear the Minister explain this provision. We must keep in mind the importance of the housing associations, for if there has been one bright spot in the development of housing policy it has been the building up of community housing associations where people have given voluntary service in this area. It seems rather sad that in the new housing revolution that is envisaged in this Act the rights in this area should be diminished. I beg to move.
Lord Morton of Shuna: I strongly support this amendment and Amendment No. 18, with which it is
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grouped. It seems to me quite extraordinary that where there is an assured tenancy the possibility still exists that anyone could consider that one did not need the lease to be in writing. A more obvious example of future confusion about who the landlord is, who the tenant is, what the subjects of the lease are, what they extend to, and whether the garden hut is covered could hardly be imagined.
I hope very much that the promise to consider the matter which was made in another place will be taken a bit further today so that we shall have the situation which we already have as regards the statutory sector under the Housing (Scotland) Act 1987. Under that Act the lease has to be in writing. I would suggest that that is the only way that one avoids interminable trouble about what are the terms of the lease.
On Amendment No. 18, I agree with everything that the noble Lord, Lord Taylor of Gryfe, has said. It is crucially important that the benefits that were given to tenants of housing associations in 1980 and consolidated in the 1987 Act should not now be taken away by a Bill which the Government say is aimed at improving the position of tenants. It would seem to me wholly wrong that these tenants and future tenants, by the back door, so to speak, should lose rights which this Chamber even last year considered it appropriate for them to have.
Baroness Carnegy of Lour: I wish to back up what the noble Lord, Lord Morton of Shuna, has just said about the question of the written lease for assured tenants. Some of the aspects of this Bill I find quite hard to follow. This one I do not find hard to follow at all. I am myself accustomed when letting houses or indeed when I have leased a house to require a written lease and to supply a written lease. I agree with the noble Lord that it is the only way to avoid trouble. I shall be interested to hear what my noble friend has to say about this, because it seems strange to me that we have not got any further on this particular aspect when the issue appears to be pretty clear. I hope that he will be able to make some encouraging noises on this issue. If not I shall be rather concerned.
3.15 p.m.
Lord Hylton: I should like to put down a marker, which is that these two amendments are likely to have very considerable significance for England and Wales. At the present time I understand that discussions and negotiations are going on to work out a form of secure housing association tenancy for England and Wales.
This is of considerable importance, as it would in my view be a great mistake to create two classes of housing association tenants—one the old kind with security of tenure and the other a new kind without that security. I do hope that the Government will be able to advance on what they have apparently already said in another place and that we shall be able to make some headway on these two amendments.
Lord Goold: First, I should like to apologise for my unavoidable absence during Second Reading. Secondly, perhaps I may declare an interest as a director of a house building company in Scotland. On Amendment No. 17 I am inclined to agree with Members of the Committee who have suggested that

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we should have something in writing. I hope that when the Minister replies he will mention this.
On Amendment No. 18 I am concerned at the suggestion that there should be security of tenure to the extent that is being suggested, because I think it is very important to attract new investment so that we can encourage more housing of the type that is so urgently required. But I fear that this investment will not come if succession is unlimited. I think that in this particular area we should be careful that we do not inhibit investment.
Lord Morton of Shuna: In Amendment No. 18 the security is restricted to tenants of housing associations. It does not apply to tenants at large.
Lord Goold: Yes, I am aware of that. But, as I say, we do not want to encourage housing associations into letting. We want to encourage new money for investment and I think that that could be inhibited if succession was unrestricted.
Lord Hylton: With respect to the noble Lord on the Government Benches who has just sat down, I think 1 am right in saying that succession rights apply only lo the tenants of private landlords and not to those of housing associations. It has of course been a practice of most housing associations to give another tenancy to a close relative living with a tenant at the time of his death.
Lord Hughes: I regret that the noble Lord, Lord Hylton, is not correct in connection with the rights of housing associations. Those rights are available at the present time according to the information which I have. On this question of succession the Minister when speaking on Second Reading pointed out that this was a follow-up to the Act of 1980, which was consolidated in the Act of 1978.
When the Secretary of State was speaking on the Tenants' Rights Etc. (Scotland) Bill on 4th March 1980 he used these words:
"We feel it would be inappropriate to provide a secure tenancy which could in effect be terminated without any legal recourse and without any impartial observer being able to judge the basis on which the landlord was bringing the secure tenancy to an end".
What is being proposed in the Bill is a total about-turn on the stated policy, which undoubtedly meant a considerable improvement in the rights of tenants. What was given in 1980 is being taken back eight years later. In fact, one might go further and say that it was taken back a year later because it was included in the consolidation provisions of last year.
I therefore hope that the Minister will follow up what my noble friend believes was stated in another place by giving further consideration to those matters. Generally speaking, housing associations—I declare an interest by saying that I speak as the president of the Scottish Federation of Housing Associations—are interested in protecting the rights of their tenants. They do not like the idea of making any of the grounds for termination of a tenancy mandatory.
The noble Lord, Lord Goold, said that private investors might not like the idea of an assured tenancy held in perpetuity. However, that is not the position. Succession can be stopped by the sheriff if
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he is satisfied that that is the proper course to take. The proposals made by the Secretary of State in 1980 were achieved because 16 grounds were listed under which a tenancy could be terminated. The main test that the sheriff had to apply was the reasonableness of termination of a tenancy in all the circumstances. That seemed to be a good basis in 1980. The housing associations of Scotland believe that it remains a good basis. They do not suggest that there are no circumstances in which a tenancy should be terminated. However, as the Secretary of State then said, it is good that an impartial observer should make the decision, rather than one who is servile to the interests of either the tenant or the landlord.
I hope that the Minister will tell us, in the light of what has been said here and what was said in another place at a later stage, that he will have another look at the matter and hopefully return to the status quo. I hope that he will say that such terminations will be at the discretion of the sheriff in every case or, at worst, that mandatory grounds should be reduced to the lowest possible level.
Lord Mackie of Benshie: I support the amendments. Perhaps I may say that an assured tenancy is a misnomer. What is meant is very short tenancies. However, the two amendments give some assurances to the tenant and I hope that the Minister will regard them favourably.
Lord Sanderson of Bowden: Perhaps I may first say to the noble Lord, Lord Taylor of Gryfe, that I am delighted that he approaches the Bill in his customary spirit of co-operation. I hope that when I have finished my rather long statement—I apologise to the Committee for its length—he will see that the Government have been doing a lot of thinking since the Bill left another place.
I think it would be appropriate at this point if I were to fulfil my promise at Second Reading to inform the Committee of the outcome of the Government's consideration of the rights of future housing association tenants. It is relevant to both amendments which we are discussing at present.
It may be helpful if I rehearse briefly the events which have preceded this announcement. Various amendments relating to the rights of future housing association tenants were discussed at Committee stage of the Bill in another place. My honourable friend the Minister for Home Affairs and the Environment gave an undertaking that Scottish Office officials would undertake discussions with the Scottish Federation of Housing Associations, together with the Housing Corporation in Scotland, to clarify the issues and the views of housing associations in relation to those issues.
Those tripartite discussions took place on 29th February and proved extremely useful. I wish to record my appreciation of the helpful and constructive contribution made by both the Scottish Federation of Housing Associations and the Housing Corporation in Scotland.
Turning to the issues, the Bill as originally drafted provided for those who were tenants of most registered housing associations at the date of the commencement of the Bill and their statutory successors to retain their existing tenancy status for

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as long as they remained living in the same house. All future housing association tenants and existing tenants who moved to a different house would become assured tenants. Their rights, other than those relating to security of tenure, would be a matter of contract rather than statute.
The tripartite discussions addressed a number of areas for modification of the original position. Both the Scottish Federation of Housing Associations and the Housing Corporation in Scotland attached considerable importance to the retention of existing tenancy status for housing association tenants who move from one house to another within an association's stock. They emphasised the importance of such moves to housing associations' ability to manage their stock to maximum advantage and set out the case against burdening tenants with a change of house and a change of tenancy status simultaneously.
There was a very detailed discussion of the comparison between the position of future tenants under the terms of the Bill and that of existing tenants under the Housing (Scotland) Act 1987. The position is well summarised in the briefing note on Amendment No. 18, which many Members of the Committee will have received from the Scottish Federation of Housing Associations. It says:
"Comparisons between the rights conferred by the existing legislation (Part III of the Housing (Scotland) Act 1987 and those proposed in Part II of the Bill are far from straightforward."
That is a fair-minded acknowledgement by the federation that the comparison of the two frameworks of rights is not as black and white as it has often been portrayed. Comparison of the two sets of provisions dealing with security of tenure—that is, the safeguards against a tenant being evicted from his or her home—is particularly complicated.
The tripartite discussions also covered the general question of providing rights by contractual, as compared to statutory, means. In this context, the Housing Corporation in Scotland offered the view that there would be scope for a model tenancy agreement for housing association tenants. It has offered to draw up such an agreement in consultation with housing associations through the federation as the representative body for the associations.
I turn now to the Government's decisions, some of which have already been given effect at Report stage in another place. I shall deal with those first. We have accepted the advice of the federation and of the Housing Corporation in Scotland in relation to existing tenants who move from one house to another within the stock of the same housing association. Clause 40 of the Bill now provides that such tenants will carry their existing tenancy status with them to their new house. We have not restricted this to tenants who move in furtherance of the interests of the housing association in the good management of the stock. It applies also for tenants moving to suit their own preferences. As well as being of practical assistance to housing associations and their tenants, this change reduces the number of people who will be affected by the change from the 1987 Act tenancy framework to the new framework introduced by the Bill.
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In relation to that new tenancy framework, important changes were made to the security of tenure provisions relating to assured tenancies. One of the points which most concerned the Scottish Federation of Housing Associations, speaking on behalf of future housing association tenants, was that the availability of suitable alternative accommodation was a mandatory ground for possession. That could have meant in theory that a tenant could be moved to a suitable alternative accommodation without good reason. I say "in theory" because in this, as in other respects, we must bear in mind the high standards of housing associations as landlords and the improbability of a housing association seeking to move a tenant from his or her home without good reason. However, we responded to that anxiety by moving the relevant ground for possession from Part I to Part II within Schedule 5. That has the effect of making any transfer of a future tenant from one house to another subject to the sheriff's view as to the reasonableness of the move. That is in addition to the stringent and extensive requirements as to what constitutes suitable alternative accommodation which take up Part III of Schedule 5.
We have also moved another of the grounds for possession which concerned the federation—persistent delay in paying rent—into Part II of Schedule 5 so that it too will be the subject of sheriff's discretion rather than being mandatory.
As I have already said, comparison of the security of tenure provisions of the Bill and the 1987 Act is very complicated. Each set of provisions contains individual provisions giving a housing association the ability to obtain possession of one of its houses which are not contained in the other set of provisions. Whether or not one set is more favourable to an individual tenant than the other set is purely a matter of his or her circumstances. However, there is no doubt that the changes made in another place have brought the two sets of provisions much closer together. In the Government's view they are now broadly similar in effect.
I note what has been said about the Scottish Federation of Housing Associations' continuing reservations about the detail of the security of tenure provisions and I have read its briefing note myself. I think that its own statements illustrate that in practical terms its remaining reservations are overstated. For example, in relation to Ground 6 of Schedule 2 to the Bill it says that tenants should only be moved to allow demolition or reconstruction if suitable alternative accommodation is available and that,
"It would be contrary to the aims and objectives of housing associations to exclude this requirement".
It is surely clear that, given the very strong view taken by housing associations as to their duties towards tenants, there will be no practical disadvantage to future tenants arising from the Bill's provisions.
Similarly, the federation's briefing note suggests that, in relation to tenants with more than three months' rent arrears:
"Discretion by the sheriff is the most appropriate way of dealing with the difficult problem of rent arrears".
I beg to differ. The most appropriate point for the exercise of discretion appears to me to be the point at

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which the housing association decides to begin legal proceedings for possession. It is best placed to know whether there are problems with housing benefit or other mitigating circumstances. If, knowing all the facts, it decides that it should seek repossession I remain firmly of the view that it is important that it is certain of obtaining it. Smaller housing associations, in particular, could not be expected to cope with significant amounts of unpaid rent which they would be powerless to do anything about.
My general point is that we should not leave the nature of housing associations and the trust which is rightly placed in them to be good landlords out of account in considering the right structure for our legislation.
This principle is important in relation to the remaining questions about future housing association tenants' rights. The starting point for that consideration must be that nothing in the Bill prevents housing associations from conferring on their tenants whatever rights they think appropriate. The question is not what rights future housing association tenants should have. It is the mechanism through which rights should be provided and the degree to which statutory intervention in the dealings between housing associations and their future tenants is appropriate.
The tripartite discussions were useful in clarifying that the Scottish Federation of Housing Associations does not consider that all of the rights available under Part III of the 1987 Act should attach to future housing association tenants. It indicated in the discussions that it does not consider that housing associations wish either the right to buy or the right to be reimbursed for carrying out repairs to continue. It is therefore common ground between the federation and the Government that we should be concerned with choosing which among the rights in Part III of the 1987 Act it is appropriate to incorporate on a statutory basis into assured tenancies.
The Government have decided that one important area for statutory provisions is that dealt with by Amendment No. 17 relating to written leases. We shall bring forward amendments at Report stage to provide that tenants under assured tenancies are entitled to a written statement of the conditions of the tenancy. That will provide a framework for all other discussions about rights and ensure that both landlord and tenant are clear about their respective rights and responsibilities. I know that Members of the Committee opposite, and indeed on the Benches behind me, share the Government's view that this is a particularly important aspect of future tenants' rights. I am sure they will be pleased that we have reached a common view in this respect.
We shall also bring forward at Report stage amendments which will give the spouse of a tenant who dies the right to continue an assured tenancy. We have been impressed by arguments that this is a right of such importance that it needs to be incorporated in statute rather than left to contractual arrangements between landlords and tenants. I am quite sure that housing associations and landlords generally would not seek to evict widows and widowers. However, I accept that even the remote possibility of such a thing is likely to prove very upsetting to someone whose
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spouse has died or is near to death. We do not wish to deprive widows or widowers of peace of mind about their housing. This is a humanitarian question rather than a matter of the strict logic of the landlord-tenant relationship. Providing for their spouses is something which it would be logical for tenants to do when agreeing their terms of tenancy, but the figures concerning those who die intestate indicate that logic does not always prevail when it involves contemplating one's own death.
We believe that the right of persons other than spouses to continue an assured tenancy should be left to contractual agreement between landlord and tenant. It is something which will vary greatly in importance from one tenant to another and one landlord to another which is one criterion for those matters which we consider it sensible to allow to be dealt with on a contractual basis. The other matters to be dealt with on that basis, out of those which the federation wishes to continue on a statutory basis, are the sub-letting and assignation of houses and the physical alteration of houses. The relevance of those could vary from association to association. I think it is possible to envisage circumstances in which a special needs housing association, for example, might want special safeguards in relation to the future use of its houses incorporated into its tenancy agreements in a way which a general needs association might not. An element of flexibility would be useful without impinging unreasonably on tenants' interests.
In discussing our criteria for these decisions, I should comment briefly on the emphasis which the federation has placed on the introduction of private finance as a factor in our thinking. This was referred to by my noble friend Lord Goold.It would be wrong to leave the Committee to suppose that that was our only consideration. However, in so far as it is a factor, I think that the federation may be over optimistic in its view that the private sector's willingness to lend to housing associations would be wholly unaffected by a level of statutory rights which could diminish the ability of a housing association to manage its stock over time. As far as I am aware there is no firm evidence upon which to base such judgments.
As I have said, our decisions have been based on wider criteria. There is a case for a degree of flexibility. These are not uncharted waters. It is often overlooked that co-operative housing associations—Glasgow has some—which are springing up fast in the worst council housing estates, are not within the framework of Part III of the 1987 Act just as they will be outwith the assured tenancy arrangements. They already rely on contractual arrangements, and this has not harmed their popularity with tenants nor led to any significant diminution of rights. They are proof that the absence of statutory requirements is not a barrier to good arrangements.
In the same vein, I attach importance to the offer by the Housing Corporation in Scotland to produce a model tenancy agreement for housing associations in consultation with the Scottish federation. I believe that that will be extremely useful and will provide a solid foundation for discussions about contractual rights. I believe that the federation is missing the point in its assertion that any model tenancy

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agreement needs to have legal force. A model tenancy agreement may go well beyond the rights and responsibilities currently regulated by statute and I think there is little doubt that flexibility will be necessary in the interests of housing associations.
I have spoken largely about housing associations because I have been fulfilling a specific undertaking. I should make it clear that we intend to extend the provisions dealing with a written statement of tenancy conditions and with the continuation of a tenancy on the death of a spouse to all assured tenancies. Those changes will not be confined to housing associations.
The Government have considered these matters very carefully over several weeks. We have made, and have undertaken to make, very substantial revisions to the Bill to meet the concerns expressed on behalf of future housing association tenants.
I believe that we have now arrived at a proper balance between statutory change and the ability of housing associations and their tenants to proceed by contractual agreement. I hope that on that basis Members opposite will agree to withdraw Amendments Nos. 17 and 18.
Lord Morton of Shuna: Before the noble Lord, Lord Taylor, tells us his intention in regard to Amendment No. 17, and because I also have put my name to the amendment, perhaps I may thank the Minister and the Government for at last yielding to pressure from this side of the Chamber and in another place which has convinced them of the need for a written lease. In effect, the Minister has given us a very long statement and I think that we should all like to study it to see exactly what it contains.
Lord Taylor of Gryfe: Like the noble Lord, Lord Morton of Shuna, I very much welcome the response of the Government to some of the points that have been made during the course of our discussion, which has certainly been worthwhile. The assurance provided by Amendment No. 17 in connection with a written lease is very welcome and I am sure that it will satisfy the noble Baroness, Lady Carnegy of Lour, who raised that specific point. If I understood it correctly, the statement regarding the succession of tenancy on the death of a spouse was also welcome, but it will require to be studied.
I wonder whether the Minister will look at the comment of the Scottish Federation of Housing Associations in connection with the model assured tenancy which he seemed to feel was perfectly adequate. Indeed, he thought that it was rather stronger than the provision in the Bill. The federation says:
"if this were not legally binding, then the principle of a Model Assured Tenancy is undermined and … if it were to be legally binding then there would be no reason for the provisions contained in it not to be statutory".
I think that this is an area in which there might be some agreement between the federation and the Government. However, as the Minister said, he gave a very long and involved statement and he rightly made no apology for that because the subject is a very complex one. It would only be right and proper for those who moved the amendment on this side of the Committee to say that we shall study the statement
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with very great care in view of its implications and if necessary we shall come back to it. However, I assure the Minister that we welcome the reasonable manner in which he presented his proposition. I beg leave to withdraw the amendment.
Lord Hughes: Before the noble Lord withdraws his amendment, perhaps I may say a few words. The statement made by the Minister sounded extremely favourable throughout but like other Members of the Committee I should like to read it tomorrow. It is not that I suspect that somewhere within it there is something in small print that cancels out other points but rather because some of the views that have been expressed may be capable of further discussion.
Another point which occurred to me and which has not escaped the notice of the federation is that at the present time housing associations are non-profit-making organisations. However, we cannot be certain of the direction in which the housing association movement will go in the future. For instance, the long-established building societies are now considering becoming public limited companies. It is not impossible that in the foreseeable future there may be housing associations that have a profit-earning motive. There is no guarantee that what one used to expect almost automatically from our present type of housing associations will necessarily result from a change in their nature.
That all justifies looking carefully at what the Minister has said, but my first impression was that his statement was conciliatory, helpful and generally favourable. I hope that my reading of it in Hansard will confirm that impression in its entirety.
Amendment, by leave, withdrawn.
Lord Taylor of Gryfe Lord Taylor of Gryfe had given notice of his intention to move Amendment No. 18:
Page 9, line 15, at end insert—
("(4) Where under an assured tenancy the interest of the landlord belongs to a registered housing association, sections 44 to 60 of the Housing (Scotland) Act 1987 shall apply. References in that Act to a secure tenancy are, for the purposes of this Act, references to an assured tenancy under which the interest of the landlord belongs to a registered housing association.").
The noble Lord said: This amendment is related to my previous amendment. I shall not move it.
[Amendment No. 18 not moved.]
Clause 12 agreed to.
3.45 p.m.
Schedule 4 [Tenancies which cannot be assured tenancies]:
The Earl of Dundee The Earl of Dundee moved Amendment No. 19:
Page 55, line 10, after ("period") insert ("—
(a)").
The noble Earl said: In moving this amendment, with the leave of the Committee I shall speak also to Amendments Nos. 20 to 22. These amendments are required to ensure consistency of treatment between paragraphs 9(3) and 9(5) of Schedule 4.
At present under paragraph 9(3)(c) a period of not more than 24 months following the death of a resident landlord is not to be regarded as a breach of the conditions under which the tenancy is to be

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considered to be with a resident landlord. This amendment and grouping of amendments will ensure that similar circumstances apply upon the death of a person whose interest as landlord was held for him in trust but who nonetheless qualified as a resident landlord through being in occupation of the building. I commend this clarification to the Committee.
On Question, amendment agreed to.
The Earl of Dundee The Earl of Dundee moved Amendments Nos. 20 to 22:
Page 55, line 11, leave out ("(a)") and insert ("(i)"). Page 55, line 13, leave out ("(b)") and insert ("(ii)"). Page 55, line 16, at end insert—
("(b) of not more than 24 months beginning with the date of death of the occupier referred to in sub-paragraph (a)(ii) above and ending with the date of occupation of the house by any other person who is entitled to the liferent or to the fee or to a share of the fee of that interest,").
On Question, amendments agreed to.
Schedule 4, as amended, agreed to.
Clauses 13 to 19 agreed to.
Schedule 5 [Grounds for possession of houses let on assured tenancies]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 23 and 24:
Page 57, line 38, after ("possession") insert ("or a superior landlord").
Page 57, line 41, leave out from ("fulfilled") to end of line 7 on page 58 and insert ("(and in those conditions the landlord who is intending to carry out the demolition, reconstruction or substantial works is referred to as "the relevant landlord")—
(a) either—

(i) the relevant landlord (or, in the case of joint relevant landlords, any one of them) acquired his interest in the house before the commencement of the tenancy; or

(ii) none of the following persons acquired his interest in the house for value—

(A) the relevant landlord (or, in the case of joint relevant landlords, any one of them);

(B) the immediate landlord (or, in the case of joint immediate landlords, any one of them), where he acquired his interest after the commencement of the tenancy;

(C) any person from whom the relevant landlord (or any one of joint relevant landlords) derives title and who acquired his interest in the house after the commencement of the tenancy; and

(b) the relevant landlord cannot reasonably carry out the intended work without the tenant giving up possession of the house because—

(i) the work can otherwise be carried out only if the tenant accepts a variation in the terms of the tenancy;

(ii) the work can otherwise be carried out only if the tenant accepts an assured tenancy of part of the house; or

(iii) the work can otherwise be carried out only if the tenant accepts either a variation in the terms of the tenancy or an assured tenancy of the house or both, and the tenant refuses to do so; or

(iv) the work cannot otherwise be carried out even if the tenant accepts a variation in the terms of the tenancy or an assured tenancy of only part of the house or both.").

