Sitting of 14 January 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  CITY OF WESTMINSTER BILL
  Read the Third time, and passed.

  GREATER MANCHESTER (LIGHT RAPID TRANSIT SYSTEM) (No. 2) BILL [Lords] (By Order)
  Orders for consideration, as amended, read.
  To be considered upon Tuesday 19 January 1988.

  LONDON REGIONAL TRANSPORT BILL (By Order)
  Order read for resuming adjourned debate consideration [10 December].
  That the Bill be now considered.
  Debate further adjourned till Thursday 21 January.

  HAMPSHIRE (LYNDHURST BYPASS) BILL [Lords] (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 21 January.

  BRITISH RAILWAYS (LONDON) BILL [Lords] (By Order)
  Order for Second Reading read.
  To be read a Second time upon Wednesday 20 January at Seven o'clock.

Oral Answers to Questions
  NATIONAL FINANCE

    OECD Countries (Expansion)
    Mr. O'Brien: To ask the Chancellor of the Exchequer what discussions he has had with Finance Ministers abroad concerning expansion targets for the Organisation for Economic Co-operation and Development economies.
    Mr. Wray: To ask the Chancellor of the Exchequer what discussions he has had with Finance Ministers abroad concerning expansion targets for the Organisation for Economic Co-operation arid Development economies.
    Mr. Holland: To ask the Chancellor of the Exchequer what discussions he has had with Finance Ministers abroad concerning expansion targets for the Organisation for Economic Co-operation . and Development economies.
    The Economic Secretary to the Treasury (Mr. Peter Lilley): The OECD does not set expansion targets. Therefore, my right hon. Friend discusses more fruitful matters with his fellow Finance Ministers.
    Mr. O'Brien: Is the Minister aware that before the on Venice conference last year the United States Treasury Secretary, James Baker called upon OECD Governments to try to set a recovery target? Since then stock markets have crashed and the statement by the Group of Seven countries did nothing, so Governments had to intervene. Is it not time that the United Kingdom Government started to intervene and to set up a programme to aid recovery in this country?
    Mr. Lilley: Since the fall in stock markets it has become apparent that most major economies were growing more rapidly than seemed to be the case at the time. We are now confident that there will not be a recession in 1988. On the United Kingdom economy, we predict 3 per cent. growth in the non-oil economy, which is very healthy indeed. The major countries of the world have co-operated in ensuring that the difficult period following the financial market crisis has been coped with.
    Mr. Wray: Does the Minister agree that the OECD estimates state clearly and categorically that the growth rate will fall from 2·75 per cent. to 1·75 per cent. in 1989? Is the Chancellor really saying that after he has sold off all the country's assets there will not be a recession or a slump, when there is an estimated balance of payments deficit of £5·2 billion?
    Mr. Lilley: I do not think that anyone can be categorical about growth rates in 1989. However, we can be reasonably assured that there will be some growth in 1988, albeit perhaps more modest than in the past. As I said, the British economy looks set to do particularly well, in spite of the gloom that the hon. Gentleman hopes to convey to the House.
    Mr. Holland: Surely the fact is that towards the end of last year the Chancellor said that there was no point in having a Group of Seven meeting unless there was agreement. There was no meeting, and there was no

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    agreement on anything significant. The statement at the end of December did not stabilise the markets until Governments intervened. The whole of OECD is now slowing down, and the effects of cuts in the United States budget deficit will aggravate that. How on earth can the Government be confident that the United Kingdom economy will continue to grow when the rest of the world is slowing down? Why do they not hold a meeting of the G7 countries to meet those targets for recovery asked for by United States Treasury Secretary Baker last year?
    Mr. Lilley: The G7 statement did help to stabilise financial markets.
    Mr. Holland: Why did the Government intervene?
    Mr. Lilley: We never comment on intervention by the British Government. If the hon. Gentleman believes statements that other countries were intervening, he can draw that inference from the G7 statement. We are reasonably confident that the British economy will do well in future because the policies that have brought us prosperity are precisely the policies needed in times of difficulty, if difficulty should arise.
    The Opposition's response to the past three questions sounds rather like the Noel Coward song that bad times are just around the corner.
    Mr. John Townend: Does my hon. Friend agree that, because of the twin deficits—the trade deficit and the federal deficit in America—America cannot continue to be the engine of the world's economy? Britain is playing its part; its high growth rate has resulted in a small balance of payments surplus. Does my hon. Friend think that the two surplus countries of Japan and Germany are doing enough to fill the gap left by America?
    Mr. Lilley: My hon. Friend is quite correct. It is important that the surplus countries as well as the deficit countries play their part in removing the imbalances that have plagued the world economy. The Japanese economy is growing strongly in terms of domestic demand and we hope to see a strengthening of growth in Germany as well. My hon. Friend is right. The British economy has been the strongest growing major economy in the western world.
    Mr. Beith: Do not the Chancellor's autumn forecasts depend on major corrections in the United States economy and on an expansion in domestic demand in West Germany and Japan? As that has been the subject of the Foreign Secretary's discussions with the Japanese Government, how can the Minister regard it as a fruitless subject for discussion?
    Mr. Lilley: No country in the OECD sets quantitative targets for GDP growth. That was the basis of the question that I answered initially. The outlook in Japan is for quite strong domestic growth, which will contribute to the removal of imbalances between Japan and the United States, and that is something that I welcome. I also welcome the presence of the hon. Member for Berwick-onTweed (Mr. Beith) today. I was sorry that he was not in the Select Committee yesterday when we were discussing, among other matters, VAT. We would have been interested to hear his views on where he would apply it.
    Mr. Soames: Does my hon. Friend agree that growth within the OECD is inextricably linked to free trade? Will he assure the House that, together with our OECD partners, we will do all that we can to promote free trade with Japan?
    Mr. Lilley: My hon. Friend has hit on one of the most important aspects of the future of the Western economy. We must resist all pressures to move towards protectionism. Free trade brings prosperity to all partners and we are foremost in promoting it.

    Civil Service (Information Management)
    Mr. Dalyell: To ask the Chancellor of the Exchequer if he has issued any guidance on information management in the Civil Service, as a result of lessons learnt during and since the Westland affair; and if he will make a statement.
    The Paymaster General (Mr. Peter Brooke): No, Sir.
    Mr. Dalyell: I gave the Paymaster General's office four days' notice of my question in the hope of a considered reply. Does the Minister dispute the enunciation by Sir Kenneth Clucas, who is a distinguished civil servant, that on 4 January the Prime Minister put Sir Robert Armstrong in a very difficult position, and that it was unethical for the Cabinet Secretary to embark on an inquiry to which he knew the answer before he started?
    Mr. Brooke: I have nothing to add to what has already been said by my right hon. Friend the Prime Minister, and other Ministers, in statements and in reply to questions.
    Mr. Marlow: Is my right hon. Friend satisfied that the system of information control within the Civil Service is sufficiently robust to prevent the leaking of unauthorised information to the hon. Member for Linlithgow (Mr. Dalyell)? If not, will he do something about it?
    Mr. Brooke: I think that my hon. Friend will agree that his question had a rhetorical purpose, and that rhetorical purpose was caught.

    Inflation
    Mr. Bill Walker: To ask the Chancellor of the Exchequer if he will make a statement on the latest outlook for inflation.
    The Chancellor of the Exchequer (Mr. Nigel Lawson): The forecast in the Autumn Statement was that inflation would be 4 per cent. in the fourth quarter of 1988. I shall present a new forcast at Budget time in the usual way.
    Mr. Walker: Can my right hon. Friend tell the House the last time on which the rate of growth exceeded the rate of inflation, as it did in the third quarter of last year? Can he also confirm that low prices are good for competition, jobs and the economy?
    Mr. Lawson: My hon. Friend is absolutely correct in pointing to the central importance of keeping inflation low for the strength of the economy. The very good performance of the British economy in all aspects over the past few years has been achieved because we have put inflation at the forefront of our policies. As for the comparison that my hon. Friend made between the rate of inflation and the rate of growth, it is more valuable to look at the figures for a whole year than for a quarter. We have not had the final figures for 1987 yet, and will not have them for a little while, but it may well be that 1987 will prove to have been the first year for a generation in which the rate of growth has exceeded the rate of inflation.
    Dr. Reid: In view of the optimistic remarks of the Economic Secretary that good times are just around the

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    corner, will the Chancellor confirm that Treasury forecasts show that next year there will be a higher rate of inflation, a lower rate of growth and a worse payments crisis than last year? What does he think Noel Coward would have said about that?
    Mr. Lawson: I will not answer the last part of the question, because to sing it would be out of order. Certainly the forecast is for a slightly higher rate of inflation in the fourth quarter—not for the whole year, because we do not make that forecast—of 1988 than there was in the fourth quarter of 1987. Nevertheless, that rate of inflation forecast for the fourth quarter of 1988 is not merely one quarter of the average rate of inflation when the Labour Government were in office, but is only about one half of the lowest figure that they achieved in any month during the whole of their period in office. As for the forecast rate of non-oil growth, it may be lower than last year, but it is higher than the Labour Government ever achieved in any year of their term of office.
    Sir William Clark: Is my right hon. Friend aware that most thinking people are well aware that one of this country's main achievements under his guidance has been the low rate of inflation?
    Mr. Holland: What about mass unemployment?
    Sir William Clark: Does my right hon. Friend further agree that the one thing any Government can do to help people on fixed incomes—pensioners and the like—is to keep the rate of inflation down so that the value of their money does not deteriorate, as it did in the 1970s?
    Mr. Lawson: My hon. Friend is absolutely right. During his very thoughtful and accurate question I heard a sedentary interjection from one of the junior Opposition spokesmen that there is mass unemployment. I should have thought on this day, when we have the figures showing that there has been a fall in unemployment over the past year of over 500,000, the highest ever fall in unemployment, that at least would have been welcomed by the Opposition.
    Mr. Chris Smith: If the Chancellor places such importance on the rate of inflation—as he clearly does, because he said yesterday to the NEDC that avoidance of inflation was at the "very heart" of Government economic policy—why have he and his Government taken a series of decisions in the past three months deliberately to fuel inflation by pushing up electricity prices, rents in the private and public sectors, water rates and nationalised industry prices? Is he proud of that?
    Mr. Lawson: I afraid that the hon. Member does not have the first idea of what causes inflation or what the rate of inflation is. The rate of inflation now is far lower than anything achieved by the Labour Government during their period in office. Not only does it compare very well with our past, but our relative inflation performance compared with other major countries has improved substantially.

    Council of Finance Ministers
    Sir Anthony Meyer: To ask the Chancellor of the Exchequer when he next intends to meet his counterparts in the European Council of Finance Ministers; and what matters he expects to discuss.
    Mr. Cash: To ask the Chancellor of the Exchequer when he next intends to meet his counterparts in the European Council of Finance Ministers; and what matters he expects to discuss.
    Mr. Brooke: The next meeting of the European Community's Economic and Finance Council is expected to be on 9 February. The agenda has not yet been decided.
    Sir Anthony Meyer: May I ask my right hon. Friend—and also say what a pleasure it is to describe him thus —whether, given Her Majesty's Government's commitment to achieving a single European market by 1992, he will discuss with his European colleagues arrangements for the reduction and eventual elimination of all customs examination of passengers arid goods travelling between countries in the European Community?
    Mr. Brooke: My hon. Friend will recall that under the Single European Act we have retained control of our own border arrangements on drugs, terrorism and antiques. I think that my hon. Friend will recognise the continuing relevance of Customs and Excise to that task.
    I am most grateful to him for his initial remark.
    Mr. Cash: Will my right hon. Friend note that the Select Committee on European Legislation recently produced a report drawing attention to the grave danger of the EEC proposals on value added tax? Furthermore, will he note that we have absolutely no intention of agreeing to those proposals, any more than Pym and Hampden had of paying ship money back in the 17th century, and that we regard them as gravely detrimental to the powers of our Parliament and its right, and the right of the Government, to decide and allocate tax priorities in the interests of our people?
    Mr. Brooke: The Government are studying the proposals made by the Commission for indirect tax approximations, but have made it clear that we could not accept any proposals that would restrict the United Kingdom's right to use zero-rating. The United Kingdom is not alone in having difficulty with the proposals. Tax changes can be agreed only where there is unanimity.
    Mr. Winnick: When the meeting with the Finance Ministers takes place, will they be told of the pressure from the SDP and Liberal leaders for VAT to apply to children's clothing, food, fuel and newspapers? Will they also be told that, while the British Government's economic policies are increasingly discredited in this country, it seems that the leaders of the SDP and the Liberal party have nevertheless been converted to Thatcherism?
    Mr. Brooke: There are a number of non sequiturs in the hon. Gentleman's question, but I, too, have noted the interesting but courageous proposals put forward by the alliance yesterday.
    Mr. Campbell-Savours: When the Minister meets his European counterparts, will he raise with them the fact that the Kuwaitis are increasingly purchasing large blocks of shares in European companies? Is the Minister aware that, despite assurances given by the Chancellor to the House the other day, the Kuwaitis have now increased their holdings in British Petroleum, and are using London broking firms to do so? Will he act now, in the national interest?
    Mr. Brooke: Under the internal market, of which the Government are in favour, British newspapers are freely

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    available throughout the Community. I have every confidence that my colleagues among Finance Ministers in the Community will have read of the developments concerning share purchasers to which the hon. Gentleman referred.
    Mr. Watts: Will my right hon. Friend impress on his European colleagues that there is no need for any increase in EEC own resources and that their priority should be the imposition of firm budgetary control, which was promised at Fontainebleau but for which we are still waiting?
    Mr. Brooke: Whichever Minister represents the British Government at Ecofin, he will certainly bear in mind what my hon. Friend has said. However, as the European Council will be meeting in Brussels the following week, there will he an even more adequate opportunity then.
    Mr. Gordon Brown: On the question of the EEC's VAT proposals, and notwithstanding the new proposals of the third party, the fourth party and the fifth party in British politics, does the Minister agree that, outside the alliance and Lord Cockfield, there is no public support for any attempt to impose VAT on vital necessities? Will he give us the assurance, which he has not yet given that the Government will implement none of Lord Cockfield's demands.
    Mr. Brooke: We have made a number of specific pledges concerning zero-rating, and the House would not expect me to add to them today.

    Industrial Productivity
    Mr. Stevens: To ask the Chancellor of the Exchequer what has been the growth of industrial productivity in the British economy over the last 12 months.
    The Chief Secretary to the Treasury (Mr. John Major): In the three months to October 1987 manufacturing output per head is estimated to have been 7¼ per cent. higher than a year earlier.
    Mr. Stevens: Does my right hon. Friend agree that that substantial increase in productivity is a major factor in keeping British industry internationally competitive? Will he also confirm that manufacturing output is growing faster than at any time since the early 1970s?
    Mr. Major: I certainly confirm what my hon. Friend has said. I should add that manufacturing output has now recovered from its loss during the recessionary period of 1980–81. Output is now above pre-recession levels and is rising sharply. We expect that it will continue to do so.
    Mr. Morgan: Would the Minister care to comment on the statement made last week in Dundee by the governor of the Bank of England, who said that growth in the British economy was unsustainably rapid? Before the governor made that statement, were his views discussed with the Government or, as his train passed through Nottingham on the way to Dundee, did he have the idea of forming his own branch of the UDM —the union of disgruntled monetarists?
    Mr. Major: I certainly cannot say whether the latter point is true. However, the governor was echoing what my right hon. Friend said to the Select Committee on the Treasury and Civil Service some time before. Specifically, my right hon. Friend said that the rate of growth prior to October, which was substantially above trend, was not
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    likely or expected to be sustained next year. However, output next year in the non-oil economy is expected to be 3 per cent. and that represents a substantial level of growth and is substantially higher than that achieved at any stage under the previous Labour Government.
    Mr. Neil Hamilton: Does my right hon. Friend agree that one reason for this rapid increase in output and growth is that, today, it is worth working because one can keep more of what one earns? Therefore, while it is welcome that the Labour party supports reducing the proportion of GNP that is taken in taxes by cutting spending, is it not unfortunate that it is only the New Zealand Labour party which supports that policy?
    Mr. Major: I understand that, from time to time, attempts have been made to introduce some of the ideas of the New Zealand Labour party to the Labour party of this country, but with minimal success. My hon. Friend is entirely right about the supply side effects of lower taxation, and my right hon. Friend the Chancellor is acutely aware of those effects.
    Mr. John Smith: If the Minister is claiming success for the Government's industry policies, can he explain why a balance of trade surplus of £5 billion has been turned into a deficit of £8 billion? What is the Government's strategy for correcting that difficulty?
    Mr. Major: The right hon. and learned Gentleman will know that in the period since 1981, and for the first time in many years, export volumes have grown at a similar rate to the world trade in manufactures. That feat was not achieved at any time during 1974–79. The right hon. and learned Gentleman—uncharacteristically in my judgment—is selling British manufacturing short. It is doing exceedingly well, and the size of our export volumes is the clearest possible illustration of that success. The size of the import volumes has a direct relationship with the fact that the British economy is growing substantially faster than that of our competitors. The right hon. and learned Gentleman should be well aware of that.

    Industry (Costs)
    Mr. Ian Taylor: To ask the Chancellor of the Exchequer what estimate he has made of the relative benefit to British industry of (a) I per cent. off interest rates and (b) 1 per cent. off pay rises.
    Mr. Lilley: A 1 per cent. moderation in pay rises would be worth roughly four times as much to British industry as a 1 per cent. reduction of interest rates, even if that were sustained for a full year.
    Mr. Taylor: I am grateful to my hon. Friend for those extremely interesting figures. Does he believe that industry could help itself by keeping a tighter grip on its unit pay costs and thereby ensure that inflation falls, which would lead to a decline in interest rates? Does he also believe that the statistics would be extremely helpful if those on the Opposition Front Bench understood what causes inflation?
    Mr. Lilley: My hon. Friend is absolutely right to highlight the importance of industry keeping control of its pay costs. I should especially like to pay tribute to the management and employees of the export industries, because the strong rise in productivity that they have

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    achieved has enabled them to keep their pay costs stable up to now, despite the considerable increases in the real earnings of the employees.
    Mr. Grocott: On the subject of interest rates, has the Minister had a chance to see the evidence from the National Consumer Council on consumer credit, which shows that eight chain stores are charging rates of interest between 32 and 39·9 per cent.? Does he not agree that that is a swindle, and what will he do about it?
    Mr. Lilley: I have not seen the figures to which the hon. Gentleman referred, but I shall examine them. It is now obligatory on those offering credit to make clear the terms on which they offer that credit. The best guarantee that people are not swindled is that they have competitive alternatives to which they can turn.

    International Finance Ministers
    Mr. Tim Smith: To ask the Chancellor of the Exchequer when he is next due to meet the Finance Ministers of the other major industrial countries to discuss the international financial situation.
    Mr. Bowis: To ask the Chancellor of the Exchequer when he is next due to meet the Finance Ministers of the other major industrialised countries.
    Mr. Lawson: I am in regular contact with my opposite numbers in other G7 countries.
    Mr. Smith: Does my right hon. Friend agree that one of the factors that makes it difficult for managers in industry and commerce, especially those involved in exports, to forecast and plan ahead is the volatility of exchange rates? What measures will he be urging upon his counterparts at the next meeting to try to achieve greater stability in exchange rates?
    Mr. Lawson: I agree with my hon. Friend. What are needed within a climate of low inflation all round are domestic policies that will sustain reasonable stability in exchange rates, which is of the first importance to successful trade and industry. I hope to say a little more about that in the debate that will follow later today.
    Mr. Bowis: Does my right hon. Friend agree that it is good news that we have had five consecutive years of growth in the Group of Seven industrialised countries? It is doubly good news that Britain is at the top of the league for such growth. It is a pity that Britain is at the top of another league table—the league table of the Opposition parties, who see nothing but unremitting gloom and despondency every time that something goes right.
    Mr. Lawson: That is a characteristic of the Opposition, and a rather sad one. It is not doing them any good, or doing any credit to the country as a whole. I found it particularly interesting at the meeting of NEDC yesterday, which I had the honour of chairing— [Interruption] This is a very moving moment in the history of the House, with the entry of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), but we are still one short.
    It was very striking that at the meeting of NEDC yesterday afternoon the TUC openly acknowledged the economic success and the economic strength of Britain at present. The argument was over priorities. Our priorities were different from its priorities, but it acknowledged Britain's economic success and strength.
    Mr. Robert Sheldon: Has the Chancellor of the Exchequer seen today's reports that the United States is selling special drawing rights for yen? That is the nearest thing to selling gold for yen. Does the Chancellor believe those reports, and if he does, does he think that the United States will properly defend its currency?
    Mr. Lawson: I have seen those reports and I have no idea at present whether they are true, but clearly that would be a move consistent with a determined American attempt to defend the dollar.
    Mr. Mullin: What does the Chancellor think would be the career prospects for a Finance Minister in Europe or in Kuwait who sold 20 per cent. of his country's largest company to a foreign power at knock-down prices?
    Mr. Lawson: The shares were sold by Her Majesty's Government at a very good price indeed. It was certainly not a knock-down price, and the British taxpayer did very well as a result of that. Contrary to what the right hon. arid learned Member for Mon klands, East (Mr. Smith) predicted, we have had to buy back only a tiny proportion, less than 2 per cent. It is true that following the stock market fall those shares fell considerably, along with many others, and the Kuwait Investment Office took the opportunity to buy, not all of them, but a substantial block of those shares. Anybody could have done that. However, as I told the House on Monday, it has given an assurance that it has no intention of seeking control of BP, nor any management role.
    Mr. Yeo: Will my right hon. Friend reassure the House that he will avoid committing too much of Britain's financial resources to concerted foreign exchange support operations for the dollar until it is clear that the United States Government are adopting policies that are themselves likely to produce a firmer currency?
    Mr. Lawson: That is certainly a policy position which I have taken throughout. During the greater part of the period since the Louvre agreement the Americans had been following such policies and were fully committed to the defence of the dollar. There was a period towards the end of last year when that commitment by the American Government appeared to be in doubt. Subsequently, however, they have taken action which suggests that they intend to defend their currency. The commitment of the United States is crucial, both in terms of intervention arid in terms of the appropriate internal domestic policies.

    EC (Internal Market)
    Mr. Cryer: To ask the Chancellor of the Exchequer what assessment he has made of the feasibility of the internal market of the European Economic Community in the absence of the harmonisation of value added taxation rates.
    Mr. Brooke: The Government strongly support the removal of barriers to trade within the Community, but they do not believe that approximation of VAT rates is a necessary part of this process.
    Mr. Cryer: If the Minister takes that view, will he formally repudiate the views of the Conservative appointee on the EEC Commission, Lord Cockfield, who believes that harmonisation of VAT is necessary? If he repudiates Lord Cockfield's views — and he has the opportunity to do so now—will he also repudiate any

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    attempt by the Government to put VAT on food, fuel and clothing, or on books and newspapers, which would be a tax on knowledge for the first time in our history?
    Mr. Brooke: Lord Cockfield is in no sense answerable to the Government. It will not have escaped the hon. Member's attention that there have been disagreements between the Government and Lord Cockfield in the context of his proposals. In response to an earlier question I indicated that I will be making no further pledges during the afternoon beyond those already given.
    Mr. Higgins: As the Government have made it clear that they propose to use their veto, if necessary, to defend the zero-rating concept, will my right hon. Friend make it absolutely clear to the Commission that there is no point in putting forward proposals which involve its abolition?
    Mr. Brooke: My right hon. Friend is correct in stating the Government's position. The approximation proposals are unacceptable as drafted, but discussion between member states is at a very early stage and it would be wrong to anticipate the outcome. The United Kingdom is committed to completion of the single market, but how this is best achieved is a matter for discussion between member states. I repeat the pledges on zero-rating which have already been given by the Prime Minister.
    Dr. Marek: The country will wish to know that the Minister will resist the arguments for value added tax of the party or parties of whom two representatives sit below the Gangway. The Minister has said that the Government have made specific pledges about what they will do and what they will allow in regard to the introduction of VAT. In view of this important occasion, will he list those pledges specifically? Do they include books, periodicals and medicines?
    Mr. Brooke: I share the hon. Gentleman's interest in the proposals that have emerged from the alliance Benches. But even into the life of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) some pleasure must have entered yesterday when the hon. Member for Rochdale (Mr. Smith) issued a statement saying that he was opposed to VAT on food. As to the pledges, those that have been given by my right hon. Friend the Prime Minister relate to food, domestic fuel and children's clothing and footwear.

    Economic Outlook
    Mr. Knox: To ask the Chancellor of the Exchequer if he will make a statement on the economic outlook for the rest of the current financial year.
    Mr. Major: The United Kingdom economy continues to show the winning combination of strong growth, low inflation and sound public finance.
    Mr. Knox: The Chancellor's economic policies have resulted in a substantial reduction in unemployment during the past year. Does my right hon. Friend think that present policies will result in a similar reduction in unemployment during the next 12 months, and does he think that there is any chance that unemployment will be less than 2 million in a year's time?
    Mr. Major: I certainly do not propose to make forecasts of the future rate of unemployment. My hon. Friend is entirely correct to point out that unemployment
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    has fallen by over half a million in the last year and 300,000 in the last six months, and today's figures again show unemployment down by 35,000. I am particularly pleased to see youth unemployment down and an especially welcome fall in the west midlands, Wales, the north-west and the north.
    Mr. Ashley: Will the Chief Secretary bear in mind that the collapsing dollar is very greatly damaging to our export industries, especially the pottery industry? Notwithstanding what was said a moment ago about our exports, will he do what he can to strengthen the dollar in order to aid our exports?
    Mr. Major: The fall in the dollar is undoubtedly unsettling, as my right hon. Friend has made clear on a number of occasions. The performance of British exports in recent months has been excellent and we are keen to ensure that that contiinues.
    Mr. McCrindle: Does my right hon. Friend perceive any danger of overheating in the economy in the months that lie ahead? Can he give the House any indication of what steps the Government have it within their power to take if that trend should develop?
    Mr. Major: We do not see any signs of overheating, so I think that the second part of my hon. Friend's question does not arise.

    International Debt
    Mr. Campbell-Savours: To ask the Chancellor of the Exchequer what initiatives he is taking with Finance Ministers of creditor countries to address the re-scheduling of a share of the debt of Latin American countries.
    Mr. Lilley: The United Kingdom will continue to play its part, along with other creditor countries, in rescheduling its share of developing countries' official debt at the Paris Club. As for commercial debts, that is a matter for the banks and countries concerned.
    Mr. Campbell-Savours: But is it not true that at the end of the day the bill for Third world debt written off by the banks may well be paid by the taxpayer, as banks write off losses against profits? If that is the case, does it not mean that the taxpayer may well be paying for ill-considered and unnecessary projects in some Third world countries? And, if that is the case, would it not be better to spend public money, taxpayers' money, in another way by simply increasing the amount of money available for Third world aid?
    Mr. Lilley: The hon. Gentleman misunderstands the nature of tax relief. If banks or other companies fail to make a profit, they do not pay tax. No money is handed out by the Treasury to them, and therefore there is no money available that is now going to them that could instead go to underdeveloped countries.
    Mr. Redwood: To ask the Chancellor of the Exchequer what responses he has received to his 1987 initiative to deal with the problem of developing countries' debt.
    Mr. Lawson: My initiative has been widely welcomed. Many countries have followed the United Kingdom's lead in converting past aid loans to grants and the Paris Club has agreed to several extended reschedulings of official debts. I am continuing to press for interest rate reductions

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    on such reschedulings. Following my initiative, the managing director of the IMF launched a separate proposal for interest rate assistance with these countries' multilateral debts via an expansion of the fund's structural adjustment facility.
    Mr. Redwood: While welcoming the excellent initiative of the Chancellor, may I ask him whether he agrees that the World Bank and the International Monetary Fund should go much further in expediting progress in this area by themselves writing off and making adequate provisions against the debts which they are putting on their books at unrealistic levels?
    Mr. Lawson: I think that the international institutions, which are backed by Governments, are in a very different position from commercial banks, which have to make sure that, if there are bad or doubtful debts, provision is properly made for them. It is, indeed, a matter of importance to the supervisory authorities in this country and other countries to ensure that that is done. I welcome what the commercial banks have been doing in this regard.
    Mr. Skinner: Is not the truth of the matter that in this financial year the amount of money that will be set against income tax relief in respect of the four main banks in Britain will be of the order of £1,000 million? Will the right hon. Gentleman also confirm that in the next financial year it is proposed that those debt provisions will rise even beyond that figure? Since the British public is of the view that we ought to be helping Third world countries, would it not make sense for the Chancellor of the Exchequer to allow money to go to Third world countries to bail them out, instead of bailing out the British banks?
    Mr. Lawson: I am sorry that the hon. Gentleman has wasted the time of the House by asking precisely the same question, based on precisely the same conception as his hon. Friend the Member for Workington (Mr. Campbell-Savours) asked, and which was answered by my hon. Friend the Economic Secretary. If a bank lends money to any borrower, whether an industrial customer or an overseas sovereign Government, and it turns out to be a bad debt, obviously there is tax relief on the bad debt. That is the law of the land. Equally, if, at the end of the day, the debt is paid, the tax relief in unwound.

  PRIME MINISTER

    Military Hospitals (Departmental Co-ordination)
    Mr Jessel: To ask the Prime Minister if she is satisfied with the co-ordination between the Secretaries of State for Defence and for Social Services concerning the use of beds in military hospitals for National Health Service patients.
    The Prime Minister (Mrs. Margaret Thatcher): Yes, Sir. Some 34,000 National Health Service in-patients, 4,000 day patients and 200,000 out-patients are treated annually in military hospitals in the United Kingdom. Ways of increasing the number of National Health Service patients treated in military hospitals are being considered by my right hon. Friends.
    Mr. Jessel: As the hospitals of the Royal Navy, the Army and the Royal Air Force, which have excellent standards, now take 34,000 National Health Service inpatients every year and could take very many thousands
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    more—on 6 January they had 495 beds available —will my right hon. Friend please urgently consider how they can take more? In particular, will she please consider whether waiting list money can be further applied?
    The Prime Minister: I am very much aware of my right hon. and hon. Friend's concern to see that we get as much health care out of the facilities as we possibly can. The ordinary health authorities can apply for waiting list money if they know of beds which are free in military hospitals and can made an arrangement for patients to be treated there, so we are going in the direction required by my hon. Friend.
    Mr. Cryer: Does the Prime Minister agree that the armed forces could provide more beds for National Health Service use and, indeed, provide facilities for the National Health Service—which is being cut back under her Government—if she adopted different priorities and shifted the £11 billion she is spending on nuclear weapons in the form of Trident to the National Health Service? In that way the continuing complaints about operations not being carried out would be brought to an end and we could spend money on patient care, instead of on mass extermination.
    The Prime Minister: The National Health Service is not being cut back. Over and above inflation, there has been provision for an extra 30 per cent. for the National Health Service. The hon. Gentleman might have got muddled up with the record of his own Government, who, 10 years ago, cut back the National Health Service, and who also cut in real terms nurses' and doctors' pay. Under this Government, the money has gone up, the number of nurses and doctors has gone up and the pay has gone up.
    Mr. Speaker: Order. The question is about beds in military hospitals.
    Sir Michael Shaw: Does my right hon. Friend agree that the limitation on the number of National Health Service patients dealt with by the services has been caused by a long-running wrangle between the Ministry of Defence and the DHSS? We on the Public Accounts Committee have been assured that that wrangle will reach a satisfactory conclusion by 31 March. Has that same assurance been given to my right hon. Friend?
    The Prime Minister: As my hon. Friend heard, 34,000 National Health Service in-patients are being treated by military hospitals, as are a lot of day patients and outpatients. I can assure my hon. Friend that health authorities are being encouraged to consider every possibility, including military hospitals, when putting in their bids for allocations from the waiting list fund. In view of my hon. Friend's question, I shall make further inquiries to ensure that what he wants is happening.

    Engagements
    Mr. Nellist: To ask the Prime Minister if she will list her official engagements for Thursday 14 January.
    The Prime Minister: This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Nellist: With Matthew Collier critical, Matthew Mulhall and Adrian Woolford of Coventry still waiting,

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    when the parents of the 90 bairns in the Midlands desperately waiting for life-saving heart surgery come to London on Monday afternoon to present to No. 10 petitions with over 50,000 signatures, will the Prime Minister meet them personally, or will she be too frightened to explain to them which children will live and which will not?
    The Prime Minister: I shall not meet them personally. [HON. MEMBERS: "Shame"] I remind the hon. Gentleman that that particular hospital was designated a supra-regional centre only in 1984, under a Tory Government, and since then over 560 open heart operations have been performed. There are vastly more open heart operations performed now than there used to be, and some 3,000 babies survive now who would not have survived eight years ago.
    Mr. Atkinson: To ask the Prime Minister if she will list her official engagements for Thursday 14 January.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Atkinson: Is my right hon. Friend aware that the first phase of the new Bournemouth general hospital in my constituency is due to be opened later this year? Is she also aware that that hospital was planned to be built 10 years ago but that, like so many others, it was a victim of Labour's incompetence in government, which brought the country to the brink of bankruptcy? Should we not be reminded more frequently of the chaos and cuts in the NHS under the Labour Government?
    The Prime Minister: Yes. The Labour Government not only cut the capital programme for hospitals, but, as I have said, cut nurses' and doctors' pay in real terms. The NHS has expanded enormously under us, as has the capital programme, and the number of nurses, the number of patients treated, both in-patients and out-patients, and the number of treatments have gone up.
    Mr. Kinnock: Will the Prime Minister tell us why she opposes the Protection of Official Information Bill of her hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), or is it a secret?
    The Prime Minister: For the reasons that have already been given in the House and elsewhere, because of the great complexity of the matter, because of the Government's responsibility for such matters and because we are considering a White Paper with a view to bringing forward a Bill. It is vital that this matter is dealt with by a Government measure.
    Mr. Kinnock: Is not it obvious that the Prime Minister's case is weak and that is why she has to Whip? In any case, the Prime Minister knows very well that the full facilities of the Government could so easily be put at the disposal of the hon. Member for Aldridge-Brownhills as he takes the Bill through the House, so her excuses are absurd. When even her right hon. and hon. Friends describe her attitude to and tactics on the Bill as "monstrous", "dangerous", "a political SAS" and as the tactics of the gulag, is it not obvious that her response has nothing to do with state security, and everything to do with a shallow, spiteful and spurious attitude?
    The Prime Minister: We believe that a private Member's Bill is not the appropriate way to secure changes in this difficult and sensitive area affecting the nation's
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    security, especially when a revisionary Bill affecting section 2 of the Official Secrets Act started its journey in the other place in 1979 but did not secure passage there. I remind the right hon. Gentleman that we need no lessons in security from him.
    Mr. Gardiner: Will my right hon. Friend today confirm that the purpose of the National Health Service is not to further the interests or feather the nests of COHSE and NUPE? Will she further confirm that the purpose of open tendering is to secure more resources for the Health Service to devote to patient care? Will she therefore condemn these foolish strikes?
    The Prime Minister: I obviously confirm what my hon. Friend has said. The purpose of the National Health Service is to bring more care to the patient. We are enabling treatments to be brought to the patient which were not available some years ago. We all regret any strikes. They are strikes at the expense of the patients, and I hope they will be condemned on both sides of the House.
    Mr. James Lamond: To ask the Prime Minister if she will list her official engagements for Thursday 14 January.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Lamond: Is the right hon. Lady aware that the Manchester royal infirmary is facing its greatest crisis in 200 years? It is having to issue warnings to its employees that it may not be able to pay their wages. Why does she continue to suggest that the only solution to this problem lies in increasing income tax, when she knows very well that her right hon. Friend the Chancellor of the Exchequer has billions of pounds in his pocket ready to be paid out in income tax cuts? A fraction of those cuts placed at the disposal of the National Health Service would remove fears from people, young and old, who are concerned for the future.
    The Prime Minister: My right hon. Friend has already made more resources available to the National Health Service this year, and next year about £1·1 billion extra will be made available out of the taxpayers' pocket. Next year, the average family will pay £1,600 to the National Health Service. That is a considerable amount. We are trying to see that full value for money is obtained from that.
    There are vast differences in efficiency between hospitals and between the ways in which the money is used, and our duty is to get the best value for money out of the resources that go into the Health Service.
    Mr. Harry Greenway: To ask the Prime Minister if she will list her official engagements for Thursday 14 January.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Greenway: Will my right hon. Friend confirm that the Conservative party remains the only party firmly committed to the modernisation of the British nuclear deterrent through Trident, given that the commitment of the Social and Liberal Democrats to that lasted all of three hours?
    The Prime Minister: I confirm that we are firmly committed to modernising the independent nuclear

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    deterrent with Trident. For one fleeting moment, I thought that we might be joined by another party, but apparently, as soon as it had a policy, it withdrew it.
    Mr. Salmond: Does the Prime Minister recall the pledges freely given by the Chancellor of the'Exchequer to the House on 31 March 1982 on "Britoil's crucial independence"? When will those pledges be honoured?
    The Prime Minister: My right hon. Friend the Chancellor made a statement this week on his attitude to using the golden share in Britoil. That statement stands.
    Mr. Leigh: When my right hon. Friend next meets or talks to her colleagues who are Heads of European Governments and receives their congratulations on becoming the longest-serving Prime Minister this century, will she remind them, as diplomatically as only she knows how, that she would certainly not have remained Prime Minister for so long, or even have become Prime Minister, if she had proposed as loopy a suggestion as that we should tax the clothes we give our children, the books they read and the food that we give them to eat? Will she remind them that one would need to have monumental hubris to expect to survive in political life by proposing such measures?
    The Prime Minister: I am grateful to my hon. Friend. The undertakings that we gave on this matter during the election — not putting VAT on food or children's clothing — stand in full, of course. Again, for one moment, I thought that another party might have a policy like that, but I quickly understood that it had not.
    Mr. Callaghan: To ask the Prime Minister if she will list her official engagements for Thursday 14 January.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Callaghan: Is the Prime Minister aware of the report last week that, under the 30-year rule, the file on Hugh Gaitskell had been embargoed? Does that have any connection with the allegation in "Spycatcher" that the former Leader of the Labour party was assassinated?
    The Prime Minister: That file was withheld in accordance with rules which are understood by the whole House and in precise accordance with some of those rules. It has been withheld for those reasons. [HoN. MEMBERS: "Why?"]
    Mr. Speaker: Order.
    Mr. Devlin: During her busy day, will my right hon. Friend take time to consider the situation in my constituency? Does she agree that parents of children in Cleveland are no different from parents in any other part of the country and that consequently, although at the end of the inquiry we may take individual measures, we should seek to reform the law relating to children and parents generally?
    The Prime Minister: I take note of the point made effectively by my hon. Friend.
    Mr. Roy Hughes: To ask the Prime Minister if she will list her official engagements for Thursday 14 January.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hughes: Does the Prime Minister recall the famous words in which she suggested that the National Health Service was safe in her hands? In view of the perpetual crisis in the service over recent months and the tragic cases that have been highlighted in the press, will she now recognise that many people throughout the country believe that she has blood on those hands?
    The Prime Minister: I am happy to inform the hon. Gentleman that for every five in-patient cases treated in 1979, six were treated this year. For every 10 out-patient cases, 11 have been treated this year. For every one heart bypass operation in 1978, there have been three this year. For every three hip replacement operations in 1978. there have been four this year. For every two cataract operations in 1978, there have been three this year. For every two cervical smear tests in 1978, there have been three this year. For every two chronic renal failure treatments in 1978, there have been five this year. 'That is a splendid record of success.

Business of the House
3.30 pm
Mr. Neil Kinnock: May I ask the Leader of the House to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): Yes, Sir. The business for next week will be as follows:
MONDAY 18 JANUARY—Second Reading of the Criminal Justice Bill [Lords].
Motions on the Rate Support Grant (Scotland) (No. 3) Order and the Revaluation Rate Rebates (Scotland) Order.
TUESDAY 19 JANUARY—Opposition Day (7th Allotted Day). There will be a debate on an Opposition motion entitled "The Current Crisis in the National Health Service".
Motions relating to Scottish rating and valuation regulations. Details will be given in the Official Report.
WEDNESDAY 20 JANUARY—Debate on motion to take note on the White Paper on the annual report on Hong Kong 1987 (Cm. 293).
Motion on the Food Protection (Emergency Prohibitions) Order
The Chairman of Ways and Means has named opposed private business for consideration at Seven o'clock.
THURSDAY 21 JANUARY — Second Reading of the Firearms (Amendment) Bill.
Remaining stages of the Duchy of Lancaster Bill.
FRIDAY 22 JANUARY—Private Members' Bills
MONDAY 25 JANUARY—Second Reading of the Regional
Development Grants (Termination) Bill.
[Documents for debate on Tuesday 19 January:
Non-Domestic Rates and Community Charges (Timetable) (Scotland) Regulations 1987 (S.I., 1987, No. 2167); Abolition of Domestic Rates (Domestic and Part Residential Subjects) (Scotland) Regulations 1987 (S.I., 1987 No. 2179).]
Mr. Kinnock: I am grateful to the Leader of the House. I congratulate him on his additional appointment, although I am sure that all hon. Members will regret the reason why that additional office had been thrust upon him.
Now that the Secretary of State for Social Services has conceded to the presidents of the royal colleges that it is necessary to increase "total resources", to use the Secretary of State's words, and the efficiency of their use in the National Health Service, can we look forward to further candour from the right hon. Gentleman during the Opposition day on the Health Service next week? Can we look forward to, for instance, the announcement of further funds which are essential if hospitals are to clear the £70 million-worth of deficits which still remain in this financial year and which must be lifted if the next financial year is not to begin with another under-funding crisis in the NHS?
Yesterday the Secretary of State for the Environment confirmed in a written answer that he had asked the Nature Conservancy Council to examine the scope for the privatisation of the nation's natural reserves. May we now have an urgent debate on the Government's intentions towards conservation and the future of the national heritage? Clearly, nothing is safe from the Government's predatory instincts, not even our countryside.
Given that this week we have seen yet a further erosion of the Government's support for firms involved in high
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technology, may we have a statement on policy for industrial research and development which will explain exactly how the Government propose that withdrawing assistance from innovation will somehow advance those industries on which our future as a nation depends, especially when our competitors are doing the opposite and giving more support to their advanced industries?
The House will have noticed the gravity of the threat posed by the massive increase in illegal imports of cocaine. May we have a statement on what the Government intend to do about this and whether they will recruit the 500 extra customs staff that are estimated to be necessary to deal with this murderous traffic?
Finally, will the Leader of the House now tell us when the House will have an opportunity to debate the televising of the House of Commons? Can he also tell us whether he is willing to cast off his coyness and join those of us who want this change and want it quickly?
Mr. Wakeham: First, I thank the right hon. Gentleman for his remarks at the beginning and say that I am sure the whole House is sad that Lord Whitelaw has had to retire from active politics. We all wish him a continued and speedy recovery, which is going on at present. [HoN. MEMBERS: "Hear, hear."]
With regard to the other matters that the right hon. Gentleman raised, of course the debate next week will enable my right hon. Friend to make quite clear the position regarding funding of the National Health Service. As I understand it, the meeting with senior medical gentlemen that took place yesterday was to discuss the way that the increase in funding that had already been announced was going to assist the NHS and continually improve its record.
With regard to the Nature Conservancy Council, as I understand it too—but I will check the matter with my right hon. Friend — a period of consultation and discussion is still going on, but I will see when is the most appropriate time to have a debate. It is obviously a very important matter that we shall have to come to in the House.
With regard to research and development plans, it is not right for a statement to be given at the moment, but many of the issues raised are just the sort of issues, subject to you, Mr. Speaker, that could well be part of the debate on the Regional Development Grants (Termination) Bill that will take place on 25 January.
On the question of cocaine and drugs generally, I will certainly refer the matter to the Home Secretary, but I have nothing to say at the moment.
I am sorry that I have not been able to announce today the date of the televising debate, as I had intended to do; but I can undertake to announce a date in my next business statement next week. I am anxious to have a debate at the time I said—around the end of the month. I think that the right hon. Gentleman will have to wait, if it is of any concern to him, for the views that I shall express on that day.
Sir Bernard Braine: The Leader of the House will know that the issues relating to abortion are often emotive. I hope that he will agree that a private Member's Bill that has secured time for debate on the Floor of the House will be enabled to be discussed fully for the House to arrive at a conclusion. I ask my right hon. Friend, therefore, whether he will give an undertaking

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that, if any attempt is made to prevent a proper debate on Friday week, he will ensure that the House is given an opportunity to reach a decision on this most grave and important matter?
Mr. Wakeham: I of course recognise my right hon. Friend's concern in the matter, although the point that he raises is hypothetical at present. I hope very much that it will not become a reality. However, I am sure that the House would wish to protect private Members' time if the chance to reach a decision on the Bill were threatened by the use of procedural devices.
Mr. Archy Kirkwood: Will the Leader of the House confirm that the announcement that he has made about the motions relating to Scottish rating and valuation on Tuesday night arises on a prayer that has been tabled in the name of my right hon. Friend and hon. Friends? If that is the case, may I warmly welcome the fact that these important regulations on poll tax implementation can be discussed? The opportunity to do so will be widely welcomed.
Has the Leader of the House yet had time to assimilate the results of the debate that we had only last night on the setting up of a Select Committee on Scottish Affairs? May we expect a statement and debate in the near future so that the Committee may be set up and start working on important issues north of the border?
Mr. Wakeham: I use the word "friend" with some care in these matters, but certainly the hon. Gentleman sitting on the hon. Member's left, the hon. Member for Orkney and Shetland (Mr. Wallace), wrote to me on these matters and I confirm that it was what I take to be the hon. Gentleman's hon. Friends who tabled this prayer that will be the subject of the debate next week.
As regards last night's debate, I was pleased to see the more flexible stance taken during the debate. The next thing is to read Hansard and see exactly what everyone's position is. Then we will decide how best to proceed from there.
Sir Anthony Grant: Has my right hon. Friend had an opportunity to study early-day motion 372 in the name of my hon. Friend the Member for Wokingham (Mr. Redwood)?
[That this House believes that honourable and right honourable Members should keep their speeches to 10 minutes or less when requested by Mr. Speaker in order to give more backbench Members of all parties an opportunity to speak, excepting only the four principal speakers in each debate.]
Will he consider, in conjunction with Mr. Speaker, the possibility of reintroducing the experiment which was very successful in the last Parliament, because any restraint on the length of speeches by windbags, especially Privy Council windbags, would be very welcome?
Mr. Wakeham: I have a great deal of sympathy with my hon. Friend. The intention is to get agreement to change Standing Orders to make this a permanent feature, but it is one of a number of procedural changes that we are considering, and I will make progress as soon as I can.
Mr. Dick Douglas: Will the Leader of the House reflect a little on what he said in reply to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) about the Select Committee on Scottish Affairs? Will he concede that the initiative lies in his hands
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and that, while the Committee of Selection could theoretically take certain steps, he should take the initiative and put down a motion to get the Select Committee established? Since Opposition Members have shown flexibility, is it not his responsibility, in keeping with his duties as Leader of the House, to take the initiative and put down a motion as soon as possible?
Mr. Wakeham: I recognise that the Committee of Selection is awaiting further guidance but, as I said to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), I was pleased to see the flexible stance taken by the hon. Member for Glasgow, Garscadden (M r. Dewar). If that had clearly been the Labour party position earlier on, the Committee of Selection would not have needed to report in the terms that it did. Once we have studied last night's debate in Hansard, it will be a question of proceeding to discussions.
Sir Ian Lloyd: My right hon. Friend will be aware that, in the exceptionally interesting and wide-ranging paper on the reorganisation of the Department of Trade and Industry published yesterday, there is a proposal that part of the Department should be restructured so that it could play a full part in assessing the contribution which science and technology could make I o the economic success of the nation. Does my right hon. Friend not agree that not only the DTI but also this House should have an opportunity to make such an assessment? Is such an assessment not long overdue?
Mr. Wakeham: I agree with my hon. Friend that discussions on matters of science and technology acre something for which he has been pressing me for some time. He puts it in a slightly different way, but I recognise the validity of his case. It is an important matter, but I hope that my hon. Friend will also appreciate that at this time in the Session there is a considerable amount of important Government business to deal with, so I cannot offer him time for that in the immediate future. I will, however, bear it in mind and, as soon as we have a bit more scope, we will do something about it.
Mr. Jack Ashley: Is the Leader of the House aware that the Cabinet papers just released under the 30-year rule show that, at the British nuclear tests in the Pacific, no high-level consideration was given to the safety of our service men, and the chiefs of staff admitted that they were dealing with an unknown quantity? As British nuclear test veterans have still received no compensation, could we have a debate on the matter as soon as possible?
Mr. Wakeham: I appreciate the right hon. Gentleman's concern, but I cannot promise him an early debate on the matter.
Mr. John Hannam: My right hon. Friend will be aware of the Home Secretary's announcement that a White Paper on the reform of the Official Secrets Act will be produced in June. Can he assure the House that we shall have the opportunity of a full debate on this important subject before the summer recess?
Mr. Wakeham: Yes, I can confirm that my right hon. Friend the Home Secretary hopes to lay before Parliament in June a White Paper on the reform of section 2 of the Official Secrets Act, and I can assure my hon. Friend that the House will be given an opportunity to debate it before the summer recess.
Mr. David Winnick: Is the Leader of the House aware of increasing concern that the Murdoch group is to take a larger stake in the Pearson group, so that the Financial Times could come under the control of Mr. Murdoch? Will the Leader of the House recognise that it would be completely wrong for that gentleman to own even more of the British press, and will he promise a statement early next week if necessary?
Mr. Wakeham: As the hon. Gentleman knows, clear rules are laid down governing mergers and takeovers of newspapers. I assure him that my right hon. and noble Friend the Secretary of State for Trade and Industry will conduct himself entirely in accordance with those rules and that a statement will be made if one is required.
Mr. Patrick Thompson: Bearing in mind the request made by the Leader of the Opposition for an early debate on the televising of Parliament, does my right hon. Friend agree that the scant respect for the great traditions and values of the House of Commons shown by many Opposition Members will do nothing to advance the cause of an early debate or, indeed, of the televising of Parliament?
Mr. Wakeham: Regardless of whether it advances the cause of an early debate, it is certainly a factor that a number of my hon. Friends will want to consider in their deliberations on these matters.
Mr. James Lamond: Will the right hon. Gentleman keep in mind the fact that he is the Leader of the whole House, including Back Benchers? Does he realise that, if he is to keep the kind regard that many hon. Members have for him, he must be careful to prevent incidents such as the recent placing of a two-line Whip on the Felixstowe Dock and Railway Bill, which was a private measure, and of a three-line Whip against a private Member's Bill sponsored by one of his hon. Friends? In addition, he gave a rather curt reply to last night's debate—he has certainly softened a little this afternoon — which also infringed the rights of Back Benchers who want to be part of the Select Committee on Scottish Affairs. Such incidents do not build up the support that is necessary if the right hon. Gentleman is to follow in the great traditions of his predecessors.
Mr. Wakeham: I know that my immediate predecessor was a hard act to follow and I shall do my best to serve the House in all capacities. However, the hon. Gentleman has not got his facts right on the earlier matters to which he referred, and that rather devalues his contribution. Matters of whipping are not matters for me or matters for discussion. I had a very few minutes in which to reply to the debate last night. I believe that we had a useful and satisfactory debate and that the way in which I proceeded will meet with the general satisfaction of the House.
Mr. Robert Adley: Is my right hon. Friend aware that every year, immediately before our debate on Hong Kong — my right hon. Friend announced this year's debate today—the Hong Kong media seem to regard it as necessary to whip up massive expectations of world-shattering announcements about to be made by the British Government. Will he make it quite clear that this is a routine annual debate, albeit an important one, and anybody expecting dramatic announcements from the Government as a result of it is likely to be disappointed?
Mr. Wakeham: The debate is likely to take up about half of a normal sitting day. As I know nothing of the speech that my right hon. and learned Friend the Foreign Secretary will make, I do not know of any special announcements.
Mr. Frank Haynes: Is the Leader of the House aware—[AN HON. MEMBER: "Can't hear."] Shut up. I apologise, Mr. Speaker. Hundreds upon hundreds of my constituents suffer from problems caused by mining subsidence and many of his hon. Friends have similar problems in their constituencies. The reason is that British Coal will not meet the costs of compensation or repairs to those properties but keeps wiping them to one side. Will the Leader of the House arrange for a debate before Easter so that something can be done to help those people?
Mr. Wakeham: Matters of dispute with British Coal are primarily matters for its management. I shall look into the matter and if there is anything that my right hon. Friend the Secretary of State for Energy or I feel requires a debate, we shall see what can be done.
Mr. Keith Raffan: My right hon. Friend may be aware that the Welsh Affairs Select Committee has decided to meet more frequently in Wales. Will he look into the possibility of the Welsh Grand Committee meeting in Wales—thus following the example of the Scottish Grand Committee, which meets at least twice a year at the Royal High school, Edinburgh—so that we can be more accessible to the Welsh people?
Mr. Wakeham: I do not have strong views about that matter, but all that I can recall is that the meetings of the Scottish Grand Committee cause me enough trouble, without adding to it. However, I shall see what can be done.
Mr. Alex Salmond: Will the Leader of the House allow time in the near future for a full debate on the Government's golden share in Britoil so that the House can determine whether it was misled by the Chancellor of the Exchequer on 31 March 1982, when he spoke of the golden share as being an effective means of protecting Britoil's independence?
Mr. Wakeham: I do not have anything to add to what the Chancellor of the Exchequer said in answer to a private notice question earlier this week. If the matter requires a debate, we shall consider that when the time is right.
Mr. Michael Fallon: Does my right hon. Friend agree that it is hard enough to find out what is going on in this place without the difficulties posed by the non-appearance of the Order Paper in its proper form and its haphazard distribution around the outbuildings? Will he undertake to see whether the Order Paper and the Votes and Proceedings can be printed properly, in their full form and according to their normal schedule?
Mr. Wakeham: I recognise that there have been some difficulties—there were some today—and I apologise to my hon. Friend and the rest of the House for that. We are doing everything that we can to ensure that they do not recur, and I shall report to the House if anything needs to be said.
Mr. Max Madden: Does the Leader of the House understand that there is considerable concern in all parts of the House at reports that the Government intend to abolish the rights of Members of Parliament to

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make representations directly to Ministers on immigration matters? Will he therefore arrange for an early statement from the Home Secretary so that he can be questioned on the Government's intentions in this matter? Will he ensure that the debate that is due to take place the week after next about the immigration rules is given sufficient time to enable all hon. Members to raise the issue of their ability to make representations directly to Ministers on immigration matters?
Mr. Wakeham: I can confirm that I shall be announcing a debate on these matters in my next business statement. That will be the occasion to deal with the points that the hon. Gentleman has raised. I shall ensure that there are discussions through the usual channels to ensure adequate time for that debate.
Mr. William Powell: When my right hon. Friend reflects on last night's debate about the setting up of the Select Committee on Scottish Affairs, will he bear in mind the two themes that emerged—that there should be such a Select Committee and that its conduct in the last Parliament was widely thought to be unsatisfactory? Is there not an obvious answer to the problem — the Committee of Selection should nominate only those hon. Members who do not serve Scottish constituencies?
Mr. Wakeham: My hon. Friend adds a novel twist to an already fairly complicated position.
Mr. Greville Janner: When can we have a debate on the special needs of special schools such as Western Park school in my constituency, where the combination of the reductions in funds for education and for health have combined to make life extremely difficult for the people who are trying to care for those children and for the youngsters themselves, especially in physiotherapy?
Mr. Wakeham: Subject to you, Mr. Speaker, it seems that some of the points that the hon. Gentleman wishes to make could be made in the debate next week.
Mr. Eric Forth: Has my right hon. Friend had time to consider the serious events in the Chamber on Monday? Is he aware that the hon. Member involved in the incident announced on radio the same day that, because of the short term of his suspension from the House, he proposes, if necessary and as he sees fit, to repeat the episode? Therefore, will my right hon. Friend allow an early debate on the procedures of the House, particularly on the disciplinary measures available to the Speaker, in order that any repetition of such an event is met with much more harsh discipline than was the case on Monday?
Mr. Wakeham: If there were a strong demand for a debate, I would look into it. The position was pretty clear earlier in the week, and I think all hon. Members hope that we do not have a repetition of that sort of thing.
Mr. Andrew Faulds: May I add my congratulations to the right hon. Gentleman, for whom I have had the warmest regard over many years, since we first travelled abroad together? I know him better than most. When can the right hon. Gentleman arrange that we should have a chance to debate foreign affairs again, because there are a number of very important issues that many of us would like to examine, such as the appalling conduct of the Israeli Government and its army in the middle east, the developments in central America and the
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continuing appalling situation in South Africa? Does he agree that these are all major matters that the House should be considering fairly soon?
Mr. Wakeham: The high regard of which the hon. Gentleman spoke is reciprocated, but that does not mean that I can find an extra day in an otherwise crowded programme in the next few weeks to debate foreign affairs. It is certainly an important subject and we will have to have a debate before long, but it will not be in the immediate future.
Mr. John Wheeler: Does my right hon. Friend agree that it is welcome news that the Treasury will authorise the minting of a £2 coin next year? Nonetheless, will he agree to a debate on the nature of the denominations of coins to be minted and issued and the design to be imposed upon them?
Mr. Wakeham: A special tercentenary coin will be minted. I recognise that a debate on the subject may be more interesting and enlightening than some debates we have, but I do not think that I can promise a debate on that subject in the immediate future.
Mr. Alistair Darling: Would the Leader of the House find time to debate the patronage and appointments by Ministers? I am thinking of the Lothian health board, where appointments have been systematically removed and replaced by card-carrying members of the Conservative party. When I was speaking to the board in Edinburgh this morning, one of them openly spoke of himself as being an agent of the Minister. That is unacceptable and cannot go on.
Mr. Wakeham: I obviously cannot comment on the particular case the hon. Gentleman raises. My impression, after a few years as Patronage Secretary, is that suitable candidates from whatever political party are hard to find for many jobs in public life. It would be more constructive for all of us to put forward suitable candidates than to criticise those who put themselves forward for public service.
Mr. Richard Holt: Will my right hon. Friend, notwithstanding next week's Opposition debate on the Health Service, seek to bring a Minister here to make a statement on the current position over meningitis? This is causing great anxiety and many hon. Members are surprised that a Minister has not already come to the Dispatch Box to air the Government's position on the subject. Will my right hon. Friend look into it?
Mr. Wakeham: I certainly recognise that this important subject is giving concern. I will refer the matter to my right hon. Friend to see whether any statement would be appropriate.
Mr. Gerald Bermingham: Would the Leader of the House take time to persuade his right hon. Friend the Chancellor of the Exchequer to come to the Dispatch Box, because today on two occasions a Treasury Minister and the Prime Minister were pressed on comments made in Europe by Lord Cockfield on the extension of VAT? This afternoon we have received assurances on fuel oils, children's clothes, food, and so on, but it is remarkable that we have not received such an assurance on books and newspapers. Perhaps the Leader of the House can persuade the Chancellor to reassure us that there are no proposals to impose VAT on books and newspapers.
Mr. Wakeham: I am grateful to the hon. Gentleman for his question. I assure him that I can deliver my right hon. Friend the Chancellor very shortly, but what he will say is a matter for him, not for me.
Mr. Phillip Oppenheim: Could my right hon. Friend find time for a debate on the tremendous damage being done to democracy by the sight of the squalid squabbling among the various factions of the alliance? Is it not true that, when the alliance was formed, its members told us that they would promulgate a new type of consensus politics? Is it not becoming apparent that it is not consensus politics that they are pushing forward, but nonsense politics?
Mr. Wakeham: I shall not delve too far into those waters. I shall merely say that I understand that the squabbling is not about how to divide up the Short money.
Mr. Peter L. Pike: Does the Leader of the House recognise that there is considerable concern about the possible extension of privatisation to the provision of leisure and recreation services by local authorities? Will he give the House an assurance that, if the Government are tempted to move in that direction, the subject will be fully debated in the House, and not sneaked through and added to the Local Government Bill by other means?
Mr. Wakeham: I have no doubt that any proposals from my right hon. Friend the Secretary of State for the Environment would be well worthy of debate in the House, and that he would welcome an opportunity of explaining his views. However, I do not think that I can add anything to the answer that I gave to the Leader of the Opposition.
Mr. David Nicholson: Will my right hon. Friend consider finding time for a debate on the report from the Foreign Affairs Select Committee on cultural diplomacy? Is he aware of the concern on both sides of the House about the funding and the administration of the British Council, which is so important to our influence and our exports abroad?
Mr. Wakeham: That is an important matter, and the report by the Select Committee is also important. However, I am afraid that the pressure of time is such that I cannot offer any prospect of a debate in the immediate future.
Mr. Pat Wall: As the Leader of the House has already said that changes are to be proposed in the rights of hon. Members to represent their constituents in immigration cases, can he ensure that a statement is made in the House next week — the week before the debate? This is yet another attack on the rights of hon. Members to represent their constituents.
Mr. Wakeham: I am not sure that the hon. Gentleman's analysis of the position is accurate. The reason that we are having a debate not next week but the week after is that that was found to be more convenient for both sides of the House.
Mr. Tony Marlow: Following the very eloquent question from my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), may I make a strong demand of my right hon. Friend that we should have a debate on that subject? My right hon. Friend will be aware that, on Monday, a hitherto totally unknown Member of the House, whom no one had clapped eyes on
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before, managed by appalling behaviour to get himself ejected from the premises and projected immediately on to our television screens.
This bad behaviour is increasing. Surely, if someone wants to be a martyr, there should be at least a little penalty; a little risk; a little bit of pain. If people want to be burnt at the stake on the Floor of the House, would not my right hon. Friend agree that at least they should pay for the faggots, or even a box of matches? If anyone is suspended from the House in future, surely he should lose his pay at the time when he is suspended.
Mr. Wakeham: I recognise the strength of my hon. Friend's argument, and I would guess that many other people think like him. However, I think that such measures would be controversial. It is a matter for the House and, as I have said, if there is a strong wish to debate it, I shall see what I can do. We should, however, take account of the fact that any hon. Member who has been suspended from the House is not relieved of all his constituency duties. Such matters, of course, would also have serious implications for you, Mr. Speaker.
Miss Marjorie Mowlam: Can the Leader of the House clarify his response to a question put earlier by the hon. Member for Havant (Sir I. Lloyd) about the chance of an early debate on the Department of Trade and Industry? It is very important to many companies interested in investing in the north-east, particularly with inward investment, to know what grants are available for the future.
Mr. Wakeham: What I said was that I thought that many of the points of substance in the report could well be debated on Monday, 29 January, on the Second Reading of the Regional Development Grants (Termination) Bill.
Mr. Patrick McLoughlin: Could my right hon. Friend find time next week, or in the very near future, for a debate on the conduct of local government? Is he aware that Derbyshire county council recently appointed Mr. Reg Race as its county director, on a salary in excess of £40,000, when his only qualification for the job seems to be that he is a former Labour Member of Parliament? Does my right hon. Friend agree that that is disgraceful and an abuse of local government, and if no debate is forthcoming, should we not consider the possibility of a Bill to outlaw such action?
Mr. Wakeham: I cannot promise a debate in the immediate future. While I have no wish to suggest any difficulties for Derbyshire, I am quite content that Mr. Race is where he is.
Mr. Nigel Griffiths: Will the Leader of the House give an early opportunity for a debate to reform the planning legislation that is allowing developers to build on green belt, green field and playing field sites in Marchmont, Morningside and Liberton in my constituency, and on similar sites in many other constituencies up and down the country?
Mr. Wakeham: Obviously I do not have the details, but I shall certainly refer the matter to my right hon. and learned Friend the Secretary of State for Scotland.
Mr. Bill Walker: Has my right hon. Friend noticed the growing tendency within some sections of the Scottish media to report matters that cannot be

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reported in England? If so, will he confirm that the matter can be debated in tomorrow's debate? If it is not raised tomorrow, will it be included in the Government's thinking in their White Paper on these sensitive and delicate matters?
Mr. Wakeham: What will or will not be in order in tomorrow's debate is not a matter for me. However, I should have thought that my hon. Friend, with the skill that he shows in such matters, might be able to make some of the points that he wants to make in principle.
Mr. Tam Da!yell: Has the Leader of the House reflected on early-day motions 228, 253, 272, 273 and 286?
[That this House notes that in the book, Campaign, By Rodney Tyler, the Selling of the Prime Minister; from behind the doors of Downing Street and Conservative Central Office—A unique inside account of the Battle for Power, the author on page 1, chapter 1, paragraph 1, sentence 1, states 'It was an extraordinary turnaround in fortunes from the moment on 27th January 1986 when Mrs. Thatcher secretly confided to a close associate that she might have to resign …' and on page 3 that 'On the eve of the crucial Westland debate she herself felt shaky enough to doubt her future' though some around her later sought to dismiss this as late evening anxieties of the sort that had disappeared the following morning. It is certainly true that if Leon Britton had chosen to, he could have brought her to the brink of downfall, by naming the real culprits inside Number 10. Instead, he chose to remain silent, and calls on the Prime Minister to give a full account of what transpired between 3rd January and 27th January 1986, at Number 10 Downing Street, in relation to the selectively leaked Law Officer's letter concerning the Westland Affair.]
[That this House notes that the Member for Aldershot on page 136 of his book Heseltine: the unauthorised Biography, states in relation to the Westland Affair that 'John Wakeham issued an order of the day which contained the trite, if effective message, that it was time for all good men to come to the aid of the party. We did.'; and calls on the Leader of the House, The Right Honourable Member for South Colchester and Maldon, to explain when he first knew the role of the then Trade and Industry Secretary, The Right Honourable Member for Richmond, Yorks, in the matter of the disclosure of a selectively leaked Law Officer's letter.]
[That this House notes that in his book Mrs. Thatcher's Revolution, published this week by Jonathan Cape and Co., Mr. Peter Jenkins writes, on page 200 'Britton himself refused to enlighten the Select Committee on any point of substance. However, his is reputed to have told close friends subsequently that not only has she known perfectly well what had happened but that, on the day following the leak, had expressed her satisfaction to him at the way things had been handled. However at that time, the downfall of Heseltine had not been achieved … He ( Mr. Britton) might point the finger at her ( Mrs. Thatcher). Potentially he now had the power to destroy her'; and calls on the Prime Minister to give the House a full account of her conversations with the then Secretary of State for Trade and Industry, the Right honourable Member for Richmond, Yorks, over the period from 3rd January and 27th January 1986, in relation to the selectively leaked Law Officer's letter concerning the Westland Affair.]
[That this House notes that in The Thatcher Years—A decade of Revolution in British Politics, published by BBC
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Books, Mr. John Cole, on page 170, considering the selectively leaked Law Officer's letter in the Westland Affair, writes 'why did he ( Sir Robert Armstrong) not give her a quick interim report when he discovered that the leak was an inside job, authorised by her Office? Why did Leon Brittan not tell her? Or the private secretary concerned? Or his chief, who sits in the same room? Or her press secretary? And why did she never ask?'; and calls on the Prime Minister to inform the House of the answers to these questions.]
[That this House notes that, in the book 'Not with Honour-The Inside Story of the Westland Scandal', on page 142, Magnus Linklater and David Leigh write that 'Instead, following Havers's complaint, she spoke privately to Brittan about the leak. Although this is something the Prime Minister has failed to disclose, to widespread disbelief, the evidence comes from an authoritative source, who told us: "The Prime Minister knew about the leak. She was pleased it had been done. There was a meeting between Brittan and her after the complaint from Mayhew. Only the two of them were present … Brittan assumed she knew of [ the leak's] origins. You must draw your own conclusions." One of Brittan's friends adds, "Nobody thought it was a problem. The complaints were out of the public domain and any inquiry was expected to be a formality. Leon wasn't worried at all about it."; and calls on the Prime Minister to give a full account to the House of the meeting between herself and Right honourable Member for Richmond, Yorks, referred to therein.]
In relation to what was said to my hon. Friend the Member for Edinburgh, Central (Mr. Darling), may I record that some of us have had nothing but courtesy from four Conservative Secretaries of State: Michael Noble, Jack Maclay, Gordon Campbell and, indeed, the right hon. Member for Ayr (Mr. Younger)? However, times have changed in Scotland, and Ministers now brutally throw people off health boards and other Government committees for the Secretary of State, which has never happened before—good Labour people who have served well.
That is partly the reason why—uncharacteristically, perhaps—for the first time ever, I have been asking questions about one of the right hon. Gentleman's colleagues, the Under-Secretary of State for Scotland—the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton)—who, absolutely without precedent, announced that he had an interest in a very controversial and contentious Bill: the Housing (Scotland) Bill. I asked whether, on Monday of next week, it would be proper for a statement to be made from the Government Front Bench —as the Selection Committee has put the ball in the Government's court—clarifying the role on the Standing Committee of a Minister who declares an interest in highly contentious legislation.
Is it proper that such a Minister should lead on, and be a major force in, such a controversial Bill? If it is considered that he should remain on the Committee, could we have a statement on whether etiquette, and, I believe. Government rules, have changed? This has never happened before in my 25 years in the House.
Mr. Wakeham: I am only prepared to answer the last part of that question. In answer to the first part, I have nothing to add to what I have said earlier. My hon. Friend the Under-Secretary himself raised his interests in the debate. He took the necessary steps to check whether he

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was conducting himself in the best traditions of the House and ministerial practice, and I am sure that he is doing exactly that.
Mr. Jim Marshall: Does the right hon. Gentleman recall that, before Christmas, I asked for an early statement about Government concern regarding job discrimination in Northern Ireland and that he gave an unfavourable reply? Is the right hon. Gentleman aware that, in view of the imminent election in the United States, American politicians are coming under increased pressure to support the MacBride principles and that that would lead to further reductions in investment and perhaps disinvestment in Northern Ireland? In view of that pressure, is the Minister now prepared to ensure an early statement from the Government so that American opinion can be reassured and so that we can have further investment in the Province and ensure higher employment levels there?
Mr. Wakeham: This is obviously an important matter, and I referred it to my right hon. Friend the Secretary of State. My right hon. Friend and his colleagues spend a lot of time encouraging investment from the United States and other places. If they feel that a statement would be helpful on this matter, I am sure that they will want to make one.

Points of Order
4.10 pm
Mr. Max Madden: On a point of order, Mr. Speaker. I wish to raise a point of order concerning the proceedings of the Standing Committee on the Immigration Bill. I gave notice of my intention to raise this matter to the Chairman of the Committee, who is in the Chamber—
Mr. Speaker: Order. I must tell the hon. Gentleman that he is not able to raise that matter in the Chamber. I also had notice of this point of order but I must tell the hon. Gentleman and the House that page 235 of "Erskine May" clearly states:
"The opinion of the Speaker cannot be sought in the House about any matter arising or likely to arise in a committee".
The hon. Gentleman must make his views known to the Ministers in the usual way. I cannot help him or allow him to raise on a point of order matters currently before a Standing Committee.
Mr. Madden: Firther to that point of order, Mr. Speaker, and with great respect, can you advise me whether it would be in order for me to write to you expressing my concern about the proceedings of the Committee continuing? In that way you would have an opportunity to reflect on the matters that I wish to raise and consider whether any matter is appropriate for your consideration.
Mr. Speaker: I will certainly accept a letter, but I cannot go beyond what I have said. What goes on in a Standing Committee is not a matter for me.
Mr. Tam Dalyell: On a point of order, Mr. Speaker. I would not have bothered the House with this point of order if it had affected only myself, but it affects a distinguished retired civil servant.
You may recall, Mr. Speaker, that, in question No. 2 today to the Chancellor, I attributed a view to Sir Kenneth Clucas, a former Permanent Secretary at the Department of Trade and Industry. The hon. Member for Northampton, North (Mr. Marlow) was then called and said to the House—certainly in the hearing of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) among others—that that information had been leaked to me. Sir Kenneth Clucas retired more than five years ago and there was no question whatever of a leak. Sir Kenneth made the statement that the Prime Minister had placed Sir Robert Armstrong in a very difficult position and that it was unethical for the Cabinet Secretary to embark on an inquiry to which he knew the answer before he started. That is the public view of Sir Kenneth Clucas and it is wrong for the hon. Member for Northampton, North to say that that information was leaked.
Mr. Speaker: I do not believe that that is a matter for me. I cannot be responsible for what hon. Members say, provided they are in order.

