Sitting of 21 July 1988

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

    BRITISH RAILWAYS (No. 2) BILL (By Order)
    Order for consideration read.
    To be considered on Monday 25 July.

    FALMOUTH CONTAINER TERMINAL BILL (By Order)
    Orders for Second Reading read.
    To be read a Second time on Thursday 28 July.

    NEWCASTLE UPON TYNE TOWN MOOR BILL [Lords] (By Order)
    Order for Second Reading read.
    To be read a Second time on Monday 25 July.

    AVON LIGHT RAIL TRANSIT BILL [Lords] (By Order)
    Orders for Second Reading read.
    To be read a Second time on Thursday 28 July.

    HARWICH HARBOUR BILL [Lords] (By Order).
    Order for Second Reading read.
    To be read a Second time on Monday 25 July.

Oral Answers to Questions
  HOME DEPARTMENT

    Neighbourhood Watch Schemes
    Mr. Riddick: To ask the Secretary of State for the Home Department what steps have been taken to encourage co-operation between local authorities and neighbourhood watch schemes over the siting of neighbourhood watch zone signs on lamp posts and other prominent places; and if he will make a statement.
    The Minister of State, Home Office (Mr. John Patten): The display, otherwise than on highway land, of signs for approved neighbourhood watch schemes now have deemed planning consent. Signs on trunk roads, for example on lamp posts, that do not cause a hazard to traffic or pedestrians get immediate approval from the Department of Transport. The display of signs on other roads is a matter for local highway authorities. I hope that they will follow the Department of Transport's lead.
    Mr. Riddick: I welcome the Government's attempts to facilitate the siting of neighbourhood watch signs. Will the Minister tell the House whether local authorities are following the Government's positive lead? Is he aware that in West Yorkshire the number of schemes in operation has increased from 160 at the beginning of last year to well over 500 and that that should make a significant contribution to deterring the would-be vandal and the would-be burglar?
    Mr. Patten: A few councils, alas, are not being co-operative with the neighbourhood watch movement, and that is very disappointing. The increase in the numbers of neighbourhood watch schemes in West Yorkshire in the past 12 months that my hon. Friend has reported to the House is very pleasing. There are now nearly 56,000 neighbourhood watch schemes in the country, a phenomenal increase of some 60 per cent. over the number a year ago.
    Mr. Worthington: On the theme of crime prevention, and given the recent publication of further work by Professor Alice Coleman showing that the design of public housing is an important factor in influencing crime rates, will the Minister contact the Department of the Environment and urge that a great deal of money be spent on public housing, to reduce crime rates? Unless that money is spent, neighbourhood watch schemes will be merely cosmetic.
    Mr. Patten: The work of Professor Alice Coleman is extremely interesting and the theme of designing out crime has been accepted by people of all political views and all architectural and planning views in this country. My right hon. Friend and I are in constant contact with the Department of the Environment. Indeed, I met my hon. Friend the Minister for Housing and Planning yesterday afternoon at 3 o'clock and that was one of the issues that we discussed. I hope that the hon. Member for Clydebank and Milngavie (Mr. Worthington) is aware of the very substantial sums of money being spent by the Department of the Environment under the Estate Action scheme—£75 million this year has been devoted to crime prevention.
    Mr. Hill: Will my hon. Friend call a meeting between the Southampton city council, the Hampshire chief constable and his Department to try to enable the neighbourhood watch scheme, with or without signs, to make some progress in the city of Southampton, which has a very high incidence of crime?
    Mr. Patten: My hon. Friend raised that important point in his recent Adjournment debate, to which I replied. We are doing what we can to ensure that in Southampton, as in every other major city in the country, the neighbourhood watch movement continues to make the progress that this great citizens' movement is making throughout the country.

    Guildford and Woolwich Bombing Cases
    Mr. Wall: To ask the Secretary of State for the Home Department when he expects to be able to announce the outcome of his review of the Guildford and Woolwich bombing cases.
    The Secretary of State for the Home Department (Mr. Douglas Hurd): I expect to announce my decision fairly soon on whether to refer the case to the Court of Appeal.
    Mr. Wall: Will the Home Secretary comment on the transfer of the Guildford prisoner Paul Hill to Winchester gaol, the 47th such move for this prisoner, which smacks more of The Gulag Archipelago or a Kafka novel than the practice of a democratic state? Will be assure the House that when he reaches a decision on the Guildford and Woolwich cases he will announce his decision in the House so that Members can question him?
    Mr. Hurd: There are many operational and other reasons why prisoners are transferred from time to time and I shall not comment on Mr. Hill's transfers. The hon. Gentleman puts me in difficulty about his second point. As I have said, I hope to announce my decision fairly soon, but that does not mean within the next week. Since I told the House in January of last year that I saw no ground for referring this case to the Court of Appeal, a new matter has come forward. The hon. Gentleman knows that I have arranged for it to be investigated by the police. That investigation has now come to an end. I need to look all over again at the whole case, from the beginning. I intend to do that during the recess.
    Mr. Stanbrook: Is my hon. Friend aware that the challenges to the decisions made by our system of justice are in many cases, especially those involving terrorist offences, beginning to take on the attributes of an industry? It is always possible to question individual items of evidence in the original trial, but it was the jury's function at that time to distinguish between right and wrong. Is it not harmful to our judicial system to go on and on and on questioning individual verdicts?
    Mr. Hurd: It is because I agree with the general thrust of my hon. Friend's question that, like my predecessors, I have taken the clear line that reference to the Court of Appeal should be undertaken by the Home Secretary only when there is new and substantial matter that was not before the original jury.
    Mr. Corbyn: When the Home Secretary is examining this material will be give an undertaking to the House—[Interruption.] I am sure you will agree, Mr. Speaker, that we are discussing an extremely important matter and that many people believe that there has been a very serious miscarriage of justice in the Guildford and Woolwich cases. One of the Guildford four, Paul Hill, is a constituent of mine. Will the Home Secretary undertake to look into the prison conditions of all the prisoners and carefully to examine what possible operational reasons there can have been for Paul Hill to be moved 47 times in 14 years and to have spent four years in virtual solitary confinement? Will the Home Secretary undertake to look sympathetically into the prison conditions and also to look—we hope very intently—at the evidence, which, I believe, demonstrates the innocence of the prisoners concerned?
    Mr. Hurd: These people have been convicted by a court. Their cases went to appeal and the verdicts were upheld. Therefore they must expect to be treated as convicted persons—neither better nor worse than other people in that category.

    Licensing Act 1988
    Mrs. Gillian Shephard: To ask the Secretary of State for the Home Department when he intends to bring the Licensing Act 1988 into effect and if he will make a statement.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): As I said in reply to a question from my hon. Friend the Member for Isle of Wight (Mr. Field) on 14 July, it is intended that the commencement date for sections 2, 4, 6, 7, 8, 10, 16, 17 and 18 of the Licensing Act 1988 will be 1 August and that the remaining sections will be in force on or before 1 September, with the exception of sections 12 and 15, which are likely to be implemented on 1 March 1989.
    Mrs. Shephard: Does my hon. Friend agree that under-age drinking, with its attendant hooliganism and yobbish behaviour, is a matter of increasing concern to the people of this country? How will the Act contribute to tackling that problem?
    Mr. Hogg: The Act tightens up the provisions of section 169 of the principal Act, in that the element "knowingly" is deleted and an offence is now committed when there is a supply to an under-age person of alcoholic drink, unless—I use loose language—the licensee or his agent took reasonable care.
    Mr. Duffy: Is the Minister aware that in Sheffield last week a judge remarked that violence among drinkers leaving night clubs in the early hours had become virtually endemic? What assurance can he offer the people of Sheffield in the light of the impending legislation?
    Mr. Hogg: The hon. Member will be encouraged to know that the Licensing Act 1988 makes provision for revocation orders in more extended circumstances and gives justices a greater power to refuse special certificates.
    Mr. Couchman: Is my hon. Friend aware that his answer will come as a disappointment to the licensed trade, which had hoped to benefit from the new hours during the summer season this year? If my hon. Friend and my right hon. Friend the Home Secretary are confronted by anti-social behaviour from the young, yob tendency during the summer, will they bear in mind that the vast majority of people who enjoy a social drink do so in a moderate, well-behaved and sensible way? Will the Government resist the temptation to blame everything on drink and look for the more complex antecedents of anti-social behaviour?
    Mr. Hogg: I am sorry that licensees will be disappointed. I accept the broad thrust of my hon. Friend's case that the majority of people who drink do so sensibly.
    Mr. Beggs: Does the Minister accept that there is great concern throughout the United Kingdom at the ease with which young people and less-responsible older people have access to drink through off-licences? Normal, sensible and reliable people are exposed to continuing nuisance at all times of the day and night because of open, blatant drinking in places such as sunshine bars and in remembrance parks where we pay tribute to those who served in world wars. Will the Minister consider that

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    problem and endeavour to assist those local authorities that wish to see control exercised over the public nuisance that is created by those consuming alcohol?
    Mr. Hogg: I could give the hon. Member for Antrim, East (Mr. Beggs) a number of answers. I remind him of the provisions of section 169 of the principal Act, which have been tightened up by the 1988 Act, and that there are provisions in the new Act for dealing with the supply of alcohol by under-age persons employed in off-licences. The hon. Gentleman will also know that my right hon. Friend the Home Secretary is prepared in principle to approve a byelaw brought forward by Coventry city council, which addresses the kind of problem to which he referred.
    Mr. Colvin: My hon. Friend will know that the measures contained in the Act—particularly more flexible hours—are welcomed by the licensed trade. It also welcomes the more stringent regulations that will permit action to be taken against under-age drinkers, but how are licensees to know when a drinker is under age? At present, a publican serving an under-age drinker risks losing not only his licence but his livelihood and his home. As my right hon. Friend the Home Secretary has recently been issued with an identity card by his local pub to prove that he is over the age of 18, why will the Home Office not support the move to a national identity card scheme?
    Mr. Hogg: That is a very much wider question, to which my right hon. Friend the Home Secretary will, I believe, be making a response later. We are much in favour of the voluntary schemes that are now in place. The new Act, and particularly the amendment of section 169, will make some licensees a little more cautious than they have been hitherto. I make the point that only a minority of licensees have been acting improperly.
    Mrs. Ann Taylor: As under-age drinking seems to have reached epidemic proportions in many parts of the country, and as the situation will probably grow worse with the introduction of all-day drinking, when will the Minister take action on the Masham committee report, and when will he announce the Wakeham committee's recommendations on under-age drinking? Do not the events of this summer prove the folly of legislating to relax licensing laws before anything is done about drink-related problems?
    Mr. Hogg: As usual, the hon. Lady is mistaken. She either exaggerates or gets her conclusions wrong. The Licensing Act 1988 incorporates many of the recommendations of Lady Masham's report, and the Wakeham committee, chaired by my right hon. Friend the Lord President of the Council, has announced its conclusions frequently.
    Mrs. Taylor: What are the Government doing?
    Mr. Hogg: I hear the hon. Lady chattering from the Front Bench. One of the things that we are doing is drawing to the attention of the police and the courts all the procedures and provisions that exist in statute, and they are extremely comprehensive.

    Uniformed Police (Sussex)
    Mr. Higgins: To ask the Secretary of State for the Home Department when he anticipates there will be an increase in the number of uniformed police on the beat in Sussex.
    Mr. Douglas Hogg: My right hon. Friend the Home Secretary will consider the application from Sussex police authority for more police officers, along with similar applications from other police authorities, before making the next allocation of additional police posts under the programme which he announced in May 1986. We cannot at this stage give an exact date for the decision.
    Mr. Higgins: My hon. Friend will recall that in March 1987 he issued a press statement saying that 66 additional police were to be provided in Sussex to enhance operational police strength, mainly in terms of increasing patrol cover and community policing. That statement was completely untrue. There has been no increase in the number of police on the beat in Sussex. When will my hon. Friend put the matter right?
    Mr. Hogg: I understand my right hon. Friend's concern, and he has always put his case with much vigour. but I have to say that I do not agree with his conclusions. Since May 1979, for example, the police establishment in Sussex has increased by 121, and the number of civilians employed by 154. Even allowing for the fact that 109 of the police officers have been allocated to Gatwick duty, there has none-the-less been a significant increase in the number of police officers available for operational duty.
    My right hon. Friend will be aware—and I think that he will welcome it—that at Worthing there has been a change in the operation of the uniformed and crime process units, which I am glad to say has significantly increased the amount of time available for patrol duties by all officers in these units.
    Mr. Campbell-Savours: Was the most recent request for extra police for Sussex met in full? Perhaps the Minister might extend it to Kent.
    Mr. Speaker: Order. The question is about Sussex.
    Mr. Campbell-Savours: If it was not—[Interruption.]
    Mr. Speaker: Order. The hon. Gentleman should confine the question to Sussex.
    Mr. Campbell-Savours: If it was not met in full for Sussex, why was it also not met in full for Cumbria? [Interruption.]
    Mr. Speaker: Order. It is an absolute abuse of our procedure to try to ask a question on a completely different topic.

    Police Cells (Prisoners)
    Mr. Baldry: To ask the Secretary of State for the Home Department what has been the change in the number of prisoners held in police cells since his statement of 30 March, Official Report, column 1083.
    Mr. Hurd: The number of prisoners held in police cells has fallen from 1,374 on 30 March to 690 yesterday. make that a reduction of 684.
    Mr. Baldry: Will my right hon. Friend confirm that Monday's Green Paper "Punishment, Custody and the Community" will help to reduce our prison population by providing more tough but non-custodial sentences?
    Mr. Hurd: I hope so, but that will be up to the magistrates and judges who pass sentence. If these ideas bear fruit, they will have a wider range of disposals, including tough punishing disposals, outside prison.
    Mr. Lofthouse: Is the Home Secretary aware that many of the people held in police cells are youngsters of 18 and under, who are held there because there are not places in many of the prisons? Some of them are held in prisons such as Armley in Leeds. The Minister told me in a written answer last Friday that two youngsters aged 18 and 17 had committed suicide there. I have been informed by the probation service that there have been three suicides during a period of a few weeks. Will the Home Secretary set up an investigation and let us know what is going on in Leeds?
    Mr. Hurd: The hon. Gentleman is ranging wide, but it is true that police cells are not the right places for prisoners, whatever their age, and that is why we are working, with increasing success, to reduce numbers. They have already been halved and I expect, without making any rash promises, that we shall make further progress as new prisons open—we have two new prisons opening in the latter part of this year—and as Ashford remand centre is reopened. As we develop the prison building programme and it comes into effect that will also relieve overcrowding in places such as Armley.
    Mr. Wheeler: Does my right hon. Friend agree that, with over 69,000 persons received into prison last year, his Green Paper has been received exceptionally well as one of the most thoughtful and far-reaching contributions for many decades on the complicated problem of keeping non-violent offenders out of prison and finding alternatives for those persons who might otherwise be remanded in custody? Will not ideas such as tracking, curfew orders and even experiments with electronic monitoring do much to contain the prison population and reduce the problem created by the number of people on remand?
    Mr. Hurd: I am grateful to my hon. Friend, with his experience of these matters, for that commendation. I hope that the Green Paper will be studied by right hon. and hon. Members and, more important, by those whose responsibility it is to judge, case by case, how they should sentence those who have been convicted.
    Mr. Cox: Is the Home Secretary aware that the continuation of this policy is an utter disgrace, that people who are held in police cells on remand are denied the rights that people held in prison have, and that magistrates, police consultative committees and the police themselves condemn that policy? When will the Home Secretary stop it?
    Mr. Hurd: The policy is to reduce and eventually do away with the use of police cells for prisoners. We have halved the number of people so held since the beginning of March, so we are half way to achieving that. Part of that policy consists of the prison building programme, which Opposition Members have consistently opposed and
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    criticised. That has brought 6,000 prison places into being since June 1983 and aims to produce 22,000 new places in all by the mid-1990s.

    Identity Cards
    Mr. Ian Bruce: To ask the Secretary of State for the Home Department if, in the light of calls for membership cards for football supporters, he will re-examine the introduction of national identity cards to aid the fight against disorderly and lawless behaviour.
    Mr. Hurd: Membership cards for football supporters is a separate question from the issue of compulsory identity cards for everyone. We remain to be persuaded that there is a sufficiently strong case for the introduction of universal compulsory identity cards.
    Mr. Bruce: I thank my right hon. Friend for that reply, but I am somewhat disappointed, since we have read in our newspapers that such a study is going on. Surely my right hon. Friend must agree that as we already must have various identity cards the principle has been accepted in many situations. Certainly the police in Dorset would be happy to see national identity cards as an additional aid to fighting crime. Such cards would help those football clubs that are introducing membership cards to do so correctly. They would also help a great deal in registering everybody for the community charge and in all sorts of ways, such as fighting benefit and other kinds of fraud.
    Mr. Hurd: My hon. Friend raises a number of points. A national identity card system would not be much use to football clubs. They are being asked to produce a selective scheme, whereas the national identity card would be universal. That means that they will want to keep out of their scheme people who would, under my hon. Friend's idea, have a national identity card. That illustrates the point. My hon. Friend has been reading the newspapers, as I have also, and what is said about my right hon. Friend the Prime Minister's supposed activities is simple make-believe. It is true that I have asked the police for an up-to-date and considered assessment. Their established view has been that they do not think that a system of compulsory national identity cards, with associated powers for the police, would help them. They have thought that the disadvantages would outweigh the advantages. In view of the renewed interest in the House and elsewhere in the subject, I have asked them for their considered and updated view.
    Mr. Benn: Has the Home Secretary considered the moral issues that are raised by the fact that the Government are contemplating a police computer dossier on every citizen in the country, while the Home Secretary is presenting a White Paper on official secrets that would deny to the electors knowledge about what the Government are doing? The proposed legislation will be of the kind that has concealed from public attention crimes committed by people such as Peter Wright, who describes in detail in his book crimes committed by the security service against the liberties of the subject. How does that fit in with the glorious revolution, which is supposed to have safeguarded our political liberties?
    Mr. Hurd: Surely that is the right hon. Gentleman's speech for tomorrow. I do not think that it arises from this question.
    Sir Peter Hordern: Will my right hon. Friend consider the issue of identity cards, not only in relation to lawless behaviour, but to enable those who have the right to seek supplementary benefit and social security to do so easily and conveniently when the new computer system comes into use? Is it not time that we thought about the issue of identity cards to do away with the degrading conditions that exist in so many social security offices?
    Mr. Hurd: It is perfectly reasonable that that idea should be thought about. I foresee a continued growth of cards such as the one that my hon. Friend the Member for Dorset, South (Mr. Bruce) showed the House just now, which he carries as a matter of convenience to identify himself for specific purposes. I think that such cards will increase. There is a very substantial difference, however, between those cards, which I believe will increase and which are useful, and a scheme by which everyone in the country would be compelled to have a national indentity card and in which the police had powers to compel people to produce those cards.
    Mr. Hattersley: I welcome the Home Secretary's first answer. Like him, I believe that a system of compulsory national identity cards would not make up in its contribution to a reduction in crime what we would lose in civil liberties.
    The Home Secretary's second answer concerned the police feasibility study. I urge him to follow his instinct on the matter, which is to use if for his speech at the Tory party conference and then to forget about it.
    Mr. Hurd: I believe that the police view is important, but it is not necessarily decisive. The matter is for Parliament to decide, of course. However, I think that it is important to discover whether the established police view, which is the one I described and with which the right hon. Member for Morley and Leeds, South (Mr. Rees) as a former Home Secretary is familiar, is still maintained.
    Mr. John Browne: Does my right hon. Friend accept that one of the greatest protections afforded to the terrorist, the hooligan, the illegal immigrant and even the under-age drinker is anonymity? In an age when credit cards are commonplace, will my right hon. Friend agree to consider the matter in depth? People should be issued with identity cards, although they need not necessarily carry them. They should, however, be available.
    Mr. Hurd: I do not really believe that the determined terrorist with whom we have to deal would be especially detected or deterred by a system of national identity cards that did not require him to carry any such document.

    Concessionary Television Licences
    Mr. Livsey: To ask the Secretary of State for the Home Department if he will make a further statement concerning his policy towards the provision of concessionary television licences to pensioners.
    The Minister of State, Home Office (Mr. Tim Renton): No. The matter was fully discussed in the debate in the House on 12 July.
    Mr. Livsey: Now that the Government have decided to put up the concessionary television licence from 5p to £5, will the Minister seek to end the discrimination between one group of pensioners living in a small street who pay the
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    full licence fee and others who do not? Surely the time is right for all pensioners to have a concessionary television licence of £5, as has recently been introduced.
    Mr. Renton: No, Sir. The purpose of the new regulations that we brought in was to return help under the scheme to those for whom it was originally intended, who were not those living in mainstream housing. If we followed the hon. Gentleman's suggestion it would mean a substantial increase in the licence fee for everyone else—about 50 per cent. if we were to give free licences for all pensioners—and that would greatly damage some people who are not pensioners, and who are much worse off than some pensioners, such as those on income support.
    Mr. Andrew MacKay: Have we not just heard a classic example of SLD woolly thinking? If free television licences were given to all pensioners, a lot of very affluent people would be getting their television licence at no cost at all, while others on limited incomes and looking after children would have to pay.
    Mr. Renton: Before I answer my hon. Friend's question, perhaps he could define the SLD for me. Of course it is woolly thinking, which does not try to concentrate help on those most in need. It is not a thought-out or practical policy in any sense of the word.
    Mr. Corbett: We know that the Government and their supporters do not like the concessionary licence scheme in any event, but will the Minister at least reconsider the Peacock committee's suggestion of exempting pensioner households which depend on means-tested benefit as a start and concentrating help in that way? Or is he saying that those of us at work would resent paying the estimated £5 a year extra that it would cost to give such help to the 1½ million pensioners who would qualify?
    Mr. Renton: As I told the hon. Gentleman in the debate last week, the point behind the Peacock recommendation is that if anyone should get a concessionary television licence it should not be pensioners specifically, but those on income support. That is the point to which Opposition Front-Bench spokesmen failed to address themselves, and they have returned instead to the simple election bribe of free television licences for all pensioners.
    Mr. Kilfedder: Will the Minister look again at this question? Many pensioners to whom I have talked ask for compassion from the Government. Does the Minister accept that many pensioners live on their own, often far from municipal and shopping centres, and that their movements are restricted virtually to the four walls of their dwelling and their garden? The television opens the world to them. Will the Minister therefore grant concessionary television licences to pensioners?
    Mr. Renton: I accept the hon. Gentleman's point about the importance of television to many pensioners. However, I would point out that last spring when representatives of the National Federation of Retirement Pensioners Associations called on my hon. Friend the Minister of State and my hon. and learned Friend the Minister of State, Foreign and Commonwealth Office, who was then at the Home Office, they made it absolutely plain that they opposed free television licences for pensioners because most pensioners do not want to seem to be supported by such charity.

    Special Constables
    Mr. Matthew Taylor: To ask the Secretary of State for the Home Department if he will call for a report from the chief constable of Devon and Cornwall on the use of special constables at weekends to police towns and villages in Cornwall.
    Mr. Douglas Hogg: Deployment of the special constabulary is an operational matter for individual chief officers. I understand from the chief constable of Devon and Cornwall that in Cornwall special constables are deployed at weekends to assist with such occasions as local carnivals and fetes and to assist with local crime prevention initiatives.
    It is common for the special constabulary to police rural towns and villages at weekends in support of regular police officers.
    Mr. Taylor: The Minister may like to know that my constituents, particularly in Truro and St. Austell, have reported considerable feelings of intimidation to me. In the light of that, I have on a number of occasions asked for more full-time constables, but the Government will not give the Devon and Cornwall constabulary the numbers that it would like. Will the Minister therefore look into the question to see whether the excellent work done by the special constabulary, whose numbers have risen recently, cannot be used to mitigate some of my constituents' worries, particularly on Friday and Saturday evenings?
    Mr. Hogg: I am very much in favour of the special constabulary, which can, indeed, do a valuable job. In terms of the manpower available to the force, the hon. Gentleman will be pleased to know that since May 1979 the number of police in his county force has risen by 133 and the number of civilians by 160. He will also be pleased to know that the force has a clean-up rate well above the national average and that the number of offences per 100,000 of the population is well below the national average.
    Mr. Harris: I welcome the figures just mentioned by my hon. Friend, but is he aware that the 800 or so special constables in the counties of Devon and Cornwall between them now account for 80,000 hours of policing? Does he agree that this is a public-spirited duty, and will he do all he can to encourage people to join this excellent force?
    Mr. Hogg: I entirely agree with what my hon. Friend has said. I must declare an interest: I was once a member of the special constabulary. [Laughter.] When they are properly trained and doing their stuff, they are extremely useful.

    Fire Services (Accident Response Time)
    Mr. Batiste: To ask the Secretary of State for the Home Department if he will issue guidance to the fire services to provide a minimum response time by fire tenders for accidents on major trunk roads.
    Mr. John Patten: No, Sir. Fire authorities have a discretionary power to use their fire brigade for non-firefighting purposes such as attendances at road accidents. We are not persuaded that it would be appropriate or necessary to prescribe a minimum response time for such work.
    Mr. Batiste: Does my hon. Friend agree that serious risk to life is involved if there is unnecessary delay in responding to the serious accidents that often occur on dangerous roads, such as the Al in my constituency? Will he therefore reconsider his guidance to the fire authorities on the discretionary use of fire appliances in those circumstances?
    Mr. Patten: I am grateful to my hon. Friend. I know of his concern about the number of road accidents and the service given to those involved in them on the A I in his constituency. This issue was last examined by the relevant joint committee in 1985, as my hon. Friend knows. At that stage, no recommendation such as my hon. Friend would like was made. However, my right hon. Friend the Home Secretary is considering setting up a new joint committee to look at the use of fire appliances to see whether such instruction about the hitherto discretionary use should be changed in some way.
    Mr. McCartney: Response times to fires on trunk roads are constantly reviewed by fire authorities. The major problem is not mistakes made by fire authorities or unprofessional conduct on their part, but the millions of pounds that have been cut from fire authority budgets, last year and this year. The hon. Member for Elmet (Mr. Batiste) would be well advised to support Opposition Members, who have consistently tried to improve fire authorities' resources so as to improve the times taken to get to accidents and fires and to improve the overall performance of fire authorities in the United Kingdom.
    Mr. Patten: That is nonsense. Her Majesty's Inspector of Fire Services constantly monitors the service given by fire services and by all fire authorities in the kingdom.
    Mr. Key: My hon. Friend will agree that, in spite of the Government's excellent road building programme, because of the increasing congestion on our major roads it is not possible, even with the best will in the world, for our emergency services to get through to the scenes of accidents. Is it not time for a major review to examine the role of helicopters in the emergency services, such as those that are available in West Germany, where helicopters are called in as a matter of course to serious accidents on major roads?
    Mr. Patten: That is kept under review as we review the workings of the excellent emergency services in this country. My hon. Friend has put his finger on a fast developing problem.

    Risky Remand Centre
    Mr. Wigley: To ask the Secretary of State for the Home Department what representations he has received concerning the report on Risley remand centre following his answer to the hon. Member for Warrington, South (Mr. Butler) on 30 June, Official Report, column 301; and if he will make a statement.
    Mr. Hurd: One hon. Member has asked a question about implementation of suicide prevention measures and questions have been asked in another place about action on the report. I have had two letters from hon. Members, and three from the general public. The required suicide prevention procedures have been carried out since the

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    inspection and measures are being taken, as the hon. Gentleman knows, to ensure an immediate and continuing improvement in conditions at Risley.
    Mr. Wigley: Is the right hon. Gentleman aware that there was a general welcome for the rigorous nature of Judge Tumim's investigation, however disturbing its consequences? Is he further aware that there was a welcome for his positive attitude to it? As the future of Risley, as he sees it, is as a local prison, will he give an undertaking that there will be alternative remand facilities in north Wales, to avoid having to send people from that area to Risley?
    Mr. Hurd: I shall look into that point and write to the hon. Gentleman. I am grateful for his general remarks. To use his terms, the report certainly was rigorous and disturbing, and I hope he feels that, as he said, our response to it was timely and vigorous.
    Mr. Butler: Does my right hon. Friend believe that grisly Risley is a good advertisement for public sector prisons?
    Mr. Hurd: If my hon. Friend waits until next week he will see how I propose that we should experiment with the private management of remand prisons.
    Mr. John Evans: Will the Home Secretary take this opportunity to say a word on behalf of the prison officers at Risley, many of whom live in Culcheth where I live and are bitter and resentful about the way in which they have been treated by this report? Will he confirm that the crumbling, overcrowded conditions at Risley have nothing to do with the prison officers, but everything to do with the incompetence of the Home Office?
    Mr. Hurd: The problems at Risley are the result of the same phenomenon that afflicts many of our prisons and most of our remand centres, namely overcrowding, which until recently has been unrelieved by a decent prison building programme. The hon. Gentleman is right to say that the staff at Risley have been undergoing a serious and testing time. I do not think that they complain about the nature of the report. I know that they have been disturbed by some of the headline publicity surrounding it, but I believe that they support the action that we have taken.

  PRIME MINISTER

    Engagements
    Mr. Jack: To ask the Prime Minister if she will list her official engagements for Thursday 21 July.
    The Prime Minister (Mrs. Margaret Thatcher): 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. Jack: Does my right hon. Friend agree that the National Union of Teachers is wrong yet again when it blames Government policies for violence in schools? Does she agree also that, as discipline starts at home, that may be difficult for some parents to achieve because they were victims of the NUT's approach to teaching in the permissive 1960s?
    The Prime Minister: I agree that young children's conduct is usually laid down by the standards that are set at home long before they go to school. It is wrong to attribute violence in schools and elsewhere to any one set of causes. It is a very complex phenomenon, and we wish to see as much kindly discipline in the home as possible and to support those teachers who are trying to give discipline and good teaching in the classroom.
    Mr. Kinnock: Will the Prime Minister take this opportunity to explain to families in Britain how a large rise in their mortgage payments combats inflation?
    The Prime Minister: As the right hon. Gentleman saw the figures published yesterday, he will know that there was a necessity to tighten the money supply. I shall repeat what the Chancellor said in his Budget speech:
    "Short-term interest rates remain the essential instrument of monetary policy. Within a continuous and comprehensive assessment of monetary conditions, I will continue to set interest rates at the level necessary to ensure downward pressure on inflation."—[Official Report, 15 March 1988; Vol. 192, c. 997.]
    That is what he has done and I support it.
    Mr. Kinnock: Will the Prime Minister tell the people of this country, in the plain language that they deserve to hear, how it is that the average mortgage payer, paying an extra £22 a month for the mortgage on his home, is helping to combat inflation?
    The Prime Minister: If the right hon. Gentleman understood anything about monetary policy, he would not need even to ask that question. Of course an increase in interest rates, when it comes to a certain limit, puts tip mortgage interest rates. Of course that takes other pressure of demand out of the economy. Of course that helps the money supply.
    Mr. Kinnock: I recall that in the Budget four months ago, the Government got their inflation forecast, their balance of payments forecast and their money supply forecast hideously wrong. Will the Prime Minister, who once said that steep rises in mortgage rates were the result of Government economic mismanagement, explain how big rises in mortgage payments combat inflation?
    The Prime Minister: We do not take lectures on inflation from the Labour party—[Interruption.] For one month the Labour party got inflation down to 7·4 per cent., which was the lowest. Prices rose about as much in a single year during the last Labour Government as they have in the whole of my right hon. Friend's five years as Chancellor.
    Mrs. Ann Winterton: Without anticipating the contents of the Queen's Speech may I ask my right hon. Friend, whether she agrees that it is vital to introduce legislation in the next Session to ban experiments on the human embryo, a measure for which there would be overwhelming support in the House?
    The Prime Minister: I cannot anticipate everything that will be in the Queen's Speech. I know that very strong views are held on that matter on both sides of the opinion divide and that those views are not necessarily across party lines. We shall need a very great deal of debate before we decide precisely what to put into legislation.
    Mr. Cox: To ask the Prime Minister if she will list her official engagements for Thursday 21 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cox: The Prime Minister and I are both London Members and we are both aware of the enormous increase in house prices in London. Can she tell first-time buyers in London, who are estimated now to have to find another £40 per month on mortgage repayments, how they are better off under her policies? Is that not yet another example of the callous indifference that she shows towards people trying, with all the difficulties of housing in London, to obtain a home while she puts yet further problems in their path?
    The Prime Minister: As I said earlier, it is absolutely vital to keep downward pressure on inflation, because the worst thing for everyone would occur if we had the kind of inflation that was customary under the Labour Government. May I point out to the hon. Gentleman, also as a London Member, that the number of people who own their own houses has greatly increased under this Government and will continue to do so. We shall continue the policy of tax relief on mortgages.
    Mr. Burt: My right hon. Friend will be aware of the phrase "cruel and unusual punishment" which appears in the Bill of Rights that we celebrated yesterday. Does my right hon. Friend share my concern that the Home Office might find itself accused of just that should a prisoner unfortunately be locked up in a cell with a member of the Opposition who has wilfully refused to pay his taxes?
    The Prime Minister: My hon. Friend has made his point more effectively than I could. He is well aware that my right hon. Friend the Home Secretary has recently published a White Paper on suitable punishments.
    Mr. John Evans: To ask the Prime Minister if she will list her official engagements for Thursday 21 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Evans: Will the Prime Minister take this opportunity to explain to the House why, last night, she cast her vote to force handicapped people to pay the full rate of poll tax?
    The Prime Minister: For the very good reasons that were given at the time and also because of the enormous increase in benefits that the Government have given to the disabled over the years. We have increased spending on benefits for the long term sick and disabled by more than 80 per cent. over and above inflation, to almost £6·75 billion. As the hon. Gentleman is aware, the mentally handicapped are not liable to the community charge. The physically disabled can receive up to 80 per cent. rebates at higher levels of income than other people, and if they are on income support they will receive help with the other 20 per cent.
    Mrs. Peacock: To ask the Prime Minister if she will list her official engagements for Thursday 21 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mrs. Peacock: Does my right hon. Friend agree that the practice whereby an elected councillor—[HON. MEMBERS: "Reading".]
    Mr. Speaker: Order. I hope that we can conduct Prime Minister's Question Time in good order today.
    Mrs. Peacock:—whereby elected councillors in one borough obtain cushy jobs in a nearby borough at the expense of ratepayers, as Miss Linda Bellos has done, should be outlawed? Will my right hon. Friend take steps to ensure that the recommendations of the Widdicombe report are put into operation as soon as possible?
    The Prime Minister: My hon. Friend has taken a specific example of the things of which the Widdicombe report complained and about which it made proposals to deal. A White Paper is due out on the Widdicombe proposals later today. I have reason to think that it will contain something about the point that my hon. Friend raises.
    Mr. Beith: Whose view does the Prime Minister support on exchange rate management and joining the EMS—that of the Chancellor of the Exchequer, or that of her adviser over the water, Professor Walters? Is she satisfied to preside over a divided Government? If not, which one will she back, and which one will she sack?
    The Prime Minister: I am very happy to preside over a Government who have such an excellent economic policy, which has produced prosperity at a level undreamed of before in this country. I congratulate the Chancellor on his excellent policies.
    Miss Emma Nicholson: To ask the Prime Ministerif she will list her official engagements for Thursday 21 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Miss Nicholson: In her busy day, has my hon. Friend had time to congratulate the Secretary of State for the Environment on the successful passage of the Local Government Finance Bill—an infinitely fairer, more just and superior system than any combination of local income tax and fresh property tax?
    The Prime Minister: Yes, the new community charge is far fairer than the existing rating system. It is far fairer than any system based on domestic rating revaluation, which would have been extremeley unfair. It is infinitely fairer than any of the Opposition's proposals for an income tax and capital values, which would hit old people very much and mean that everyone would have to reveal his income to their local authority.
    Mr. Terry Davis: Does the Prime Minister appreciate that people's views of the effects of the Local Government Finance Bill will be influenced by their experience of recent legislation, such as the changes in social security? What has the Prime Minister to say to my constituents, such as an unemployed man who this week was told by the social fund officers at Erdington in Birmingham that he must live in an unfurnished flat and that he could not have a crisis loan to buy a cooker or a bed because they considered that it was not a crisis or a risk to health to be without a bed or a cooker?
    The Prime Minister: I am not going to comment on things that the hon. Gentleman suddenly puts to me. He is aware that the amount that has been allocated to the social fund is very similar to that which has been spent in past years—[Interruption.]
    Mr. Speaker: Order. We must hear the answers that are given.
    The Prime Minister: The amount that this Government spend on social security benefits of one kind or another is £50 billion—greatly in excess of that spent before.
    Mrs. Gillian Shephard: To ask the Prime Minister if she will list her official engagements for Thursday 21 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mrs. Shephard: Does my right hon. Friend agree that the Royal College of Nursing has set a very good example to the rest of the trade union movement in its attitude to industrial relations, especially in its refusal to go on strike? Does she consider that its attitude may have something to do with the fact that, according to today, The Guardian, it has been refused a place to set up its stall at this year's Labour party conference in Blackpool? [Interruption]
    Mr. Speaker: Order. The same rules apply to both sides of the House.
    The Prime Minister rose [Interruption]
    Mr. Speaker: Order. It is intolerable for questions to be asked but for the answers not to be heard.
    The Prime Minister: I agree with my hon. Friend that the Royal College of Nursing is a most excellent professional body that sets extremely high standards. It does not believe in going on strike. It puts its commitment to its patients first. I should have thought that that would be applauded by both sides of the House.
    Mr. Turner: The Prime Minister will remember a visit that she paid to my beloved Bilston, where she purchased two large hat pins. In view of her alleged disagreements with the Chancellor of the Exchequer and the Secretary of State for Foreign and Commonwealth Affairs, were they purchased for deflationary purposes?
    The Prime Minister: I warmly endorse and applaud the policies of both my right hon. Friends to whom the hon. Gentleman referred. Sometimes I want hat pins to stir some Opposition Members.
    Mr. Butterfill: To ask the Prime Minister if she will list her official engagements for Thursday 21 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Butterfill: Does my right hon. Friend agree that the introduction of a national identity card would not only help to control crime but would help with football hooliganism and under-age drinking, and should be feared only by those who have something to hide?
    The Prime Minister: My right hon. Friend the Home Secretary answered a question on that matter earlier. A number of cards are used for different purposes. They may be used to purchase drink, to ensure that one is over age, and they may be needed in football grounds. I doubt whether the case has yet been made for a compulsory system of national identity cards, with all that that means. Nevertheless, my right hon. Friend the Home Secretary has asked the police to update their views on the matter. We would need to make a strong case, and to prove it before a compulsory system of national identity cards is ever introduced.

Business of the House
3.31 pm
Mr. Frank Dobson: Will the Leader of the House tell us the business for the next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): The business for next week will be as follows:

MONDAY 25 JULY—Remaining stages of the Copyright, Designs and Patents Bill [Lords]

TUESDAY 26 JuLY—Opposition Day (19th Allotted Day). Until about Seven o'clock there will be a debate entitled "The Inadequacy of the Government's Transitional Scheme on Housing Benefit". Afterwards there will be a debate entitled "The Safety of and Service to the Travelling Public". Both debates will arise on Opposition motions.

Motions relating to social security regulations. Details will be given in the Official Report.

WEDNESDAY 27 JULY—Motion relating to the statement of changes in the Immigration Rules.

Motion on the Police and Criminal Evidence Act 1984 (Codes of Practice) Order.

Motion relating to the Education (School Teachers' Pay and Conditions) Order.

Motion relating to the Building Societies (Transfer of Business) Regulations.

Motion to take note of EC document on social legislation relating to road transport. Details will be given in the Official Report.

THURSDAY 28 JULY—Motion for the Summer Adjournment.

Proceedings on the Consolidated Fund (Appropriation) Bill.

FRIDAY 29 JULY—Debates on the motion for the Adjournment.

The House may also be asked to consider any Lords Amendments and Messages which may be received.
[Relevant documents:
Monday 25 July 1988: 6048/88: Social regulations for road transport.
Relevant Report of European Legislation Committee: HC 43-xxix (1987–88) para 2.
Tuesday 26 July: Child Benefit (General) Amendment Regulations 1988 (S.I., 1988, No. 1227)
Income Support (General) Amendment No. 3 Regulations 1988 (S.I., 1988, No. 1228)
Income Support (Transitional) Regulations 1988 (S. I., 1988, No. 1229)
Social Security (Credits) Amendment (No. 2) Regulations 1988 (S.I., 1988, No. 1230)]
Mr. Dobson: I thank the Leader of the House for his statement. It is an improvement on last week's statement in that, at least so far, no guillotines are proposed for the forthcoming week.
To save the Government legislative time, will the Leader of the House tell us whether the Government propose to accept the Lords amendments to the Health and Medicines Bill and abandon proposals to charge for dental and eye examinations?
Will the House have an opportunity before the end of the Session to debate the proposals for phase 2 of the new parliamentary building in Bridge street? Will that be a substantive motion so that work can go ahead?
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In view of the Leader's wider duties to protect the interests of this elected House as a whole and Back Benchers in particular, is it not shameful that he has failed to establish a Select Committee on Scottish Affairs? If Scottish Tories are too idle to serve on their own Select Committee, surely the legendary discipline of Tory Whips could be used to get some English volunteers. Will he either set up the Committee or arrange for a debate so that he can explain to the people of Scotland why they are being treated with such contempt?
Does the Leader of the House recall promising on Thursday 7 July that a Defence Minister would write to my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry), who unfortunately cannot be here this afternoon, and explain how it was that, in May 1984, the right hon. Member for Tonbridge and Mailing (Mr. Stanley), then a Defence Minister, told the House:
"No such strip searches have been carried out at RAF Greenham common."—[Official Report, 24 May 1984; Vol.
60, c. 552.]
when the Government agreed to pay compensation to a woman because she was strip-searched at Greenham common at that time?
Having received a copy of the letter which seeks to explain away all this, may I ask the Leader of the House to arrange for the Member concerned to come to the House to face the music because the letter contains contradictory claims about what happened which would not come well from a petty criminal in a magistrates' court? Surely the Leader of the House cannot expect my hon. Friend to accept the explanation that the Minister did not understand that for the police to force a woman to take off her clothes—[Interruption.]
Mr. Deputy Speaker (Mr. Harold Walker): Order. We are discussing the business for next week. I hope that the hon. Gentleman will confine his questions to that.
Mr. Dobson: This issue should have been on the business for this week. All that I am asking is that the Leader of the House makes sure that the right hon. Gentleman who gave that misleading answer comes to the House to explain how it came about.
Mr. Wakeham: The hon. Member for Holborn and St. Pancras (Mr. Dobson) has asked me four questions that are nearly about next week's business. First, he asked me about the Health and Medicines Bill. As he knows, the Bill is still before another place and it would not be appropriate for me to discuss in any detail matters which are being dealt with by another place. However, the discussions in another place did not produce any new arguments in relation to the introduction of optical and dental examination charges. We remain of the view that it is right to introduce such charges. Our proposals rightly exempt those whose circumstance are such that they cannot afford to pay. We do not accept that those who are not exempt will be deterred from seeking treatment because of the charges. The charges are part of a package which will make a significant contribution to the improvement of primary health care.
On the hon. Gentleman's question about the new building Sub-Committtee report, I confirm that it is my intention to arrange a debate on the report in the spillover. The terms of the motion are, perhaps, best left for discussion through the usual channels.

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I am sorry that, in spite of having said this to the hon. Gentleman a great many times, he still does not understand the position with regard to the Select Committee on Scottish Affairs. I have made proposals to the Opposition which were unacceptable to them, and that is why the Select Committee has not been set up. I have stated my willingness to hold a debate on this matter. The timing of the debate is best left for discussion through the usual channels.
The hon. Gentleman's remarks about my right hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley) were absolutely disgraceful. I shall see to it that the letter of explanation that my hon. Friend the Minister of State for the Armed Forces sent to the hon. Member for Stalybridge and Hyde (Mr. Pendry) is published so that people can see the explanation that he gave. My right hon. Friend stands by the answer that he gave on 21 May 1984, which was based on a Ministry of Defence police investigation which found no evidence to support the allegations of strip searches at Greenham common. The hon. Member for Holborn and St. Pancras has totally misunderstood the proceedings that took place in the Newbury court.
Sir Anthony Grant: Will it be possible some time in the future to have a debate on the issue of sanctions against South Africa so that we can examine carefully the precedents set by the previous Governments who, when apartheid was even more oppressive than it is now, far from opposing sanctions spent vast sums of taxpayers' money to encourage trade with South Africa, and so that we can probe carefully the humbug of the Opposition?
Mr. Wakeham: I cannot promise my hon. Friend a debate on that next week. However, I should point out to him, in case he has not already spotted it, that with a little ingenuity on his part there are a number of occasions when he could raise the issue.
Mr. James Wallace: Will the Leader of the House accept that the proposal that was put to the Opposition parties with regard to the setting up of the Select Committee on Scottish Affairs would have entailed a change in the Standing Orders of this House which would not have meant "business as usual" which is what his right hon. and learned Friend the Secretary of State for Scotland said would happen after the last election and that therefore it is not surprising that the Opposition parties found the proposal unacceptable?
Secondly, is the fact that we have not yet had the debate on the defence estimates—although the defence White Paper was published a considerable time ago, and we have received the report of the Select Committee on Defence—a reflection of the fact that the Government are finding it increasingly difficult to meet our defence commitments with the resources available? Can we expect a debate early in the spillover?
Mr. Wakeham: I am sure that the debate on the Select Committee on Scottish Affairs will be interesting because, obviously, different points of view will be put, but I stand by what I said a moment ago to the hon. Member for Holborn and St. Pancras (Mr. Dobson).
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The Select Committee on Defence has now reported on the defence White Paper and I hope that it will be possible for me to say something about a debate on that in my next business statement.
Sir Nicholas Fairbairn rose——
Hon. Members: Welcome back.
Sir Nicholas Fairbairn: May I assure my right hon. Friend that there is no one in Scotland who knows what a Select Committee on Scottish Affairs is, does, or what it has ever done and they do not want to?
When can we have a debate on foreign affairs so that we can advise the Foreign Office that there is no doubt as to what happened at Katyn, and who executed 10,000 members of the Polish officer corps? There is a memorial in London that bears the word "Katyn 1940". I f the Foreign Office imagines that that massacre occurred at the hands of the Germans, perhaps it can explain how that could be since there were no German soldiers at Katyn for another year.
Mr. Wakeham: I must say that I am delighted to see my hon. and learned Friend in his place and he makes his points with his usual clarity. We had a debate on foreign affairs recently, but I recognise that there is pressure for another one. Unfortunately, I cannot promise my hon. and learned Friend such a debate in the immediate future.
Mr. Tam Dalyell: Rather than leave it to deepest August, could there be an announcement next week about the future commissioners from our country to Brussels? Has the Leader of the House noticed Peterborough in The Daily Telegraph, which suggests that the paramount consideration is the need to clear the Prime Minister's conscience:
"Of the 'need to do something for Leon"
What could possibly be on her conscience that needs clearing, and should we not have a statement about it next week?
Mr. Wakeham: The present commissioners will hold their posts until the end of the year. No decisions have been taken about possible successors and the early press speculation has embraced more than one name.
Sir John Stokes: Since a ceasefire has been announced in the Iran-Iraq war, may we have a statement next week from Her Majesty's Government about the future of the Armilla patrol?
Mr. Wakeham: The Government welcome Resolution 598, as well as the Secretary-General's announcement about the Iran-Iraq war. Whether that requires a statement from my right hon. Friend the Secretary of State for Defence is a matter that I must refer to him for guidance.
Mrs. Margaret Ewing: Returning to the vexed issue of the Select Committee on Scottish Affairs, does the Leader of the House accept that his statement today seems to be a strange reversal of his earlier commitment that there should be a debate about this matter before the House rises? Will he not accept that the Government's failure to address this matter next week shows a continuing contempt for Scotland, and that that contempt will be seen against the background of the Government's failure to offer a real debate on the future of Ravenscraig, given that the Prime Minister seems to be unable to interpret exactly

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the words of Sir Robert Scholey and given the prevarication of the Secretary of State for Scotland about this matter this week in the Scottish Grand Committee? Does he not accept that there should be a full-scale debate on Scottish affairs, and particularly Ravenscraig, before the House rises?
Mr. Wakeham: I recognise the case for a debate on Scottish affairs and I recognise that there would be plenty of hon. Members who would want to take part, but I do not accept for one moment what the hon. Lady has said. The fact that I seek to get agreement through the usual channels as to when is the most convenient time to have such a debate is not evidence of contempt for the House; it shows that I take some trouble and care about such matters.
Mr. Michael Latham: With a view to action next week in a statement, will my right hon. Friend please reread the Hansard for Monday's Question Time, which I believe he attended, where my hon. Friend the Member for Horsham (Sir P. Hordern) made a statement about the disgraceful situation regarding the salary of the Comptroller and Auditor General for Northern Ireland? That must receive the Government's immediate attention and should be sorted out next week.
Mr. Wakeham: It is better that the matter be sorted out properly, rather than in a hurry. The Government will, of course, consider carefully the report of the Public Accounts Commission and will give their response in the normal way.
Mr. Alfred Morris: Is the Leader of the House familiar with the exchange I had with the Under-Secretary of State for Corporate Affairs on 13 July, reported in column 352 of Hansard, when the hon. Gentleman implied that the ombudsman's letter to me, widely reported in the press, about the Barlow Clowes scandal and the case of my constituent Mr. Mullard was confidential? Is the right hon. Gentleman aware that it is not true that the letter bore any such inscription and that it reached the public domain after it was sent to my constituent? Will the right hon. Gentleman now confirm that it was entirely proper for the ombudsman's letter to be made public and will there be a statement from the Under-Secretary of State by next week, in reply to my letter to him, to put the record straight in this House?
Mr. Wakeham: I am happy to put the record straight here and now. I understand that my hon. Friend is writing today to the right hon. Gentleman. My understanding of the position is that, when the Parliamentary Commissioner for Administration writes to a Member, he treats the letter as being in confidence, but what is done with it thereafter is entirely a matter for the recipient. I am sure that my hon. Friend was in no way intending to suggest in his comments that the right hon. Gentleman had behaved improperly.
Mr. Tom Sackville: Will my right hon. Friend find time to debate the protection of our national monuments from unsympathetic nearby development? Is he aware that St. Paul's cathedral, surely one of the best-known and loved buildings in the world, is currently at risk from yet another series of utilitarian and soulless structures being built around it? Does he agree that the
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matter is too important to be decided by local planners and developers, that the application should be called in and the matter decided by the House and the nation?
Mr. Wakeham: I have heard from time to time criticisms of some of our modern architecture and of some proposals for buildings in the area of St. Paul's. That is a matter for my right hon. Friend the Secretary of State for the Environment and I shall see to it that my hon. Friend's concern is drawn to his attention.
Mr. Greville Janner: May we please have a debate on the intolerable growth of crimes of violence and of vandalism, especially in the county of Leicestershire and especially because the Home Secretary has seen fit to ignore the Adjournment debate, initiated by the hon. Member for Rutland and Melton (Mr. Latham), in which Members of Parliament for Leicestershire of all parties demanded that the request of the chief constable of Leicestershire for more police constables on the beat should be honoured? In view of the fact that not one further constable has been allowed, in spite of a doubling in crimes of violence, may we now have a full debate on the matter?
Mr. Wakeham: I recognise the concern of the hon. and learned Gentleman and of my hon. Friend, but it would be wrong to say that my right hon. Friend the Home Secretary ignored their representations. He took them seriously and considered them. The Government's record in improving the pay, conditions and numbers of the police is a good record and I hope that it will continue to improve.
Mrs. Teresa Gorman: Will my right hon. Friend take time next week to dig out the explanation for the building works that are taking place in Norman Shaw North? They include the installation of the most horrendous iron bars at second-floor level, at least 40 ft above the ground, which not only prevent the windows opening and anyone caught in a fire jumping out that way, but are apparently designed to stop a passing burglar with a 40-foot ladder erecting it there, in full sight of a policeman sitting in his box for 24 hours a day and three or four men on the back door. The works appear to have started and, unless something is done, will go right through the building, whereupon we shall all suffer from a lack of ventilation.
Mr. Wakeham: Decisions of that sort are taken by the appropriate Sub-Committee of the Services Committee after receiving expert advice. I shall ensure that my hon. Friend's advice is given to that Committee to see whether it has got it right.
Mrs. Alice Mahon: Will the Leader of the House reconsider his decision not to hold a debate on the letter received by my hon. Friend the shadow Leader of the House about strip-searching at Greenham common? Does he appreciate that many Opposition Members are horrified at what happened there? That intimidating procedure is used increasingly as a method of control. It is a violation of people's rights. Will the Leader of the House reconsider and hold a debate on that serious error—I use that word selectively?
Mr. Wakeham: I have nothing to add to what I have already said on the subject. The hon. Lady knows that if she wishes, she has the opportunity to raise the matter.
Mr. John Carlisle: Does my right hon. Friend recall that last week I asked him for a debate on the increasing practice of hon. Members visiting the constituencies of other hon. Members without first telling them? In particular, does he recall that 40 Labour Members of Parliament were due to attend the Mandela march in my constituency? Is he aware that only 13 of those hon. Members actually turned up, and in consequence the hon. Member for Sheffield, Central (Mr. Caborn) has sent the absentees a letter asking them for a donation of £5 to help offset the deficit on the cost of the coach? Therefore, can we have an urgent debate on the funding of the Opposition and the management of their affairs? If Labour Members had not poured down the drain my gift of South African wine, they could have sold it to help offset the cost.
Mr. Wakeham: If, as my hon. Friend suggests, there are certain financial difficulties in some parts of the Opposition, I am quite sure that they will not want to use the Short money to sort it out.
Mr. Dennis Skinner: Does not the Leader of the House think that it is about time we had another debate about the breaches of safety that are being committed by P and O Ferries and its owner Jeffrey Sterling? Is he aware that on Saturday a fire broke out on the European Clearway? John Ball, who was working at the time and has since rejoined the strike, listed a horrifying catalogue of breaches of safety which had been unrecognised by the so-called Government inspector, including an oil leak that had been reported five weeks previously. P and O Ferries had hung a bucket underneath it and had done nothing else. It is about time that P and O Ferries instead of the National Union of Seamen was dragged before the courts.
Mr. Wakeham: I do not accept anything that the hon. Gentleman says. I am bound to tell him that I would prefer to rely on Government reports by qualified inspectors rather than the hon. Gentleman's testimony. If he had been listening to the business that I announced rather than trying to work out his question, he would have noticed that he might well be able to make his point in the debate next Tuesday.
Mr. Peter Thurnham (Bolton, North-East:)A few moments ago my right hon. Friend the Prime Minister called for more debate before legislation could be introduced on the Warnock report issues. Will my right hon. Friend bear that in mind as I am sure that such a debate would be welcome?
Mr. Wakeham: I shall certainly bear that in mind, but I do not promise an early debate on the subject.
Mr. Harry Ewing: The Leader of the House was in his place and heard the exchange between the Prime Minister and the hon. Member for Batley and Spen (Mrs. Peacock) about the recommendations in the Widdicombe report in relation to councillors. With regard to the publication of that report next week, before the Government start their usual anti-councillor campaign, will there also be a White Paper and recommendations dealing with the position of former Ministers, who in their roles as Ministers were responsible for the privatisation of an industry, and then, when they left office, became directors in that industry? To compound that felony, they
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are now party to a decision to give £50,000 a year to Tory party funds. Who does the Leader of the House consider is most corrupt?
Mr. Wakeham: I am not alleging, and I do not think that the hon. Gentleman is alleging, that anybody is corrupt. If he is, it is not his normal courtesy and style to do it by way of a business question. There are better ways of alleging corruption than that sort of allegation, which I do not accept for one minute. The Government are to publish a White Paper dealing with some very important questions arising from the Widdicombe report. I suggest that the hon. Gentleman and I should read it before we comment.
Mr. John Heddle (Mid-Staffordshire): Will my right hon. Friend find time for the House to debate the report of the Public Accounts Committee on Her Majesty's Land Registry? Does he acknowledge that this matter was raised in an Adjournment debate on 30 November last? Will he confirm that house purchasers, particularly first time buyers, are frustrated, that they have been put to inconvenience and expense by the Land Registry delays and that there should perhaps be a restructuring of the whole system?
Mr. Wakeham: I recognise that it is an important report, but the Public Accounts Committee's reports are debated regularly in the House. The subjects for debate are chosen after discussion with the appropriate Committee and through the usual channels. I think that this case should be dealt with in the same way as the others.
Mr. Roy Beggs: I am sure that the Leader of the House is aware of the breadth of support on all sides of the House for national sports centres in England, Scotland and Wales. I know that he would be anxious that we in Northern Ireland should also have a national sports centre, a centre of excellence. Will he look carefully at early-day motion 1402?
[That this House applauds the efforts of Billy Bingham, the Northern Ireland soccer team manager, to raise private funding to purchase Stranmillis Playing Fields, Belfast, to develop a Northern Ireland National Sports Centre such as already exists in England, Scotland and Wales; deplores the decision to designate part of This attractive parkland/playing field site for development in order to attract greater interest and higher offers from developers; and calls upon the Secretary of State for Northern Ireland to protect the interests of the whole community by freezing the sale of Stranmillis Playing Fields with development approval and to provide reasonable time to enable Billy Bingham to complete his fund raising in order to purchase the complete site and develop a National Sports Centre for Northern Ireland at Stranmillis, Belfast.]
Will he consider providing a n opportunity at an early date for the House thoroughly to discuss the action that has been taken in Northern Ireland to thwart Billy Bingham's efforts to acquire this beautiful parkland playing field site for a sports centre for all the people, including young people, of Northern Ireland?
Mr. Wakeham: I recognise the hon. Gentleman's concern. The playing fields were declared surplus to requirements and they are being disposed of under the normal rules for the disposal of surplus land. They were first put on the market in September 1987 and they were readvertised, under revised terms, in May 1988. There is a

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statutory requirement to sell them at the best price. The Department of the Environment for Northern Ireland is negotiating with a prospective purchaser, but other parties may bid for the land until such time as a contract is signed.
Mr. Neil Thorne: Has my right hon. Friend noticed that my early-day motion 1172 "Emergency Aid in Schools" has now attracted over 200 signatures from Members on both sides of the House? The scheme is promoted by St. John Ambulance and supported by the Red Cross.
[That this House recognises the value of teaching first or emergency aid in schools and applauds the initiative of the St. John Ambulance in issuing their publication Emergency Aid in Schools, which, accompanied by a video, shows how children can be taught a basic course between the ages of six and 12 years so that they are competent in: assessing emergency situations, restarting breathing and circulation, dealing with bleeding, shock, unconsciousness—especially resulting from drug or solvent abuse and burns and scalds, and so qualifying for the St. John Ambulance Three Cross Emergency Aid Award.]
Will my right hon. Friend write to our right hon. Friend the Secretary of State for Education and Science and ask him either to have a debate on the matter or to write to all local education authorities and urge them to undertake this course? It seems to be an excellent scheme. It is particularly pertinent to the comments of the hon. and learned Member for Leicester, West (Mr. Janner) who is concerned about hooliganism and thuggery. If more young people learnt about first aid at school, I am sure that they would be dissuaded from participating in violent activities in their teens.
Mr. Wakeham: The Government commend the work undertaken by St. John Ambulance to promote the teaching of emergency aid in schools, in particular the materials provided for the three cross emergency aid award scheme. Consideration will be given in due course to the place of first and emergency aid within and alongside the national curriculum.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr Harold Walker): Order. I shall try to to call all those Members who are now on their feet, but it would be helpful to have short speeches—[Laughter.] I mean short questions.
Mr. Bob Cryer: May we have a debate on catering in the House of Commons so that if work needs to be done during the summer recess it can be carried out, particularly in view of the lavish amounts of money that were spent yesterday on the junket in Westminster Hall? Bearing in mind that the thousands of people who come here every year are provided with paltry facilities, does the Leader of the House not think that we ought to improve our catering for the general mass of the public? [HON. MEMBERS: "Privatise it."] In so doing we could compare the two standards under which Tory Members of Parliament book the private dining rooms secretly—because the bookings are not published—for the lobbying organisations that pay them. Is it not a disgrace that ordinary people cannot get a cup of tea but that Tory Members of Parliament can book the private dining rooms for lavish meals at any time that they choose?
Mr. Wakeham: I do not know what sort of world it is in which the hon. Gentleman lives, but I would have thought that the Westminster Hall ceremony gave great pleasure and satisfaction to hon. Members from both sides of the House and to the nation as a whole. It was a very important and successful occasion, and I do not believe that the hon. Gentleman's remarks add anything to it.
Mr. John Greenway: I am sure that my right hon. Friend noticed the publication this week of the excellent Green Paper on community service orders, and will have noted also the reply that my right hon. Friend the Home Secretary gave during Home Office questions today, when he said that a Green Paper on the future of private sector involvement in remand centres may be imminent. Can my right hon. Friend assure the House that those excellent Green Papers will be thoroughly debated when we return at the end of the recess, because their provisions will make a major step towards the fight against crime in this country?
Mr. Wakeham: They are very important Green Papers and they deserve to be debated. No doubt an opportunity will arise, but I cannot make a specific promise at the moment.
Mr. Barry Jones: Will the Leader of the House arrange a debate on the important subject of the shortage of speech therapists and physiotherapists and its effect on the service given to young children at school? Will he study early-day motion 1383 standing in my name on the Order Paper?
[That this House calls upon Her Majesty's Government to set up an urgent inquiry into the provision of speech therapy; deplores the uneven provision of speech therapy in London education authorities which blights the progress of children at school in the much welcomed language units; regrets the evident distress of parents of children at school with speech defects who know that academic progress and personal development are gravely hindered because of the injurious consequences of qualified staff shortages; urges the Right honourable Gentleman the Secretary of State for Education and Science and the Secretary of State for Wales to improve the salaries and status of speech therapists so as to improve recruitment to a profession that suffers recruitment difficulties; acknowledges the dedicated and professional work of speech therapists and their ancillaries; regrets the shortage of speech therapists in the County of Clwyd; acknowledges the important need for speech therapy by stroke victims of all ages; and expects Her Majesty's Government to make available sufficient money to enable health authorities and London education authorities to make adequate provision of speech therapists.]
Does he understand the deep distress and worry of many parents in England and Wales, knowing that if they have youngsters at school with speech defects they are not receiving sufficient attention? What will the right hon. Gentleman do about that situation?
Mr. Wakeham: This is a matter of priorities within local education authorities and other bodies. However, there will be occasions next week when the hon. Gentleman could raise the matter, and that is his best way forward.
Mr. Tony Marlow: As my right hon. Friend knows, Jacques Delors is quite right—we are going to get dragged kicking and screaming into the United States of Europe. The reason for this, as my right

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hon. Friend knows, is that the institutions of the European Court of Justice, the Commission and the European Parliament are heavily biased in that direction. Fortunately, we have an institution in this House—the European Select Committee, though unfortunately it is crammed full with unreconstructed Eurofanatics who are tribunes of the Commission and a praetorian guard for a United States of Europe—
Mr. Deputy Speaker: Order. I thought that the hon. Gentleman wished to ask a question about next week's business.
Mr. Marlow: Will my right hon. Friend make a statement next week so that the House can be reassured that that Select Committee will actually represent the constituency of this House?
Mr. Wakeham: I must say to my hon. Friend, for the second time in two weeks, that he underestimates himself. If he imagines that a Select Committee that is chaired by the hon. Member for Newham, South (Mr. Spearing) and on which my hon. Friend also sits is crammed full of Eurofanatics, he has a very crazy idea of what is a Eurofanatic.
Mr. Andrew Faulds: May I assure the right hon. Gentleman, in view of his continuing interest, that I am in the most robust and ruddy good health, and that I shall continue to oppose the introduction of the televising of the proceedings of this House? In connection with that, what progress has he made with his plans to demonstrate to all the Members of the House, and not just to the members of the Select Committee, the appalling inconvenience and discomfort that the introduction of cameras, sound equipment and lighting equipment will do to the proceedings of this House?
Mr. Wakeham: I am glad to see that the hon. Gentleman is in good health but he is being a little unfair. We invited everybody from the House to witness the lighting demonstration that we organised, and the hon. Gentleman who—I nearly said, I regret to say—is not a member of the Select Committee—
Mr. Faulds: I should be.
Mr. Wakeham:—was there and took a prominent if not terribly constructive part in the proceedings. The Select Committee is getting on extremely well. All points of view—including tinges of the hon. Gentleman's own point of view—seem to emerge from time to time in our discussions.
Mr. Ian Bruce: Has my right hon. Friend had time to note that my early-day motion 1119 on Japanese reparations to prisoners of war has nearly 200 signatories?
[That this House, in welcoming the growing friendship between Japan and the United Kingdom, believes that this friendship will not fully blossom until the wrongs done during the Second World War to Allied prisoners are fully accepted by the Japanese Government and due reparation made.]
It seems rather strange that hon. Members who have written directly to the Government asking for their help in this matter have been told that little can be done because, effectively, the rights of the people concerned were signed
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away by the Government at the end of the war. Could we have a debate to decide who should be paying those people reparations?
Mr. Wakeham: As my hon. Friend knows, this matter was dealt with in the 1951 treaty of peace with Japan, as was made clear by my right hon. and learned Friend the Foreign Secretary in a written answer on 18 May. I cannot promise an early debate but my hon. Friend will know of the ways in which he can raise the matter if he thinks that that is the right thing to do.
Dr. Norman A. Godman: Has the right hon. Gentleman seen early-day motion 1397 entitled "Absence of helicopter assistance after Piper Alpha disaster"?
[That this House, whilst deeply appreciative of the heroic efforts of the emergency services to save the lives of the men involved in the Piper Alpha oil-rig disaster, is greatly concerned that an offer of the assistance of the helicopter aboad the emergency support vessel "Iolair' was ignored; believes that there is reason to assume that at least some of the lives might have been saved had this helicopter been used; and calls upon the Secretary of State for Energy to furnish any evidence he may have on this subject to the official inquiry into the disaster.]
That EDM, which acknowledges with deep appreciation the magnificent efforts of the emergency rescue services to save the lives of the poor men involved in that accident, goes on to express deep concern that those in charge of the emergency services failed to use the helicopter—
Mr. Deputy Speaker: Order. It is not appropriate in business questions to make a speech that the hon. Gentleman might make if the Leader of the House sets down the matter for debate.
Dr. Godman: Thank you, Mr. Deputy Speaker. Does the right hon. Gentleman agree that it will be helpful if the Secretary of State for Transport makes an early statement dealing with the serious allegations made by men on board the Iolair, that there was a failure to use a helicopter that was just 15 minutes' flying time from the Piper Alpha?
Mr. Wakeham: Of course I recognise the hon. Gentleman's concern. The search and rescue operation for survivors from the Piper Alpha disaster was initiated and co-ordinated by HM coastguard Aberdeen. The first helicopter was on the scene within 10 minutes, but, because of the intense heat, helicopters were unable at any time to operate close enough to Piper Alpha to assist with the recovery of survivors from the sea or from the platform. Many offers of helicopter assistance made after the initiation of SAR operations had to be declined because of airspace congestion. So far as is known, no specific offer of the Iolair helicopter was made to Aberdeen coastguard. It would be inappropriate for the conduct of the search and rescue operations to be debated or discussed in advance of the judicial inquiry into the disaster.
Mr. Roger Knapman: Will my right hon. Friend find time during the course of the next week for a debate on the role of the trade unions in a modern society and on whether they should seek to dominate British political parties? Does my right hon. Friend agree that such a debate would give some of us a chance to advise the

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Transport and General Workers' Union whether to back the dream ticket in the forthcoming Labour leadership elections?
Mr. Wakeham: I recognise that that would make a good and interesting debate, but I cannot promise one next week.
Ms. Joan Ruddock: The Leader of the House in an earlier response agreed to publish a letter concerning strip searches at Greenham common. I wish to tell him that that will not satisfy women Members. The Minister's case seems to rest on the phrase
"A requirement to remove all clothing other than underclothing would not have been taken to constitute a 'strip-search'."
I can tell the House that if I—
Mr. Deputy Speaker: Order.
Ms. Ruddock: I am going to ask the question. A woman who is searched in her underclothes believes that she has been strip-searched. In the light of that very serious matter, I ask the Leader of the House to reconsider and to bring to the House the right hon. Member for Tonbridge and Mailing (Mr. Stanley).
Mr. Wakeham: No, I will not. My right hon. Friend stands by his answer. His answer was given after a Ministry of Defence police investigation, which found no evidence to support the allegations to which the hon. Lady refers.
Mr. Kenneth Hind: In the light of the concern about the takeover bid for Rank Hovis McDougall, and given that at this moment the European Parliament is putting together a directive on monopolies and takeovers policy that will have far-reaching effects upon competition policy throughout the Community, will my right hon. Friend grant time for a debate on that subject?
Mr. Wakeham: The full bid for Rank Hovis McDougall by Goodman Fielder Wattie is being considered in the normal way by the Director General of Fair Trading, who, under the Fair Trading Act 1973, is responsible for advising my right hon. and noble Friend the Secretary of State for Trade and Industry on the question of reference to the Monopolies and Mergers Commission. In those circumstances, it would not be correct for us to debate the issue or for me to make any further comments.
Mr. Richard Livsey: Will the Leader of the House consider urgently holding a debate next week on the impact of the purchase of Rover Group by British Aerospace, and in particular its impact on the town of Llanelli, where 900 workers are likely to lose their jobs? The first that they heard of it was through the media, and I regard that as an act of deceit.
Mr. Wakeham: The hon. Gentleman may find the opportunity to raise the matter on the motion for the Adjournment, if that is what he thinks he ought to do.
Mr. David Shaw: Will my right hon. Friend, in relation to next week's debate on transport safety, consider the problems faced by seamen and the residents of Dover onshore, rather than when the ships are sailing? Over 100
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attacks have been made on working seamen by members of the National Union of Seamen, many of whom have now been found guilty. Moreover, people living around the port every morning at 7 o'clock have whistles, klaxons and other noise-making equipment bellowing into their homes. It seems impossible in the circumstances for the police to get to grips with the demonstrators, because the union does not seem to be helping out at all.
Mr. Wakeham: That is a matter not for me but for the Chair. I should have thought, however, that some of the points that my hon. Friend wishes to make would be very suitable for next week's debate.
Mr. Nigel Griffiths: Is the Leader of the House aware that many dental patients are now waiting for up to 10 weeks, in pain, for clearance by the DHSS, and that many dentists are waiting for payment as a result of new regulations introduced in April? Will he ensure that next week we have a chance to debate the matter? Is he aware that we are receiving many letters from patients and dentists and that the problem is highlighted in papers such as the Sunday Post in Scotland? Is it not a disgrace?
Mr. Wakeham: The hon. Gentleman will know that he will have an opportunity to raise those matters on more than one occasion next week, if that is what he wants to do.
Mr. Rhodri Morgan: Will the Leader of the House find some parliamentary time next week—or perhaps better still during the long summer recess—to give some additional coaching and instruction to those Tory Members who this week have displayed a new-found interest in humour, attempting to make jokes about Zimbabwe and aviation matters and disrupting Welsh Question Time? I believe that those Tory Members are now called the League of Glasgow Empire Loyalists.
Despite the excellent attempts at coaching by the hon. Member for Watford (Mr. Garel-Jones), as assistant Government Chief Whip in charge of alleged jokes, will the Leader of the House find out whether it will be possible on our return from the recess for canned laughter machines to be brought in so that hon. Members know exactly when and when not to laugh? Will he be able to tell us all how he is to manage our parliamentary time so that we find time to encourage this new-found tendency among Tristan and his soldiers?
Mr. Wakeham: My impression is that the hon. Gentleman's question arises more from his embarrassment about his performance and that of his hon. Friends than from an attempt to get a constructive reply out of me.
Mr. Hugh Dykes: On a point of order, Mr. Deputy Speaker. I shall not take more than a few seconds. I believe that my hon. Friend the Member for Northampton, North (Mr. Marlow), who has unfortunately left the Chamber, perpetrated—unwittingly and accidentally, I am sure—a major inaccuracy in referring to the composition of the Select Committee on European Legislation. As my right hon. Friend the Leader of the House will know, the Committee consists of six members who are broadly in favour of Community membership, six who are broadly sceptical and two who are neutral.
Mr. Deputy Speaker: Order. The political views of hon. Members have nowt to do with the Chair.