The noble Lord said: These two amendments are required to clarify the conditions which must be fulfilled if a landlord is to gain possession under ground 6 of Schedule 5. The first amendment makes it possible for a superior landlord to gain possession under ground 6. This is to cover a situation where, for example, a local authority lets a property to a housing association for sub-letting but then requires
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possession for redevelopment. I am sure the Committee will agree that this is fair and reasonable.
The other more complex amendment consists of a redraft of the sub-paragraphs to ground 6. This is necessary to cover two main issues. First, the amendment makes it clear that neither any immediate nor any superior landlord should have acquired the property after commencement of the tenancy whether or not that landlord is the one seeking possession. Secondly, our intention is that the landlord should be able to obtain possession under ground 6 in order to demolish or reconstruct the house; but only if he has offered the tenant a reasonable opportunity either to vary the terms of the tenancy, or to accept a tenancy of only part of the house, or both as circumstances dictate. The redrafted provision is designed to achieve this, which the original version does not quite manage to achieve.
I commend these amendments to the Committee. I beg to move.
Lord Carmichael of Kelvingrove: Again I shall want to read the Minister's statement of explanation, but perhaps I may ask him a very quick question. When a superior landlord requires the tenancy of a house, who will judge whether the alternative accommodation offered is suitable, be it in another part of the house, another part of the building or perhaps in a different house altogether? Who will judge whether it is suitable or reasonable to ask people who already have an assured tenancy to go to other accommodation?
Lord Sanderson of Bowden: I shall have to find out the answer to that question and inform the noble Lord in due course.
On Question, amendments agreed to.
The Earl of Dundee The Earl of Dundee moved Amendment No. 25:
Page 58, line 12, after ("landlord") insert ("(or, where there are joint landlords, any of them)").
The noble Earl said: Under ground 7 the sheriff must grant possession if the tenant has died and has been succeeded by another person who has inherited the tenancy under the will of the original tenant, but only if the landlord begins proceedings for possession not later than 12 months after the death of the original tenant or, if the sheriff so directs, not later than 12 months after the date when the landlord becomes aware of the death.
This amendment has the effect that in the case of joint landlords the 12-month qualifying period will begin when the sheriff decides that any one of them became aware of the death of the original tenant. I trust that Members of the Committee will be able to support this amendment. I beg to move.
Lord Carmichael of Kelvingrove: Can the Minister explain whether this in any way contradicts or makes more difficult our proposal in later amendments to extend the succession period to two years, if it is not a spouse, with regard to an assured tenancy. The Bill provides for a six-month period of residence for the person in the house who had been living with the assured tenant before death. However, if it were a two-year tenancy would the landlord have any right to go to the sheriff to obtain possession within the

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two-year period, if the period were changed to two years?
Perhaps I did not explain that very clearly. As the Bill now stands, the period is six months where a relative had been living with the assured tenant before the tenant died. If the amendment that the Minister has put forward is accepted it would provide a 12-month tenancy before the sheriff had power to change the tenancy. On the other hand, our amendment provides for a period of two years to be allowed. Possibly the Minister is receiving advice; perhaps I have not grasped the point. I am looking at it very carefully. In explaining it I see that it is very complicated. I can perhaps return to the matter later.
The Earl of Dundee: I am grateful to the noble Lord. I appreciate the point he is making. If he is happy to do so, perhaps it would be best to wait until a later stage of the Bill and tie the two matters together at that moment.
On Question, amendment agreed to.
The Earl of Balfour The Earl of Balfour moved Amendment No. 26:
Page 58, line 22, at end insert—
("Ground 8A
The house was at any time occupied by a person under the terms of his employment as a person employed in agriculture and the house has been let on an assured tenancy and—

(a) the tenant neither is nor at any time was so employed by the landlord and is not the widow of a person who was so employed, and

(b) not later than the commencement of the tenancy, the tenant was given notice in writing that possession might be recovered under this Ground, and

(c) the court is satisfied that the house is required for occupation by a person employed or to be employed by the landlord in agriculture;

and for the purpose of this Ground "employed", "employment" and "agriculture" have the same meanings as in the Agricultural Wages (Scotland) Act 1949.").
The noble Earl said: This is the first of two amendments to preserve the special provisions that have existed for a long time in the rent Acts enabling farmers to regain houses when required from employees employed in agriculture.
Agriculture is going through a period of great uncertainty. We farmers cannot forecast what crops or livestock we shall be producing five years from now. There is genuine uncertainty about what labour force will be required. Although the Bill, in paragraphs 5 and 6 of Schedule 4, contains provisions excluding tenancies of agricultural land and holdings from being assured tenancies, there is nothing in Clause 18 to instruct a sheriff to look at Schedule 4. The only way a landlord can gain possession of any house is, quite rightly, by a court order.
My proposed Ground 8A is taken from Case 17 of Schedule 2 to to the Rent (Scotland) Act 1984. Amendment No. 30 proposes Ground 18, taken from Case 7(a) of the same schedule. Paragraph (b) of Case 7 is incorporated in Ground 17 of the Bill. No farmer or laird wants to turn an old employee out of his house when he retires. However, if the farmer or laird cannot offer a house to a new employee, he is unlikely to get the employee he wants. Perhaps I may remind Members of the Committee that, as stated at Second Reading, this Bill phases out the rent Acts.
I have been asked to group Amendment No. 31 with Amendments Nos. 26 and 30 although it relates to a different subject. It is not good that any house should remain empty. Most private landlords or tenant farmers wish to have every habitable house occupied. However, tenants can be strange people. And, unfortunately, some apparently good people can behave in most strange ways. I have had tenants—I am sure that I am not the exception—who lived in a cottage for two years, have then removed most but not all the furniture and have literally disappeared. Amendment No. 31, proposing Ground 19, is taken from Ground 5 of Schedule 3 to the Housing (Scotland) Act 1987 and is designed to meet this case. It is a problem that could also face housing associations, discussed earlier. I beg to move.
The Earl of Dundee: With the leave of the Committee, I should like to speak to Amendments Nos. 26, 30 and 31. I have listened very carefully to my noble friend's exposition of these amendments. They touch on matters of importance. However, while I believe there is much in what my noble friend says, I do not consider that the amendments are necessary.
In coming to this conclusion I should explain first that one of our central aims to Schedule 5 has been to reduce the number and complexity of grounds for repossession. In doing so, I would argue that we make it much clearer and simpler for tenants and landlords to understand the conditions which are to be fulfilled if repossession is to take place.
Turning to these proposals, my noble friend's first two new grounds are both essentially designed to ensure that a landlord farmer can take into possession agricultural houses or the like for use by his employees who are to be employed in agricultural activities. I accept that in some cases a landlord may not be able to predict a future need for housing for employees but, generally speaking, this should be something that can be foreseen. Thus the landlord will be able to protect his right of possession by writing an appropriate condition into the tenancy agreement or by taking advantage of the short assured tenancy option provided by the Bill. This he can do with confidence in his ability to regain possession at the end of the tenancy. He may, of course, find that his expected need for the property does not materialise. If this happens he can allow the short assured tenancy to run on. I believe that the circumstances outlined by my noble friend can therefore be fully met by the Bill as it stands. Indeed, the examples discussed serve to illustrate the strength and flexibility of the short assured tenancy concept.
With regard to the third proposed ground, this would result in Ground 5 of Schedule 3 to the Housing (Scotland) Act 1987, which applies to public sector tenants, being applied to assured tenancies. Again, I do not believe that it is necessary. If a tenant is absent from a property to the extent that it is no longer his principal home it means that the tenancy is no longer an assured tenancy as defined by Clause 12(1)(b). In cases where there is dispute as to whether a house is a tenant's principal home, a landlord could seek to persuade a sheriff that the tenancy should no longer be assured. It is unlikely many cases of this nature will arise. I hope that these remarks will reassure my noble friend about the cases he outlined.

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Most long periods of absence will be for a good reason (for example, a tenant in hospital) or will be accompanied by non-payment of rent which will allow repossession under grounds 8, 11 or 12. In the light of this explanation of how the cases described by my noble friend are already catered for, and in the interests of keeping the grounds for possession simple, I hope my noble friend will not press his amendment.
The Earl of Balfour: I should like to ask one further question. I should hate a worthy tenant, if just granted a short assured tenancy, to feel that he was likely to be turned out, say, at the end of a couple of years, other than perhaps in the case of an unfortunate accident on a farm where somebody is killed. Unfortunately, farming does not have the best record. I might be in the position of knowing that a tenant could have the house for five or eight years. I have always managed to hold on to my employees satisfactorily for a long time. I hope that continues. We have good relationships.
However, there is uncertainty that I feel because I should not like to have to go to court to get a house back if there does not seem to be any other way to have the house restored. My sole reason for needing the house would be that I required a new employee. The Bill is not quite clear enough in specifying that the only occasion when I would want the house back would be for a new employee. That is all.
The Earl of Dundee: I note what my noble friend says. I hope I can reassure him when I remind him that in cases of short assured tenancies the landlord is always in a position to regain possession owing to the finite nature of short assured tenancies.
The Earl of Balfour: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4 p.m.
The Earl of Balfour The Earl of Balfour moved Amendment No. 27:
Page 59, line 19, after ("residing") insert ("or lodging with him").
The noble Earl said: In moving Amendment No. 27 1 should like to speak also to Amendment No. 29. Both amendments attempt to insert the words "or lodging with him" into the schedule. These words have also been taken from cases 2 and 4 of Schedule 2 to the Rent (Scotland) Act 1984. I consider that there is a distinct difference between a friend or relative residing with the householder and the comparative stranger who lodges with the householder. The friend or relative probably does not pay any rent, but the lodger usually does.
I have been asked to group with these amendments Amendment No. 28, which seeks to remove the words "in the opinion of the sheriff ' from the first line of Ground 16 because these grounds are those on which a sheriff may order possession. He does not have to do so. If the landlord has to get a sheriff's officer out to look at the furniture, in my opinion that is an additional expense when it is more than likely that the sheriff would take no action for many months after the case comes to court. I beg to move.
Lord Sanderson of Bowden: I have listened to what my noble friend said. I have looked carefully at his
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amendments and I am happy to accept them. They ensure consistency of terminology both within the Bill and with earlier legislation.
On Question, amendment agreed to.
The Earl of Balfour The Earl of Balfour moved Amendment No. 28:
Page 59, line 24, leave out ("in the opinion of the sheriff").
Lord Sanderson of Bowden: I accept Amendment No. 28.
On Question, amendment agreed to.
The Earl of Balfour The Earl of Balfour moved Amendment No. 29:
Page 59, line 26, after ("residing") insert ("or lodging with him").
On Question, amendment agreed to.
[Amendments Nos. 30 and 31 not moved.]
The Earl of Dundee The Earl of Dundee moved Amendments Nos. 32 and 33:
Page 59, line 36, leave out ("Ground 1") and insert ("Ground 9").
Page 59, line 46, leave out ("Ground 1") and insert ("Ground 9").
The noble Earl said: These amendments pick up consequential changes required as a result of an amendment made in another place.
On Question, amendments agreed to.
Schedule 5, as amended, agreed to.
Clause 20 [Extended discretion of court in possession claims]:
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 34:
Page 14, line 4, after ("under") insert ("sections 1,2,3 and 18 of).
The noble Earl said: This is a small point, but it seems to me that the matters concerned should be identified by section. Otherwise one merely refers to the Act of Parliament and one has to read all the way through to understand which part applies. My amendment identifies what is concerned. It is not an important point, but I think it is in the interests of clarity. I shall have more to say about clarity in a few minutes. I beg to move.
The Earl of Dundee: I have listened to my noble friend's case for this amendment. However, as my honourable friend the Scottish Office Minister for Home Affairs and the Environment explained in another place, we are satisfied that any doubts about whether cohabitees will be covered are entirely unfounded. The provision in the Bill applies to,
"any person having rights of occupation under the Matrimonial Homes (Family Protection) (Scotland) Act 1981".
That will ensure that cohabitees will be covered in the same way as spouses, as my noble friend wishes.
On the basis of my explanation, I hope my noble friend will feel able to withdraw his amendment.
The Earl of Selkirk: I see no reason at all to withdraw the amendment. I never mentioned cohabitees. The mere fact that the Bill states that the Act is included covers cohabitees in Clause 18. I really cannot see why the noble Earl will not accept my amendment. It is to clarify the purpose so that people know exactly what part of the Bill they should read. The answer the Minister has given does not seem to me to be an answer at all. I should like the noble Earl to think a little more about the matter.
The Earl of Perth: I should like to support the noble Earl, Lord Selkirk. It is asking a lot of many people to have to go all through the Bill to find out what it is all about. All they would have to do, if the amendment were accepted, would be to take Sections 1, 2, 3 and 18. I hope that, as the noble Earl said, in the interests of general drafting and clarity these words—which in no way change what is proposed—will be accepted for that purpose.
Lady Saltoun of Abernethy: I too should like to support the noble Earl, Lord Selkirk, and the noble Earl, Lord Perth, in this matter.
The Earl of Dundee: I am again grateful not only to my noble friend Lord Selkirk but to the noble Earl, Lord Perth, and the noble Lady, Lady Saltoun. As my noble friend requests, I shall take this matter away and have it looked at again. I apologise for assuming that the noble Earl had in mind what was discussed in another place when similar words were used. I give that reassurance to my noble friend and I shall see whether in the interests of clarity we can do a bit better.
Lord Carmichael of Kelvingrove: I congratulate the Minister on coming back and the other noble Lords, particularly the noble Earl, Lord Selkirk, for persisting. On behalf of everyone who has to plough through Bills and spend much time in the Library tracing things, perhaps I may say that it would be a great help if matters were clear. Who knows—in this Bill we may make a blow for clarity of legislation.
The Earl of Selkirk: I shall not press the matter to a Division, although I believe that we might even win a Division on this. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 35:
Page 14, line 15, after ("on") insert ("the ground specified in section 30(1) of this Act or on").
The noble Lord said: This amendment is designed to remove an anomaly in the Bill as currently drafted. The amendment ensures that a sheriff may not sist, suspend or postpone proceedings or an order for possession when a short assured tenancy is concerned. This simply brings the treatment of short assured tenancies in this respect into line with that of the other mandatory grounds for possession in Schedule 5. Landlords who let on a short assured tenancy basis do so because they wish to be certain of regaining possession at the end of the tenancy; for example, because they expect to be returning from abroad then and need to be able to re-occupy their house. Tenants who accept short assured tenancies will be well aware of the period of their tenancy and will have no expectation of being able to retain possession thereafter. In those circumstances a landlord who seeks an order for possession should not have to wait indefinitely for the possession order to be granted or to take effect. I trust that Members of the Committee will agree that this is fair and reasonable and that the amendment should be accepted.
Lord Hughes: The way in which the Minister has put forward the amendment makes it sound totally reasonable, and I thought that he would proceed to an amendment dealing with Clause 30(1)(a). I am certain that not every Member of the Committee from south of the Border will understand it. It reads:
"that the short assured tenancy has reached its ish".
Perhaps the words that the Minister has used may be more appropriate to include in the Bill instead of that obscure legal term.
Lord Sanderson of Bowden: I note what the noble Lord has said. The point of the amendment is important but I shall read what he said to see whether there are grounds for including the wording in the Bill. At this stage I can give no assurances.
On Question, amendment agreed to.
Clause 20, as amended, agreed to.
Clauses 21 and 22 agreed to.
Clause 23 [Limited prohibition on assignation etc. without consent]:
On Question, Whether Clause 23 shall stand part of the Bill?
The Earl of Balfour: I have read the clause most carefully and have had a short discussion with the Minister. However, I ask Members of the Committee to look at the words "prohibiting or" in line 9. Subsection (1) deals with tenancies which have been sublet or assigned. Subsection (2) reads:
"Subsection (1) above does not apply if, under the terms of the tenancy, there is a provision prohibiting … assignation".
I believe that that cancels out subsection (1). Will my noble friend look at the drafting of this clause between now and the Report stage? I believe that if the words "prohibiting or" were removed I should be happy with the clause because it would then be for the landlord to create his own terms.
Lord Sanderson of Bowden: I thought that when my noble friend came to see me I had convinced him that he should not concern himself with this point. However, I am prepared to look at the matter again and come back to him.
Clause 23 agreed to.
Clauses 24 to 28 agreed to.
4.15 p.m.
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 36:
After Clause 28, insert the following new clause:
("Premiums for assured or short-assured tenancies.
It shall be unlawful for any premium, fine of other like sum or any other pecuniary consideration in addition to rent, to be charged to a tenant prior to or on creation of an assured tenancy or a short-assured tenancy, save that a deposit not exceeding one month's rent may be charged.").
The noble Lord said: This is a simple amendment and its terms explain its purpose. It provides that it shall be unlawful for any premium, fine of other like sum or any other pecuniary consideration in addition to rent to be charged, other than the one month's rent as deposit. The amendment was prompted by representations made to me by the Scottish Council for Single Homeless. It believes that the practice of

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charging key money is undesirable and is generally recognised as being so.
I understand that in Scotland it has been a crime to charge a premium or key money since 1971. I was not aware of that and I suspect that in many cases the law was not observed. It has been unlawful in most cases since 1920. The Government's proposals seek to remove from the category of a criminal offence the charging of premiums for assured and short assured tenancies. The wording of the amendment contains the definition of the word "premium", which is used in Section 90 of the Rent (Scotland) Act 1984. I hope that the Minister and other Members of the Committee will recognise the practice as being undesirable and will accept the amendment which stands in my name. I beg to move.
Lord Goold: I share the concern expressed by the noble Lord as regards key money. I ask the Minister to take this matter away and reconsider it.
Lord Carmichael of Kelvingrove: I hope that the Minister will accept the amendment. We consider it to be a matter of great importance. Those Members who have had a great deal of experience at weekly surgeries know the difficulties which arise as a result of this, particularly in cities where there are a high number of single room lettings. The single homeless are frequently in difficulty as regards raising even quite small sums of money and the cycle of visiting money lenders goes on.
The provisions for the charging of key money were changed in 1971 when problems then arose due to the introduction of various clever forms of rental purchase. Those tenants interested in buying property lost their house if they missed one week's rent after paying for perhaps a year or two. We believe that the request for key money should be returned to its criminal category and that that would help people in dire circumstances, particularly the single homeless.
Baroness Carnegy of Lour: I agree with what has been said about key money. My experience does not enable me to know whether this provision must be included under the new circumstances created by the Bill. Where the market price is set for rent does the situation arise in the same way as it has in the past? The system may be self-regulating. I should like to be sure that what is feared is not possible. I agree with the noble Lord that people may be at the mercy of a landlord when they are cornered into doing something which they cannot afford. I hope that my noble friend will explain why it is necessary to include this provision in the Bill having regard to the new atmosphere that we are now creating.
The Earl of Balfour: Although I sympathise with the idea behind the clause I am thinking of a case where someone may be asked for a substantial deposit for a flat which is comprehensively furnished. The furniture may be valuable and it could be seriously damaged by an unworthy tenant. In such cases it is not uncommon for a hefty premium to be charged and one month's rent may not cover the deposit.
Lord Sanderson of Bowden: It may help the Committee at this stage if I explain why the Government did not include a prohibition on premiums in the Bill. As noble Lords are aware, premiums are prohibited for regulated tenancies under the Rent (Scotland) Act 1984. That is necessary because the 1984 Act controls the rent of such tenancies and were premiums permitted landlords might use them simply to make up the difference between the controlled and the market rent.
However, Part II of the Housing (Scotland) Bill allows landlords to charge as the rent for an assured tenancy whatever the market will bear. This is the point which was mentioned by my noble friend Lady Carnegy of Lour. Thus the incentive for landlords to charge premiums to give them a reasonable return will be gone. Indeed, as our policies bear fruit and more accommodation becomes available for private letting, any landlord charging a premium will be at a disadvantage against others, since prospective tenants will simply go elsewhere. That is the case against banning premiums—that it should be left to the market—as rents are to be.
However, I know that there are other views, and some of them have been expressed in the Committee this afternoon. I must say I have been struck by the strength of feeling expressed from the Benches behind me and also from those opposite. I have to say that the new clause we are discussing might not achieve precisely what Members of the Committee wish as regards this particular amendment. For instance, it would not prohibit the charging of a premium when a tenancy is assigned from one tenant to another rather than created. Nevertheless, in the light of what has been said, if the noble Lord will withdraw his proposed new clause I would be prepared to look again at the matter and come back to it at a later stage.
Lord Taylor of Gryfe: I beg leave to withdraw the amendment in view of what the noble Lord says.
Amendment, by leave, withdrawn.
Clause 29 [Short assured tenancies]:
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 37:
Page 17, line 18, leave out ("six") and insert ("twelve").
The noble Lord said: This amendment is simple. It is to double the period from six months to one year. The reasons again are obvious. A six months' tenancy is really not a tenancy at all. The tenant has hardly settled in and proved whether he is a good or a bad tenant in that time. Also the period could be used by unscrupulous landlords simply to have a long series of six-monthly tenancies during which time they could raise the rent if they thought the market would bear it.
The snag in the explanation just given by the Minister before his very kind assurance that he would look again at the previous amendment—that the market would regulate this situation—would not apply unless the policy was successful and there was plenty of accommodation to rent. That is certainly not the case at present. For this simple reason a