Autumn Statement
4.14 pm
The Chancellor of the Exchequer (Mr. Nigel Lawson): I beg to move,
That this House approves the Autumn Statement presented by Mr. Chancellor of the Exchequer on 3rd November 1987; welcomes the prospect of continuing low inflation and steady growth as the basis for maintaining the trend of rising employment; and congratulates Her Majesty's Government on the continuing reduction in the share of national income pre-empted by public expenditure.
Mr. Speaker: I must tell the House that a large number of right hon. and hon. Members wish to take part in the debate—no fewer than eight Privy Councillors. I do not subscribe wholly to the way in which the hon. Member for Cambridgeshire, South-West (Sir A. Grant) put his question to the Leader of the House today, but I would say to the House, and to Privy Councillors, that short speeches should be the order of the day if we are to ensure that more Back Benchers can be called. The Chair has—as yet— no authority to limit speeches to 10 minutes, but if speeches take about that time most of those on the list will be called.
I announce to the House that I have selected the amendment in the name of the Leader of the Opposition.
Mr. Lawson: The Autumn Statement debate this year is a little later than it has been in previous years. Part of the reason was to allow the Treasury and Civil Service Select Committee, which was established only on 24 November, to prepare its report. I believe that that delay was also for the convenience of the Opposition. I sympathise with the Committee's frustration that it was not constituted sooner and I congratulate my right hon. Friend the Member for Worthing (Mr. Higgins) and his colleagues on producing their report as promptly as they did.
Mr. John Smith: The right hon. Gentleman referred to the convenience of the Opposition. In case such ideas gain some currency, let me make it quite clear that we were asked whether we thought it would be a good idea for the Select Committee to report. We assented to that. That is the only way in which it was convenient to us and in that respect it was convenient to the Government and everyone else, so what is the Chancellor's point?
Mr. Lawson: I am glad that the right hon. and learned Gentleman agrees with what I said.
In my Budget statement last March I warned that:
"the biggest risk to the excellent prospect I have outlined is that of a downturn in the world economy as a whole. There are still serious imbalances afflicting the three major economies—the United States, on the one hand, and Japan and Germany on the other — which, if not handled properly, could lead to a simultaneous downturn in all three. And this in turn could be exaggerated by renewed turmoil in the foreign exchange markets, whose tendency to overshoot is as notorious as it is damaging." — [Official Report, 17 March 1987; Vol. 112, c. 817.]
Recent events have brought those concerns very much to the fore, and I therefore propose to devote most of my remarks today to the prospects for the world economy —not least because this may be my last opportunity to do so before this year's Budget statement, which, I can now tell the House, will be on 15 March. The important issue of public expenditure will, therefore, be dealt with by
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my right hon. Friend the Chief Secretary, when he comes to wind up this debate, if he is fortunate, Mr. Speaker, to catch your eye.
Mr. David Winnick: Before he departs from the subject of public expenditure, which apparently is to be dealt with by his colleague, does the Chancellor take on board the sort of feelings that have been expressed up and down the country in the past few months and certainly in the past few weeks, which is that, given the cash crisis in the National Health Service, if there is a choice between more money for the NHS and other essential services or continuing tax cuts, it should be the former that has priority? Does the Chancellor recognise the strength of feeling, even among Conservative voters, on that issue?
Mr. Lawson: When I appeared before the Select Committee on the Treasury and Civil Service—of which the hon. Gentleman is a mernber—I recall that he and I had a discussion on that matter. I do not propose to go into that matter any further today because I want to talk directly about the world economy. My right hon. Friend the Chief Secretary will deal with public expenditure and, in particular, I am sure that he will deal with the NHS in the course of his speech.
Mr. Nicholas Bennett: Does my right hon. Friend agree that, although the Government have cut income tax, tax yields have risen?
Mr. Lawson: That is quite correct.
Mr. Gerald Bermingham rose—
Mr. Lawson: I cannot give way again. I recall that, a few moments ago, Mr. Speaker pointed out that a large number of right hon. and hon. Members wish to take part in the debate. I do not believe that it is fair on them if I prolong my remarks by giving way more than a limited amount of times.
I presented my Autumn Statement to the House a bare two weeks after the collapse of the world's stock markets that has come to be known as Black Monday. Apprehension about the prospects for the world economy at that time was at its most acute. It was widely predicted that the equity market collapse would inevitably lead to a major world recession this year.
Two months on, it is easier to put the sharp fall in the stock market in October into some perspective. Although the scale and suddenness of the fall were unprecedented, it has increasingly been seen as in large measure a correction, following the rapid rise in the early part of 1987. In the three main markets—London, New York, and Tokyo—following the sharp falls in October, share prices have not fallen any further since the end of that month, and are at much the same levels as a year ago. The impact on consumer spending — the so-called "wealth effect"—should therefore be limited.
But a shock such as the stock market collapse can readily damage business confidence quite severely. Most of the major countries therefore acted promptly to reduce interest rates, both to deal with the immediate risk of a lack of liquidity and to sustain business confidence. I am sure that, in the circumstances of that time, that was right.
A further reason why business confidence has remained pretty well intact is that all the economic evidence published since October, so far from implying that world recession is imminent, suggests that the world economy

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prior to the stock market collapse was in fact markedly stronger than had earlier been recognised. So any slowdown there may be this year will be from a pretty vigorous momentum of growth.
It is now clear that activity picked up markedly during the course of 1987. Taking the seven major industrialised countries as a whole, output in the third quarter of the year was more than 3 per cent. higher than a year earlier, with industrial production in October more than 4 per cent. up. In the United States, industrial production in the third quarter of 1987 was 5 per cent. up on a year earlier, and unemployment reached its lowest level since 1979. Japan, the world's second largest economy, which had earlier been a little sluggish, began to move ahead briskly, with industrial production at the latest count some 8 per cent. higher than a year ago. The United Kingdom, as I indicated in the Autumn Statement, looks to have enjoyed 4 per cent. growth over last year as a whole, with again the third quarter stronger than the first two. The Canadian economy, too, is buoyant. It is only the performance of continental Europe, and particularly Germany, which remains disappointing, though even there modest growth is continuing.
Thus, overall, world growth has been proving extremely robust. However, the serious imbalances in the world economy remain.
At the heart of those imbalances lies the huge structural budget deficit in the United States. That is particularly damaging, not just because of the enormous size of the United States economy, but because the Americans, with their low propensity to save, have proved wholly unable to finance the deficit entirely from domestic savings. This means, inevitably, that the United States requires large capital inflows from overseas, with the counterpart, so long as this state of affairs persists, of a large current account deficit.
For years, there were calls for the United States to reduce its budget deficit — except, I have to say, from the Opposition Front Bench, which urged us to emulate it. But not nearly enough progress was made, not least because of the difficulty of reaching any sort of agreement between the Administration and the Congress on how to go about it. Indeed, I was interested to see that President Reagan himself said earlier this week:
"That deficit is an embarrassment and a shame—most dangerous, perhaps, because it signals the complete breakdown of one of the most basic functions of the United States Government."
There has now been some encouraging progress, with the legislation passed just before Christmas to reduce the deficit, relative to the level it would otherwise have been, by $30 billion for 1988 and $45 billion for 1989. But these steps, welcome though they are, will not be sufficient, by themselves, to reduce the deficit to a tolerable level.
It has been clear for some time that the reduction of the other set of imbalances-the current account imbalances —will depend on domestic demand in the United States growing more slowly than that in Japan and Germany for some years to come. One of the prime objectives of the major industrialised countries, meeting together in the Group of Seven, has been to achieve this in an orderly way. The United States action, and the decision of the German authorities to reduce their key discount rate from 3 per
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cent. to 241/2 per cent., the lowest rate they have had since the war, are helpful steps, and paved the way for the G7 communique issued on 23 December.
That communique also re-emphasised the agreement to co-operate to foster exchange rate stability, following a period of turbulence on the foreign exchanges which had seen a further slide in the dollar.
Wild gyrations in exchange rates can create grave uncertainty and damage business confidence throughout the world. Companies in all countries find it more difficult to plan for the future, and have to spend precious time, money and ingenuity on insuring themselves against exchange rate risks, when they should be concentrating on the real job of improving company performance. That is one of the main reasons why the CBI, for example, has stressed the importance to its members of a stable exchange rate.
It is thus natural that countries should seek to act together to prevent excessive exchange rate volatility. Moreover, history has shown that a readiness by countries to commit themselves to some form of exchange rate stability is the only feasible way of securing wider international co-operation on economic policy.
Mr. Stuart Holland: I am most grateful to the Chancellor for giving way. There is a paradox in what he is saying. He is talking about robust economic growth, which he is extrapolating from one quarter's figures for several countries, before the stock market crash. What are his comments on the OECD forecast for a slow-down in European OECD countries to 1·5 per cent. of GDP by 1989? Does he recognise that United States growth will have slowed down from about 3 per cent. a year in 1985 to not much more than 1·5 per cent. in 1989?
While exchange rate stability is an objective in itself, it is the volume effect on demand for United States exports that will be crucial. What action will the Chancellor take, with other Finance Ministers, to get spending going in the global economy, whi While exchange rate stability is an objective in itself, it is the volume effect on demand for United States exports that will be crucial. What action will the Chancellor take, with other Finance Ministers, to get spending going in the global economy, which is the real basis for the recovery of the United States' trade and payments deficit?
Mr. Lawson: Clearly I should not have given way to the hon. Gentleman.
Mr. Holland: Answer the question.
Mr. Lawson: As I have said on a number of occasions, there is likely to be some slowing down of world economic growth this year but it is a slowing down from a considerably higher level than was earlier recognized—the level in 1987. Far from there being any of the dangers that the hon. Member for Vauxhall (Mr. Holland) mentioned, the policies he advocates would simply lead to a resurgence of inflation.
If countries are indeed prepared to accept wholeheartedly the exchange rate commitments to which I was referring before that rather lengthy and inconsequential intervention, they will find themselves obliged to pursue domestic policies which are consistent with their exchange rate objectives. That applies most obviously to monetary policy, though fiscal policy also has a vital supporting role, particularly over the medium term. It is, however, an academic dream, divorced from reality, to imagine that sovereign states will be persuaded into consistent domestic policies simply by a process of careful international analysis and discussion.
Of course, countries may choose at any time to ignore the implications of the exchange rate arrangements they

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have entered into. Sovereign states cannot, in the end, be required to take particular courses of action. But if they are not prepared to play their part in an agreement with the visible, measurable, objective of broad exchange rate stability, within a framework of low inflation—I stress the necessity of that framework — it is hopelessly unrealistic to imagine that a more general agreement on consistency of fiscal and monetary policy would stand any chance at all of working. Those who suggest otherwise are not living in the real world.
Let me be quite clear. I am not suggesting a return to anything like the rigid exchange rate system that applied under Bretton Woods, which contained the seeds of its own destruction. But I believe that there are clear advantages in a more managed approach designed to prevent the wild gyrations of recent years, particularly in the dollar, and in so doing achieving greater international co-operation in economic policy more generally.
The events of recent years underline the point. It is most unlikely that the heady rise in the dollar during 1984 would have taken place if there had been an exchange rate agreement at the time, and the United States authorities had thus been obliged to give greater weight to the external value of the dollar in the conduct of their monetary and fiscal policy. Had that been so, the imbalances that plague us today, and the protectionist threat that accompanies them, could never have developed to the extent that they have.
Since the United States became converted in 1985 to the desirability of co-operation on exchange rates, we have had the Plaza agreement in September 1985, designed to deal directly with the problem of dollar over-valuation, and over the following 15 months we saw an orderly, but substantial, depreciation. The Louvre accord, signed in February of last year, provided a period of broad stability, intended to allow the major economies to adjust to the massive exchange rate changes that had already taken place.
A number of commentators have seized on the decline in the dollar that has occurred since October to suggest that the Louvre accord was fundamentally flawed, and thus unsustainable, from the outset. I have to say that I disagree. As Paul Volcker observed in a speech in Geneva in November:
"The argument of some seems to be that the agreement sacrificed appropriate internal economic management to the requirements of a stable exchange rate. That seems to me a misreading of both the nature of the understanding and, more broadly, the need to accord the requirements of exchange rate stability more prominence in economic policy-making."
I was pleased to note, too, that the Select Committee said in its report—and I quote:
"give weight to ensuring reasonable stability of exchange rates which was the original intention of the Louvre agreement."
It is of course clear, and this is implicit in both the Plaza and Louvre agreements, that stability of exchange rates cannot be achieved simply by wishing that it were so. Appropriate domestic policies—fiscal and in particular monetary — are required. For a period, the Louvre accord brought the necessary results—stable exchange rates, greatly helped by the fact that interest rates in the United States rose, and those in Japan and Germany edged down.
What brought that period of stability to an end was the perception in the market that the Americans were no longer committed to the Louvre agreement, and were simply concerned to prevent any risk of domestic recession
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as they saw it. The markets were also aware that, after commendable progress in fiscal 1987, the United States looked unlikely to reduce its budget deficit for fiscal 1988 by anything like the extent agreed at the Louvre.
During November and December, therefore, the dollar appeared to be given little weight in United States policy, with the inevitable result of turmoil on the foreign exchanges, with the dollar falling and expected by many to fall further. Last week, however, the United States authorities demonstrated a renewed commitment to supporting the dollar, with the Federal Reserve bank intervening, in concert with other central banks, to a very much greater extent, and doing so in a deliberately public way. This ending of a brief but damaging phase of so-called benign neglect is a step in the right direction. but it is idle to suppose that official intervention on its own, even when it is co-ordinated internationally and involves full United States participation, amounts to a coherent policy.
But intervention is an important tactical weapon, and it would be foolish not to use it when appropriate. In our own case, it has helped us to achieve a remarkable degree of stability for sterling, particularly against the deutschmark — something that is widely welcomed by British industry—and in the process to build up our foreign exchange reserves to an adequate level.
The desire at the Louvre to allow time for the exchange rate changes to have their effect on trade imbalances is equally important now. The financial markets were perhaps surprisingly slow to wake up to the imbalances in the world economy, but when they did, they showed signs of impatience at the slowness of the adjustment.
In fact, important changes are taking place. Although the published United States trade deficit has shown very little improvement so far the volume figures have moved very substantially: for example, in the year to the third quarter of 1987, exports had risen by 15 per cent., whereas imports were up by only 6 per cent.
As many of us had warned, there was bound to be a lag before these developments fed through to the current account — the well known J-curve. Repeated dollar depreciations, so far from speeding up the adjustment of the current account, can only add to the length of the J-curve. This is particularly the case if, at the same time, domestic activity is not adequately reined back.
Looking forward to the prospects for 1988, it is clear that there remain very real risks in the outlook for the world economy. While there is no immediate prospect of recession, the substantial dollar depreciation could lead to serious inflationary pressures in the United States and there still remains the threat of creeping protectionism, which could at any time escalate into a trade war.
However, the current strength of the world economy, which I illustrated earlier, does give us a breathing space in which to get the world economy on to a more sustainable footing. Some of the necessary steps have already been taken, but more action needs to follow. We must get the right policies in place, and pursue them with patience and determination, because there are bound to be periods of difficulty which we shall have to ride out. Provided we can do that, although there may be some slowdown in world economic growth, I am confident we can avoid the twin dangers of inflation and recession.
Clearly, we in Britain cannot wholly insulate ourselves from developments overseas, and we should not imagine otherwise. But subject to those inevitable uncertainties, it is clear that the British economy is well placed to continue

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the excellent progress of recent years in spite of the problems faced by many other countries and the turbulence in the financial markets.
Dr. Jeremy Bray: The Chancellor has emphasised the importance of exchange rate stability and the dependence of exchange rates upon the fundamentals, but he has said that it is not realistic to expect different Governments to agree about wider economic matters within their domestic economies. Can he reconcile those three statements?
Mr. Lawson: Yes, indeed. This has been the lesson of history. What I said was that the wider co-operation that has occurred has been a result of the acceptance by the major countries of an external discipline. The gold standard was a good example; it operated successfully for a long time. That is the point which I was seeking to make, and am I sorry that the hon. Gentleman failed to understand it.
Britain's strength is clear to the OECD, which forecasts that in 1988 we shall once again be among the fastest growing of the major industrial nations. It is clear to the many thousands of companies from overseas which are coming to invest in Britain. It is clear to those who run industry—take, for example, the American chairman of British Oxygen, Mr. Richard Giordano, who said last year:
"In the last half dozen years, Britain has done a pretty good job. If I was a company having to set up in Europe, it is Britain I would choose."
And it is clear, of course, to the British people, as they demonstrated in the general election only eight months ago.
In fact, the strength of the economy is clear to everybody except to the Opposition. Their problem is that they are so wedded to living in the past that they cannot accept that the policies we are following, which are precisely the reverse of those they followed when they were in office, can possibly have led to the success we see around US.
When it became clear that growth in 1987 was moving well ahead of the already strong trend of the past five years, the Opposition put it down to a short-lived preelection boom. I am sorry that the hon. Member for Dagenham (Mr. Gould) is not here. Being of New Zealand origin he may, I hope, have gone back to his native land to learn an excellent lesson from the policies being pursued by the Labour Government in New Zealand. They could certainly teach him a lot. Anyhow, last February he spoke of the
"irresponsible and profligate spending boom which the Chancellor hopes will sweep him to a general election victory".—[Official Report, 18 February 1987; Vol. 110, c. 942.]
I am glad that the Opposition accept that we had a sweeping victory. I have to tell the hon. Member for Dagenham and his hon. Friends that growth in the period since the general election has, if anything, been stronger than it was before the election, and further non-oil growth —less rapid than in 1987, but still in excess of anything ever achieved under the Labour Government — seems likely in 1988.
The Opposition put the alleged pre-election boom down to higher consumer spending. Again, they are barking up the wrong tree. Growth in 1987 was stronger
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than in 1986 precisely because investment growth picked up and exports increased more rapidly than in the previous year, in the aftermath of the oil price collapse.
The Opposition also claimed that this so-called preelection boom would be instantly reversed. In the last Autumn Statement debate, which I looked at just before coming to the Chamber, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) made one of his justly notorious predictions:
"An election victory would be followed by a massive increase in taxation",
he alleged. He went on:
"There would be more public expenditure cuts." —[Official Report, 17 December 1986; Vol. 107, c. 1253.]
He has now had his answer on public expenditure in the clearest possible terms, with the substantial increases announced in the Autumn Statement. Whether he was right or wrong about taxation, of course, remains to be seen, but he will only have to wait now for another two months, until 15 March, for the massive increase in taxation which he so confidently predicted, if indeed there is one.
Meanwhile, having warned of a dangerous boom, the Opposition have now reverted to their normal cry that higher borrowing and lower interest rates—an unlikely combination, if ever there was one—are needed to stave off impending recession.
It was once said that Wall Street had correctly forecast 13 out of the last five recessions. The Opposition have done even better, because they predicted recession in each and every one of the last six years, and in each and every case they have been wrong. The trouble is that all the old beliefs that they have clung to in spite of the accumulating evidence are being finally and definitively disproved. They believe that economic growth depends on ever higher public spending, paid for by higher borrowing and higher taxes, and on easy money. They should look at what happened last year. Public borrowing, even leaving aside privatisation proceeds, looks like turning out at the lowest level since 1970–71. Interest rates, as the Opposition themselves point out, are, if anything, a little above the international average, yet we have seen the strongest period of sustained growth since the war.
For some time the Opposition justified their attachment to higher borrowing by reference to the experience of the United States. The whole House, and certainly my hon. Friends, will recall the right hon. Member the Leader of the Opposition urging the Government to borrow on a massive scale and saying:
"They cannot even see the lesson of the United States economy when it is staring them in the face". — [Official Report, 31 July 1984; Vol. 65, c. 236.]
It is now all too clear who got the wrong lesson. With his unerring instinct for backing a loser, the right hon. Member made the keystone of his party's economic policy what has turned out to be the Americans' undoing—an excessive budget deficit.
Right hon. and hon. Members of the Opposition completely failed to appreciate the real reasons for the rapid creation of new jobs in the United States. They ignored the role played by the low tax burden. They ignored the importance of labour market flexibility and low wage increases, which contribute so much to the fact that unemployment in the United States is lower than in any major country in western Europe. They completely

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failed to appreciate the importance of deregulation and of the enterprise economy. As usual they got the wrong end of every stick.
The short point is this. A successful economy cannot be created by the Government pumping in money. It depends on the performances of businesses and the individuals at all levels who work in them. That is what led to the outstanding performance in Britain in 1987. That is what has given us an upswing of unprecedented length, strength and steadiness. That is what enables us to look forward to the future with confidence.
The most telling example of the transformation in British industry is to be found in manufacturing. The Opposition, of course, always paint a gloomy picture of British manufacturing as an industry in terminal decline, in contrast with what they allege to have been a golden age under their stewardship. Nothing could be further from the truth, and I will give the figures for 1979.
The plain fact is that manufacturing output fell over Labour's period in office whereas during our whole period of office since 1979 it has risen. But the contrast goes far beyond that, because the underlying strength of British manufacturing industry has been transformed. Britain's manufacturers have increased their profitability for five years in succession, the best performance for a generation.
Does the right hon. and learned Member for Monklands, East (Mr. Smith) wish to intervene? He will have his chance in a moment, anyway.
Mr. John Smith: I thank the right hon. Gentleman for encouraging me to ask the obvious question. He said that he wanted to be judged by output. Can he tell us by how much manufacturing output has increased since 1979, after eight years of Conservative Government?
Mr. Lawson: The point that I am making is such a simple one that even the right hon. and learned Member ought to understand it. It is that during the whole of the Opposition's period of office manufacturing output fell, and during the whole of our period in office it has risen. That is clear to everybody, even the right hon. and learned Gentleman.
In the past, strong growth of the kind we have seen would undoubtedly have quickly fed through into much higher inflation. In fact, although prices in 1987 rose somewhat faster than in 1986, as the one-off benefit of the oil price fall was lost, inflation remained low throughout the year. At the same time unemployment fell rapidly. Today's figures—which I am sure the right hon. and learned Member for Monklands, East will want to welcome as soon as he gets up to speak—show that during 1987 as a whole the number of people out of work fell by more than half a million — the biggest fall on record, with the rate falling far faster than in any other major country over the same period.
In the Autumn Statement, I forecast that growth in 1988 would be 2½ per cent. for the economy as a whole, with the non-oil economy growing at 3 per cent. I shall, of course, be making another forecast in the Budget and I do not intend to make one today. However, on the question of the non-oil economy, which is critical for new jobs, let me just say this. Growth of 3 per cent. for the non-oil economy in 1988, although slower than last year, would be a thoroughly creditable performance. The Labour Government never once achieved 3 per cent. growth, with
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or without oil. Indeed, it was only achieved once in the whole of the 1970s, yet we have achieved that rate of growth in four out of the last five years.
Keeping the economy on track involves keeping a constant watch on all the indicators of how the economy is developing and then taking action as necessary. I have never hesitated to act in the past when I have judged that there was a risk to our inflation objectives. I can assure the House that I shall not hesitate to do so in future. It is precisely by acting promptly that we have been able to avoid the need for drastic and destabilising lurches in policy. Our track record speaks for itself.
We enter 1988 with the British economy in good shape and the public finances sounder than at any time since the war. That is no coincidence. When we came to office in 1979 we gave the highest priority to restoring the public finances to a sound and sustainable condition. That is one of the rocks on which the new strength of the economy has been built. Thanks to that achievement, we have been able to choose to increase public spending, especially in priority areas, while continuing to reduce overall public spending as a share of gross domestic product. Unlike the Opposition when they were in office, we have been able to sustain our policy year in, year out.
The Opposition, of course, are brimful of ideas for spending ever higher amounts of the taxpayer's money, and no doubt we shall hear more of them today. The plain fact is that, had their policies been implemented, the money simply would not have been there in the first place. It was certainly not there in the 1970s, and it would not have been there in the 1980s either.
The Autumn Statement which we are debating today, my first in this Parliament, embodies the consistent strategy that we have been pursuing since 1979. I commend it to the House.
4.48 pm
Mr. John Smith: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
`regrets that the Autumn Statement fails to provide adequate resources for the vital public services and the people who need them, particularly the National Health Service which consequently faces further under-funding next year, and, despite a deteriorating situation in the balance of trade and balance of payments and unsettled international economic relationships, does not propose measures to strengthen manufacturing industry and science and technology, promote vigorous regional development, or significantly reduce unemployment'.
I suppose that it is not unusual for this Chancellor of the Exchequer to dodge the main issue in the debate, but we should remind him that the debate is about the Autumn Statement. Although it is interesting to hear his views on the world economy, and although it is important that we should discuss that matter, among other things, one would have expected a Chancellor of the Exchequer who had proposed the Autumn Statement — this is the first opportunity which the House has had formally to debate it—to defend and argue for the propositions contained in this crucial statement of the pattern of public expenditure. However, the Chancellor is fulfilling his promise that he would not say a word about it. He said that he would leave it to his right hon. Friend the Chief Secretary, who, of course, will be the last speaker in the debate, so there will be no opportunity for any hon. Member to hear the Government's views about the

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Autumn Statement until the wind-up speech. That does not seem to be the action of a Chancellor who is confident of his ability to defend the propositions that he put forward in his Autumn Statement.
Labour Members conceive their role to be slightly different. We shall probe the underlying issues in the Autumn Statement and invite the Government to defend some of the conclusions that emerged from it. However, before I do that, I have to comment on the fact that we have had to endure once again the commonplace of speeches by the Chancellor of the Exchequer that the British economy, under his beneficent stewardship, is in a condition of near perfection. If I exaggerate, it can be only slightly, because the Chancellor never misses an opportunity to say how difficult things are in the rest of the world but how well-managed they are here in the United Kingdom.
I have a purpose in making that statement. To put it mildly, the Chancellor's claim is a matter of dispute. A glance at the balance of trade figures, particularly the prognosis for the balance of payments, which, typically, the Chancellor once again ignored, would soon jolt back to reality anyone who might temporarily have succumbed to the public relations hype which the Government substitute for serious policy discussion and presentation.
To elucidate some of the important issues on the public expenditure front, let me, for the purposes of argument, if for nothing else, assume that the Government are correct in their claims for the economy. Let us assume that the economy is stong and that the nation is prosperous. Let us assume also that, as every economic commentator predicts, the Chancellor will, by 15 March—the ides of March—have £3 billion to £4 billion at his disposal. Some commentators put the amount higher than others, but all agree that that figure is roughly correct. It would be fair for the purposes of argument to proceed on that assumption.
Let us consider public expenditure in that context, particularly spending on the National Health Service. I hope that the House does not need to be reminded of the crisis in our Health Service. The Government's first response to the crisis was to deny that it existed. Day after day, particularly during and after questions to the Prime Minister, from about the time of the Autumn Statement until quite recently, there was an endless barrage of statistics from the Prime Minister. Most people waiting for treatment and their relatives who could not find treatment in our hospitals, particularly in the acute services, found those statistics pretty wildly irrelevant to their problems and to their circumstances. They were irrelevant to the fact that there were empty wards because there were no trained nurses available to staff them. They were irrelevant to children who had to wait for serious heart operations.
The Government's first attempt was to deny that the problem existed. That attempt was increasingly undermined as a position which they could defend, as medical and nursing professions, appalled at the crisis that they knew existed in the service and strongly supported by a public who rely uniquely on the National Health Service for the prevention and cure of illness and disease, the alleviation of avoidable pain and the moderation of disability, made it crystal clear that the Government's
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presentation of the condition of the National Health Service was in stark contrast to the reality encountered in hospital wards.
Let us take just one manifestation of that concern—the protest by the heads of the three royal medical colleges. They spoke out against what they described as the breakdown of acute hospital services and the almost total collapse of morale in hospitals. Yesterday, they at last met the Secretary of State for Social Services. At long last, after months of the campaign, the Government have admitted that there will be a need to increase the total resources available to the National Health Service. I hope that that means that we shall have an amendment to the proposals in the Autumn Statement. Nothing was said about it by the Chancellor of the Exchequer. We would find the statement made by the Secretary of State for Social Services to the heads of the royal medical colleges a little more convincing if he came to the House of Commons today and explained the financial changes that the Government are prepared to make, following the assurances that they apparently gave to those senior medical figures yesterday. We shall wait with interest to hear the Chief Secretary spell out the increase in resources that the Government propose to make.
Let us accept that we have passed by the argument that there is no need for more resources. Both sides of the House agree that we urgently need more resources for the National Health Service.
Mr. Patrick Thompson rose—
Mr. Smith: I shall give way to the hon. Gentleman in a moment.
This is where we come to the importance of the assumptions about the economy. If the economy is strong, if the nation is prosperous, and if the Government have £3 billion at their disposal, what on earth is to stop them spending it on the National Health Service? We know that it is not a matter of resources not being available. A political choice is being made and the Government are calculating whether to spend the money on tax cuts or on the National Health Service.
Mr. Patrick Thompson: Given the desire for an increase in resources, will the right hon. and learned Gentleman say exactly how many extra resources he would raise by increasing taxation?
Mr. Smith: On a visit to St. Thomas's hospital only a few days ago, the Leader of the Opposition gave a good response to the question asked by the hon. Gentleman. The first step that we recommend should be taken is that the underfunding of the hospital services commented on in the unanimous report of the Select Committee on Social Services—underfunding which existed for four years up to 1986 and which would cost about £1·3 billion, equivalent to about 1 p on income tax, according to the ready reckoner attached to the Autumn Statement —should be made good. That is a clear and specific commitment well within the range of what is available to the Government.
As the hon. Gentleman asked me a straight question and I gave him a straight answer, will he put the same question to the Government? Has he any confidence that he will get as specific and direct an answer as I supplied? I suppose that the hon. Gentleman must have been among the Tory Members canvassed in an opinion poll a few

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months ago when the question was put to them: would they prefer the money to be spent on the National Health Service or given in tax cuts? A large majority of Conservative Members preferred tax cuts to spending on the National Health Service. I dare say that it might be more difficult to find hon. Members willing to admit that they accepted and defended that conclusion, after the events of the last few weeks, in view of the public concern about the National Health Service.
Mr. Phillip Oppenheim rose—
Mr. Smith: I shall give way to the hon. Gentleman as, almost certainly, he will want tax cuts rather than more spending on the National Health Service.
Mr. Oppenheim: Will the right hon. and learned Gentleman tell the House how much money would be needed to be put into the Health Service to ensure that anyone who could be treated was treated and that no one was kept waiting unnecessarily long for an operation? How much money would be needed to ensure that everyone could be treated, and how would he raise it?
Mr. Smith: It is a matter of great fascination to me that serious questions about funding the National Health Service are addressed to the Opposition and not to the Government. Even on the Conservative side of the House there is no belief in the sincerity of the Government's commitment to the National Health Service. Of course, enormous amounts of money could be spent on the National Health Service and Government after Government have said that they would always spend all the money that they would always want to spend on it, but we need to spend significantly more than the present Government are spending. A few months ago they told us that it did not need to be spent. They have been moved from that position by the outcry from the medical profession and the public. They have moved, but they have not yet moved financially. We have only about another £100 million on top of the several hundred million pounds of planned extra expenditure in the Autumn Statement and we have some way to go to obtain a better provision for the Health Service. But we now know that we shall be given the answer on 15 March when the Chancellor, who has £3 billion at his disposal, decides to spend the money either on the Health Service or on tax cuts. We shall then know clearly the Government's political priorities.
Part of the trouble about the Government's approach to public expenditure as a whole, and the NHS n particular, is that Ministers and Conservative Members have a less direct and personal contact with the public services than have the public whom they serve. We know that that is so in the case of the Health Service. When the Secretary of State for Social Services has to go into hospital, he goes into a private hospital. Many Conservative Members make use of the private education sector. But let them never forget that the vast majority of British people depend on public services for the standard of living and the quality of life that they enjoy.
It is disturbing that we are seeing the emergence of more rumblings from the Right wing of the Conservative party about changes in the NHS. I noticed in the press today that the hon. Member for Wokingham (Mr. Redwood), who is regarded as some sort of significant intellectual figure on the Conservative Back Benches and in whom the Prime Minister until quite recently reposed the special trust of
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employing him in her special advisory unit, has issued another pamphlet about reforming, as he calls it, the NHS —he is quite prolific in giving his views—in which he calls the Health Service a monster. Indeed, he goes further and calls it an untamable monster. He recommends various new devices for privatising the Health Service.
That is so far away from the ordinary person's perception of the value of the Health Service that I would not bother with it were it not for the fact that such Right-wing extravaganzas, particularly in the area of privatisation, become official Government policy a few years later. We have learnt at our peril to pay attention to them when they first appear. But on that, as on all other matters to do with public services, the underlying philosophy of the Government is that public expenditure is somehow intrinsically not worthwhile but private expenditure is. Anyone with any common sense knows perfectly well that, whether expenditure is in the public or private sector, it should be evaluated according to the economic or social good which it can achieve.
I am not foolish enough to argue that all public expenditure is good in itself. I deplore—I do not know whether I will take Conservative Members with me—the amount of money that we spend on social security as a result of the unemployment that has been caused by the Conservative party. That is a heavy burden on the shoulders of the British taxpayer. I am not sure— here I am sure that I take my hon. Friends with me in their entirety — that expenditure on Trident is the best example of public expenditure. Nor, I hope, would all Conservative Members argue that all private expenditure is necessarily good, although some have more chance than others to do that. A sensible person would take the view that we should look at the proposed public expenditure to see whether it achieves good economic and social purposes. Under this Government, some credit is always to be taken if either the total of public expenditure or the proportion of public expenditure as part of the national account is falling.
We do not take that view, because to do so implies that there is something undesirable about the public expenditure involved. In the case of the NHS, we have already had to point that out to the Government. It has taken some time to establish—I hope that we have done so—some change of priorities by the Government. But the idea is spread that the fact that the NHS is publicly organised somehow means that it will be less efficiently organised than it would be if it were organised on a private basis. I see Conservative Members nodding, which means that they would prefer the NHS to become a private system on the view that it would somehow be better administered.
I simply do not understand how Conservative Members can hold that view when they look at the private medical system in the United States. Not only are 36 million Americans not covered by the health care in that country, but the cost of administration and bureaucracy arc breaking the back of the system. We know that our NHS has to allocate about 2·6 per cent. of its budget to administration. I am sure that everybody would want to reduce that figure as much as possible, because every pound that is released from administration can be spent on care. There should be no argument or dispute about that. We want an efficient and well-directed Health Service. But the proportion spent on insurance, on collection, on arbitration of disputes and on bureaucratic

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organisation of the private health service in the United States is 5·3 per cent.—twice the cost of the NHS. So we argue that the NHS is not only social justice, but efficiency in action for the British people. That is why it is deeply rooted in their affections and interests. That is why the Government will have to retreat in the face of the outcry against the way in which they have handled it.
A similar approach runs through the whole of the Government's view on public expenditure. We see it not just in social expenditure but in public expenditure that is used to support the economy. I am thinking in particular of spending on science and technology, research and development, regional economic development, education and training. All need public expenditure, and that public expenditure is valuable capital investment in the British people and the future of our economy.
Let us look at the statement made earlier this week by the Secretary of State for Trade and Industry on the scrapping of regional development grant. In the usual way in which the Government go about their business we were told that that really does not mean much because in place of the automatic grant on which industry can rely at the moment in deciding whether to go to the north, south, west or east of the country, there is to be regional selective assistance. It is said that Ministers have made provision to spend as much by way of regional selective assistance as by way of regional development grant. We are invited to draw the conclusion that there has been no change in the objective of the policy, just a change in the means of achieving it.
There was what I can describe only as marked scepticism on the Opposition Benches at that presentation of the Government's policy. I doubt whether regional selective assistance will come remotely near the amount of money spent on regional development grants. The Government's fundamental purpose is to reduce the impact of regional economic policy, and certainly to reduce its cost. I see no signs of indignation on the faces of Ministers at that charge.
I think that I know how that will be achieved. It is typical of the Government's modus operandi to say that something has become selective and to manage matters so that the money will be reduced. Once something becomes selective, Ministers can refuse more applications than they grant. Then they will claim that expenditure has gone down because there has been less demand leading it forward.
We were given an interesting insight into the Government's approach by the way in which the Department of Trade and Industry administered the innovation and hi-tech investment grant. It was revealed in a memorandum circulated by Mr. Anthony Kesten, a senior official in the Department, and it came into the hands of one of my hon. Friends. It instructs officials on how to deal with applications for grants and says:
"As you may be aware, Ministers have decided that, as part of their continuing review of DTI support, they want a more critical view to be taken by officials of possible support for single company R and D."
It goes on to describe various schemes covered by the memorandum and then comes the interesting part:
"Ministers have said that, while companies should not be firmly discouraged from making applications, no attempt should be made to seek them out."
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It goes on to list various ways in which companies can fail to be encouraged:
"I should emphasise that Ministers do not see the new requirements as marking any change in policy and it is essential that, in their day to day contacts with companies, case officers do not suggest otherwise."
The published guidelines remain and officials must not say that they have been diverted from them, but there must be fewer applications and it is the duty of officials to make sure that that happens. The document continues by saying that when officials visit companies they should not reveal that there has been any change in policy. In case there is any doubt about whether this is meant to bite and applications are meant to fall as a result, a phrase in the last part of the document says:
"Offers that have been made prior to today are not affected by this instruction."
So this is an instruction from Ministers to officials in the Department to make a change of policy but not to reveal it to those who are affected by it, and to make sure that fewer applications are granted. I can think of no more appropriate demonstration of the disreputable and deceitful techniques adopted by the Government than that revealed by this memorandum produced by the Ministry. It would be useful if some Minister told us about it at some stage.
The Chief Secretary to the Treasury (Mr. John Major): If the right hon. and learned Gentleman believes the memorandum was such a secret, perhaps he could explain why this was announced in the DTI White Paper.
Mr. Smith: The scheme has now been completely abolished in the DTI White Paper, so we shall not need to bother with it. As the right hon. Gentleman knows, the existence of the memorandum was revealed before the White Paper was published. The shadow Chief Secretary did us a public service by giving the memorandum to the newspapers before the Government published their White Paper, so the Chief Secretary's excuse will not do.
Does the Chief Secretary think that it is right for Ministers to give instructions to officials to pretend that a policy has not changed when it has? The fact that the Chief Secretary, perhaps prudently, remains in his place shows that he would find defending what I have described impossible in a decent and sensible Government. But it is, I am afraid, typical of what goes on.
The Government approach public expenditure from a fundamentally erroneous standpoint, both in terms of value and economic analysis. The truth is that well-directed and targeted public expenditure has a crucial role to play in providing good social services and achieving a successful economic policy. If we do not invest in science and technology, research and development and training, we cannot provide a base for long-term sustained growth, particularly for industries at the leading edge of technology, which are especially at risk now. The Government must know, because almost everyone in British industry knows, that the technological base of British industry is dangerously fragile. In case the Chancellor believes that that is merely an invention of the Opposition—he seems to think that every criticism of the Government comes from some deluded imagination on the Opposition Benches — let me quote to him the Financial Times leader for 13 January. Today is 14 January, so I am pretty up to date and cannot be accused of lack of topicality:

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"British industry is still beset by many problems; productivity is between a half and a third lower than that of its competitors; private sector spending on R and D and training is low; few companies can claim to be world leaders in their sectors; the regional spread of industry is exceptionally uneven, with head offices, jobs and purchasing power concentrated in the south-east".
I do not wish to criticise British industry merely for the sake of it, but many people would regard that as an accurate statement of some of the problems facing British industry. What it says about technology and, even more so, about unbalanced regional development is certainly true.
Of course, the Prime Minister and other members of the Government constantly pretend that there is no north-south division in the country, but everyone else knows that there is. We know that we have unbalanced economic development. There is a danger that, to prevent overheating in the south, the brakes will be clamped on the economy and the north will find itself in even more difficulty because it has never even got going.
The misallocation of resources —especially of social resources— that results from this unbalanced economic development is large. It is having a dastardly effect on the regions. On any analysis of the British economic situation we discover that, as the Financial Times leader said, the reality is startlingly different from the complacent picture sketched by the Chancellor. If we read his own Autumn Statement carefully we discover that it predicts that growth will fall, inflation increase and the balance of payments deficit deteriorate.
The Chancellor does us no service by minimising the dangers that face the economy. Many of them arise from the short-term policies of recent years — stimulating a consumer boom for electoral considerations, for instance — which have generated an unsustainable economic growth and aggravated our balance of trade and balance of payments problems.
It is also true, as I think the Chancellor is willing to recognise, that some of our dangers stem from the dangerous disequilibrium in the world economy. He referred at some length to the international position. We recollect that after the events of Black Monday he promised us a meeting of G7 within a short time. He said that as soon as there was an accord with the United States there would be a meeting of the G7 Ministers. That was repeated throughout December but there was no meeting; the so-called telephone accord was scrambled together on 23 December—just before Christmas. It did not appear to have much useful effect in the markets. It does not look as if there will be a meeting of the G7 Ministers in January, either. It looks as if there will be no meeting at all.
It is difficult to believe, given the serious problems facing the world economy, that it is not imperative that the leading industrial nations get together to hammer out common policies to tackle these common problems.
We have three acute inter-linking problems—the enormous imbalance in world trade, the management of currency values and the international debt problem. In recent days there has been an intervention by the central banks — the Chancellor referred to it—to thwart the speculators who prey on movements in currencies. However, I am bound to observe that, while I am glad that that appears to have had some success, it might have been wiser, before the end of the year, to make sure that the United States was prepared to defend its currency before
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our reserves were swollen by dollars at what Treasury officials conceded to the Select Committee was a probable loss of 10 per cent. due to the dollar's subsequent fall.
What action have the Governments of the G7 countries taken to deal with the trade imbalances? They may be operating through their central banks to exert some influence on the exchange rates. Incidentally, the Chancellor has travelled a long way from the days when he said that exchange rates, like interest rates, were matters for the market. That was all we heard from 1979 to 1981. He talks about consistency of policy—what a change to move from the markets deciding these matters to managed floating. What on earth is managed floating if not a roundabout system of intervention? It is a way in which a person who did not previously believe in intervention comes to say that he is now in favour of it. The Chancellor cannot say that he wants managed currencies, because he wants to retain an element of floating, so now we have a hybrid called managed floating — the Chancellor's contribution to the international economic dialogue. It is a little imprecise, as one would expect from the author of the phrase. It is not clear how it will work or whether anyone agrees with it, but it is the Chancellor's contribution. I suppose that we should welcome any signs of his repentance and of his having at least moved away from the rather arid free-market, non-interventionist doctrines that he preached to the House, in the name of consistency, from 1979 to the early 1980s.
We must concert the economic policies of the major countries that are in difficulties. It is all very well for the Chancellor to wring his hands and say that it is an academic dream to think that countries will be able to concert their domestic economic policies—that was what he said in his speech. It is also an academic dream to think that free markets can solve all the relationships between countries. As far as I can see, that is a much more academic, and certainly a much more dreamlike, way of approaching the situation than attempting, by persuasion, diplomacy and patient efforts, to encourage other countries to bring their policies more in line with each other or, at least, to run them in such a way that they do not conflict with the common interest of economic stability.
If the United States unwinds its trade deficit too quickly —the Chancellor referred only to the budget deficit; he did not deal with the trade deficit—the danger is that there will be trouble, not only for the system, but more especially for those who trade with the United States. If we are to avoid the recessionary perils and the downturn in world economic activity that might lie in store, we need an expansion in the economies of Western Europe and Japan. It is true that there has been some expansion in Japan. However, it appears that, if anything, West Germany is moving in a more restrictive direction, if recent statements by the Finance Minister and the Chancellor of the Federal Republic are to be fulfilled.
Our Chancellor may say that others are not behaving as they should. He was happy to berate the United States in his Mansion house speech and did so a little today. Criticism has been directed heavily against that quarter, but West Germany is now appearing as a co-defendant in the Chancellor of the Exchequer's dock.
I cannot help but observe that the United States large trade deficit was the basis of a great deal of the British exports, without which our trade balance would look even worse than it does today. Therefore, it would be more

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fitting if the Chancellor gave at least a nod in that direction when he feels that he must criticise the United States so vigorously.
Are we not told by the Government, who find it difficult to persuade other countries to concert their policies, that Britain has a new importance in the world and that unlike previous years, when, it is said, we were not regarded as an important country, we now walk the world's stage with a new-found self-confidence which is based on the Government's vigorous economic policies? If that is so, why does nobody else in the world appear to listen to the Chancellor?
The Chancellor could usefully spend some time with his colleagues, the Finance Ministers of the other G7 countries, in preparing a joint approach to tackle those problems. They should work hard at what is perhaps the difficult work of concerting their policies and they should start as soon as possible. They should not, of course, put the international debt problem to one side. Although there has been some movement regarding Mexico, little international attention has been paid to the problem.
I am prepared to be generous to the Chancellor and accept that his proposals for the sub-Saharan situation should be welcomed. Indeed, they are certainly supported by Opposition Members. However, he has not persuaded anyone else about them and has certainly not yet persuaded the United States. The international debt problem must be tackled with much more vigour by the leading industrial countries and must be given a much higher place of importance on the international agenda.
Mr. Tim Yeo: The right hon. and learned Gentleman has tried to have some cheap fun at the Government's expense over the description of managed floating. Will he be specific on one point and add to his welcome for managed floating a welcome for the present exchange rates that that policy has achieved? If not, will he tell us precisely at what exchange rate his party thinks that the Government should now aim?
Mr. Smith: I do not think that it was cheap to comment on the Chancellor of the Exchequer's and the Government's development of thinking since 1979. That seems essential background for understanding some of the things that he said today. I would take the hon. Gentleman's criticism a little more seriously if he could point out any inaccuracies in what I have said. However, I have described accurately the way in which we have moved from non-intervention to intervention in an elliptical manner.
The exchange rate at any particular time is a matter of judgment. One must especially take into account the effect on industry in this country. I fear that the Chancellor is excessively nervous about interest rates because he is not confident about inflation in this country. That is why he turned down the CBI's request to reduce interest rates. I am flattered that the hon. Member for Suffolk, South (Mr. Yeo) should be so anxious to find out the detail of the policy from the Opposition. That is a welcome development. Conservative Members are finding it hard to obtain answers from Ministers, so I encourage them to ask for answers from the Opposition.
I should like to turn —[Interruption.] Well, the experts on turning are on the Conservative, not the Opposition, Benches. The hon. Member for Tatton (Mr.
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Hamilton) is as yet unconverted. He is still a primitive monetarist, which is why he is not on the Treasury Bench. He would have to change his position to move to the Treasury Bench.
To achieve some change in international policy the Government would need to see our position more clearly. The trouble is that they are suffocated by a cloak of self-satisfied complacency and self-congratulation, which prevents the development of an alternative policy to the present chaotic state of affairs.
That sense of complacency obscures an appreciation of the real problems and dangers that lie ahead in the British economy. The Chancellor knows perfectly well that inflation is likely to increase. Indeed, the Autumn Statement predicts that it will increase, which is why he is so nervous about interest rates. He knows that productivity growth is likely to slacken and that it is unlikely to be sustained by the sort of supply-side policies of support for science and technology, research and development, investment in manufacturing industry and so on, for which the Labour party argues but which will not be followed by the Conservative party.
The Chancellor knows that an economic boom that is founded on a massive extension of consumer credit is built on shaky foundations. He knows that all predictions about world growth head downwards. Indeed, they were heading downwards even before Black Monday and are likely to be revised downwards even further as expectations diminish. In that situation— [Interruption.] I am facing the facts that are set out for us by the Organisation for Economic Co-operation and Development, the EEC and the World Bank and, indeed, by all who comment on the international economic situation. I advise Conservative Members that it is extremely instructive to read OECD publications to discover what it says about the British economy and to compare that with what the British Government say and, even more, with what the British press says about the British economy. One would hardly think that one was looking at the same set of circumstances.
A wise Chancellor would face the problem squarely and adapt his policies to meet it. Let me give the Chancellor some advice—[ Interruption.] I am not arguing for the Government being consistent; I am trying to change their policies. My whole purpose in life is to modify the Government's policies. I welcome the changes of heart, but wish that they were more sincere and better developed. Indeed, I am hoping for greater things. I shall be living almost entirely on hope in that respect during the next year or two.
We know that there are difficulties and it is foolish to avoid considering them. I should like to give the Chancellor one or two pieces of advice, especially about inflation. He should now announce the abandonment of the foolish privatisation of the electricity and water supply industries. I have an unconfident hope that he might have learnt something from the privatisation of the Government's share of British Petroleum. It does not seem a triumph to have managed the transfer of the predominant share in Britain's greatest company from British national ownership to Kuwaiti national ownership. Had that been advertised as the likely outcome of the operation, there might have been fewer brass bands on display and fewer commandos scaling City office fronts on

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the day of the issue. Indeed, it might have been more appropriate to have had a courtesy detachment of the Kuwaiti national guard at BP's front door.
However, despite the warnings of that experience, the Government appear to wish to press on with privatisation. If the Chancellor is serious about controlling inflation, I say to him, "Please avoid imposing that extra 15 per cent. on the cost of electricity in two years to fatten up the books for privatisation; relieve British industry and British consumers of an extra £500 million which does not need to be put on their backs." All he needs to do that is to swallow his pride and to change his policy.
As the Chancellor considers his Budget in the next week or two, I hope he will heed the advice that has apparently been given to him by his own advisers, which is that to proceed with tax cuts would be highly irresponsible in Britain's present circumstances.
I will quote from the Daily Telegraph—it is hardly irresponsible if it is in that newspaper. I believe that the Chancellor once contributed to the City page of that newspaper or one of its sister journals. On 24 December 1987 it was reported:
"A row has broken out between the Chancellor, Mr. Lawson, and his senior Treasury advisers over the wisdom of cutting taxes in the next Budget against the rapid deterioration in Britain's overseas payments position … Sir Terry Burns, chief economic adviser at the Treasury, is understood to be leading the revolt against a tax-cutting Budget."
We all wish him luck.
Apart from being a wrong decision on priorities in relation to public expenditure, tax cuts would feed straight through into increased consumer expenditure, particularly in the more prosperous areas, and increase overheating of parts of the economy, exaggerating regional imbalances and, above all, adding a further twist to the increasing balance of payments deficit. If the resources were used instead in prudent and well-directed increases in public expenditure, we could achieve an improvement in services, real help for our struggling regions and better foundations for long-lasting industrial success and avoid an aggravation of our most serious economic problem, which is the balance of payments.
The Chancellor constantly ignores the balance of trade and the balance of payments difficulties, but they will be the most serious constraints on the management of the British economy in the difficult years that lie ahead. I believe that it would profit the Chancellor and the Government much more to take these challenges, problems and difficulties more seriously. I ask the Chancellor to tell the House and the nation how the Government propose that we should overcome them. But to do that would mean abandoning their outlook and some of their prejudices. They would have to change some of their objectives. I hope that that will come about, although I am not confident about it. The Autumn Statement gives us no evidence that it will.
We know from our campaign on the Health Service that, however reluctantly, we have moved the Government. I can assure them that on this cause and some others we will fight and fight again to save the services that we love.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. May I repeat Mr. Speaker's plea for brief speeches.
5.36 pm
Mr. John Biffen: The debate on the Autumn Statement is traditionally a wide-ranging economic debate, as we were reminded by my right hon. Friend the Chancellor when he used it as an occasion to consider the world economy. We know that my right hon. Friend the Chief Secretary to the Treasury will be winding up on the contentious issues of public spending, and I should like to direct these remarks mainly to him.
Before I do so, may I say this about the economy more generally. We are holding the debate against a background of a quite remarkably successful record of economic management, which has persisted through several characteristic acts of Government. The Chancellor has been twitted for having adjusted his policies in recent times. All I can say is that wise and prudent control of economic affairs requires that degree of flexibility. Above all, it means a commitment to an underlying theme, which we have inherited and executed since 1979 to bring about greater monetary stability and expansion of ownership, and broadly speaking to create for this country a social market economy that could perform for us what has been performed for our continental neighbours in other circumstances. Much of what we have achieved is a testimony to that degree of resolution.
I should like to make two points to the House. I hope that I shall not detain hon. Members beyond the time indicated by you, Mr. Deputy Speaker. The first of them relates to the search for more effective qualitative and quantitative control of public spending, and the second relates to the social and political priorities revealed by the spending plans of the Autumn Statement. A search for more refined control of public spending has all the elements of the quest for the holy grail. It has preoccupied and detained politicians for generation after generation
Little short of 30 years ago we had what was, I suppose, a seminal contribution from the Plowden report on public expenditure. I suspect that that has been largely forgotten in subsequent comments, reports and inquests, and indeed in the setting up of institutions; a more recent one, perhaps the most colourful of them, is the "Star Chamber". It:is appropriate here that I should pay tribute to Lord Whitelaw, for no man could have presided over such an institution with such genial effectiveness.
But at the end of the day, there is no doubt whatever that the execution of public spending, the determining of its totality, and the identification of priorities are matters that require political will, skill and authority; for it is that, and the interplay of those factors, which is finally effective.
Although I was much rewarded by reading the report of the Treasury and Civil Service Select Committee, when it said:
"Our predecessors in 1984 said that they had been increasingly concerned 'that the mechanism for determining public expenditure priorities, which produces the results in the Autumn Statement, is not working as well as it should'",
I have to tell it that that has all the virginal innocence of the Social Democratic and Liberal policy document. We shall always live without that delicate reality of having found a truly objective way in which public expenditure is interpreted. No, it is a political process.
One of the values of our debate this afternoon is that it is a process in which the House of Commons can join. We have the Autumn Statement figures; but we are not here just to underwrite them and say that they are a set of judgments that have been carried out by the Executive

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which command our deferential respect. Politics is not like that. It is a continuing process. Only a few weeks ago, £100 million came forward for the Health Service. That expenditure was determined in the context of a proper and continuing debate, in which this Chamber plays a part.
With that reflection, I would like to make a few further remarks about our health spending. Already, this debate is being given a more reflective nature, and that is to be welcomed. My hon. Friend the Member for Wokingham (Mr. Redwood), who has been referred to already this afternoon, has produced a pamphlet pointing out some of the changes that would be appropriate in our approach to providing health services for the nation. It is not simply a question of adding money to the existing structures. That is the short term and immediate challenge, but there is a wider discipline which, unless we recognise and acknowledge it, invalidates calls merely for more money in present circumstances.
I should like to say to my right hon. and hon. Friends, and indeed to the House generally, that it is 40 years since Aneurin Bevan obtained his political immortality with his National Health Service legislation. Any discussion on this topic will always be inspired by the principles that preoccupied his life. But, 40 years on, this is an occasion not just for a memorial service, but for real consideration of factors that begin to affect the whole funding of National Health Service provision in this country.
I should like to put before the House five immediate considerations that I should like to detain some body—perhaps not as ambitious as a Royal Commission, but some study group within Government that would be the precursor for producing a discussion document upon which policy changes could proceed.
First, we have to ask ourselves whether the great increase in personal disposable income has affected the original argument about the extent to which one could look to an element of state managed insurance, as opposed to direct Treasury funding. Secondly, we have to assess and anticipate the demands made upon the service by the changing age structure of our society. Thirdly, the resource implications of changing medical technology have to be further assessed. That factor is of accelerating importance. Then we have to consider the relevance of the present random application of charges. The power to make charges was a very early strain upon the political circumstances of the service. Indeed, it helped in the resignation of Aneurin Bevan. What we have learnt since then is that they have become very much an integral part, albeit modest, of the application of the National Health Service.
Mr. Eric Heifer: Will the right hon. Gentleman give way?
Mr. Biffen: No, I am trying to proceed within the times imposed. I am sorry, because I enjoy debate.
Then there is the undoubted growth of private medical insurance. It is something that we can trace and it is inspired very substantially by group membership of employees, whether trade union members or not; it is very much an employee-dominated expansion.
So let us consider those five principles and make a calm and reflective judgment about what is possibly a more appropriate system of funding for the future than the one we now have. Thereafter, we are likely to be able to say
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what institutional changes, if any, are needed. I do not believe that we approach this problem correctly by identifying, all too often, an institutional change—part of the guilt transfer mechanism, blaming area health authorities and so on. It is the other way round: until we get funding more appropriately settled, we cannot hope to get our institutional arrangements correct.
If I apologise to the hon. Member for Liverpool, Walton (Mr. Heffer), I will at least throw this crumb of conciliation to Opposition Members. I am always looking for sustenance from my own mild prejudices. I have been able to find it in "A Fabian Submission" only this week, prepared by David Lipsey and approved by the executive committee of the Fabian Society:
"In welfare provision, we need to accommodate a substantial role for the voluntary sector, as well as state and local provision".
I am prepared to accept that as the broad principle on which to try to operate, so that we can see the prospect of National Health reform, if not in this Parliament, certainly soon thereafter.
There is no way in which we can escape the fact that the untrammelled operation of the National Health Service gives rise to intolerable expenditure. Already we are accustomed to think that defence spending cannot be left to the admirals or the generals. In these areas of high technology, the potential for limitless expenditure is quite daunting. The House has recognised that, of course, in the National Health Service. In the last Parliament we spent a good deal of time and emotional energy trying to devise a system—
Mr. Heffer: Will the right hon. Gentleman give way.
Mr. Biffen: No, I am sorry, I will not give way.
— trying to devise a system of setting a control over pharmaceutical prescriptions so that there was a fair balance between the pharmaceutical companies and the consuming public, as reflected in the prescribing habits of the medical profession. Although clinical freedom is a vital concept in the operation of the health services, it has to be set alongside cost considerations no less than in other parts of our expenditure.
I have sought to show that I do not take a very simple approach to the question of medical and health expenditures, that of merely looking at our present expenditures and saying that they are inadequate. We must operate against a prospect of reform for the future. But for the immediate future, there is no way that the public will be convinced that bed closures, ward closures or hospital closures are consistent with an adequate Health Service, even if the number of operations and the amount of expenditure are at record levels. In the short term, there is no alternative to a further enhancement of expenditure upon the Health Service.
We read that my right hon. Friend the Secretary of State for Health and Social Services has seen the heads of three royal colleges and that they are reasonably assured by their discussions. They say that he told them that he would go back and discuss health spending with his colleagues. He will not be discussing with the Minister of Agriculture; he will be discussing his dilemma and his challenge with my right hon. Friend the Chancellor of the Exchequer. It is absolutely essential, for the short-term relief of the situation that now exists in the Health Service, and if we are to have any political initiative to conduct the

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wider reforms which are essential, to have a clear transfer of further moneys over and above what is contained in the Autumn Statement.
It is not the task of hon. Members to engage in detailed judgments, and I do not intend to do so at all, but I say to my right hon. Friend that whatever sum is chosen is hound to be related to the total resources that he has available for tax changes and tax reductions. I hope that at least the equivalent of between 1p and 2p of tax change on the direct rate will be available for the Health Service; that is the kind of change necessary to re-secure an initiative in this situation.
There is no question whatever that a reformed and vital Health Service and social services are not an overhead, not an incubus upon the productive economy, but a natural partnership for an economy based upon the social market principles which have sustained this party and this economy so well.
5.46 pm
Mr. Robert Sheldon: The House will have heard with great interest the doctrine put forward by the right hon. Member for Shropshire, North (Mr. Biffen) on the position of the Health Service. Although we would certainly disagree on a number of details, there can be no question of the importance attached to it in this debate by my right hon. and learned Friend the Member for Monk lands, East (Mr. Smith) as well as by the right hon. Member for Shropshire, North. They have illustrated its importance both for the future of the Government and for the way in which the Government regard their public expenditure.
We must hope for changes from the Chancellor of the Exchequer because one thing is clear—he is a great learner. He has learnt a great deal in the past eight years during which he has been involved in the management of this country's economy, as Financial Secretary to the Treasury, later in the Department of Energy and more recently as Chancellor, and the House should recognise it and pay some sort of tribute to him for it as well. We must remember that when he started his work on behalf of the Government in financial and economic matters he believed that the markets were able to decide these matters with a degree of perfection which he has now come to understand is not available to it.
As we all know—although there is no point in going into these matters in great detail at this remove in time — he believed in the sanctity of M3 and the monetarist position, and he believed too that these great lessons that had been taught by what he considered to be the mismanagement of the 1970s would be put right in the 1980s. Now he understands that markets, although they may finally decide a number of issues, are, as he put it himself, frequently in a position to overshoot, and that those who look for fundamental causes in the making of their decisions in markets are not likely to do very well in their market operations. The proper success of market operations lies all too frequently in determining the behaviour of other market operators rather than determining the fundamental causes themselves. That is the weakness of markets, and the Chancellor now understands the weakness of markets and the way in which they can fluctuate around any particular norm.
He took those kinds of lessons to the Plaza agreement and used them in the context of the Louvre accord, and they were valuable in helping him understand the way in
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which Finance Ministers can co-operate to a limited extent in bringing about a level of the pound, of the dollar, of the deutschmark, of the yen that is in line with long-term prospects.
The realisation of the importance of these matters and the learning process, however, are not at an end. The one thing that the Chancellor of the Exchequer needs to learn is the importance of manufacturing industry. As our oil exports — the oil industry is one of the factors that distort our trading economy—become less and less important and we are able to obtain fewer resources from oil, the role of manufacturing industry will become still more important. I welcome the greater attention that the Chancellor is giving to the manufacturing industry. Nowadays he frequently mentions improvements in manufacturing industry. The past year's improvements have been improvements on a very poor level indeed, as is evidenced by our experience in our constituencies, but they are improvements nevertheless. We can only hope that we shall make up some of the ground lost over the past eight years.
Perhaps I should draw attention to the report of the Treasury and Civil Service Committee and pay tribute to the Committee—as I usually try to and as we all should —for producing its report quickly and in difficult circumstances. Although the Committee's conclusions are not unanimous, the analysis is especially useful to us. The list of specialist advisers is also impressive. In my experience—indeed, in the experience of all those who have served on the Select Committee — advisers are prepared to undertake work at inconvenient times for very inadequate reward. The Select Committee can still select the finest advice available and that is cause for congratulation. We have people outside the Government machine who are prepared to give advice comparable to the advice that the Chancellor received in quality, although not in detail. I note sadly the absence of an agreed report. I know that the report clearly sets out the different views, but these can often be obtained from a variety of academic, economic and journalistic sources. It is most valuable when a Select Committee puts aside its partial affections and tries to put suggestions to the House to overcome some of the differences that exist and put matters in a different context. A Select Committe is the only body that can do that and, if it does not, it is failing in an important objective.
The Chancellor spent most of his time — not unwisely, although I would have preferred to hear something more on public expenditure — drawing attention to the importance of the world economic situation. We must all believe that for the next 12 to 18 months that situation will be uncertain at best. In his evidence to the Select Committee, replying to question No. 124 on 9 December, the Chancellor said:
"In the first place I see no sign at the present time of the world going into recession. All the recent figures that we have had so far do admittedly relate to the period before the stock market collapsed."
I detected a little more pessimism in his comments this afternoon. The Chancellor said that he saw no sign of tine world going into recession. We hope that he is right, although it all depends on what one means by recession. There will certainly be a slowing down of world growth and a reduction in United States activity. In the short-term it is likely that oil will produce less revenue and, more

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important, that its beneficial effects on our balance of payments compared with those of oil-importing countries will be weaker.
It is clearly accepted that in the short-term, and at the time of the Budget, the Chancellor will have money to spend. He will have perhaps £3 billion and perhaps as much as £4 billion or even £5 billion. He wants to use that money to lower the standard rate of income tax to 25 per cent. and the higher rate to 50 per cent. He would dearly like to end capital gains tax, which, following its emasculation, raises only about £1·3 billion—not good value for the amount of work involved. I would dearly like it to be increased but I realise that it is unlikely that we shall increase revenue from capital gains under this Government. The Chancellor would like to reduce part of the cost of mortgage tax relief, which stands as a fiscal rebuke to his failure to achieve the greater tax neutrality that he has at heart. The abolition of capital gains tax and the reduction in the cost of mortgage relief are not likely to feature in the Budget resolutions. What comfort the Chancellor has stems from the hope that the incidence of mortgage tax relief may be reduced due to reductions in income tax.
I query the Chancellor's proposed use of the resources available. At present, we have a well-planned consumer boom. No one can doubt the tactical experience and expertise that the Chancellor has brought to bear in these matters. He planned the boom for the election and it has not quite got out of hand yet, which, in itself, is an achievement that has not often been equalled. Nevertheless, an increase in consumer expenditure is planned in 1988. It is expected that GDP will increase by 2·5 per cent. and consumer expenditure by 4 per cent. The expected increase in manufactured imports, which is already being realised, is a consequence of that.
The major budgetary question this year is how to spend the money from a reduced public sector borrowing requirement. Faced with the possibility of a world recession—at best a downturn in world activity and a consumer boom at home—it would be folly to couple that with tax handouts that would increase consumption further and thus increase manufactured imports and worsen our balance of payments. It would be far better to use that money now in the interests of the long-term future of manufacturing industry and to improve the serious economy, which we shall need to support us in any difficult times ahead—and there may be difficult times ahead. This is not the time to be spending money in consumer booms following the election consumer boom. As my right hon. and learned Friend the Member for Monklands, East said, investment in education, training and health can all be useful. What we should not do is to spend the money in a way that will only lead to a further import boom in an attempt to meet the Chancellor's requirements of tax rates of 25 per cent. and 50 per cent.
I should also draw attention to the White Paper "DTI — the department for Enterprise". I understand Ministers' desire to direct expenditure on industry into the most worthwhile projects. Ministers have always felt that they need greater control of the money that they have available—in regulations and statutory instruments to set out the ways in which the money available can be spent. They frequently find that the money does not go for the purposes for which they wish it to go. They try to target
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it and ask, "How can we ensure that this money goes for this purpose?". That is an understandable and often worthwhile desire. However, it is easy to assume that one can move from that to giving civil servants the discretion to decide who should have how much and for which purpose. It is easy to assume that Whitehall knows best and that the civil servants handing out money to supplicants from Ashton-under-Lyne will be far-seeing officials who can size up a chemical project or assess the value of an expanding furniture manufacturer. All that I know is that such civil servants are limited in number and there are not all that many to be found in the Department of Trade and Industry. I do not question the ability or dedication of civil servants; I only wish that the Government would say the same more widely. However, we do not breed such people in any numbers.
I would wish particularly for more movement in and out of Whitehall to provide a greater degree of cross-fertilisation, but there is little sign of that as yet. We need to know and understand the civil servants with whom we are dealing and the responsibilities and vast sums of money that we are giving them to see the dangers that may arise. We need to face reality and realise that a knowledgeable embattled supplicant will often find himself face to face with an eloquent but under-informed official who will be making decisions that may be momentous for the life of the company seeking assistance.
The House will know that the Public Accounts Committee is anxious that civil servants are not placed in a position where the temptations of fraud and corruption are likely to occur. We are conscious that the combination of a dissatisfied civil servant on the one hand and a company in difficulty on the other is a real threat to the probity of the Government service, of which we are rightly proud. Once standards decline they are immensely difficult to reinstate, as many other less fortunate countries have found. We could well arrive at a position where discretion incurs not only the dangers of poor investment but the perils of corrupt decisions.
There used to be advantages in the regional employment grant. Indeed, there were advantages with the investment grant, and I was a great upholder of its value. One advantage was not that large beneficial investments were made that otherwise would not have been made—although that undoubtedly operated on the margin and we must not underestimate the importance of that — but that money went into manufacturing industry to modernise it. Now we are reducing the amount of money given and are relying on the expertise of Whitehall.
I look forward to the Chancellor of the Exchequer continuing his passage through these matters and coming to understand even further the importance of manufacturing industry in the long term. As I said, there could be uncertainties ahead. The sure way forward is to use that money for long-term investment. That is the lesson that I hope the Chancellor will be absorbing over the next two months.
6.1 pm
Sir Peter Hordern: My right hon. Friend the Chancellor of the Exchequer rightly referred to the strength of the economy. I commend him for the successive improvements in the economic strength of our country over the past few years.
It is not suggested or proposed in the Autumn Statement that the same rate of advance that we have

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enjoyed over the past year or two will be seen again. As the House knows, the forecast is for a slower rate of growth and an increasing deterioration in our balance of trade. I accept that it is still a small proportion of our GDP, but nevertheless the relative deficit in our balance of trade is certain to increase.
One matter that concerns me is confidence. Last October we observed a sharp fall in the stock market. My right hon. Friend the Chancellor was right to address himself to that problem and be as bullish as he could about our future prospects. In this mood of international cooperation, it is doubly important that careful use be made of language when criticising our allies. I raised this matter in a speech just before Christmas. I could not then, and cannot now, see any point in criticising President Reagan so volubly as happened in my right hon. Friend's Mansion House speech. What was the point of it? If it were because the President and Congress were not aware of the difficulties arising from America's internal deficit, I would be amazed. It is not as though my right hon. Friend was ignorant of the fact that America's constitution made it difficult for the President and Congress unanimously to agree on what should be done. I regret that criticism, because it affected confidence then, and that effect still persists.
It is important to understand the options that exist for the United States, because that is where the problem lies. The problem concerns the United States' internal and external deficit. My right hon. Friend and others have frequently told the Americans that they must put their house in order and to do so by various uncomfortable measures. We should recognise that one of the ways in which America can improve its position is by allowing, for however temporary a period, a continuing fall in the value of the dollar in relation to other currencies.
With regard to the effect of the fall in the value of the dollar in relation to other currencies, only 9 per cent. of America's GDP is involved in imports. It is much less of a sacrifice for the United States to allow a fall in the value of the dollar relative to other currencies. Furthermore, it is bound to be beneficial to its manufacturing industry to have less competition from Japanese companies and other industrial imports. A substantial proportion of its imports are dollar imports.
I remember a book by Mr. Servan-Schreiber in which he complained about the level of United States' investment in France. Now that there is a large American deficit, substantial sums of money are being invested in the United States. The criticism then was that the American dollar was all-powerful: but now the dollar is criticised for being far too weak. There must be some consistency in these matters and we must understand that an attack on the Americans and the way in which they pursue their affairs will damage confidence. With regard to markets, the question of confidence is very important.
I wish I could share my right hon. Friend's confidence about working with other countries to prop up the dollar and keep the deutschmark and yen in their proper place. The movements are so great and the pressures so large that only if the natural course of events is allowed to take place and money allowed to flow freely where investors wish it to go will the position right itself. The dollar trade deficit must eventually be met by willing investors. It is unlikely to do so if investors think that the dollar is being propped up at the wrong price by a combination of central banks. They will wait until the crisis is over and the dollar finds
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its own level. There is a new special drawing rights agreement between the United States and Japan to keep interest rates low, which I am sure is beneficial. On any ordinary investment view, dollar assets, particularly manufacturing assets, are cheap compared with Japan.
It may be that the dollar still has further to fall, but the time will come when investment in the dollar will prove to be most productive. It is evident that British firms think so because British investment in United States' firms has more than doubled over the past year and reached a figure of $30 billion. The dollar will find its own level, whatever the central banks may do and despite the agreement to make what have proved so far to be expensive purchases at the wrong price.
I recollect a period — the sight of the right hon. Member for Blaenau Gwent (Mr. Foot) reminds me of this —when the Labour Government talked with glee about catching the speculators. I remember talk about the gnomes of Zurich and making their pips squeak—or it may have been the right hon. Member for Leeds, East (Mr. Healey) talking about Conservatives. It was said that the speculators would be caught by the actions of the central banks and that that would solve the problem. I hear the same sort of language now, and it fills me with dismay. I regret to say that that was not the solution to the problem.
What are we proposing that the Americans should do in an election year? This is the course of action that we are proposing they should take. First, they should cut public expenditure; secondly, they should raise taxes; thirdly, they should raise interest rates; or any combination of those. As my right hon. Friend said, the United States domestic economy has not been adequately reined back. The President has a saying: "If you want to try anything out, try it out on the folks in Peoria." If the folks in Peoria were told that the British Chancellor of the Exchequer is telling them in an election year that they should reduce their public expenditure and raise taxes or interest rates, I think they would probably ask him to pass that one across them again. The options for the Americans are rather different and they may be rather more uncomfortable for us than for them if they allow the dollar to fall somewhat, as it may. The dollar price means more to us than to the United States.
We have a monetary policy—I find it difficult to understand these days, and that is not through want of trying—and we have an exchange rate policy which aligns us neatly with the deutschmark. In the absence of EMS—I am in favour of us being allowed to join the EMS—at least we are aligned to the deutschmark. What would be the effect of a reduced dollar deficit and an increase in United States exports, which is what we are urging the Americans to do? We cannot imagine that a reduction in the United States deficit will happen without some pain to other countries. We must look at the likely consequences of that. Of our £8·5 billion-worth of imports from the United States, £7·1 billion were in manufactured goods. That represents only 10 per cent. of our imports, but when one thinks of the amount of American exports to the European Community, which represents well over 20 per cent., and of the fact that 50 per cent. of our exports go to the European Community, one sees that any substantial improvement in the United States level of exports is bound to be felt by the European Community.
When we are talking to and lecturing the Americans, we should recognise that the effect may not be entirely pleasant for the European Community, and certainly not

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for us, because, as the House knows, we are forecasting a higher trade deficit during this year. We are also forecasting the most rapid rate of growth in the Community, so we may find a progressive deterioration in the balance of trade, as has been suggested in the Autumn Statement. To the extent that the United States position improves, more strain is bound to be felt within the European Community.
On the stock market collapse, it appears that, during the past five or six years, when the economy has been performing well, it has been helped along by the avid appetite of the United States for imports. We and other countries have benefited greatly from that avidity, but it will no longer be there, which will cause a strain on world trade. We know the difficulties with Japan and negotiations in West Germany. I remind the House of what happened in the stock market collapse in 1929. In 1930, there was a creditable recovery in share prices, but then there was a pressure for trade restraint on every side, which started with the Smout-Hawley Act and went to tariff restraint by Italy and France, and by 1932 we had our own tariff wall through the Ottawa agreement.
The same pressures will start again, not directly with tariff restraint but with voluntary export restraint, which now covers about 50 per cent. of all world trade. I suggest that this is the time to negotiate with other countries to ensure that we open up our markets to the United States and allow the progressive liberalism of world trade. If we were to find the pace of world economic growth slowing down, which is quite likely to be the case, it is up to those who expect to find an improvement in the United States trading position to open their markets correspondingly, and the greatest responsibility for that rests on the European Community. It appears to me that this could be done most effectively by revising the common agricultural policy as early as possible.
I recognise what the Government are doing, but to lecture the Americans when we have the nerve to pile up surpluses amounting to £13 a week for every family in the country, and forbidding the free movement of other agricultural produce into the European Community, is nonsense. We must be very careful during the next few months to see that what happened in the early 1930s on restraint of trade does not happen again. It will require a good deal of leadership and steady nerves. If we are to be certain that the stock market collapse does not lead to a recession, we must open up our markets. The European Community must play its part, and so must we, not by buying dollars at the wrong price but by opening our markets in Europe; in other words, to bring in the old world to redress the balance of the new.
The crisis is not over yet. I would like to think that it is, but I do not believe it is. We need the skill and patience which the founders of the European Community showed in gaining the unity of Europe. We need to show skill, patience and perseverance in dismantling the barriers for the movement of goods and services throughout the world. The task needs leadership, which we and our partners in Europe are uniquely qualified to give, and I hope we give it.
6.16 pm
Mr. A. J. Beith: The House enjoyed the commentary of the hon. Member for Horsham
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(Sir P. Hordern). I agree with his conclusion. I am sorry that the Chancellor is leaving, because I wanted to give him some information. I have been conducting some market research on an issue that I know concerns him. If he is thinking of extending VAT in the Budget, he will get as critical a response as did my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) from my hon. Friends and me. I suggest that he should not contemplate it for a moment.
Having left the Chancellor with the fruits of my labours of the past couple of days, I wish to say that the hon. Member for Horsham took a curious view in criticising the Chancellor for what he said about the American economy. It may be as well to rein in the Chancellor a little for his desire to lecture the rest of the world. Perhaps he took his example from the Prime Minister and presumed upon the Prime Minister's influence with the American President, but there is another side to the scenario which the hon. Gentleman painted.
If the lack of confidence in the United States continues, the dollar continues to slide and Wall Street — I mean those who use Wall Street as a means to invest their money — continues to doubt the willingness of the American Administration to cope with its economic difficulties, the end product is recession of a kind which will end up in this country.
The hon. Gentleman is right to point out that we shall pay a price for the correction in the American economy, but we cannot stand back and say, "We do not mind what you do; we do not care what happens in the American economy". Still less can we fail to show some sympathy for those in the United States who are trying to get more sensible economic management. One of the President's mottos is, "Defence is not a budget issue; you spend what you need". Attractive as that may be as a concept, it plays havoc with control of public expenditure and demonstrates that everything cannot be blamed on Congress because some of that spending was generated by the President.
The economy has undergone a significant recovery and there have been some worthwhile achievements. The House should recognise the good things in the Chancellor's more recent economic management, as well as the good luck he has had. We must recognise that millions of people have a different perception of this. Many of them remember the industrial destruction which preceded the current growth and from which the current growth is measured. Many of them were the victims of it —those who lost their jobs in that industrial destruction and those whose hopes were destroyed. Then there are those who are the victims of unemployment or low wages, who do not see any of the rich benefits and pickings that are to be found in many parts of the country, and those who are in regions where the feeling of economic prosperity is not present or is confined to a few prosperous pockets.
It is very easy to view the present economic conditions with equanimity and, indeed, some enthusiasm from Westminster, but it looks very different in other parts of the country. That is why the Government's public expenditure proposals are of considerable interest, even if that interest has been overshadowed by this week's proposals on regional aid in the Secretary of State for Trade and Industry's White Paper. This is not really the occasion to debate that; we shall have an opportunity to do so in a week or so. However, it has caused great concern

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and anxiety that, in reality, regional expenditure will go down, because many requests for selective aid will be refused. The loss of automaticity will be seen as a marvellous opportunity for a reduction in public expenditure on regional aid, and it is impossible to conceive of the system resisting such an opportunity when it is presented.
The right hon. Member for Shropshire, North (Mr. Biffen) spoke very forcefully, and with widespread support, about the Health Service as one of the key expenditure issues that we must face. He was right to insist that there is a political judgment to be made — a political recognition that the people of this country have such a high regard for their Health Service and that they are prepared to make sacrifices to see it maintained at a reasonable level. The present degree of decline in the Health Service evokes real anger right across political opinion. Anxiety is not confined to those who support Opposition parties; it is strongly in evidence among those who voted for the Government.
Several factors advanced by the right hon. Gentleman as relevant to the current debate are indeed important. We must have a debate on the financing of the Health Service. It is not enough to imply that the problems would go away if we increased funding significantly. The right hon. Gentleman put forward a bold claim for, in effect, expenditure of £3 billion on the Health Service. However, even if that were carried out, we cannot pretend that there would be no people waiting for operations and no waiting lists in particular specialties or parts of the country.
We can get rid of some of the waiting lists. However, it is inherent in the nature of the Health Service that difficult choices are posed, and the more that medicine advances, the more difficult those choices become. In the past, politicians have failed to face up to them; they have preferred to let them be coped with within the medical system —and, in particular, to leave them to doctors—on the understandable ground that there are merits in clinical freedom. The fact remains, however, that, given the present capacity of medical technology, decisions made purely by doctors cannot answer the public's demands for access to high-technology medicine, and that system cannot cope with the sort of judgment that may need to be made about the relative priorities given to preventive and high-technology medicine. The difficult choices must be made by politicians, and there must be debate about them.
However, the capacity of the Health Service to cope with that debate and, indeed, with the issue of better management simply is not there if it is suffering severe restraint. Such restraint is now taking place. Although the Government can point to real increases in Health Service expenditure, the number of people in an aging population needing the Health Service is larger, and the development of medical technology is another factor. In the present climate, better management of the Health Service cannot be achieved: indeed, the present climate has given efficient management a bad name. Any health authority that tries to organise its resources effectively is up against a climate in which so many other things are happening, for purely financial reasons, that it has difficulty in justifying any decision that it may make.
No worthwhile debate or development can take place unless the Health Service is better funded, and that applies particularly to NHS pay problems. Health authorities have had to cope with insufficient funding for nationally
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agreed pay increases, and the Treasury and Civil Service Select Committee has pointed to the difficulty that arises when those pay increases are only ever dealt with from within the Department's own budget, and never compared as a potential expenditure with spending in other Departments.
We must have some way of discussing from time to time whether an increase in the funding of, for instance, the roads programme is more important than an increase in nurses' pay. The social and political judgments that have led to attempts to deal with chronic low pay in the Health Service must surely have implications beyond the existing budgets of that service. The Select Committee was right to point that out in its report, and I commend it for doing so —I was not present at the meeting at which that passage was put in.
The Government must respond to what is being said about the Health Service. That is the key message that the Chancellor must receive from the public expenditure part of the debate. However, this is also an opportunity to review what has happened since the Chancellor made his Autumn Statement. I have some sympathy with him, because forecasting what would happen to the economy just after Black Monday was a bit like forecasting what would happen to our parties' merger prospects at about breakfast time yesterday: it was not exactly a promising time at which to make prophecies.
Some of us said at the time of the statement that the Chancellor would have to revise or reconsider his assessments, especially because he was so optimistic about the international response that he was expecting. He was pretty bullish about what would be done by the Americans, the Germans and the Japanese. The hon. Member for Horsham spoke about the dangers of the previous avid American purchasers of goods manufactured in Britain ceasing to be part of the picture if measures are taken in the American economy. The counterpart of that is that we want avid Japanese buyers for British goods. We want to see an expansion in Japanese domestic demand, and we welcome the efforts that the Foreign Secretary has been making to challenge the Japanese Government on such matters as trade barriers.
The Chancellor has not said much today to revise the extraordinarily optimistic assumptions that he made then. Is he not concerned by the dangers of an overstrengthening of the pound against the deutschmark? He has not said much about that today either. Is there not also a real danger of spiralling world recession, with collapsing commodity prices feeding through to serious problems for Third world countries, which are already beset by the debt problems to which the Chancellor has made some effort to propose solutions? There has been support for his initiatives from both sides of the House, especially for those relating to Africa, but the problems are getting worse, and the measures that he was advocating a couple of months ago will not be adequate to deal with them.
In the light of the events of the past few months, the questions about the overall management of the economy that the Chancellor must consider relate to his aspirations for tax cuts, and the opportunities opened up to him by a public sector borrowing rate that is at historically and internationally low levels. While the economy is relatively healthy, it might be a wiser option to combine some investment in key services—the Health Service is one of them, but there are others, such as housing and home improvement — with taking steps against recession at

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home. At the same time, the Chancellor should seek the international co-operation without which we cannot reduce the risks of recession being imported from abroad. Clearly, it is more important than ever for Governments to be prepared to act internationally, but there is also a national dimension.
The Chancellor would do well to heed the warnings of the Centre for Economic Policy Research, which said in a report this month:
"continued failure to correct the underlying problems courts the risk of a slide into recession throughout most of the world."
The record of the last couple of months on international co-operation is pretty inadequate. Europe's future is threatened by prospects of slow growth and high unemployment, and the Chancellor's apparent satisfaction with the amount achieved so far is simply not borne out of any objective reading of what has been happening. If the demand from the United States economy declines, Europe must replace that lost demand, either from within itself or from the few other potential sources of purchasing power, such as Japan. That cannot be done without considerable international effort and co-operation.
Many people in this country have worked very hard to win such improvements as have been made in the economy. Those improvements are not won primarily by people sitting in Westminster or in No. 11 Downing Street; they are won by industrialists and by workers on the shop floor. Much of the price has been paid by people who are not at work, because they have no jobs, and have been the victims of the restructuring of industry.
Many people have much at stake in this country and abroad in those Third world countries where international help is needed. Considerable effort must be made to ensure that the events that took place on Wall Street and during the stock market collapse are not simply the beginning of a long saga, which would mean that the very confidence referred to by the Chancellor would not be induced and that, in the coming years, the suffering to which I have referred would be magnified.
6.29 pm
Mr. Terence L. Higgins: I greatly appreciate the kind remarks that have been made about the report of the Treasury and Civil Service Select Committee. The delay in setting up that Committee was immensely frustrating because it happened at a time when we were passing through perhaps the most turbulent set of events in international monetary affairs that we have witnessed for many years. None the less, I hope that the report that was produced, under considerable pressure, has been useful to the House.
You have asked, Mr. Speaker, that we should be brief and, therefore, I wish to restrict my remarks to two issues. First, I shall deal with the mechanism for determining public expenditure priorities and, secondly, I shall say something about exchange rate policy, which was the main item in the Chancellor's speech.
We are in the middle of a period of discussion on public expenditure. We have had the Autumn Statement and now we are having the debate. I gather that we shall soon have the public expenditure White Paper, which will spell out the detail. The Select Committee will, of course, then wish to take evidence on that White Paper and make its report.
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We shall have further debate on the White Paper after that. In that time I hope that I can persuade my right hon. Friend the Chief Secretary to the Treasury that we need to look carefully at the mechanism for determining public expenditure priorities. My right hon. Friend the Member for Shropshire, North (Mr. Biffen) was absolutely right to say that the determination of those priorities must be based on a series of political decisions. That is inevitable, but it does not mean that we should not try to make the mechanism for reaching those decisions as efficient as possible.
The present situation consists of bilateral discussions between the Treasury and the spending Departments and, if necessary, recourse to the Star Chamber. That is followed by a quick Cabinet endorsement of the outcome with a great sigh of relief. That is not an effective way of determining priorities because there is no proper overall review of them.
The Select Committee has drawn attention to the problem that occurs when a Department makes a claim for more resources that is large either in relation to its total expenditure—which may be small in some cases—or in absolute terms. Over the years, we have had problems of that nature. Some years ago there was a problem concerning Sir Keith Joseph and the student grants. There was great controversy over a trivial sum of money when the Treasury insisted that savings should come from within the same Department. I believe that that attitude is the root cause of many of our problems. We had a similar difficulty at the Foreign Office when it had to find savings that had difficult implications for the BBC's overseas services. The Health Service is a classic example of the problem.
The Committee has pointed out that there was a large demand to meet the increases in nurses' pay. The decision was taken that savings would be found within the DHSS. It is true that a large chunk of the increase for the nurses' pay came from the reserve, but none the less savings have to be made within the health Department. That is the cause of many of our problems. From a constituency level we are aware that the increase in nurses' pay was not fully funded and that there was no scope for finding savings elsewhere, with the result that wards were closed. Such action represents an inefficient way of operating because the overheads run on just the same. I believe that the right approach would have been to seek the necessary savings across the board from other Departments and not simply from the DHSS.
I wish to comment on the statistics that have been bandied about on this issue. I do not believe that it is right to say that there has been an increase, in real terms, when allowing for inflation. We all know that the relative price effects of nurses' pay, pharmaceuticals and so on are significantly larger than the rate of inflation.
Mention is also made of expenditure on the Health Service in relation to GNP. I believe that the Select Committee took a balanced view on that issue. We drew attention to the substantial, unprecedented increase in NHS resources that has taken place. We pointed out that, as a percentage of GNP, resources had increased from 5·37 per cent. in 1979 to 6·12 per cent. in 1986. That is true of the past, but let us consider the plans for the future.
The right comparison is NHS expenditure adjusted by the Government's forecasts of inflation and the GNP forecast, which includes the inflation effect. If we make that comparison, we discover—I refer the House to the

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table that the Committee published—that the proposed increases in Health Service expenditure are significantly smaller, reducing to 1·2 per cent. of GNP. In other words, Health Service expenditure is not going up in line with GNP. I do not believe that the House would accept such an assessment of priorities.
Therefore, it is tremendously important that if there is a large increase in the resources demanded by a Department, consideration should be given to a broader approach to where those savings can be found. I accept, however, that such savings should first be sought within the Department. I accept that my proposed approach would not be easy, because the whole process would be opened up. The Chief Secretary would have to trot round from Department to Department saying, "I am sorry, but there has been a big increase in nurses' pay and you will have to cough up something." I accept that that would not be easy, but the present arrangement has run us into difficulties and will continue to do so. I do not believe that I am being naive and I believe there is a lesson to be learnt.
The Chancellor spent much of his time on intervention. Clearly—as my right hon. Friend said in evidence to the Select Committee—there has been a change of policy. Previously, the policy was to intervene only to smooth fluctuations in currency movements. That is different from saying that we will seek to maintain a level of rates in the face of what the markets would otherwise produce. In this regard the Louvre agreement was not sufficiently explicit. The present Committee and its predecessor noted that fact, and it is clear that the agreement has not operated in the way in which the Chancellor of the Exchequer had hoped.
On page XII of the Committee's report we point out that the amount of intervention, in broad terms—the periods are not precisely the same—by the United States monetary authorities totalled $5 billion whereas the intervention by the other major participants totalled $95 billion. Therefore, the United States contribution to support its currency has been small in comparison to what everyone else has put in. We point out in our report that the resources available to the United States to sustain intervention operations are inadequate. The Chancellor has also pointed out that there was a weakening of resolve by the United States.
We are intervening in the currency markets to support the United States dollar, yet the United States Government are vacillating. That country is not a major participant in the operation and its resources to fund such an operation are inadequate. Intervention is an extremely dangerous operation on which to embark and it has serious cost implications for Britain.
The Select Committee and the Chancellor agree that there is a case for seeking underlying stability. I do not believe that such stability can be achieved as a result of intervention, because that means adopting a speculative position against considerable market forces.
Finally, I wish to pick up a point made by the right hon. and learned Member for Monklands, East (Mr. Smith). He does not understand the market philosophy. It is quite different to intervene in the way that I described, when the market has sought to establish a position and one is trying to change it. The market is determined by supply and demand, and intervention may affect the demand. If one wants to establish stability on a more permanent basis, one must seek to influence the underlying forces and powers that influence the market. In that respect my right hon.
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Friend the Chancellor is right. It has to be done by differential interest rates or by fiscal policy, or by a combination of the two.
Therefore, while I understand the need for cooperation, and pay tribute to the way in which my right hon. Friend has worked hard in that area, I do not think that it is the right approach to say that there is no hope of getting agreement on interest rates and fiscal policy unless there is agreement on intervention. For reasons that I have already mentioned, I consider that intervention is a temporary palliative. It is not the approach that is needed to establish more permanent stability.
The Chancellor was right to adopt an approach that sought co-operation, but the policy of intervention is dangerous; it may turn out to be expensive and does not deal with the underlying problems. In the light of what he said this afternoon, I urge my right hon. Friend to concentrate on the problem of co-ordination in a broader and deeper sense—on interest rates and fiscal policy, rather than on intervention. I do not think that it has been effective; it was a change of policy which was not advisable.
Mr. Bowen Wells: Does my right hon. Friend agree that the reason why the United States was not willing to intervene in the market to the extent which was initially agreed was that the coordination policy of which my right hon. Friend spoke was not in order at that time? Germany and Japan were unwilling to expand their markets sufficiently to enable the United States to resist a further fall in the dollar.
Mr. Higgins: That may well be so. However, the crucial point is that, even if the intervention had been coordinated, it may not have succeeded if the underlying factors had not been dealt with.
I hope that my right hon. Friend the Chief Secretary will give attention to my point about public expenditure, and that we can pursue those issues in the Select Committee. I hope that my right hon. Friend the Chancellor will continue with a policy that, although hazardous in some respects for the United Kingdom, because of international imbalances, has been vastly preferable to earlier economic policies.
6.42 pm
Mr. Michael Foot: During this debate, and at the time of the Autumn Statement, there has been talk of a national recovery and indeed, in some cases, of an economic miracle. In this debate I wish to present the contrasting situation in my constituency and in many parts of Britain. No economic miracle has yet appeared in those areas and no economic recovery which could be dignified with those terms. We still have a level of economic activity far below what it was in 1979, and a level of unemployment higher than it was in 19'79. Therefore, it is an insult to talk in those terms and represents a distortion of what is really happening in Britain.
If the economy is being run with such success, why are we confronted day after day, case after case, with fresh evidence of the squalor, the shoddiness, the injustices and the dangerous undermining of well-tried institutions that are most essential to preserve civilised society in Britain?
I know that many right hon. and hon. Members wish to speak in the debate, but I should like to refer briefly to