Consolidated Fund (Appropriation) Bill
4.13 pm
Mr. Deputy Speaker (Mr. Harold Walker): I have a short statement to make about arrangements for the debate on the motion for the Adjournment which will follow the passing of the Consolidated Fund (Appropriation) Bill on Thursday 28 July 1988.
Hon. Members should submit their subjects to Mr. Speaker's Office not later than 9 am on Wednesday 27 July. A list showing the subjects and times will be published later that day. Normally the time allotted will not exceed one and a half hours, but Mr. Speaker proposes to exercise his discretion to allow one or two debates to continue for rather longer—up to a maximum of three hours.
Where identical or similar subjects have been entered by different Members whose names are drawn in the ballot, only the first name will be shown on the list. As some debates may not last the full time allotted to them, it is the responsibility of hon. Members to keep in touch with developments if they are not to miss their turn.
I also remind hon. Members that on the motion for the Adjournment of the House on Friday 29 July, up to eight hon. Members may raise with Ministers subjects of their own choice. Applications should reach Mr. Speaker's Office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the result made known as soon as possible thereafter.

Fast Reactor Programme
4.15 pm
The Secretary of State for Energy (Mr. Cecil Parkinson): With permission, Mr. Deputy Speaker, I should like to make a statement about the Government's future funding of the research programme being carried out by the United Kingdom Atomic Energy Authority into the fast reactor.
The programme involves the major facilities at Dounreay in Caithness—the prototype fast reactor, known as the PER, which started operation in 1974. and the associated plant for reprocessing fast reactor fuel. The rest of the programme takes place at a number of other authority sites including Harwell, Risley and Windscale. This is chiefly concerned with materials and fuel development, plant performance and safety.
In the current financial year, net expenditure on the programme is planned at £105 million, of which the CEGB is contributing £28 million. Of that total, some £50 million represents the net cost of the Dounreay operations.
The Government have carried out a review of the programme in the light of the expectation that commercial deployment of fast reactors in the United Kingdom will not now be required for 30 to 40 years. Our overall aim in the review has been to retain a position in the technology for the United Kingdom at economic cost. In considering the programme, we have also had firmly in mind the importance of Dounreay to the Caithness economy, and the contribution of the people of Caithness to the development of the fast reactor.
We recognise that there is continuing benefit to be secured from operation of the prototype fast reactor. We have therefore decided to fund the reactor until the end of the financial year 1993–94. This will enable operating experience to accumulate for a further five years. We have also decided to fund the reprocessing plant at Dounreay until 1996–97, to process spent fuel from the reactor. Our decisions will ensure continuing and substantial employment at Dounreay into the late 1990s.
In addition to the work at. Dounreay, we have decided to maintain a core programme of fast reactor research and development of £10 million a year. The present research programme will be phased down to that level over the next 18 months. This will enable us to make a continuing contribution to the development of the technology. We shall also continue our support for the existing collaboration between European countries on fast reactor research. Moving to the core programme could mean the loss of over 1,500 jobs over the next two to three years at sites other than Dounreay.
The programme that I have set out recognises that the commercial requirement for the fast reactor in the United Kingdom is likely to be some decades away. At the same time it will retain a position in the technology for the United Kingdom at economic cost; it recognises the special contribution of Dounreay to the Caithness economy; and it provides a basis for continued collaboration with our European partners.
Mr. John Prescott: The Minister's statement offers some welcome, if short-term relief for the Dounreay site in Scotland, but it yet again increases the redundancies in essentially high technology areas in Harwell, Risley and Windscale. Since the Minister

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has made it clear that he does not see a use for a commercial fast breeder reactor for 30 or 40 years, is he offering Dounreay a role for only five to eight years? There is clearly a long time gap, which suggests a phased closure programme. Therefore, does the Secretary of State anticipate a role for Dounreay after 1993?
Does the Secretary of State agree with and confirm Lord Marshall's statement that ending the contribution to the research programme is justified, since a privatised industry would not fund such research for benefits that are 30 years away? What will be the future funding for a privatised electricity industry in that area?
The Secretary of State states that the research programme will be reduced to £10 million. What is the cut in funding and what effect will that have on the spin-off advantages of non-nuclear technology, which we have seen particularly in oil rig structures and computer controls? What skills and jobs are affected by the statement and will the Secretary of State identify them by the authority's sites in Harwell, Risley and Windscale? What future will they have for re-employment?
Finally, does the Secretary of State accept that the reality of today's statement arises directly out of the Government's programme for the privatisation of the electricity supply industry where the short-term commercial criteria are in direct conflict with the long-term national interests?
Mr. Parkinson: First, I must make it clear that this does not arise from the privatisation proposals. Had the industry stayed in the public sector, the same examination would have had to take place and we would have come to the same conclusion that there is no likely commercial application for 30 to 40 years. The privatisation issue is a red herring.
Mr. Prescott: What about Lord Marshall?
Mr. Parkinson: Lord Marshall would have had to persuade the Government to put up the substantial funds that would be necessary if we were to continue, and I have no reason to think that he would have been in any way successful.
Dounreay will be a major employer in the region until the late 1990s. It will be available as a site for other nuclear purposes should they arise during that period. My right hon. and learned Friend the Secretary of State for Scotland will be making intensive efforts during the nine years that this programme offers to find work to replace that at Dounreay.
I told the House that £105 million was being spent on the programme; that £50 million was being spent at Dounreay; and that the other £55 million represents the cost of the rest of the programme. I said that that would be scaled down over the next 18 months to a core programme of £10 million a year.
Hon. Members: What does that mean?
Mr. Neil Hamilton: Will my right hon. Friend confirm that, contrary to the assertions of the hon. Member for Kingston upon Hull, East (Mr. Prescott), there is no necessary connection between fast breeder reactor technology and ownership in the private sector? Such investment as takes place in Germany comes from the private sector.
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Will my right hon. Friend confirm that the National Nuclear Corporation's design team which is working in this area has 20 years' expertise behind it and there will at some stage be a future for fast breeder technology, so that it is important to keep this technology going? However, it is perfectly understandable that, in view of long-range forecasts for fuel prices in the future, it should be put on the back burner at this stage.
Mr. Parkinson: Yes, I recognise the important work done by the NNC in this area. The best news for the NNC is that the Government have committed themselves to a major new programme of pressurised water reactors which will ensure that that important national facility and skill continue to be used.
Mr. Robert Maclennan: Why has the Secretary of State taken such grave and damaging decisions before the reorganisation of the electricity supply industry and before it could give him a coherent statement of its view of consumers' needs? Why has he done this before the responsibility for carrying out research and development into all our long-term fuel needs has been reallocated, as it will have to be following privatisation?
The Government's intention to reduce participation in the European collaborative programme to a mere £10 million may well be seen by our European competitors as a cop out, and it may even scupper the collaboration. Has he taken soundings of those Governments before announcing this, or is he prepared to let our lead in this area pass to France?
Why has the right hon. Gentleman not stated more precisely the loss of jobs associated with the decision at Dounreay and in the north of Scotland? What steps have been agreed by him and his Cabinet colleagues to offset the undoubted economic damage that will be done to the north of Scotland? He has been vague on that, and that will not be acceptable.
I recognise that forecasts of energy supply needs are notoriously difficult to make, but why has the Secretary of State suddenly changed the Government's forecast from approximately 20 years to approximately 40 years? Has he simply plucked that figure out of the air?
Finally, will the Secretary of State recognise that the dismay which was felt by my constituents and many people throughout the country about this programme stems not only from anxiety about its impact on the economy of the north and those other establishments where the work is more immediately being cut, but because they have a sense that two generations of work on producing a superb British technological achievement which leads the world is being handed to our commercial competitors?
Mr. Parkinson: If the Opposition listened to the statement instead of thinking about their supplementary questions, they might hear the answers to the questions that they subsequently ask. The statement made it clear that 1,500 jobs will be lost in the next 18 months at the sites other than Dounreay. That was in the statement. There is no question——
Mr. John Garrett: How many redundancies at each site?
Mr. Parkinson: That has not yet been settled, because the distribution of the work has to be determined in the light of the new programme.

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Lord Marshall has made it clear on privatisation that he would not propose to support the programme beyond 1990 and it is clear that there will be no commercial need for a reactor for some considerable time.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) talks about European collaboration, but let me remind him that at this moment the French Superphenix is out of action and the Germans, who were supposed to build the next reactor, cannot even obtain a licence for the operation of their demonstration fast reactor, so that programme is in abeyance. We are offering a continuing programme of work on fast reactors and reprocessing, coupled with a core programme of research. That will enable us to play a substantial part in the European collaboration.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House that we have another important statement and a number of important debates to follow. Therefore, may we have brief questions, please?
Mr. Ian Bruce: Will my right hon. Friend say a few words about Winfrith, the Atomic Energy Authority facility in my constituency, which I believe is doing some work on this programme? Will he also say a few words about the nuclear energy research programme? We all saw at the last general election that the Conservative party was the only one committed to continuing nuclear energy. I am amazed at the comments coming from the Opposition. Will he say something about our continuing research on pressurised water reactors and other areas?
Mr. Parkinson: My announcement today represents about a quarter of the work of the Atomic Energy Authority. That is the £105 million programme, of which, as I have explained to the House, about £60 million is due to be retained well into the next decade. Therefore, the authority has a substantial programme of other work. The authority will have to make some major adjustments as a result of this announcement, and that is recognised. The authority commands the almost exclusive use of some skills that are in short supply and we expect there to be quite a demand for the personnel that the authority releases.
Mr. Tony Benn: Is the Secretary of State aware that, although his statement was cast in bland language, he is plainly saying that the fast reactor is not commercial and cannot be seen to be commercial for the foreseeable future?
The right hon. Gentleman will know better than anyone that Lord Marshall was one of the most passionate advocates of the fast reactor and that in 1974, during my period in the Secretary of State's office, he was demanding the immediate building of a full-scale fast breeder reactor?
The right hon. Gentleman's statement will be welcomed because it is the first statement by a Minister in this Government that a complete line of nuclear reactor systems is to be phased out. The many skills of those in the industry need to be safeguarded, but I hope that the Secretary of State will come clean and tell us that the decision has been dictated in part by the fact that there is a big pressurised water reactor programme from America.
Furthermore, while I strongly disapprove of privatisation, I know that when one privatises one does not back
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non-commercial projects such as the fast breeder reactor programme. One of the reasons why the whole nuclear programme in the United States has been at a halt for 10 years is that no private utility in America is prepared to build any reactor system, and that includes the pressurised water reactor to which the Secretary of State now seeks to commit us by a statutory requirement that a given amount of electricity must be generated by nuclear means.
Mr. Parkinson: I have announced clearly that there will be no commercial demand for this technology for some decades. That was not always the case. Presumably the right hon. Member for Chesterfield (Mr. Benn), who supported the programme when he was Secretary of State, did not always hold the view that he now holds, or he would have made a decision, like the decision that I have announced today, to reduce this technology and its costs to a more bearable size. He did not do that.
The right hon. Gentleman asked about privatisation, and privatisation has forced us to face up to questions that should probably have been asked some years ago.
Sir Ian Lloyd: It is extraordinary how the nuclear cookie crumbles. My right hon. Friend the Secretary of State has made a statement with grave and far-reaching implications, which I have no doubt the Select Committee on Energy will wish to investigate in some detail. In advance of that, however, perhaps my right hon. Friend will elucidate four points.
First, what are the crucial assumptions that he has made in reaching his decision that a commercial fast breeder reactor will not be required for 30 to 40 years?
Secondly, what financial contributions does he expect to be made by the Central Electricity Generating Board and its successors after 1993–94?
Thirdly, why does he believe that the core programme of fast reactor research can be sustained on the minuscule sum of £10 million when the existing programme has cost well over £100 million and has not been successful?
Fourthly, what will be the financial level of the British contribution to the European fast breeder reactor programme? Finally, have we abandoned all intention of taking part in the possible construction of a commercial fast breeder reactor in Europe?
Mr. Parkinson: My hon. Friend asked me about the crucial assumptions. The commercial electric utilities see no possibility of ordering a commercial fast breeder reactor for the foreseeable future—for many decades—and that is very important. If there is no customer, to continue with a huge programme, which assumes that there will be a customer, is to fool oneself. Secondly, the £10 million core programme, coupled with the additional work which will be continued at Dounreay, will enable us to continue to maintain and increase our knowledge of fast breeder reactors and their working for the foreseeable future.
I have already mentioned that the European collaboration is in some disarray. My hon. Friend may have noted that, in addition to the fact that the German programme has been stalled, the Italians have held a referendum and have virtually been ordered to pull out of the European collaboration. I have had discussions with my German and French counterparts, and I shall be having further discussions, to establish how we can maintain a sensible programme that will not cost as much as the previous programme.

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My hon. Friend asked whether we will contribute to the cost of a European fast reactor. I should have thought that it was clear that we do not think that there would be any purpose in making the huge £800 million investment that would be needed, and we shall therefore not be taking part in the European fast breeder reactor construction programme.
Mr. Alex Salmond: The Secretary of State referred to Dounreay being available for other nuclear purposes should they arise. Are they codewords for nuclear dumping in Caithness? Is not the clear implication of the statement, which puts a fine time scale on the operations at Dounreay, part of a softening-up process to make the area acceptable for EDRP, the European demonstration reprocessing plant, or nuclear dumping—the dirty end of the nuclear industry? Does not the future of the Caithness economy lie in diversifying out of the nuclear industry and into alternative and renewable energy resources, whose total research budget from the Department of Energy is only one sixth of the budget of the fast breeder programme?
Mr. Parkinson: The hon. Gentleman would be quite wrong to say that I was suggesting that we should keep Dounreay open so that it could accept the Nirex proposals. That is not the case. During the next eight or nine years, there may be other nuclear work which may be suitable for the area. I do not say whether there is, but if the facility is available the work could be done. There are possibilities of other work but they are so general that I cannot give further details of them at the moment. The facility will be there if it is needed and it will be there for the next eight or nine years.
It is clear that the hon. Gentleman does not represent the constituency that contains Dounreay. If I had announced that we were closing the reactor forthwith, that 2,000 jobs would be lost and that we hoped for a programme of diversification, he would have been the first person to stand up and start shouting. In fact, we are announcing a continuing programme and my right hon. and learned Friend the Secretary of State for Scotland has announced that he will work to try to ensure that other jobs become available as Dounreay runs down.
Mr. John Hannam: Will my right hon. Friend confirm that the main reason for the non-viability in the immediate future of the fast breeder reactor and other energy technologies such as liquefaction and gasification is the long-term forecast of lower electricity fuel costs? Will he also confirm that we shall be maintaining a British-based technology?
Mr. Parkinson: We are trying to maintain a position in a technology which we still believe has a future—albeit much delayed as compared with original expectations. It will be some considerable time before the fast breeder reactor is needed—if ever. We believe that the technology has been proved at Dounreay; we have shown that we can construct and operate a fast breeder reactor, which is at the moment pumping electricity into the grid. By the time we close it down, Dounreay will have served its purpose in showing that the fast breeder reactor is a technical possibility.
Mr. Bruce Millan: The answer that the right hon. Gentleman has just given is the first clear statement of what is going to happen after 1993. We welcome the fact that there are to be no immediate redundancies at Dounreay, but the Secretary of State has now said, has he not, that in 1993–94 Dounreay will close down; is that the reality? [Interruption.]
Mr. Parkinson: I am afraid that that is wishful thinking on the part of the hon. Gentleman, who is violently opposed to nuclear power in any form——
Mr. Millan indicated dissent.
Mr. Parkinson: Not the right hon. Gentleman, but the hon. Member for Kingston upon Hull, East (Mr. Prescott), who has been busy doing a bit of electioneering on this important issue.
The facility will not close down in 1993. What will close down in 1993 is the reactor, and the reactor employs a small proportion of the people on the site. We estimate that by 1995 there will still be 1,600 people working on that site—on reprocessing, decommissioning and security. At the end of the operation, there will still be 500 continuing jobs on the site in security and maintenance.
Sir Trevor Skeet: Following from the Secretary of State's decision, what does he propose to do with the 45 tonnes of plutonium that would have been used in the fast reactor system, which we now understand is to be deferred for 30 to 40 years? Will he bear in mind that the international collaboration has been seriously set back on three fronts—CERN, space and nuclear energy?
Mr. Parkinson: I have already said that there is no purpose in continuing with the programme, which was originally based on the assumption that commercial fast reactors would be needed early in the next century. It is now clear that they will not be needed. The Government have faced up to that and have come forward with a set of proposals that recognise the contribution of Dounreay and the need to run down the Dounreay site in a careful way over a long period. They also recognise that we should retain a position in the technology, and that is what we are doing.
I am not here today to discuss the other projects that my hon. Friend mentioned. We are recognising the realities of the fast reactor programme and making arrangements to maintain the technology in an economic way.
Mr. Tam Dalyell: When the Secretary of State was pressed by the hon. Member for Banff and Buchan (Mr. Salmond) on what he had said to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) about other nuclear purposes, should they arise, his reply was "After all, they are so general that I cannot go into them." But some of us have gone into them with the directorate of Dounreay. As the Secretary of State well knows, one possible purpose is reprocessing and another is the problem of what to do with those 10 Ministry of Defence submarine reactors, which must be reprocessed, monitored and stored somewhere by the early 1990s. Will the right hon. Gentleman be a little more forthcoming about those alternatives?
Mr. Parkinson: The hon. Gentleman has mentioned some of the possibilities, but no one is prepared to make

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any commitment that the Dounreay site will be used for any of those purposes, although they are the sort of purpose for which it might he used. The Ministry of Defence and other bodies that have been consulted do not want to be committed to using the site. That is why I said that if the site is available and needs arise it will be possible to use it. But there is no commitment of any sort that it will be used for any purpose other than its present one.
Mr. Allan Stewart: Does my right hon. Friend agree that the logic of the SNP policy—as far as such a description is appropriate—is that Dounreay should be closed immediately? Is not this announcement a positive outcome for Dounreay and Caithness, because it guarantees substantial employment until the late 1990s?
Will my right hon. Friend say anything further about the work that our right hon. and learned Friend the Secretary of State for Scotland will undertake? Can he give an assurance that it will involve the Highlands and Islands Development Board and the local authorities? Might it not be helpful if there were a meeting with the Scottish Office in the near future to consider the long-term economic opportunities for Caithness?
Mr. Parkinson: Yes, my right hon. and learned Friend will be discussing this matter with the Highlands and Islands Development Board.
I confirm what my hon. Friend said about the Scottish National party. The only suggestion that the hon. Member for Banff and Buchan (Mr. Salmond) made was that we should extend the renewables programme. I suppose he means that we should cover Caithness and Sutherland with windmills. That is not a particularly sensible policy, and it would ensure that 2,000 people were put out of work now, with only the possibility of work in the future.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. I shall call all hon. Members who are rising.
Mr. Charles Kennedy: Does the right hon. Gentleman appreciate that this statement marks the final nail in the coffin of an economic programme for the Highlands and Islands which has been fostered by successive Governments of both political colours and which involved the Corpach pulp mill—now closed—the Invergordon aluminium smelter—now closed—and the Dounreay fast reactor programme which, in the words of the Secretary of State, is to close in the 1990s?
I refer to the question asked by the hon. Member for Eastwood (Mr. Stewart). Will the Secretary of State say anything more about the intensive efforts over the next nine years that the Secretary of State for Scotland will make to try to undo the structural harm done to the economy of the Highlands? I can tell him, on behalf of my constituency and that of my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), that if they are as successful as the efforts of the past nine years made by the Scottish Office, unemployment will continue to rise and the economy will continue to collapse.
Mr. Parkinson: I have already told the House that there will be substantial employment at Dounreay. I mentioned the figure of 1,600 in the mid-1990s. That figure will slowly decline. At the end of the decade, about 500 people will still be working at Dounreay on maintenance and security. That will be a continuing commitment. Right through to
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the end of the 1990s, at least 500 will be employed, and there will be considerably more than that for most of the 1990s. During that time, my right hon. and learned Friend will be working hard with the Highlands and Islands Development Board to see what other jobs can be attracted to the area. At least he will have a lot of time in which to work to make this transition as painless as possible.
Dr. Michael Clark: Is my right hon. Friend aware that many of us who take an interest in the technology of nuclear generation are somewhat apprehensive about today's statement? Is it not possible that the right hon. Member for Chesterfield (Mr. Benn) was right to say that this is the beginning of the end for the fast breeder programme? Does my right hon. Friend agree that it is difficult to mark time in technology? Either we go forward with others or we stay behind on our own. Will his Department do all that it can to ensure that we keep abreast of the know-how in this technology so that we can re-enter at some later time, as we will almost certainly want to do?
Mr. Parkinson: We are not leaving this technology. As I have said, we shall operate various parts of the plant for at least nine years. We shall still have a substantial research programme after that. It would not have been justified to continue with expenditure on this scale and then to invest another £800 million in a European fast reactor, knowing that there was not likely to be a commercial customer for the technology for decades. We have faced up to the realities of the fast reactor programme and we are retaining a position in it.
Mr. David Heathcoat-Amory: This is a sad and difficult, but correct, decision. I congratulate my right hon. Friend on facing up to the issue rather than postponing the decision. With the continuing low price of uranium and the comparative success of other reactor types, it must be right to reduce expenditure on the fast reactor, whose prospects are comparatively poor.
Will my right hon. Friend confirm that his commitment to the rest of the nuclear programme, and in particular to the PWR programme, is undiminished? Will he see whether research staff can be transferred from the fast reactor to the PWR programme?
Mr. Parkinson: I am happy to confirm to my hon. Friend that the Government remain committed, as they were in their election manifesto, to maintaining a substantial nuclear programme. I was at Sizewell on Monday and I have bad news for the Opposition. Sizewell is running ahead of schedule and all the signs are that it will be built to time and to cost and that it will be an efficient station pumping electricity into the grid in 1994. I have set up an inquiry into Hinkley Point. I have had no other applications from the CEGB. I understand that there will be two more. The Government remain committed to maintaining a substantial nuclear programme.
Mr. Tony Baldry: Given that fast breeder reactors are unlikely to be commercially viable, at least for decades, is not the only responsible decision that any responsible Government could take that which my right hon. Friend has announced this afternoon? Is it not clear that the logical conclusion of the energy policies of all the Opposition parties would have been the decimation of

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Dounreay—and of the whole of the rest of the British nuclear industry—a long time ago? So their indignation this afternoon is quite synthetic.
Mr. Parkinson: My hon. Friend has identified the Opposition's problem. That is why they sit muttering and shouting from sedentary positions. They are wholly opposed to the entire nuclear programme. Had they been in power, they would have closed Dounreay years ago, and thousands of other people in the industry would have been put out of work.

Short Brothers plc
4.49 pm
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Peter Viggers): With permission, Mr. Deputy Speaker, I wish to make a statement about Short Brothers plc.
My right hon. Friend the Secretary of State for Northern Ireland informed the House on 29 June that we are seriously interested in possibilities for privatisation. We are, therefore, actively seeking the return of Short Brothers plc to the private sector from state ownership. I wish to make it clear that the Government are ready to consider suitable proposals that might lead to the acquisition of Short Brothers by private sector interests. I invite organisations which can secure the necessary financial backing to come forward as soon as possible.
The Government would prefer to transfer the company as a whole to the private sector. We would not, however, rule out the sale of the different parts of the business to separate interests.
In considering any proposals, the Government will give full weight to the contribution that a continuing viable business could make to the Northern Ireland economy.
My statement today follows the Government's consistent approach throughout the United Kingdom of seeking to replace state ownership with the benefits and opportunities that flow from effective private sector leadership. Those benefits have been clearly demonstrated in the companies that have already been privatised.
Shorts has many achievements to its name, especially in exports, and it is an important contractor for the Ministry of Defence. The Government believe that the future of a strong viable business at Shorts is best served not by continued dependence on public ownership, but by the disciplines and opportunities of the private sector. Returning the company to private ownership, therefore, offers the best prospects of its future development and levels of employment in the longer term.
Mr. Jim Marshall: I hope that the Under-Secretary will not misunderstand if I welcome him to the Dispatch Box. We have read a great deal about the Government's intentions towards Government-owned companies in the North of Ireland, but the presence of Ministers in the Chamber to make those intentions clear has been rare. Even the Under-Secretary will have to agree that the Opposition, especially my hon. Friend the Member for Kingston-upon-Hull, North (Mr. McNamara), have had to go to great extremes to encourage the Under-Secretary to make a statement before Parliament rises at the end of next week.
Although the statement has been made today, the Under-Secretary must agree that it is very short on what will happen to Shorts and long on the Government's intentions. We believe that it is regrettable that the future of Harland and Wolff will still be subject to conjecture and uncertainty. The future of Shorts should be determined as quickly as possible. I am sure that the Minister agrees that we are witnessing the continued victory of Thatcherite economic dogmatism over the real economic needs of Northern Ireland. The Minister must also accept that the Government are seeking to escape their responsibility for the industrial and economic well-being of the Province.

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When will the Minister begin to understand that Shorts and Harland and Wolff are regarded in the Province as symbols of the Government's continued commitment to the economic and industrial infrastructure in the North of Ireland? The announcement today and the Under-Secretary's previous announcements on Harland and Wolff and Northern Ireland Electricity give the impression to many people, especially those in Northern Ireland, that the Government are trying to shed their responsibility for continued industrial and economic development in the North of Ireland.
I hope that the Minister will accept that the Opposition's view is that Shorts should remain a publicly owned company. If it is to be privatised, I urge the Minister to accept that the company should be privatised as a whole and not broken down into its three main constituent parts. Further, I urge the Minister to accept that guarantees about job losses must be obtained. The Minister must surely accept that, if the company is privatised and there are large-scale job losses, that will seriously undermine not only the economic development of Greater Belfast, but that of Northern Ireland as a whole.
May I, Mr. Deputy Speaker, with your permission, ask a number of specific questions? First, will the Minister state whether the Government intend to introduce any capital restructuring of the company prior to privatisation? If so, will it require the approval or the agreement of the Commission in Brussels, as occurred with the privatisation of the Rover Group?
Secondly, what will happen to the proposed $60 million order from the Pentagon if the company is privatised?
Thirdly, what prospect is there of Government funds for the company, especially for the new 90 to 100-seater Jetfan aircraft experiment?
Fourthly, can the Minister confirm that both Boeing and McDonnell Douglas have been approached to take over Shorts, but have declined?
Fifthly, what consultations have taken place specifically with the management, but, more generally, with the work force?
Sixthly, can the Minister confirm that the losses for this financial year are likely to be about £130 million?
Seventhly, if divisions are sold separately, will the Minister give a cast-iron guarantee that the important missiles division will not be sold to foreign competitors?
Short Brothers is a company of which all of us can be proud. I am sure that the Minister agrees that it is operating on the very frontiers of new and high technology—in many aspects exciting technology—and that it would be a disaster for the company to be run down and the highly trained and skilled work force to be lost, not just to Belfast but to the United Kingdom.
Mr. Viggers: I shall deal first with the hon. Gentleman's last point. We fully recognise the importance of Shorts and its skilled work force in Northern Ireland, and we pay due regard to their interests.
The hon. Gentleman said that the statement was short on what will happen. That is true, because what we have announced today is our intention to move the company to the private sector. The future of the enterprise will very much depend upon the intentions of those who approach us and negotiate with a view to undertaking parts, or the whole, of that operation.
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The hon. Gentleman's question gives me the opportunity to say that the Government recognise the direct interest of Shorts' suppliers, customers and work force. We wish to make it clear that the Government will continue to provide support for Shorts while we move towards its privatisation. I especially wish to confirm the Government's continuing commitment to the statement, first made in a parliamentary answer on 23 December 1981, that the Government will stand behind the company.
The hon. Gentleman asked about the Government's commitment to Northern Ireland and their intention to improve employment there. I am very proud of the fact that unemployment in Northern Ireland has reduced substantially in the past two years and is now some 19,000 fewer than in September 1986. That is all credit to the industry—substantially the private sector industry—of Northern Ireland, which has been successful in taking advantage of United Kingdom policies.
The hon. Gentleman asked a number of specific questions. The first was whether capital restructuring will require EEC permission or authority. That will, of course, depend on the approaches that we receive from the private sector, which I have invited today. At this stage it is a hypothetical question.
The hon. Gentleman asked about the future of the prospective $60 million Pentagon order for the American National Guard. If the enterprise in Belfast—be it within the public sector, as Shorts is now, or within the private sector—can supply the American Government with orders, that prospect is extremely good. However, I cannot give a cast-iron guarantee that the order will be successful. At the moment, Shorts has been negotiating for some time with the American Government and those discussions are at an advanced stage. Whether the order can be fulfilled depends on the work force rather than the ownership of the company.
The hon. Gentleman asked about the FJX. That will also depend on the manner of approach to Shorts and the enterprise of those who wish to undertake it. The Government have not approached Boeing or McDonnell Douglas about taking over Shorts. We would welcome approaches from all quarters. In reply to the hon. Gentleman's specific question, we have not made approaches to the two companies to which he referred.
The hon. Gentleman asked about discussions with management. Those have taken place, but our first priority was to give the House a statement of our intention that the company should be moved to the private sector. lie also asked for a statement of the current loss this year. The overall loss of Shorts in 1985–86 was £37 million. The overall loss in 1986–87 was £20 million. The figures for the current year have not yet been audited and it is not possible for me to make a statement on them.
The hon. Gentleman asked whether the missiles division would be undertaken by foreign control and management. That will depend entirely on the approaches that we receive for the company. The number of jobs and the prospects of the enterprise in Belfast depend on its ability to produce and sell products that customers want to buy. We wish it well.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House that we are now eating into the time of some very important debates. I hope that questions will be brief.
Mr. James Kilfedder: It is appalling that Shorts, which has an international reputation for excellence and is on the frontier of high technology, is to be split up by the Government and sold off in parts. It amounts to the fact that commercial vultures will come along. When they have picked the bones clean, they will go elsewhere. Privatisation may be all right for England where the economy is strong, but that cannot be said of Northern Ireland where this action and decision will upset a very fragile economy.
Is the Minister aware that the excellent work force of dedicated and skilled men will deeply and bitterly resent the Government's decision? That applies not only to the work force, but to the people of Northern Ireland. Will the Government think again about this matter in view of the high unemployment in Northern Ireland—and I adopt and echo the comments of the hon. Member for Leicester, South (Mr. Marshall)—and ensure that they will not sell the company in part? Will they reconsider? If they have to sell it, they must sell it in one piece and ensure that it is maintained as a viable unit.
Mr. Viggers: The hon. Gentleman cannot have heard my statement in which I said:
"The Government would prefer to transfer the company as a whole to the private sector. We would not, however, rule out the sale of the different parts of the business to separate interests."
We have certainly not ruled out the transfer of the company as a whole.
With regard to the future of Shorts in private sector ownership, 17 major businesses have been privatised in the United Kingdom including the British Airports Authority, Rolls-Royce, Royal Ordnance, British Airways, British Telecom, British Gas, British Aerospace, Jaguar, and Cable and Wireless and 655,000 jobs have been moved to the private sector. Those who work within the new private sector areas are very pleased that that is the case. For instance, the profits of the National Freight Corporation have risen from £4·3 million in 1981 to £370 million in 1986. The hon. Gentleman is unnecessarily gloomy. There is no reason why the enterprise should not have a profitable and successful future in private enterprise.
Mr. Roy Beggs: This statement can only add to the distress of those who are unsure and uncertain whether they will have a job should the proposal proceed. There are very special circumstances in Northern Ireland where there are more people unemployed than currently work in the manufacturing sector. Is the Minister aware that the proposals to privatise Shorts, Harland and Wolff and Northern Ireland Electricity collectively are perceived as phased British economic withdrawal from Northern Ireland? That perception is there and is causing concern. Overseas investors will be watching what happens very carefully and this proposal may cause them to consider further whether to invest in Northern Ireland if the Government are seen to pull out from our major employers.
I am not reassured by the statement that the Government would prefer to see the company purchased and retained as one single entity. There is a let-out there. As we are not all fools and we are aware that the attractive
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sectors of Shorts—the profit-making sectors—will probably be snapped up by investors, will the Minister undertake, in the event of the company being broken up, to continue to fund those sectors that are not yet profitable to retain employment and give encouragement? What can the Minister say today to reassure those who question whether there is now British economic withdrawal from Northern Ireland?
Mr. Viggers: I say again to the House that the Government's preference, as stated in my statement, is to transfer the company as a whole to the private sector. That, I reassure the hon. Gentleman, is what I said and it is what I mean. However, we would not rule out the sale of different parts of the business to separate interests, but our preference is that the business should be transferred to the private sector as a whole.
With regard to the hon. Gentleman's substantial point, any talk of economic withdrawal from Northern Ireland is nonsense. The Government and our predecessors have provided substantial economic support to the Province. This year public expenditure in Northern Ireland will total £5 billion, of which some £1·6 billion is the amount of the United Kingdom subvention to Northern Ireland. That enables the Northern Ireland Office and my Department in particular—the Department of Economic Development—to fund a very wide range of programmes through the Industrial Development Board and the Local Enterprise Development Unit which are highly successful and have led to a wide range of investment and employment opportunities. That is why we are so proud that unemployment has fallen in Northern Ireland.
It is necessary for us to take account of the manner in which money is spent to ensure that we obtain good value for money. In that way we can have some confidence that the level of unemployment will continue to fall leading to more confidence and prosperity in Northern Ireland.
Sir Michael McNair-Wilson: Will the sale of the company be conditional upon the purchaser maintaining Shorts at Queens Island for a five-year period as a minimum? If the company was sold to a foreign aircraft company which decided to rationalise its product line, it is conceivable that it might want to move its production facilities to its own factories which might be outside Northern Ireland. That undoubtedly would be a serious blow to the employment prospects in the Province. On that same point, are the Ministry of Defence contracts, particularly those for the Short Tucano, absolutely secure, no matter who buys the company?
Mr. Viggers: On the first point, I assure my hon. Friend that employment in Northern Ireland is the main basis upon which financial support is given to industry. It would certainly be the Government's continued intention to support enterprise, industry and employment in Northern Ireland. In my statement I said that the Government would give full weight to the contribution that a continuing viable business could have to the Northern Ireland economy—and that of course is in Northern Ireland.
I am pleased that the Tucano project is now making good progress with further deliveries to the Royal Air Force. That contract is held by Shorlac and I see no reason why it should be disturbed by any proposals that we have to switch the operation to the private sector. In common

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with the general point that I made, I think that the private sector would have enhanced opportunities to seek further export orders for the Tucano aircraft.
Mr. Seamus Mallon: Now that the decision has been made to sacrifice jobs on the altar of Tory ideology, will the Minister give a commitment to the House that if Shorts is to be sold off in separate sections to separate interests, some parts will be based in rural Northern Ireland so that the imbalance in employment can be rectified and so that all the people of the North of Ireland can benefit by this decision, however dubious?
Mr. Viggers: I am not sure how many times I must repeat that the Government would prefer to transfer the company as a whole to the private sector. As to spreading its operations around Northern Ireland, the hon. Gentleman will well know that there are almost 100 jobs at Shorts in west Belfast. It is not for Government, if the company is in the public sector—certainly not if it is in the private sector—to be dirigiste about where the operation should be. I do not think that it would be appropriate for the Government to make conditions about the transfer to the private sector. To that extent, I completely contradict the—Government's—[Interruption.]—the hon. Gentleman's assertion that we have sacrificed jobs.
Mr. Robin Maxwell-Hyslop: Is not the reality, as opposed to the theoretical structure, that the Northern Ireland Vote is paying for the high cost of the Ministry of Defence's change in specification of the Tucano, which ought properly to fall on the Ministry of Defence's Vote rather than on the Northern Ireland Vote? As long as both are part of Her Majesty's Government, that problem does not present itself in a form that has to be resolved. If the company is privatised, it will. As my hon. Friend is speaking for Her Majesty's Government, not only the Northern Ireland Office, can he tell us whether the cost of the changes in specification will, after privatisation, be paid for by the Ministry of Defence or his Department and, if by neither, by whom they will be paid?
Mr. Viggers: The terms on which the Tucano contract was entered into by Shorts and the Ministry of Defence were effectively a fixed-price contract, which meant that Shorts would pay the cost of modifications and alterations to meet the contract. Who will meet such obligations will be a matter for consultation between the successor to the Tucano operation and the Government.
Mr. Richard Livsey: Does the Minister agree that Shorts is important to employment in Northern Ireland? Its dependence on defence contracts and high technology and its recent poor financial performance, which must have a bearing on its position, show that the company should not be privatised. What assurance will the Minister give that employment will be maintained at its present level at Shorts? Will he confirm that the company is likely to make a loss this year? He has already said that it made a loss of £20 million in 1986–87.
Mr. Viggers: The company made losses in the past two years ended 31 March 1987. The figures for this year have not been audited, so I cannot make a statement on the amount of overall loss or profit. As to the primary point made by the hon. Gentleman, I deny that public or private ownership has anything to do with the level of employment. Success in winning customers, providing
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products that people want to buy and at prices that they want to pay win profits and jobs for companies. I have every hope and expectation that in private ownership Shorts will be able to do that.
Mr. Michael Colvin: The Opposition cannot criticise the Government for lack of commitment to Northern Ireland; it is clear to see everywhere that one looks, and I have just been to look. Will my hon. Friend acknowledge that Shorts is a company of great capability, which may not yet have achieved its full potential? Will not privatisation add the vital element of market forces, which is the spur to higher productivity? Surely that is the best way of preserving jobs. Will my hon. Friend confirm that British bids for the company will be given preference, and will he say when it is likely to be Harland and Wolf's turn?
Mr. Viggers: We have announced that it is our wish that Harland and Wolff should move to the private sector; we are having discussions about that, as my hon. Friend will well know. I could not phrase my hon. Friend's expectation of the opportunities offered by private enterprise better than he did. The number of jobs in any company depends on its ability to produce and sell products that customers want to buy. We have every expectation that the Shorts enterprise will want to do that.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. I shall call those hon. Members who have been standing.
Mr. Bob Cryer: How many millions of pounds of taxpayers' mow/ have been put into Shorts? Given that the Government are proposing to sell Shorts at a knock-down price, will not this announcement join the long list of crimes committed in Northern Ireland? It is daylight robbery of the taxpayers. As the Government are so keen on ballots for trade unionists, will the Minister organise a ballot among Shorts workers to see whether they want privatisation of the concern to which they have given their lives over many years, or does democracy stop short for workers? Is it not scandalous that the Government are making this proposition in an area that, as the Minister knows—the Secretary of State is sitting next to him—is so sensitive that the plan will bring concern, shock and amazement to people who are already much bemused by the circumstances that prevail in the Province?
Mr. Viggers: It is indeed true that much public money has been put into Shorts. Shorts has been able to borrow money, which is guaranteed by the Government. I hear what the hon. Gentleman says and I recognise that Shorts' workers will be apprehensive and concerned about a move from the public to the private sector. I say to them that there is no future for a company that is supported by Government. The future lies in the private sector, where there is enterprise and the opportunity of growth. That is where the company's longer-term employment prospects lie. I am sure that, on reflection, most people will take that view.
Mr. Tony Benn: Is the Minister aware—quite apart from the general arguments about privatisation, which confers political power over the economy on shareholders who have no interest whatever in the social conditions of the Province—that tens of

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millions of pounds have been put into Shorts and Harland and Wolff? As a Minister, I had direct responsibility for the funding of Shorts' aircraft and the Musgrave dock. The money that was put in sustained and created jobs that otherwise would not have been there.
When the Minister talks about subsidy, he might mention the £13 million a week—£722 million a year—that the Government spend on the emergency in Northern Ireland. Is it not a fact that that money would be better put into economic development than into the continuation of the war? Given the role that Harland and Wolff and Shorts have played in sustaining employment in Northern Ireland, it must be obvious to anyone who listened to the statement that it, like many others made by the hon. Gentleman's Office, is a barely concealed announcement that the Government are planning an economic withdrawal from Northern Ireland.
Mr. Viggers: I have said already that, in considering any proposals, the Government will give full weight to the contribution that a continuing viable business would make to the Northern Ireland economy. Indeed, we shall give that full regard.
The right hon. Gentleman asked whether it would not be more helpful to transfer the money spent on security in Northern Ireland to the economy. I can scarcely disagree with him. However, any moderately intelligent 10-year-old would know that that option is not available to the Government, nor was it to the previous Government. We have three problems—security, political problems and the economy. Our job, especially that of my Department, is to ensure that the economy plays its part in improving prosperity and employment prospects in Northern Ireland, thereby making a happier Province that will contribute to solving the other two problems.
Mr. George Foulkes: Does the Minister accept that today's announcement will reduce the Government's influence on politically sensitive contracts? Does he accept that, even in the present position, whereby all Shorts directors are appointed by the Government, the company refuses to make any public comment on incontrovertible evidence that, by falsifying end-user certificates, Shorts' Blowpipes are getting into the hands of terrorists? Will he say what the Government are doing to discover information about that problem and make a statement about it? Does he accept that such instances will be much more likely if the company is privately controlled, especially if there is to be foreign investment in and control over Shorts?
Mr. Viggers: The hon. Gentleman is tempting me to go wide of the subject of the statement. He made allegations about the company, which I refute, but I do not think that what he says is an argument against what I have announced.
Mr. Dennis Skinner: Is not this selling off by the Tory Government almost getting into the political gutter? It is almost as though, when she meets the Cabinet, the Prime Minister goes around the table and asks, "What have you got to sell off today?" She turns to the Secretary of State for Northern Ireland and asks, "Is it not time that you sold something off, despite all the social consequences?" Will the Minister guarantee that Mr. Ravi Tikkoo,
1320
with Mafia-like tendencies, is not to be given a chance to buy into Shorts? He is the man who ordered gunmen on to his ship to drive off members of the National Union of Seamen. The Government are just about getting to the level that no one could have imagined nine years ago—selling off Northern Ireland, with all the problems that it has. They should be ashamed of themselves.
Mr. Viggers: Some 655,000 workers, who worked in the public sector in 1979, now work within the private sector. They recognise the benefits of private enterprise, as I trust that the people of Northern Ireland will. If we seek to insulate Northern Ireland from the economic forces that apply in the rest of the United Kingdom, which have brought massive benefits to the remainder of people in the United Kingdom, we shall do the people of Northern Ireland not a service but a disservice.
Mr. Tam Dalyell: May I press the Minister on defence sales? On four occasions this afternoon he has said—doubtless sincerely—that the preferred option was to sell Shorts as a whole. Could there not easily, without raising Aunt Sallys, be a situation in which some big international firms want to pick off those parts of Shorts that are extremely advanced, and leave the rest? There will be plundering of what is technically advanced. That is not fanciful. What will the Government do? Will they say, "We really prefer that it should be kept as an entity"?
In the context of the Saudi arms deal, people may have reservations about what exactly happened with arms in the middle east, but that is not the point. We are discussing a major contract. Shorts is a major company. How is it to react to a Saudi arms deal, for example? What is the fallback position?
Mr. Viggers: We shall consider all approaches on their merits and take account of all interests, including, of course, the national interest.
Sir Michael McNair-Wilson: On a point of order, Mr. Deputy Speaker. I do not think that the hon. Member for Leicester, South (Mr. Marshall) intended to mislead the House, but if he chooses to look at next week's oral questions to the Secretary of State for Northern Ireland, he will find a question in my name about the privatisation of Shorts. Frankly, his suggestion that he has dragged the statement out of a reluctant Government is bunk.
Mr. Deputy Speaker: Order. Let us get on.

Short Brothers plc
  BILL PRESENTED
    DEMOCRATIC OATHS
    Mr. Tony Benn, supported by Mr. Eric S. Heller, Mr. Jeremy Corbyn, Mr. Ken Livingstone, Mr. Bernie Grant, Mrs. Alice Mahon, Mr. Bob Clay, Mr. Eddie Loyden, Mr. Ronnie Campbell, Mr. Harry Barnes, Mr. Jimmy Wray and Mr. Chris Mullin, presented a Bill to provide a new Oath to be taken by the Crown on the occasion of the Coronation, and by Privy Councillors, Members of Parliament, holders of all judicial offices, all civil and military officers, Lord Mayors, Mayors, Lords Lieutenant and others holding positions of authority within the United Kingdom: And the same was read the First Time; and ordered to be read a Second time tomorrow, and to be printed. [Bill 204.]

  EUROPEAN COMMUNITY DOCUMENTS
  Ordered,
  That European Community Document No. 4171/88 on pharmaceutical directives be referred to a Standing Committee on European Community Documents.—[Mr. Maclean.]

Estimates Day
[3RD ALLOTTED DAY] considered
Estimates Day
  SUPPLEMENTARY ESTIMATES 1988–89

  NHS Pay Awards
  [Relevant document: Third Report from the Social Services Committee ( House of Commons Paper No. 547 of Session 1987–88) on Resourcing the National Health Service: Prospects for 1988–89.]
  Motion made, and Question proposed,
  That a supplementary sum, not exceeding £538,303,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1989 for expenditure by the Department of Health and Social Security on hospital, community health and related services, including a grant in aid.—[Mr. Maclean.]
  5.23 pm
  Mr. Frank Field: I thank the Liaison Committee for today's debate and for drawing attention to the estimates and supplementary estimates that we are specifically voting today. I welcome the Under-Secretary of State for Health and Social Security, the hon. Member for Derbyshire, South (Mrs. Currie), to the debate. No doubt, Mr. Deputy Speaker, she will wish to catch your eye and respond to the debate. She has a somewhat schizophrenic attitude to public expenditure. Some days she is in favour of cutting it, and some days she is in favour of increasing it.
  At the beginning of the debate, it is important to establish just how large the estimate is. In cash terms, class XIV, vote 1 is the largest ever single vote in the history of voted expenditure. The vote covers what most of us would call in shorthand the health authorities' budgets. We are debating the supplementary estimate, which involves an amount of about £538 million, the vast majority of which is to cover the additional pay costs to health authorities of pay awards to doctors, dentists and professions allied to medicine. At the beginning of the debate, we are discussing the supplementary estimate and the review body's recommendations.
  I ask the House to bear with me if, on occasion, I must quote from official documents. The debate is technical and it is important that certain matters are clearly put on the record.
  The pay review body stated:
  "our recommendations will result in a substantial increase in the pay bill. This flows largely from the exceptional circumstances associated with the introduction of the new clinical grading structure, which will affect the vast majority of the nurses, midwives and health visitors covered in our review … It is in our judgement right that the new pay structure should be sufficiently flexible to provide a fully satisfying career within the clinical field. But the cost of introducing it is unavoidably high."
  I stress that the pay structure should be "sufficiently flexible" to achieve the objective.
  It seemed that the review body had two objectives in mind. The first was to make a major change in the relative position of nurses in the pay league. I asked staff in the House of Commons Library whether they would update

  1323
  the 1974 Halsbury report on staff nurses and compare it with the pay review body's proposals. Although the results are not exactly the same, they are certainly comparable. We must take note of that objective. Those hon. Members who have fairly long memories will remember how important the Halsbury report was in its attempt more adequately to pay nurses.
  The second objective of the pay review body has been summed up by many hon. Members, but perhaps best by the Prime Minister. It was not summed up most eloquently by the Prime Minister, but, as she runs the show, what she says normally goes. Therefore, it is worth paying attention to how she puts a message on the record. She said that she was anxious that those directly involved in patient care should have a pay structure that reflects their skill, qualifications and responsibilities. The review body's first objective was to lift the relative pay of nurses, and its second objective was to provide a pay structure that would keep nurses in wards rather than in administration.
  The Select Committee welcomed the statement that the Government intend fully to fund the pay award. It was one of our constant pleas to the Government. I do not wish to make party political points by drawing attention to the number of times the Government rejected our plea. It is important to note what the Secretary of State said when he announced the Government's decision on the pay review report. Again, I apologise to the House for quoting, but it is important to be clear about what everybody said in the debate. In a press release, the Secretary of State said:
  "In reaching this decision"—
  to accept the review body's recommendations—
  "the Government has again demonstrated its commitment to the nurses and the other NHS professions concerned … The Government will be implementing all these awards in full from 1 April, and will meet the full additional costs … from the Reserve. In consequence, these awards will be fully funded."
  That is where the debate began. From that point, certain doubts have been raised about what is meant by "fully funded". Once again, as recently as 14 July, the Prime Minister introduced some doubt when she addressed the House. In response to an oral question she said:
  "The amount that has been made available was the amount that was estimated by the nurses' pay review body. That full amount has been put forward. [Interruption.] The formula used for estimating the total sum required was agreed between representatives of National Health Service chairmen and the review body. That amount is intended to be the amount which they said regrading of the structure would cost."—[Official Report, 14 July 1988; Vol. 137, c. 546]
  Again I emphasise the Prime Minister's point about what it was said that the pay review body award would cost. When one reads the pay review body's words, one realises that we are not debating an estimate but that we are looking at an estimate based on an estimate based on an estimate. That is the very point that the Select Committee drew to the attention of the House in its third report, which is the basis of this debate.
  The House will be pleased that this is the last quotation that I wish to put on the record—
  Mr. Sam Galbraith: Shame.
  Mr. Field: Well, I may give hon. Members more quotations a little later.
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  The crucial quote from the review body is as follows:
  "Our estimates are necessarily approximate because they themselves are based on estimates. First, the Health Department have provided earnings and paybill estimates for 1988–89 at current rates of pay and allowances, together with recent manpower figures … Secondly, since assimilation of staff to the new clinical scales depends upon local decisions based on a process of examining individual posts, it is impossible to predict with any certainty the numbers who will he receiving each level of pay. Our calculation of the cost of the recommendations for these staff is based on an estimate by the Health Departments of the numbers which in their view will be placed in each of the new grades. For these reasons, the actual cost of our recommendations may well differ from our estimates".
  I shall repeat the last sentence because it is crucial to this supplementary estimates debate. After listing the basis of the estimates based on the estimates of the estimates and coming up with that figure, the pay review body stated:
  "For these reasons, the actual cost of our recommendations may well differ from our estimates".
  That has led us to the current position.
  Late last night I wrote to the Under-Secretary of State listing some of the questions which I hope will be answered in this debate. In order not to disappoint my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith), I may well quote from them a little later.
  It is clear from the press reports and the information that we are getting back from the local areas and our contacts with those in the nursing profession that the regrading is not going as smoothly or as positively as those of us who welcomed the Government's original statement had hoped. Indeed, there is some difficulty in answering quite simple questions about the allocation of funds from this supplementary estimate.
  One question to which I hope we shall get a clear answer in the debate is: how have the Government divided the total sum? Has it been divided down on a per capita basis for the regions or according to the number and seniority of the nurses employed in those regions? Secondly, is it true, as some of us have heard, that the regions are holding back some of the money partly because they do not know how the review will take place at a local level but also perhaps because they hope to get some spare cash out of it? That applies to the regions that have done relatively well in the distribution.
  Thirdly, what is actually happening at district level? Are the reports correct which Opposition Members and, I am sure, Conservative Members have received—that the districts are cash-limiting the review exercise and that because there is a cash limit local hospitals are changing or limiting the structure on to which the nurses can be fixed? If that is so, it is not only a serious matter for our consideration, but it goes back on the second objective which the Prime Minister laid down when she welcomed the pay review body's findings and the Government's full implementation of the recommendations, and said that we should have a flexible pay scale or, in other words, one large enough so that people with various skills, abilities and training can, at the end of the week, receive pay which to some extent matches the skill that they bring to their daily jobs. Those are the three important questions which we hope will be answered before the end of the debate.
  As I said at the beginning of my remarks, most of the debate will be used to discuss the pay awards and the funding of this year's increase in pay, but although many of us are concerned only with the nurses, the estimate does not relate only to nurses. It also covers doctors and their

  1325
  pay award. Can the Minister enlighten the House about reports that the money available for the doctors' award may be insufficient to fund their increased subscriptions for medical defence insurance, two thirds of which will be met for the first time by the health authorities? What will happen to the Whitley council pay awards? I know that the hon. Member for Eastleigh (Sir D. Price) hopes to catch your eye, Madam Deputy Speaker, in a moment, and will no doubt raise that point.
  The current position is compounded with irony. The reason why the Select Committee, many hon. Members who are not members of the Select Committee and many outside organisations which are concerned with the National Health Service pleaded with the Government to fund this year's pay award fully was to take out of the Health Service debate the element of uncertainty that arose in previous years when the pay award was not fully funded. We have a clear statement from the Prime Minister and the Secretary of State down that the Government will fully fund the award, yet there is massive uncertainty again in the National Health Service about the position on pay and how the pay bills will be met in October this year.
  So that I do not disappoint my hon. Friend the Member for Strathkelvin and Bearsden, I refer the House to paragraph 26 of the third report of the Select Committee on Social Services. Some time ago, we drew attention to the nightmare that we thought might exist if the Government appeared somewhat mean in implementing their pledge of fully funding the pay awards. We stated in the report:
  "The most immediate effect of the Nurses' Pay Review Body Report will be to increase uncertainty about the budgetary situation in the autumn when most of the award will become payable on a back-dated basis. There is no certainty at present about whether the sum allocated in the Supplementary Estimates will be sufficient to meet the full additional cost to health authorities of the pay review body awards."
  Since the publication of the report the number of questions to which we need answers has increased. I listed three of them earlier and I hope that the Minister will take them on board. In the letter that I wrote to her last night, which I expect she did not receive until this morning, I listed other questions which I should like to draw to the attention of the House. I for one am uncertain about the level of the basic pay increase for those nurses who will not get an increase in pay because their position has been regraded. I have asked questions about the basis of allocating the total sum and whether it was on a per capita basis, the RAWP basis, or on the pay bill basis.
  Can the Minister tell us something about the instructions that the Government have issued to the regions and districts about implementing the pay award? Do those instructions—I am sure that they exist—tell local health authorities that they should get on with the regrading exercise in the spirit of the review and that they should not be concerned with the total cost, or are the Government anxious to limit the cost of the findings of the pay review body? If that was their original intention, and given the extent of disquiet, will the Government think again and issue new instructions? What steps will the Government take to ensure that all the additional funds, for which I hope we shall vote today—without a Division—will be spent on pay and will not be earmarked for other projects within the Health Service?
  1326
  It is not my intention to argue a case other than that we are considering an original estimate, which represents the largest single estimate, in cash terms, for health authorities. I do not dispute that, in their initial response, the Government were anything but proper and generous to the nurses and the other groups when they said that the pay award would be met in full. Sadly, however, we are a little older and a little wiser since the Government made that first statement and we know that life in the real world is rather complicated.
  Since the original Government statement regional and district health authorities have had to try to implement the Government's intentions and there have been two reactions. First, nurses are beginning to say, privately and publicly, that they do not believe that they will get the pay increase that they thought they would get as a result of the regrading arrangements. I am not talking about those who will not be regraded and who, therefore, will receive a modest pay increase—that was the intention all along—but the remaining 85 per cent. who were led to believe that they would receive a substantial increase in their pay. The nurses' disquiet about their pay is spreading a degree of despondency within the Health Service the like of which has not been seen since before the Government announced their intention to implement the pay review body recommendations in full.
  Secondly, if additional funds over and above those that we are debating today are not made available in the autumn it is clear that, as well as increasing staff demoralisation, looming on the horizon will be the prospect of further cuts and ward closures. When the Minister replies I hope that she will say that the Government have listened carefully and that they will meet the issues that we have raised.
  Mr. Jerry Hayes: The hon. Gentleman has referred to cuts and closures, but I am sure that he would be the first to agree that it is not just a question of finance. What does he think about the small minority of consultants who are causing tremendous problems in the regions and districts? Last week in my district health authority, west Essex, a theatre had to be closed to be cleaned. That meant that the anaethetist lost his session and that he did not have much to do. He was asked to go five miles up the road to St. Margaret's hospital in Epping to work with the surgeon. That would have helped a lot of people with serious problems who needed operations. However, the anaesthetist refused to do so and that meant patients had to be turned away and operations cancelled. The senior consultant anaesthetist of the district, rather than telling the man that his behaviour was ridiculous, warned surgeons at St. Margaret's hospital that anaesthetists would not—
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. I must remind the hon. Gentleman that he is making an intervention, not a speech.
  Mr. Hayes: Does the hon. Gentleman agree that such a state of affairs is unacceptable and that, perhaps, the answer is for consultants to have contracts with the district and not the regional health authorities?
  Mr. Field: The answer to those questions is yes. I wish that the hon. Member for Harlow (Mr. Hayes) was as gentle with me when asking for my views in Committee.