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12-month tenancy would be fair. It would give the tenant some chance to look around and give some security in regard to a so-called assured tenancy. I beg to move.
The Earl of Dundee: I listened carefully to what the noble Lord said about setting the lower limit for short assured tenancies at 12 months. However, I am not convinced. We must bear in mind that the aim of the short assured tenancy is to give people the chance to let their house for a precise period, with an absolute guarantee of regaining possession at the end of that period. I accept that that consideration could be consistent with any period one might think of, but any minimum period inevitably will be somewhat arbitrary. Some people will want to let their houses for less than 12 months; for example, when on an extended holiday or when working abroad. That is why we have settled on six months as the minimum period. I hope the noble Lord will accept this explanation and feel able to withdraw his amendment.
Lord Mackie of Benshie: I am not sure that the explanation is a good one, but I will look at this again and consult further. It is true that there are occasions such as when people go on holiday and wish to let their house, but on the other hand the period allows opportunities for an unscrupulous landlord to take advantage of it in a far more long-term way by a series of short tenancies. I should like to look at this again, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 29 shall stand part of the Bill?
The Earl of Balfour: Might I just ask my noble friend whether the wording could be amended? In subsection (5), after the words "Section 25", could be at the next stage insert the word "above"? This would conform to the rest of the Bill. Thus the wording in line 45 would be:
"(5) Section 25 above shall apply in relation to".
Lord Sanderson of Bowden: I shall certainly look at what my noble friend has suggested and if it is sensible we shall do what he asks, but not otherwise.
Clause 29 agreed to.
Clause 30 agreed to.
Clause 31 [Reference of excessive rents to rent assessment committee]:
The Earl of Dundee The Earl of Dundee moved Amendment No. 38:
Page 18, line 35, leave out ("of similar tenancies").
The noble Earl said: As now drafted Clause 31(3)(a) requires a rent assessment committee to make a rent determination for a short assured tenancy only if there is a sufficient number of similar tenancies of similar houses in the locality. This might well be interpreted to mean that comparison only with other short assured tenancies would be permitted.
As was pointed out in Committee in another place, in some areas, particularly rural areas, there may not be enough short assured tenancies to fulfil this requirement; and in any case the evidence of the rent under any assured tenancy is relevant to the rent under a short assured tenancy. As a consequence of this, the rent assessment committee would not be able to make a determination and tenants would not be able to exercise their right to have a market rent determined even when there was evidence from rents of other assured tenancies that their rent was excessive. The amendments recognise this potential difficulty by making it possible for the rent assessment committee to take into account the level of rents of all assured tenancies in similar houses in the locality. It will of course also bear in mind that rents for short assured tenancies should normally be lower than those for ordinary assured tenancies. With that explanation, I beg to move.
On Question, amendment agreed to.
The Earl of Dundee The Earl of Dundee moved Amendment No. 39:
Page 18, line 36, after ("locality") insert ("let on assured tenancies (whether short assured tenancies or not)").
The noble Earl said: I beg to move Amendment No. 39 formally.
On Question, amendment agreed to.
[Amendment No. 40 not moved.]
Clause 31, as amended, agreed to.
Clauses 32 to 42 agreed to.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 41:
Before Clause 43, insert the following new clause:
("Replacement of Schedule 1 to the 1984 Act.
.—(1) Schedule 6 below replaces Schedule 1 to the Rent (Scotland) Act 1984.
(2) The provisions of Schedule 6 below shall have effect for determining what person (if any) is the statutory tenant of a dwelling-house at any time after the death of a person who immediately before his death was either a protected tenant of the dwelling-house or the statutory tenant of it or the assured tenant of the dwelling-house or the statutory assured tenant of it.").
The noble Earl said: The only point of this amendment is to try to clarify a Bill which I must say I do not think has been devised in the best and clearest way that it could have been. Added to that, there have been a number of previous Bills which from time to time are referred to and—something I have never known in the history of statute law—two consolidation Bills within something like three years. I do not know whether that has ever happened before: I have never seen it. This is the state we have got into and here I am taking a small step to try to clarify part of the Bill.
I am dealing with Schedule 6. In case anyone should doubt what I have said I beg them to look at that schedule to see whether they can make head or tail of what it says. If that is not posssible, it proves that it is totally illiterate and incapable of explanation. One has to buy a copy of the 1984 Act at a cost of £.6·90 and when that has been done one can apply Schedule 1 of that Act to the amendments in Schedule 6 to this Bill. I believe that would take an ordinary person an hour and a half to do. It is quite a complicated operation and is something which is totally unreasonable to expect the assured tenant to

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do. Not only that but it is a very important matter. People regard it as most important to know who will succeed them in an assured tenancy. It is a rather complicated system and I am not sure I would do it in that way myself, but that is not the point.
I am not seeking to alter the Bill. I am purely seeking to make the matter clearer for assured tenants to see how they stand. I want them to be able to see that from the Bill. I believe it will help everybody if the noble Lord will agree to this. If the Minister wishes to alter certain words—the clause is no more than an introduction—because I may not have used terminology which is exactly what he would like, then I would accept that. However, I should like him to agree to a full Schedule 6 which explains to an assured tenant the situation as regards succession. I believe that if he does that he will be doing a good service to assured tenants. I beg to move.
4.30 p.m.
Lord Morton of Shuna: I strongly support the drafting proposed by the noble Earl, because the Bill is absolutely impossible to follow. It is fairly easy for government departments, which have all the Bills available to them and can put them on to word processors and carry out the changes in that way. However, for anybody who does not have that facility, it is quite impossible to follow the type of amendment which Schedule 6 creates without going back, cutting up and sticking pieces of paper on and then trying to see if one has it right.
In the Copyright Bill, which was in this House last month, we had the facility of a schedule which printed out the effect of the amendments carried by the Copyright Bill to the Registered Trademarks Act. That was very useful. If I understand the noble Earl, that is what the noble Earl is trying to do here. I suggest that that is extremely helpful, as is anything which makes legislation more comprehensible.
At times there seems to be an intention in the drafting of Bills to make them as difficult as possible for any, so to speak, lay person to understand. In this House we should be very strongly in favour of exactly the opposite and we should try to make Bills as readily understandable as possible even if it means adding a sheet or two of paper to the Bill.
Lord Hughes: I should like to support the noble Earl, Lord Selkirk. I pray in aid something which the Minister said which I thought was a new and refreshing statement of government policy. In replying to his noble friend Lord Balfour, he said:
"If it is sensible we will put it in".
Governments have not always done that, and the noble Earl, Lord Selkirk, has quite obviously put his finger on something in the Bill which is anything but sensible and has suggested a simple way of achieving exactly what the Government want.
The noble Earl was extremely fair and said that he would not exactly stick to the wording which he used. He wanted the principle that anybody who wished to know what was going on could discover that from the Bill rather then looking at various bits and pieces of another Act. Therefore, I hope that the Minister will
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accept his own advice and put this in, because it is sensible.
Lord Kirkhill: I also should like to join with others in supporting the remarks made by the noble Earl, Lord Selkirk. I do that for two reasons: first, the noble Earl, through the Committee stages of much Scottish legislation other than this particular Bill, has always sought to emphasise the very point that he has made this afternoon as it relates to this Bill and as it related to others. The truth of the matter is that the ordinary citizen, were he to look at the Bill in order to discover his position as an assured tenant would probably not find exactly how he stood in the matter. If some sort of redrafting as suggested by the noble Earl is taken up by the Minister, then surely those most affected by the Bill will know where they stand. That will be an improvement and also an improvement in government communication.
The Earl of Perth: I should like to support all those who have spoken. I have seen the noble Earl, Lord Selkirk, at a table surrounded by all sorts of reference books trying to solve the sort of problem we are discussing today. I believe that he and all of us should be absolved from that. The only body which I can think will benefit from the present obscurity is HMSO, which receives £6·90.
Lord Sanderson of Bowden: During our Second Reading debate my noble friend raised the possibility of incorporating in the Bill the revised Schedule 1 to the Rent (Scotland) Act 1984 which results from the amendments we proposed to make to it. I can but admire the effort he must have put in to produce the version we see in Amendment No. 43, which deals with Schedule 6. However, I am afraid that I must disappoint him: his revised schedule would not have the effect that our amendments are designed to achieve.
As I promised my noble friend at Second Reading, I have looked carefully at Schedule 6. The difficulty is that the amendments made by Schedule 6 have to take account of three separate sets of circumstances. I shall just explain them to the Committee. The first is when the original tenant is alive at the Bill's commencement; the second when the original tenant has died but a first successor is alive at the Bill's commencement; and the third when both the original tenant and a first successor have died at commencement. Clause 43 applies different parts of the amendments in Schedule 6 in each of the three sets of circumstances.
Briefly, in the first case, we intend to allow succession by the original tenant's spouse as a statutory tenant, as at present; but a second succession will only be possible by someone who is a member of both the original tenant's and the spouse's family, and who has lived with the spouse—the first successor—for two years before that first successor's death. Such a second succession will be to a statutory assured tenancy.
Another member of the original tenant's family may succeed to the tenancy if there is no qualifying spouse and if he has lived with the tenant for two years. But a first successor in these circumstances will

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succeed to a statutory assured tenancy, and there will be no right of second succession.
In the second case that I mentioned, where the original tenant dies before commencement, the first successor, whether spouse or another member of the tenant's family will have a statutory regulated tenancy. In this case second succession—but to a statutory assured tenancy—will be possible for someone who was a member of the family of both the original tenant and the first successor, and who has lived with the first successor for two years before his or her death. Finally, in the third of the cases that I listed, where a second successor already holds the tenancy, we do not intend to make any change to their position.
I apologise to the Committee for having explained the position at some length. But I think it will have shown your Lordships how complex the provisions are, and why the valiant attempt by my noble friend Lord Selkirk does not fully deal with the problem.
As I indicated at Second Reading, I share his desire to make legislation self-standing as far as possible—and I may say that I think that Members of the Committee will find this Bill rather better in that respect than the Housing Bill for England and Wales, which has yet to arrive in this Chamber. However, that is for the judgment of the House at the appropriate moment.
On this occasion, I fear that we must live with the way in which Clause 43 and Schedule 6 have been drafted. To do otherwise would in fact be likely simply to complicate further already complex provisions. However, having listened to the noble Lord, Lord Morton of Shuna, and my noble friend Lord Selkirk—and they are both lawyers and I am not—I am prepared to have another look at this situation, though, as I said at Second Reading, the matter is not quite so easy as it seems.
Lord Morton of Shuna: Perhaps the Minister would consider what I understood is called a Keeling schedule; that is, to have another schedule after Schedule 6 setting out the result of the amendments carried in Schedule 6 to Schedules 1 and 2 to the Rent Act (Scotland) 1984. This would then all be in one document. That is what was done and what I intended to refer to in the Copyright Bill. I should have thought that it was quite easy, and it would cost only a little more.
Lord Sanderson of Bowden: I had intended to mention that we were going to have a close look at what has been said about the Copyright Bill to see whether we could learn any lessons from it, and then come back.
The Earl of Selkirk: The Minister, with great care and trouble, has underlined the very statement that I made: the Bill is totally incomprehensible. I do not pretend to be a man of learning, but I did my best to make sense by putting the two schedules together and I have failed. If I have failed, perhaps it is not unreasonable to assume that other members of the community may fail to make common sense out of
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utter nonsense. It is a disgrace that, with the best will in the world, one cannot make sense of two schedules.
The noble Lord, Lord Morton of Shuna, has kindly suggested the Keeling schedule, which is a possible way out. I beg the Government to be sensible. It is outrageous to offer to the country a provision that is incomprehensible as it stands. Even if one takes a great deal of trouble, it does not make sense. This will affect those people concerned about who will succeed them when they die. It is a sensitive point. Indeed, many great novels have been written round the story. We should ensure that this is put right. By report stage, noble Lords must have before them some provision that can be regarded as sensible. I hope to have the Government's assurance that that will be the case.
Lord Sanderson of Bowden: I am prepared to look at this again and consider whether we can perhaps help the noble Lord with the problem that has been raised. I warn the Committee that, as a result of the request, there may be three new schedules. I shall look at what has happened in regard to the Copyright Bill and at what has been said today by the noble Earl. He has the advantage of being a lawyer and I do not. I understand the position that he is trying to relate to the Committee and how difficult it is to follow some of the legal arguments.
I must dispute one matter, however. We are not talking nonsense; we are endeavouring to put in place a law that will be effective and will improve housing in Scotland. That is what both the Scottish Office and I are attempting to do. I will not have it said that this is nonsense. We shall consider whether there is a better way of putting it into print.
Lord Hughes: I think that it would be acceptable for the Minister to come back with three schedules that were understandable—the Selkirk version in triplicate, if I may so put it; but not, for heaven's sake, the drafter's version in triplicate.
The Earl of Selkirk: I accept what the noble Lord has said. However, I must say bluntly that Schedule 6 as it stands is nonsense. I challenge anyone to deny that. One has only to read it: it means nothing by itself. Although it does not matter about me, it is unfair on the public. Members of the public ought to understand what it says. If the Minister can put this matter right, I shall be very grateful and I believe that he will thereby do a good service to the country. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.45 p.m.
Clause 43 [Statutory tenants: succession]:
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 42:
Page 27, line 42, at beginning insert—
("(a) In section 3(1)(a) of the Rent (Scotland) Act 1984 after the words "protected tenancy" here shall be inserted the words "or assured tenancy", and after the words "protected tenant" there shall be inserted the word "or assured tenant";
(b)").
The noble Lord said: In moving Amendment No. 42, I shall speak also to Amendments Nos. 44 and 47. These related amendments extend succession rights to cover assured tenants. In the clause as presently drafted, such tenants would have no succession rights at all. The amendments would rectify that position. I beg to move.
Lord Morton of Shuna: I support the amendment. I am not certain where the long answer on Amendment No. 18 takes us in relation to this amendment. I have not yet had the opportunity to read what the Minister said about succession to assured tenancies. I know that he said something, but that is as far as I am prepared to go. It is important that there should be succession rights. I therefore support the amendment.
Lord Kirkhill: If the Government were to accept the amendment, it would at least give some sense of security to those who are affected. The Minister has just been saying how much he wants the Bill to find common acceptance. Here is an opportunity for him to show willing.
Baroness Carnegy of Lour: I think that this is an amazing amendment. The concept of making it possible for the market to operate and for new money to come into housing, which is fundamental to the Bill, will be undermined if previous succession rights are to be restored.
The noble Lord, Lord Morton of Shuna, said that he had not quite heard what my noble friend the Minister said.
Lord Morton of Shuna: I did not say that I did not hear; I heard perfectly well. I did not fully take in and understand the effect on the Bill of what the Minister was saying in regard to the amendment.
Baroness Carnegy of Lour: The noble Lord is an experienced lawyer and knows this subject in great detail. I thought that my noble friend the Minister said that spouses would have succession. That was new in the long statement that he made. Apart from that, the amendment would change the fundamental concept of the Bill and surely cannot be accepted by the Government. Unless my noble friend the Minister suggests otherwise, I shall have to oppose it.
Lord Mackie of Benshie: Perhaps the Minister would clarify the point put by the noble Baroness, Lady Carnegy of Lour. As I understand it, the amendment would simply ensure the succession for the period of the assured tenancy. That is an old principle of Scots law. If that is so, it appears to be perfectly reasonable.
Lord Goold: I am not sure whether I have misunderstood. I share the fear of the noble Baroness. If the amendment were accepted, it would detract from the purpose of the Bill and prevent the investment in new housing for which we look. We must have some assurance that succession will not be unlimited. In my view, this would be destroyed by the amendment.
Lord Sanderson of Bowden: Whatever the intention behind the amendment, it would largely defeat much of the object of the Bill, as my noble friends Lady Carnegy of Lour and the noble Lord, Lord Goold, have pointed out.
The amendment, if passed, would mean that when an assured tenancy was terminated the tenant would be entitled not to a statutory assured tenancy, as the Bill provides, but to a statutory regulated tenancy, as provided for in the Rent (Scotland) Act 1984. Quite apart from the question as to whether a clause dealing with succession rights is the right place to introduce such an amendment, I have to say to the Committee that the effect of the amendment would be anomalous, not to say bizarre.
It would mean that when an assured tenant's tenancy was terminated, but the landlord did not have immediate grounds for possession, the tenant would at once have the right to have a rent registered. That would in many cases be lower than the rent freely negotiated between landlord and tenant at the start of an assured tenancy. I can think of few things more likely to deter potential landlords from letting than a likelihood that after the initial period of the lease they will have no option but to allow a tenant to continue to live in their house but at a lower rent than they have received until then.
However, Amendment No. 42 would have other effects as well. It would mean that many of the grounds for possession in Schedule 5 could never be invoked—even when the landlord had overwhelming reasons for so doing—since, by virtue of Clause 18, most of them could only be invoked in respect of statutory assured tenancies. Furthermore, any of the cases on which possession must be granted under the Rent (Scotland) Act 1984 and for which notice must be served on the tenant, could not be invoked for one of these tenancies created by this amendment.
In short, the amendment would kill off assured tenancies before they are horn. That would be a tragedy for those people who find private rented accommodation best suits their needs. It would dry up the supply of private rented property and probably lead to increased problems of homelessness.
The noble Lord, Lord Morton of Shuna, asked what was the connection between my statement and this particular amendment. By creating regulated tenancies on succession instead of assured tenancies this amendment would seriously undermine the future position of housing associations and their long-term financial interests. With those comments, I hope that the Committee will see fit to reject this amendment.
Lord Taylor of Gryfe: In the light of what has just been said I do not propose to press the amendment to a vote. Once more I should like to read and study what the Minister has said. He seemed to be very persuasive, and at least he has persuaded himself. I shall look at the matter as fairly as possible and I may return to it. However, I do not propose to press the amendment at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 43 agreed to.
Schedule 6 [Amendments to Schedule 1 to Rent (Scotland) Act 1984 (c.58)]:
The Deputy Chairman of Committees (The Earl of Listowel): If Amendment No. 43 is agreed to I cannot call Amendments Nos. 44 to 47.
[Amendments Nos. 43 and 44 not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 45:
Page 62, line 8, leave out sub-paragraph (b).
The noble Lord said: This is an amendment which we consider to be very important as it relates to people in a social and a family context. I am sure that the Minister is very familiar with it. We are not trying to protect a tenancy in perpetuity. As the noble Lord, Lord Goold, suggested earlier, that would be dangerous, and I agree that that would be so. However we are trying to get a little fairness into the situation.
Schedule 6 (6) states,
"Where a person who—

(a) was a member of the original tenant's family immediately before that tenant's death, and

(b) was a member of the first successor's family immediately before the first successor's death,

was residing with the first successor in the dwelling-house at the time of, and for the period of two years immediately before, the first successor's death, that person".
and so on. From representations which have been made to us by housing associations, those interested in housing, citizens' advice bureaux and also as a result of our own experience, and I am sure that of a great many Members of the Committee, we believe that in some parts of the country it is very common for ailing people to be looked after at home by the family. Perhaps it is not as common as it should be and I believe that the Government would like to make it more so. Frequently the family home may be the best place to nurse an elderly parent. Perhaps a daughter or a son and his wife would give up their home to live with the parent in order to nurse him. One hopes that that would be for quite a long period and for at least two years. There would be no question of succession if they were actually living with the elderly parent and if the parent was able to survive for two years.
That is not always the case. People are being asked to do a good deed—namely, to provide home nursing and to allow the elderly parent to live in a family atmosphere, which is most appropriate. It would be more appropriate if it were in that parent's own home. The immediate relatives undertaking this are being asked to take a big chance in giving up their own house and moving in with an elderly relative. They hope that this will be for two years but they will not know how much time they have to look after the elderly parent. They probably hope for a great deal more than two years, but it puts a great strain on the young people.
We do not believe that a great number of people will be involved, but for the sake of giving those people peace of mind the period of two years should be reduced to six months. I believe that the Minister feels that two years is sufficient. However, I believe that the original period was a much longer one. It was
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said at Second Reading in another place that five years was just a little too long; my right honourable friend in another place suggested that five years was too long. I believe that the Minister has come a long way in suggesting two years, but even that is too long. A period of six months has been suggested by people with experience; namely, citizens' advice bureaux and other groups. Perhaps the Minister would consider another figure other than six months but certainly under two years. If that is possible we would certainly go away and consider it. We believe that two years is a very long time, particularly under the circumstances that I have tried to outline. People who undertake to nurse old people are taking the great risk of perhaps being left homeless at the end of the time.
The rest of Schedule 6 gives ample security for the owner or the factor of the house to repossess the house in most cases. There are one or two situations which may cause great tragedy. I hope that the Minister will yield a little on this question. I beg to move.
The Earl of Dundee: Amendments Nos. 45 and 46 appear to alter the residence requirement for someone other than a spouse to succeed to a tenancy. The Government are convinced that the six months' qualification in the existing legislation is too short. It allows someone with very little real link with a house to take over the tenancy of it. As the Committee may be aware, when the Bill was introduced in another place, it proposed that the residence requirement should be five years. The noble Lord, Lord Carmichael, has alluded to that. However, having listened to strong representations from honourable Members in another place, my honourable friend the Scottish Office Minister for Home Affairs and the Environment agreed to reduce that period to two years. I am satisfied that we now have it about right. Two years is long enough to ensure that anyone succeeding to a regulated tenancy has developed real links with the house concerned, but does not impose an unreasonable requirement.
Perhaps I may refer to Amendment No. 25, which I moved earlier, and in doing so confirm to the noble Lord, Lord Carmichael, that the amendment has nothing to do with succession to regulated tenancies. The period of residence applies only to such tenancies. I should also like to refer to the area of transitional arrangements. We feel it is right that the position of people who move into a tenant's house before the Bill comes into effect, and who have lived there for six months or even more but not two years when the tenant dies, should be considered. Having said that, I do not expect those circumstances to arise in many cases. Nevertheless, the position of such people needs to be clarified. I should like to give notice to the Committee that we intend to bring forward proposals to cover that point at a later stage. I hope I have said enough to persuade the noble Lord not to press the amendment.
Lord Carmichael of Kelvingrove: I am grateful to the Minister for the last point he made. However, I feel that the issue before us is important. There has been strong pressure and the matter is one at which we must look more thoroughly. If the Government get their way the working of the Bill will prove to be a great problem for local councillors, citizens advice

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bureaux, Members of another place and Members of this Chamber. Therefore, in order to make the Government see how seriously we treat it, I should like to test the opinion of the Committee.
5.2 p.m.
On Question, Whether the said amendment (No. 45) shall be agreed to?
Their Lordships divided: Contents, 80; Not-Contents, 148.