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some of those examples, the most notable of which is the National Health Service, which already has been mentioned in the debate by Opposition Members and others. The presidents of the royal colleges showed that they knew better than the Prime Minister what was happening in the National Health Service.
The right hon. Member for Shropshire, North (Mr. Biffen) made some extremely pointed and important remarks on that subject. However, I should like to give him one warning. The right hon. Gentleman quoted from a particular pamphlet. It was once said of Bernard Shaw that he was a good man who had fallen among Fabians. I hope that the same fate does not befall the right hon. Gentleman, who quoted from a Fabian pamphlet as if it was an authoritative statement on the subject, and I hope that he will think again.
Most of the problems with the National Health Service are not novel. The same problems and calculations existed in 1948 when Aneurin Bevan established the National Health Service. I remember it better than any other hon. Member because I am the only hon. Member here who was present during those controversies. The controversies were about how one would unloose an infinity of demand. Had Bevan listened to those arguments, heeded them, accepted them — they came from so many quarters, from Conservatives, Liberal Benches and Labour Benches — the National Health Service would never have been founded in 1948. We have a Health Service because he said that we must represent the claims of that service above any other area of social services, and because he presented them with such daring, comprehension, understanding and compassion the Treasury was prepared to listen.
The problems are not easily solved now, but the sort of figure that the right hon. Member for Shropshire, North mentioned should be presented to the Cabinet today. Perhaps one of the reasons why the right hon. Gentleman was removed from the Cabinet is that the Prime Minister feared that he would present that argument. I hope that some other members of the Cabinet will do that, but I doubt that they will present it as persuasively as the right hon. Gentleman could present it. If they do not, they will be overwhelmed, because the demand throughout the country is growing strongly all the time. The Government will have to yield. The fact is that £200 million is insufficient. The Government will have to yield much more at the time of the Budget, and the sooner they do that, and the better grace with which they do it, the better it will be for the health of the National Health Service and of the nation.
The National Health Service is not the only example where the screw has been turned. According to the figures, there has been an expansion in the total amounts allocated, but elsewhere — I speak for a constituency where we feel the consequences of those measures—the Government have imposed cuts which are taking effect now. But the Government still dare to talk about a national recovery. During the next few months some of the special cuts that they have inflicted on social security will be brought into operation. They will be applied through discussions such as those that took place yesterday in the House about child benefit.
Other provisions will be applied to cut what many hon. Members believed had been established as the best social services to deal with family problems. Conservative
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Members have said during the past few days that the demand for family allowance was an all-party demand at the end of 1945. Child benefit was a great improvement on the family allowance. It was consolidated by the last Labour Government on a more ambitious scale so that child benefit was paid to the mother without any means test, and sustained at its original value. All those principles are being undermined by the Government. That is a very serious matter. It will have serious consequences, particularly in areas such as mine where people are dependent on these provisions. The vast increase in homelessness in many big cities and in other places is another example. So what is meant by all the talk of a national recovery?
Then there is what the Government have done to so many other institutions, including universities. Surely at a time of technical advance the Robbins principle of a university education for every boy and girl, man and woman, who can take advantage of it should be carried out. That was one of the finest principles that came out of the second world war. It was accepted by us all. I would have thought that it was a civilised principle of the first order. The Government have done nothing more disgusting than to abrogate that principle. There is great competition in that sphere. It is dreadful that people who themselves have apparently had a first-class education should introduce measures that will deny a similar education to other people who are just as capable of benefiting from it. [Interruption.] Let those who wish to deny what I say talk to the leaders of the universities and people at universities who have been protesting against the policies operated by the Government over many months. There is talk of the Government withdrawing some of the offensive clauses from the Education Reform Bill. I hope that they will do so.
Another part of the Government's programme which affects people directly is the extraordinary White Paper published on Tuesday by Lord Young and his Department. Huge sums of taxpayers' money are being used to publicise the document as though it had been accepted by the House. When one reads the document, one realises how taxpayers' money has been misused to publicise Lord Young and his Department. The explanation I offer to the House is that the document was not prepared originally to be presented by Lord Young's Department but would have been presented by him if he had been appointed chairman of the Conservative party. He seems to have decided that, as he had drawn up the document, he might as well get the taxpayers to pay for it.
If hon. Members think that I am exaggerating, let them look at page 2, where it is explained that 1979 was supposedly the turning point of the century in our economic life. Lord Young is not so modest as to think it was a turning point just in the postwar period, but in the century. In glorifying his achievements and his prospects Lord Young does not even mention that North sea oil has made some contribution to the economy over the past few years. That is not even mentioned in the document, which supposedly describes the whole economic position of the country.
The same Lord Young comes forward with proposals for changes in regional policy. I am not saying that the previous policy was perfect; of course, it was not. Many cuts imposed under that policy hit areas such as mine. That

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is why we pleaded with the Government to listen to what we had to say before they introduced a new regional policy.
The idea of having discretionary grants as a substitute for guarantees for different industries is dangerous; it is a principle that is difficult to work sensibly. It is not only we in the Labour party who say that. Three ex-Ministers from the Department of Trade and Industry asked questions about it yesterday—the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), the right hon. Member for Chingford (Mr. Tebbit) and the right hon. Member for Henley (Mr. Heseltine). I have to be careful about applying zoological terms to the right hon. Member for Chingford—if I do, I may get complaints from the Animal Welfare Trust—but when three worms turn on the same afternoon, asking the Minister to look properly at the proposed change, the Government ought to take note.
We are deeply concerned about the Government's proposals in the area I represent. The changes will apply not just to areas which have been badly hit but to considerable parts of Wales, Scotland and the north-east. There should have been much more discussion about how to have a more effective regional policy.
One obvious way which we had worked out and which was being applied in 1978 was special development assistance for the areas which were hardest hit, the areas threatened not just with a 2 or 3 per cent. increase in unemployment but with a doubling of unemployment. Unemployment went up to the then appalling figure of 12 per cent. in areas affected by the steel crisis. But over the next three or four years, under the wonderful recovery programme of the Conservative Government, unemployment went up to over 20 per cent. What we sought to provide under the Labour Government's regional policy was special development assistance over and above the general development area assistance. It worked. There were plans for getting new industry into my area. Other areas too had special development area status. It enabled us to get on with the job of rebuilding, as local authorities and industries are eager to do now. We are determined to rebuild industry. We wish the Government had listened to what we had to say about how a sensible regional policy should be worked out.
Even at this late hour, if only Lord Young can set aside his propaganda leaflets, cannot we have a proper discussion? Most of the affected areas are represented by Labour Members and by Labour local authorities that are passionately eager to join in the task of rebuilding. The idea that local authorities are hostile to trying to get on with this major task is ludicrous. To get more jobs is the number one priority of many local authorities. But, partly because of their insane hatred, detestation or suspicion of local authorities, the Government have not been prepared to join in such activities. I hope the Government will consider that afresh.
That is just another example of how fraudulent is the claim that we have had a national recovery. Whatever else there may have been, it is certainly not a national recovery. Until it is national, the Chancellor of the Exchequer should be more reticent in the claim that he makes for himself and his achievements.
The hon. Member for Horsham (Sir P. Hordern), with his usual delicacy, properly rebuked the Chancellor for lecturing the Americans. If, at the beginning of the Reagan regime, the Americans had pursued similar policies to
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those pursued by our Government in 1979, 1980 and 1981 there would not have been a recovery in the United States or throughout the world. The world would have been plunged into an even deeper slump perhaps than in 1929. There would not have been a recovery here. The Chancellor thinks that he governs these things, but he is just the fly on the wheel. He thinks that he makes the wheel go round. What happens in the United States economy is far more important than anything he does. Therefore he should have been a bit more careful about looking back.
Some people prophesied what was going to happen in the American economy. Professor Beckerman, an old fashioned Keynsian—which means that he is absolutely up to date; he has got the policies which the Chancellor is looking for for next month — said way back, as anyone can check, before President Reagan came to office, that of course he would prefer a Democrat to be elected, but the incoming American Administration would not carry through a full monetarist policy, as they were claiming they would. Because tax cuts were popular and public expenditure was not popular, they would carry through, not by intention but by accident, a Keynsia n policy of reflation no matter what it might be called.
That is what they did for five or six years, and when the American economy recovered we managed to clutch the coat tails in the last four years. That is what really happened, so it does not become the Chancellor to make a holus-bolus criticism of what Americans may be doing now. The situation may be different, but the idea that economic problems which we have not solved can be solved by encouraging the Americans to go in for a full-scale cut in their deficit is absurd. All that will happen is that there will be the kind of slump that there would have been if the Americans had embarked on that policy six or seven years ago.
This does not mean that I agree with the American policy. I think that they could spend their money much more sensibly. If only they would divert a huge amount of that public expenditure, as they could, from armaments into these other fields, it would be much better for all of us. So I certainly think that we should encourage that. But the suggestion that all economic wisdom rests with the Treasury Bench and the Chancellor of the Exchequer and that all that is necessary is for the Americans to copy what the present Government have been doing is absurd. First of all, they would have to explain which of their policies they wished the Americans to copy—the one that they tried with such appalling results in their first period of office or those that they are following now, although they are trying to conceal the fact that they have come round that far.
I know that several Tory Members are trying to entice them further along that road of sanity and I do not wish to interfere with that process because I think that it could be beneficial for the country as a whole. Some of the benefits of such a policy might eventually get through to the great areas that some of us represent that have seen the tragic failure of the Government to understand what is happening. But Government Members do not come to those areas; they do not know the areas and they do not see what is happening in our places. So we have got to tell them.
In the meantime, I hope that we can stop the Chancellor of the Exchequer preaching to others when he has himself found the right gospel only in the last few weeks. I hope that he will change his habits in a way that may be helpful

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to us all instead of causing the kind of injury that might follow the sort of prescriptions that he has been giving in the last few years.
7.2 pm
Dr. Charles Goodson-Wickes: I am honoured to have been called to address the House for the first time. It is a special privilege to be allowed to do so in the debate on the Autumn Statement, which has been delayed nearly as long as this speech.
Sitting under the Strangers Gallery tonight is the Conservative Member for Blaydon between the years 1931 and 1935—not, I hope, the last Tory representative for that area. He has been my friend and political mentor for many years. He tells me that in his day one informed the Whips when it was convenient for one to attend the House. The position seems to have been reversed over the years.
I know that the whole House will join me in wishing my predecessor, Michael Havers, now in another place as Lord Havers of St. Edmondsbury, an early return to robust health. It is widely recognised that during his exceptionally long service as Attorney-General he had a formidable workload the success of which remained largely unrecognised owing to its sensitive nature. The burden clearly took its toll upon his health. I am confident that the House will agree that The Times got it right when it described him recently as
"one of the straight men of politics"
—as noble a tribute as any to which any hon. Member could aspire. To achieve the highest office of precedence as Lord Chancellor, with all its constitutional, legal and procedural duties, only to have to lay down the burden shortly thereafter must have been a bitter blow. In wishing him well, I take the opportunity to thank him for his wise counsel. It is a privilege to follow his 17 years of service as Member of Parliament for Wimbledon.
I wish to depart slightly from the usual convention by mentioning also Michael Havers' own predecessor, Sir Cyril Black. A number of hon. Members will remember his service in the House from 1950, when he gained the seat, for 20 years thereafter. He continues to offer unparalleled and unselfish service to the area with which he has so long been associated. I cannot speak too highly of his accumulated wisdom, which he has been kind enough to share with me. To follow two such distinguished Members, both of whom served Wimbledon so well in their different ways, will present a challenge which I address with understandable misgivings.
The constituency of Wimbledon forms the western part of the London borough of Merton and, although in the popular mind it is associated with the village of Wimbledon, it extends very much further, with an agreeable diversity of people and interests. Let nobody think that it is a unformly affluent area free of social and other problems. On the eastern side of the railway, which bisects the constituency, there are areas of relative deprivation as one moves towards the boundary, which runs along the course of the river Wandle.
Merton has a distinguished and interesting history dating from an Iron Age settlement. Henry VI was crowned at Merton priory and, by marriage, the royal connection continues, as the Princess of Wales' father, also in another place, is the lord of the manor of Wimbledon. His forefathers inherited Wimbledon house by descent
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from Sarah, Duchess of Marlborough. It was one of Lord Spencer's predecessors who found himself in dispute with the inhabitants of Wimbledon in 1864. He proposed to enclose the common and subsequent protests led to an Act of Parliament vesting it in a specially constituted body of conservators.
Another parliamentary predecessor of mine, Sir Henry Peek, played an active part in preserving the area for "public enjoyment". The present system continues and I can tell the House that no hard feelings persist. However, the unique status of the common and the method of its funding are likely to produce difficulties in relation to the restructuring of local government finance. But I shall be raising that point with my right hon. Friend the Secretary of State for the Environment on a more suitable occasion.
Wimbledon common has been the site, as well as the subject, of dispute on many occasions in the past. Pitt the younger, while Prime Minister, engaged in duelling on the common, luckily without serious results, before the practice ended in the mid-19th century. The common was, from the time of the Restoration, the site of military reviews and manoeuvres and both the royal tournament and Bisley trace their origins to those events.
The most famous of Wimbledon's inhabitants, however, was a sailor, Lord Nelson, who lived at Merton place in the present south Wimbledon, in his famous menage a trois with Sir William and Lady Hamilton. It was from this house that he left to meet his death at the battle of Trafalgar.
Three other distinguished men of Wimbledon were William Wilberforce, a pioneering Tory who did so much to bring about the abolition of slavery, Baden-Powell, who wrote his "Scouting for Boys" there, and John Innes of horticultural fame, who, in Merton park, founded one of the first garden suburbs.
Merton has a long history of learning and the 13th century statute of the same name was repealed only in 1923. Excellent schools of many types flourish in the borough, as my right hon. Friend the Chief Secretary to the Treasury can testify from his personal knowledge. The influence of various religious bodies is a marked power for good in the constituency, as is the medical work carried out at the Atkinson Morley's and Nelson hospitals.
The constituency is mainly residential with a well-balanced community. The tradition for commerce and light industry, dating from the snuff mills and the fabric works, established by William Morris, persists and flourishes. Several new companies, many with a high technology element, are moving into the district, joining such old companies as leather curriers.
The name of Wimbledon is universally associated with lawn tennis and, in recent times, it has acquired the additional distinction of first division football. Many other sports from golf to greyhound racing are enjoyed and there are also other admirable cultural and leisure opportunities.
I address the House at a time when the funding and functioning of the welfare state has been called increasingly into question. One of the privileges shared by all hon. Members is the opportunity to see at first hand the immense amount of voluntary activity, often unrecognised, carried out in the service of others. Basic human instinct to help those most vulnerable in society is reflected in this voluntary work and in the financial contributions from so many. I like the term "community self-help", analogous with the concept of individual self-help. There

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is nothing novel about that. After all, many of our great hospitals and educational establishments started life as charitable institutions.
Although it would be naive to suggest that the private sector and voluntarily raised finance could solve the present difficulties, they nevertheless have their part to play. I see no ideological bar to such funds supplementing the welfare state and hope that there would be universal support for that. A move in this direction would go some way towards satisfying the recent call made by the presidents of three of the royal medical colleges for
"additional and alternative funding in the National Health Service".
I noted with interest the arguments of my right hon. Friend the Member for Shropshire, North (Mr. Biffen) in that context.
I speak from some small experience, having been involved with a charity set up in my father's name, which has my right hon. Friend the Member for Castle Point (Sir B. Braine) as president. Among other things, we have provided funds for beds and living accommodation for the families of critically ill children to stay in National Health Service hospitals at times of anxiety. Only this week, we have contributed to the renovation of an underused building at Bart's. That hospital, where I trained, was founded over 850 years ago and it seems illogical that an organisation such as the National Health Service, established barely 40 years ago, should be expected to cope unaided with today's unlimited demands.
If charities, which now have an annual turnover in excess of £10 billion a year, are to play their full part in our society, two requirements must be satisfied—first, the incentives for giving should be increased and, secondly, the funds gathered should be used as efficiently as possible.
On the first point, I must congratulate the Government on their success over the past eight years in creating a climate favourable to charities. The 1986 measures have been described as the best charity Budget that we have ever had. The extension of tax relief to companies for one-off gifts was a major step forward. These are early days yet for the payroll giving scheme for individuals, but many employers, including central Government Departments, have set up the appropriate machinery. However, a new publicity boost is needed from the Government to increase general awareness of the scheme and to spur on charities and their agencies to take advantage of it. Provided that the administrative burden is not too great, income tax relief for individuals on single gifts might also be arranged in due course.
My second point is to urge the implementation of last year's Woodfield report. The inadequacies which it identified in the supervision of charities must be remedied. The question of registration should be tackled to go beyond the endorsement or otherwise of submitted statements of charitable aims. A very small number of cases of abuse taint the image of charities in general. Unfortunately, there are cases of bodies claiming tax relief for non-charitable purposes, fraud or tax avoidance. A requirement for charities to submit annual accounts must be sensible and these should also be made available to the public.
Although I am aware of the practical objections raised on both sides of the House, I also urge the Chancellor to reconsider possible sanctions to discourage the accumulation of funds. Such accumulations may be perfectly proper, but there have been cases of idleness on the part
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of trustees and there is always a potential danger in the practice which I have heard described as "money looking for trouble to happen".
It seems ludicrous that the Charity Commission, which has done such valuable work, has inadequate resources, both financially and professionally, to inspect annual accounts and to investigate possible wrongdoing. I am sure that my right hon. Friend would share my reluctance to advocate increased Government expenditure on this matter and perhaps much work, historically done without charge by the commission, could be contracted out, with better use being made of existing resources. The introduction of a modest registration fee, possibly renewable annually, would not be unreasonable. That would be in the interests of good administration and the production of revenue.
As the Inland Revenue has the power to disclose prima facie abuse to the commission, staff must obviously be redeployed to adjust to modern-day circumstances. Although a modernised Charity Commission might well pay for itself by preventing unjust fiscal claims, that argument would not in isolation carry weight with the Treasury.
Such enlightened Government measures would greatly increase the scope for co-operation between the public, private and voluntary sectors for the good of the population as a whole. I hope to play some small, but effective, part in furthering this end.
7.18 pm
Mr. Giles Radice: The House will have enjoyed the speech of the hon. Member for Wimbledon (Dr. Goodson-Wickes) and the way he spoke about his predecessor who was a highly respected Member of the House. It will have enjoyed what he had to say about his constituency and it will also have noted the expertise with which he spoke about charities. No doubt we shall hear much from him in the future. However, there is just one issue which I wish to take up with him. Speaking as a Member for the north-east, I can assure him that there will not be another Tory Member of Parliament for Blaydon.
As we pointed out in the Treasury and Civil Service Committee report, the Budget judgments for this year will be made against a highly disturbed and turbulent international background. Indeed, they are the most turbulent since 1979–80, the years of the second oil shock. We can all agree that it is extremely difficult to predict the consequences of the sharp fall in the stock market in the last two weeks of October. For one thing, markets all over the world continue to be extremely unsettled, but we heard nothing about that from the Chancellor. We should have done.
Also, the response of the policy-makers in the main industrial economies has been extremely hesitant arid uncertain. The coming of the American presidential election has already had an impact on the United States, but it is not only the United States which has been slow to act. Other countries have also been adopting a highly cautious approach, particularly the West German Government, who seem to be very unclear about what action they should be taking. Yet West Germany has an obvious responsibility as a major trading nation, with a balance of payments surplus equivalent to 4 per cent. of its GNP.

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The empty G7 statement just before Christmas was a sign of the confusion and uncertainty in the seven major industrial countries about what to do next. However, despite the difficulties about long-term predictions, the House should note that the latest report from the Organisation for Economic Co-operation and Development has already forecast that, as a consequence of the October crash, international economic activity will be significantly weakened. It also says that unemployment in OECD countries will begin to rise again.
The OECD report is particularly concerned about the impact on industrial and consumer confidence which could lead to a downturn in both investment and spending with the inevitable consequences for growth and employment — very much a classic Keynesian picture. Significantly, it warns policy-makers about the risk of a world recession. I should have thought that the Chancellor would at least have had the courtesy to mention that warning from a body of which the United Kingdom is a member. It is a risk which the Chancellor typically dismisses far too lightly.
With all the turbulence and uncertainty around, there might be a case for expressing some sympathy for the Chancellor as he prepares for the Budget if he were not so insufferably complacent, confident and cocky about the prospects for the British economy, and, more especially, about his own performance as Chancellor of the Exchequer.
It is true, and it is a good thing, that in 1987 our growth rate, at 4 per cent., has been faster than most of the rest of Europe. It is also welcome news that unemployment has been falling over the past 18 months, albeit assisted by changes in the way that the unemployed are registered. However, the forecast for growth in the Autumn Statement is only for 2·5 per cent. in 1988 and there are some signs that much of that growth will be bunched in the early part of the year. Lower growth, whatever the Autumn Statement says, is likely to mean higher unemployment. I note that the OECD report predicts that the pace of growth in the United Kingdom may not be sufficient
"to prevent the rate of unemployment from rising again."
That is a very different message from the Chancellor's this afternoon.
The Chancellor's dilemma is that, if unemployment is to continue to fall significantly, and if regional differences are to be reduced, we shall need growth rates somewhat above 3 per cent. over the next three years. Yet the growing balance of payments and trade deficit is a factor that must make any Chancellor cautious about increased rates of expansion. That is a genuine dilemma that the Chancellor must face. Yet he makes these things far more difficult, not only for himself but for the British economy, by three aspects of his economic policy.
First, the Chancellor has made it clear that he is firmly committed to further income tax cuts in his Budget. Yet income tax cuts are, as all the models show, the least effective way in which to boost employment. They would almost certainly suck in more imports at a time when our balance of payments deficit is predicted to deteriorate.
Then there is the Government's posture on public spending and their highly cautious stance on the PSBR — more cautious in the Autumn Statement than was predicted. That stance means that infrastructure projects,
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regional policies, and key social programmes such as health and education will all be deprived of necessary funds. The Chancellor forgets the important point that well-targeted public spending is a safer way, in terms of our balance of payments, bringing down unemployment and keeping growth going.
There is a third problem. As the Americans understand well, the obvious way to tackle a balance of payments deficit and to assist manufacturing is by devaluation. Indeed, the 1986 British devaluation provided substantial assistance to our economy. However, since then, the pound has increased in value by over 10 per cent. Yet the Chancellor's policy is to tie the pound firmly to the EMS, particularly to the deutschmark. In doing so, he clearly rules out any further devaluation in the near future. In that context, he should note the point made by the Prime Minister in an interview in the Financial Times in November, when she warned that gearing the pound to the deutschmark was likely to be deflationary. There is clearly a difference between the Prime Minister and the Chancellor on that point.
Mr. Quentin Davies: In his remarks, does the hon. Gentleman take any account of the extreme difficulty that we have had recently in preventing the pound from appreciating above three deutschmarks? How on earth can we contemplate pursuing a devaluation for parity at present, even if we wished to do so, without simply appalling monetary consequences?
Mr. Radice: That point has already been answered: we must bring interest rates down. Our interest rates, as the Chancellor pointed out to the Select Committee, are higher than most of those of our main competitors by two to three points and there is no reason why they should not be lower.
However, I draw some comfort from how much the Chancellor's policies have changed since 1979, which has been mentioned by several of my hon. Friends. After all, the Chancellor was the inventor of the medium-term financial strategy. However, monetary controls were virtually abandoned in October 1985. He used to castigate the Labour Government for their irresponsibility, yet over the past 18 months he has manufactured a good old consumer boom, fuelled by a remarkable drop in the savings ratio—I think from 7 per cent. to 5 per cent.—disguised fiscal relaxation and earnings rising faster than inflation.
It is not an Opposition invention to say that it is a good old consumer boom. The Chancellor himself told the Select Committee that the present rate of growth was unsustainable and above our historic levels. It was that for a good reason — the Chancellor was making his contribution to the Conservative party winning the general election.
Even on public spending, there has been a shift. First, hon. Members may remember that the objective was to reduce public expenditure in volume terms. Then it was to hold public spending constant in real terms. Now it is to reduce public spending as a proportion of GDP. Those are marginal changes, but they are changes in the right direction. There is also the famous change on the exchange rate policy. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) noted that the Chancellor used to say that exchange rates should be left to the market, but he now believes in managed floating

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and international intervention, although, as the right hon. Member for Worthing (Mr. Higgins) pointed out, he does not do that very effectively.
The former hard-line monetarist, the man who really invented the Government's strategy back in 1979, is becoming increasingly pragmatic. Like my right hon. and learned Friend, I welcome the Chancellor's conversion. I welcome his changes and over the next few weeks and months, and for however long he remains Chancellor—I understand that he wants to be Foreign Secretary—we all look forward to further changes in a more sensible direction.
7.29 pm
Mr. Leon Brittan: My first and pleasant task is to congratulate my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes) on his maiden speech. He began with an elegant and apposite tribute to our former colleague, Lord Havers. I am sure that we would all wish to be associated with everything he said and, in particular, with the good wishes for his return to health. We were then given a conducted tour of Wimbledon which left even those of us who thought we knew the place infinitely better informed than we had been before. Finally, my hon. Friend made a perceptive and constructive speech about the relationship between the welfare state and the voluntary sector, and put forward a number of important suggestions which, I am sure, merit consideration. In all, if I may borrow a phrase from his constituency, he served an ace and we look forward to many more.
Looking at the Autumn Statement so long after its publication, we inevitably feel that it has a slightly antique flavour about it. But it is none the less remarkable for all that, because it is an account of strong but soundly based growth with the prospects for substantial further growth and falls in unemployment—and, by implication, more tax cuts. The decisions announced in it are, of course, the public spending ones arrived at after a period of intense haggling, which anyone who has been Chief Secretary looks back on with a mixture of nostalgia and relief that those days are over.
Although the hon. Member for Durham, North (Mr. Radice) seemed not to give sufficient weight to this fact in the earlier part of his remarks, the Autumn Statement shows an increase in spending for 1988–89 and 1989–90 of £2·6 billion and £5·6 billion respectively compared with the figures announced last year. The growth in Government expenditure in real terms, excluding privatisation proceeds, is expected to be 1·25 per cent. a year over four years
Those who might have anxieties about the implication of such an increase in public spending, after a period when the stated aim had been to hold expenditure roughly flat, are reassured in the Autumn Statement by the argument that public expenditure will at least continue to fall as a proportion of the nation's income over the next three years. When one takes into account the fact that, last year, the plans for this year were increased by £4·75 billion, the further increases in spending amount to significant relaxations in the public expenditure objectives of the Government.
Nevertheless, in the context of a rapidly expanding economy, my own view is that the Government's present proposals are still consistent with a generally sound financial posture. However, it is against that background
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that we must consider the implications of the Autumn Statement and subsequent developments for future policy — in particular, for the forthcoming Budget. The Autumn Statement forecasts growth of 2·5 per cent. this year and £1 billion of PSBR for the current financial year, and assumes a similar PSBR for next year, although the actual PSBR is to be set in the Budget.
Looking forward rather than backward, the key question seems to me to be: have recent events at home or abroad, and possible developments in prospect, changed the situation in a way that should influence the Chancellor's judgment? I think they have. I agree wholeheartedly with the conclusion of the Governor of the Bank of England that the need for caution is now paramount. I add that caution makes good sense politically, too. We were, after all, re-elected only a few months ago and we have a whole Parliament in which to achieve our tax objectives.
We have always acted on the principle in the past that we would implement those objectives as and when we could afford to do so. I am sure that we would be wise to continue to follow that principle. By all means let us do what we can safely do this year, but in a year of international turbulence, the domestic consequences of which are still not clear, financial prudence should, above all else, be our watchword. Much can change in the next few weeks, but for the moment the objective of a negative PSBR would seem the right one to set.
This conclusion flows from considering both the world scene and the domestic economy. The international position needs to be examined first, because it is there that the uncertainties are greatest. What happens in the United States is crucial. There have been excruciatingly painful efforts in the United States to reduce the budget deficit, ending up with a cut at the lowest level needed to persuade the markets that the United States is even remotely serious about tackling its problems. Since then, some forecasts have emanated from the United States suggesting that spending will actually be greater than envisaged and that the cut in the deficit will be correspondingly low. It is clear that there is not the slightest intention of the increase in interest rates that is needed to go along with the cut in the budget deficit. It is not surprising that that should be so in an election year, but it is an important fact in the total equation.
Worst of all, in terms of confidence in the markets, is the continued insouciance shown by the United States administration, with the President, but a few days ago, saying that the trade deficit is a sign of the strength of the United States' economy.
Mr. Austin Mitchell: That is what the Minister said.
Mr. Brittan: It is not surprising that it has needed herculean efforts on the part of the world's central banks, at great cost, to keep the dollar even at its present level. Nor is it surprising that the financial community has considerable doubts about whether those efforts can be successful in anything other than the short term, in the absence of an appropriate policy to deal with the underlying problems.
When I was at the Treasury between 1981 and 1983 and we faced complaints about the high value of the pound, we always said that the exchange rate could not be altered by intervention on any permanent basis, and that all we could do was to smooth out short-term fluctuations.
Dr. John Reid rose—
Mr. Brittan: I am inclined to believe that that is just as true today of current attempts to prop up the dollar. Although the dollar may have fallen far enough already, there inevitably remains a real risk of further irresistible pressure on it and a further fall in the United States stock market. There is no way in which we can insulate ourselves against that, so that is the first main reason for adopting a cautious fiscal stance.
I reject the idea that we should try to spend or borrow our way out of a recession that has not come and, if it did, would be extraneously induced. I suggest that the same cautious conclusion emerges from an examination of the United Kingdom economy. I do not accept that the fall in share prices has had a deflationary effect, or that it will have one, and that therefore we should now adopt a more expansionary policy than would otherwise be desirable. One might reasonably have expected that the fall in the stock market and the fear of further falls would have had that effect, but all the signs are that that has proved not to be the case. There are no signs of a significant lessening of economic activity; expansion is continuing at a rapid rate in all parts of the United Kingdom, including the assisted regions.
It is interesting to see the Lloyds bank economic bulletin, entitled "Limited Impact of Equity Slump", which contains a careful analysis of the so-called wealth effect and comes to the conclusion that it has proved to be extremely limited.
Another commentator makes the point that the exceptional growth in the second half of 1987 —annualised GDP growth of 5 to 7 per cent. — has a carry-over effect into 1988 so strong that, with no further growth at all, growth would be 2 per cent. in 1988 for that reason alone; with continuing growth, 3 per cent. to 3·5 per cent. is the probable total for the current year. Moreover, the stock market effect — if it had a deflationary effect—has already been counteracted by the 1·5 per cent. reduction in interest rates. There are already significant labour shortages in certain industries in parts of the country. That underlines the need for a vigorous regional policy — but that is a matter for another day. Looking at the whole picture, I believe that the domestic risk against which the Government must guard is not recession but the further build-up of inflationary pressures. For those reasons, domestic and international, I come out strongly on the side of those urging caution in the preparation of the Budget.
However, on the figures in the Autumn Statement, even with caution, there is likely to be some scope for tax reductions, and certainly opportunity for tax reform. Political momentum in favour of moving to 25p basic rate and reduction of top rates to 50p is now probably irresistible, but its timing must depend on what is consistent with a prudent PSBR target.
One way of enabling more money to be available for tax reductions than would otherwise be possible would be to restrict tax allowances to the basic rate. Indeed, there is a great deal to be said for also limiting mortgage interest relief and pension relief to the basic rate. If all that were done, £1·75 billion would become available for tax reductions.
Much of that money may be needed to deal with the problem of the tax treatment of married women, depending on precisely how that is done. However, I am
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sure that the Chancellor appreciates that that is a structural problem, the resolution of which cannot be delayed any longer. The feeling of injustice about the present arrangements is now overwhelming. I for my part think that the Government's original proposals to deal with this had very much more to commend them than the critics have allowed.
Beyond that, and maybe beyond the forthcoming Budget, I would make the top priority the highest possible increase in personal allowances to take as many people as possible, at the lower end of the income scale, out of income tax altogether. That is desirable on two grounds. First, it is, of course, the people at the lower end of the scale for whom tax is now the greatest real burden.
Secondly, it is the obligation to pay tax on low incomes which is the main cause of the poverty trap and anything that can be done to make it more worth while to work than to stay on the dole is intensely desirable. Taking people on low earnings out of tax altogether means that employers can take on more people and further reduce unemployment, for the simple reason that the money that they can afford to pay will not be so reduced by tax that it is no longer higher than the dole.
If the main economic and social problem that we still face, particularly in certain parts of the country, is high unemployment, the top priority of fiscal policy must be to take people out of tax and stimulate employment in that way, provided always that that can be done in the confines of a reasonable fiscal policy.
To allow inflation to start up again would do no service to the economy, no service to the unemployed, no service to the Government, no service to the Conservative party, and no service to the country.
7.42 pm
Mr. Peter Shore: I should like to add my voice to the tributes that have been paid to the hon. Member for Wimbledon (Dr. Goodson-Wickes) for his successful maiden speech. The House was pleased with what he said about his predecessor, who was a most popular Member. Those who know his constituency of Wimbledon will share his sentiments entirely. We enjoyed his contribution and look forward to hearing from him again.
I join my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) in feeling considerable disappointment at the Chancellor's speech, which opened the debate. It was a mistake for the Chancellor to have left the entire subject matter of the Autumn Statement to the Chief Secretary who is to reply, rather than essaying himself an analysis, defence and general setting-in-context of the Autumn Statement for which, after all, he has the prime responsibility.
I listened, of course, to what the Chancellor said about the international economic scene. I accept that there are great difficulties in reaching any certain judgments about the likely course of events. However, I agree with the hon. Member for Horsham (Sir P. Hordern) and with my right hon. Friend the Member for Blaenau Gwent (Mr. Foot), because I do not see much sense or profit being gained from publicly upbraiding America for the alleged failure of its economic policy when the United States has been the principal engine of world economic growth for several years. Any significant reduction in the American deficit should, at least, be accompanied by corresponding increases in the growth activity of the great surplus nations

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of Japan and West Germany. If we were seriously to urge on the Americans dramatic movements in cutting their trade deficit and their budget deficit without corresponding and compensatory movements towards expansion by the other major industrial countries of the western world, we should have a recipe for a major slump and recession, which would not be confined to the western world but would, of course, embrace Third world countries, which have appalling suffering.
I am sorry that the Chancellor could not remain in the Chamber until he had heard the end of my speech. Nevertheless, I am glad that the Financial Secretary to the Treasury has heard what I have said and I hope that my sentiments will be conveyed to the Chancellor.
There are two or three crucial and indisputable facts about our present economic and social situation. The first is clearly stated in the Autumn Statement. The growth in GDP that we have enjoyed during the past year is forecast to slow down considerably in the year ahead. That does not conflict with the forecasts of the Organisation for Economic Co-operation and Development and others. The forecast of a falling-away of growth applies not only to Britain, but to virtually all the other countries in the western world and it is one principal source of our concern. It is clear that unless something else happens, growth will slow down. That will mean an end to the gradual reduction in unemployment and it is perfectly possible that there could be a reversal of the current trend. That is fact number one.
Fact number two is that the Autumn Statement forecasts—correctly, I am sure—the elimination of the public sector borrowing requirement. It is true that it will be the first time since 1970 that we have moved into surplus on the budget account. That is a remarkable change. However, the way in which that has come about might merit considerable discussion in the House.
My explanation of what has happened is that during the past 18 months there has been a significant increase in Government public expenditure, which has been only partially disguised by the sale of public assets. At the same time, there has been an obvious and notable decrease in taxation and a considerable fall in the exchange rate, especially in the earlier months. Surprise, surprise—the economy expands when one cuts taxation, increases public expenditure and lowers the exchange rate. Of course that is what happens, but for the past eight years the Treasury Bench has failed to understand that when one achieves expansion, one gets buoyancy in revenue, which means that the money that one thought that one had borrowed is more than covered by receipts from the increased economic activity. That is what the entire Keynesian argument is about. There are certainly criticisms of it and, although there are lessons to be learnt, it should not be carried too far. However, it is much more rewarding than the awful arid doctrines of monetarism which simply squeeze the life out of the economy while hoping that somehow spontaneous regeneration will occur. The elimination of the PSBR is, thus, the second point.
The third fact, which I think has impinged itself on all hon. Members and, indeed, on everyone in the country, is that two of our social services are going through a period of obvious crisis. The National Health Service has been referred to by many speakers, not only in this debate but virtually from the time the House resumed after the recess. I will say nothing more about it except that I agree entirely with the right hon. Member for Worthing (Mr. Higgins),
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the Chairman of the Treasury and Civil Service Select Committee, who pointed out that the growth rate in real terms is at most 1·2 per cent. That will not be adequate for the needs of the Health Service, where a massive injection of funds on the scale mentioned by the former Leader of the House, the right hon. Member for Shropshire, North (Mr. Biffen), is almost certainly required.
Another social service of great importance to our people is rented housing, where we are talking not about the inadequacy of growth but of devastation and destruction that has not been compensated by any new building in the private sector. There has not been an increase in overall housebuilding in Britain. This is the eighth year in which the total has fallen well below the level in every year during the 1970s.
Mr. Winnick: I am grateful to my right hon. Friend for giving way. Is he aware that just before the Christmas recess, I received a reply from a junior environment Minister saying that as far as the Government were concerned it was no longer the function of local authorities to build. Bearing in mind the thousands of people on waiting lists throughout the country, and the scandal of bed-and-breakfast and hostel accommodation, is it not absolutely disgraceful that for the first time in 60 to 100 years local authorities have been told that they no longer need to build?
Mr. Shore: It is the logic of the situation that local authorities can no longer be responsible if they are denied the resources. Let us look at the figures. The figures produced in the Autumn Statement on public spending are for expenditure on housing of £3,020 million. In the same 1988 cash value terms, we were spending more than £7,500 million in 1978–79. That is a fall in the housing programme of 60 per cent.
Mr. Roger Knapman rose—
Mr. Shore: I shall not give way to the hon. Gentleman at the moment.
It will surprise no one to learn that both completion and new starts in public sector rented housing in the past year have been 30,000, whereas in 1978 starts were 107,000 and completions were 130,000. If anyone wants to know why we have an army of homeless and such discontent on oar estates, there is the reason. There has been total neglect of housing provision and an obsession with housing ownership.
I have put together three facts which are pretty much incontrovertible. The first fact is that we shall have a slowdown in growth over the next year. Secondly, we have no PSBR deficit; indeed, we have a surplus for the first time in 17 years. Thirdly, we have two obvious crises in two essential public social services which cater for the needs of our people. Surely there has never been a better opportunity for the Chancellor to act, for once, clearly and responsibly in the interests of the British people If the Chancellor felt when he presented the Autumn Statement last year that a PSBR of 1 per cent. of gross domestic product, a mere £4 billion, was prudent to the point of great praise for himself, why should not a similar PSBR in the coming year be equally prudent? Would not that mean that resources of the order of £6 billion would become available?
As many right hon. and hon. Members have said, it would be folly if such resources were flung into consumer

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purchasing power. Some contribution could be made there, but to dispense large sums of money to private consumers, knowing perfectly well that that would fuel an expenditure explosion or an increase in imports, would be folly. However, there would be no folly at all in spending more money on the Health Service and on the building and construction industries, both of which have a very low import content. Such expenditure would also give enormous help to many people who are in desperate need of adequate health care and decent accommodation.
I must say to the Chief Secretary to the Treasury that there cannot have been many such opportunities where circumstances have been so united for doing good things. They are now in the hands of the Treasury, and we hope that they will be exploited in the Budget of 1988.
7.56 pm
Mr. Bowen Wells: One of my first observations in my brief remarks concerns what right hon. and hon. Members on both sides of the House have been saying about the way in which we could distribute the additional money that the economy is earning. My right hon. Friend the Chancellor and his team have managed to expand our economy so that there is money available for the Health Service and indeed the social services and housing, about which the right hon. Member for Bethnal Green and Stepney (Mr. Shore) has spoken.
Mr. Knapman: Will my hon. Friend bear in mind the remarks of the right hon. Member for Bethnal Green and Stepney (Mr. Shore), who referred to homelessness? Would it not help the plight of the homeless if certain Labour councils with 10 per cent. of their council houses empty got round to letting those houses?
Mr. Wells: That is a very good point, but I was congratulating my right hon. Friend the Chancellor on the way in which he has conducted the economy so that we have surpluses available to spend in this way. Indeed, it is a great credit to him that this wonderful situation has been brought about by careful and sensible financial policies.
I want to help the Chancellor in relation to the international scene. He opened the debate on that subject. It is in the international setting, as the right hon. Member for Blaenau Gwent (Mr. Foot) said, where, if we get it wrong and the United States economy goes wrong, we shall not be able to resist the forces of depression in this country if the economies of the world contract.
The issue causing me to detain the House this evening is my concern at the serious lack of analysis of the international financial situation that was displayed particularly by the shadow Chancellor of the Exchequer, the right hon. and learned Member for Monklands, East (Mr. Smith), on the occasion of the stock market crash and the subsequent Opposition Supply Day debate.
I thought that the right hon. and learned Gentleman conducted the debate in a frivolous manner that was most unhelpful in seeing a solution to the serious domestic and international difficulties that we faced at that time. On that occasion speaker after eminent speaker claimed that the financial markets would not stabilise until after the United States budget deficit had been reduced substantially. Indeed, my hon. Friend the Member for Horsham (Sir P. Hordern) made this point delicately—as the right hon.
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Member for Blaenau Gwent said in his speech—to the Chancellor this evening in taking issue with him on his Mansion House speech.
Once such an event as the stock market crash has occurred, we were assured that the dollar exchange rate would stabilise and the stock market would recover. Undoubtedly, the United States budget deficit has been a cause of imbalance in the international financial markets for some time, but in the years that it has been growing, it has caused stock markets to rise to unprecedented heights in this country and indeed in the United States. The value of the dollar has risen simultaneously and the deficit has been the principal reason that the world economy began to grow from 1981 onwards. I agree with the right hon. Member for Blaenau Gwent, who 1 am sorry is not in his seat, that the failure of the United States Government to expand the economy at that point would have led to a drastic world-wide recession.
Perverse as the phenomenon may be, this is what happened during the period 1981–87. It has two other significant effects. It was a major cause of the rising United States trade imbalance because its value was rising instead of falling, as a budget deficit would conventionally have suggested it should do, and which most economic commentators would say was inevitable. This has led to very serious calls for protectionism from beleaguered American manufacturers faced with a huge amount of competitive foreign goods on their domestic, let alone international, markets and their inability to compete with both in domestic and overseas markets.
The other effect of the United States deficit is to suck in foreign domestic savings to finance the budget deficit, and to create historically high real interest rates. The high interest rate regimes run in this country are a reflection of the United States policy, which has undoubtedly inhibited investment in our domestic economy. This in turn has led to the persistence of unemployment in Britain and Europe and has had a devastatingly contracting effect on the trading partners of Britain and Europe and the economies of the Third world trading nations because of the falling demand in Europe and Britain and falling commodity prices.
If the United States budget deficit had this effect in 1987, how can it be argued that simply by reducing the United States deficit we will gain market stability, exchange rate stability and continuation of growth? Undoubtedly, if the United States had responded to the calls for a drastic cut in the budget deficit, growth in the United States would have slowed dramatically, throwing the United States economy into recession. Such a situation would have made it very difficult to export to the United States, and slump would have hit the United States' trading partners, Japan, Britain and western Europe. Such a scenario would have been disastrous for the international economy.
If we look at the current condition of the world economy, we cannot be self-satisfied. Europe still has major unemployment and serious under-utilisation of productive capacity. The markets of the United States with Latin America and Europe's African markets are closed down because of their chronic indebtedness. No expansion of exports from Europe or the United States can take place there. Only the markets of the far east are open to world trade, where fierce competition between Japan, the United States, Britain and western Europe takes place, much of it resulting in trade on a very marginal, if not a minus,

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base. If, on top of this, we close down trade between the United States, Japan and western Europe by putting the United States into recession, we shall certainly face a worldwide slump.
It is widely argued that the way out of these difficulties is to enable the world economy to expand without overheating into inflation. How is this to be done? It will not happen automatically; it must be managed. As Paul Volcker rightly said, money will not manage itself, and certainly international money will not. It is equally certain that if one does not manage money, others will manage it for one. I agree with Lord Lever who, in an article in the United States publication "The International Economy", says:
"Yo-yo currencies are fundamentally incompatible with a liberal and prosperous, interdependent global economy. The most important condition for a return to greater world progress and trade expansion is the establishment of a system of collective disciplines for the management of the exchange rates of the world's major currencies and especially that of the dollar."
I support wholeheartedly the Chancellor's efforts to coordinate policies in the world and, in particular, the measures that he outlined in his speech this afternoon. One thing that he left out of his analysis, however, was the issue of debt, yet my right hon. Friend is the most innovative Chancellor and the most imaginative Finance Minister on the world stage at present in putting forward his suggestion of how African indebtedness should be dealt with.
He has suggested that the world's indebtedness may be dealt with, especially as regards Africa, where there is very little hope of repayment, by converting present public indebtedness—that is, Government loans—to grants, by reducing interest rates and by extending the indebtedness of those countries so that repayment can take place over a much longer period, with the repayment being related to the economic capacity of a country to earn its living and service its debt.
My right hon. Friend has met with little encouragement from trading partners such as West Germany and the United States, but he should persist in his attempts to persuade both the United States in relation to the Latin American debt, and West Germany and Japan in relation to other indebtedness, to enable that reorganisation of the indebtedness of Third world countries so that trading can be resumed, markets can be opened up in those countries and we can thereby begin a world expansion in trade which will result in the reduction of unemployment in our own economies and the beginning of the expansion once more of the very impoverished nations of the world on which we impact. Unless we also look at that debt issue and get it put right, we will not see the world expansion in trade that we all desperately need.
It is by the combination of policies, the co-ordination of policies and the management of policies that we shall expand world trade, prevent recession and prevent the recurrence of inflation, which is an undoubted scourge on all our economies.
There are certain points which need, therefore, to be addressed in trying to achieve that co-ordination of policies that will benefit us all. First, there must be expansion of the German and Japanese economies, and trade with all countries. Their economies must permit imports from those of us who are able to supply them, and so there must be a dramatic reduction in tariff barriers, and a GATT round, designed for that purpose, must be
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hurried up and made effective. There must be a controlled reduction of the United States deficit, and of our interest rates here in Europe and in the United States to encourage investment; a stabilisation of currency relationships; and massive debt rescheduling to permit trade with the underdeveloped economies of the world.
We must support the international organisations in their attempts to make certain that there are proper economic policies, designed to produce wealth-creating activity in Third world countries—and that must be a condition of any rescheduling in which we might indulge. Those international organisations—the World Bank and the International Monetary Fund — should be strengthened to provide the money for that expansion and the disciplines necessary for those Third world economies to prevent them going once more into chronic indebtedness.
We must also reduce agricultural subsidy in the developed world so as to increase the possibility of trade with the Third world countries which mainly trade in agricultural commodities and which are unable to do so because of agricultural subsidy regimes.
Given those conditions, and working together, we shall see an expansion of world trade and so an increase in commodity prices, with the result that the whole world trading system will benefit and we shall be able to get an expanded economy, able to afford health services and social services without indulging in overspending in the public sector.
8.8 pm
Dr. John Reid: I begin by adding my congratulations to the others given to the hon. Member for Wimbledon (Dr. Goodson-Wickes) on his maiden speech. I cannot say that I agree with everything he said, but I found it a generous contribution. It was concise and comprehensive and in many parts extremely interesting. In short, it was riot the Chancellor's speech.
The Chancellor's speech was a rather bizarre contribution, managing to open a debate on the Autumn Statement while making no reference to large and important sections of that statement, including, for instance, public expenditure. I do not blame the Chancellor for staying as far away as possible from the Autumn Statement because the only way I can sum it up is that it is a sort of plethora of platitudes. Unfortunately, he could not distance himself too far from it because of the striking similarity between that plethora of platitudes on 3 November and the cartload of cliches today.
We heard an updated version of the Chancellor's familiar theme of the Government's first four years. In effect, he said, "We are turning the corner." Indeed one of his hon. Friends could not resist throwing in a reference to Noel Coward's telling us that good times were just around the corner. When we heard that in the first four years of this Government, we knew in our hearts that it bore little relation to reality. The same is true of the Chancellor's statement. He boasts of prosperity to my constituents, who see around them nothing but increased poverty. He sings of industrial success when people in my constituency and in Lanarkshire experience little but industrial decline. He bleats about steady growth to those in Britain who have seen nothing but steady decline in the standards of public services over the past few years.
The truth does not lie in the statement that the Chancellor made today. The truth about the economy is

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simple: far from experiencing an economic miracle, we have an economy which is still growing more slowly than it did under the much reviled Labour Government whom the Chancellor likes to attack when under fire. Manufacturing output has only just returned to its 1979 level and manufacturing investment is still almost 10 per cent. lower than it was in 1979 when the Government came to power. Our manufacturing trade deficit is at an all-time record and our balance of payments has been deteriorating rapidly. As if this year's news were not bad enough, the Autumn Statement makes it plain that there is worse news for next year. On the Government's own calculations, the Treasury expects slower growth, higher inflation and a worse balance of payments this year than we had last year—all of this in spite of the fact that the Government have had the benefit of £60 billion of oil revenues.
How, then, can the Chancellor continue to boast of economic and industrial success? I do not believe that it is just because the Chancellor is a stupid man, although from time to time it strikes me that if he left his brain for scientific purposes the scientific community of Britain would contest the will. It is not just because he is an obstinate man — although, God knows, he is that as well. It is not merely that he is apparently ignorant of the social consequences of his policies. The fact is that the Chancellor has managed to combine all three characteristics—stupidity, ignorance and obstinacy—in a manner almost unparalleled since Marie Antoinette. It is almost unbelievable that, with a windfall of that magnitude, this Chancellor should have created such a manufacturing deficit—not for the first time in 30 years, but for the first time in Britain's industrial history.
It is because of the combination of the Chancellor's blindness to the consequences of his policies and his failure to realise the suffering that they have caused that he can boast about his fiscal policy, among other things. The Government's fiscal policy has been marked by two characteristics. First, it has been socially divisive and, secondly, it has increasingly diverted the burden of taxation away from those best able to afford it on the backs of those least able to afford it.
The Chancellor may not have departmental responsibility for the poll tax, but it is the child of his philosophy because it meets the two criteria that I have outlined. Not only is that tax grossly unfair, highly inefficient and thoroughly regressive, but its effects on millions of people in Scotland have been intentionally underestimated in Government propaganda. The truth is that the poll tax will not remain at the £250 per head that the Government have suggested. According to figures produced by the Library, assuming that the new business rate will be held steady in real terms—the Government tell us that it will—and that the cuts made in central funding to the local authorities over the past five years will continue, at 1986 prices the poll tax will be running at £450 a head in real terms in a very short time. That is one further act whose genesis lies in the fiscal policies based on the Chancellor's philosophy.
I refer briefly to the Chancellor's public policies. If he does not believe that there is a crisis in the National Health Service, let him speak to nurses and ancillary workers at Hartwood hospital. I understand that through the howls of disbelief at her statements on the National Health Service, the Prime Minister today challenged hon.
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Members with constituents who are nurses or ancillary workers who are holding a token strike to condemn that action. I shall respond to the Prime Minister's challenge. It is the height of hypocrisy for Margaret Thatcher of all Prime Ministers to ask us to condemn people who have committed their lives to the Health Service, who pursue a profession that has had a tradition of non-militancy for 100 years but who have been pushed to action that they regard as extreme for the sole purpose of safeguarding patient care.
On 15 March—the ides of March—the Chancellor will have the chance to prove that the Government really care for the National Health Service. If he does not take that opportunity to use part of the supposed £3 billion surplus to meet the inadequacies of the Health Service, we shall have a historic repetition of the events of the ides of March. "Et tu, Nigel?" may not have the same classical ring as "Et tu, Brute?" but there will be some classical justification for it if another supposed friend of the National Health Service sticks another dagger into its heart.
8.16 pm
Mr. David Howell: The world economy has been passing through an extremely dangerous phase, and continues to do so. Unlike the hon. Member for Motherwell, North (Dr. Reid), I feel that we owe my right hon. Friend the Chancellor a vote of confidence for the skill with which he has so far steered us through these dangerous and challenging rapids. His troubles are certainly not over yet, as I shall explain in a moment. Now that Paul Volcker has departed from the scene, my right hon. Friend's judgment will become increasingly central in world financial circles. He will be turned to increasingly and that will be a heavy responsibility, which I believe he will carry with skill and experience.
I said that my right hon. Friend's troubles were not yet over, because the worst is yet to come. In the 1930s, following the financial crash, many said, "That is just financial. We can all relax. The economy is fundamentally sound." Our position today is not dissimilar and the same pattern could unfold if we are not careful. The reason has less to do with our own affairs than with the fact that the United States economy is in an extremely fragile, indeed rotten, state. Despite the superficial signs of prosperity—job performance and the increasing exports to which my right hon. Friend referred—that economy is riddled through with debt of every kind.
Tomorrow's trade figures may be a little better. They will merely confirm what is obvious to some of us, although not to some Opposition Members: one cannot devalue one's way to salvation in trade any more than one can do so in any other activity. The trade figures will probably not be appalling, but they will not be very good.
Tomorrow's trade figures will tell us nothing. The United States economy is burdened not only with the debts of the developing countries about which my hon. Friend the Member for Hertford and Stortford (Mr. Wells) spoke so eloquently but, more seriously, with a mass of farm debts, energy bad debts, over-borrowing by consumers on a scale far greater even than in this country and, above all, a mass of bad debt arising from the huge speculative borrowing that went on throughout spring and summer last year to finance junk bond arrangements and leverage-managed buy-outs. The present situation is the legacy of that period, which some hon. Members seem to think was

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a good period for United States economic policy. The true legacy consists of borrowing and debt on a most fearsome scale, which are bound to mean that the American economy remains deeply sick.
All this will mean that the recession, which will come anyway, will be prolonged. I differ from my right hon. Friend the Chancellor only in that respect. Of course, he is right to suggest that this economy is in a strong position in a dangerous world. However, he is too sanguine about the prospects of recession arising from what is coming quite soon in the America economy. As happened in the 1930s—the present situation is not dissimilar—we have a mass of bad debt that will never be repaid and that will lead banks increasingly to seek loans of higher quality and to try to squeeze out those stuck with unrepayable loans.
Neither the clichéd traditional policies of Keynesianism recommended by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) nor monetary policy have much power to exert a counteractive influence. There often comes a stage—this was very much so in the early 1930s—when a monetary policy that has been relevant during several stages of the cycle ceases to be an effective instrument. Keynes described it as like pushing on a piece of string, trying to counteract the recessionary forces of a debt-ridden world — particularly a debt-ridden United States economy — by monetary expansion and an injection of additional money and liquidity.
That is the reality, and those who think that we are over the financial crisis and that there will be a calm phase when everything will gradually pull together are living in cloud cuckoo land. The dangers are as great as ever, if not more so. Our task in our part of the global economy is to do everything responsibly and to manage our small ship in the colossal storms that are all around us and are still coming over the horizon.
The first thing that we must do—we have already done some things that were necessary—is recognise the limitations of our position and avoid following the Americans into debt-ridden disaster. We must avoid accumulating more debts. Luckily, we are in a stronger position than the Americans were in the 1930s, just as the Americans are in a much weaker position. In the 1930s, the United States was a creditor country, but now it is one of the world's biggest debtor countries. We had some credits in the I930s, but they were dying away. Today we are a strong, major creditor nation.
We must do everything possible to preserve that, internally and externally, and to maintain a creditor position. That means avoiding debt in terms of the Autumn Statement and the issues immediately ahead for the Budget, and it means that we must pursue a policy of a tight Budget. By a tight Budget I mean a balanced one, I understand from the excellent report of my right hon. Friend the Member for Worthing (Mr. Higgins) and his colleagues that when the Chancellor speaks of a balanced Budget he means a borrowing requirement of about 1 per cent. of GDP. That is probably sensible — a little borrowing covering some but not all of Government capital spending and revenues covering certainly all current spending.
If the Chancellor follows that policy with a tight and balanced Budget consistent with the picture that I have painted of an extremely dangerous world, it could make room for £3 billion or £4 billion-worth of tax cuts or increased expenditure. We have heard different views on which it should be, but I believe that tax cuts produce
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increased revenue. Cutting taxes has produced a vast increase in revenue from VAT, corporate taxation and income tax. Out of that can and should come the additional resources that should be spread to the vulnerable parts of the economy and to the major public and social services that we need.
If Opposition Members think that there is a policy choice — that we can have either tax cuts or public expenditure increases—they are living in a world of muddle. Tax cuts will generate the wealth that will enable us decently to finance vital public services and raise family living standards through individual effort.
Dr. John Marek: Will the right hon. Gentleman give way?
Mr. Howell: No, there is not time.
In the Chancellor's own words, there is room for substantial tax cuts within the balanced budget strategy.
Should we go for higher interest rates? I cannot understand that view. Every time that interest rates go up, they add to the money supply and liquidity and increase the inflation risk, not reduce it. To increase rates would go against the strategy of G7, to which we are committed.
My right hon. Friend the Member for Richmond, Yorks (Mr. Brittan) said that he agreed with the comments of the Governor of the Bank of England. I do not agree with them, and I did not understand the reference to the need to raise interest rates. That would be wrong and inconsistent with the earlier point that I made about maintaining a tight position in this country. Raising interest rates is an absurd response to the need to maintain the position, avoid debt and tighten credit.
The more realistic policy that my right hon. Friend may have to face is to return to more direct controls over consumer credit, the various ways in which plastic money is dished out and the way in which some credit companies freely provide credit to completely uncreditworthy people without bothering to find out how much they have already borrowed. He may have to consider, dare I say, direct hire purchase controls, which is an old instrument of the past. If we are concerned about avoiding consumer debt, that is where we must press the button. The idea that raising base rates will do anything to improve matters has been disproved; on the contrary, it would be counterproductive.
That is the message that I want to add to the interesting points that my hon. Friends have made. We must avoid debt and keep a tight ship. This is the very last moment when one should crowd on sail in the middle of a storm — that would be absurd. There are enormous squalls ahead and we must be extremely cautious. The vast inflation of assets and house prices led to the crash in October and it could lead to another. Inevitably and unavoidably, now will come the recession. That is now much the greater danger than price inflation, although we may get both at the same time. Price inflation will remain subdued because commodity prices will not rise—they will fall. Oil prices will fall and that will create a climate internationally of disinflation.
What we must be prepared for is recession. My right hon. Friend has helped to prepare us with great skill in moving through all these shoals and difficulties, but there is more to come and much more skill will continue to be needed if we are to get through without great hurt.
8.26 pm
Ms. Joyce Quin: I welcome the opportunity to speak in the debate, particularly as I am a member of the Treasury and Civil Service Select Committee that has considered the Autumn Statement and through it the state of the British economy.
Like my hon. Friends, I feel that the position is not quite as the Chancellor depicted it this afternoon. There are large sectors of weakness in our economy and in the Chancellor's strategy for dealing with it that have been glossed over.
One of our main concerns, if not the main concern, must be unemployment. I welcome any fall in unemployment, but even on the Government's figures it is still well over 2·5 million. I fail to understand how there can be general rejoicing among Conservative Members about the state of the economy when that level of unemployment persists. Rejoicing can begin only when unemployment drops below the level that it was when the Government took office in 1979.
In his evidence to the Select Committee, the Chancellor was less than clear about the future level of unemployment. He was not sure whether it would go up or down or stay the same, and he seemed to adopt a nonchalant attitude to questions.
Unemployment should be the centre of any economic strategy. I share the worries that many of my hon. Friends have stressed about the balance of payments, particularly about the value of manufactured goods and the increasing demand for imports. Allied to that is the fear that some have expressed, that many imports are bought on credit. As a part of the tremendous growth of consumer credit, that has virtually doubled since 1980. Perhaps even more worrying is the fact that the claims of moneylenders in court to recover loans has increased since 1980 by 180 per cent., which makes the credit problem clear.
As we look ahead to the Budget and the possible taxation changes, it is important to stress our commitment to zero rating on VAT. During Treasury questions today, the Government seemed to reiterate their commitment to continue with the zero rate on food, children's clothing and fuel, but we have still not had a firm commitment, despite repeated questioning during Question Time and in the Treasury Select Committee, to a continued zero rate on books, newspapers and periodicals. Perhaps in his reply the Chief Secretary will give such a commitment from the Government. I certainly hope so.
My hon. Friend the Member for Motherwell, North (Dr. Reid) talked about the unfairness of much of the tax burden, and I echo what he said. The tax burden is distributed unfairly. I hope that the Government have studied the Government publication "Social Trends", which shows clearly that under this Government inequalities in society and disparities in incomes have greatly widened. I hope that the Chancellor will take those figures on board when looking at future tax reform. Many tax perks and concessions are given unfairly to those who are already well off.
One case which the Chancellor could pledge to do something about concerns tax perks and concessions for private investors in forestry. I understand that those concessions amount to about £10 million a year. That may not seem a great amount, but £10 million could build about three new hospitals. It could certainly extend the attendance allowance to children under the age of two, as
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suggested in the amendment to the social services legislation put forward yesterday, which would cost only £7 million. It is unjust to give tax perks and concessions of that type.
A great deal of unfavourable publicity has been given to generous tax concessions to well-known television chat show hosts and snooker players, who have created vast tracts of unattractive conifer plantations which, in the absence of planning controls, are disfiguring some of our most beautiful landscapes and national parks. The Northumberland national park is having its character changed daily by geometric slabs of monochrome conifers. The Chancellor could do his bit for nature conservation and at the same time get back some money for a more useful purpose by ending those concessions.
The concessions mean that, to meet the real cost of £400 per acre for conifers, the tax investor needs to fork out only £120. By careful switching from schedule A to schedule B tax, the tax concessions become even more generous. This form of forestry is uneconomic without such concessions; I would ask the Government to affirm that. The Government are paying ten times more to subsidise forestry than to subsidise sheep farming on the same land. I hope that the Government will take this on board and give a commitment to us in the reply.
The initial points I made are more fundamental, particularly on unemployment. It would be good to have a comprehensive strategy for tackling that subject tonight, although precedent suggests that this is very much in doubt.
8.34 pm
Mr. John Townend: The Autumn Statement is a vindication of the Government's economic policies since 1979. My right hon. Friend the Chancellor and his predecessor deserve the country's gratitude for the way they have managed our economy. We have had almost seven years of sustained growth. This year manufacturing output will rise by 5 per cent., which is one of the highest rises in the industrial world.
Despite what the hon. Member for Gateshead, East (Ms. Quin) has said, unemployment has dropped by 500,000 and is falling rapidly. In the Bridlington and Driffield travel-to-work area in the north of England unemployment has fallen by 2 per cent. in the past year and is now only 1 per cent. above the national average. At the same time, industrial productivity and profitability have grown fast. This has all been achieved at a time when inflation has been progressively brought down.
The Chancellor now has a real chance to create a virtuous economic circle. More growth creates higher profits and wages, which boost Government revenue. At Budget time the Chancellor will be in an enviable position enjoyed by very few previous Chancellors. He will be able to increase spending on health and education, as has been announced in the statement, to reduce Government borrowing and taxation, and have a virtual balanced Budget for the first time in many years. That will stimulate non-inflationary growth even further.
As a result of the undoubted strength of our economy, we are well placed to cope with the stock market crash which has taken place in most of the world's stock markets, and with the resulting world depression that is being forecast by many people, including many hon. Members, and most of our competitors. There is no doubt that if there is a world recession we will be affected. Two

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aspects of the economy must be watched carefully. The first is the competitive position of industry, which is likely to be adversely affected by the recent strengthening of sterling. We should be reluctant to increase interest rates further, as that would push the value of the pound even higher. I suggest that at Budget time there is a good case—I agree with my right hon. Friend the Member for Guildford (Mr. Howell) —for tightening the fiscal stance and allowing interest rates to fall and sterling to stabilise at a slightly lower level.
It would he damaging to our competitive position if unit labour costs rose faster than those of our industrial competitors. For several years, wages have risen significantly faster than inflation, but unit labour costs have been kept down by a massive increase in productivity. The rate of increase, which by historical standards has been large, is unlikely to be sustainable over many years. Recent increases of wages by 7 to 8 per cent. are worrying. Despite the pressure from many sources, the public sector, as the largest employer in the land, has a responsibility to set an example in keeping wage increases under control in 1988.
I have some apprehension about the level of public spending. Since 1979 the Government's policy on public spending has been progesssively watered down. The Treasury Select Committee, on which I am privileged to serve, has drawn attention in previous reports to the policy changes, and that is repeated in paragraphs 13 and 14 of the report on the Autumn Statement. I was one of those who strongly supported the 1979 policy of reducing spending in real terms. I was unhappy that this was not achieved and that spending rose by 2·25 per cent. in real terms between 1978–79 and 1982–83. The Government then faced the facts and changed their objective to holding public spending broadly level in real terms, but regretfully they failed to achieve that objective.
The policy now is to let spending rise in real terms it rose by 1·75 per cent. from 1982–83 to 1986–87—so long as it falls as a percentage of GDP. I was perturbed when the Chancellor informed the Committee at one of its recent meetings that in a recession the Government might let spending rise as a percentage of GDP in any particular year. Government spending, excluding the proceeds of privatisation, which is planned to be 42 per cent. of GDP in 1988–89, is far too high. We should have a target to get that figure down to under 40 per cent.
Without doubt the taxation rate on individuals is still too high. Our top rate of 60 per cent. is far too high when compared with our major industrial competitors. The bottom rate of 27 per cent., on to which is added 9 per cent. national health insurance contribution, making a total starting rate of 36 per cent., is also far too high.
Dr. Marek: The hon. Gentleman must get his facts right. Our top rate is not all that high. Only the United States and possibly one other country have a top rate lower than ours.
Mr. Townend: If the hon. Gentleman examines the facts, he will find that in many other countries the top rate starts at a much higher level of income.
Despite the excellent efforts by the Treasury in particular and the Government in general, expenditure in some areas is not very well controlled. The DHSS budget is spending £69 billion a year. I asked in a written question what was the cost to the United Kingdom taxpayer of
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DHSS payments to citizens of the Irish Republic. I received the reply that the Department did not know, as no separate records are kept. I thought that that might be understandable; perhaps all non-United Kingdom citizens were lumped together under one heading. Accordingly, I put down another question asking the total cost to the Exchequer of DHSS payments to non-United Kingdom citizens. I received the same reply—the Department had not the slightest idea.
I am sure that we are not receiving value for money in many parts of the Health Service. We have been pouring in billions of pounds of extra money every year, yet the demand for more resources by those with vested interests is rising like a crescendo. I find it strange that we have far more nurses per hospital bed occupied than have, for instance, Germany and France.
Such massive consumer resources should be split up. They are far too large for any single Cabinet Minister to oversee. There should be separate Cabinet Ministers for health and for social security. If we do not want an extra Cabinet Minister, social security should be tacked on to employment. That would be far more logical.
Let me say a brief word about the world scene. If the United States must solve its dual problems of the trade and the federal deficits, it will inevitably cease for a period to be the engine of the world economy. If we are to avoid a world recession, other countries will have to take its place.
The United Kingdom, with its growth rate in the past year, has certainly played its part—especially in view of its balance of payments deficit, which Opposition Members have pointed out. The world, however, must look to the two major surplus countries to play their part if we are to avoid recession. They, of course, are Germany and Japan. Although both countries make gestures by stimulating their economies, they have not done enough to keep world trade growing at the required rate. In particular, Japan's actions to open up its home markets 1:0 imports have been pitiful. Japan needs to be pressurised more effectively and, indeed, threatened with retaliation by all members of the G7 group.
It is interesting that our Foreign Secretary said on returning from Japan that he was hopeful that the discrimination against Scotch whisky would end — not now, but within a year. It is always the same with the Japanese: they will do it, but not now. It is not convenient; it is not politically possible; it is in the future. It is always the same old story.
I support the remarks of my right hon. Friend the Member for Worthing (Mr. Higgins) about intervention. It is very dangerous for us to intervene to keep up the value of the dollar when the United States is not putting its own money at risk. Table 4 on page 12 of the Select Committee report shows that the brunt of the intervention has been borne by Japan, Taiwan, the United Kingdom and Germany, not by America.
This is a year in which the Chancellor has the resources to make significant reductions and, I hope, significant reforms in taxation, and to stimulate enterprise even further. However, all the big spenders have the scent of money in their nostrils, and every pressure group imaginable is demanding more and more spending. The Chancellor should not give in to those strident demands. He should use the resources available to lower borrowing, and to reduce interest rates and taxes. Our economy is in a healthy state, and the hand on the tiller is perhaps the

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most able of this century. There may be economic storms ahead for the whole world, but we can be hopeful that Britain will come through relatively unharmed.
8.45 pm
Mr. Alex Salmond: A few years ago, a bright young financial journalist wrote:
"In my mind the great social justification for a mildly inflationary economy is that a society in which borrowers do better than lenders of money is fundamentally more attractive than one in which the reverse is true."
I have often wondered what happened to the ideas and ideals of that young journalist—particularly now that he occupies No. 11 Downing street. One of three cardinal errors in the Government's approach to the economy has been consistently to create an economic environment that has favoured the lenders rather than the borrowers of money. This culminated in 1986, when real interest rates over the average for the year—taking the three-month Treasury rate compared with inflation—reached plus 7 per cent., one of the highest rates of the century.
The Government claim consistency for their economic policies. Certainly interest rates, at least, have been consistently high, but the reasons for that have been changing all the time. When the Government first came to office, there were high interest rates in hot pursuit of sterling M3. That was eventually given up as being unmeasurable. Some three years ago, the Chancellor hiked interest rates to stabilise the currency, and latterly we have had high interest rates to stop so-called "overheating" in the United Kingdom economy. The phrase "overheating" comes as a bitter irony to regions whose economy is still in deep freeze. Industrial production in Scotland, for example, has not even returned to the levels of 1980. How, then, are we to reflect on a Government who talk about high interest rates to stop overheating of the economy?
Conservative Members used to say — perhaps they still do—that there was a direct relationship between the level of interest rates and that of public borrowing: the higher the level of public borrowing, the higher that of interest rates. Among the many "achievements" of the present Chancellor has been to establish that, in the United Kingdom over the past eight years, there has been an inverse relationship between the level of public borrowing and that of interest rates. Over the period between 1979 and 1986, the public sector borrowing rate went from £10 billion to £3·5 billion. Over the same period real interest rates rose from minus 1 per cent. to plus 7 per cent. Under the Government, the lower the level of the PSBR, the higher the level of real interest rates.
What has it taken to get any amount off the real level of interest rates? It has taken a 25 per cent. stock market crash. I was talking the other day to one of my constituents, a hard-pressed farmer, who asked why there was at last some relief in the level of interest rates. I replied that the reason was a 25 per cent. stock market crash. He replied that he wanted a fall of another 25 per cent. so that he would secure another 2 per cent. off the interest on his borrowing.
That reflects real feeling in the real economy—the manufacturing and the producing economy — that its interests are being made subservient to those of the financial economy. Instead of growing with the manufacturing economy, the financial economy has grown
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at its expense. In the 10 years between 1976 and 1986, the financial sector increased its share of gross domestic product from 11 per cent. to 16 per cent. In the same period, the manufacturing sector declined from 29 per cent. to 24 per cent. The financial sector has been allowed to grow at the expense of the real economy. The Government have committed the error warned of by a previous Tory Chancellor of making industry too poor and finance too proud.
In later life Churchill conceded that he was probably the worst Chancellor in British history. To be fair to the great man, he wrote that before the term of office of the right hon. and learned Member for Surrey, East (Sir G. Howe). That right hon. and learned Gentleman has the distinction of wasting the greatest economic opportunity of modern times—more than £100 billion of oil revenue protection for the United Kingdom's balance of payments. For generations successive Governments have been "blown off course" because of pressure on the balance of payments. The Government came to office with no constraint, but what did they do? They invented their own constraint and introduced the sterling M3 target.
I was interested in the remarks made by the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), who demonstrates that the spirit of 1979 to 1981 still haunts the Conservative Back Benches. However, how on earth can he talk about regenerating the regional economy of the United Kingdom when he simultaneously advocates a policy of fiscal retrenchment?
I regard the appropriation of Scottish oil revenues as probably the greatest piece of international larceny since the Spanish stole the Inca gold. However, such action would have been much easier to bear if the oil revenues had been used to finance expansion and investment in the economy instead of being used to finance monetarist experimentation and retrenchment, and if Scotland had not been forced to bank-roll the Government's economic policies for the past eight years. Despite that, the Chancellor still has the effrontery to come to Scotland and tell the people how dependent we are on the largesse of the Treasury!
The monetarist experiment is now over, but the economic consequences live on. They live on with the reemergence of the balance of payments as the major restraint in the United Kingdom economy. In the Autumn Statement discussed today we have had the forecast of a £3·5 billion balance of payments deficit this year and there is the possibility of it increasing next year to £5 billion or £6 billion. The United Kingdom will have to pay its way through the world without the comfort of massive oil revenues and with a vastly reduced industrial base.
The third major failing in the Government's approach to the economy is their lack of any attempt to redress the serious regional imbalances in the United Kingdom. Perhaps the greatest single cause of inflationary pressure within the United Kingdom economy at the moment is spatial imbalance. The south-east the south-west and East Anglia are bidding up prices throughout the country. Government policy, far from redressing that balance, in many ways reinforces it.
Let us consider the fiscal and transport subsidies that are available to the south-east of England, London weighting, and the massive defence expenditure based along the M4 corridor. Such subsidies, together with mortgage tax relief, represent massive implicit subsidies for the most privileged corners of the United Kingdom.

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The south-east of England houses 30 per cent. of the United Kingdom population, but it obtains 50 per cent. of the available mortgage tax relief. That represents an excess subsidy over that region's population share of £1 billion. That should be compared with the regional aid budget for the whole of the United Kingdom. We find that mortgage tax subsidy — an excess subsidy for the south-east of England—is now worth more than the entire regional aid budget for the rest of the United Kingdom, and that is before taking into consideration the recent announcement on regional aid.
It is part of the hypocrisy of the present Administration that public expenditure in the regions and nations of the United Kingdom is described as an unacceptable subsidy, but massive tax subsidies for the south-east of England are said to be "fostering the enterprise economy".
The Government have critically weakened the United Kingdom's industrial base as a result of high interest rate and high exchange rate policies. Secondly, the vast opportunities of the oil revenues have been wasted. Thirdly, and perhaps most important, no attempt has been made to redress the maldistribution of resources. The Government have concentrated power, income and wealth in the south-east corner of the United Kingdom, which just happens to be occupied by the Conservative party's friends, sponsors and voters.
8.54 pm
Mr. Andrew Mitchell: I shall be brief, not least because I am an enthusiastic co-sponsor of the early-day motion proposed by my hon. Friend the Member for Wokingham (Mr. Redwood) that urges that Back-Bench speeches should be limited to 10 minutes.
I wish to make three points. First, this year's Autumn Statement has been delivered against a background of profound international turbulence and nervousness in the financial markets. For many years, we were used to the British economy being rather less certain, more turbulent and less successful than other Western, or indeed Eastern, developed economies. Now the position has been reversed. In many ways, our economy is performing in much the same way as it did in the 1950s — inflation perhaps a little lower here and growth perhaps a trifle higher there. However, in the 1950s we were performing much worse than our main competitors—now we are performing rather better.
There must be something refreshing and perhaps invigorating for my right hon. and hon. Friends on the Treasury Bench about the way in which their policies and views have been copied around the world. That has occurred not only in countries with Administrations that follow avowedly free-market policies. So-called Socialist Governments in Scandinavia, Spain, Australia and New Zealand are pursuing policies similar to our own. That can hardly be dismissed as coincidence. In New Zealand and Australia, there has been a conversion to policies traditionally denoted as Thatcherite—a conversion to policies of minimum tax interference in the workings of the market and a philosophy of tax neutrality. It is interesting to note that the Labour Governments of those countries were returned to power in the past year—re-elected on such economic policies.
Over recent years, we have seen the internationalisation of the markets in terms of competition, supply side and tax regimes. Those countries that bucked that trend — as France did for a while—are now safely back on board.
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The alternative is simply too unpalatable. The countries that are winning are those which have competitive supply-side economies, which have competitive tax regimes and labour markets that work, and which are privatising and deregulating.
It is a truism that such greater internationalisation makes international co-operation vital. I believe that the concerted action behind the Louvre accord is absolutely essential. The accord has nothing to do with stopping international trends. It is not about seeking to prevent long-term market adjustments. It is about ensuring that the least amount of concerted intervention has the maximum impact on limiting the gyrations of the currency markets. Without such intervention, our industries and economies are too much at the mercy of the currency speculators.
My second point is that we are now in a strong position because of the consistency and sense of purpose of the policies that we have followed for the past eight years. Those eight years of caution and prudence have paid off. We have finally got public expenditure under control. We should keep growth in public spending within the prospective growth of the economy. The worst message that we could now give is that we have money to burn.
The corporate reforms enshrined in the 1984 Budget have had a dramatic effect. Corporate profits are now at an all-time high, with all the consequent gains for investment and new employment. I now look forward to a Budget that will include the major personal tax reforms that would be most beneficial to the supply side of the economy.
My third and final point is that I have some sympathy with paragraph 19 of the Select Committee report that deals with the determination of public expenditure priorities centrally, and particularly in respect of the NHS. The report makes the point that NHS expenditure has massively increased. Through medical research and discovery and the opening up of marvellous new medical cures and treatments, the demands and the need for funding medical care are increasing and will continue to increase. How we bridge that gap and how we increase the amount that we spend as a country on health care is a matter which exercises all hon. Members on both sides of the House. It is not a matter which I propose to pursue now.
However, the manner in which we target additional funds to the NHS is relevant to the debate. An overrun budget in a hospital department or a growing waiting list are not necessarily evidence only of need. They may be evidence of gross inefficiency and the misuse of resources For example, we know that some hospitals spend three times as much as their neighbours on the same operation. We need to know much more about that phenomenon within the NHS if we are to ensure that increases in funding are to reach directly and effectively those in need. To achieve that aim we must develop the internal market within the NHS. That is the best way to ensure value for money, support better health practice and enable funds to stretch further in the interests of patients.
The Autumn Statement offers steadily rising living standards, rising employment, low inflation and impressive growth. It was presented to the House against the background of an increasing international consensus of Governments of both the Left and the Right on the rectitude and success of this Government's policies.