  1327
  We are not debating a motion that criticises the Government for not giving resources to the Health Service. I have bent over backwards to draw attention to the Government's generosity, but I hope that the Government will keep faith with the nurses and, if need be, come up with extra funds.
  I know that one cannot always appeal to the best instincts of the Government to achieve the right results; therefore, I appeal to their political instincts. It would be absurd for the Government to make this record allocation and then, in October, to end up with a disgruntled work force because the pay review body recommendations had not been fully implemented and because further cuts were imminent. My grandmother used to say that it is not worth ruining the ship for a hap'orth of tar. We may need more than a hap'orth of tar to ensure that the review body recommendations are implemented in full. I appeal to the Government's instincts to do right by the Health Service and also to their political instincts. The Government have funded a large increase in the Health Service budget, but this winter they must not end up in the same position as last winter.
  I thank those people who helped us to draw up our report, namely our three advisers, Nicholas Bosanquet of York university, Dr. Steve Engleman of the university of Edinburgh and Dr. Ken Grant of the City and Hackney health authority. May I also thank the staff of the Select Committee, which is headed by Helen Irwin. Those of us who work on that Committee know what an extraordinarily talented group of people we have around us. The only caution I have in drawing the House's atttention to that fact is that the Secretary of State and the Under-Secretary of State are listening. If the Secretary of State was truly interested in value for money he would poach our staff to work in his Department.
  There has been an on-going debate about the implementation of the pay review body recommendations and the Minister for Health has gone on record as saying:
  "I have every intention of ensuring that it"—
  the pay review body recommendations—
  "is carried out in good faith."—[Official Report, 12 July 1988; Vol. 137, c. 178.]
  No one is seeking to doubt the Government's good faith so far, but we have enough evidence to suggest that the Government must make a firm statement about what they will do if it turns out that the supplementary estimate that we are debating and for which we are seeking approval is not enough to meet their commitment to implement the pay review body recommendations—a commitment welcomed by the House. Such implementation would raise the pay of nurses and other workers within the NHS to a better—although not necessarily a fairer—level than it has been for a long time.
  Several Hon. Members rose—
  Madam Deputy Speaker: Order. This is an appropriate time to remind the House that we had a debate on this subject on 5 July. There is a great deal of interest in today's short debate and, unless hon. Members cut their speeches short, many will be disappointed at the end of the day.
  5.47 pm
  Mr. Alistair Burt: It is always a great pleasure to follow the hon. Member for Birkenhead (Mr. Field) whose fair-minded approach not only to life, but to life in this House, is a model for many. His concluding remarks remind me of the slightly suspicious child who does not truly believe in the sweetshop's existence, but who suddenly finds himself inside it. He then prefers to spend his time searching around the heavily laden shelves for something that might not be there rather than enjoying the goodies all around him. Therefore, I do not intend to follow the hon. Gentleman in his study of the potential difficulties arising from what he admitted to be the most generous cash vote ever passed by way of a supplementary vote. I wish to consider some of the positive aspects.
  I shall relate my remarks to the general structure and financing of health authorities and I shall consider my district health authority in detail. I am pleased to have this opportunity to speak in this debate, as my father has worked in the Health Service all his life as a general practitioner. He practises in Bury and is also chairman of the family practitioner committee.
  Although I shall not say a great deal about primary health care, I take this opportunity to pay tribute to all those involved in primary health care and to all those who work in family practitioner committees for their excellent work. I pay particular tribute to the FPC of Bury for what it has done recently in computerising its cervical cancer screening system and acting as a model for the north-west. My brother also works in the National Health Service. He is an anaesthetist who works in a London hospital, so I have something of a medical background, although my own life took me in a slightly different direction.
  Recent debates on the NHS in this place have been characterised by three trends—first, the lack of enthusiasm and general support from Labour Members for a subject in which they are supposed to have such a deep concern; secondly, an over-concentration on selective history; thirdly, a lack of ideas about how to deal with the future. In the most recent Opposition day debate on the subject, those three characteristics came together. Those Opposition Members who bothered to take part waxed lyrical about the origins of the Health Service. They paid full and due credit to Bevan and lingered long over the injustices intended to be put right by the shining step into tomorrow when the NHS originally came into being.
  However, Opposition Members' tragedy is that that love of history, which is so much part of the Labour party's tradition, can become a quicksand and entrapment, denying them the flexibility to consider the present problems and thus develop new ideas for the future. It was lost on no one in this House that the most effective contribution from Opposition Members came from the right hon. Member for Plymouth, Devonport (Dr. Owen) who made the speech that should have been made by Members on the Labour Front Bench.
  Although Labour Members remember that rich heritage in a lyrical way, Conservative Members are entitled to remember another heritage, particularly bearing in mind the size of the estimates that we are discussing today. If I had spoken 10 years ago, I would have been concerned about the desperately low morale of Health Service workers in my constituency, owing to strikes in the service. I would have been asking about the low pay of nurses and why inflation had destroyed their

  1329
  rises. I would have been angry that the economic collapse had cost my constituents their new general hospital in the capital expenditure wash of those days, which had left the district as the only district in the north-west not to have a new general hospital in the past century. However, I appreciate we are not here to deal with history. In these estimates, we are concerned with the present and the future.
  I want to consider the grassroots example of my own health authority of Bury. Those hon. Members who know the area in which I was born and brought up will know that Bury, Ramsbottom and Tottington are not part of a great rolling shire. It is not an unduly privileged area. It is as average a constituency as one could wish to find—apart, of course, from being the most important, as each hon. Member would say of his constituency. The story of that health authority over the past few years and the way in which it has coped with the finance given to it and has planned to cope with the finance given to it and has planned to cope with the finance symbolised by the estimates before us is the story of how one health authority has adapted and responded to change in a demanding world.
  It is an appropriate opportunity to pay tribute to all those who work in those local services in the Bury health authority—the nurses, doctors, all the professionals in primary care in hospitals and in the community and all those who support them in the various ancillary services. It is also an opportunity to be grateful to those who administer the enormous funds that we are debating today, including Mr. Philip Bacon, the district administrator, all those who work with him and those who have been chairmen of the health authority. Great chairmen include the late Aubrey Clayton from the Labour party and the present chairman, Mr. Ted Schofield, from a Conservative background.
  When talking about this size of budget, it is easy to get lost in great national statistics. They tend to smother what is really important to people at the grass roots, in the surgery, in the community, in hospital or in any other form of care. We sometimes forget that when we are talking about those vast sums. What matters is what is being delivered to the person in the surgery. When I think about that and about some of the examples of what my health authority has done in the past few years and what it can do with those sums that we are discussing today, I can see that we are in a different world from that we hear portrayed by Labour Members.
  Let me quote some examples from an ordinary health authority in the north-west of England. In 1979, the number of staff employed in direct patient care was 1,020. On 31 March 1988, that number had risen to 1,307. Over the past five years, nine additional consultants have been appointed. Over the next 12 months, we hope to make five more appointments. That will mean that, since 1982, there has been an increase of 40 per cent. in the level of consultant staffing in the health authority. The number of in-patients treated in 1978 was 19,412. By 1987–88, that had arisen to 25,571. In terms of capital development, since 1979, there have been over 40 separate developments, costing a total of £17 million.
  When my right hon. Friend the Prime Minister comes to the Dispatch Box to talk about the Health Service and deliver some statistics, Labour Members often express concern, but statistics are about real people. One cannot
  1330
  walk around a statistic, but one can walk around my new hospital, the first phase of which was completed on the 40th anniversary of the creation of the Health Service.
  Mr. David Sumberg: My hon. Friend referred to the new Fairfield hospital. Does he acknowledge that we had been waiting for that for 18 years, that it took a Conservative Government to put it there and that the people of Bury are now benefiting from it?
  Mr. Burt: My hon. Friend is right. If we had been talking about this size of estimate 10 years ago, our constituents would have had the hospital 10 years earlier.
  One cannot shake hands with a statistic, but one can shake hands with one of the nine new consultants whom we have appointed over the past few years. One cannot comfort a statistic, but one can comfort one of the thousands of patients who have been treated in the past year as a result of the increased efficiency in the local health services.
  Mr. Jim Cousins: Perhaps the hon. Gentleman would like to come a little further north, to Newcastle. where 322 hip operations were put in the waiting list initiative for this year. That was much to be welcomed. Hip operations in an area like Newcastle are very important, as there is a large number of elderly and dependent people. I would have been the first to say so if those operations had been carried out, but, unfortunately, as the regional health authority has banned all new consultant posts for this year because of the lack of certainty about funding, those operations were taken out of the waiting list initiative. Perhaps the hon. Gentleman would like to come north and explain to the 322 people concerned.
  Mr. Burt: The point at issue is whether the resources are effectively administered. First, 15 or 20 years ago, there would not have been a waiting list for hip operations because such operations could not be done. The number of such operations has grown tremendously. Secondly, the way in which the waiting lists are constructed locally and the way in which the regions deal with their resources is a matter for those regions. The statistics that I have given are for my health authority and show how it looks after our people.
  The way in which the resources are applied has to do with the way in which they are administered. Over the past couple of years, as the Health Service has come under increased scrutiny, it has become clear that what is at the root of the problem, is not money but the way in which different authorities and regions look after that money. Recent surveys, including the Sunday Times awards for district health authorities, show that the greatest problems lie in the way that some districts look after the money that they are given. Perhaps the hon. Gentleman should ask why his authority has not done something else with that money.
  Mr. Cousins: Will the hon. Gentleman give way?
  Mr. Burt: I cannot give way because so many other hon. Members wish to speak in the debate.
  The problems that underlie the estimates cannot be hidden. There is no doubt that the Health Service has problems on the horizon that must be faced—the problems

  1331
  of an elderly and aging population and the problems of regrading to which the hon. Member for Birkenhead referred.
  We must not miss the opportunity to emphasise the positive aspects and the care with which the Government are looking at the problems of the Health Service for the first time. The difference between the two sides of the House is that Opposition Members are trapped and hidebound by history and are producing no ideas on how to deal with the problems; for them it is merely a matter of increasing the amount of money going into the Health Service. All the ideas about reform and about dealing with the problems come from Conservative Members.
  I wish strongly to stress to the Minister first that there is a great deal of good inside the National Health Service. The way in which my health authority is coping with its cash and the way in which it will cope with the extra money that will come through the estimates shows that there are good district health authorities that are well managed and well run. Within those health authorities are people who have lessons for other health authorities. It may be necessary to draw good people from the National Health Service who are working in districts that are proving to be efficient so that they can go to regions such as that represented by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) and help put right the problems of administration.
  We must not lose sight of the fact that there are good people in the National Health Service who must not be lost in a general view that we must have only outside advisers in the Health Service review. We must make sure that the good people who work in the Health Service and who know the system are given the opportunity to put forward their ideas about reforming the system.
  Secondly, we must ensure that the scope for private health treatment and for liaison between public and private care continues. That might be a way of dealing with the problem of waiting list operations. The district health authority in my region adopted such a solution to problems of National Health Service waiting lists, liaised with private hospitals and started to reduce those lists.
  Thirdly, we must remember that the patients, our constituents, the people with whom we deal are not interested in the slightly arcane problems of how a service is delivered. What matters to them is that that service is delivered. One cannot ask someone who is desperately ill whether they mind going into a private hospital. They need a job to be done, and if that job has to be done through a mixture of public and private care, it still has to be done. What matters is that the service is delivered, not the ideology behind the way in which it is delivered.
  Lastly, the review should take account of the importance of building a new consensus on National Health Service spending. We realise that the National Health Service is a precious asset. Over the past few months, we have been talking about change. Today we are talking about the use of resources in the new estimates and the hon. Member for Birkenhead was kind enough to be generous in his remarks about Government spending. There is a great deal of consensus. This place emphasises differences, but if we are truly to serve the people we represent we must make the most effective use of the estimates that we are voting today. If we are to produce the
  1332
  best ideas of how to run the Health Service in future, those ideas must coalesce. The money we are debating today will give the Health Service a great start. With that start, with the vision of the future and the ideas from this side of the House and with decent people to administer them, we shall have a Health Service in future of which we can truly be proud.
  6.3 pm
  Ms. Harriet Harman: I begin by extending thanks to the Select Committee on Social Services for the extremely important work that it has been doing and to my hon. Friend the Member for Birkenhead (Mr. Field) for the way in which he opened the debate. The report produced by the Select Committee is extremely timely and is about an issue of concern to people throughout the country.
  It is absolutely clear what the Government must do. They must give the Health Service enough money to pay the nurses the increases that they have been promised. If the Government do not do that, the consequences will be disastrous. Either thousands of hospital beds will have to be closed to pay the nurses their increase, or the nurses will not get their pay increase, they will feel cheated and demoralised, they will leave the Health Service, and beds will have to be closed because there will not be enough nurses. For the sake of all the patients waiting for treatment on growing waiting lists, the Government must promise tonight to pay the nurses their pay increase.
  Nurses have considerable training, they do a responsible job and they work anti-social hours. Yet the problem of nurses' pay slipping behind has been a perennial one. It is absolutely clear that nurses' pay is a classic case of sex discrimination. If most nurses were men rather than women, we would not be facing that problem year in, year out.
  In the past, the fact that nursing did not provide attractive long-term career prospects was masked by the continuous supply of 18-year-old girls ready to take up nursing. Not enough attention—indeed, hardly any attention—was paid to keeping experienced older nurses within the Health Service. It was assumed that every nurse who did not return to nursing after having children would be replaced by an 18-year-old girl. That was very wasteful of the skill and experience of older nurses, but it was overlooked until demographic changes meant that there now are not enough 18-year-old girls to take the place of the 30,000 nurses who leave the Health Service every year.
  The Government have tried to imply that the nursing shortage is a problem only of particular nursing specialties, or only in London and the south-east, but that is not the case. At the beginning of this year, I conducted a survey of all district health authorities and 120 replied. It revealed that 83 per cent. reported difficulties in filling nursing vacancies. I should like to go into some detail about the findings of the survey, as it is still the most up-to-date survey on nursing shortages throughout the country.
  It is not the case that there are nursing shortages only in paediatrics and intensive care. My survey showed that 60 per cent. of districts have shortages in mental illness nurses, 48 per cent. in theatre nurses, 40 per cent. in nurses in geriatric care, 36 per cent. in intensive care nurses, 31 per cent. in nurses nursing the mentally handicapped and 29 per cent. in paediatric nurses. We are talking about a

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  national problem which hits geriatric wards and paediatric wards, intensive care and care in the community. It is the Government's responsibility to sort it out.
  As children in Birmingham had their heart operations cancelled, it was exasperating to hear Ministers saying, "It is nothing to do with us. It is not our fault. It has nothing to do with resources; it is the nursing shortage." The nursing shortage is very much bound up with the question of pay.
  Nurses join the Health Service because they want to help others, because the work interests them and because they believe in the National Health Service. The Price Waterhouse survey carried out on behalf of regional chairmen confirmed that that was the case. Nurses leave the Health Service because of pregnancy. They do not return to nursing after having their babies because of low pay and lack of job satisfaction.
  Against the background of a nationwide shortage of nurses that was putting services at risk, the pay review body recommended an average 15 per cent. increase for nurses, and we welcome that. In April, the Government led everyone to expect that the pay award would be fully funded and that the Government had made that commitment.
  That was reflected in the headlines at the time. The Guardian said:
  "Nurses pay rise stems tide of health debate";
  The Independent:
  "Tory nerves calmed by 15·3 per cent. award for nurses";
  The Sun:
  "Loadsa loadsa money for our super nurses";
  The Star:
  "A welcome tonic for the NHS";
  The Daily Mail:
  "Record rise for nurses";
  and the Daily Express:
  "15 per cent. pay joy for nurses".
  The Government basked in the glory of that good publicity. On 21 April, the Prime Minister said:
  "the Government have decided that the cost in excess of the allocation already made for this year should be met from the Reserve."—[Official Report, 21 April 1988; Vol. 131, c. 528.]
  On the same day, the Secretary of State announced that the Government would provide £749 million. He said:
  "In consequence, these awards will be fully funded."
  The problem is that the £749 million he mentioned was an estimate. The pay review body warned that its estimates of the cost of the pay award
  "are necessarily approximate because they are themselves based on estimates."
  The agreed plan was to introduce new clinical grades according to what each nurse was actually doing. The average pay award of 15 per cent., with some nurses receiving up to a 60 per cent. increase, would then be paid at the end of the year.
  Managers, in consultation with the unions, are carrying out that review, but there is no sign of the relief that swept over nurses and managers in April. That has gone. Reports are beginning to emerge that at local level in all regions managers are downgrading nurses. The Nursing Standard of 16 July accuses health authorities of being cowardly. Its editorial states:
  "Cowardly because they are not willing to return a higher percentage than that allocated for fear of another round of cost cutting to pay for the extra cash."
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  An internal memorandum from the North-West regional health authority, leaked to The Guardian, revealed that the allocation that the Government had made for the pay award was
  "at least £3·3 million short."
  The authority said that the options available to it included spending cuts, slowing down the regrading exercise—that is, cheating the nurses—or manipulating the regrading to reduce the cost—that is, cheating the nurses.
  The Prime Minister and her health team have lately become rather shy and convoluted when talking about the pay awards. Although, when pressed, they repeat the magic phrase "fully funded", they are careful at the same time always to mention that they mean fully funding the specific sum of £749 million extra. That puts local managers in an invidious position. Should they respect the integrity of the clinical grading review and risk a large pay bill, for which they will not be reimbursed and which will trigger a massive round or service cuts? The size of the review body pay award and the number of nurses in the National Health Service mean that underfunding would have disastrous effects on services.
  The North-West regional health authority reckons that the cost of the award will be not the anticipated 14·5 per cent. but between 17 per cent. and 21 per cent. The additional cost, if that were to be reflected nationally, would be an extra £140 million, or even as much as £360 million. If health authorities were forced to find, taking the lower estimate, £140 million from service reductions, 7,000 beds would have to be closed for a year. Regional health authorities will not be certain of the extent of any underfunding until at least halfway through the financial year. To meet a shortfall of £140 million, they would have to cut 14,000 beds for half a year.
  We have to face up to these figures if we are to understand the scale of the consequences, should there he underfunding. If it were to amount to £150 million, t hat would represent the loss of 10,000 heart transplant operations, or 45,000 coronary by-pass operations. The Minister is laughing, but that is exactly why managers and nurses are nervous. If she were to listen to what they are saying, she would be less complacent. It is because they are facing up to the figures while she is not that they are concerned.
  The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I think I heard the hon. Lady say that we should have to give up 10,000 heart operations. Will she please tell the House how many heart operations we used to do and how many we do now? It is not 10,000, or anything like it, thank God.
  Ms. Harman: That is absolutely beside the point. [Interruption.] Yes, it is beside the point. I am trying to explain to the House, but the Minister fails to understand, that there is great uncertainty and fear at local level. People believe that there is to be a trade-off between the pay awards and nurses. It is about time that the Minister understood—[Interruption.] The hon. Member for Gillingham (Mr. Couchman) says from a sedentary position that the uncertainty and fear are spread by me and my friends. That is not so. We are responding to genuine concern at local level.
  I intend to read letters from nurses who express the fear that is felt at local level. No wonder that managers and nurses are nervous. It is no good trying to improve nurses' morale by improving their pay if at the same time their pay

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  increase is funded by cuts in services. Nurses' complaints have never been just about pay. They are also about cuts in services.
  Cuts in services due to the underfunding of pay awards have been bad enough in the past four years. I remind the House that there was a £32 million shortfall in 1984–85, a £36 million shortfall in 1985–86, a £12 million shortfall in 1986–87 and a £24 million shortfall in 1987–88. No wonder managers fear underfunding for this round. If the underfunding this year is as large as £140 million, the cuts will be catastrophic. It is fear of underfunding that is interfering with and gnawing away at the base of clinical regrading.
  The pay review body warned that it is difficult for local managers to insulate their judgments about grading from their preoccupation with budgetary constraints. Indeed it is. Nurses suspect that managers are downgrading or undergrading nurses to fit the amount of money that they think they will get, rather than risk the service-cutting consequences of sticking to the regrading. They are aided and abetted in this by DHSS guidance, which the unions fear undermines clinical regrading.
  I shall give just one example. I said at the beginning of my speech that the idea was that nurses would be graded according to what they do and that it would not involve restructuring, yet the DHSS has told managers that they are to be allowed only one grade G post per ward. If two sisters on a ward have equal responsibilities that ought to qualify them for grade G, they will have to compete for one post. Instead of the two sisters receiving the pay increase that they are expecting, only one will get it. The other will be downgraded. The clinical grading review was supposed to improve morale, not to set nurse against nurse and leave the profession feeling cheated.
  I shall read letters from nurses at local level to scotch the complacent view of the hon. Member for Gillingham, who thinks that this is my invention. A nurse in West Yorkshire wrote:
  "Our AUGM"—
  that is, the assistant unit general manager—
  "has said that the Authority must work to a 15 per cent. budget and that unfortunately most of us will be disappointed."
  A nurse in Dorset wrote:
  "If the grading process is not implemented fairly it will only cause more nurses to leave the National Health Service and lead to further industrial action which may on this occasion prove fatal."
  It is signed
  "from one very discouraged nurse."
  A nurse in Cheshire wrote:
  "It is also becoming increasingly apparent that managers are taking every opportunity to downgrade job descriptions."
  I shall not read out all the letters of protest, because there are so many of them, but they show that this does not seem to be an exercise that is successfully raising nurses' morale.
  If regrading is used to cheat nurses out of the pay increases that they are expecting, they will become even more demoralised. Nurses' hopes will have been raised only to be dashed. I had hoped that we should not be accused of being alarmist, but if we are accused of being alarmist and of stoking up fear it would be very easy for the Government to reassure people by simply saying that they will fund the pay awards in full. I notice that the
  1336
  Under-Secretary of State for Scotland, the hon. Member for Stirling (Mr. Forsyth), said in a Scottish Office news release:
  "I deplore the campaign of rumour and innuendo which COHSE in Scotland are mounting".
  However, he then said that the additional funding of £92 million for Scotland is expected to meet, without shortfall, the cost of the review body pay award to nurses in Scotland. But the question that is begged is, what if it does not do so? Everybody is keeping quiet about that.
  It is not as though we cannot afford to give nurses decent pay rises. The National Health Service is not too expensive. We spend less, as a percentage of our national wealth, on health than America, France, Germany, Italy or Holland. The Treasury has enough money available to enable the Minister to say from the Dispatch Box that managers can carry out the grading review with integrity, because it will be funded.
  The Treasury has deliberately underestimated revenue by up to £3 billion. It is receiving more tax than it admits, and it is selling more assets than it expected to sell. It is doing so to pull the wool across the eyes of the hon. Lady, who is in a spending Department. It is trying to distract her from calling for extra spending. But the NHS need not be kept short of cash. The Secretary of State for Health could pay the nurses and keep beds open.
  Earlier this year, the Government were faced with widespread protests about cuts in services and the declining morale of nurses. It was that massive protest, supported overwhelmingly by the public as well as by those providing health care, that forced the Government to promise full funding of the pay award. If the Government betray the nurses, they will cause a storm of protest far greater than that which we saw earlier this year.
  The Government need not allow uncertainty to continue and morale to ebb. All that needs happen is for the Minister clearly to announce tonight that she will fully fund the pay award. We shall listen carefully to her words, as will managers and nurses all over the country. It is no use the Minister saying that she will fully fund the estimated costs. Estimates, by definition, can be wrong. The Minister must say that she will fully fund the pay award. If she does not, it will be clear that managers must choose between cutting services or cheating nurses. The Minister should end the fear and uncertainty that has cast such a shadow across the Health Service.
  When the pay award was announced and the Government declared that it would be fully funded, the Secretary of State said:
  "It is good news for the staff, good news for the patients and good news for the country."
  That promise must not be broken.
  It is not just nurses who are concerned about their level of pay this autumn, because there is a legacy of anger among other workers. There is a resentment among porters, cleaners and catering staff, who have been offered only 5 per cent. They already make up a large proportion of the working pool of people who, although they work long hours, have to rely on benefits to supplement their income. There is also concern about laboratory staff pay levels. Medical laboratory scientific officers are paid about 50 per cent. less in the Health Service than they would be in the private sector. As a result, it is difficult to recruit and to keep those staff. Laboratories are short-staffed, with those remaining coming under more pressure. One district health authority has been compelled to suspend its cervical

  1337
  cancer screening because of a backlog of smears for analysis. There is no chance of the Government, in paying the nurses, robbing Peter to pay Paul. They cannot take from other parts of the pay bill to finance the nurses' award.
  I ask the Minister to take this opportunity to make a statement about the Government's plans to introduce eyesight test and dental check-up charges. When the Health and Medicines Bill was debated on Report, not a single Conservative Back Bencher supported the Government's proposals to charge for eye examinations. The Government will face a major row if once again they bring their proposals to make those charges before the House. The people most likely to lose are the elderly. It is they who most need eye tests, and who are most likely to be deterred by charges. We should not have to wait until October for a statement on this important matter. The Under-Secretary of State for Health and Social Security is present and it is for her to say whether those charges are to be reintroduced, or whether the Government will drop that wretched and unpopular proposal.
  6.22 pm
  Mr. Nicholas Winterton: First, I must apologise to the House and to my hon. Friend the Minister for not being present for the beginning of this debate. I apologise also to the hon. Member for Birkenhead (Mr. Field) who leads the Social Services Select Committee with great distinction in this Parliament. I fear that I may go over some of the ground that he has already outlined, but that is because there is on the Select Committee—on which it is a great honour to serve—an immense consensus among Members representing most parties on how the problems of the Health Service directly relating to the estimate we are debating should he tackled.
  The hon. Member for Peckham (Ms. Harman) will forgive me if I do not immediately follow her on the path down which she led the House, albeit that I have sympathy with the sentiments she expressed, if not the language that she used, in respect of eye test and dental examination charges. As a member of the Social Services Select Committee, I hope that the Government will take a mature attitude to what happened in another place earlier this week and will give serious consideration to the view expressed there—which was endorsed by the overwhelming majority of the Select Committee's members—that it is undesirable to charge for eye tests and dental examinations, and that, to some extent, that goes wholly against the preventive medicine campaign that my hon. Friend and other Ministers over the years have organised and undertaken in the length and breadth of the country. I say to my hon. Friends on the Treasury Bench that I shall not be able to support the Government if they seek to overturn the decision that was taken in another place on that matter.
  I understand that the problems of nurses and nurses' pay has so far dominated this debate. I have immense sympathy with the Government, who I believe made an announcement in good faith that they would fully fund the recommendations of the independent nurses' pay review body. However, we know that on this occasion that body did not recommend a straightforward pay increase but a complex, total regrading of nursing staff at every level. It is for nursing and other managers throughout the Health Service to undertake that very difficult duty carefully.
  1338
  However, I say to my hon. Friends on the Treasury Bench and to my hon. Friend the Under-Secretary of State in particular, who I understand will be intervening later, that if in the light of a considered and responsible clinical regrading of nurses it is seen that the Government underestimated the amount that needed to be allocated for pay, I hope that they will have the courage and the determination—and perhaps I ought to address this remark to my hon. Friend the Minister and not to the Government as a whole, because DHSS Ministers must fight their own corner—to go to the Treasury and ask for further resources to meet the cost of the clinical regrading which is a critical part of the Health Service structure. It will be irresponsible and bordering on the immoral if the Government, having stated to the people of this country and to their own supporters in the House that they would fully fund the pay award, dc not in the event carry through that promise and assurance.
  Other statistics have been quoted relating to regional and district health authorities throughout the country. The hon. Member for Birkenhead may have mentioned our discussions in the Mersey region with the chairman of that authority, Sir Donald Wilson. He is currently chairman of all the regional health authority chairmen, so he holds a responsible and important position. His senior managers indicated to the Select Committee when it visited the Mersey region—particularly the Wirral and Macclesfield health authorities—that in their estimate it was likely to be £.1·5 million underfunded, and that is after it had undertaken a well-considered and responsible nurses' regrading.
  If the Mersey region, which is currently a RAWP loser, is expected to provide the necessary funds, and if there is inadequate money within the cost improvement programme to pay for the nurses needed and the regradings that are necessary, patient services will inevitably be cut.
  As the hon. Member for Peckham knows—and as the Minister for Health knows—my district health authority has had to reduce theatre sessions to stay within budget. That is increasing critical waiting lists in important categories, not least orthopaedics. I have been a member of the Select Committee for more years than I care to remember—for longer than any other hon. Member has sat on any other Select Committee. That has, I hope, given me an understanding of the Health Service that not all hon. Members have the privilege to possess. It has been of immense interest to me for nearly 14 years, and I have made contact with almost every branch of medicine. It is critical that the Government reconsider. If additional supplementary resources are required, they should be provided this year.
  The nurses' pay review body dealt not only with a single year's increase, but with the critical aspect of regrading. We must ensure that we retain the nurses whom we have, and encourage other young men and women to come into such a magnificent career. As the hon. Member for Peckham pointed out, we can no longer rely on the many 18-year-old young ladies who were happy to come into nursing, perhaps seeing it as a vocation, but a vocation lacking the salary to reward their skill and care. Many were fortunate to come from families that could provide them with assistance, but that is no longer so. The competition in the market place for able young women—and men, for that matter—is very great. Unless we are

  1339
  to lose more nurses, the Government must look again at the total cost this year following the nurses' clinical regrading.
  I understand the Government's position. It would, perhaps, have been irresponsible to say, "Whatever the total cost, we will meet it." Those responsible for undertaking the regrading might have regraded more generously than was merited. There is no doubt that some nurses merit regrading and others do not. I believe that the Royal College of Nursing has in general taken an amazingly responsible attitude throughout this difficult period, and continues to do so.
  Time and again the Government tell us that they are trying to achieve better value for the massive sums that they spend in the Health Service. The hon. Member for Birkenhead began by admitting that the Government had given generously. That is to the credit of the hon. Gentleman, who represents not only Birkenhead but the Labour party in this place. We do not often hear such a constructive approach to the opening of a debate on a vital issue.
  The Government also say that they want better management. If that is the case, they must provide the wherewithal first to allow the Health Service to operate more efficiently and secondly to give the management the tools to enable them to make the right decisions, with proper knowledge of all the facts. They are certainly not able to do that at present. I recently visited the King's Fund college where I had the pleasure of addressing people on a course in management within the National Health Service. A number of them said to me, "We are concerned that the Health Service is not committed to management, and that the Government are not either, despite the Griffiths report and all the talk that followed its publication. If they were committed, they would be more determined to provide us with the equipment to enable us to do our job." Adequate resources for computer systems and information technology will play a vital part in enabling health authorities to provide value for money, and to enable consultants and others to make informed decisions.
  The hon. Member for Peckham mentioned laboratory assistants, medical physicists and pathology staff. All those groups are vital to the Health Service, but there is a problem over pay. They are not remunerated in accordance with their skills, and, with the growing competition in the market place, the Health Service will undoubtedly be starved of people who are vital to the provision of an efficient service and value for money. Accordingly, I make a special plea on behalf of all who are employed in the professions allied to medicine.
  Let me also make a plea, as I have done elsewhere, for medical secretaries. Time and again—not just during the Select Committee's current inquiry into the resourcing and structure of the Health Service, but during other inquiries—consultants have said, "We are here because of our operating skill, but we are unable to work to the extent that we should like because we have not the back-up staff." Only recently when we visited Guy's hospital, just across the river, a leading consultant said that he was losing his medical secretary because she was going elsewhere for a better salary. The hospital was unable to pay the salary that was essential to maintain that vital member of staff. I
  1340
  have referred outside the House to the case of Mr. Lennox Holt, a rheumatologist in Manchester, who told me that his work was being gravely impeded because he could not employ the right quality of medical secretary to enable him not only to do his job but to refer the case notes back to other doctors who would follow up the care and treatment of his patients.
  Let me make two more brief points. We have severe problems with capital spending, and perhaps I could link that to my continuing concern about care in the community, to which the hon. Member for Peckham referred. It worries me dreadfully that managers throughout the country are deciding to close psychiatric hospitals—and other hospitals, for that matter. I am particularly concerned about the position of the mentally ill, but inevitably my concern extends to the mentally handicapped.
  Those managers are trying to run down the psychiatric hospitals and discharge patients into the community, where there are inadequate facilities for them. There are not enough trained and qualified staff to maintain an acceptable level of care and treatment. The managers are then disposing of the hospital sites for large capital sums, many of them for development. Once those sites are lost, there will be too little long-stay hospital care for the more severely mentally ill, particularly those suffering from schizophrenia. There is growing anxiety about decisions that some health authorities are being forced to take because of the resource problems that they are facing which will result in chaos and suffering for groups within our society about whom we should be concerned.
  Some time ago the Select Committee undertook an inquiry into care in the community. Some of the recommendations that we made, which have not been accepted by the Government, are as relevant as, if not more relevant than, they were when we produced our report. The Government should take a greater interest in what district health authorities are doing in closing psychiatric hospitals and hospitals for the mentally handicapped. We could produce a situation such as exists in Italy today. It closed those hospitals and people are now on the streets, sleeping on park benches, under bridges and in the call-in day centres and night shelters. Those people no longer have the care and medical attention that they require to contain their condition and enable them to maintain an acceptable standard of life.
  Debates such as this give those of us who study the Health Service carefully an opportunity to express some of our deep anxieties. Such hon. Members come from both sides of the House. If the hon. Member for Peckham had tackled this subject in the caring and responsible way that the hon. Member for Birkenhead did, rather than concentrating so much on the entirely political issue of the nurses' pay review body, its recommendation and the full resourcing of the award, we might be able to find the common ground which would enable the House to produce policies and proposals, perhaps as we did when the Health Service was founded 40 years ago, without any bickering.
  So often the nurses are used as a political weapon by one party with which to beat the other. [Interruption.] That is the case. I represented the Conservative party when I spoke alongside the leader of the Labour party and the leader of the Liberal party at a nurses' rally in Central hall, Westminster, and I was pleased to do so. I said that I would fight to make my Government implement in full the

  1341
  pay review body's recommendation. The Government announced that they would do that and I expect them to live up to that assurance in full. Not only should they implement it in full, as they have agreed in principle to do, but if there is a shortfall because of the regrading due to an error in underestimating that, they should if necessary come forward with a supplementary estimate to ensure that the pay review body's recommendation can be implemented in full.
  This is a vital subject. Despite the bickering and anger that occasionally flares across the Floor of the House, I feel instinctively that there is a growing consensus on how to tackle the problems of the NHS. I cannot speak for my hon. Friends. They fight their fight in their own way. I shall fight my fight in the House in the way that I have done ever since I came here 17 years ago.
  I hope that the hon. Member for Peckham, perhaps in private moments with me, will accept that the private sector, of which she made no mention, is not generally in competition with the NHS, behind which I stand 100 per cent., but is more complementary to it. It works in co-operation with the NHS and it can make a growing contribution in filling some of the gaps that for a time will inevitably exist within the NHS.
  I hope that the Government will continue to look sympathetically on the needs of a service that is close to the hearts of the overwhelming majority of the British people, and, perhaps, of all the political parties here. It is also probably close to the heart of 99 per cent., if not 100 per cent., of Conservative voters.
  6.44 pm
  Mr. Barry Jones: The hon. Member for Macclesfield (Mr. Winterton) made an independent speech and I hope that the hon. Member for Bury, North (Mr. Burt) listened carefully to what he said and the manner in which he said it.
  The vote deals with expenditure in excess of £15 billion and I want some of that unimaginable sum for a highly important, much under-rated sector—the provision of fully trained speech therapists in our state schools for the benefit of youngsters suffering from speech defects. If those defects arc not tackled, boys and girls at school will never realise their full potential. To say that in 1988 is to point to something that is desperately wrong.
  Perhaps hon. Members will agree that youngsters are only young once and that the happiness of their families will be blighted if parents know that their children are not getting the expert attention or sufficient time to mitigate and/or eliminate their speech defects.
  I want to quote from several letters that I have received from constituents on the matter. The first, from a Mrs. Davies, says:
  "The school is a marvellous place and our son has achieved a great deal since going there over four years ago. The nursing sister whom we had absolute total confidence in is unfortunately retiring at the end of July 1988 and we have learnt to our horror she is to be replaced with a nurse who will only be on duty for 24 out of the 37½ hours at present, which means our child will be at school for several hours a week without a qualified nurse on duty to attend to any emergency which may arise."
  She goes on to say:
  "there are about 75 pupils at school. Over 50 of these pupils need regular speech therapy. We have one part-time speech therapist. The school needs two full-time speech therapists
  1342
  plus an assistant. We as parents arc not asking for these things for ourselves but for our children. It is their right. They cannot go to ordinary schools."
  My constituent ends:
  "Please, please help us to get the nursing staff and speech therapists that our children are entitled to. Please, we beg you to help us in our campaign."
  Another of my constituents, Mrs. Gerrard, writes:
  "My husband and I arc parents of a child who attends Dorin Park Special School in Chester. We are extremely concerned and worried to find that there is no full-time 'Speech Therapy' at the school."
  That is a school, incidentally, that the parents praise highly. The letter continues:
  "It is extremely vital that two full-time speech therapists, plus an assistant be employed at Dorin Park. As parents we cannot understand the reasons behind neglecting to employ someone, the education of the children being foremost. The children must come first and not the cutbacks. We would be extremely grateful for any help".
  Mrs. Gerrard has a five-year-old child who suffers from severe cerebral palsy. I believe that the House would wish that such a fine school should have a full complement of speech therapists.
  I repeat at this juncture that the budget for votes 1 to 5 exceeds £15 billion. On behalf of my constituents, and thousands of parents elsewhere in England and Wales, I claim a bigger share for speech therapy and physiotherapy.
  Ms. Hilary Armstrong: My
  hon. Friend the Member for Alyn and Deeside (Mr. Jones) has raised the issue of speech therapy. I must tell him that I was rung by a speech therapist at 8.15 this morning who said that she had read in The Guardian that morning that the House would debate the estimates. She asked whether the pay award would be fully funded today and she asked me to ensure that the Minister addressed the issue of speech therapists' pay, because speech therapists had been struggling to get their pay award for many months. Whether it will be fully funded is another issue that they have been anxious to find out about. I am grateful that my hon. Friend has raised the matter and I hope that the Minister will make a reply that will give the speech therapists some hope that the pay award will be made and funded.
  Mr. Jones: I am grateful to my hon. Friend for her apposite intervention. I am certain that the Minister will respond fully on this important matter.
  I shall conclude my remarks on speech therapy by quoting briefly from a letter sent to me by Mrs. Dorothy Price, the chairman of the governing body of Ysgol Del yn, a special school. She says:
  "The children have very specific needs which require the expertise of qualified therapists. The feeling is that if we don't have a statutory right to provide the necessary service surely we have a moral obligation."
  She goes on to say:
  "We are reneging on our responsibilities to these young people if we don't provide the service that has been shown to be needed."
  First, I ask the Minister, in the knowledge that those matters are appropriately to be described as a moral issue, whether the Government will enable those youngsters to have a statutory right to that necessary service. Secondly, will the Government give extra cash to the authorities that must deliver speech therapy and physiotherapy services? Thirdly, have the families of deprived children the right to take that case and similar cases throughout England and Wales to the European Court? Fourthly, w ill the Government launch a campaign, under the auspices of the

  1343
  careers service, to promote careers in speech therapy and physiotherapy? Fifthly, will the Government give speech therapists and physiotherapists sufficient salary and status to attract applicants for training and for designated and advertised posts?
  I note that £1·5 million was paid in 1987 to British Telecom in respect of the priority fault repairs service for general practitioners and pharmacists. I further note that for the current year £2 million is earmarked. That is extraordinary. Are the telephones of GPs and pharmacists so very faulty? I know that British Telecom is making a small fortune from repairing those faulty telephones—if it is repairing them—so why is priority repair hideously expensive? Does the Minister know how many telephones needed priority repair in 1987? We know that British Telecom's profits in 1987 were huge. Was its telephone service to GPs and pharmacists as unreliable and bad as the figures suggest? I look forward to receiving from the Minister a breakdown of the figures, which are to be found under the appropriate vote heading. If £2 million is earmarked for the repair of GPs' and pharmacists' telephones, there must be something very wrong indeed.
  The social fund stands at £179 million and is for budgeting and crisis loans. It is also for community care grants, maternity expenses, funeral expenses and heating expenses in exceptionally cold weather. I do not think that the social fund is enough, and I would urge the Government to enlarge it.
  I know from my work as an hon. Member who holds regular surgeries that the social fund is the last bastion of defence for the poverty-stricken and those who are destitute. One of my constituents came to me in distress, saying that he needed a new pair of shoes, and I said that I would try to help him. In the end, I am glad to say, the Department of Health and Social Security offered him £30. My constituent, who was under great pressure, had to repay that £30 loan which was described as a "budgeting loan".
  My constituent desperately needed the pair of shoes but he did not feel that he could repay the loan at £3·50 a week. After all, he came to me because he was not managing on the weekly cash that he had. In the end, a kindly social fund officer rescheduled the budgeting loan at £1·41 a week. My constituent accepted that, but he is under immense pressure in finding that £1·41. He does not have a lot of money—
  Mr. Deputy Speaker (Sir Paul Dean): Order. The hon. Gentleman is straying a little outside the terms of the debate. We are discussing hospital community services and related services, whereas the hon. Gentleman is straying into the social services. I am sure that he will bring his remarks back to the subject under debate.
  Mr. Jones: I am glad of your intervention, Mr. Deputy Speaker. You have brought me back into strict order, but I thought that while we were discussing the Supply estimates I could make the point on behalf of a desperate constituent.
  I support my hon. Friend the Member for Peckham (Ms. Harman) on the question of nurses' pay. I have had deputations and much correspondence on the subject and
  1344
  the nurses in my part of the world tell me that, although a pay award of 15 per cent. has been trumpeted, many of them may receive only 4 to 5 per cent.
  The hon. Member for Macclesfield made a strong and independent point about charges for dental examinations and eye tests, which we have debated in this place and on which we know the other place has a point of view. If the Government do not listen to the points made in another place and by the hon. Member for Macclesfield, the well-being of several million pensioners will be at risk. I urge the Government to listen carefully. If they do not, politically they will suffer greatly.
  6.58 pm
  Sir Michael McNair-Wilson: As we all know, this debate takes place during the year of the 40th anniversary of the National Health Service. We all agree that in the 40 years for which the service has existed it has expanded enormously away from the concept of a tick-over service once outlined by Aneurin Bevan. It is now treating more patients, with more staff, in more hospitals, for more illnesses and disabilities, than ever before. What is more, it is receiving more Government finance than at any time in its history.
  As has been said, the supplementary estimate will give our nurses the largest pay award that any Government have given the nursing profession. Opposition Members carp about the pay award as if it were the Government who had decided upon the award and the Government who were going to restrict it. Yet, as I am sure Opposition Members will have heard, my right hon. Friend the Prime Minister said on 14 July:
  "£803 million was the figure estimated not by the Government but by the nurses' pay review body."—[Official Report, 14 July; Vol. 137, c. 547.]
  They will also know that Mr. Trevor Clay said:
  "There are many problems at local level. But some managements are succeeding in some districts. Why can't others make the same speed?"
  I cannot criticise any Government who provide £803 million for the nursing profession. I hope that the grading problem will be sorted out as soon as possible. We must all recognise that it is a new dimension in nursing. We all know that it will produce difficulties and we should not imagine that they will be sorted out in a matter of three of four months. To hope for that would be unreasonably optimistic.
  This supplementary estimate relating to the nurses' pay award has already produced much controversy in the Chamber. That suggests that, like the Supply estimate on which it is based, it is a source of controversy between the two sides of the House, as estimates have been in the history of the Health Service. We are all aware that Supply estimates and the inevitable supplementary estimates are merely guesstimates—no doubt informed guesstimates—by the Treasury and the DHSS. They are not estimates that are demand-led by the Health Service, the regions and the districts. They are figures chosen by Treasury officials to fit an extrapolation which may or may not be correct and which we seek to improve as the months of the financial year pass with supplementary estimate after supplementary estimate until we arrive at a figure that we think approximates to the resource needs of the NHS.
  Mr. Rhodri Morgan: Does the hon. Gentleman agree that, in South Glamorgan health authority, nurse is being set against nurse? Operating

  1345
  theatre nurses are being told that there are only a certain number of grade G posts, so some of them will have to go down to grade F, even though they have the same responsibilities as their colleagues on grade G
  Sir Michael McNair-Wilson: I do not want to get involved in grading. I am not an expert on it, nor have I had complaints about it from my district health authority. In fact, I have not had a single letter about it.
  I want to pursue my point about the estimates. They are the only way by which the Health Service is funded. We pass them year after year and we have a right to expect that they should be more than informed guesstimates. They should have some bearing on the demands within the service. Those demands are the yardstick of the resources that need to be provided.
  I am pressing my hon. Friend the Minister for a better way of funding the NHS than the system that has obtained in the past 40 years. These estimates, both supplementary and Supply, do not give me the basis for calculating how the global figures in them are reached. I do not know whether they assume additional savings within the Health Service, or a percentage increase in the number of patients to be treated and staff to look after them, and whether they take into account the effect of inflation on the equipment that hospitals will have to buy. I do not know what emphasis they place on savings in general health care. We all know that about £100 million has been saved by privatising certain services in the Health Service in the past nine years—mainly domestic and catering services. But what savings could be made by using the private sector of medicine to relieve demands on certain parts of the NHS for specialist treatment? Does the Department have a figure? if so, are those savings assumed in the estimate, let alone the supplementary estimate? Without such knowledge, statements about underfunding have little validity.
  Yet underfunding was almost the keynote of the third report of the Select Committee on Social Services. The report, entitled "Resourcing the National Health Service: Prospects for 1988–89", gives two definitions of underfunding: first, it is
  "the amount of funding less than that required to maintain current service levels and planned development";
  secondly, in a retrospective sense, it is
  "the amount of funding required to maintain the service at a constant standing in relation to changes in demography, technology and policy aims."
  Neither definition refers to further measures aimed at making existing funds go further with better management.
  I admit that in paragraph 11 the Committee states that it accepts that the better use of resources can lead to higher performance but it goes on to say that that
  "does not of itself solve the continuing problem of underfunding."
  That is such a definite statement that one must assume that the Committee is arguing that, with or without savings, the National Health Service is underfunded. I cannot help wondering whether the Committee has allowed itself to be persuaded by certain district and regional health authorities that such is the case.
  I cast doubt on the Committee's conclusions because some health authorities appear to do rather better out of their budgets than others. As reported in The Times last week, some hospitals also seem to have a better record for treating patients than others. I recognise that, as the Committee pointed out, if budget savings or lower average
  1346
  costs mean treating more patients, that can lead to increased total costs. However, the obverse of that argument seems to be that the fewer patients treated, the lower the costs. That is clearly a self-defeating concept.
  I am not arguing against more money for the NHS, but the old Parkinson rule—that expenditure tends to rise with income—still holds good, and I would be sorry if the Select Committee's comments were read as if they endorsed those who argue that the NHS is as efficient with its budget as it can be and that large additional sums for it are imperative to stave off further reductions in hospital services. It cannot be for nothing that the Trent and Birmingham health authorities have asked BUPA to provide them with a system for costing the services that they give. Probably I am not comparing like with like—I speak with a special interest in the matter—but I wonder why kidney dialysis units run by private health care companies for the NHS can provide dialysis that is 30 to 40 per cent. cheaper than the NHS dialysis units, and still make a profit. Carrying that argument to its natural conclusion, the present figure of 47 new kidney patients on dialysis per million could be almost doubled, which would put us right up alongside the top levels in western Europe. Will my hon. Friend explain, if she can, that wide diversity of charge?
  Another area in which considerable sums of money could be saved and a better service provided is hospital laundry. By September 1987, privatisation of laundry work had saved £8·1 million, but considering that laundry and linen services cost the NHS £231 million a year, according to the National Audit Office report published in April 1987, one must wonder whether that is the best that we can do—
  Mr. Ian McCartney: Will the hon. Gentleman give way?
  Sir Michael McNair-Wilson: No, I shall not. Other hon. Members want to speak and the hon. Gentleman will have his chance.
  A member of the laundry service in my constituency tells me that he believes, and it is the considered view of his trade, that savings of as much as £100 million are waiting to be made if private launderers are encouraged to tender for hospital contracts. Despite all the talk about privatising services since 1983, the amount of hospital laundry work, by value, being handled by the private sector has decreased. Yet I know from experience that the supply of sheets, pillow cases and blankets is often extremely haphazard in the National Health Service—
  Mr. McCartney: Will the hon. Gentleman give way`'
  Sir Michael McNair-Wilson:—so much so that the service spends at least—
  Mr. McCartney: Will the hon. Gentleman give way?
  Sir Michael McNair-Wilson: No, I shall not give way. It is no good shouting at me.
  The service spends at least: £100 million on disposable linen substitutes, although I doubt whether anyone prefers them to ordinary linen. When I was a patient in one of the hospitals in Oxford, I was asked by the nursing staff to take up with the administrator the wretched supply of linen and blankets to the patients. I was asked to do that because, as a Member of Parliament, I was assumed to

  1347
  have some clout with the administrator. I am glad to say I did have some, because we did get a better supply—but what a miserable state of affairs.
  I ask myself why the private sector is finding it so difficult to submit tenders for hospital laundry. I am told that the private sector, when asked to tender, is asked to tender in such a way as to make the chances of it wishing to proceed extremely improbable. I shall give three examples. When the Lewisham and north Southwark district health authority asked a private tenderer to submit a tender for its laundry service, it required a book containing 226 pages. The tender documents for the Peterborough hospital contained 186 pages and that for south-east Kent contained 238 pages. My constituent told me that one tender document was six books long and took him nearly four hours to read.
  I shall quote a letter from a hospital laundry contractor who supplies hospitals all over western Europe. This is a letter that the contractor wrote to the district general manager of the Airedale health authority, giving his reasons for not tendering for the work. It said that the company
  "is sorry to have to inform the Airedale Health Authority that it cannot submit a tender under the conditions to tender laid down by the Health Authority. This is in spite of investing hundreds of man hours and many thousands of pounds in the exercise to date."
  The letter continues that the company
  "has twenty years' experience of providing Full Rental Textile Care Services to hundreds of hospitals, clinics and old people's homes. It is part of a Group whose whole raison d'être is serving healthcare institutions. It cannot permit itself to enter into a contractual obligation which it believes to be neither commercially responsible and reasonable nor potentially a successful service to the customer."
  That company told me that its standard contract is usually only five pages long, but the three examples I have given involve tender documents hundreds of pages long. One is forced to the conclusion that health authorities do not want to put their laundry service out to tender, whether savings can be made or not, and achieve that objective by asking for massive tender documentation. I remind the House that we are talking of little, simple things such as linen, blankets and towels. By imposing unreasonable contract terms, they do their best to dissuade private tenderers, despite the willingness of those same tenderers, to invest in the necessary equipment. They, or those responsible for running the laundries, prefer to have it in-house, perhaps because the wage structure relates to the number of pieces processed per week. Dare I say that hospital laundry managers have a vested interest in exaggerating the piece count? The private sector tell me that when they win a tender, the number of pieces processed falls by between 17 and 40 per cent., simply because payment is made on a different basis.
  By the same token, is there any reason why the capital accounting procedures used in hospitals should favour in-house as opposed to external tenderers? In-house tenderers are allowed to discount their equipment purchases at the unrealistic figure of 5 per cent., and we all know what the standard price for money is in the market.
  I have touched on three areas of National Health Service spending where the private sector can provide services that could mean major savings. Major savings mean getting more out of the resources that are available. If we are to move away from the idea that the National
  1348
  Health Service is chronically underfunded, we have to improve both the way in which we draw up our estimates and ensure that the resources available are used as wisely and prudently as possible.
  7.14 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): Although this has been a short debate, it has been interesting. I welcome the opportunity to take part as a Front Bencher in a debate on a report of the Social Services Select Committee, having for a number of years taken part in such debates as a member of that Select Committee when I was a Back Bencher.
  It is a pity that the words of the Chairman of the Select Committee, the hon. Member for Birkenhead (Mr. Field), were not listened to by more of his hon. Friends. When he got to his feet, I counted two of his Front Bench colleagues listening to him and five Back-Bench Members, which, of course, has been par for the course in recent health debates. When the Labour party spokesman got to her feet a little later the number went up to seven Back-Bench Members, but, of course, that included the Chairman of the Select Committee. I am afraid that it needs no more figures to demonstrate the real interest of the Labour party in issues to do with health care.
  I shall answer briefly one or two of the points that have been made. The hon. Member for Peckham (Ms. Harman) asked for a statement on dental and eye charges. I do not know whether she heard it, but a statement was made earlier today by my right hon. Friend the Leader of the House, and I have nothing to add to it.
  The hon. Member for Alyn and Deeside (Mr. Jones) asked a number of questions, including questions about speech therapy and British Telecom. I hope that he will understand that, because of the short time available, I cannot answer his questions in detail, but I undertake to write to him.
  We have had three splendid speeches from Conservative Members. I congratulate my hon. Friends the Members for Bury, North (Mr. Burt), for Macclesfield (Mr. Winterton) and for Newbury (Sir M. McNair-Wilson). I especially appreciated the excellent, robust speech of my hon. Friend the Member for Bury, North. I enjoyed the elegant and thoughtful remarks of my hon. Friend the Member for Newbury, who might like to know that, on provisional estimates for renal dialysis, it looks as though the number of new patients per million is now up to about 50, so we have further progress there.
  I hope that my hon. Friend the Member for Macclesfield will forgive me if I deal with his points in a moment.
  As for the priority given to Health Service spending, the figures speak for themselves. This year alone the Government are spending some £23·5 billion on the NHS in the United Kingdom. Our spending will rise by nearly £2 billion over last year. That is a cash increase of some 9 per cent., or about 4·5 per cent. in real terms after allowing for general inflation. We have allocated a slightly higher proportion of our money to the regional health authorities in England this year, so the figures should be 9·5 per cent. in cash terms and 4·8 per cent. in real terms for the RHAs.
  Mr. McCartney: Will the hon. Lady give way?
  Mrs. Currie: Spending on the National Health Service this year will have risen by 39 per cent. in real terms since 1978–79. That compares with an increase in public spending as a whole of 16 per cent. in real terms over the same period. In other words, spending on the Health Service under this Government has risen two and a half times as fast as public spending in general. I am sure that the Chairman of the Select Committee will agree that this is the biggest budget that the National Health Service has ever seen.
  My hon. Friend the Member for Bury, North—who has left us—left us with the picture of Labour Members and, sadly, one or two Select Committee Members acting as bewildered children in a shop full of goodies, looking for the gaps on the shelves. My only concern is that his metaphor was a shop full of sweets—I would have preferred a shop full of fruit, but the point is well made.
  Mr. McCartney: Will the hon. Lady give way?
  Mrs. Currie: I should like to get a little further into my speech, because I want first to answer some of the points made by hon. Members who have been here the whole time.
  Hospital and community health service spending on staff for all groups in the United Kingdom last year, including agency staff, was more than £11 billion. Of that, the estimated pay bill for our nurses and midwives was £5·2 billion; for doctors and dentists in the hospital and community health service it was £1·6 billion; and for the professions allied to medicine it was just over £500 million. We have accepted the estimates of the full cost of this year's review body awards which come to £803 million for nurses and midwives, £168 million for doctors and dentists, and £45 million for the professions allied to medicine. The £538 million sought in the summer supplementary estimates is the additional amount required on top of the 4·5 per cent. included in the public expenditure White Paper for England for the hospital and community health service. The hon. Member for Birkenhead is nodding. He is with me, even if no one else is. Other items are included in other supplementary estimates.
  The difference between these estimates and those in the review body report is accounted for by employers' costs, that is national insurance and superannuation. The assessment of the hon. Member for Birkenhead of the historic size and importance of this supplementary estimate is far more accurate than the somewhat trite remarks of the hon. Member for Peckham.
  We are employing more nurses than ever before. The last count last September showed a further increase to record levels. In England, there are 405,200 whole-time equivalent nurses and midwives—that is 490,000 on a head count. In itself that makes the regrading exercise so much more of a headache. It is a fact that more nurses in our employ are better qualified than ever before, including in the community nursing service where more than 80 per cent. of staff are qualified. I believe that that is all to the good.
  It is a firm Government policy to improve nursing education through Project 2000 and to reduce the service burden of students so that they are no longer treated like skivvies. We feel just as strongly as the Royal College of Nursing about that and I believe that our stand has been courageous and welcome.
  1350
  It is also a firm Government policy to look after nurses and midwives for their own sakes and because they are our core work force. In this country we rely very heavily on nurses and we have relatively fewer doctors compared with other countries. Our job and theirs is to look after the patients and we can do that only with a skilled, productive work force in a professional atmosphere with high morale whose contribution is recognised in the pay packet.
  Mr. Galbraith: I am slightly worried that the Minister will not answer the very important question that we raised. If more money is required as a result of regrading than that already set aside by the Government, will they find the additional money to fund fully the regrading exercise?
  Mrs. Currie: The hon. Gentleman is aware that I think very highly of him. However, every time he rises I cannot help remembering that he came to this House after being a consultant in the National Health Service. He gave up £10,000 in salary to do so. We are certainly looking after someone very well out there. If he will bear with me, I hope to answer his question in full shortly.
  We hope that the Opposition will not vote against the mammoth package of extra money for the nurses and midwives. I noted that the Labour party had a vote last night to which attention was drawn earlier by my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard). The national executive committee of the Labour party had to decide whether the Royal College of Nursing should be allowed anywhere near the Labour party conference. There was another split in the Labour party. There was a vote of 21:1 against the RCN going to the Labour party conference. The one was the Leader of the Opposition and the deputy leader was among the 21. I have checked up on this and I can state that the RCN is welcome at the Conservative party conference. I confirm that we expect to see the RCN at Brighton in October.
  We have had plenty of humbug and hypothetical questions tonight. If the Labour party had won the 1979 general election there would not have been a nurses' pay review body or a supplementary estimate of the size that we are discussing. My concern about the Opposition's approach and that of the Select Committee on Social Services on occasion is that they are so negative. Every change is seen as a problem and every effort to cope with problems is seen as a failure, even when it is a blazing success. Every improvement is ignored and every opportunity to run down achievement is seized. The hon. Member for Birkenhead again described the pay awards as very generous. We are content to accept that compliment.
  I want now to consider what is happening in Macclesfield. As my hon. Friend the Member for Macclesfield is aware——
  Ms. Harman: Will the Minister give way?
  Mrs. Currie: The hon. Lady has not given me enough time to answer all the questions that she asked. I will come to them in a moment. I hope that she will allow me first to pay a courtesy to my hon. Friend the Member far Macclesfield who served on the Select Committee for Social Services with such distinction for so long.
  If my hon. Friend the Member for Macclesfield does not mind, I want to read a letter sent to me by Mr. Richard Jordan, who lives in Macclesfield. I imagine that he is a constituent of my hon. Friend. I checked with Mr. Jordan

  1351
  and he said that he would be delighted if I were to read out his letter. His handwriting is a little shaky and hon. Members will understand why in a moment. He wrote: "Dear Mrs. Currie,
  I am fed up with hearing the complaints about the NHS, of course everybody wants more money, but please tell us all how wonderful the service is, the Macclesfield General and West Park Hospitals have brought me through two heart attacks and now two strokes, hence my bad writing.
  All the staff at our hospitals are marvellous and I hope you will praise them. Doctors in our village on the spot at home within minutes, ambulance, doctors, nurses, equipment is here within the half hour, immediate doctor and nurses attention on arrival at hospital, food very good, with varied menus, sisters and nurses nothing too much trouble.
  When I had my strokes the doctor and even the specialist from the hospital called at home to confirm my condition and examine me. My local doctor saw to the nurses, physiotherapy, calling and providing me with a wheelchair, stick, chair, and everything including oxygen etc. I felt that the NHS has done so much … We are so grateful to the NHS and feel sure there are many more people who feel the same way."
  He comments further about the cheerful and expert service. That is the service in Macclesfield, and it is repeated throughout the country.
  The hon. Member for Birkenhead asked one or two specific points. I will consider those and then consider the regrading exercise in some detail.
  Mr. Nicholas Winterton: As my hon. Friend the Minister has referred specifically to my constituency, I want to confirm everything in Mr. Jordan's letter. I have splendid doctors, wonderful nurses and, as my hon. Friend the Minister knows, a new district general hospital. However, with regard to my local hospital, perhaps she will refer to the fact that its new operating theatres are closed for several sessions a week when they could be relieving people who require hip replacement or knee joint replacement operations. They are closed because there are inadequate resources to staff the hospital and theatres to operate 100 per cent. of the time. We have growing waiting lists in important specialties. I fully accept that we have an excellent hospital and that it provides fine service, but perhaps my hon. Friend the Minister should direct her attention to the point that I have raised.
  Mrs. Currie: As my hon. Friend is aware, part of the difficulty in some of the theatres, as has been shown in recent research studies, has arisen in obtaining the key staff, especially the nurses, to work in them. That is why we are undertaking a clinical grading review so that highly qualified staff who accept a lot of responsibility should be paid appropriately. We are certain that that will help to alleviate the problems in future.
  Mrs. Clare Short: It is a little late.
  Mrs. Currie: If it is a matter of being a little late perhaps the hon. Member for Birmingham, Ladywood (Ms. Short) will stay here a little longer and hear what I have to say.
  Ms. Short: I am here for the next debate.
  Mrs. Currie: Right.
  The hon. Member for Birkenhead asked about Medical Defence Society subscriptions. As he is aware, the doctors' and dentists' review body recommended that two thirds of the costs of subscriptions should be reimbursed directly.
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  As the hon. Gentleman will realise, the cost to the health authorities can be estimated quite precisely and they have been included.
  The hon. Member for Birkenhead also asked about Whitley. As he is probably aware, the settlements are coming in fairly close to the figures that we anticipated. Others are not yet settled, and we do not normally speculate while pay negotiations are still under way, for obvious reasons. I hope that the hon. Member for Birkenhead will be satisfied with that reply.
  Let us consider the regrading exercise. I suspect that there has been some misunderstanding and I want to assist the House. First, it does not apply to all nursing staff. Managers and students are excluded by agreement. About 85 per cent. of our nursing staff are affected, but that means that we are talking about a large proportion of the half a million nurses that we employ. The nurse managers are the subject of a separate grading exercise. Students will be affected by Project 2000. However, under the 1988 review body awards, the minimum for senior nurses will be 5 per cent. The minimum for students will be 6·3 per cent. and the minimum pay rise for all the nurses will be 4·2 per cent.
  The hon. Member for Birkenhead asked several questions about how the pay bill was divided and calculated.
  Ms. Harman: We know all that.
  Mrs. Currie: The hon. Member for Birkenhead asked some questions and I am answering them. He obviously did not know the answers.
  The Government set up a sample survey of staff and asked them of what their work consisted. We tried to work out, by grossing up, how many staff will be involved in changing grade. We gave the figures to the review body along with our considered views on the increase in pay needed for other reasons such as inflation or the extra costs of living in London. We accepted what the review body said about the costs of the exercise to the National Health Service. I shall remind the House of precisely what Sir James Cleminson said in the review body's report. In paragraph 154 he says:
  "Our estimates are necessarily approximate because they are themselves based on estimates."
  We provide estimates of manpower levels and pay bills every year. That is how the DHSS cash was calculated, and we accepted the figures in good faith. If the hon. Member for Birkenhead thinks about it, he will agree that the method that I have described is easily the obvious method of calculation. Had he recommended it, I would have said that it was an intelligent and serious approach to a fiendishly difficult problem.
  With the exception of funds for the London supplement, the total sum allocated to regional health authorities was in proportion to their initial cash limits. This tried and tested method has been used in previous years. We considered doing it differently; other methods have their advantages and disadvantages.
  Hon. Members asked whether we are satisfied that the estimates are accurate and whether we will implement the exercise in the spirit in which it was intended. Of course the answer is yes. When such large numbers of staff are to be regraded there are a limited numbers of ways for a Government to respond. They can offer the figures and accept the calculations in good faith—which we did; that meant requesting a set amount of cash as a supplementary

  1353
  estimate—they can reject all the calculations and use guesswork, which we were not prepared to do, or they can say "Go ahead, never mind the cost." But that implies offering a blank cheque. I accept the strictures of my hon. Friend the Member for Macclesfield that that would have been irresponsible. We have issued much guidance, which is all in the Library. I sometimes wonder why we put it in the Library, because I do not think that anybody reads it.
  I shall set out precisely for what the money for which we are voting is intended. I shall set out in public the views that we discussed in private with regional health authorities. The money is to regrade jobs as they were in post on I April this year. We accept that that is a snapshot, but there must be a set date or it is not fair. The money is not for new posts or to fill vacancies as at 1 April. That would be growth, which has already been argued for. Some 1·2 per cent. is provided for RAWP and 1·5 per cent. for cost-improvement and income-generating programmes. There has already been more than 2·5 per cent. growth this year.
  The money can be used to replace agency staff. It is not intended to permit health authorities to bow to trade unions or industrial relations pressures. The entire review body system for nurses, midwives and professions allied to medicine was set up precisely because those professions had put their patients first despite industrial action by others. In a press release last week, the Royal College of Nursing told us to get on with it. It said that it was confident that the Government would keep their promises and that the sooner the exercise was finished the better.
  The money is not for health authorities to think up their own gradings. This is not a local version of regional pay. We have put our views about regional pay to the review bodies, but that is a completely separate issue. It is essential to have consistency of grading across the country so that the same grade does the same work. Our officials will be visiting health authorities during the summer to ensure that this consistency is achieved. That is only fair and it is what we have agreed with the staff.
  The hon. Member for Peckham bleated on about the sufficiency or otherwise of the enormous sum on which we shall be voting. We have received no firm information and we shall not act on rumour, especially rumour put about by one or two trade unions that might want to bid-up gradings, to try to poach members or alarm good staff.
  It is early days and there is a long way to go. We are unlikely to have any solid information before the autumn—much closer to the deadline of 31 October. Any other views are pure speculation, and many of them are plain wrong.
  I shall write to the hon. Member for Birkenhead in more detail about the issues that he raised, but I should like to put the regrading exercise in context. It is the biggest change to face nursing for many years. It is the biggest personnel activity since the National Health Service was established. It is probably the biggest review this decade of health care staff in Europe. It is certainly far bigger than anything we have handled before and it affects far more staff, every single one of whom is personally assessed and regraded. It is a heck of a lot bigger than regrading the staff in the citizens advice bureau in Birkenhead and it is light years away from the proverbial whelk stall which, on the admission of Opposition Front Bench spokesmen, Opposition Members could not run.
  1354
  It is worth remembering the regrading exercise in the Halsbury report, which was mentioned by the hon. Member for Birkenhead. I have read the report, which says:
  "Within the time limits which we set ourselves to submit our report we have not been able to carry out evaluation in depth of the work of each grade … what we have seen and heard has left us in no doubt that an evaluation of this kind is urgently needed."
  That was November 1974. We are undertaking the exercise because we have the management skills and the resources. I hope that the House will honour and recognise our commitment.
  7.36 pm
  Mr. Frank Field: There seems to be some question about when the debate should finish. Before I make my brief concluding comments, will you, Mr. Deputy Speaker, say whether I am right in thinking that this debate can run for three hours?
  Mr. Deputy Speaker: By a resolution of the House of 22 June, this debate can last three hours. If the House wishes, the debate may continue until 8.23 pm. I understand that some arrangement may have been made to finish the debate earlier so that the second debate can begin. The resolution of the House is clear.
  Mr. McCartney: On a point of order, Mr. Deputy Speaker. I apologise for raising a point of order at this stage, and I understand what you, Mr. Deputy Speaker, said about formal arrangements being made. In her opening remarks, the Minister criticised Labour Members for not being available to debate the Health Service. She did so in the knowledge that her office refused my request for a meeting to discuss underfunding in my constituency. An apology was given on the basis——
  Mr. Deputy Speaker: Order. The hon. Gentleman is making a point that would be perfectly legitimate in a debate, if he were called.
  Mr. Field: You kindly informed the House, Mr. Deputy Speaker, that an informal agreement has been made. When these agreements are made, the experts in the usual channels should talk to the people—
  Mr. Deputy Speaker: Order. I made clear the resolution of the House, by which I am bound. I added in parenthesis that I thought some informal agreement had been reached. It is my job to carry out the resolution of the House. I hope that is clear to hon. Members.
  Mr. Field: I am grateful to you, Mr. Deputy Speaker, for saying that and I hope that hon. Members have heard your remarks. My hon. Friends and some Conservative Members have been present for all the debate. My hon. Friends do not now wish to take part, so I can therefore bring the debate to a conclusion.
  I think that the Whips have an important lesson to learn from tonight's proceedings. I hope that it will be learnt by Labour and Government Whips. It is not pleasant for hon. Members who have been present throughout the debate—who have much expertise and who wished to contribute to the debate—to be leaned on so that some informal agreement can be adhered to. That is a sour note for me to begin my summing up on, but perhaps it is appropriate, given the comments made by the Under-Secretary of State for Health and Social Security.

  1355
  I have merely two things to say. Many hon. Members made efforts to divide what I said from the sentiments that were expressed by my hon. Friend the Member for Peckham (Ms. Harman). Perhaps my hon. Friend made her points more gently than I did, but there was certainly no disagreement between us. It was strange for the hon. Member for Macclesfield (Mr. Winterton) to have to make his point. Apart from the hon. Members for Newbury (Sir M. McNair-Wilson) and for Bury, North (Mr. Burt), who did not think that it was necessary to discuss the estimates, there was no disagreement at all.
  Opposition Members are concerned about one central issue, which I put to the Under-Secretary of State. I hope that she heard the message, if not from Opposition Members, from practically every Conservative Member who has spoken in the debate. They are as pleased as we are about the size of the supplementary estimate. They and Opposition Members are pleased that, officially and unofficially, we welcome the Government's commitment fully to fund the pay award. We have raised a single crucial question. Is the regrading exercise to be screwed up because of a cash ceiling, or will the Government give the green light so that the regrading exercise can take place and fulfil the review's expectations that the Prime Minister outlined?
  Being the written word, Hansard does not take account of the way in which hon. Members shake their heads. It is important for us to recall that, when I asked whether the exercise is to be cash-limited, the Under-Secretary of State said no. She shook her head like one of those dogs that sit in the back of cars. When the cars stop, their heads move. It was a terribly important intervention from her.
  Mrs. Currie: The hon. Gentleman should beware of reading anything into my gesture when, at one stage, I talked to the Whip, who was sitting on one side, and to my Secretary of State, who was sitting on the other side. I apologise if I made my point in a rushed way, but I am conscious that a large number of hon. Members are waiting to speak in the next debate, and we must be courteous to them also. We did the calculations in good faith. We accepted the recommendations of the review body in good faith and in good heart. We are voting today on the biggest supplementary estimate that the Health Service has ever seen. The regrading exercise is being done in detail for 500,000 people.
  We have no hard information and no information that will confirm any of the rumours or negative comments that are being put about. We already have some information that we may well have got it right. I hope, and I am sure that the hon. Gentleman also hopes, that all the experience that is going into the matter will bear fruit and that the net result will be some contented nurses and well-cared-for patients.
  Mr. Field: From the Under-Secretary of State's careful statement I hope that we may infer that, when we return after the summer recess, we may seek more time to consider a further supplementary estimate so that we can make a reality of the Government's commitment fully to fund the nurses' pay award.
  Mr. Nicholas Winterton: Will the hon. Gentleman, who is Chairman of the Select Committee, agree that my hon. Friend the Under-Secretary of State herself admitted that
  1356
  the pay review body stated that this is its best estimate? Therefore, there could clearly be an error. Should we not be able to accept from that, if indeed there is an error after a responsible clinical regrading is carried out, that the Government should have the courage and decency to come forward with another supplementary estimate?
  Mr. Field: As usual, I could not have phrased the point better than the hon. Member for Macclesfield has. I hope that that message has clearly gone to the Government.
  Mr. McCartney: As Chairman of the Select Committee, will my hon. Friend ask the Under-Secretary of State to reconsider the matter and agree to meet me and discuss the basic point relating to the underfunding of my health authority?
  Mrs. Currie rose—
  Mr. Field: I shall not give way to the Under-Secretary of State. As my hon. Friend spoke, she was beckoning with her first finger. I hope that, when the regrading exercise is completed, the Under-Secretary of State is as happy to give signs to all the nursing profession as she is to give them to my hon. Friend the Member for Makerfield (Mr. McCartney).
  We have an informal agreement to which the Select Committee was not a party. We have used four minutes of the time allowed for debate on the next topic, and I apologise for that. If the Whips want informal agreements, they should talk to the right people, and, in this case, it is Select Committees.
  Original question deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of estimates).