DIVISION NO. 1

CONTENTS

Amherst, E.

Jeger, B.

Ardwick, L.

John-Mackie, L.

Attlee, E.

Kirkhill, L.

Banks, L.

Leatherland, L.

Basnett, L.

Listowel, E.

Birk. B.

Lloyd of Kilgerran, L.

Blackstone, B.

Lockwood, B.

Blease, L.

Longford, E.

Bonham-Carter, L.

Lovell-Davis, L.

Bottomley, L.

McIntosh of Haringey, L.

Briginshaw, L.

Mackie of Benshie, L.

Brooks of Tremorfa, L.

McNair, L.

Bruce of Donington, L.

Mar, C.

Carmichael of Kelvingrove, L.

Mason of Barnsley, L.

Carter, L. [Teller.]

Molloy, L.

Cledwyn of Penrhos, L.

Morton of Shuna, L.

Cocks of Hartcliffe, L.

Nicol, B.

David, B.

Pitt of Hampstead, L.

Davies of Penrhys, L.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Donaldson of Kingsbridge, L.

Prys-Davies, L.

Elwyn-Jones, L.

Rea, L.

Ennals, L.

Ritchie of Dundee, L.

Ewart-Biggs, B.

Seear, B.

Ezra, L.

Serota, B.

Falkender, B.

Shackleton, L.

Falkland, V.

Shepherd, L.

Fisher of Rednal, B.

Stallard, L.

Foot, L.

Stedman, B.

Galpern, L.

Taylor of Blackburn, L.

Gladwyn, L.

Taylor of Gryfe, L.

Glenamara, L.

Taylor of Mansfield, L.

Grey. E.

Tordoff, L.

Grimond, L.

Turner of Camden, B.

Hampton, L.

Underhill, L.

Harris of Greenwich, L.

Wallace of Coslany, L.

Hatch of Lusby, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

Whaddon, L.

Hughes, L.

Williams of Elvel, L.

Hylton, L.

Winchilsea and Nottingham, E.

Jay, L.

NOT-CONTENTS

Airey of Abingdon, B.

Brougham and Vaux, L.

Aldington, L.

Bruce-Gardyne, L.

Alexander of Tunis, E.

Butterworth, L.

Allenby of Megiddo, V.

Caithness, E.

Allerton, L.

Cameron of Lochbroom, L.

Ampthill, L.

Carnegy of Lour, B.

Arran, E.

Carnock, L.

Auckland, L.

Cathcart, E.

Balfour, E.

Cawley, L.

Bauer, L.

Chelmer, L.

Beaverbrook, L.

Chelwood, L.

Belhaven and Stenton, L.

Coleraine, L.

Beloff, L.

Colnbrook, L.

Belstead, L.

Constantine of Stanmore, L.

Bessborough, E.

Cork and Orrery, E.

Birdwood, L.

Cottesloe, L.

Borthwick, L.

Cowley, E.

Boyd-Carpenter, L.

Cox, B.

Brabazon of Tara, L.

Cross, V.

Brookeborough, V.

Cullen of Ashbourne, L.

154

Dacre of Glanton, L.

Milverton, L.

Davidson, V. [Teller.]

Monk Bretton, L.

Denham, L. [Teller.]

Montgomery of Alamein, V.

Dilhorne, V.

Mottistone, L.

Dundee, E.

Munster, E.

Eccles, V.

Nelson, E.

Ellenborough, L.

Nelson of Stafford, L.

Elliott of Morpeth, L.

Norfolk, D.

Erne, E.

Nugent of Guildford, L.

Erroll, E.

Onslow, E.

Faithfull, B.

Orkney, E.

Fanshawe of Richmond, L.

Orr-Ewing, L.

Ferrers, E.

Oxfuird, V.

Fortescue, E.

Pender, L.

Gainford, L.

Perth, E.

Gisborough, L.

Polwarth, L.

Glenarthur, L.

Porritt, L.

Goold, L.

Prior, L.

Gray of Contin, L.

Pym, L.

Gridley, L.

Rankeillour, L.

Hailsham of Saint Marylebone, L.

Reay, L.

Rees, L.

Halsbury, E.

Renton, L.

Hardinge of Penshurst, L.

Renwick, L.

Harmar-Nicholls, L.

Rippon of Hexham, L.

Havers, L.

Rodney, L.

Hayter, L.

St. Aldwyn, E.

Henley, L.

Saltoun of Abernethy, Ly.

Hesketh, L.

Sanderson of Bowden, L.

Hives, L.

Sandford, L.

Holderness, L.

Seebohm, L.

Hood, V.

Selborne, E.

Hooper, B.

Selkirk, E.

Hunter of Newington, L.

Sharples, B.

Hylton-Foster, B.

Skelmersdale, L.

Johnston of Rockport, L.

Slim, V.

Joseph, L.

Somers, L.

Killearn, L.

Stodart of Leaston, L.

Kimberley, E.

Strange, B.

Kinloss, Ly.

Strathcarron, L.

Kitchener, E.

Strathclyde, L.

Layton, L.

Strathcona and Mount Royal, L.

Lloyd of Hampstead, L.

Long, V.

Swinton, E.

Lucas of Chilworth, L.

Terrington, L.

Lurgan, L.

Teviot, L.

Lyell, L.

Thomas of Gwydir, L.

McFadzean, L.

Thorneycroft, L.

Mackay of Clashfern, L.

Trafford, L.

Macleod of Borve, B.

Vaux of Harrowden, L.

Margadale, L.

Westbury, L.

Marley, L.

Whitelaw, V.

Massereene and Ferrard, V.

Windlesham, L.

Merrivale, L.

Wise, L.

Mersey, V.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.11 p.m.
[Amendments Nos. 46 and 47 not moved.]
Schedule 6 agreed to.
Clauses 44 to 52 agreed to.
Clause 53 [Right conferred by Part III]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 48:
Page 30, line 42, after ("Homes") insert ("or public sector landlord").
The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendments No. 49 and 57. The amendments seek to address the principles of choice. They aim to give tenants of public sector landlords and approved landlords equal rights when they choose a new landlord. This part of

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the Bill is all about tenants' choice. The exclusion of public sector landlords from becoming receiving landlords surely undermines the declared object of giving tenants choice.
District and island councils in Scotland are experienced landlords. They have managed about 840,000 properties for a long time. They have vast experience of landlord-tenant relations. Their housing departments offer vast areas of expertise. In the past 10 years they have become even better because they are much more professional. They have become computerised, and the allocation system, although every attempt was made to make it fair before, has become fairer and a bit easier because of the application of modern management techniques and the computer.
Tenants are keen to be able to have a public sector landlord. The Minister may be aware that in a recent poll of Scottish Special Housing Association tenants in Stirling district 92 per cent. of those who responded (80 per cent. of all SSHA tenants in the area) wanted their local authority added to their choice of prospective landlords. The Minister may be aware of that figure and I am sure that he has paid attention to it. Two other surveys of new town tenants were also carried out recently. The result was that 91·3 per cent. of Cumbernauld Development Corporation tenants surveyed said that they wanted the choice of being able to move to the district council under the tenants' choice proposals. I think that I have a communication from Irvine District Council in the welter of paper that I have. I am not sure whether it was from Irvine, but 88 per cent. of its tenants said that they wanted the choice of being able to move to the district council under the tenants' choice proposals. I also know that tenants in East Kilbride new town would like the choice of moving to the public sector when they move from East Kilbride Development Corporation.
More explanations about choice may be given. Scottish Homes may speak to the tenants and send the material to them to show how much better it would be to go to one of the big landlords whom I am sure the Minister hopes will take over. If wide choice is to be available to existing public sector tenants they should not be denied being able to choose their local authority in preference to their current landlord.
Equally, if tenants of approved landlords are dissatisfied with their service they should be allowed to have a genuine choice, and to transfer to another landlord. As the Bill is presently drafted, if the approved landlord decides to sell the acquired property to another landlord, the tenants affected will be given no choice. The tenant has only one choice; that is, the choice on the first transfer. Even that choice is curtailed. East Kilbride is an old new town now. The people there may always have lived under the aegis of the East Kilbride Development Corporation as their landlord. They will have only one choice—to move to Scottish Homes. They will not be able to move to a local authority. They will be able to go to Scottish Homes or some other body. They will not be able to stay with a public sector landlord. After that, there is no choice.
There is something slightly—dishonest is an improper word—unfair about the idea of calling the proposal tenants' choice, whereas tenants have one choice only—like the Queen bee or the drone bee—and then they are dead. Their choice is probably not as easy as the drone's choice. I hope that the Minister will accept the point. I hope that he knows the feeling that is being stirred up among SSHA tenants and those of the new town developments about the lack of opportunity to move to a local authority.
I am sure that the Minister is aware of the good relationship that exists, which has taken a long time to build up, between SSHA tenants and local authorities. It is now difficult to tell which are which. If they could, a large number of SSHA tenants would opt for the local authority. I beg to move.
Lord Sanderson of Bowden: I am afraid that I cannot recommend that we accept Amendments Nos. 48, 49 or 57. The wording proposed would allow transfers to take place to public sector landlords, as the noble Lord, Lord Carmichael, said. That is directly in opposition to our policy. As I acknowledged on Second Reading, there has been much debate in another place and elsewhere on the point that transfers under the provisions of Part III of the Bill should be allowed to local authorities or back to local authorities. However, I stressed then, and I repeat now, that transfers to local authorities would do nothing to add to the diversity of provision and nothing to ease the burden on local authorities.
In some areas local authority housing forms as much as 80 per cent. of the total housing stock. For instance, in Monklands 79 per cent. of the stock is local authority housing in a population of 109,000. In Motherwell 78 per cent. of the stock is local authority housing, where the population is 150,000. In many other areas well over 60 per cent. of the housing stock is in the hands of the local authority.
Because of the size of that stock, local authorities face a substantial task. While some local authorities cope well with the problems, others are less effective. I do not believe that we should open up the possibility of increasing the scale of local authorities' operations and therefore I consider that the amendment is unacceptable.
I shall continue by emphasising two further points. First, in Scotland, the provisions of Part III do not involve compulsion. No tenant will be forced to change his landlord under the tenants' choice arrangement. The tenant will have to consent to the new landlord approaching his existing landlord (Clause 55(1)(b) refers) and to the terms of the lease he is offered by the new landlord before the transfer can proceed (Clause 57(2)); and by withdrawing consent he can abort a transfer at any time before the sale takes place (Clause 55(4)(b)). Thus all tenants to whom Part III extends can remain as tenants of their public sector landlords if they wish. There will be no compulsion on them to change.
Secondly, although the Bill as drafted precludes the transfer of a house to a local authority under the tenants' choice arrangements, nothing in the Bill will prevent transfers of stock between public sector landlords, or acquisition, for example, by local

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authorities of private sector stock under other statutory or administrative provisions. Under Section 12(7) of the 1987 Act, for example, the Secretary of State can approve proposals by local authorities to sell their stock to other bodies. This section has been, for example, relevant in the recent sales of stock by Glasgow District Council to community co-operatives and, in Castlemilk, to the SSHA. Also, it is possible for SSHA (and will be possible for Scottish Homes) to seek the Secretary of State's approval, under its administrative rules, to dispose of property.
In the other direction, Sections 2(1)(c) and 9 of the Housing (Scotland) Act 1987 make it possible for a local authority, without requiring the consent of the Secretary of State, to acquire property if it wishes to do so, provided it is prepared to give priority within its capital allocation to the purchase. It would be possible for property acquired in this way to include tenanted property, and any such transfers would in practice require the tenants' consent. I repeat, therefore, that transfers of stock to a local authority, under other statutory provisions, are not ruled out by the Bill before us today.
Finally, the amendment before us would enable a public sector landlord to require another to transfer property to it, if the tenant agreed. After such a transfer had been completed, the tenant, who would of course still be a tenant of a public sector landlord, would be able immediately to exercise tenants' choice again, and so on and so on. The scope for a merry-go-round of transfers is, I believe, a prospect not to he welcomed, particularly by the local authorities themselves. No sooner would one transfer be completed when another would start. The management difficulties which could be caused are easily imagined.
I believe this amendment to be wholly wrong and I must ask the House to reject it.
Lord Taylor of Gryfe: It is extremely difficult to resist the comment that the Minister speaks very rapidly about these complex problems and when he gives assurances one does not have the time to absorb the implications of the statement.
The amendment seeks to address the principle of choice, which is important. It aims to give tenants of public sector landlords and approved landlords equal rights when choosing a new landlord. The exclusion of the public sector landlords from becoming "receiving" landlords surely undermines the declared objective of tenants' choice. This is the point which the noble Lord, Lord Carmichael, was trying to make, and I must say in response that, while I am impressed by the comprehensive reply which has been given, I am not quite sure that I fully understand all the implications. It is extremely difficult to say whether one accepts it or does not accept it or will vote against it under these circumstances.
I feel that the only comment I can make is that I shall try to read the Minister's reply and understand it and perhaps come back to the Minister if I find that it does not address the subject of the amendment which is before us.
Lord Carmichael of Kelvingrove: I agree with most of what the noble Lord, Lord Taylor of Gryfe, has said. I am interested in the point the Minister made that the public sector could still become landlords of houses transferred in the future. I suppose that had to be put into the Bill of necessity for a landlord who had the machinery and apparatus hurriedly to take over houses.
What I cannot understand is that choice is being given and the terms of the Bill are very much concerned with tenants' choice. Here we have overwhelming numbers of tenants who wish to stay with the local authority, but one of the worries raised a number of times on Second Reading is just how easy it will be, when the Bill becomes an Act and begins to work through the system, for tenants genuinely to have a choice so that they need only transfer if they wish. There may be various pressures which will arise and about which we need to be very careful. I think that the local authority tenants and the SSHA tenants, as well as the new house tenants, have given a surprising affirmation of their faith in local authorities as landlords—surprising to many people. Particularly in recent years, anyway, they have recognised the fairness of the housing allocation policy, which is not something which should be talked down at all.
As the noble Lord, Lord Taylor of Gryfe, indicated the Minister has said a great deal and my noble friend, who has a great deal of experience, would like to add something. However, unless some other matter arises, I shall ask leave at a later stage to withdraw the amendment.
Lord Kirkhill: I wanted to make one point to the Minister. On a number of occasions this afternoon he has expressed his desire that tenants should have a very extensive choice. Why that choice should preclude the re-affirmation of local authorities as landlords, I cannot quite understand. I suggest that, although a tenant may not be under compulsion, when he finds others round about him opting for, say, Landlord A, it may well be because the landlord concerned has said that he will rapidly modernise the properties by a given deadline. Peer pressure develops in such a situation.
I myself should have thought that to relocate with the local authority in such circumstances would be a very useful safety valve. If the Minister were to say to me, "Ah, well, but at the end of the day the tenant has to sign his agreement before a commitment sustains in law", I should quite understand that. I should retort that in my experience, which stretches over many years as a local councillor in the city of Aberdeen, where I was ultimately Lord Provost, the tendency is to go with the majority in the area where one lives. That will be a very dangerous situation.
Lord Sanderson of Bowden: Perhaps I may come back for a moment at a slightly slower speed so that the noble Lord, Lord Taylor, can understand what I am talking about on this matter. Surely the whole point must be that, as I have said, the provisions of Part III do not involve compulsion. But I think that when noble Lords see figures such as I have quoted of local authority work in the housing area of 80 per cent., and not much less in some other

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authorities—and I quoted 79 per cent. for Monklands—they will feel that the local authority housing departments have a tremendous load already.
Quite frankly I have heard about the polls which the noble Lord, Lord Carmichael, has pointed out to us this afternoon. I have to say that I do not believe the result of every poll, looking at some of the polls on this matter and the way in which they were conducted. The scare stories which went around were such as would have made me frightened of moving from a local authority house to one with someone else as landlord.
What we must do is to go ahead with the plans as the Government wish—that is, to spread the opportunity. I say again, very slowly, to the noble Lord, Lord Taylor of Gryfe, that the provisions of Part III do not involve compulsion.
Lord Carmichael of Kelvingrove: The Minister was speaking of polls and I know what he means. I do not always believe them myself or I should be very unhappy. As regards polls, I think the Minister totally misunderstands the folk feeling towards private factoring in Scotland. This is a terribly important matter. I do not know whether the Minister has lived with a private factor, but so many people have that in their folk memory. I hope that that phenomenon never comes back but it is a very powerful memory. Therefore I am not at all surprised at this figure. I think that the figure of 91 per cent. is quite genuine in the present circumstances. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 49 not moved.]
5.30 p.m.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 50:
Page 30, line 44, after ("proprietor") insert ("or leaseholder").
The noble Earl said: This amendment is, I am afraid, wrongly drafted. My amendment seeks to establish that the Scottish have the right to acquire from a public sector landlord any house which is occupied by a qualifying tenant and of which on that date the landlord is the heritable proprietor.
But what happens if the landlord is not the heritable proprietor? Let us suppose that he is the leaseholder, as I believe is the case in a number of local authorities. Does this provision exclude leaseholders or is there some more complicated arrangement whereby the private proprietor could take over the leasehold? I do not know what is in the Government's mind. I am only asking whether that has been considered and what solution, if any, the Government have been able to find. I beg to move.
The Earl of Dundee: I am grateful to my noble friend for his question. Indeed, as he has mentioned, in some parts of Scotland, particularly in Lanarkshire, local authorities do not hold houses as outright owners but on long leasehold tenure. For tenants' choice to operate in such cases would require an assignation or partial assignation of the landlord's
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interest in the lease. I understand that in most cases this would be either impossible or impracticable.
Even if this were possible I should not have thought that any prospective new landlord would want a leasehold interest. With this in mind we therefore brought forward in another place amendments which were agreed and which specifically ruled out tenants' choice applying to houses held on lease by public sector landlords. I believe that this is a wholly sensible exclusion and that Part III should apply only where the public sector landlord is the heritable proprietor. I hope that explanation may be of some help to my noble friend and that he may see fit to withdraw his amendment.
The Earl of Selkirk: I thought that that was probably the answer I would receive. That means that unless one is a heritable proprietor this particular branch of Part III does not apply at all. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove had given notice of his intention to move Amendments Nos. 51 and 52:
Page 31, line 44, leave out ("may") and insert ("shall").
Page 31, line 44, leave out ("only").
The noble Lord said: In looking at Amendment No. 51 I felt that I had been wrong in not suggesting earlier, when the Minister told us of the possible groupings, that it should be grouped with Amendment No. 56. I am sorry that it is not. However, to me this is a paving amendment for Amendment No. 56. I may be quite wrong in that regard but in these circumstances I shall not move the amendments at this stage.
[Amendments Nos. 51 and 52 not moved.]
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 53:
Page 31, line 45, leave out ("one-third") and insert ("one-fifth").
The noble Lord said: We come now to what is really rather an old friend which we discussed a great deal during the previous housing Bill. A good deal of experience has been gained by councils in rural areas since then.
I may be able to explain this provision quite simply by saying that what we want is that, instead of one-third of the houses having to be sold under the terms of the Act before a council in a rural area so designated is able to retain them, another figure should be substituted. We think that a figure of one-third would be a disaster and that a figure of one-fifth is still a fairly serious amount.
The Bill states in regard to the proportion of houses sold that in addition the Secretary of State must be satisfied that an unreasonable proportion of the houses have been sold not as principal homes but as holiday houses. One of the great troubles, as all of us who live in rural areas know, is that there is a big shortage of houses to rent. Normally in rural areas the gross or individual incomes are not up to the level of the incomes in more prosperous urban areas or areas situated near to urban centres. Therefore the need to retain the working population in the