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Tonight we shall see whether Opposition Members are moving towards accepting that consensus, or whether they wish to buck the trend and remain out in the cold.
9 pm
Mr. Austin Mitchell: I want to emphasise how much the Chancellor has done during recent months to kill the goose that laid his golden eggs through a series of actions which have been directly harmful to British manufacturing industry.
The first and most dangerous of those actions was to encourage the pound to rise in value. The system of putting the pound into a relationship with the deutschmark when the deutschmark has to go up means that the pound has been rising and becoming dangerously uncompetitive. There has been a major loss in competitiveness during the past few months. A major real over-valuation compared with 1986 has emerged.
That tendency has been further sustained by the high interest rate, which the Chancellor refuses to reduce. Indeed, the Bank of England does not want to reduce it because it considers that the Chancellor has allowed credit to expand so enormously that any reduction in interest rates will boost the credit bubble again. Therefore, we are trapped in a policy of high interest rates and an overvalued pound, when it is logical that the pound should fall with the dollar, if we are to maintain our competitiveness in the American market which has produced two thirds of manufacturing exports since 1979. We have become dependent upon the American market. The dollar still has some way to fall. It is no use the world trying to shore up the dollar. We cannot push water uphill by international agreement. The pound needs to come down with the dollar.
The terms of trade in manufactures are now, at 104, worse than they were at the height of the monetarist depression in 1981. That forebodes the same consequences for manufacturing industry — the loss of jobs and exports and the rise of imports—as resulted from that depression. It means that expansion must now come to an end. We are now at an interesting turning point which will prove either the monetarist, moralist philosophy of economics that we have heard so much about from Conservative Members or the argument that I emphasise, that competitiveness and industrial health are based on the exchange rate, and that we need a competitive exchange rate for a healthy, exporting, competing manufacturing industry.
If the exchange rate hypothesis is correct, the economic consequences of the next few months will be serious to British industry. If the monetarist, moralist interpretation—to which several Conservative Members have referred—is correct, we shall be able to ride it out with only a slight setback in growth. We are now at that interesting test point. It is my thesis that the Chancellor needs to provide for some of the problems that we will have with our exports by expanding the domestic economy much more than he seems to envisage with the present halfcocked expansion, which is doing nothing to make up the ground we have lost or to bring down unemployment.
As a country, we are under-borrowed compared with competing economies and compared with what we need to do to sustain economic activities. If the exchange rate thesis is correct, it is ludicrous to cut borrowing, and even
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more ludicrous to be over-funding to try to damp down the credit explosion, which is what the Government are doing.
I conclude by saying that the next few months will provide a serious test, which bodes ill for British manufacturing. With the over-valued pound, the terms of trade and the high interest rate burdens with which it is compelled to compete, the prospects for survival of manufacturing and for a continued fall in unemployment are dire indeed.
9.4 pm
Mr. Gordon Brown: This has been an interesting and informative debate in which we have had a maiden speech by the hon. Member for Wimbledon (Dr. Goodson-Wickes). He concentrated, appropriately for his position as a doctor, on many of the issues facing the Health Service. His speech was eloquent and excellent in its delivery, even if it concentrated on the silver linings of the Health Service at the expense of the dark clouds on the horizon.
The debate was also dignified by speeches from the Chairmen of the Select Committee on Treasury and Civil Service and the Public Accounts Committee. The debate has been graced too by speeches from my right hon. Friends the Members for Blaenau Gwent (Mr. Foot) and Bethnal Green and Stepney (Mr. Shore) and from my hon. Friends the Members for Durham, North (Mr. Radice), Gateshead, East (Ms. Quin) and Great Grimsby (Mr. Mitchell).
The debate may be remembered most for the interesting speech by the right hon. Member for Shropshire, North (Mr. Biffen) who suggested that the 1p or 2p that might otherwise have gone to tax cuts would be better spent on the National Health Service, the amount being £2·5 billion if reckoned at 2p. He has done more in a few minutes to speak up for the traditions of one-nation Toryism than the Chancellor has done in eight long years as a member of the Conservative Government.
When we face one of the biggest crises in the National Health Service in its 40-year history, when we still have 2·5 million unemployed and 5 million on supplementary benefit, and when 8 million are dependent on these benefits and 16 million are on low incomes, one might have thought that the Chancellor would at least have paused this afternoon to consider some of the tasks that remain undone. One would have thought that the self-congratulation might have been interrupted to take note of the poverty, deprivation and misery in our midst, and that we might have heard from the Chancellor, if not a promise or a commitment, at least the offer to consider using some of our national resources to relieve poverty, further to reduce unemployment and to help the National Health Service, which is in such need.
But the truth about the Government has been revealed, as my right hon. and hon. Friends have said so eloquently. Even though the Government have the money—with the windfall of North sea oil revenue being higher than expected, money available to them by good fortune rather than by good management — even though they have been made aware from both sides of the House of the needs of the people, even though to secure re-election they made certain promises and even though they can see for themselves the employment benefits of spending and investing the money, the Government refuse to spend enough on Britain. Money that was once withheld on

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grounds of financial prudence is now withheld for reasons that can only be described as ideological. Again and again in the last eight years the Government have said that they would spend if they could. Now they can, and they will not.
If the economy is as successful as the Chancellor has said, why cannot he spend sufficient money to provide a decent level of pensions for 9 million pensioners? Why has he had to freeze child benefit for the 7 million mothers and 12 million children who depend on it, and why for the first time in 40 years has he had to introduce charges for a visit to the optician and dentist to raise £170 million?
If the economy is fundamentally far stronger than it has ever been, as the Chancellor said at the new year, and if we are to look forward to long-term sustainable, secure growth and rises in living standards, why by the one test of these economic prospects—the level of investment in training, in education, in research and development, and in machinery and plant — have the Government done worse and why are they still doing worse than all our major competitors? Why as a result of the Autumn Statement will the Government continue to do worse in the next three years?
Why are we investing less in ourselves—as a share of our national income—than all our major competitors, including Japan, which appears to be investing 50 per cent. more than we are? Why is no other country in the industrialised world, with the exception of Belgium, investing less in its economy? Why are we investing less as a share of our gross national product in the oil-rich 1980s than we did in the 1960s and the 1970s?
If the Chancellor will not listen to me, will he listen to the Confederation of British Industry, which had this to say a few weeks ago about our growth rate:
"The momentum will not be sustained without much higher levels of investment in research, development and training, as well as fixed capital."
And, if he will not listen to the CBI, will he not listen to the Engineering Employers Federation, which said in its Budget submission:
"We believe the level of investment expenditure in the UK to have become disturbingly low … What concerns us is that growth will be unsustainable without increased investment, training and research and development."
Faced with that record of low investment generally, might we not have expected the Chancellor to be telling us in his Autumn Statement how he is to bridge that gap in all those major areas, how he is going to make up that investment shortfall, especially when we know that in the public sector we invest 40 per cent. less per head than is invested in Germany and 200 per cent. less than is invested in Japan?
Is it not the case — and I expect detailed answers from the Chief Secretary when he replies this evening—that, far from narrowing, that gap will widen as a result of the Autumn Statement: £100 million a year less in local authority direct investment each year until 1990; £800 million a year less in public sector capital investment each year until 1990; a 2, 3, 4 per cent. decline in the amount of money invested by the Government in our economy? No wonder the CBI has also said that
"the cuts in public sector capital spending must be reversed."
The Government's argument throughout all this is that spending has been sufficient, even when all the evidence from doctors, teachers, industrialists and public servants has been the opposite. If the Chancellor believes that spending is sufficient, has he looked at the state of our
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schools? One million of our primary schoolchildren are being educated in classrooms built before the first world war, on which, as a result of the Autumn Statement, only 2 per cent. of the money needed for vital repairs is to be spent. Has he visited our hospitals, where two thirds of the wards were built in the days of the voluntary and charity hospitals and even now nurses are having to leave their patients to run flag days to raise money for vital equipment and repairs? Has he seen the condition of our inner cities and our regions? Has he looked at our roads and railways? Does he not understand that what we do not invest in infrastructure today we shall have to spend on more unemployment tomorrow?
Nowhere is the need for greater investment more clear than in research and development, science and innovation. Prior to the last election the Government promised that they would spend more money in this area. They promised more support for single industry research. They commissioned and received the Bide report on information technology. They gave the impression that they would sponsor further space research. They promised £200 million for the collaborative programme in electronics called LINK. But since the election there has been not a penny more for single industry support, which is now abolished; not a penny more for space research, as, further, we pull out of the European programme; not a penny more for the second stage of Alvey, for which the demand was for £400 million and which is to receive around £30 million; not a penny, after 13 months, for the LINK programme in electronics. Is it not a scandal that, 13 months after the Prime Minister announced the creation of the LINK programme in electronics, not a penny has been spent, especially when the Prime Minister said as she announced it in December 1986 that it was
"essential that advances were rapidly exploited"?
The Government claim that they are spending more when they are spending less, as a Government, on industrial research and development. Perhaps that is what the Department of Trade and Industry meant when it claimed recently in its press release that it was
"helping to translate science fiction into fact".
All this has happened since the Prime Minister took personal responsibility for our research and scientific effort.
Education, promised more in the Autumn Statement and at the election, receives less after we take into account the election year teachers' salary commitments and redundancies in our universities. The vast majority of British young people leave school at the earliest opportunity without qualifications. Half as many workers in Britain have technical qualifications than their counterparts in the United States, Japan and West Germany. A lower proportion of our people are in higher education than in any European country with the exception of Portugal. If we followed the example of Japan, the United States and West Germany, 500,000 more pupils would stay on at school. One million more pupils would leave with higher grade qualifications and there would be 500,000 more people in our universities and colleges.
We are now doing worse than countries far smaller than ourselves. South Korea, with a population of 50 million, has 1,200,000 university and college students, yet Britain, with a bigger population, has only 800,000. Our best prospect now appears not to try to stay level with Japan, but to keep up with Taiwan, not to beat West Germany,

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but to stay up with South Korea. Are Conservative Members proud of the fact that, instead of pursuing the ambition to have the best educated, best trained, best qualified working population in the world, we are spending much less than most of our European competitors on education?
The cuts are nowhere more obvious and alarming than in the Government's policy towards our regions. The latest Government figures show that more than one million jobs have been lost since 1979 in the north, Scotland and Wales. The latest Government figures published in December show that the real value of manufacturing investment is still 35 per cent. lower in the north than it was in 1979, 33 per cent. lower in Yorkshire, 30 per cent. lower in the north-west and 27 per cent. lower in Wales. Most damaging of all is the high permanent unemployment, emigration and forced depopulation in one part of the country when we have overheating, congestion, skill shortages, pressure on the green belt and escalating house prices in another part of the country. That is neither good for the regions nor for the country as a whole.
What is the Government's reaction? On Tuesday they published a White Paper which makes a virtue of the fact that they will cut automatic regional aid which was worth £800 million in 1979, £200 million this year and will be worth nothing in the future. They plan to replace it with private consultancy services, one-stop shops and advisory services whose chief feature is that they will benefit the more prosperous regions more than they will ever benefit the disadvantaged regions. What has happened to the bipartisan tradition in regional policy? Regional policy was started by a Conservative Government when unemployment in the regions was 4 per cent. to 5 per cent. The Government are now abandoning it when unemployment is still about 14 per cent. to 15 per cent. in most of our industrial regions.
What about the promises to the inner cities? They are now in danger of moving from depression to recession, without ever having enjoyed an intervening period of recovery. Where is the new investment that will benefit the inner cities? Does the Minister not realise that the small amounts given by the Prime Minister to urban development corporations, city action forces and inner city task forces have already been taken away in cuts in rate support grant, and regional aid, and further cuts, even at the heart of the urban programme?
I do not know how Conservative Members can deny that. At the election the Secretary of State for Trade and Industry made a great virtue of the fact that the programme for the inner cities would have to be self-financing. The Chief Secretary said:
"We will not succeed by spending money".
The British economy was not to have performed like that. It was to be quite the reverse. I shall finish the quotation:
"We can only tackle the problems of the inner cities by direct action to encourage local initiative, by giving people the opportunity to be self-reliant."
Does closing schools in the inner cities provide the opportunity to be self-reliant? Does cutting the number of beds and wards in hospitals give patients the opportunity to be self-reliant?
Did the Government ever intend to do anything for the inner cities? We are told that on election night the Prime Minister said that something had to be done for the inner
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cities. But when it was suggested to the Prime Minister when she visited the north-east a few months ago on her walkabout that she had said that something had to be done for the inner cities, she said:
"That was not quite what we said."
Notice the royal "we".
"We said that we wanted to win back those inner cities to our cause."
That was not a commitment to jobs in the inner cities, just to votes in the inner cities. Success is to be judged not by how much people in the inner cities were assisted, but by how much the Tory party in the inner cities was assisted.
Is that not the old trick — to hold out as long as possible by denying that there is a problem in the inner cities, the Health Service, or the education service or anywhere else, and then to turn out a huge and grand new initiative more to do with public relations than public policy changes?
Is that not what happened to the enterprise zones, announced with a great flurry in 1979 and quietly abandoned by the Government with a press release on Christmas eve? Is that not what happened with the great new initiative for 20 city technology colleges announced in October 1986 by the Secretary of State for Education, only four of which have been designated and none of which has been opened?
What about all the other initiatives? Remember Britain 2000 and Mr. Richard Branson of Virgin Records? Mr. Branson was brought in to clean up the litter. Mr. Branson cleaned up; the litter remained — government not by grand and great design, but government by gimmick and government by gesture. We do not get job campaigns for our inner cities and regions, simply advertising campaigns.
As we near the next election, the Prime Minister will return to the inner cities and, just as she did with unemployment, she will declare the problem of urban deprivation to be solved, no doubt after 19 changes in the definition of "inner city". The nation knows that the inner city crusade is a crusade without cash. The problems of the inner cities and regions will last until domesday if the Government's policies are all that confront them.
What of the National Health Service which has been mentioned by so many people this evening? When we know that the NHS needs at least an additional 1 per cent. above inflation for demography; when it needs another 1 per cent. to keep pace with technology; when we know that, to make good the shortfall that exists at the moment and to make up for the nurses' salary awards that were never properly funded, another 1 per cent. is needed; when we know on the Government's own figures, given by them to Select Committees and in documents that are available to the House, that the minimum that the Health Service would need is an increase in real terms above inflation of more than 3 per cent., what is the proposal in the Autumn Statement? What is the proposal, stripped of its pretentions, after taking into account the announcement just before Christmas of another 100 million this year?
When the Health Service needs at least an extra 3 per cent. above inflation, the Autumn Statement proposes 0·7 per cent. That is the best that the Autumn Statement can do. We find ourselves with one quarter of the money that is needed. [Interruption.] The Chief Secretary says that he will give the figures. The statisticians in the Treasury will now be at work. The figures are clear in the Autumn Statement. One should take account of the fact that

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spending is to rise by £100 million this year, and if that is not compensated for next year by another announcement there will be a cut.
The Government used to tell us that they would spend if only they had the money. Now they have the money and they still refuse to spend. It is not a shortage of cash in the Treasury that is depriving the Health Service of resources; it is a shortage of compassion and concern on the part of the Government. It is not the absence of money; it is the absence of morality in the Government. If they do not accept what we say, let them look at the evidence around the country. I shall not take the most publicised versions of what has been going on in different areas and communities. All one needs to do is to listen to the health authorities, the doctors and the patients.
One has only to listen to the consultants in Birmingham who, on Monday, had to form a committee to save the Health Service; to listen to the Cornwall health authority, which yesterday had to close a 79-bed hospital to save £500,000; to listen to the Greater Manchester health authority, which says it cannot even pay its salary bills and whose cash is running out—any other authority in that position would have been declared bankrupt; to listen to the people from the midlands whom the Prime Minister refused to meet this afternoon; to listen to the Shropshire health authority, which is faced with a decision to close 10 hospitals with a loss of 367 beds; to listen to them all to know that waiting lists are at 850,000 throughout the whole of the United Kingdom, we have lost 46,000 beds since 1979, 30,000 nurses are leaving the Health Service every year, and if the Government do not spend the money that is required, the Health Service faces the rest of 1988 with a crisis on its hands.
The position of the Government and of the Prime Minister is that the private sector must be encouraged to bridge the gap, even when she knows that the National Health Service is more efficient, less administratively expensive to run and that, in a unique way, it combines economy with equity. Even though all those things are known, and the Prime Minister knows that the public want to spend money on health—and want it spent on the National Health Service — she refuses to invest any more. She would prefer private money being used ineffectively to public money being used productively. She believes in the private sector, not because it is more efficient—it is not—but because it is the private sector. She opposes the extension of public provision, not because she thinks it is inefficient, but merely because it is public. In that way, she would reduce our great National Health Service, which is internationally admired and the envy of the world, to the economics of her corner grocer shop and the morality of the worst ethics of the stock market. Thereby denying people the security of a national service and replacing it with the uncertainty of dependence on free market forces, she then parades that choice as an extension of freedom.
My right hon. and hon. Friends have said today that the Chancellor faces a choice. We are told that he is considering reducing the top rate of tax for the top 4 per cent. of the population, at a cost of £850 million. Why does he not spend that money properly on the National Health Service, education and the public services? We are told he is considering abolishing capital gains tax, which is paid by the top people in this country, raising just over £1 billion. We are told that he is considering abolishing inheritance tax, which raises £1 billion from those who are
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rich enough to inherit sums of more than £90,000. Is it not clear to the Chancellor that the wish of the country arid of the vast majority of its people is that, instead of tax cuts to make the rich few who will benefit from them richer, the money should be spent on our Health Service, public investment and the expansion of our public services?
No Government have had the advantages of North Sea oil revenues of £60 billion of windfall money that this Government have enjoyed. During these past eight years, no country has lost so many jobs in productive industries or has invested so little a share of its national income in its industry or public services, with the result that no country faces the future so ill-prepared for the problems of the 1990s or the 21st century. If the Germans had discovered oil, would they have closed down the Ruhr and invested all the money abroad? Would the Japanese have closed down their computer industry and put all their money abroad?
The message to the Chancellor from the country is clear. As my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said earlier, the Chancellor may have changed his tune about the importance of the money supply and about the wisdom of leaving interest rates and exchange rates to the vagaries of free market forces, but on the issue of public investment, especially investment in the National Health Service, he has refused to learn from his mistakes. Even when he has the money and knows the needs, even when the Prime Minister has made promises, and when we can see the employment benefits of investing in the National Health Service, in education and the industries of this country, the Chancellor refuses to invest more in Britain. His is a message of dogma and ideology. What this country needs is realism and common sense, and for that it will have to look to the Labour party.
9.30 pm
The Chief Secretary to the Treasury (Mr. John Major): The hon. Member for Dunfermline, East (Mr. Brown) has just made his debut as an Opposition Front Bench spokesman on the economy. He spoke with considerable eloquence and passion, but what he said was a welter of misleading and half-understood statistics, almost all of which were wholly inaccurate.
The hon. Gentleman had much to say about jobs, but nothing to say about falling unemployment. If the hon. Gentleman read the Autumn Statement, he clearly did not understand it. He refered to social security cuts, but made no acknowledgement of the £48·5 billion that is made available in the Autumn Statement. He referred to education restraint, with no acknowledgement of the extra £630 million over last year's provision.
The hon. Gentleman referred to inner cities with no acknowledgement of the fact that this year's public expenditure plans will bring total urban spending to £500 million a year, which is two and a half times more in real terms than the amount spent by the Labour Government at any time during their period of office. The hon. Gentleman made no reference to the substantial growth of initiatives that the Government have produced in recent years for the inner cities, such as urban development corporations, urban development grants, urban regeneration grants, enterprise zones, the inner city initiative and Estate Action. None of those initiatives has reached the

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hon. Gentleman. I do not know where he has been for the last few years, but I dare say that Rip Van Winkle is better informed than the hon. Gentleman about what is going on.
The hon. Gentleman referred to investment, but made no mention of the fact that in the economy as a whole investment was at record levels last year. Indeed, in the first three quarters of 1987 it was up 3·5 per cent. on the previous year's record figures. All those facts were overlooked by the hon. Gentleman in his welter of misleading statistics.
However, until the hon. Gentleman's speech we had had an interesting and thoughtful debate, which was marked by several excellent speeches, including an extremely eloquent maiden contribution from my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes). My hon. Friend paid a warm and generous tribute to his predecessor, Lord Havers. We all join my hon. Friend in wishing the noble Lord a full recovery soon from his recent illness.
My hon. Friend called for more publicity for payroll giving to charity. I congratulate him on turning his maiden speech towards a most important and interesting topic. I shall certainly draw his remarks to the attention of my right hon. Friend and I hope that those in industry and commerce who deal directly with payroll giving will take my hon. Friend's remarks to heart.
My hon. Friend has the triple attributes of being an occupational physician and barrister and a former serving officer in the Army. I have no doubt that the House will make ample use of his knowledge and talents in all of those areas, and will look forward to hearing from him on many occasions.
It is not often that events in the world economy take centre stage in British politics, but the effects in world markets and the responses of the major countries have justifiably and understandably raised serious questions in people's minds. It was, therefore, entirely appropriate that my right hon. Friend the Chancellor should have devoted so much of his opening speech to those issues.
While the fall in stock markets and the instability of the dollar have made the outlook more uncertain, this is clear to those who wish to see it. The British economy has the strength to weather any external difficulties that might arise. That strength is founded on the sound public finances that we have set out clearly in the Autumn Statement. The statement sets out our broad plans for public expenditure. The House may wish to know that the public expenditure White Paper, which will give our detailed plans, and better inform the hon. Member for Dunfermline, East, will be published next Wednesday. I am sure that we will then have the opportunity to debate it in the normal way, once the Select Committee has concluded its consideration.
The right hon. and learned Member for Monklands, East (Mr. Smith), who is at present enjoying a no doubt fascinating conversation with his hon. Friend the Member for Wrexham (Dr. Marek), spread his net quite widely. I shall turn to his comments on the National Health Service in a few moments.
When the right hon. and learned Gentleman hinges his remarks on opinion polls, as he did, perhaps I may remind him of an opinion poll last June that left him in Opposition and the Government in power with a substantial majority.
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Before he starts lecturing the Government about opinion polls and public attitudes, he might remember the result of the election just a few months ago.
It was generous of the right hon. and learned Gentleman to assume that my right hon. Friend the Chancellor might have a fiscal adjustment available for his Budget. That is not only generous, but curious too, as before that June opinion poll the right hon. and learned Gentleman and his hon. Friends were repeatedly telling the country to expect higher taxes and public expenditure cuts.
I am gentler than my right hon. Friend the Chancellor, so I will not quote the explicit words of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). [HON. MEMBERS: "Go on."] No, I am much too gentle for that. The fact is that the Opposition were wrong about public expenditure and they have changed their minds about our tax prospects. If the Opposition were so wrong and have changed their minds so rapidly on those issues, I am not sure why they should assume that they are right now in anything that they say.
Before I respond to the right hon. and learned Gentleman's remarks, I wish to deal with the strength of our public finances, as set out in the Autumn Statement. Much of what has been said today reinforces the fact that the background to the debate is extremely favourable. Growth in manufacturing output continues to rise and there is a secure outlook for investment and inflation.
My right hon. Friend promised that I would deal specifically with public expenditure, and I propose to do so. Our plans include cash increases in the planning total of £2½ billion and £5½ billion in the next two years, much of which is directed specifically to priority programmes. I emphasise for the right hon. and learned Gentleman's interest that they are increases, not cuts, in public expenditure. Our plans also show a welcome and rapid fall in the share of national income taken by public expenditure, with the trend set to continue from 44 per cent. of gross domestic product in 1986–87 to 41¼ per cent. by 1990–91. That will be of special pleasure to my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan), who expressed his concern to ward off inflationary pressures and urged caution in our fiscal stance. I agree without qualification that prudence and caution are vital and I know that the Chancellor will have heard my right hon. and learned Friend's remarks with great interest.
Public borrowing this year is also down, to ¼ per cent. of gross domestic product — £1 billion — which is noticeably better than earlier expectations and the lowest for 18 years. This is in sharp contrast to elsewhere in the industrial world, where the ratio of Government debt to income has been rising. Here, as an act of policy, we have bucked the trend, and our debt interest payments have decreased from 5¼ per cent. of GDP in 1980–81 to 4¼ per cent. this year. Lest that seem an arcane statistic, I shall point out that the decline, which is set to continue, means that within our medium-term plans we are able to spend more on priority programmes and less on debt interest.
The 1 per cent. reduction in debt interest amounts to £4½ billion — precisely the sum by which next year's spending is increased before taking account of reserves. I hope that it is not too unkind to remind the House that if borrowing had stayed at the same proportion of national income that we inherited, the increased servicing cost this year would have been £8+ billion — nearly 7p on the

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standard rate of income tax. That is where increased borrowing would have got this Government and the taxpayer, and that statistic was noticeably missing from the speech of the right hon. and learned Member for Monklands, East.
Nor did the right hon. and learned Gentleman make any mention of his pre-election claims of higher taxes and lower public expenditure if the Government were reelected. Nor, interestingly, in view of the way that he twitted my right hon. Friend the Chancellor about not covering all aspects of policy, was there any reference to the new economic strategy that the leader of the Labour party commissioned from the shadow team six months ago today. It may be that the future of other policies launched yesterday encouraged the right hon. and learned Gentleman to remain silent. In any event, Labour policies remain a secret after six months, while the alliance's have become a catastrophe after six hours.
The debate has repeatedly returned to public expenditure priorities, and the right hon. Member for Blaenau Gwent (Mr. Foot), his right hon. and learned Friend the Member for Monklands, East, my right hon. Friend the Member for Shropshire, North (Mr. Biffen) and a number of other right hon. and hon. Gentlemen referred specifically to the National Health Service. My right hon. Friend the Member for Shropshire, North set out some intriguing principles for the reform of the National Health Service and I have no doubt that they will be widely read and considered, although they seemed to receive no endorsement from Opposition Members who still live in a time of many years ago.
Few people would doubt the genuine affection in which the National Health Service is held. It has been manifested in recent weeks in calls for greater funding and I will return to that point in a moment. First, I wish to refer to Opposition Members who in recent years have repeatedly claimed that the Government simply do not care about the National Health Service.
Miss Marjorie Mowlam: The Minister's performance is absolutely pathetic.
Mr. Major: Not only is this not true, but remarks like that simply trivialise and debase what ought to be an important national debate—and the hon. Member for Redcar (Miss Mowlam) illustrates the point far more eloquently than I can. I have no doubt that Opposition Members care about the National Health Service, and I have no doubt that their predecessors cared 10 years ago when they imposed on the Health Service the largest capital cuts it has faced at any time in its history. So the question is not about who cares — we all care — but about how to achieve the quality and quantity of service that we all wish to see. In that, money cannot be the whole answer. The pressures are clear.
The hon. Member for Walsall, North (Mr. Winnick) is present with us. Lord Wilson of Rievaulx once referred to the hon. Gentleman as the silliest man in the House. Clearly, that was one of the noble Lord's characteristic understatements.
The pressures on the NHS are clear. Demographic changes, an aging population, medical improvements and greater expectations have all led to the calls for greater funding. If we are genuinely concerned not about making political points but about getting the best possible Health Service, that cannot be the whole answer. [Interruption.]
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It is interesting that the Opposition are not genuinely interested in the Health Service but only in making partisan political points about the Health Service.
The House is familiar with the growing resources devoted to the service, the increasing number of patients treated and the increasing number of medical staff employed. [Interruption.] I see that the hon. Member for Walsall, North is making his usual intellectual contribution; he is welcome.
Mr. Winnick: Does the Minister use the NHS?
Mr. Major: The answer to the hon. Gentleman's question is yes.
For next year, the net increase for the whole of the National Health Service is £1·15 billion and a similar increase is already committed in the public expenditure plans for the second year in the public expenditure programme. To that £1·15 billion must be added the proceeds of cost improvements programmes, income generation schemes and, to supplement capital programmes, the resources raised by surplus land sales.
We are witnessing extensive public examination of the resources put into the Health Service and I believe that we need equally careful consideration of what we get out of the Health Service as a result of the money that we put into it. Some of what we get is familiar and welcome: the extra medical staff responsible for patients, the extra 1 million in-patient cases, the extra 500,000 day cases and the extra 3·75 million out-patient cases. Those improvements in the service are concrete evidence that the Government have put in extra resources for care and that they have been used.
As the right hon. and learned Member for Monklands, East and my right hon. Friend the Member for Shropshire. North acknowledged, Governments alone cannot meet the infinite demands for health care.
We have to ask some uncomfortable management questions of the NHS if we are genuinely to confront the difficulties of getting the best possible patient care for the resources that are made available. Why are general surgical beds in some parts of the country empty for nearly seven days between patients hut occupied again in less than half a day in other parts of the country? That question deserves an answer. Why does it cost more in some hospitals than in others to do the same operation on the same type of patient? Why can so few health authorities tell us what a particular operation costs? Why do general surgery patients spend two and a half days in hospital before their operations in some health districts while in others they spend less than a day? Why, when there are said to be nursing shortages, do four-hour overlaps on nursing shifts still exist? Those genuinely concerned to improve the quality of our health care believe that those questions, as well as the question of resources, need to be addressed.
Moreover, those questions need an answer before we or the Opposition can know that shortage of funds is the problem. If the answers are unsatisfactory, the case for looking first to improve value for money becomes unanswerable.
Mr. Winnick: Will the Minister give way?
Mr. Major: No, he will not.
That is why, when responding to the problems arising this year, we insisted that the extra funds were

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accompanied by an improvement in the arrangements for monitoring Health Service performance and why I believe that the results of that monitoring should be published in the interests of getting the best patient care.
Mr. John Smith: The Chief Secretary to the Treasury is aware that yesterday the heads of the three royal medical colleges met the Secretary of State for Social Services, who gave them certain assurances. Will the right hon. Gentleman say whether, in real terms, any extra money, on top of that committed in the Autumn Statement and in statements since, will be given to the National Health Service?
Mr. Major: The right hon. and learned Gentleman anticipated what I was about to say in a couple of paragraphs' time.
We all wish to ensure that patients are treated as well and as speedily as possible. If we are to do that we cannot and should not exclude medical practice and medical efficiency from consideration in the future. It is neither acceptable nor credible simply to blame the level of funding.
The right hon. and learned Member for Monklands, East referred to press comments following the meeting between the Secretary of State for Social Services and the presidents of the three royal colleges. I cannot answer for those press reports, but I can confirm that my right hon. Friend made it clear to the presidents that we had recognised the need to increase resources for health care in the public expenditure round that we have just concluded. Furthermore, last month we announced an additional £100 million for the National Health Service for the current year, and next year we plan to make available a record £21 billion, which is 32 per cent. more in real terms than under the last Labour Government.
We are launching the new income generation scheme and taking powers to increase health authority powers. As my right hon. Friend the Member for Shropshire, North said, we see the private sector as having an important role to play in the provision of health care. That is what my right hon. Friend made clear to the three presidents, and he did not suggest to them that further sums were about to be added to this year's public expenditure settlement.
The increase in public expenditure in real terms for the next year, in terms of the specific increase identifiable in the public expenditure White Paper, is around 2·1 per cent. With the income generation scheme and other schemes, that is likely, based on precedent, to be raised to a real-terms increase of about 3 per cent. in the next year, which is precisely the sum that the hon. Member for Dunfermline, East said was needed. That is the sum that will be available in the next year for the public expenditure settlement that has just been concluded.
The Autumn Statement shows that the National Health Service has been a major beneficiary, with an increase of £700 million over plans in England. There have been other significant additions to the programmes that I have mentioned and other programmes as well.
Mr. Winnick: Will the Minister give way?
Mr. Major: No.
The plans for education have been increased by £600 million, providing additional funding for universities, for
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basic science and for improving the condition of school buildings. There are additions for law and order, in particular to provide for an expansion in the prison building programme that will amount to almost £400 million in the next financial year.
We have also, contrary to what was said, made substantial additions to our capital plans. Next year capital spending will be about £22 billion, which is £1½ billion more than we had previously planned. Of that increase, spending by nationalised industries accounts for about £660 million, and spending by local authorities, particularly on housing, another £560 million.
Priorities have been the theme of much of the debate. The Select Committee report, for which I thank my right hon. Friend the Member for Worthing (Mr. Higgins) and his colleagues, posed two important questions—how are priorities determined and what is the mechanism by which they are set? My right hon. Friend the Member for Worthing echoed those questions and I strongly suspect that he will follow them up when the Select Committee takes evidence on the public expenditure White Paper. I am delighted that he did so, for not only do they lie at the heart of successful planning and control of public expenditure, but they reveal clearly the difference between this Government and the Labour party.
For the Government, the setting of priorities means establishing the total public spending that can be afforded in the light of the need to keep borrowing down and to meet the Government's objectives for taxation, and then choosing what can be afforded for individual programmes and costing them. The approach of the Labour party is quite different but quite simple. It is a philosophy of, "Give them the money and to hell with the consequences, however inflationary they may be."
The right hon. and learned Member for Monklands, East has made that plain. He wrote in Tribune some time ago:
"I'm not sure it's important to cost everything."
Later he said:
"I'm cautious about writing down bits of money, they get added up by the Conservatives."
Until the right hon. and learned Gentleman learns that it is necessary to cost everything and add it up, he is not fit to be an Opposition spokesman, let alone Chancellor of the Exchequer—not that he is likely to get the chance, with their policies.
The Select Committee, to its credit, is looking for something a good deal more sophisticated, although it veers to the opposite extreme of searching for the philosopher's stone. I fear that that does not exist. There is no magic mechanism for comparing the merits of extra spending on one programme as against another. In the end, the judgment must be political. What there can be is a full appraisal of spending options, with an assessment of output so that the judgments can be informed judgments.
Mr. Winnick: This is rubbish.
Mr. Major: The hon. Gentleman is a specialist on rubbish. The prospect for reviewing policies is continuous, but the public expenditure survey is designed to draw the threads together year upon year.
Mr. Winnick: That is all he is good at.
Mr. Speaker: Order. The hon. Member must not shout across the Chamber.
Mr. Major: It is clear that the legacy of the noble Lord has upset the hon. Gentleman.
I know that my right hon. Friend and the Select Committee are uneasy that Departments are expected to look first to their own cash provisions to finance new initiatives. I make no apology for asking a Minister seeking additional resources to see what in the first instance he can contribute from his own programme to offset the savings. If savings cannot be found, his bid will have to be considered alongside those from other Departments and against the possibility of making reductions in existing programmes. To allow Departments to post off bids to the Treasury without having searched for offsetting savings would substantially weaken public expenditure control, and I have no intention of permitting that to happen.
We have heard a little today about cuts, but not as much as we often do. The dog has barked less loudly than usual. It may be that the Opposition are beginning to realise that it is possible to increase spending, reduce borrowing and cut taxes if we pursue policies that lead to an expanding economy. I remind the Opposition what real cuts look like: a 30 per cent. reduction in capital spending on hospitals and a 40 per cent. reduction in roads capital spending—the product not of this public expenditure survey but of those conducted by Lord Barnett.
Let me tell the Opposition what Tory "cuts" look like: a 36 per cent. increase in National Health Service capital spending, a 30 per cent. increase in the roads programme, and further increases in the coming years. Our cuts have been in borrowing and inflation, not in hospitals and roads. The cuts we have seen have been cuts by the Labour party in Labour headquarters in Walworth road and in the axing of that most enjoyable publication "Labour Weekly" only weeks after reporting that Labour lost the election on economic issues. "Labour Briefing" also has little affection for the Labour party, as it clearly shows.
The Autumn Statement reflects the greatly improving prospects for the economy. Public spending and borrowing are under control. Inflation is low and will remain so, investment is rising, unemployment is falling and there will be growth this year and next year. The Autumn Statement is a further signpost on the route to prosperity, and I commend it to the House.
Question put, That the amendment be made:
The House divided: Ayes 227, Noes 283.

Division No. 139]

[9.59 pm

AYES

Abbott, Ms Diane

Blunkert, David

Adams, Allen (Paisley N)

Boateng, Paul

Alton, David

Boyes, Roland

Anderson, Donald

Bradley, Keith

Archer, Rt Hon Peter

Bray, Dr Jeremy

Armstrong, Ms Hilary

Brown, Gordon (D'mline E)

Ashdown, Paddy

Brown, Nicholas (Newcastle E)

Ashley, Rt Hon Jack

Brown, Ron (Edinburgh Leith)

Ashton, Joe

Buchan, Norman

Banks, Tony (Newham NW)

Buckley, George

Barnes, Harry (Derbyshire NE)

Caborn, Richard

Barnes, Mrs Rosie (Greenwich)

Callaghan, Jim

Barron, Kevin

Campbell, Menzies (Fife NE)

Battle, John

Campbell, Ron (Blyth Valley)

Beckett, Margaret

Campbell-Savours, D. N.

Beith, A. J.

Canavan, Dennis

Benn, Rt Hon Tony

Carlile, Alex (Mont'g)

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

Clarke, Tom (Monklands W)

Bermingham, Gerald

Clay, Bob

Bidwell, Sydney

Clelland, David

Blair, Tony

Clwyd, Mrs Ann

550

Cohen, Harry

Leadbitter, Ted

Coleman, Donald

Leighton, Ron

Cook, Frank (Stockton N)

Lestor, Miss Joan (Eccles)

Cook, Robin (Livingston)

Lewis, Terry

Corbett, Robin

Litherland, Robert

Corbyn, Jeremy

Livingstone, Ken

Cousins, Jim

Livsey, Richard

Crowther, Stan

Lloyd, Tony (Stretford)

Cryer, Bob

Lofthouse, Geoffrey

Cummings, J.

Loyden, Eddie

Cunliffe, Lawrence

McAllion, John

Cunningham, Dr John

McAvoy, Tom

Dalyell, Tam

McCartney, Ian

Darling, Alastair

Macdonald, Calum

Davies, Rt Hon Denzil (Llanelli)

McFall, John

Davies, Ron (Caerphilly)

McKay, Allen (Penistone)

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

McKelvey, William

Dewar, Donald

McLeish, Henry

Dixon, Don

McNamara, Kevin

Dobson, Frank

McTaggart, Bob

Doran, Frank

McWilliam, John

Douglas, Dick

Madden, Max

Dunnachie, James

Mahon, Mrs Alice

Dunwoody, Hon Mrs Gwyneth

Marek, Dr John

Eadie, Alexander

Marshall, David (Shettleston)

Eastham, Ken

Marshall, Jim (Leicester S)

Evans, John (St Helens N)

Martin, Michael (Springburn)

Fatchett, Derek

Martlew, Eric

Faulds, Andrew

Maxton, John

Field, Frank (Birkenhead)

Meacher, Michael

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

Meale, Alan

Fisher, Mark

Michael, Alun

Flannery, Martin

Michie, Bill (Sheffield Heeley)

Flynn, Paul

Millan, Rt Hon Bruce

Foot, Rt Hon Michael

Mitchell, Austin (G't Grimsby)

Foster, Derek

Moonie, Dr Lewis

Foulkes, George

Morgan, Rhodri

Fraser, John

Morley, Elliott

Fyfe, Mrs Maria

Morris, Rt Hon A (W'shawe)

Galbraith, Samuel

Morris, Rt Hon J (Aberavon)

Galloway, George

Mowlam, Marjorie

Garrett, John (Norwich South)

Mullin, Chris

Garrett, Ted (Wallsend)

Murphy, Paul

George, Bruce

Nellist, Dave

Gilbert, Rt Hon Dr John

Oakes, Rt Hon Gordon

Godman, Dr Norman A.

O'Brien, William

Golding, Mrs Llin

O'Neill, Martin

Gordon, Ms Mildred

Orme, Rt Hon Stanley

Grant, Bernie (Tottenham)

Patchett, Terry

Griffiths, Nigel (Edinburgh S)

Pendry, Tom

Griffiths, Win (Bridgend)

Pike, Peter

Grocott, Bruce

Prescott, John

Hardy, Peter

Primarolo, Ms Dawn

Harman, Ms Harriet

Quin, Ms Joyce

Hattersley, Rt Hon Roy

Radice, Giles

Healey, Rt Hon Denis

Randall, Stuart

Heffer, Eric S.

Rees, Rt Hon Merlyn

Hinchliffe, David

Reid, John

Hogg, N. (C'nauld & Kilsyth)

Richardson, Ms Jo

Holland, Stuart

Robertson, George

Home Robertson, John

Robinson, Geoffrey

Hood, James

Rogers, Allan

Howell, Rt Hon D. (S'heath)

Rooker, Jeff

Howells, Geraint

Ross, Ernie (Dundee W)

Hoyle, Doug

Rowlands, Ted

Hughes, Robert (Aberdeen N)

Ruddock, Ms Joan

Hughes, Roy (Newport E)

Salmond, Alex

Hughes, Sean (Knowsley S)

Sedgemore, Brian

Hughes, Simon (Southwark)

Sheerman, Barry

Illsley, Eric

Sheldon, Rt Hon Robert

Janner, Greville

Shore, Rt Hon Peter

John, Brynmor

Short, Clare

Jones, Barry (Alyn & Deeside)

Skinner, Dennis

Jones, Ieuan (Ynys Môn)

Smith, Andrew (Oxford E)

Jones, Martyn (Clwyd S W)

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

Kaufman, Rt Hon Gerald

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

Kennedy, Charles

Snape, Peter

Kinnock, Rt Hon Neil

Soley, Clive

Kirkwood, Archy

Spearing, Nigel

Lamond, James

Steel, Rt Hon David

551

Steinberg, Gerald

Wareing, Robert N.

Stott, Roger

Wigley, Dafydd

Strang, Gavin

Williams, Rt Hon A. J.

Straw, Jack

Williams, Alan W. (Carm'then)

Taylor, Mrs Ann (Dewsbury)

Wilson, Brian

Taylor, Rt Hon J. D. (S'ford)

Winnick, David

Taylor, Matthew (Truro)

Wise, Mrs Audrey

Thomas, Dafydd Elis

Worthington, Anthony

Thompson, Jack (Wansbeck)

Wray, James

Turner, Dennis

Young, David (Bolton SE)

Vaz, Keith

Wall, Pat

Tellers for the Ayes:

Wallace, James

Mr. Frank Haynes and

Walley, Ms Joan

Mr. Ray Powell.

Wardell, Gareth (Gower)

NOES

Allason, Rupert

Couchman, James

Amess, David

Cran, James

Amos, Alan

Currie, Mrs Edwina

Arbuthnot, James

Curry, David

Arnold, Jacques (Gravesham)

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

Arnold, Tom (Hazel Grove)

Davis, David (Boothferry)

Ashby, David

Devlin, Tim

Atkins, Robert

Dickens, Geoffrey

Baker, Rt Hon K. (Mole Valley)

Dicks, Terry

Baker, Nicholas (Dorset N)

Douglas-Hamilton, Lord James

Baldry, Tony

Dover, Den

Banks, Robert (Harrogate)

Dunn, Bob

Batiste, Spencer

Durant, Tony

Beaumont-Dark, Anthony

Dykes, Hugh

Bellingham, Henry

Eggar, Tim

Bendall, Vivian

Evans, David (Welwyn Hatf'd)

Bennett, Nicholas (Pembroke)

Evennett, David

Benyon, W.

Fallon, Michael

Bevan, David Gilroy

Favell, Tony

Biffen, Rt Hon John

Fenner, Dame Peggy

Blackburn, Dr John G.

Field, Barry (Isle of Wight)

Blaker, Rt Hon Sir Peter

Finsberg, Sir Geoffrey

Body, Sir Richard

Fookes, Miss Janet

Bonsor, Sir Nicholas

Forman, Nigel

Boscawen, Hon Robert

Forsyth, Michael (Stirling)

Boswell, Tim

Forth, Eric

Bottomley, Peter

Fowler, Rt Hon Norman

Bottomley, Mrs Virginia

Fox, Sir Marcus

Bowden, Gerald (Dulwich)

Franks, Cecil

Bowis, John

Freeman, Roger

Boyson, Rt Hon Dr Sir Rhodes

French, Douglas

Braine, Rt Hon Sir Bernard

Fry, Peter

Brandon-Bravo, Martin

Gale, Roger

Brazier, Julian

Gardiner, George

Bright, Graham

Garel-Jones, Tristan

Brittan, Rt Hon Leon

Gill, Christopher

Brooke, Rt Hon Peter

Glyn, Dr Alan

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

Goodhart, Sir Philip

Bruce, Ian (Dorset South)

Goodlad, Alastair

Buchanan-Smith, Rt Hon Alick

Goodson-Wickes, Dr Charles

Buck, Sir Antony

Grant, Sir Anthony (CambsSW)

Budgen, Nicholas

Greenway, Harry (Ealing N)

Burns, Simon

Grist, Ian

Burt, Alistair

Hamilton, Neil (Tatton)

Butcher, John

Hanley, Jeremy

Butler, Chris

Harris, David

Butterfill, John

Hawkins, Christopher

Carlisle, John, (Luton N)

Hayes, Jerry

Carlisle, Kenneth (Lincoln)

Hicks, Robert (Cornwall SE)

Carrington, Matthew

Higgins, Rt Hon Terence L.

Carttiss, Michael

Hordern, Sir Peter

Cash, William

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

Chalker, Rt Hon Mrs Lynda

Howarth, G. (Cannock & B'wd)

Channon, Rt Hon Paul

Howell, Rt Hon David (G'dford)

Chapman, Sydney

Hughes, Robert G. (Harrow W)

Chope, Christopher

Hunt, David (Wirral W)

Churchill, Mr

Hurd, Rt Hon Douglas

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

Jack, Michael

Clark, Sir W. (Croydon S)

Jackson, Robert

Colvin, Michael

Jones, Gwilym (Cardiff N)

Conway, Derek

Kellett-Bowman, Mrs Elaine

Cope, John

Key, Robert

Cormack, Patrick

King, Roger (B'ham N'thfield)

552

King, Rt Hon Tom (Bridgwater)

Renton, Tim

Kirkhope, Timothy

Rhodes James, Robert

Knapman, Roger

Rhys Williams, Sir Brandon

Knight, Greg (Derby North)

Riddick, Graham

Knowles, Michael

Ridley, Rt Hon Nicholas

Knox, David

Rifkind, Rt Hon Malcolm

Lamont, Rt Hon Norman

Roberts, Wyn (Conwyj

Lang, Ian

Roe, Mrs Marion

Latham, Michael

Rowe, Andrew

Lawrence, Ivan

Rumbold, Mrs Angela

Lawson, Rt Hon Nigel

Ryder, Richard

Leigh, Edward (Gainsbor'gh)

Sackville, Hon Tom

Lester, Jim (Broxtowe)

Sainsbury, Hon Tim

Lightbown, David

Sayeed, Jonathan

Lilley, Peter

Scott, Nicholas

Lloyd, Sir Ian (Havant)

Shaw, David (Dover)

Lloyd, Peter (Fareham)

Shaw, Sir Giles (Pudsey)

Lord, Michael

Shaw, Sir Michael (Scrab')

Luce, Rt Hon Richard

Shelton, William (Streatham)

Lyell, Sir Nicholas

Shepherd, Colin (Hereford)

McCrindle, Robert

Shersby, Michael

Macfarlane, Sir Neil

Sims, Roger

MacKay, Andrew (E Berkshire)

Smith, Sir Dudley (Warwick)

McLoughlin, Patrick

Smith, Tim (Beaconsfield)

McNair-Wilson, M. (Newbury)

Soames, Hon Nicholas

McNair-Wilson, P. (New Forest)

Speed, Keith

Madel, David

Speller, Tony

Major, Rt Hon John

Spicer, Sir Jim (Dorset W)

Malins, Humfrey

Squire, Robin

Mans, Keith

Stanley, Rt Hon John

Maples, John

Steen, Anthony

Marland, Paul

Stern, Michael

Marlow, Tony

Stevens, Lewis

Marshall, John (Hendon S)

Stewart, Allan (Eastwood)

Marshall, Michael (Arundel)

Stewart, Andrew (Sherwood)

Martin, David (Portsmouth S)

Stradling Thomas, Sir John

Mates, Michael

Sumberg, David

Maude, Hon Francis

Summerson, Hugo

Maxwell-Hyslop, Robin

Taylor, Ian (Esher)

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

Thompson, D. (Calder Valley)

Miscampbell, Norman

Thompson, Patrick (Norwich N)

Mitchell, Andrew (Gedling)

Thorne, Neil

Mitchell, David (Hants NW)

Thornton, Malcolm

Moate, Roger

Thurnham, Peter

Montgomery, Sir Fergus

Townend, John (Bridlington)

Morrison, Sir Charles (Devizes)

Tracey, Richard

Moss, Malcolm

Tredinnick, David

Moynihan, Hon C.

Trippier, David

Mudd, David

Trotter, Neville

Neale, Gerrard

Twinn, Dr Ian

Needham, Richard

Vaughan, Sir Gerard

Nelson, Anthony

Viggers, Peter

Neubert, Michael

Waddington, Rt Hon David

Nicholls, Patrick

Wakeham, Rt Hon John

Nicholson, David (Taunton)

Waldegrave, Hon William

Nicholson, Miss E. (Devon W)

Walker, Bill (T'side North)

Onslow, Rt Hon Cranley

Waller, Gary

Oppenheim, Phillip

Walters, Dennis

Page, Richard

Ward, John

Paice, James

Wardle, C. (Bexhill)

Parkinson, Rt Hon Cecil

Warren, Kenneth

Patnick, Irvine

Watts, John

Patten, Chris (Bath)

Wells, Bowen

Patten, John (Oxford W)

Wheeler, John

Pattie, Rt Hon Sir Geoffrey

Whitney, Ray

Pawsey, James

Widdecombe, Miss Ann

Peacock, Mrs Elizabeth

Wiggin, Jerry

Porter, David (Waveney)

Wilkinson, John

Portillo, Michael

Wilshire, David

Powell, William (Corby)

Winterton, Mrs Ann

Price, Sir David

Winterton, Nicholas

Raffan, Keith

Wolfson, Mark

Raison, Rt Hon Timothy

Wood, Timothy

Rathbone, Tim

Woodcock, Mike

Redwood, John

Yeo, Tim

553

Young, Sir George (Acton)

Mr. Mark Lennox-Boyd and

Mr. Stephen Dorrell.

Tellers for the Noes

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That this House approves the Autumn Statement presented by Mr. Chancellor of the Exchequer on 3rd November 1987; welcomes the prospect of continuing low inflation and steady growth as the basis for maintaining the trend of rising employment; and congratulates Her Majesty's Government on the continuing reduction in the share of national income pre-empted by public expenditure.

PETITION

  Rating Reform
  10.14 pm
  Mr. John Home Robertson: I am grateful to have such an enormous audience to hear this important petition which I wish to present on behalf of 636 residents of the town of Tranent and the neighbouring area in my constituency.
  The petition calls on the House to repeal the Scottish poll tax legislation. I cannot think of many issues which have united Scottish public opinion to the same extent as this. The House should take account of the deep sense of outrage that the tax is arousing in Scotland. Tranent is an area which would be severely penalised by the imposition of the poll tax. For example, a family of three adults in a three-apartment house in Lindores drive, who currently pay a rates bill of about £435 a year, would have to pay more than double that figure, £1,050, under the poll tax. Meanwhile, people living in far more prosperous areas would pay substantially less.
  I wholeheartedly endorse the terms of the petition from the Belters of Tranent and I support their appeal to the House to repeal this pernicious and dangerous legislation, which is an affront to the principles of democracy and to the nation of Scotland.
  To lie upon the Table.

Health Services (Maidstone)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dorrell.]
10.17 pm
Miss Ann Widdecombe: I do not wish to rehearse too much the background to the Health Service crisis which has so badly affected my constituency in the last six months, as that has already been done adequately through the diligence and eloquence of my hon. Friend the Member for Mid-Kent (Mr. Rowe), whom I see in his place and who raised the issue in the House a few weeks ago.
We have a brand new hospital in Maidstone. Last year there was an unprecedented rise in activity, so that we were treating about 30 per cent. more patients. That rise in activity was not predicted and could not reasonably have been so. That meant that the health authority was badly overrunning its budget.
The district health authority was already extremely efficient, because it had introduced privatisation measures, because it had cut waste and because it had already increased its throughput per patient bed; therefore, it had very little scope to find economies and savings to meet the additional strains upon the budget. It therefore reacted with ward closures. One major closure was in the brand new hospital. It also closed all physiotherapy facilities and threatened further ward closures.
I am very grateful to my right hon. Friend the Minister for Health for the immediate help which he made available and for giving us money enough to reopen those wards. I am also very grateful to him for the additional money which enabled Maidstone to appoint a third orthopaedic surgeon and a fourth gynaecologist to cut some of our severest waiting lists.
But those measures are addressed to the immediate crisis and are designed to cope with immediate problems. It is more to the future that I want to look tonight, because I have to cope in the constituency both with a very heavy legacy of the past six months, which in itself is bound to affect the future, and with the major question that I know to be in the minds of my constituents, which is not so much whether the present crisis is over as what guarantees we have that we shall not be in this situation again this time next year if we continue to be efficient and to increase our activity.
The legacy I am left with is one of badly increased waiting lists. A cardiac patient came to my surgery last Saturday who needs a test to establish whether he needs major heart surgery. The test, never mind the operation, will not be available until October 1988. He has been offered various appointments at various hospitals within the South East Thames area, but October 1988 seems at the moment to be the best that can be offered.
Cataract patients write to me in desperation and say that they are prepared to go to Inverness. They do not have quite to go to Inverness, but the nearest I found recently was Glasgow, which is not too far from there. My office has been turned into an agency for finding places for operations.
In the immediate term, this is something that can be addressed and can be tackled. It is about the future that I am particularly concerned — not only the future funding but the future adminstration of the South East Thames regional health authority. There has been very
Z
555
little in the past to inspire confidence on the part of the people of Maidstone in some of the decisions taken by the authority.
First of all, we were the only hospital in the entire region which, when it opened, was not given additional money for running costs. Secondly, a purely regional decision, not one that has been taken by other regions and not one that has been decreed by central Government, to change from RAWP to ACORN has removed £1·2 million from Maidstone's future expectations. When we are just recovering from a major crisis, to find that £1·2 million has been taken off our future expectations does very little to give us hope and confidence.
Mr. Andrew Rowe: Is my hon. Friend also aware that, in an apparently unique regional hospital authority decision, the hospital in Medway where students come gets no money at all towards paying the costs of those students? It appears to be the only regional authority in the country that has taken that decision.
Miss Widdecombe: I am grateful to my hon. Friend for his intervention and that addition to this debate.
Furthermore, those concerned work on out-of-date statistics which work very badly to Maidstone's disadvantage, calculating our allocation and our entitlement on birth statistics and population flows that were obtaining six years ago.
When the crisis erupted in Maidstone in the summer, I immediately entered into negotiations with the South East Thames authority to find out what it could do for us. It promised us two things, or rather half-promised us two things. First, it said that it would look at its finances and see if there was any flexibility for loan or other arrangements; secondly, it said that it would try to improve the statistics, which was bound to work to Maidstone's advantage.
Several months after the receipt of that letter, neither of those half-promises had been implemented. It was not until I managed to see the Minister, in conjunction with my hon. Friend the Member for Mid-Kent and my right hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley), that we finally got the extra money and help that we needed. According to a reply given to the hon. Member for Southport (Mr. Fearn), the authority has a budget of £933 million—Maidstone needed less than £1 million to keep its wards open—but, if it cannot manage the cash flow better than that, it does not hold out much confidence for the future of the South-East Thames region.
The South East Thames regional health authority is a little remote. It is in Bexhill-on-Sea. It is quite an intrepid character who goes to Bexhill-on-Sea. Whether one goes by road or rail, one needs a great deal of time on one's hands. The health authority said that it moved to Bexhillon-Sea because it was too expensive to stay in Croydon. It moved from Croydon to Bexhill-on-Sea, but it still has its empty, £600,000 premises in Croydon. For £600,000, we could have kept our wards open.
If it may be gathered from this that I am not wholly at one with the way in which the regional health authority operates, the fact remains that the authority does have the odd cross to bear. This is an urgent matter and I ask my hon. Friend the Minister to respond to certain points which could help the authority to help Maidstone.
556
I quoted from out-of-date statistics. The authority's consistent defence is that it does not decide which statistics to use. It is simply not supplied centrally with up-to-date figures. I wish to ask my hon. Friend whether it is possible to expedite the updating of those figures.
Secondly, there should be clear guidance to all regional health authorities to reward efficiency, because efficient district authorities do not have the scope to economise when they are faced with financial difficulties. Inefficient authorities do, so there should be a reward which recognises efficiency. If we had that, we would have had far fewer problems in Maidstone.
Thirdly, there is the underfunding of pay awards. I do not believe that it has been wrong for the Government to have some underfunding of pay awards. Blank cheques do not promote efficiency and the elimination of waste. Some authorities have reached an efficiency ceiling, but not all. Before we believe that an efficiency ceiling has been reached in the South East Thames area, I have here statistics which show Maidstone's performance to be well above that of others. Some authorities are not performing to the expected standards, but presumably are still funded for the expected standard. When an efficiency ceiling is reached, there is no longer the flexibility to react by the elimination of waste. I appeal both to my hon. Friend the Under-Secretary of State and to my right hon. Friend the Minister for Health to consider the effects of under-funding of pay awards on those areas which suffer through the regional allocations and which have already reached their efficiency ceiling.
I do not feel particularly penal towards the South East Thames regional health authority, but I think it would benefit the NHS as a whole if the regions were abolished. However, we shall have enough of that in two weeks' time in another debate. I shall not ask my hon. Friend to respond to that tonight because I am sure that she would not wish to do so.
Finally, we need an overhaul of the NHS and a reform of its structure and system as well as of our level of funding. In short, we must not roll from crisis to crisis.
I have a letter from the South East Thames regional health authority chairman which suggests to me that, although he can guarantee sufficient money — indeed, has already given sufficient money — to reopen our wards this year, he is concerned about the economies that have been implemented for the future.
I am concerned about where my constituents will find themselves this time next year. Will they still be queuing up at my surgery for me to find them operations in Glasgow, or will they be able to rely on proper rewards for efficiency, which is what my district health authority deserves and what is too little recognised throughout the South East Thames area?
10.30 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I congratulate my hon. Friend the Member for Maidstone (Miss Widdecombe) on obtaining the debate and once again reiterating her concern about her local health authority, as she has also done in six recent parliamentary questions, in her contribution to the debate on the Health Service during the debate on the Consolidated Fund Bill on 8 December, at a meeting with other local Members of

557
Parliament with my right hon. Friend the Minister for Health on 30 November and in much correspondence with Ministers, some of which I have still to respond to.
I also commend my hon. Friend the Member for Mid-Kent (Mr. Rowe), who is in his place tonight. I commend both my hon. Friends to their constituents for their energy, interest and concern. I take note of what my hon. Friend the Member for Maidstone says about visitors to her constituency advice bureau and no doubt as a result of what she has said tonight she will have many more. In a few moments, I shall offer my hon. Friend some figures which may be new to her. I hope that, with her considerable experience of finance, she will find them interesting.
Maidstone district health authority's cash allocation for this year is over £32 million — a 8 per cent. change over the previous year, which, in turn, was nearly 6 per cent. more than in 1985–86. Also in recent years, the capital allocation has been between £2·5 million and £3 million each year, even after the opening of the magnificent new district general hospital, which, as my hon. Friend knows, I recently visited.
My hon. Friend asked whether we could obtain more updated figures and I share her interest and concern on that. She probably knows about the Korner reforms, which mean that statistics will be more readily available this year when the new system comes on stream. I hope that if, as a result, there is any comment about the cost of administration, clerical and computer staff, she will still consider it a good idea.
My hon. Friend talked about the underfunding of pay awards. I am sure that she realises that no Government ever give a blank cheque on pay awards. Certainly we do not, and have no intention of so doing.
Miss Widdecombe: I and everybody else fully accept that the Government do not write blank cheques, but neither does the region nor the district. Somebody must pick up those pay awards, which I accept are agreed by the independent review body, not the Government. All that I am appealing for is that the shortfall should not be such that it makes inroads into funds that should be spent on patient care—[Interruption.]
Mrs. Currie: The hon. Member for Rhondda (Mr. Rogers) says that we should give my hon. Friend a party card. I am not sure to which party he is referring.
My hon. Friend's point is well made and well taken. I merely put it to her that pay awards are not an alternative to service to patients. Paying our staff properly is part of our service to patients, particularly if it thereby ensures that we can keep the staff whom we want. Current discussions with the review bodies for the doctors, dentists and nurses will no doubt have their outcome in due course. However, I repeat that it would be a foolish Government who gave a blank cheque for pay awards in the middle of a pay negotiation. I am sure that my hon. Friend can find it in her heart to agree with something in that statement.
I hear what my hon. Friend says about the regional system. I am sure that she is aware that I shall not have a chance to respond to her debate on 26 January. However, I hope that she will recognise the recent valuable role of the regional health authority. Earlier this year, the region calculated that the total projected overspend among its districts would be over £9 million.
Those health authorities have a statutory duty to remain within their cash limits, as I have to remain within
558
my budgets. So the region correctly stressed that to the districts, and emphasised that reductions in service had to be made only as a last resort. Most of the districts, like Maidstone, introduced further savings measures not affecting patient care, such as slowing down some service developments and instituting income generation schemes. The region, too, has implemented savings and has clearly taken note of my hon. Friend's previous remarks, because I understand that it will be reducing its expenditure in 1988–89 by £275,000. We expect it to keep to its budget just as much as anyone else in the area.
However, a number of districts had to make temporary service reductions. To help those districts, the regional health authority co-ordinated what it called a cash management exercise, whereby health authorities whose cash position is less critical this year assisted by contributing to a regional pool to help the other authorities, such as Maidstone, that were facing particular problems. At that stage in the autumn, the region was predicting that it would break even in this financial year.
Then we had the storm, and we have since allocated, as my hon. Friend knows, £8 million to the South East Thames health authority for the damage done. That is what it asked for, and what it got. We then found that there were further emergency measures, some of which my hon. Friend has referred to, to avoid overspending. But there was also the announcement on 16 December of about £75 million extra for the hospital and community health services in England for this financial year.
South East Thames asked the district to bid for additional money, which it could use in this financial year to meet immediate problems of the sort that have been described. Maidstone asked for an additional £191,000, which I can tonight confirm that it will receive. That will enable Maidstone to reopen, later this month, the temporarily closed general surgical ward at Maidstone district general hospital, which will then no longer be on amber alert. Eighteen temporarily closed beds at Kent county ophthalmic and aural hospital will also reopen shortly. An additional programme of joint replacement operations at the local private hospital will be undertaken, until another ward at the district general hospital can be commissioned to enable such operations to take place there.
Two wards that have been temporarily closed at Linton and Preston Hall hospitals might also have been reopened with the money, but they are having to be used to accommodate some patients from Maidstone hospital psychiatric wing, which had to be evacuated following extensive storm damage. I hope that my hon. Friend can accept that. In addition to the £191,000, Maidstone will get a further £135,000, which will go towards reducing its credit of balances and put the authority on a sounder financial footing for the coming year.
My hon. Friend is probably aware that we have been repeatedly advised by our financial advisers that if we delay paying our creditors for too long, all they do is put the prices up next year; so it is a sound, counter-inflationary measure to ensure that our health authorities have a reputation for paying on time. As a result, since my hon. Friend last raised the question with me, Maidstone district health authority has received an extra £326,000 for this financial year.
I fully accept that, after being able to reopen temporarily closed services with additional Government money, Maidstone does not want to be in the same

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position again next year or, indeed, in April of the coming year, when it may have to close some services again. It is for the regional health authority to decide on allocations to districts, and it will be doing that for 1988–89 on 21 January. That is the present system. I know that district and regional officers are discussing bridging finance from the region to help Maidstone get back on a sounder financial footing, but my hon. Friend will appreciate that, for the moment and for the foreseeable future, this is primarily a regional responsibility. However, I shall make sure that the region is aware of her views and those of my hon. Friend the Member for Mid-Kent.
Dame Peggy Fenner: My hon. Friend will observe that many of my hon. Friends who serve and represent constituencies in the South East Thames region are sitting in this evening. We would emphasise that we all share the concern of my hon. Friend the Member for Maidstone (Miss Widdecombe) about what will happen in the next allocation. We hope that, even under the present system, my right hon. and hon. Friends will ensure that the South East Thames region takes account of the several deprived districts in its area.
Mrs. Currie: My hon. Friend has made her point extremely well. I should also draw attention to the presence in the Chamber tonight of my hon. Friends the Members for Dover (Mr. Shaw), for Sevenoaks (Mr. Wolfson), for Gillingham (Mr. Couchman) and for Faversham (Mr. Moate), and to that of one or two Opposition Members who come from a long way away.
Mr. Allan Rogers rose—
Mrs. Currie: No, forgive me, but I shall not give way because I do not have the time.
My hon. Friend the Member for Maidstone has drawn attention to the statistics that are based on performance indicators which, as she rightly says, come from the data for 1985–86 which, of course, are the latest information that I have. She is quite right that the authority has a high throughput. Indeed, it is one of the best in the country. I am talking mainly about Maidstone hospital. Although in fact it is not the best in South East Thames regional health authority—All Saints is the best—Maidstone is highly efficient and cost-effective.
The costs per case of Maidstone district health authority were £601 for 1985–86. I agree that that compares favourably with, for example, Brighton at £1,194 per case, Orpington at £1,074 per case or Lewisham at £1,257 per case. They are all similar hospitals—major district general hospitals with more than 250 beds. Among the 21 similar hospitals in the region, Maidstone ranked not first, but sixth in terms of cost per case. Kent and Canterbury and Eastbourne district general hospitals are cheaper. Although the difference is not great, it is worth putting it on record.
In terms of medical and dental costs per case, Maidstone DGH ranks not first but seventh in the regional health authority. The Royal Sussex county hospital, for example, spends much less on nursing per case and Greenwich district general hospital spends much less on medical staff per case. However, Maidstone has very good hotel and maintenance costs, which is amazing. I am curious to know why it costs nearly four times as much to
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run the ancillary services at Brighton general hospital as at Maidstone. Perhaps our two splendid lady chairmen, Mrs. Cumberlege and Mrs. Nelson, could get together on that and share lessons.
I know that the regional health authority is reviewing its policy on cash allocations — [Interruption.] I am disappointed in the hon. Member for Rhondda. He is usually interested in health matters. I also know that the regional health authority—
Mr. Rogers rose—
Mr. Speaker: Order. It is a tradition that hon. Members do not interrupt, especially from a sedentary position, during Adjournment debates.
Mr. Rogers: I was asking the Minister to give way.
Mrs. Currie: The hon. Gentleman knows that time is restricted in Adjournment debates.
My hon. Friend knows that the regional health authority is reviewing its policy on cash allocations for mental illness. It is essential that in all the discussions about the pressure on acute services, we do not lose track of the need for services for those with mental handicap, mental illness or other groups who, perhaps, are not always in a position to make much fuss. I have no doubt that Maidstone district health authority's feeling that other DHAs, which send large numbers of patients to Maidstone, are getting something good on the cheap, will be taken into account. I gather that the DHA says that it is between £300,000 and £400,000 out of pocket as a result of treating out-of-district mental illness patients. There may be some discussion about the exact amount, but I know that the region has taken that fact on board.
I also know that, following the regional health authority's meeting on 19 November, further work is being done on bed usage at Maidstone and on whether there is scope for increasing the use of day care and short-stay accommodation. The district health authority has recently shown considerable improvements on the day-case side, but in ear, nose and throat treatment, 95 per cent. of patients are in-patients. I have no doubt that in its discussions the DHA will take account of facts such as bed occupancy in ENT, for which there is a waiting list of well over 500 for non-urgent surgery and treatment. The figure is over 400 for opthalmology. The occupancy for those specialties has been below 50 per cent. for many years. On the other hand, the gynaecology department treats more than 20 per cent. of its patients as day cases and has relatively good occupancy rates and a tiny waiting list. I make no judgment from those figures but hope that the regional health authority will consider them. I am sure that with good will and the willingness to change some long-held practices, issues such as these can be resolved in the interests of patients, possibly without using additional funds.
We have to make a point here about planning. Estimates of future patient numbers, on which we base much of our financial planning, are based partly on recent history and demography, and partly on population patterns and changes. Whether or not they are six years out of date, I can assure my hon. Friend the Member for Maidstone that every effort is made to take them fully into account. We also base our financial planning on any planned growth of services such as an additional consultant or expected changes in practice.

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In 1982–83, the growth of in-patient cases in Maidstone was 1·5 per cent. In the following years it was 4 per cent. and then 5 per cent. In the year after that, it seemed to have levelled off because there was a very small drop in activity for in-patients at about 1 per cent. What is then clear is that the 13 per cent. jump in in-patient cases in the following year took everybody by surprise. Indeed, nobody could have planned for that and known that it would happen. I do not think that anyone would have believed the people of Maidstone if they had said to us blithely that they expected an increase in numbers of inpatient cases of 13 per cent. in one year.
It is a tremendous tribute to all the staff concerned that they managed to cope with such an increase in demand. I do not believe that the regional health authority should be blamed for its failure to anticipate that sort of growth. I suspect that, even if it had anticipated it, other DHAs would have objected strongly to anything like a 13 per cent. increase being given to Maidstone in a year.
562
In relation to the cost of the region's accommodation, I understand that if it had not moved in 1983, it would have been faced by a rent review in Croydon, and the rent would have cost about £1 million a year.
Miss Widdecombe: At least the authority would have got something for it.
Mrs. Currie: What the authority did was to buy the existing premises at Bexhill and expenditure since has been much less than it would have had to pay at Croydon. I assure my hon. Friend the Member for Maidstone that the region has been active in trying to dispose of the remainder of the lease and no doubt will do so shortly. However, we have an extra £800,000 in revenue savings as a result of the move, which has been spent on improving mental illness, mental handicap and renal services. I hope that this information is helpful to all my hon. Friends.
Question put and agreed to.
Adjourned accordingly at thirteen minutes to Eleven o'clock.

FOREIGN AND COMMONWEALTH AFFAIRS

  Diplomatic Passports
  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will introduce diplomatic passports for United Kingdom diplomats; and if he will make a statement.

  Mr. Eggar
  There are no immediate plans to introduce diplomatic passports but a joint Home Office/Foreign and Commonwealth Office working group is at present studying the question.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has as to which nations do and which do not issue diplomatic passports to their diplomatic staff; and if he will make a statement.

  Mr. Eggar
  I am not aware of any country, other than the United Kingdom, which does not issue diplomatic passports to its diplomatic staff overseas.

  Cyprus
  Mr. Hardy
  To ask the Secretary of State for Foreign and Commonwealth Affairs what payments have been made to the Government of Cyprus in each of the last three years(a) in total, (b) as aid and (c) in respect of the use of the sovereign bases.

  Mrs. Chalker
  The information is as follows:

  Financial Year 1984–85

  Financial Year 1985–86

  Financial Year 1986–87

  (a)

  1,578,143

  1,568,326

  1,377,547

  (b)

  1,578,143

  1,568,326

  1,377,547

  (c)

  Nil

  Nil

  Nil

  Publication dale

  Total print run

  Number of Her Majesty's Stationery Office sale copies

  COI copies

  Britain 1979

  23 January 1979

  21,000

  10,250

  10,750

  Britain 1980

  29 February 1980

  18,370

  9,750

  8,620

  Britain 1981

  6 March 1981

  17,500

  7,645

  9,855

  Britain 1982

  23 February 1982

  17,500

  7,880

  9,620

  Britain 1983

  14 February 1983

  18,400

  7,580

  10,820

  Britain 1984

  29 May 1984

  23,000

  6,980

  116,020

  Britain 1985

  6 February 1985

  17,600

  7,480

  10,120

  Britain 1986

  2 January 1986

  17,750

  7,188

  10,562

  Britain 1987

  2 January 1987

  17,750

  7,348

  10,402

  Britain 1988

  6 January 1988

  17,500

  6,721

  10,779

  1 Includes 5,000 copies of a special edition prepared for distribution at the London Economic Summit.

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  The sovereign base areas are sovereign British territory and no payment is made in respect of their use. The figures given for aid include aid provided by the Overseas Development Administration and the Foreign and Commonwealth Office. They also include payments made to individuals under Government arrangements for training and scholarships.

  Falkland Islands
  Dr. Marek
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer to the hon. Member for Wrexham on 11 January, if he will give the reasons as to why the terms of the contract under which the renewable resources assessment group at Imperial college, London provides scientific advice to the Falkland Islands Government are commercially confidential; and at whose suggestion they were made confidential.

  Mr. Eggar
  The terms of the contract have been negotiated between the Falkland Islands Government and the renewable resources assessment group and are subject to the approval of the Islands' Executive Council. It is normal commercial practice for details of contracts to remain confidential to the parties concerned.

  "Britain—An Official Handbook"
  Mr. Dobson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the cost of preparing "Britain 1988—An Official Handbook"; and how many copies have been printed.

  Mr. Eggar
  17,500 copies of the handbook have been printed by Her Majesty's Stationery Office, 10,779 for the Central Office of Information on behalf of the Foreign and Commonwealth Office and 6,721 sale copies. Preparation and production costs are estimated to total £145,200; Her Majesty's Stationery Office's production costs are recovered from sales.

  Mr. Dobson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the publication date of "Britain—An Official Handbook" in 1979 and each succeeding year; and how many copies were printed in each year.

  Mr. Eggar
  The information requested is given in the table:

ENERGY

  Radioactive Waste
  Mr. Matthew Taylor
  To ask the Secretary of State for Energy what are the estimated volumes of radioactive waste likely to be produced by a commercial fusion reactor in terms of cubic metres per gigawatt (e) year.

  Mr. Michael Spicer
  I am advised by the United Kingdom Atomic Energy Authority that a commercial fusion power reactor of the type now envisaged might produce 10–100 cu m of radioactive waste per gigawatt (e) year. This volume is similar to that produced by a fission reactor of similar volume, but its radioactivity reduces more quickly with time.

  Fast Breeder Reactor Programme
  Mr. Wallace
  To ask the Secretary of State for Energy when national representatives of the European fast reactor collaboration programme last met; and what subjects were discussed.

  Mr. Michael Spicer
  Representatives of the utilities, the design companies and the R and D organisations involved in the European fast reactor collaboration meet frequently and discuss a wide range of fast reactor issues.

  Renewable Energy
  Mr. Speller
  To ask the Secretary of State for Energy if he will give details of past and current spending proposals for renewable energy research and development supported by his Department over the last five years.

  Mr. Michael Spicer
  My Department's expenditure on renewable energy research and development over the last five years is as follows:

  £ million

  1982–83

  14·7

  1983–84

  11·7

  1984–85

  14·9

  1985–86

  13·2

  1986–87

  12·0

  1987–88

  114·4

  1 Estimated.

  Note: These figures include expenditure on "waste as a fuel" projects under the Energy Efficiency Office demonstration scheme.

ATTORNEY-GENERAL

  County Courts
  Mr. David Nicholson
  To ask the Attorney-General what changes in staffing there have been since 1983 in the county courts of(a) Bristol, (b) Exeter, (c) Yeovil and (d) Taunton.

  The Attorney-General
  Since 1983 the number of staff at the county courts at Bristol, Yeovil and Taunton have increased from 81 to 82, 19 to 20½ and 13½ to 14 respectively. The number of staff at Exeter remains unchanged. It is intended by the end of January 1988 to increase the staffing levels at Bristol, Exeter and Yeovil by two additional members of staff and at Taunton by one additional member of staff.
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  Mr. David Nicholson
  To ask the Attorney-General what representations he has received regarding the backlog of cases before the county courts of(a) Bristol, (b) Exeter, (c) Yeovil and (d) Taunton.

  The Attorney-General
  During the last six months the Lord Chancellor's Department has received 16 representations concerning delays in listing cases at Bristol county court and one concerning delays in listing at Exeter county court. None was received in relation to Yeovil or Taunton.

  Divorce
  Mr. Watts
  To ask the Attorney-General in how many defended divorce proceedings in each of the last three years for which figures are available legal aid was granted to(a) male defendants and (b) female defendants.

  The Attorney-General
  The information requested is as follows:

  Male Respondents

  Female Respondents

  1984–85

  1,815

  859

  1985–86

  1,797

  844

  1986–87

  1,442

  796

  Mr. Watts
  To ask the Attorney-General how many divorce proceedings in each of the last three years for which figures are available were(a) contested and (b) uncontested.

  The Attorney-General
  Figures for the latest three years for which full data are available (1983 to 1985) are shown in the table.

  England and Wales

  1983

  1984

  1985

  Uncontested decrees nisi granted

  149,189

  147,136

  161,409

  High Court defended divorce cases disposed of by trial

  500

  489

  464

  Land Registry
  Mr. Barry Field
  To ask the Attorney-General what was the cost of the Land Registry services for each of the last five years in(a) England, (b) Wales, (c) Scotland and (d) by county.

  The Attorney-General
  The following table shows, for England and Wales, the expenditure involved in providing Land Registry services; and for Scotland, the expenditure involved in providing the services of the Department of the Registers (about 97 per cent. of which is attributable to the Register of Sasines and the Land Register of Scotland). Figures are not kept for England and Wales separately, nor for individual counties in England, Wales and Scotland. Such figures could be provided only at inordinate expense.

  England and Wales£ million

  Scotland Wales£ million

  1982–83

  66·8

  8·2

  1983–84

  75·6

  9·9

  1984–85

  82·4

  10·9

  1985–86

  91·0

  12·2

  1986–87

  102·2

  12·4

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  Both the Land Registry and the Department of the Registers are self-financing, expenditure being fully offset by income from fees.

TRADE AND INDUSTRY

  Companies Act Investigations
  Mr. Sedgemore
  To ask the Chancellor of the Duchy of Lancaster (1) how many investigations have been made under section 444 of the Companies Act 1985 and its predecessor, section 173 of the Companies Act 1948, in each of the last five years;

  (2) how many civil servants at the Department of Trade and Industry, and how many others, are currently concerned in carrying out investigations under section 444 of the Companies Act 1985;

  (3) what criteria he uses in deciding whether to hold an investigation under section 444 of the Companies Act 1985 into the ownership of shares in or debentures of a company.

  Mr. Maude
  The criteria for an investigation under section 444 of the Companies Act 1985 is that it appears to the Secretary of State there is good reason to investigate the ownership of any shares or debentures of a company, and that it is unnecessary to appoint inspectors for the purpose. The section empowers the Secretary of State or his officers to make the investigations; it does not empower him to appoint outsiders for this purpose. No investigations are currently in progress. Information sought about previous investigations cannot be provided without undue expense.

  Sumrie Clothes plc
  Mr. Sedgemore
  To ask the Chancellor of the Duchy of Lancaster when the Secretary of State for Trade and Industry received the report of his inspectors into the affairs of Mr. Michael Hepker, Sumrie Clothes plc and related matters; if he will make the report public; and if he will make a statement.

  Mr. Maude
  The inspectors' report on Sumrie Clothes plc has not been received. When it is, a decision on publication will he taken.

  Furniture Foam
  Mr. Teddy Taylor
  To ask the Chancellor of the Duchy of Lancaster, pursuant to the statement by his Under-Secretary of State on 11 January, why he requires to seek the prior approval of the EEC Commission before implementing his proposals to restrict the use of foams in furniture in the interests of safety.

  Mr. Maude
  In accordance with directive EC 83/189 on the provision of information on technical standards and regulations, member states of the European Community submit new proposals to the Commission of the European Community in draft. This provides other member states and the Commission with an opportunity to comment on the proposals from the point of view of any possible conflict with proposals for EC legislation, and in case the proposed measure could constitute a new barrier to trade which could not be justified by reference to the need for protection of health and safety of consumers or workers. These established procedures will be followed in the case 350
  of the proposed regulations for improved fire resistance of domestic upholstered furniture. Although the Commission has the power to prohibit the United Kingdom making any regulations which it believes would be a barrier to trade and can use the European Court to enforce its ruling, it would be unlikely to do so in any case where the regulations would affect United Kingdom and other EC manufacturers alike, as these would.

  Peckham Task Force
  Ms. Harman
  To ask the Chancellor of the Duchy of Lancaster how many jobs have been created by the Peckham task force in(a) its first 12 months of operation and (b) its second 12 months of operation; and how many of those jobs have been filled by (i) young people and (ii) local people.

  Mr. Kenneth Clarke
  Many north Peckham task force projects create new jobs directly. Other jobs are created indirectly by businesses helped by task force work:— jobs in firms assisted by the task force development fund;
  — jobs created in voluntary or statutory agencies as a result of task force assistance;
  — jobs gained for residents as a result of training courses facilitated by the task force.

  In addition, the broad range of work being encouraged by the task force to increase skills and enterprise amongst north Peckham residents feeds through into more confident and employable people who can compete for and hold down jobs in the wider London economy.

  It would involve disproportionate cost to estimate the jobs resulting directly and indirectly from the whole of the task force's work, and be misleading to include only those that can be readily counted.

  Ms. Harman
  To ask the Chancellor of the Duchy of Lancaster how much has been spent by the Peckham task force; and in relation to any expenditure on estates, which estates have been the recipients of work paid for through the task force.

  Mr. Kenneth Clarke
  Since the Government's north Peckham task force was set up in 1986, some £2·3 million of Government funds have been committed for task force projects benefitting the residents of the area. Of this, about £1 million has come from funds available to task forces and £1·3 million from other Government programmes. In addition, some £250,000 has been committed by the private sector and £130,000 by the local authority. Estates which have benefited from task force funds are north Peckham estate, where the task force contributed to improved lighting and the refurbishment of premises for Southwark adult education institute, and Gloucester Grove estate, on which projects to establish shopping facilities and to convert unused garages to workshops for small firms are in hand.

  Support for Innovation
  Mr. Speed
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the future of support for innovation schemes for single company projects.

  Mr. Butcher
  As my right hon. and learned Friend told the House during his statement on 12 January, we have decided that research and development which is at the
  351
  stage of commercial exploitation should be the responsibility of the private sector. Therefore, the general schemes of single company support for innovation were closed to new applications at 18.00 hours on 12 January. Formal applications received before then will be appraised under the schemes as they existed previously. The schemes covered are support for innovation, the microelectronics industry support programme, support for software products support, and the fibre-optics and optoelectronics scheme.

  Departmental Press and Public Relations
  Mr. Caborn
  To ask the Chancellor of the Duchy of Lancaster what proportion of his Department's 1987–88 expenditure on press and public relations will be devoted to the production of a video to promote a new corporate image of his Department.

  Mr. Maude
  [holding answer 11 January 1988]: In the context of the new measures recently announced to the House, we have produced a short video to help with staff communications, as is now common in many organisations in both the public and private sectors. This video is mainly concerned with the Department's new policies and services although it does also mention the importance of the Department's image with the business community. The production cost of this video is approximately £17,000. The Department's expenditure on press and public relations in 1987–88 is expected to be £1,123,000.