  NHS Pay Awards

  Adult Employment and Youth Training
  [Relevant document: First Report from the Employment Committee ( House of Commons Paper No. 526 of Session 1987–88) on the Department of Employment's Estimates 1988–89.]
  Motion made, and Question proposed,
  That a supplementary sum, not exceeding £281,927,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31 March 1989 for expenditure by the Department of Employment on a grant in aid to the Training Commission (formerly the Manpower Services Commission).—[Mr. Peter Lloyd.]
  Mr. Deputy Speaker (Sir Paul Dean): I remind the House that, under the resolution of the House of 22 June, this estimate is to be considered in so far as it relates to adult employment and youth training.
  7.45 pm
  Mr. Ron Leighton: I am pleased to be able to introduce this debate, which gives the House an opportunity to consider and discuss employment training.
  The Committee took evidence from the Training Commission, the Minister, and the permanent secretary at the Department of Employment. We published that evidence, and I hope that it will illuminate matters and inform the House. As yet, the Committee has not come to a common view on the merits of the new programme. I

  1357
  emphasise that the views that I shall express in opening the debate are my own and that other hon. Members will speak for themselves.
  I fear that, compared with our competitors, training is something that we as a nation do not do terribly well or excel in. In the first half of this century, our survival was often held to depend on military capacity. But from now on it will depend as much or more on the efficiency and effectiveness of our industry, research and development, and investment in the skills of our people. When we compare ourselves with our competitors, there can be no room for complacency.
  In the last Parliament, the Committee could not have been other than impressed to see young Japanese people going to school until aged 20, leaving with a thorough grounding in mathematics and science, and then joining the great Japanese companies and receiving a further year's training in the speciality of the company involved. Plainly, such enterprises benefit from a highly competent work force. Today, it is a matter not of just getting state of the art, modern, high-tech equipment, but of having a highly skilled work force to exploit and get the best out of.
  Because of time restraints, I shall briefly mention only one other country. A fortnight ago, the Committee spent a couple of days in the Federal Republic of Germany. One had to recognise the thorough, comprehensive training that is given to the whole of the younger generation there. Of the 16 to 18 year group, 20 per cent. were in grammar schools preparing for university, 20 per cent. were in full-time vocational schools, and 56 per cent. were in the renowned dual system of apprenticeships. The average annual cost of an apprenticeship place was £8,000—incidentally, all paid for by employers, who seem to be as convinced of the value of investing in skills of their people as that of investing in their machines. We visited a railway workshop called Duewag making rolling stock. Many apprenticeship places there cost £10,000. But the proof of the pudding is in the eating. That firm has a buoyant, flourishing export trade. Coming from Britain—the country that invented railways and once built them all over the world but is now closing its railway workshops and will soon be importing rolling stock—it was an eerie experience to be shown a video of that firm's rolling stock being sold in many countries on every continent of the world. Obviously, training is a vital ingredient of success.
  I refer directly to the estimates and, in particular, last year's estimate for the new job training scheme. We discovered that the initial sum that was allowed for the JTS was £215 million. Because of poor take-up, that sum was cut to £156 million, but, eventually, only £64 million was actually spent—in other words, just 42 per cent. of the reduced figure. There was a massive underspend. We must recognise that the programme was wildly unsuccessful. It was hugely unpopular, with an extremely large number of drop-outs. There were resources for 232,000 entrants. Over 100,000 people entered the programme, but, by the end of the year, only about 30,000 were in place, so the Training Commission agreed that the programme had failed.
  As there are several similarities between the JTS and the new employment training scheme, we asked the Training Commission what lessons it had learned from the experience. The Training Commission suggested four things: first, to start with realistic, not over-ambitious targets; secondly, to give sufficient financial incentives, both to trainees and managing agents; thirdly, to sell the
  1358
  scheme better to employers, some of whom were hesitant to take on the long-term unemployed; and fourthly, to gain the co-operation of all the parties involved on whom it is dependent for the delivery of the programme: employers, local authorities, voluntary associations and trade unions. We were told that these are the lessons that need to be incorporated into the new programme.
  Before looking at how successfully the lessons might have been learned, may I say that in none of the countries that we have visited has training or training programmes been a cause of acute political controversy between the parties. The approach to these matters has been agreed by all those principally concerned.
  In those countries, there is thus a consensus approach, and everyone gets on with the job. Indeed, on a visit to the DGB, the German TUC, I specifically asked whether there were any differences between the parties on training, and was answered with a categoric no.
  Only in Britain have these matters been rent by acrimony. Why? The answer is partly the inadequate nature of programmes, and the motives for introducing them. We have had YOPS, TOPS, CP, JTS, and much else—all schemes which, in their time, we were told to be proud of, yet now all scrapped. Therefore, it is not perhaps surprising that there is some cynicism. Few of those schemes were meant to be permanent; they were conceived as temporary palliatives to ameliorate the effects of unemployment.
  In answer to question 121 in his evidence to the Committee, the Minister of State, whom I am pleased to see in his place, said of the community programme:
  "You will know that the Community Programme originally was—if I can put it this way without being too crude—to fill in the time of the unemployed in ways useful to the community. That was the idea behind it."
  The schemes were specifically designed to have a "register effect", in other words, to reduce the unemployment count. I fear the Government's motives were suspected. Many people saw the schemes as a cheap way of massaging the unemployment figures for electoral reasons.
  What the country needs is not temporary expedients, not cosmetic palliatives, but high quality, credible, training programmes, ideally aiming to give us a work force as well trained or better trained than any in the world. That needs agreement, and the active co-operation of all parties concerned. It means a national consensus as to what is required. To obtain a consensus people have to listen to each other, and that includes the Government. It is no good the Government saying that they have a huge majority, therefore they can do what they like, because that way leads to disaster. It means, for instance, the Government listening to the trade unions. That is not something that the Goverment have been very good at. They have preferred to regard the unions as the enemy within, to be undermined and eliminated. That is riot the way to reach agreement or consensus. The trade unions must be valued as essential partners.
  I turn now to the new employment training programme. It does not, of course, address the training needs of the 90 per cent. of those in employment. That is another story for another time. It is a programme for the long-term unemployed—and lit is targeted on two groups: the 18 to 24-year-olds who have been unemployed for six months, and the 18 to 50-year-olds who have been unemployed for more than two years.

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  I fully support the concept of a programme for the long-term unemployed. As a result of the seven-year recession that we suffered after 1979, we have between one and two million people who have been unemployed for years. Unless something is done specifically for them many will never work again. Unemployment is not an orderly queue, where those waiting longest are first off. The reverse is the case.
  The programme is not, of course, an exercise in job creation. To succeed it should ensure that the long-term unemployed get a fairer share of the jobs which are available. The Committee has paid great attention to the long-term unemployed and in the previous Parliament we produced a report advocating a job guarantee for the long-term unemployed. I do not know whether Ministers have seen that report, but they might care to read it at some point.
  The most useful thing that I can do this evening is to turn to the question marks over the new programme. The first is the level of funding and the quality of training. The numbers of people to be put through the programme annually are scheduled to increase from the 400,000 who were on the old programmes to 600,000 on the new programme—an increase of 50 per cent. but with no new money. How is it possible to increase the numbers by 50 per cent. and at the same time to enhance the quality of the training without any more money? The participants will spend only 40 per cent. of their time on directed training, in other words, two days per week for about six months. Perhaps we could hear what vocational qualifications that will achieve.
  Let me come back to the lessons learned from the new job training scheme. The first is the need for adequate financial incentives. The Government are great believers in financial incentives. The last Budget was predicated on the need to give already wealthy people thousands of pounds of incentives to get them to work. So what are the financial incentives to come on the programme? The fact is that most of the participants on the present community programme will be worse off on the new employment training programme.
  Many of the participants on the community programme are young single men. The pay is an average of £67 a week for a part-time place. In a letter dated 2 July, the Minister of State told us that a single person aged 22, with travel costs of £8 per week, would receive a net income of £33 per week—that is for doing three days' work or work experience. Like such single people, many others will be more than £20 per week or as in that case £30 per week worse off. Presumably that is the way in which more people are put on the programme for the same amount of money.
  The new employment training programme moves away from the idea of some sort of rate for the job for the work part of the programme to benefit plus. That, not surprisingly, is controversial. Some people see it as a move to workfare, the approach which was discredited in some states in the United States of America. The plus is some £10 above benefit. Out of that, the first £5 of travel expenses must be paid, reducing it to some £5 per week. Being out of the house and being on the programme will inevitably involve extra expenses, such as buying food, so people could be worse off financially.
  1360
  On 24 May, the Secretary of State, who I am pleased to see in his place, stated:
  "we are aiming to ensure a position in which no one is worse off when taking part in the programme than they would be on benefit."—[Official Report, 24 May 1988; Vol. 134, c. 281.]
  Well, yes, but should there not be an incentive that makes them better off? My modest suggestion when the scheme was first announced was that the plus above benefit should be doubled, because that would be something of an incentive. To do so would cost £180 million per annum. We are told that the Treasury is currently awash with revenue, so it cannot say that it has not got the money. I should like to reiterate that suggestion this evening—
  Mr. Andrew Rowe (Mid-Kent) rose—
  Mr. Leighton: I shall give way to the hon. Gentleman who is an extremely valuable member of the Committee. However, the intervention may take time from the time available for him to make the speech which I hope to hear later.
  Mr. Rowe: I am grateful to the hon. Gentleman for giving way. If, as he began by saying, training is indispensable to people's future employment, should they not value it a great deal more than enforced idleness? Therefore, should they not see the benefit of a training programme as being of considerable advantage to themselves?
  Mr. Leighton: Yes. That is precisely what was said about JTS, but it failed. When we asked the Training Commission why, it gave us four reasons and one of the things it suggested was that a financial incentive should be offered. Some may argue that there should be no such incentive and that people should value the training and do it for nothing, but the Training Commission considered that a financial incentive was important.
  The other major lesson that the Training Commission drew from the failure of the JTS was the need to secure the support and co-operation of all the other parties involved and on whom the Training Commission is dependent for the delivery of its programme.
  The other parties involved in the programme are the employers, the local authorities, voluntary organisations and trade unions. The Secretary of State knows that he faces some problems in that regard and that the conditional support of the TUC is less than full-hearted. The vote in the general council was extremely close and it will be a contentious matter at the congress in September. Britain's largest white collar union, the National and Local Government Officers Association, and Britain's largest unions, the Transport and General Workers Union and the National Union of Public Employees, are actively opposed to the programme.
  Trade unionists have expressed a number of concerns about the programme, which include the low level of allowance and the perception that employers will get workers for £5 a day, thus exerting a downward pressure on wages. They are concerned that trade unions had to be consulted about the proposed schemes for the community programme, but that trade union approval is no longer necessary for the employment training programme. The principle of parity on the Training Commission has been broken—six extra employers' representatives have been placed on the commission to outnumber trade union representatives. I do not understand why, but we may receive an explanation tonight.

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  The most important worry for some unions is whether the programme is voluntary—for the critics of the programme that is the key issue. At present, the programme is not compulsory, perhaps for no other reason than that there are not nearly enough places for the client group. The Secretary of State has said may times that the programme is voluntary and that he has no plans or intent to make it compulsory. Nevertheless, many people have the strong fear that, if the unemployed vote with their feet, as they did with the JTS, they will be pressured into the scheme or lose benefit.
  Ms. Clare Short: rose—
  Mr. Leighton: I am just about to quote my hon. Friend, but I hope that she will forgive me if I do not give way.
  The Secretary of State has been asked many times, as he was on 24 May by my hon. Friend the Member for Birmingham, Ladywood (Ms. Short), to state that he will not designate the scheme under section 26 of the Employment Act 1988 during the lifetime of this Parliament. I hope that I have anticipated the point that my hon. Friend was seeking to make. However, each time the Secretary of State has declined to say that he will not designate the scheme. If he did not designate the scheme that, more than any other step, would defuse opposition to the programme. If the Secretary of State really does not intend to designate and thus make the scheme compulsory, I cannot understand why he will not make that simple categoric statement. So much depends on it.
  The Secretary of State is aware that many voluntary organisations that have participated in the community programme have written to hon. Members to express their worries—one of the main ones is the lack of funding to continue project training.
  The Under-Secretary will know of an organisation called Mutual Aid, which he has visited. It sent me a document that showed a nice picture of him visiting that organisation and described the kind things he said about it. He might care to know that Mutual Aid has written to me because it is worried about the new programme and it voices its criticisms of it.
  The Secretary of State knows that many local authorities, including many Conservative-controlled authorities, are declining to participate. The Minister of State wrote us a letter to inform us that Kensington and Chelsea will not participate, apparently because they believe they will be out of pocket.
  I believe that a number of improvements will be necessary to obtain the support of the partners, who are necessary to deliver the programme. I welcome the £50 allowance for child care for single parents. I hope that that will prove to be the thin edge of a desirable wedge to develop child care in this country. The Secretary of State might care to have a word with his right hon. Friend the Chancellor of the Exchequer about removing the existing tax disincentives for workplace nurseries and creche facilities. It will also be necessary to ensure that single parents coming off the employment training programme obtain jobs with sufficient pay to enable them to continue to finance such child care.
  Mr. Ernie Ross rose—
  Mr. Leighton: My hon. Friend will have a chance to make his point in his speech and I am not anxious to prolong my remarks.
  1362
  A programme directed at the long-term unemployed is vital. I am sure that, after the recess, the Select Committee on Employment will want to pay great attention to ascrutinising and monitoring the programme. I believe that what we have presently is half a loaf and I shall devote my time to seeking to obtain some improvements so that we get the whole loaf.
  8.5 pm
  Mr. Spencer Batiste: As time is short and as many colleagues on both sides of the House wish to speak, I shall be brief.
  The debate must be put in a wider historical context. Last summer I read an extremely important work on Britain's industrial decline during this century by Correlli Barnett entitled "The Audit of War". That describes the collapse of our competitive industrial position vis-à-vis the other developing European countries from the postindustrial revolution era until now. It highlights a number of the essential ingredients that have contributed to that decline and the key ingredient was our attitude to acquiring skills compared to the attitude in other countries. At the higher level of skill training for management and at the basic level of skill training of the work force we have progressively, over many decades, lost out to our competitors. The Select Committee report has highlighted the effect of chickens coming home to roost after a long time.
  In today's edition of the Evening Standard there is an interesting article that highlights the problem to which the hon. Member for Newham, North-East (Mr. Leighton) referred and the problem we face with schemes such as the community programme. The article is entitled
  "Thousands can't read after 11 years at skool".
  That article states:
  "Alarming disclosures are made today about school-leavers who can't read, write or do simple sums … after 11 years in the classroom.
  Thousands of teenagers leave school without these vital skills and six out of ten are so frustrated in fifth forms of comprehensives that they play truant either part or all of the time.
  Dr. Tom Wood, head of a youth training centre, says:
  "We have to give basic literacy and numeracy skills to the young people who have for some reason reached 16-plus with limited proficiency in these areas' … When teenagers are urged to take part in any training involving the three Rs … they usually pretend to be sick to avoid being humiliated … One in three of the teenagers questioned at training schemes said they had not been interested in passing exams at school because they thought this would not help them get work."
  I know that every hon. Member in the Chamber has visited, as I have on a number of occasions, youth training schemes in their constituencies and in other parts of the country. They will be only too aware of the fact that, in many cases, they cater for the drop-outs from schools—the people to whom the article referred. The most interesting thing that one discovers is that, when training is put in the right context and the trainees can see a skill coming into their hands which they will find relevant to their futures, they are remotivated to learn. Perhaps one of the most important pressures behind the Education Reform Bill, which attempts to deal with the literacy problem in schools, was to address the difficulty of children who are demotivated during the latter years at school. The schemes that we are debating relate to adult and youth training which is designed to help people who have left school recently or some time ago.

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  This debate, which I suspect will become increasingly significant in the years ahead, takes place against the background of the changing nature of the labour market. In many parts of the country, employers are saying over and over again that they simply cannot recruit people to fill vacancies because people do not have the necessary skills. Only today, I had a letter from Leeds city council. which is typical of many of the stories told to Members of Parliament. It states:
  "The Council has a nursery building programme closely monitored by the Nursery Committee. The Committee's objective is to spend budgets allocated with the minimum of 'slippage' and achieve set building 'targets'.
  One problem experienced in the last few months has been the difficulty in recruiting skilled builders, particularly bricklayers.
  One contractor has a contract to build 3 nurseries of a total value of £4½ million and this Contractor … has had repeated difficulty recruiting bricklayers to the extent that the contract is now several weeks behind schedule.
  The Committee has pursued this matter through its own Education Department and it is hoped that 'Employment Training' and 'Training for Skills' courses could help the situation."
  Until recently, in many parts of the country, people were not motivated to take skills training because they could not see any jobs available for them when they had acquired those skills. However, as a consequence of the 23-month record period during which unemployment has plummeted in all parts of the country, that situation is now quite different. We can now say to youngsters, "The problem is that you lack the skills that employers need. This programme is designed to help you obtain those skills."
  The old scheme had its shortcomings. The hon. Member for Newham, North-East described some of the shortcomings of the new JTS. Those were highlighted in the Select Committee report which is a most valuable document. It stated that only 110,000 people were in training in September 1987 when the resources of the scheme catered for 232,000. The hon. Gentleman described that as a failure. I am not sure whether one should look at the glass and describe it as half full or as half empty. That depends, I suspect, whether one is on the Conservative or Opposition Benches. Clearly, 110,000 people benefited from that scheme, although at least as many again could have done so. Basically, the scheme was about right, but there were a number of factors in it which did not enable it to develop its full potential.
  Mr. Leighton: At the end of the year, there were only 30,000 people in training.
  Mr. Batiste: I noted that point. That led to my right hon. Friend asking the Manpower Services Commission, as it then was, to review the scheme to see whether it could be made more attractive. It has done that with a view to providing a scheme that will offer literacy and numeracy training at the lowest level and go right through to the high-tech training that is also needed. It is important to note that the scheme was approved by all the commissioners, including the three trade union commissioners, in the MSC.
  The scheme is fair and, as the hon. Member for Newham, North-East has conceded, the lessons of the new JTS have been learned, although he argues that the financial incentives should be increased further. I would
  1364
  take rather a different line. If the scheme is to be successful, the greatest incentive must be that those taking part in the scheme see that the skills that they acquire will lead them to a job. Otherwise, we shall run into the danger that it will become an infill operation. The real incentive, if the scheme is to be successful, is that those who participate will acquire something that will be valuable to them in the long term so that they will have an exploitable resource to offer the labour market in years to come.
  This scheme is only part of the picture. Training is vital across the spectrum. I should not like anyone to think that, because the Government are putting such a great deal of money into the scheme, that absolves everyone else from responsibility for training. Everyone has a fundamental responsibility for training. That starts in the schools and continues in the colleges, polytechnics and universities. It also lies with local authorities and employers. I am also delighted to see that some of the more enlightened trade unions, such as that of the electricians, are undertaking significant and valuable training schemes of their own. The identification of training as one of the high priorities by some in the modern trade union movement is a welcome sign.
  Skill training is about how we tackle the problem of unemployment and how we meet the industrial needs of our society. There is a need for motivation. Hon. Members on both sides of the House are preoccupied with that. The difficulty with a scheme of this kind is that people who should know better pump negative publicity at it. Even if, in the words of the hon. Member for Newham. North-East, they would prefer to see a whole loaf rather than half a loaf, they should not condemn it. Those people should encourage its development. It is a disgrace that the TGWU, NALGO, NUPE and COHSE should oppose the scheme.
  Ms. Short: It is a disgrace that the Government are putting forward such a rotten scheme.
  Mr. Batiste: Opposition Members are taking a negative attitude towards the scheme.
  Undoubtedly, young people will look to the scheme as a way to make up for the opportunities that they have missed in the education system as a result of a series of problems inherent in the structure of our society that we are trying to tackle at all levels. People outside the House will see Opposition Members and those in the union movement who oppose the scheme as using that group of people and exploiting them for political ends.
  The scheme is a good one. It meets important needs in our society and everyone who is concerned about skill training should do everything in his power to ensure that it succeeds.
  8.18 pm
  Mr. Ernie Ross: In the short time available to me, I should like to concentrate on those aspects of the new training programme which have caused great concern to those organisations involved with the programme. I want to concentrate on the voluntary organisations that are involved.
  To set the tone, I should like to quote from the Church of Scotland's Church and Nation deliverance at the 1988 General Assembly, which the Prime Minister attended. It states that it views
  "with great concern the Government's plan to end the Community Programme, under which many thousands of

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  jobs involved with care and support in the community have been created, which jobs will, in general, be lost in September when the programme comes to an end."
  It also views with concern.
  "the morality of the Government's new Employment Training Scheme believing that the proposals militate against natural justice. (For many years Job Creation has provided union approved wages related to the work done; the proposals depart from this by paying a negligible bonus in addition to the existing state benefit.); and instruct the Church and Nation Committee to communicate with the relevant Government Departments, with a view to having the provisions of the scheme considered."
  The Minister will perhaps tell us how he has replied to the deliverance, to which his right hon. Friend the Prime Minister no doubt listened with great concern. I questioned the Minister when he was before the Select Committee on Employment about the attitudes of voluntary organisations. He suggested, not dismissively but curtly, that the bids for places were over-subscribed. That included many bids from voluntary organisations. I then asked the local organisations whether they agreed with the Minister's views. The Dundee association of social services said that there was no evidence of any local discussions initiated by the Training Commission with that organisation, which brings together all the voluntary sector organisations in Dundee. As far as it was concerned it was hardly voluntary, given that after September there was no alternative. Obviously, given the very good work that they do the organisations might well be opened to opting out. In many cases, they were not prepared to sacrifice their organisations without some commitment from the Government to ensure that the organisations would not suffer because they had participated in the scheme.
  The Tayside committee on alcohol abuse was very concerned that after September there would be a closure, or certainly a curtailment, of some of its activities. Its service was a giving service and it certainly could not cope with training and managing a particular scheme. It was concerned that the Wishart centre in Dundee might have to close its day centre because its capabilities would be reduced. It could lead to alcoholism research being discontinued and affect the benefits to other organisations.
  My hon. Friend the Member for Dundee, East (Mr. McAllion), who unfortunately is unable to be here tonight, received a letter from the Wishart centre. He had written to the Under-Secretary of State for Employment. I should like to put on record the response to the letter from my hon. Friend. It stated:
  "Thank you for your letter of 5 July enclosing a copy of the letter you had received from Patrick Nicholls.
  I read Mr. Nicholls' letter with great interest—especially the second page which included statements that I had never heard before and which sounded quite promising. Eagerly, I began asking questions about Mr. Nicholls' `third option'. Unfortunately however, I discover that it is not a viable alternative to community programme or employment training, but 'a tinkering round the edges', as it was put to Dundee Survival Group and the Wishart centre have registered their intent to become a Training Manager with reluctance because we cannot see a viable alternative if we wish to serve our client group."
  It went on to refer to something which I shall explain briefly. My constituency is a soft fruit growing area and those who are unemployed or who earn very little traditionally go to what is called the berry picking instead of having a holiday. The letter continues:
  "I know we're into 'the berry season', but after advertising for care workers in the Job Centre for ten days I have only had two applicants this week! I really cannot see this new scheme
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  being highly sought after come September. For us, as you know, we have the additional problem that trainees will have to face abuse, threats and working with HIV carriers. Who, I ask you, would do that for a tenner a week for the sake of training?"
  That is one more voluntary organisation that does not believe that the scheme is a good one.
  The Keep Scotland Beautiful campaign, which employs 400 part-time staff under the community programme, will not be able to keep them on when the new Training Commission replaces the Manpower Services Commission in September. The staff, including 25 in Tayside, will be forced back on to the dole. The campaign says that the people that they employ on the scheme
  "are exceptionally good at what is almost a sales business, selling a litter-free environment to the public and receiving training they would never have got from the MSC alone."
  The Dundee liaison committee on homelessness was concerned about the way in which the Secretary of State could assist those community programmes which may feel under threat. In a letter to me on 11 July 1988, it said:
  "We understand that Mr. Fowler, the Secretary of State for Employment, and his Ministers have been putting the case for additional funding from other Government Departments to ensure that those community care schemes which are wholly dependent on Community Programme funding and are unsuitable for Employment Training funding should be able to continue in existence after the end of August. It is now into July and no concrete proposals for alternative funding have appeared."
  Where have those suggestions come from? They have come as a result of various discussions that have taken place in Scotland with the Minister of State, Scottish Office, in particular on 22 June when the Scottish Council for Voluntary Organisations met the Minister, who obviously gave some sign that he would be prepared to consider a scheme.
  It would be useful to highlight briefly which services the schemes provide and then to put on record the separate funding that they would require. The social care schemes supported by the community programme include care attendance scheme, lunch clubs, gardening and decorating for the elderly, services for the disabled, support for single parents, children's creches and adventure playgrounds. youth clubs, home insulation and support for ex-offenders. It would be easy for the Minister to say that all those areas could provide training. Unfortunately, in almost every case they are a scaled-down version of professional, full-time employment. If that training went too far, it would come into contact with that professional area and therefore would have to be discontinued.
  The meeting on 22 June proposed two ways of using the programme. The first suggestion was:
  "Scottish Office Departments with responsibility for 'Care in the Community' services shoul'd set up a Social Care Fund for a transitional two-year period. The Department of Employment might be expected to contribute towards the costs of the Fund in recognition of the contribution the Fund would make to maintain the maximum choice of quality training places."
  It goes on:
  "a fund of £1 million would allow for 200 places per year. Applications for funding would be assessed and awards made by a committee of officials of the funding Departments of the Scottish Office and by MSC Scotland."
  It goes on to say that after a two-year period the recipients obviously would have to find alternative funding, but it would give the community programmes a chance to find alternative funding.
  Another suggestion to which the council has received no response yet is for

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  "the MSC to contribute to the 'core' costs of providers of social care training opportunities within Employment Training."
  Perhaps the Minister will respond to those two initiatives. Some of the community organisations in Dundee and in Scotland as a whole which are extremely concerned may consider entering the scheme.
  The Scottish Trades Union Congress and the Convention of Scottish Local Authorities have made it quite clear that they are not prepared to participate in the new employment training scheme. They had a meeting with the Minister on 14 July and I spoke to them today. They said that during that meeting the Minister conceded that he had nothing further to add to the assurances that they sought, which were similar to those sought by my hon. Friend the Member for Newham, North-East (Mr. Leighton), that the scheme would remain voluntary, at least during this Parliament. The Minister still could not give them an answer.
  That is extremely important for local authorities, given that the Secretary of State for Scotland, like the Minister with responsibilities for England and Wales, has clawed back considerable amounts of money from those local authorities. The Minister is still considering the plea from local authorities for extra funding for the additional financial aspects of the scheme, if they were to become training managers. He still cannot give them an assurance that if they joined the scheme and used their own funds to top up the money that the trainee would receive the Government would not claw back the money through some form of penalty. Unless the Minister can give some affirmative response to that, it is unlikely that the STUC or COSLA will be able to encourage their members to enter the scheme.
  There are many other aspects on which I should like to concentrate, such as the experiences of my colleagues and me in Germany and America. It was an experience to go to the land of capitalism and see how it is retraining its workers. It was an eye-opener to see what the Secretary of State for Employment had seen when he visited the United States.
  I welcome the decision to provide a weekly sum for women to enable them to return to work, but the scheme does not go far enough. It does not deal with mothers who have children under school age, so we are still discriminating against women who do not have enough money to send their children to nursery schools or to day care centres. They cannot therefore return to work. That was not what we found in West Germany or the United States. The Secretary of State now has the assistance of an adviser from the other side of the Atlantic, who we hope will be able to influence the Secretary of State and his team. We hope that it will result in the good practices in the United States being followed in this country.
  The Under-Secretary of State must refer to the organisations that provide care. He must not just say that the Government hope to do something for them in the future. These organisations need to know now whether they can seriously commit themselves to employment training. It is no use if they operate for a short time and then discover that they have to fold up because money is no longer provided for them. Unless the Under-Secretary of State can give the assurance for which the Scottish Trades Union Congress and the Convention of Scottish
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  Local Authorities have asked, the organisations that provide care will disappear and the people of Scotland will suffer a serious loss. The Minister must give that assurance tonight. These organisations must know exactly what the Government intend to do so that the viability of the employment training initiative can be ensured.
  8.32 pm
  Mr. James Paice: I am a member of the Select Committee, but, as the hon. Member for Newham, North-East (Mr. Leighton), the Chairman of the Committee, has already said, we have not yet discussed the details of employment training and reached a decision. He put forward his personal view, as did the hon. Member for Dundee, West (Mr. Ross). It is only right, therefore, that I should do the same. The House will not be entirely surprised when I say that I do not agree completely with what they have said. There is a dire skills shortage in many parts of the country. My constituency unemployment rate stands at 2·8 per cent., and we face terrible problems when we try to recruit for all forms of business. There are pages and pages of vacancies advertisements in local newspapers.
  Mr. Richard Holt: My hon. Friend represents a constituency with extremely low unemployment, but I represent a constituency with one of the highest unemployment rates in the country. I have received today from the Teesside chamber of commerce details of the skill shortages that it expects to see during the next three months. There are still shortages in every grade, from skilled labour to part-time workers.
  Mr. Paice: I welcome my hon. Friend's intervention. It demonstrates that the problem affects the whole country and all businesses.
  I am surprised that so many Opposition Members have defended the community programme. They slanged it for many years, but now they say that it has been useful. I am not sorry to see its demise. It was always a make-work system. It provided very little good-quality training. In fact, very little training at all was provided and it achieved very little. I understand the worries in the voluntary sector, but it is not the role of the employment training programme to provide the services that are needed in the community. They should be provided in some other way. The new adult programme that is to start in September will be much more flexible than any of the previous schemes. It begins with an assessment of each trainee. As any expert in training knows, the best programme starts with an individual assessment to tailor the training to the needs of the trainee.
  For many reasons I welcome the introduction of child care benefit for single parents. In three or four years we shall desperately need those people in the work force. I welcome, too, the flexibility that the supplementary grants system will provide for specific skills training, for which extra money will be required.
  I am sorry that the business enterprise training programme has been incorporated in the new scheme. The private enterprise programme for the would-be entrepreneur and the would-be self-employed is to continue. That is good, but it is strange that as soon as people have got their business off the ground they will lose the opportunity

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  for further training, other than through the new programme. That is where the business enterprise training programme would be of help.
  A great deal has been said about the financial benefits that would be provided for the person who is being trained. It is strange to say in one breath that training is vital and we need to spend more on it and to emphasise its value but in the next breath to say that it is not worth while for people to be trained for an extra £5 a week. They are contradictory statements. Everybody on the scheme will be at least £5 a week better off.
  Mention has already been made of the Select Committee's visit to Germany two weeks ago. We looked at the dual track programme and the adult programme. German unemployment benefit is paid as a percentage of the unemployed person's previous wage, but there is also a premium, apart from the benefits system, for the adult programme. That premium is 5 per cent. of the unemployed person's previous wage. That works out, on an average industrial wage, at about £4 a week.
  Ms. Short: The hon. Gentleman must work it out properly. His figure is wrong.
  Mr. Paice: The hon. Member for Birmingham, Ladywood (Ms. Short) makes a sedentary intervention, but she will have to go to Germany and check the figures for herself. Members on both sides of the House visited Germany and they will vouch for the fact that that figure is correct.
  Ms. Short: The average wage in Britain is considerably higher than the £80 a week that was implied by the figure that the hon. Gentleman gave, and the average wage in Germany is considerably higher than that. There is something wrong with the hon. Gentleman's arithmetic.
  Mr. Paice: I said specifically that the premium was 5 per cent. of the average industrial wage, and 5 per cent. of £80 is £4.
  There is no doubt that there is a very great need for effective training. I entirely endorse the comments on that point made by the hon. Member for Newham, North-East. I would demur only with his suggestion that we have not achieved anything like it. In my view, the youth training scheme, and now the new employment programme, are very much what the country wants. Contrary to the opinion held by many, I believe that they are comparable to the programmes offered by many of our major industrial competitors in the West.
  I grow tired of hearing Opposition Members, trade unionists and others criticising those programmes on the evidence of a few isolated instances. On that basis they castigate the whole scheme. As my hon. Friend the Minister will know, I served for a number of years on an area manpower board. The sadness is that the vast majority of those involved do not really know a great deal about training and are not involved in monitoring or able to make the kind of assessment that matters. If individuals, be they Opposition Members or trade unionists, wish to criticise a particular training programme in a particular place, they should take their criticism to the MSC and ask what is being done to improve the standards. It serves no purpose to castigate the whole scheme.
  Mr. Ernie Ross: We had experience of a group who pretended that they were capable of training young people. I went to the MSC and to the Secretary of State for
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  Scotland about that matter and we exchanged a great deal of correspondence. Despite the fact that there was evidence to show that that group was not carrying out its responsibilities, it was given approved training organisation status.
  Mr. Paice: I shall not disagree with the hon. Gentleman because I do not know the details of the case. However, I also know of managing agents who were given approved training organisation status but who should never have been granted it. That underlines my earlier point that many of the people who are sitting in judgment on area manpower boards are unfit to make those judgments. That applies to trade unionists as much as to others who are nominated for election to those boards. I do not want to digress and talk about the YTS but will continue my discourse on the adult programme.
  Many of the major objections to the adult programme come from trade unions and local authorities operating in areas of greatest need and of high unemployment. Mention has already been made of the "rate for the job". That demonstrates a total lack of understanding of what training is all about. There is no such thing as the rate for the job if one is being effectively trained. In reality, employers will have to make massive contributions to the funding of the schemes. It must also be recognised that the contribution made to a business by unskilled labour is minimal. There is no justification for saying that the employer should pay the rate for the job because the trainee is making a contribution to the business, because he is not. I hope that that attitude represents the final dregs of "The country owes us a living" culture, which brought Britain down in the 1970s. It is time that we—
  Mr. Ernie Ross: Will the hon. Gentleman give way on that specific point?
  Mr. Paice: No, I shall not give way again.
  It is time that we got away from cradle to the grave employment and recognised the need for training through one's lifetime and for retraining, however unfortunate may be the reason—including unemployment. Training is not just about time serving. We must abandon the belief that it takes years to learn new skills. That was in the old days, of the "Sit by Nellie" approach to training, whereby one was supposed to sit and watch, and learn over the years. Modern training technology has developed a long way since those days, and time scales for the assimilation of skills have been dramatically reduced.
  The programme recognises that skill shortages exist, as we heard from my hon. Friend the Member for Langbaurgh (Mr. Holt). It also builds on modern training principles and practices. It offers the opportunity to all unemployed people to gain the skills that they need. It is very sad that the scheme is not being welcomed and recognised as being good and valuable, building on the strengths that the YTS developed over the years. The new programme should be welcomed by all who really care about the unemployed and the unskilled.
  8.45 pm
  Mr. Andrew Welsh: During the present prolonged spell of high unemployment and lack of job opportunities, the provision of proper training schemes becomes a matter of major importance. I remain unconvinced that the Government's proposals are in any

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  way the best method of proceeding. However, if the alternative is straightforward unemployment, the schemes clearly become the lesser of two evils.
  Ideally, my party would like to see introduced a proper system of training similar to those of other European countries, and adequately funded and geared to the changing needs of industry, commerce and the individual employees in a rapidly changing world. I regret that the Government have chosen to abandon the rate for the job that was previously paid under the community programme in favour of a benefit plus system—a premium of between £10 and £12 a week, thus leaving its single, under 25-year-old trainees, who represent about 50 per cent. of total trainees, about £10 worse off for a full week of training and work experience than they would have been as part-time community project workers.
  I know that that situation is posing major difficulties for existing schemes in my constituency. In the city of Brechin, current schemes run by an energetic Church minister have transformed the lives of otherwise unemployed individuals, giving them employment, improving the local environment, and leading to a high success rate in finding consequent employment. That excellent scheme is now threatened by the Government changes, which mean that individuals will cease to be offered a working wage—and that was at the heart of the previous scheme's attractiveness. Unless local government funding is obtained, that particular scheme will founder and the whole community will be the poorer for it. With cutbacks in local government funding, the chances of obtaining that money from local authorities are growing more and more remote.
  By replacing community benefit with job training as the main focus, the Government put at risk about £50 million of Scottish social care projects that may not be able to adapt to the new scheme. I ask the Minister to examine the specific problems being posed to organisations such as the Angus Crossroads caring scheme and other caring groups by proposed changes in employment training programmes. I know of the tremendously good work being done by those groups and the advantages that they offer to families and to individuals by the programmes they have been allowed to initiate and undertake. Some tremendous local initiatives and services will be destroyed unless proper funding is restored.
  I reiterate the fears already expressed by organisations such as the Tayside services liaison committee on alcohol, whose employment scheme may be wiped out. The supported flats made available under the Dundee Cyrenians scheme may also have to close. The Wishart centre's effectiveness as a day centre will be greatly reduced, and the Dundee survival group will be struggling to continue its tremendous services for the homeless. The fears expressed by those voluntary caring organisations are repeated in my constituency and throughout Scotland.
  Over the past five years, many voluntary organisations have been able to utilise the community programme to the benefit of various needy groups. Organisations that are first and foremost service-giving cannot also take on a major training role without their services suffering. I direct the Minister to those organisations and to the concerns that they express. That point is of particular importance to Scotland, where a proportionately greater number of
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  programmes have been concerned with community care rather than with the environment, as is the case in England and Wales.
  I know that approaches are being made by many of those organisations to the relevant local authorities, but with the severe constraints in local authority budgets the chances of obtaining funding are limited. I believe that the Secretary of State for Employment mentioned the possibility of other Government Departments being asked to find funds to assist voluntary organisations that have developed caring schemes under the community programme. What reassurances can the Minister give Crossroads and other community schemes about future funding?
  Many parts of Scotland need job creation schemes as well as training schemes—indeed, some would say more. I believe that the Government's offering is hopelessly inadequate. Not more than £400 is, I understand, to be spent per six-month trainee. Sweden spends £12,000 on training its unemployed, whereas the average employment training place here will cost about £5,000 a year. While value for money is always a desirable goal, mere cheapness can be self-defeating. Moreover, restart and the stricter eligibility conditions for unemployment benefit mean that even without formal workfare compulsion the scheme is highly coercive, as has been said earlier. As no time scale is attached to ministerial guarantees of the voluntary status of the scheme, no wonder such concerns are being voiced.
  Because of the abandoning of the rate for the job, employment training had destroyed the political consensus that supported the community programme and was one of its strengths. The voluntary sector warned that that would happen. Now voluntary agencies are caught between dependence on local authority funding and trade union good will on the one hand, and the need for MSC funding on the other.
  May I suggest some methods that might help such voluntary organisations? Would the Government consider, for example, allowing the Training Commission to permit agency contracts for the community programme to be extended until the end of February 1989, as with project contracts, to provide time for negotiation with local authorities? Could an additional £10 a week premium be payable to single people to bring their weekly income close to what they would have received as a rate for the job? That, I believe, would cost approximately £150 million on a total budget of £1·5 billion, so it is certainly financially feasible.
  Initially, the Scottish Office—or the Minister's Department—could exempt local authorities from clawback penalties on the amount that they spend on topping up trainees' incomes. Perhaps a community fund outwith employment training could be introduced to which agencies feeling that they could not provide a quality caring service within employment training could apply for transitional funding.
  The scheme is far from ideal. I hope that the Government will look again at funding in Scotland for caring schemes that not only provide employment, but are a crucial lifeline for individuals and their families who are helped by them.
  8.53 pm
  Mr. Anthony Coombs: I welcome this huge employment training scheme, which is probably larger than any such scheme over the past 25 years. I do not think that it is putting it too strongly to say that training, more than anything, will determine our economic growth over the next few years. It is equally true that the problems of skill shortages are the result of demography as well as the industrial restructuring of the past few years. The demographic problems are well known, although it is worrying to see that the National Economic Development Office survey showed last week that only one in seven employees was aware of them. Nevertheless, there has been an increase of 900,000 in the work force, and between 1987 and 1995 1 million fewer 16-to-19 year-olds will be available for training. That is a source of potentially severe skill shortages in apprenticeships, technicianships and the other forms of training available to young people at present.
  The problems are by no means new, and they are common to the whole industrialised world. We have recently been told by Professor Charles Handy that 70 per cent. of jobs over the next 10 years will be knowledge-related, whereas 20 years ago the proportion was only 30 per cent. It has been estimated, probably more cogently, that by the year 2010 even people who stay in the same job will have to be almost completely reskilled three times in their working lives.
  Mr. Batiste: Does that apply to Members of Parliament?
  Mr. Coombs: I do not know.
  Evidence of that is working through into the labour market. While we have 1·8 million extra jobs since 1983, and although we have 700,000 vacancies in the economy, the Engineering Industry Training Board shows that the increase in vacancies is mainly in such industries as electronics, in which vacancies have increased by 95 per cent. over the past nine years, and in instrumentation, where the increase has been 30 per cent. Those skilled industries are creating the demand for labour. Although the demand for engineering operatives, for example, has fallen by 43 per cent. over the past nine years, the demand for technicians and scientists has risen by over a half.
  That is why, when we are talking about a high demand for the skilled, flexible worker, I welcome the employment training scheme, not only because of its size but, more important, because of its emphasis on quality. I applaud the youth training schemes, approved training organisations, competence objectives, transferable qualifications and, perhaps most important, the requirement for a knowledge of computers and information technology on every youth scheme.
  I have no doubt that the employment training scheme, with its broad scope from literacy to high technology, will be a better-quality scheme than we have ever seen before. Evidence presented to the Select Committee showed that in the west midlands, although there were only 35,000 places available, 125,000, applications were received from trainee managers. A point was made earlier about smaller funding for more places. We should remember that a large proportion of those trainee managers will bring private capital into the scheme to improve the quality of training that it provides.
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  I believe that the scheme will do an important job in countering skill shortages. However, although the Government should give a lead in tackling skill shortages, the primary responsibility for skill training should be and is with employers. As the hon. Member for Newham, North-East (Mr. Leighton) said, that is a truth which we in Britain have been slow to grasp. For example, a survey was carried out in 1984. The figures for vocational training were difficult to obtain, but it was estimated that the private sector in Britain was spending £2·5 billion compared with £7 billion in West Germany. As a result, Germany was producing three times more engineers than we were. That is still a worrying factor. Two out of three firms in Britain do no training.
  Although the good firms spend the equivalent of 4 per cent. of labour costs on vocational and educational training, the average in the United Kingdom is only 2 per cent., and that works out at 0·7 per cent. of turnover. That is ironic when the economic monitor, the Engineering Industry Training Board, says that 43 per cent. of firms complain that skill shortages will constrain their growth over the next six months, yet apprentice recruitment is still only 8,000 a year.
  It is equally ironic that, when we are talking about skills shortages in microelectronics, a Policy Studies Institute survey showed that only 51 per cent. of firms were doing any staff retraining. It is also ironic that when apprenticeships are so valuable, half the industrial apprenticeships available in my constituency go unfilled.
  The Government are providing help on such matters through, for example, open technology, the regional technical centres, projects such as Trident to improve links between schools and industry and by making sure that the youth training scheme is more clearly and closely linked to the needs of, for instance, the engineering industry. I understand that the engineering industry has just set up a youth training scheme which gives 53 weeks of off-the-job training rather than the normal 30 weeks.
  There is no doubt that the major power to solve skills shortages lies with the employer. I should like to see more employers taking up the joint scheme between the National Economic Development Office, the Engineering Industry Training Board, the City and Guilds organisation and the Training Commission to train more craft workers on the German meister system. I understand that the take-up has been poor recently. I should like to see more employers take up the signposter initiative and the Engineering Industry Training Board's green site and primary projects initiative with schools. I should like to see further development of the segmented craft engineering traineeships by companies. Most of all, I should like to see companies give a far higher priority to the recruitment of scientists and engineers.
  Ms. Short: The hon. Gentleman should get the Government to do something about it.
  Mr. Coombs: This is a private sector responsibility.
  When the private sector is paying newly-qualified engineers on average only £10,800 a year and technicians £8,300 a year, about the same as the average industrial wage, it is not surprising that they find it difficult to encourage people into the industry. It was worrying to hear the vice-chancellor of the Open university tell the Select Committee on Education, Science and Arts yesterday that, although it is easy to get firms to pay for

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  business studies training for their employees at the Open university, only 30 per cent. of them regularly pay for scientific or technical training. It is in the interests of private sector firms to do that. It is their responsibility. They are the best people to do the training and, in increasing numbers, they must accept that responsibility.
  Perhaps understandably, some companies in the small firms sector are put off going into training by the multiplicity of schemes and sources of funding. That is one of the problems addressed by the consultation document on the funding of vocational and educational training, which I understand is still out for consultation. It is daunting that some training schemes are the responsibility of the British Institute of Management, the CBI, universities, and industrial bodies and yet others are the responsibility of different Government Departments.
  I hope that as a result of the review of vocational and educational training those schemes will be drawn together, at least in terms of the way in which information about them is disseminated if not in the way they are organised. I hope that greater emphasis will be put on local employer networks within each local education authority, using the chambers of commerce to develop joint schemes between employers which will stimulate training and prevent poaching of trainees between firms.
  The final area in which the Government are making a contribution but where more needs to be done and will be done when the Education Reform Bill is enacted is the need to ensure that young people have the necessary qualifications to enter the engineering industry in the first place. It is significant that the qualification for a technician in the engineering industry through the Engineering Industry Training Board will be four passes at GCSE grades A to C. However, only 26 per cent. of school leavers at the moment get passes in O-level mathematics and physics. That will be exacerbated by the declining number of pupils over the next few years. The reason for that low figure is too much specialisation in the fourth year in schools and the fact that too many students drop scientific and technical subjects and mathematics. In Scotland, schools have started to address that problem and, as a result, they have one third more people who are qualified in those subjects.
  The Government, through the national curriculum, will, I hope, begin to solve that in a big way. The national curriculum, the technical and vocational education initiative incentive grants to teachers of shortage subjects and education support grants should lead to more pupils taking a wider range of technical subjects. That will form the bedrock of the solution to the skill shortage in this country.
  9.6 pm
  Mr. Frank Haynes: I should like first to congratulate my hon. Friend the Member for Newham, North-East (Mr. Leighton), the Chairman of the Employment Select Committee, on his contribution at the beginning of this first-class debate. I listened to every word he said. There is no doubt that my hon. Friend knows what he is talking about when he speaks about training. I should also like to congratulate hon. Members on both sides of
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  the House who are members of that Select Committee and who have contributed to the debate. All of them do a first-class job in the Select Committee.
  Ms. Short: All of them?
  Mr. Haynes: Yes, all of them, under the leadership of my hon. Friend the Member for Newham, North-East. I kicked off by congratulating him because the Select Committee would not work properly if he was not at the helm.
  I also want to congratulate the Secretary of State for Employment on being here during the debate. I shall not give way to him, but I welcome him to the debate on training. However, he was not present very often when this year's Employment Bill was in Committee. He was swanning around in Sweden and here, there and everywhere, but my hon. Friend the Member for Oldham, West (Mr. Meacher) was there regularly and he is here tonight, so I congratulate him. I felt that I must make that point about attendance.
  I also want to speak about the principle of training. I shall not go into all the fine details, as the Select Committee does, but I wish to talk about the principle. I went into the pits in 1944 and I had first-class training. The training that was talked about in Committee and the training that the Government propose is labour on the cheap. The Government have poked their noses right into training instead of leaving it to industry. I was trained in industry and the Government had nothing to do with it.
  I started at 50 per cent. of the rate of the chap I worked alongside, who was an experienced man. I worked at the coal face during the two-year training course and every two months I got a percentage increase. After two years, I was fully qualified and got the same rate as the other man. That is why this scheme is unfair,—it is labour on the cheap. Youngsters in my constituency let me know that in no uncertain terms. I am here on their behalf to tell the Government that the system is unfair, not only for youngsters but for the people who have been taken out of employment because of the Government policies.
  There used to be nine pits in my constituency. Now four are left because they got rid of five. Where are all the youngsters and the people who worked in those pits? They have gone on the dole queue. Now the Government provide money for training under the NCB (Enterprise) Ltd scheme. They hold seminars and issue leaflets urging people to take another regular job and retrain outside mining in some other industry. People have been encouraged to accept redundancy so that the Government can do away with the pits and no one will work in them again.
  NCB (Enterprise) Ltd., paid for by the Government, means that these people cannot go on training schemes unless they are guaranteed a job. That is a con trick. If the pits had not been closed they could have continued working in them and contributed to the energy requirements of the nation. We heard a statement today on the nuclear industry, and there will be more. The Opposition said long ago that we would go back to the coal mining industry. I am sorry that we have problems. Once a pit is closed it is finished—it cannot be reopened. We must open new pits in the new seams throughout the country.
  The hon. Member for Langbaurgh (Mr. Holt)—he is probably on the train back home now—spoke of a

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  shortage of skilled workers in his constituency. The hon. Member for Cambridgeshire, South-East (Mr. Paice) agreed with him and said that there were such shortages across the whole nation. The tragedy of all this is that the Conservatives have been in office for 10 years now and have not done a great deal about the problem. We are still struggling to provide skilled workers. If the Government went about it in the right way we might get somewhere. They should listen to some of the things being said by Opposition Members such as myself—[HON. MEMBERS: "Where are they?"] I do not know what the hon. Member for Elmet (Mr. Batiste) is laughing about: he does not know what work is. I do. I had to work to keep a family, but his lot are professionals. They have lived on easy street. Some of the beggars are working outside as well, earning up to five or more salaries, while the poor devils that we represent are trying to get work and cannot. And they are conned with this so-called training scheme. It is training on the cheap all right.
  The Secretary of State has said the scheme is voluntary, but there is nothing voluntary in this flaming scheme. I remember the right hon. Gentleman saying something in Committee about people's social security benefits being taken away if they did not go on the scheme. Now the right hon. Gentleman sits there blinking at me, but he knows what I am talking about. The hon. Member for Colne Valley (Mr. Riddick) served on the Standing Committee and made a contribution or two—he was one of the few Tories to do so. Opposition Members had to do it all; we had to put Conservative Members in the picture about what was going on.
  Every now and again, the Government change the name and direction of their training schemes. They do not even know where they are going. I wish they would listen to what the Opposition say about training. When people who have lost their jobs through Government policy manage to find a job, I will go along with the Government's scheme—but the jobs are not there. In my constituency, I have youngsters who have gone through the two-year training scheme but cannot find a job at the end of it. There is still 12 per cent. unemployment in my constituency. The Government say that unemployment stands still, but in my constituency unemployment will rise and rise because of what is happening.
  I believe that the Government arc planning further pit closures in my constituency—in addition to the four that have already closed—which will make matters even worse. That will affect not only the industry in my constituency, but suppliers there and in other constituencies. It is a difficult problem, but the Government do not listen. They know it all. They are dogmatic. People must do what they say. We have had enough; we have had a bellyfull; and I tell the Government that the next time that the Prime Minister declares that there will be an election, that lot over there can look out.
  9.15 pm
  Mr. Graham Riddick: The hon. Member for Ashfield (Mr. Haynes) talked about labour on the cheap, but I think that that was a Whip's speech on the cheap to cover tip the fact that there is nobody else on the Labour Benches to speak in this debate. That is what it is all about. He might have his fan club up there in the Strangers Gallery—all one of them—but where are the rest of them? There are none.
  Mr. Haynes: On a point of order, Mr. Deputy Speaker. What the hon. Gentleman is saying is totally unfair. He knows full well that my hon. Friends are now back working in their constituencies.
  Mr. Riddick: They might be back in their constituencies working, but some of us are trying to represent our constituencies here in the Chamber—that is the difference.
  I am pleased to have the opportunity to speak in this fascinating and riveting debate on the important topic of training. I agree with my hon. Friend the Member for Wyre Forest (Mr. Coombs) that British industry has let down the nation to a certain extent in this sector. It has not provided enough training. It must be said, however, that Governments of the past two or three decades have not allowed British industry to earn sufficient profits to invest in training.
  Like the hon. Member for Ashfield, I had a proper job before I came here. I used to work in sales management in industry—the coal face of industry. I first started work with an American company called Procter and Gamble, which had an American business culture. It carried out all its own training and invested heavily in its own people. I was then poached from the American company—after it had invested in my training and had improved my effectiveness—by a British company, which was fairly typical.
  I recently met one of the directors of the Confederation of British Industry in Yorkshire. He told me that at a time of deep recession training and research and development are the things that tend to go. He assured me, however, that once the profitability of British industry picked up, training would be back on the agenda, and it would invest in training once again. I hope that my hon. Friend the Member for Beverley (Mr. Cran), who used to be with the CBI, will confirm that that will happen in the future.
  That is a question of training people already in work. Tonight we are debating the Government's proposal and their massive training role to help the long-term unemployed. There is an enormous need for high quality training which cannot be over-emphasised. The change in the pattern of job vacancies demonstrates the need for skilled people. There are fewer vacancies for manual, unskilled workers in manufacturing industry, but a far greater demand for individuals in the professional, managerial, technological and service sectors who have the appropriate skills.
  If we consider manufacturing industry, it is significant that from the low point of the recession in 1981 to the present day, as the economy has picked up, output has risen by 22·3 per cent. During that same period, employment in manufacturing industry has fallen by 1·1 million—a drop of 18·2 per cent. In other words, productivity has increased by about 40 per cent. British industry needs fewer unskilled manual workers.
  However, unemployment remains high. At the same time, the CBI and the chambers of commerce and trade in Yorkshire and elsewhere are reporting very serious skill shortages. For example, an ice-cream factory on Merseyside reported that it could not find enough maintenance fitters or refrigeration engineers. In Manchester, seven new hotels can barely find the staff to open their doors.
  The jobs exist. Moreover, now that the baby boom of the 1960s has flattened out, there are marvellous opportunities for our young people. However, we must

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  ensure that the long-term unemployed in their 30s, 40s or 50s are not ignored. They must not be left on the scrap heap. That is why the new training scheme is so important.
  How do the Opposition react? Apart from the playful little speech from the hon. Member for Ashfield, Opposition Members react with a mixture of bewilderment—in some cases a measure of support and in others downright opposition. The dinosaurs in the union movement, notably the Transport and General Workers Union, the National and Local Government Officers Association and the National Union of Public Employees, complain about workfare and cheap labour. However, they claim to champion the cause of the working class and the unemployed. What humbug.
  The response of employers and training organisations to the employment training programme has been very good but if the trade unions wish to cause trouble they can; but if they do that they and hon. Members opposite—in particular, the hon. Member for Birmingham, Ladywood (Ms. Short) who has been stirring things up to such an enormous degree—will bear a very heavy responsibility for depriving some of the most unfortunate people in society of an opportunity to better themselves and have a chance in life.
  Instead of complaining about cheap labour many of the long-term unemployed will welcome the opportunity of a long-term future and will then sell their newly-found, newly-learned skills at a decent wage to companies that are prepared to employ them.
  When my hon. Friend the Member for Elmet (Mr. Batiste) referred to the prospects of the new employment scheme, the hon. Member for Oldham, West (Mr. Meacher) said under his breath in a rather threatening way, "We shall see." He does not want it to succeed because the Labour party likes to see high unemployment. It believes that that is good for its political prospects. It is unfortunate that the hon. Member for Oldham, West makes many ambiguous noises about this and gets the hon. Member for Ladywood to do all his dirty work for him. Whatever the dinosaurs of the Labour movement do, the new scheme will start in September and give the long-term unemployed a chance to learn new skills to take long-term job opportunities. The Government are to be congratulated on giving them that chance.
  9.24 pm
  Ms. Clare Short: I am sure that we are all grateful to the Select Committee on Employment for giving us an opportunity to debate this important subject. My hon. Friends regret that the debate has been on a Thursday evening as many of them have had to return to their constituencies. [HON. MEMBERS: "Why"] One only has to stand in the post office to see that the quantity of mail received by Labour Members compared with that received by Conservative Members shows who does more work for their constituents.
  Like every hon. Member who has spoken, I want to concentrate on employment training—ET. It is just as ugly as the original ET, but with none of his lovable qualities. Before doing so, I should like to mention youth training. I put on record the Opposition's deep resentment and opposition to the removal of the right to benefit for 16 to 18-year-olds, thus making the youth training scheme
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  compulsory. The level of refusal to take up YTS was low. We do not believe for a moment that that action was necessary to make young people take up further education and training. It was done so that the allowance paid to young people on YTS, which has decreased over the years—the Government deliberately allowed it to be eroded—could decrease further.
  It was deeply wrong to remove young people's freedom to choose their training scheme. Good quality training schemes should give young people a freedom of choice. Out of desperation, because they have no income, young people are having to take the first scheme on offer, whatever its quality. Even worse—this has had a big impact in my constituency—the right of young people in receipt of benefit—whose families cannot support their children aged 16 to 18 years in full-time education—to study at their local further education college, take O or A-levels and vocational qualifications has been wiped out by the loss of the right to study for 21 hours. That is an outrage and the option should not be destroyed but expanded to allow young people to stay in full-time education. We are behind in the number of young people who stay in further education compared with our competitor countries. We are deeply critical of the moves that the Government have made in removing the freedom of choice for YTS schemes and young people's opportunities to study full-time if they so wish.
  Mr. Paice: The hon. Lady decried the allowance paid to YTS trainees and said that it was decreasing. Does the hon. Lady accept that the amount paid is a minimum, not a maximum, and that many work experience placements pay considerably more in addition? That is constantly increasing, so to talk about the minimum as the norm is quite incorrect.
  Ms. Short: A minority of YTS placements receive top-up. It is important that top-up is allowed. It is deeply regrettable that top-up is not being allowed in the employment training scheme, although the model is identical to YTS. We know that a growing minority of young people on YTS are receiving top-up, but if the YTS allowance had remained at the original value of the youth opportunities programme allowance it would be worth not £20+ but £40+. I hope that as the 16 to 18-year-old cohort declines, more young people will be in work with training and not taking any job to avoid YTS. That is what is happening at present and the Government must take action. I hope that more young people on YTS will receive top-up and a decent wage and that the possibility of using top-up under YTS will be used by the trade union movement to improve the position of young people in the labour market. That is not only desirable but likely to happen.
  I now refer to the adult training scheme, or ET, as the Government have now decided to call it. The Opposition's view is that it is a deeply flawed scheme and a tragically wasted opportunity to provide improved training for the long-term unemployed. There is a desperate need to expand training opportunities for everyone, but, in particular, for the long-term unemployed, because of the changes that are taking place in our economy. Conservative Member after Conservative Member has said how deplorable it is that we have skill shortages and that there is not more training. The Government have been in power for nearly 10 years. They have eroded training

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  mechanisms. They have cut the number of skillcentres, got rid of the industrial training boards, cut the apprenticeship system. and so on. They deplore the lack of training in our country. It is a serious lack for the economy and for the quality of life and work for individuals, and the Government are responsible for it. They should organise things so that we have more training rather than less training. ET is deeply flawed, but we desperately need more and better training for the long-term unemployed.
  It is also our view that the community programme, which is now to be abolished, has provided enormously valuable schemes to care for some of the most needy and desperate people in our communities. For example, in my constituency, mobility for the disabled is provided through a community programme. It includes decorating many elderly people's homes, doing up their gardens, schemes for disabled children, and so on. They are important community services, but we do not believe that they are all that should he on offer to the long-term unemployed. We have always argued that the CP should not have been only part-time but should have been a mixture of part-time and full-time work, according to people's needs.
  There should have been more training opportunities for the long-term unemployed. When crucial services were being provided through the CP to some of the most vulnerable people in our communities, the jobs should have been permanent. Long-term unemployed people should have been given priority for such jobs. As they acquired skills and knowledge through working with such vulnerable people, they should have been allowed permanently to stay in their jobs and use their skills to take care of the local community, instead of constantly being forced to leave the scheme just as they had learnt to do their jobs particularly well.
  We have consistently argued that point. That has always been our view. We said it when CP was first launched, we said it throughout the life of CP, and we say it now. Instead, what do we get? We get employment training, which builds on the failed job training scheme, rather than the best of the community programme. We continue to be told that it is a £1·5 billion programme. Of course, that is not true. There was some training in the community programme. Many schemes funded and organised training for themselves. After a great deal of pressure on the Government, funding was provided for training. [Interruption.] If Conservative Members who do not know about these matters would listen, they might learn something. After the scheme was launched, the Government provided funding for training in the time when people were not working. It was building up nicely, and the Government cut the budget. We demanded training. At last we got a budget, the programme was starting to build, and the Government deliberately cut the money. Conservative Members should not tell us about the lack of training in the community programme. When they launched the programme it failed to provide training and it was a deliberate part of the Government's strategy to cut the training that we later squeezed out of them.
  I was referring to ET. We are constantly told that the budget is £1·5 billion. Of course, people on the scheme are to be paid £10 or a little more on top of their benefit. A large part of the budget is simply benefit money that people would otherwise receive. We are talking about half that amount of money. It is not such a big budget. Conservative Members should face up to that fact and be honest about it.
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  As someone who had worked in this subject for many years before I was elected to the House, written reports, done research and demanded improvements in schemes and more training before most Conservative Members even knew their way around the initials of the Manpower Services Commission, it is my view that, in their obsessive desire to cut wage levels, the Government have constantly destroyed our efforts to improve training opportunities for young people and the long-term unemployed. The Government use the schemes to lower wage expectations and restructure the labour market. The expectations of young people in employment have been deliberately lowered by the youth training scheme and a number of other schemes which subsidise employers who pay low wages. The success of that is measurable. Much of the inspiration behind this scheme has been the search to reduce the wage expectations and conditions of those in employment. Because the Government have that ulterior motive, they are throwing away a major opportunity to improve our training provisions for long-term unemployed people.
  Some of us remember when the right hon. Member for Chingford (Mr. Tebbit) was the Secretary of State for Employment—all these measures were tried before. He tried to bring in the removal of benefit rights as a means of forcing trainees on to YTS. He tried to introduce benefit-plus for the long-term unemployed, but he failed. He then threatened to abolish the Manpower Services Commission because he was so angry about having failed. The MSC now has much less independence and authority than it used to have. The Government now have compulsory YTS and are bringing in the benefit-plus scheme because they seek to lower the wage expectations and not because they wish to help the long-term unemployed or improve our training provision.
  We object to the benefit-plus model because one of the most immediate and desperate experiences of the long-term unemployed is poverty. Any of us could live on benefit for a short time because we have things that we have bought in better times and we might have a little in savings. However, if one is forced to live on benefit levels for months or years, one becomes extremely poor and cannot replace shoes, children's clothing, sheets, or bedding. The overwhelming experience of those who are long-term unemployed is grinding continuous poverty. Conservative Members talk about the need for people to make sacrifices to obtain training, but they do not know the reality of the poverty in which people have had to live.
  This morning I received a letter from a constituent who was desperately upset. After three years of unemployment, he had found a place on a community programme and received £90 per week for working three days one week and two days the next. He said how happy he had been, how he worked hard because he always worked hard, that he liked working and was proud to work and that it made him feel better. He has just been told that he will be put on benefit-plus, get £10 and have to work full-time. He is distraught because he does not understand it and feels insulted. He had felt that his life was just getting better. He has written to me, pleading that I represent his case and try to get something better for him.
  I advise Conservative Members that when this scheme hits the streets and many more people experience what is on offer, and when the overwhelming majority of 18 to 25-year-olds who predominate on the community programme and who are the guarantee or primary group

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  for this programme, find that they are about £20 a week worse off, they will be extremely angry. There will be a lot of hostility to the programme.
  Mr. Riddick: I am grateful to the hon. Lady for giving way. I have heard what she has been saying about poverty being the major problem, but surely another major problem facing long-term unemployed people is boredom. They are bored because they have nothing to do. Surely this is an opportunity for them to learn some new skills and to have a new start in life. That is what the programme is about.
  Ms. Short: There is absolutely no question but that poverty is the primary problem. Other problems are that the long-term unemployed are isolated from society, and feel that they have no friends and that they cannot make a contribution. All those things are hurtful to people who then feel demoralised and unwanted, and who start to respect themselves less. They lose the confidence to apply for jobs. We know, because all the research tells us, that that is the effect of long-term unemployment. So what should we do? Should we make them an offer that does not make them any better off so that they have to grind on in poverty or should we make them an offer that gives them the chance to acquire skills and a decent income?
  Opposition Members believe that the long-term unemployed are entitled to the chance to acquire skills and a decent income, but the Government are so determined to reduce the wage levels of some of the poorest people in our community that they bring in this kind of scheme, which will impoverish even more those who are already impoverished so that they are worse off than with the offer of the community programme.
  It is said that benefit-plus will give an extra £10 per week, or even a little more because some special categories will get £11 and a few pence extra per week. When Conservative Members talk about the degree of TUC approval, they should remember that that "approval" came reluctantly because the TUC had feared something worse if it did not negotiate what it could from the scheme.
  We are told that the scheme is the same as the TOPS allowance. People are willing to train full time and people have queued up for TOPS courses for such an allowance. When the skillcentre in my constituency kept waiting lists, they were years long. People wanted to train to obtain a skill in which there was a shortage, so they knew that they would get a job. When people are unproductive they are entitled to a training allowance. That might make them a bit better off compared with what they receive in benefit and they also get their bus fares paid and so on.
  When people are put in a workplace and are producing goods and services alongside other workers, they expect to get some pay. They are entitled to an income that takes account of the work that they produce. It is not good enough to say that, in the case of the employment training scheme, they will receive £10 on top of their benefit. They must receive pay in proportion to their productivity. If they do not, they will be used to undermine the jobs and wages of those in work. That is what happened with YTS and YOP. The Minister's Department has produced a number of research papers that have shown that if young people are introduced to the workplace as free labour, they will displace other workers from jobs.
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  The employment training schemes threatens the long-term unemployed because it is worse than the community programme in terms of those people's income levels. It threatens people in low-paid work—the places on the scheme will be concentrated in such work—because that scheme will be used to displace workers. That is why we, together with many trade unions and many of the long-term unemployed, object to it so strongly.
  How cynical can the Government get? I have with me a brochure handed out to employers to try to get them involved in the scheme. What does it tell them?
  "Employment Training gives you the opportunity to hire people whose training you have been able to check yourself … You might regard the training period as an extended interview."
  Now we get down to it. The Government might as well say, "Take on 20. Use them, they are free and keep the ones you want." An "extended interview" is not the high quality training that Conservative Members have tried to pretend the scheme is all about. The Government's expensive advertising budget has been spent trying to pretend that "an extended interview" means high-quality training. It is in their brochure and they are their words, not ours.
  Ministers are aware that there is deep opposition to the scheme from the trade union movement, the voluntary sector and many local authorities, including a number of Tory local authorities. There will be a great deal of conflict. Roger Dawe, the director general of the Training Commission, has said that if one wants to learn the lessons from the failure of the JTS one must have consensus, support from local authorities from trade unions and so on.
  Ever since the Government introduced the scheme we have pleaded with them to give us some basic assurances. We have sought an assurance that the scheme will be voluntary. My hon. Friend the Member for Newham, North-East (Mr. Leighton) has already referred to the duplicity of the Secretary of State who has constantly said that he has no plans to designate the scheme under section 26 of the Employment Act 1988 which gives him the power to take away people's social security benefits should they refuse a place on the scheme or leave it early. However, the right hon. Gentleman will not say that he will not designate the scheme. He is playing games. He has no plans to designate it now, but if things go wrong he will do so later. The Government are being dishonest and if they are considering the possibility of designation, they should tell us.
  With the new availability-for-work tests there is an increasing compulsion on people to join schemes. People are called in and are threatened with the loss of their benefit. They are asked whether they are looking for a job and what wage level they are willing to accept. If they do not give the right answers they lose benefit anyway. Compulsion is creeping in through the availability-forwork tests and if that does not do the Government's job, they will designate the scheme and make it compulsory.
  We are opposed to the scheme because it is not good enough. It is not good enough for the long-term unemployed and it has the potential to destroy the jobs of those already in work. It will not provide good training. We desperately want a scheme that will meet those criteria. If the Government will agree to pay a decent rate when people are working and producing—and an allowance when they are training—and if they give an absolute

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  assurance that the scheme, including the availability-for-work tests, will be voluntary and if they will provide adequate funding for training, we will campaign for the scheme. I plead with the Government to heed what I say and what has been said on many occasions. We shall go out to the trade unions, which are rightly opposed to the scheme, and say, "OK. We have got something better now; let us all work for it."
  We want a decent scheme for the long-term unemployed—they vote for us, and a lot of our relatives and friends are part of that group. We have relatives and friends who have been on training schemes and I do not believe that Conservative Members could say the same.
  This is a desperately urgent and important matter to us. Of course, we want to form a Government, but in the meantime we want something better for the long-term unemployed and this is not the answer. There will be dissension and conflict and the scheme might well fail. The Government have made a grave error because they are obsessed with cutting the wages of the poorest people in the country.
  9.44 pm
  The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls): In the few minutes available to me, I shall not be able to do justice to the interesting and valuable contributions from hon. Members on both sides of the House. I hope that hon. Members will accept that, if they think that I have not given their contribution sufficient treatment.
  Before I reply to the specific points that have been raised, I wish to put matters into context. It is obvious that the Select Committee's report and this debate have concentrated primarily on the new employment training programme. That is entirely right, given the significance that we attach to it. The hon. Member for Birmingham, Ladywood (Ms. Short) was right when she said that the Committee had given us a valuable opportunity to discuss those matters.
  Employment training will have a budget of about £1·5 billion in a full year, which will make it the largest programme of its kind anywhere in the world. The fact that the Government are investing that sum of money in employment training is a measure of our intent to help the long-term unemployed back into work. The case for training the long-term unemployed is clear and it should command the support of all Members of this House.
  The prospect for jobs is better now than it has been for a decade. Unemployment has fallen for 23 months in succession by a total of 835,000, which is the largest and longest sustained fall on record. For the last six months, unemployment has fallen by an average of 40,000 a month. That is a direct reflection of the strength of the British economy. More than 1·8 million additional new jobs have been created since 1983. The economy is entering its eighth successive year of growth at an average rate of 3 per cent.
  There is therefore every reason to believe that unemployment will continue to fall, provided that people who have been out of work can take the jobs which are increasingly available. That means, above all, that they need the chance to train in up-to-date skills.
  We know from recent surveys that there are some 700,000 unfilled job vacancies in the economy as a whole.
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  We now have a unique opportunity to train the long-term unemployed so that they can take advantage of those opportunities.
  However, there is now clear evidence of a concerted campaign of intimidation directed against organisations which want to play a part in employment training. Of course, anybody is entitled to say that he does not want to take part in the new programme, but what is unacceptable is that anyone should try to intimidate other people into boycotting employment training.
  There is clear evidence that officials of the Transport and General Workers Union have been involved in a number of violent demonstrations against officials of the Training Commission, the employment service and voluntary organisations that want to run training projects under the new programme.
  In March, the newly elected executive of the TGWU voted to oppose employment training, despite the fact that their general secretary, Ron Todd, was one of the MSC commissioners who designed the programme and recommended it unanimously to the Government.
  Since then, there has been a series of unpleasant incidents involving members and officials of that union. My right h on. Friend the Secretary of State for Employment wrote to Mr. Todd about that in April. He undertook to carry out an investigation. We are still awaiting a substantive reply. My right hon. Friend has now had to write to Mr. Todd again to draw his attention to two further incidents. One of those involved the week-long occupation of the Birkenhead job-centre—
  Ms. Short: Will the Minister give way?
  Mr. Nicholls: The hon. Lady took more than her fair share of the time and she will have to forgive me if I press on.
  One of those incidents involved the week-long occupation of the Birkenhead jobcentre, as a result of which no help could be given to unemployed people in that area. It is absolutely typical of that sort of demonstration that it is the unemployed who suffer.
  Now we have the Liverpool city council not only opposing employment training, but threatening action against anyone who seeks to work with it. Liverpool city council, which is, of course under the control of the hard Left, voted on 29 June to boycott employment training. Not content with that, it also voted to take a whole series of steps designed to bully voluntary organisations and private companies in Liverpool into boycotting the programme. [Interruption.] The hon. Member for Ladywood does not like what she is hearing, but she will have to realise that she associates herself with those people by holding the views that she does.
  If those threats are carried out, the unemployed people of Liverpool will be deprived of training and the elderly and disabled will lose the benefits of many of Liverpool's voluntary services.
  Unemployment in Liverpool is higher than the national average. But if the council has its way, it will be even higher because the city's unemployed people will lose the opportunity to train for employment and return to work.
  Even after hearing some of the speeches this evening, I remain an optimist and I should like to think that all hon. Members will join me in condemning that attempt to victimise those unemployed people who are most in need of help. It is the same destructive attitude that we saw in

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  Dundee earlier this year. The conclusion is quite inescapable. If the hard Left cannot have jobs or training on their own terms, it would rather have unemployment. That is its message to the unemployed of Merseyside today, just as it was its message to the unemployed of Dundee in April.
  I want to make it absolutely clear that the Government are not going to be deflected by any campaign of intimidation. The programme will go ahead as planned on 5 September. The Government will not turn their back on the unemployed. As a nation we need their skills and experience if we are to sustain our economic growth. I believe it is the duty of everyone in our society—including local authorities and trade unions—to help unemployed people get back to work. That is what employment training is all about and that is what is at stake.
  The speech by the hon. Member for Ladywood did nothing to dispel the ambiguity which has surrounded the Opposition's attitude to employment training from the outset. Her speech contained the usual familiar recital of complaints about the programme—complaints which we have answered time after time.
  It is obviously asking too much of the hon. Lady, given her particular prejudices, to ask her to take my word for it. Therefore, I refer her to the comments of Mr. Peter Ashby, writing in The Independent. The hon. Lady may sneer, but let us consider Mr. Ashby's credentials. He is not an uncritical supporter of Her Majesty's Government; he is a long-time member of the Labour party. He is a committed trade unionist and he spent three years working for the TUC. He is head of a body called Action on Long-Term Unemployment. This is what he had to say on the views of the hon. Lady, commenting on the views of her hon. Friend the Member for Oldham, West (Mr. Meacher):
  "Michael Meacher's defence of the Labour Party's policy on employment training is sadly unconvincing."
  We are all entitled to an under-statement.
  "What he does not answer is the basic question: will the party support employment training?"
  He continues:
  "It is surely time for Michael Meacher and his colleagues"—
  and we must assume that they include the hon. Lady—
  "to speak out in favour of long-term unemployed people having the option of high-quality public-sector training.
  It is too late in the day for those in positions of leadership to remain sitting on the fence. Unless they declare themselves in support of a programme, it will go down at TUC Congress."
  He concludes:
  "I hope from Mr. Meacher's letter that he is in favour of employment training. If so, could he please tell us in simple English?"
  Of course he cannot, and the hon. Lady did not do so either.
  In the few minutes that remain, I shall try to deal with some of the central points. Although the hon. Lady knows the facts, it is possible that some of her hon. Friends do not. Yet again she raises the old canard that Tory authorities are not in favour of the scheme. Again she mentions the case of Kensington and Chelsea. I can tell the hon. Lady that the position of Kensington and Chelsea is perfectly honourable. It has decided that for the time being it wants to wait and see, and it made it clear that it will not
  1388
  come into the programme yet. If the hon. Lady thinks that she can derive some satisfaction from that, she is welcome to it.
  The hon. Lady is concerned that the programme will not be voluntary. There is not much point in trying to convince the hon. Lady that anything conceived by the Government is a right and proper approach.
  The TUC, again not uncritical supporters of the Government, has given its conditional support to the programme. It is absolutely inconceivable that the TUC would have done that if it thought that the Government intended to make the programme compulsory. Accepting for the moment that there are some grounds for the fears of the hon. Member for Ladywood, surely she realises that the moment that we attempted—[Interruption.] If the hon. Lady will stop howling from a sedentary position, I shall try to deal with some of her points, inadequate though they were. If the Government tried to make the programme compulsory, the TUC would immediately withdraw its support and that would be the precise opposite of what we want. If the hon. Lady will not accept my word for it, she ought to reflect on the TUC's attitude.
  The hon. Lady well knows that what she is asking the Government to do is to say that they will never at any time in the future invoke the Social Security Act 1975 that was passed by the last Labour Governmnt, at a time when her hon. Friend the Member for Oldham, West was a Minister with responsibility for social security. It would go against everything that we have planned and it would be against our best interests to do so.
  I am afraid that we have again heard the hon. Lady say tonight that the Labour party is united against the scheme. Again I remind her, if she will not accept my words, of what Neil Fletcher, the chairman of the Association of Metropolitan Authorities education committee, had to say about it. He referred to the hon. Lady's employment training policy as "political posturing" and he is reported as saying that
  "If the Labour movement goes down the boycott road, the first achievement will indisputably be to destroy upwards of 20,000 jobs. The avalanche of public odium that we would achieve by any such boycott would be well deserved."
  The unemployed, employers and the economy need the programme. That is why I say that employment training deserves the unreserved support of Members on both sides of the House.
  9.56 pm
  Mr. Leighton: I hope that the House will take the view that the Select Committee performed a worthwhile service in allowing the House to debate employment training and that the debate has shed some light on the subject, as well as generating some heat. The Training Commission does not believe that the programme is set in concrete and it will keep it closely under review. When we return to the House after the recess, the programme will already be in operation. I feel sure that the Select Committee will want to monitor and scrutinise the programme closely and to report to the House on its scrutiny. I trust that the House will be able to look again at the issue.
  Mr. Deputy Speaker (Mr. Harold Walker): The Question is, That the motion stands over under the Standing Order.
  Mr. Nicholls: I was obviously too generous, Mr. Deputy Speaker, to the hon. Member for Newham, North-East (Mr. Leighton).
  Mr. Deputy Speaker: Order. The motion is stood over until Ten o'clock.
  Mr. Nicholls: On a point of order, Mr. Deputy Speaker. I seek your guidance. I had it in mind that I might fill the vacuum with a few more words of wisdom and peaceful remarks, but if you are saying to me that I am not entitled to do so I shall resume my seat and will allow others to fill it with equally spurious points of order.
  If I am entitled to do that, let me assure the hon. Member for Dundee, West (Mr. Ross) that I shall look into the specific points that he put to me about programmes in his constituency. We do not intend the community programmes—
  Mr. Deputy Speaker: Order. I must explain to the Minister that technically the position is that until Ten o'clock we ought to move on to the next item of business, the British Shipbuilders Borrowing Powers (Increase of Limit) Order 1988, but it would be inconvenient to call the Minister to begin his speech on shipbuilding, to interrupt him at Ten o'clock for the House to dispose of the estimates votes and then to return to shipbuilding. It is a difficult and, to me, a unique experience to have this hiatus.
  Mr. Nicholls: On a point of order, Mr. Deputy Speaker. It seems that I could use the few seconds that remain to us to thank you for your guidance to the House—
  Mr. Deputy Speaker: Order. If the Minister will put it to me, I shall listen to his point of order.
  Mr. Nicholls: The point of order, Mr. Deputy Speaker, that I was trying to raise with you—
  It being Ten o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to paragraph (5) of Standing Order No. 52 (Consideration of Estimates), to put forthwith the deferred Questions necessary to dispose of the proceedings on Supplementary Estimates, 1988–89 (Class XIV, Vote I and Class VII, Vote 5).