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countryside by means of rented accommodation is very much greater.
Other factors are now creeping into this. To ask that we define the number of homes sold and limited as holiday homes to one-tenth would be also quite reasonable because nowadays a very large number of houses in the country are sold to people who, for example, have houses in London which have so swollen in value as to be worth a quarter of a million or even half a million pounds. With that kind of figure people who are retiring can sell their houses in London, move to a country house and live in great comfort on the extra capital which they have acquired. Such a house does not count as a holiday home but it still has exactly the same effect on the number of homes to let in the country areas.
We regard this as a very serious problem. The Government have agreed the figure of one-third. They have agreed that there is a problem. We wish to reduce the figure of one-third to one-fifth. I shall be most interested to see whether the Minister can give us figures for houses which have been sold in these areas. We think that one-fifth is a very reasonable figure and that even that one-fifth could do great damage to the economy. We want to define the figure which would apply as one-tenth. We wish also to make that figure an alternative and not an addition to the one-third. I shall say no more just now because I am sure that the Minister, who knows the problems in the country, will have applied his common sense to this matter and will be able to give a satisfactory answer or a promise. I await that with interest.
Lord Hylton: I am bound to say that I am somewhat encouraged by reading Clause 53. It makes me think that perhaps the Government have begun to learn something from the experience in England. They were warned time after time during the course of the Housing Act 1980 in England that there would be serious problems in English rural areas. Those warnings were borne out in practice. I imagine that exactly the same situation applies in Scotland.
It is encouraging that at last the Government appear to have taken this problem on board. As regards the amendment of the noble Lord, Lord Mackie of Benshie, I am delighted that it draws further attention to what is a very acute and serious matter, as I know from Somerset and as all my rural colleagues tell me from all over the shop, particularly in national parks, in areas of outstanding natural beauty and other such areas. The famous Sandford amendment of 1980 did not by any means solve that problem.
This is a serious matter and I hope that the Government will look very carefully at this amendment.
Lord Sanderson of Bowden: I have listened carefully to what the noble Lord, Lord Mackie of Benshie, has said. I am not surprised that he has moved this amendment. However, before the Secretary of State can designate an area as a rural area and thus exempt houses from the tenants' choice provision in Part III of the Bill, two processes have to be gone through. First, one-third of the total public sector housing stock in the area before the right to
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buy came into effect must have been sold under the right to buy, tenants' choice or otherwise. Secondly, the Secretary of State must consider whether, in his view, an unreasonable proportion of houses which have been sold have been resold and are not owner-occupied or rented in the normal way; in other words, they are used as holiday homes.
I know that a number of district councils have argued that it will be so difficult to satisfy both of those criteria that in practice no designation orders will ever be made. That point was also raised in another place. However, I believe that the provisions in Clause 53 and in the right-to-buy provisions in the 1987 Act are more flexible than Members of the Committee who have spoken may realise.
The word "area" in Clause 53(4)(c), which is to be found at page 31, line 33 of the Bill, is deliberately not defined. A local authority could apply to the Secretary of State for a designation of an area covering all of the particular district council or a particular town, village or group of houses. The first test which must be fulfilled before an order can be made—that is, that one-third of the houses in the area have been sold—therefore presents much less of a difficulty to authorities than they may have appreciated because the definition is flexible.
I believe that Clause 53 as it is presently drafted is sensible. I give noble Lords the assurance which was given to Members of another place that any applications received from local authorities for areas to be designated under the provisions will be looked at very carefully. We shall consider each application carefully on its merits. I hope that with those assurances the noble Lord will be prepared to withdraw the amendment.
Lord Mackie of Benshie: I understand that a district authority could ask for a parish to be designated. That was not my understanding previously and I am grateful to the Minister for pointing that out. Perhaps I may ask him whether he has any figures for numbers of houses sold in particular areas which have gone as holiday homes or been taken up as retirement homes, which is just as important. Those figures would be very useful in considering certain areas.
As the Government have acknowledged, the problem is very real. I think that the figure of one-third must be far too high for a parish area. I can think of parishes where, if one-third of district council houses to let had been sold, there would be grave trouble in manning the services in the area. Perhaps the Minister can give some indication of those figures.
The Earl of Selkirk: Perhaps my noble friend will also clarify what houses are included. There is always a disagreement as to whether housing association homes are publicly owned. Does the provision include Scottish Homes, the Housing Corporation and local authority housing? What is included?
Lord Sanderson of Bowden: First, I do not have the figures. Perhaps the noble Lord, Lord Mackie, will look at what I have said. I shall look most carefully at what he has said to see whether some basis of

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agreement can be arrived at. However, we are in the very early days so far as concerns the right to buy.
As regards housing stock which must be considered, local authority housing and housing association houses are included in the figures which must be submitted to the Secretary of State. However, if the noble Lord, Lord Mackie of Benshie, is looking to a provision which will have an "either/or" operation, as he indicated and as is mentioned in one of the amendments, I believe he will find that the Government will resist that strongly. I suggest that he looks carefully at what I have said about the area to see whether that is the way in which district councils should address the problem.
Lord Mackie of Benshie: The Minister not only appears reasonable; he often is reasonable. With those assurances and the knowledge that we can come back to the matter, I shall look at it again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 54 and 55 not moved.]
5.45 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 56:
Page 32, line 11, after ("house") insert ("excluding those as defined in subsection (4) above").
The noble Lord said: I hesitate to move into this area again because those who have spoken on it are very knowledgeable about country areas and country life. Amendment No. 56 is another facet of the discussion which we have just had. I intervene only because I have received a number of representations from local authorities. I feel it is fair to let the Minister know that. It might have been more suitable to put all the related amendments in one group. However, that was not done. In fairness to those who have taken the trouble to approach Members of the Committee, I feel that we should look at the matter.
One area, the Minister may be interested to know, as it is not far from his home, is that of the Ettrick and Lauderdale District Council. The district council of Bearsden and Milngavie, which is not far from my home, and some of the Western Isles councils have also written. The Ettrick and Lauderdale District Council makes a number of points which I think are relevant and which the Minister should take away, if only to help in the writing of future White Papers. In paragraph 1.29 of the White Paper, Housing: The Government's Proposals for Scotland, it is pointed out:
"The Government's objectives are equally applicable to the rural areas".
No indication was given of the manner in which due regard was to be paid to the circumstances in rural areas. Perhaps it was fairly late at night and whoever was writing the White Paper did not know what to say and simply put that down.
There is a strong feeling in the correspondence I have received that rural areas are not getting the consideration they should. It is very difficult when people, in the circumstances pointed out by the noble Lord, Lord Mackie, sell a house in London and move
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to a rural area. I can see how the local economy may be distorted. Anyone living in a London house long enough can buy almost any house they wish in Glasgow because of the increased values of London property.
I speak only to emphasise the widespread feeling of disquiet. Perhaps none of us has answers other than designating local areas and finding a formula which will be accepted for designating rural areas. I hope that the Minister will realise that concern is felt not only by those in rural areas but also by the rest of us.
The Earl of Dundee: I am grateful to the noble Lord. He is right in saying that we must do everything we can for rural areas and isolated communities. However, I believe that the amendment which he has brought to our attention, so far as it relates to all houses covered by Clause 53(4), would confuse the statutory position and make its interpretation extremely difficult. That is so because subsection (4)(c) refers to houses in an area which the Secretary of State has already designated as a rural area. I am not sure whether the noble Lord, Lord Carmichael, intended to include subsection (4)(c). It may be that he was seeking to ensure that the same houses are not counted twice if a local authority seeks to have the Secretary of State designate as a rural area an area including, as a part, an area already designated. I think I see the noble Lord nodding his head. If so, however, there is nothing in the Bill as at present drafted which would prevent the local authority applying to the Secretary of State to designate as a rural area only the additional parts of the area the local authority has in mind. In the circumstances, I believe that in its present form the amendment is confusing and that it makes an unnecessary reference to subsection (4)(c).
Although I can appreciate the basic arguments and concerns which the noble Lord has deployed on excluding special needs houses from the calculation which determines whether the one-third threshold has been reach, I believe that my previous point on the choice of "area" is again relevant.
The word "area" in subsection (4)(c) of Clause 53 which reads through into subsection (6) is not defined. That is deliberate. In that way, a local authority could seek designation for the whole area of the authority, or for a parish, town, village or indeed group of houses. It would not seem, therefore, beyond the ingenuity of a local authority to exclude from the "area" chosen in its application special needs houses as covered in subsection (4), particularly those groups of houses in subsection (4)(a). Therefore, I believe, that the amendment is unnecessary in that the effect it is designed to produce can already be achieved by a local authority by shrewd delineation of the area in question.
I hope that those few remarks will be of some help to the noble Lord and that he will see fit to withdraw his amendment.
Lord Carmichael of Kelvingrove: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 53 shall stand part of the Bill?
Lord Hylton: Once again I should like to thank the Government for Clause 53(4). It shows that the very long debates we had in your Lordships' House in 1980—and I think on one or two subsequent pieces of legislation—have sunk in. We now have a clear exception for sheltered housing and special provision even for houses, bungalows and so on specially designed for persons of pensionable age and for disabled people. I hope that this will prove a good precedent, an omen, for the English legislation that has yet to reach us.
I do not know whether the noble Lord would like to be drawn on that point. If he feels like being drawn perhaps he would also say something about houses in rural areas in England.
Lord Sanderson of Bowden: I certainly do not want to be drawn. I talked earlier today at Question Time about the English educating the Scottish. However, I have no doubt at all that any Bill that is passed through your Lordships' House dealing with housing in Scotland will be taken due note of by the Government in relation to their responsibilities in the Department of the Environment.
Clause 53 agreed to.
Clause 54 [Persons by whom right may be exercised]:
[Amendment No. 57 not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 58.
Page 32, line 44, at end insert—
("( ) For the purpose of inquiry into the affairs of approved persons or any subsequent purchaser, sections 28 to 32 of the Housing Associations Act 1985 shall apply as if approved persons or any subsequent purchasers were a registered housing association and as if this section was contained in an Act in force immediately before the commencement of this Act").
The noble Lord said: We are proceeding rather more rapidly than I have been able to keep pace with. The Minister is aware of that.
The purpose of the amendment is to extend to Scottish Homes the same rights to inquire into the affairs of an approved person and to take any necessary subsequent action as are currently available to the Housing Corporation in respect of housing associations. The Housing Associations Act of 1985 at present gives the Housing Corporation general powers to inquire into the affairs of housing associations, to take action to sort out their management or to transfer their assets to other associations or to the Housing Corporation. The Bill is silent about the rights of Scottish Homes to intervene and rectify management problems of an approved person. The amendment is a means of securing a degree of supervision of all approved landlords in the same way as can currently be exercised in relation to housing associations.
The amendment gives expression to all the worries that I have had about private landlords. I should like the Bill to succeed. As I have said repeatedly and as I continually maintain, I do not care who owns houses so long as people are able to have a suitable roof over their head at a rent they can afford. However, the Minister should not underestimate the
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great problems that there have been with private landlords in Scotland. Therefore, he has to make very sure that any bad apples are pulled out of the barrel immediately.
If we are to have decent private rented accommodation, the factors who run it must be of the very highest standard in every way. I believe that this is a very important amendment for the sake of the success of the Minister's own Bill. I beg to move.
Lord Sanderson of Bowden: This amendment seeks to apply to receiving landlords, under tenants' choice, the powers of the Housing Corporation in relation to registered housing associations which were designed for use in extremis. I think that the Committee will readily see that that would be inappropriate and would have unacceptable potential consequences.
I have said that those powers are designed to be used in extremis. They are the ultimate sanction. To put that into context, none of the powers in Sections 29, 30 or 32 has ever been used. Section 28 has been used only on one occasion in recent years. As a technical point, Section 31 does not apply to Scotland. I think that the reason for that lack of use will be clear to the Committee if I elaborate on the nature of those powers.
Section 32 of the 1985 Act enables the Housing Corporation to require a housing association to transfer its entire housing stock to somebody else. Applied to a receiving landlord under tenants' choice, that would quite simply be confiscation by the public sector of private property. Section 30 of the 1985 Act enables the Housing Corporation to order a bank where a housing association has its account not to part with any of the money, to direct an association as to the transaction which may or may not be entered into, or to remove members of the association or sack any of its employees. In our view it would be entirely wrong for those powers to be exercisable in relation to a private company which has been approved as a tenants' choice landlord. That is an important point.
We intend that approvals of receiving landlords should be subject to control by more appropriate means. Where appropriate Scottish Homes has power to attach conditions to its approval of a landlord. Such conditions would normally be expected to require a landlord to give Scottish Homes information sufficient to enable the progress of the transferred houses to be monitored—by making an annual report, for example. Such conditions could be adjusted to the needs of different forms and standings of landlord. Scottish Homes will monitor landlords and use its best offices to ensure that the promised services are delivered by receiving landlords.
I am very glad to hear that the noble Lord, Lord Carmichael, wishes the Bill well. Indeed, so do we all on this side of the Chamber. There is a very important job to be done. It underpins the point I made at Second Reading that the importance of Scottish Homes should not be underestimated and that the power and influence that it will bring to bear in Scotland is something we look forward to seeing. We hope that it will do for Scottish housing what the Scottish Development Agency has done for industry.
Lord Hylton: In his reply the Minister drew our attention to certain safeguards which, he says, will be built in when houses are transferred. However, I wonder whether these are likely to be sufficient. There have been cases of housing associations getting into difficulties and having to be bailed out by the Housing Corporation or merged with other associations or taken over. We have also had experience of building society fraud, and it would not surprise me at all to learn that one or two tenants' co-operative associations had found themselves in financial difficulty.
If bodies of that kind can get into difficulties, how much more likely it is that private landlords, whether or not they are companies, will also over time find themselves in speculative positions or illiquid or something like that, which would have very prejudicial consequences for their tenants. I think that the noble Lord who moved this amendment has done a real service and I hope that the Government will give the matter further thought.
Lord Carmichael of Kelvingrove: I have listened to the Minister and I think that we are all trying to do what is right. I hope that when reading the record of our discussion I shall remain convinced. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6 p.m.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 59:
Page 32, line 44, at end insert—
("( ) An approval under this section shall be subject to the adoption by the approved person of a Code of Practice in such form as may be prescribed by regulations made by the Secretary of State by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament; and failure to conform with this Code of Practice shall be grounds for the revocation by Scottish Homes of the approval.").
The noble Lord said: This amendment, tabled in my name and those of my noble friend Lord Carmichael of Kelvingrove and the noble Lords, Lord Taylor of Gryfe and Lord Mackie of Benshie, is intended to qualify the conditions under which the landlord can be approved by Scottish Homes for the sake of the transfer of tenancies. The idea behind the amendment is that the Secretary of State should prescribe a code of practice so that adherence to the code will be the criterion upon which Scottish Homes will or will not approve any potential landlord.
As the Bill stands, there is provision for the approval of landlords by Scottish Homes, but the Bill is quite silent on the conditions or criteria to be used in granting approval. So far as one can see, Scottish Homes could adopt a procedure to approve, for example, red-haired landlords but not anybody else. That would obviously be absurd. The concerns expressed about the tenant's choice arrangements have concentrated on the lack of control of the new landlords other than housing associations and the fear of malpractice and maladministration. Tenants who exercise their right to choose an alternative landlord lose the range of rights that they were given in 1980 and which were consolidated in 1987.
It cannot be the intention of the Government—I hope it is not—that the tenants should be
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disadvantaged. The loss of tenants' rights would act as a powerful disincentive to tenants considering transferring to an alternative landlord. For those who exercise their rights the realisation of the weakening of their statutory position may come too late and the opportunity to transfer back to a secure tenancy does not exist.
We consider that a statutory code of practice, which of course has been attacked in various ways and in different situations in other Bills, is a means of simultaneously securing control by the Government, through Scottish Homes, of the practices adopted by approved landlords and the terms of tenancy under which they make rented property available. In this way the Government can be seen to be protecting the interests of tenants. Responsible landlords would not be deterred by a code of practice provided that it did not undermine the financial basis of their involvement. Thus the adoption of a code can be seen as making easy rather than impeding transfers of tenancies.
The principle of a statutory code is similar to the social landlords' charter which was promised by a Minister during the Committee stage of the Housing—and I should like to add (England)—Bill. The Minister in charge of that Bill in another place said that he wanted to introduce some sort of statutory code that would bite by means of contracts to tenants and would apply to various landlords judged to be decent participants in the newly defined social sector, but that promise has not yet found expression in the legislation. It is essential that the code has statutory force. It cannot be left to a set of model rules or recommendations. Public sector tenants enjoy statutory rights and safeguards at present. Anything short of a statutory code would undermine their position and therefore make them very unwilling to transfer to a new landlord.
It would of course be preferable for the detailed contents of a statutory code—or at least the principles—to be specified in primary legislation, but we appreciate that it is not possible to insert that in this Bill given the stage that it has reached. Therefore as a second best we suggest that this should be left to the Secretary of State. The intention is that the code should cover minimum criterion standards to be adopted by landlords. It could be used to require landlords to conform with minimum standards of accountability and availability of information and enable tenants to exercise choice in an informed manner. It could also be used to oblige approved landlords to consult with local authorities in their strategic capacity in order to ensure that landlords' activities could be co-ordinated as part of an overall housing strategy.
On the other hand, the code would re-establish in law the terms of tenancy currently contained in Part III of the Housing Act 1987 and thus preserve rights which would otherwise be lost by tenants transferring to a new landlord. Those terms include the right (which was introduced in 1980) covering security of tenure, the right of succession, the right to a written lease, and the right to undertake repairs and improvements. It is doubtful whether the right to buy could be included without discouraging potential landlords from seeking approval.
If a landlord failed to conform with such a code, approval could be revoked by Scottish Homes, thus excluding him from further participation. I suggest that this amendment is a convenient method of safeguarding tenants' rights and securing minimum standards. I hope and trust that the Government will accept it. I beg to move.
Lord Mackie of Benshie: I should like to say a few words in support of the amendment which has been so ably moved by the noble Lord. The code of practice offers protection not only for the tenants; it is certainly a protection for the landlord. As the noble Lord, Lord Morton, implied, Scottish Homes could take a dislike to bald-headed landlords, and that would be a disaster. It is necessary to lay down some code of practice. The Minister may not agree with everything that the noble Lord said but the principle must be right, because at the end of this clause the Bill states quite clearly:
"An approval under this section may be revoked by Scottish Homes, but without prejudice to any transaction previously completed".
The power is there. This amendment simply asks for the conditions to be defined. I should have thought that potential landlords would welcome a code because it gives them a basis on which to work and certainly a basis on which to argue if they come into conflict with Scottish Homes. I hope that the Minister will accept this amendment.
The Earl of Selkirk: Whether or not the Government want to accept this amendment and have a code of practice, if Scottish Homes is to fulfil its task it is necessary that there should be some kind of inspection. I made a suggestion of that sort rather more specifically on subsection (2) but the Minister did not like it at all. Of course I accept that. But is it intended that there should be a degree of inspection of Scottish Homes? If not, whether or not there is a code, no one will know what is happening. There is nothing to indicate it in this Bill although no doubt there are deep thoughts in the mind of the Minister. I should be interested to know what they are.
Lord Sanderson of Bowden: I recognise the concerns that have been expressed here, the deep thoughts by many noble Lords on all sides of the Chamber on this matter. I know that in another place this matter was debated. There have been entirely misconceived scare stories of old-style private landlords in precarious financial circumstances offering a poor quality of service to tenants who have been coerced from the safety of the public sector.
Scottish Homes will have ample powers to ensure that this will not be the case. Many of the landlords to which it gives approval will be familiar and respected names. Housing associations, landlord arms of building societies, and other major financial institutions are likely to be prime choices by tenants. Other landlords are likely to include those formed by the tenants themselves, such as co-operative or housing associations; and here again a general purpose code seems inappropriate.
The question of ensuring that landlords—who are in receipt of public money and who are approved for the purposes of tenants' choice—provide a good
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housing service to their tenants was discussed on several occasions in another place. There is a variety of ways of achieving this, and different methods may be appropriate for different circumstances. For example, it may be sensible to have different mechanisms relating to registered housing associations, such as the model tenancy agreement that I mentioned in relation to Amendment No. 18 earlier today.
I refer to the remark of the noble Lord, Lord Morton of Shuna. I am aware that there have been various proposals discussed in England but I think that it would be sensible, given our Scottish Homes proposal, to consider separately the right approach for Scotland. Scottish Homes will be able to give approval, subject to conditions, that could include conditions as to practice, management, or any other term that a code might include. Contractual conditions of this kind can be tailored to the individual landlord and the needs of the transferring tenant in a way that a code cannot. Landlords will no doubt wish to remain able to receive further groups of tenants. It will therefore be in their own interest to provide a good service. Otherwise tenants will not choose to go to them and Scottish Homes will withdraw approval.
Although I believe we share the view that receiving landlords should have integrity, provide a good quality of service and be financially sound, I do not see this amendment contributing to the attainment of that aim. I understand the strong feelings on this matter but I hope that the noble Lord will agree to seek leave to withdraw his amendment for the reasons that I have specified.
Lord Morton of Shuna: I am disappointed. Up to now I have found the Minister's contributions to this Bill helpful. What he has said now in my view is complete rubbish. He is saying in effect that Scottish Homes is to be given power to approve of those of whom it cares to approve, to disapprove of those of whom it cares to disapprove and any potential landlord is to have no standard, and no method of challenging such disapproval. That seems to me to be basically unjust.
There is a complete carte blanche. Whether one chooses red-haired people (I was taking the example from a 1947 case), or bald-headed landlords (as suggested by the noble Lord, Lord Mackie of Benshie), it is quite open under Clause 54 to be completely irrational in one's approval or non-approval. There must be some standard set.
Scottish Homes is given no standard upon which to act except what it considers best. If we are to have a statutory body—which is what Scottish Homes will be—controlled by the Secretary of State, and therefore by the Government, we must ensure that it has some standard upon which to act. To have complete freedom to do what one likes, and then for any government to say, "This is not a government body; it is taking an independent choice," seems to me to be entirely wrong. Some standard must be laid down. It may not be a code of practice but it must be some standard, and not a complete piece of waffle.
I shall withdraw the amendment at this stage but I can assure the Minister that we shall return with some