  Mr. Caborn
  To ask the Chancellor of the Duchy of Lancaster what plans he has to change the corporate image of his Department; and what costs will be involved on(a) new stationery, (b) uniforms and badges and (c) the change of vehicle logos.

  Mr. Maude
  [holding answer 11 January 1988]: We have introduced new letterheads in the Department to replace a wider range of diverse styles which were previously in use. An expensive survey would be needed to identify the exact costs of redundant stationery including those held locally by secretaries and typing pools. We estimate the purchase cost of redundant stationery held in the central stationery stores to be approximately £5,000. However, this will be offset to a significant extent by using this stationery internally or in scrap pads. It is our intention that in due course the new style will be reflected in other areas such as uniform badges and on vehicles. Planning is still in hand for this process but in many cases we will phase in the changes as part of normal renewal and maintenance programmes.

PRIME MINISTER

  Yorkshire
  Mr. Cryer
  To ask the Prime Minister when she next expects to pay an official visit to Yorkshire.

  The Prime Minister
  I have at present no plans to do so.

  Winterbourne Houghton
  Mr. Nicholas Baker
  To ask the Prime Minister if she will pay an official visit to Winterbourne Houghton.

  The Prime Minister
  I have at present no plans to do so.

  Taxation and Family Policy (Departmental Co-ordination)
  Mr. Shersby
  To ask the Prime Minister if she will make a statement on co-ordination between the relevant Departments responsible for taxation and family policy, with particular reference to eligibility for mortgage interest tax relief as it applies to married couples, unmarried couples cohabiting and groups of individuals buying the same house together.

  The Prime Minister
  All Government Departments take account of the effects of legislation on the family and there is proper co-ordination of their work on policy changes. Mortgage interest tax relief is the responsibility of my right hon. Friend the Chancellor of the Exchequer; the aspect to which my hon. Friend refers was discussed in the Chancellor's Green Paper "The Reform of Personal Taxation" published in March 1986 (Cmnd. 9756).

  Tayside
  Mr. Bill Walker
  To ask the Prime Minister if she has any plans to visit Tayside.

  The Prime Minister
  I have at present no plans to do so.

  Firearms Certificates
  Mr. Teddy Taylor
  To ask the Prime Minister if she will raise at the next meeting of the European Council the proposals by the Commission for the mutual recognition of firearms certificates; and if she will make a statement.

  The Prime Minister
  My hon. Friend is no doubt referring to the proposal for a Council directive on the control of the acquisition and possession of weapons. Member states must be free to carry out the checks necessary to preserve security and maintain law and order. We shall continue to make clear to other member states our belief that the proposal in its present form does not contain adequate safeguards to combat terrorism and limit the ability of criminals to acquire firearms illegally. As the proposal has yet to be formally discussed, it would not be appropriate to raise it at the next European Council.

  Civil Service (Report)
  Mr. Dalyell
  To ask the Prime Minister what consultation has taken place between Her Majesty's Government, the First Division Association, and the permanent secretaries, in their capacity as affected employees, over Sir Robin Ibbs's report on the Civil Service.

  The Prime Minister
  The report to which the hon. Gentleman refers is still under consideration. The unions will be consulted if any change in terms and conditions of service is contemplated.

  Africa (Visit)
  Mr. Dobson
  To ask the Prime Minister if she will list all those who accompanied her on her recent visit to Africa; and what their duties were.

  The Prime Minister
  On my visit to Africa I was accompanied by four officials and 11 support staff. It would not be appropriate to list the names and duties of those who accompanied me.
  353
  Mr. Dobson
  To ask the Prime Minister what was the cost of her recent visit to Africa; and if it was all met from public funds.

  The Prime Minister
  It is too soon to give precise information on the cost of this visit. A provisional estimate is £80,000. The cost was met from public funds.

  Publicity
  Mr. Dobson
  To ask the Prime Minister which Minister is responsible for ensuring that the conventions governing the content of Government advertising and promotional materials are complied with.

  The Prime Minister
  Ministers in charge of Departments are responsible for ensuring that Government conventions on publicity and advertising are complied with.

  Windscale Fire
  Dr. Cunningham
  To ask the Prime Minister if, pursuant to her reply of 11 January,Official Report, column 2, she will list all those papers about the 1957 Windscale lire withheld from release under the terms of the Public Records Act.

  The Prime Minister
  It has been the practice of successive Administrations not to disclose the contents of closed records. The limited number of records concerned have been retained under section 3(4) of the Public Records Act 1958 or closed for longer than 30 years under section 5(1) of the Act in accordance with the established criteria.

  Engagements
  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Thursday 14 January.

  Mr. Adley
  To ask the Prime Minister if she will list her official engagements for Thursday 14 January.

  The Prime Minister
  This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.

OVERSEAS DEVELOPMENT

  Third World (Education Campaign)
  Mr. Anthony Coombs
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to provide more funding for a public education campaign on Third world issues.

  Mr. Chris Patten
  I have decided to increase the Overseas Development Administration's annual grant to the Centre for World Development Education from £100,000 to £125,000 for the financial years 1988–89 and 1989–90. The Scottish Education and Action for Development also receives an annual grant of £6,000, and recently I agreed a contribution of £70,000 to the Council of Europe's public awareness campaign on north/south interdependence.

  The widespread distribution to schools last year of our booklet "British Aid" is to be followed this year with the ODA's first video for schools on the aid programme.

ENVIRONMENT

  Property Repossession
  Dr. Reid
  To ask the Secretary of State for the Environment if he will provide the latest figures for property repossessions arising from mortgage default in 1987.

  Mrs. Roe
  The Building Societies Association has estimated that 21,950 properties in the United Kingdom were taken into possession by building societies in the year ending June 1987, 0·3 per cent. of the number of loans which were outstanding to the societies at the end of that period. It is estimated that 630 dwellings were taken into possession by English local authorities during the financial year 1985–86, the latest period for which an estimate is available. Corresponding information is not available from other lending institutions.

  Severe Weather
  Mr. Cummings
  To ask the Secretary of State for the Environment if he intends to make special financial arrangements to assist district councils in the county of Durham in the event of severe weather conditions during the winter.

  Mr. Chope
  I refer the hon. Member to the answer which I gave to the hon. Member for Liverpool, West Derby (Mr. Wareing) on 17 December 1987 at column 617, and to my right hon. Friend's reply on 13 January 1988 to my hon. Friend the Member for Gravesham (Mr. Arnold).

  Rating Reform
  Mr. Battle
  To ask the Secretary of State for the Environment what estimate he has of the proportion of households in England which will be liable to pay above average community charge which are households with below average incomes.

  Mr. Howard
  In order for a community charge to be larger than the average of £224, local authorities in that area would have to be spending at least £47 per adult more than the estimated cost of a standard level of service. I estimate that in England 16 per cent. of households have below average incomes and live in such areas. Many of that 16 per cent. may be entitled to a rebate. This estimate is necessarily subject to a margin of error.

  Mr. Anderson
  To ask the Secretary of State for the Environment what are the implications of the proposed community charge for premises in enterprise zones.

  Mr. Howard
  Non-domestic property in enterprise zones will continue to be exempt from rates during the life of the zone. We propose to provide for a special method of valuing properties in enterprise zones, so that, when the zone comes to an end, rateable values will discount any element of rent payments which reflect the benefit of the rates holiday.

  Individuals living in enterprise zones presently pay domestic rates and will be liable for the community charge in the same way as everyone else.

  Mr. Rooker
  To ask the Secretary of State for the Environment if he will set out the detailed calculations for each local authority showing the assumptions about
  355
  numbers of poll tax payers whose incomes will lead to payment of rebates, which led him to give a figure of £1,500 million for payment of rebates in his speech of 16 December 1987, Official Report, column 1117.

  Mr. Howard
  [holding answer 11 January 1988]: I refer the hon. Member to my reply to my right hon. Friend the Member for Aylesbury (Mr. Raison) on 8 December at columns 98–99, for the basis on which my right hon. Friend made his estimate of a total rebate cost of £1,500 million.

  It is not possible to make such estimates for individual local authorities since information about incomes at this level is available on a sample basis which is not adequate to make estimates at local level.

  Supermarket Development (Nottingham)
  Mr. Allen
  To ask the Secretary of State for the Environment what representations he has received concerning the sale of land belonging to Nottingham city council for supermarket development without competing tenders being received; and if he will make a statement.

  Mr. Waldegrave
  None. One letter of objection about a proposed superstore development at Hyson Green, Nottingham, addressed to the leader of the city council and signed by 10 persons has been copied to my right hon. Friend the Prime Minister.

  Council House Sales
  Mr. Butler
  To ask the Secretary of State for the Environment when he intends to introduce proposals to abolish the cash-flow provisions affecting the right to buy council homes.

  Mr. Waldegrave
  The White Paper "Housing: The Government's Proposals" proposed that the cost floor rule under the right to buy should be abolished. The responses are still under consideration.

  Competitive Tendering
  Mr. Hannam
  To ask the Secretary of State for the Environment whether local authorities will still be able to utilise the priority suppliers scheme under the arrangements for competitive tendering proposed in the Local Government Bill; and if he will make a statement.

  Mr. Chope
  I refer my hon. Friend to the answer I gave him on 11 January.

  Acid Rain
  Mr. Wray
  To ask the Secretary of State for the Environment what is the latest information about the deterioration of forests due to acid rain; and if he will make a statement.

  Mr. Moynihan
  I refer the hon. Member to my reply of 18 December 1987, at column 795, to the hon. Member for Carmarthen (Mr. Williams).

  Dr. Thomas
  To ask the Secretary of State for the Environment what evidence he has of the percentage of the United Kingdom native tree species showing signs of acid rain die-back.

  Lord James Douglas-Hamilton
  I have asked to reply.
  356
  The survey of forest health carried out by the Forestry Commission in 1987 included observations of oak, beech and Scots pine. The results are being analysed in relation to levels and types of air pollution at each of the sites; no information is yet available to provide guidelines on the relationship between crown thinning and acid rain and other pollutants.

  Treasure Trove
  Mr. Barry Field
  To ask the Secretary of State for the Environment whether he has any plans to review the law on treasure trove; and if he intends to issue a consultation paper.

  Mr. Moynihan
  My right hon. Friend has been reviewing the arrangements for reporting and recording of archeological finds generally. We plan to issue a consultation paper shortly.

  Tree Survey
  Dr. Thomas
  To ask the Secretary of State for the Environment what representations he has received concerning the desirability of a nationwide tree survey; and if he will make a statement.

  Mr. Moynihan
  I have not received any such representations. However, annual surveys of forest health are carried out by the Forestry Commission. Various surveys have been carried out, or are being carried out, into the effects of the great storm on 16 October 1987, but these are confined to the affected area in the south-east of England.

  Car Exhaust Emissions
  Dr. Thomas
  To ask the Secretary of State for the Environment what proposals are being considered by his Department for the reduction of emission of hydrocarbons and nitrous oxide from car exhausts.

  Mr. Moynihan
  As to standards which are already permitted within the European Community, I refer the hon. Member to my reply of 7 December, at column 20, to my hon. Friend the Member for Fulham (Mr. Carrington). We expect proposals from the Commission shortly to allow tighter standards of controls over small cars.

  Residuary Bodies
  Mr. Cousins
  To ask the Secretary of State for the Environment if he will list the current emoluments to the chairmen and members of the residuary bodies for the five former metropolitan county residuary bodies.

  Mr. Chope
  The information is as follows:

  Current remuneration (from 1 October 1987)

  £

  Chairmen

  Greater Manchester

  19,064

  Merseyside

  West Midlands

  South Yorkshire

  17,330

  Tyne and Wear

  West Yorkshire

  357

  £

  Members

  All members

  6,107

  Notes:

  (i) One member of West Yorkshire residuary body receives a daily attendance allowance (currently 1755) as an alternative to an annual salary.

  (ii) Remuneration is subject to abatement, if applicable, in respect of public sector pension received.

  Mr. Cousins
  To ask the Secretary of State for the Environment if he will list the numbers of meetings of each residuary body since 1 April 1987.

  Mr. Chope
  The number of full residuary body board meetings held during the period 1 April 1987 to 13 January 1988 was as follows:

  Residuary body

  Number of full Board meetings

  London

  34

  Greater Manchester

  9

  Merseyside

  18

  South Yorkshire

  9

  Tyne and Wear

  10

  West Midlands

  18

  West Yorkshire

  10

  Local Income Tax
  Mr. Tony Banks
  To ask the Secretary of State for the Envoronment (1) if, further to his reply to the hon. Member for Pembroke (Mr. Bennett) of 16 November 1987,Official Report, columns 183–185, he will publish in the Official Report (a) the number of income tax payers he has assumed were resident in each rating authority, (b) the average level of income he assumed each income tax payer was earning and (c) the total number of income tax payers in England, the average level of income they were earning and the source of his information;

  (2) if, further to his answer to the hon. Member for Pembroke (Mr. Bennett) of 16 November 1987, Official Report, columns 183–185, he will give the exact relationship he assumed between changes in expenditure by a local authority and changes in grant when producing exemplifications of local income tax rates for each authority.

  Mr. Howard
  [holding answer 13 January 1988]: The assumption about the relationship between expenditure and grant was described in the note covering the exemplifications placed in the Library on 12 November. Full equalisation of taxable resources was assumed. To calculate exemplifications on this basis it is unnecessary to make assumptions about the number of income tax payers or the average income, either for England as a whole or for each district and borough.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment, further to his answer to the hon. Member for Pembroke (Mr. Bennett) of 16 November 1987,Official Report, columns 183–85, on local income tax, he will publish the figures he assumed for England for (a) the total amount of Government grant, (b) what part of Government grant was equivalent to the total paid in rate rebates and (c) the level of the national non-domestic rate in pence to two decimal places.
  358
  Mr. Howard
  [holding answer 13 January 1988]: A number of assumptions were made about such matters as the total amount to be raised from LIT, rebates, balances and the yield of an extra 1p income tax. I refer the hon. Member to the answer I gave on 23 November to the hon. Member for Southwark and Bermondsey (Mr. Hughes). It was unnecessary to make any additional assumptions about the total amount of Government grant The Government's assumption about the level of the NNDR has been that, on the basis of actual poundages in 1987–88, it would be 224·11p.

  Plutonium
  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment what is his policy on the transport by air of plutonium, plutonium oxide or plutonium nitrate produced at the Sellafield reprocessing plant; and whether he will make a statement.

  Mr. Peter Bottomley
  I have been asked to reply.

  The transport of all radioactive materials by air must comply fully with the national and international regulations governing this type of transport The International Atomic Energy Agency is about to undertake a review of this particular issue, to decide whether any regulatory changes are required.

  Fuller Peiser
  Mr. Cousins
  To ask the Secretary of State for the Environment if he will list all consultancies carried out by the London-based agents Fuller Peiser since 1983 on behalf of his Department.

  Mr. Chope
  The Department is currently using Fuller Peiser as agents for the disposal of some of its property m London. I am not aware that the Department has placed other work with the firm since 1983.

  Mr. Cousins
  To ask the Secretary of State for the Environment if he will list all asset sales by the Department or its agencies managed by the London-based agents Fuller Peiser since 1983.

  Mr. Chope
  The Property Services Agency is currently using Fuller Peiser as agents for the disposal of some of its property in London. No central record is kept of commissions by the Department's agencies, but we are aware that the firm was also retained as agents by Aycliffe and Peterlee new town development corporation to carry out the marketing for the disposal of the industrial assets of the Corporation.

TRANSPORT

  Lenton Triangle Junction, Nottingham
  Mr. Allen
  To ask the Secretary of State for Transport what representations he has received on the closure by British Rail of a part of the Lenton Triangle junction, Nottingham; and if he will make a statement.

  Mr. David Mitchell
  My right hon. Friend has received representations from the hon. Members for Bolsover (Mr. Skinner) and for Nottingham, North. It would not be appropriate to comment on these in view of his quasi-judicial position.

  Nottingham-Bulwell-Mansfield Railway
  Mr. Allen
  To ask the Secretary of State for Transport what representations he has received about the opening of a railway line from Nottingham through Bulwell to Mansfield; and if he will make a statement.

  Mr. David Mitchell
  My right hon. Friend has received representations from the hon. Members for Bolsover (Mr. Skinner) and for Nottingham, North. As this possibility of reopening a passenger service between Nottingham and Mansfield through Bulwell is relevant to British Rail's proposal to close part of the Lenton Triangle junction, it would not be appropriate for my right hon. Friend to comment in view of his quasi-judicial position.

  M1 (Traffic Flow)
  Mr. Butler
  To ask the Secretary of State for Transport whether he has any plans to improve the speed of traffic flow along the M1 during carriageway repairs.

  Mr. Peter Bottomley
  We are always looking for ways of improving traffic flow, consistent with safety of road users and the work force at roadwork sites. We aim to minimise delays by careful programming, improved traffic management and greater use of lane rental contracts which give an incentive for early completion.

  Settle to Carlisle Railway
  Mr. Curry
  To ask the Secretary of State for Transport what information he has as to the financial contribution to the running costs and maintenance of the Settle to Carlisle railway service which has been provided by North Yorkshire county council in 1987 and proposed for subsequent years.

  Mr. David Mitchell
  I understand that North Yorkshire county council is making no financial contribution to the maintenance and running costs of the Settle to Carlisle railway service in the financial year 1987–88, but is contributing £750 for publicity. I am awaiting confirmation of the council's position.

  Mr. Curry
  To ask the Secretary of State for Transport what information he has as to the financial contribution to the running costs and maintenance of the Settle to Carlisle railway provided by Cumbria county council in 1987 and as to what contribution is envisaged by Cumbria county council over the next two years.

  Mr. David Mitchell
  I understand that Cumbria county council is presently contributing £27,000 to support services on the Settle to Carlisle railway, and that that level is unlikely to change in the next two years, provided the line stays open for British Rail services. I also understand that the county council is contributing £2,000 for publicity in 1987–88. I am awaiting confirmation of the council's position.

  Coach Drivers
  Sir Anthony Grant
  To ask the Secretary of State for Transport if he has any plans to change the conditions regarding the health of a coach driver before he obtains a public service vehicle licence.

  Mr. Peter Bottomley
  The conditions, which are set out in "Medical Aspects of Fitness to Drive" (published by the Medical Commission on Accident Prevention), are kept under regular review by the Secretary of State's honorary medical advisory panels. Compliance is monitored through an initial medical examination and regular mandatory checks for all PSV drivers from the age of 46.

  Pedal Cyclists
  Sir Anthony Grant
  To ask the Secretary of State for Transport how many persons have been killed or injured by pedal cyclists in each of the last five years.

  Mr. Peter Bottomley
  Statistics are available only for pedestrians injured by pedal cyclists. They are as follows:

  Pedestrians injured by pedal cyclists: Great Britain: 1982–86

  Killed

  Seriously injured

  Slightly injured

  Total

  1982

  11

  231

  565

  807

  1983

  8

  220

  570

  798

  1984

  8

  239

  556

  803

  1985

  10

  168

  423

  601

  1986

  8

  155

  419

  582

  Motorways (Hunting)
  Mr. Tony Lloyd
  To ask the Secretary of State for Transport what advice he gives concerning hunting adjacent to motorways; and if he will make a statement.

  Mr. Peter Bottomley
  We are not aware of any special safety problems that this is posing or of ignorance on the part of hunting interests about the dangers and need for vigilance. The attention of the Fox Hounds Association has been drawn to this in the past.

  A30 (Honiton to Exeter)
  Mr. Maxwell-Hyslop
  To ask the Secretary of State for Transport why his decision on the route of any A30 improvement between Honiton and Exeter has not yet been announced; and what decision he has now reached.

  Mr. Peter Bottomley
  We are considering the response to the public consultation held last year and other relevant factors. We shall announce our preferred route as soon as we have completed this.

  Travel Statistics
  Mr. Roy Hughes
  To ask the Secretary of State for Transport if he will show the most recent information on the percentage of passenger journeys made by transport mode for each region in Great Britain.

  Mr. Peter Bottomley
  The following information is available from the 1985–86 national travel survey:
  361

  Percentage of journeys (all journeys over 1 mile)

  Region

  Car or Van

  Bus or coach

  Rail

  Other public public modes

  Other public private modes

  All modes

  Northern

  63

  20

  1

  2

  14

  100

  Yorkshire and Humberside

  62

  20

  1

  1

  16

  100

  East Midlands

  72

  12

  —

  1

  15

  100

  East Anglia

  75

  7

  —

  1

  17

  100

  South East excluding London

  77

  6

  3

  1

  13

  100

  London

  60

  15

  11

  1

  13

  100

  South West

  76

  7

  —

  1

  16

  100

  West Midlands

  72

  12

  1

  1

  14

  100

  North West

  66

  16

  1

  2

  14

  100

  Wales

  71

  13

  1

  1

  14

  100

  Scotland

  59

  21

  1

  2

  17

  100

  Great Britain

  69

  13

  3

  1

  14

  100

  Other public modes include coach tours and excursions, taxis and minicabs, air journeys (within Great Britain), and other public modes.

  Other private modes include motor cycles, scooters and mopeds, bicycles, other private modes and walking (over 1 mile).

  Mr. Roy Hughes
  To ask the Secretary of State for Transport if, ignoring journeys to and from work of under

  Percentage of journeys

  Length of Journey

  25 to 50 miles

  50 to 100 miles

  100 to 150 miles

  150 to 200 miles

  200 to 250 miles

  Over 250 miles

  Car or van

  82

  80

  81

  75

  61

  48

  Bus or coach

  5

  7

  9

  9

  12

  19

  Rail

  11

  10

  7

  10

  21

  20

  Other Public Modes

  1

  2

  2

  3

  4

  12

  Other Private Modes

  1

  1

  1

  3

  2

  1

  All Modes of Transport

  100

  100

  100

  100

  100

  100

  Other public modes include coach tours and excursions, taxis and minicabs, air journeys (within Great Britain) and other public modes. It is not possible separately to identify air journeys.

  Other private modes include motor cycles, scooters and mopeds, bicycles and other private modes.

  Motor Cycles (Eye Protectors) Regulations
  Mr. Waller
  To ask the Secretary of State for Transport what information he has as to the availability of eye protectors prescribed in the Motor Cycles (Eye Protectors) Regulations 1985.

  Mr. Peter Bottomley
  The supply of visors has improved through new manufacturers' products significantly increasing the numbers available. A drop in demand was reported in December but not all motor cyclists may yet have approved eye protectors. I urge all those riders who are in such a position to obtain them well before 1 April 1988.

  Mr. Waller
  To ask the Secretary of State for Transport what representations he has received from the Association of Chief Police Officers concerning possible difficulties in enforcing the Motor Cycles (Eye Protectors) Regulations at the present time.

  Mr. Peter Bottomley
  The Association of Chief Police Officers expressed concern about the availability of 362
  25 miles, he will show the most recent information available on the percentage of journeys made by (i) car-van, (ii) bus-coach, (iii) rail, (iv) aircraft and (v) other over distances of 25 to 50 miles, 50 to 100 miles, 100 to 150 miles, 150 to 200 miles, 200 to 250 miles and over 250 miles, respectively.

  Mr. Peter Bottomley
  The following information is available from the 1985–86 national travel survey:

  approved eye protectors. This has led it to recommend that riders should for the time being be warned rather than prosecuted for not having approved eye protectors.

  King's Cross Fire
  Mr. Bowis
  To ask the Secretary of State for Transport if, following the preliminary hearing of 2 December 1987, he is in a position to announce where and when the formal investigation into the King's Cross underground lire will be held.

  Mr. Channon
  The formal investigation into the King's Cross underground fire will be held before Mr. Desmond Fennell OBE QC and will begin on Monday, 1 February 1988 at 10.30 am in Westminster Central hall, Storey's gate, London SW1H 9NU.

  A second one-day preliminary meeting devoted to technical matters concerning the King's Cross underground fire, will be held before Mr. Desmond Fennell OBE QC, at 10.30 am on Monday, 25 January 1988 in Church house, Great Smith street, London SW1.

  Both meetings will be held in public. Advertisements will be placed in the press.

  Dock Labour Scheme
  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport if he will detail the current administrative costs
  363
  of the dock labour scheme and the individual administrative costs of each local board in each of the past 10 years.

  Mr. Patrick Nicholls
  I have been asked to reply.

  I refer my hon. Friend to the income and expenditure account which is published in the annual report and accounts for the National Dock Labour Board and in the notes to the accounts which follow. The latest published figures, for the year ended 27 December, 1986, show that the board's management levy was maintained at 2¾ per cent. of the total leviable wage bill, and amounted to £4·3 million. Administrative costs for individual local boards are not made public.

HOME DEPARTMENT

  Medomsley Prison
  Ms. Armstrong
  To ask the Secretary of State for the Home Department whether work on the new kitchen block at the premises of the former Her Majesty's prison at Medomsley, Derwentshire, has been completed.

  Mr. Douglas Hogg
  No. The building element of this work is nearing completion, but the kitchen equipment will not be installed pending a decision on the future role of this establishment.

  Ms. Armstrong
  To ask the Secretary of State for the Home Department what plans he has for the recently closed prison at Medomsley; and if he will make a statement.

  Mr. Douglas Hogg
  Her Majesty's prison Medomsley, originally a detention centre, was temporarily brought into use as a category C training prison in June last year. The establishment was closed in October and the staff deployed to areas of pressing need in other prisons. The establishment is presently being surveyed with a view to assessing whether, and how, it should be redeveloped. A decision on Medomsley's future will be made when the results of the survey have been evaluated.

  Prisons (Drugs)
  Mr. Butler
  To ask the Secretary of State for the Home Department if he will initiate a review of the administration of drugs in Her Majesty's penal establishments.

  Mr. Douglas Hogg
  No. This was one of the matters reviewed by the Social Services Committee in its Third Report in the 1985–86 Session. The use of medicines at all establishments continues to be monitored by the Director of Prison Medical Services.

  Video Recordings Act 1984
  Mr. Wallace
  To ask the Secretary of State for the Home Department if he will state the number of convictions obtained for offences under the Video Recordings Act 1984 in respect of each year during which the Act has been in force.

  Mr. John Patten
  I refer the hon. Member to the answer I gave to my hon. Friend the Member for Lancashire, West (Mr. Hind) on 27 November at columns 365–66.

  Arson (Wales)
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for the Home Department how many alleged and actual incidents of arson at holiday and second homes have been dealt with by police forces in Wales since 1979.

  Mr. John Patten
  Information in the form requested is not collected centrally.

  Drug Addiction (Report)
  Mr. Corbett
  To ask the Secretary of State for the Home Department whether he will place a copy of the drug addiction research initiative report, complemented by Dr. Virginia Berridge, in the Library.

  Mr. Douglas Hogg
  No. It is open to Dr. Berridge to publish the report or make it otherwise available as she wishes. The public bodies (including the Home Office) which jointly funded the report have no plans for its publication.

  Television Licences
  Mr. Wigley
  To ask the Secretary of State for the Home Department what is his Department's policy on the refund of unexpired television licences of deceased holders to their next of kin.

  Mr. Renton
  Refunds are available when two licences are held of which one was obtained in error; when a unexpired monochrome licence is surrendered for a colour licence; and when a licence is surrendered within 28 days of its issue (or due date of issue in cases of renewal). We have no plans to extend these arrangements.

  Prison Population
  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the prison population for England and Wales on the latest date available.

  Mr. Douglas Hogg
  On 8 January the prison population in England and Wales was 47,271, excluding 557 prisoners held in police cells.

  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the average prison population in England and Wales for 1987.

  Mr. Douglas Hogg
  The provisional average population of prison department establishments in 1987 was about 48,400. The provisional average population held in police cells was about 530.

  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the prison remand population for England and Wales for the latest date available.

  Mr. Douglas Hogg
  On 30 November 1987, the latest date for which reliable information is available, about 10,890 untried or convicted unsentenced prisoners were held in prison department establishments in England and Wales. A further 912 prisoners, many of whom were on remand, were held in police cells. By 11 January, the latest date for which information on prisoners in police cells is available, the number was 676.

  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the average prison remand population during 1987.
  365
  Mr. Douglas Hogg
  The information requested will not be available for another month.

  The average population of untried or convicted unsentenced prisoners in prison department establishments in England and Wales for the first 11 months of 1987 was about 10,640. Over the same period an average of 535 prisoners, many of whom would have been on remand, were held in police cells.

  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the certified normal accommodation and the actual population on the latest date available for (1) Her Majesty's prison, Bedford, (2) Her Majesty's prison, Birmingham, (3) Her Majesty's prison, Cardiff, (4) Her Majesty's prison, Doncaster, (5) Her Majesty's prison, Exeter, (6) Her Majesty's prison, Leeds, (7) Her Majesty's prison, Leicester, (8) Her Majesty's prison, Lewes, (9) Her Majesty's prison, Lincoln, (10) Her Majesty's prison, Liverpool, (11) Her Majesty's prison, Manchester and (12) Her Majesty's prison, Reading.

  Mr. Douglas Hogg
  On 8 January the certified normal accommodation and populations of the prison service establishments listed were as follows:

  Establishment

  Certified normal accommodation

  Population

  Bedford

  176

  346

  Birmingham

  592

  1,135

  Cardiff

  340

  424

  Doncaster1

  720

  —

  Exeter

  310

  428

  Leeds

  642

  1,381

  Leicester

  200

  435

  Lewes

  364

  551

  Lincoln

  359

  678

  Liverpool

  968

  1,236

  Manchester

  969

  1,565

  Reading

  178

  323

  1 Planned to open in 1993.

  Probation and Community Service
  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the weekly cost of supervising a person on probation and community service in England and Wales for the latest date available.

  Mr. John Patten
  In the financial year 1985–86 the weekly cost of supervision by the probation service in England and Wales was about £15 for a person on a probation order and about £13 for a person serving a community service order. These are estimates which depend on assumptions about the allocation of the time of probation officers and are approximate. The figures are derived from those published in "Probation Statistics, England and Wales" (table 12.3 of the latest issue, 1986), copies of which are in the Library.

  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the weekly cost of supervising a person in a probation hostel in England and Wales for the latest date available.

  Mr. John Patten
  The estimated weekly cost of accommodating a person net of residents' contributions in a probation/bail hostel in England and Wales in 1986–87, was £155·25.

  Crime Statistics
  Mr. Bermingham
  To ask the Secretary of State for the Home Department (1) how many persons convicted of an indictable offence in England and Wales in 1986 by a magistrates' court had committed an offence which involved violence;

  (2) what percentage of persons sentenced to a period of immediate imprisonment in 1986 in England and Wales had been sentenced to a period of six months or less.

  Mr. John Patten
  In 1986, there were 34,647 persons found guilty of violence against the person, sexual offences and robbery. There were 42,743 persons sentenced at all courts to immediate imprisonment, of whom 49 per cent. rceived sentences of six months or less. This information can be found in table S1.1(A) of "Criminal Statistics, England and Wales, Supplementary Tables 1986, volume 1" and in table 7.28 and 7.29 of "Criminal Statistics, England and Wales 1986", (Cm. 233), respectively, copies of which are in the Library.

  Fine Defaulters
  Mr. Bermingham
  To ask the Secretary of State for the Home Department how many persons in 1986 were committed to prison in lieu of default in payment of a fine.

  Mr. Douglas Hogg
  The information available centrally is that in 1986 about 19,200 persons were received into prison department establishments in England and Wales following committal in default of payment of a fine. The figures appear in the annual publication "Prison Statistics England and Wales" (table 7.3, of the 1986 issue. Cm. 210), copies of which are in the Library.

  Prisoners (Cost)
  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the weekly cost of keeping a person in prison in England and Wales for the latest date available.

  Mr. Douglas Hogg
  Information on the costs of running the prison service is published in the annual reports on the work of the prison department, copies of which are in the Library. The report for 1986–87 (Cm. 246) shows that the average weekly cost of keeping a person in a penal establishment in England and Wales in that year was £252 (see appendix 6, table D).

  Mr. Khurshid Ahmad Malik
  Mr. Teddy Taylor
  To ask the Secretary of State for the Home Department if his Department has been able to return to Mr. Khurshid Ahmad Malik the Indian passport which was deposited with the Department in September and acknowledged on 21 October under the reference M565200, to enable him to return to his homeland after receiving private medical treatment, details of which have been sent to the Under-Secretary of State by Dr. S. A. Malik of Southend on Sea.

  Mr. Renton
  I regret that we have not been able to do so. As Mr. Malik was told in the immigration department's letter to him on 6 January, an exhaustive search has not traced his passport. I acknowledge that this has caused Mr. Malik considerable inconvenience and extend the Department's apologies to him. The letter
  367
  recently sent him may, as it indicated, assist him in obtaining an emergency travel document from the Indian high commission. If the high commission is unable to issue a travel document we will consider what further action we are able to take.

  I can assure my hon. Friend that strenuous efforts to locate the missing passport will continue. Staff are trained to treat passports and other documents with care and the incidence of loss of passports within the immigration department, which receives some 500,000 items of correspondence each year, many of which contain passports, is very small.

  Remand
  Mr. Cox
  To ask the Secretary of State for the Home Department what had been the longest time a person had been held in prison awaiting trial as of 31 October.

  Mr. Douglas Hogg
  [holding answer 17 December 1987]: According to such information as is held centrally, the longest period a person has been held in custody on 31 October awaiting or during his trial was just over 15 months. The trial was completed on 10 December 1987.

SCOTLAND

  Rating Reform
  Mr. Worthington
  To ask the Secretary of State for Scotland when he expects to introduce a unified business rate in Scotland.

  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland when the proposed business rate will take effect in Scotland; and when the Scottish business rate will be brought to the same level as in England.

  Mr. Lang
  The introduction of a uniform business rate applying throughout Great Britain cannot be considered until non-domestic property north and south of the border is valued for rating purposes on a comparable basis. The process of harmonising valuation practice is under way but is unlikely to be completed until after the 1990 revaluation. On the question of a separate uniform business rate for Scotland, I refer the hon. Member for Clydebank and Milngavie (Mr. Worthington) to my reply to his question on 17 December at column 643.

  Video Recordings Act 1984
  Mr. Wallace
  To ask the Secretary of State for Scotland if he will state the number of convictions obtained for offences under the Video Recordings Act 1984 in respect of each year during which the Act has been in force.

  Lord James Douglas-Hamilton
  The table gives the number of persons against whom a charge was proved of an offence under the Video Recordings Act 1984, excluding offences under section 14 (which cannot be identified separately from other offences of forgery).
  368

  Scotland

  Year

  Persons against whom charge was proved under the Video Recordings Act 1984 (excluding section 14)

  1984

  —

  1985

  —

  1986

  —

  1987 (January to September)

  9

  Roads
  Mr. Foulkes
  To ask the Secretary of State for Scotland what schemes within the trunk road network started construction in each year since 1979.

  Lord James Douglas-Hamilton: The relevant information, by financial year, is as follows:

  Trunk Road Schemes (over £1 million) which started construction since 1978–79

  Road and date

  Scheme

  1978–79

  A92

  Bourtreebush—Aberdeen City Boundary

  A929

  Powrie Brae Improvement

  A94

  Park ford Improvement

  A1

  Broxbum—Skateraw Diversion

  A9

  Blackford Bypass

  A9

  Tore—Maryburgh

  A9

  Pitlochry Bypass Phase I

  1979–80

  A9

  Aviemore—Granish

  A9

  Charleston—Tore

  A96

  Auchmill Road Bucksburn Phase II

  A96

  Elgin Relief Road

  A1

  Ayton Bypass

  A9

  Ardullie—Foulis

  A952

  Invernettie Diversion

  A92

  Thornton Bypass—Northern Section

  A9

  Pitlochry Bypass Phase II

  A9

  North of Kingussie—South of Aviemore

  1980–81

  A9

  Improvement at Syde and Pert

  1981–82

  A82

  Reconstruction of Eas Eonan and Derrydarroch Bridges

  A74

  Improvement at Johnstone Bridge

  A94

  Balnabreich—St. Ann's

  A742

  Improvement from Greenock—Inverkip

  A835

  Silverbridge—Gorston Diversion

  A9

  Evanton Bypass

  A9

  Regional boundary—Drumochter Lodge

  A96

  West Adamston Improvement

  A92

  Thornton Bypass Phase II

  A1

  Penmanshiel Diversion Contract No. 4

  A78

  Dundonald Camp—Monkton Diversion

  A75

  Carsluith Diversion

  A9

  Killiecrankie—North of Calvine State I

  A9

  North of Guay—Tynreich

  A82

  Carnoch—Craigrannoch Stage I

  A82

  Strathfillan Manse

  A94

  Improvement at Stracathro

  A9

  Auchterarder and Aberuthven Bypass

  A77

  Bridgemill Diversion

  1982–83

  A7

  Canonbie Diversion

  A92/A94

  Stonehaven Bypass

  A972

  Kingsway Stage II

  369

  Road and date

  Scheme

  A74

  Improvement northbound Kirkton—Glengonner—Abington

  A82

  Carnoch—Craigrannoch Stage II

  A76

  Bargower Diversion

  1983–84

  A94

  Scotston—Candy

  A74

  Abington—Glengonner—Kirkton Farm Improvement southbound

  A92

  East Fife Regional Road (EFRR) Phase I

  A929

  Tealing—Tarbrax

  A9

  Perth Western Bypass

  M74

  Wellburn—Poniel

  A835

  Maryburgh—Moy

  A9

  Killiecrankie—North of Calvine Stage 2

  A95

  Reconstruction of new U/bridge at Loch Vara

  A94

  Laurencekirk Bypass

  A75

  Collin Diversion

  A1

  Tranent Bypass

  A75

  Gatehouse of Fleet Bypass

  1984–85

  A9

  Dalreoch—Burnside

  A74

  Perchall—Woodend

  A85/A972

  Kingsway Improvement Stage III

  M74

  Draffan—Wellburn

  A1

  Musselburgh Bypass

  A75

  Creetown Bypass

  A92

  East Fife Regional Road (EFRR) Phase II

  A82

  Camus Nan Clais—Hollybank

  A75

  Bridge of Dee Diversion

  1985–86

  M74

  Poniel—Millbank

  A94

  Forfar Bypass

  A82

  Dubh Eas Stage II

  A7

  Synton—Mossend Diversion

  A82

  Auchentullich—Polnaberoch

  A9

  Alness Bypass

  A835

  Contin Diversion

  1986–87

  A96

  Auldearn Bypass

  A82

  Polnaberoch— Arnburn

  A75

  Annan Bypass

  A96

  Bucksburn—Tyrebagger Hill Stage I

  A82

  Arden—Auchentullich

  A75

  Ringford Bypass

  A830

  Mallaig—Kinsadel Stage I

  A929

  Kingsway—Powrie Improvement

  A92

  Murcar— Balmedie

  A9

  Mound, Sutherland Diversion

  1987–881

  A96

  Forres Bypass

  A9

  Dornoch Firth Crossing south approach road

  A75

  Castle Douglas Bypass

  A9

  Dornoch Firth Crossing north approach road

  A74

  Northbound Strengthening from A72 Junction to A723 Junction

  A830

  Lochailort—Polnish Bridge Improvement

  A82

  Auchendennan—Arden Improvement

  A75

  Glenluce Bypass

  M80

  Stepps Bypass advance works contract No. 1

  A82

  Luss—Camus Nan Clais

  A9

  Dunbeath Diversion

  1 11 January 1988.

  In addition, 195 schemes costing between £100,000 and £1 million started over the period.

  Mr. Foulkes
  To ask the Secretary of State for Scotland what was the actual expenditure on the trunk road network in each year since 1978–79; what is the projected outturn expenditure for the current financial year; and what is the budgeted expenditure for 1988–89.
  370
  Lord James Douglas-Hamilton
  The information requested is as follows:

  Expenditure (£ million net)1

  Financial year

  Capital

  Current

  Total

  1978–79

  65

  8

  73

  1979–80

  74

  9

  83

  1980–81

  81

  10

  91

  1981–82

  88

  16

  104

  1982–83

  96

  14

  110

  1983–84

  87

  20

  106

  1984–85

  97

  17

  115

  1985–86

  101

  19

  119

  1986–87

  95

  20

  115

  1987–88 projected

  110

  19

  129

  1988–89 budget

  To he announced later this year

  1 Figures rounded to nearest £ million. Rounded figures may not necessarily sum to the totals.

  Mr. Foulkes
  To ask the Secretary of State for Scotland what is the current position of the Dumfries bypass in relation to projected expenditure and planned date of start of construction, and what were the original budget and original planned start date.

  Lord James Douglas-Hamilton
  The Dumfries bypass has been under construction for many years. Throughout that period estimates of costs and planned start dates have varied as the results of detailed studies became known. The current cost is estimated at £15·10 million and it is planned to start construction in the late summer of this year.

  Mr. Foulkes
  To ask the Secretary of State for Scotland what is the current state of planning for the A74 upgrading announced during the general election campaign; what is the budgeted cost; and what alterations in priorities in the trunk road network will be necessary to accommodate it.

  Lord James Douglas-Hamilton
  As recently announced, feasibility studies are under way to consider the best way of implementing the upgrading. Until these studies have been completed, around the end of this year, it will not be possible to assess priorities in the trunk road programme, and how the A74 project will fit in. The estimated cost of the project is at least £200 million.

  Mr. Foulkes
  To ask the Secretary of State for Scotland if he will publish in the Official Report all correspondence between Ministers and the hon. Member for Carrick, Cumnock and Doon Valley on the Auchinlech/Cuinnock, New Cumnock, Maybole and Girvan bypasses.

  Lord James Douglas-Hamilton
  Since 1980 Scottish Office Ministers have corresponded with the hon. Member about the four bypasses mentioned on 13 occasions and I have arranged for copies of these letters to be placed in the Library of the House.

  Scottish National Meat Centre
  Mr. Wray
  To ask the Secretary of State for Scotland what participation the Scottish Development Agency will have in the activities and formation of the Scottish national meat centre and food park.

  Mr. Lang
  The Scottish Development Agency is discussing with Edinburgh district council the possible development of a Scottish national meat centre in Edinburgh. The nature and extent of the agency's participation in the centre is still under consideration.

  Regional Aid
  Sir Russell Johnston
  To ask the Secretary of State for Scotland what was the total value of regional aid grants paid to companies in respect of activities in Badenoch and Lochaber, respectively, in each of the last eight years for which figures are available.

  Mr. Lang
  Information on payments of grant by the Highlands and Islands Development Board under section 8 of the Highlands and Islands Development (Scotland) Act 1965 is not available in the form requested. Approvals of grants under this Act to firms in the Badenoch and Strathspey and Lochaber local authority districts in the period 1980 to 1987 are as follows.

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  Local Authority District

  Section 8 Approvals (£ thousands)

  Badenoch and Strathspey

  648

  239

  402

  651

  807

  1,028

  729

  588

  Lochaber

  355

  408

  459

  647

  551

  918

  1,486

  677

  EOA

  RDG payments ( £ thousand)

  Fort William

  30

  2,247

  3,226

  275

  402

  136

  902

  534

  Inverness

  849

  428

  4,193

  321

  162

  623

  1,542

  —

  Nature Reserves
  Mr. Buchanan-Smith
  To ask the Secretary of State for Scotland if he has plans to dispose of any nature reserves or parts of nature reserves in Scotland; and if he will make a statement.

  Mr. Rifkind
  I refer my right hon. Friend to the answer given to the hon. Member for Linlithgow (Mr. Dalyell) by my hon. Friend the Minister with responsibility for home affairs and the environment on 13 January; and to the answer given on the same day to the hon. Member for Copeland (Dr. Cunningham) by my right hon. Friend the Secretary of State for the Environment.

  European Demonstration Reprocessing Plant
  Mr. Wallace
  To ask the Secretary of State for Scotland when he received the final report by Mr. Alexander Bell on the public inquiry into the proposed siting of the European demonstration reprocessing plant at Dounreay; and when he expects to make a statement.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend has not yet received the report. When he does he will consider it carefully before coming to a decision, but I cannot say when that will be.

DEFENCE

  BP Flotation
  Mr. Wray
  To ask the Secretary of State for Defence if, pursuant to his reply of 2 November 1987,Official Report, column 600, to the hon. Members for Glasgow, Provan and Newham, North-West (Mr. Banks), the costs to the public funds for the use of the Royal Marines and Commandos in the British Petroleum share launch have now been assessed; and how much of them has been recovered.
  372
  A small number of payments of regional selective assistance have also been made to companies in the Lochaber district in the period 1980 to 1987 but details on these cannot be given as to do so would disclose information on individual businesses. No such payments were made to firms in the Badenoch and Strathspey district.

  Details of payments under the old regional development grant scheme are available only for payments of over £25,000 to firms in the Fort William and Inverness local employment office areas (EOA) which subsume Lochaber and Badenoch respectively. These are set out as follows.

  Mr. Freeman
  I refer the hon. Member to the answer I gave the hon. Member for Newham, North-West (Mr. Banks) on 12 November 1987, at column 306, and my reply of 13 January 1988.

  Tanks
  Mr. Fatchett
  To ask the Secretary of State for Defence (1) what representations he has received from the Army about the purchase of Challenger tanks; and if he will make a statement;

  (2) when he expects to announce a decision about future orders of tanks for the Army; and if he will make a statement.

  Mr. Sainsbury
  I refer the hon. Member to the answer given on 12 January to my hon. Friend the Member for Bridlington (Mr. Townend) at column 200.

  UK Air Defence Region (Incursions)
  Mr. Rogers
  To ask the Secretary of State for Defence on how many occasions since 1979 have two or more Soviet aircraft entered the United Kingdom air defence region at the same time.

  Mr. Freeman
  I have nothing to add to the answer given by my hon. Friend the Minister of State for the Armed Forces on 11 January 1988, at column 67.

  Nuclear Installations (Military Aircraft)
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Defence if, pursuant to his answer to the hon. Member for Ynys Môn of 16 November 1987,Official Report, column 452, he will clarify how close to nuclear installations military aircraft are permitted to fly.

  Mr. Freeman
  The instructions governing the distances at which low-flying military aircraft may pass by a nuclear installation vary according to the type of installation. Details are classified.

  Expenditure
  Mrs. Clwyd
  To ask the Secretary of State for Defence what was the Government's level of spending on defence, expressed per household, for 1979 and for each year since then (i) current prices, (ii) 1979 prices and (iii) 1987 prices.

  Mr. Freeman
  The information requested is shown:

  Defence expenditure per household

  Current prices £s

  1987–88 prices £s

  1979–80 prices £s

  1979–80

  456

  792

  456

  1980–81

  550

  805

  464

  1981–82

  614

  819

  472

  1982–83

  699

  869

  501

  1983–84

  744

  884

  510

  1984–85

  818

  932

  537

  1985–86

  849

  912

  526

  1986–87

  853

  889

  512

  1987–88

  877

  877

  505

  Unit Costs
  Mr. Rogers
  To ask the Secretary of State for Defence (1) when he last published in a written answer the unit cost of a particular system;

  (2) when it became his practice not to publish project unit costs.

  Mr. Sainsbury
  [holding answer 11 January 1988]: The unit cost of a particular system was last published in a written answer on 6 July 1987, at columns 61–2. Information of a similar character was given on 2 November 1987, at column 609.

  Last year the practice of publishing unit costs of selected equipments in the annual "Statement on the Defence Estimates" was reviewed. It had long been recognised that publication of prices paid for equipment by my Department could be inimical to the commercial interests of manufacturers in other markets, and representations from the manufacturers themselves confirmed that this was the case. My right hon. Friend accordingly decided to discontinue the publication of such figures. They will, however, be made available to the Defence Committee of the House each year on a classified basis.

HOUSE OF COMMONS

  Ordnance Survey and Admiralty Publications
  Mr. Barry Field
  To ask the Lord President of the Council (1) when hon. Members will be able to receive Ordnance Survey publications from the Vote Office;

  (2) when hon. Members will be able to receive Admiralty publications from the Vote Office.

  Mr. Wakeham
  The Accommodation and Administration Sub-Committee of the Services Committee will shortly be considering the question whether the Vote Office should provide Ordnance Survey and Admiralty publications to Members on request. I shall ensure that my hon. Friend is informed of its decision.

EDUCATION AND SCIENCE

  Assessment and Testing (Report)
  Mr. Baldry
  To ask the Secretary of State for Education and Science when he expects the task group on assessment and testing to report; and what action he anticipates taking following the publication of such a report.

  Mrs. Rumbold
  I refer my hon. Friend to my right hon. Friend's reply to my hon. Friend the Member for Walthamstow (Mr. Summerson) on 12 January, at column 205.

  Nursery Education
  Mr. Pike
  To ask the Secretary of State for Education and Science if he will list, by sex, the number of children in each local education authority who receive nursery education.

  Mr. Dunn
  The number of boys and girls under live in January 1987 attending maintained nursery schools or nursery classes in primary schools in each local education authority in England is as follows:

  Boys and girls in nursery schools and classes in England— January 19871

  Boys

  Girls

  Barking

  512

  444

  Barnet

  1,196

  1,111

  Bexley

  307

  305

  Brent

  1,133

  1,077

  Bromley

  60

  62

  Croydon

  315

  293

  Ealing

  1,381

  1,290

  Enfield

  719

  696

  Haringey

  1,064

  1,007

  Harrow

  410

  379

  Havering

  121

  105

  Hillingdon

  1,329

  1,288

  Hounslow

  1,892

  1,784

  Kingston Upon Thames

  515

  441

  Merton

  800

  760

  Newham

  1,921

  1,972

  Redbridge

  249

  231

  Richmond Upon Thames

  327

  279

  Sutton

  327

  356

  Waltham Forest

  1,158

  1,110

  Inner London

  11,113

  10,766

  Birmingham

  4,545

  4,416

  Coventry

  978

  890

  Dudley

  1,154

  1,139

  Sandwell

  1,862

  1,689

  Solihull

  702

  688

  Walsall

  1,991

  1,380

  Wolverhampton

  1,941

  1,865

  Knowsley

  980

  940

  Liverpool

  3,156

  2,988

  St. Helens

  695

  678

  Sefton

  1,044

  990

  Wirral

  836

  778

  Bolton

  1,446

  1,334

  Bury

  398

  403

  Manchester

  3,464

  3,351

  Oldham

  993

  936

  Rochdale

  910

  870

  Salford

  1,582

  1,491

  Stockport

  548

  530

  Tameside

  1,139

  1,153

  Trafford

  312

  293

  375

  Boys

  Girls

  Wigan

  1,043

  989

  Barnsley

  1,425

  1,358

  Doncaster

  1,557

  1,518

  Rotherham

  1,380

  1,329

  Sheffield

  2,445

  2,282

  Bradford

  2,450

  2,286

  Calderdale

  667

  624

  Kirklees

  2,038

  1,841

  Leeds

  2,830

  2,753

  Wakefield

  1,916

  1,853

  Gateshead

  830

  815

  Newcastle Upon Tyne

  1,421

  1,416

  North Tyneside

  1,197

  1,217

  South Tyneside

  927

  925

  Sunderland

  1,528

  1,431

  Isles of Scilly2

  0

  0

  Avon

  1,687

  1,591

  Bedfordshire

  2,371

  2,211

  Berkshire

  2,549

  2,352

  Buckinghamshire

  1,130

  1,013

  Cambridgeshire

  997

  955

  Cheshire

  2,370

  2,413

  Cleveland

  4,195

  3,941

  Cornwall

  775

  629

  Cumbria

  1,176

  1,084

  Derbyshire

  3,115

  2,815

  Devon

  1,065

  998

  Dorset

  387

  367

  Durham

  2,949

  2,709

  East Sussex

  543

  453

  Essex

  1,105

  1,072

  Gloucestershire2

  0

  0

  Hampshire

  972

  832

  Hereford and Worcester

  460

  449

  Hertfordshire

  3,834

  3,668

  Humberside

  3,510

  3,310

  Isle of Wight

  72

  56

  Kent

  993

  919

  Lancashire

  3,049

  2,903

  Leicestershire

  2,650

  2,552

  Lincolnshire

  491

  476

  Norfolk

  448

  422

  North Yorkshire

  1,389

  1,305

  Northamptonshire

  1,252

  1,181

  Northumberland

  917

  899

  Nottinghamshire

  5,604

  5,484

  Oxfordshire

  915

  832

  Salop

  565

  557

  Somerset

  57

  27

  Staffordshire

  2,925

  2,887

  Suffolk

  1,077

  982

  Surrey

  1,330

  1,292

  Warwickshire

  1,035

  918

  West Sussex

  300

  246

  Wiltshire

  114

  127

  Total

  141,552

  134,622

  1 Full and part-time pupils.

  2 These authorities have no nursery schools or classes.

  Education Reform
  Ms. Armstrong
  To ask the Secretary of State for Education and Science what representations he has received seeking the extension, by law, of the national curriculum to those children who are supported by public funds through the assisted places scheme; and if he will make a statement.
  376
  Mrs. Rumbold
  Only a very small proportion of the responses from individuals and organisations on the consultation document made points about pupils on the assisted places scheme.

AGRICULTURE, FISHERIES AND FOOD

  Fatstock Certification
  Mr. Ieuan Wyn Jones
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the future of fatstock certification.

  Mr. Donald Thompson
  Fatstock certification is an integral part of the beef and sheep variable premium schemes. Its future will depend upon progress in the current review of the Community's sheepmeat regime; and on future arrangements for beef support in 1989 on which discussions have yet to start.

  Variable Premium Payments
  Mr. Ieuan Wyn Jones
  To ask the Minister of Agriculture, Fisheries and Food, whether the weekly guide prices published on 13 July 1987 are the prices on which the variable premium payments are being calculated; and if he will make a statement.

  Mr. Donald Thompson
  Yes. Variable premium rates for the 1988 sheepmeat marketing year are being calculated on the basis of the decisions on guide price levels reached at the 1987 price-fixing, the details of which were announced by my Department on 13 July 1987.

  Milk Quota
  Mr. Ieuan Wyn Jones
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on his Department's policy on milk quota leasing.

  Mr. Donald Thompson
  Quota leasing gives milk producers a valuable element of flexibility and I welcome the Commission's intention, expressed in its report on the quota system published last October, to propose that it should be maintained.

  Radiation
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food how many sheep in the restricted area of Cumbria which had died from natural causes were monitored for radioactivity in each month from June to December 1986.

  Mr. Donald Thompson
  None.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will place in the Library any literature relating to the disposal of dead sheep circulated to farmers in the restricted area of Cumbria following the Chernobyl accident in 1986.

  Mr. Donald Thompson
  In addition to the information I gave to the hon. Member on 10 December 1987 Ministry officials wrote — on 8 April 1987, at the start of the lambing season — to farmers in the restricted area outlining "mark and release" arrangements for the new lamb crop. This letter included a passage on the disposal of casualties. A copy of the letter is being placed in the Library of the House.

  Environmentally Sensitive Areas
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food what percentage of land within each environmentally sensitive area is currently being farmed under the restrictive rules in return for payment.

  Mr. Donald Thompson
  It will not be possible to provide a definitive estimate of the percentage of land covered by ESA arrangements until we have completed our detailed land cover survey of each ESA. Our provisional estimate of the area of land being farmed under ESA agreements in England is shown below.

  ESA Area covered by agreements (ha)

  The Broads

  16,749

  Pennine Dales

  8,403

  Somerset Levels and Moors

  8,181

  South Downs

  3,104

  West Penwith

  5,646

  1 This does not include land farmed under the Broads grazing marsh conservation scheme in 1987.

  Meat and Livestock Commission
  Mr. Ieuan Wyn Jones
  To ask the Minister of Agriculture, Fisheries and Food when he hopes to publish his response to the Purdom report on the Meat and Livestock Commission.

  Mr. Donald Thompson
  The Ministry's efficiency scrutiny of the Meat and Livestock Commission, a copy of which has been placed in the Library of the House, has been discussed with the MLC which is taking action on a number of the recommendations it contains.

WALES

  Public Inquiry (Swansea)
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales if, in the light of the existence of circular 44/87, he will undertake to review any findings of the inspector for the public inquiry into the application for executive houses at Murton lane, Newton, Swansea; and if he will make a statement.

  Mr. Grist
  This appeal is one of those transferred by regulations to a planning inspector and my right hon. Friend has no power to intervene in the decision-making process other than by formally recovering jurisdiction. On present information, he does not believe that there is a case for taking such action. The guidelines on housing for senior management remain as set out in Welsh Office circular 30/86.

  Agriculture Department, Ruthin
  Mr. Barry Jones
  To ask the Secretary of State for Wales (1) if he will take steps to ensure that the Welsh Office Agriculture Department, Ruthin, will remain open for the foreseeable future;

  (2) if he will meet staff unions from the Agriculture Department office in Ruthin to discuss the prospects for closure; and if he will make a statement.

  Mr. Peter Walker
  We have no plans to close the Ruthin divisional office.
  378
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many staff are employed at the Agriculture Department office in Ruthin; how many cases this office handles annually; and how many farms in north Wales this office is expected to service annually.

  Mr. Peter Walker
  The divisional office at Ruthin employs about 77 people (including 26 ADAS staff). Claims and grant applications in 1987 totalled 5,709. The number of holdings recorded in 1987 was 6,366.

  Gobowen Orthopaedic Hospital
  Mr. Barry Jones
  To ask the Secretary of State for Wales what estimate he has made of the effect of the closure of beds at Oswestry (Gobowen) orthopaedic hospital upon the expectations of patients in Clwyd for joint replacement operations; and if he will make a statement.

  Mr. Grist
  I understand that the closures are temporary measures and as such consideration of their effects is for the health authorities concerned. Officials of the Welsh Office are, however, keeping in touch with both Clwyd and Shropshire health authorities.

  Cancer Treatment
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will take urgent steps to enable patients in Clwyd suffering from cancer to receive treatment in Clwyd; and if he will make a statement.

  Mr. Grist
  The Welsh Office is already exploring with health authorities in Clwyd and Merseyside how treatment services for patients in Clwyd can be improved.

  Mr. Barry Jones
  To ask the Secretary of State for Wales how many patients suffering from cancer, living in Clwyd and Gwynedd, receive treatment in the Wirral; and if he will make a statement.

  Mr. Wyn Roberts
  The information requested is not held centrally. The cancer treatment services at Clatterbridge hospital, Wirral, are the responsibility of the Mersey regional health authority to which the request for information should be directed.

  Flooding
  Mr. Alex Carlile
  To ask the Secretary of State for Wales if he will introduce a system of higher-rate grants or cheap loans to farmers in Wales for the construction of works and buildings to alleviate the effect on their enterprises of persistent flooding; and if he will make a statement.

  Mr. Peter Walker
  Grants of 30 per cent. in the less-favoured areas and 15 per cent. outside the less-favoured areas are currently available to farmers for works and facilities to prevent the flooding of agricultural land by watercourses if such works form part of an approved plan under the agriculture improvement scheme. In addition, water authorities have permissive powers under the Land Drainage Act 1976 to undertake land drainage and flood protection works. I said in the House on 21 October last, at column 752, during the debate on the effects of flooding in Wales, that I would look into any problems that were drawn to my attention. I am still happy to do so.
  379
  Mr. Alex Carlile
  To ask the Secretary of State for Wales if he has any proposals for works to alleviate persistent flooding on major roads in mid-Wales; and if he will make a statement.

  Mr. Wyn Roberts
  In consultation with the county council and the water authority we are continuing to investigate the causes of persistent flooding of the A483 and A487 trunk roads in North Powys and to seek to identify cost-effective remedies where needed. Non-trunk roads are the responsibility of the county highway authorities.

  Mr. Alex Carlile
  To ask the Secretary of State for Wales if he has any proposals to alleviate farm losses caused by flooding in the Severn valley; and if he will make a statement.

  Mr. Peter Walker
  Flood protection works are the responsibility of the Severn Trent water authority which, I understand, has a flood alleviation scheme for the confluence of the rivers Vyrnwy and Severn under initial consideration. Any works may be eligible for Government grant under the Land Drainage Act 1976. Otherwise farming is a commercial operation which should reasonably be expected to allow for the consequences of bad weather.

  Milk
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales how many Welsh farmers are at present engaged in milk production; and what were the corresponding figures for each year since 1979.

  Mr. Peter Walker
  The number of registered milk producers in Wales in December for each year since 1979 is shown in the table:

  Registered milk producers in Wales in December

  Number

  1979

  7,939

  1980

  7,617

  1981

  7,375

  1982

  7,283

  1983

  7,253

  1984

  7,046

  1985

  6,850

  1986

  6,769

  1987

  1

  1 The December 1987 figure is not yet available. The figure for November 1987 was 6,484.

  Farm Diversification Grants
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales what funds have been made available for grants for farm diversification in Wales during 1987–88; and if he will make a statement.

  Mr. Peter Walker
  It is not anticipated that claims for grant will be made during the financial year.

  Local Authorities (Vacant Land)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales what information he has as to the amount of vacant land held by each Welsh local authority in 1974, 1979, 1983 and for each subsequent year; what percentage of the 380
  total land in each authority area and of the local authority's total land holding this represents; and if he will make a statement.

  Mr. Ian Grist
  This information is not held centrally.

EMPLOYMENT

  Community Programme
  Ms. Armstrong
  To ask the Secretary of State for Employment what are the relative percentages of training and work experience for participants on the community programme.

  Mr. Lee
  Agents and sponsors are responsible for designing their own programmes of work experience and training, and detailed information is not held centrally. However, the following information is provided from the latest (4th) community programme participants survey:66 per cent. of participants were receiving on-the-job training at the time of the survey.
  20 per cent. were receiving formal training at their place of work.
  12 per cent. were receiving training away from their place of work but during work hours.
  12 per cent. had received, or were receiving, training in their own time, of whom 60 per cent. were attending one day a week for an average 26 weeks.

  There is some overlap in the figures, with many of those receiving on-the-job training receiving one of the other types of training.

  Ms. Armstrong
  To ask the Secretary of State for Employment what percentage of participants on the community programme is women(a) nationally, (b) in the county of Durham and (c) in Durham, North-West constituency.

  Mr. Lee
  It is not possible to give the information in the precise form requested. During the 12 months ended 30 November 1987, the latest date for which statistics are available, the total number of entrants to the community programme was 272,697, of whom 70,356, or 25·8 per cent. were female. The corresponding figures for the county of Durham were 6,551, 1,670 and 25·5 per cent. Figures for the Durham, North-West constituency are not available.

  Ms. Armstrong
  To ask the Secretary of State for Employment if he will give an estimate of how the change in the community programme from part time to full time is likely to affect the numbers of women applying for places.

  Mr. Lee
  The planned change in the community programme from part time to full time has been overtaken by the Government's decision that the community programme and a number of training programmes should be replaced by a new comprehensive training programme for unemployed adults. No detailed assumptions about the breakdown of those applying for places on the new programme have been made.

  Mr. Teddy Taylor
  To ask the Secretary of State for Employment (1) why the Manpower Services Commission has declined to provide authorisation and funding for community programmes after 26 August; if he will provide guidance to the management of such schemes on the longer term arrangements they may make for recruitment and programmes; and if he will make a statement;

  (2) if he will make a further statement on the future of the community programme.
  381
  Mr. Cope
  My right hon. Friend the Secretary of State announced in the House on 18 November that the community programme is to be replaced by a new adult training programme from September. I hope that most existing community programme managing agents will decide to take part in the new programme, which will offer, for the first time, a comprehensive package of assessment and training for long-term unemployed people. We are currently considering the Manpower Services Commission report on the new programme and my right hon. Friend expects to respond shortly to the chairman of the commission.

  Mr. Teddy Taylor
  To ask the Secretary of State for Employment how many persons were employed in connection with community programmes sponsored and financed by the Manpower Services Commission at the most recent date for which figures are available.

  Mr. Lee
  On 30 November 1987, the latest date for which statistics are available, there were 221,348 persons employed on community programmes.

  Mr. Teddy Taylor
  To ask the Secretary of State for Employment if he will make a statement on the operation of the community programme in the Southend-on-Sea area.

  Mr. Lee
  The community programme is operating successfully in the Southend-on-Sea area, as it is elsewhere in the country.

  Age Discrimination
  Mrs. Clwyd
  To ask the Secretary of State for Employment if he has any plans to introduce legislation to prevent age discrimination in employment.

  Mr. Lee
  The Government do not believe that legislation of this nature would be beneficial or practical.

  Restart Scheme
  Ms. Richardson
  To ask the Secretary of State for Employment (1) what percentage of those invited to attend restart interviews are women since the beginning of the scheme; and what is the total number of women approached;

  (2) if he will publish up-to-date figures showing the outcome of interviews conducted under the restart scheme, classified by sex, covering the period from the introduction of the scheme in the same format used in the reply given on 10 December 1987, Official Report, columns 231–32, giving a breakdown of these figures to show outcomes for each three month or similar time period.

  Mr. Lee
  The information requested is not available.

  MSC (Press Releases)
  Mr. Darling
  To ask the Secretary of State for Employment if he will list the number of press releases issued by the Manpower Services Commission in each month since August 1985.

  Mr. Lee
  The total number of press releases issued in each month includes those prepared and issued by the MSC press office and COI regional offices on MSC's behalf.
  382

  1985

  1986

  1987

  January

  —

  169

  143

  February

  —

  144

  178

  March

  —

  153

  284

  April

  —

  159

  198

  May

  —

  138

  64

  June

  —

  147

  110

  July

  —

  186

  147

  August

  116

  120

  149

  September

  159

  150

  209

  October

  190

  183

  169

  November

  148

  142

  140

  December

  134

  110

  89

NATIONAL FINANCE

  Public Expenditure
  Mr. Neil Hamilton
  To ask the Chancellor of the Exchequer if he will make a statement on the trend of public expenditure as a proportion of national income.

  Mr. Fallon
  To ask the Chancellor of the Exchequer if he will make a statement on the trend of public expenditure as a proportion of national income.

  Mr. Major
  Public spending as a proportion of national income has been falling since 1982–83. My right hon. Friend the Chancellor of the Exchequer announced plans in his Autumn Statement which will ensure that this trend continues.

  Mr. Kirkwood
  To ask the Chancellor of the Exchequer when he expects to publish the White Paper on public expenditure.

  Mr. Major
  The 1988 public expenditure White Paper will be published at 11 am on Wednesday 20 January and copies will be available in the Vote Office.

  Mr. Michael McNair-Wilson
  To ask the Chancellor of the Exchequer if he will describe the procedure and criteria used in determining the relative priorities accorded to the different programmes within the annual public expenditure planning total for 1988–89; and if he will make a statement.

  Mr. Major
  The public expenditure plans for 1988–89 announced in my right hon. Friend the Chancellor of the Exchequer's Autumn Statement were determined by the Government in the 1987 public expenditure survey, in addition to the specific policy reviews which go on throughout the year. Briefly, the survey process involved a review by each departmental Minister of his spending programme. In the light of these reviews there was a discussion in Cabinet in July which determined the framework for bilateral discussions between departmental Ministers and myself in the autumn. The plans agreed at these bilaterals were endorsed by Cabinet in October.

  Decisions on priorities are based on detailed analysis and assessment of programmes, particularly in the area of efficiency and value for money, but ultimately such decisions must be a matter of political judgment. In the 1987 survey the Government's policies set out in our general election manifesto were reflected in expenditure decisions — for example, the increases in planned spending on education, health and inner cities.

  Mr. Wood
  To ask the Chancellor of the Exchequer if he will make a statement on the trend of public expenditure as a proportion of national income.
  383
  Mr. Major
  I refer my hon. Friend to the answer I gave earlier today to my hon. Friend the Member for Tatton (Mr. Hamilton).

  Mr. Chapman
  To ask the Chancellor of the Exchequer what is his latest estimate of the outturn for public expenditure in 1987–88; and what is his latest estimate of revenue.

  Mr. Major
  The Autumn Statement forecast for 1987–88 was for general Government expenditure of £172·8 billion and general Government receipts of £171·1 billion. More details are available in the 1987 Autumn Statement.

  Mr. Thurnham
  To ask the Chancellor of the Exchequer if he will estimate the likely savings in public expenditure as a result of the recent proposals of the efficiency unit.

  Mr. Brooke
  The efficiency unit proposals to which my hon. Friend refers are still under consideration.

  Luncheon Vouchers
  Mr. Steen
  To ask the Chancellor of the Exchequer if he will take steps to increase the level of tax exemption for luncheon vouchers.

  Mr. Brooke
  I cannot anticipate my right hon. Friend's Budget.

  Public Sector Borrowing Requirement
  Mr. John Marshall
  To ask the Chancellor of the Exchequer what is his latest estimate for the public sector borrowing requirement outturn in 1987–88.

  Mr. Knapman
  To ask the Chancellor of the Exchequer what is his latest estimate for the public sector borrowing requirement outturn in 1987–88.

  Mr. Major
  The Autumn Statement forecast was for a PSBR in 1987–88 of £1 billion.

  Mr. John Greenway
  To ask the Chancellor of the Exchequer what is his latest estimate for the public sector borrowing requirement's outturn in 1987–88.

  Mr. Major
  I refer my hon. Friend to the answer I gave earlier today to my hon. Friend the Member for Hendon, South (Mr. Marshall).

  North Sea Oil
  Mr. Mullin
  To ask the Chancellor of the Exchequer if he will estimate expected North sea oil revenue from all sources for each year up to 1991.

  Mr. Lilley
  Projections of Government revenues from the North sea for 1987–88 were published in the Autumn Statement 1987 and, for later years, in the 1987–88 Financial Statement and Budget Report. Revised projections will be published at the time of the next Budget.

  Mr. Kennedy
  To ask the Chancellor of the Exchequer what representations he has received on the current taxation regime governing North sea oil activity; and if he will make a statement.

  Mr. Lilley
  We have received representations from a number of representative bodies and companies. We have taken careful note of these representations, and keep the North sea fiscal regime under constant review.

  Economic Growth
  Mr. David Shaw
  To ask the Chancellor of the Exchequer what has been the rate of growth in the United Kingdom economy since 1980; and how this compares with the figures for other major European Community countries.

  Mr. Bellingham
  To ask the Chancellor of the Exchequer what has been the rate of growth in the United Kingdom economy since 1980; and what are the comparable figures for other major European Community countries.

  Mr. Nicholas Bennett
  To ask the Chancellor of the Exchequer what has been the rate of growth in the United Kingdom economy since 1980; and what has been the comparable figure for other major European Community countries.

  Mr. Lilley
  Since 1980 the United Kingdom economy has grown at a rate of over 2½ per cent. a year, which is substantially faster than any other major European country.

  Mr. Richard Shepherd
  To ask the Chancellor of the Exchequer what is his latest forecast for the rate of economic growth in the United Kingdom over the coming year.

  Mr. Allan Stewart
  To ask the Chancellor of the Exchequer what is his latest forecast for the rate of economic growth in the United Kingdom over the coming year.

  Mr. Wells
  To ask the Chancellor of the Exchequer what is his latest forecast for the rate of economic growth in the United Kingdom over the coming year.

  Mr. Major
  In the Autumn Statement my right hon. Friend the Chancellor forecast that the economy would grow by 21/2 per cent. in 1988. The non-oil economy is expected to grow by 3 per cent. This will take us into the eighth successive year of steady growth.

  Mr. Hanley
  To ask the Chancellor of the Exchequer if he will estimate the effects on employment of economic growth in the United Kingdom since 1983.

  Mr. Key
  To ask the Chancellor of the Exchequer if he will estimate the effects on employment of economic growth in the United Kingdom since 1983.

  Mr. Major
  The steady growth of the United Kingdom economy since 1983 has contributed to a rise of over 1¼ million in the number of jobs.

  Mr. Michael
  To ask the Chancellor of the Exchequer when he next expects to meet the director general of the Confederation of British Industry to discuss the prospects for the British economy.

  Mr. Morley
  To ask the Chancellor of the Exchequer when he next expects to meet the representatives of the Confederation of British Industry to discuss the state of the economy.

  Mr. Cousins
  To ask the Chancellor of the Exchequer when he next expects to meet the director general of the Confederation of British Industry to discuss the current performance of British industry.

  Mr. Major
  My right hon. Friend meets the director general of the CBI from time to time and a wide range of issues are discussed.

  Take-home Pay
  Mr. McLoughlin
  To ask the Chancellor of the Exchequer what has been the growth of real take-home pay for a married man on male average earnings since 1978–79.

  Mr. Lilley
  Since 1978–79, real take home pay has risen by almost 24 per cent. for a married man on average male earnings.

  British Petroleum plc
  Mr. Cummings
  To ask the Chancellor of the Exchequer how many shares the Bank of England now holds in British Petroleum.

  Mr. Cohen
  To ask the Chancellor of the Exchequer what is the value of the shares which the Bank of England now holds in BP.

  Mr. Darling
  To ask the Chancellor of the Exchequer if he will indicate the number of British Petroleum shares that have been purchased by the Bank of England under the special arrangements to date; and if he will make a statement.

  Mr. Brooke
  Approximately 39 million.

  Miss Mowlam
  To ask the Chancellor of the Exchequer if he will make a statement on his policy towards future sales of shares in British Petroleum plc in the light of the outcome of the recent sale of shares in the company.

  Mr. Norman Lamont
  The shares in British Petroleum which were purchased by the Bank of England under the buyback scheme will be disposed of I n due course as part of the wider privatisation programme. The Bank has undertaken not to dispose of any shares acquired under these arrangements up to 29 April 1988 except at a price in excess of 120p.

  International Debt
  Mr. Worthington
  To ask the Chancellor of the Exchequer what initiatives he is taking with Finance Ministers of creditor countries to address the rescheduling of a share of the debt of Latin American countries.

  Mr. David Young
  To ask the Chancellor of the Exchequer what initiatives he is taking with Finance Ministers of creditor countries to address the rescheduling of a share of the debt of Latin American countries.

  Mr. Meale
  To ask the Chancellor of the Exchequer what initiatives he is taking with Finance Ministers of creditor countries to address the rescheduling of a share of the debt of Latin American countries.

  Mr. Buckley
  To ask the Chancellor of the Exchequer what initiatives he is taking with Finance Ministers of creditor countries to address the rescheduling of a share of the debt of Latin American countries.

  Mr. Lilley
  I refer the hon. Member to the answer I gave earlier today to the hon. Member for Workington (Mr. Campbell-Savours).

  Mr. Patnick
  To ask the Chancellor of the Exchequer what responses he has received to his 1987 initiative to deal with the problem of developing countries' debt.
  386
  Mr. David Davies
  To ask the Chancellor of the Exchequer what responses he has received to his 1987 initiative to deal with the problem of developing countries' debt.

  Mr. Lilley
  Good progress has been made on two of the three specific proposals that my right hon. Friend the Chancellor made at the April meeting of the development committee. The United Kingdom has converted aid loans into grants for 14 African countries; other creditor countries are following suit. To date, seven countries have had their official debts rescheduled over longer than usual periods in the Paris Club. We are continuing to press for international action to reduce interest rates on rescheduled officially guaranteed debts.

  Mr. Skinner
  To ask the Chancellor of the Exchequer what recent meetings he has had with other Finance Ministers regarding world debt; and if he will make a statement.

  Mr. Lilley
  Last September my right hon. Friend attended the Commonwealth Finance Ministers' meeting and the meetings of the IMF and World Bank where the debt problems of some of the developing countries, especially those of the poorest in sub-Saharan Africa, were discussed.

  Taxation
  Mr. Nicholas Baker
  To ask the Chancellor of the Exchequer if he will bring forward proposals to reduce capital taxation.

  Mr. Norman Lamont
  I have noted my hon. Friend's suggestion but cannot, of course, anticipate the Budget judgment.

  Hospital Radio Broadcasting Equipment (VAT)
  Mr. Amess
  To ask the Chancellor of the Exchequer what representations he has received about value added tax on hospital radio broadcasting equipment.

  Mr. Lilley
  I refer my hon. Friend to my reply on 27 November at column 129.

  Interest Rates
  Mr. Geraint Howells
  To ask the Chancellor of the Exchequer if he will make a statement on present levels of interest rates.

  Mr. Ronnie Campbell
  To ask the Chancellor of the Exchequer if he will make a statement on the current level of interest rates.

  Dr. Moonie
  To ask the Chancellor of the Exchequer if he will make a statement on interest rates.

  Mr. Lilley
  Bank base rates are 811/2 per cent.

  Mr. Latham
  To ask the Chancellor of the Exchequer whether he will make a statement on the trend in interest rates during the Christmas adjournment.

  Mr. Lilley
  Bank base rates have remained at 81/2 per cent. throughout the Christmas adjournment.

  Credit Card Companies
  Mr. Macdonald
  To ask the Chancellor of the Exchequer if he will introduce legislation to provide for closer regulation of the operation of credit card companies; and if he will make a statement.

  Mr. Lilley
  My right hon. Friend has no present plans to alter the regulatory framework for credit card operations.

  Drug Trafficking
  Mr. Evennett
  To ask the Chancellor of the Exchequer if he is satisfied with the liaison arrangements between Her Majesty's Customs and Excise and the police and other enforcement agencies in connection with the investigation of drug trafficking.

  Mr. Lilley
  Yes.

  Self-employment
  Mr. Devlin
  To ask the Chancellor of the Exchequer if he will quantify the extent to which growth in the economy has been reflected in an increase in self-employment over the period since 1979.

  Mr. Quentin Davies
  To ask the Chancellor of the Exchequer if he will quantify the extent to which growth in the economy has been reflected in an increase in self-employment over the period since 1979.

  Mr. Major
  Self-employment in the United Kingdom in June 1987 was over three-quarters of a million higher than in 1979, an increase five times as great as in the previous 30 years. Self-employment has been encouraged by the combination of steady, sustained growth in the economy and the success of supply side policies in stimulating enterprise.

  Capital Investment
  Mr. Andrew Smith
  To ask the Chancellor of the Exchequer what action he proposes to take to stimulate capital investment.

  Mr. Major
  The Government's economic policies will continue to encourage capital investment by promoting an environment in which business can prosper.

  Value Added Tax
  Mr. Grocott
  To ask the Chancellor of the Exchequer what was the total revenue from value added tax(a) in 1979 and (b) in the latest year for which figures are available.

  Mr. Lilley
  The information is as follows:

  (£ million)

  1979

  6,360

  1986

  21,094

  Mr. Atkinson
  To ask the Chancellor of the Exchequer if he will make a statement on progress on his negotiations within the European Economic Community regarding the raising of the value added tax threshold.

  Mr. Lilley
  The European Parliament has given general support for the Commission's draft directive concerning 388
  VAT and small and medium-sized enterprises. This proposes, amongst other things, a higher optional registration threshold of 35,000 ecu (about £25,000).

  Mr. Alex Carlile
  To ask the Chancellor of the Exchequer when he next intends to meet the finance Ministers of the European Economic Community to discuss the possible harmonisation of value added tax within the Community.

  Mr. Brooke
  The Community's economic policy committee is examining the Commission's proposals on the abolition of fiscal frontiers and is expected to report in March. The timetable for subsequent discussion in the Finance Ministers' Council has not yet been decided.

  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer what have been the costs sustained by the EEC Commission and the United Kingdom Government in pursuing the infraction proceedings at the European Court of Justice on the United Kingdom's value added tax zero rates; and who will be responsible for paying the costs.

  Mr. Lilley
  [holding answer 13 January 1988]: It is for the European Court to decide on the basis and responsibility for costs. Neither the costs incurred by the Commission in bringing the case nor the Government's in defending it at the European Court are at present known.

  Buildings (VAT)
  Mr. Heathcoat-Amory
  To ask the Chancellor of the Exchequer what recent representations he has received about value added tax on buildings.

  Mr. Lilley
  Budget representations from several trade bodies have included references to VAT on buildings.

  Privatisation
  Mr. Battle
  To ask the Chancellor of the Exchequer what is his latest estimate of the income to the Exchequer from privatisation in the present year, and in the next two years.

  Mr. Jack Thompson
  To ask the Chancellor of the Exchequer what is his latest forecast of income to the Treasury from privatisation measures in 1987–88 and 1988–89.

  Mr. Caborn
  To ask the Chancellor of the Exchequer what is his latest estimate of the income to the Exchequer from privatisation in the present year, and in the next two years.

  Mr. Norman Lamont
  The latest estimate of income from privatisation in the present year and in the next two years is contained in the Autumn Statement.

  Mr. Murphy
  To ask the Chancellor of the Exchequer if he proposes to make any changes to the Government's privatisation programme as a result of the BP flotation.

  Mr. Win Griffiths
  To ask the Chancellor of the Exchequer what conclusions he has drawn from the BP flotation; and what measures he intends to take in dealing with any further privatisation proposals.

  Mr. Morgan
  To ask the Chancellor of the Exchequer if he will make a statement on Her Majesty's Government's latest plans for further privatisation measures.
  389
  Mr. Norman Lamont
  No.

  Mr. Beith
  To ask the Chancellor of the Exchequer whether, in the light of recent events, he has revised his estimates of privatisation proceeds to the Exchequer over the next few years.

  Mr. Norman Lamont
  The latest estimate of proceeds for the next three years remains as given in the Autumn Statement.

  Industry (Costs)
  Mr. John Townend
  To ask the Chancellor of the Exchequer what estimate he has made of the relative benefit to British industry of 1 per cent. off interest rates as compared with 1 per cent. off pay rises.

  Mr. Lilley
  I refer my hon. Friend to the reply I gave earlier today to my hon. Friend the Member for Esher (Mr. Taylor).

  Excise Duties
  Mr. Graham
  To ask the Chancellor of the Exchequer if he will make a statement on the latest position regarding negotiations within the EEC about harmonisation of excise duties.