  Adult Employment and Youth Training
    SUPPLEMENTARY ESTIMATES 1988–89

      CLASS XIV, VOTE I
      Resolved,
      That a supplementary sum, not exceeding, £538,303,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1989 for expenditure by the Department of Health and Social Security on hospital, community health and related services, including a grant in aid.

      CLASS VII, VOTE 5
      Resolved,
      That a supplementary sum, not exceeding £281,927,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1989 for expenditure by the Department of Employment on a grant aid to the Training Commission (formerly the Manpower Services Commission).
      MR. DEPUTY SPEAKER then proceeded to put forthwith the Question which he was directed to put pursuant to paragraph (1) of Standing Order No. 53 (Questions on voting of estimates, &c.).

    ESTIMATES 1988–89
    Resolved,
    That a further sum, not exceeding £57,388,304,000·00, be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence and Civil Services for the year ending on 31st March 1989 as set out in House of Commons Papers Nos. 256, 329, 339, 510 and 605.
    Bill ordered to be brought in upon the three foregoing Resolutions and upon the three Resolutions agreed to on 7 July by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. John Major, Mr. Norman Lamont, Mr. Peter Brooke and Mr. Peter Lilley.

    CONSOLIDATED FUND (APPROPRIATION) (NO.2) BILL
    Mr. Norman Lamont accordingly presented a Bill to apply a sum out of the Consolidated Fund to the set-Nice of the year ending on 31 March 1989 to appropriate the supplies granted in this Session of Parliament, and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed.

  Shipbuilding
  10.1 pm
  The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Kenneth Clarke): I beg to move,
  That the draft British Shipbuilders Borrowing Powers (Increase of Limit) Order 1988, which was laid before this House on 13th May, be approved.
  The order concerns British Shipbuilders' borrowing limit. This is the statutory ceiling on the funds which the corporation may acquire in the form of public dividend capital from the Government, and loans from the commercial market. The order merely gives British Shipbuilders the power to receive the money. It will always be for the House to decide what actually should be made available through the estimates procedure.
  The limit presently stands at £1,550 million, as a result of the British Shipbuilders (Borrowing Powers) Act which received the Royal Assent in July last year. The terms of the 1987 Act enable the borrowing limit to be raised by amounts not exceeding £150 million at a time to £1,800 million, subject to affirmative resolution of this House. I now propose that the borrowing limit be so raised by £150 million to £1,700 million.
  I have stated very clearly on a number of occasions in recent weeks that British Shipbuilders has continued to consume alarming sums of money relative to its size. The total now stands at almost £1·8 billion since 1979, while employment is now only 6,261 people. No hon. Member should be surprised to see that the borrowing limit needs to be raised yet again—for the fourth time, I might say, in the last two years. The increase last July amounted to £20,000 per employee. This year's increase amounts to a further £24,000.
  Of the £150 million provided by the British Shipbuilders (Borrowing Powers) Act 1987, around £100 million has been spent so far. British Shipbuilders forecast, that it will need the rest over the summer and early autumn so that, without the approval of this order tonight, there would be a risk to the corporation's ability to continue trading before the next Session of this House. This is the fourth time in the last two years that the House has had to vote extra money to save the business from closing down.
  Since the 1987 Act received the Royal Assent, borrowing has been needed for three main reasons. Contract losses have continued to mount. For instance, the first of two ferries for Caledonian MacBrayne built by the Ferguson yard was discovered to be seriously overweight. This is likely to cost the taxpayer around £4 million more than expected on a ship priced at £7 million. None of the corporation's orders has been carried out without contract losses. Secondly, under-recovered overheads have been running at a high rate because of the chronic shortage of orders and work at the yards. Thirdly, the dispute with the customer for the Danish ferries at North East Shipbuilders has meant that no instalment income has been received for many months. British Shipbuilders has had to meet all the building costs itself, although the programme of work has continued. I will touch on that again later.
  These and other costs have all required cash, including borrowing from the market and public dividend capital. For the same reasons the corporation will not be able to operate its business within this year's external finance limit of £80 million. The House has been invited to vote a
  1392
  further £74 million as a summer supplementary estimate for British Shipbuilders. The external finance limit will be revised formally once we are clear about disposal possibilities for the remaining facilities and the share of any further costs that the taxpayer will need to cover this financial year.
  That history of losses provides the background to my policy for the corporation. We are not selling parts of the business because of some ideological hang-up. We are selling them for sensible commercial reasons. We believe that the parts of shipbuilding that are capable of survival in this country will be managed more efficiently in the private sector, and must face up to market conditions.
  I now turn to the programme of disposals that I announced on 18 April when the letter of intent from Kvaerner for its proposed purchase of Govan was received. On 27 June I was delighted to announce the terms that had been agreed with Kvaerner. These have now been notified to the European Commission. I trust that the Commission will accept the terms at its meeting next week, so that the sale can be completed in early August as planned.
  Kvaerner offers Govan a future. As British Shipbuilders had not succeeded in attracting other orders beyond the two ships for China agreed early last year, it is plain that the only alternative facing the yard was closure. I look forward to welcoming Kvaerner to these shores. Quite apart from the other business that it intends to bring, there is the prospect of at least one major merchant shipbuilder continuing in Great Britain. As I have said before, my aim now is to discover to what extent it might be possible to return all of British Shipbuilders' yards to private hands. The corporation is nearing the end of its life as a nationalised industry, and there is no realistic prospect of its ever achieving commercial viability in its present form.
  It is of course important to stress that we are looking for serious purchasers with sensible business plans and substantial financial backing. We shall sell the parts of the business to substantial interests with a prospect of developing the business for the reasonably foreseeable future. We owe it to the work force and the taxpayer to negotiate on that basis. We are not prepared to facilitate asset-stripping, or to inject large sums of public money into flimsy or speculative ventures. I have to tell the House plainly that I cannot guarantee that we will find credible purchasers or affordable orders and work for every part of the business. My aim is to return every part of the business to the private sector on a basis that is fair to the purchaser, the taxpayer and the work force wherever possible.
  British Shipbuilders now expects bids for Appledore from at least two groups interested in continuing merchant shipbuilding at the yard. British Shipbuilders will shortly set a bid date, which I expect to be in early August. As for the other yards, our main objective is to retain merchant shipbuilding as the principal business if that can be achieved on reasonable terms acceptable to ourselves and the European Commission.
  Interest has also been expressed in Clark Kincaid and the Ferguson yard at Port Glasgow. I expect British Shipbuilders to set bid dates for those facilities in the near future. There remains considerable interest—I stress the word "considerable"—in Marine Design Consultants at Sunderland and Dundee. I expect bids for MDC will be invited a little later in the programme. In all these cases

  1393
  there will, of course, be delay between the receipt of bids and any request for consent for disposal to allow for negotiations with the parties.
  There are, as I have told the House before, a number of parties interested in acquiring all or part of the British Shipbuilders facilities at Sunderland. However, I have to say that they are taking their time in bringing serious propositions to John Lister, the chairman of British Shipbuilders, as the basis for bids. There are naturally important points that need to be discussed in advance of bids on such matters as compliance with the European Community sixth directive and the various qualities that British Shipbuilders would expect to see in an attractive bid.
  I am aware that two bidders in particular have made a great deal of their interest in acquiring the business in the press, especially the local press in the north-east. It can only be in the interest of the people of Sunderland if the people who say that they have plans for the yards now come to the table with solid propositions and evidence of financial hacking. For that reason, we have to set a definite target for bids to be received for North East Shipbuilders Ltd. in Sunderland. John Lister has agreed to set a final date soon for bids for NESL which will certainly not be later than the end of September.
  I am particularly conscious of the uncertainties facing the work force at North East Shipbuilders. I am only too aware of the concern that that is causing to the work force and its families in Sunderland, which is a particularly troubled town at the moment. The House will recall that, apart from its appalling record on losses in recent years, the immediate problem at NESL began with the difficulties that I announced on 18 April between British Shipbuilders and its Danish customer. That dispute still drags on. Meanwhile, British Shipbuilders has cancelled a considerable number of contracts with Mr. Johansen and how has a number of excellent ferries completed in the River Wear and ready to sell. It is making considerable efforts in that direction, but ships take time to sell in today's markets. Meanwhile, inevitable layoffs have already begun at the yard, as was always expected from the moment that the order began if further orders were not attracted into the yard alongside the Danish ferries.
  There is also a great deal of interest in the possible order for a series of general cargo ships from Mambisa, the Cuban deep sea shipping company. British Shipbuilders has put in an application for intervention fund support in connection with that order. After careful consideration, I have decided that I cannot offer such support to British Shipbuilders.
  As I have said before, my reasons for that are not political or ideological. They are practical and commercial. I am simply not satisfied that British Shipbuilders could build those ships to cost or could do so within the terms of the sixth directive by which we are willingly bound. I have seen no persuasive argument to the contrary, and I have seen a good deal of evidence that supports my view. For instance, the last four ships for Cuba overran their intervention fund support, which was already a considerable cost to the taxpayer, by between 12 and 17 per cent. of cost. If we look back over the history of British Shipbuilders, we see that intervention fund support over the years has cost the taxpayer £250 million. Trading losses on top of that intervention fund support
  1394
  total about £1 billion. Most of us could find more attractive ways of spending £1 billion of public money on one public service or another.
  However, I am prepared to consider intervention fund support for the Cuban and other orders from any who may successfully negotiate the purchase of a yard in Sunderland. Such a purchaser would have to accept the risk of contract losses over and above intervention fund support. Any new purchaser or manager would strive to avoid such trading losses. My Department has established that the Cuban company Mambisa has the authority to purchase these ships and to negotiate price and credit terms. One of my officials has been to Cuba to discuss that very matter.
  It remains now to be seen whether any of those interested in the yards could negotiate satisfactory terms and they certainly face fierce competition. However, Mambisa has confirmed to my official that it is prepared to allow plenty of time for negotiations to take place.
  All this confirms what I told the Select Committee on 28 June. The Cuban order is now a serious opportunity and there never was a June deadline for any contract. However, it is important—so that there is no misapprehension—for people in the north-east to understand that the order is not, and never was, a forgone conclusion. The Cuban order simply is not in the bag or readily available for anybody.
  Mambisa is pleased with the ships that it has bought in the past and is happy to order again, but only on competitive terms that are attractive to it, which is, of course, the basis on which any prospective customer would proceed. If the order was won by any British bidder, work would be unlikely to start on the Cuban ships for some months. It could not start this year. The Cuban order, even if it is won, is not, of course, big enough to provide sufficient work to occupy both yards in Sunderland and all their work force. The Cuban ships are not the only ships that prospective purchasers are talking about with British Shipbuilders and my Department.
  The situation is extremely difficult and it is important for me to play fair with the people of Sunderland. It would be quite wrong for me to disguise from the House or from the people of Sunderland the fact that there is a very large question mark over the future of the Sunderland yards. We must face up to the fact that there is no clear or certain expectation that any order for any ships can be found for those yards—under any credible ownership of the yards—at acceptable cost.
  I have said before that I am not convinced that merchant shipbuilding offers the best future for the town, if it can be sustained only by huge subsidies for occasional orders. The whole business runs the risk of continuing on a hand-to-mouth basis, which is no certain future for the work force and their families. Substantial lay-offs, if not redundancies, are inevitable over the next few months. If no satisfactory bid is forthcoming, I shall in due course announce a package of measures for the town that will be designed to create new opportunities and which will underline all the efforts already being made to secure its economic future. I very much hope that that will not prove necessary, but it is the Government's duty to the people of Sunderland to help them to attract new enterprise and jobs should the need arise.
  The order before the House tonight is essentially a technical matter, which is designed to allow British Shipbuilders to continue trading within its statutory

  1395
  trading limit. It is the occasion for a shipbuilding debate in which hon. Members who represent shipbuilding constituencies and other hon. Members who have legitimate interests in shipbuilding may give their views.
  British Shipbuilders now has its programme of disposals well in hand. There are inevitable uncertainties. Some facilities may close. However, I hope that in place of a corporation which still makes appalling losses we shall shortly see a merchant shipbuilding industry which is strengthened by these disposals and has a promising future into the 1990s and beyond. I shall make every effort to ensure that we improve the prospects for profitable industrial activity and for secure employment which will last in all the shipbuilding towns.
  10.18 pm
  Mr. Bryan Gould: I had intended to begin my short speech by saying that the Opposition welcomed the order and the fact that at least the borrowing limit is to be raised, which is a sign that the Government do not intend to pull the plug on British Shipbuilders at the moment. However, in the light of the speech that the Chancellor of the Duchy of Lancaster has just made, that welcome would be quite inappropriate. We have just heard nothing less than the sounding of the death knell of British merchant shipbuilding and, in particular, the death knell for shipbuilding on the Wear. The Chancellor's announcement that he is not prepared to provide intervention fund support in the present circumstances is nothing less than a knife in the back for the workers in Sunderland.
  This debate traditionally provides the opportunity for asking questions about the future of the British shipbuilding industry. We have had precious little information from the Chancellor tonight, except for that staggering announcement of his refusal to support the British merchant shipbuilding industry.
  We are within a week or so of the House rising for the summer recess. Events of great importance are likely to take place during that recess, and I ask the right hon. and learned Gentleman to ensure that I and the hon. Members whose constituencies are involved and who have an interest in shipbuilding are kept informed and allowed to question the Chancellor and his Department about each stage of the operation. We need to be able to continue to make the case for British merchant shipbuilding over that period, as it has certainly not been made by Conservative Members.
  I was going to express a welcome for this order, but I was not going to welcome the reasons for extending the borrowing limit. They lie in the uncertainty, delay and confusion that have arisen because of the Government's attitude to the decisions they have to take. Because the future, particularly in Sunderland, is so unclear and, in the light of the Chancellor's speech, so gloomy, costs are rising, workers are being laid off and losses are sure to mount. Because of all that, British Shipbuilders continues to need the increase in borrowing limits for which the order provides.
  The Chancellor had the opportunity this evening to provide the House and the industry with information on which the industry could base some sort of future and make better plans to reduce the inevitable haemorrhage of
  1396
  costs that will occur over the next few months. Instead, I fear that the industry will be left with no incentive except to bear the losses as they happen and to look forward to a future without hope.
  The right hon. and learned Gentleman mentioned the future for Govan. It has a future of a sort in the hands of Kvaerner, and subject to the permission of the Commission it has a future with the intervention fund subsidy that is available. But it is reasonable to ask why it was necessary to give the yard away if the subsidy approved by the intervention fund is to be continued. That is an instance of the ideology that the Chancellor denies is at work.
  We also heard some cryptic remarks about the future of Appledore Ferguson and Clark Kincaid. We were told that British Shipbuilders was setting bid dates. It should be put firmly on the record that British Shipbuilders is not taking the initiative in this respect. To the extent that John Lister and others are setting bid dates, they are doing so under the direction of the Chancellor of the Duchy of Lancaster.
  The most pressing question arises not in respect of Govan, Appledore Ferguson or Clark Kincaid but—it was clear from the Chancellor's speech—in respect of North East Shipbuilders Ltd. Layoffs are already taking place and by Christmas no more than 200 men will be left on the site. By early in the new year the yard will have no more work and will close unless orders are secured. It is essential to the future of British merchant shipbuilding that the yard's future should be secured. It is surely common ground among all who care for the future of the industry—that must include the Chancellor—that the future of the yard depends on securing orders, not on the form of ownership.
  Orders are the lifeline for NESL. The overwhelming priority for any Government, Minister or person concerned with the future of the yard must be to secure orders to keep it and the industry alive. The Government have their priorities wrong; they deny their commitment to ideology, but say that ownership must be established first, and only then can orders be examined. It is that order of priorities that threatens the survival of the industry.
  The yard desperately needs orders. An order—subject, I agree, to the factors that the Chancellor mentioned—is available. One crucial precondition to the securing of that order is that intervention fund support should be made available. The Chancellor had an opportunity tonight to make it clear that, if British Shipbuilders, NESL, could reach agreement on price and could raise the necessary financial support—I will come to that in a moment—the difficulty that might arise in the absence of intervention support might be removed, the yard would be encouraged and helped to secure the order, and only then would the Government insist, if they wished, on sorting out ownership.
  It is the Government who have reversed that order of priorities and insisted for reasons of no validity—reasons which rest entirely on their own dogma—that the order should take second place to ownership.
  It is not as though the Chancellor's arguments bear any real examination. First, the doctrine peddled by the Chancellor speak very little for his confidence in the new management that he appointed only a year or so ago. I believe that he should have come to the House tonight to express some confidence in the new management, which has recognised the problems facing British Shipbuilders,

  1397
  especially the yard in Sunderland, which has taken great steps, with the co-operation of the work force, to get matters right. The Chancellor has expressed a substantial, if not fatal, vote of no confidence in both management and work force.
  Secondly, the Chancellor bases his argument on the need to ensure—as he puts it—that contract losses, if they arise, will be borne not by the taxpayer, but by a new private owner. Even on the Chancellor's terms, that argument does not stand up. I do not believe that the case for the inevitability of contract losses has been made. If the Chancellor is simply making that assumption, it amounts to a tremendous vote of no confidence in the yard and its management.
  I shall assume for the moment that the Chancellor was right in saying that, if the Cuban order were obtained and intervention fund support provided, there would still be contract losses, but there is no escape by selling to a private owner. No private owner worth his negotiating salt would sit at the opposite end of the table and ignore that factor when deciding what price to pay or, far more likely, what sum to demand to take the yard away. The taxpayer will pick up the bill for contract losses, irrespective of whether the yard remains in public ownership. Ownership is irrelevant to contract losses; as it is irrelevant to securing the orders and to the survival of the yard. It is the Government's dogma alone that makes ownership relevant at all.
  There are real questions to be asked and answered. Unfortunately, in a remarkably uninformative speech, the Chancellor has provided little information on any of those real questions. On the Danish ferry contract, we have had no indication from the Chancellor of what the legal position was, how the negotiations were proceeding, what the Export Credits Guarantee Department's attitude was, what would happen if Johansen finally defaulted, and what that would mean for the work programme on the remaining ferries? We have no information on that, which is extremely disappointing.
  What about the Cuban order? As I have said, that is the one remaining realistic prospect for keeping the yard open. The Cuban order was denied as a possibility for months by the Chancellor. It was only when the yard and its management insisted that it was a real possibility that the Chancellor deigned to take it seriously.
  There was also a question about the application for intervention fund support. British Shipbuilders wrote expressing considerable interest in the order, referring to the price it thought that it would bid and the amount of intervention fund it would need. However, the Chancellor's Department told British Shipbuilders that help would he very unlikely. When it raised again and in public the need for intervention fund support, it was rebuffed with the excuse that no application had been made. That kind of double dealing epitomises the lack of support and interest that the Government have shown in securing the Cuban order.
  However, at least a senior civil servant has now been to Cuba and presumably has entered into serious negotiations. We hope that he has come back from Havana with some serious propositions. Again, we heard very little information about that from the Chancellor tonight.
  1398
  Will the Chancellor confirm that he believes that the Cuban order is a real possibility? Will he also confirm that British Shipbuilders—subject, I agree, to foreign competition—can bid successfully for the order? Will he further agree that with intervention fund support and a level of financial support in a package—which we, above all, must be able to organise in the City of London in the form of a package that will at least match that available from other supplying countries such as Spain—the Cuban order would be available and would save the yard? That is what we had hoped to hear this evening from the Chancellor. Instead we heard the sound of the slamming of the door.
  If the Government insist on their ideological obsessions and on selling the yard before they consider support for the order, there are still real questions which the Chancellor has not deigned to answer. How many bidders have we had? How many are serious? How many of them would keep the yard going as an entity? How many intend to split up the yard, retaining only such bits as design capacity? What are the deadlines? Is there a serious prospect of the Copson bid or order materialising? If it materialises, what are the plans to bridge the gap that would inevitably arise? All those are real and practical questions, the answers to which will determine the fate of thousands of jobs and of this vital yard and part of the British merchant shipbuilding industry.
  We have had no answers from the Chancellor to those important questions. I am left with welcoming the order. However, I suspect that the increase in borrowing powers is itself a poisoned chalice and that this is not an act of generosity, but something that will be hung around the neck of British Shipbuilder; in future as further evidence of how unsustainable it was. Time and again we hear the figures trotted out about how much public money is being devoted to the industry. The Chancellor has conceded in earlier comments that large proportions of that money have gone to warship yards that have since been privatised and to restructuring and causes other than trading losses. I hope that these further sums will not be added into that quite unfair and misleading total.
  As the Chancellor is aware, I recently visited Sunderland and the two yards on the Wear. I was impressed, as any visitor would be, by the evidence of the taxpayers' investment and by the immense facilities available to the yards. I was also impressed by the keenness and realism of the management and the tremendous efforts made by the work force, which has suffered grievously in terms of job losses in recent years. I formed a very high opinion of the efforts made in those yards to sustain a future that is so important to British industry.
  I am sorry to hear tonight that the Chancellor does not share that enthusiasm. No one discounts the difficulties involved, but I had hoped that the Chancellor would reaffirm his commitment to British merchant shipbuilding and NESL. Sadly, we did not hear that reaffirmation tonight.
  10.34 pm
  Mr. Neville Trotter: The size of the borrowings revealed to the House by my right hon. and learned Friend the Chancellor is perhaps not a shock—the seriousness of the position has been rehearsed on many occasions over a long time—but it shows that we are indeed in a crisis and cannot just accept a continuation of the previous scene. I agree with my right hon. and learned Friend that action is needed.
  My right hon. and learned Friend will understand the concern in the north-east about the fate of Sunderland Shipbuilders. He is, I know, aware that this is regarded as a regional problem not just of concern to all parties on Wearside but in the wider area.
  Enormous efforts have successfully been made to modernise the local industry and provide alternative employment prospects on Wearside. My right hon. and learned Friend cannot, however, be ignorant of the serious unemployment problem in Sunderland. We must do all we can to seek to ensure a future for the town's shipyards.
  There are signs of a changing world scene for shipping. It would not be right to say that the sun is rising and that there are rosy prospects, but ship demand is growing. There are signs that the era of cut-throat competition, which depressed prices and led to dramatic borrowing to cover British Shipbuilders' losses over many years or more, is easing. Prices are rising, and our main competitors in the far east are experiencing problems. The Japanese are suffering from the high yen. When I visited Japan earlier this year with a Select Committee, I was interested to note the difficulties that the Japanese are experiencing with all their exports because of the strength of the yen. For the first time, Korea is experiencing industrial relations problems. Demands are being acceded to for very large wage rises. These eastern competitors will not have the easy time that they had in the past.
  The shipbuilding recession is an international problem and the House has rehearsed the problems many times over the 13 years of the recession. On many occasions, I have drawn attention to the need for international action. At last, there are signs of that happening. Discussions are now under way between the Japanese and the EEC to seek to establish some stability in the shipbuilding market.
  I have referred to the concern on Wearside and in the north-east, but the reduction in capacity has a far wider knock-on effect on the engineering industry. The House is aware that I have been involved with the marine equipment industry for a long time. Twice as many jobs are involved in the manufacture of parts of ships as in assembly in the shipyards. Those jobs are nationwide, not only on Wearside.
  Inevitably, there is much uncertainty on Wearside about the future of Sunderland Shipbuilders. However much we should like him to, I understand why my right hon. and learned Friend cannot reveal details of any discussions with potential purchasers of the yard or discussions with the Cubans or other potential purchasers of ships. Will he, however, undertake that any information about potential orders from Cuba or other shipowners will be made available to a potential purchaser of the yard so that the potential purchaser will know the state of any negotiations?
  Will my right hon. and learned Friend consider the possibility of the two sites in Sunderland being converted into private ownership separately? I remind him that at
  1400
  one time they were two separate businesses before British Shipbuilders came into being. Will he give way on the end of September deadline if serious negotiations are in progress at the time? If by then there is a serious possibility of either site—or both sites—in Sunderland being transferred to a purchaser, will he undertake to extend the deadline?
  One must accept that one cannot go on building ships at 45 or 50 per cent. losses. It is a measure of the Government's support for the industry that they are prepared to continue the intervention fund at 28 per cent. A 28 per cent. subsidy on future merchant orders will be available to any purchaser of the Sunderland yard and my right hon. and learned Friend should spell out that fact. I ask him to understand the wide concern in the north-east about the future of the industry, and I hope that he can give the House some assurances on my specific points.
  10.40 pm
  Mr. Bob Clay: I endorse the remarks of my hon. Friend the Member for Dagenham (Mr. Gould) about the Minister's speech. It was even more dreary, pessimistic and disappointing than I expected it to be. Some of his remarks were positively damaging to any prospect of the privatisation of NESL on which he is so bent. Any potential purchaser who took much notice of his speech would immediately be put off.
  The Minister has created an absolutely hopeless mess for the future of NESL, because of his ideological obsession with privatisation first and, perhaps, orders later. That point can be illustrated in a pragmatic way. On many occasions, the Minister himself has acknowledged that the Cuban order is a serious possibility. He acknowledged that point tonight, despite saying that he was not prepared to give intervention fund assistance for it at the moment. That statement is to be welcomed, compared with his remarks earlier in the year that the order did not exist at all.
  Having acknowledged it as a serious possibility, the Minister must surely accept that any immediate purchaser of NESL—a purchaser on whom he is insisting—will have to clinch the Cuban order, unless there are so many orders around the world at the moment that each potential purchaser can come along with different prospects. If that is the case, the scenario is different from the one that has continually been painted in debates over the past few years, when we were told that there were no orders in the world.
  The Minister acknowledges that the Cuban order is essential. Some other things can be exciting in the longer term, but they will not happen unless the gap, or some of it, is filled by the Mambisa order in the near future.
  I do not understand how the Minister has the audacity to talk about potential purchasers taking their time. Only a few weeks ago, he announced his determination to privatise NESL. Some people—one or two—have been seriously working night and day, putting other matters aside, to try to put together a package that will save the yard. If one is trying to put together a bid, I can hardly believe that it is helpful not even to know what the bid deadline is or what is happening with the Cuban order. It is a chicken and egg situation. How does one put together a business plan for NESL when one does not know what

  1401
  is happening with the Cuban order? How does one hope to secure the Cuban order when the Cubans do not even know with what ownership they are placing the order?
  It is ridiculous for the Minister to say that people are taking their time. Some of the people who are not taking their time, other than the one or two serious potential bidders, are the growing number of sharks, charlatans and comedians who are coming on to the scene and, looking at the pickings. That is ridiculous when we are talking about 12 to 15 potential purchasers. It is so ridiculous that, I suppose, I could walk out of the Chamber and announce that I am to put in a bid for NESL, and my name would go on the list. Anyone can walk in off the street, ring up the Department of Trade and Industry, and another joker will be put on the list as a potential bidder. That is the ridiculous situation that has been created.
  Men have been laid off and will be laid off in their hundreds in the next few weeks—that affects their families—but they do not even know the names of the potential bidders—the "blue tornado" and the rest of the jokers. The men do not even know whether this measure will provide them with some future security. The Chancellor of the Duchy of Lancaster has created that situation by his insistence on privatisation before anything else can happen.
  Let us look at the outcome. From a pragmatic point of view, the position is ludicrous. There are only one or two serious prospects. As an example I shall take Mr. Zacchi and his consortium, which seems serious about wanting to secure the Mambisa order. We can also take as an example Mr. Copson and his bucket boats, which is a more long-term proposition. How does it help fitting together those different propositions and working out whether things can be built and outfitted in Pallion, Southwick or North Sands and how the facilities could fit together in a way that would maximise them when those people are, in effect, having to bid against each other and against a deadline that they do not even know?
  Apart from the Minister's blank refusal, which I suppose was not that unexpected, there was the appalling announcement that in no way will there be intervention fund aid without privatisation. The other appalling development was his announcement that the bid deadline might not be until the end of September. As he knows, there will be hundreds more redundancies by them. If the Minister allows the damaging uncertainty to continue until that time—when there are people who, if he would only clarify the position, could start talking seriously about bids in the next few days—the position becomes even more damaging than we thought.
  In conclusion, the Minister has created a mess and it is his responsibility to get out of the mess. There is a way out of it. If one puts ideology aside, the common-sense way to proceed is to say, "We have one or two potentially serious possibilities—the Cuban order, Mr. Copson and one or two others—and the job with which we should now get on is clinching the Cuban order, doing the work on Mr. Copson's proposition and talking about the one or two other potential orders. Let's leave NESL as it is at the moment to get on with that job."
  When those orders have been clinched when we know whether Mr. Copson can build his bucket boats and whether he can get a licence and overcome some of the other hurdles facing him, and when the NESL's existing management who, at the top level, from the chairman down to the managing director, are one of the best
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  managements in British Shipbuilders for a long time and who are supremely qualified to work out the practicalities of building those ships and arranging cycles and time scales to save the greatest number of jobs—when all that has been done, if the Minister must, we can then debate the privatisation of what has been achieved. That is the logical way to proceed.
  If the Minister does not do that, this debate may mark the final announcement of a malicious and unnecessary sabotage of the largest remaining part of the British merchant shipbuilding industry.
  10.48 pm
  Mr. Charles Wardle: I am grateful for the opportunity to make a brief contribution to the debate, because the decline of shipbuilding in this country has a significance which should not elude British industry as a whole and which is worth emphasising.
  I am not suggesting that there is any great significance in the motion to increase the statutory limit up to which British Shipbuilders can raise additional public dividend capital or raise commercial loans. My right hon. and learned Friend the Chancellor of the Duchy of Lancaster has explained his object in that regard and what he has told the House that British Shipbuilders requires is analagous to a private company seeking to increase its authorised but unissued share capital or to raise the borrowing powers in its memoranda and articles of association.
  What matters in any enterprise is the reason for which that additional finance is contemplated. The sound reason is to fund expansion beyond the scope of any current earnings and cash flow. The less happy reason which applies in the case of British Shipbuilders is to enable a company to accommodate the effect of cumulative losses, to cover the cost of cuts which managers euphemistically describe as "rationalisation" and to cover the cost of redundancies without breaching statutory limits.
  Not surprisingly for British Shipbuilders, this evening's order comes after a decade of huge losses. The industry has struggled with the massive problems of over-capacity throughout the world, cut-throat competition, spectacular changes in marine technology and production methods in the shipyards. As such things had an effect, it must be said that British shipbuilding labour has all too often shown itself to be poignantly ignorant of the vital need to be flexible on matters such as demarcation and of the need for greater productivity.
  Mr. Austin Mitchell: That is not true.
  Mr. Wardle: I am not saying that there has been no progress, but there has not been enough. There is no question but that our labour has priced itself way beyond the competition offered by far eastern shipbuilders.
  The sad story of Britain's shipbuilding decline from 80 per cent. of the world market to one third of the virtual captive market that existed during the rebuilding boom of the late 1940s and early 1950s and down to our present minute and paltry share of the market is a well-documented case study of industrial decline, upon which I shall not dwell.
  The last chapter of that case study was the ill-judged nationalisation that scraped through in 1977. In the past decade, that has resulted in the massive drain of £2 billion of taxpayers' money. The purpose of that support has been to preserve the jobs of a few workers and—rightly perhaps

  1403
  —to sustain the shipbuilding communities. It might have been kinder if, long ago, the attention of such communities had been turned to other products, fresh markets, new enterprise and a renewed sense of determination.
  No amount of taxpayers' money, grants or subsidies will turn the industrial clock back. It is sad that Opposition Members cannot accept that and cannot accept its significance for Britain's industry. No amount of subsidy will halt the inevitable progress of change. [Interruption.]Opposition Members may shout as much as they like, but it will not. The harsh fact of life that must be faced is that competition is here to stay. There are cheaper and more flexible sources of labour, and sophisticated technology and cheaper raw materials at the disposal of shipbuilders in Japan and—more worrying for our industry—in South Korea.
  British Shipbuilders undertakes a production task whereby two thirds of the product cost is bought in and one third is open to management and employee control. That is not a basis on which our yards can compete with the far east.
  The problems are not unique to shipbuilding; industrial change is taking place everywhere. In the early 1980s, countless firms in the black country faced a similar acute problem of over-capacity in world markets. Those companies had priced themselves out of the market as a result of wage-driven inflation.
  Mr. Gould: What?
  Mr. Wardle: The hon. Member for Dagenham (Mr. Gould) may express surprise, but I worked in that part of the world and saw examples of the good times and the bad. I saw the problems and I have witnessed the resurgence. There is a lesson to be learned by the shipbuilding industry. The sooner Opposition Members grasp the import of that lesson and encourage the shipbuilding communities to understand it, the sooner prosperity will return to those yards.
  Mr. Gould: I have borne the hon. Gentleman's outrageous lecture with equanimity for some time, but will he estimate a guess as to the importance and relevance of the 60 per cent. increase in the real exchange rate, brought about by an excessively tight monetary policy perpetrated by his Government, to the problems experienced by British industry in the period he mentioned, and especially industry in the black country?
  Mr. Wardle: It was undoubtedly a factor, along with the increase in oil prices in the 1970s. I recommend that the hon. Gentleman looks at the comments of his colleagues and the level of unemployment that they were predicting in the late 1970s before this Government came to power.
  Wherever industrial change has been accepted as a challenge, and wherever the hankering after yesterday's markets has stopped, industrial and commercial resurgence has already begun, with new technologies and new opportunities to exploit. I hope that the British shipbuilding industry will grasp that vital lesson.
  We have heard all about the resourceful and wholly commendable initiatives taken by the Government to provide subsidies for the possible Danish and Cuban orders and latterly to find suitable buyers. We have heard about Govan and Kvaerner and the initiatives taken
  1404
  towards Appledore and Ferguson, but, so far as the Wear and North-East Shipbuilders are concerned, the harsh reality of market competition must be faced. There will always be pockets of specialist shipbuilding enterprise in this country, but, on the Wear, we should not perpetuate a long-gone past, but create a new and prosperous future.
  10.55 pm
  Mr. Bruce Milian: The speech to which we have just listened has been a complete waste of time in this short debate which is taking place at a disgracefully late hour about an important industry. I shall cut my remarks short and just make one or two comments about Govan shipyard.
  The way in which Sunderland has been treated is outrageous. The Minister's speech, far from being helpful to the prospect of privatisation and the prospect of obtaining the orders that Sunderland desperately needs, has been extremely unhelpful and damaging. Sunderland has been treated in an utterly disgraceful way.
  The deal concerning Govan has gone through, subject to the European Commission's approval. Although I have expressed my views on privatisation on a number of occasions, I have to accept that the privatisation of Govan will now go ahead. It is not an unmixed blessing, even with the orders that are coming to Govan, because 500 redundancies will accompany them. So far as making the yard profitable is concerned, it helps if one obtains the yard for nothing, all the assets, plant and machinery are written down to nil in the 1986–87 British Shipbuilders' accounts and if all the losses and any prospective losses on the orders in the yards at the time are borne by British Shipbuilders and, ultimately, by the taxpayer. Kvaerner is getting an extremely favourable deal at Govan, but I wish the company well at the yard because the interests of my constituents who work there are bound up with the success of the yard.
  I want to ask about intervention fund support in the long term. It was announced in a written answer on 27 June that the two gas-carrying ships which are definitely to be ordered at Govan are to have intervention fund support and the two other possible orders will also be eligible. The sixth directive was meant to last for five years and we are only 18 months into it. The Government have already reneged on the directive, as they are not making support available to British Shipbuilders so long as the company remains publicly owned.
  I hope that the Minister will tell us about the longer-term prospects of the sixth directive, both in Govan and elsewhere. It was intended to last for five years and there has already been a considerable resiling on that by the Government. Those hon. Members who still have shipbuilding interests are entitled to ask the Minister to tell us something this evening about the longer-term future of the sixth directive and intervention fund support. I should like to say much more, but I know that hon. Friends with constituency interests are anxious to be called.
  11 pm
  Miss Emma Nicholson: The shipyard in my constituency is important to its economy. If the shipyard in Appledore were to be closed, or turned into a marina or a block of luxury flats, there is

  1405
  no way in which 520 jobs could be found for 520 very skilled people. I feel confident that privatisation will not lead to the closing of the yard.
  I am puzzled by the unpleasant tone of some of the Opposition speeches. I appreciate that my shipyard, if I may use that familiar phrase, is different. At least half the men on the shop floor welcome privatisation. There is an exceptionally good relationship between management and men. The management, the men and I have had no difficulty in discovering who will be putting forward the bids. Would-be bidders have approached me and have asked to meet me. John Lister, the chairman of British Shipbuilders, has fobbed me off over making a closer link, sooner than he wishes, between the prospective purchasers and the men on the shop floor.
  The Minister welcomed a large delegation from the yard to his office only last week. It was an immensely helpful and successful meeting. Of course he was unable to tell the men everything that they wanted to know. Commercial constraints mean, quite properly, that until bids are on the table, commercially sensitive information cannot be released. Everything cannot be put on the table during union and management negotiations when a prospective purchaser is being tempted to buy.
  The yard has a good order book and a good future. There are no worries about far eastern labour, because nobody else makes such splendid little ships—dredgers—as Appledore Ferguson. The yard has made tremendous advances in the use of modern technology, with beautiful computer-aided design. It has already led to great advantages.
  The fears and concerns that have been expressed more inelegantly than Opposition Members may realise will not be justified in the long run. Privatisation will lead to more jobs and to the expansion that the dead, cold hand of the state could never achieve.
  11.2 pm
  Mr. Chris Mullin: You will forgive me, Mr. Deputy Speaker, if I err slightly on the inelegant side, too, but I must outline the consequences of the shattering blow that this state of affairs represents for my constituents and those of my hon. Friend the Member for Sunderland, North (Mr. Clay). Sunderland was built on shipbuilding. Well within the memory of many of the people who live and work there today, Sunderland was once the largest shipbuilding town in the world. Male unemployment now stands well in excess of 20 per cent. In some areas there are whole streets where hardly anyone has a job. A generation of children is growing up who may never have any work, except that provided by a Government scheme. If the Minister and hon. Members detect just a little anger on this side of the House, I have given him the reason for it.
  I must knock on the head a couple of falsehoods that were lobbed in by the hon. Member for Bexhill and Battle (Mr. Wardle). He referred to workers pricing themselves out of jobs. The workers in the Wearside shipyards take home on average £110 a week. Their gross pay is between £145 and £160, depending on their grade. It is outrageous for the hon. Gentleman to talk in those terms. They are merely an illustration of his ignorance.
  The hon. Member spoke about the need for flexibility and claimed that there had been demarcation problems, although I was interested to note that the Minister did not
  1406
  make such an allegation. Indeed, anybody with a knowledge of the industry would avoid making such an allegation because the workers in Sunderland have been extremely flexible. As one of them put it the other day, they have seen more changes than the traffic lights in Fawcett street. They have bent over backwards to make their industry viable. There is no sacrifice that they have not been prepared to make.
  It has not been pointed out clearly enough just how much what has occurred has been in direct contradiction to the advice of the management of British Shipbuilders. Mr. Lister, the widely respected chairman, who was appointed just over a year ago by the Government, has left nobody in any doubt about his view of the situation. When he appeared before the Select Committee on Trade and Industry on 14 June, he was asked by my hon. Friend the
  "Did you think when you were appointed last year to be chairman that you were going to be presiding over the fragmentation of your corporation within the year?
  A: I would not have joined if I had thought that for a moment. I thought that my job was to turn it round and make it viable. After six months I believed I could see a way to do that, or I would never have come.
  Q: So, as an experienced businessman, you can see that, in keeping the corporation together in its present form, whether publicly owned or not, it would have a future?
  A: Yes."
  Later, Mr. Lister said in answer to a question from the hon. Member for Waveney (Mr. Porter):
  "In my view, if you took one yard out of British Shipbuilders it would not be able to exist in the form that it is … we would not be able to sustain the research and technical effort at the level that is necessary.
  Q: Have you advanced that view to the Department of Trade and Industry?
  A: Yes, I have.
  Q: With what response?
  A: I think they accepted it.
  Q: Did they indicate what they were going to do about it? A: Their response was to suggest that we would sell Govan to Kvaerner.
  Q: I do not see the logical connection between the view you have expressed and the sale of the yard.
  A: Neither do I."
  What is occurring is happening in the teeth of the interests of the work force, without regard to the social consequences and in defiance of the view of the management appointed by the Government. If there is some bitterness in Sunderland, it is due to a feeling—the Minister used the phrase "ideological hang-up" and perhaps that best describes it—that this is privatisation at all costs.
  I join my hon. Friend the Member for Sunderland, North in saying that we should do our best to obtain the Cuban order and then discuss the form of ownership. The workers in Sunderland are practical people. Unlike some Members here, they dwell firmly in the real world. They have done their best to preserve their industry and the generations of skills that have been accumulated. As I say, let us get the order and then argue about the method of ownership.
  11.8 pm
  Dr. Norman A. Godman: The hon. Member for Devon, West and Torridge (Miss Nicholson) kindly referred to the joint interest that we have in Appledore Ferguson. I understand that she is to visit the Newark yard in Port Glasgow in my constituency

  1407
  at the beginning of August. Hugh Hagen, the convener of the shop stewards' committee, informed me this evening that he is looking forward to her visit.
  Miss Emma Nicholson rose—
  Dr. Godman: I do not have time to give way. This is too serious a matter for many hundreds of families in my constituency.
  My hon. Friends and I must be brutally realistic over this matter. We must ignore the Minister's professions of ideological innocence. The Government are getting rid of what is left of British Shipbuilders. That is accepted by the shop stewards and employees at Clark Kincaid and at the Newark yard of Appledore Ferguson. It is now received wisdom. The Minister spoke of serious purchasers with sensible business plans, and I should like to speak about both facilities. Clark Kincaid is the only marine engine builder left on the Clyde. It is now building an excellent work force, entirely unlike that described by the hon. Member for Bexhill and Battle (Mr. Wardle)—a speech characterised in some respects by its insensitivity and stupidity. If our workers are paid so highly, why has Kvaerner come to Glasgow?
  Clark Kincaid is building two engines for Chinese ships which are under construction at Govan. As I have told the Minister before, the Chinese superintendent engineers are delighted with the quality of the workmanship of the first engine, which has been test-run for scores of hours. Clark Kincaid would, I believe, become a much more attractive prospect to serious purchasers if Kvaerner would give us some indication that it would purchase the engines for the liquid petroleum gas carriers from the lower Clyde. I for one do not believe that the intervention fund money should be used to purchase equipment that is to go into a ship from outwith the European Community. Statistics from the Department of Trade and Industry prove that more than 90 engines for ships built in European Community shipyards—I see that the hon. Member for Tynemouth (Mr. Trotter) agrees with me—have come from engine builders outwith the EEC. In my view, that was not and is not the purpose of the intervention fund principle.
  As I have said to Kvaerner, it could display plainly its commitment to the west of Scotland by placing orders with Clark Kincaid, which in my naturally biased view is among the best engine builders in Western Europe. When a replacement was built in the north-east for the Atlantic Conveyor, which was sunk in the Falkland conflict, the engine was built by Clark Kincaid. Cunard's technical director sent a letter saying that he had not encountered that quality of workmanship before. When the Atlantic Conveyor was extended at Scott Lithgow in my constituency, the superintendent engineer at Cunard told me, "This engine is a superb product of which the whole of Scotland can be proud."
  If Kvaerner places those engine orders with Clark Kincaid, it will make it a much more attractive prospect to a would-be buyer. I hope that considerable sympathy will be shown to the management buy-out proposals. Those involved know the lower Clyde and are trusted and respected by the committee of shop stewards, who, led by councillor Robert Jackson, are demanding—rightly, in my opinion—that they be allowed to talk to the would-be
  1408
  purchasers. Is British Shipbuilders denying that facility to these highly experienced, mature and wise shop stewards? If so, it is a disgrace. They are a credit to the members they represent, and they will negotiate sensibly and realistically with a serious would-be purchaser.
  Ferguson's—the hon. Member for Torridge and Devon, West will have to forgive me; to me it will always be Ferguson's of Port Glasgow—has been mentioned in that august journal the Greenock Telegraph, known to my Scottish colleagues and of course the hon. Member for Eastwood (Mr. Stewart). Last night's editorial stated:
  "Appledore Ferguson is our one remaining shipyard. Whatever happens, they must not be sold down the river. British Shipbuilders must make sure that they find a buyer who can give reasonable guarantees about the future of this excellent little yard."
  That is precisely what it is—an "excellent little yard". Despite what the Minister said about the recent error on the Caledonian MacBrayne ferry, that remains the fact. The error was the responsibility of the designer, as he knows. It had nothing to do with the work force, which is entirely blameless in that regard. The designers who committed the error have parted company with British Shipbuilders.
  Appledore Ferguson is a first-class little yard. The shop stewards and the convener, Hugh Hagen, should be given the facility to speak to would-be purchasers. I believe that Ailsa Perth of Troon is a serious would-be purchaser with sensible business plans. I wish to hear from the Minister that the board of British Shipbuilders will give every facility to Hughie Hagen and his colleagues to meet would-be purchasers, whether they are from Ailsa Perth or elsewhere. That is what I am seeking for my constituents who work at Clark Kincaid and Ferguson.
  As everyone here knows, when a company is acquired, the work force is acquired with it. That is a fact to which the hon. Member for Torridge and Devon, West alluded. Incidentally, I hope to visit the shipyard in her constituency at the beginning of September, with her agreement. It would be difficult to refuse to do so, given that I accepted her visit to my constituency.
  I wish to ensure that the shop stewards at Clark Kincaid and Ferguson—they are fine, decent, honourable men, whom it is a privilege to represent—are not barred from talking to would-be purchasers. After all, they will be purchased along with the material facilities in the yards. I want to see both yards continue, although it looks as if that will be under private ownership. I want the best deal possible for my constituents at Clark Kincaid and Ferguson in Port Glasgow.
  11.18 pm
  Mr. Austin Mitchell: We have had the opportunity to hear a little industrial rubbish from the hon. Member for Bexhill and Battle (Mr. Wardle), who does not speak much in the Chamber. Having listened to him, I can understand why that is. We have heard "I'm all right, Joe" from the hon. Member for Torridge and Devon, West (Miss Nicholson). The Minister gave us a homily on borrowing powers, which amounted to the ability of British Shipbuilders to borrow its own death grant.
  This is the death knell of British Shipbuilders. The Minister comes to bury it and I come to praise it. It has done a superb job in concentrating the industry, in keeping it going and ensuring that it can survive to inherit the

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  turnaround in shipbuilding that will come in the 1990s, in which we need to be an active player. Thanks to the Minister's policies, we shall not be. Having done all that, British Shipbuilders is being sabotaged by the Minister. He is normally the genial face of industrial incompetence, but tonight he was the shamed face of industrial murder. It is no wonder that he had such a miserable and unhappy expression throughout the debate, bearing in mind the news that he brought. He was telling us about industrial murder.
  A hole was knocked in British Shipbuilders by taking out the defence yards, so that they made no contribution to the whole. The idea that obsessed the Minister earlier in the year was the giveaway of Govan, which was 40 per cent. of BS's capacity. I shall not repeat my Victor Kyam joke that the giveaway is such an obsession that when it comes to Harland and Wolff, which is not part of British Shipbuilders, the Government are not bothering to check whether Mr. Tikkoo, who is presumably a Hindu, is a Protestant Hindu or a Catholic Hindu, before he is given the yard.
  We are seeing the dismantling of British Shipbuilders. The Minister has told us that what is not sold will be scrapped, closed, sunk, made redundant or ended. That was his message. It was also the message that he gave to the Select Committee on Trade and Industry. He said:
  "I rather think there won't be any yards in the ownership of British Shipbuilders in 12 months' time."
  Can there be a more incompetent way of dealing even with the dismantling of British Shipbuilders? Is not that an invitation to every shark and to every crook—to all those strange creatures which swarm in these waters—to come in and take the pickings? Is not that treating British Shipbuilders like a rummage yard to be picked over? Is not the Minister saying to anyone who wants, "Come in. There are bargains here. There are profits for the asking"? Is he not saying to anyone who might place orders with British Shipbuilders, "Hold on to your orders. You'll get better terms and a better deal. You'll even get the yard"? Is not that incompetence?
  What swindler in the City would announce that the company was to go within a year whatever happened and then, as the right hon. and learned Gentleman has done tonight, start knocking the goods and saying that they are not up to the job—that the vessels that the yards produce are not adequate for the purposes for which they are intended? What kind of industrial performance is that? What confidence does it show in British shipbuilding and in the industrial future of Britain?
  The Minister compounds his asinine attitude to the sale of a national asset with dogma, particularly on the question of NESL. He has told us that the Government will not consider giving help—the kind of help that every other Government would give their shipbuilders. The Government will not consider helping NESL to win the Cuban contract. The Cubans want those ships, which are of a good basic Austin and Pickersgill design. All other Governments will provide help and say, "We shall build up a package and help with the financing." The Chancellor of the Duchy, on the other hand, has told us that the Government will not do that unless the yard is sold first, they will not do it if the yard remains publicly owned.
  Effectively, that is the death knell of the shipyard. The lay-offs have already begun: by the end of August there will he about 370 lay-offs; by September, 600 to 700 lay-offs; by Christmas, there will be only a couple of
  1410
  hundred people left, and by February next year the yard will run out of work. The Minister has said that that yard must now twist in the wind while the agony of finding a buyer who can take on the Cuban contract continues. He should have been saying, "We will provide the help to get that contract for British Shipbuilders to keep the yard going and to keep the jobs in being." All that he has promised tonight is a little industrial mortician operation when the yard is closed. I am surprised that he did not promise the area a garden festival, as garden festivals have been passed round British industrial areas like wreaths under this Government.
  It is a bitterly frustrating job being in Opposition and having to watch such industrial incompetence and sabotage going on. We are having to watch mistakes being made and the Government ruining a great British industry. We cannot stop it happening. The Government have the votes. We cannot argue against it, because sheer prejudice from the top—from No. 10 Downing street—is forcing this treatment on a British industry. What we can do is to pin the blame for the sabotage of the industry right where it belongs—on the Government, on the Minister and on his Department—the Department of Trade and Industry reduction and industrial sabotage. They are responsible for sounding the death knell for North East Shipbuilders Ltd. and for British Shipbuilders.
  11.23 pm
  Mr. Kenneth Clarke: The hon. Member for Great Grimsby (Mr. Mitchell) has a racy turn of phrase which usually enlivens our debates, but I think that his flair for light entertainment is a little ill-placed in this extremely serious and important debate about the future of British shipbuilding. The hon. Gentleman added to the attacks on my hon. Friend the Member for Bexhill and Battle (Mr. Wardle), the one hon. Member to whom I do not need to reply.
  Mr. Austin Mitchell: The Minister agrees with him.
  Mr. Clarke: I agree with 90 per cent. of what my hon. Friend said. Unlike the hon. Member for Great Grimsby, unlike me, and unlike any other hon. Member who has spoken in the debate, my hon. Friend the Member for Bexhill and Battle has considerable experience of running a business in difficult trading conditions—and successfully. He spoke a great deal of business common sense in the face of a lot of completely hopeless wishful thinking and irresponsible financial suggestions from the Opposition.
  Unfortunately, it is important that we make things clear to the people who are so worried in the shipbuilding towns. Several times I was accused of not being sufficiently informative. I was only too informative. I was probably looking serious and grave because I was setting the facts before the House, as everyone should know them. As my hon. Friends the Members for Tynemouth (Mr. Trotter) and for Torridge and Devon, West (Miss Nicholson) acknowledged, I had to hold back commercially confidential information. I will not give details of people who might be customers or purchasers and who do not want details about them to be disclosed. That would sabotage the outcome that hon. Members have said they want. I put forward the position as clearly and fairly as I could to the House. The only sensible way of proceeding is that which I set out.

  1411
  I begin with the one yard that has a secure future—Govan—as a result of the policy that we have followed. The Opposition attacked the arrangements for Govan, on the absurd basis that we have somehow given away that asset to a Norwegian company. Of course, we have had to cover the cost of the losses on finishing the Chinese orders. Of course, we had to cover the cost of redundancies which were not the responsibility of Kvaerner, and we have made arrangements that I believe satisfy the Commission rules. They are prudent; they do not write off debt; they are fair arrangements that give that company a future. We have also complied with the sixth directive, to which I shall return.
  The right hon. Member for Glasgow, Govan (Mr. Millan) made it sound as though the sixth directive forces Governments to give up to a certain level of aid. That is wrong: it does not. Other European countries do not give aid, but there is a limit if they do. We readily accept that to ensure fair trading within the sixth directive, with which we have complied.
  For the future, we have made it clear to Kvaerner that, within the rules that appertain at the time, intervention fund support would be available for orders by Kvaerner. If the four ships are ordered, Govan has a work load well into the 1990s. The alternative was closure. Our policy has been successful in Govan, so it was absurd to attack what has happened there—
  Mr. Millan rose—
  Mr. Clarke: I shall not give way to the right hon. Gentleman, as he is the least troubled Member in the Chamber, since Govan is safe into the 1990s, subject only to the approval of the European Commission, which I hope we shall get tomorrow.
  Opposition Members will not face up to the background of what has happened to the other yards. I explained that background and set out the purpose of the policy. Opposition Members keep accusing me of being obsessed with privatisation, but this policy is not, in its origins, about privatising the yard. It is the Opposition who are obsessed with privatisation. Because an element of people bidding for particular yards has entered the scene, they are so obsessed by their preference for retaining what has proved to be an especially disastrous nationalisation of the yards that they insist on turning all their speeches around privatisation and saying that that is the root of the problem. It is not.
  The hon. Member for Dagenham (Mr. Gould) said that the reason for the cuts and lay-offs in the work force is the Government's activities. It is not: it is because there are no orders. The Danish work in Sunderland is now running down. Lay-offs were bound to come at this time. It is because there is nothing to build that lay-offs are taking place. If a Cuban order, an order for a bucket ship or any other order were obtained now, work could not begin until next year. Lay-offs are inevitable and it is misleading people to suggest that the present situation arose because of the Government and could have been avoided.
  We did not start with the problem of ownership. We began by looking at British Shipbuilders' application for the intervention fund support for the Cuban order. That is the background to the order tonight. This is the fourth
  1412
  time in two years that we have had to come to the House for more money. Last year it was £20,000 per employee; it is £24,000 per employee this time—and we shall all approve that in a few minutes' time. The history has been one of making losses over and above intervention fund support on every order.
  But the hon. Member for Dagenham, supported by his Friends, says, "Never mind. Let's just get the Cuban order"—the implication being, "at any price." The business is highly competitive: the Cubans are not bound to order with us. But the Opposition say that we should carry the cost overruns at the taxpayers' expense and then sort out ownership. That cannot be done. Such an approach would not only be in breach of the sixth directive and disallowed by the Commission, but would be disallowed quite sensibly, because it is utterly irresponsible trading of the sort that the Opposition indulged in with the Polish ship order when they were last in government.
  The Opposition cannot claim that they envisage a serious future for the corporation. They simply say, "Let us get the order at any cost. Let us carry on as we are now." The Government examined the matter and have said, quite sensibly, that there can be no future in going along that path.
  Mr. Gould: The Chancellor can resolve the dispute by giving a simple answer to this question: will he provide intervention fund support for the Cuban order, irrespective of ownership?
  Mr. Clarke: We shall not give intervention fund support to British Shipbuilders, because its history is that it cannot comply with the sixth directive and it cannot stop making cost overruns on top.
  The Cuban order has only become serious during the past few weeks, because Mambisa has only just received authority to place the order. We shall allow the Cubans to negotiate with any serious bidders and they will be notified of any bidders that we recommend. We shall give any serious bidders information about the order.
  In answer to my hon. Friend the Member for Tynemouth (Mr. Trotter), we shall look at separate purchasers for the separate yards, if they come up. Mr. Copson—who needs a licence for his bucket ships—must apply for the licence. Mr. Zacchi, who has gone public, must put propositions to us. There are other purchasers who want to build other ships, but they have not gone public. We are negotiating with them. If other people think that they can buy these yards and take orders at intervention fund support levels within the sixth directive, the Government will consider them.
  We shall also look at Appledore——
  It being one and half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted Business).
  Question agreed to.
  Resolved,
  That the draft British Shipbuilders Borrowing Powers (Increase of Limit) Order 1988, which was laid before this House on 13 May, be approved.

  SET-ASIDE REGULATIONS
  Resolved,
  That the draft Set-Aside Regulations 1988, which were laid before this House on 1st July 1988, be approved.—[Mr. Kenneth Carlisle.]