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definition. I suggest that he reads what the Minister from the Department of the Environment said in another place.
Lord Sanderson of Bowden: Before the noble Lord sits down, perhaps I may respond to him. I very much hope that we shall not suspect Scottish Homes of abuse of its powers before it comes into existence. Surely the remedy for any landlord who feels aggrieved about the propriety of the basis of Scottish Homes's decisions must be to leave the correctness of those decisions to judicial review. Am I not right?
6.15 p.m.
Lord Morton of Shuna: That is fine, but judicial review—as the Minister knows full well—is only a review of administrative action. The person administering the review has to decide on the powers that are given to the body, the Minister, or whatever, that is being challenged. Has the body, the Minister, or whatever, acted within those powers? Let us look at Clause 54. There is no way that anybody can say that a matter is outwith the body's powers. It has power to do anything. That is what is wrong.
Lord Taylor of Gryfe: Before the amendment is withdrawn, perhaps I may press the Minister a little further. The changes involved in this Bill are important. We shall have a new organisation, Scottish Homes. No one knows it at the moment; it is a new quango. It has to establish its authority and credibility in relation to the public. Therefore I suggest that to lay down a code, or to set out criteria on which it would make judgments in this matter, would be to its advantage.
A point was made by the noble Lord, Lord Carmichael, with his experience of Glasgow and the west of Scotland. Traditionally in Scotland there is a kind of class war attitude that the landlords are all evil-doing, rapacious people. This goes back in folklore. It is part of the thinking in the west of Scotland. I do not say it is the thinking of the noble Lord.
Lord Carmichael of Kelvingrove: I hope my noble friend will accept that while I deplore the attitude in many ways, I deplore the reason it started—because those facts were true.
Lord Taylor of Gryfe: I am saying that it is a fact of life. It is important, if this new coalition of housing interests is to work, that we should establish a new climate in tenant landlord relationship. I suggest that accepting this amendment and laying down a criterion on which we judge good landlords could be to the advantage of this Bill and its acceptability to the Scottish public.
Lord Mackie of Benshie: On the same point, will the Minister tell me whether I am right? In his explanation he said that the tenants would be protected by the contracts between Scottish Homes and the landlord. If that is the case, obviously the Minister, or someone, is laying down criteria for the contracts to be drawn up. It therefore strengthens the case for guidelines that will be known to both parties.
Lord Sanderson of Bowden: We have had a very useful exchange on this matter. I see very clearly the point the noble Lord, Lord Morton and others are aiming at. Scottish Homes would be subject to the general duty to act reasonably. However, I shall study what the noble Lord and others have said on this issue. I have no doubt that we shall return to it.
Lord Morton of Shuna: I am very glad that the Minister has had reason returned to him after a short interval when it was away. I hope he will give favourable consideration to this matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 54 shall stand part of the Bill?
Lord Hylton: I have looked carefully at the Bill, thinking that I might find somewhere in it a reference to housing action trusts in Scotland. These are proposed in the Bill for England still in another place. It is known that in England there is a vast backlog both of repairs and improvements to local authority housing estates, particularly in large cities and industrial areas. I should have thought that it was likely that similar conditions apply in certain parts of Scotland.
In my own experience—having spent one night on a housing estate in north Edinburgh about six years ago where half at least of the flats and maisonettes were boarded up—conditions seemed to be getting into a worse state by the month. It may have been righted by now. But that seems one possible place where a housing action trust could have operated.
Will the Minister say, if these trusts are not to be included in the Bill, whether they will be brought in under some other legislation or by some other means? Will they be included in the general category of "approved persons"?
The Earl of Dundee: It may be helpful to the noble Lord, Lord Hylton, if I were to tell him that we have included as approved persons the housing associations, the building society landlords and the co-operatives formed by tenants associations and by tenants themselves and also responsible private landlords. There are no categories as such. And, unlike England, there will be no housing action trusts in Scotland. I hope that will be of assistance to the noble Lord.
Lord Hylton: Is the noble Lord suggesting that he does not think they are necessary in Scotland?
The Earl of Dundee: In no way is it to be inferred that such trusts are not necessary. But we have a different system in Scotland of achieving the same effect.
Lord Morton of Shuna: Perhaps the Minister will enlighten the Committee rather more, because we have housing action areas which local uthorities may define. There are some in Edinburgh and no doubt quite a few in Glasgow. Is it not possible to have housing action trusts? I do not know, but perhaps the Minister will be able to enlighten us. Are local

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housing action areas to be dealt with only by the local authorities or housing associations? What is the Government's position?
The Earl of Dundee: Scottish Homes, the establishment of which is not paralleled in the English Bill, should be able to achieve all that housing action trusts will do on the basis of voluntary co-operation. I believe that local authorities in Scotland would not welcome housing action trusts.
Clause 54 agreed to.
Clause 55 [Application to exercise rights conferred by this Part and offer to sell]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 60:
Page 33, line 31, at beginning insert ("the price being the higher of').
The noble Lord said: This amendment concerns an area that local authorities are concerned about. It has been suggested that the amendment be grouped with Amendment No. 61.
The reason for the amendment is that it would be unreasonable for recently built or modernised houses—those that will be the most popular and which people will be most anxious to have transferred—to be sold at less than the cost incurred by the original landlord in respect of the house in the last five years. The result would be that the original landlord's remaining tenants would be paying off the balance of debt in the house. That is the only way I can see the original landlord selling at less than the cost had been to him. The remaining tenants would be paying off the debt and therefore subsidising either the new landlord or the tenants of the landlord, if he was very generous—or perhaps a hit of both.
If transfers take place on a substantial scale, the financial implications for those tenants who remain with the council could be serious. Fewer and fewer tenants would be servicing the remaining debt. Tenants who choose to remain with the council should not be expected—I believe the Minister agrees that it would be unfair—to finance improvements for those who choose to leave.
Using the district valuer's value is not sufficient. There should be included the costs incurred in respect of the house or houses as defined in Clause 62(2) of the Bill. That is what is proposed by Amendment No. 61. Both amendments together will solve a problem which, unless the amendments are accepted, could make it extremely difficult for tenants who, by definition, will be in the less desirable houses in an area. They would be subsidising tenants in the newer and better repaired houses. I beg to move.
The Earl of Dundee: Although I understand the arguments which the noble Lord, Lord Carmichael, has deployed, I believe that they may stem from a misunderstanding. In the right-to-buy scheme the result of the transaction is that the house becomes owner-occupied rather than tenanted. The price at which this transfer takes place is basically market value with vacant possession less a discount reflecting
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the time the individual tenant has spent as a tenant of publicly rented 'accommodation.
The result of the transaction which will take place under Part III of the Bill, however, is that the house will move from the public rented sector to the private rented sector. The tenant will remain a tenant. The valuation, as the Bill sets out, will be market value, subject to tenancy. There is no question of any discount reducing the price to the receiving landlord.
As there is no discount, there is no discount to restrict and no justification for any cost-floor arrangement—which is a means by which discount is limited when the right to buy is exercised. Under the tenants' choice provisions as under the right to buy, the price to the purchaser will not be higher than market value. In the tenants' choice case, the price will be at market value. I can understand the argument that individual councillors and local authorities will be concerned at the prospect of selling property without realising from the sale sufficient funds to extinguish any remaining debt on the property. In purely financial terms, however, what matters is the anticipated flow of rental income from letting the house, compared with the flow of costs which will have to be incurred on management, maintenance and repair. These flows will be an important factor in the district valuer's assessment of market value.
Let me assure the Committee also that where transfers take place but the amount of debt outstanding is not extinguished, authorities receiving housing support grant will, under the housing support grant formula, be compensated for the loss. Where an authority does not at present qualify for housing support grant, if sufficient sales take place at below outstanding debt levels significantly to push up loan charges per house, and hence rents, these authorities could once again qualify for housing support grant. The maximum loss to an authority and its remaining tenants is therefore limited.
I do not believe that it would be sensible or logical to introduce any cost-floor restriction on the price of property transferring under Part III of the Bill. In the light of that explanation I hope that the noble Lord, Lord Carmichael, will see fit to withdraw his amendment.
Lord Carmichael of Kelvingrove: I shall need to read the Minister's speech carefully, particularly his remarks about there being no floor price for a house and the allowances for repairs. I believe that the matter will be dealt with in a subsequent amendment, but it is an important responsibility for local authorities. In the hope that there may be greater clarification as we deal with this group of amendments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 61 not moved.]
6.30 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 62:
Page 33, line 46, leave out paragraph (c).
The noble Lord said: The amendment questions the whole matter of market values. How can there

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possibly be a true market value if the only prospective purchasers are Scottish Homes and those approved by it? I believe that it is unrealistic to assume that the only prospective purchasers were in the market for the house and that competition in the open market would not result in a higher transfer value. As written, the clause is inconsistent with comparable council house sales' legislation, which assumes an element of competition under Section 62 of the Housing (Scotland) Act 1987. The Bill will result in unrealistically low transfer values and a loss of resources to the local authority.
I consider that this is a dubious business. The district valuer is supposed to assess rents on the basis of a free market and that the number of houses available is almost in equal balance with those seeking tenancies. I believe that there are too many suppositions and hopes to achieve a real value. However, this provision is even worse because there is only one prospective purchaser. It is not as though the district valuer is making an assessment and then advertising the house for sale in a local newspaper in order that many people may apply. He is making a valuation for Scottish Homes and only for Scottish Homes. He knows that it is the only body involved. In these days of competitive thinking there will be no competition in an assessment made for only one person. I hope that the Minister will look carefully at this issue, give it some thought and perhaps even accept the amendment. I beg to move.
The Earl of Dundee: Amendment No. 62 seeks to remove, from the factors to be taken into account by the district valuer when he determines the value of a property for transfer under the provisions of Part III, the assumption that only persons approved as receiving landlords will be prospective purchasers. Clause 54 of the Bill, however, rightly ensures that only suitable persons or bodies—that is Scottish Homes itself or persons approved by Scottish Homes—can acquire property from the public sector under the tenants' choice arrangements.
It must be right, therefore, to carry through this restriction on the range of prospective purchasers to the arrangements for valuation. It would be quite illogical, in my view, for the Bill to place restrictions on one aspect of the provisions, namely, on the type of landlord who can acquire property, while on the other hand allowing valuations to be carried out on the assumption that other non-approved landlords were in the market. To delete the provisions of Clause 55(6)(c) from the Bill, as this amendment requires, would be to import double standards.
The suggestion has been made that, because of the restriction in the number of landlords assumed to be in the market, the property to be transferred may be undervalued. The criticism might particularly apply, it is suggested, when the tenants' choice provisions first come into force and few landlords have received Scottish Homes' approval. I believe, however, that this concern is not well founded. District valuers, who will make the valuations, are highly expert, independent professionals, and there would have to be very few landlords approved indeed for district valuers not to be able to envisage a bidding situation
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between them. But even at the very early stages when, say, Scottish Homes is the only purchaser in the market, district valuers' professional expertise and techniques will allow a valid market value to be calculated by assessing the capital value of the flow of rents (if the property were to continue with the secure tenancy) against the anticipated flow of management, maintenance and repair costs. I believe therefore that fears expressed that there will be under-valuations in an artifically thin market are unjustified.
The Bill, as drafted, seeks to maintain a balance between guiding district valuers in their task yet at the same time avoiding being too prescriptive. To delete the provisions of Clause 55(6)(c) would, in my view, upset that balance. While I appreciate the concerns expressed by the noble Lord, Lord Carmichael, I am unable to accept the amendment.
Lord Grimond: Before the noble Lord who moved the amendment decides what to do, I hope that the Government will give an undertaking to look at the matter again at continuing stages. It appears to be quite apparent that if a property is withdrawn from the open market—which is the effect of the Bill—it will restrict the possible purchasers. It will be another case of moving into some form of monopoly which appears to be much favoured by the Government. It must have an effect on the local authorities and on the housing market. I do not see how the district valuer can overcome that. Surely his business is to value property on the basis of its value on the market. I do not see how he can make allowances for other matters and how he will reach a reasonable valuation. Therefore I hope that the Government will look at the matter again.
Baroness Carnegy of Lour: I do not know whether I have understood the issue, but I should like to point out that when a valuation is put on a property the potential area of available purchasers is taken into account. Surely it is essential that the district valuer should take note of the fact that this is a restricted market. That is stated in the Bill. Is this not a perfectly reasonable clause? I do not fully understand what the noble Lord, Lord Grimond, is worried about. One cannot consider the market to be fully open when it is not.
Lord Grimond: Perhaps the noble Baroness will allow me to say that if that is the case, and it may well be so, I am not clear that this subsection is necessary. If in any event the district valuer will take into account the fact that a possible purchase will be restrictive, I do not see why the clause is needed in the Bill.
The Earl of Dundee: I appreciate the concern expressed by the noble Lord, Lord Grimond, as regards monopolies. It must be admitted that there will be monopolies in respect of Scottish Homes, but I do not believe that it is one which will give us cause for concern. As I said earlier, district valuers are highly expert in their job and can easily envisage a bidding situation. I believe that, if we were to go along the lines suggested by the noble Lord, Lord Carmichael, in his amendment, we should be applying double standards. On the one hand we shall

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be limiting the category of receiving landlords while on the other hand saying that, as regards valuations, we must take into account everyone else whom we have not especially cordoned off.
Lord Mackie of Benshie: Is it not a fact that the Bill provides that:
"the district valuer shall have regard to the price which, on the relevant date, it would realise if sold on the open market by a willing seller on the following assumptions"?
The Bill then totally denies the existence of a free market by providing:
"that the only prospective purchasers were Scottish Homes or the persons who, on that date were approved …"
Surely it is a complete denial of the principle of valuation by independent people if you deny them the right to value on the open market and say that the consideration must be lined up with the fact that it is a monopoly buyer.
The Earl of Dundee: I think the valuation criteria set forth in subsection (6) give rise to more complicated problems than the Government have yet acknowledged. For instance, we have this problem of what happens if the sum realised is less than the loan outstanding. We are told that this will have to be made good by housing support grant, but do we really want a kind of open, limitless tap in this direction?
Secondly, if, as appears likely and particularly in unfashionable areas, some very low valuations emerge, will this not encourage speculative builders, some of whom may succeed in getting themselves designated as approved persons, by one wangle or another?
Lord Carmichael of Kelvingrove: I think that the Minister has heard from the Committee and particularly from the contribution by the noble Lord, Lord Hylton, just what the feelings are on this subject and the worries that are involved. It seems to me to be simple and straightforward, in that, if the valuation does not cover the money already spent and the outstanding debt on the house, that is something very serious. The idea of a local authority using some sort of roundabout way to get money, I would say, first, would have something wrong with it somewhere: perhaps as regards the district valuer's valuation. However, we shall go further into this subject in the next amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 63:
Page 34, line 1, leave out paragraph (d).
The noble Lord said: This amendment shows some of the difficulties and weaknesses of this part of the Bill. I am suggesting that, on page 34, lines 1 to 3 should be omitted. The subparagraph (d) concerned states that the assumption of the district valuer is to be that the applicant will,
"within a reasonable period carry out such works as are reasonably necessary to put the house into the state of repair required by the landlord's repairing obligations".
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I consider that the existence of this assumption within the statutory formula for evaluating the market value is unnecessary. That is because the market value should already have taken into account the state of repair of the house. If you go to buy a house and realise that a damp course will be needed, unless you work on the assumption that the present owner will put in a damp course for you, you will not pay for the house as if there was a damp course there. So this is unrealistic, first, because it is difficult to see how the district valuer is to be satisfied that work is needed to put the house into a reasonable state of repair required by the landlord's repairing obligations. This could give rise to considerable dispute between an applicant and a local authority landlord.
Secondly, it is not clear that applicants shall within "a reasonable period" carry out any works to any house which they are able to acquire under the terms of this part of the Bill. Thirdly, it could be argued that a strict interpretation of this part of the Bill, when applied to certain problem properties in areas of low amenity, could result in a negative value and perhaps a payment by local authorities to the approved landlord where the market value was particularly low and a considerable amount of repair work was necessary to fulfil the landlord's repairing obligations.
As written, this subsection would mean that tenants who remain with the council would pay for the cost of transfer. In the first place, the remaining tenants would continue to service the outstanding debt on the transferred property. They could also be liable to pay part of the renovation costs on the transferred property, already assumed in the transfer value. The intention of this clause is perfectly good but I believe that the implications of it leave much to be desired. I believe that Amendment No. 63 is one which is well worth accepting in order to try to make the clause more reasonable. I beg to move.
6.45 p.m.
The Earl of Dundee: I have listened carefully to what the noble Lord, Lord Carmichael, has said in support of his amendment, which seeks to remove from the factors to be taken into account by the district valuer when determining the value of a property the assumption that a prospective landlord will put in hand, within a reasonable period, works necessary to bring the property in question up to standard.
I believe we should seek in the Bill to provide guidance to district valuers in their task of assessing the value to be attached to a property, without being too prescriptive. In my view, the provisions of Clause 55(6)(d) are necessary to make it clear that, while the price on transfer reflects the current state of the house to be acquired, the new landlord will be expected to effect the necessary improvement works in early course. This expectation has been carried forward into the factors which the district valuer is to take into account when determining the value of the property. If the property has been well maintained, the cost of necessary improvement works should be minimal and will have little impact on the valuation of the property. Nonetheless, I believe it is only fair to all parties involved in the transfer that the

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valuation assumptions should put no obstacle in the way of prospective landlords carrying out early repair works to the property, once acquired.
On the point raised by the noble Lord, Lord Carmichael, about relative values, I can assure him that it is possible that properties will be valued by the district valuer at negative figures. Certainly we need to take that into account; but as regards the thrust of his amendment I hope he may possibly allow himself to be persuaded by the case I have put forward and feel himself able to withdraw the amendment.
Lord Mackie of Benshie: Looking at this, I find that it could be interpreted in two ways. Is the Minister saying that, if the valuer is to take into account that the applicant would carry out the necessary repairs, that would put the price up? Or would it put it down? This could be interpreted both ways. The district valuer is to have regard to the price which the property will realise when sold on the open market on the assumption that the landlord carries out the repairs: that would put the price up. Is that what it means—that the district valuer will put the price up because repairs have been carried out?
Lord Swinfen: Before my noble friend answers, may I say that any valuer worth his salt—and I speak as one who has been a valuer—will take the condition of the property into account when deciding its value. When the Minister last spoke he gave me the impression that he was trying to insist on the purchasing landlord putting the property into a reasonable state of repair. If that is his intention, it is expressed in a rather ungainly manner in the Bill. I suggest that it should be put in, as a separate clause; that it he part of the purchaser's obligations. I suggest that should be spelt out very much more clearly.
The Earl of Dundee: I am grateful to my noble friend and I will certainly consider the point he has raised and whether we can do as he suggests. However, we believe that the assumption will be fulfilled and that repairs which need to be carried out will be carried out. Applicants will be reputable approved bodies which will be unlikely to dishonour the terms of any deal struck on repairs in the course of consulting tenants. Scottish Homes will monitor landlords' standard of performance for maintenance and repairs. In a sense, I take the point of the noble Lord, Lord Mackie of Benshie, but the need to put right deterioration and repairs is as it is. It is something which is either attended to or not attended to. If it is attended to in the right way it must involve costs and hence the influence for the district valuer.
Lord Carmichael of Kelvingrove: I did not read as carefully as I should have liked this section of the Bill when it was discussed in another place. However, the Minister must realise that in a very rational Chamber there has been grave scepticism from almost every quarter. The noble Earl, Lord Dundee, spoke about good faith and responsible people doing repairs, and that sort of thing. Someone still has to judge whether repairs are adequate or correct. If he thinks for one moment, he will realise that there have been many
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disputes among reasonable people as to whether the repairs were properly done or skimped.
I believe that the Minister, in his own interests, should take this section, which has been looked at in a rather cool manner by the Committee, and have another look. However, in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman (Lord Hayter): I call Amendment No. 64 which is similar to Amendment No. 65.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 64:
Page 34, line 3, at end insert—
("( ) Where a landlord disputes the market value determined by the District Valuer, the landlord may at any time within two months after service of the application refer the matter to the Lands Tribunal for determination. Where such a reference has been made, the landlord need not serve on the applicant an "offer to sell" within two months after service of the application. In proceeding under this subsection the Lands Tribunal may as it thinks fit vary the market value. Whether or not the market value is so varied the landlord shall within two months after the determination by the Tribunal serve on the applicant an "offer to sell" notice in terms of subsection (5) by stating the market value as determined by the Lands Tribunal.").
The noble Lord said: Perhaps I may move Amendment No. 64, which is grouped with Amendment No. 65, in the name of the noble Lord, Lord Taylor of Gryfe. Amendment No. 64 is in the name of my noble friend Lord Carmichael and myself. As the Deputy Chairman said, it appears that they are more or less aiming at the same thing.
The purpose is to give the landlord a right to go to the Lands Tribunal if he disagrees with the district valuer's valuation. The Bill imposes statutory restrictions on what is meant by market value of houses transferred under this part. The Bill proposes to require forced sales of individual houses initiated by approved persons or Scottish Homes to be effected at the price determined by the district valuer, who is an employee of the Inland Revenue, with no right of appeal by public sector landlords to an independent tribunal or arbiter. That has a patent unreasonableness and is contrary to natural justice.
In theory, it allows the district valuer to set unrealistic values which will deprive public sector landlords of resources which could have been applied to the improvement and repair of retained public sector stock. I also suggest that it does not allow any mistake to be put right. Disputes about the level of compensation payable to the owner of land or property being acquired compulsorily by Scottish Homes is dealt with under Clause 2(5) except for the case of public sector houses. That is dealt with in the usual way by arbitration and then the Lands Tribunal. Why should public sector landlords be denied the same right of appeal which is applied to other landowners who are having their property acquired compulsorily?
As the Minister will be well aware, at present the law about the transfer of public sector stock between different aspects of the public sector or different public sectors is governed by the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947, which allows, if necessary, an independent assessment to be made by the Lands Tribunal. The