  Mr. Lilley
  I refer the hon. Member to my right hon. Friend's replies to my hon. Friend the Member for Berkshire, East (Mr. MacKay) on 20 November at column 704, and to my hon. Friend the Member for Buckingham (Mr. Walden) on 11 December at column 288.

  Pensioners
  Mr. Jack
  To ask the Chancellor of the Exchequer what plans he has to undertake a study of the subject of the income tax burden on retirement pensioners; and if he will make a statement.

  Mr. Norman Lamont
  I have noted my hon. Friend's suggestion and will bear it in mind, although the income tax burden on pensioners is something we keep continually under review.

  Income Tax
  Mr. Anthony Coombs
  To ask the Chancellor of the Exchequer what is the proportion of income tax revenue paid by the highest 5 per cent. of earners currently; what was the figure in 1979; and what are the absolute figures for these two fiscal years.

  Mr. Norman Lamont
  It is estimated that the top 5 per cent. of tax-paying tax units (married couples and single people) have income tax liabilities of £12·5 billion in 1987–88. This represents 29 per cent. of total income tax liabilities of about £43·1 billion. In 1978–79, the liability of the top 5 per cent. was £4·9 billion which was 24 per cent. of the total liability of £20·3 billion.

  Mr. Lewis
  To ask the Chancellor of the Exchequer what has been the average annual gain in each year since 1979 to those earning over £50,000 as a result of changes in taxation.

  Ms. Armstrong
  To ask the Chancellor of the Exchequer how much, on average, those earning over £50,000 a year have gained in changes in taxation since 1979.
  390
  Mrs. Clwyd
  To ask the Chancellor of the Exchequer what has been the average individual cumulative gain to those earning over £50,000 a year as a result of changes in taxation since 1979.

  Mr. Norman Lamont
  The table shows the average reduction in income tax liability of taxpayers who in 1987–88 had incomes over £50,000. The figures in the first column are the reduction in liability under the tax regime for the year in question, compared with the liability under the tax regime of the previous year. The second column cumulates the changes and therefore compares each year with 1978–79. All tax regimes have been indexed to 1987–88 levels by reference to the statutory formula and applied to incomes at 1987–88 levels, projected from the 1984–85 survey of personal incomes. Estimates are provisonal.

  Average reduction in income tax liability of those with income over £50,0001

  Average annual gain per tax unit

  Average cumulative gain per tax unit

  £

  £

  1979–80

  9,750

  9,750

  1980–81

  -500

  9,250

  1981–82

  -1,450

  7,800

  1982–83

  150

  7,950

  1983–84

  800

  8,750

  1984–85

  1,600

  10,350

  1985–86

  150

  10,500

  1986–87

  100

  10,600

  1987–88

  200

  10,800

  1 Based on 150,000 single people and married couples with income over £50,000 expected to pay tax in 1987–88. All information is in terms of tax units, i.e. married couples are counted as one and their incomes combined.

  Mr. Martyn Jones
  To ask the Chancellor of the Exchequer what figures he has showing the major beneficiaries of changes in direct taxation since 1979.

  Mr. Norman Lamont
  All 24·7 million taxpayers will pay less in income tax in 1987–88 than they would under the 1978–79 income tax regime, indexed to allow for movements in prices; and, compared with that indexed regime, 1·4 million people have been taken out of income tax altogether.

  Mr. Henderson
  To ask the Chancellor of the Exchequer what income tax relief has been received by a taxpayer earning £50,000 each year since 1979, at 1987 prices.

  Mr. Norman Lamont
  The income tax relief received in each financial year from his main personal allowance by a married man with earned income of £50,000 and no other reliefs or allowances is as follows (amounts have been revalued at 1987–88 prices):

  £

  1978–79

  2,660

  1979–80

  2,097

  1980–81

  2,115

  1981–82

  1,839

  1982–83

  1,869

  1983–84

  2,025

  1984–85

  2,175

  1985–86

  2,277

  1986–87

  2,277

  1987–88

  2,277

  Credit Growth
  Mr. Doran
  To ask the Chancellor of the Exchequer if he will provide figures for the rate of credit growth over the last four years.

  Mr. Lilley
  The growth in consumer credit over the last four financial years is as follows:

  Rate of growth (per cent.)

  1983–84

  20

  1984–85

  16

  1985–86

  17

  1986–87

  17

  Source: CSO Financial Statistics table 9.3.

  Mr. McLeish
  To ask the Chancellor of the Exchequer what proportion of outstanding consumer credit is accounted for by credit card lending by banks.

  Mr. Lilley
  Credit on bank credit cards including its interest-free component accounts for 15 per cent. of all consumer credit outstanding and about 3 per cent. of personal sector debt.

  Pay
  Mr. Holt
  To ask the Chancellor of the Exchequer what level of pay rise for the average employee would be compatible with full compensation for price increases over the last year.

  Mr. Cran
  To ask the Chancellor of the Exchequer what level of pay rise for the average employee would be compatible with full compensation for price increases over the last year.

  Mr. Curry
  To ask the Chancellor of the Exchequer what level of pay rise for the average employee would be compatible with full compensation for price increases over the last year.

  Mr. Brooke
  The pay rise that would compensate fully for price increases over the last year would be about 4 per cent. However, when changes in income tax are taken into account, the pay rise needed would be only about 21/2 per cent.

  Mortgage Interest Tax Relief
  Mr. Sumberg
  To ask the Chancellor of the Exchequer whether he has any plans to review the systems of mortgage interest tax relief; and if he will make a statement.

  Mr. Norman Lamont
  The level of mortgage interest relief has to be fixed each year and will be considered in framing the Budget proposals.

  Mr. Shersby
  To ask the Chancellor of the Exchequer if, pursuant to the answer of 26 November,Official Report, column 373, he will analyse the weight of responses for and against the Green Paper proposals on personal taxation which led him to conclude that there was insufficient support for the approach advocated in the Green Paper on the treatment of mortgage interest tax relief for married and unmarried couples; what other proposals in this regard have been put to him; and if he will make a statement.

  Mr. Norman Lamont
  I think my hon. Friend's question arises from a misunderstanding. A proposal to link 392
  mortgage interest tax relief to the residence instead of the borrower(s) was made in the context of the system of independent taxation with transferable allowances outlined in the Green Paper. My answer of 26 November referred to overall support for the Green Paper approach to the tax treatment of married couples as a whole, not specifically to mortgage interest relief. The Government have made it clear that we consider it important that the tax penalties on marriage should be removed.

  Private Borrowing
  Mr. Malcolm Bruce
  To ask the Chancellor to the Exchequer if he will make a statement on the level of private borrowing over the last year.

  Mr. Lilley
  In the financial year 1986–87, borrowing by the private sector amounted to £43 billion.

  OECD Countries (Expansion)
  Ms. Ruddock
  To ask the Chancellor of the Exchequer what discussions he has had with Finance Ministers abroad concerning expansion targets for the Organisation for Economic Co-operation and Development economies.

  Mr. Fisher
  To ask the Chancellor of the Exchequer what discussions he has held with other Finance Ministers on recovery targets for the Organisation for Economic Co-operation and Development economies.

  Mr. George Howarth
  To ask the Chancellor of the Exchequer what discussions he has had with Finance Ministers abroad concerning expansion targets for the Organisation for Economic Co-operation and Development economies.

  Mr. John Garrett
  To ask the Chancellor of the Exchequer what discussions he has had with Finance Ministers abroad concerning expension targets for the Organisation for Economic Co-operation and Development economies.

  Mr. Lilley
  I refer the hon. Member to the answer I gave earlier today to the hon. Member for Normanton (Mr. O'Brien).

  Capital Gains Tax
  Mr. Andrew MacKay
  To ask the Chancellor of the Exchequer what representations he has received concerning the effects of capital gains tax on the economy.

  Mr. Norman Lamont
  A number of representations have been received and these will be borne in mind in the run-up to the Budget.

  Forestry
  Ms Quin
  To ask the Chancellor of the Exchequer if he will give an estimate of the cost to the Exchequer in the current financial year of the tax concessions offered to investors in forestry.

  Mr. Norman Lamont
  The income tax forgone is currently estimated at some £10 million. No information on which to base an estimate of the cost of capital tax reliefs is available.

  Inflation
  Mr. Ward
  To ask the Chancellor of the Exchequer if he will make a statement on the latest outlook for inflation.

  Mr. Gerald Bowden
  To ask the Chancellor of the Exchequer if he will make a statement on the latest outlook for inflation.

  Mr. Lilley
  As forecast in the Autumn Statement the RPI is expected to increase by 41/2 per cent. over the year to the fourth quarter of 1988.

  International Finance Ministers
  Mr. Yeo
  To ask the Chancellor of the Exchequer when he is next due to meet the Finance Ministers of the other major industrialised countries.

  Mr. Lilley
  I refer my hon. Friend to the answer I gave earlier today to my hon. Friend the Member for Beaconsfield (Mr. Smith).

  European Monetary System
  Mr. Livsey
  To ask the Chancellor of the Exchequer what recent review he has undertaken of the Government's policy towards membership of the exchange rate mechanism of the European monetary system; and if he will make a statement.

  Mr. Lilley
  The matter is kept under review.

  Balance of Payments
  Mr. Nigel Griffiths
  To ask the Chancellor of the Exchequer what is his latest forecast for the United Kingdom balance of payments figure for 1987 and 1988.

  Mr. Major
  The Autumn Statement forecast was for a current deficit of £21/2 billion in 1987 and £31/2 billion in 1988.

  Mr. Barry Jones
  To ask the Chancellor of the Exchequer if he will make a statement on the implications for the management of the economy of the current balance of payments.

  Mr. Major
  Present and prospective United Kingdom current account deficits are relatively small as a percentage of GDP and reflect the fast growth of the United Kingdom economy relative to other major countries. The United Kingdom also has a very strong net overseas assets position. As such, the current account position should not pose any major problems. Policy will continue to safeguard against any unsustainable developments.

  Money Supply
  Mr. McFall
  To ask the Chancellor of the Exchequer what is the latest figure for M3, calculated on a yearly basis.

  Mr. Lilley
  The annual growth rate of M3 to November 1987 was 21·3 per cent.

  Unemployment Costs
  Mr. Boyes
  To ask the Chancellor of the Exchequer if he will commission research into the total cost of unemployment in the north; and if he will make a statement.

  Mr. Major
  No.

  Tobacco Tax
  Mr. Jessel
  To ask the Chancellor of the Exchequer what was the yield from tobacco tax in each of the last five years; and what is the estimated yield for the current year.

  Mr. Lilley
  The information is as follows:

  Excise duty (£ million)

  VAT (£ million)

  Total tax (£ million)

  1982–83

  3,446

  770

  4,216

  1983–84

  3,806

  810

  4,616

  1984–85

  4,140

  860

  5,000

  1985–86

  4,459

  910

  5,369

  1986–87

  4,768

  970

  5,738

  11987–88

  4,850

  2

  2

  1 Estimate.

  2 Not available.

  Note: VAT receipts on tobacco products arc calculated using estimates of consumers' expenditure, forecasts of which are not available in sufficient detail to enable an estimate for 1987–88 to be made.

  Exchange Rates
  Mr. Steinberg
  To ask the Chancellor of the Exchequer what mechanisms other than market forces exist for the medium-term alteration of the exchange rate.

  Mr. Lilley
  I refer the hon. Member to the answer I gave on 13 November 1987 to the hon. Member for Glasgow, Cathcart (Mr. Maxton).

  Confederation of British Industry
  Mr. Pike
  To ask the Chancellor of the Exchequer when he last met the director general of the Confederation of British Industry; and what matters were discussed.

  Mr. Major
  My right hon. Friend last met the director general of the Confederation of British Industry at the meeting of the National Economic Development Council on Wednesday 13 January. The council discussed the outlook for the economy; a report on the knitting industry and international competitiveness, research and development and action by economic development committees.

  Tax Revenues
  Mr. Adley
  To ask the Chancellor of the Exchequer in what areas he is presently looking for new tax revenues: and if he will make a statement.

  Mr. Norman Lamont
  No. Decisions concerning taxation are, as my hon. Friend is aware, matters for the Chancellor of the Exchequer's Budget Statement.

  Central Office of Information
  Mr. Dobson
  To ask the Chancellor of the Exchequer what is the total staff of the Central Office of Information; and what it was in 1978–79 and 1982–83.

  Mr. Brooke
  The information requested is as follows:

  1 January

  Permanent staff in post1

  1979

  1,163

  1983

  969

  1987

  804

  1 Including part-timers.

  Advertising
  Mr. Dobson
  To ask the Chancellor of the Exchequer what are the conventions governing the content of Government advertising and promotional materials; and if he will make a statement.

  Mr. Brooke
  The conventions on central Government publicity and advertising are set out in the Government's evidence submitted to the Widdicombe inquiry in 1985 and deposited in the Library of the House (published as annex D to "Local Authority Publicity: interim report of the Committee of Inquiry into the Conduct of Local Authority Business, chaired by Mr. David Widdicombe QC").

SOCIAL SERVICES

  NHS (Staff Accommodation)
  Ms. Harman
  To ask the Secretary of State for Social Services if he will give the latest available figures for(a)

  1. Nursing staff—annual board and lodging charges

  (I)

  (II)

  (III)

  Grade of accommodation

  Standard board and lodging charges

  Amount payable with 40 per cent, abatement

  Students-pupil nurses and others under age 22

  Other1nurses

  £

  £

  £

  Bed-sit rooms:

  4–6 sharing common facilities

  854

  512 (2307)

  512

  3–4 sharing common facilities

  1,018

  610

  1 bedroom and 1 living room

  1,507

  904–20

  Self-contained flat

  2,161

  1,296–60

  1 The charges to nurses other than students may be reduced by up to 40 per cent. where the accommodation provided is sub-standard.

  2 A further reduction of 40 per cent. is appropriate where a nurse shares accommodation at the request of her employing authority.

  2. medical staff—board and lodging charges

  (I)

  (II)

  (III)

  Category of accommodation

  Lodging charge per annum

  Amount payable if doctor is required to stay overnight in hospital

  1 night in 3 or more

  1 night in 4

  1 night in 5

  1 night in 6 or 7

  £

  £

  £

  £

  £

  Single bed-sitting room

  1,051

  0

  368

  578

  788

  Separate bed and living room

  1,554

  0

  543

  855

  1,166

  In addition, the maximum charge may be abated by:

  (i) half the proportion by which the accommodation fails to reach 120 sq ft per room (ie a single room of 60 sq ft would attract a discount of 25 per cent.).

  (ii) up to 20 per cent. in respect of unsatisfactory standards of the accommodation or its furnishings.

  Consultants
  Mr. Allen
  To ask the Secretary of State for Social Services what was the annual cost of consultants' contracts for each district health authority in Nottinghamshire in 1979–80, and what increase there has been in real terms by 1986–87 both in total expenditure and per head.

  Mrs. Currie
  Prior to 1 April 1982 health services in Nottinghamshire were administered by the Nottinghamshire area health authority and expenditure figures on a district basis were not collected centrally.

  The hon. Member may wish to contact the chairman of the Trent regional health authority who may be able to assist with the information he seeks.
  396
  the numbers of units of staff accommodation owned and rented to staff in the National Health Service and (b) the average weekly rent for such accommodation for each of the district health authorities in Greater London.

  Mrs. Currie
  Information in the form requested is not collected centrally. However, an inquiry of health authorities in 1985 indicated that in total the National Health Service in England had around 120,000 units of accommodation for staff. Since 1977 health authorities have been required to fix annual rentals broadly in line with those charged by local housing authorities for similar properties in their areas.

  In practice, most junior doctors and nurses do not pay rent but, depending on the type of accommodation they occupy, a lodging charge determined by agreement between NHS management and staff organisations. For nurses these charges were last increased on 1 July 1986.

  The following tables provide examples of what student/pupil nurses and junior doctors might pay after the various forms of discount:

  Traffic Accidents
  Mr. Redwood
  To ask the Secretary of State for Social Services what was the estimated cost of road traffic accidents to the National Health Service in 1986.

  Mrs. Currie
  The estimated cost to the National Health Service of treating road accident victims in 1986 is not yet available. However, the figure for the previous year, 1985, has been estimated at £124 million in England.

  NHS (Administrative Staff)
  Mr. Butler
  To ask the Secretary of State for Social Services if he will give the percentage change in the number of administrative staff in the National Health Service in England since 1979.

  Mr. Steen
  To ask the Secretary of State for Social Services if he will set out in the Official Report in tabular form the number of managers and administrators employed in the National Health Service since 1979; and if he will indicate the percentage increase or decrease each year.

  Mr. Newton
  The number of whole-time equivalent administrative and clerical staff, including general managers, employed in England in the September of each year between 1979 and 1986 was as follows:

  Year

  Staff in post

  Percentage increase over previous year

  1979

  103,000

  —

  1980

  105,400

  2·4

  1981

  108,800

  3·2

  1982

  108,800

  less than 0·1

  1983

  110,000

  1·1

  1984

  110,300

  0·3

  1985

  111,000

  0·7

  1986

  111,400

  0·3

  The percentage increase over the period was 8·1.

  The numbers are independently rounded to the nearest 100, but the percentages have been calculated on the basis of unrounded figures.

  Health Care (North West)
  Mr. Tony Lloyd
  To ask the Secretary of State for Social Services what are his priorities for health care in the area covered by the North Western regional health authority.

  Mr. Newton
  Health care priorities are set by individual health authorities in the light of national and regional policies taking into account local circumstances.

  Priorities for the North Western region are outlined in the region's short-term programme for 1987–88, a copy of which is in the Library.

  AIDS
  Mr. Ashley
  To ask the Secretary of State for Social Services what, pursuant to his answer of 17 December,Official Report, column 688, is the exact number of patients in the United Kingdom, who received blood infected with AIDS virus, if these patients got the virus from one or more batches of contaminated blood; if they were told the result of the infection; over what period of time were these people infected; when was the last indication of an infected blood transfusion; and if he will make a statement.

  Mr. Newton
  The very small chance of human immunodeficiency virus (HIV) infection arising from a blood transfusion in the United Kingdom was further reduced from August 1983 when potential donors in high-risk groups were asked not to give blood. Screening of all donations for antibodies to HIV began in October 1985; there have been no reports of HIV infection arising from transfusions given in England and Wales after that date.
  398
  The exact number of patients in the United Kingdom who have received blood infected with HIV is unknown. In general, infected patients would be identified only if they became ill later. At the end of 1987, 41 cases of HIV infection associated with blood transfusions given in the United Kingdom before October 1985 had been reported to the communicable disease surveillance centre. This figure includes the eight cases of AIDS to which I referred in my reply on 17 December 1987 at column 688.

  Because blood from different donors is not pooled into batches, an infected donation would have affected only one recipient.

  Radiotherapy
  Mr. Warren
  To ask the Secretary of State for Social Services when his Department's guidance to health authorities on the organisation of radiotherapy services will be completed; and if he will make a statement.

  Mrs. Currie
  The Department's review of its guidance to health authorities on the organisation of radiotherapy services is nearing completion.

  Oswestry (Gobowen) Orthopaedic Hospital
  Mr. Barry Jones
  To ask the Secretary of State for Social Services how many beds are to be closed by Shropshire health authority at Oswestry (Gobowen) orthopaedic hospital, and for what period of time; if he will make extra cash grants to the Shropshire health authority to enable it to keep the beds in use; how many orthopaedic surgery wards will shut and what service will be available, when beds are closed for paediatrics, rheumatology and spinal injuries; how many nursing posts are frozen; what is his estimate of the number of people from(a) Wales and (b) Clwyd treated at the hospital in Oswestry annually; what is his estimate of the impact of bed closures upon potential patients from Clwyd; how many Clwyd patients attended Oswestry hospital in 1986 and 1987; and if he will make a statement concerning bed closures as they affect patients from Clwyd seeking joint replacements.

  Mrs. Currie
  The Shropshire health authority is responsible for the services provided at Oswestry hospital. The hon. Member may therefore wish to write to the chairman of the Shropshire district health authority for the information he is seeking.

  Hannah Pickard Ward (Clayton Hospital)
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services what is the full cost of the recent upgrading of the Hannah Pickard ward, Clayton hospital, Wakefield: why the ward has not been re-opened; when it will be reopened; and if he will make a statement.

  Mrs. Currie
  Wakefield health authority is responsible for the services at Clayton hospital. The hon. Member therefore may wish to approach the chairman of Wakefield health authority for the details he is seeking.

  NHS (Savings)
  Ms. Harman
  To ask the Secretary of State for Social Services by how much general managers in the National Health Service in England have been requested to revise
  399
  their short-term programmes to achieve a saving on their previously submitted programme; and if he will make a statement.

  Mr. Newton
  Regional health authorities have not yet submitted their short-term programmes for 1988–89. We have given them more time in which to do so, so that they can take account of both the extra resources for that year which my right hon. Friend announced on 3 November and the implications for their 1988–89 plans of the additional resources for 1987–88 which I announced in my statement to the House on 16 December.

  Social Security Reform
  Mr. Hood
  To ask the Secretary of State for Social Services what is the estimate of the first three years' savings resulting from the April changes in housing benefits in Scotland.

  Mr. Portillo
  I regret that the information for Scotland alone is not available.

  NHS (Expenditure)
  Mrs. Clywd
  To ask the Secretary of State for Social Services what was the level of Government spending on the National Health Service, expressed per household, in 1979 and in each year since then at (i) current prices, (ii) 1979 prices and (iii) 1987 prices.

  Mr. Newton
  The information requested is as follows:

  Government spending on the NHS expressed per household (Great Britain)

  £ Cash

  at 1978–79 prices

  at 1986–87 prices

  1978–79

  384·85

  384·85

  748·74

  1979–80

  454·31

  388·72

  756·27

  1980–81

  583·32

  420·97

  819·02

  1981–82

  648·31

  426·11

  829·03

  1982–83

  702·38

  430·65

  837·86

  1983–84

  739·51

  433·48

  843·37

  1984–85

  785·66

  441·11

  858·21

  1985–86

  823·09

  435·81

  847·89

  1986–87

  876·01

  450·26

  876·01

  These figures are affected by changes in the number and composition of households. Over the same period per capita expenditure has increased from £268·23 to £329·39 at 1986–87 prices.

  Richmond House
  Mrs. Beckett
  To ask the Secretary of State for Social Services what expenditure was incurred on furniture and office equipment, including floor coverings, as a result of the move(a) of his private office and (b) of his Department to Richmond house from previous furnished accommodation at Alexander Fleming house.

  Mr. Moore
  Expenditure incurred to date on furniture and office equipment, including floor coverings, as a result of the move of DHSS staff over the Christmas recess from Alexander Fleming house to Richmond house was as follows:

  (a) Secretary of State and his private office—£17,000

  (b) The remaining staff (including five other Ministers and their private offices)—£450,000

  400
  The vast majority of staff were able to utilise their furniture and equipment from the previous accommodation. The costs at (b) include floor coverings for the whole of the Richmond house complex; provision of additional machines for facsimile and telex; together with equipment for audio conferences.

  Widows' Pensions
  Mrs. Beckett
  To ask the Secretary of State for Social Services what rights of appeal are available to a widow whose pension is withdrawn on the grounds that she is living with a man as his wife(a) if the pension is an ordinary widow's pension and (b) if it is a war widow's pension.

  Mr. Portillo
  Decisions on entitlement to national insurance widows' benefits, supplementary benefit or family income supplement, including decisions as to whether a widow is living with a man as his wife, are made by independent adjudication officers. There is a right of appeal against decisions of adjudication officers to an independent social security appeal tribunal. There is also a right of appeal on a point of law against a decision of a social security appeal tribunal to a social security comissioner.

  There is no right of appeal open to a widow in receipt of a war widow's pension when the Secretary of State decides that the pension should be withdrawn because she is living with a man as his wife. Instead, she can ask the Secretary of State to review the decision and ask her local war pensions committee to make representations on her behalf.

  Social Fund
  Mrs. Beckett
  To ask the Secretary of State for Social Services if he will list the offices of his Department which to date have raised operational difficulties with their social fund budgets; and what difficulties each office envisages with their budget.

  Mr. Scott
  The questions which a few local offices have raised about their budget allocations concerned management matters which are normally treated as confidential.

  Hospital Closures
  Mr. Nellist
  To ask the Secretary of State for Social Services why, pursuant to his answer to the hon. Member for Caernarfon (Mr. Wigley) of 18 December,Official Report, column 938, information is only currently held to December 1986 about the referral of proposals for the closures of hospitals.

  Mrs. Currie
  Statistics about permanent closure proposals are routinely collected from regional health authorities; those for 1987 are not yet available.

  NHS (Pay Awards)
  Mr. Wareing
  To ask the Secretary of State for Social Services if he will publish a table showing for each health authority in England the estimated cumulative under funding of pay awards over the last two years.

  Mr. Newton
  Authorities are expected to meet the cost of pay awards from within the total resources available to
  401
  them, including savings achieved through cost improvement programmes. Allocations to regions do not include any specific "earmarked" provision for pay costs; decisions on the allocation of funds between manpower costs and other expenditure are a matter for health authorities. However, the Government, in considering reports from the review bodies, take account of their financial effects. Additional funds were provided in both 1986–87 and 1987–88.

  In 1987–88, the additional £262 million provided for health authorities in England covered 95 per cent. of the cost of the review body awards over and above general inflation; in 1986–87 92 per cent. of that cost was covered in this way.

  Mr. J. F. Yeatman
  Mr. Steen
  To ask the Secretary of State for Social Services when he hopes to send the decision on war disability pension to Mr. J. F. Yeatman of Wembury, Plymouth, reference M1/824D0, following his application for a medical re-examination in January 1987 and his medical re-examination on 29 July 1987, the findings of which examination have still not been communicated to Mr. Yeatman; and if he will make a statement as to the reasons for the delay in this matter.

  Mr. Portillo
  I regret the delay in this case. It is mainly due to a backlog in dealing with claims to war pension because of a significant increase in the number of claims in 1986 and 1987, coupled with the need to obtain further evidence about Mr. Yeatman's medical history following his medical examination in July 1987. A decision will be sent to Mr. Yeatman within the next few days.

  Census
  Dr. Thomas
  To ask the Secretary of State for Social Services (1) what consultations he will be holding on the nature of the questions to be contained in the 1991 census of population; and when he expects this consultation to take place;

  (2) whether he will consider including a question in the 1991 census of population in order to ascertain the number of Welsh-speakers living outside Wales.

  Mrs. Currie
  I refer the hon. Member to the reply given to the hon. Member for Tatton (Mr. Hamilton) on 2 November 1987, at column 573. Consultations on the content of the 1991 census are taking place currently. The arrangements are described in "Census Newsletter No. 2", a copy of which is in the Library.

  A question in order to ascertain the number of Welsh-speakers living outside Wales is being considered, as are many other suggestions.

  However, no decisions have yet been taken on the content of the census. Proposals will be published as a White Paper later this year.

  Community Medicine
  Mr. Wolfson
  To ask the Secretary of State for Social Services when he intends to publish the report of the committee of inquiry into the future development of the public health function and community medicine; and if he will make a statement.

  Mr. Moore
  I have today published the report of the inquiry set up by my predecessor to consider the future 402
  development of the public health function in England. As required by its terms of reference, the report concentrates on the control of communicable disease and the role of public health doctors within the framework of general management in the NHS and also examines the wider issues of the public health function. It suggests ways in which surveillance of the health of the population might be improved, a greater emphasis on the prevention of illness and premature death achieved, and the effectiveness of health services better evaluated. The Government are grateful for the work of the chairman and members of the inquiry. We shall be studying their recommendations in detail as a matter of urgency and hope to make a further statement on implementation in the near future.

  Publicity
  Mr. Dobson
  To ask the Secretary of State for Social Services what is the latest figure for the estimated spending in 1987–88 by his Department on(a) television advertising, (b) radio advertising, (c) newspaper advertising and (d) other promotional material; and what are the estimated expenditures in each area for 1988–89.

  Mr. Moore
  [holding answer 17 December 1987]: Figures for total spending by my Department on television radio and newspaper advertising and other promotional literature in 1987–88 are as follows:

  £

  Television

  7,668,000

  Radio

  1,420,000

  Newspapers

  8,232,000

  Other promotional literature

  6,720,000

  Total

  24,040,000

  For 1988–89 detailed decisions on expenditure by media have not yet been taken, but the overall publicity figure is expected to be £18 million.

  Press and Public Relations
  Mr. Dobson
  To ask the Secretary of State for Social Services what is the latest figure for the estimated expenditure by his Department on press and public relations for(a) 1987–88 and (b) 1988–89.

  Mr. Moore
  [holding answer 17 December 1987] My Department has no section which can be separately identified as public relations. Functions which are commonly associated with public relations are carried out by the Department's information division.

  Estimates for the year 1987–88 are as follows:

  £

  Advertising and other paid publicity activities

  28,800,000

  Manpower

  994,000

  Estimates for the year 1988–89 are as follows:

  Advertising and other paid publicity activities

  18,000,000

  Manpower

  1,133,696

  Cancer Screening
  Dr. Glyn
  To ask the Secretary of State for Social Services what estimate he has made of the cost of expanding the cervical smear test programme to ensure that all results are available within one week for all women over 16 years of age at least once every three years.
  403
  Mrs. Currie
  [holding answer 18 December 1987]: The Department's cancer screening evaluation unit has estimated that the additional cost in England and Wales of a change from five-yearly to three-yearly screening for all women aged 20 to 64 would, assuming 100 per cent. acceptance of screening, be somewhat over £22 million per annum.

  The additional cost of a change from three-yearly screening beginning at age 20 to three-yearly screening beginning at age 17 would, assuming 100 per cent. acceptance of screening, be about £4 million per annum.

  Ensuring that all results were available within one week would require considerable over-capacity in laboratories in order that they could cope with fluctuations in demand. The further cost that would be required has not been calculated, since maintaining such over-capacity would not seem to be the best use of resources.

  The national policy is to screen women aged 20 to 64 ever five years. Epidemiological studies indicate that
  404
  women screened in line with this policy are 84 per cent. less likely than unscreened women to develop invasive cervical cancer. I am advised that our efforts should be directed at increasing uptake, since increasing the proportion of women being screened in line with this policy will have a greater impact on death rates than increasing the frequency of screening.

  Hospital Beds
  Mr. Dobson
  To ask the Secretary of State for Social Services if he will give for 1983 and for the latest year available the total number of hospital beds for each of the following services, broken down by district health authorities(a) general medical, (b) general surgical, (c) non-psychiatric acute, (d) geriatric, (e) maternity, (f) mental illness, (g) mentally handicapped and (h) total.

  Mrs. Currie [holding answer 7 December 1987]: The information the hon. Member seeks has now been placed in the Library.

Preamble
The House met at three of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Sandford.
Viscount Daventry Viscount Daventry—Sat first in Parliament after the death of his uncle.

Toy Safety and Unit Pricing Proposals
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress was made at the European Consumer Affairs Council held on 18th December, with particular reference to the draft toy safety and unit pricing directives.
Lord Beaverbrook: My Lords, the Council agreed a common position on the amended proposal for a toy safety directive. The Council also resolved the few remaining points of difficulty on the two unit pricing proposals. A common position on these proposals is expected to be formally adopted very shortly.
Baroness Burton of Coventry: My Lords, if I am correct in saying that formal adoption of both these drafts depends upon approval by the European Parliament can the Minister tell us what is the earliest date on which this can be expected? Does his Answer indicate that he anticipates no further problems concerning such approval?
Concerning the meeting on 18th December is the noble Lord aware that my information is that the Commission submitted two Considerations to the Council? One dealt with consumer integration in other Community policies and one dealt with the consumer interest in standards making. If that is the case will he comment on the result?
Lord Beaverbrook: My Lords, it is indeed correct that the European Parliament's agreement must be obtained before adoption and also the approval of the Economic and Social Committee. They have of course yet to give their opinion on the amended proposal. Provided this is favourable, adoption is likely in mid-1988. The target date for the toy safety directive to come into force is 1st January 1990. The other points put to me by the noble Baroness did appear on the agenda but there was not substantial discussion on them. However we hope that there will be at the next meeting.
Lord Graham of Edmonton: My Lords, what the Minister has said is good so far as it goes; but could he be helpful by telling us what action the Government intend taking as their contribution to the European Child Safety Campaign, which is due to begin in April 1988? Can we be told of the extent to which the voluntary sector and the media will be involved? When doing so will the Minister bear in
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mind that hazardous toys can be found in every kind of store and that an early initiative involving large stores and market traders would be helpful?
Lord Beaverbrook: My Lords, the noble Lord makes a very good point on the proposed Child Safety Campaign. Any government should do all they reasonably can to reduce the number of accidents to children. As regards the proposed campaign the UK has made clear its readiness to participate in some form of child safety campaign provided that it is well thought through and properly targeted. The particular areas that the noble Lord mentioned of course should be taken into account.
Baroness Burton of Coventry: My Lords, reverting to the Answer that the Minister gave to my second supplementary question, is he aware that on the 18th December the Commission apologised for the short notice given about these submissions? Is he also aware that no discussion at all took place on them, that the actual Council meeting itself did not commence until after lunch on the Friday before Christmas and that I think that this is just not good enough? In commenting on those proposals will the Minister tell the House whether it is true that the next meeting of the Council is to be on 3rd May? If it is to be delayed until then, believing that the Government and the Minister wish to help, will the Minister tell the House whether in the meantime the House will pursue consideration of the two submissions which were ignored on 18th December?
Lord Beaverbrook: My Lords, the noble Baroness is indeed correct. The Government's understanding is that the German presidency intends to hold a consumer council on 3rd May. I think it would be right for me to say that we hope that the agenda will be prepared further in advance and that there will be more progress made on that basis at that time.
Lord Brougham and Vaux: My Lords, is my noble friend aware that my society is hoping to be very involved in this Child Safety Campaign which will hopefully start in April? Can he say whether the toy safety regulations will be in limbo until 1990 and that there will not be any new toy safety regulation?
Lord Beaverbrook: My Lords, in this country we already have considerable regulations on toy safety. There is no question at all of there being a free-for-all in the production of unsafe toys. It is purely a matter of trying to get some European standards.
Lord Sainsbury: My Lords, is the Minister satisfied with the proposed timescale for implementation? What reaction has he had from trade and consumer interests?
Lord Beaverbrook: My Lords, UK industry has generally welcomed the toy safety proposal because it will provide a common set of requirements throughout the whole European Community. The directive will also give a more comprehensive coverage than is provided for under our present national toy safety regulations. For that reason consumers should also welcome it. As regards the

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timescale, nothing happens overnight in Europe in general but I think it is fair to say that at least we now have a timescale.
Lord Campbell of Alloway: My Lords, is the Minister aware that, in the absence of Community regulations, there are certain decisions by the Court of Justice that may well inhibit Her Majesty's Government from prohibiting the import of dangerous toys from other member states of the Community?
Lord Beaverbrook: My Lords, I believe that I understand what my noble friend is getting at. However, once a European standard has been agreed, we hope that it will be no less rigorous than our existing laws.

Unemployment Statistics
3.15 p.m.
Baroness Turner of Camden: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied that their present method of compiling statistical information on unemployment reveals the true level of unemployment in the United Kingdom.
The Earl of Dundee: My Lords, I am satisfied that the monthly unemployment figures derived from the claimant count are an accurate measure of the number of people claiming benefits at unemployment benefit offices. However, I am aware that the figures are somewhat higher than an alternative estimate using an internationally recommended definition of unemployment, based on the number of people without jobs seeking work. The results of the annual Labour Force Survey for Spring 1986 gave an unemployment total on the basis of 2.97 million for Great Britain—200,000 less than the claimant count.
Baroness Turner of Camden: My Lords, I thank the noble Earl for that reply. However, is it not a fact that since 1979 there have been no fewer than 19 changes in the way in which those statistics are compiled and that on each occasion, with one exception, the result has been to lessen the numbers of officially notified unemployed? As an example, there was the decision to remove men aged 60 and over from the unemployment count even though they were not necessarily out of employment, and the Social Security Bill removed men from the age of 55 and above from the unemployment count. Will there be further moves in that direction and does the Minister think that such self-deception helps anybody?
The Earl of Dundee: My Lords, the noble Baroness is quite right to point out the changes that have occurred. However, I do not agree that any measure of self-deception corresponds. It is impossible to know what the current unemployment count would
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be now if it were calculated on a former basis. While some people attempt to estimate current totals on the old basis, they cannot really know, for example, how many people would now register at jobcentres if that were made compulsory again or how many occupational pensioners would still be signing on if it were not for the relaxation of the requirement for men over 60 to be available for work in order to get national insurance credits or supplementary benefit at the long-term rate.
Baroness Seear: My Lords, will the Minister tell the House whether, in calculating the increase in employment which is largely an increase of women working part-time, those part-time workers count as a complete unit or a fraction of a unit? Do two part-time workers make one job or do they count as two jobs?
The Earl of Dundee: My Lords, I shall need notice of that question.
Lord Diamond: My Lords, that is a preposterous answer when we have been told time and time again over very many years that two part-time workers count as two jobs. No attempt has been made to determine what a full-time worker is.
Lord Stallard: My Lords, will the noble Earl accept that we can calculate how many people have been removed from the unemployment statistics because of changes in social security benefit eligibility conditions as well as the proposed changes contained in the Bill which is about to come before the House? Will the noble Earl consider publishing in the Official Report a breakdown of how many people have been removed from the unemployment statistics because of changes in social security legislation? It is becoming evident that, while the Government appear to have a splendid—
Noble Lords: Question!
Lord Stallard: Is it not becoming evident, as has been said before, that while the Government have a splendid policy of reducing the numbers of unemployed what we need is a policy to reduce unemployment?
The Earl of Dundee: My Lords, I could not agree more with the noble Lord when he says that what we need is a policy to reduce the number of unemployed. I am very happy to repeat today the announcement this morning that we have had a fall of 35,400 in December to 2.614 million. That is a fall of 505,000 over the past 12 months, the largest since similar records began in 1948.
Lord Molloy: My Lords, is the Minister aware that, notwithstanding the possibility of unemployment figures being cooked, the main factor is that they are far too high? Does he agree that there is a possibility that high unemployment figures may be related to the problems of inner cities and the rise in criminal activity throughout the country?
The Earl of Dundee: My Lords, we shall always feel that, whatever the level of unemployment, it is too high and should be reduced. I can assure the noble Lord that the happy news that we have had today reflects reductions in the level of unemployment throughout the country.
Baroness Carnegy of Lour: My Lords, is the Minister aware that the welcome fall in unemployment figures is great news to a number of noble Lords, at any rate on this side of the House, who disagree with the groans we hear coming from the other side of the House? Does he agree that the unemployment figures record the number of people who are looking for a job, want a job and cannot find a job and so are drawing benefit, and that many women who are in part-time work or looking for part-time work are very satisfied with that type of work? There is absolutely nothing wrong with counting those women as individuals and not as half people.
The Earl of Dundee: My Lords, I endorse my noble friend's view that those people should be counted as individuals.
Lord Basnett: My Lords, since the noble Lord, Lord Young, in evidence to the Select Committee on Employment in another place, conceded that the campaign alleging that the unemployment figures were fiddled had succeeded, would the noble Earl not agree that those figures lack public credibility? Would he not further agree that it would be sensible of the Government to introduce an advisory committee on the unemployment figures like their advisory committee on the retail prices index?
The Earl of Dundee: My Lords, as I have already said, I do not accept to any extent that the unemployment figures have been fiddled. We are able to achieve consistency, if we so wish, between the current date and 1979; the seasonally adjusted series is maintained on a consistent basis going back in fact to 1971 and the figures are published. It takes account of all the relevant changes.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that many people very much resent the suggestion made by the noble Lord opposite that the figures have been fiddled as both an unjustified reflection on Ministers and a yet more unjustified reflection on our wholly impartial and honourable Civil Service?
The Earl of Dundee: My Lords, I am grateful to my noble friend for his support.
Lord Basnett: My Lords, will the noble Earl accept that I did not say that the figures were fiddled? I happen to think that the changes over the past few years have been inexplicable. What I said was that the noble Lord, Lord Young, had accepted before the Select Committee on Employment in another place that the campaign alleging that the figures had been fiddled had succeeded. I therefore asked a question which has not been answered by the Minister.
The Earl of Dundee: My Lords, however much the noble Lord may question the method of computing and doubt the particular figures that he sees, I am sure that he agrees that we should all welcome the trend in unemployment which is coming down. That is now undeniable.
Lord Mason of Barnsley: My Lords, will the Minister explain to the House why it has been necessary for the statistical method of calculating unemployment figures to be changed—we suggest "massaged"—19 times since 1979?
The Earl of Dundee: My Lords, the most important change, which was the introduction in 1982 of the count of benefit claimants, came about because of the introduction of voluntary registration at jobcentres and careers offices. The previous registration figures would have been incomplete and it was necessary to change the basis of the count. Other changes have resulted from the elimination of unnecessary procedures in benefit offices and there have been two corrections to reduce over-recording.

Uganda
3.22 p.m.
Viscount Buckmaster: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their attitude towards the present Government in Uganda, and whether they consider that the situation there has improved since Viscount Buckmaster's Unstarred Question was debated on 4th December 1985.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we support the efforts of the Ugandan Government to restore peace and stability to Uganda and welcome their courageous economic decisions and the President's own public commitment to the maintenance of human rights. The majority of people in Uganda now live in an atmosphere of greater stability and security than they have known for some years, and we hope that this improvement will continue.
Viscount Buckmaster: My Lords, I thank the Minister for that reply. Does he not agree that, whereas in the central, western and southern parts of the country there seems to he a general stability and the government are in effective control, nevertheless in the northern and eastern parts instability continues and is accompanied by killings, some of which are attributed to the government and some to the opposition? Is the Minister satisfied that the staff of Her Majesty's High Commission in Kampala have access to all parts of the country?
Lord Glenarthur: My Lords, it is certainly true that rebel forces are still fighting against the government in some areas of the north and east. They are mostly soldiers from previous administrations. However, we

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welcome the Ugandan Government's efforts to bring about reconciliation of the various conflicting interests in Uganda. As regards the last part of the noble Viscount's supplementary question, so far as I am aware the staff of the High Commission have access to all parts of the country, but if I am wrong in that I shall let him know.
The Earl of Selkirk: My Lords, can the noble Lord tell the House whether the penetration of the Sudanese into the north of Uganda has been stopped and particularly their poaching of game of one kind or another?
Lord Glenarthur: My Lords, so far as I am aware there is no particular problem about poaching game or entry by the Sudanese into the northern area; but should there be any further information on that matter, I shall let my noble friend know.
Lord Cledwyn of Penrhos: My Lords, in a debate that took place two years ago this House agreed that the essential step was the revitalisation of the Ugandan economy. Can the Minister go a little further and say whether he believes that the economy has been revitalised and if so to what extent the aid programme from this country has assisted that process? Can the Minister also tell the House what is the latest report from Amnesty International on the question of the abuse of human rights?
Lord Glenarthur: My Lords, President Museveni's government in May 1987 embarked upon an economic recovery programme with the support of the IMF, which in itself is an encouraging sign. It is a bold initiative which is required and it will require courageous decisions on the part of the government. Her Majesty's Government have provided substantial aid in a number of different support programmes. In June last year we pledged £25 million worth of balance of payments support for Uganda to be spent over two years. Then there are £5 million worth representing a bilateral programme to finance vital imports for the agricultural, transport and industrial sectors and £10 million worth of co-financing with the World Bank of special facilities for Africa. The remaining £10 million is subject to Uganda maintaining the economic recovery programme to which I referred. There are other matters as well. I am afraid that I do not have details of the Amnesty International report but I shall try to obtain them for the noble Lord.

Immigration: Medical Controls
3.27 p.m.
Lord Hatch of Lusby: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their policy towards immigrants who are suffering from illness.
The Minister of State, Home Office (Earl Ferrers): My Lords, the immigration rules provide for passengers, who are subject to immigration control, to be examined by a medical inspector on arrival in the United Kingdom. An immigration officer may, on the advice of the medical inspector, refuse a passenger leave to enter on medical grounds, unless he considers that there are strong compassionate reasons to justify admission. Alternatively, the officer may admit the passenger, but require him or her to report to a medical officer of environmental health for further examination and, if necessary, treatment.
Lord Hatch of Lusby: My Lords, is the noble Earl aware of the specific case, about which I gave his department notice, of Mr. Ruda Patel, who entered this country in August 1986 when suffering from Parkinson's disease and who was promised by the Home Office that within a month a decision would be made on his application for permanent residence? Is he further aware that Mr. Patel left this country in November 1987 in order to attend the funeral of his wife in Kenya without having received any message from the Home Office, and when he returned was given only a temporary visa and refused any extension of that visa or permanent residence? Also, will the noble Earl confirm that the Member of Parliament for the constituency within which Mr. Patel lived refused to intervene on his behalf, and that that Member of Parliament was the Prime Minister?
Earl Ferrers: My Lords, I am aware of the case to which the noble Lord refers. He is quite correct in saying that Mr. Patel came to this country. He came on a temporary visit, and having applied for a more permanent permission to stay required to have back his passport. When he asked for the return of his passport he was advised that he would need to obtain clearance from the authorities in Kenya before returning to this country. He failed to obtain that clearance.
Lord Rea: My Lords, may I say something which may not be relevant in this case? Does the Minister know that Mr. Patel is putting no charge on public funds, since, like his Member of Parliament, he obtains his medical care through the private sector?
Earl Ferrers: My Lords, I must reassure the noble Lord that it is not the medical condition which was the cause of Mr. Patel's rejected application; it was the fact that he left the country and was warned that he would have to start the application process again. He failed to do that and turned up without the correct clearance certificates.
Lord Mishcon: My Lords, in the first instance, perhaps I may congratulate the noble Earl on his new Ministry and say that it is a great joy to see him return to the Dispatch Box, to which in the past he lent great distinction. I should like to ask him this question arising out of the discussion that we have just had. In spite of his Answer, is he aware that there is a general feeling that there is still too much of a bureaucratic attitude shown by immigration officers and even their medical advisers? At the start of what I am sure will be a very distinctive Ministry at the Home Office, will

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the noble Earl see that mercy and understanding are incorporated in the duties of immigration officers and their medical advisers?
Earl Ferrers: My Lords, I am very grateful to the noble Lord, Lord Mishcon, for his kind welcome. I feel a little like the rubber ball that has bounced back, but I appreciate his welcome.
There is in the noble Lord's questions always an iron fist inside a kid glove. I shall give careful and sympathetic consideration—and I know that our immigration officers do that—but I must assure the noble Lord that in this case the individual concerned was warned of the conditions that would have to be entered into before he returned. He failed to meet those conditions. The immigration officers were quite correct in the action they took. Having said that, I should add that Mr. Patel's case is being considered further and he is at the moment in this country.
Lord Hatch of Lusby: My Lords, in his Answer to me the noble Earl revealed the difficulty about Mr. Patel and many other immigrants. He had applied for permanent residence in August 1986. He was promised an answer to that application by the Home Office within one month. Yet 15 months later he had received no notification. Is this not a scandal with regard to the attitude of the Home Office'? He was not able to satisfy the conditions for the return of his passport simply because the Home Office had not fulfilled its promise. Is it not the duty of a Member of Parliament to intervene on behalf of a constituent in this kind of case, which I understand was postponed only on the intervention of a Labour councillor?
Earl Ferrers: My Lords, it would be quite improper for me to say what points should be taken up by a Member of another place, whoever that is. I can only assure the noble Lord, Lord Hatch, that these matters are considered very carefully. While there may be reasons about which the noble Lord is concerned, this gentleman was warned that if he went back, and removed his passport, the process would have to start again.
Lord Peyton of Yeovil: My Lords, if my noble friend were to refrain altogether from responding to supplementaries which contain no element of the interrogatory he would enjoy a great deal of sympathy and even some applause.
Earl Ferrers: My Lords, I am not sure whether or not that requires a reply!

Business
3.33 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I say that the Committee stage of the Legal Aid Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Second Reading of the Arms Control and Disarmament (Privileges and Immunities) Bill will be taken.

Legal Aid Bill [H.L.]
3.34 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [The Legal Aid Board]:
Baroness Faithfull Baroness Faithfull moved Amendment No. 1:
Page 1, line 7, at beginning insert—
("( ) It is the Lord Chancellor's duty to promote and secure the provision of a legal aid scheme designed to ensure that people of small or moderate means are not denied access to legal advice, assistance and representation, as defined below, on account of their means.").
The noble Baroness said: At the Second Reading of this Bill the noble and learned Lord the Lord Chancellor ended his notable speech with the following words:
"The legal aid system in this country is one of the best in the world. The provisions in the Bill not only preserve all that is best in our legal system; they enhance it".—[Official Report, 15/12/87; col. 614.]
In this amendment we seek to keep it so, now and in the future. We seek to enshrine on the face of the Bill the stated purpose of legal aid in this country so that it is clear for all to understand.
Amendment No. 1 states:
"It is the Lord Chancellor's duty to promote and secure the provision of a legal aid scheme designed to ensure that people of small or moderate means are not denied access to legal advice, assistance and representation, as defined below, on account of their means".
In his speech at Second Reading the noble Lord, Lord Meston, said that there is no clear statement of principle or purpose in the Bill. The amendment seeks to remedy that. Furthermore, without such a statement of principle the legislature on future occasions may be unable to safeguard the provisions of the Bill.
This is not a wrecking amendment; nor does it call for vast resources. In colloquial language it puts a marker down as to the principle and purpose of the Bill. With the present noble and learned Lord on the Woolsack we have no fear for the erosion of the principles of the Bill. We trust that this will be the case with all future Lord Chancellors. But all Lord Chancellors have the misfortune not to have a Vote. They have no money available to them for expenditure. They are dependent on the Treasury for any item of expenditure. All Secretaries of State are of course dependent on the Treasury to run their departments, but out of a lump sum allotted to them they can decide on the details of expenditure.
I pay tribute to the Chancellor of the Exchequer and the Treasury officials for the promotion of a sound economy in our country. I believe that individuals, families, communities and countries should live within their means. However, what is important is to have those means, large or small, wisely deployed. I would respectfully suggest that

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those at the Treasury, by the very nature of their work, cannot be in touch with the grass roots needs of people and cannot always take an overall view as to the effectiveness and cost-effectiveness of the grass roots needs.
Legal aid efficiently and fairly administered can save money, which is often not appreciated by the Treasury. I cite examples. In a debate in your Lordships' House on family courts, the noble and learned Lord, Lord Havers, then sitting on the Woolsack, said that, while from all sides of the House there was support for family courts, the Treasury was concerned about the cost but could give no details as to the costing.
I contend that family courts would save money for the legal aid fund. I understand that the Treasury is withdrawing grant from the National Conciliation Service, yet this would save legal aid. Again, the support and the extension of the Citizens' Advice Bureaux, money advice centres and legal centres will diminish the need for legal aid.
Another point made at Second Reading was that it was estimated that there were 56 regulation-making powers, all of which it is proposed would be by negative resolution. Further, many of the key regulations need the consent of the Treasury. It is within the realms of possibility that expenditure on legal aid could be whittled down. With this amendment as an enhanced principle in the Bill that could not happen without full knowledge and a debate in this Chamber.
I acknowledge that feelings enter into all we do. I can never forget the time when, as a young social worker in the 1930s, I was working in one of the poorest parts of Birmingham and living in the Birmingham settlement. I was secretary to the poor man's lawyer, a solicitor who came voluntarily one evening a week to advise those with legal problems. The men and women had access to advice but not to the due processes of law. I saw the resentment and the sense of hopelessness which that engendered. It is surely society's responsibility to ensure that no one should be denied access to justice on account of low income. All should have proper access to the law within a well-administered and accessible framework. That, as I said at the beginning of my speech, is the principle that should be enhanced in the Bill. I beg to move.
3.45 p.m.
Lord Elwyn-Jones: I greatly hope that the noble and learned Lord the Lord Chancellor will feel able to give his support to the amendment, the first that we have to consider, particularly bearing in mind the content and manner in which it was so ably moved by the noble Baroness, Lady Faithful!, in her moving speech, based on her great experience in the field helping those in need in Oxford and in other parts of the country.
In his notable speech on Second Reading the noble and learned Lord the Lord Chancellor acknowledged his overall responsibility for the legal aid scheme. He
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also commended the words of the White Paper which appeared earlier this year, namely:
"The purpose of legal aid is to ensure that people of small and moderate means"—
that is the language used in the amendment—
"receive access to proper legal advice, and to justice".
That says in positive mandatory terms what the amendment says slightly more reservedly, but it achieves what the noble Baroness referred to so eloquently. It enshrines on the face of the Bill the purpose of the Bill. Without that statement of principle the Bill, which is largely an enabling Bill, will be singularly naked and lacking in real content and significance. The purpose of the amendment is to spell out the principle which it is generally agreed should be applied in the legal aid field.
The substance of the Bill as at present is to be set out in a large number of as yet unseen and unknown regulations not in the Bill, and about that one cannot at this stage complain. Therefore in view of the shape of the Bill, it is essential that the general principle in Amendment No. 1 should be set out clearly and plainly. Without a statement of principle of that kind Parliament—indeed the noble and learned Lord the Lord Chancellor himself—would be unable to safeguard the provision in the amendment or direct the development of the Bill. The amendment should not and is not intended to embarrass the noble and learned Lord. On the contrary it is designed to give him strength in his negotiations with the Treasury. That is its whole purpose. He has said, and we were moved by it, that the Bill will do much to establish a framework within which the legal aid scheme could advance towards the 21st century in an efficient state. If our detailed examination of the Bill's proposals established that to be its purpose and effect, we would support it. But one of the early tests of the noble and learned Lord and the Government will be their approach to this blameless, indeed highly praiseworthy amendment.
In my speech on Second Reading I ventured to quote from the 34th annual report of the Lord Chancellor's Legal Aid Advisory Committee which stated:
"law is not merely an instrument of social control…it is also a positive instrument for defending individual liberties and giving reality to civil rights. Law, in this sense as well as in its restrictive sense, is a necessary precondition for order. If individuals cannot secure their legitimate rights and defend their interests through a system of justice. they will resort to other means in an endeavour to do so".
Then there follow these memorable and notable words:
"If the rule of law and equality before the law lie at the heart of the social system, then equally legal aid lies at the heart of the legal system".—[Official Report, 15/12/87; cols. 614–5.]
In the confidence that that approach will also appeal to the noble and learned Lord the Lord Chancellor, I hope that he will find it desirable and inescapable to support the amendment.
As I have said, our present worry is that the Bill currently contains no statement of principle of any kind so far as I have been able to gather. It is right that now, at the very beginning of the consideration of the Bill, this notable amendment, which spells out

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clearly the principle and the claimed intention of the Government, should receive universal approval not only of the Committee but of the noble and learned Lord the Lord Chancellor.
Lord Allen of Abbeydale: I rise to make a brief contribution from the Cross-Benches in support of the amendment. Perhaps I ought to say that I had some concern in the past with criminal legal aid and, more to the point, I served for some years in the Treasury. The extensive regulation-making powers in the Bill are very much subject to the control of that great department. Like the noble and learned Lord, Lord Elwyn-Jones, I cannot help thinking that in settling the terms of these regulations it could well be of assistance to the noble and learned Lord if the basic purposes of the Bill and the overall responsibility to be assumed by the Lord Chancellor were set out in terms at the outset. It would be of great help to Parliament in considering whether the regulations as they appear comply fully with the intentions of the legislation.
It is regrettable that when one reads this important Bill one discovers that the opening provisions consist mainly of definitions. It is no doubt interesting to know what is meant by "advice", "assistance" and "representation", but as a fanfare to start the Bill the clause, as drafted, emits a rather uncertain sound.
Some press comments have suggested that this amendment is designed to change the Bill. That is not its purpose. It is designed to spell out what the White Paper stated to be the purpose of the Bill and to define the role of the Lord Chancellor as it is now to become. I hope that the Government will accept the amendment. If they do not, we may be tempted to suspect that the Treasury is showing its hand even at this early stage.
Lord Denning: While I sympathise with the sponsors of the amendment, I suggest that the way in which it is now stated is not a proper form. I should first like to deal with the double negative:
"to ensure that people…are not denied access to legal advice".
Put in the affirmative, that means that people are provided with legal advice.
Secondly, there is the implication of a duty upon the Lord Chancellor to provide legal advice and assistance for those who need it. It is an important duty to place upon him but it should be stated as an objective; it is too high to put it as a duty. I recall that there is now a process of judicial review. If anyone believes that the Lord Chancellor, or anybody else in authority, has not fulfilled his duty he can go to the courts of law, complain to them and ask them to put an order on the Lord Chancellor to carry out his duty.
Members of the Committee will have seen recent reports about the National Health Service. No doubt it is its duty to provide a good medical and health service for all the people in this country at whatever expense. We hear parents of very sick children saying that the children are not being operated on as quickly as they should be. They go to the courts and ask for a judicial review as to whether the health service is doing its duty.
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The emphasis on a "duty" is often taken too far in some quarters and even by the courts. I suggest that although the objective is desirable, and it may well be desirable to have a statement of principle in the Bill, it should not go forward in its present form but should be stated as being an objective which the Lord Chancellor should seek to achieve and not a duty.
Lord McGregor of Durris: I am sure that the proposers of the amendment will be happy to pay attention to what the noble and learned Lord, Lord Denning, has said. Speaking as a layman, it seems to be easy to add to the amendment a phrase to the effect that in no circumstances would anything that the Lord Chancellor did in discharging the duty or obligation be actionable.
I wish to raise a further consideration relating to the phrase in the amendment which states:
"a legal aid scheme designed to ensure that people of small or moderate means are not denied access to legal advice, assistance and representation".
Since 1950 that has been the major aim of the scheme. During the whole of that period the Government have always accepted a commitment to keep the eligibility level for legal aid and advice well above average earnings, because the scheme was designed to help people to cope with what everybody agreed, and still agrees, to be the high level of legal costs. If the scheme is to work, that must be a feature of it.
In 1979 the Lord Chancellor raised the eligibity of two-parent families with two children to 70 per cent.; that is to say, 70 per cent. of such families would be eligible for legal aid. That was the level of eligibility when the scheme was introduced in 1950.
The Government continue to quote that figure. Sometimes it is said to be 70 per cent. of the population and sometimes 70 per cent. of families. In the White Paper it was said to be 70 per cent. of households. That is a difficult notion because there are a large number of single person households containing retired persons which distort the meaning of the 70 per cent. There are more mysteries than certainties about the figure.
In the 1970s Mr. Cyril Glasser served as a special consultant to the Legal Aid Advisory Committee of the Lord Chancellor's Department. He undertook a major study of the levels and extent of eligibility in the legal aid scheme. In collaboration with the Central Statistical Office he produced genuine data for the first time in the operation of the scheme. He published a further calculation 18 months ago showing that the proportion of two-parent families with two children eligible for legal aid was then nearly 60 per cent. and that it was falling fast. It is now calculated that the proportion is down to 40 per cent. It would be helpful to have the latest computations of the Lord Chancellor's Department on that matter.
In practice the scheme has always provided financial assistance for people who wish to pursue their matrimonial troubles at law. Such persons have always absorbed the lion's share of the legal aid fund.
Lord Hailsham of Saint Marylebone: I believe that since the introduction of criminal legal aid that is no longer so.
Lord McGregor of Durris: I am grateful; the noble and learned Lord is right. I was speaking of civil legal aid, where the problems are different.
Are we not reaching the point at which there is a serious danger of the legal aid scheme being reduced to the point of providing financial assistance for very poor people wishing to pursue their family problems in court? If that is to be avoided, there must be faced serious issues of allocation of available funds. Clearly there will not be sufficient funds to meet the noble aspiration which the noble Baroness mentioned at the beginning of the debate. Allocation there must be. How can a Legal Aid Board, constituted and empowered as it is in the Bill, deal with a problem of that nature?
Issues affecting the income limits will be dealt with by negative resolutions. Is not this a whole area which must receive parliamentary discussion? Would it not be wise, at this stage in the Bill, for the noble and learned Lord the Lord Chancellor to retain control over these major issues and not to pass them on to a board, which is emasculated in respect of powers, to deal with such matters? I very much hope, together with others who have spoken, that the noble and learned Lord on the Woolsack will feel able to accept at least the spirit of this amendment.
4 p.m.
Lord Simon of Glaisdale: I have in the past, and still do, work very closely with the noble Baroness and indeed, with the noble Lord, Lord McGregor, and on matters which we put very high on our respective agenda, I believe we see eye to eye. However, in my submission, this amendment is wrong both in its form and in its intention. In its form it puts a duty on the noble and learned Lord the Lord Chancellor. That duty, as my noble and learned friend Lord Denning pointed out, by the evolution of our legal process is now reviewable in the courts. The job that is given to the courts is really quite an impossible one to carry out. The amendment refers to people of "small or moderate means". The people who apply will obviously be the people who are just above the current legal aid limits. How can any court possibly say that they are of "small or moderate means"? I suppose we all think of ourselves in those terms when we read of the glittering figures on Wall Street. However, it is really quite an impossible task to impose on the courts and, indeed, on Parliament when it comes to review the regulations. It is quite premature now to canvass the question of the regulatory powers under this Bill. That is quite a different question.
I said that it is not only wrong in form but it is wrong in intention. The noble Baroness, with her usual candour, made it quite clear—and this was reinforced by my noble and learned friend Lord Elwyn-Jones—that the purpose is to put pressure on the Treasury, to strengthen the arm of the Lord Chancellor when it comes to negotiations with the Treasury. The public purse has constant calls upon it. We hear almost daily of the needs of the National Health Service, social security, education; and there are the arts. There is not an aspect of our national life
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where many of us, most of us, or all of us, cannot think that it would be desirable to spend more money if it were available.
Like the noble Lord, Lord Allen, I too have served in the Treasury and of course I had heard for years before how mean the Treasury was and very occasionally—much more occasionally—how generous the Treasury had been on a particular occasion. When I went to the Treasury I was in charge of the Inland Revenue, so I thought that I should go to Somerset House to see what was happening there. In the course of that visit I was introduced to an official called the Revenue Secretary and I noticed in the corner of his office a large safe. Now, I thought, I shall see these vast sums that the Treasury dispenses so meanly. So I asked that it should be opened. It was opened and it contained nothing at all—not even a bottle of gin! The Treasury has constant competing calls. It is wrong in principle to arm legislatively one particular Minister with power to pre-empt the calls of other Ministers on the public funds. I therefore hope that my noble and learned friend the Lord Chancellor will not accept this amendment.
Lord Morris: I believe that I am not alone in finding it extremely difficult to resist the immense charm of the noble Baroness, Lady Faithfull, and indeed that of the noble and learned Lord, Lord Elwyn-Jones. The noble and learned Lord made it quite clear to the Committee that he believed that this amendment was nothing more than a piece of declaratory law, just stating the purposes and principles behind this Bill.
We have heard that this amendment is very much more than that. It is a blank cheque drawn on the Treasury and drafted by the noble and learned Lord the Lord Chancellor. It is no more and no less. However, worse than that it places a duty on the noble and learned Lord to do things which are impossible for him to do on his own. I suggest that this amendment should be resisted at all costs.
I just refer to a point made by the noble Lord, Lord Allen of Abbeydale, with regard to the drafting of the first clause. I very much welcome this more modern style of drafting where the basic definitions are at the front of the Bill because not least it concentrates the mind of the legislators let alone the practitioners. I would very much resist the earlier practice of having the interpretation clauses at the back of the Bill.
Lord Mishcon: A mist has descended on the Committee and it has hidden the sunshine that the noble Baroness and my noble and learned friend Lord Elwyn-Jones brought into it. The sunshine was that, in spite of the fact that this is an enabling Bill, at Second Reading the count of regulations made under it was, I believe, over 50. However, if we leave this as an enabling Bill without giving the noble and learned Lord the Lord Chancellor, present and future, certain clear duties—and I do not baulk at the words—we shall be missing an opportunity which will not return and we shall be walking into risks in the future which I do not believe any one noble Lord would wish to contemplate.

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Both the noble and learned Lord, Lord Denning, assisted by the voice of his brother, the noble and learned Lord, Lord Simon, who I thought spoke most pathetically about the absent gin bottle, had one thought in common and I venture to suggest as a humble practitioner in the law, that they have not looked carefully at the wording of this resolution. The proposed amendment does not say:
"It is the duty of the Lord Chancellor to ensure that people of small or moderate means are not denied access to legal advice",
and so on. If it had said that, their remarks would be pertinent, though I would still feel that by a suitable choice of words we could overcome this threat of judicial review, which appeared to be the main purport of their arguments, as well as the fear that the Treasury would have no answer at all, whatever the call upon it by the Lord Chancellor's Department.
Those are not the words of the amendment. The words of the amendment are, "to promote and secure". That is his duty. The provision of a scheme—
Lord Simon of Glaisdale: Would the noble Lord allow me? The amendment states:
"secure the provision of…legal aid".
How does that differ from "ensuring"?
Lord Mishcon: I regret that the noble and learned Lord has again stopped short in his reading of this amendment. I say that with the deepest possible respect. He stopped short of words which are very material and which I was about to read to the Committee. The words are not the provision of legal advice for people who otherwise would not be able to afford it. He is under a duty to secure the provision of a scheme. That is the first thing—not a duty to provide legal advice. Then come the words which defeat the arguments of both noble and learned Lords, though at least the noble and learned Lord, Lord Denning, said he had the utmost sympathy with the object behind this amendment. I was very glad to hear it and for that sympathy I am duly grateful.
The words are "designed to ensure". Therefore, if the aim of the scheme eventually ensures that, then this is the purpose of the amendment and the aim that is behind the preparation and the provision of that scheme. It is designed to ensure that.
The Committee and the noble and learned Lord seem to feel that there are some words here which need altering in order that the whole purpose of the design behind this amendment can be secured. I am quite sure that the main point we wish to get through is the purpose of this amendment. At Committee stage if the principle is right then it deserves to be carried. At a later stage of the Bill we can deal with any minor alterations in order to ensure that advantage is taken of certain points. I would urge upon the Committee that it is terribly important that this amendment is not lost as a result of a misunderstanding and that the mist created by some previous speakers is not allowed to obscure the sunlight.
4.15 p.m.
Lord Campbell of Alloway: I regret that I am unable to accept this amendment and to bask in the sunshine of my noble friend Lady Faithfull's approval, welcome though it would be. It is wrong in form, it is wrong in intention and it is also wholly unenforceable.
Although in principle I support the incorporation of a purpose clause, this amendment goes much further. I am sure that from his experience my noble friend Lord Renton will correct me if I am wrong, but this amendment goes very much further than what is normally understood to be a purpose clause. It does not state the object of the Bill but imposes a duty.
Furthermore it does not, as has been suggested, secure expenditure for legal aid by indirect pressure on the Treasury by the duty proposed to be placed upon the Lord Chancellor. If it did, it would be open to the serious exception to which the noble and learned Lord, Lord Simon of Glaisdale, has referred. The Committee may think it is of some consequence that we should consider this amendment on its own merits and not, as has been suggested, as an indication of the attitude of the Government or as a general attitude on the part of any Member of the Committee.
If the clause read:
"The purpose of this Bill is to promote and secure",
I accept as a matter of principle that that would be a form of purpose clause and as such would not be objectionable. But it is not. It imposes this duty upon the Lord Chancellor and therefore the clause as it stands is, with respect to the noble Lord, Lord Mishcon, in my view wrong in principle. A purpose clause should never seek to impose a duty of such a nature.
The statutory duty which this amendment seeks to import into the Bill is insufficiently precise to be capable of enforcement by a judicial review, as was said by the noble and learned Lord, Lord Denning. No other means of enforcement are provided. To try to meet the argument of the noble Lord, Lord Mishcon, may I say, yes, it is a breach of a duty to promote and secure the provision of a scheme "designed to ensure". That is what it is. In this context I ask the Committee to consider for one moment the crucial question; that is, what steps if not taken would constitute a breach of such a duty? It is virtually impossible to envisage the answer to that question. As was pointed out by the noble and learned Lord, Lord Denning, the courts would be unable to deal with it or to enforce it in any way.
Furthermore a duty to be enforced by the courts has to be reasonably specific. What means are "small or moderate"? All men have different views about "small or moderate means". The noble and learned Lord, Lord Simon of Glaisdale, very reasonably instanced those just on the edge of qualification. But it would not end there, would it? The words "small or moderate means" import a degree of uncertainty which would be wholly unacceptable for the purposes of judicial enforcement.

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The last question is, what constitutes a denial of access to legal advice and so forth? The Committee may well think that it comes to this. Apart from being wrong in form and intention and unenforceable in the courts, it is improper to include words of mere exhortation such as those in the drafting of any statute, however much one may sympathise with the sentiments which prompted this amendment and with which I assuredly sympathise.
Lord Parry: Before the noble Lord sits down, simply on his final point on denial of access and what it constitutes, would he not agree with me that the noble and learned Lord the Lord Chancellor indicated that he was aware, and the House seemed to be aware at Second Reading, that access to the law is denied both on price and on fear of access to a great many people on the country?
Lord Campbell of Alloway: I am anxious not to take up too much of the time of the Committee, and with leave I would ask that I might deal with this at a later stage of the Bill.
Lord Hailsham of Saint Marylebone: I hope that I shall not be considered to be intruding in this debate. I noticed that the weather forecast today predicted not merely fog but frost, and I hope that if I am slightly cool towards this amendment I shall not be accused of freezing it out of consideration. I could not help thinking, as I listened to the dulcet tones of the noble and learned Lord, Lord Elwyn-Jones, and, indeed, of the noble Lord, Lord Mischon, that the Committee was not being told and that nobody mentioned that we had had a legal aid scheme within the general responsibility of the Lord Chancellor since 1949.
It has got on pretty well. It is the fastest developing and has remained the fastest developing in real terms of all our social services. Whether that is an unmixed blessing is a matter for discussion, though not now. Why? The scheme as originally introduced covered civil legal aid only. It included criminal legal aid from 1962, and it had legal advice and assistance only from 1972 when, while I was Lord Chancellor, it was introduced in that respect.
For all that time, in spite of the complaint that there is no statement of purpose in this law, we got on very well without a statement of purpose at all. The reason was that the duty placed on the Lord Chancellor was never an indiscriminate one. We progressed by stages, and I fancy we are still progressing by stages. We have always excluded defamation from the province of legal aid. We did so because we deliberately did not consider that in the light of other needs, particularly even in the field of legal aid, defamation was a suitable subject for according assistance to litigants.
Despite constant pressure to do so, we have always been rather reserved in giving legal aid or assistance in tribunals of various kinds, at least some of which were designed to avoid the necessity for providing
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remuneration to lawyers at all. if this amendment is passed it seems to me that my noble and learned friend will immediately have to try to devise a scheme which inserts defamation into the legal aid scheme and inserts representation before all tribunals in front of which anybody had any claim to representation at all. The truth is that there must be priorities, and this amendment is indiscriminate in its general statement of duty.
The question that I would ask the proposers of the amendment is: how did the various Lord Chancellors under Lord Attlee's Government, how did the noble and learned Lord, Lord Gardiner, how did the noble and learned Lord, Lord Elwyn-Jones, get on without a statement of purpose? They got on very well. The reason was that they were entitled, in consultation with their colleagues, to exercise a certain degree of common sense and priority. As the late Aneurin Bevan was once heard to observe, priorities are the language of socialism. The principle that I am seeking to propose is the same.
Looking at this amendment, I wonder how many of the other spending Ministers operate under statutes which impose on them an indiscriminate duty. How many Acts of Parliament impose this on the Social Services Secretary, on the Secretary of State for Education and Science, the Defence Ministry or the Home Office? How many of them have this? Is it really desirable to impose upon my noble and learned friend this kind of general and indiscriminate duty, and is it an advance in the science of legislation to attempt to do so?
I find it very difficult to reconcile this amendment with the actual terms which follow in the statute. The scheme is laid out very largely in the statute. Legal aid is to be accorded in the criminal courts by the courts themselves. That is how it is accorded at the moment; it is accorded by the judiciary. It is accorded by the magistrates in the magistrates' courts and it is accorded by the judge in the Crown Courts. How can the Lord Chancellor interfere with the judiciary, and would he not be under an obligation to do so, or at least to introduce amendments in the Bill which would enable him to do so, if this amendment were passed?
As regards the question of means, that is already the duty of the Social Services Secretary. I am not quite sure what is intended under this Bill. If it is to be the Lord Chancellor who has to devise the scheme to secure that people of moderate means are not denied legal aid, where does the Social Services Secretary come in? Where does the Legal Aid Board, which is to take over the position of the existing committees and the Law Society, come in? I find that this amendment is something which has very few precedents. It is of doubtful parentage indeed, having regard to those who have sponsored it, other than my noble friend Lady Faithfull, who is wholly innocent in these matters, not having held any of the high offices of state to which the amendment relates.
There is just one other thing that I should like to say. It concerns the role of the Treasury. I come back to what was said by my noble and learned friend Lord Simon of Glaisdale. It is silly to impose upon an

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individual Minister a duty to provide within the ambit of his own Vote, ultimately out of the Consolidated Fund, something which must bear relation to the total global amount of government expenditure, whether by taxation or borrowing. The Treasury has an indispensable part in our constitution of relating the demands of the spending Ministries to the individual demands of spending Ministers. Of course my noble and learned friend the Lord Chancellor will fight like anything to get his slice of the cake. I wish him luck in doing so. At the same time, to impose upon him a duty which must depend upon the size of the cake and the collective responsibility of government is contrary to the general understanding that I have of our financial arrangements under our existing constitution.
4.30 p.m.
Lord Elwyn-Jones: The noble and learned Lord invited me to give any precedent of the kind that we find in this amendment. There is a convenient one which happens to be in my hand that is found in Section 1 of the National Health Service Act 1977:
"It is the Secretary of State's duty to continue the promotion in England and Wales of a comprehensive health service designed to secure improvement—
(a) in the physical and mental health of the people of those count ries"—
an interesting reference to England and Wales, incidentally—
(b) in the prevention, diagnosis and treatment of illness, and for that purpose to provide or secure the effective provision of services in accordance with this Act."
That was in 1977 and it has proved a most valuable provision.
Lord Hailsham of Saint Marylebone: I notice that the noble and learned Lord did not add it to the duties of the Lord Chancellor.
Lord Renton: This seems to me to be such an important matter that I hope the Committee will bear with me for a few moments. As is well known to some noble and learned Lords who have spoken, as chairman of the committee which suggested that they should be used when appropriate, I am on record as being in favour of purpose clauses in order that we may do what Parliament so rarely does, which is to express its intention. Although we legislate to a vast amount, we so rarely indicate in general terms what we are doing. Therefore when I first saw this amendment I looked upon it with some favour.
A purpose clause is often valuable and could, in the context of this Bill, be valuable to enable the Bill to he properly interpreted by the courts; to give guidance to the Legal Aid Board upon which, as my noble and learned friend Lord Hailsham rightly said, the main responsibility will be for introducing the legal aid scheme (I shall come to that in a moment), and in addition as guidance for those who are going to have to draft the many regulations in the Bill. I have not counted them but a friend of mine did so and said that there could be 51 regulations.
We are faced with an amendment which is up to a point a purpose clause. In fact it goes rather further
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than being a purpose clause. But, alas, despite my previous position in favour of such things, I also find difficulties in this amendment. The main difficulty is, as has been said by those with greater authority than I, the duty placed upon the Lord Chancellor.
If we turn to Clause 2(2) we find that the Legal Aid Board is the body upon which they are going to place the responsibility for doing just what is mentioned in the amendment. Clause 2(2) says:
"Subject to subsections (3) and (4) below, the Board shall have the general function of securing that advice, assistance and representation are available"—
I think that is a good word in the circumstances—
"in accordance with this Act and of administering this Act".
Placing that duty as expressed in the amendment upon the Lord Chancellor would be inconsistent with that subsection.
I do however say this, and I want to keep it short. I hope that in the light of this discussion, and hearing in mind the possible advantages of having some sort of purpose clause, my noble and learned friend the Lord Chancellor, after the Committee stage is over, might look with favour upon a purpose clause and not on the lines of the amendment but with the objectives I have already described and will not repeat.
Baroness Phillips: If a mere laywoman may tangle with noble and learned Lords, it seems to me that the noble and learned Lord the former Lord Chancellor, who has just spoken, has turned us back to what the Bill says, which is very reasonable. He referred to the "advice, assistance and representation" which have already been given, and he suggested that they have more or less grown up informally.
If we were to apply that principle to every Act of Parliament there would be no necessity to have Houses of Parliament at all. We could have some fairly informal discussions— like presumably the Barons had when getting Magna Charta together—and from those you would evolve by custom and practice how the courts operate.
Speaking as a mere magistrate we were always working, as I understood it, under Acts of Parliament and statutes. We are discussing today a new Act of Parliament which is going to be quite far reaching and presumably will be on the statute book for a long time. If we look at the definitions of "advice, assistance and representation" there is a gorgeous phrase which makes one think that "Yes, Prime Minister" is very accurate.
"They have the meanings respectively assigned to them by section 1".
Clause 1 tells us what "advice" means, what "assistance" means, and what "representation" means but it does not tell us how individuals obtain these. Even if we look at subsection (2) it does not actually come back to the vital point which is embodied in this amendment, that nobody shall be deprived of the opportunity of getting these vital things, "advice, assistance and representation". i must suggest that in no way are we bringing in a new principle and in no way are we covering a point that is covered in the Bill already.
Lord Milverton: Having heard the different arguments and points of view I would certainly still be happy to support this amendment. Even if the movers of the amendment are told that as it is it cannot be accepted, I would hope that my noble and learned friend the Lord Chancellor would be able to say that he would be able to work at it and be able to find a way to bring in the important principle of this amendment.
I am sure that despite any legal aid there is of this or that sort—and not only am I sure but I know—there are (as the noble Baroness, Lady Phillips, said, and other noble Lords most probably know) many men and women who cannot afford—and are desperate to be able to afford and have the means—to have legal assistance. I would say that many know that, and I would dare to say that many church workers and other clerics would confirm that. It is important that this principle is not just disbanded.
The Lord Chancellor: We have had an extremely interesting debate on this important amendment with which the Committee stage of this Bill is starting. I am bound to say that, as it was being explained to us by the various persons who have appended their names to it, I was not absolutely certain that all had precisely the same idea of what the amendment would achieve.
The amendment expresses an intention of laying on the Lord Chancellor a duty to do certain things. I am not clear whether my noble friend Lady Faithfull, the noble and learned Lord, Lord Elwyn-Jones, and the noble Lords, Lord Allen of Abbeydale and Lord McGregor of Durris, wish this to be a duty enforceable at law. I rather understood the noble Lord, Lord McGregor of Durris, to say no, and that he would be prepared, if necessary, to see the amendment amplified by an express statement to that effect.
This is a fundamental question in seeking to impose a duty of this kind. What is the scope of it? Is it intended to be enforceable at law? If it is intended to be enforceable at law, I must say that I should have thought that the words used in the amendment would require to be a good deal more precise than they are.
As has already been pointed out, the reference to "small or moderate means" is one that has been used often in ordinary language and in speeches to describe the purpose of legal aid. However, I do not think many would regard that phrase as sufficiently precise to determine who is entitled to legal aid and who is not. One of the provisions of the Bill is designed to determine who is financially eligible for legal aid and who is not. That is done by means of regulations which would be expected to be precise and of the kind the noble Lord, Lord McGregor of Durris, referred to. If this is intended to be a legally enforceable duty on the Lord Chancellor, these words are certainly not sufficiently precise to be a proper expression of that legal duty.
The next matter I wish to mention is perhaps a little more general. A person who does not fall into the category of being of small or moderate means but who has enough money to enable him to litigate without concern for his means is entitled to litigate
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whether or not he has a good case. If he has a bad case, in due course that will be ascertained, if necessary after a full hearing. It has always been part of the condition of the grant of legal aid in a civil case, at least in the shape of representation, that the person concerned should have some form of reasonably stateable case and if it is a criminal case, that it should be in the interests of justice in the broad sense of that expression—and there have been elaborations of that expression for particular purposes—that he should receive assistance out of the public purse. This amendment does not address that problem at all. Surely it cannot be an adequate statement of the purpose of legal aid, going straight to the positive form of it, to give access to legal advice, assistance and representation at the taxpayer's expense irrespective of whether one has a stateable case. A good deal more consideration should be given to it if the idea of the amendment is to impose a legal duty on the Lord Chancellor.
Lord Mishcon: I am sure that the noble and learned Lord will forgive me and will not think this an impertinent intervention. The amendment says "as defined below". If the noble and learned Lord will look at the definition clause he will see that Clause 1(5) says:
"Regulations may specify what is. or is not, to be included in advice or assistance".
The regulations will provide that assistance is not available unless there is a prima facie case in civil law as the regulation provides now.
4.45 p.m.
The Lord Chancellor: The amendment incorporates the definitions of advice, assistance and representation, not the conditions under which they may be available. The subsection to which the noble Lord has just referred may be part of the definition; but regulations will determine the conditions under which legal aid, in the shape of advice, assistance and representation, will be available. Therefore, with great respect to the noble Lord, his point is not well taken in this situation. If a general duty of the kind that is here described is to be imposed on the Lord Chancellor, it would have to deal with this aspect of the matter and deal with it precisely.
A number of other points about the clause have already been referred to by noble Lords. For example, my noble and learned friend Lord Hailsham has pointed out that the amendment—if it has the effect I am assuming for present purposes—would impose on the Lord Chancellor a duty right across the whole spectrum of litigation and would completely destroy the distinction between actions of defamation, for which it has been generally accepted up till now that legal aid should not be available, and others. It would be a general duty in respect of all kinds of proceedings. These are some illustrations of the problem that the amendment creates. It is fundamental to the questions, with which I hope my noble friend will deal when she responds, to hear whether or not it is the intention to impose an enforceable legal obligation upon the Lord Chancellor.