  Church of England (Pensions)
  11.33 pm
  Mr. Michael Alison (Second Church Estates Commissioner, Representing Church Commissioners): I beg to move,
  That the Church of England (Pensions) Measure, passed by the General Synod of the Church of England, be presented to Her Majesty for her Royal Assent in the form in which the said Measure was laid before Parliament.
  This Measure is the latest in a series of Measures designed to modernise and improve the pension provisions of those who minister in the Church of England. I shall give a few details of the pensions payable. On completion of 37 years' service, a full pension of £5,330 is available to Church of England incumbents and, as a result of clause I, the clergy scheme is extended to include deaconesses and licensed lay workers on exactly the same terms. The sum payable is reviewed annually and increased each April by at least the same proportion as the previous year's increase in the national minimum stipend for incumbents.
  In addition, a capital sum of £12,900 tax-free is payable on retirement, which can clearly greatly help with the acquisition of a retirement home for members of the scheme. Further financial assistance in the form of loans at low interest rates is also available—repaid, if so desired, from the estate of the beneficiary on death. For those who do not want to purchase their own homes, the pensions board has purpose-built or other residential homes.
  Widows of members of the Church of England pension scheme, which is now a non-contributory scheme, and covers the clergy and auxiliary ministry alike, are entitled to a survivorship pension equal to 60 per cent. of the pensions that their husbands would have received. In addition, every diocese has a group team assurance scheme under which widows receive a lump sum equal to three times the previous year's national minimum stipend.
  Any child under 18 years of age at the time of a scheme member's death also receives a pension, as of right, until he or she reaches the age of 18. The sum is usually one sixth of the late father's pension entitlement. The pensions board can, in addition, give discretionary help to retired ministers or scheme members, their widows or widowers.
  These broad provisions are, I believe, generous and highly commendable. They place the Church of England pension provisions, if not at the very top of private schemes, well into the upper quartile of such schemes. The payment of pensions now costs the Church Commissioners £39 million a year, taking the cost this year, for the first time, above the cost of stipends for working clergy. During the past five years, the commission contribution has increased no less than 73 per cent., which is way above the rate of inflation and indicate substantial real improvements for clergy pensioners.
  There is, however, one area of provision about which the ecclesiastical committee has expressed regret in its report to the House, as hon. Members who have read it will note. It relates to the provision of pensions for a first spouse when a scheme member was divorced or has remarried. The General Synod took the view that, because the statutory or obligatory provision of pensions for first wives is the subject of an investigation by the Lord Chancellor's Department, it would be premature for the General Synod to go it alone, as it were, before the wider civil provision comes before the House.
  1414
  Some members of the ecclesiastical committee took the view that the Church of England should have been a bit bolder and set the trend rather than wait to follow it. The fact that, for better of for worse, it decided not to go it alone, although perhaps regrettable, should not be allowed to detract from the broad general qualities of the Church of England's pension arrangements that I have described, nor suffice to deem the Measure other than expedient.
  The matter was explored thoroughly in the oral evidence taken by the ecclesiastical committee, and in response to vigorous probings by, among others, the hon. Member for Birkenhead (Mr. Field), the chairman of the Pensions Board, Mr. Howard Gracey, made it plain that on an ex gratia, although not non-statutory, basis, the board makes provision by way of housing and of finance for divorced wives.
  It would, I think, be tedious to take the House through every clause in the Measure., particularly as it has, in the ecclesiastical committee's report, substantial explanatory notes on each clause. By providing for a unified, non-contributory scheme for incumbents and auxiliaries alike, the process of steady improvement in provision has not been neglected, as evidenced in clause 3, with the provision, for the first time, of pensions for widowers, in clause 5 of lump sums payments on death—in addition to those payable on retirement—and provision for early retirement otherwise than on grounds of ill health, which is already provided for. These are all good grounds in themselves for commending the Measure to the House.
  11.38 pm
  Mr. Frank Field: The right hon. Member for Selby (Mr. Alison) was kind enough to refer to the debate in the ecclesiastical committee, when several of us raised the status of divorced clergy wives. He correctly reported the committee's decision and its regret that the pensions board would not act imaginatively. The Church's behaviour on that is, to put it mildly, rather pathetic. Many of us look to it to take the lead, not to follow the secular state.
  The right hon. Gentleman rightly drew attention to the commissioners' impressive record of building up pension entitlements for the clergy and other Church workers. The Measure has been a long time coming—so long that some people thought that it would have gone through by now, and have made retirement plans on the basis of it being on the statute book. I shall not take up further time and prevent its enactment.
  11.39 pm
  Mr. Simon Hughes: I will be even more brief than the hon. Member for Birkenhead (Mr. Field). The Measure is welcome. I confirm that it is the general view that the provisions of pensions by the Church is generous, good and fair. The Measure helps in that. I also want to flag up a linked issue to which the right hon. Member for Selby (Mr. Alison) referred once in passing. This relates to the other side of the coin. The other matter that concerns the clergy and their families and for which they plan during their working lives is where they will live after retirement.
  Another matter that is not quite as certain or secure sometimes is adequacy of accommodation for clergy in their retirement. I hope that the Church will complement its good work in this Measure by ensuring that all those

  1415
  who give their lives to the ordained ministry can be assured, for their entire retirement, of adequate and suitable housing of a type and in a place that they wish. That is equally important, and where it has not been met and achieved, it lacks the provision that pensions now have by virtue of this consolidating and expanded measure.
  Question put and agreed to.
  Resolved,
  That the Church of England (Pensions) Measure, passed by the General Synod of the Church of England, be presented to Her Majesty for her Royal Assent in the form in which the said Measure was laid before Parliament.

  Prisoners of War (Compensation)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
  10.40 pm
  Sir Bernard Braine: I begin by drawing the attention of my hon. and learned Friend the Minister of State, Foreign and Commonwealth Office to all-party early-day motion 119 in the name of my hon. Friend the Member for Dorset, South (Mr. Bruce) which has now attracted 176 signatures and which will, I promise, attract a great deal more. The motion summarises succinctly what I am about to say. It states:
  "That this House, in welcoming the growing friendship between Japan and the United Kingdom, believes that this friendship will not fully blossom until the wrongs done during the Second World War to Allied prisoners are fully accepted by the Japanese Government and due reparation made."
  In 1941, at a moment of great peril for our country, locked as we were in deadly conflict with Nazi Germany, the Japanese struck suddenly and without warning at the Americans, the Dutch and overselves in the Pacific. By the time Singapore had fallen, over 50,000 British service men and women and civilians, 20,000 Australians and 1,700 Canadians who had defended Hong Kong with great gallantry had fallen into enemy hands. Such was the appalling treatment of these helpless prisoners that over a quarter of them were either to be slaughtered in cold blood or to die of disease, malnutrition and unbelievable brutality by the time the Japanese surrendered.
  I was a member of the personal staff of the Supreme Allied Commander in South-East Asia, Admiral Lord Mountbatten. I was in Asia in 1945 when the Japanese surrendered. I was moved to tears by the first sight of the pitiful survivors who came out from the hell of Japanese captivity. Many of them, still in their 20s, were to die prematurely, many more were disabled and crippled for life.
  It is difficult at this distance of time to describe what they had endured. Field Marshal Slim, one of our greatest soliders, has put on record what the victorious British 14th Army found as it over ran the prison camps. He wrote:
  "The state of these camps and of their wretched inmates can only be realised by those who saw them as they were at this time. Except for derelict huts and bashas, the camps were little more than barbed wire enclosures in which wild beasts might have been herded together. The Japanese and Korean gaolers, almost without exception, were at the best callously indifferent to suffering, or at the worst, bestially sadistic. The food was of a quality and a quantity barely enough to keep men alive, let alone fit them for the hard labour that most were driven to perform. It was horrifying to see them moving slowly about these sordid camps, all emaciated, many walking skeletons, numbers covered with suppurating sores, and most naked but for the ragged shorts they had worn for years or loin cloths of sacking. The most heart-moving of all were those who lay on wretched pallets, their strength ebbing faster than relief could be brought to them."
  He concluded:
  "There can be no excuse for a nation which as a matter of policy treats its prisoners of war in this way, and no honour for any army, however brave, which willingly makes itself the instrument of such inhumanity to the helpless".
  I will mention just one case—I could mention a thousand—recounted to me by a former prisoner who suffered greatly. He refers to what happened to one of his comrades in Sonkrai camp on the notorious Siam-Burma railway. He said:
  "He was chained to the teak tree at the entrance of the camp and we had to pass him every dawn when going out to

  1417
  work and at night when returning to Camp. We could do nothing to assist him or even get near him. He was left to die—in his own filth—exposed to the heat of the day and the cold at night. Tropical exposure is a nightmare. He grew weaker; no food or water was given to him and as death approached he lapsed into hallucinations and delirium. At nights, you could have heard a pin drop as we listened to his cries. It was sheer agony. In the end he died; a shocking and unnecessary death. The Japanese guards danced round his body shouting with glee. They enjoyed every moment of it."
  I was already a Member of Parliament when, in May 1951, hon. Members pressed the Government of the day to ensure that when the peace treaty was to be signed later that year there should be compensation for the appalling sufferings our men had endured. I recall vividly the powerful arguments of Jackie Smyth, VC, who had fought in Burma, the eloquence of George Thomas, who was later to become our Speaker and is now Lord Tonypandy, and the moving personal testimony of the late Lawrence Turner, the hon. Member for Oxford, who had been a prisoner and whose health never recovered from the experience.
  It was not to much avail, for under the provisions of the treaty our service men were awarded the princely sum of £76·50, while civilians received £48·50. The excuse for accepting such derisory sums was that the Japanese economy was in ruins.
  All that was 37 years ago. It may be asked, why revive the argument now? There are two reasons. First, we should demonstrate that violations of international law, as Japanese behaviour certainly was, are never to be tolerated by civilised nations and that, where there has been a denial of basic human rights, adequate reparation must be made.
  Secondly, since the 1950s the wheel of fortune has turned favourably for Japan. Today, she is a stable democracy and the second richest nation on earth. She plays a responsible role in the management of the world economy and is ready to help in the eradication of world poverty. All that is greatly to the credit of the Japanese people and their Government, but, if the slate is to be wiped clean and Japan is to take her place in the comity of civilised nations—if she is to enjoy the respect of the international community and to be honoured for her virtues and achievements—there has to be contrition for past crimes and proper compensation for the victims still living and the families of those whose lives were destroyed. That is the view of many hon. Members. It is certainly the view of survivors of Japanese prison camps and for them we should realise that the years are fast slipping away.
  A lead has been taken by the Hong Kong Veterans of Canada, who have lodged a claim for compensation with the United Nations Human Rights Commission. They are supported by the International Commission of Jurists, Amnesty International, the International Committee of the Red Cross, the World Veterans Federation and the International Commission of Health Professionals, all of whom have status as non-governmental organisations to engage in such an undertaking.
  The Canadian initiative has been systematic. Their approach to the United Nations Human Rights Commission is based on resolution 1503 of the United Nations Economic and Social Council of 1970. Their case is founded on an impressive in-depth study of the medical sequelae of what happened to the victims of Japanese cruelty. It presents a declaration of principle for consideration by the United Nations of compensation for gross violations of human rights. I understand that
  1418
  Australian veterans may be taking parallel action. There is to be a preliminary hearing at the United Nations in New York next month.
  I am advised that, although Japan did not sign the Geneva conventions, that has been held by experts in international law to be of no consequence, since the Japanese Government of the day were aware that such a code existed and that the conventions had been accepted as the customary law of nations.
  I hope, therefore, that I shall not be told by my hon. and learned Friend, as my colleagues have been told by other Ministers, that article 14(b) of the peace treaty specifically waived all claims that were not expressly provided for in the treaty itself, and that, in 1954, it was agreed that payment of a global sum of $4·8 million would be regarded as a full discharge by the Japanese Government of their obligations under article 16 of the treaty. No Government had and no Government have any right to sign away an obligation by another state to compensate for gross violations of the human rights of individuals and for the death and injury that occur in future years as a result of the sufferings that the Japanese inflicted on their helpless captives.
  The relevant conventions expressly forbid such action by Governments. The regulations annexed to the 1907 Hague convention concerning
  "the laws and customs of war on land"
  provide that
  "a belligerent party which violates the provisions … shall, if the case demands, be liable to pay compensation. It shall be responsible for all acts committed by persons forming part of its Armed Forces."
  Article 130 of the third Geneva convention of 1949 refers specifically to grave breaches of human rights, such as
  "wilful killing, torture or inhuman treatment including biological experiments, wilfully causing great suffering or serious injury to body or health."
  They were hourly and daily occurrences in Japanese prisoner-of-war camps. Article 131 significantly goes on Ito state that
  "no High Contracting Party shall be allowed to absolve itself or any other High Contracting Party of any liability incurred by itself or by another High Contracting Party in respect of … breaches."
  I am advised that the International Committee of the Red Cross supports the legal; argument of the Canadian veterans that the peace treaty that the allied powers entered into with Japan does not remove Japanese legal and financial obligations to the victims of violations of the Geneva conventions. The conventions clearly provide that Japan shall not be absolved from compensation liability in respect of breaches committed by its armies during world war 2.
  The Geneva conventions literally follow the Hague convention of 1907 and do not abrogate it in any way. Therefore, they are part of the customary law of all nations. A further consideration strengthens the Canadian claim and thereby strengthens any British or Australian claim. One of the non-governmental organisations supporting the veterans is the World Veterans Federation. My hon. Friend should note that, at the fifth international conference on legislation concerning veterans and war victims held at Bad Ischl on 21 to 24 April this year, it was agreed that there should be compensation for victims of acts contrary to international humanitarian law because of the post-traumatic stress disorders of such acts. A

  1419
  recommendation was made that the World Veterans Federation should initiate and support steps towards that end.
  In short, the Japanese should not be allowed to escape the consequences of the damage that they inflicted on helpless prisoners for the rest of their natural lives.
  It may be that the Japanese will answer that the peace treaty was the end of the matter—that is what Ministers have been saying. I suppose that if the United Nations ever ruled otherwise, it could not compel Japan to make reparation. If that proves to be the case, I am bound to say here and now that it will confirm the views held by many people in this country and elsewhere in the West that Japan can never be regarded as a civilised nation.
  I pray that it turns out otherwise. Opinion in Japan is sensitive to the issue. There has been a stirring of conscience as a result of the revelations of earlier appalling atrocities committed by the Imperial Japanese Army in China before the second world war. The Canadian reference to the UN should help to encourage this process of inward questioning and with this the Japanese Camp Survivors Association in this country heartily concurs.
  The Canadian Government are not involved in the claim being made by its veterans and I am not asking that Her Majesty's Government should be involved in any claim that might be made by British veterans. All I ask is that the Ministers here should stop saying that the rights of individual victims were signed away in 1951. It is shameful that such an argument should have ever been used. I have demonstrated that it is unsound in international law. Moreover, the action of the Canadian veterans shows that there is indeed a case to answer.
  If our Government cannot help directly, I want an assurance that they will not impede action by the Japanese Camp Survivors Association or any other British veterans. Better still, they should show readiness to provide positive help and information as the Minister for veterans' affairs in the Canadian Government has done in respect of the Canadian veterans.
  Therefore I shall listen with the greatest care to what my hon. and learned Friend says in reply but I would, with great respect, remind him that he will be speaking here in a free Parliament, as all his predecessors have done since the end of world war 2, because the men and women of my generation stood and fought cruel and repellent enemies who, if they had prevailed, would have blotted out our freedom. There is therefore an obligation on the part of any British Government to those who died and to those who suffered in enemy hands. It may be very late in the day but I submit that there is still time for the new democratic Japan to make amends if it will. Our Government should encourage her to do so.
  11.58 pm
  Mr. Gerald Howarth: I am most grateful to my right hon. Friend the Member for Castle Point (Sir B. Braine) for permitting me to participate in his Adjournment debate. He has a distinguished record, not only in this House but previously, to our country during time of war when he served, as I am delighted to record as a Staffordshire Man, with the North Staffordshire Regiment. I am only sorry that it was not with the South Staffs. There is another bond
  1420
  between us apart from our joint membership of this House, because my father served on Mountbatten's staff of the South-East Asia command during the second world war as a Royal Air Force liaison officer.
  I join my right hon. Friend in this debate because I had occasion to have at my surgery one survivor of the Japanese prisoner-of-war camps, Mr. Robert Kelly, now aged 72 years, who worked on the infamous bridge over the River Kwai. For somebody of my post-war generation, like my hon. and learned Friend the Minister of State, to see before me a man who had worked in that infamous and intolerable labour camp in those appalling conditions brought home to me, as I hope that it will to my hon. and learned Friend, the fact that our generation owes a great deal to that generation and the sacrifices that it made.
  In adding to the contribution which my right hon. Friend has made so eloquently, I shall add only two points. First, those men are a diminishing band. They are now in their twilight years and many are in straitened circumstances. It must be borne in mind that not only the physical but the mental anguish that they suffered at those barbarous hands all those years ago will have unquestionably debilitated them and impaired their earning capacity during their lifetime. They therefore find themselves more readily in straitened circumstances than their fellow citizens who served in the war but who did not go through those horrors.
  My right hon. Friend has already said that, in 1954, when the agreement was signed, Japan was on its knees, it was trying to recover and rejoin the comity of nations. Today Japan is probably the most economically powerful nation on earth. I do not believe that it is immoral or improper for hon. Members to campaign on behalf of their constituents and to suggest to Japan that, in view of its enormous success—which it has been able to enjoy as a result of joining the free world and the free trade of that world—it should feel able to make some further recompense.
  I do not believe that £76·50 paid in 1954 should represent the full and final settlement. I hope that my hon. and learned Friend will be able to assure my right hon. Friend, myself and our 200 colleagues on both sides of the House who have signed the early-day motion tabled by my hon. Friend the Member for Dorset, South (Mr. Bruce), that Her Majesty's Government will not be found wanting by our constituents.
  12 midnight
  The Minister of State, Foreign and Commonwealth Office (Mr. David Mellor): I am glad to have this opportunity to answer a debate that has been instigated by my right hon. Friend the Member for Castle Point (Sir B. Braine), the Father of our House. His largesse of spirit has been shown so often in such debates—not least by what he has said tonight. It is a pleasure for me to answer any debates in which he participates having regard to the great kindness that he has shown me, and the support that he has given me over the years. It therefore saddens me that, although agreeing with many of the points that he raised, I shall be unable to give him much more satisfaction than some of my predecessors have done.
  My hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) is right to say that those of us of the post-war generation who today live in freedom owe an enormous debt of gratitude to those who served in the

  1421
  war. We owe a particular debt to those who suffered as dreadfully as those whom my right hon. Friend starkly described, those who suffered at the hands of the Japanese. My father spent most of the war fighting in the far east, but, happily, he was never taken prisoner. He has told me of things that, once experienced, he has never forgotten; he remembers them as vividly as my right hon. Friend.
  There is no dissent about the facts. We also know that the suffering was shared by thousands of Americans, Australians, Canadians, New Zealanders and other allies and by many thousands of civilians who were also treated appallingly. Although it is more than 40 years since those events, some wounds do not heal. If we had suffered in the same way, would the bitterness and anger ever disappear? I doubt it. Therefore, I am not surprised at the response that my right hon. Friend has had from a number of veterans to the case that he has raised.
  I also understand the feeling at the heart of this matter—the feelings of those who, having suffered at the hands of the Japanese, now see a rich and successful Japan. They must believe that they surely deserve some further compensation.
  My right hon. Friend, drawing on his 40 years of experience, was able to recall vividly the debate in the House in May 1951, when I was two years of age. At that time, it was a live issue and a great deal was said. Arguments were put forcefully and passed into the minds of the British negotiators. Behind the debate in the House lay many hours of discussion with the Far East Prisoners of War Association, which made a valuable contribution to the debate.
  The negotiations proceeded on a bipartisan basis, the treaty of peace with Japan was signed by a Labour Government and ratified by their Conservative successors. The British delegation led the way in insisting that there should be a specific provision for compensation for former prisoners of war. That was not in the original treaty, and it is an unusual provision in a peace treaty, which reflects the uniquely dreadful treatment suffered by our service men in the far east.
  As we know, the result was the peace treaty signed in San Francisco on 8 September 1951, which formally brought to an end the state of war between the United Kingdom and Japan. The treaty contained a number of articles, of which two are particularly germane. Article 14 concerned the general question of compensation and recognised that reparation should be made. It gave the allied powers the right to seize and dispose of Japanese property, which, alas, although my right hon. Friend the Member for Castle Point castigates the point, I fear cannot be readily evaded. Article 14(b) concludes with these words:
  "Except as otherwise provided in the present Treaty the Allied Powers waive all reparations claims of the Allied Powers, other claims of the Allied Powers and their nationals arising out of any actions taken by Japan and its nationals in the course of the prosecution of the war … ".
  Article 16 makes specific provision for the compensation of prisoners. That is what we might call the British article, upon which we insisted. Under that article, the sum of £4·5 million was paid and there was an agreed minute between the Japanese and the allied powers recording that payment and stating that the payment would be recognised
  "as a full discharge by the Japanese Government of its obligations under Article 16 of the Peace Treaty".
  1422
  Out of that, we in the United Kingdom received just over £1·6 million. That was made available to the former far east prisoners of war. The sum that has been described was the sum that was paid. Although the sum of £76 was worth a good deal more in 1952 than it is today, I well understand and appreciate that it was extremely small sum.
  Sir Bernard Braine: Will my hon. and learned Friend give way?
  Mr. Mellor: My right hon. Friend puts me in difficulties. I wanted to make the case. I do not want to be discourteous to him, but would he allow me to finish?
  Sir Bernard Braine: I want to ask my hon. and learned Friend just one question in the limited time available. Does he agree, as a lawyer, that the treaty does not absolve Japan from the conventions? That is the charge that has been put to the United Nations. This is a new situation.
  Mr. Mellor: We believe that the treaty that was signed is binding on us and was a full and final settlement. Whether it is right or wrong, that is the position today and we do not see any way round it. I can assure my right hon. Friend that it is not wilfulness on our part; that is just the best objective interpretation that we can give. Every Government have had to defend that position and give such an interpretation over the past 40 years, and I fear that I have no authority to diverge from that.
  We can only rest on the fact that it is the function of peace treaties to put an end to claims. If that were not so, we would still be concerned about disputes throughout the centuries. No compensation would be adequate to meet the sufferings of the people concerned. I understand that this compensation will seem to many people peculiarly inadequate, but we can find no legal basis for going back to the Japanese Government and asking for more. It has been the opinion of successive Governments, and it remains the opinion of this Government, based as best we can on an objective assessment of the documents, that Ito seek to go back on the undertakings to which we put our signature would not be an act of good faith and could not be justified.
  My right hon. Friend has raised the Canadian initiative. I am grateful to him for giving me advance notice, with his typical courtesy, of all his points, which I hope will allow me to deal with them. If I run out of time, I shall write to him, because I want him to have a proper explanation.
  We do not think that it would be proper for the Government to press the claim. That was one of the considerations that the Canadian Government have had I o bear in mind. I understand that it is an independent association called War Amputations of Canada which have submitted the claim to the United Nations Human Rights Commission on behalf of the Hong Kong Veterans Association. I was interested o hear my right hon. Friend say that his claim has the support of the International Committee of the Red Cross, the International Commission of Health, Professionals and other nongovernmental organisations that have consultative status at the United Nations Commission on Human Rights. I understand that a delegation of former prisoners of war went to the 44th Commission on Human Rights in February, but I am not aware that any non-governmental organisation with consultative status raised the delegation's concern in that forum.

  1423
  My right hon. Friend also mentioned that this claim was submitted under the procedures based on resolution 1503. I have every sympathy for the claimants—I cannot stress that enough—but I am afraid that the chances of success under this procedure cannot, in my judgment, be high. One of the criteria applied under that resolution when judging whether claims are admissible is that the allegation of the violation of human rights must be
  1424
  submitted within a reasonable period, and the 40 years that have elapsed may be held to be not within that proviso.
  A second difficulty is that the question may be outside the mandate of the United Nations, since that body was not in existence at the time when the violations took place. All I—
  The motion having been made after half-past Ten o'clock on Thursday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at ten minutes past Twelve o'clock.

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Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Worcester.): The LORD CHANCELLOR on the Woolsack.
Viscount Goschen Viscount Goschen—Sat first in Parliament after the death of his father.

Motorway Crash Barriers
Lord Campbell Lord Campbell of Croy asked Her Majesty's Government:
Whether they are satisfied that crash barriers between carriageways on motorways are strong and resilient enough to reduce the lethal effects of accidents.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, current safety fences are designed to contain a 1.5 tonne vehicle travelling at 70 mph impacting at an angle of 20 degrees; and to redirect it so as to minimise injury to the occupants and the hazard to other road users. The Government are satisfied that current safety fences perform as well as, and often better than this.
The Government are assessing the case for stronger and more resilient fencing. Whatever their standards, safety fences are not a substitute for safe driving.
Lord Campbell of Croy: My Lords, I thank my noble friend for that Answer with which I fully agree. I particularly agree with the fact that the barriers must be firm but not too strong so as not to have any "give" in them. Do the Government think it disquieting that in some recent motorway accidents vehicles which were not unusually large or heavy have crossed the central reservation and hit oncoming traffic?
Lord Brabazon of Tara: My Lords, fences are struck thousands of times each year. On average over three years, 700 injury accidents are reported each year on motorways in England where the vehicle has hit the safety fence. Of that number only 40 have gone through or over the fence and over half of them involved heavy goods vehicles. In answer to my noble friend's last point, I agree that there is a balance to be struck. If a fence is not resilient the damage done to a vehicle hitting it is likely to be disastrous.
Lord John-Mackie: My Lords, is the Minister aware that the fences are too low; they are below the centre of gravity of most vehicles? As the vehicles hit them they will topple over into the next carriageway. Therefore the fences should be higher. The strength is not important but the height is.
Lord Brabazon of Tara: My Lords, out of the many accidents that happened last year only 40 vehicles
1480
went through or over the barrier, so I do not believe that is necessarily the case. In fact, I am sure that it is not.
Lord Mowbray and Stourton: My Lords, can my noble friend say by what date the Government estimate that all M-roads will have a substantial central barrier?
Lord Brabazon of Tara: My Lords, already 99 per cent. of motorways have a central barrier. Those which do not are where the two carriageways are sufficiently far apart. It is better not to have a central barrier if the carriageways are far enough apart because vehicles can run off rather than go into the opposite carriageway.
Lord Underhill: My Lords, while appreciating the Minister's Answer, can he say on what kind of survey it was based? In the light of the other facts that he has given, is it proposed to ask the TRRL to carry out a survey on the question of motorway barriers?
Lord Brabazon of Tara: My Lords, that is the assessment to which I referred and which is now taking place. It is expected to be completed later this year and the results will then be made public.
Lord Nugent of Guildford: My Lords, is my noble friend aware that I have tested the resilience of the barriers? Is he aware that I did so one night some years ago when I struck a patch of black ice after leaving the House after a debate? My car skidded out of control and I struck the central barrier at, I should think, 70 miles an hour. It was a fast road and there was nothing on it. I struck the barrier at an angle of 20 or 30 degrees and it gradually brought me to a stop without too much damage to the motor car. Therefore it stood up to the design specifications.
Lord Brabazon of Tara: My Lords, I am glad to hear my noble friend's report. I am not so concerned about the damage to his motor car; I should have been much more concerned if my noble friend had been damaged in the accident. I believe that the incident proves that the crash barriers work very effectively.
Baroness Macleod of Borve: My Lords, can my noble friend tell the House how many of the accidents happened at night? Does he agree that the height of the barrier is most important because it prevents the lights of the oncoming cars from being a nuisance when they meet cars coming in the opposite direction?
Lord Brabazon of Tara: My Lords, I am afraid that I cannot tell my noble friend how many of the accidents happened at night. I came prepared with a number of statistics but I am afraid that that is not one of them. The lights of oncoming vehicles are a problem but certain stretches of motorway are fitted with overhead lights which reduce the problem and certain stretches also have a barrier of some kind.
Lord Tordoff: My Lords, would the noble Lord like to read out the statistics and we can then produce questions to fit the answers that he has?
Lord Brabazon of Tara: My Lords, I always come prepared with as much information as possible.
The Earl of Lauderdale: My Lords, can my noble friend say how many of the 40 vehicles which went through or over the barriers, actually went over?
Lord Brabazon of Tara: My Lords, no, I cannot. Out of the 40 vehicles which went through or over the barriers half were heavy goods vehicles. But 1 cannot define which went through and which went over.
Lord Gisborough: My Lords, will the Minister encourage the planting of shrubs between motorway carriageways to deflect the lights of oncoming traffic?
Lord Brabazon of Tara: My Lords, that is an extremely good idea where the space between the carriageways allows it. I must admit that I do not know of our policy on that matter but I have seen a number of roads where it has taken place. However, it relies on there being sufficient space between the carriageways.
Lord Campbell of Croy: My Lords, is it not becoming even more important that all the barriers should be as good as that encountered by my noble friend Lord Nugent because of the additional lighting now being installed on the motorways, the standards of which constitute serious obstacles?
Lord Brabazon of Tara: My Lords, I hope that all the barriers are of the same standard as that encountered by my noble friend. As I said earlier, an assessment is being made to discover whether stronger or different materials can be used. We shall report publicly on the matter later this year.
Lord Whaddon: My Lords, is the noble Lord satisfied with the standards of inspection of the concrete footings of the vertical posts supporting the barriers? Is he aware of reports in the media of occasions when, following accidents, they are found to be inadequate and to have made a substantial contribution to the breakage of the barrier and to vehicles crossing into the other carriageway?
Lord Brabazon of Tara: My Lords, I believe that the noble Lord is mistaken in his last conclusion. I agree that some footings have been found to be misshapen, but the TRRL investigated that and published the result which confirmed that that did not significantly impair the performance.

Gatwick Airport: Night Landings
3.10 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they will relax the restrictions on night landings of civil aircraft at Gatwick Airport so as
1482
to permit the landing at any time of delayed aircraft whose rescheduled time of arrival was within permitted hours.
Lord Brabazon of Tara: My Lords, the night noise restrictions at Gatwick which my right honourable friend announced in February permit the airport manager to exempt flights from the restrictions if they are delayed by widespread and prolonged disruption of air traffic. This has already helped to relieve the effects of major foreign air traffic control disputes.
Lord Boyd-Carpenter: My Lords, while thanking my noble friend for that helpful reply, perhaps I may ask him whether it means that in all cases in which an aircraft is delayed and as a result arrives on the approach after the time of closure it will be allowed to land at Gatwick and not be diverted to other airports, with consequent misery to passengers and threat to safety from an overtired crew.
Lord Brabazon of Tara: My Lords, each case is dealt with on its merits. The general rule is that if these delays are caused by widespread and prolonged disruption of air traffic, exemptions can be given.
Lord Orr-Ewing: My Lords, the Question deals with landings. Do the regulations allow for the fact that there is much less disturbance by way of noise when landing as compared to taking off'? Surely one should be able to extend the hours of landing quite considerably past the regular permitted time.
Lord Brabazon of Tara: My Lords, this policy of night landing or night movement restrictions at both Gatwick and Heathrow, particularly Gatwick as regards the present situation, was reviewed by my right honourable friend. We published our plan for the next five years which allows for an increase in the number of night movements at the expense of phasing out some of the older aircraft.
We are committed to an improvement in the night noise climate at both those airports. To exempt completely the quietest aircraft from landing would give rise to an adverse effect on the night noise climate, so it is not in the airlines' long-term interest to allow those extra movements.
Lord Jenkins of Putney: My Lords, is it not the case that the restrictions on most capital cities are much more severe than those on London airports? Is it not the case that it may be desirable to consider the possibility of planning air flights, particularly international and charter tours, so that aircraft arrive at airports north of London, many of which are crying out for custom?
Lord Brabazon of Tara: My Lords, if Heathrow and Gatwick are to maintain their positions as leading airports in Western Europe and indeed in the world they must have the flexibility to allow night flights to be operated from them. We have to try to mitigate the noise effects of those night flights and we have to maintain a balance between the interests of the residents and those of the travellers.
Lord Underhill: My Lords, is this not one of the points on which the Secretary of State has asked the Civil Aviation Authority to report to him by November? Will that not include the question of night flights, both landing and take-off? Will that not also involve the question of the use of quieter aircraft if there is to be an extension of night landings or take-offs? The other important question is that everyone is now agreed that the problem is lack of air space. Should there not be a curtailment of nonpublic transport movements, particularly those of the military?
Lord Brabazon of Tara: My Lords, as to the noble Lord's first question about my right honourable friend's request to the CAA to produce new proposals by November on easing air traffic control restrictions and by next July on airport capacity both in the South-East and in the country as a whole, the Secretary of State in his letter asked the CAA to take into account environmental considerations. We now have our policy for night flights set out for the next five years and I should think it unlikely that we shall be advised by the CAA to change that.
The use of military air space is kept under review. The National Air Traffic Services, which is responsible for air traffic control in this country and is a joint body between the CAA and the Ministry of Defence, keeps under review the need for military air space. From the information I have, the possible advantages in reduction of military air space are not very great.
Lord Jay: My Lords, would not many of these troubles have been avoided if the development of Stansted Airport had not been held up for 20 years as a result of a lot of special pleadings?
Lord Brabazon of Tara: My Lords, quite possibly. However we now have a plan for Stansted to be developed to deal with 8 million passengers by 1991. I am not a historian as to what happened over the past 20 years, as is the noble Lord, Lord Jay. At the moment I am more concerned about what will happen next weekend and the weekend after.
Lord Ferrier: My Lords, does my noble friend appreciate the extent to which the absence of proper railway services impairs the use of Prestwick Airport as a safety valve? When will they build a railway station which is part of the airport?
Lord Brabazon of Tara: My Lords, I believe that as regards the current situation which we arc facing of delays to aeroplanes to Gatwick, about which I am being asked in the Question, Prestwick could have nothing to offer to relieve those delays.
Lord Boyd-Carpenter: My Lords, my noble friend twice referred to permission to land after hours being granted where there had been widespread and prolonged delays. Is my noble friend aware that if you are a passenger or the crew of an aircraft which is behind time, it does not make any difference whether that is part of widespread and prolonged delays? It is those particular people who suffer. Will
1484
he make it clear that his Answer does not exclude them?
Lord Brabazon of Tara: My Lords, they are bound to be suffering because of something which has gone wrong with the system as a result of those delays over a period of time. Therefore, I hope that they would be accommodated within the dispensations which are able to be given.
Lord Gisborough: My Lords, does not my noble friend believe that many people would much prefer to travel by night to a provincial airport where they would be very welcome rather than spend three or four days lying on a sofa at Gatwick Airport? Perhaps he would therefore encourage the use of provincial airports.
Lord Brabazon of Tara: My Lords, we have done a great deal to encourage the use of provincial airports over the past few years, as anyone who cares to look at the figures will see. The main problem in the past few weeks has been one of air space over Europe and difficulties with the destinations to which people are travelling. If my noble friend looks at the figures for the delays I am afraid that he will find that provincial airports have been as badly affected as the London airports.
Lord Mackie of Benshie: My Lords, has the Minister taken on board the point put by his noble friend Lord Orr-Ewing; namely, that there is a tremendous difference in nuisance value between landing at under power and taking off at full power? That makes relevant the point put to him by the noble Lord, Lord Boyd-Carpenter.
Lord Brabazon of Tara: My Lords, that is true but I tried to answer that. We are interested in the overall amount of noise created. While landings obviously make far less noise than take-offs, if one is looking at the overall noise created—and we are committed to reducing that amount of noise over the years—one has to take both into account.
Lord Borthwick: My Lords, while there are difficulties about aircraft and landings, we are trying to do as little as we can with Turnhouse. That used to be a very good aerodrome and is one of the best in the whole of Britain for landing. It is more or less fog-free and during the war it was a very valuable place. That has now been closed down. Why is that?
Lord Brabazon of Tara: My Lords, if my noble friend is referring to Edinburgh Airport, which is a long way—
Lord Borthwick: My Lords, not Edinburgh Airport.
Lord Brabazon of Tara: My Lords, in that case I am not certain that it is very relevant to the Question on the Order Paper.

Arab-Israeli Conflict
3.20 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they will, in co-operation with their major allies, seek to convene a special international conference concerning the problems in the Middle East.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we believe that an international conference under UN auspices can provide a suitable framework for negotiations between the parties to the Arab-Israel conflict. We shall continue to work for such a conference to be convened.
Lord Molloy: My Lords, I thank the noble Lord for that reply. There seems a distinct possibility of a ceasefire and an armistice in the Iran-Iraq war. United Nations Resolution 598 has been in existence for one year. Tens of thousands of people have died—civilians and people in armies and air forces—but the United Nations appears to have done very little. Does not the Minister agree, therefore, that if a ceasefire is brought about there should be special representation with regard to the future of prisoners on both sides? Does not the Minister further agree that when this part of the Gulf war is over there should be a full endeavour to resolve the dispute between Israel and the lands that Israel occupies, with particular reference to the Palestinian refugees?
Lord Glenarthur: My Lords, the two issues are of course separate but I very much agree with the noble Lord that we should all welcome Iran's decision. It is a most significant move towards the end of what the noble Lord describes as a most destructive conflict. The real work on that now begins.
As regards the Arab-Israel problem, this very much relates to the proposals for the international conference and those, as I have said, we continue to support.
Lord Cledwyn of Penrhos: My Lords, does not the noble Lord agree that if a ceasefire takes place, as we fervently hope it will, that will create a new situation in the Middle East? The Shultz initiative becomes even more important in the light of a possible ceasefire. Can the Minister say what is the present position with regard to the Shultz initiative?
Lord Glenarthur: My Lords, as regards the chances of a ceasefire, we must seize this opportunity for peace. We pledge our full support for what the secretary general is seeking to achieve. As regards the Shultz initiative— and I take it that the noble Lord is referring to the Arab-Israel conflict rather than the Iran-Iraq conflict—we greatly welcome the renewed United States engagement on that issue. It is certainly a vital ingredient of the peace process. We are keeping in close touch with Mr. Shultz. My right honourable and learned friend the Foreign Secretary saw him on 3rd June before the latest shuttle and has seen him twice since then.
Lord Chelwood: My Lords, is my noble friend aware that many people will have been pleased to hear the remarks made by the Minister of State at the Foreign Office, Mr. David Mellor? He gave a warning to the Israeli Government that if peace is not established within 20 years there will be more Palestinians than Israelis and Jews in Israel and the occupied territories, which would leave the Israeli Government in a South African type situation.
Lord Glenarthur: My Lords, if my noble friend and I have in mind the same quotation he will find that my honourable friend was not accurately reported.
Lord Tordoff: My Lords, reverting to the Iraq-Iran war, will the noble Lord accept from these Benches that we are also extremely pleased that the Iranian Government have taken the step of calling for a ceasefire? Are Her Majesty's Government now going to take steps to renew our representation in Tehran, which was discontinued when Mr. Chaplin left last year in circumstances which were far from satisfactory? Have assurances been received from the Iranian Government that the presence of a British diplomat in Tehran could take place with proper security?
Lord Glenarthur: My Lords, we must move one step at a time. We do not yet have a ceasefire. We must look at representations, and so on, in the light of events.
Lord Molloy: My Lords, does not the Minister agree that international conferences through the United Nations have never been particularly fruitful? The endeavour of my original Question was to suggest to the Government, who have done so much and given a good lead in establishing some form of connection and discussions with people, that we should rely on our powerful allies and not necessarily the United Nations in an endeavour to stop the squalid war that is continuing between Palestinians in their own country and the forces of Israel which are occupying that country.
Lord Glenarthur: My Lords, I am sure the noble Lord realises that the issues involved here are exceedingly complex. They go very much to the heart of the dispute itself. That is why, as I have said before, it is for the parties to work out mutually acceptable arrangements. It would be wrong for us or anyone else to dictate terms from the outside.
Lord Mellish: My Lords, does not the Minister agree that we must approach this in a realistic way. International conferences are not worth the paper they are written on if either side of the argument is not prepared to co-operate!
Lord Glenarthur: My Lords, it is important to achieve an end to the conflict, which is what the noble Lord, Lord Molloy, is concerned about. We believe that the active re-engagement of the United States in a search for peace and the suggestions put forward for a conference still provide the best hope.

Benzodiazepines: Effect
3.25 p.m.
Lord Sefton of Garston Lord Sefton of Garston asked Her Majesty's Government:
Whether they will ensure that before any repeat prescriptions are made of the benzodiazepines mentioned in Current Problems 21, the GP concerned shall re-examine the patient and that a data sheet warning of any side effects will be given to the patient.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, professional decisions of this type are the responsibility of the doctor concerned. Many general practitioners already operate repeat prescribing control systems which ensure their patients are regularly reviewed. GPs must also use their judgment in deciding how much to tell a patient about the possible side effects of a particular drug.
Lord Sefton of Garston: My Lords, will the Minister accept that his reply will give serious concern to people who either are patients or have relatives with this problem? The circular to which I refer was published in January 1988. It refers to the effects of a short period of taking the drug Ativan. Some of its effects can lead to suicide and aggressive behaviour. The circular recommends to doctors that it should not be prescribed for longer than four weeks. Since January hundreds of people have been represcribed this drug without the doctor seeing them. Have we reached the stage where we can no longer trust doctors to exercise proper responsibility in this respect?
Lord Skelmersdale: My Lords, while we share the concern that has been expressed over the prescribing of benzodiazepines we believe that such concerns are best addressed by the medical profession in the first instance. That is why the Government are determined that the chief medical officer should hold discussions with the relevant professional bodies about the prescribing of these drugs. We must get this matter into proportion. There are several medical conditions for which these drugs are appropriate.
Baroness Gardner of Parkes: My Lords, will the Minister confirm that most medical practitioners—indeed, I believe all on the national health list—receive circulars from the department which clearly set out the side effects of any drug of this type? Moreover, general practitioners now, particularly the newer ones, will have undergone an additional three years' vocational training which is of enormous value. I am sure the remark about not trusting doctors will not be upheld by most Members in this House.
Lord Skelmersdale: My Lords, I am interested in my noble friend's remarks. She is of course right. The DHSS funds the distribution to doctors of the British National Formulary, which is issued twice a year and has been since the early 1980s. The Drug and
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Therapeutics Bulletin and the Adverse Drug Reactions Bulletin have both recently carried articles, in July 1987 and June 1986 respectively.
Lord Ennals: My Lords, without necessarily supporting the comments made by my noble friend, may I support his constructive proposals? Does the Minister accept that there is now a major problem in diazepines and tranquilliser addiction? It is almost always due to ill-advised repeat prescriptions. Does the Minister accept from me that the task of escaping from this addiction is a major challenge which requires a great deal of support for those who are seeking to break from something so addictive?
Lord Skelmersdale: My Lords, I am advised that these drugs are not always addictive. However, having said that, I go along with what the noble Lord, Lord Ennals, said. I firmly believe that it would be inappropriate to ban benzodiazepines. They are clinically useful for patients suffering from anxiety or insomnia where treatment is given for short periods of time. I add that they are much less addictive than barbiturates which they replaced for much the same purpose.
Lord Ennals: My Lords, my noble friend did not suggest that this form of medication should be prohibited.
Lord Skelmersdale: My Lords, no. I was merely reinforcing his non-suggestion.
Lord Peston: My Lords, I ask the Minister to bear in mind that the issue is not benzodiazepines themselves but repeat prescribing which seems to be growing at a very rapid pace. If this is happening, can the Minister either use his good offices to emphasise the seriousness of the matter to the medical profession or alternatively do something about giving medical training to doctors' receptionists who seem to be the principal persons whom patients see for these drugs?
Lord Skelmersdale: My Lords, I have no doubt that all these matters will be raised by the chief medical officer at the talks to which I have referred. We and the medical profession are anxious to control the level of repeat prescribing and I believe that to be generally welcomed throughout your Lordships' House. Many doctors recognise the need for a regular review of repeat prescriptions and they operate their own control systems. The health departments already monitor instances of prescribing that seem to be excessive, using information from the prescription pricing authorities. Discussions with the profession are taking place about how information concerning repeat prescribing can be improved. This will enable doctors to exercise a greater level of control. I stress that this is principally a problem for the doctors. We will do everything in our power to help.
Lord Sefton of Garston: My Lords, I thank my noble friend on the Front Bench for confirming the purport of my question which was about represcribing. In January 1988, doctors were told to

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be very careful and to monitor the use of Ativan and various other drugs in that category because they are dangerous and addictive. Since January 1988—
Noble Lords: Question!
Lord Sefton of Garston: My Lords, do noble Lords wish me to make a speech? Since January 1988 many doctors have been continually represcribing this drug through the receptionist. In view of that will the Minister take some firm steps to ensure that no represcribing takes place without the patient being seen by the doctor?
Lord Skelmersdale: My Lords, as I sought to illustrate earlier, that is not always appropriate. The number of prescriptions for drugs dispensed by community pharmacists in Great Britain shows a steady decline. From a peak of 31 million in 1979 the number of prescriptions has fallen to about 25 million in 1986. Pressure is continuing on this point.

Business
3.33 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Housing Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment consideration of Commons Amendments to the Civil Evidence (Scotland) Bill and Court of Session Bill will be taken.

Judicial Standing Orders
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the following amendments be made to the Standing Orders regulating Judicial Business:—
Standing Order VI
Leave out paragraphs (1) to (3) and insert:—
("(1) ORDERED, that in all Appeals the Appellants do give security for costs by paying into the House of Lords Security Fund Account within one week of the presentation of the Appeal such sum as shall be authorised from time to time by the House, to be subject to the Order of the House with regard to the costs of the Appeal.
On default by the Appellants in complying with the above conditions, the Appeal to stand dismissed.").
Standing Order X
Leave out the words after ("applied") and insert:—
("for legal aid and the application has not been determined before the expiration of the periods of time limited by Standing Orders I, II and III, such periods of time shall be extended until one month after the date of the final refusal of the application or the issue of a Certificate.").

Standing Order XIV
In the Schedule of Fees
Leave out ("On Recognisance").—(The Lord Chancellor.)
On Question, Motion agreed to.

Business of the House
3.35 p.m.
The Lord Privy Seal (Lord Belstead): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order 44 (No two stages to be taken on one day) be suspended until the House rises for the summer recess.—(Lord Belstead.)
Lord Houghton of Sowerby: My Lords, I do not believe that we should allow this Motion to pass without comment and possibly some question. I do not believe that this should be a seasonal ritual in your Lordships' House towards the summer recess, especially since it is almost certain that this suspension of the standing order is intended principally to catch the Finance Bill. I ask the Leader of the House what other Bills besides the Finance Bill are likely to be caught by the suspension of this standing order? That is important.
The Finance Bill this year is of special importance to your Lordships' House as I shall explain when the time comes next week. I do not believe that we should submit to this concertina procedure at a time when the Finance Bill contains more than it has for many years past, including clauses dealing with management which previously were dealt with under the Taxes Management Act and which amend that Act. The Taxes Management Act was not a money Bill but this is. I believe that your Lordships' House must take note of the way in which legislation that was free from the restraints of the Parliament Act was passed, but when it comes to be amended it is put inside a money Bill. I do not believe that your Lordships' House should be cheated out of the right to discuss questions regarding the liberty of the subject and the obligations of citizenship merely because they are under the shelter of a money Bill.
I should have thought that this year was the time to test the constitutional position of putting down amendments to Chapter V of the Finance Bill dealing with matters relating to the obligations of the citizen and the penalties imposed upon him. That is why I believe it is of special importance that we should never pass a Motion of this kind as a matter of ritual. On a special occasion we should take steps to ensure that the concertina procedure does not apply. In conclusion, I respectfully suggest that there is other business that could well have been left over to the resumption of the House on 10th October, whereas the Finance Bill, as we all realise, cannot wait for that length of time.
When one sees the spectacle as regards the firearms Bill, for example, with all the gun runners on the Benches opposite and all my noble friends scattered to the winds as if grouse shooting had already begun, it seems to be misusing the time of the House. It is

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quite wrong to have the firing squad there, all with dummy ammunition, and the rest of your Lordships held up for a long time. If only we could have discussed the Finance Bill during that time, what a fruitful time we should have had. I suggest to the Leader of the House that he should study some of the passions in this House as well as the petty convenience of some parts of the Government's programme.
Lord Belstead: My Lords, it has been very refreshing to have a short tour d'horizon from the noble Lord about government legislation and legislative methods on this particular Motion which I have moved. The fact of the matter is that, despite what the noble Lord said, the Finance Bill is a money Bill and the other money Bill that will be taken under this Motion is the Consolidated Fund Bill. The substantive answer to the question which the noble Lord asked me and which I need to give, is that the other Bill which will benefit from this Motion, if the House agrees to it, would be the Electricity (Financial Provisions) Scotland Bill. That Bill would have its Second Reading and remaining stages taken on Wednesday 27th July.
It is true that that Bill is not a money Bill; it provides for an increase in the statutory financial limit of the Scottish electricity boards by increasing their maximum borrowing powers from £2·7 billion to £3 billion. I believe that the House is normally content to take such Bills through all their stages on one day, though technically in this case it is not a money Bill.
Lord Hailsham of Saint Marylebone: My Lords, should it not be clearly understood that what is and what is not a money Bill is a question upon which Mr. Speaker's Certificate is absolutely conclusive by statute, and that the firearms Bill has nothing whatever to do with grouse shooting?
On Question, Motion agreed to.

Murder and Life Imprisonment: Select Committee
3.40 p.m.
Lord Belstead: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Your Lordships may recall that during the Third Reading of the Criminal Justice Bill last December the noble Lord, Lord Windlesham, suggested that it might be desirable to set up a Select Committee of the House to consider the crime of and the penalty for murder and the arrangements for determining the duration of the period to be spent in custody by life prisoners. This suggestion was enthusiastically received by several other Members of your Lordships' House. On that occasion the noble and learned Lord the Lord Chancellor undertook to draw this suggestion to my attention. I have now had an opportunity to consult the other party leaders on this matter and I am happy to say that we are all of the view that this would be a fruitful area for inquiry by a Select Committee of the House.
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The orders of reference set out on the Order Paper I hope accurately reflect the sentiments expressed by those who spoke at Third Reading and I trust that the House will find them acceptable. The Committee of Selection will meet next week to propose the members of the Select Committee and those will be embodied in a Motion to be laid before the House towards the end of next week. The committee may be expected to begin its work in October and to sit for about one year. I beg to move.
Moved, That a Select Committee be appointed to consider

(a) the scope and definition of the crime of murder in England and Wales and in Scotland;

(b) the question whether imprisonment for life should remain a mandatory rather than a maximum penalty for murder; and

(c) the working of the arrangements for reaching decisions on the release of those serving life sentences for murder;

this consideration to include such matters as the sentencing judge's power to recommend a minimum period of detention and the means by which the Home Secretary and the Secretary of State for Scotland take judicial advice on individual cases where a life sentence has been imposed.—(Lord Belstead.)
Lord Cledwyn of Penrhos: My Lords, we on these Benches warmly welcome the Motion. This is something to which noble Lords throughout the House have been looking forward. We also approve the wording of the Motion, which we think is fully appropriate for the inquiry that will follow. We look forward to hearing from the noble Lord what names are proposed for the chair and the membership of the committee.
Lord Harris of Greenwich: My Lords, my noble friends will certainly want to be associated with the remarks of the noble Lord the Leader of the Opposition. As the Lord Privy Seal said, this matter was raised by the noble Lord, Lord Windlesham, during the Third Reading of the Criminal Justice Bill. A number of us supported his suggestion very firmly and I think it would be right on an occasion such as this to express our thanks to the noble Lord and indeed to the noble and learned Lord the Lord Chancellor, who was involved in the debate on that occasion. This is highly satisfactory, and with the noble Lord, Lord Cledwyn, we look forward to seeing the names of the members of the committee.
Lord Hailsham of Saint Marylebone: My Lords, I congratulate my noble friend on taking this step. There are few more important questions in the criminal law than the proper definition for the future of the nature of the crime of murder and its distinction from manslaughter. There can be no doubt of the value of the life sentence as such, which is really an indeterminate sentence, and the use which is currently being made of the judge's private indication as to the appropriate length of the sentence without having it made public is a matter which cannot be justified in principle. I should like to congratulate my noble friend.
Lord Windlesham: My Lords, as my name has been mentioned, perhaps I may add my voice in support of the Motion. The orders of reference reflect accurately the concerns which were expressed during the debates on the Criminal Justice Bill. I doubt whether I am alone in finding encouragement that the law on murder in Scotland and the administration of sentences of life imprisonment are to be included in the terms of reference of the Select Committee.
As my noble and learned friend Lord Hailsham has just remarked, the subject matter of the proposed committee is one of profound importance in the criminal law, in sentencing practice and in public administration. At the moment there is a legal and administrative morass in which the powers of the courts, the discretionary authority of the Secretary of State, and the intentions of Parliament have become confused and obscured. There is a need for scrutiny and rationalisation, and I am pleased that it is this House which is to undertake the task.
Lord Elwyn-Jones: My Lords, I should like to express my gratitude for the decision of the Government to set up this committee to decide a matter which I know is causing great concern to courts up and down the country. I hope that we may see the outcome of it sooner rather than later in view of its importance in the criminal law.
Lord Monson: My Lords, can the Leader of the House say whether the Select Committee's terms of reference will extend to the possibility of recommending the introduction of a more rigorous form of imprisonment for those convicted of the more bestial types of murder, thereby taking much of the heat out of the widespread public demand for the reintroduction of capital punishment?
Lord Belstead: My Lords, I am grateful to the House for the reception it has given to the Motion. I am especially grateful to the noble and learned Lords on both sides of the House for the remarks which they made. It will be for the Select Committee itself to determine its terms of reference and it will take into account the point which the noble Lord, Lord Monson, has raised. The Motion next week on composition will be moved by the Lord Chairman of Committees. I commend this Motion to the House.
On Question, Motion agreed to.

Housing Bill
3.45 p.m.
The Minister of State, Department of the Environment (The Earl of Caithness): 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 Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Assured tenancies]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 1:
Page 1, line 18, at end insert (''and any tenancy falling within this subsection, or subsection (3) below, shall be a tenancy to which the provisions on protection from eviction contained in section 27 below apply").
The noble Lord said: In moving Amendment No. 1 I should like to speak also to Amendments Nos. 57, 60, 61, 62 and 63. I do not know how many Members of the Committee were able to watch some few weeks ago a programme in the "World in Action" series about harassment of tenants by landlords. In that programme, which I was able to see again only yesterday, there were numerous interviews with a landlord by the name of Nicholas Hoogstraten.
The programme described how he and his associates were in the game—they described it as a game—of thieving property. They called it thieving property. They bought properties at below their true market value. They were available at below their true market value because there were sitting tenants in those properties. Their next step was what Mr. Hoogstraten described as winkling. The purpose of that was to get those sitting tenants out of the properties so that the properties could be sold again at the different market value of a property with vacant possession.
Mr. Hoogstraten described how in many cases he was dealing with properties with controlled tenants paying £10, £12 or £20 a week who were frustrating the sale of a property. With today's prices in London, a single property with a piece of land with development value could be sold for £1 million. He described these tenants as scumbags. He described their rights as rubbish. He described them as being the proper victims of the landlords who were being denied the right to use their own properties for profitable speculation. The fact that they had been living there for 10, 20 or 30 years meant nothing to him. He was proud of this. He laughed when he said it.
The proposals in Part I of the Bill which are intended to extend the private rented sector are so serious in the way that they extend the possibility of this kind of harassment that the Government have introduced a whole chapter of Part I with the intention of restricting harassment. I pay tribute to their motives in doing so.
They recognise that the whole system of assured tenancies and assured shorthold tenancies and the whole way by which controlled tenancies and security of tenure are to be eroded by the many provisions of the Bill will increase the risk of harassment by landlords like Mr. Hoogstraten. They have attempted in Chapter IV of Part I of the Bill to do something about it. But I want to suggest to the Committee that what they have done and what they are proposing go no way at all towards reassuring tenants or frightening landlords that anything better will be achieved.
Indeed, Mr. Hoogstraten in the programme which was recorded some four weeks ago, when at least the provisions of the Bill in Committee in another place

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were available, if perhaps not the changes on Report—and I recognise that there are differences here—said, "The Housing Bill is going to help us a great deal. It will make our lives, we the landlords"—that kind of landlord—"very much easier".
Should anyone think that I am talking about four weeks ago as being past history, yesterday afternoon in a committee room in this place we had one of Mr. Hoogstraten's victims. Since the programme was made her flat has been set on fire. She does not know who set it on fire and she cannot prove that it was the landlord or any of his associates. She is the victim who had already been spat upon several times by Mr. Hoogstraten in her own garden. She is the victim who when she called in the housing tenancy adviser of the local council found that one of Mr. Hoogstraten's associates was about to throw a lump of concrete at him He only escaped because she shouted at him to duck.
All this is happening now. This lady left her flat only last Sunday because her life was no longer tolerable in the circumstances in which she found herself. I must ask Members of the Committee to consider very seriously the provisions of the Bill which make the risk and potential profits—because that is what Mr. Hoogstraten is talking about—of harassment much greater. We must consider whether the provisions to deal with harassment are good enough. Our amendments deal with four particular aspects of harassment where we believe that they are not good enough and where we believe that something more must be done to deal with the problem.
The first aspect is to be found in Amendment No. 57. The major point here is that the Bill refers to acts which are calculated to help the landlord eject the tenant—I am paraphrasing the less important words. All the experience of the tenants' rights groups, the local councils who are concerned with such matters and the experience which was made most clear in the "World in Action" programme is that it is very difficult in law, and in practice, to identify an individual act which can be said clearly to be calculated to be harassment. But a whole series of acts which in themselves may not be serious can cumulatively add up to harassment. Therefore in Amendment No. 57 we are seeking to change the wording. Instead of the words "calculated to", we propose that the Bill should say "or omits to do acts", because the failure to provide services may not be an act but it is an omission to do acts which individually or cumulatively add up to harassment.
That is perhaps the most important of all the amendments which we wish to put forward. We suggest to the Committee that the existing protection for tenants is not good enough. Everyone who is dealing with tenant protection knows that it is not good enough. Moreover, the courts know that it is not good enough because there is inadequate conviction in connection with those who find themselves in such circumstances.
The second and especially important point, to which I have already referred in a sense in passing, is the issue of "calculated to". That involves the law in
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saying what the landlord's intentions are as a test of whether it is a case of harassment. The Government are proposing to move away from reliance on the landlord's intention as such. Again, I recognise that there are attempts at improvement in Chapter IV of Part I, but the test of "calculated to"—that is, causing the tenant to leave—is in our view still not good enough. There should be an objective test of whether the landlord's actions have the effect of making it more likely that the tenant will have to leave, rather than that there should be any judgment on the landlord's intentions.
The third point, which again comes from the experience shown in the "World in Action" programme, is that it is not enough to say that actions which come under the scope of the law are the actions of the landlord or the landlord's agents. Mr. Hoogstraten operates under something like 20 names and I have a list of those names with me. He has something like 50 associates; he has 30 or 40 associated companies and managing agents and he has 20 or so main business addresses. In addition to all those, there are people who are not even his formal associates.
Let us think of a house in multiple occupation. One of the most common ways of winkling out an undesirable tenant is not to do anything overtly violent; is not to make any threats and is not even to do anything like dismantling the roof—although that is common enough. It is simply to move in an objectionable tenant on the floor below. That tenant on the floor below will not be the landlord or the landlord's agent and he will therefore not be covered by the scope of the harassment provisions. Yet that tenant on the floor below could play music all night, could hammer holes in his ceiling and into the floor of the tenant who is to be removed and could make his life an absolute misery. Indeed, he could be a very effective informal agent for harassment. So our amendments go that much further to provide that any person who is associated with attempts to persuade a tenant to leave the premises should come within the scope of harassment legislation.
Such an approach—namely, "the any person approach"—was included in the Protection from Eviction Act 1977. But although the Government claim that they are providing a further safeguard from harassment, in fact they are proposing a weaker provision concerning the identity of the person who commits the act of harassment.
I sincerely believe that all Members of the Committee will have the same objective. We all want to see the major harassment which I have described in very brief terms—indeed, I could have gone on for much longer and described very much worse things—outlawed. We all want that. The question is: does the Bill now achieve it?
Lord Coleraine: I am most grateful to the noble Lord for giving way. He has spoken at considerable length on amendments to Clauses 27 and 29 of the Bill, but is he going to say anything about the effect of the first amendment tabled in his name and what it means? Further, does the first amendment add anything to the provisions protecting tenancies in Clause 27 which is not already there?
Lord McIntosh of Haringey: I am indeed happy to speak to any amendments tabled in my name. However, it was my intention to speak principally to the amendments relating to Clause 27, to which Amendment No. 1 is really a paving amendment. I do not claim that it adds anything to the scope of the amendments to Clause 27.
Lord Coleraine: The noble Lord says that Amendment No. 1 is a paving amendment. So far as I can see, it adds nothing to the Bill and is quite superfluous to it. Moreover, the other amendments tabled in the name of the noble Lord stand completely independent to the first amendment. Therefore I do not see how it can be said to be a paving amendment to anything.
I should have thought that any decision which was taken in relation to Amendment No. 1 was entirely free-standing and had no bearing on any decision which the Committee may make on any of the other amendments to which the noble Lord has spoken.
4 p.m.
Lord McIntosh of Haringey: It has been agreed through the usual channels, with the agreement of the Government and the department, that the amendments should be taken together. It is a longstanding tradition of this place that we should seek to save time by grouping amendments into meaningful groups. I hope that the committee will agree that this is a useful tradition which should be continued.
Lord Coleraine: What the noble Lord says may be correct. However, if that is so, why should not the amendments to Clauses 27 and 29 be taken at their proper place in the Bill, when those clauses are reached?
Lord McIntosh of Haringey: I am happy to take any amendment individually if the Committee thinks that that will further the Committee business. As it is, we have an agreed grouping which we hope is helpful. Morever, I hope that we will not abandon the useful convention that we can have an opportunity to consider amendments together and to consider matters at a time which is usually thought to be for the convenience of this place.
There are, although the noble Lord was kind enough not to refer to them, a number of other amendments which could be taken in this group. We have tabled amendments which refer to harassment by a so-called resident landlord. We have tabled a whole series of amendments about possession of properties under assured tenancies. We have amendments about possession on, for example, forced disposal. They are all related to this matter, because the whole of Part I is related to the major changes the Government are making in the nature of the private rented sector. We consider that that is perhaps the most important single social effect which will arise from the Government's changes. We consider that those changes are recognised, by the Government's amendments and intention, to be of great social significance. We believe that it is right for the Committee to take a view on harassment and on the adequacy of the Government's measures to combat it. I beg to move.
Lord Broxbourne: I have listened with some sympathy to the expos½ of the noble Lord, Lord McIntosh, delivered with his characteristic lucidity and skill. I want just to query whether the drafting of Amendment No. 57 is correct. If I read it aright, it would leave Clause 27 as reading, "does acts"—the amendment leaves out -calculated to"—
"interfere with the peace or comfort".
I do not believe that that is a grammatical construction which would be appropriate in a statute. Some other word, if only "which", is required to give the effect intended to the noble Lord's amendment. If I am wrong, he will say so straightaway, and I am fully ready to believe him.
Lord McIntosh of Haringey: My Lords, I admit that this is one of those cases where to a considerable extent I have drafted the amendment myself. Not being a lawyer, I am capable of being seriously wrong; but as I read it, the sentence will now read; if the landlord
"or any person acting on behalf of the landlord · does acts or omits to do acts which individually or cumulatively interfere with the peace or comfort of the residential occupier or members of his household".
I believe that that is grammatically correct. It was my intention in framing the amendment.
Lord Broxbourne: I believe that the Committee will be disposed to give the noble Lord the benefit of the doubt. He need not plead, as a serious matter of mitigation, that he is not a lawyer. Indeed, there are some who would think that that is a matter of congratulation rather than commiseration. No doubt the ingenious parliamentary draftsmen will scrutinise the matter with the care that it deserves and the expertise that they possess.
Perhaps I may make my second point to my noble friend the Minister. I wonder whether the words "calculated to", which the noble Lord's amendment proposes to omit, are well chosen in a statute. It is difficult to give juridical interpretation to the term "calculated to". What degree of motivation it implies is a matter of doubt. I respectfully ask my noble friend to consider whether that is an appropriate phrase to include in an Act of Parliament. If it is to be included, should it not figure in the interpretation clause to Chapter IV. There is an interpretation clause (Clause 33: "Interpretation of Chapter IV") which contains a variety of provisions, but no interpretation of that rather idiosyncratic and esoteric term "calculated to". Can it be either changed or defined?
Lord McIntosh of Haringey: Perhaps I may suggest that the point made by the noble Lord, Lord Broxbourne, would be dealt with if he accepted my amendment, which removes the words "calculated to"
Lord Broxbourne: I was hoping that there were better, simpler and more acceptable ways of meeting the point.
Lord Renton: In making his impassioned speech against harassment—I have an open mind about the pronunciation—the noble Lord, Lord McIntosh of

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Haringey, was preaching to the converted, bearing in mind the fact that the Bill contains greatly improved provisions in Chapter IV—especially Clauses 27 to 30—for preventing harassment. The noble Lord has done a service by inviting us to ensure that the terms especially in Clause 27 are as they should be.
The word "calculated" has been interpreted by the courts on a number of occasions and has generally, in the context in which it has appeared, been held to mean the same as "intended". There have been other connections, more rare, in which it has been held that the word means "likely". In this context either of those interpretations would do.
I did not think that the noble Lord's speech was necessary to convince us all about the dangers of harassment and the need to get rid of it; nor did I think that the implied criticism of the Bill with regard to that was fair, because, as I say, those clauses are strongly worded and should go a long way towards stopping it.
I come to the individual amendments. I agree with my noble friend, Lord Coleraine, that the first amendment seems to be unnecessary, because Clause 1, to which it relates, deals with assured tenancies and they are residential tenancies to which Clause 27 refers. The residential occupier is defined in Clause 27(8)(a). I do not believe that Amendment No. 1 (the paving amendment) is necessary.
Perhaps I may briefly deal further with the other amendments. I have dealt with what appears to be important about the word "calculated". I believe that the noble Lord has a point when he invites the Government to consider whether it is enough merely for the court to bear in mind acts committed where there could perhaps be circumstances, more rare, when there was a failure to commit acts. I hope therefore that my noble friend will consider that point. It is a narrow point but valid and it is the only point of substance which arises on this group of amendments.
Lord Stewart of Fulham: I am not a lawyer nor a parliamentary draftsman although, as suggested, one may regard that as a matter either for disappointment or congratulation. A very witty Member of this House, the late Lord Hale, had also been a Member of the other place. Once in a speech there he remarked, "My honourable friends spend half their time making ill-natured remarks about lawyers, and the other half asking me for unpaid advice".
Although I am not a lawyer, I have a memory. I seem to remember this same debate pushed back about 25 years to when another place was discussing the evil then known as "Rachmanism". Now it apparently is known as "Hoogstratenism". I do not believe it is true that people with foreign-sounding names are more likely to behave in this manner than people with ordinary names. However, it is true that when they do, they attract the press more obviously. The great evils of harassment 25 years ago went on for a considerable time until somebody with the foreign-sounding name of Rachman was connected with it. Then matters flared up and it made a great press story. History seems to be repeating itself, and
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I think it does so for this reason: whenever a situation is created where a house has a definite rent attached to it but, if the tenant can be got out, the rent which can be charged immediately leaps up, a motive is created for harassment.
I accept that these amendments do not alter that fact about the Bill. That seems to me one of the general evils of the situation. I think we ought to try to avoid a situation in which getting the tenant out will make the house a more valuable asset. If that is done then a motive is created for committing a crime and it is not much use, or it is only a limited amount of use, to chase round afterwards trying to prevent the crime, if we have already allowed the law to create a situation in which it pays to commit the crime. Nor need one fall into the error of supposing that all landlords are wicked and all tenants virtuous.
The trouble is that if a situation is created in which it pays to harass a tenant out, the landlord who wants to be virtuous and public-spirited knows that he is behaving like a mug in comparison with the landlord who is prepared to practise harassment. That is the evil with which we are faced. In those circumstances, if the situation exists where it pays to commit harassment, we cannot be too careful or vigilant in trying to prevent it. I am especially interested to see that, if I understood it correctly, one of the loopholes which the amendments of my noble friend aim to stop is that connected with the fact that the act of harassment may be committed by somebody who is not the landlord but who is in effect working for him. This was remarkably true in the days of Rachmanism. When one tried to find out who was responsible for it, the owner of the property always seemed to be changing into somebody else.
I was reminded of that section of Dante's Inferno which was reserved for the thief and the extortioner, part of whose nature and penalty it was that when one looked closely at them, they turned into somebody else. This seems to be that situation all over again. Therefore, I urge that if we are in any doubt as to whether the precautions we have taken for hunting down and punishing harassment are strong enough, we should err on the side of making them as strong as possible. If we have allowed the law to create the situation in which it pays to commit harassment we cannot be too careful in trying to nail it down and penalise it.
4.15 p.m.
Lord Stallard: I am neither a lawyer nor a barrister, and I hesitate to enter a field which seems to be being taken over by lawyers. However, I have been a tenant of a private landlord and I know literally thousands of other tenants of private landlords. I have dealt with them for many years in the whole of my public life, and I was active throughout the whole length of the Rachmanite era. I was responsible for at least trying to do something in the other place about the legislation which was being used by the gangsters. I must confess that I did not find it too difficult. When I listened to the noble Lords, Lord Coleraine and Lord Renton, I did not find it too difficult to align Amendment No. 1 with Clause I. I thought it improved matters. As I see it, Clause 1 deals with the