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application of this legislation to transfer of individual houses is effectively blocked and nobody has any right of appeal. Even the determination of a market value provided by Section 62(2) of the Housing (Scotland) Act 1987, which provides for the landlord and tenant to have an independent valuer approved by both to set the figure, is not allowed.
That is not a theoretical aspect. There was a case recently in Castlemilk where a large body of houses was being transferred to the Scottish Special Housing Association from Glasgow District Council. The district valuer fixed market values determining the price, ignoring the fact that a large number of the houses had vacant possession and taking it on the basis that they had secure sitting statutory tenants. Of course that made a considerable difference to the value. It appears to us on this side of the Committee that there is a strong case for a normal appeal to the Lands Tribunal if the Government are to get out of any possibility of being accused of merely acting against local authority landlords out of a desire to treat them differently. If they want to treat them the same as everybody else, they should give the same right of appeal to the Lands Tribunal. I beg to move.
Lord Sanderson of Bowden: I cannot recommend acceptance of Amendments Nos. 64 and 65, which seek to give the Lands Tribunal, presumably the Lands Tribunal for Scotland, an appeal function if a public sector landlord disputes the valuation reached, in accordance with the provisions in the Bill, by the district valuer.
I am aware of exchanges between the Scottish Development Department and Glasgow District Council, which takes the view that the district valuer is not sufficiently independent to carry out this task. I emphatically do not subscribe to Glasgow's view. The district valuer acts in the public interest in the widest sense. I do not mean that he acts to further the policy of the government of the day. Rather, he acts in the interest of the public as a whole who pay for and use the services of central and local government authorities and bodies enjoying statutory rights. The district valuer ensures on behalf of the public generally that the particular interest of one body does not prevail over another in matters of valuation. Not only do I firmly recognise the independence of the district valuer; I also am conscious of the depth of experience amassed by the Valuation Office. In my opinion the involvement, as proposed, of the district valuer will lead to a high degree of consistency in valuations; and it will make an appeal mechanism unnecessary.
Under this part of the Bill the Lands Tribunal for Scotland will be given an appeal role in a number of matters relating to the process of transferring property. These duties are modelled largely on the role discharged by the tribunal in right-to-buy cases. That legislation makes no provision for an authority to refer to the tribunal disputes over valuations of property in right to buy applications. I can see no reason why the tenants' choice provisions should impose a duty on the Lands Tribunal which does not exist in the otherwise broadly similar framework for processing right to buy applications.
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This amendment could in practice be a wrecking amendment, because of the delays which could be introduced if an appeals mechanism was to be introduced. I agree that in compulsory purchase cases disputes over valuations of property can be determined by the Lands Tribunal for Scotland. But in compulsory purchase cases it is possible to do this because title to the land can be taken and the acquiring authority can get on with the works while leaving the compensation, or the exact amount of the compensation, to be settled at a later date. Sometimes in fact the final amounts may be settled years later.
However, under tenants' choice, where a new lease is involved and where, for example, the level of rent payable by the tenant to the new landlord will be critically dependent on the acquisition price, the final price must be determined before the lease can be agreed and the transaction completed. To allow appeals to the Lands Tribunal could significantly stem the timescale for tenants' choice and in practice mean that very few potential landlords or tenants would be willing to exercise their new rights.
I believe therefore that it is essential for a final price be determined quickly and impartially. I stress again the complete independence of the district valuer and the high regard in which the valuation office is held generally. To add the possibility of appeal against the district valuer's determinations would be unnecessarily and damagingly time-consuming and bureaucratic. I therefore urge the noble Lord to withdraw the amendment.
Lord Mackie of Benshie: Is the Minister saying that district valuers are infinitely more competent than Her Majesty's judges, who are subject to appeal?
7 p.m.
Lord Sanderson of Bowden: Where we are dealing with valuations, the prices of property and the speed with which one is able to carry through the operation—that is an important part of the whole—I happen to think that we are dealing with experts in the field in which they operate.
The Earl of Selkirk: The applicant is surely free to accept the price or not. He does not have to accept what the district valuer says; if he does not like it, he says no; is that not correct?
Lord Sanderson of Bowden: I think that the noble Earl is right on that particular point, but we are dealing with a slightly different point. The amendment, I understand, concerns valuations of transfers from local authorities.
Lord Morton of Shuna: That is a marvellous way of not answering the question. Let us consider the case where Scottish Homes, or some other potential landlord, makes a requirement on a local authority to sell transferred houses to, say, Scottish Homes. As I understand it, no answer has been given to the noble Earl's question. If a district valuer fixes a price that Scottish Homes—to take that as an example—does not like, can it refuse to accept the valuation?
Lord Sanderson of Bowden: As I understand the point of the noble Earl, he asked whether the tenant has a right to refuse the district valuer's valuation. The answer is that the tenant always has a right to accept or to reject.
Lord Morton of Shuna: If the Minister will not recognise the question put by the noble Earl, I shall put the question myself. If the district valuer sets a price that Scottish Homes as the potential purchaser considers excessive, has Scottish Homes the right to say that it does not want the property?
Lord Sanderson of Bowden: Yes.
Lord Morton of Shuna: Then why is it that a local authority has no right to reject the price that the district valuer has set and, even in the case where the district valuer has made a mistake, is not permitted to appeal to the Lands Tribunal! However much expertise the district valuer may have, I think that the Lands Tribunal would regard itself as having as much expertise. The Lands Tribunal for Scotland has a higher standing in questions of setting values in such situations. I do not understand why, in the case of purchases from local authorities, the Government insist that the purchasers can say that they do not like a price, but a local authority is unable to do so, and has no right of appeal against the price, even in the case of the most blatant mistake.
I think that this matter must be looked at again. The Government appear to have it wrong, and I hope that they will reconsider it.
Lord Sanderson of Bowden: I draw to the attention of the noble Lord, Lord Morton of Shuna, the exchanges that took place in the House over the right-to-buy legislation in Scotland. Noble Lords clearly approved of the right-to-buy legislation, which does not allow appeal to the Lands Tribunal in Scotland in matters of valuation.
The noble Lord, Lord Morton of Shuna, asks why a purchaser can reject a price. An approved landlord will base his decision not on the accuracy of valuation but on his ability to pay. I come back to the most important point. We have a precedent in the legislation that we passed in 1980; that is, the right-to-buy legislation for Scotland. I do not see why there should be a different set of rules and regulations in this Bill when in the right-to-buy legislation there is the clear provision not to allow appeal to the Lands Tribunal in regard to valuation.
Lord Morton of Shuna: The difficulty is surely that most tenants buy only one house, especially tenants exercising a right to buy. There is not much difficulty in valuing one house. People know roughly the value of a corporation house. If the purchase is of 1,077 houses in Castlemilk, there may be a high level of dispute about the value of the block of houses with, say, half or 40 per cent. of them empty. It is with that type of issue that we are concerned. As I said, we are not discussing a tenant buying one house.
Rather than continue the argument, I shall read with care what the Minister has said, although he has not convinced me. I hope that similarly he will read what I have said and consider whether there may not
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be some merit in it. In the hope that he will do so, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 65:
Page 34, line 3, at end insert—
("( ) Where a landlord disputes the market value determined by the District Valuer, the landlord may at any time within two months after service of the application refer the matter to the Lands Tribunal for determination. Where such a reference has been made, the landlord need not serve on the applicant an "offer to sell" within two months after service of the application. In proceeding under this subsection the Lands Tribunal may as it thinks fit vary the District Valuer's determination of the market value. Whether or not the market value is so varied the landlord shall within two months after the determination of the Tribunal serve on the applicant an "offer to sell" notice in terms of subsection (5) by stating the market value as determined by the Lands Tribunal.").
The noble Lord said: This amendment is almost precisely the same as that which we have just considered. I do not propose to go over the ground so ably covered by the noble Lord, Lord Morton of Shuna. I was rather persuaded that he has an argument.
In Scotland we accept the valuation of the district valuer more or less all the time, just as we accept his professionalism and his independence. However, we are legislating perhaps for the exceptional case, and the right to appeal to the Lands Tribunal should surely be respected. This will not arise every day. It need not delay the general thrust of the Bill. As the noble Lord, Lord Morton of Shuna, has withdrawn his amendment, perhaps I should follow the same course. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 55 shall stand part of the Bill?
Lord Hylton: I wish to make two brief points. Clause 55(6)(d) deals with the applicant putting a house into the state of repair required. Does "repair" include improvement? If so, it would make a difference. I am encouraged to ask the question because the noble Earl, Lord Dundee, used the word "improve" in his reply. I realise that that may have been a slip of the tongue, but equally it may have been in his brief.
Secondly, the clause specifies the criteria that the district valuer will have to take into account. I wish to go beyond that and ask whether conditions concerning repairs and improvements will be included in the contract and conveyance of property to be sold. That would be a means of achieving greater certainty in what is a complex matter.
The Earl of Dundee: I am grateful to the noble Lord, Lord Hylton. I shall certainly look into the matter which he has drawn to my attention. I cannot answer him now. I shall either write to him or bring back something later on.
The Earl of Selkirk: Perhaps I may bring to the attention of my noble friend subsection (8)(b), which states:
"the applicant to receive a good and marketable title to the house".
I drew the attention of my noble friend to the importance of that provision under Clause 3 when it

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was being discussed. I hope he will bear that in mind because if a house is not marketable Scottish Homes is going to get into a great deal of trouble.
Lord Sanderson of Bowden: I gave an answer to my noble friend Lord Selkirk yesterday on the question of title and I said that we were looking very closely into the fact that a real title must be transferable. I said that we shall come back at the next stage of the Bill with the answer to that point.
Clause 55 agreed to.
Clauses 56 to 59 agreed to.
Clause 60 [Consent for subsequent disposals]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 66:
Page 36, line 22, after ("Act") insert ("including any person who acquires any property under this section").
The noble Lord said: This is another safeguarding amendment. Having looked at it, I believe the intention being put forward by one of the responsible bodies advising us is to make sure that a person other than Scottish Homes who acquires any part of a property shall not dispose of it under this provision. If any other person acquires under this clause any property that is passed on from Scottish Homes—that is the second person who acquires it—he shall also require the consent in writing of Scottish Homes. In other words, the first person shall obviously require the consent of Scottish Homes and it should always be aware of where the property has gone and who is the second or perhaps third or fourth landlord. I beg to move.
Lord Sanderson of Bowden: I have heard quite clearly what the noble Lord, Lord Carmichael, has said. Clause 54 of the Bill provides that the right to acquire property under the tenants' choice provisions can only be exercised by Scottish Homes, or by a person approved by Scottish Homes. We believe this approval mechanism is necessary to safeguard the interests of the tenant who may contemplate changing his landlord. Clause 60 provides that property which has been transferred under the provisions of Part III—that is, where the tenant has exercised tenants' choice and transferred to a new approved landlord—can only be disposed of by the new landlord if that new landlord obtains Scottish Homes's approval.
We believe that this mechanism for approving first subsequent disposals is necessary to prevent any possible collusion, however unlikely, between an approved landlord and another which Scottish Homes has not approved as a receiving landlord. I accept that any such circumvention of the mechanism under which landlords are approved is unlikely, as Scottish Homes would, almost by definition, be unlikely to approve a landlord which would act in this way. But in including the Clause 60 approval to disposal arrangements, we have sought to make absolutely certain that the tenant's position is protected.
However, we do not believe that it is reasonable to require Scottish Homes to be associated with the future ownership of the property for all time, as
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would be the case if the amendment we are considering were to be accepted. Let me repeat that the tenant concerned has chosen to transfer his tenancy from the public sector, and that no tenant will be forced to move against his wishes. The transferring tenant has elected to join the private sector, and I do not believe that, having done so, and having gained the advantages which attracted him to transfer in the first place, he can or should, after the first subsequent disposal, be in any different position from any other private sector assured tenant.
I do not believe it is right that Scottish Homes should be involved with all transferred property for ever and a day. I doubt whether the Committee would relish the idea of a never-ending bureaucratic control of this kind. I am certain that once Scottish Homes is set up it would not wish to be involved in that way for ever. Therefore I cannot recommend that this amendment be accepted.
7.15 p.m.
The Earl of Selkirk: Perhaps I may ask my noble friend what limitation there is. We know what has already happened in that people are bribed to come out of a house. When the tenant is out of the house and it is free, it may be that the house has a much higher price than it would have with the tenant still in it. We know that is going on already. It is very difficult to stop and I do not know what precautions the Government are taking in this particular case.
Lord Sanderson of Bowden: I hoped that I had explained that Scottish Homes in the first instance has to approve the landlord. At the first sale thereafter Scottish Homes is involved. After that the tenant is definitely in the private sector and like anyone else has to stand in the private sector. I hope that I made myself clear in my explanation. What I am trying to say is that the system we wish to bring in under this clause means that there is control and a means whereby Scottish Homes has control of the approved landlords for a sufficient time.
The Earl of Selkirk: If I understand my noble friend correctly, the situation is that if he misbehaves himself he will be scratched off the list.
Lord Carmichael of Kelvingrove: That is most interesting and I am grateful to the noble Earl for bringing out that matter. I do not know whether it says in the Bill that a landlord will be scratched off. We have been trying to have that measure included in the Bill, as the Minister knows. There is the great worry of vacant possession. We endeavoured to get a bad landlord's register at some point. I accept that there are difficulties and no one wants Scottish Homes to be a nanny all the time. However, it is a little stronger than the average tenant who is caught up with a landlord.
I know that most of them will be large, responsible landlords, but the bottom end of the market will slip into the hands of the less scrupulous landlords whether the Minister likes it or not. We seem to have a housing Bill every year so perhaps the matter can be reviewed then. In 10 years' time there will be a number of houses which have slipped into the bottom

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of the market. The landlords may not all be as angelic as the Minister seems to suggest. I hope that he will keep his eye on this problem, because we certainly shall. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 67:
Page 36, line 23, at end insert—
("( ) The consent of Scottish Homes under subsection (1) above shall only be granted where the disposal is to an approved person, under the terms of section 54 of this Act.").
The noble Lord said: In many ways this amendment is tied up with Amendment No. 66 and I hope that the Minister will see the connection. Perhaps his explanation will go a little further than the explanation we were able to get from him as regards Amendment No. 66. Again, I can see the difficulty and I do not want Scottish Homes always to be responsible for every piece of property it has bought. I believe that it has a responsibility to approve the kind of people who are going to be factors in the property. I beg to move.
The Earl of Dundee: Clause 60 is designed to prevent possible abuses of the right to acquire by ensuring that it is not possible to circumvent the provision that all transfers under tenants' choice should be to landlords approved by Scottish Homes or to Scottish Homes itself. By requiring Scottish Homes to approve the first disposal by a receiving landlord of property transferred under the tenants' choice provisions, possible collusion, however unlikely, between an approved landlord and a second landlord who might not have attracted the approval of Scottish Homes will be prevented. The clause, therefore, will operate to the benefit of the transferring tenant.
Amendment No. 67 would, however, compel Scottish Homes only to approve first disposals of property transferred under Part III of the Bill to other "approved" landlords. This is an unnecessary restriction. I do not believe that the house should necessarily have to remain in the private rented sector. For a number of good reasons the house may become vacant following acquisition—for example, if the tenant dies or voluntarily ends his tenancy. We should not rule out the possibility of the landlord selling the house for owner occupation provided Scottish Homes's approval is obtained.
I should like to assure the Committee that Scottish Homes will look very carefully indeed at the local renting market before deciding whether to approve a sale of property which transferred under the tenants' choice arrangement. There is no question of landlords enticing tenants to transfer their houses to them, then selling the property with vacant possession for substantial capital gains.
First, Scottish Homes will approve under Clause 54 only reputable landlords as receiving landlords. It is very unlikely indeed that any landlords out to make a fast profit will receive approval. Secondly, tenants transferring under tenants' choice will have the protection of their tenancy arrangements, and the
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anti-harassment laws will apply equally to them as to other private sector tenants. Landlords, therefore, will secure vacant possession only in circumstances where the tenancy comes to an end for good reason. Thirdly, as I have indicated, Scottish Homes will take into account all relevant information and the local circumstances before approving the disposal of property, whether tenanted, or available for rent or for sale. If the disposal is to a new landlord, the identity and standing of the new landlord will be relevant and important considerations.
This amendment is therefore unnecessary in the sense that the fears which may have prompted it are unfounded, and it is undesirable in that it would unreasonably fetter Scottish Homes's discretion in the process of approving disposals of property which transferred under Part III. I hope that the noble Lord will see fit to withdraw the amendment.
Lord Carmichael of Kelvingrove: The Minister has been a little more reassuring. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 68 and 69 not moved.]
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 70:
Page 36, line 27, at end insert—
("(3) Before giving consent under this section, Scottish Homes shall take such steps as it considers appropriate to secure that the tenants occupying the properties which are the subject of the proposed disposal are made aware of the proposal to dispose of the properties, and are made aware of the proposal to dispose of the properties, and are made aware that they have an opportunity to make within such time as may be specified, representations to Scottish Homes with respect to these proposals; and Scottish Homes shall consider any representations made within the time specified.").
The noble Lord said: I have already commented on the fact that the Minister reads his briefs so rapidly. The noble Earl, Lord Dundee, seems to be similarly affected. I did not quite gather the references to the protection of tenants in the speech he has just made. Perhaps he will reiterate what the protection is, as the amendment provides that tenants should be informed and consulted about disposal plans and have their views taken into account by Scottish Homes in the granting or withholding of consent.
The wording of the proposed subsection is derived from Clause 59(3) of the Housing Bill regarding disposals by housing action trusts, but it is equally appropriate in the Scottish context. Without this subsection the tenants' wishes can be entirely ignored. Perhaps the Minister can give us an assurance that that is not so. They need not even be aware of the planned disposal. That position is at variance with the Government's stated objective of encouraging greater individual control over the conditions in which people live. I look forward to receiving an assurance from the Minister. I beg to move.
Lord Sanderson of Bowden: As usual I listened carefully to what the noble Lord said in connection with the amendment. I shall try to speak slowly so that he hears the assurance that I am about to give him. The amendment seeks to place a requirement on Scottish Homes to take appropriate steps to ensure

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that tenants are advised of any proposal to dispose of the property they occupy and to have regard to tenants' views on the proposed disposal. I can assure the Committee that, before deciding whether to approve the disposal of property acquired under the tenants' choice provisions, Scottish Homes will be expected to take all relevant factors into account. The views of tenants on the proposal will be one such factor and an important one.
I do not believe, however, that there should be a statutory obligation on Scottish Homes to inform tenants, or to ensure that they are informed, or to carry out consultations in any particular way. Scottish Homes, which will be a highly responsible body, should be left to exercise its discretion on how it informs itself on the suitability and acceptability of a landlord's application to transfer the property he has acquired under the provisions of this part of the Bill.
On the noble Lord's point about the protection of tenants, I would point out that there are anti-harassment provisions—for example, in Clauses 33 and 34—and Clause 35 creates a new offence of harassment. At this stage I shall give what I think the noble Lord is asking for. I give an assurance that the administrative rules to which the Secretary of State will oblige Scottish Homes to adhere in the exercise of its functions will require Scottish Homes to satisfy itself that it is fully aware of the views of tenants occupying the property before it reaches a decision on any application to dispose of a property which an approved landlord has acquired under the tenants' choice provisions of the Bill. With that assurance, I hope that the noble Lord will seek to withdraw his amendment.
Lord Carmichael of Kelvingrove: The Minister continually comes back to the claim that Scottish Homes will be a highly responsible body. We hope and assume that it will be, and we know that the Government will take great care in that regard. There will also be a great necessity for Scottish Homes to keep its tenants informed. That is not always the case with quangos, which sometimes find it difficult to speak the same language as the people with whom they are dealing. A great deal of effort will have to be put into this. At the same time there will be an unprecedented growth in local activity. Local organisations and associations, citizens' advice bureaux, law centres and political surgeries of all parties will be trying to help tenants before they make up their minds whether to transfer to Scottish Homes and warning them if Scottish Homes intends to pass them on. We hope that the provisions will work out in the first few years; but 10 years from now the position may be very difficult.
I am glad the Minister made the reply that he did. I think he hopes for too much in believing that the responsible position and civic attitude of Scottish Homes can be taken for granted. However, I am happy with the answer he has given. I do not know whether the noble Lord, Lord Taylor of Gryfe, has anything to add.
Lord Grimond: Before the Committee passes on from this amendment, I should like to emphasise that this is a matter of great importance for many people.
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Will we have an opportunity to see the rules or the reference which he gives Scottish Homes on this matter? The methods of consultation are important. It may have to go on for some time because these matters may take some time to finalise. We are all grateful for the undertaking that the Minister gave, but perhaps he can be a little more explicit. Where will we see the rules and what will they contain?
Lord Sanderson of Bowden: It is difficult to give an assurance that administrative rules which will be drawn up by a body which is not yet in being can be brought before the House. I understand the feelings about the matter. The noble Lord, Lord Carmichael, understands as well as I do that Scottish Homes is responsible to the Secretary of State. I have given an assurance in the name of the Secretary of State that the administrative rules, which he will have to approve, will be brought forward. The Secretary of State will have to satisfy himself that the views of tenants occupying properties are taken fully into account. At this stage I do not think that I can go any further than that in answer to the noble Lord.
Lord Taylor of Gryfe: I thank the Minister for the assurance he has given. I should naturally have preferred to see that important obligation in the statute but, nevertheless, the Minister has given his assurance in the name of the Secretary of State for Scotland, and I accept it in that way. I should not expect to see all the administrative rules laid down and approved by the House, because we might then have another long debate on the subject.
I want the organisation to succeed. It will succeed through its fairness and the credibility that it will build up. One of the essential elements will be the taking into account of tenants' wishes and the effect of the policies on tenants. In view of the generous assurance that has been given, I beg leave to withdraw the amendent.
Amendment, by leave, withdrawn.
Clauses 60 and 61 agreed to.
The Earl of Dundee: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Church Commissioners (Assistance for Priority Areas) Measure
7.32 p.m.
The Lord Bishop of Rochester The Lord Bishop of Rochester rose to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.
The right reverend Prelate said: My Lords, the first Measure which I have to ask your Lordships' House to agree to present for the Royal Assent is the Measure which the General Synod passed unanimously in all three of its Houses, which the Ecclesiastical Committee of Parliament took only three lines in which to declare expedient, and which