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My noble friend Lord Renton, who was supported to some extent by others, asked whether consideration could be given to incorporating a statement of purpose in the Bill. If I take the explanation of the noble Lord, Lord McGregor of Durris, of the way he sees the amendment, it may be that what is sought is something of that kind. As my noble and learned friend Lord Hailsham said, the legal aid arrangements have been in existence for quite a long time and to date nobody has attempted in legislation to express the purpose of legal aid. There have always been substantial provisions for regulation-making power in legal aid statutes.
Legal aid has got along fairly well without any statement of purpose. However, I am happy to accede to any improvement in the existing legislation which clearly is an improvement. If a statement of purpose would help anyone and would be acceptable as a reasonably concise explanation of the purpose of the Bill, I would be happy to adopt it.
The difficulty of formulating a precise and appropriate clause of that kind should not be underestimated. I cannot at present guarantee that it would be possible. However, if this commends itself to the Committee I would certainly be willing to give some further thought to the possibility. No doubt if that is what the Committee had in mind, it would also give further consideration to these matters in the light of all the points that have been raised in the debate. I shall not take time from the Committee to summarise them again.
However, I should like to refer to one or two matters that have been raised. The noble Lord, Lord McGregor of Durris, and my noble friend Lady Faithfull referred to the substantial outlay in civil legal aid on matrimonial problems. I got the impression—and I hope it is right—that they have a proposal either for eliminating this aspect of expense or at least greatly reducing it. If there is a method by which that can be done, I shall be delighted to hear it. I would not be the first to wish that if money is being wasted under the existing legal aid arrangements these moneys should be used to better purpose.
The second point that I want to mention is in relation to moderate means and the various figures that have been referred to. It is perhaps an illustration of what I was trying to say earlier about "moderate means" being very imprecise that a number of figures have been described over the years. The noble Lord, Lord McGregor of Durris, referred to work of quality that was done in the Lord Chancellor's department in relation to this matter. If one uses households generally, still the best estimate that I have from the department is that 70 per cent. of households are still covered.
However, I would be the first to acknowledge—and I used to have some particular interest in matters of statistics and the like—that these figures are very difficult to attach any real weight to at all, and I am not clear that there are very good figures that can be used for this purpose, which very strongly emphasises the point that I was seeking to make. It is not a lawyers' point; it is a practical point about what one
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intends by the phrase "a person of moderate means". These are considerations which the Committee must have in mind.
My summary then is that I could not accept this amendment in any form, if the intention of it is to impose a statutory duty enforceable at law on the Lord Chancellor in anything like the terms here proposed. If, on the other hand, the intention is to seek to express, in a simple and short form, the whole purpose of the legislation, then I would certainly be willing to consider it. I doubt whether this amendment in its present form would be adequate for that, for the reasons that have been given; but I would certainly be willing to consider that and to reconsider any proposals which your Lordships might have on that line.
Lord Ackner: I apologise for arriving late and would not have spoken after the noble and learned Lord the Lord Chancellor, but for the fact that we have been sitting in the Appeal Committee. But I am wondering, in answer to his suggestion that he would consider a statement of purpose, whether the Committee has been reminded of this. The Government's response in Command Paper 9077, which contained the Government's responses to the recommendation on legal services of the Royal Commission presided over by the noble Lord, Lord Benson, had this phrase at page 10:
"The Government believes that legal aid should be available to assist those of small or moderate means by giving them the same chance to pursue or defend their legal rights as those in a position to instruct lawyers privately, provided that it has been shown that there are reasonable grounds for pursuing or defending the right in question."
That seems to be a purpose that the Government have already approved, put in writing some six or seven years ago, and I hope it is still operative.
The Lord Chancellor: Just before my noble friend replies, perhaps I may say to my noble and learned friend Lord Ackner that that comes not from a statutory provision but from a response. It may well provide material from which provision for a statutory purpose could be built. I doubt very much whether it would be adequate as stated for that purpose.
Lord Elwyn-Jones: May I ask the noble and learned Lord whether he thinks it would be possible, if the proposals of a statement of purpose is to be made, that we might have that before the Report stage of the Bill?
The Lord Chancellor: I am not sure that I particularly understand what the noble and learned Lord is asking. If I can devise a suitable statement of purpose with help such as I have available to me, then I would have in mind, if it were ready in time for the Report stage, to put it down as a proposed amendment as part of the proceedings for the Report stage. If perchance I was to have it ready very early and there was an opportunity to consider it before the Report stage, I would certainly be happy to let your Lordships have it. But I do not think that the prospect of that is sufficiently great for me to offer it, especially at this stage.
Baroness Faithfull: First, I should like to thank the noble and learned Lord the Lord Chancellor for explaining very carefully and in his very lucid way his view with regard to this amendment. Perhaps I may also thank all those who have spoken both for and against, but mostly of course for.
May I take up the point about the enforceable legal obligation? I do not know what the other supporters of the amendment have at the back of their minds, but I had never thought that this was to be an enforceable legal obligation on the Lord Chancellor. What I thought was that it was making a clear statement of purpose and guidance about this Bill. I have often listened to the plea of my noble friend Lord Renton that Bills should be understandable not only to the legal profession, but to those of us who are lay people and those of us in the country on the ground. Therefore I have thought that by putting down this amendment it would be clear to all those.
It is not only the lawyers who are concerned in this Bill; it is the people of this country, the voluntary workers of the Citizens' Advice Bureaux and other organisations that are involved in this Bill. Therefore it seemed right to me that in simple language the purpose of the Bill should be enshrined in the Bill, together with guidance. I make that as my first point.
My second point is that when people talk about moderate means and how this is to be determined, those of us who have worked on the ground have had to do this every day of our lives. The Social Security Act has to deal with people and whether they can or cannot draw social security. If you take a child into care, the parents are assessed to pay. Some of them can afford a great deal; some of them can afford nothing. You have a scale and a scale can be worked out. Therefore I am not quite sure why there is so much worry about this question of people of small and moderate means. This is perfectly possible to lay down and work out, and indeed it is in a great deal of our legislation at the moment.
I think that I am going to take issue with the noble and learned Lord, Lord Hailsham. The noble and learned Lord turned to me and said that I had never held high office of state. I understand therefore that that insinuated that there was much I did not understand in the law—
Lord Hailsham of Saint Marylebone: Let me say at once that what I said was that my noble friend was entirely innocent. I was rather intent upon the Opposition Front Bench, as I thought I had made it clear that it was rather odd that the noble and learned Lord, Lord Elwyn-Jones, had not asked for a definition of his duties having held the office of Lord Chancellor for so long, nor did his predecessor the noble and learned Lord, Lord Gardiner, and nor did his predecessor, Lord Jowitt.
5 p.m.
Baroness Faithfull: Nevertheless, I have not held high office of state; but I do, from the grass roots part of this Bill, understand what people want and need in this country. I am very grateful to the right honourable lady the Prime Minister who brought me into this House, who made the recommendation that
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I should come into this House, in order that I might put before your Lordships' House the feelings of the people of this country who are vulnerable, who are poor and who need support and help. I have to say to the Committee that they do not understand the judges, and therefore there have to be people who interpret to those people what the judges mean. Although I have not held high office of state, I stand between the judges and the vulnerable of this country.
The noble and learned Lord the Lord Chancellor asked whether we could suggest ways in which money for legal aid might be saved. A great deal of legal aid money can be saved by early counselling, advice and help given to people, such as is given by the Citizens' Advice Bureaux, counselling and the money centres. If these organisations are supported, a great deal of money would be saved because people would not need to go to lawyers. Many of those cases are helped by voluntary workers in the Citizens' Advice Bureaux and the legal aid centres. I think that that provision needs to be developed.
The Citizens' Advice Bureaux have an enormous number of offices but they do not cover the whole country. Therefore, there are areas where people must go to solicitors and must have legal aid, whereas, if a Citizens' Advice Bureau, legal centre or a money centre were available a great deal could be saved on legal costs. I have covered most of the points. I think that it was right to bring the amendment before the Committee. There must be more simplicity and understanding in our legislation. The noble and learned Lord, Lord Elwyn-Jones, mentioned that there is a precedent in the national health insurance legislation. It is not a new idea.
I stand by the amendment. I have, however, listened to what the noble and learned Lord the Lord Chancellor has said. I hope that something can be done.
The Deputy Chairman (Lord Aylestone): Is the noble Baroness withdrawing the amendment?
Baroness Faithfull: No, I shall leave the matter there.
Lord Elwyn-Jones: The noble and learned Lord the Lord Chancellor indicated—I do not know what the extent of the commitment is—that he would produce a statement of purpose and make it part of the Bill. If that is accomplished in a form that is satisfactory to the noble Baroness and myself, we may well be disposed not to take the matter further at this stage. However, I do not know how much further the noble and learned Lord can proceed on this matter, especially in the light of the intervention of the noble and learned Lord, Lord Ackner.
The Lord Chancellor: I am grateful that the precise aim of the amendment has been made clear. My noble friend has made it clear. Therefore, I shall endeavour to produce, with assistance to which I have already referred, a statement in the simplest terms that we can devise, which I hope will be comprehensible, of the purpose of the Bill. At the moment I do not go beyond that. I shall have a try at

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it. However, I cannot guarantee that it will be successful. There are difficulties in accomplishing that succinctly and in accordance with all the terms of the Bill.
It would be idle for anyone to suppose that if such a statement of purpose were incorporated it would not form part of the basis upon which the courts would construe the statute, if they ever have to. I am sure the Committee will appreciate that a great deal of care is required. That is why I am unable to give an absolute commitment that we shall be successful. As has already been pointed out, this has not been done so far and great intellects have been applied to the legal aid scheme since it was begun. I cannot claim therefore that I shall be able successfully to produce such an innovation. I undertake to do my best. In the light of that undertaking, I hope that my noble friend will feel able to withdraw the amendment.
Baroness Faithful!: In light of the undertaking just given by the noble and learned Lord the Lord Chancellor, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [The Legal Aid Board]:
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 2:
Page 3, Line 19, at end insert—
("( ) In appointing members to the Board the Lord Chancellor shall have regard to the following principles—

(a) the need for the independence of the Board;

(b) consultation with bodies representative of the consumers and providers of legal and advice services;

(c) representation from different parts of England and Wales;

(d) knowledge of the work of the courts and social conditions.").

The noble and learned Lord said: The amendment arises from the provisions in Clause 2(5) regarding the composition of the Legal Aid Board:
"Subject to subsection (6) below, the Board shall consist of no fewer than 11 and no more than 17 members appointed by the Lord Chancellor; and the Lord Chancellor shall appoint one of the members to be chairman".
Subsection (6) gives the Lord Chancellor power by order to:
"substitute, for the number … in subsection (5) … such other number as he thinks appropriate".
Subsection (7) provides:
"The Board shall include at least two solicitors appointed after consultation with the Law Society".
The amendment deals in greater detail with the board's composition than do the present provisions. The Committee will see from the amendment that it is proposed:
"In appointing members to the Board the Lord Chancellor shall have regard to the following principles"—
As has been established in the debate, there is no objection in principle to a reference to "principles". At least I hope that is so. The amendment provides that in appointing members to the board the Lord Chancellor shall have regard to:
"(a) the need for the independence of the Board".
I doubt whether that proposal will be challenged by the noble and learned Lord, or, indeed, by anyone.
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The necessity for the board to be independent, in the sense of being able to make its own decisions, is of great importance.
It is encouraging to note that when this part of the arrangements was touched upon on Second Reading, the noble and learned Lord said that he expected members of the Legal Aid Board to be independent. He went on to say:
"the type of person I shall be looking for to sit on the Legal Aid Board is not the type of person who would allow his personal independence to be compromised".—[Official Report, 15/12/87; col. 609.]
I am sure that the noble and learned Lord will not resile from that. In regard to a part of the Bill which is naked of provisions as to the board's composition in anything but the vaguest terms, we suggest that that element should be the first qualification and necessity for the board's existence and functioning.
The amendment provides that:
"in appointing members to the Board the Lord Chancellor shall have regard to"
their reliability in promoting that principle. The amendment also suggests in (b):
"consultation with bodies representative of the consumers and providers of legal and advice services".
As the noble Baroness said earlier, the workers in this field have had very great experience in these matters and can be of very great assistance. My experience, at any rate of the bodies that are functioning and of their representatives who have been so earnest and helpful to us in the preparation of this debate, is that the noble and learned Lord the Lord Chancellor would have no difficulty in finding worthy and suitable persons within that category to be members of the board. The same might be said both of the consumers associations and the providers of legal and advice services of which happily there are quite a few.
Paragraph (c) states:
"representation from different parts of England and Wales".
It is an unhappy fact that at the moment the provision of legal aid and advice is somewhat patchy. It is therefore important, if the quality and willingness to serve is sufficient among the people of this country, to find such persons in different parts of the country to enable appropriate representation to be established for the country as a whole.
Paragraph (d) states:
"knowledge of the work of the courts and social conditions".
The Members of the Committee will see that Clause 33(2) of the Bill makes a provision in regard to the advisory committee which will continue to advise the Lord Chancellor at least for the time being, That provision is:
"Appointments to the committee by the Lord Chancellor, whether by way of replacing existing members or making additional appointments, shall be made so as to secure that the committee is constituted of persons having knowledge of the work of the courts and social conditions."
So there is a clear precedent within the compass of the Bill itself to indicate that persons with:
"knowledge of the work of the courts and social conditions"
should be represented—if that is the right word—upon the board.
It is significant that the Scottish Act requires at least one member to have experience:
"of the practice and procedure of the courts".
Clearly in a field where the board will have so many quasi-judicial and directly legal matters to deal with and consider, it is desirable that someone with that degree of experience of the work of the courts and of social conditions should be appointed to the board.
One of the most moving aspects of the intervention of the noble Baroness was the way in which she showed—as some of the earlier interventions did not clearly indicate—her deep sense of sympathy with the problems with which we were endeavouring to deal. Therefore I am happy to move that this amendment be carried. Strength would be added to the set up—if that is not too unsuitable a word—of the legal aid board if men and/or women with the qualifications suggested in the amendment were appointed to the board by the noble and learned Lord the Lord Chancellor. I beg to move.
5.15 p.m.
Lord Renton: Although I am very much in favour of the next three amendments which are very specific in relation to the composition of the board, with due respect to the noble and learned Lord, Lord Elwyn-Jones, I have doubts about the practicability and need for his amendment. I shall take the points of the amendment in turn. Paragraph (a) mentions:
"the need for the independence of the Board".
In the nature of things the board will be a quango. Quangos are normally regarded as independent. Whatever the composition of the board, there may well be some kind of criticism: for instance, that "yes" men have been chosen or that it is not entirely independent. I do not think that it is other than overzealous of us to try to write that into the statute.
The amendment states in paragraph (b):
"consultation with bodies representative of the consumers and providers of legal and advice services".
I find that aspect of the amendment difficult. One of the problems of this provision would be that there is no body representative of litigants as a whole, for example of parties to divorce cases as a whole. That would give rise to some kind of difficulty.
Paragraph (c) mentions:
"representation from different parts of England and Wales".
On the face of it that proposition looks to be sound and sensible, but when we come to think it through, bearing in mind that the board may not be very large as its numbers will vary between 11 and 17, the noble and learned Lord the Lord Chancellor may be wasting a good deal of other talent that he might like to get onto the board if, in addition to selecting someone from Wales—which I am quite certain he should have—he must have someone from the South, someone from the East, the Midlands and the West as purely geographical representatives. That makes five people, plus the person from Wales which makes six out of possibly only 11 people on the board. We should not fetter the noble and learned Lord the Lord Chancellor in that way.
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Paragraph (d) of the amendment continues:
"knowledge of the work of the courts and social conditions".
Of course one hopes that the members of the board will have such knowledge but again to tie down the noble and learned Lord the Lord Chancellor to that definition may mean that he is missing the opportunity of getting somebody onto the board from, for example, industry who may not have knowledge of the courts or much knowledge of social conditions apart from those prevailing in the industries in which he has worked. My instinct is to say that that provision is a bit overzealous and that we could do without it.
Baroness Faithful!: I wish to take up a point made by the noble Lord, Lord Renton, when he talked about:
"consultation with bodies representative of the consumers".
I wish to point out to the noble Lord that in the National Health Service Act 1977 the Ministry of Health and subsequently Parliament set up the community health councils to represent consumers. As regards understanding consumers, those who are, for instance, in the social services, in the Citizens' Advice Bureaux, in fact in the statutory and the voluntary services, well understand the consumers' point of view.
Lord Renton: Perhaps I may briefly reply to the noble Baroness. Of course there are many statutory consumer councils but here we are dealing with a quite different point. Here the noble and learned Lord the Lord Chancellor is obliged to find out the people representative of certain groups. I believe that the biggest group of people who get help under the legal aid scheme are the people involved in divorce cases. Should the noble and learned Lord the Lord Chancellor really be obliged to ferret out a suitable representative of such people?
Lord Meston: I support the amendment. I hope that the noble and learned Lord the Lord Chancellor does not feel that the duty, such as it is, which would be imposed on him by the amendment would be too great a burden.
With respect to the noble Lord, Lord Renton, the amendment does not direct the Lord Chancellor absolutely to employ representatives from different parts of England and Wales; it requires him to have regard to the need for representation from different parts of England and Wales. The noble and learned Lord the Lord Chancellor will be aware, from our Second Reading debate if from nothing else, that there is great concern that the board should be as independent and as broadly based as possible. The amendment does little more than suggest in express terms what the noble and learned Lord indicated at Second Reading that he will seek to achieve in any event. To that end, I suggest that the amendment does no harm and may do some good.
The Lord Chancellor: As the noble Lord, Lord Meston, has just said, I indicated at Second Reading the sort of search I would have in mind in trying to get people for the board. As many Members of the

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Committee will know, on the assumption that the legislation may progress I have been consulting widely about possible candidates for board membership. I have contacted the local authority associations, bodies representing advice agencies and consumer associations generally, as well as many other organisations which have or may have an interest in legal services. I am most grateful to all of them for the help that they have given.
It is not a particularly easy task to get suitable people for the board. We have searched as widely as possible. My aim is to appoint people who are prepared and able to dedicate themselves to improving the management and operation of legal aid administration in all its aspects.
I understand the spirit of the proposed amendment perfectly well. It selects some principles, as it says, to be considered. In so far as it expresses those matters, I think it would be necessary at the very least to indicate that those are some principles among others to be considered. However, there are difficulties with the phraseology which I should like to mention.
It is absolutely clear that we want people of calibre. The Legal Aid Advisory Committee has been commended by more than one of the Members of the Committee who sit on the Opposition Front Bench for its independence. However, there is no statutory provision—and never has been, so far as I know—that the people appointed to the Legal Aid Advisory Committee should be independent. In a sense, it is a difficult concept to put into a statute, which is a similar sort of point to one I made earlier. One would need to ask. "Independent of whom?". Independence is not an abstract notion in its application; the board must be independent of somebody. Members of the Government will not be appointed to the board; I can assure the Committee of that. The people who are appointed to the board will not be members of the Government and they will he people of calibre.
I find that part of the wording of the amendment difficult to accept as part of a statute. So far as I know—I am open to the result of researches—a phrase of that kind has not appeared in statutory provisions before. Nonetheless, the councils and boards who have been appointed have been of calibre. There is an example which is near to home in the shape of the Legal Aid Advisory Committee, as I have said. As the noble and learned Lord, Lord Elwyn-Jones, has pointed out, there is a re-enactment of the provision for that committee in the Bill in the passage to which he drew attention and from which paragraph (d) comes. Therefore, I feel that it was rather inappropriate to have a phrase of that kind. I am perfectly happy to have a provision concerning consultation so long as it is seen not to be the only consultation that I should have.
This amendment has a slightly heterogeneous aspect about it. It is a mixture, if I may put it that way without seeking to be offensive to the drafting. It is confusing to know whether it is the personal qualities of the people or the method by which they are arrived at which is contemplated. One jumps from one to the other. I am sure that that is a matter which we can adjust together in due course.
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As I say, I have no particular objection to the proposed paragraph (b) if the Committee thinks that something of that sort is necessary. I believe that any Lord Chancellor will wish to do that in any case. However, if the Committee believes it will help, I have no objection to it.
As regards representation from different parts of England and Wales, that is slightly more difficult. Obviously I should very much like to have people who really know about conditions in Wales and all parts of England. However, the board is going to meet regularly and we do not wish to have people who have to spend all their time travelling from the remotest parts of England. That requirement is therefore just a bit difficult in practice. The Committee may take it that I shall try to get people who know about particular conditions throughout England and Wales, so far as that is possible.
I am also anxious that the people appointed to the board should include people with knowledge of the work of the courts and social conditions. We already have a provision for two solicitors on the board. I suppose that one may assume, with a fair degree of confidence, that they will be people with knowledge of the work of the courts and probably social conditions as well. That is expressly secured already. I think that it will be necessary, for example, not to leave out of account the need for expertise on management issues. One of the main responsibilities of the board is to provide management machinery. Concern has been expressed in some quarters that the board may be overloaded with accountants. I do not know why that should be a particularly feared section of the professional community. However, expertise in management is certainly required.
As regards the amendment as a whole, I am not particularly happy with the way it is expressed at present. Certain of the matters covered by it are perfectly acceptable if the Committee thinks it necessary to put those into the Bill. However, I should have thought that one could leave them to the good sense of the Lord Chancellor.
There is one drafting point of a slightly different kind which I should like to make. It concerns the use of the word "representation". I want the board to be a unit containing all sorts of knowledge. I think it would be inadvisable if, for example, the solicitor members of the board regarded themselves as representative of solicitors. They should be sitting on the board as part of it and seeking with their colleagues to attain a good and efficient legal aid system. However, I am sure that the solicitors who will be appointed will be of that sort. I do not think that the noble and learned Lord meant for the word "representation" to have that connotation in the circumstances of the amendment, but the fact that he used that word brings me to make that point, with which I hope the Committee will agree. I do not know that there is much between us in principle. I am open to any suggestions the noble and learned Lord may have as to how the matter may be progressed.
Lord Elwyn-Jones: The Committee will be grateful to the noble and learned Lord the Lord Chancellor for his sympathetic response to what was intended as a helpful suggestion. We are well aware of the

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considerable efforts he has been making in the confident expectation that in due course this ewe lamb, as I think the noble and learned Lord, Lord Hailsham, once described one of his projects—
Lord Hailsham of Saint Marylebone: It was one of the then Attorney-General's projects. The Attorney-General was my noble and learned friend Lord Havers, and it was the Contempt of Court Bill.
Lord Elwyn-Jones: It was his ewe lamb; in which case he may well be regretting the birth of that lamb. However, I must not distract myself from what I am seeking to say.
Clearly, we sympathise with the approach towards the membership indicated by the noble and learned Lord. I urge that he should not be discouraged by the prospect of coming from Wales as a circuiteer. As a circuiteer of the Wales and Chester circuit, I know the routes well. I know that now there is the Severn Bridge, unlike the old days, and trains that run nearly ten times as fast. However, in the light of the assurances that the noble and learned Lord has given I ask leave to withdraw Amendment No. 2.
Amendment, by leave, withdrawn.
5.30 p.m.
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No. 3:
Page 3, line 24, after ("include") insert ("(a)").
The noble and learned Lord said: With the agreement of the Committee, I should like to group with Amendment No. 3 Amendments Nos. 4, 5, 6 and 7. Amendment No. 3 is a paving amendment for Amendment No. 7, which seeks to give effect to what the noble Lord, Lord Renton, indicated was an idea that he would accept in principle, although he did not commit himself to any specific wording of the amendment.
Lord Simon of Glaisdale: I wonder whether I may interrupt the noble and learned Lord. I have not had a list of groupings. Did he say that he was taking this amendment with Amendments Nos. 4, 5 and 6?
Lord Silkin of Dulwich: And Amendment No. 7. The list suggests grouping Amendments Nos. 3, 4, 5, 6 and 7, with which I find myself in agreement. Indeed, it is convenient that before Amendments Nos. 4, 5 and 6 are taken Amendment No. 7 should be considered because they are essentially amendments to the clause and affect Amendment No. 7.
Amendment No. 7 seeks to put in statutory form requirements which follow the pattern of consultation to which the noble and learned Lord the Lord Chancellor referred. He has been having widespread consultations, which we very much appreciate, as to the persons to be appointed to the board. The amendment is also consistent with assurances that were given to the Law Society by his immediate predecessor last July, and also with Scottish legislation. The noble and learned Lord the Lord Chancellor is to be congratulated on the width of the consultation that he has undertaken on the
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subject of the membership of the board since the functions of the board are of crucial importance. We hope and expect that the first board, which I understand is to be appointed in the near future, will be entirely consistent with the provisions of this amendment.
We are particularly concerned that the board should contain knowledge of conditions throughout the country—I hope that in putting it that way I shall have the assent of the noble and learned Lord—which includes knowledge of the procedure and practice of the courts and of social conditions, as well as the experience of those providing advice of a general character and those who can speak with knowledge for those sections of society likely to be consumers of legal services. I hope that those general principles are fully acceptable.
If the amendment is accepted, out of a maximum of 17 members the board will include at least three members, possibly four, who are either members of the legal profession or holders of knowledge of court procedure. It would include at least three others with special experience of a more general character earmarked by the amendment. Thus the amendment proposes to earmark what would be a minority of the 17 members of the board, if that is the eventual total, leaving a majority to accommodate the stated intention of the Government to include those with experience in personnel, finance and management, which we accept is a matter of great importance.
Our claims to earmark categories are extremely moderate. It is apparent from the amendments on the Marshalled List that the legal profession would have preferred a larger representation, but we have sought to avoid overweighting the board with lawyers, particularly bearing in mind that the numbers in the earmarked categories are minimum numbers. We say that it should have at least that number, and we leave it open to the noble and learned Lord to appoint more if he thinks it desirable.
It may be asked: why not leave it entirely to the noble and learned Lord the Lord Chancellor who understands what is required? I agree entirely that he does, but to that question there are two replies. First, the inclusion of those ear-marked categories in the Bill strengthens the hand of the noble and learned Lord against those who may wish to press for a larger majority of people with business experience who may be less concerned with the requirements of the consumers of legal services than with the cost of supplying those services.
Secondly, as the noble and learned Lord the Lord Chancellor said in the Second Reading debate, this Bill is intended to set the pattern of the legal aid system for the remainder of the century. To incorporate these requirements in the Bill would indicate to the noble and learned Lord's successors how Parliament in 1988 saw that pattern for the next decade or longer and how they thought it should be set.
This amendment is supported by the Law Society, subject to the outcome with regard to Amendment No. 5. It is certainly supported in principle by the Law Society. It is supported by the National Association of CABs, the National Consumer

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Council and a number of other bodies representative of those working in this field. Legal aid is recognised today as being an essential public service. This amendment will help to ensure that that principle remains predominant as we enter the new legal aid system that will take us into the 21st century. I beg to move.
Lord Meston: Perhaps it will assist at this stage if I indicate that, in the expectation that Amendment No. 7 will be moved, as well as Amendment No. 3, and in the hope that they will find some support, I do not intend to move Amendments Nos. 4 and 6 at this stage. I hope also that, as Amendment No. 7 provides, a place will be found on the board, and indeed in the Bill, for a barrister member.
As regards Amendment No. 5, I do not believe that the Bar would wish to enter into a numerical game with the Law Society as to membership of the board. I understand the reasons for the amendment, which no doubt will be expressed more fully by the noble Lord, Lord Mishcon, in due course.
I suggest it is correct that the Bar should be represented, and so should others, to ensure the independence of the board, and the width of representation of the membership of the board, without being delegates as such. As I understand it, the wording of Amendment No. 7 echoes, at least in part, the Scottish legislation, and for that reason must have something to be said for it. I am a little intrigued by the last category; paragraph (0 in Amendment No. 7 states:
"at least one other person having experience of the procedure and practice of the courts".
I do not know who is meant to be involved. I can think of a number of crooks or vexatious litigants who would make thoroughly undesirable candidates.
Lord Renton: I am rather disappointed with the speech of the noble Lord, Lord Meston. As I said at Second Reading, if we are to have two solicitors on this board—and that is already stated in the Bill—I should have thought that there should be at least two barristers. Under the present scheme the Law Society's administering committee has always had two distinguished, experienced members of the Bar serving on it, and they have found time to do so.
When I saw the noble Lord's Amendment No. 4, I welcomed it. I should have been prepared to support Amendment No. 5 which makes provision to increase from two to three the number of solicitors not merely because there are 10 times as many solicitors as barristers in this country, but because the solicitors will have to play, as they have done in the past, an even greater part numerically than the Bar in administering the scheme. It seems to me that there should be that representation. We would have that provision if Amendments Nos. 4 and 5 were accepted.
I think that Amendment No. 6 is sensible. As the noble and learned Lord the Lord Chancellor will be consulting the Law Society about the appointment of solicitors, so should the General Council of the Bar he consulted on the appointment of members of the Bar.
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I do not understand the comment of the noble Lord, Lord Meston, that we are not in the numbers game with solicitors. I had understood that the General Council of the Bar wanted to have two members on the board. It is preferable that we should accept Amendments Nos. 4, 5 and 6. Indeed, I should be prepared to move them if necessary, as one is entitled to do.
I do not have any great objection to Amendment No. 7 but I do not see the need for paragraph (6) of Amendment No. 7 if we accept Amendments Nos. 4 and 6. If we were to accept Amendments Nos. 4 and 5, I am doubtful whether we should need paragraph (0 of Amendment No. 7. We know that there are people other than barristers and solicitors who have experience of the procedure and practice of the courts. There are barristers' clerks, legal executives and so on, who are not necessarily qualified solicitors. I do not know whether those are the sort of people that the noble and learned Lord, Lord Silkin, has in mind in Amendment No. 7.
Lord Silkin of Dulwich: I am grateful to the noble Lord. Of course there is a wide range of people who have experience of the procedure and practice of the courts in addition to barristers' clerks and solicitors' clerks. There are those who have years of experience of working in them in one form or another.
Lord Renton: Yes. There are the press reporters who report legal cases. There are the police. The examples are innumerable. However, this relatively small, independent legal aid body, which must be highly respected, must have people who understand and have had professional experience of the working of the courts. That is why I say it is better that we should accept Amendments Nos. 4, 5 and 6.
5.45 p.m.
Lord Denning: I do not like Amendment No. 7. I think that the matter should be left to the noble and learned Lord the Lord Chancellor in accordance with the general provision. What about the legal executives? What about the magistrates' clerks, the magistrates' associates, and so on? I would not tie the hands of noble and learned Lord the Lord Chancellor to "at least" one of those. There may not be a suitable person ready and available to take up the task.
I prefer Amendments Nos. 4 and 6 for this reason. In obtaining legal aid the solicitors play a very important part in putting the case before the legal aid committee as to whether advice should be given. Perhaps the most important aspect is when the barrister is asked to advise whether there is a reasonable case to proceed with. The legal aid committees go by that barrister's advice 99 times out of 100. The barristers therefore play a most important part in the provision of legal aid.
In criminal cases also, where advice is given as to whether or not to appeal, the barrister's advice is accepted. In those circumstances I see no reason why there should be any differentiation between the number of solicitors and the number of barristers. If

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there are to be two solicitors then there should be two barristers. I suggest that that is the only fetter we should put upon the noble and learned Lord the Lord Chancellor when establishing this board.
Lord Boyd-Carpenter: I very much agree with the noble and learned Lord, Lord Denning, that this somewhat complicated amendment would leave the noble and learned Lord the Lord Chancellor with quite considerable difficulties of selection, and, if I may say so with respect, a rather odd collection of people.
Paragraph (c) provides for:
"at least one member after consultation with the appropriate local authority associations".
There are a great many local authority associations. Which of them are appropriate in this respect is a very open question. They each and all of them regard themselves as the only appropriate body for consultation about almost everything. The noble and learned Lord the Lord Chancellor would therefore be in great trouble if he consulted one and not the others. None of them would recommend the same person. The process seems fairly useless because this does not seem to be a matter which concerns local authorities and their associations.
The most extraordinary provision, paragraph (d), provides for:
"at least one member after consultation with the providers of general advice to members of the public".
Who are they? I suppose the press would regard itself as the most important provider of general information to the public. It would also be challenged by the broadcasting media. It is an extraordinary expression to use. It is no doubt intended to mean some worthy collection of people who work in organisations. However, as expressed and as it is proposed to put into the law, the ordinary meaning of the phrase:
"the providers of general advice to members of the public"
seems to suggest those who provide a great deal of advice to the public; that is to say, our friends in the press.
Paragraph (e) provides for:
"at least one member after consultation with the representatives of consumers of legal services".
Who on earth are the consumers of legal services?
Lord Hailsham of Saint Marylebone: Persons charged with crime!
Lord Boyd-Carpenter: As my noble and learned friend Lord Hailsham suggests, they are either those who committed serious crimes and who we know, as a result of the activities of the parole board, will soon be at liberty and therefore available for appointment to this board; or, if it refers to the legal aid scheme in particular, as the great volume of the work done is, as I understand it, divorce, the person presumably most qualified would be the member of the public who had had the most divorces. That is not perhaps a proposal which would appeal to the right reverend Prelates on the Bishops' Bench!
Lord Hailsham of Saint Marylebone: I do not know. We are all broadminded nowadays!
Lord Boyd-Carpenter: It seems to me that the amendment is largely an organised or perhaps a disorganised nonsense, and I hope my noble and learned friend the Lord Chancellor, with his habitual courtesy, will dismiss it.
Lord Hailsham of Saint Marylebone: I do not want to intrude too much into these debates, for very obvious reasons, but at an earlier stage in the year I gave some thought to this matter. I fully agree with the Opposition Front Bench and those who proposed the various amendments that the composition of the board must be subject to parliamentary scrutiny. The Lord Chancellor must be very clearly accountable to Parliament and continuously accountable to Parliament for his appointments from time to time. But having said that, I doubt whether the sort of trade unionism and other speeches we have heard will assist him in the discharge of his duties.
The first thing we have to remember is that this is an executive board and not an advisory board. It must not mix itself up with the Legal Aid Advisory Committee, which has done very useful work but must not have its work duplicated by the board. This is the board that will take over the work of the executive committees of the legal profession all over the country, and certain of the functions of the Lord Chancellor. Members must therefore be chosen for their executive ability. The Lord Chancellor should consider that first of all.
Secondly, there is a legal principle which will be known to the noble and learned Lord who proposed the amendment, Lord Silkin of Dulwichi—expressio unius est exclusio alterius. The effect of putting all these things in will tie the hand of the Lord Chancellor and prevent him from appointing numbers of otherwise suitable people, because he will say "Oh, but there is only one barrister so far", or "There are only one-and-a-half solicitors". The result is that there will be no room for some desirable expert in management on the board, even if the full number of 17 is provided.
I endorse what my noble friend Lord Boyd-Carpenter said about consumers of legal services. I was not altogether jocular when I asked, "Who are the consumers of legal services?" First, as he said, there are people involved in matrimonial disputes. Secondly, there are people who are run over by motor cars and those who are sued by them. Thirdly, there are the persons who are charged with crimes. They are the consumers of legal services. There is no representative body of these rather heterogenous characters for the Lord Chancellor to consult. Even the noble Baroness, Lady Burton of Coventry, who is such a protagonist of consumers, cannot represent the consumers of legal services. Even my noble friend Lady Faithfull cannot do that.
I back my noble and learned friend Lord Denning. Obviously Parliament will have to scrutinise the Lord Chancellor, and the Lord Chancellor must be heavily accountable to Parliament for what he does. But I wonder whether it is wise to put all these characters together defending the rights of solicitors, barristers,

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local authority associations and advisory bodies. That will give us a board of the great and the good but who represent nobody except one another.
Lord Renton: Can my noble and learned friend say whether he considers the fact that the Bill provides that the board shall include at least two solicitors would prevent the Lord Chancellor from also appointing two barristers?
Lord Hailsham of Saint Marylebone: It depends what vacancies there are. On the first appointment it would not matter, but if one man on the board were to die that might prevent the appointment of somebody who was thought suitable. For example, if one of the two solicitors were to die or be run over by a motor car the Lord Chancellor would have to appoint another solicitor. Therefore his hands would be very heavily tied. I agree with the principle of accountability and parliamentary supervision, but I doubt whether the principle of definition is not merely an example of quango-like trade unionism.
The Lord Chancellor: The problem of securing the right people to be members of the Legal Aid Board is not altogether an easy one. In response to the earlier amendment I sought to indicate the kind of Legal Aid Board that I have in mind. I understood from the reaction from all sides of the Committee that, generally speaking, noble Lords were in agreement with that.
It has not been particularly easy on consultation to identify a great number of people who would be entirely suitable. I should like to begin by dealing with the position about the Bar. I think I am right in saying that it was the original intention of my noble and learned friend Lord Hailsham—whose interventions in these debates I greatly welcome—to have in the statute a provision for two barristers as well as two solicitors. The difficulty that has arisen as a result of trying to work out the details of the scheme is that the board will be a working board in the sense that there is a lot for it to do. It is intended that the members of the board should take a close interest in aspects of the work of the board. The board may think it wise to conduct its business by dividing itself so that parts of its operation will be subject to particular administrative scrutiny by some members of the board with special interests.
We have agreed, with the advice of my officials and with consideration of the nature of the administration of the Law Society at present, that the hoard's work would be quite demanding, particularly in the early stages. Up to now there has been difficulty in being certain that suitable members of the Bar would be able to participate in the work of the board on the basis at present estimated. My officials, as well as myself, have been discussing this matter. We have corresponded with the chairman of the Bar and we have written to the past chairman about this point.
It has been put on record that practising barristers, or barristers recently in practice, should be appointed to the board. We agree that that is highly desirable. Because we recognise the problems in finding a practising barrister able to give two days a week, we have agreed to reduce the commitment, if that could
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be done, to one day to try to find a good candidate. But there is a problem even about that. This is why at present I am not anxious to commit myself in the statute to a particular level of barrister participation. If we can find barristers willing to give the necessary commitment, we shall embrace that opportunity eagerly.
Lord Denning: Are the members of the board to be paid? If a barrister gives his time to this, will he be paid or will he do it free?
The Lord Chancellor: There is no question of people being invited to carry out this work free. They will receive remuneration on a stated basis, but, as the noble and learned Lord knows, there are different levels of remuneration according to the different work that people may be doing. I need not go into the detail of that just now. No doubt we shall hear more about that later, and we have perhaps read something about it recently as well. All I need to say in answer to the noble and learned Lord is that it is anticipated that members of the board will be paid for the work they do.
Notwithstanding that, it is not clear at the present time that we shall be able to find two barristers who are able to participate as fully as we should like. It may be possible to solve the problem, and I hope that it will be, but the Committee must appreciate the fact that unless it is clear that the problem can be solved, and solved for all time, it is unwise to put the matter on the face of the Bill. It would mean that if that point cannot be met, then we cannot operate at all and primary legislation would be required to alter the situation. It is a severe practical difficulty.
In principle, I am in favour of the amendment and would welcome two suitable barristers on to the board. That is the main point that I should like to raise in relation to the general issue—
6 p.m.
Lord Renton: I hope that my noble and learned friend will forgive my interruption. I should like to place on record the fact that the advice that he has received from the Bar has changed from the advice that I was given at the time of the Second Reading. I accept what he has said.
The Lord Chancellor: This is a changing situation. We have correspondence with the Bar and have not yet received a reply. This is an interim stage and I should not like to prejudice any hope of securing suitable members of the Bar. However, if we can achieve it, we certainly shall.
I do not wish to include the amendment at the moment only for the reason that I have given. If the situation changes, we shall certainly reconsider the matter. That of course would be after consultation with the general council of the Bar, and that is what we are trying to carry out at the moment.
I envisage that a board will be appointed after consultation with a large variety of people. I do not think that it would be right to state that it should be at least one member after consultation with the appropriate local authority associations. In so far as

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there are local authority associations which are appropriate (I take the point made by my noble friend Lord Boyd-Carpenter) they will be consulted before anyone is appointed. If a vacancy occurs on the board after it is appointed and running, we should not want to restrict consultation to particular groups at that stage. I think that it is a mistake to link a particular place on the board with a particular consultation. We shall try to have wide consultation, as a result of which I hope that we shall obtain a board whose members will cover separately (or more than one member will cover more than one aspect) the various concerns that underlie the amendment. I do not wish to go into the detail of those. Comment has been made about the possible people who may be regarded as covered by the various headings. As have other noble Lords, the noble Lord, Lord Meston, has speculated on what is intended by paragraph (f). However, I think that it would be a mistake to try to achieve it in this way.
If any provision about consultation is to be included, I think that the correct form is a general consultation provision prior to all appointments. The appointments should then be left free, subject to the system of appointments that has already been included (unless any member of the Committee suggests that that should be deleted, though I do not think that that has been suggested). Subject to that, the consultation process should yield as good a board as we can achieve with wide interests and experience.
Lord Silkin of Dulwich: I found that to be an extremely helpful reply, as have been the previous ones. We must look at the lines on which the noble and learned Lord proposed that the difficulty might be dealt with. It may be that we on this side of the Committee, together with the noble and learned Lord, will be able to work out the most suitable wording.
If necessary, we can look at the matter at a later stage, but I wonder whether what the noble and learned Lord said about the difficulty regarding the Bar, which I have always fully understood, would apply to the form of the amendment in subsection (7)(b) which specifically provides for one member. We ask that because we were aware not only of the difference between the total numbers of solicitors and barristers but also of the problem that the Bar would have in finding a substantial number or even more than one member. We understand that the Bar would have no difficulty in finding one member. However, between now and the next stage of the Bill the noble and learned Lord might ponder over the question of whether it is desirable that in the Bill there should be specific reference to solicitors and no reference to barristers. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Meston Lord Meston had given notice of his intention to move Amendment No. 4:
Page 3, line 24, after ("least") insert ("two barristers and").
The noble Lord said: I do not wish to move this amendment.
Lord Renton: One is entitled to move the amendment in another Member's name. During an earlier discussion, I said that I was proposing to move this amendment if it was not moved. However, in view of what the noble and learned Lord the Lord Chancellor has said (which indicates that he is now in discussion with the Bar Council, and that its attitude has changed since Second Reading) I do not propose to take the matter any further.
[Amendment No. 4 not moved.]
Lord Mishcon Lord Mishcon moved Amendment No. 5:
Page 3, line 24, leave out ("two") and insert ("three").
The noble Lord said: At the outset I should like to make clear the fact that there is no competition whatever between my own side of the profession and the Bar as to how many representatives are on the board. It is not a matter of prestige; it is a matter of serving the nation. In that context, on behalf of the Law Society, I should like to remind the Committee—I am sure that I do not have to remind many Members—that the Law Society has been administering the legal aid scheme since 1949. It has had a full-time legal aid committee dealing with the matter; it has had officers dealing with the matter. We are talking of 40 years of expertise, quite apart from administering approximately 80 per cent. of the legal aid fund in respect of solicitors. It is because the Law Society would wish to put that expertise at the nation's disposal that at least three members of the solicitors' profession should be on the board.
In view of the way in which I commenced my remarks, I should like to say that the Law Society completely supports the fact that the Bar, with its 5,000 members— I make no point of the fact that that is one-tenth of the number of practising solicitors—
should be represented. I was delighted to hear that the noble and learned Lord the Lord Chancellor is hearing sounds from the Bar Council that such representations should be possible. I beg to move.
The Lord Chancellor: I should like to say how much I appreciate the work of the Law Society in administering this scheme. I am sure that that is true of those who have been my predecessors since the legal aid scheme was introduced, and those noble and learned Lords who are here have indicated so to me. It has been a great service to the nation and the legal aid board, when established, will have a great deal to learn from the Society. I am sure that the experience gained over the past 40 years will be immensely valuable.
For that reason alone I should be perfectly content that the Bill should continue to have a provision expressly reserving two places for solicitors, even if we do not ultimately amend it to include any express provision in respect of the Bar. On the other hand, I believe that the more restrictions one has, the more difficult it may be to secure the best possible board. I hope that the noble Lord might feel that we have; ought genuinely not only to pay tribute to the past Put also to express confidence in the contribution that the solicitor branch of the profession will give us in he future by having the figure of two. I hope that he nay feel that that is sufficient for the present.
Lord Mishcon: I have some difficulty with the very kind words of the noble and learned Lord the Lord Chancellor. He paid tribute to the experience and what has been done for the nation. I am sure that the Law Society, which has heard that expression of appreciation from him before and was very grateful for it, will be grateful for it now. I only hope that that experience and that appreciation will be remembered over the years. It is experience accumulated over 39 years. I feel, therefore, if I may say so respectfully to the noble and learned Lord, that to have a fixture—if I may put it that way—of at least three, which is not very many but which will give that experience over the years, would be guidance for his successors; he needs no guidance himself. Otherwise, I would have been completely content with the noble and learned Lord's assurance that he would be looking at a figure similar to three or possibly more, dependent on how he finds his experience with the rest of the board. I should be content with that verbal assurance.
However, I am looking forward to the future and I believe that a profession which represents some 40,000-odd practising members, and is doing the main part of this, ought to have its experience available to the board in a membership of at least more than two. I wonder if the noble and learned Lord would at least indicate that he will very seriously consider the alteration from two to three. I certainly do not wish to test the feeling of the Committee but I hope that he could at least say that he will consider the matter favourably.
The Lord Chancellor: The invitation of the noble Lord is very enticing, but I have considered this fairly carefully and I do not feel able to depart from the suggestion that the Bill should be left as it stands as an acknowledgement of the position. Of course, as I pointed out, the Bill says "at least two" and we are in no way bound to restrict it to that. I feel that the provision of "at least two" is sufficient and I am not in favour of increasing the number to three on the information and consideration which I have been able to give to this matter.
Lord Mishcon: There are so many important amendments and matters of principle coming before this Committee that I do not believe that I should take up time at this stage in testing the feeling of the Committee or taking the matter further. Therefore, I beg leave to withdraw the amendment with liberty to apply at further stages of the Bill if I see fit.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 and 7 not moved.]
6.15 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 8:
Page 3, line 26, leave out subsection (8) and insert—
("(8) The powers conferred by subsections (4) and (6) above are exercisable by statutory instrument which shall not come into force unless or until approved by a resolution of each House of Parliament.").
The noble Lord said: This is one of those occasions when one reminds the Committee of the procedure, and one does it very respectfully. The negative procedure for dealing with matters or orders and statutory instruments is not one favourable to the
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House of Lords. We have a tradition that we never vote upon such matters. We are, our course, bound by the fact that we cannot amend and in those circumstances we merely stand in the face of the negative procedure by being able to make speeches and by feeling somewhat powerless.
In dealing with the matter which is raised on page 3, line 26, we therefore ask for leave to omit subsection (8) and to insert there quite clearly that:
"The powers conferred by subsections (4) and (6)"—
which are very important,
"are exercisable by statutory instrument which shall not come into force unless approved"—
and that is, or course, an affirmative resolution,
"by a resolution of each House of Parliament".
I beg to move.
Lord Simon of Glaisdale: Constitutionally, this seems to me one of the most important matters that the Committee has to consider. A great deal under this Bill is carried out by regulations. We have come to accommodate that although it inhibits to a great extent the regulatory function of the Houses of Parliament and, in particular, it inhibits the function of this House as a revising Chamber. Even if this amendment is accepted, there is no possibility of amending the regulations that are laid. All that can be done is discussion and, if opinion is hostile enough, the regulations are taken away, redrafted and relaid; but at any rate this goes part of the way.
As the noble Lord, Lord Mishcon, said, it particularly impinges on the responsibilities of this House as a revising Chamber. That is not purely a negative expression but it is the constitutional duty of this House. Unless this House can carry it out, it is not carried out at all. One must face the fact that under our present electoral system, this House, by its composition, reflects more accurately the totality of political opinion in the country than any other institution.
In my respectful submission, what is proposed by the noble Lord, Lord Mishcon, is the very minimum that is acceptable. The House will then have an opportunity of seeing the regulations, discussing them. If they are unsatisfactory, it is true they cannot be amended. But they can be met with such hostility as has happened in the past, that they are taken away and redrafted in view of the opinion expressed.
Lord Ackner: Having had the privilege and pleasure of hearing my noble and learned friend Lord Hailsham say, in regard to Amendment No. 7, that the noble and learned Lord the Lord Chancellor was heavily accountable—a comment he repeated more than once—to Parliament in the choice of the members of the board, I too, and for that reason, support the amendment.
Lord Hailsham of Saint Marylebone: Before my noble and learned friend replies I wish to say this, and I shall be very interested to hear his reply. I should have thought that there was a manifest difference between the powers given to him by subsection (8) and the powers exercised by him under subsection (6). I should have thought that the maximum and the

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minimum numbers of the board were a typical example of what ought to be done by negative resolution. Unless one complained of the maximum being raised to 18 or 19 or the minimum reduced to nine or 10, one would really let the matter go on the nod.
The other powers are positive and some of them are analogous to powers which are already dealt with by affirmative resolution and not by negative resolution. I believe there is a distinction between the two subsections.
Lord Elwyn-Jones: This amendment refers to an important provision in the Bill; namely, the functions to be exercised by the board. In subsection (8) the powers that are relevant are those conferred by subsections (4) and (6). Subsection (4) reads:
"does not confer on the board any of the following functions unless the Lord Chancellor so directs by order and then only to the extent specified in the order".
It goes to the nature of the functions that are exercisable by the board. I should have thought that that was a matter of considerable importance 'and might well go to issues of principle. Subsection (6) relates to the number that would perhaps have been appropriate to be dealt with by negative machinery and formulation. On the former, one ought to draw the line here as this refers to a matter of principle.
I am most grateful to the noble and learned Lord the Lord Chancellor for the letter he sent me about this matter. I appreciate the difficulties. It may be desirable to look carefully as between one clause and another to see which in particular merits the full-dress procedure of full debate, because there is a very great sense of frustration when we have merely a negative resolution. The Lord Chancellor might therefore consider whether this is an appropriate clause for making the wider provision available.
The Lord Chancellor: I am grateful to the noble and learned Lord, Lord Elwyn-Jones, for what he has said, and also to the other noble and learned Lords who have spoken; namely, my noble and learned friends Lord Hailsham, Lord Ackner and Lord Simon of Glaisdale.
On Second Reading, I indicated in a reply to one of the main points made by the noble and learned Lord, Lord Elwyn-Jones, that I thought there was room for considering the particular powers to see which was the appropriate method. I entirely adhere to that. I think it would be a waste of parliamentary time to have an overall view of this. I think it is best that we look at each of these in particular.
In this case I think that the changes which would be wrought by the exercise of power under subsection (4) would be very important changes. They would be extensions of the first power of the board. We are hoping to set up the board to take over the civil legal aid activities of the Law Society. Then, as matters develop, we may be able to extend. This power is the power for extension of these functions of the board. Therefore I believe that if it is operated subsection (4) is an important change and accordingly I think that
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it would be right to accept the amendment in so far as it deals with that aspect.
On the other hand—my noble and learned friend Lord Hailsham and the noble and learned Lord, Lord Elwyn-Jones, were inclined to the same view—subsection (6) is a mere change of number. If it was contentious it could readily be raised under the negative procedure. No explanation would be needed as one would be under subsection (4). At present I am disposed to accept the view that the powers in subsection (4) should be under the affirmative procedure and those in subsection (6) should be under the negative procedure. In general terms this principle is the right principle to apply in dealing with this important matter. I agree entirely that it is an important constitutional matter which I should like to get right. In applying it to this particular case, that is the way in which it should be done.
In the light of that, I hope that the noble Lord feels able to withdraw the amendment on the understanding that we shall consider introducing an amendment to have that effect.
Lord Mishcon: I am sure we are all grateful to the noble and learned Lord the Lord Chancellor for what he said, and especially for his assurance that in each and every case we shall be looking to see whether the negative or the positive procedure will be appropriate. In addition, we shall be looking at things on their merits. In view of the kind assurance from the noble and learned Lord that there will be an amendment at Report stage which will deal with this matter in the way that he said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 [Powers of the Board]:
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No. 9:
Page 3, line 38, leave out from ("different") to ("fields") in line 39.
The noble and learned Lord said: This is not so weighty an amendment as some of the others which we have discussed previously. It is of a probing character. The provision in Clause 3 of the Bill is to the effect that the board may do various things. It goes on to say:
"advice, assistance and representation may be provided in different ways in different areas in England and Wales and in different ways in different fields of law".
One understands entirely that there are different conditions in different parts of the country. At the moment, what is not abundantly clear to me is why the powers of the board in relation to advice, assistance and representation should differ according to the areas in England and Wales that are dealt with. They may wish to use their powers in different ways in different parts of the country. If that is what it means then why should their powers be different according to the area of the country which is dealt with? It is simply to obtain an explanation that this amendment has been tabled. I beg to move.
Lord Renton: Part of the answer to the last point raised by the noble and learned Lord is that one could have different areas which deal with divorce and other civil matters. The only point I wish to put to my noble and learned friend is that there are already existing areas and sub-areas for legal aid. Presumably, free scope is given to the board to change those areas and to have an entirely different arrangement. Perhaps the noble and learned Lord would say what he has in mind.
The Lord Chancellor: I am not absolutely certain that I understand precisely the amendment which the noble and learned Lord is proposing. If I am not mistaken, there is more than one "different" in line 38. I am not sure whether it is the first or the second one from which he means to start the deletion.
Lord Silkin of Dulwich: Perhaps it would help if I read out the wording of the subsection if the amendment were made. It would read:
"and advice, assistance and representation may be provided in different ways in different fields of law".
6.30 p.m.
The Lord Chancellor: I am very much obliged to the noble and learned Lord. We are including the provision which he seeks to probe because we think that it may be wise to retain flexibility in this matter; the social conditions and conditions in which legal advice is sought may be different in different parts of England and Wales. We fear that unless it is made plain that different arrangements could be made in various parts of the country to take account of those differences, it may be held to be illegal to make such differentiation.
In a sense, this power is intended to complement the sort of idea that was contemplated in the earlier amendments about knowledge of England and Wales as a whole. The conditions may well be different in different parts of England and Wales, and it seems appropriate that the arrangements could take account of these differences. I do not say that they will, but that they could take account of these differences. I hope that that explanation meets the point that the noble and learned Lord made.
Lord Silkin of Dulwich: I am grateful to the noble and learned Lord for explaining in principle. It would certainly help me if he could give some explanation of the kind of difference that he has in mind.
The Lord Chancellor: I think it is fairly easy to see that in some situations a particular kind of arrangement for the provision of services would be appropriate, whereas in another part of the country, where perhaps that particular type of service is remote, some other form of arrangement would be appropriate. I do not think that I want to speculate too much on what might give rise to this power, but it does seem a suitable power to include. I hope that the noble Lord will feel able to withdraw the amendment.
Lord Hailsham of Saint Marylebone: I do not know whether my noble and learned friend has this in mind, but when I was practising in the provinces in the county court there were certain parts of the country where one was not allowed on taxation a fee for a barrister unless one could get a No Local Bar certificate, and the ordinary representation allowed on taxation was representation by solicitor. I do not know whether that is an example of what my noble and learned friend has in mind, but it would seem to come within the terms of what he has proposed.
Lord Silkin of Dulwich: Perhaps the noble and learned Lord the Lord Chancellor might spend a little time considering this with his advisers. If he has any example to give beyond what he has already said perhaps he could let me know. I am grateful for his reply and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 10:
Page 3, line 39, at end insert—
("( ) In exercising its powers under subsection (1) above, the Board shall have regard to the need to maintain and develop a competent accessible independent national network of advice centres and law centres.").
The noble Lord said: We have just been dealing in Committee with Clause 3, and in particular subsection (1). With the Committee's permission I shall remind noble Lords what that subsection says:
"Subject to the provisions of this Act, the Board may do anything—

(a) which it considers necessary or desirable to provide or secure the provision of advice, assistance and representation under this Act; or

(b) which is calculated to facilitate or is incidental or conducive to the discharge of its functions.".

In that context, I should like to draw the Committee's attention not just to the efforts of my own profession practising in offices and in firms, or to the worthy services of the Bar, but to one of the great pillars upon which legal aid has relied and will rely even more in the future, that is, the network of advice centres and law centres. I am sure that noble Lords will wish to pay tribute with me to the work that is done there, much of it by volunteers, saving the legal aid fund money, doing it in an informal way and therefore doing it in an acceptable way to so many of our citizens who find it a little fearful to walk into professional offices and certainly into counsel's chambers.
The addition is made at this stage by this suggested amendment:
"In exercising its powers under subsection (1) above, the Board shall have regard to the need to maintain and develop a competent accessible independent national network of advice centres and law centres.".
Having regard to earlier discussions, noble Lords may feel that one has to be a little careful about wording—about using adjectives that are too extravagant or imposing duties to look at the need in too general terms. Therefore I shall at once tell the Committee that in the very much respected Benson Report on Legal Services these words were used:
"the need to develop a competent accessible independent national network of generalised advice agencies".

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So I rely for the generality of the words that have been used in this amendment upon a very reliable report which, when it was discussed in your Lordships' House, met with very deep respect, as indeed we have for the person, our colleague, whose name that report bears.
I do not want to refer to that alone as a source for this amendment. I look with confidence at the noble and learned Lord the Lord Chancellor who will so well remember the wording of the Government White Paper which contains the following commitment in paragraph 26:
"The Government will need to be satisfied that all areas of the country are fully provided for in all types of work".
That was the feeling of the Government when the White Paper was issued—that it was a necessity that all areas of the country were to be fully provided for in all types of work in regard to legal aid.
I should like to say at once that it is a fact that a power to make grants is conferred on the board by subsection (2)(b) of the Bill. However, the objective of this amendment is to make sure that that power is in fact used. I beg to move.
Lord Denning: I should like to support this amendment. I know of the work because I happen to be president of the Citizens' Advice Bureau of Andover. I know what they do; I know how volunteers come and give a great deal of their time during the day for nothing. I know that they also get in touch with solicitors if need be, and those solicitors also give advice in the evening. They do excellent work, and I would support it being carried out accordingly.
Baroness Faithfull: I support this amendment, and I should like to ask some questions. Looking at the number of Citizens' Advice Bureaux in the country and at the map, I understand that the whole country is not covered by Citizens' Advice Bureaux, by legal centres or by money centres which give a great service. Therefore, perhaps I may ask my noble and learned friend the Lord Chancellor whether the board will carry out a survey throughout the country.
I have just received a very interesting book from Herefordshire which looks at the services in the country areas. Many of the country areas are in just as parlous a state as are the inner cities.
That brings me to a second point. The Citizens' Advice Bureaux, the legal centres, the money centres, save the country money by first of all advising and helping people, and often it prevents them from having to go to a solicitor. There is not a network throughout the country. Therefore may I ask my noble and learned friend whether it is likely that there will be a network—or at least a survey to see how a network can be set up—to meet the needs of every part of the country, including the country areas?
We have in this country in some areas—only in some areas—an excellent conciliation service. This again saves legal aid—and I said this earlier—a great deal of money. However, I understand now that it is possible that the Government may withdraw the
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grant to the conciliation services which save legal aid. May I ask my noble and learned friend those two questions and how they are to be met?
Lord Irvine of Lairg: I too desire to support this amendment. So far as I am concerned, its signal purpose is to call attention to the fact that there is no secure basis for the funding of the advice centres and the law centres. These are the bodies on which the Government intend to build a more efficient and effective legal aid system.
As I ventured to say on Second Reading, there is at present no duty on central government to fund these bodies; there is no duty on local government to fund these bodies; and, even more surprising, there is no express authority or power given to local authorities to fund them. In fact, the bulk of the funding comes from local authorities. They rely on a general power under Section 137 of the Local Government Act. This enables them to spend a limited amount of money on matters not otherwise authorised but which are in the interests of their area or their inhabitants.
How much may be available by the Section 137 route for advice agencies is wholly dependent on the extent to which local authorities, already hard pressed, may have drawn on their limited funds under Section 137 for other purposes, but also obviously it is dependent upon what individual local authorities choose to make available to these centres within the tight confines of Section 137.
As the noble Baroness, Lady Faithfull, said, across the country there is a very fractured picture. There are overworked urban centres; there are non-existent rural centres; and geographic inequalities in advice provision are dramatic. In many urban areas, for example, long queues form outside the CABs before the doors arc open. For example, within minutes of Hackney CAB opening, a full day's work passes through the doors and then the doors have to be locked. In other areas of the country there is scarcely any provision at all. For example, in the East Midlands there is one advice worker for 23,250 inhabitants. That is a level of provision which does not allow each consumer in that area any more than one hour per decade of information and advice.
The provision of specialist law centres is even worse. Out of 47 shire counties, 22 have no law centre or housing centre, and it is estimated that 5 million people do not have any access to advice at all. The Government are putting a great deal on these agencies; so the basic question is therefore should they not ensure that they are securely funded? If they are not securely funded, they will not be able to do what they are going to be required to do. I asked that question on Second Reading and there was no answer. I ask the question again in the confident expectation that the noble and learned Lord the Lord Chancellor will, with his usual courtesy, respond to it.
May I shortly state in practical terms what I gather are the understandable apprehensions of the advice agencies. When green form work is transferred to them from private practice true they will be paid for it, but they ask: will the result be that local authorities will then be liable to fund us even less than today so that we end up in nett terms worse off? Surely that

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fear must be well grounded when they have no right to be funded by anyone or any body. Surely therefore some body should assume responsibility for a coordinated and adequately-funded national network of advice agencies. That body should obviously be the board. If this amendment is not acceptable to the Government, one would desire to ask what proposal do they have for ensuring the secure funding of these agencies?
6.45 p.m.
Lord Hailsham of Saint Marylebone: I put this point in a purely interrogative sense. The amendment refers to law centres and advice centres. They are of course not the same thing, as noble Lords opposite have clearly recognised in what they have said. Dealing with them in reverse order, I hope it will not be thought that I am hostile to law centres. On the contrary, the noble and learned Lord, Lord Elwyn-Jones, knows that I became his accomplice in the sole funding of seven. On the other hand, I personally hope that the law centre will never supplant the green form scheme where there is an adequate supply of solicitors ready to work under that scheme. I should like to know whether or not my noble and learned friend agrees with that.
Moving on to the advice centres, it appears to be common ground between certainly my noble and learned friend Lord Denning and my noble friend Lady Faithfull that this includes the Citizens' Advice Bureaux. Is it intended at all by the Government that responsibility for the Citizens' Advice Bureaux (to whose work I pay full tribute since I have always been a warm supporter of them) should be transferred to the Legal Aid Board? If so, I have missed something. It is possible that it was because I was not able to be present at the Second Reading of this Bill—much to my regret—but I should like to know definitely whether the responsibility for CABs should belong to the Lord Chancellor and, through him, the Legal Aid Board.
Thirdly, I was a little surprised to hear my noble friend Lady Faithfull refer to the conciliation services, in presumably matrimonial disputes, in the same breath as this amendment. I had thought that these would be separate from both the CABs and the law centres. I wonder whether my noble and learned friend, when he comes to reply, would clear up these points?
Baroness Faithfull: Perhaps I may say first of all from the point of view of the Citizens' Advice Bureaux being part of the board's responsibility that the Citizens' Advice Bureaux, as I understand it, do far wider work than give only legal advice to people. Therefore, they could not be exclusively the responsibility of the board. Nevertheless, having said that, they give the most enormous amount of legal advice and legal consultation and counselling to people, which saves legal aid. With regard to the conciliation service, the service is of course entirely separate from both legal centres and the CAB, but nevertheless they also give a service which saves legal aid to an enormous degree.
The Lord Chancellor: Clause 2(2) of the Bill sets out the general functions of the new Legal Aid Board. They are to secure that advice, assistance and representation are available in accordance with the Bill, and to administer the Bill when enacted. In the White Paper announcing the establishment of the board the Government made clear that they saw the board as initially taking over no more than the functions currently performed by the Law Society. In time, however, the board might take on further functions. The power to do this is set out in Clause 2(4) which we discussed in relation to the regulation-making power. All of these functions, both initial and future, relate to the operation of the legal aid scheme. I regard this as vitally important. The main source of legal advice and legal aid is and will remain the independent legal profession, and as such the priorities must be for the board to concentrate on improving the operation and administration of the legal aid scheme.
The board may of course have connection with advice and law centres. As I mentioned at Second Reading, it is proposed that responsibility for the grants to the seven law centres, to which my noble and learned friend referred, which the Lord Chancellor currently funds, will be transferred to the Legal Aid Board and any contracts entered into by the board for the provision of advice and assistance may be with advice agencies or law centres. I want to emphasise, particularly in view of what the noble Lord, Lord Irvine of Lairg, said, that there is no question of this Bill putting any responsibility to give advice on advice agencies or law centres. What it does is to empower the board with appropriate consent to make contracts with advice agencies or law centres.
If somebody is struggling to get money it is often a source of strength that the person has some additional work for which he will be paid. It is in that context that I believe that this may be a helpful matter to advice agencies or law centres. It is a different question from the core funding or the setting up of these advice agencies or law centres, but it may be helpful to them in this way.
The board will be asked to consider as an early task whether the best use is being made of the resources devoted to advice and assistance and the board will need to be satisfied that the services provided in the law centres are an effective use of resources in that context. As I said at Second Reading, it will be open to other law centres to submit proposals for contracts or grants in the general context of the board's plans for advice and assistance. However, I should leave the Committee in no doubt that it is the Government's view that central funding is not the most appropriate source of core funding for these initiatives.
As I said at Second Reading, law centres may well provide a valuable service to local communities but they are essentially a local service and are appropriately funded locally. I wish to make the point that the establishment and maintenance by the board of a network such as is proposed in the amendment is not the kind of work for which the board is to be set up, and it would distract the board

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from its central purpose—the efficient and effective administration of the legal aid scheme. That is what the board is for.
I wish to make another point which in a sense follows up what my noble and learned friend Lord Hailsham said. The over-riding purpose of the majority of the provisions in the Bill is to establish a legal aid arrangement based on solicitors and barristers. That has been the way the legal aid scheme has always operated, and for the most part it has worked well. Under the Bill the private practitioner remains the main source for the provision of public funded legal services. The Bill would indeed allow for work to be contracted out in some circumstances to advice agencies or law centres but the Government's intention is that this should only be in areas where they have particular expertise and when it would provide a better use of resources.
Perhaps I may give an illustration of the kind of difference in arrangement that I had in mind in replying to the noble and learned Lord, Lord Silkin of Dulwich. It might depend on the nature of available private practice whether in a particular area the matter was best arranged by a contract with a law centre or advice agency or left in the ordinary scheme. This amendment, however, would require the board to set up a network of advice and law centres dealing with a whole range of legal issues. It would thus give rise to the very real risk of conflict between the agencies and the private practitioner and could almost be said to be encouraging the establishment of a service in opposition to the private practitioner.
If the board were to act in the spirit of the amendment it would almost inevitably mean less and less advice and assistance being given by solicitors and more and more by advice agencies. Matrimonial work is a good example. If the board were required to establish a network of advice agencies and law centres, it would make sense to encourage people to use them even for matrimonial matters where the private profession has traditionally done much of its legal aid work. It would not be long before representation in matrimonial matters, at least in the magistrates' court, would move to advice agencies.
I appreciate that this may not be exactly palatable to all those who support the amendment but I want to emphasise that the purpose of the Bill is not to set up legal centres or advice agencies such as Citizens' Advice Bureaux. I certainly pay tribute to them but the opportunities that this Bill affords in relation to matters closely connected with legal aid may well be helpful to those centres and agencies. However, that will be incidental to the main purpose of the Bill, and as an incidental possible benefit it is to be welcomed. It would be a mistake and a complete misunderstanding to substitute for the purpose of the Bill a different purpose altogether as suggested in the amendment.
Lord Irvine of Lairg: If the noble and learned Lord is of the opinion, as he has said, that it is inappropriate for central government to provide the core funding for these agencies, does he believe that local authorities should be under a duty to provide
1396
that funding? Is he of the opinion that local authorities should have an express power to provide that funding, or is he indifferent to how these agencies are funded?
The Lord Chancellor: My responsibility, so far as I am seeking to discharge it at the moment, is in relation to legal aid. These agencies may well have something to contribute in the area that approximates to legal aid. If so, this Bill may be of some help to them. I certainly do not consider it part of my function in relation to this Bill to go beyond it and to deal with matters as my noble and learned friend has said and as the Committee has heard, quite outside the legal aid field—matters with which, for example, Citizens' Advice Bureaux are concerned.
Perhaps I should also say, as regards conciliation and conciliation services, that research has been commissioned into the effectiveness of conciliation procedures. Ancillary to that, the Lord Chancellor's department gave grants to certain conciliation services in order that the research might be carried out. When the fieldwork was finished at the end of December 1987, that completed the present project. The results are being evaluated and depending on the evaluation further action may be required. The effectiveness of conciliation services in relation to preventing disputes and preventing expenditure in legal aid is the matter which the research was designed to test. I hope, in due course, to be able to report the results of these researches.
7 p.m.
Lord Mishcon: The words of the noble and learned Lord the Lord Chancellor—I say this for the first time in the course of the Committee proceedings and I say it to my great regret—will be received with great sorrow throughout the country, certainly so far as those who are connected with advice centres and Citizens' Advice Bureaux are concerned. They reflect—and I am choosing my words advisedly—a lack of appreciation of what happens on the ground. What happens on the ground is that the citizen goes to the Citizens' Advice Bureau or the legal advice centre. This is done almost every single day throughout the country, and in all appropriate cases there is complete liaison with local solicitors; they work in close co-operation. One without the other would impose upon the legal aid fund an absolutely insuperable financial burden. The advice centres and the Citizens' Advice Bureaux are looking to Parliament at this moment to see that the White Paper words that I used and quoted are not wasted or meaningless words.
Perhaps I may remind the noble and learned Lord that in successive legal aid reports the Law Society has expressed concern about inadequate and insecure funding of both advice agencies and law centres. In the categories that I was talking about earlier I should have mentioned law centres as being a very important part of all this. I shall quote, if I may, very shortly the 30th annual report which reads:
"The Law Society has supported secure central government funding for law centres for a number of years and remains of the view that this is the only way to avoid the waste of resources and the disruption caused by annual funding uncertainties."

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What is happening is this and it is pathetic. If you ask the Minister responsible for local government, he will with the greatest courtesy tell you that if you are talking about law centres and legal advice bureaux, it really is not a matter for him as the local government Minister. You then go to the noble and learned Lord, the Lord Chancellor. We have been to the noble and learned Lord's predecessors; we have asked Questions in this House and have been told "No, this is a matter for local government." in between this complete and utterly vicious and rather cruel circle, the advice centres of this country, the law centres of this country and the Citizens' Advice Bureaux of this country are suffering. It is our duty, in my humble submission, to see that this amendment tonight is passed. I hope that it can be accepted and passed by this Committee without a Division. But if a Division is necessary a Division will take place.
7.3 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 55; Not-Contents, 91.

Division No. 1

CONTENTS

Airedale, L.

Irving of Dartford, L.

Amherst, E.

Jay, L.

Ardwick. L.

Jeger, B.

Attlee, E.

Kennet, L.

Bonham-Carter. L.

Kilbracken, L.

Briginshaw, L.

Kilmarnock, L.

Broadbridge. L.

McNair, L.

Bruce of Donington, L.

Manchester, D.

Carter, L.

Mayhew, L.

Cledwyn of Penrhos, L.

Meston, L. [Teller.]

Cocks of Hartcliffe, L.

Mishcon, L.

Craigavon, V.

Oram, L.

Dean of Beswick, L.

Phillips, B.

Denning. L.

Pitt of Hampstead, L.

Dormand of Easington, L.

Ponsonby of Shulbrede, L.[Teller.]

Elwyn-Jones, L.

Faithfull, B.

Prys-Davies, L.

Fitt, L.

Saltoun of Abernethy, Ly.

Foot, L.

Serota, B.

Gallacher, L.

Silkin of Dulwich, L.

Galpern, L.

Stewart of Fulham, L.

Graham of Edmonton, L.

Stoddart of Swindon, L.

Grey, E.

Tordoff, L.

Halsbury, E.

Turner of Camden, B.

Hayter, L.

Underhill, L.

Henderson of Brompton, L.

Williams of Elvel, L.

Houghton of Sowerby, L.

Winchilsea and Nottingham, E.

Hylton-Foster, B.

Irvine of Lairg, L.

NOT-CONTENTS

Alexander of Tunis, E.

Boyd-Carpenter, L.

Ampthill, L.

Brabazon of Tara, L.

Arran, E.

Brougham and Vaux, L.

Ashbourne, L.

Broxbourne, L.

Auckland, L.

Caithness, E.

Barber, L.

Cameron of Lochbroom, L

Beaverbrook, L.

Carlisle of Bucklow, L.

Beloff, L.

Carnegy of Lour, B.

Belstead, L.

Carnock, L.

Benson, L.

Coleraine, L.

Blake, L.

Colwyn, L.

Blatch, B.

Cork and Orrery, E.

Boardman, L.

Cottesloe, L.

Borthwick, L.

Craigmyle, L.

1398

Crickhowell, L.

Napier and Ettrick, L.

Dacre of Glanton, L.

Nelson, E.

Davidson, V. [Teller.]

Newall, L.

Denham, L. [Teller.]

Nugent of Guildford, L.

Dilhorne, V.

Orkney, E.

Dundee, E.

Pender, L.

Elibank, L.

Penrhyn, L.

Elliot of Harwood, B.

Rankeillour, L.

Ferrers, E.

Reay, L.

Ferrier, L.

Rees, L.

Glenarthur, L.

Renton, L.

Gridley, L.

Romney, E.

Hailsham of Saint Marylebone, L.

Russell of Liverpool, L.

Sanderson of Bowden, L.

Hesketh, L.

Seebohm, L.

Hives, L.

Shannon, E.

Hooper, B.

Skelmersdale, L.

Jenkin of Roding, L.

Stockton, E.

Johnston of Rockport, L.

Strange, B.

Lane-Fox, B.

Strathcarron, L.

Lauderdale, E.

Strathclyde, L.

Lindsey and Abingdon, E.

Strathcona and Mount Royal, L.

Long, V.

Mackay of Clashfern, L.

Swinfen, L.

Malmesbury, E.

Thomas of Gwydir, L.

Margadale, L.

Thorneycroft, L.

Marley, L.

Trafford, L.

Merrivale, L.

Trumpington, B.

Mersey, V.

Vaux of Harrowden, L.

Monk Bretton, L.

Wyatt of Weeford, L.

Mottistone, L.

Wynford, L.

Mountevans, L.

Young, B.

Munster, E.