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transference to the assured tenancy situation as opposed to the tenancies which might have applied previously, like security of tenure, and so on.
Therefore it is essential that if we are to change those to assured tenancies, then they ought to be given the same protection or given the protection which they would be allowed under Clauses 27 and 29. I thought that was what we were doing. As my noble friend rightly says, Clause 1 paved the way for discussion on those protections included in Clauses 27 and 29.
Lord Coleraine: The noble Lord possibly misunderstands the point that I was making. It is as follows. All the tenancies which the first amendment would bring within the scope of the protection from eviction clause are already in that clause. Therefore the amendment is quite unnecessary.
Lord Stallard: I must stick to the point. Our amendment adds to Clause 1 the point that tenants will be given the same protection. When we amend Clauses 27 and 29, we shall have improved the protection they get. Therefore it is important that Clause 1 should contain the facility or the measures for giving that kind of protection to the new assured tenancies. That is causing a great deal of concern. I certainly do not know many private tenants with the simplified view held by the two noble Lords. It does not add anything if they get the added protection or if this protection is added to what is already becoming in most people's minds a bit of a trick. The assured tenancy will very shortly, as soon as possible, become an assured short-hold letting.
Then there are problems and difficulties. Tenants are at the mercy of the people mentioned by my noble friend on the Front Bench. Not Rachman—he has gone. He has been overtaken by a new breed of the same people who are now operating in inner London. So I felt that it was necessary to allay some of the fears of people who will be on the sticky end of the Bill. We should say that even if it does turn into this other assured tenancy or assured short-hold, tenants will still have the protection of Clauses 27 and 29 as amended by this House. I may be entirely wrong; but I shall stick to that point of view because I do not think that I am far out.
The whole series of amendments gives us the opportunity to mention or discuss harassment and eviction, and all that that implies. When we say that Clause 27 gives all the protection that is necessary, that is where we immediately differ. Clause 27 was based on—or the wording is virtually the same as—the Protection from Eviction Act 1977. There will be many of us who never accepted that as being adequate. The provisions of that measure on protection from eviction were never adequate to deal with the kinds of situations that exist in real life.
When we talk about the situation, it is not just a few isolated cases. I should tell Members of the Committee that in a survey of the London boroughs carried out in 1985, 4,500 cases of harassment were reported, but only 76 prosecutions took place. That shows the inadequacy of the legislation: that the 4,500, and the many more that would have been
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reported if people had known how to go about protesting, only gave rise to 76 prosecutions.
Lord Renton: When he says that the noble Lord is pointing to the inadequacies of the present law rather than to any inadequacies in the Bill.
Lord Stallard: The Bill simply repeats the words of that existing Act. Consequently it repeats the same inadequacies. We shall probably never agree on that, but that is how I read the Bill. If it repeats the words of the Protection from Eviction Act 1977, it has not improved anything. The Bill has left that Act as it was. I thought that Act was inadequate at the time and I still think it is inadequate now. That is why I support this provision to amend Clause 1 of the Bill. If that is perverted thinking, then I plead guilty to it.
The Royal Borough of Kensington and Chelsea has the highest proportion of private tenants in the country. That borough recorded 66 illegal evictions and 352 cases of harassment in 1986, yet very few of those cases proceeded to court. In my own borough of Camden—I think everybody must know where I live by now—for the last six-month period for which we have statistics, the number of harassment cases investigated was 121. But, because of the inadequacies of the present legislation—which are carried on into the Bill—the people who investigate the cases must consider whether they have a chance of succeeding if the case goes to court. If they do not think a case stands a chance in court, they have to try all kinds of other means of solving the problem rather than go to court where they know they will lose the case because of the wording of the Act. Of those 121 cases only six went to court. That is nowhere near adequate.
I give an example of one of the cases that went to court. All six cases were successful, incidentally. That shows the persistence of the officers involved. I give an example of one of those successful cases. In that case a tenant was given alternative accommodation while her own accommodation was being repaired. However, she returned within a couple of hours of vacating her accommodation because she had left some papers behind. When she returned, she caught some builders red-handed. They were in the process of demolishing the ceiling and taking down a wall. They did so despite the fact that they knew that all her private possessions were in the flat. I am not talking about the situation that operated 20 years ago under Rachman. I am talking about something that happened a few months ago despite the existing legislation which appears to be carried on into this Bill.
The lady concerned caught the builders red-handed. That case was successfully prosecuted. The landlord was fined £250. If the Government consider that that is adequate and that tenants have nothing to worry about, they are on the wrong track. Tenants have plenty to worry about when that kind of thing occurs, because the present legislation allows it to happen. Therefore, the Government must allow me to say that the legislation needs strengthening. We intend to strengthen it by the amendments we have put down to Sections 27 and 29. which will then be

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applied to the assured tenancies as laid out in Clause 1. That seems to me to be reasonable.
I shall give another couple of examples of cases of harassment. The 1986 adjusted figures for unlawful eviction cases brought under the terms of Section 1(2) of the Protection from Eviction Act 1977 show that in England 49 cases resulted in a guilty verdict being returned. In Wales in that year 10 prosecutions were brought and five guilty verdicts were returned. In the same year 26 cases of unlawful harassment were brought under the terms of Section 1(3) in England, 10 of which resulted in guilty verdicts. No cases were brought to court in Wales under that subsection of the 1977 Act. The whole thing tends to confirm the opinion of local authorities and people responsible for bringing convictions that the Act has not been successful so far. This Bill will be similarly unsuccessful unless it is strengthened in the way that we have suggested.
I wish to give another couple of examples. These examples occurred only two or three weeks ago. Therefore we are not talking in terms of events of long ago. The first incident occurred on an estate in a house which was in a bad state of repair. Repair work was started but not finished. The house was left in an unfinished state with no bath or shower. During that period the landlord offered cash to the tenants to move. Developers are already going round council estates in Camden offering cash to tenants to tempt them to leave in advance of the legislation being passed. Nothing has happened yet, but property developers have moved into council estates, are knocking on doors and saying to tenants, "When the legislation is passed, you will have to pick a new landlord. Will you consider me? Here are my details."
Why should tenants not be worried in the face of such advances? In the example I mentioned, a landlord offered cash to tenants to tempt them to move. He went into their rooms without any kind of permission, written or otherwise, and looked around. The tenants in the basement moved out as they became frightened. At that point the landlord's builders went in and removed the spine walls and the chimney breasts. The other tenants protested and called in a district surveyor. The surveyor said that if he had not been called in and the building had not been made safe, it would probably have collapsed within 24 to 48 hours. How can we ask why tenants are worried about the effects of this Bill when such things are happening? Unscrupulous landlords are going round offering tenants money or threatening them because the landlords can earn a lot of money from empty rooms and empty property at the moment.
The villain who was shown on a recent film is not going to be worried about what happens to his tenants. When asked about his tenants he replied that he did not care about them and said that if they were evicted it was their problem. He said that all he wanted was the room and that he could make £150 a week on it. He said that he was the landlord of the property, that he wanted the rooms empty and that the fate of the tenants was somebody else's problem.
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One would not think that such things occurred in Hampstead, but there was another bad case of harassment there. A tenant died a few weeks ago and at the weekend the landlord changed the locks in order to keep the tenant's cohabitee out of the flat. The landlord was called Bokhari. I do not discount the fact that all these landlords have foreign sounding names. At the weekend in question the landlord threw out the belongings of the deceased tenant and those of the tenant's cohabitee into the street. The tenant's cohabitee was arrested as the police believed that he was picking up things which did not belong to him and they were suspicious because he had no address and nowhere to go. There was an awful kerfuffie. The landlord in question has umpteen properties in the same area and is already harassing other tenants.
Anyone who says that the Bill has prevented any harassment is not telling the truth. Nevertheless it has improved the situation that has pertained up until now. These two clauses are certainly an improvement on the existing situation. But I am saying that they do not go far enough. I am asking Members of the Committee to support the amendments. That way we can at least try to alleviate some of the problems that we have outlined and many others that we could mention if we had the time.
Lord Trafford: I feel that the noble Lord has spoken to some extent about penalties rather than the cover of the clause. In some ways I agree with him on that point. As I am probably the Member of the Committee who lives nearest to Mr. van Hoogstraten, I must say that I have absolutely no sympathy or any defence to offer for such activities. I should like to see such activities curtailed in every possible way. Nevertheless, if one refers to page 19, line five, of the Bill, one will see that it provides part of an answer to the points made by the noble Lord, Lord McIntosh.
I also agree that it is right that these measures should be strengthened. I should hate to think that Members on the other side of the Committee, or anyone else come to that, believed that we on this side of the Committee did not wish to see these practices cease altogether. None of the previous five speakers have been lawyers. Yet they would be the first to agree that there is some difficulty in introducing legislation which would curtail these problems but would at the same time free the market. There is a difficulty in framing the legislation in such a way.
I personally welcome the strengthening of measures to fight harassment, for which I have no sympathy whatsoever. I have no interest to declare in this matter. I was a landlord at one time, although I am one no longer. Nonetheless, I have no sympathy at all for any harassment on the part of landlords.
I suggest that page 19, lines five and six of the Bill might cover some of the examples that the noble Lord, Lord McIntosh, postulated could take place. I remember the campaigns of the noble Lord, Lord Stallard, in another place on this matter. But I think he is referring more to penalties than the cover of the legislation. The great difficulty for tenants in these circumstances is that it is expensive, difficult and

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often very inconvenient to them in terms both of their existence at the time and the expense of bringing actions against landlords.
Lord Graham of Edmonton Lord Graham of Edmonton: They are terrified.
Lord Trafford: Precisely. The noble Lord has intervened from a sitting position. I agree that they are frightened. That is an unacceptable situation. However, I am not sure that the amendments which are proposed will help the situation very much. Much of what has been said in relation to the amendments is covered by the lines which I have mentioned.
I hope I speak for all Members of the Committee on this side of the Chamber when I say that we have no sympathy with the landlords in the examples given by the noble Lords, Lord Stewart, Lord McIntosh and Lord Stallard.
4.30 p.m.
Lord Stallard: I hope that I have not given the impression that I am concerned only with penalties. I hope that the noble Lord will read the amendments and will see what I am attempting to say about them. The amendments would shift the burden of proof from the tenant, where it lies at the moment, and on to the landlord. The landlord should be made to prove more than he has to at the moment and tenants should have more safeguards. I hope I did not give the impression that I was concerned only with penalties.
Lord Trafford: I understand the point which the noble Lord has made. However, he gave an example of a landlord who was fined £250. That amount, relative to the cost of property, was trivial. I therefore believed that he was emphasising penalties rather than stopping harassment. I am sure that all of us would like to achieve that. I re-emphasise the point that there is difficulty in framing legislation to achieve what we all wish to achieve at the same time that we help the housing market in general terms.
Lord Ross of Newport: I referred to the activities of Mr. Hoogstraten in my Second Reading speech. I expressed the hope that the Committee would take the opportunity to strengthen the Bill to make sure that actions taken against such persons would be successful.
I received a telephone call from a gentleman acting on behalf of the Association of Tenancy Relations Officers. I did not know that such officers existed. I am told that the members of the association are employed by a very few local authorities to explain and, in the last resort, enforce the legal rights that successive parliaments have seen fit to give to residential occupiers. The association has been in being for some 25 years. It acts as a sort of quasi police force so far as the Protection from Eviction Act is concerned. The association suspects that there are many landlords like Mr. Hoogstraten who are waiting to exploit some parts of the Bill. Mr. Hoogstraten actually stated that that was the case in a television programme. He said that it was a step in the right direction. He was pictured at one of the
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London property acutions. I believe that half the time people who buy such properties do not know what they are buying.
I believe that we are opening a Pandora's Box. I have always supported the Government's attempt to bring more private sector rented housing on to the market. However, I am sure that that will lead to grave difficulties in London, Brighton and one or two other places. I implore the Committee to listen to the pleas which have been made from this side of the Chamber. I am sure that no one will disagree that landlords must be dealt with properly. However, anything that we can do to strengthen the Bill must be done. The Bill will obviously be passed. It is up to us to strengthen it.
The association has had to implement the provisions of the Protection from Eviction Act for the last 25 years. It states:
"anything that can be done to restrict their activities and bring the worst offenders into court must be written into the Bill before it leaves the House of Lords".
In 1986 the borough of Kensington and Chelsea took criminal proceedings against Mr. Hoogstraten for harassment. In January 1988 he was found not guilty on all nine counts at Inner London Crown Court. In March 1988, the borough of Kensington and Chelsea made representations to the Minister for Housing and Planning suggesting how improvements could be made to harassment legislation in order to give greater protection to tenants against unscrupulous landlords. The present Bill had been published at that time. I hope that the Minister will assure us that he has listened to representations from a borough which has been in the midst of the problem and knows a great deal about it. Is he satisfied that the Bill as it is drafted is adequate? I doubt it; that is why I support the amendments.
Lord Campbell of Alloway: Abhorrence of harassment has been expressed from all sides of the Chamber. That is common ground. It is common ground that the existing situation needs strengthening. It is common ground that the Bill strengthens it. However, we are discussing Amendment No. 1. Does that amendment add anything to the Bill or strengthen it?
Amendment No. 57 is referred to in Amendment No. 1. Amendment No. 57—I have considerable sympathy for it—is irrelevant to the acceptance of Amendment No. 1. To describe Amendment No. 1 as a paving amendment is, with great respect, a misnomer. It does not strengthen anything. It is an otiose provision. Having listened to what has been said, I believe that we should concentrate on Amendment No. 57. Amendment No. 1 takes the matter no further.
Lord McIntosh of Haringey: I hesitate to return to the question of grouping, which was raised originally by the noble Lord, Lord Coleraine. However, I must point out that the grouping of amendments was accepted by the Government. In addition, I was asked by the Government Whip's Office just before lunch today to add Amendments Nos. 60 and 62 to the list. Clearly there is some agreement between the Front Benches as to the relevance and interconnection of the amendments.
Lord Campbell of Alloway: I am not saying that there is no interconnection. However, one is defeated every time in the ball game of grouping. At the end of the day, each amendment must be considered and moved on its own merits. Amendment No. 1 has no merits whatever; in my humble opinion, Amendment No. 57 has.
Baroness Fisher of Rednal: The clause attempts to create assured tenancies and assured shorthold tenancies. In the long run, that will be done at the expense of tenants with either protected tenancies in the private sector or secure tenancies in the local authority sector. The Government wish to see that change in tenancy. Therefore, the change will also mean a change in security. It is obvious that the Government hope that new rent levels will be brought in. Market rents are mentioned frequently in the Bill.
If we change protection for tenants, we shall find that evictions will take place not through harassment, but rather through rent arrears. We shall find in the long run that rents will rise. I believe that the Bill also provides mandatory grounds for possession if tenants are three months in arrears, rather than as at present a discretionary power. Therefore, I believe that we have to think very seriously about why the amendment has been put down. It provides protection against eviction—perhaps in order to allow higher rents—which tenants will face if they are not given the protection they have at the moment.
Lord McIntosh of Haringey: I think that it may be helpful if, after further reflection, I respond to the points made by the noble Lords, Lord Coleraine and Lord Campbell of Alloway. I defended our grouping of amendments on the grounds that we were free to group as we wished. However, I accept the points that both noble Lords have made. It might he for the convenience of the Committee if I said now, without in any way denying the Government the opportunity to reply to this or any other amendments which have been discussed, that I propose to withdraw Amendment No. 1 and return to the matter on Amendment No. 57.
Lord Coleraine: I should like to make it clear that I understand entirely the predicament in which the noble Lord, Lord McIntosh, finds himself. This is a matter of the practice of the Committee. I understand that he will withdraw the amendment. I think that that is quite correct. The difficulty which faces the Committee with a grouping of this kind is that while the debate is held now many members who have participated in the debates may not be present when the amendments are moved. In an hour or two's time when the amendments come up Members in the Committee or voting may have no idea of what arguments were put forward when the amendments were debated.
Baroness Blatch: The noble Lord, Lord McIntosh and other noble Lords are absolutely right to take any opportunity in this Committee to expose the worst landlords in the system. Certainly Mr. van
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Hoogstraten is one of them and, I believe, deserves wholesale condemnation from all of us in this Committee.
However, are not Mr. van Hoogstraten and others of his ilk a creation of the way in which the present Act works? That point has not been made by noble Lords who have spoken so far. Rent controls, for example, under which landlords receive no reasonable return on their investment, have acted as an inhibitor and given rise to some of the abuses that have been catalogued by many who have spoken already in this debate.
Let us consider the package of proposals in the Bill—a loosening of rent controls allowing landlords a reasonable return on their investment; a system of assured tenancies with all the protection from eviction which is contained in Clause 27; another mechanism for helping the poorest to meet a more reasonable rent for the landlord. Is that not a healthier and more constructive way forward than to argue for more of the same, which would merely make the system more restrictive, would give no return on investment and would not open up the private rented sector?
I agree with the noble Lord, Lord Ross, that we have to find ways of opening up the private sector if we are to go some way towards resolving some of our housing problems. It is a question of balance and how one opens up the housing sector. I think that loosening rent controls and finding another mechanism for helping the poorest to meet the rents is the way forward.
Lord Bellwin: I should like to support m0y noble friend.
Noble Lords: The amendment has been withdrawn!
Lord McIntosh of Haringey: I do not want to inhibit debate. I have indicated that I shall withdraw the amendment but I think that it is proper that noble Lords should have freedom to intervene.
Lord Bellwin: I should like to make the same point as my noble friend Lady Blatch. The noble Lord, Lord Stallard, said that there was a lot of money to be made from empty rooms. I wonder therefore why we are not concerned that there are over 200,000 empty dwellings in the private sector and some 100,000 empty dwellings in the public sector. Those are empty rooms. If we look at the reasons for the empty rooms we come back to the underlying theology of the Bill.
I speak not without some knowledge of the subject. I served on the Francis Committee, which in the early 1970s studied the workings of the Rent Acts of 1965 and 1968. Although harassment was a great worry then as it is now—and as all speakers have said it is something that everybody deplores—the committee concluded that altering security of tenure from furnished to unfurnished accommodation would open the door still further to the closing down of private rented dwellings. We expressed our great concern at that time. In the event, the Government of the day took no notice, went ahead and increased

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security of tenure. What did we have but the inevitable further drying up at a dramatic rate of the amount of accommodation available?
This is relevant to the amendment of the noble Lord, Lord McIntosh. He, like everyone, has to look at the causes of harassment. If there was an increase in the available accommodation the prizes would not be so great for the dreadful people who do such things. It would not be worth the candle to the same extent as it is today. For that reason I believe that we cannot look at the amendment pertaining to harassment in isolation without taking into account also the other factors in the Bill regarding different forms of tenancies. In my opinion, if it is as successful as we all hope, the Bill will make a major contribution to reducing the rewards which harassment produces today.
4.45 p.m.
The Earl of Caithness: I am not quite sure how to respond to this debate, because it was not quite in the form that I thought this morning—or at 11 o'clock, at lunchtime, at 3 o'clock or now even—that it would be. I started off this morning believing that we would debate Amendment No. 1. Of course the noble Lord, Lord McIntosh, is absolutely entitled to bring forward any other amendments in his name to be discussed together with Amendment No. 1. That is what he has done and he has a right to do so. Those are the rules under which the Committee operates.
I think that it is right to say that we on this side of the Committee are very concerned about the lack of a private rented sector. In that we are supported by the noble Lord, Lord Ross of Newport and his party. Both the noble Lord, Lord Ross, and we believe that the private sector has an important part to play within the rented market. As my noble friend Lord Bellwin has just reminded the Committee, it has decreased at an alarming rate. That we believe is to a very great extent due to the existing legislation. That is why we have produced new legislation which we believe will enable landlords to let and at the same time give very necessary security to tenants. As the noble Lord, Lord Goodman, said at Second Reading, tenants' security is very important. We have taken full cognisance of that point. When noble Lords study the Bill they will see the security provisions which we have included.
We have also taken the opportunity to tighten the law to prevent harassment. Harassment and illegal eviction of private tenants are not a recent problem. Bad landlord behaviour is in large part a product of the Rent Acts, which have held down rents and deprived landlords of a reasonable rate of return. However, no one in this Committee could condone illegal attempts to gain control of property. As my noble friend Lord Renton and all my noble friends have said, Members opposite are preaching to the converted.
Under the Protection from Eviction Act of 1977, which has its origins in legislation passed in 1964, harassment and illegal eviction are criminal offences attracting in extreme cases very severe penalties—up to two years' imprisonment and/or a fine of up to £2,000.
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The Bill includes extensive measures to strengthen this area of the law. They are aimed not only at the immediate landlord but at any superior landlord. These measures include a new offence of harassing an occupier knowing or having reasonable cause to believe that this was likely to cause him to leave his home.
There is also a new civil right to damages provision for tenants who are evicted illegally, which we hope will be effective from 9th June of this year. The amount of damages available under the new right could be equivalent to the whole of the landlord's financial gain from evicting the tenant. We see this as a powerful deterrent to misbehaviour by a minority of bad landlords. Even Peter Rachman might have thought twice about evicting his tenants had there been legislation of this kind in the 1950s. If I may encapsulate the provisions, this is what we have brought into the Bill already in order to take care of an existing situation. It is not a situation that will be created as a result of this Bill. We believe in fact that the provisions in the Bill will make the situation a great deal better.
The noble Lord, Lord McIntosh, referred to a Mr. van Hoogstraten, who is a landlord with properties in London and the South-East and who has recently been the subject of well merited criticism by the media. Perhaps I may just say to the noble Lord, Lord Ross of Newport, that of course officials in my department have spoken to officials of the Royal Borough of Kensington and Chelsea and to the tenants who were involved in the court case against Mr. van Hoogstraten brought by the borough, so we have views about why the case failed and what kind of improvements in the legislation may be necessary. I am sure that the Committee will agree that Mr. van Hoogstraten is exceptional among landlords in his attitude to his tenants and the law. He is not typical of landlords generally. He has been in prison in the past and has been fined.
I put to the Committee that he might not have made the profits from property that he did had the new right to civil damages been available earlier. The noble Lord, Lord McIntosh, spoke for about 10 minutes about this one landlord but it is worth stressing that bad behaviour by landlords is a product of the Rent Acts, which have made renting private property an uneconomic activity. The noble Lord, Lord Stewart of Fulham, was right when he said that present legislation has encouraged a very small minority of landlords to take some extreme actions. I repeat that the provisions of the new tenancy arrangements under this Bill with market rents will reduce that element of encouragement to had landlords.
Lord Stallard: The noble Earl said that one can blame the new breed of bad landlords on the Rent Acts. How does he explain Rachman, who was a product of the 1957 Rent Act?
The Earl of Caithness: With respect, I think that the noble Lord may have misheard me. I was indeed referring to Rachman and landlords who, under the existing Rent Acts and other Acts that affect housing did some things which, I suggest, they would not have

1511
done had there been available then the present penalties that are included in the Bill and the new right to civil damages.
Lord Coleraine: Surely the noble Earl accepts that Rachman is in no sense a product of the 1957 Act.
The Earl of Caithness: Mr. Rachman was buying property at market value. It was property that was subject to tenancy and therefore had a low market value, and he was harassing tenants and evicting them from that property in order to sell it. Had the provisions of the present Bill been in existence and if civil damages could have been taken against him, I put to the Committee that he might not have done some of the things he did. Quite apart from the anti-harassment measures that I have mentioned, I think it highly unlikely that the deregulation provisions of this Bill will increase harassment and illegal eviction. Landlords who try to get rid of their tenants illegally usually do so because they want to have vacant possession in order to sell the property and not because they want to re-let it. As my noble friend Lord Coleraine has just reminded the Committee, the incentive to harassment is already there. This Bill will not increase it.
The point which my noble friend Lord Trafford and I take from the example, given by the noble Lord, Lord Stallard, of the tenant whose ceiling was taken down is not that the 1977 Act is inadequate but that the court imposed a fine which he thinks was inadequate. The fine could have been a lot higher, but that was a matter for the court. We shall be discussing with the Magistrates' Association whether there is any advice that can be given to its members about the appropriate penalties to be imposed upon landlords who are found guilty of harassment and illegal eviction. We shall be issuing a circular to local authorities which will remind them of their powers under the Protection from Eviction Act, and which will contain general advice on the use of control orders and CPO's in cases of harassment.
Lord Stallard: I apologise for again interrupting, but on this point the noble Earl quite rightly says that Rachman was interested in having empty properties for sale. I accept that it would have been better if these measures had been available at the time and better still if they had been strengthened in the way that we suggested. However, he failed to mention that the prices which can be obtained for property are now far higher than even Rachman could have dreamed of obtaining by emptying his properties. So the incentive still applies to emptying the property for sale.
If one considers the selling prices of properties in the inner cities and London and the rents that could be obtained by letting those properties, calculating how long it would take to obtain by those rents the huge fortune that one can make by selling, there is simply no comparison. The interest is still in selling. Ordinary family houses in boroughs such as Islington, Hackney and Camden at the moment sell for £300,000 to £320,000. How much rent will a landlord have to receive to make that kind of money? What landlord will say. "I shall buy that property
1512
because I want to get back into the rented market"? He will not want to rent those rooms for £50, £60 or £70. That would not make economic sense from the landlord's point of view. He still wants property for sale and there is therefore still the incentive for the kind of oppression about which we have heard.
The Earl of Caithness: The noble Lord, Lord Stallard, merely confirms the potential for harassment and eviction of tenants that exists under the present legislation because of the wide discrepancy between artificially low rents and the resulting capital value of the dwelling against vacant possession value of the dwelling. I put it to the Committee that, if a landlord under the new assurred tenancy provision can let for a market rent which gives him a rate of return, at least some properties which are at the moment empty may come back into the rented sector. Surely that is something to be welcomed.
I turn to Amendment No. 1. I shall deal only with Amendment No. 1, because I sense that we shall be having another substantial debate on Amendments Nos. 57, 60, 61, 62 and 63, on which I shall have more to say to the Committee. Rather than repeat myself then, having made some general remarks I shall confine myself now to Amendment No. 1.
The effect of this amendment is to apply the new civil right to damages for unlawful eviction set out in Clause 27 to tenancies which fall within Clause 1 of the Bill and are therefore assured. I assume that this is a probing amendment, and in fact that has now been confirmed by the noble Lord, Lord McIntosh of Haringey.
Of course, the amount of damages under Clause 28 will vary according to the nature of the occupier's agreement: this is because the damages are to be assessed as the difference in the value of the landlord's interest in the building containing the premises with and without the residential occupier. So the landlord who evicts unlawfully a Rent Act tenant with a registered rent can expect to have to pay higher damages, all other things being equal, than one who evicts an assured tenant paying a market rent. But the incentive to evict the assured tenant may of course also be much less.
I hope that that explanation goes some way toward reassuring the noble Lord, Lord McIntosh, but I look forward to resuming discussion of this matter, which is a very important matter for the Committee to decide, when we come to Amendments Nos. 57 and 60 to 63.
Lord McIntosh of Haringey: I am grateful for the recognition by the Minister that this is a matter of very great importance. To return to the procedural matters that we have just been discussing, it was for that reason that we thought that it should be the first item on the Committee's agenda. We put it into Clause 1 because that clause which deals with the creation of assured tenancies, is something that the outside world will see as being the potential cause of an increase in harassment. That was the thinking behind it. We thought that tenants who saw Clause 1 going through unchallenged or unamended would

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feel that in a sense we had let them down. However, under pressure from Members opposite, I have agreed that the matter should be discussed separately. I think that there are procedural problems with this which are not merely concerned with the length of debate. Certainly when we come to discuss Amendment No. 57 I shall not deal with it at very great length although I must repeat the more important arguments for the benefit of those Members of the Committee who were not present at the earlier debates.
However, the procedure whereby we attempt to group amendments together—and we sometimes create amendments which make that possible even if they do not add a great deal except in psychological terms to the force of the Bill—is a system which is worth supporting. It ought not to be abandoned. I hope that Members of the Opposition or the Government Benches will not feel inhibited in doing so in the future. It is in accordance with the Committee's somewhat informal, but usually helpful, conduct at Committee stages that we should continue this procedure. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved amendment No. 2:
Page 2, line 22, at end insert—
("( ) The provisions of this Part relating to termination of an assured tenancy before the expiry of the term shall not apply to any such tenancy which falls within the meaning of section 20 below, except in pursuance of a provision for re-entry or forfeiture for non-payment of rent or breach of any other obligation of the tenancy.").
The noble Lord said: In moving Amendment No. 2 I wish to speak also to my Amendment No. 43 and, at the request of the Government Whips' Office, to Amendments Nos. 41, 42 and 46. In case any noble Lord should think that a debate on Amendment No. 2 will result in my withdrawing the amendment I give notice now that I shall not do so. I do not think that I would have the right to do so because the grouping that has been agreed includes government amendments.
The same argument applies. If we allow Clause 1 to go through without drawing attention to the huge risks which are involved in the proposals for assured shorthold tenancies, we would be causing misunderstanding outside this Chamber and causing fear to those tenants who are likely to become assured tenants and are afraid of the risks of the provisions for shorthold tenancy.
In considering the later amendments I shall welcome the government Amendment No. 42 which we believe goes some way to achieving the objectives of our Amendment No. 43. The problem with shorthold tenancies can be expressed very simply. If it is in the interests of landlords to have the assured tenancy provisions, and if, as the Government argue, there is likely to be an increase in private rented property as the result of the assured tenancy provisions, it must be for one or both of these reasons. Either they will obtain more rent out of the
1514
properties than they have done in the past over many years under the more restrictive rent control procedures; or they feel that the provisions for repossession are stronger. To put it another way, the security of the tenants under the assured tenancy scheme is weaker.
I suggest to Members of the Committee that both are the case, and that the provisions of an assured tenancy will be substantially weaker than the provisions under existing rent Acts. We shall argue those points in detail as we come to the different clauses which deal with repossession and so on. I do not wish to pre-empt those arguments.
The provisions for a shorthold tenancy drive a coach and horses through the remaining restrictions which exist to prevent landlords treating tenants' houses simply as a speculation rather than as a real economic and social service.
Perhaps I may again emphasise the degree to which I hope we are all agreed. I do not think that anybody in this Committee wishes to encourage private rented accommodation simply for the benefit of money making for landlords. They wish to do so because they see that private rented accommodation is a useful part of the total housing picture in our country.
The Minister referred to the support of the noble Lord, Lord Ross, for that point of view. It is a view that I share. I believe that there should be a plurality of types of tenure in this country. Anything which adds to the varied and efficient provision of decent housing for people at a decent affordable rent should be encouraged. If it can be achieved through the private rental sector, we have no ideological objection to it. We are saying that the Government's provisions in respect of the assured tenancies are shot to ribbons by the provision for shorthold tenancies.
The shorthold tenancy is the same as an assured tenancy in every respect except that it may have a finite term from six months to five years. At the end of the finite term the landlord's opportunities for repossession are very much greater than they are for ordinary non-finite assured tenancies.
This is in no sense a wrecking amendment. It is one which seeks to go in the same direction as the government Amendment No. 42. However, it goes a little further than that. We are saying that such a tenancy cannot be brought to an end by the landlord before the expiry of the term, except in pursuance of a provision for re-entry or forfeiture for nonpayment of rent or breach of any other obligation of the tenancy. We are reinstating in the Bill the safeguard against the use of the break clause which was contained in the 1980 Housing Act which created the protected shorthold tenancy, which was the predecessor of the current form of tenancy. Under our amendments, it is still possible for the landlord to terminate a shorthold fixed term if the tenant fails to pay the rent or if he breaches the terms of the tenant's agreement. If our amendments are accepted, he cannot use the provisions of the Bill in order to transfer his tenancies, as they become available, to shorthold tenancies and then kick people out at the end of a fixed term, or indeed in advance of a fixed term.
Those are the purposes of our amendments. We believe that they are helpful to the Bill rather than unhelpful. We think that they are in accordance with a long line of housing and tenancy provisions embodied in the law. We hope that they will find favour with the Committee. I beg to move.
The Earl of Caithness: Where a landlord has granted a fixed term assured tenancy, whether or not it is an assured shorthold tenancy within the meaning of Clause 20, the circumstances in which he can recover possession of the dwelling before the end of the fixed term are limited by Clause 7(6) of the Bill. This allows the court to grant possession only on certain of the grounds in Schedule 2 and then only if the terms of the tenancy make provision for it to be brought to an end on the ground in question.
One effect of Amendment No. 2 in the name of the noble Lord, Lord McIntosh, is further to reduce the grounds which the landlord can use in such a case. Grounds 2 and 9 would not be available to the landlord. We agree that a landlord ought not to be able to use Ground 9, which involves the provision of suitable alternative accommodation, to get possession during the fixed term of any assured tenancy, not just a shorthold, and I undertake to bring forward an amendment to achieve this at a later stage of the Bill. We do not agree that a landlord's mortgagee should be denied the use of Ground 2, however, where the landlord has defaulted on his mortgage and to that extent the amendment is not acceptable.
The other effect of the amendment is to prevent a landlord bringing a shorthold to an end during the fixed term where the tenancy includes a right for him to determine it. We agree that it should not be possible to determine a shorthold within its first six months, and we have tabled government Amendments Nos. 41, 42 and 46 to that effect. We shall discuss them in a moment. But if, for longer shortholds, the landlord wishes to include a right to determine and to use it, we do not see why he should not be able to do so.
Let me turn to the government Amendments Nos. 41, 42 and 46, and the opposition Amendment No. 43. There is, as I am sure Members of the Committee are aware, nothing between the Government and the noble Lord, Lord McIntosh of Haringey, on those amendments. Both our amendments and those tabled by the Opposition have the same purpose, though the wording is slightly different.
Clause 20 provides that in order for a tenancy to be an assured shorthold tenancy it must be for a term of at least six months. We do not want landlords to be able to circumvent this requirement by granting six month tenancies with a power to determine the tenancy at some point before the minimum six month term is up. Our amendments provide that any tenancy with this sort of provision will not be shorthold. Provided the qualifying conditions are met it will be a full assured tenancy. These amendments block a possible loophole.
The opposition amendment takes a slightly different route but reaches the same goal. With
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respect to the noble Lord, Lord McIntosh, we prefer our route because it avoids the need to mention reentry or forfeiture. It achieves this because determination is defined in Clause 45(4) as excluding those things. I am delighted the noble Lord will accept government amendments, and that he now agrees that they achieve what he wants.
Lord Monson: I wonder whether the noble Lord, Lord McIntosh, would accept that landlords would be less keen on the idea of shorthold tenancies if the Labour Party were to enter into a long-term compact with the Conservative Party and the other opposition parties on the future of private rented accommodation and on the question of security for landlords as well as tenants, and showed themselves to be as interested in the rights of landlords as they are, justifiably, in the rights of tenants? It is fear of what a future Labour Government might do that makes landlords so reluctant to enter into long-term commitments.
Lord McIntosh of Haringey: Perhaps I may first respond to the noble Lord, Lord Monson. When I was saying that we accepted that private rented accommodation could be a valuable part of the housing market, it certainly was not because we were concerned for the interests of landlords. Our concern is that there should be decent accommodation on a wide variety of bases for a wide variety of people at affordable rents. If some of that can be achieved by giving landlords a reasonable return on investment, there can be no ideological objection to that.
However, as I pointed out at Second Reading, the rate of return on investment for private landlords does not depend on the quality of the property but on the time when the property was bought in a situation where house prices—residential accommodation prices—have been going up dramatically faster than inflation over a number of years. I fear that the noble Lord, Lord Monson, is not going to tempt me into committing my party to becoming supporters of landlords under those very dubious economic circumstances.
We have, as the Minister said, a measure of agreement on what is necessary to restrict a particular kind of misuse of the shorthold tenancy provision, and the noble Earl has given an undertaking that he is going to bring forward amendments—I think at Report—to deal with one particular problem that is referred to in Amendment No. 2. Under those circumstances, I can only say that I have heard with interest what he has said, and I look forward to having an opportunity to discuss it with him. I hope that the result will go a long way to meeting our objectives in these amendments. It is, under those circumstances, proper that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 3:
Page 2, line 22, at end insert—
("( ) The provisions of this Part relating to rents in respect of assured tenancies shall not apply where a Rent Assessment

1517
Committee has not registered a rent under section 14 below for an assured shorthold tenancy falling within the meaning of section 20 below.").
The noble Lord said: Amendment No. 3 is to he taken together with Amendments 33, 44 and 50. It may be for the convenience of the Committee if I explain what is intended by those amendments. The reason why we have Amendment No. 3—and I say this in the absence of the noble Lords, Lord Campbell of Alloway and Lord Renton, but in the presence of the noble Lord, Lord Coleraine—is that we are referring to a number of different clauses in Part I of the Bill and it is necessary in our view for Clause I of the Bill to bring those elements together and to provide a coherent view of what is intended in the remainder of the Bill, otherwise there is a serious risk that the whole provision for shorthold tenancies will be misunderstood.
The first amendment we are concerned with after Amendment No. 3 is Amendment No. 33. This amendment has the effect of ensuring that the setting of rent for an assured shorthold tenancy is only subject to Clause 22, which is the clause that deals with the assured shorthold tenancy procedure, and not to Clause 13, which is the more general assured tenancy procedure.
The important point here is that if, as we assert, landlords have substantially more powers to remove tenants under the assured shorthold tenancy procedure than they do under the assured tenancy procedure—and we are by no means satisfied with the assured tenancy procedure itself—that ought to be reflected in the rent, because security of tenure is one of the things that deeply concerns people and affects the judgment that they are going to make about whether they take, or accept, a tenancy as between one form of tenure and another. We would look to the Government for an assurance that they understand that an assured shorthold tenancy does not merit the same level of rent as an assured tenancy. I hope that this is a relatively uncontroversial provision, and therefore an uncontroversial amendment.
The next amendment refers to the determination of the rent under an assured shorthold tenancy. What we say here is that it is extremely important that there should be a determined rent set by a rent assessment committee. At the moment the provisions for rent assessment committees—and we shall come back to some specific aspects of the rent assessment committees in later amendments—are in our view quite inadequate. Rent assessment committees are not as accessible to tenants as they should be—in effect, on demand.
Noble Lords spoke at Second Reading about the valuable work of rent officers. I believe that the noble Lord, Lord Ross, made particular reference to this, and certainly other noble Lords did. The whole point about rent officers is that in effect they are available to tenants on demand, whereas the rent assessment committee is hedged about with restrictions. In particular, there is a restriction which says that the rent assessment committee is absolved of the responsibility for determining a rent if they think that there is no comparable rent in (I think the phrase is)
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that part of the country. I do not really know what "that part of the country" means, but it could be interpreted by a rent assessment committee which wanted to avoid unnecessary or unwelcome work in such a way as to make it quite difficult for a tenant to get a determined rent that would provide him with the kind of protection about rent that he wants.
The final amendment in this group is Amendment No. 50, which refers to the reference of rents to a rent assessment committee. The point about this amendment is that once a rent has been determined by a rent assessment commitee under the conditions we are proposing, that rent shall continue in effect even if there is a change of tenant. That is an important provision, and one that the Government ought to find some way of meeting.
That amendment is rather long and complicated, and I have no doubt is therefore subject to textual criticism. But, even if that amendment is not totally adequate, I hope that the Government will recognise that it is important that there should be built up by the rent assessment committees over a period of time a body of not case law but case regulation, case understanding, and case pricing that will help rent assessment committees to determine more effectively than they can under the provisions of the Bill what a reasonable rent should be for this type of tenancy.
The amendments hang together and properly demand the attention of the Committee in its consideration of Clause 1 of the Bill. I hope that they will commend themselves to the Committee.
The Earl of Caithness: Amendment No. 3 reflects the view of the noble Lord, Lord McIntosh of Haringey, that there should be a powerful incentive if not an outright compulsion to obtain a determination of rent for a shorthold tenancy. This brings us once again to an issue on which there is a clear divergence across the Chamber; namely, the merits of statutory regulation of private lettings as against the right of landlord and tenant to negotiate terms between themselves.
As I have already indicated, our position is that the existing rent Act regime places an undue emphasis on statutory regulation and the balance ought now to shift in the opposite direction towards greater freedom for the parties to sort out their affairs by negotiation and contractual agreement. We are by no means ignoring the need for statutory procedures in cases where the parties cannot agree between themselves, but we are quite adamant that there should be no compulsion to use them. Amendment No. 3 would in effect provide such compulsion since it would apparently require that, if a shorthold tenancy did not have a rent determined by the rent assessment committee, it would he excluded from the new market rent regime altogether. That is not an approach that we could countenance.
I turn to Amendment No. 33. Clause 13 as it stands relates only to periodic tenancies. A shorthold letting will, by virtue of the definition in Clause 20(1), be granted for a fixed term. For as long as that fixed term runs, the tenancy will therefore be outside the scope of Clause 13. Generally our position is that, where a fixed term tenancy is granted, landlord and tenant ought to be bound by the terms of that agreement and

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have no right of access to any statutory rent-fixing mechanism.
We recognise that some statutory rent provision is desirable in respect of shorthold lettings, but that is provided for under Clause 22. Clause 13 will thus be of no relevance in the initial fixed term of a shorthold letting. To this extent the amendment is unnecessary. However, once the initial fixed term has come to an end, the landlord may not wish to seek immediate repossession; he may be prepared to let the tenancy run on as a periodic tenancy. It seems perfectly reasonable that he should be encouraged to do this. Where he does, a mechanism will be needed under which the rent can be increased. It seems right that at that stage, and at that stage only, the tenancy should be brought within the scope of the Clause 13 procedure just like any other assured periodic tenancy. Accordingly, the landlord will be able to propose an increase in the rent, and the tenant will be free to refer that to the rent assessment committee if he wishes. The effect of the amendment would be to deprive the landlord, who let a shorthold continue beyond the fixed term, of any means of increasing the rent. This in our view would be quite unreasonable from the landlord's point of view and would merely serve to encourage landlords to seek immediate repossession of their property even when they might not otherwise have chosen to do so.
I deal next with Amendments Nos. 44 and 50. These again are at odds with the basic thrust of government policy towards the private rented sector. We accept that the shorthold market needs to be underpinned by a statutory rent-fixing procedure. That is the purpose served by Clause 22. The intention is to provide a safety net for the shorthold tenant who has struck a particularly bad bargain with his landlord and committed himself to paying a rent that is clearly well above market level. In such circumstances, the rent assessment committee is available to bring the rent into line with the generally prevailing level. However, it is one thing to provide a statutory mechanism for occasions when it is genuinely needed; it is quite another to require that the mechanism must be used in all cases. In no circumstances do we wish the statutory machinery to cut across the freedom of the landlord and tenant to negotiate matters amicably between themselves. On that basis we cannot accept the proposed amendment.
Nor can we accept the approach in Amendment No. 50, which would require the rent assessment committee to determine the rent for a shorthold at a level below that applying to full assured tenancies. It is central to our strategy that rents for private lettings, full assured tenancies and shortholds, should be established according to free market principles. One would expect that the rents for shorthold tenancies ought in general to emerge somewhat lower than those for full assured tenancies, having regard to the limited security of tenure. However, it would not be right to enshrine this expectation in legislation. A market, the operation of which is determined by statute, by definition is not the free market that we wish it to be.
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As regards housing benefit, this will of course come into play in respect to the market rental. I can set the Committee's mind at rest by making clear that where a rent has been determined by the rent assessment committee, whether for a full assured tenancy or a shorthold, that rent will normally be accepted as reasonable for housing benefit subsidy purposes. The necessary provision for this can be made under existing legislation. There is therefore no need for an amendment to the social security legislation of the kind suggested in Amendment No. 50
Lord Ross of Newport: I am very disappointed, as I said on Second Reading, about the demise of the role of the rent officer. I gave my name to these amendments because, in respect of shorthold tenancy, I thought that an alternative might be to go to a rent assessment committee. I believe the Government are wrong in their belief that rents fixed amicably between landlord and tenant will not be sky high. In effect this could swamp the advice of people like rent officers, who have abundant experience and knowledge of what sensible rents should apply. This should be done in stages. I do not think that it will help anybody in the borough of Kensington or anywhere else if the rents are something like £300 or £400 a week, as I suspect that they probably will be. Such tenancies will be taken up by short-term visitors to these shores—holiday lets to people coming from overseas wanting temporary accommodation.
I rather regret that the Goverment have turned their back on this. I wonder whether the originator of shorthold, the late Sir Brandon Rhys-Williams for whom I had great respect, would agree that the Government should not allow people occupying shorthold to have the advice of rent officers or, if that is not to be, rent assessment committees. I think that we should have made use of that facility.
Baroness Gardner of Parkes: I take a different view on the matter from the noble Lord, Lord Ross of Newport. He says that rents in Kensington are £300 a week or thereabouts. Of course they are, but what is the noble Lord saying? I could point to rents in the area ranging from £100 up to £1,500 a week. Rents range over all prices. What I think is not understood by the Opposition in particular is that people are not willing to let a place if they have to undergo the hassle of involvement with a rent assessment officer. They are prepared to agree a price with the tenant, strike a bargain and everybody is perfectly happy about it. The alternative is to have the threat hanging over one's head that one will be taken to a rent assessment officer.
Many years ago I was taken to what was then a rent tribunal. I had a surgery with a flat above it and a flat below it. The time came when I needed to move the surgery. In those days, furnished tenants did not have security of tenure. I gave notice that I wanted to leave. The girls in the flat above, who had been there for years, found other accommodation and moved. The girls below, who had been there two or three weeks, immediately applied to the rent officer for security of tenure.
The only way to act in those days was to apply for a reduction in rent. I appeared on my own behalf and

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was asked what I thought about the rent. I said that I thought it was rather low, but I was happy to accept it. The girls were asked what they thought, and they said they were perfectly happy with it. Despite that, the tribunal cut the rent by £1.50 a week although both landlord and tenant had been happy with it. The tribunal also said that it could see that we needed possession in order to sell the house and it gave the girls only three months security of tenure. I lost the only buyer that I had at that time. The girls found alternative accommodation and left after about two weeks.
Having been through the harrowing experience of a rent tribunal, I am aware how hard it is for landlords to face it. I believe that we are entirely overlooking the fact that if many people will be willing to let their properties, there will be a surplus of property available. Therefore landlords will be unable to charge the sky-high rents about which we have been talking. Landlords are charging sky-high rents because they are so restricted in the type of tenant that they can now accept, and they are conscious of the bad deal that they are getting. There are plenty of people who, as tenants, would be willing to agree a rent with the landlord, strike a fair bargain and carry on.
Until recently all the rents in London had to be subject to assessment and no one was letting property within London. Outside London there were no restrictions, and that had an adverse effect on the situation in London. If that situation were to be returned in the Bill, we should be back exactly where we were. I certainly oppose the amendment.
Lord McIntosh of Haringey: Having known the noble Baroness for a long time, I can say that I have total respect for her probity and sympathise with the difficulty that she experienced with the rent tribunal. I am afraid that she is not typical of landlords who will he using the shorthold tenancy procedure.
As the Minister made admirably clear in his response to the amendments, the shorthold tenancy procedure is a fundamental difference between us. In our view it will amount virtually to complete deregulation. There are those who want complete deregulation; and although I hesitate to say that I respect them for that, I understand their reasons. No one has yet answered the question why, under the two-tier system of assured tenancy and assured shorthold tenancy, any landlord in his right mind should opt for an assured tenancy instead of an assured shorthold tenancy. He has an extra ability to kick out tenants at the end of a fixed period. It costs him nothing; there is no assurance that there will be a lower rent. Indeed, it has been specifically denied that there will be any recognition of the lack of security in the rent paid. The Minister made no comment on that assertion which I made in introducing the amendment. Will it be 10 per cent. or 20 per cent. below? There is no indication that there will be any recognition of the lack of security in the rent paid for a shorthold tenancy.
Under such conditions, why should there be anything other than shorthold tenancies? The
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shorthold tenant will always be afraid to exercise even the rights which are given to him under the Bill because of the fear that, at the end of his shorthold tenancy, he will be kicked out under the shorthold provisions. What incentive or protection will there he for a shorthold tenant to apply for his rent to be registered? The answer is that, unless the amendments are accepted, there will be none. The provisions for a rent assessment committee under those circumstances are meaningless. The whole elaborate structure which the Government appear to have set up to protect tenants under the assured tenancy procedure will be as naught.
I fear that this is a matter on which we cannot allow the Government to get away with what is, in effect, a switch-sell. They are selling complete freedom for landlords as though there was a degree of assurance in the assured tenancy procedure. That is not the case and we must show that it is not the case. It is necessary for me to ask the Committee to take a decision on Amendment No. 3.
5.34 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 76; Not-Contents, 117.

DIVISION NO.1

CONTENTS

Addington, L.

Kilbracken, L.

Airedale, L.

Leatherland, L.

Ardwick, L.

Listowel, E.

Aylestone, L.

Longford, E.

Birk, B.

Lovell-Davis, L.

Blackstone, B.

McIntosh of Haringey, L.

Boston of Faversham, L.

McNair, L. [Teller.]

Briginshaw, L.

Mais, L.

Bruce of Donington, L.

Mayhew, L.

Buckmaster, V.

Molloy, L.

Carmichael of Kelvingrove, L.

Morton of Shuna, L.

Carter, L.

Mountevans, L.

Cledwyn of Penrhos, L.

Nicol, B.

Cocks of Hartcliffe, L.

Ogmore, L.

Dean of Beswick, L.

Oram, L.

Dormand of Easington, L.

Peston, L.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L. [Teller.]

Ennals, L.

Ewart-Biggs, B.

Prys-Davies, L.

Falkender, B.

Rea, L.

Falkland, V.

Reilly, L.

Fisher of Rednal, B.

Rochester, L.

Gallacher, L.

Ross of Newport, L.

Galpern, L.

Seear, B.

Graham of Edmonton, L.

Sefton of Garston, L.

Grey, E.

Serota, B.

Grimond, L.

Shackleton, L.

Hampton, L.

Stallard, L.

Harris of Greenwich, L.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stoddart of Swindon, L.

Henniker, L.

Turner of Camden, B.

Hooson, L.

Underhill, L.

Houghton of Sowerby, L.

Wallace of Coslany, L.

Howie of Troon, L.

Wells-Pestell, L.

Hughes, L.

White, B.

Jacques, L.

Willis, L.

Jay, L.

Winchilsea and Nottingham, E.

Jeger, B.

John-Mackie, L.

Worcester, Bp.

NON-CONTENTS

Ampthill, L.

Balfour, E.

Arran, E.

Bauer, L.

Auckland, L.

Beaverbrook, L.

1523

Belhaven and Stenton, L.

Johnston of Rockport, L.

Beloff, L.

Killearn, L.

Belstead, L.

Kinloss, Ly.

Bessborough, E.

Lauderdale, E.

Blatch, B.

Lawrence, L.

Borthwick, L.

Long, V.

Boyd-Carpenter, L.

Lucas of Chilworth, L.

Brabazon of Tara, L.

Luke, L.

Brookeborough, V.

Lyell, L.

Brougham and Vaux, L.

Lytton, E.

Broxbourne, L.

Mackay of Clashfern, L.

Butterworth, L.

Macleod of Borve, B.

Caithness, E.

Marley, L.

Cameron of Lochbroom, L.

Merrivale, L.

Campbell of Alloway, L.

Mersey, V.

Campbell of Croy, L.

Milverton, L.

Carnegy of Lour, B.

Monson, L.

Carnock, L.

Mowbray and Stourton, L.

Clitheroe, L.

Munster, E.

Coleraine, L.

Norrie, L.

Colnbrook, L.

Onslow, E.

Cork and Orrery, E.

Orr-Ewing, L.

Cox, B.

Peel, E.

Craigavon, V.

Pender, L.

Davidson, V. [Teller.]

Peyton of Yeovil, L.

Denham, L. [Teller.]

Plummer of St. Marylebone, L.

Derwent, L.

Digby, L.

Prior, L.

Dilhorne, V.

Quinton, L.

Dundee, E.

Rankeillour, L.

Eccles, V.

Reigate, L.

Eden of Winton, L.

Renton, L.

Elibank, L.

Renwick, L.

Elles, B.

Rippon of Hexham, L.

Elliot of Harwood, B.

Rochdale, V.

Faithfull, B.

Rodney, L.

Ferrers, E.

Rugby, L.

Ferrers, L.

St. Aldwyn, E.

Fortescue, E.

St. Davids, V.

Fraser of Kilmorack, L.

St. John of Fawsley, L.

Gainford, L.

Saint Oswald, L.

Gardner of Parkes, B.

Sanderson of Bowden, L.

Gisborough, L.

Stanley of Alderley, L.

Glenarthur, L.

Strathspey, L.

Greenway, L.

Swinfen, L.

Gridley, L.

Terrington, L.

Hailsham of Saint Marylebone, L.

Thomas of Gwydir, L.

Thomas of Swynnerton, L.

Harmar-Nicholls, L.

Thorneycroft, L.

Havers, L.

Trafford, L.

Hesketh, L.

Trumpington, B.

Hives, L.

Ullswater, V.

Holderness, L.

Wise, L.

Hood, V.

Wolfson, L.

Hooper, B.

Young of Grafham, L.

Hylton-Foster. B.

Zouche of Haryngworth, L.

Jenkin of Roding, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.43 p.m.
Clause 1 agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 4:
After Clause 1, insert the following new clause:
("Application for registeration of rent.
.—(1) Notwithstanding any provision in the terms of the tenancy, an application for the registration of a rent for a dwelling-house may at any time be made to the Rent Assessment Committee by the landlord or the tenant, o0r jointly by the landlord and the tenant, under an assured shorthold tenancy of the dwelling-house.
(2) Any such application must be in the prescribed form and contain the prescribed particulars in addition to the rent which, it is sought to register.
(3) Subject to subsection (4) below, where a rent for a dwelling-house has been registered under this Part of this Act no application by the tenant alone or by the landlord alone for the registration of a different rent for that dwelling-house shall be entertained before
1524
the expiry of two years from the relevant date (as defined in subsection (5) below) except on the ground that, since that date, there has been such a change in—

(a) the condition of the dwelling-house (including the making of any improvement therein)

(b) the terms of the tenancy

(c) the quantity, quality or condition of any furniture provided for use under the tenancy (deterioration by fair wear and tear excluded), or

(d) any other circumstances taken into consideration when the rent was registered or confirmed, as to make the registered rent no longer the market rent.

(4) Notwithstanding anything in subsection (3) above, an application such as is mentioned in the subsection which is made by the landlord alone and is so made within the last 3 months of the period of 2 years referred to in that subsection may be entertained notwithstanding that period has not expired.
(5) In this section "the relevant date", in relation to rent which has been registered under this Part of this Act, means where on an application for the registration of different rent the registered rent has been confirmed, the date of that application or, if there was more than one such application, the date of the last of them.").
The noble Lord said: Perhaps I may also speak to Amendments Nos. 34 and 37. On this side of the Committee we are concerned with giving tenants and prospective tenants the maximum protection which we believe Members of the Committee will accept. In a recent speech delivered at a conference on housing, the Housing Minister, Mr. Waldegrave, assured those attending that the Government are keen to ensure that:
"rents remain within the reach of those in lower-paid employment".
Similarly, in the latest consultation document issued by the Department of the Environment entitled Tenants' Choice, that is one of the criteria which will be developed by the Housing Corporation in consultation with the Secretary of State. It says:
"to ensure that only stable and responsible landlords with a long-term commitment to the provision of rented housing for those who need it are approved".
In order to ensure that that objective is fulfilled, the Government have given repeated assurances that housing benefit will cover market rents set by the rent assessment committee. I quote:
"The real market rent must be met by housing benefit for those eligible for it … Where the rent assessment committee has determined the rent for a tenancy the regulations will provide that the rent will automatically be accepted as a reasonable market rent".—[Official Report, House of Commons, 27/6/88; col. 119.]
However, the problem is that we consider that there are many circumstances in which tenants will not have the right to refer the rent to the rent assessment committee. I give the following examples relating to assured tenants: during a fixed tenancy (Clause 14 only applies to periodic tenancies); during the first term of a contractual periodic tenancy; at the end of the periods in the two examples given above unless a notice of increase is served; and during any period in a periodic tenancy where there is a provision for an increase in rent.
Examples where similar circumstances prevail for assured shorthold tenants are as follows. During any fixed term tenancy granted after the first fixed term; during a periodic tenancy arising at the end of the first fixed term when no notice of increase has been served; if the rent assessment committee considers that there is not a sufficient number of similar comparable tenancies in the locality and that the rent

1525
payable is not significantly higher than the rent which the landlord may reasonably be expected to obtain, then it is under no obligation to make an assessment of the rent. Moreover, at the end of a fixed term contractual shorthold tenancy, any determination by the rent assessment committee will cease to be the maximum recoverable rent—the rent can be increased by agreement between the landlord and the tenant—and there will be a period in which the tenant will have no access to the rent assessment committee. This period could be up to one year. For example, it would be one year if the rent assessment committee determines the rent on the last day of the fixed term tenancy.
In addition, even if the rent assessment committee registers a market rent, the landlord and tenant can agree a higher rent and that will almost certainly not he covered by housing benefit. Therefore, during those periods, if the contractual rent charged by a landlord is higher than the reasonable rent assessed by the rent officer for the purposes of housing benefit subsidy for the local authority, there will be no subsidy payable on the difference. In such cases tenants are likely to be faced with the choice of paying the difference themselves or, if they cannot afford to, of falling into arrears and facing eviction and homelessness.
Thus, the effects of the Bill and the consultation paper on housing benefit are that rents are likely to double or treble especially in areas of chronic housing shortage such as in inner London. Housing benefit will not always cover the full rent. Those on low incomes will not be able to afford the rents under the new assured tenancies if not covered in full by housing benefit. Tenants wanting to take up the tenancy will not know whether housing benefit will cover the rent and will have no means of finding out.
The choices are that if the Government genuinely wish to ensure that those on low incomes are not excluded from this sector, then safeguards must be added to the Bill. That must be done either by limiting the rent that can be charged by landlords under the new assured tenancies to market rents fixed by the rent assessment committee and providing access at all times to that committee or by making all rents under the assured tenancy scheme, whether fixed by the rent assessment committee or not, eligible for full benefit subsidy.
The first option is preferable because it would prevent landlords charging excessively high rents at the taxpayers' expense while landlords will nevertheless be able to charge reasonable market level rents. That is consistent with the Government's wish:
"to ensure against the possibility … of rents being led by a racket, so that housing benefits lead the rents ahead of the real market rent".—[Official Report, House of Commons, 27/6/88; col. 119.1
That option would ensure that those on low incomes who are not entitled to housing benefit would also benefit.
Obviously in our opinion the Bill as it stands leaves a lot to be desired and that is hy I propose these amendments. I await the Minister's reply with interest. I beg to move.
The Earl of Caithness: As drafted, Amendment No. 4 would give the landlord or tenant, or both acting jointly under a shorthold tenancy, the right to apply at any time to the rent assessment committee for the registration of a rent. There is no specific provision as to the basis on which the rent assessment committee would determine the rent, but we can infer from the reference at the end of subsection (3) that it would be a market rent. The Bill as it stands provides a mechanism under which the rent assessment committee can determine the rent payable under a shorthold tenancy but it is considerably more restricted in scope than that envisaged in this amendment, and quite deliberately so.
Generally speaking, our view is that landlord and tenant should be free to negotiate the tenancy agreement and having once done so should be bound by its terms. That is why we have provided no access to the rent assessment committee for full assured tenancies granted for a fixed term or for short periodic tenancies which have been in existence for less than 12 months.
However, we recognise the need for an adequate safeguard against exploitation in the shorthold market. Such a safeguard is set out in Cluase 22. It is designed to deal with the situation where a shorthold tenant has struck a particularly had bargain which involves him paying a rent which is clearly above the level generally prevailing in the market. Where this is the case the rent assessment committee will be able to set a lower rent which overrides the terms of a tenancy agreement. However, the wording of this provision makes it clear that the committee can determine a rent only where there is a sufficient number of other tenancies against which the tenancy in question can be compared and only where the evidence of those other tenancies confirms that the rent under consideration is indeed above market level.
We are firmly of the view that it would be wrong to go any further than we have done in Clause 22 given the basic principles on which the legislation is constructed. A safety net is provided for the shorthold tenant but only for use in limited circumstances and without cutting across the vital concept of a free market. The approach reflected in this amendment represents a considerable divergence from the strategy we have chosen to adopt in so far as it involves a greater reliance on statutory procedure to determine rent levels and correspondingly less emphasis on freely negotiated terms and the market principle. It is for that reason that I cannot commend the amendment to your Lordships.
Amendments Nos. 34 and 37 strike once again at the principle of the freedom of landlord and tenant to negotiate changes in the rent and other terms of a tenancy independently of statutory procedures. We entirely accept the need for statutory procedures to be available in respect of private lettings and the Bill therefore provides them, but only in those circumstances where the landlord and tenant are genuinely unable to settle matters amicably between themselves. It is our firm belief that, contrary to what is often suggested, the landlord-tenant relationship is not an inevitably hostile one. All the indications are that the majority of landlords are perfectly satisfied

1527
with their tenants, and vice versa. There are many occasions on which the two parties are happy to resolve their affairs on an amicable yet business-like basis with no need to resort to statutory procedures. That is what my noble friend Lady Gardner of Parkes reminded the Committee of and I know that, unlike the comment of the noble Lord, Lord McIntosh of Haringey, she is typical of many landlords. It is one of our key objectives to ensure that it is possible for such landlords to continue to do business by agreement rather than on a statutory basis.
Each of the amendments thus represents a divergence from what we are seeking to achieve. Amendment No. 34 would delete the provision which enshrines the freedom of landlord and tenant to vary, by agreement, any term of a tenancy, including a term related to rent. Amendment No. 37 would remove the provision which ensures that the rent determined by the rent assessment committee becomes the rent under the tenancy unless the parties otherwise agree.
Leaving aside the objection of principle to which I have referred, the second amendment would have the effect of depriving the rent assessment committee's determination of any statutory force, which I am sure is the opposite of what the noble Lord, Lord Dean of Beswick, intends in his amendment. I hope that in the light of what I have said the noble Lord will understand the Government's arguments on these amendments.
Lord Renton: I agree with the explanation given by my noble friend but I should be grateful for clarification. He pointed out, rightly, that Amendment No. 4 does not give an indication of the nature of the rent that would be registered but assummes that it would be a market rent. Under Clause 14, to which he referred, which deals with the determination of rent by a rent assessment committee, various factors are mentioned which have to be borne in mind and applied by the rent assessment committee.
Am I right in thinking that what it will come to is that instead of the rent assessment committee having to fix a notional market rent, it will hear from both sides—landlord and tenant or their representatives—and will simply use its judgment as to what, in the circumstances, the rent ought to be in the light of the representations made to it?
The Earl of Caithness: As I understand it, that will be a consideration which will be taken into account. However, the committees will also take into account the level of the rents because, as I have explained, there has to be evidence of rents at a different level from that agreed. I am sure that the rent assessment committees will be looking at the level of those rents as well.
Lord Renton Lord Renton: I thank my noble friend.
Baroness Fisher of Rednal: Can the Minister give me an interpretation? I am thinking of when a marriage breaks down and under the Matrimonial Causes Act and the Family Reform Act the wife is left to stay as the tenant. I may be wrong but it looks as
1528
if the Bill does not recognise what are called the family law rights of many of these ladies who are left and whom we call separated wives.
We use the term "non-tenant spouse"—because the tenancy is left in the man's name—and allow the wife to stay with the children. I understand that the non-tenant spouse has no right to apply to a rent assessment committee to have a rent registered or to be a party to any proceedings. In other words, the person left in the matrimonial home will not be able to appeal to a rent assessment committee and might even find the rent substantially increased beyond her means and without coming under the housing benefit maximum.
Lord Trafford: Is it not true, referring to rents in the private sector, that it would depend on to whom the tenancy was let? The circumstances described by the noble Baroness, unfortunate though they may be, would apply to the original letting of the tenancy. If this were to both, then it would apply to the deserted wife. If it is not in both names it would not, and could not, be so; certainly not in the present circumstances. If that is to what the noble Baroness refers, surely that is how it applies. Is that not correct?
Baroness Gardner of Parkes: I take the opportunity of raising this point because we have reached this subject although it is more related to Amendment No. 9. There is a real issue to be considered on where a marriage breaks up. It is important that the tenancy right should remain with the spouse who has the children. Another point concerns the need to change the tenancy from husband to wife, or from wife to husband, depending on who has the children and who remains in the property. If it is necessary to change the tenancy from, say, husband to wife it is important that it should not count as a new letting. That would make a considerable difference. The existing and protected tenancy would be changed completely in character.
I put forward these points now in the hope that, perhaps at a later stage in the Bill, the Minister can consider them. It is therefore important that a spouse left with the children should have a greater tenancy right.
6.00 p.m.
The Earl of Caithness: The noble Baroness, Lady Fisher of Rednal and my noble friend raised a very important point as regards the question of separated and non-tenant spouses. We shall be dealing more extensively with that, as my noble friend has reminded the Committee, when considering Amendment No. 9. I should hate to steal the thunder of what my noble friend Lord Hesketh will tell the Committee when he comes to speak about that amendment. At this stage I say to the noble Baroness that the non-tenant spouse might be unaware of a rent increase affecting her; but if there was a divorce and subsequently a maintenance order made, the increase would be reflected in the maintenance payment. The question of who should have the tenancy in the event of a divorce is, as my noble friend knows, settled by the court, and at that time it takes the position of the children very much into account.