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another place has already resolved, without a vote, should be presented to Her Majesty.
I now have the responsibility of asking your Lordships to concur. I am glad to be doing that during the week in which the concern of the Church of England for urban priority areas was declared afresh at a memorable service in Westminster Abbey. Clause 1 does not increase the powers of the Church Commissioners; it merely updates them so that a Measure that became law in 1954 to deal, in the main, with the post-war situation can, 34 years later, be amended so that the commissioners may assist the dioceses with finance for church buildings in any area where social or economic changes have taken place.
As the rector of a new town parish in the 1950s, and as the bishop of a dioscese where I have dedicated 25 new church buildings since 1961, I can testify at first hand to the importance of the existing powers of the commissioners to aid new housing areas and also to what that help has meant in many hard pressed parishes faced with an urgent need for a new building. But those powers have only been exercised in areas of recent housing development which the 1954 measure defined as:
"the provision of new dwellings after 1st April 1945".
That definition has been blunted by the passage of time, and Clause 1 of the new Measure substitutes a new definition which limits eligible housing developments in any area where social or economic changes have taken place during the 25 years prior to the application being made.
Clause 1(2) is a transitional provision to cover applications already in hand. Clause 2 gives powers to the commissioners to make grants or loans for church buildings in any areas, both town and country, where social changes demand additional provision. Clause 2(2) continues certain provisions of the earlier measure, including that of converting or adapting existing buildings, while Clause 2(3) makes possible the extension of the powers to cover buildings that are shared with another denomination under the Sharing of Church Buildings Measure 1970.
The other main purpose of the Measure is to allow the Church Commissioners to make payments to the Church Urban Fund. Clause 3 sets forth the manner in which grants or loans may be made to that fund, which has been set up to provide the necessary financial mechanism to target financial assistance from the Church to urban priority areas. The fund is appealing to the Church for £18 million to support expenditure of £1 million per annum in real terms. It is a major project to which all 43 dioceses in England are pledged, and it is hoped that it will make a valuable contribution to urban renewal by helping people to plan and implement ways of meeting their own spiritual, social and economic needs.
The Church Commissioners hope to contribute £1 million per annum and are confident that they can do that without prejudicing their existing commitments or their basic object, which is, of course, the financial support of the clergy, both those who are in full-time parochial work and those who no longer carry that responsibility.
The Measure is the natural development of the commissioners' historic role of helping the clergy in town and country, in new housing areas and in historic places and, pre-eminently, in poor parishes. I have been proud to be a Church Commissioner for over 27 years. I commend the Measure to your Lordships and ask you to concur with the other place.
Moved, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.—(The Lord Bishop of Rochester.)
Lord Sandford: My Lords, I rise as a fellow Church Commissioner, not to support the right reverend Prelate, because he does not need it, or to explain the Measure, because he has already done so, but because nearly 20 years ago when I worked on the Bench opposite it fell to me to welcome the right reverend Prelate to your Lordships' House and to congratulate him on his maiden speech. I thought that I might take it upon myself tonight, because this is one of his two swan songs, to thank him on your Lordships' behalf for his contributions to our debate over those 20 years, to wish him well in his retirement, and to say that, although we cannot look forward to hearing him again, we very much look forward to meeting him in those parts of the House to which he will still have access, not least the Bishops' Bar.
Lord Williams of Elvel: My Lords, from these Benches I should like to echo the remarks made by the noble Lord, Lord Sandford, who is my colleague on the Ecclesiastical Committee, and to wish the right reverend Prelate a happy and successful retirement. I talked to him the other day about what he was going to do in his retirement and he said that he was going to be much busier when retired than he has been as a servant of your Lordships' House. I think that we have all benefited from the right reverend Prelate's contributions, not least from the clarity with which he has expounded various measures which have come before your Lordships' House. If I may say so, we appreciate the common man's language which the right reverend Prelate has used.
Turning to the assistance for priority areas Measure, we wholeheartedly support the conclusions of the report, Faith in the City, and we are very glad to welcome the Measure. As the right reverend Prelate said, it occasioned very little debate in the Ecclesiastical Committee when it was discussed. There has been some public debate about the urban fund and I should like to reassure the right reverend Prelate from these Benches that that fund has our full support. We believe that it is a proper use for the funds of the Church Commissioners and we believe that it will give an opportunity for the Christian gospel to be presented in a proper manner to the inner cities. We certainly welcome that.
I do not see that there can be any argument about the use of church buildings; as the right reverend Prelate said, times have moved on. Clearly, there are buildings which need to be reconverted and other buildings which need to be renovated. In short, from these Benches I welcome the Measure. The right reverend Prelate was right to say that it caused no

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problem in the Ecclesiastical Committee in deeming it expedient and I understand that it caused no problem in the other place.
Lord Banks: My Lords, the right reverend Prelate has explained the content of this Measure very clearly. It would perhaps hardly be appropriate that I as a member of the United Reformed Church should speak in any detail about its contents. The Measure is concerned with the Church of England and its welcome intention to strengthen its presence in priority areas. Perhaps I may briefly anticipate the next Measure which we are to discuss, which enables the Church of England to make provision for co-operation with other churches. I greatly welcome such co-operation.
However, I rise principally to associate my noble friends and myself with the expression of good wishes to the right reverend Prelate and with the wish that he should have a happy retirement. I am particularly glad to have the opportunity to do so since when I was at school the right reverend Prelate, although not of course in his present capacity, was at that time the captain of monitors. As a consequence, I have always stood in considerable awe of him and since coming to your Lordships' House I have always been a little apprehensive lest he should take offence at something I may say and give me a monitor's detention.
The right reverend Prelate's contributions to this House over many years have been considerable, significant and much appreciated. He will be greatly missed among us and we all wish him well.
Lady Saltoun of Abernethy: My Lords, as the only Cross-Bencher present, I am sure that the Cross-Benches would also like to associate themselves with the good wishes of the noble Lord, Lord Williams, and other noble Lords who have spoken to the right reverend Prelate on his retirement. Of course, he counts as a Cross-Bencher and we shall always think of him as such.
The Lord Bishop of Rochester: My Lords, I am extremely grateful to all the noble Lords who have so kindly responded to the Motion which I have moved tonight. I appreciate very much my noble friend Lord Sandford's remarks; as he said, 19 years ago he was sitting on the other side when he welcomed me to the House. I am also very grateful to the spokesmen for both the Opposition parties and the Cross-Benches who have associated themselves with what he so kindly said. I have a memory that the noble Lord, Lord Banks, was very seldom in monitor's detention and I do not see him qualifying for it again.
I am particularly grateful to the noble Lord, Lord Williams, for his support for the Church urban fund and because he went out of his way to say that he regarded this as a proper use for the Church Commissioners' money. We appreciate that very much indeed. I am grateful that the noble Lord, Lord Banks, speaking as a member of the United Reformed Church, saw in this Measure a move by the Church of England which he could welcome and
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support. I shall value his support in the next Motion which I have to move in a few minutes. I commend the Motion to the House.
On Question, Motion agreed to.

Church of England (Ecumenical Relations) Measure
7.48 p.m.
The Lord Bishop of Rochester The Lord Bishop of Rochester rose to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.
The right reverend Prelate said: My Lords, I beg to move the second Motion standing in my name on the Order Paper. This second Measure which it is my duty to present to your Lordships tonight is an enabling Measure which will make it lawful for the General Synod to promote canons in matters of ecumenical relations. It comes before this House after overwhelming votes in all three houses of the General Synod and after the Ecclesiastical Committee of Parliament has deemed it to be expedient.
The need for the Measure arises from the growth of co-operation at the grass roots, in the parishes of the country, rather than from another round of high-level negotiations. In an increasing number of places up and down the country, co-operation between the local churches of all denominations is developing apace. There are now 700 local councils of churches and nearly 500 local ecumenical projects, where churches are working very closely together and where there is often a considerable amount of shared worship.
The Church of England is involved in many such projects, not only with the English Free Churches but also with the Roman Catholic Church, for it is important to note that in no fewer than 110 places the Church of England is participating with Roman Catholics either alone or in a wider scheme. If my diocese is anything to go by, there are in addition many places where the Church of England welcomes the local Roman Catholic congregation to the parish church for its own mass.
Things have been happening very fast in recent years and shared worship has run ahead of the law. Section 15 of the Act of Uniformity 1662, in dealing, for instance, with common prayer requires everyone who preaches in a parish church to have a bishop's licence. Therefore technically every time a Roman Catholic priest or a Free Church minister or layman preaches at a Church of England service that law is being broken.
The Sharing of Church Buildings Measure, which I had the honour to move in your Lordships' House in 1970, permitted for the first time the sharing of buildings. Although it allowed a measure of shared worship, that was not its primary aim.
In 1980 the House of Bishops issued a code of practice on ecumenical relations in order to provide guidelines for ecumenical co-operation. That code was an interim document produced in the expectation that there would soon be substantial

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changes in relationships between the Churches. Sadly, very sadly, in the judgment of many of us, those changes have not yet come about. So the House of Bishops had to establish a working party under the chairmanship of the former Bishop of Derby to consider the Anglican involvement in local ecumenical developments. The measure now before the House and the canons which are proposed attempt to implement the recommendations of the Derby Working Party.
Clause 1 of the Measure makes it possible for provision by canon to be made for joint worship with other Churches and for the use of Church of England buildings by members of other Churches. Clause 2 makes it possible for a canon to permit a bishop to authorise areas in his diocese to participate in local ecumenical projects. Clause 3 lays down who may be permitted to preside at the Holy Communion and to solemnise marriages, while Clause 4 allows clergy from the United Churches of South India, North India, Pakistan and Bangladesh when visiting England for a limited period to exercise their ministry in both Anglican and non-Anglican churches. This is an amendment which many feel is long overdue.
Your Lordships will see that, while the Measure and the canons give legal authority for co-operation with Christians of other traditions, there are at every point carefully drafted safeguards. This means that they do not go as far or as fast as some enthusiasts would like. They have, however, received the overwhelming support not only of the three Houses of the General Synod but also of the 43 Diocesan Synods.
There are at present no national schemes or proposals for union before the Church of England. Therefore it is desirable to establish some rules for Church of England parishes and clergy to follow in ecumenical relations. This Measure enables such rules to be established. I commend it to your Lordships' House in what, as one noble Lord has already suggested, may well be my last speech from these Benches. When I spoke here for the first time, it was about the sharing of buildings and tonight it has been my duty and pleasure to speak about the sharing of ministry.
I rejoice that, despite all the disappointments in Church relations of the past two decades, this is a welcome indication that the ecumenical movement is still moving. I beg to move.
Moved, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.—(The Lord Bishop of' Rochester.)
Lord Williams of Elvel: My Lords, the House will be grateful to the right reverend Prelate for moving the Church of England (Ecumenical Relations) Measure. The House will note that there are perhaps more items of controversy in this Measure than there were in my view in the previous Measure that the right reverend Prelate moved.
It is true that this matter was discussed in the Ecclesiastical Committee as is proper and it is true
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that that committee deemed the Measure to be expedient. Nevertheless, there was considerable discussion in that committee about Clause 5 which I should like to bring to the Floor of your Lordships' House. Clause 5 refers to the safeguards which I think the right reverend Prelate mentioned. It defines those Churches which may be designated by the two archbishops, acting jointly, as a Church to which the Measure applies.
I cannot imagine that anyone would quarrel with the right reverend Prelate when he expresses his sincere desire for progress in ecumenical relations. It must be right that various Churches of all denominations should try to come closer together. That has been a movement which I personally have supported. My father supported it and others have supported its general thrust.
Nevertheless there are certain criteria which I am sure the right reverend Prelate would accept that we have to insist on if ecumenical relationships are going to correspond to what some of us believe to be the proper doctrine of what I shall refer to as one catholic and apostolic church.
Clause 5 stipulates as a criterion for a Church to be designated by the archbishops that that church should subscribe to the doctrine of the Holy Trinity and should administer the sacraments of baptism and holy communion. Some of us have doubts—I put it no stronger than that—about simple subscription to the doctrine of the Holy Trinity as opposed to the other doctrines in the Nicene Creed. I raised this matter with the right reverend Prelate before the debate, so I hope that this does not come as a sudden challenge. I do not mean it to be a challenge. Some of us believe that simple subscription to the doctrine of the Holy Trinity is not sufficient, although it is necessary, to qualify for a designation by the two archbishops as Churches with which the Church of England should properly enter into ecumenical relations. There are other extensions beyond the doctrine of the Holy Trinity which are contained in the Nicene Creed and which are represented in the corpus of belief of the Church of England which I would qualify as being the corpus of belief represented by the Book of Common Prayer.
I should be most grateful if, when the right reverend Prelate comes to reply, he will let us know—I hope, if I may say so without being controversial, in a slightly fuller manner than the right reverend Prelate the Bishop of Derby was able to let us know in the Ecclesiastical Committee— exactly why the Holy Trinity doctrine was chosen as a fundamental bottom line belief, as it were, for a Church that could be so designated.
I do not wish at all to enter into theological controversy but I am sure that the right reverend Prelate will recognise that this is a matter on which many people do feel quite strongly. When he does come to reply I shall be grateful if he will enlighten us on exactly why this expression has been chosen.
Lord Banks: My Lords, in my previous intervention, I said that I greatly welcomed co-operation between the different Christian Churches. The United Reformed Church, of which I am a member, does of course include two traditions—the

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Presbyterian and the Congregational. Having moved home, my wife and I are just about to join a new Church. That is the Amersham Free Church. The Church is interesting, in that it is a full member of the United Reformed Church and a full member of the Baptist Union. But, going beyond that, that free Church representing three traditions works in the closest possible way with the Church of England and the Methodist Church in Amersham. It is to be hoped that the co-operation will be strengthened and extended. I welcome all such co-operation and I am glad that the Measure which we are discussing will facilitate it.
8 p.m.
Lord Fanshawe of Richmond: My Lords, I should like to thank the right reverend Prelate for taking us so carefully and skilfully through the Measure which is before your Lordships' House, and to associate myself with the comments which have been made by noble Lords on both sides of the House concerning his retirement. I want to join in thanking him for the work which he has done in the House over the years.
I should not like the Measure to pass without making some comment on Clause 1 of the draft Canon B43. While I support and agree with all the comments which have been made by the noble Lord, Lord Williams of Elvel, Clause 1(1)(a) fails to mention the Book of Common Prayer or to enjoin parochial church councils in their duty to use it.
Noble Lords who are members of the Church of England have to suffer in our parish churches on far too many occasions the Series 3 rite, which is an alternative to the Book of Common Prayer. More and more it is becoming the only liturgy in use in many parish churches. It is rare today to find a church where one can attend Matins. Occasionally it is imposed on the members of the church after a sung Eucharist so that the church empties and a few people remain for Matins. It is rarely used as a separate service.
More and more the priests who leave our theological colleges tend to leave with the idea that Series 3 is the liturgy which should be used today. Fewer and fewer parish priests are prepared or wish to use the 1662 Prayer Book. Recent events about which we have read in our newspapers concerning a village called Hartley Wintney not far from London have seemed to me to be the tip of the iceberg of what is going on in many parish churches at the present time. I was delighted to see that the parishoners in Hartley Wintney won their battle and will not have their altar wheeled around the church on a trolley or have the pews removed. However, the fact that that sort of dispute can take place in the Church today is indicative of the attitude of many of the leaders of the Anglican Church.
We are told that the young dislike the 1662 Prayer Book. I am not sure that that is correct. However, that is what we are told. We are told that people like myself are out of date and do not count in the Church. I should like to take the opportunity on my own behalf to warn the Episcopate that we may be old-fashioned and out of date but we are the backbone of the Church and we should not be ignored in the way that many people who have
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attended church all their lives are finding they are, particularly in relation to the Prayer Book.
Finally perhaps I may quote the noble Lord, Lord Williams of Elvel, from the Official Report for 29th October 1987 at col. 708. In that debate he said:
"The rubrics of the Book of Common Prayer are and have a certain hallowed authority, if I may put it like that. At our peril we move away from the tradition of the Church of England as enshrined in the Book of Common Prayer".
The Lord Bishop of Rochester: My Lords, I am very grateful to those of your Lordships who have taken part in the debate. I appreciate the kind words of the noble Lord who has just spoken in associating himself with what others said earlier. I am grateful to both the noble Lords, Lord Williams and Lord Banks, for their support for the Measure.
I should like to put Clause 5 in its historical context. I well remember, when the British Council of Churches was inaugurated in 1942, that Archbishop Geoffrey Fisher, then Archbishop of Canterbury and the second president of the council, was concerned that those from the Society of Friends and from the Salvation Army who had been associated with many inter-Church activities and consultations in the 1930s should not be excluded from the new British Council of Churches, which was then coming into being. With his own particular genius for finding a way through problems of that sort, he found a form of words which enabled those two bodies, as well as the YMCA and the YWCA, to be associated with the council from the start.
The measure reflects a change of emphasis which has taken place in the past 45 years or so. It reflects the recent ecumenical discussions that have taken place in which Roman Catholics and others have been involved on baptism, eucharist and ministry. It reflects a renewed emphasis on what is sometimes called the Lambeth Quadrilateral—the four main points upon which the Anglican communion stands: the Bible, the Creeds, the threefold ministry and the two dominical sacraments. It is to reflect that and carry the support of those of Catholic loyalty in not only the Church of England but in other churches that the phrase is used. I am hound to say that I do not regard it as the best phrase. However, in the context of 40 years of continuing discussions and of the recent ecumenical discussions across the board, it makes a stand for the point of view which the noble Lord was emphasising.
The reference made by the noble Lord to the Book of Common Prayer is only marginally relevant to a Measure dealing with ecumenical relations. Let me assure him that the Alternative Service Book which succeeded Series 3 in 1980 is widely used. The bishops have taken particular pains to ensure that in all our theological colleges those who are being trained as the clergy of the future shall be trained both in the understanding and the use of the Book of Common Prayer as well as of the alternative book.
I would assure him that some things that happen in parishes happen because of pressure from the laity. Certainly in some of the parishes, like the one he quoted at Hartley Wintney—of which I have several in my diocese—it is very often the clergy who hold the restraining hand. I do not think that those who are loyal to the Prayer Book and who wish to see it

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maintained understand the pressures on the clergy in many cases for a much freer and much less traditional form of service.
I am grateful to many of my own clergy for the way in which they seek to hold the balance and to provide in their parochial programme for those who wish to worship according to the Prayer Book and for those who welcome and support the use of the alternative book.
Although it is only marginally related to the Measure, in courtesy to the noble Lord I have expressed myself at some length on that point. I can assure him that all of us in the House of Bishops and all those who sit on these Benches recognise it as a matter of concern in many places. We also know that in many other places the Church is growing, growing at quite a rate. In those places where churches are having to be extended and new churches built it is not because they are using the old Prayer Book; they are holding with difficulty to the alternative book and pressing on to something that possibly by the year 2000 will look even more different.
I come back to the Church of England (Ecumenical Relations) Measure and thank your Lordships for your support for it.
On Question, Motion agreed to.
Viscount Davidson: My Lords, before adjourning the House I should like to add my voice to those of other noble Lords and, on behalf of the Government, wish the right reverend Prelate the Bishop of Rochester a well-earned, happy and long retirement. He has graced the Bishops' Benches since 1969 and we shall all miss his episcopal presence and resonant voice. We shall also miss his occasional trips through the Government Lobby.
On behalf of the Government I should like to record our appreciation of his service to the House and of his contributions to our deliberations on many occasions.

British Railways (Penalty Fares) Bill [H.L.]
Recommitted to an Unopposed Bill Committee.

Saint Bennet Fink Burial Ground (City of London) Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twelve minutes past eight o'clock.

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