Resolved in the negative, and amendment disagreed to accordingly.
The Earl of Arran: Perhaps I may suggest that now would be a convenient time to break for dinner. I suggest that we do not return to the Committee stage before 8.15 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Arms Control and Disarmament (Privileges and Immunities) Bill
7.12 p.m.
Lord Glenarthur: My Lords, I beg to move that the Arms Control and Disarmament (Privileges and Immunities) Bill be now read a second time. As your Lordships will be aware, this Bill was thoroughly debated in another place last year and carefully scrutinised in Committee. I do not think this is the occasion for a general debate on the whole range of isms control and disarmament issues, to which your Lordships have rightly devoted considerable time in recent months, perhaps most notably in the excellent debate introduced by the noble Lord, Lord Cledwyn, on 9th December. I therefore intended to concentrate) on the Bill itself: to set out its purpose and to explain some of its provisions.
The main objective of the Bill is to give effect to the outcome of the Stockholm conference on confidence and security building measures and disarmament in Europe. This concluded on 22nd September 1986 with agreement on a substantial package of measures elating to the notification, observation and inspection of military activities in Europe. In

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addition to the military provisions of the document, the Stockholm accord also calls on participating states to confer privileges and immunities, as laid down by the Vienna convention on diplomatic relations, both to inspectors carrying out on-site verification and to observers invited to military activities notified under the terms of the accord.
This Bill is therefore designed to confer upon both observers and inspectors, as well as on their auxiliary staff, those privileges and immunities which are set out in detail in the Diplomatic Privileges Act 1964. This means that both inspectors and observers will be equated with diplomatic agents while in the United Kingdom. As a result, they will enjoy inviolability of the person as well as immunity from criminal jurisdiction and, with some exceptions, from civil and administrative jurisdiction as well.
Auxiliary personnel will be equated with administrative and technical staff assigned to embassies in the United Kingdom. They will enjoy the same privileges, except that their immunity from civil and administrative jurisdiction will be confined to acts performed during the course of their duties.
The Bill also provides for privileges and immunities to be conferred by Order in Council, subject to the affirmative resolution procedure, to give effect to any international agreement or arrangement superseding the Stockholm document, or making provision for furthering arms control or disarmament. The purpose of extending the Bill in this manner is to avoid as far as possible the need for primary legislation each time there is a new arms agreement involving the granting of privileges and immunities, for example, to those involved in its verification.
The INF Treaty is an example of this. It is the Government's intention, once this Bill becomes law, to introduce an Order in Council to cover the INF inspection arrangements in the UK. But such extensions will be done under the affirmative resolution procedure, which will give your Lordships the opportunity to debate the order when the time comes. The only privileges and immunities which the Bill confers directly are those stemming from the Stockholm document.
I should like to make clear that no changes are made in this Bill to the privileges and immunities set out in the Diplomatic Privileges Act 1964. The present Bill merely extends the category of people who are entitled to them. Nor in practice will the proposed extension to Stockholm observers and inspectors greatly increase the number of people entitled to full diplomatic privileges and immunities in the United Kingdom. Many such observers and inspectors are likely to be diplomats or military attaches already accredited here.
Those coming from abroad will only be granted privileges and immunities for the duration of their stay in the United Kingdom. In practice, this is likely to be about two or three days in each case. Nor will such observations or inspections be particularly frequent. The maximum number of inspections any country must accept under the Stockholm accord is three per year; and we are unlikely to invite observers
1400
to military exercises in the UK more than once every two or three years. Moreover, while we are obliged under the terms of the accord to invite representatives of all 35 signatory states, in practice many of the smaller states do not send observers.
I am pleased to report that the provisions of the Stockholm accord have worked extremely well during its first year of operation. Five inspections have been carried out, including one by the United Kingdom on the GDR in September; and United Kingdom representatives have observed 15 exercises in the course of this first year, eight in the Warsaw Pact and seven in NATO countries. At exercise "Purple Warrior" in Scotland last November, we ourselves played host for the first time to observers from Stockholm signatory states, including from all the Warsaw Pact except Romania. The observation programme passed off smoothly. It attracted compliments from both Eastern and Western observers alike, both for the efficiency with which it was organised and for the commitment to openness and transparency in military matters that it demonstrated.
The building of trust between states is an essential concomitant of successful arms control. The Stockholm accord, although not a treaty with legal force, nonetheless involves a political commitment by its 35 signatories to increasing predictability about military activities in Europe, in order to reduce mistrust and the risk of miscalculation in times of tension. It represents a significant advance on the more modest voluntary measures in the Helsinki Final Act 1975; and is the first of its kind to provide for verification through on-site "challenge" inspection within the area of application. Together with our partners in the Alliance, the Government are determined to build upon and expand the results of the Stockholm conference. To that end, at the CSCE review meeting in Vienna last July, Western countries tabled a proposal for further negotiations on confidence building. We hope that these will begin in the course of this year.
I hope that the House will demonstrate its support for the laudable aims of the Stockholm document by giving this Bill the Second Reading I believe it rightly deserves. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Glenarthur.)
7.19 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord, Lord Glenarthur, for his opening speech and for his explanations of the Bill. It is a small Bill with big implications and we welcome it because it opens the door to greater possibilities than seem apparent at first glance.
The Bill is related to the negotiations which led to the INF treaty which was signed in Washington on 8th December. It goes to the heart of the most difficult obstacle in the way of agreement; namely, verification. Most of us were relieved and glad that: his long-standing obstacle had been overcome by the countries concerned. It would be foolish this evening to say that all the problems have thus been resolved, and no doubt there will be many pitfalls on the road

1401
ahead; but the principle of verification has been accepted by both sides. The Bill is part of the practical process of achieving that.
The noble Lord has reminded us of the history of the Bill and of the fact that it goes back to the Stockholm Conference of September 1986 and the agreement made then providing for on-site verification and the observation of military activities. As the noble Lord said, it was agreed in Stockholm that those who came to observe and to inspect and any necessary staff should enjoy the same immunities and privileges as diplomats under the terms of the Vienna Conference and the Diplomatic Privileges Act 1964.
When the Bill received its Second Reading in another place on 22nd October last, the INF treaty had not then been signed; but the Bill made provision for the future in Clause 1(2). The noble Lord has already referred to the Orders in Council which will be needed to cover future eventualities and he has described the procedures. Over the years we have been concerned in this House, as noble Lords I am sure will agree, with privileges and immunities and their abuse by some embassies. The Bill therefore has some implications for what has been discussed in this House over the years.
The impression which the noble Lord has given is that those who come to visit the installations and who come to attend the military exercises will not be numerous. Perhaps he would be good enough to tell the House once again how many people in respect of inspection and visitation of exercises will be coming to this country in all from the Soviet Union over the next 10 years. As the noble Lord said, we had a comprehensive debate on the INF treaty here on 9th December. This Bill was referred to on that occasion by several noble Lords who spoke. Therefore I do not propose to cover that ground again tonight but to concern myself rather more with the provisions of the Bill, especially as we are somewhat limited with time.
We should recognise that territorially we are a relatively small part of the area which will be subjected to verification procedures. The task of inspection in the huge land areas of the Soviet Union and the United States is formidable but that again is a matter for the governments concerned. I must express the hope and the expectation that the necessary procedures will be carried out successfully and with goodwill in those two very large countries.
The INF treaty has raised our expectations that there will now be serious progress towards a START treaty. If such a treaty is signed—that is now said to be the objective of both President Reagan and Mr.Gorbachev—then the administration of the verification process will become even more complex than it is at the present time under this Bill following the INF treaty. We shall need to consider our own involvement as a country, and this may well be significant, in the light of events.
However verification in this country under the INF treaty will necessarily be a less complex affair. We have only two bases which are declared sites; and, as I understand the position, inspection will be restricted to these so that in our discussion of the Bill at this moment as things stand now under the treaty
1402
we are only concerned with inspectors from the Soviet Union visiting those two installations of Molesworth and Greenham Common. I should be grateful if the noble Lord would confirm that I am right in that definition.
But the Bill is an enabling Bill and if a START treaty is signed the area of inspection in Britain will presumably be extended. It would be interesting to know by how much. I know that any such extension will need the approval of Parliament by way of the Orders in Council to which the noble Lord has already referred; but it would help if we can be told the extreme boundaries to which privileges and immunities could be extended in those circumstances.
May I also assume that inspectors will be accompanied by appropriate personnel from this country and that presumably their travel facilities will he clearly defined? What we are contemplating at this point under the INF treaty is an arrangement for the inspection of two sites; an arrangement which will come to an end when all the missiles have been removed. We are dealing with a temporary situation and perhaps the Minister will tell us what term is intended. What will be the so-called "draw down" period?
The treaty itself is of course very relevant to this Bill; but I must confess that my heart sank when I learnt that it is a document comprising 31 pages of treaty and a 100 page appendix described as a "Memorandum of Understanding". I understand that the treaty documents published by the United States will be deposited in the Libraries of both Houses of Parliament and I shall be grateful if the noble Lord will confirm that. In my reading of the debates which took place in another place that point was not absolutely clear as the Library of the other place was specifically mentioned there.
I move on to another point arising from the words in subsection (2) of the Bill which are as follows:
"or otherwise making provision for furthering arms control or disarmament".
This is the enabling provision which looks forward to further developments, and this could include not only START but an agreement on chemical weapons too. The Government deserve praise for their initiatives on this front. We hope that further progress will be made; but we should be clear that the implications of verification here are very different from those that we have been discussing. The production, experimentation and storage of chemical weapons pose a different problem, and it may be that the Order in Council procedure will not be adequate to cover it. I make that point in passing; but I do not wish to stray too far from the technicalities of what is in essence a technical Bill.
I am sure that the Minister will confirm that as regards privileges and immunities there is nothing new in the Bill which affirms the position set out in the Diplomatic Privileges Act 1964. By this small Bill an obstacle to progress has been removed. There is a long way to go and no one with any sense will expect miracles; but we can be thankful that we are supporting a significant step in the right direction.
7.30 p.m.
Lord Kennet: My Lords, the Bill has been introduced with exemplary clarity by the Minister. From these Benches, we welcome it for what it does. The next set of inspectors who will have to receive diplomatic immunity will be those for the INF treaty and the subsidiary agreements, as the Minister has said. It was for that reason that the House of Commons gave four Committee days to consideration of the Bill. I do not propose that we should follow suit. However, I intend to speak fully on the Bill tonight in the hope of getting some government comments and explanations of the treaty structure which, I hope to show, are needed. They could not have been sought before because when the Bill was considered for four days in the House of Commons, the package of agreements had not been published. So this is the first time that either House has had the opportunity of discussing the package.
The inspectors will verify the destruction or departure and subsequent non-reappearance of certain classes of nuclear missiles and launchers based both here and in Western Europe. All those weapons are of a range to strike Western Europe from Eastern Europe and vice versa, but not to strike the United States from Eastern Europe and vice versa. Thus, if the removal and destruction of the weapons increases security—and most people believe that it will—the security which will be increased is the security of Europe, including Russia. The security of the United States will not be increased directly.
The two sides in Europe will therefore need the confidence which can only come from verification that what has been agreed is being done. The treaty provides for Soviet inspectors to verify the destruction of missiles which are stationed in Western Europe, which is necessary. However, it does not provide for Western European inspectors to verify the destruction of those which are deployed in Eastern Europe, which is equally necessary. Instead, it provides for United States inspectors to do that. But it is not the United States which expects an increase in its direct security from the treaty. The United States is already invulnerable to those missiles. They cannot get there.
Moreover, the treaty expressly looks forward to a START agreement. We are vulnerable to Soviet strategic missiles in exactly the same degree as the United States. While we have a greater interest than the United States in the good verification of an INF treaty, we shall have no more than an equal interest with the United States in the good verification of a START treaty. If we in Europe get no verification of our own, even when US vulnerability is not at stake, how much can we expect to get when it is at stake, as it will be with a START Treaty for 50 per cent. strategic reductions?
There is a whole structure of interlocking agreements. Perhaps the House does not realise they are all in the public domain. I have been able to study all of them. First, we have the INF agreement itself and its two protocols, respectively on elimination and inspection. That is a bilateral treaty between the United States and the Soviet Union.
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Next, we have a series of basing country agreements which the United States has signed with Italy, Germany, Belgium, the Netherlands and ourselves which regulate various matters bilaterally with each of those countries. It has an annexe on privileges and immunities.
Next, there is the exchange of notes between this country and the Soviet Union regulating—insufficiently, I shall argue—certain matters between us and them. Lastly, there are the deployment state agreements, as they are called, between the Soviet Union and East Germany and Czechoslovakia.
First, I have some general questions about the status of the documents that concern us. Will any of them be registered as treaties of the United Nations? What about ratification by those countries whose parliamentary system, unlike ours, requires that stage before a treaty can come into force? Which countries will have to ratify and which will not? Lastly, are all the basing country agreements the same as ours?
Next, I have some general questions about the intended effects of the agreements. There is one real shock in the text which makes one sit up and think "What on earth is going on here?" That occurs at Protocol I, paragraph II. 7 of the main agreement. I have given the Minister prior notice of that and all the other points I shall raise. Therefore, I shall spare the House the references from now on. That paragraph speaks of re-entry vehicles which have been released by unilateral decision from existing programmes of co-operation. What programmes of co-operation?
Lord Glenarthur: My Lords, I hesitate to interrupt the noble Lord. I understand his interest in discussing the wider question of the INF agreement and perhaps others and how the provisions will affect the United Kingdom. However, I wonder whether that is perhaps stretching our rules of procedure under Standing Order No. 26(v). It may take us beyond the narrow confines of the Bill before us. Perhaps I did not make it plain enough to your Lordships that in any case we shall have the opportunity for a more wide-ranging debate when the Government take advantage of the provisions in the Bill to extend it to the INF inspection agreements and any others which may follow in due course. I hope the noble Lord will accept the spirit in which I say that.
Lord Kennet: My Lords, of course I accept the spirit. However, in point of fact there will be no more justification to go wide when the orders are laid than there is on the occasion when the Bill is being considered which will entitle the Government to make the orders. Indeed, it would be possible to argue that there will be less justification to go wide later.
Perhaps I may point out that the House of Commons spent no less than four days in Committee on the Bill. They discussed the entire disarmament field—present, past and future. They discussed not only the INF treaty, which I am discussing, but chemical, conventional and mutual and balanced force reductions. If the Minister is content to hear me out, I shall not be very long and we shall be finished

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by 8.15. Then I shall undertake that, so far as I am concerned, we shall not have another go at the Bill in Committee stage. The Minister nods, and I am most grateful to him.
I mentioned the re-entry vehicles which have been released by unilateral decision from existing programmes of existing co-operation. Those appear to be exempt from the treaty between the Americans and the Russians. My question is: what vehicles, what programmes of co-operation, what release and what sort of unilateral action? What is going on here? It is obscure from the text of the treaty.
Next, there is to be some destruction of missiles actually in the United Kingdom. If there is an accident, either on the spot or an environmental accident—there will be a lot of burning of pretty hairy military equipment—whose courts will be responsible for dealing with compensation claims? That is a question to consider now and not later, as has been suggested. Worldwide, under START the destruction of weaponry is going to be even greater. It may even be that there is a possibility of a nuclear winter situation arising out of disarmament.
The INF agreement itself contains the usual provisions for its own termination, before the 13 years are up, by notice delivered and so on. However, neither the Basing Country Agreements nor the exchange of letters contain such provisions. It is curious that the Deployment State Agreements among the Warsaw Pact countries do have those provisions. On our side, is it right for us to assume that if either signatory terminates the main agreement under its own provisions, no acts will thereafter be done under the agreement and there will therefore be no question of either the basing country agreement or the exchange of notes remaining in force? I imagine that that is so; can the Government confirm that?
Here is a small puzzle which I hope that the Government will be able to say is due to haste in their own drafting and nothing worse. In the exchange of letters with the Soviet Union, the Government wholeheartedly support the INF agreement and its protocol on inspections. They do not, apparently, support the other protocol on the eliminations themselves. Why is this? One would have hoped they would support both.
I turn now to what I call the edges of the agreement, including the vexed question of circumvention by building up weapons systems not covered in the agreement in order to obtain supposed compensation for some loss. I hope that the Government have no intention of going along with any of this; they might be asked to do so.
The preamble of the INF agreement relates the whole package to Article 6 of the Non-Proliferation Treaty, which reminds the superpowers of their duty to get on with nuclear disarmament in general. It would not be disarmament if the INF reductions were compensated for by more air-launched or sea-launched missiles, whether ballistic or cruise, or bombers. Therefore, I imagine that compensation is expressly precluded by that agreement. It is all the more important that it should be because the nuclear warheads themselves are not going to be destroyed
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and would thus be available, with ill will, for other systems. We must remember that the agreement is not for nuclear disarmament; it is for the abolition of means of delivery only.
Throughout the treaty package, the procedures are Soviet-American procedures and this country has a quite insufficient role. The United States presents us with a sealed envelope containing Soviet-American procedures which we are required to accept without opening. These procedures are objectionable because many of them insulate the British Government, Parliament and press from knowledge of what is going on. We stay in the dark and our confidence in verification remains dependent on American confidence, or on the American wish that we should be confident.
It is surprising that in some respects the Soviet deployment states, that is, East Germany and Czechoslovakia, get a better deal under their agreements with the Soviet Union than we do under ours with the US. A few of the procedures on our side constitute downright infractions of British sovereignty. I shall mention them later.
Under the agreements the superpowers are to notify one another of intended launchings of missiles for research purposes. We are not notified, but it is our security which is at stake. Again and again, the superpowers notify one another of things and do not notify us. This example can stand for many cases.
Besides the inspectors, who will be Soviet officials, there are to be two teams of Americans touring the country with them. They will have some diplomatic immunity, though apparently on a lesser scale; they are the in-country diplomatic escort, and the air crew diplomatic escort. You get the picture? The Americans are escorting the Russians on their mission, just as the Russians will be escorting the Americans in the Soviet Union. There is no objection to that. But what do we do? Do we escort everybody, as it is our country and as one would expect, and as I think we would like to do simply out of courtesy, because we approve of the treaty, even if our highest national security interests were not involved? Well, no; or not much. Probably not! The in-country escort "may" include British people; the agreement does not say "shall". It will be up to the Americans.
Again it is provided that when a party of Soviet inspectors are flying around Britain looking at different places—they may indeed fly from Greenham to Molesworth and back—the American air crew "may" include a British person. That should be "shall". Although the "inspected country"—a reference to the Americans—must clear the members of its in-country escort with the "inspecting country"—that is the Russians—it does not need to do so with the basing country, the UK. This means that the Americans must submit their names for the approval of the Russians but they do not have to submit them to us.
The gear that the Soviet inspectors bring into this country is to be inspected by the Americans but not by us. If any of it is found to be unconnected with the purpose of the visit, that is to say, designed for a bit of espionage on the side, it is to be impounded by the

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Americans on our soil, indeed on our RAF bases, under a dual key arrangement with the Russians. We are to know nothing about it.
It is curious that under Warsaw Pact deployment State agreements the Russians, the Czechs and the East Germans inspect incoming American equipment together. If the Germans or Czechs do not like it, the Russians are bound to ensure its removal. The Americans are not bound to do any such thing for us. On our side the presence or absence of RAF people at the inspections which are to take place at RAF bases is on the basis of "may" and not "shall". In other words the Americans decide; we have no rights. There is altogether too much "may" and not enough "shall" in these parts of the text.
Since we do not, by right, see much of what goes on during an inspection, how are we to learn about it? The Government will no doubt say, as they always do when it is a matter of Anglo-American consultations, that our friendship is not to be enquired into because it is ipso facto full, friendly, constructive and loving. But what do the agreements say? The basing country agreement says that after an inspection has taken place—after it has taken place—we may request "a briefing", and if we do it will be provided. I ask the House and the Government to consider: how does this wretched wording to cover the removal of the weapons consort with the wonderful rapport that was supposed to make a dual release key unnecessary while these things were operational? And how does the American undertaking to "advise" us that "the inspection has been completed" compare with the Soviet undertaking to "inform" the East Germans and the Czechs "about the conclusion of the inspection?"
I turn to the infringements of sovereignty. The first concerns West Germany but sets a precedent for us later. In the INF agreement, a bilateral treaty between the Soviet Union and the US, the US undertakes to destroy the Pershing IAs. Though the warheads of these missiles are American property, the missiles themselves are German property. Of course the German Government have agreed, but the undertaking should have been given by Germany and not the United States. If that is what happens to undoubted German property under this treaty, what is likely to happen, under an advanced START, to the Trident missiles which, in view of their recycling through a common US-UK servicing pool, cannot be called undoubted British property? At any rate they would certainly be less clearly British than the Pershing Is are German. We should think about it.
In the INF agreement itself the US undertakes to ensure that basing countries admit the inspectors' equipment and supplies duty free. Here we come to a direct infringement of British sovereignty. It is quite unacceptable that the Government should have permitted the United States to purport to promise the Russians that the British Customs will do this or that. Again, in the main INF Treaty, the United States has given the Soviet Union the right to waive the diplomatic immunity which will be conferred upon their people under this Bill when the Soviet Union is of the opinion that an immunity would impede the
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course of justice and that it would not prejudice the implementation of the agreement. I am not sure that that is a good right for the inspectors to have; or rather I am not sure that the limitation placed upon it is a good limitation for them to be entitled to enjoy. But what I am sure of is that neither the right nor any limitation on it are the Americans' to give. They are ours to give, and their purported giving by another country infringes our sovereignty. The Government must take responsibility for that.
To sum up my judgment of the treaties, the Bill is necessary and useful. The treaties are good enough for their main purpose: that is, ridding Europe of these weapons. But they are severely defective because they are bilateral through and through, reflecting a purely bipolar world which is on the way out, and because they infringe our sovereignty. The deployment of these weapons in Europe was decided by NATO in 1979—an Alliance decision. The role of NATO as a whole in the verification of their removal is nil; and the role of each European NATO country is virtually nil. This is deplorable. Both in itself, and as a precedent for the even more important agreements that we hope will follow it, and which are bound to be influenced by it, the present treaty structure ought to be improved.
The removal of Soviet INF weaponry ought to be made subject to NATO verification. This would require the revision of the INF agreement; and, fortunately, the agreement provides fully for its own revision. Because this country is the only nuclear power among the basing countries, and because it is also the only depository power of the Non-Proliferation Treaty to which this agreement is linked by its preamble, it is our Government which ought to set the ball rolling. They ought to propose a NATO system of verification of the INF agreement so that we can know directly that the Russians are keeping their part of the bargain; and so that we can know directly what the Russians know about how the Americans are keeping their part of the bargain.
As a very first step—though I do not think that the major objective of full NATO verification should wait upon this—there should be a continuing committee of basing countries, perhaps in NATO, perhaps in the WEU, in which they can share their experience and align their policies.
These disarmament arrangements are not secret treaties and we shall not allow them to become so. We shall debate them fully. It is the hope of mankind for its entire future that is at stake. Let us have frank and ungrudging debate both now and later. If any mistakes have been made, let us have considered discussion of them and of how to put them right. I allege that mistakes have been made, and I have suggested how they could be put right.
7.53 p.m.
Lord Mayhew: My Lords, I was following the noble Lord, Lord Kennet, with considerable sympathy until he reached the proposition that NATO should undertake the verification of the INF

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treaty. I would agree with him in principle that it would be good to have more European involvement in the matter. He argued this very well. The real fear among those who are passionately concerned to see the INF treaty work is that it might not be ratified by the United States Senate and Congress. If a treaty, drafted as it now is, is at risk in the United States Congress—which provided not merely for NATO inspection but for Warsaw Pact inspection of United States weapons—I think that that would severely limit the possibilities of success in Washington.
I wish to follow the Minister and the noble Lord, Lord Cledwyn, in addressing myself modestly to the provisions of the Bill. I should hope to return to the very important and interesting questions raised by the noble Lord, Lord Kennet, when we have the affirmative order and perhaps at Committee stage. We are all welcoming this remarkable stride forward in agreement on verification—so much so, that I forbear to spell out its significance.
I wish to make three points modifying our rapture at this moment. First, it is so much easier to verify a treaty which provides for the elimination of a total class of weapons. It is so much easier to verify that this Chamber is empty—if it is—than if it contains no more nor less than 100 Peers. In the case of the INF Treaty we are asked to verify the position of no weapons of this class at all. On strategic weapons, conventional forces, or chemical weapons (to which the noble Lord, Lord Cledwyn, referred) we are there dealing with verifying a certain level—neither more nor less. The problems, both political and technological, are vastly greater. I am afraid this is one of the restraints that we must feel as we go into the negotiations on strategic arms. Here the problem of verification will be infinitely more difficult than the one we have successfully overcome in connection with intermediate weapons.
Secondly— the Minister made this clear—the verification provisions will apply only to those sites declared by the superpowers to contain their intermediate nuclear weapons. It will not apply to any other area of any other country. Here it will apply in Greenham, Molesworth, and nowhere else. Therefore it is technically possible to hide up a secret cache of intermediate nuclear weapons which can neither be seen from the air by satellite nor visited on the ground by inspectors. I am afraid that this is true and it will form a considerable part of the discussions in the United States Senate on the question of ratification. I can see opponents of the treaty arguing that it is too easy for the Russians to hide away these intermediate weapons. I hope that it will also be borne in mind that although one can hide from the satellites, and from the inspectors, a precise cache of intermediate nuclear weapons, the moment one starts manning them, supplying them, maintaining them or even having personnel attached to them, that cannot be concealed from the extraordinary technology of inspection which the two superpowers have. I do not therefore think that this provides an operational capacity to either side even if they were prepared to cheat.
My third reservation was touched upon by the noble Lords, Lord Kennet and Lord Cledwyn. This
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verification procedure does not provide for the possibility of substitution. This is very important. Almost as soon as the ink was dry on the INF Treaty, and the two superpower leaders had given their blessing to it, the British Government announced a project—I am not now discussing its merit—for co-operation with the French Government on airborne cruise missiles carried on Tornadoes. One gets rid of the ground-based intermediate nuclear weapons and everyone cheers. One has verification, and the Russians come here and note that they have gone. Then in the next breath one puts exactly the same type of weapon on to an aircraft. What is the net gain? What has happened?
I am not encouraged by the remarks of the Minister of State at the Foreign Office, Mr. Mellor, in Standing Committee D of the House of Commons. He said:
"No decisions have been taken on any consequential changes that might be needed in the deployment of Alliance systems"—
consequent on the abolition of the intermediate nuclear weapons.
"It must be clarified that neither air-launched nor sea-launched cruise missiles are part of the treaty… We shall honour to the letter any agreement reached within the INF framework and subsequently, we hope, the START framework, but no more than the rest of our Allies shall we be prepared to bind our hands in relation to other activities outside the treaty".
That is a rather long and diplomatic Foreign Office way of saying that we shall have other weapons of a type similar to the land-based cruise missiles. That is a limitation on the effect of this on the verification we are talking about.
I put these three negative points, though not because my noble friends and I are not enthusiastic supporters of the Bill. We regard it as a splendid promise of future agreements in disarmament and future verification agreements of a more complicated but effective kind.
8 p.m.
Lord Glenarthur: My Lords, I am grateful to all noble Lords who have taken part in the debate. I am glad that we all agree that this short Bill, by facilitating the provisions of the Stockholm accord, is in itself a small contribution to the breaking down of barriers of mistrust and suspicion. The Stockholm accord, as I have said, also provides a vehicle for furthering the aims of other agreements in the arms control and military security field.
The present Bill, as I explained earlier, avoids the need for primary legislation each time that there is a new international arms agreement involving the granting of privileges and immunities. The noble Lord, Lord Cledwyn, rightly drew our attention to the case of a chemical weapons convention. I am grateful to the noble Lord for his kind remarks about the efforts which the Government are making in this direction. Such a convention could contain provisions allowing for international inspection on United Kingdom territory.
It is not clear whether the privileges and immunities of chemical weapons convention inspectors would be more appropriate for primary legislation or for the present Bill. Because no draft of

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any such convention has yet emerged, it would be wrong to foreclose any options at this stage. I hope that by my saying that the noble Lord, Lord Cledwyn, will appreciate I take on board the point he made that we have to see what any convention states.
I very much agree with the noble Lord, Lord Mayhew, that START, chemical warfare conventions and other matters can throw up greater complications. I take that point on board, as I do also his remark that missiles outside designated sites would be hard to keep operational without very visible support facilities.
At present we envisage the extension of the Bill only to the INF agreement signed last month, in so far as it affects inspections taking place on United Kingdom territory. To that end, it is the Government's intention to avail themselves of Clause 1. This provides for the Bill's application to other arms control agreements. I am unable to tell your Lordships precisely when this will be, as much will depend on the timing of the Bill in its remaining stages. But our intention is to do so at the earliest opportunity.
The noble Lord, Lord Cledwyn, asked me a number of questions: first, how many inspectors will be involved, and how many observers? As I have said, no country is obliged to accept more than three inspections per year. The inspection team can consist of up to four, plus auxiliary staff, and can last anything up to 48 hours. There have been five inspections to date this year, though none in the United Kingdom.
Concerning observers and observable military exercises in the United Kingdom, it is unlikely that we shall be inviting observers more than once every two or three years. I described earlier the exercise Purple Warrior towards the end of last year. Each of the 34 other signatory states can, in theory, send up to two observers to each exercise, but on the basis of experience so far, including Purple Warrior, the smaller countries tend not to send observers, while for some of those that nominate diplomats already accredited in the country concerned the observation period, as was the case with Purple Warrior, is unlikely to exceed two or three days.
The noble Lord, Lord Cledwyn, was quite right when he said that only Royal Air Force Greenham Common and Royal Air Force Molesworth are involved so far as concerns verification arrangements on INF in this country. All missiles on those sites will be eliminated within three years and it is likely that those at Molesworth will be eliminated first.
The noble Lord asked about certain practical arrangements to do with escorting. British officials, along with American officials, will meet the aircraft carrying the Soviet inspection team and will form part of the permanent escort of Soviet inspectors during the period of inspection. Neither the inspectors nor the aircrew will be allowed access beyond the two bases, where they will be accompanied by British and American escorts at all times.
The noble Lord, Lord Cledwyn, asked about the extreme boundaries to which privileges and
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immunities could be extended This really refers to START and what may stem from that. The verification arrangements are still under discussion and it is not quite clear how it will apply to the United Kingdom. As for accompanying personnel—another of his points—as I have said, they will be accompanied at all times by United Kingdom personnel. As for the drawdown period, to use the technical term, elimination will be within 18 months for shorter-range INF and three years for longer-range INF. There are other aspects to do with the timing and duration of the inspections that would fit within those parameters, but I hope that that has given the noble Lord the answer he sought.
As for the matter of treaties being deposited in the Libraries of both Houses of Parliament, I shall certainly ensure that if they are not in the Library of your Lordships' House now they will be placed there straight away. I am grateful to the noble Lord for raising that point.
The noble Lord, Lord Kennet, raised a number of detailed points. I have listened carefully to all of them. I fear that much of what he said and many of the queries he raised go much wider than the Bill. I should certainly like to study carefully what he said and if necessary write to him. Some of his points are pertinent and relevant to the narrower subject of our debate today and I shall certainly try to answer some of those.
Lord Kennet: My Lords, I am most grateful to the noble Lord for offering to write to me. I shall read his letter with interest and care. But is there really any point in informing the Government in advance of the points one intends to raise? I let the noble Lord know in a very full letter more than a week ago all the points I intended to raise today. My questions are in Hansard. For proper parliamentary debate I submit that the Government's answers should also be in Hansard, if not now—I think they should appear now, because that is why one writes in advance—then perhaps on another occasion, and if so, what? Or are the Government of the opinion that silence in response to questions of which prior notice has been given before a debate is quite a good thing?
Lord Glenarthur: My Lords, as I said earlier, the noble Lord, Lord Kennet, was straying very wide of the Bill before your Lordships. I am grateful to the noble Lord for giving me notice of his questions. The fact that he did so merely reinforced in my mind the fact that his points were wide of the Bill. If the noble Lord wishes it, and I think that he does, I can now deal shortly with the subjects he raised that are relevant to the Bill.
Lord Kennet: My Lords, in response to the point about wideness, the House of Commons took four days in Committee, which was eight or 10 hours, to discuss the treaty structure before the treaty had been published. Today is the first occasion on which either House of Parliament has been able to discuss that treaty structure. If the noble Lord rebukes me for taking 25 minutes to do so, is he sure that he wishes

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to take upon his shoulders the burden of rebuking the House of Commons for taking eight hours before they knew what they were talking about?
Lord Glenarthur: My Lords, I am in no sense rebuking anyone. I was trying to stick to the rules within the procedure of this House. However, I can give a short answer to many of the points although not within the time-frame that we have allowed for this debate. There is a sound procedure whereby any letters written to noble Lords on any subject are placed in the Library, and I hope that that will satisfy the noble Lord. It is all very well to talk about another place but your Lordships' House has its own procedures and we must bear that in mind.
The noble Lord asked some relevant questions and I am grateful to him for giving me notice of them. First, he referred to the inspection of inspection equipment and of dual key inspection. As clearly stated in Article V(4), the full in-country escort—and we shall always have an escort—will examine such equipment. In the case of inspection to the United Kingdom, the in-country escort will always include British personnel. As regards diplomatic air crew escort accreditation, I do not think that there is the kind of inconsistency that the noble Lord appears to believe there is. The inspection protocol covers inspections in both the United States and basing country territory. The basing countries' agreement covers inspection only in basing countries and in this case it cannot refer to the United States in the way in which the noble Lord feels it should.
Lord Kennet: My Lords, there is a misunderstanding. I am sorry that the noble Lord feels that we are overrunning our time. I should like to state that I urged him most strongly to arrange for a slightly longer time for this dinner time debate. Unfortunately, he did not see his way to take up that possibility. I have since been told that if we overrun a little it will not matter; if we overrun a great deal it will be possible to continue this Second Reading debate at a later time. I received that message from the Government Whip's office, so let us relax about the matter. I hope that the noble Lord will forgive my interruption.
My point was not that the basing country agreement ought to apply to the United States—of course not. The requirement that the Americans should clear the membership of their diplomatic escort with the Soviet Union is one thing. It would have been better if they had been bound to clear it with us too, as it is our country which is being inspected in the cases with which I am concerned.
Lord Glenarthur: My Lords, I still do not believe that there is the inconsistency which the noble Lord seems to think exists. The inspection protocol covers inspections in both the United States and the basing country territory. The basing country agreement can cover inspections in basing countries only. Without studying the noble Lord's remarks in great detail, I honestly do not believe that there is the inconsistency to which he draws attention. The noble Lord indicates that he thinks there is an inconsistency but I beg to differ. I shall of course study his remarks to see whether we can reach an accord.
Lord Kennet: My Lords, if the noble Lord will be patient, I did not use the word "inconsistency" and I have not alleged any inconsistency. I have said that the obligation on the United States to clear the membership of a certain team with the Soviet Union should be matched by an obligation to clear the membership of that same team with us on the occasions when the team is accompanying a Soviet inspection team in this country. There is no inconsistency in what is printed; it is simply a mistake. That is the point that I am making.
Lord Glenarthur: My Lords, in his letter the noble Lord stated that there was a discrepancy, so perhaps I should have used that word and not the word "inconsistency".
The noble Lord implied that Protocol 253 stated that the United States shall ensure basing countries admit equipment and supplies duty free. He went on to indicate that he considered it to be unacceptable that the United States should enter into an agreement with the Soviet Union to ensure that the British Government do anything. I do not think that that is correct. That form of words is acceptable language based on the commitment given by the United Kingdom in the basing countries' agreement, Article IV(5).
As regards the waiving of privileges and immunities and the noble Lord's concern about the annexe to the BCA, the annexe on privileges and immunities contains the regime applying to US and Soviet inspectors. These privileges have been agreed by the basing countries as applying during inspections in their territory. Article IV(4) of the BCA refers to that and it is appropriate to annexe them to the BCA.
Turning to the question of the waiving of Customs duties and the fact that the noble Lord's eyes should be on the exchange of notes, I believe that on this point the noble Lord may be on the wrong track. The waiving of Customs duties is agreed between the US and the Soviet Union for each other's territory, by the US through basing countries and the BCA for Soviet entry to basing country territory. I shall of course study the other remarks made by the noble Lord which go wider than the Bill.
As the noble Lord, Lord Cledwyn, said, both the Stockholm accord and the signing of the INF agreement last year indicate that we now have a real prospect of resuming business between East and West in a way which brings mutual benefit. Indeed, the noble Lord, Lord Mayhew, made a similar comment. We must build on the achievements that have been registered so far, leading to a reduction in what we can surely all agree, whatever our other disagreements, are the enormously over-swollen arsenals of conventional, chemical and nuclear weapons. We now have the opportunity to open a new chapter in confidence-building between East and West in the hope of creating a climate of trust which makes war inconceivable. We have not, alas, reached that point. But allowing representatives of each Alliance to visit the other with the protection of diplomatic privilege is one small step towards that

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goal. This is what this modest but important Bill seeks to achieve. Once again, I commend it to your Lordships. I beg to move.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Legal Aid Bill [H.L.]
8.20 p.m.
House again in Committee on Clause 3.
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No. 11:
Page 4, line 7, after ("undertake") insert ("or commission").
The noble and learned Lord said: The purpose of this amendment is in part to draw attention to the importance of the board carrying out extensive inquiries and investigations of a kind which in fact is contemplated by subsection (2)(f), but in particular to make quite certain that it can do that not only by making those inquiries itself but also by commissioning research from academic and other bodies. Indeed, it is to be hoped that it will regard that as a very important part of a continuous research function to assist it in dealing with its powers and in making a periodical assessment of the needs for different forms of legal aid which will certainly not remain static in different parts of the country.
I dare to hope, despite what the noble and learned Lord the Lord Chancellor said in reply to the previous amendment, that among the matters it will investigate in depth is the gaps in legal services and the way in which those gaps are being filled, in particular by law centres and other advice bodies, irrespective of whether this Bill contains a provision for the function of those bodies to be within the ambit of the board. Indeed, it is hard to see how a full picture can possibly be assessed by the board or by the noble and learned Lord the Lord Chancellor unless it is aware not only of the gaps that exist but also of the problems which exist concerning the various bodies such as law centres which try to fill those gaps.
Unless those and similar matters affecting the general picture of legal aid provision are part of the main function of the board, the board will be handicapped in carrying out its job. I have no doubt that it is the intention that the board should be able to commission investigations of the kind I have mentioned, in particular for academic bodies but also others, and no doubt to pay for those under its powers contained in Clause 3. However, in case there be any doubt about that from the wording of the subsection, which refers only to "undertaking" and not also to "commissioning", we think it preferable to write that into the legislation so that the importance of it cannot be underestimated.
In Clause 3(4) the draftsman has adopted that cautious principle of being certain in distinguishing between the powers to provide advice and the powers to secure the provision of advice. In moving this amendment, I am following, or seeking to follow, his excellent lead in that respect. I beg to move.
The Lord Chancellor: I entirely accept the point that the noble and learned Lord makes. My impression, which is perhaps the same as his, is that this is probably comprehended in the Bill already. However, as he has made the point perhaps he will allow me to check that for certain and I will come back on Report. It is certainly our intention that the board should have power not only to undertake but also to commission somebody else to undertake inquiries or investigations.
Lord Silkin of Dulwich: I am grateful to the noble and learned Lord for that reply, and in the light of it I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 12:
Page 4, line 22, at end insert—
("and such directions shall include conditions as to the availability to the public. and quality of, advice, assistance or representation and as to the means for monitoring such availability and quality.").
The noble Lord said: As much as anything else, this is a probing amendment in order to ascertain what standards the noble and learned Lord the Lord Chancellor thinks should be set down in view of the provision in the Bill as it exists at the moment. Subsection (4) states:
"The powers to provide advice, assistance or representation under this Part and to secure its provision under this Part by means of contracts with, or grants or loans to, other persons or bodies—

(a) shall not he exercisable unless the Lord Chancellor so directs and then only to the extent specified in the direction: and

(b) if exercisable, shall be exercised in accordance with any directions given by him".

There is no hint in the Bill as to what the matters are that the Lord Chancellor would of necessity have in mind before contracting out certain services under the Bill. It merely says that the board itself would not be able to exercise the powers without the directions of the Lord Chancellor.
Therefore it was thought necessary to table this amendment so that there is protection in the sense that such directions shall include conditions as to the availability to the public and the quality of advice, assistance or representation, and as to the means for monitoring such availability and quality. The purpose of the amendment is to see that to a great extent, if not completely, the choice of representation, availability and quality is there. The noble and learned Lord may well think that this is a helpful addition to the Bill. However, if I may say so, I am particularly interested in what the noble and learned Lord has in mind himself as to the kinds of matters that should limit the board's powers to deal with this contracting-out provision, which many of us feel is a very dangerous matter. I beg to move.
The Lord Chancellor: I am sorry that the noble Lord should feel that a contracting-out option is dangerous. I hope that it may prove an extremely useful and cost-effective option. However, I recognise the concern that he has expressed that the service provided by those contracting with the board to provide advice and assistance should be a good service of a proper quality.

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I believe that this can be achieved by setting proper conditions for the award of contracts. As the noble Lord and the Committee realise, the Bill at present provides that if the powers are exercisable they should be exercised in accordance with any directions the Lord Chancellor may give. Therefore it is open to the Lord Chancellor, in agreeing to the exercise of this option, to lay down conditions which must be adhered to if the power is to be lawfully exercised. I certainly intend, as I am sure that anyone discharging the responsibility that I have would wish, that the conditions and directions should be appropriate. The requirement that this amendment proposes also applies to some law centres, the responsibility for which is to be transferred to the board as they will be funded to the extent provided under its grant-making powers. This will mean that, if it is done in accordance with this amendment, there will be a tighter control over the activities of those centres than they have enjoyed in the past, because the noble Lord's amendment applies to grants and loans as well as to the other contracts.
I understand the point that the noble Lord has made. I am not convinced that it would be necessary to set this as an obligation in respect of all grants and loans as well as contracts. I should be glad to consider further what he has said and to see whether anything further is required to be added to the provisions of the Bill. It was our intention that the Bill should give power to cover this aspect of the matter. I should be happy to consider that further in the light of what he has said if he feels able to withdraw the amendment at the present stage.
8.30 p.m.
Lord Mishcon: I am most grateful to the noble and learned Lord and readily agree to what he has suggested. I hope I am not over-burdening the noble and learned Lord's department; but it would be of considerable assistance if one had an intimation before Report stage that the amendment as it stands is acceptable, or of any suggested amendment. If it is acceptable then it could be tabled at Report stage so that this point is covered. Subject to those remarks, I readily accept what the noble and learned Lord has said, and I regard it as very helpful. I ask leave to withdraw the amendment.
The Lord Chancellor: I shall try to write to the noble Lord if we manage to overtake all the matters which we have to consider in the time available to do so.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
Lord Meston Lord Meston moved Amendment No. 14:
Page 4, line 31, at end insert—
("(8) Subject to the approval of the Lord Chancellor, the Board shall establish regional legal services committees which shall be constituted under regulations and which will be given the task of promoting and developing a more efficient and effective use of existing legal resources on a regional basis.").
The noble Lord said: Amendment No. 14 is concerned with the regional distribution of legal services. The hoard itself is inevitably limited in
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numbers and may well be thought to be over-centralised even if it is able to disperse its administrative functions throughout the country.
The amendment is not merely concerned with administrative functions; it is concerned to provide by committees a positive mechanism to deal with any geographical imbalances in the provision of legal services. As the noble and learned Lord, Lord Elwyn-Jones, said earlier this afternoon, the provision of legal services throughout the country is patchy in some areas. It is characterised by overworked urban solicitors and urban law centres and sometimes by sparse rural services trying to meet the reasonable needs of people in an increasingly sophisticated legal framework. The irony is that it is the lower income groups that often encounter the most complex pieces of legislation in regard to the law of social security, housing, consumer credit, immigration and so on.
All those problems mostly arise in areas where there tend to be fewer lawyers because they find there is less for them to do in privately paid work, and less incentive to practise in such areas. By this amendment the Lord Chancellor would be empowered to set up regional committees to assess and to meet local needs.
There exists already the North-West Legal Services Committee which I understand has had the support of the Lord Chancellor's department. That in itself indicates that it has been regarded as a useful and successful committee. This amendment derives its inspiration from the South Wales Legal Services Steering Committee on whose behalf the noble Lord, Lord Parry, spoke with great effect on Second Reading.
The purpose of the amendment is to provide something which I hope is useful to co-ordinate and improve legal services, particularly in deprived areas. I hope it will be seen as a useful adjunct to the powers of the board. It is only an enabling provision but it will put on a statutory basis that which the Lord Chancellor has already done at least in the North-Western area. I beg to move.
Lord Renton: Would the noble Lord agree that what he is proposing here in mandatory terms is very similar to the power given in permissive terms under subsection (1) when read with subsection (4) of Clause 3?
Lord Meston: I am sorry, but would the noble Lord repeat the subsections to which he was referring?
Lord Renton: Subsection (1) and subsection (4) of Clause 3 would enable to be done that which he is making mandatory in his amendment.
Lord Meston: I hope that I am not making anything mandatory. It is subject to the approval of the Lord Chancellor and it is therefore intended that committees should not have to be set up in every area but only in those of which the Lord Chancellor approves as suitable for such committees. They certainly will provide positive assistance to the hoard in such areas.
Lord Irvine of Lairg: I support the amendment. As I read the amendment put down by the noble Lord, Lord Meston, the purpose is to put a duty on the board to establish these regional legal services committees, but subject to the approval of the Lord Chancellor. It does not appear to me that there is any duplication with the provisions of Clause 3 to which the noble Lord, Lord Renton, has referred because these are permissive only so far as the board is concerned.As regards the amendment itself, it starts with the proposition to be found in the Bill in Clause 3(1) that "advice, assistance and representation" may be provided in different ways in different parts of the country. That was a provision which the noble and learned Lord the Lord Chancellor was invited to explain further in the context of the probing amendment tabled by my noble and learned friend Lord Silkin—Amendment No. 9. Having heard the Lord Chancellor's explanation, I feel that this provision makes good sense.
There are differing local needs for particular kinds of advice. I have felt constrained to say on more than one occasion that the provision of advice agencies is haphazard across the country not only in number but in the expertise available. Therefore, it seems to make good sense to allow the board to provide advice, assistance and representation in different ways in different parts of the country according to need.
The noble and learned Lord the Lord Chancellor gave reasons for resisting Amendment No. 2 which would have required him to have had regard to certain principles. The noble and learned Lord was resistant to that for the reasons that he gave. In appointing members to the board one of the principles in that amendment is representation from different parts of the country. The Lord Chancellor observed that he would not wish people to travel to London from the remotest parts of England to sit on a board which would be essentially a London-based board. There is a good deal of sense in that.
Surely the board cannot function in the manner intended under the Bill unless regional committees are established with local knowledge. Today and earlier in our debates the noble Lord, Lord Renton, drew attention to the geographical division of the country into legal aid authorities. Surely that could be utilised for the regional committee structure proposed by the amendment. The point of the amendment is this: how can a London-based board, to which people from the remoter parts of the country cannot reasonably be expected to travel or to serve on, determine the advice needs of communities, say, in Truro or Bootle? Regional committees would furnish the board with practical advice and information about local needs and the efficiency of its delivery on the ground. For those reasons I support this amendment.
The Lord Chancellor: I know well the work pioneered by what is now the North-West Legal Services Committee, a venture which the noble and learned Lord, Lord Elwyn-Jones, was instrumental in establishing. I also know of representations I have received for the funding of a committee in South Wales.
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The North-West Legal Services Committee receives funding through the legal aid administration of the Law Society. Pressure for funding other committees by central government was resisted by my noble and learned friend Lord Hailsham when he was Lord Chancellor on the grounds that these were essentially local initiatives and that their development must rest with those in the locality who are directly involved in the provision of legal services.
In my view, the amendment which is now proposed in unnecessary. I do not oppose it on the basis of any antipathy towards the concept of local or regional committees. My reason is that the amendment is unnecessary. The board can fund regional committees or any other type of local committee appropriate to the locality under the general power in Clause 3(2)(b). That power is quite sufficient. Of course, these grants or loans would need my approval and I should need to be convinced that to set up such committees in the particular area was the right course to take.
The board would need to look at this position in the light of all the circumstances as they appear to the board. I certainly think that, as the noble Lord, Lord Irving of Lairg, has pointed out, this clause as drafted is not a completely discretionary clause on the board. It places a duty on the board, with the consent or approval of the Lord Chancellor. That is a slightly hybrid type of obligation. If the Lord Chancellor were to approve, the duty would arise. That seems slightly unusual. However, I make no particular point about that. Rather, I am saying that we already have a very flexible power to do all that is required in this provision. Whether or not that power should be used in this way would be a matter for consideration.
I should like to refer to another point arising out of the speech of the noble Lord, Lord Irvine of Lairg. He mentioned my earlier comment about people travelling from remote parts of the country to London. I would not wish to create an inevitable obligation for that to happen. It is conceivable that a person may travel from a remote part of the country to London every week for a multitude of purposes, one of which might be the Legal Aid Board. He might be doing other work as well.
I myself travel quite often from an area which may be regarded as even more remote than any part of England and Wales. I was just illustrating one possible difficulty in placing too inflexible obligations on the Lord Chancellor in the selection of members of the hoard. But I would not wish it to be taken that nobody could be appointed to the board in London from some distant part of England or Wales. The board might be all the better for such appointments, and any consequences that might arise might be well taken.
I hope that in the light of these explanations the noble Lord, Lord Meston, will feel able to accept that his concern, in so far as he wishes the board to have the necessary power, is intended to be covered by the provisions of the Bill, and that he may feel that in these circumstances the amendment might be withdrawn.
Lord Meston: I am grateful to the noble Lord, Lord Irvine of Lairg, for his support. This amendment was intended to provide a precise and useful requirement—albeit in a hybrid form, as the noble and learned Lord the Lord Chancellor has put it—to the benefit of both the board and the public, on the basis that local committees know what is best required in their individual areas. I am reassured by the indication of the noble and learned Lord the Lord Chancellor that the power under Clause 3(2)(b) can be used to provide grounds for committees if that seems appropriate.
I should have hoped for something more precise, but for present purposes I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
8.45 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 15:
After Clause 3, insert the following new clause:
("Advice and representations by solicitors in magistrates courts.
.—(1) The Board shall make a scheme providing—

(a) for the making, by committees set up under the scheme, of arrangements whereby advice and representation to which this section applies is provided by solicitors in attendance at magistrates' courts; and

(b) for the making, by such committees, of arrangements whereby advice and assistance is provided for persons—

(i) such as are mentioned in section 29 of the Police and Criminal Evidence Act 1984; or

(ii) arrested and held in custody who—

(a) exercise the right to consult a solicitor conferred on them by section 58(1) of the Police and Criminal Evidence Act 1984; or

(b) are permitted to consult a representative of a solicitor.

(2) A scheme under subsection (1) above which relates to advice and representation at magistrates' courts may provide that arrangements made under it may be so framed as to preclude solicitors from providing such advice and representation if they do not also provide advice and assistance in pursuance of arrangements made by virtue of a scheme under that section which relates to the provision of advice and assistance for persons such as are mentioned in section 29 of the Police and Criminal Evidence Act 1984 and for persons arrested and held in custody.
(3) A scheme under subsection (1) above applies to such advice and representation in connection with criminal proceedings before magistrates' courts as may be specified by the scheme, being advice and representation for persons, or any class of persons, in respect of whom no legal aid order is for the time being in force in relation to the proceedings in question and to whom advice and assistance in respect of those proceedings is not being given under section 1 of the Principal Act.").
The noble Lord said: When the Police and Criminal Evidence Bill came before Parliament many of us were concerned about some of the powers that were given under that Bill. We were consoled by the knowledge that there was going to be an effective 24-hour scheme for solicitors to be available at police stations and magistrates' courts. This amendment places a duty on the board to continue that very useful scheme. It may be of interest to the Committee to know that that scheme is helping annually approximately 200,000 suspects at police stations.
Having said that, I am even more delighted to report to the Committee that the cost is approximately £16.6 million, when in fact in July 1985 £20 million was the estimate that the then noble and learned Lord the Lord Chancellor said would be available for the scheme.
The purpose of this amendment is to ensure that reference is expressed to the schemes in the Bill, which will emphasise their importance, although I readily concede that arguably the board has power to establish these schemes under Clause 3(1) of the Bill as drafted. I make that point immediately because if I did not the noble Lord, Lord Renton, would immediately rise and tell me that that was so, and he would be correct.
The Lord Chancellor: I should make it absolutely clear at the outset that it is the Government's clear intention that duty solicitor arrangements. both for magistrates' courts and police stations, should continue to operate. The administration of them will be transferred to the board, which may well have its own views on how they should best be organised and run, so I cannot guarantee that the precise details of the present arrangements will stand for all time. What I can, however, say is that this amendment is quite unnecessary to continue the duty solicitor arrangements.
Under the existing legislation, as many noble Lords will know, many of the functions carried out by the Law Society in the legal aid area are based on formal schemes made by the Law Society subject to the Lord Chancellor's approval and that of the Treasury, though not of Parliament. It is a kind of delegated power to make schemes delegated to the Law Society with these two approvals.
The Bill does away with that rather inflexible and rigid framework for schemes. It is one of the points that I had in mind in relation to the wording of the first amendment. We are trying to get away from the idea of these rigid schemes because it is possible to get the same result by more flexible arrangements. So the Bill does away with that inflexibility of requiring schemes, and I should be reluctant to reintroduce that inflexibility unless it were absolutely necessary and shown to be so.
In future the management of the duty solicitor arrangements will be for the board, but regulations will clearly specify that there have to be duty solicitor arrangements for both magistrates' courts and police stations. The Bill as at present drafted enables duty solicitors to be provided under Part III or Part II. Initially at least I would expect them to be provided under the advice and assistance provisions of Part III because that is the more natural place for it to be found. But, at a later stage, the board may well wish to consider making arrangements under the contracting-out powers of Part II. It might well be a suitable type of arrangement for a duty solicitor to have a contracting-out type of provision; a contract with particular people or with a particular centre, say, to provide the necessary services.
This amendment in its present form would deny the flexibility inherent in the proposals made in the Bill. To summarise, the position is that I entirely accept the spirit of the amendment in seeking a continuation of the duty solicitor scheme but not in the form of "scheme" in the very technical sense of the previous legislation. I believe that our present proposals enable these arrangements to continue, to be modified possibly in the light of experience and to be improved either under Part III, the natural place

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for them, or possibly Part II, as matters develop. I hope that in the light of that explanation the noble Lord will feel able to withdraw the amendment.
Lord Mishcon: I am much obliged to the noble and learned Lord for much of what he has said. I should like to have the opportunity of consulting and to study what the noble and learned Lord has said. At this stage I would ask leave to withdraw the amendment.
The Lord Chancellor: Before the noble Lord withdraws his amendment, may I take this chance to say what I should have said on other occasions. If, as a result of such consultations, a point arises that I have not covered, if the noble Lord felt able to draw my attention to it before we come to Report stage, it might save time at that stage, just as he has asked me, if possible, to give him my results.
Lord Mishcon: The noble and learned Lord is always so courteous to others that I should like to reciprocate that courtesy, and I shall certainly do so.
Amendment, by leave, withdrawn.
Clause 4 [Duties of the Board]:
Lord Irvine of Lairg Lord Irvine of Lairg moved Amendment No. 16:
Page 4, line 38, at end insert—
("( ) The Board shall, from time to time, furnish to the Legal Aid Advisory Committee such information as it may require relating to the discharge or proposed discharge of the Board's functions.")
The noble Lord said: The noble and learned Lord the Lord Chancellor made it reasonably plain on Second Reading on 15th December that after a transitional period he might well exercise his power to dissolve the Legal Aid Advisory Committee. The result would be that only the new Legal Aid Board would remain. In that debate the noble and learned Lord, at col. 650, insisted that he desired to retain the benefit of independent comment on the operation of the legal aid system. In particular the noble and learned Lord said:
"The Legal Aid Advisory Committee has given valuable advice. It will continue to do so during the transitional period, but the Legal Aid Board is charged with giving advice. If we can obtain people of the same quality on the Legal Aid Board, it may be unnecessary duplication to have the Legal Aid Advisory Committee and the Legal Aid Board giving advice. None of those advisory bodies is completely without the need of a little money to keep it going".
As a fellow Scot I see the force of that. The noble and learned Lord continued:
"On the whole, one would prefer not to have unnecessary wheels on the coach. Therefore, power has been taken in the Bill to dispense with the services of the Legal Aid Advisory Committee after a time, if that should seem right".
It is reasonable to infer that the card of the Legal Aid Advisory Committee has been marked.
While moving this amendment I would invite the noble and learned Lord to consider how consistent this is with his acceptance of the need for him to continue to have the benefit of independent comment—I emphasise the word "independent"—on how the scheme is working. The question is: is it
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realistic that the Legal Aid Board could ever provide independent comment on the discharge by it of its own functions?
The point is that when the Law Society runs legal aid, the Legal Aid Advisory Committee keeps the Law Society's administration of the scheme under critical scrutiny. Now the new Legal Aid Board is going to run the scheme. Therefore, the simple point which is the background to the amendment is that the Legal Aid Board cannot be a watchdog, in the public interest, over itself. If the Legal Aid Advisory Committee goes, then the Legal Aid Board will be exercising the functions formerly exercised both by the Law Society and the Legal Aid Advisory Committee. There will therefore be no independent body able to give the independent comment which the noble and learned Lord the Lord Chancellor has assured this House he desires to retain.
Let me emphasise this point by practical example. Time and again, the Legal Aid Advisory Committee has expressed itself in trenchant and critical terms that the scheme is not being administered effectively in the public interest. In its 34th report published in January 1985, the committee expressed its serious concern about gross regional variations in the grant of legal aid, particularly the "striking variations" in allowing the green form £50 limit to be exceeded.
In its report for the next year, 1984–85, the advisory committee had strong things to say about delays in the issue of civil legal aid certificates. It called for the Law Society to establish performance objectives. In its most recent report for 1985–86 the committee was outspoken about delays and accumulating backlogs in the system, while at the same time noting the adverse effect on the administration of the scheme of cash limits and manpower ceilings.
What I would call attention to is this: can it seriously be argued that the Legal Aid Board is going to say this sort of thing about its own administration of the scheme? Independent criticism of administrators comes only from a body independent of the administrators. This amendment is predicated on the advisory committee continuing permanently in being because of the independent watchdog function in the public interest which only it can exercise. The amendment would give it a power to require the new board to give the advisory committee such information about how the board is administering the scheme as the committee requires so as to allow it—the advisory committee—to exercise its watchdog function effectively.
A later amendment, Amendment No. 57 on the Marshalled List, will seek to remove the power to dissolve the committee given to the Lord Chancellor by Clause 33(5), and will further require the Lord Chancellor to refer the Legal Aid Board's annual report to the advisory committee for its consideration and comment on what is contained in that report along with any other comments that the Legal Aid Advisory Committee may choose to make on the whole operation of the scheme.
Meanwhile, this amendment will give the committee a power to require the board from time to time to furnish information to the committee to assist

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it to fulfil its function of monitoring the operation of the scheme in the public interest. I commend the amendment to the Committee. I beg to move.
Lord Ackner: I should like to support the amendment which I should have thought might have been welcomed by the noble and learned Lord the Lord Chancellor in order to test whether the Legal Aid Advisory Committee has anything of value to offer. This would precisely achieve that because the noble and learned Lord the Lord Chancellor would then be able to see whether, as a result of the board from time to time furnishing the committee with information, there is a useful feedback from that committee which would justify its existence. I do not want to arm the noble and learned Lord the Lord Chancellor with a reply to a later amendment which I have down and to which my noble friend Lord Irvine has referred. However, I should have thought that it would fortify his resistance to be able to say, "I want to keep the power to abolish the committee in the light of the utility or absence of utility which it demonstrates, having regard to this amendment which obliges the committee to act with the information which it receives". For those reasons I should have thought that this is a sensible amendment.
9 p.m.
The Lord Chancellor: The Legal Aid Advisory Committee has been operating for some time, and from the reaction to its reports, which the noble Lord, Lord Irvine of Lairg, and others have expressed, it has been operating satisfactorily to them at least, and I think also to others. It has no power to require the Law Society to furnish such information as it may require. It is perfectly able to operate successfully without such a power. If the Legal Aid Advisory Committee seeks any information from the Law Society it would in the normal course of events without any such power ask for it. If for any reason the information was not forthcoming, it should be possible for the Lord Chancellor to obtain that information if necessary. At the present moment it does not appear to me to be right to give the Legal Aid Advisory Committee a formal power of this kind when it has not proved necessary in relation to the Law Society. The Legal Aid Advisory Committee has functioned perfectly well without such a power.
As to whether the Legal Aid Advisory Committee should be continued indefinitely, perhaps I should keep what I have to say about that until the amendment arises in which that question is to be debated. The noble Lord, Lord Irvine of Lairg, tempts me to answer but I think it is perhaps more appropriate that I should wait to hear the full arguments that my noble and learned friend Lord Ackner and others supporting the amendments will advance. I had better have the whole case against me before I give my reply. That is a wise precaution for people to take in other circumstances and perhaps I should retain that right myself.
At the moment my answer to the amendment before us is that no such power exists at present, the Legal Aid Advisory Committee functions perfectly satisfactorily, there is no reason to think that any
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such power is necessary for the future, and there is no question that if information were required powers exist to enable it to be provided.
Lord Irvine of Lairg: I am heartened by the support for the amendment that has been offered by the noble and learned Lord, Lord Ackner, and I see great additional force in the reason that he gave for his support. I have heard the noble and learned Lord the Lord Chancellor say that the power which it is suggested the advisory committee should have in relation to the board is not one which it presently has in relation to the Law Society. If I were generally to accede to that form of reasoning, it would follow that nothing new should ever be done for the first time.?
We attach great importance to the permanent retention of the advisory committee. We shall consider the noble and learned Lord's response to Amendment No. 57 when it is moved. He declines to anticipate his position in relation to it and we shall consider that response along with the limited response that he has made in relation to this amendment. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No. 17:
Page 5, line 2, after ("cases") insert ("or categories of cases").
The noble and learned Lord said: Clause 4 of the Bill sets out the duties of the board. Subsection (5) provides that:
"The Board shall have regard, in discharging its functions, to such guidance as may from time to time be given by the Lord Chancellor".
Subsection (6) qualifies subsection (5) by providing that:
"Guidance under subsection (5) … shall not relate to the consideration or disposal, in particular cases, of—
(a) applications for advice, assistance or representation",
or subsequent matters arising where those are available.
The question which is not wholly clear is whether that is intended simply to prevent the Lord Chancellor from giving guidance on individual cases or whether it goes wider than that to classes of case which go beyond the single individual case. On the face of it, it would not seem sensible that he should not have the power greater than the power to deal in this way with cases of various classes or a number of cases of the same kind. The provisions of subsection (6) should therefore be restricted to guidance in individual cases so that only in those cases should the Lord Chancellor be prevented from giving his guidance. I shall be glad to know what the noble and learned Lord the Lord Chancellor has in mind in relation to this subsection. I beg to move.
The Lord Chancellor: The idea of this particular provision is to exclude interference by the Lord Chancellor in a grant or refusal in an individual case. That is the primary thing that is attacked here. The noble and learned Lord's amendment would insert the phrase "or categories of cases". It seems to me at the moment that it might be perfectly appropriate for the Lord Chancellor to give directions in relation to categories of cases, so long as that did not involve guidance in relation to particular cases.

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For example, it would be quite wrong for him to say, "Please refuse all applications that come from a certain person or relate to a certain thing". On the other hand, it would seem perfectly reasonable that the Lord Chancellor should say to the board that in matrimonial matters involving children those applications must be given priority. That sort of guidance would seem perfectly feasible. So to exclude guidance in relation to categories of case might well exclude the possibility of guidance that would be perfectly reasonable, and indeed necessary, for the Lord Chancellor to take in the public interest in seeing that the arrangements that the Legal Aid Board made fitted the public interest.
There may be room for some more subtle provision which tries to distinguish between acceptable guidance in categories of case, and non-acceptable guidance in categories of case that the noble and learned Lord's amendment raises. But at the moment I feel that the amendment that he has proposed strikes against guidance that it might be perfectly appropriate to give. Perhaps we both ought to think a bit further about this point.
Lord Silkin of Dulwich: I am grateful to the noble and learned Lord the Lord Chancellor who seems to have understood the problem here a bit more clearly than I expressed it. I agree with him that any form of words will not be easy to formulate to encompass what we both have in mind. Perhaps if we can both think about it we may be able to come up with something. Meanwhile I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 18:
Page 5, line 11 at end insert—
("(8) The Board shall consult the Law Society with respect to any proposals or exercise of powers by the Board which, in the opinion of the Board, may have a significant effect on solicitors and shall consult the General Council of the Bar with respect to any proposals or exercise of powers by the Board which, in the opinion of the Board, may have a significant effect on counsel.").
The noble Lord said: At first sight, and I admit it at once, the Committee may feel that this is not a very wise amendment. The Committee may say "Really, do you have to insert in a Bill that the board must consult the Law Society where matters of significance affecting the solicitors' profession are concerned, and must consult with the General Council of the Bar in regard to proposals or powers which the board think might have a significant effect on counsel?" I accept the rebuke which has not yet been uttered and will now try to explain why the rebuke is not deserved.
As the Bill is presently drafted, the Legal Aid Board has only to consult the Lord Chancellor, and the Lord Chancellor has no duty of consultation, save of course the duty to consult with the Treasury, except in relation to the appointment of solicitor members of the board and to remuneration. While that be so, can one from experience say that it all works out very well when no duty to consult in this manner is set out in a Bill?
I have to tell the Committee what has happened in Scotland. Grave concern has been expressed by the
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legal profession that they have not been sufficiently involved in the reform of the scheme following the Legal Aid (Scotland) Act 1986 and the establishment of the Scottish Legal Aid Board. I am told, and told reliably, that the result has been hasty changes leading to unforeseen consequences. There is a gentleman called Rob Mackenzie of the Law Society of Scotland, who spoke in October 1987 at the National Legal Aid Conference in Liverpool. He said that one of the startling features of the Scottish Act was the speed with which changes were brought in. I give your Lordships some facts.
Between September of that year and 1st April 1987, when the new Scottish Legal Aid Board and the statutory provisions became operative, a complete and revamped framework of secondary legislation required to be drafted and was put out for consultation and comment. I am reliably informed that in some cases a matter of only two or three weeks was allowed for that consultation. What was the result? It was inevitable. Less than six months after the commencement of the new regime the society and the board had a formidable list of proposals for change. There was a Scottish Office news release on 15th December 1987 which announced that a number of the proposals had been conceded.
I shall quote the Secretary of State for Scotland, the right honourable Malcolm Rifkind, QC, MP, who confessed in the following terms:
"It is clear that the new arrangements require some adjustments to ensure that our objectives for legal aid are being fully achieved … Given the magnitude of the changes introduced in April, it is hardly surprising that there are some areas where improvements are possible. I am grateful to all those who made representations".
The Secretary of State might have said—one is obviously grateful for the appreciation that he expressed—that there might have been no need for the changes if proper consultation had taken place.
I am well aware that the board, as chosen, will consist of people of worth who will realise the need to consult about the matters referred to in the amendment and to do so with both branches of the profession. That will be true of the first board, and I hope it will always be true of its successors. What is the harm if one inserts the provision in this Bill based on the unfortunate experience in Scotland? I utter these words with some fear, bearing in mind that while half of the noble and learned Lord's heart is in this country the other half is in the very country that I have mentioned. I feel that the amendment should be incorporated in the Bill for the reasons that I have tried to give. I beg to move.
9.15 p.m.
Lord Renton: If the Bar and the solicitors were to be represented on the board, presumably it would not be necessary to have consultation of the kind which is envisaged in the amendment by the noble Lord, Lord Mishcon. Nor would it be necessary to have it if the effect on solicitors or barristers respectively were to be favourable to them. Therefore when the amendment refers to "a significant effect" on them, one wonders whether those are the right words.
In any event, I must say that this endless writing into statutes of a duty to consult when consultation would be part of the normal process of

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administration seems to me to be something that goes too far and is a habit which we should not develop.
The Lord Chancellor: It is fairly apparent these days that good administration, whether by the Lord Chancellor, by the Legal Aid Board or anyone else, requires consultation with those who are affected, and does not need, as my noble friend Lord Renton said, to he constantly written into statutes. The noble Lord. Lord Mishcon, explained what took place in Scotland. All I can say is that one result of the speed with which matters happened in Scotland was that statutory improvements to the Scottish Act, which were seen to he necessary in the light of experience, are set out in Schedule 4 to the Bill. Had it not been done speedily, that opportunity would have been lost and who knows when another opportunity might have arisen.
However, I am not here to defend or comment upon what happened in Scotland except as it may contain some lessons for us. The position as I see it is that consultation about the effects on people of any change, proposal or exercise of power by the board would be proper action for the board to take. I take some exception to the concentration in this amendment on consultation with the Law Society and with the General Council of the Bar.
To the ordinary lay person, represented for example by those to whom my noble friend Lady Faithfull referred, it might give the impression that the Legal Aid Board and the whole of the Legal Aid Bill was for the benefit of solicitors, the Law Society and the General Council of the Bar whereas in fact of course the primary purpose is to provide a service for people of low, small or moderate means. Any change might well affect them so they also should be consulted.
The Committee may think the amendment gives an undue prominence to the interests of the Law Society and the General Council of the Bar. I also take the point that my noble friend Lord Renton made that they are to have the advantage, we hope, of having membership of the board. However, I do not go quite so far as my noble friend. The mere fact that there are people on the board who are members of the Law Society or perhaps members of the Bar or even members of the General Council of the Bar would not I think make it right for the board to proceed on what those members might think was the correct opinion of the effect of any changes on the solicitors' branch as a whole or on the Bar as a whole.
Whatever the constitution of the board, it would still be appropriate for proper consultation to take place in relation to proposals for change. I should think that, on consideration, my noble friend would agree with that.
Lord Renton: Strictly speaking it does not need to he written into the Bill.
The Lord Chancellor: I am greatly obliged. In my view this particular provision, whether or not one depends on that consideration, does not need to be written into the Bill. For the reason that I mentioned a moment ago, I think that it creates a slightly unfortunate impression of the balance of the Bill as a
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whole. It may be that the noble Lord will feel able in the light of these submissions to withdraw the amendment.
Lord Mishcon: I feel that I must at least answer in view of the nature of the objections that the noble and learned Lord the Lord Chancellor and the noble Lord, Lord Renton, raised. I was going to say—but the noble and learned Lord the Lord Chancellor has said it rather better than I could—that emphasis has been placed upon the fact that membership of the board does not mean representation of the interests of the people concerned. One hopes, as the noble and learned Lord the Lord Chancellor said, that this will operate as a unit for the general benefit of mankind, if I may put it that way.
So the mere fact that solicitors and counsel will be represented on the board was not quite an answer to what I have said; nor, with great respect to the noble Lord, Lord Renton, does he necessarily describe the altruistic attitude of the Law Society and, I am sure, of the General Council of the Bar, when he says that one need not necessarily consult a particular body when one is doing something which is very favourable to the profession. I hope that my profession is sufficiently altruistic to say that we are being given too much.
Lord Hailsham of Saint Marylebone: I do not think so.
Lord Mishcon: The noble and learned Lord is amazed at that remark and finds it a matter for some jollification; but I assure him that that really is the attitude of my profession. I am sure that he can speak for his profession. I say that with some seriousness because quite obviously what may be deemed to be very favourable to the profession would be seen by it to be too favourable if another aspect is being ignored and is being sacrificed by virtue of the benefit which is being offered. That may be a matter that quite obviously should be discussed and be the subject of consultation, whether it be favourable or unfavourable.
I must deal with the point of the noble and learned Lord the Lord Chancellor about the amendment looking as though the whole interest to be safeguarded was that of the law. I think that possibly the Opposition is the one place where no such suggestion ought to be faced fairly, since we are the ones who are responsible, together with others such as the noble Baroness, Lady Faithfull, for seeing to it that the interests of all parties are represented on the board. We have talked about the consumer, the Citizens' Advice Bureaux and other bodies. We have obviously tried to safeguard their interests. It is the legal profession who will have to carry out the duties of the Legal Aid Act. Therefore, we thought that such consultation was very necessary; it was not supposed to be of a selfish character.
If I am told, as the noble and learned Lord has said, that that is not a desirable result, in spite of the fact that I tried to give reasons as to why it should happen, I naturally want to think about his remarks. In the circumstances, at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No. 19:
Page 5, line 11, at end insert—
("(8) The Board shall ensure that legal representation shall be available in any proceedings before any court, tribunal or statutory inquiry where in the opinion of the Board—

(i) a significant point of law arises;

(ii) evidence is likely to be so complex or specialised that the average layperson could reasonably wish for expert help in assembling and evaluating the evidence and its testing or interpretation;

(iii) a test case arises;

(iv) deprivation of liberty or the ability of an individual to follow his occupation is at stake; or

(v) the proceedings are before the immigration appeal tribunal, social security commissioners or the vaccine damage tribunal.").

The noble and learned Lord said: This is a particularly important amendment. It is regrettable that inevitably it has come at a time when the Chamber is looking a little bare. I am sure that many Members of the Committee would have wished to consider the amendment and take part in the discussion.
The amendment raises the question of representation before tribunals and statutory inquiries. The provision of legal aid in those cases has been advocated by many persons and bodies over a considerable period of time. Among them are the Lord Chancellor's Advisory Committee on Legal Aid which has made proposals which. to a large extent, are echoed in the amendment. It has repeatedly pressed for an extension of legal aid to tribunals, as have the Law Society and other bodies. The restrictions on that provision which the amendment proposes follow the ideas of the advisory committee.
The amendment falls short of granting a general extension of legal aid to tribunals. It requires the board to ensure that legal aid is generally available to tribunals if—but only if—in the opinion of the board there is a particularly strong necessity for it. It sets out categories of cases where it is likely that that necessity will arise. It goes a little further in that under paragraph (v) there is a provision for proceedings before certain tribunals—the immigration appeal tribunal, social security commissioners or the vaccine damage tribunal—where it can be assumed, in our view, that the matters will be of such importance that representation ought to be available.
Some legal advice and representation is a vital element in the provision of justice. I am sure that we all have no doubts about that. That is so irrespective of the identity of the court or tribunal which is entrusted with the dispensation of justice in any particular case. The potential damage to the individual who is unrepresented before tribunals or at statutory inquiries is potentially as great as or greater than that which arises before the courts of justice.
It is difficult to see what possible logic there is, if indeed there is any logic, in a system which excludes from tribunals, inquiries and other bodies representation under the legal aid scheme for cases in which damage may be very great and the issues involved very complicated and complex—questions of law, fact and evidence—when legal aid is available
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in relatively simple cases involving comparatively little damage to individuals which happen to come before the court. The only justification that can be given for that distinction is the hard logic of cost to the public and the way in which the legal aid system has developed. But the hard logic of cost undoubtedly creates its own injustice.
This amendment recognises the cost factor. That is why it seeks to limit the extension of the proposed new facility to the most important and difficult cases—those which are most deserving of the provision of representation or those who are unable to afford to be represented themselves; cases, indeed, in which in many instances the other side may be a statutory authority that has no difficulty in obtaining representation or a large company which is well represented when it comes across a case of some difficulty.
I accept entirely that there may be cases of which it may be said that it is better for there not to be representation at all. But no representation at all is not the same thing as one side being represented in a way which is inevitably unfair to the other side. It is that situation that this amendment seeks to end, but only in cases where one can justify by the nature of the case the importance to the individual concerned of being represented. In my submission to the Committee, at the very least this amendment presents the noble and learned Lord the Lord Chancellor with the strongest case that he can have to put to his Cabinet colleagues; namely the argument that they should depart from the inflexibility that was displayed in the White Paper, which said that there should not be extension to tribunals. I hope that he will welcome and seize that opportunity. I beg to move.
9.30 p.m
Lord Renton: I wonder whether the noble and learned Lord would be so good as to explain why he has raised this matter at this stage—admittedly under the heading "Duties of the Board"—when it might have been more appropriate to have raised it under Clause 14, which deals with availability of representation.
Lord Silkin of Dulwich: We certainly thought it quite appropriate to raise the issue under the duties of the board. It will be for the board to decide whether in its opinion one of the conditions of precedent which are set out in paragraphs (i) to (v) arise. That would be a function of the board entirely consistent with its general function of deciding whether there should be representation or advice in other cases.
Lord Elwyn-Jones: I hope that the noble and learned Lord the Lord Chancellor will be able to look sympathetically and approvingly at this amendment. It has always struck me as exposing a tremendous lacuna in the arrangements for legal aid where before tribunals—and we have a multiplicity of them—parties are represented fully on one side by an array of counsel who raise important matters of law and matters of importance to the individual before the tribunal. Yet it is a one-sided process.

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At one stage, trade unions preferred to undertake this procedure through their own experienced spokesmen. That is a phase which has long since passed. Now, even though skilled men—of whom the noble and learned Lord may have had a little experience—have done their work well in the past, the inequality of representation before tribunals on matters of very great importance to the individual concerned is becoming more apparent and more unsatisfactory.
Without going into the detail of the matter. I urge the importance of acceptance or at least an undertaking to look at this matter which has been raised by authorities in this field. It is high time, in a period of proliferation of tribunals, when so much is done outside the courts which is of increasing importance to the individual subject, that we consider whether we can fill in some way, if only modestly, the gap which now undoubtedly exists in this field.
Lord Ackner: Perhaps I may add a short comment on this point. As my noble and learned friend the Lord Chancellor knows, very often great costs are run up in appeals where, if the case had been argued competently in the first instance, no appeal would have been necessary. If in this field one is concerned with public expenditure—and it is probably only in this field that one is so concerned—one should hear in mind that money well spent at an early stage can often prevent quite unnecessary expenditure at a later stage.
Lord Meston: With respect, perhaps I may take up that last point and support it. This is an important amendment. I suggest that the extension of legal aid in some form or other to tribunals would be valuable and possibly cost-effective. I have some experience of industrial tribunal cases. I suggest that to enable legal representation in more cases, certainly before industrial tribunals, would lead to more cases being settled, or abandoned when they are utterly hopeless as indeed far too many of them are.
The existing ACAS and interlocutory procedures in industrial tribunal cases do not deter the unarguable case. They do not prevent a great number of cases being pursued to a full hearing when, had there been proper advice at an early stage, the applicant would have been saved a great deal of disappointment and the respondent—usually his employer or former employer—would have been saved a great deal of expense and trouble.
As the noble and learned Lord, Lord Ackner, has said, the effective presentation of cases at an early stage will inevitably be of benefit and will shorten cases before tribunals, some of which go on for far too long.
I see one problem in the amendment. When monetary sums are awarded, typically the amounts recovered before tribunals are small—surprisingly small in some cases. Indeed, the applicants themselves are often surprised at how little they are able to recover. The cost provisions are such that orders for costs in favour of the successful party are seldom made by tribunals. It follows that if there was representation under the legal aid scheme, the
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statutory charge would bite and would probably swallow up most of what was recovered. It would therefore be necessary to provide some measure of exemption from the operation of the statutory charge if the amendment, or something like it, were to come into force.
The Lord Chancellor: I accept there is no doubt that some times, if cases were better prepared in a lower court, the result would save unnecessary expense. I may be wrong, but I have come across a case or two of which that might be said in which there was legal representation. If one could incorporate that with legal representation, perhaps the point that my noble and learned friend makes might be powerful. As it is we have to see whether the amendment focuses on cases of that sort.
So far as I can see, the amendment would apply to any form of tribunal, statutory inquiry or court. It would apply to a defamation action in which some important point of law arose or which was a test case for one or more actions of defamation. As I said earlier, up to now it has been accepted that defamation actions should not be covered by legal aid. That would be an innovation in itself. But the fundamental point about the amendment is that the distinction between tribunals and statutory inquiries on the one hand and the ordinary courts of law on the other is that tribunals and statutory inquiries are set up specially for particular purposes. Matters are taken from the ordinary courts so that specialised attention may be given to them by persons who have special qualifications to deal with such matters.
The whole thrust of the great increase in such tribunals and statutory inquiries—I shall not pause to try to trace the history of that growth or the particular administrations under which it arose— indicates that the justification advanced was that these tribunals offered a specialised service and therefore were not dependent in anything like the same way as ordinary courts on the arguments advanced by the parties on one side or the other in the shape of representations of law. A tribunal is supposed to be familiar with the law and able to apply it.
The amendment has the exceptional quality that it would apply to every court, tribunal or statutory inquiry and therefore there would be no kind of threshold test. The administration of the board would be required to look into applications in every possible kind of court, tribunal or statutory inquiry to see whether, for example, a significant point of law arises, whatever that might mean; perhaps one which is significant as distinct from any other point of law. The evidence is likely to be so complex or specialised that the average lay person could reasonably wish for expert help in assembling and evaluating the evidence and its testing or interpretation. One can understand that it would largely apply, for example, to the planning inquiry field. I think that any substantial planning inquiry would have that character. As far as I understand, all of these headings are options. If one or more of the headings apply, legal aid would become available and therefore a tremendous field is being opened up.

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Paragraph (iv) of the amendment reads:
"deprivation of liberty or the ability of an individual to follow his occupation is at stake".
I am not clear what is meant by the latter part of that provision. Paragraph (v) appears to be different and appears to give a complete right to legal aid in respect of the immigration appeal tribunal, social security commissioners and the vaccine damage tribunal. That appears to fit strangely into the principle, if there is a principle, in the early part of the amendment.
As some Members of the Committee have pointed out, this matter has been discussed for some time. When my noble and learned friend Lord Hailsham was Lord Chancellor he made arrangements for his department to commission research into the effectiveness of representation at tribunals. My experience of some tribunals suggests to me that perhaps one is better without legal representation on occasion. I have vivid recollections of appearing for the rating officer in Scotland in valuation appeal committees. The most successful applicants to those committees were not those who came along with learned senior counsel, or arrays of distinguished counsel, but the lady who came along with a baby in her arms and briefly stated her position. She usually went away with more by way of success than did those who came equipped with dazzling and perhaps expensive counsel to support their application.
Perhaps lawyers such as myself are apt to assume that if one has the benefit of a lawyer one necessarily has the benefit of a better result. I would be the last person to underestimate the value of a lawyer's services. On the other hand, when one is examining a question as important as this, it is wise to see whether legal representation overall makes any substantial difference to the result of tribunals.
The research is going ahead and is concentrating on social security, mental health, industrial and immigration tribunals. We hope to have the results of the research early in 1989; it is a fairly thorough examination. However, I cannot accept this amendment at present and nor can I reasonably give any encouragement that I shall be in a position to accept it at any time during the currency of the proceedings on this Bill.
Lord Silkin of Dulwich: At this hour of the night I would not think of seeking to test the opinion of the Committee. However, we may wish to return to this matter at a later stage, perhaps with a better drafted amendment. The noble and learned Lord's objections seem to be largely devoted to the wording of the amendment and to particular parts of it, although the White Paper is much more robust in opposing the general concept of extension. However, we shall consider that issue.
I should like to comment on the noble and learned Lord's observation that it is sometimes better not to be represented before tribunals. Of course it is sometimes better not to be represented but in general—particularly if the other side is a powerful body which is represented—it is difficult to persuade the unrepresented person that that is so.
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What the noble and learned Lord said does not apply only to tribunals in so far as it applies at all. I well remember a long divorce case that I fought unsuccessfully before the High Court. My client could not afford to brief counsel for the Court of Appeal and he was not eligible for legal aid. I told him that in my view he had a very good case and that he could do it himself. He did so far more successfully than I did in the court below. Cases of that kind happen, but it would be a very sad reflection on the purpose and advantages of legal aid if one were to accept that that is a generality that one ought to regard as usually applying in tribunal cases. However, at this hour of the night, I do not believe it is profitable to pursue the matter, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 20:
After Clause 4, insert the following new clause:
("Regional Legal Services Committees.
.—(1) The Board shall establish regional committees for legal services, composed of appropriate groups of legal aid areas or any parts of legal aid areas.
(2)The said committees shall consist of bodies representative of the consumers and providers of legal and advice services and local authorities in each region, and other people interested in the work of the committees.
(3)The said committees shall ensure and facilitate the development of legal and advice services.
(4)The said committees shall advise the Board upon regional needs for legal advice, assistance and representation and the Board shall exercise its powers and duties under this Act with due regard to such advice.
(5)The Board shall provide financial and other resources to the regional committees for the performance of their obligations.")
The noble and learned Lord said: This amendment would require the establishment of regional legal services committees along the lines of the existing North-West Services Committee and, if I may say so, of a committee in South Wales which, however, is impoverished, although for some reason the North-West body is not. However, both do excellent work in the locality.
One of the problems in the legal aid field is the unequal availability of legal aid as between one district and another. It has been found, and legal aid annual reports have indicated, that locally based legal services committees make a valuable contribution in the regional development of legal services. They are particularly useful in identifying unmet needs. in pioneering new schemes for the provision and delivery of legal services and, indeed, in co-ordinating the provision of services in their areas.
Clause 3 (1) of the Bill, it would seem, confers on the Legal Aid Board power to establish such committees. The subsection states:
"Subject to the provisions of this Act, the Board may do anything

(a) which it considers necessary or desirable to provide or secure the provision of advice, assistance and representation under this Act.".

It is therefore a broad enough provision to cover the financing of regional legal services committees.
I have had very eloquent letters from South Wales about the work that the South Wales Legal Services Steering Group does, for which we are grateful in those parts. The North-West Legal Services

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Committee has a proven record of bringing together all those concerned with the administration of justice and the provision of legal services to achieve improvements. I am told, for example, that the committee pioneered what has now become the ALAS scheme. I hope it is not the "alas" scheme because that sounds too desperate a situation for me to call in aid, and I hope I shall not be pressed to say what ALAS stands for. However, whatever it stands for, it is a scheme which has organised experiments for delivering legal services to prisoners. It has published directories of advice services in the locality and it is the kind of service which can be rendered by these local groups. Other committees exist in the North-East, and for some time I have received letters from them and also from South Wales.
The Law Society in its response to the legal aid efficiency scrutiny, said that regional committees:
"would play a key role in co-ordinating legal services".
It is thought that that role is particularly crucial if the Government are to press ahead with their plans to hive-off parts of the green form advice scheme. This is a situation which has concerned the Law Society and this is one of the stop-gap measures which it believes will be particularly useful if that occurs.
On any view it seems important to ensure the spread of availability of legal aid and legal services across the country and that there should be a willingness to set up these regional legal services committees dedicated to looking after the interests, above all, of the people in their own region. There are some regions which are badly neglected and which sorely need such facilities. I cannot believe that it would involve any great expenditure. We believe that it would be a valuable addition to the administration of the legal aid scheme. I beg to move.
The Lord Chancellor: I have already made comment on the North-West Legal Services Committee, and I have also referred to the South Wales Steering Group for such a committee and its eloquent desire for help.
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I have already explained that power to do what is suggested in this amendment is available to the board subject to the approval of the Lord Chancellor. I also sought to explain that it is a matter of seeing what is required in the view of the board when the board is set up. I hope that the noble and learned Lord, Lord Elwyn-Jones, will feel that the answer I gave to the earlier amendment may be something to be taken into account in answering this one. I certainly do not see a need to add anything on these lines to the Bill when the Bill already covers a discretionary power to the board to make provisions on the lines that the amendment seeks to provide.
Lord Elwyn-Jones: I confess that I was not giving my undivided attention to the earlier consideration of this matter. I therefore may have let something very important pass by in the odd moments when one is allowed relaxation. I shall bring no tears to anyone's eyes but I have sat in this Chamber since three o'clock in the afternoon. If I have missed something which was said earlier, I apologise. I invite a serious look at this provision, otherwise I shall be unable to go to South Wales again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 5 and 6 agreed to.
The Earl of Arran: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

City of Westminster Bill
Brought from the Commons, read a first time and referred to the Examiners.
House adjourned at one minute before ten o'clock.

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