1529
I remind the Committee that we shall be coming to Amendment No. 9 when we shall deal with the whole of the Matrimonial Causes Act and the Family Law Reform Act in much more detail.
Baroness Fisher of Rednal: I accept what the noble Earl said regarding divorce; but there are many couples where the marriage breaks up and no divorce takes place. I believe the noble Earl said that the non-tenant spouse has no right to appeal to the rent assessment committee. If she can find a husband to pay the extra rent, she will be all right. We know that a great number of marriages break down and the husbands disappear altogether. It is the fact that a rent might be increased and the non-tenant spouse cannot apply to the rent assessment committee.
The Earl of Caithness: I shall look at the point raised by the noble Baroness if it is not covered in due course by my noble friend Lord Hesketh.
Lord Dean of Beswick: Obviously, I am not going to move forward and begin speaking about Amendment No. 9 because no doubt that will be given a proper airing in its rightful place. On the Minister's reply to this amendment one matter strikes me. He keeps referring to market rents; but never once has anyone representing the Government used the term "a fair rent". If some of the protection contained within this amendment is not given serious consideration and is dismissed out of hand, it will result in a fair rent but only to the landlord. It will not be fair to the tenant. If one were in a situation where supply almost equates with demand, one could achieve some kind of negotiation on a rational and reasonable basis. However, in an area such as inner London (which will probably be the biggest minefield of the lot) there will be no basis for setting reasonable and fair negotiations.
It is all very well to say that tenants will negotiate with landlords and that a deal will be acceptable to both; but the fact is that most landlords will be aware of their rights and familiar with the rent law. Most of them will be articulate and know all about the subject. We are talking about a large percentage of people who will probably have no such attributes so that the negotiations themselves will be conducted between unequal parties. I can visualise the landlords going for short-term tenancies as that is the best way for them to terminate tenancies because they cannot continue to let properties on the basis that they desire.
The Minister said that normally landlords and tenants are happy together. I suspect that if we are unable to persuade the Government to insert more complete and profound protection for potential tenants into the Bill, then when this Bill becomes an Act there will be all the happiness of being together like the proverbial shotgun wedding. One partner will he there on the basis that he or she has nowhere else to go and the partner has to negotiate from that situation. The landlord, on the other hand, may well have a battery of people who have to reside in a particular area and who may have far better means to finance a tenancy.
Baroness Gardner of Parkes: I ask the noble Lord to give way. The noble Lord is saying that if this Bill becomes law people will have nowhere to go. People have nowhere to go now and that is the whole purpose of this Bill. It is to make available housing that does not exist at the present moment. I believe this to be a point that the noble Lord is overlooking. We also have failed to remind ourselves that this Bill applies only to property that is not already occupied or let. We are talking about new lettings and places that are not available now. I believe that this Bill must increase the supply of accommodation and that an amendment of the kind that the noble Lord is supporting will only prevent that happening.
Lord Dean of Beswick: I should like to believe the noble Baroness that these will be completely new lettings and that they are not already on the market. Each year there is a considerable changeover of lettings of any kind whether in the private or public sector. Once a tenancy ceases, it becomes a new one. I take a completely opposite view to that of the noble Baroness when she speaks about negotiations and the protection that they will give to tenants. I believe that tenants will get about as much protection from these measures as giving someone who has just been to the guillotine an aspirin to cure the headache. These provisions are loaded mainly in favour of landlords otherwise the Bill would not be before us.
I predict that at the end of the day, if the Bill becomes law and it is enacted as it stands, I shall be amazed if within two or three years from now a Minister (if it is the same Government) can come to the Dispatch Box and say that these measures have helped to solve the housing problem in London. They will have no effect on it whatever other than to allow landlords to charge more rent. Someone mentioned the question of housing benefit, and I understand that we shall be dealing with that provision later on in Part V of the Bill. I should like to read more closely what the Minister said. I do not know whether he fully understands the lack of protection that a great number of tenants will receive if this Bill goes through. I ask the Minister to look at the subject more closely. To constantly use the term "market rents" is an invitation for an explosion upwards of rents which even the Minister will regret when it occurs.
The Earl of Caithness: Before the noble Lord decides what he intends with this amendment, I ask him how he can say that, on the one hand, there will be no more properties let in London in the next three years as the result of this Bill yet, on the other hand, he says that all this Bill will do is enable landlords to charge more rent. We are not affecting existing tenancies.
Lord Renton: Before the noble Lord answers that question, I wonder whether he can explain this point. Why is it that in subsection (4) of his amendment the landlord is given the opportunity of making an application when a period of nearly two years has expired but the tenant is given no such opportunity?
Lord Dean of Beswick: Perhaps I may reply first to the Minister. While I do not see it happening, if as the

1531
Government say the Bill releases houses for rent I can see it being on the basis of rents far higher than even the Government imagine. Nobody has spoken about it today but there are predictions that mortgage rates will rise by another 2 per cent. That will have an effect on what landlords will be able to charge for housing in the stress areas. In that respect the Minister is playing with an argument. I do not believe that there is a vast pool of houses available for rent.
Lord Trafford: I am a little puzzled by what the noble Lord is saying and seek clarification of some of his points. First, he accepts, I take it, that the Bill does not apply to existing tenancies. I believe that that is common ground. Secondly, the noble Lord said quite rightly that when demand is much higher than supply, prices tend to rise. In general economic terms, he is absolutely correct about that. However, if the purpose of the provision is to increase supply—although the noble Lord is obsessed with inner London to which he referred five times in his speech I can assure him that many other parts of the country have housing problems—the increase in supply must be encouraged to level off demand. I accept his argument that new tenancy rates may rise. I accept his argument that where long-term tenancies fall in, the landlord may prefer to use shorthold tenancies. However, I do not take the main argument in his speech; first, because the increase in supply is one of the main objects of the Bill; secondly, because once that increase in supply is achieved it affects the level of demand; and thirdly, because this does not apply to the whole of London and does not apply to existing tenancies.
Lord Dean of Beswick: Perhaps I appear to be concentrating on London. I was a Member of Parliament and at one time the leader of Manchester Council with housing as my special responsibility. I am quite aware that not only London, Manchester and Leeds have housing problems. I understand that. The Government have been asked about homelessness on a number of occasions. It was raised during the Second Reading debate and in a series of Questions. The Government keep telling us that they are convinced that the Bill will help to solve the problem.
I walk here every morning from my flat and pass through parts of London on the way. I see flats for sale but none for rent. If those flats were let, there is no question that people could afford the rents. The Government are saying that the Bill will help homeless people. That will not be the case unless the Government fund in full the tremendous increases in rent that these people have to pay.
If the noble Lord, Lord Renton, is convinced that there is an omission that might benefit the tenant, perhaps he would care to correct that at a later stage of the Bill.
6.15 p.m.
The Lord Bishop of Worcester: I am in difficulty here because I would greatly welcome anything that would make available more rented property to those in need. However, I greatly fear that the Government will give with one hand and take away with the other.
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If it is new rented property about which we speak, does the Minister agree that there will be a temptation for present tenancies to be brought to an end as quickly as possible so that they may be renegotiated at a higher rate? Is there not a danger of giving with one hand and taking away with the other?
When we talk about negotiated rents for tenancies we must remember that we are talking very often about people at the bottom of the social pile, people who are not capable of negotiating, people who, as the noble Lord, Lord Dean of Beswick, said, are not articulate and do not have knowledge of property and renting. They will always be at a disadvantage. Are the Government seeking to give with one hand and take away with the other?
The Earl of Caithness: As the right reverend Prelate knows, under the present Acts it is extremely difficult to hasten the end of existing tenancies. One of the results of this has been harassment. As the right reverend Prelate will recall from our earlier discussions, we are strengthening protection in that respect under Clause 29. That is a significant improvement. As to taking away with one hand, I should say that the Government are giving with one hand and giving with the other. The Government are seeking to increase the availability of rented property. We have said that we want this to be at market rent. We have said that housing benefit for those who require it will need to meet that market rent.
Lord Stallard: The right to establish assured tenancies has existed since 1980. Has the Minister any statistics of how many assured tenancies have been taken up in London? Half of those in the private sector are in bed-and-breakfast and are outside rent control. Can he tell us how many assured tenancies have been set up since 1980? If we had that information we could decide for ourselves how the Bill will set up some more. The noble Baroness, Lady Gardner, believes that it will produce many more assured tenancies. From where will they come, if they have not come since 1980 in the London area?
Baroness Gardner of Parkes: Perhaps I may answer that question. In London all the rents were determined over this period. It is only recently that London rents have been derestricted. Outside London we did not have those restrictions and lettings were more successful.
Lord Jay: The Minister said that the Government are trying to increase the availability of rented properties; but the Government are not trying to do that at all. The great majority of rented properties are council-owned properties. The whole of the Government's policy is tending to reduce the number of rented council properties available in the community.
They are reducing that number by making it easier for such properties to be sold, which reduces the amount of rented accommodation. They are doing it by refusing local authorities the right even to spend more than 25 per cent. of their capital receipts on building new council houses. It is this reduction in

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supply of rented council properties, deliberately created by the Government, that is causing the shortage of rented properties in the country. It is that shortage which is forcing up rents. Therefore my noble friend is absolutely right to say that it is a complete fallacy that the availability of relatively few private rented properties, as compared with the loss of council properties, may lead to a fall in demand for rented property. I wonder how the Government can claim to be increasing the amount of rented property when in fact they are doing exactly the reverse.
Lord Dean of Beswick: I think my noble friend and colleague Lord Stallard put a most pertinent question on the issue of assured tenancies. He asked how many assured tenancies there are now. I do not have the latest figure but I do know that when the question was last answered from the Dispatch Box by the noble Lord, Lord Skelmersdale, the number given at that time—which was not so long ago—was appallingly low. In fact I think it was in the region of just over 300. Unless there has been a dramatic acceleration since then, are we to assume that the assured tenancies scheme has been a failure?
Baroness Gardner of Parkes: I am sorry to speak again on this amendment, but I feel that I must take up the issue raised by the noble Lord, Lord Jay. That issue was debated so many times during the years when I was a member of the Greater London Council; namely, the magic that because you have more council rented accommodation you have more vacancies. That is not necessarily so. People who are occupying a council flat are occupying that flat whether they are renting it or whether they own it. I still hold the belief that they are entitled to own it. Therefore I do not accept his argument that if we turn them all into rented properties tomorrow there would be many more of them available.
Lord Trafford: Perhaps I may just say something about two points which have been made. I cannot believe the figures that have just been quoted by the noble Lord, Lord Dean of Beswick. I know he quoted from an Answer but he did not specify the Question which was tabled. If the figure was nationwide, I find it impossible to believe that that was the actual figure. Secondly, if he is referring to any new assured shorthold tenancies, that cannot be true. I must have signed nearly that many in the past eight years.
Before the noble Lord rises, perhaps I may make just one further point. We heard a comment—from a "communist" I would say—from the noble Lord, Lord Jay. He must know that as regards local authority tenancies one of the drawbacks—and it has nothing to do with the rent—is that labour is immobile. The percentage of changes that take place is approximately—I shall have to do a quick mathematical figure here—60 per cent. of what can occur in a privately-owned sector; that is, the owner-occupier group of people. Therefore that suggests that what happens in that group is that they are stuck there because they cannot exchange. It is not a question of whether they are renting or owning, as my noble friend Lady Gardner of Parkes said. It is the system which fixes them.
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The aim of the Bill is to increase the privately rented sector. However, to a very large extent we have been talking in this debate about existing tenancies being affected—which they are not—about shorthold tenancies which may or may not apply, and very much, as I said to the noble Lord earlier, about inner London. There are other vast areas in which that applies and with due respect to the noble Lord, Lord Jay, his other remarks, which were no doubt true economically, were actually irrelevant to this amendment.
Lord Jay: All that the noble Lord has just said makes no difference whatever to the fact that if you reduce the total of council-owned rented properties on the present scale you will reduce the total of rented properties available in the country as a whole.
The Earl of Caithness: I think that my noble friend Lord Trafford is right. We have wandered far and wide from the amendment before us. Indeed, we have almost gone through the Second Reading again. Therefore I think that as there are one or two other amendments which we should like to discuss this evening, perhaps we ought to concentrate on the amendment moved by the noble Lord, Lord Dean of Beswick, and let him decide what he wishes to do with it.
However, before the noble Lord does so, he asked me to reply to the point raised by the noble Lord, Lord Stallard. The latest figure that I have for assured tenancies set under the Housing Act 1980 was compiled on 1st April 1987. That figure is 3,000—that is, 3,000 more than there would have been had we not had the Housing Act 1980. But, as the noble Lord, Lord Stallard, will be aware, that Housing Act was strictly confined. The reason that there is what we consider to be a relatively low figure is that only new or newly-refurbished houses could he let under that scheme and only approved landlords could use it. However, that has encouraged us to believe that there is a big market ahead of us.
Lord Dean of Beswick: The Minister's theories are not justified by the figures, because the figures I have are that since 1980 3,000 assured tenancies have appeared, 2,600 of which are sheltered accommodation. Therefore in fact there have been 400 assured tenancies since 1980. If that is success: show me a failure. However, bearing in mind what the Minister said—I should like to look at the implications of what he said—and because we have had a good debate on the matter, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Tenancies which cannot be assured tenancies]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 5:
Page 91, line 16, at beginning insert ("Subject to sub-paragraph (3) below").
The noble Lord said: In moving Amendment No. 5 I wish to speak also to Amendment No. 6. As the Bill is presently drafted a landlord could remove the rights of an assured tenant occupying part of a house.
If the landlord moves into the house and is able to persuade the sitting assured tenant to accept a new tenancy of his accommodation, or to move to accommodation in another part of the house, the landlord would then be able to claim that since the new tenancy was granted he has been living in the house as his home and is therefore a resident landlord.
The tenant would become a tenant unprotected by the Bill. The landlord would he able to evict him without having to give any reason for so doing. Further, if the landlord shares any accommodation with the tenant, the latter could be evicted without a court order pursuant to Clause 31 of the Bill.
The proposed amendment reinstates a safeguard contained in the Rent Act 1977 to prevent such an abuse of the law by providing that the sitting tenant will remain an assured tenant, even if he accepts a new tenancy following the landlord taking up residence in the house. Where there are multiple tenancies within a large building I think that the situation would be wide open to that particular abuse and it would be a pipe dream to suppose otherwise. I beg to move.
The Earl of Caithness: Under this Bill landlords letting accommodation in their own homes are treated differently from non-resident landlords. Provided that the conditions in paragraph 10 of Schedule I are met, a letting will not be an assured tenancy under Part I. Future lettings by resident landlords will not be subject to any special statutory regime. These landlords will be able to agree rents with their tenants without statutory intervention and the security which tenants have will be a matter of contract. We all, I think, would want to encourage people to let spare accommodation in their homes and it is simply not appropriate that they should be subject to the sort of legal controls necessary for nonresident landlords.
The purpose of the noble Lord's amendments is, if I understand them correctly, to protect a tenant who has an assured tenancy but who accepts a new tenancy of the same dwelling house or of another dwelling house in the same building. The noble Lord fears that if the landlord who grants the new tenancy has become a resident landlord and satisfies the test in paragraph 10 of the schedule, the new tenancy would not be assured.
Of course, no one can force an existing tenant to accept a new tenancy. However, I agree that there is a risk that an assured tenant could lose his rights in those circumstances if he accepted a new tenancy without understanding the significance of doing so. Therefore if the noble Lord will withdraw his amendments, I undertake that we shall consider the point with a view to tabling an amendment of our own at a later stage. I hope that the noble Lord, Lord McIntosh of Haringey, is counting!
Lord Dean of Beswick: I am obviously grateful for the fact that the Minister has undertaken to take the matter away and consider it. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
6.30 p.m.
The Earl of Caithness moved Amendment No. 7:
Page 92, leave out lines 21 to 24.
The noble Earl said: The Committee will know that shared ownership has been a popular form of low-cost home ownership provided by housing associations under which people can get a foot on the housing ladder by part-buying and part-renting their homes. In legal terms of course the occupier does not own a share in his home as such, rather, he has a lease for which he has paid a premium set at a proportion of the capital value of the dwelling, the rent being reduced on account of that premium.
Shared owners have been able to buy extra shares as they could afford them and eventually acquire the whole of the equity in their homes if they wanted to. I am sure that the Committee will agree that this is an imaginative and welcome scheme.
In the Housing and Planning Act 1986 we excluded certain shared ownership leases from the rent control provisions of the Rent Act because they were restricting the availability of shared ownership schemes. Our first thought was that those leases, defined in Schedule 4 of the 1986 Act, needed to be excluded from the assured tenancy scheme too, and that is what paragraph 13 of Schedule 1 achieves. We have concluded however that that is an unnecessary complication and that there is no reason why shared ownership leases should not fit within the main assured tenancy regime. That regime will enable a landlord to grant a long tenancy at whatever combination of rent and premium he can obtain in the market, with contractual rent reviews. That is exactly what is required for shared ownership to work. Paragraph 13 of Schedule 1 is therefore in our view redundant, and the amendment removes it. I beg to move.
Lord McIntosh of Haringey: I do not think that we shall oppose the amendment. However I should be grateful if the Minister would clear up one or two possible effects of the amendment and perhaps correct any misunderstandings that I may have on the matter. It is obvious that if people are contemplating shared ownership, they will need to be made aware, as clearly as possible, about the new regime that will apply to shared ownership. Does it mean that the rental part of shared ownership could be on the basis, for example, of assured shorthold tenancies or is it only on the basis of assured tenancies? It would be helpful if the Minister will indicate in what way the Government propose to let people on shared ownership leases know what their new legal status is.
The Earl of Caithness: The noble Lord has asked me some questions. Perhaps I could write to him between now and another stage with the details.
On Question, amendment agreed to.
On Question, Whether Schedule 1, as amended, shall be agreed to?
Lord Monson: Before we leave Schedule 1, will the Minister tell us whether the assured tenancy provisions introduced by this Part of the Bill will continue to be governed by the repairing obligation

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provisions contained in earlier Housing Acts? In other words, will it still be necessary for a landlord to grant a lease of seven years or more before full repairing obligations can be imposed—with his agreement of course—upon the tenant?
Finally, what about apportionment of the responsibility for paying insurance on the fabric of the building against normal perils, such as storm, fire, aircraft damage and so on, which has always been something of a grey area?
The Earl of Caithness: I should like to draw the attention of the noble Lord, Lord Monson, to one of the Government publications which I am sure he has read. It is Government proposals for housing—private renting which my department and the Welsh Office have produced. In it he will find an elegant little paragraph on what the position on repairs will be. It answers him clearly. Of course he will know from reading the Bill that under the 1985 Act at present for most tenancies of fewer than seven years, the landlord will be required to keep the exterior structure of the dwelling in good repair. We shall of course be extending that obligation to flats.
Baroness Gardner of Parkes: I too should like to ask a question about Schedule 1. I wish to refer to paragraph 2: "Tenancies of dwellinghouses with high rateable values". The paragraph refers to a dwellinghouse having a rateable value -for the time being". What will happen after the community charge becomes operative and the rateable value vanishes? What will the basis then be? Not every property that comes up for rent will necessarily have a rateable value assessed. If people alter or add to the building under the present system the rateable value would have varied. I wonder how that matter will be dealt with. I do not necessarily require a reply now. I believe that it is a matter that should be considered in the Bill.
The Earl of Caithness:Thank you.
Schedule 1, as amended, agreed to.
Clause 2 [Letting of a dwelling-house together with other land]:
Lord Monson Lord Monson moved Amendment No. 8:
Page 32, line 24, after ("land") insert ("contiguous to the dwelling-house").
The noble Lord said: The purpose of the amendment is to restrict the security of tenure provisions imposed by the Government to the dwellinghouse and the garden or land immediately surrounding the dwellinghouse. There is no call for the state to extend its protective embrace to paddocks where horses, ponies and donkeys may graze, or to vegetable gardens or allotments which may be situated on the opposite side of the public highway to where the house is situated, as is often the case to my certain knowledge.
It is no good the landlord letting paddocks or allotments on a separate tenancy agreement or even giving a tenant a licence to occupy, because more
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often than not the courts construe such arrangements as artificial and deem the land concerned to be included in the main tenancy agreement.
So far as non-essential land, such as paddocks and allotments, is concerned, it is up to the tenant to negotiate such security of tenure as the rent level warrants and as the tenant requires. He may not require the same security of tenure that he will wish for the house and garden. It is no business of government to interfere in the law of contract where non-essential land is concerned. I beg to move.
Lord Renton: At first sight I was attracted by the amendment, but on further thought I am not sure that we should acccept it, with great respect to the noble Lord. Admittedly it is now unusual, but in the last century there were, especially in the North of England and the Midlands, rows of terraced houses built with practically no garden attached. There is sometimes a path or tiny yard at the back of a house, and the local authorities, or the private landlord as the case may be, managed to arrange that there were strips of land to go with each house.
If the amendment were accepted in such circumstances, although it is essentially part of the enjoyment and occupation of the dwellinghouse, the land would not be covered. It could be made the subject of other contractual arrangements, as the noble Lord said. I shall be interested to hear what my my noble friend the Minister has to say about this matter. Although the circumstances are unusual, we should be prepared to deal with them. They must be considered. I prefer the flexibility of the clause as it stands, without the amendment.
The Earl of Lytton: I support the amendment. I know what has been said about the possibility that the term "contiguous" may give rise to a legal severance of the entitlement of the tenant. I do not believe that that was intended. If the wording is perhaps at fault, the concept behind the amendment is not. In particular, in the Bill we are trying to protect the dwellinghouse and to provide someone with a roof over his head. That being the case, the surplus land, as it were, over and above the necessary garden area should not rank for protection pari passu—to use what I believe is the correct legal term—with the remainder of the property. Therefore I commend the amendment to the Committee in terms of its spirit even though the wording may not be ideal.
Baroness Gardner of Parkes: The Act says:
"If, under a tenancy, a dwelling-house is let together with other land".
Surely we are only discussing a case where the land is included in the letting. If, instead of that, the land were separately dealt with or not included in the letting, there would be no concern, or it could be dealt with as a separate letting if one wanted to let the garden separately. Like my noble friend Lord Renton, I prefer the present wording because I found this word "contiguous" very deceptive and confusing in terms of people's garages attached to houses. The rates can be changed if they are contiguous and not if they are not. I like the original wording in the Act.
Lord Monson: Perhaps I may take the opportunity of replying to the noble Baroness. I explained that it is no good the landlord putting the paddock or whatever on a separate tenancy. That may be no good because more often than not the courts construe such arrangements as artificial, an artificial way of getting round the restrictions under the rent Acts. Therefore that nullifies the whole purpose of letting the paddock, allotment or whatever it is on a separate tenancy.
Lord Renton: There is a further point which was just touched upon by my noble friend Lady Gardner of Parkes—that is garages. Sometimes with quite modern houses a group of houses is built with garages placed quite separately. There is an example of that just across the river and it is a situation which we should also envisage.
Baroness Fisher of Rednal: Will the noble Lord go a little further? I am thinking now of council houses which might be sold. I could describe many houses in the city of Birmingham, there might be 40 or 50 houses in little closes with very nice grass and trees provided by the local authority. Some have quite big areas of green. I know many local authorities have done this so that especially where there are blocks of flats there is green open space. How would that be affected under the noble Lord's amendment? I should not like to feel that there was no protection for those areas. Even if the blocks of flats or the surrounding houses were sold to a private landlord, I should like to feel that the open space development would be retained.
Lord Monson: Perhaps I may quickly say that it is up to the noble Lord to answer that but, so far as I am aware, my amendment would not affect that at all. Houses such as the noble Baroness mentions have been sold, therefore no question of tenancy arises.
The Earl of Caithness: It is clear from our discussion that the amendment of the noble Lord, Lord Monson, does not achieve the purpose which he stated at the outset of protecting the tenants' occupancy of the house and garden. The noble Lord's amendment removes protection not only from the contiguous land but also from the dwelling.
Clause 2 deals with the case where accommodation is let with other land. This is important because of the need to decide whether the accommodation is let as a separate dwelling, which is one of the factors which will determine whether the letting is an assured tenancy under Part I. The test used is whether the main purpose of the letting is to provide a home for the tenant. It seems to us that the question of contiguity ought not to be relevant because the key point is in Clause 2(1)(a), to which I draw the Committee's attention.
The noble Lord, Lord Monson, mentioned the case law that has arisen since the Rent Act 1977. I can assure him that Clause 2 is based on case law. While I would not always regard that as a very promising provenance, in view of the presence of my noble friend Lord Renton I am happy to accept it in this instance and I rather agree with him.
Lord Monson: I think this has been a useful discussion. The noble Lord, Lord Renton, pointed out the most obvious objection to the amendment as it stands: I was not aware of the sort of terraced properties he described. I still think it is wrong, and whereas it may well be right to protect gardens of one-quarter of an acre, when we are talking about fields of two, three or four acres, very different considerations apply.
Perhaps we ought to come back at the next stage and look at it again. It may well be legitimate for the Government to interfere in the normal interplay of supply and demand as regards shelter—dwelling-houses with four walls and a roof, with a garden surrounding them. However, the same does not apply to what one might call optional extras. It is the optional extras, the luxuries, if you like, that I am trying to exclude from the protection of the Act. We have time to think about it in the next few months, and therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clauses 3 and 4 agreed to.
Clause 5 (Security of tenure):
6.45 p.m.
On Question,Whether Clause 5 shall stand part of the Bill?
The Earl of Lytton: Before we leave Clause 5, I should like to mention just one thing which I feel cannot go unchallenged. My criticism of Clause 5 is allied to my criticisms of the Bill as a whole—namely, that it goes out of its way to avoid the reality of security of tenure and the importance of that principle in the context of residential landlord/tenant relationships. At this point I have to declare an interest both as a chartered surveyor and as a landlord of private rented accommodation. I hasten to add that this is in a very small way.
The Government in their White Paper and the Minister in his introduction to the Bill have laid emphasis on bringing rents up to an economic level. I believe that this is an illusion and one perpetuated by my own professional body, with which I do not agree in this instance. We have heard much from the noble Lords, Lord McIntosh of Haringey and Lord Dean of Beswick, about rent control, but, with respect, we cannot have both low rents and security of tenure in the private sector. If we want it in the public sector that is a different matter. We have heard also about marginal cases, wives who have been deserted, people unable to afford levels of economic rent. With respect, marginal cases and concentration on them make bad law.
The Bill assumes that a landlord can and will be willing to offer a property at a rent that will be attractive to a tenant as against the alternative of that tenant purchasing a property on the open market, assisted by a mortgage. It assumes that the tax advantages of home ownership will be put into a proper equilibrium as compared with renting. It also

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assumes that there will be freedom of movement within that sector. This freedom of movement is, I believe, the single greatest advantage of renting over purchasing.
I believe that none of these things will come to pass under this Bill, particularly because there is no political consensus. Landlords will not be willing lessors lest at some future date the equivalent of the Protection from Eviction Act 1964 rears its head and is slapped upon them with very little notice. As long as nothing is done to free up the existing security of tenure provisions on existing tenancies—I say "existing"—small landlords will continue to wait in vain for justice—the same landlords who have looked to the Government to do something about freeing the entire sector. We know that the residential rental sector is shrinking and needs revitalising. It has been shrinking for a long time, on everybody's admission, and with respect to the noble Lord, Lord Jay, I do not think that is related to the provision or otherwise of council housing for rent. The private sector as it stands has been shrinking quite separately from the public sector. I have to ask what landlord would willingly let residential property now where a hint of security of tenure exists at present or will do in the future. I suspect, very few. The promise of the immortality of the present Government might be welcome but not necessarily believed.
If it is accepted that present rents represent too low a return to attract landlords into the marketplace, then it follows that fair rents on existing rented accommodation are too low. I am obliged to ask why new landlords will be able freely to negotiate rents at open market levels but old landlords will not. Is it perhaps that tenants cannot afford those increases? If so, why is it the private landlord who provides social security in this instance? How much longer will he have to wait to get more than a 1 to 2·5 per cent. return on capital?
This Bill will create a two-tier system—one for lettings before it comes into force and another one thereafter. I can imagine nothing more divisive. I can imagine also that this will give a great incentive to the sharks, who have already been mentioned, who already show a high profile but who are, I believe, a very small element in the private rented sector. Nonetheless they bring it into disrepute.
As I have been approached in the past for advice by tenants suffering from harassment, I know very well how difficult it is to prove that a large, anonymous and perhaps threatening man came banging on a tenant's door in the small hours of the morning. Yet the ingredients of a compromise are present and within our grasp. For a landlord, knowing that he could ultimately gain possession of a property (and thus sell on the open market if he wished, having given an appropriate period of notice) might well be content with a modest income in the interim period.
As I see security of tenure as the biggest disincentive to private residential lettings, it follows that I would personally encourage the freeing up of the entire system by the partial removal of security of tenure. But in the same breath I have to say that rent control of some kind or another would almost
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certainly have to remain a large part of the rental system. That would be a quid pro quo for the relaxation on security. Shortholds could still be excluded if necessary, as could the situation regarding resident landlords, and indeed furnished lettings. I believe that there is a point where a willing landlord can do business with a willing tenant, but I cannot see that happening under the terms of this Bill, and in particular under the provisions of this clause.
I wish to distinguish the residential letting situation from its commercial counterpart, which, I believe, may be behind some of the Government's thinking. Most commercial tenants do not wish to buy their freeholds and the absence of rent controls has meant a free rental market. We have gone too far down the road of rent control in the private rented sector ever to recover that kind of free market situation in rents. Therefore, I feel that there are too many political and practical uncertainties remaining for the residential sector to recover in the way envisaged by this Bill.
The Earl of Caithness: I understand the views of the noble Earl, Lord Lytton, who has advocated the removal of all statutory controls over private lettings, leaving both the rent and the tenant's security as matters of contract.
The Earl of Lytton: I thank the noble Earl for giving way, but, with respect, I did not advocate the total removal of all statutory controls. I advocated the rolling back of some of them.
The Earl of Caithness: I retract that statement and I apologise to the noble Earl. The point is that the noble Earl wished to go very much further than the Government have gone, and we have gone very much further than the noble Lord, Lord McIntosh, has gone, or would like us to go. So perhaps we have struck the middle road, which can only be to the benefit of the landlord and the tenant.
Clause 5 agreed to.
Clause 6 [Fixing of terms of statutory periodic tenancy:
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 9:
Page 5, line 14, at end insert—
("(3) Where the landlord serves a notice under subsection (2) above—

(a) he shall make reasonable enquiries to establish whether there is a person in occupation of the dwelling-house who is entitled to apply to a court to have the tenancy transferred into his name under the provisions of section 24 of the Matrimonial Causes Act 1973, Schedule 1 of the Matrimonial Homes Act 1983, or section 12 of the Family Law Reform Act 1987; and

(b) if, subsequent to making such enquiries, the landlord finds that there is a person in occupation who is entitled to apply to a court to have the tenancy transferred into his name under the provisions of either of these Acts,

he shall serve a notice in the prescribed form on that person.").
The noble Baroness said: I rise to move Amendment No. 9 and speak to Amendments Nos. 10, 31, 35, 36, 38 and 39, which have been grouped together. In saying that I point out with very many apologies that Amendments Nos. 35 and 36 should be amendments to Clause 13 and refer to page 10, line seven of the Bill. However, on the Marshalled List

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they come under Clause 14 and refer to page 11, line 20, of the Bill. I apologise for that error. I do not know how it arose.
The purpose of these amendments is to protect the spouse or partner who remains in a family home after the breakdown of a relationship. We seek by these amendments to ensure that both members of a couple know what is going on during a tenancy, and that that will enable the person who remains in the home after the breakdown of the relationship to take steps to protect his or her rights.
Amendments Nos. 9 and 10 deal with Clause 6, under which the landlord has the right to propose a variation in the terms of a tenancy. Amendment No. 31 deals with the situation where a landlord intends to seek possession against a tenant and, in effect, terminate that tenancy. Amendments Nos. 35 and 36 deal with Clause 13, which concerns the right of landlords to apply to increase the rent.
The general purpose of these amendments is, first, to ensure that bodies which make decisions about assured tenancies, such as the rent assessment committee or the court, make the decision in the light of all the facts. Secondly, the amendments provide that the person who is going to have to abide by the proposed changes—the spouse who remains in the tenancy—should have a chance to put his or her case to an independent body for a fair hearing.
It is quite common for a tenancy to be in the sole name of one spouse. It is most commonly, of course, in the name of the man. This Bill only recognises the rights of tenants, despite the fact that non-tenant spouses have a long-term interest in the property under the Matrimonial Homes Act 1983. Those rights include the right to remain in occupation, the right to pay rent and the right to apply to the court to have the tenancy transferred into a sole name.
But these rights are in very great danger of being completely eradicated if these amendments are not accepted. It is of the greatest importance that at a time of a very high rate of marital breakdown, it is the parent with the care of the children, which is generally the mother, who should have her accommodation protected and who should not be made homeless. As the Bill stands at present, the landlord could change the terms of the tenancy, increase the rent and evict a tenant without the spouse being made aware of the facts. Therefore, his or her right to remain in occupation is made absolutely meaningless.
At this point it is important to note that the rights of the spouse of an owner occupier are much greater than those of the spouse of a tenant. The purchaser of a property or a building society seeking repossession is under an obligation to investigate whether there is a spouse who has an interest in the home.
It could be said that it is far more difficult for a building society or a purchaser to find out about the existence of a spouse in the house than it is for the landlord, who has probably had a great deal of contact with a house. A landlord may often have called at the house to see if it needed repair, for instance. Under Clause 9 a spouse with a right of
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occupation under the Matrimonial Homes Act has a right to apply for an adjournment of proceedings or to apply for a suspension or postponement of any order made by the court. But, as I have already said, what use are such rights if the spouse has no knowledge of the proceedings in the first place? Those principles apply equally to cohabitees. The Family Law Reform Act 1987 provides that the court can order a transfer of property from one partner to another if it is in the interests of the children.
But, again, of what benefit is this if the rent is too high or a possession order is made without the previous knowledge of the cohabitee? Surely the way out of the predicament is to put the onus on the landlord to investigate the case and to serve a notice on that spouse who remains in the habitation so that she or he can apply to the rent assessment committee or to the court if possession proceedings are brought. Amendment No. 35 would require the landlord to find out whether there was a wife in the house, and, if there were, to serve a notice on that wife. Amendment No. 36 would allow a wife to refer the level of rent to the rent assessment committee herself and attend any hearing the committee might hold in order to make representations.
When we debated Amendment No. 4, it was pointed out that non-tenant spouses would be able to apply to the RAC. The Minister said that on divorce a husband would pay the increased rent demanded by the RAC through a rise in maintenance. However, it should be remembered that maintenance is rarely paid regularly. In many cases, it cannot be relied on. Maintenance is fixed not only according to what the wife needs but perhaps even more according to what the husband can afford. To ask the husband to pay the amount of the increased rent by way of maintenance is not a practical proposition.
Amendments Nos. 38 and 39 apply to Clause 15, which allows a landlord to charge premiums. That does not necessarily present a problem if there is a court order transferring the tenancy under the Matrimonial Homes Act. However, it will be a problem if one spouse wishes to assign the tenancy voluntarily to the other because the couple do not want to divorce. Our concern is to prevent a landlord from charging a premium in those circumstances.
Clause 15 also enables a landlord to refuse to allow a tenant to assign a tenancy. It is important that the provision does not apply in the case of assignments between spouses and partners in those situations. It must be right to encourage spouses to enter into agreements about property as soon as possible and without the need for court proceedings. Our amendments would achieve that.
We must remember that a large number of single parent families end up homeless. Every precaution should be taken to avoid that. It is true that 19 per cent. of applications to local authorities are made by those who are homeless as a result of a breakdown in a relationship. That is the second most common cause of homelessness. It is also true that 33 per cent. of homeless households are one parent families. The purpose of our amendments is to ensure that after a breakdown, the spouse—who in many cases is a mother with children—will not encounter barriers in

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remaining in the tenancy. I hope that the Minister will look kindly on the amendments. We set great store by them. I beg to move.
7 p.m.
Lord Trafford: I do not wish to be unsympathetic either to single parent families or spouses of broken marriages. However, there is considerable difficulty in the practical application of the amendments. What is being advocated is a form of social letting whereby a private landlord who makes a private let agreement with a tenant also enters into obligations which are unwritten and unthought of with regard to a spouse, a family, a broken marriage and so on. All of that would not normally enter into a landlord's consideration of a straightforward economic or financial transaction.
I do not think that it will be easy to put into this type of Bill something which is provided, for example, in the Matrimonial Causes Act in terms of owner occupation where there is a significant contribution—or an implied contribution—by a spouse to a marriage. However, the matter becomes more difficult in the circumstances which the noble Baroness has outlined. She has pointed out that many of the people who apply to local authorities are people who would otherwise be rendered homeless. Whatever the figure she gave—I believe that she said 19 per cent. —I am sure that she is correct. The circumstances are tragic.
We must not confuse a straightforward private letting with what can occur in the public sector or elsewhere as regards social letting. That is what the noble Baroness is talking about. She is shaking her head. However, once one moves away from the economic and financial circumstances on which such lets are negotiated, one is allowing other factors to enter, whatever one likes to call them.
That is what is being advocated. It seems to me to be impractical. The object of the Bill is quite different. It would be better to take other steps or measures rather than try to amend the Bill to include such an implication, involvement or duty on a landlord who, in those circumstances, will believe that he is signing a straightforward financial obligation to let a piece of property at a certain price for a certain time. It does not seem to me to be a free and reasonable negotiation—
Lord Morton of Shuna: The noble Lord must be aware that if one buys a house, one must be sure that there is no deserted spouse who has rights to it. I fail to see any basic difference between that situation and a letting situation.
Lord Trafford: There is a significant difference. I believe that as regards house purchases one of the reasons for employing a lawyer—and this will appeal to the noble Lord—is to ascertain what hazards or difficulties may lie in the way. For example, there may be a right of way across the property or a right of access by a number of authorities. That is why searches are undertaken. Those are entirely different matters.
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We are talking about what should happen if we wish to revive the private sector. If noble Lords opposite do not wish to revive the private sector and take a totally contrary view in the matter, they can put as many difficulties in the way as they like. We have a straightforward situation which we either wish to encourage or do not wish to encourage. One of the ways of discouraging it is to put hurdles and tripwires in the way. When a landlord signs a straightforward undertaking in good faith with a tenant and the situation then changes dramatically, the landlord should not be landed with those problems.
I have not referred to the other amendments which deal with raising rents. That is a slightly different issue. However, I believe that the main amendment is a discouragement and a trip-wire which will upset what we are trying to achieve in the Bill. I also believe that the amendments are impractical.
Lord McIntosh of Haringey: I had not intended to intervene. However, the noble Lord, Lord Trafford, is seeking to persuade us as a matter of policy that we are not in favour of private rented property. In fact he seems to be trying to put us off private rented property with his examples. He is saying that a landlord should be guaranteed against any change in family circumstances which might work to his disadvantage later on and that a tenancy which was arranged with a single person would not continue on the same terms if that person married, if his marriage broke up or if there were obligations to other members of his family. Unless he is saying that, it is difficult to understand the meaning of his intervention.
Lord Trafford: I said nothing of the sort. If the noble Lord took a tenancy with me and then decided to marry one wife, divorce her and marry two more, it would be nothing to do with me. He is my tenant and I am his landlord—or vice versa. However, if I sign a contract with the noble Lord which creates a tenant and landlord situation, and the noble Lord then marries two or three other people—even one will do—and decides of his own volition to leave the lady, he may then say, "The tenancy that I signed with you should now be transferred to her". In those circumstances it would be perfectly reasonable if the agreement had been signed in their joint names. However, he is asking landlords to undertake duties which they would not normally expect to undertake when they sign an agreement with a single tenant.
With due respect to the noble Lord I have been, although I am not now, a private landlord. I used to sign different forms of tenancy agreement. On one occasion it would be in a single name, on another it would be a joint undertaking—and incidentally, the tenants were often not married. Nevertheless, that tenancy was then transferable. It was nothing to do with the landlord because the landlord—who in that case was myself—would know that he had undertaken that obligation. But to place upon him an unknown obligation is a disadvantage and a drawback to an activity which the Bill apparently wishes the landlord to undertake.

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It is for that reason that I think that these proposed measures are trip-wires in the way of the privately rented sector. They ask people to undertake not just financial but also social obligations. One might say that if one wishes landlords to undertake that obligation they should double the rent and be quite certain that the situation is taken care of. If one wishes to encourage the recovery of the private sector it does not make sense to put obligations in its way.
Lord McIntosh of Haringey: The noble Lord has certainly succeeded in diminishing my enthusiasm for the private rented sector. If tenants in the private rented sector cannot change their family circumstances after the original lease was signed without losing their security of tenure, the value of the private rented sector as a viable part of our housing market is clearly drastically limited.
Lord Trafford: That equally is rubbish, if I may say so. The noble Lord is trying to put words into my mouth. I did not say, and he knows perfectly well that I did not say, that a person who has signed a tenancy agreement cannot change his social circumstances. I am saying that if a person contracts for one particular obligation he should not automatically be expected to have contracted for two, three or four other circumstances. That is all—neither more or less.
It is pejorative, and if I may say so somewhat hypocritical, to put forward all kinds of other explanations and rubbish to suggest that I said something else. That is all I have said about the question—neither more nor less.
Lord Meston: I hesitate to intervene. However, I believe that the noble Lord, Lord Trafford, is under a misconception if he thinks that the landlord will automatically be taking on not just the tenant himself but the wife or the mistress or the lover of the tenant, or whoever he or she may bring into occupation. He speaks as though when the relationship breaks down and the tenant leaves, the landlord has no right to be heard at all in the following proceedings which would enable the tenancy to be transferred under the Matrimonial Homes Act, the Matrimonial Causes Act or the new Family Law Reform Act. That is a misconception. The established rules of the court provide that in such circumstances the landlord is notified of the application and has the right to be heard as a fully competent party before the court.
I speak from fairly recent experience of just such a case. A lady client of mine was left in the lurch in a rented property. Her husband went off. She inevitably got into difficulty with the rent. She desperately tried to take over the tenancy. The landlords, who I think were the Church Commissioners, not unreasonably said that they would like to help her but did not think that she could keep up the rent. She tried very hard to get someone to guarantee the rent or to raise a bank loan to buy a long lease from the landlord. Ultimately she failed and the landlords, as they were entitled to notwithstanding their evident sympathy for the lady, prevailed and she had to go. That is just the kind of situation we are considering.
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I think therefore that the noble Lord is under a misconception if he thinks that there will be some automatic procedure enabling the property to be transferred to the spouse or whoever it may be.
I should very much like to support both the logic—
Lord Trafford: Will the noble Lord permit me to intervene? In the amendment it is proposed that there should be a written obligation on the landlord to take action which he would not presently have to take under an ordinary lease.
7.15 p.m.
Lord Meston: As I understand the obligation in the amendment, it is simply to give notice to the other possible occupier. However, if I am wrong perhaps I shall be corrected.
Having heard the argument in support of the amendment, I should like very much to support both the sentiment and the logic of the proposal. In practice it quite frequently happens that a tenant's spouse or partner is left when the relationship breaks down. The sole tenant—usually the man but not always—surrenders the tenancy or accepts a notice to quit without reference to the estranged partner and disappears before the party in occupation has any opportunity to retrieve the position. The result is that that party is evicted and has to go to the local authority to be rehoused or has to look to the DHSS for the rent.
It is quite correct to say that people in that position are in a much weaker position than equivalent parties who are married to freeholders. In those circumstances there is a right under the Matrimonial Homes Act to register a charge or a caution. As the noble Baroness said, the partners or spouses of freeholders also have a further advantage. If the lender, which is usually a bank or a building society, seeks to enforce security there is a specific duty on it under the rules of court to make inquiry to see who is in occupation.
As I read the amendment it is an attempt to bring tenants' partners into line with the partners of freeholders. To that extent it is a valuable amendment. It is not to be forgotten that these people already have existing rights. For a number of years under the Matrimonial Causes Act the tenancy has been regarded as property. There are existing rights for the transfer of tenancies under the Matrimonial Homes Act going back to 1967 which were reinforced in 1981. It is my understanding that the amendment is not intended to enhance those rights but rather to ensure that those rights are not lost by the unilateral act or omission of the disappearing tenant.
Lord Renton: Would it not be a good thing if we were now to hear what my noble friend Lord Caithness has to say about this rather conflicting argument?
The Earl of Lytton: Perhaps I may intervene very briefly. It seems to me that the situation here is in the essence of a contract between landlord and tenant. The landlord is entitled to know to whom he is letting and the tenant is entitled to know who is letting the

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property to him. It therefore follows that if some change occurs, such as the tenant marrying and wishing his spouse to be included as a tenant, he ought to give due notice to his landlord that that is what he would like. The landlord can then be asked to make sure that he has served a notice on both parties or that he is dealing with both parties and makes due representation to them jointly and severally as the case may be. It seems to me that anything short of that represents an imbalance in the whole concept of landlord and tenant law.
Baroness Gardner of Parkes: I must respond to the comment of the noble Earl, Lord Lytton. In an ideal world where all husbands and wives got along marvellously, and men really thought about what might happen to their wives, they might give due notice that they were now married and they would like their wife to have equal rights. They might have a joint tenancy, which is something that I should like to see more couples have. However, there are many situations in which that does not happen.
The noble Baroness, Lady Platt, has asked me to say that she too feels strongly on this issue. I do not support the amendment as such because I am not sure that the wording is right. However, I support the principle. It should refer to whichever spouse has the children, because it is the welfare of the children and their future which is most important. If the landlord is receiving the rent from the man, or from the wife who is continuing to live there with the children although the man has gone, what difference does it make to the landlord? On the other hand, if the woman finds that, although the husband's tenancy rights were protected because he had been there for some years, hers is considered a new tenancy and she loses all the rights that existed with the earlier tenancy, I think that that may be a very serious position.
Without doubt local authorities are overburdened with homeless families, and homelessness is a terrible thing in terms of the children. This type of Act does not suggest any reduction in rent for the landlord. The point made by the noble Baroness is that it would usually be the woman who is left. It could be a man whose wife has deserted him but it is usually the man who goes off. Whichever parent is left with the children, if the tenancy is not in joint names then that parent should have the opportunity to acquire the tenancy. I support that in principle.
Lord Hesketh: I fully appreciate the reasons why the noble Baroness moved these amendments. The arguments behind them were set out for my honourable friend the Parliamentary Under-Secretary of State by representatives of women's organisations at meetings at the department. I have considerable sympathy for the partner to a marriage which is breaking up who is kept in ignorance by the other partner of developments which could be of vital significance for her future. However, I do not think that these amendments are a practical way of helping such people.
The amendments would require a landlord to serve a notice in prescribed form of changes in the terms of
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the tenancy, notice of increase in rent, and, most important, notice of proceedings for possession on a person living in his property who is not the tenant.
The tenant of course gets such notices automatically. The amendments would require the landlord to make inquiries to establish that the person has a right to apply to the court under matrimonial legislation for the tenancy to be transferred to her—I say her, though of course it would apply to a spouse of either sex, because it is most often the woman who is left in the position of being a non-tenant spouse.
I contend that that is an unreasonable burden to place on landlords. A landlord makes a contract with his tenant. He should not be obliged to make inquiries into the personal affairs of that tenant. If the tenant marries, he may apply for a joint tenancy to be granted to himself and his wife. That is the best course, and one that we shall advocate in the advice literature that we shall be issuing to prospective tenants after this Bill becomes law. Of course it is open to a wife to apply to the court in good time to get a property adjustment order made. But it would be burdensome and possibly objectionable for a landlord to have to investigate the marital status of his tenant every time he serves one of these three notices.
I would point out that it is not normally in the tenant's interests to allow a notice of rent increase to go uncontested, on the assumption that his wife will simply be saddled with the cost of the higher rent. He might well be expected to pay maintenance as part of the divorce settlement, and his maintenance payments are likely to be higher if the rent is increased significantly. So in practical terms. he—if it is he—has nothing to gain by letting a notice of rent increase go uncontested.
I believe that the notice of proceedings of possession is the most important of these notices. I understand that, where possession proceedings are started, notice is served at the address of the property that the landlord wishes to repossess. If the spouse is still living at the property, it is open to her to find out what is going on and seek to intervene in the proceedings. I understand that the courts will treat such intervention sympathetically, and if it is an arrears case, the wife may be given the opportunity to pay off her husband's arrears.
I make the practical observation that people do have to take some responsibility for safeguarding their rights. I strongly urge spouses to take out joint tenancies, and our advice literature will do so too. I do not think that we should expect the landlord to go through complicated and intrusive procedures to protect the spouse's rights.
I am afraid that I also see problems with Amendments Nos. 10 and 36. Again, I have sympathy with the partner to a broken marriage who is living in a property in the case where changes to the terms of the tenancy or rent are agreed without her knowledge. However, we are up against the fact that the landlord's contract is with his tenant. He must serve the notice on the tenant, and if the tenant agrees to it, even if he is not living in the property, the case will not get referred to the RAC. We do not want

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every spouse to apply to the RAC in every case. We want to get at the case of the deserted spouse. The point I made earlier about maintenance still applies—if the tenant does not challenge the rent increase, he will pay for it through maintenance.
As regards Amendment No. 38, the prohibition on assignment without the landlord's consent applies to the tenant. It does not apply where the court makes an order to transfer the tenancy. So the first part of this amendment is unnecessary. As regards the second part, the landlord makes a contract with his tenant. He does not necessarily want the tenant to be able to assign the tenancy to his spouse or to someone with whom the tenant is living as husband or wife. It would be wrong to override his contractual agreement.
With regard to Amendment No. 39, when the court transfers a tenancy to a spouse as part of divorce proceedings the premium becomes irrelevant and the spouse is not charged it. If we prevent a tenant from charging his spouse a premium when there is a question of assigning it to her—and I have to say that I find it a most unusual course of behaviour to want to do so—then the tenant who is determined to recover his premium will simply not assign the tenancy to his spouse. So I do not think that this amendment is very practical nor, in respect of divorcing couples and matrimonial legislation, is it necessary.
Earlier in the day my noble friend Lord Caithness referred the noble Baroness, Lady Fisher, to my own arrival at this Dispatch Box later in the evening. With regard to her question, it is indeed the case that if a husband vanishes, leaves his wife and does not institute divorce proceedings, he could leave his wife facing a rent increase that he has unilaterally agreed with the landlord. But it is the case under the current Rent Act that a tenant could agree to a rent increase about which his wife did not know and would not have accepted.
The problems that arise with broken marriages in rent-fixing legislation cannot be dealt with here; but of course where there is a divorce, judicial separation or decree of nullity, the Members opposite have tabled amendments which I can say now we shall accept.
I am afraid that I cannot accept these amendments, because they impose undue burdens on landlords or interfere with the contract entered into between landlord and tenant, and I ask the Committee to reject them.
Baroness Fisher of Rednal: I should like to ask the noble Lord one question. It is very interesting to hear that the man continues to make maintenance payments. However, I sit in the matrimonial courts in Birmingham and in fact that does not happen at all. The husband leaves and the woman is left high and dry, and more often than not the first thing that she has to do is to go straight down to the social security offices to make quite sure that she receives some payment. It normally takes that office between three and four weeks to make quite sure that the husband has not returned or is not coming into the house and giving her some money and so on.
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That is the difficulty that arises—not if there is maintenance money being paid and divorce proceedings are being instituted. But when a woman is left with only payments from social security with which to pay the bills, if the landlord is then able to increase the rent without the tenant's spouse knowing, that simply means to say that she has to receive a greater amount of money from the social security to pay it. In those circumstances, one would have thought that the noble Lord might have been more sympathetic to the amendment moved by my noble friend.
Lord Hesketh: I think I am right in saying that in the circumstances that have just been mentioned by the noble Baroness, Lady Fisher, the unfortunate lady that she uses in her example will be covered by housing benefit.
Baroness Ewart-Biggs: Obviously, I am extremely disappointed because we were trying to protect mothers and their children from becoming homeless. That was the whole object of these amendments. It had nothing to do with social tenancies, as the noble Lord, Lord Trafford, said. We do sometimes refer to social tenancies, but in fact not in this case. It was to prevent the situation in which the mother—the spouse who remains in the tenancy—is totally unaware of the notices, the increases in rent, or the eviction order that has been served upon the husband who has left her and is rendered homeless by the time she finds out. It is then too late to do anything about it. We were asking for a very minor change. The noble Lord, who is in a very good position to know about such situations, gave it his support.
However, the Minister made one small concession. I think it was peripheral to the point that I was making. It concerned divorce, and I was talking about people who did not necessarily wish to get divorced but who wished for the mother and the children to be protected in the tenancy.
We shall obviously consider what the Minister said more carefully and take advice. We may well come back with some amendments which will try again to bring before the Committee the point that we have been trying to make in these amendments. In the meantime, with very great disappointment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh: Perhaps I may suggest that this would be a suitable moment to break for dinner until 8.30 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Civil Evidence (Scotland) Bill [H.L.]
7.31 p.m.
The Lord Advocate (Lord Cameron of Lochbroom): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered. — (Lord Cameron of Lochhroom.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill 67 as first printed for the Commons.]
1 Clause 2, page 1, line 24, leave out '16 of the Administration of Justice (Scotland) Act 1933' and insert '5 of the Court of Session Act 1988'.
2 Clause 4, page 2, line 20, leave out 'the stage of.
Lord Cameron of Lochbroom: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 and 2. These amendments may be said to approach the ideal. They are of a technical nature. They raise no new issues of substance or policy and, perhaps most importantly, they are few in number. I think that is a tribute to the very constructive debates which took place on the Bill during its consideration by your Lordships.
Amendment No. 1 is a drafting amendment. It is something of a coincidence that both of the Bills involved are before us this evening. The Civil Evidence Bill originally referred to Section 16(e) of the Administration of Justice (Scotland) Act 1933. This was a power to make court procedural rules. That power is repealed and re-enacted in what is currently Clause 5 of the Court of Session Bill—a consolidating measure. If Parliament approves both these Bills and they receive Royal Assent, it is anticipated that the Court of Session Act will be in force some time before the Civil Evidence (Scotland) Act. This amendment therefore ensures that correct reference is made to Section 5 of the Court of Session Act 1988 rather than the repealed provision in the 1933 Act.
So far as concerns Amendment No. 2, noble Lords opposite will no doubt be pleased to see it on the Marshalled List as it was an Opposition amendment in the other place. It is a purely drafting amendment and has the especial merit of removing unnecessary words. I commend these amendments to the House.
Moved, That the House do agree with the Commons in their Amendments Nos. 1 and 2.—(Lord Cameron of Lochhroom.)
Lord Morton of Shuna: My Lords, I have no intention of opposing these amendments. All I would say is that this very useful Bill—which I believe that we got more or less right in this House—has come back virtually unscathed. I think that it is a matter for congratulation.
On Question, Motion agreed to.

Court of Session Bill [H.L.]
7.33 p.m.
Lord Cameron of Lochbroom: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered. — (Lord Cameron of Lochbroom.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
References are to Bill 157 as first printed for the Commons.
1 After Clause 44, insert the following new clause:
Restoration of possession and specific performance.
'The Court may, on application by summary petition—

(a) order the restoration of possession of any real or personal property of the possession of which the petitioner may have been violently or fraudulenty deprived; and

(b) order the specific performance of any statutory duty, under such conditions and penalties (including fine and imprisonment, where consistent with the enactment concerned) in the event of the order not being implemented, as to the Court seem proper.'.

2 Insert the following new clause:
Specific relief may he granted in interdict proceedings.
'Where a respondent in any application or proceedings in the Court, whether before or after the institution of such proceedings or application, has done any act which the court might have prohibited by interdict, the Court may ordain the respondent to perform any act which may be necessary for reinstating the petitioner in his possessory right, or for granting specific relief against the illegal act complained of.'.
3 Schedule 2, page 18, column 3, leave out lines 41 to 45 and insert—

'Sections 50 to 101.'.

4 Page 22, line 20, column 3. at end insert—

'Section 89. In section 91 the words from the beginning to "seem proper"."

5 Page 28, column 3, leave out line 29 and insert—

'Sections 76 to 88. Section 90.'.

Lord Cameron of Lochbroom: My Lords, with leave, I beg to move that this House do agree with the Commons in their Amendments Nos. 1 to 5 inclusive. The amendments made to this Consolidation Bill in the other place were passed without opposition and have been approved by the Chairman of the Joint Committee on Consolidation Bills. The main amendment concerns Section 89 of the Court of Session Act 1868. The original view of the Scottish Law Commission was that this whole provision had been rendered obsolete by the abolition of the Bill Chamber in 1933. However, recently the section was founded on in litigation before the court and on this being brought to attention it was appreciated that the provision was not wholly obsolete and that a part of it should be retained. Accordingly, in the other place the provision was repealed and in part re-enacted. This was to ensure, as is proper with Consolidation Bills, that the law was restated but not altered. The other amendments are minor or consequential. I beg to move the amendments en bloc.
Moved, That the House do agree with the Commons in their Amendments Nos. 1 to 5. — (Lord Cameron of Lochbroom.)
Lord Morton of Shuna: My Lords, again I have no intention to oppose this but merely wish to welcome the usefulness of having this consolidation measure.
On Question, Motion agreed to.
The Earl of Dundee: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.
Moved accordingly and, on Question, Motion agreed to.
[The Sitting was suspended from 7.36 to 8.30 p.m.]

Housing Bill
House again in Committee on Clause 6.
[Amendment No. 10 not moved.]
Lord Hesketh Lord Hesketh moved Amendment No. 11:
Page 5, line 22, leave out ("month") and insert ("period").
The noble Lord said: This is simply a drafting amendment. An amendment to subsection (3)(a) of Clause 6 made in another place extended from one month to three the period allowed for a landlord or tenant on whom notice is served under the clause to refer that notice to the Rent Assessment Committee. However, due to an oversight a necessary consequential amendment to the wording of subsection (3)(b) was omitted. The present amendment makes good the omission. I beg to move.
On Question, amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 agreed to.
Schedule 2 [Grounds for possession of dwelling-houses let on assured tenancies]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 12:
Page 95, line 8, leave out ("(in either case)").
The noble Lord said: I understand that it would be for the convenience of the Committee if in addition to Amendment No. 12, which I now move, I also spoke to Amendments 13, 14, 15, 16 and 29. Those who follow these matters closely will understand that in effect they all hang together. They all deal with the gravamen of Schedule 2, which is the part of the Bill that deals with possession: the various grounds for possession; grounds on which the court must order possession; and grounds on which the court may order possession.
It is right to say in introducing these amendments that we recognise, as indeed do the Government in bringing forward the Bill in this shape, that everyone concerned in housing not only has obligations—and much of what we have been talking about earlier this evening was about obligations and responsibilities of landlords towards tenants—but we also recognise that landlords have rights in respect of the letting of their property.
At the same time, while they have the right to regain possession of their property under certain circumstances, there is also an obligation on the landlord to recognise that the tenant (who, under the terms of the Bill and indeed the terms of the amendments I move will be dispossessed) also has rights.
As has been said, the Government in this Part of the Bill are doing a great deal to improve the lot not only of landlords but also of tenants of a certain status. We think on this side of the Committee that, much though the Government are doing, there are ways in which their circumstances can be improved. The Minister and his advisers will understand our general sense of wanting to help people who could be in danger in the desperate circumstances of housing, whatever the legalities of the matter, of being dispossessed of their tenure.
We nevertheless also accept that it is right and proper in a Bill of this kind and at this time—because we shall be lambasting the Government more than once—to pay tribute to the fact that this Part of the Bill is not only unexceptionable in general from the point of view of its thrust, but we also recognise that there is a lot of common sense in it. What the Minister's advisers will assuredly have told him is that what we are doing here is shifting emphasis and making some alterations, without necessarily fundamentally either destroying or altering to a major extent what the Government are doing.
In effect, three of the amendments are small but necessary, and the major ones are seeking to change, or change around, or replace particularly the items in Schedule 2 on page 95 and the following pages. We hope that the Minister will accept that we are seeking to improve on the intention of the Government. We hope that the Government will not be arrogant enough to believe that at every stage they have got it right. Those people outside the House who advise us, based upon their fears and experiences, may have something to contribute to improve some parts of the Bill. That is the spirit in which I would ask the Minister to listen to what I have to say.
In the consultation paper outlining the Government's proposals on the private rented sector Ground 1 is presented as being an amalgamation and simplified version of a number of existing Rent Act grounds for possession. But in fact as drafted it is considerably wider in scope than those grounds, and leaves assured tenants with less security of tenure than regulated tenants. This series of amendments seeks to rectify this by establishing grounds equivalent to those applying to regulated tenants under Cases 11, 12 and 20 of Schedule 15 of the Rent Act 1977. I hope the Minister will accept that in essence the last sentence of mine encapsulates what this series of amendments is about.
In Schedule 2 we have a series of grounds on which the court must order possession. They are laid out there and I shall be referring to some of them as we go through. Ground 1 sets out two separate and distinct bases for possession. The purpose of the above amendments is first to modify Ground lA and secondly to delete Ground 1B as a mandatory ground. A separate amendment proposes its replacement by a new discretionary ground.
Case 11 of the Rent Act 1977 safeguards the position of owner occupiers or tenants who wish to let their own homes on a regulated tenancy during a temporary absence. For example, where an employment commitment has taken them abroad. The case guarantees the landlord possession at a later date provided that the court is satisfied that the landlord intends to resume occupation of the premises, or that other special circumstances have arisen. For instance, the landlord needs to sell the property in order to acquire a new home nearer his place of work. By contrast no such condition applies to the granting of a possession order under paragraph (a) of Ground 1. The mere fact that a landlord once occupied the premises will entitle him to possesion against all future assured tenants subject only to notice being served at the beginning of the tenancy that the ground applies to it.
I ask the Minister to accept that this is an anomaly and gives former owner-occupiers an additional mandatory ground for possession which is related neither to their own present circumstances or needs nor to the conduct of the tenant. It is also open to abuse as a landlord will be able to move into a property for a short time and later claim that it was his only or principal home. Such shams are difficult to expose, and tenants will require protection against abuse in the form of additional conditions governing the granting of possession.
The amendment to insert Ground 1B establishes that one of a number of conditions must be met before possession can be granted under paragraph (a) of Ground 1. These conditions, which are identical to those applying to regulated tenancies under Case 11, are set out in a further amendment to add a new Part V to Schedule 2. As amended, the grounds will properly safeguard the interests of the bona fide former owner-occupier who has genuine need of possession.
Paragraph (b) in the Bill as drafted sets out a second arm to Ground 1. Any landlord other than one who has acquired the property over the head of a sitting tenant will have an automatic right to possession if he satisfies the court that he requires the premises as his or his spouse's only or principal home. The nearest equivalent ground applying to regulated tenancies is contained in Case 9 of Schedule 15 to the Rent Act 1977. However, Case 9 is discretionary: the court may refuse to grant possession if it considers it unreasonable to do so. In addition, the court cannot make an order under Case 9 if it is of the opinion that greater hardship would be caused to the tenant by the granting of possession than would be caused to the landlord by refusing to grant possession.
In our view the greater hardship test strikes a reasonable balance between the interests of landlord and tenant. It also provides some safeguard to tenants in the event of a spurious claim by a landlord that the premises are required for his own use when the real intention is to sell the property with vacant possession and the omission of the test from Ground 1B will bear unduly harshly on tenants. The amendment deletes the present paragraph (b), thus removing the second arm of Ground 1. A separate amendment proposing a new Ground 17 seeks to introduce a new discretionary ground virtually identical to that applying to regulated tenants under Case 9.
I think that it is appropriate to mention one or two details in respect of the other amendments. Under Amendment No. 15, proposing Ground 1A, when paragraph (b) of current Ground 1 is deleted no special provision is left for owners who have acquired a property for future use as a retirement home and who have in the meantime let it on an assured tenancy. It is reasonable that such landlords should have a mandatory right to possession, provided that the court is satisfied that the landlord intends to take up possession of the property on retirement or that other special circumstances have arisen.
Amendment No. 16 deals with the special circumstances of members of the armed forces.
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Under new Ground 1B, we take into account that paragraph (b) of current Ground 1 leaves no special provision for members of the armed forces who have acquired a property as a future residence. The amendment inserts a new Ground 1B equivalent to the ground applying to regulated tenancies under Case 20 of Schedule 15 to the Rent Act 1977.
Under Amendment No. 29 there is proposed a new Part V, entitled,
"Provisions Applying to Grounds 1, 1A, and 1B".
It sets out the conditions that will need to be satisfied before possession can be granted under Grounds 1, as amended, IA and 1B. It is equivalent to Part V of Schedule 15 to the Rent Act 1977.
I hope that the Minister will understand the spirit in which the amendments are moved. This is not an attempt to knock or decry the obligations, duties and—not least—the rights of a landlord, but we are anxious to ensure that tenants who may be very frail and much at risk are given the maximum protection possible. I beg to move.
8.45 p.m.
The Earl of Caithness: Amendments Nos. 12 and 13 would make it a requirement of Ground 1 that both conditions in it should be fulfilled before the ground could be used. That is to say, a landlord who wanted to recover a property under this ground for himself or his wife to live in would have to live in the property first, and would have to live in it, or his wife would have to live in it, after possession had been recovered. But there arc many cases of people who buy property while they are working or living somewhere else, people in tied accommodation who want to have somewhere of their own to retire to, schoolmasters, members of the armed forces, many others. In many cases it is simply not practicable for them to live in the property before they let it out. We want to encourage people to make available for rent homes which they cannot actually live in themselves.
If we were to accept the Opposition amendments, we should make the ground so tight that it could not be used in many situations where it would only be fair and reasonable for the landlord to have his property back. I do not think that that is what members of the Committee want. Indeed, I think that it would do much to maintain some of the many barriers to encouraging landlords to let property that I believe they would like to let but fear letting under the present Acts.
I turn to Amendments Nos. 14, 15, 16 and 29. Taken together, they attempt to have adopted in the Bill various tests in the Rent Act that we have consciously decided to abandon. Amendment No. 29 reinstates provisions similar to those that exist in the Rent Act. It set out an additional part to the schedule containing conditions at least one of which must be fulfilled if an amended Ground 1, or as the noble Lord would like Ground 1 A or Ground 1B, is to apply. We have tried to simplify and streamline the grounds for possession.
The existence of a flexible, open-ended form of shorthold makes some of the more complicated grounds in the style of the Rent Act cases unnecessary. We do not want to provide grounds for

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possession that are so hedged around with conditions that they are virtually unuseable. For that reason, I am not attracted by the idea of reinstating these parts of the Rent Act.
Amendment No. 14 tries to bring back some parts of the Rent Act. It sets out a requirement that, for a particular ground to apply, certain conditions must be satisfied. Amendment No. 15 reinstates, in a form amended to cater for joint landlords, the retirement case for possession, Case 12. The arguments that I have already mentioned apply equally to these amendments. Ground 1 as it stands we believe to be perfectly adequate for the purposes of someone who wishes to repossess property to which he intends to retire. We do not need this additional Ground 1A, hedged around as it is by the restrictive conditions in the proposed part of the schedule.
Amendment No. 16 suggests that there is a need for a special ground for repossession for servicemen, similar to Case 20 of the Rent Act. However, I can assure them that the scope of Ground 1 is perfectly adequate to enable it to be used by servicemen for the usual reasons for which they wish to recover possession. I know that the noble Lord is particularly interested in the Armed Forces. I can assure Members of the Committee that I have the interests of servicemen very much at heart. If I thought they would not be able to recover their homes when returning from service, or for other reasons, I should have asked for this ground to be amended. But the serviceman is no different from any other landlord who returns home or otherwise needs his property for himself, or who purchases a property for his retirement. These are exactly the sorts of cases Ground 1 is designed for, and we do not need an additional ground to provide a definition of a serviceman or for any other reason.
We are moving away from the Rent Act regime, and we are attempting to encourage landlords to let property confident in the knowledge that they can recover it when they need it. This is the best way to increase the supply of privately rented accommodation. These amendments would not help our aim in that regard, but would hinder it.
I should like to take up a point specifically raised by the noble Lord, Lord Graham of Edmonton. He said that he was worried that a landlord could move into a property to establish residence and would set up a sham deal. If the landlord occupied the property only to establish residence and it was not his only or principal residence—in other words, it was a sham—and if the court could establish that it was a sham residence, the mandatory ground would not apply. There is a safeguard when the landlord goes to court and it will obviously look into the matter carefully.
Lord Graham of Edmonton: I listened carefully to what the Minister said. I shall need to study it and consult with those outside the House who have drawn our attention to the need for these amendments. In general the Minister has a much rosier view of what he believes (not what he hopes) the Bill will achieve in the circumstances of the housing market in 1989, 1990 and 1991.
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I do not wish to be offensive in saying that we on this side of the Committee not only rely upon but are moved by a different side of the ball game. I am not alluding to any undue pressure from any source. In looking at the housing situation I remember the time when my noble friend, I and others watched both fascinated and repulsed by the current situation which allows the iniquitous successor to Mr. Rachman to operate. We remember that two weeks ago we listened in a room upstairs to representatives from the Bayswater Housing Project. It has people living in substrata housing in which neither the Minister nor I, nor any other Member of the Committee, has or is ever likely to live. They are real people and they are suffering from the delusions which other Governments—it could have been my own—were seeking to solve. That is the reality.
We are far from sanguine. I believe that the Minister is far too sanguine—and that is not an offensive phrase—that the Bill will solve problems of that kind. It may well relieve the rented housing sector, free it and make it more flexible. However, it will not come near to a million miles of solving the problem of some of the people we have in mind.
I am disappointed by what the Minister has said. I shall read his words carefully and perhaps come back with some of these aspects at another stage. I appreciate the fact that the Minister and his advisers are taking the amendment seriously. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 13 to 16 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 17:
Page 95, line 20, leave out lines 20 to 31.
The noble Lord said: The amendment seeks to delete the ground dealt with on page 95 at line 20.
Ground 2 seeks to give landlords of mortgaged properties a mandatory right to possession where the mortgagee requires vacant possession of the property in order to dispose of it under a power of sale. There is no equivalent ground applying to regulated tenancies in general, although it is incorporated into the specific grounds covering returning owner occupiers, retirement homes and the homes of serving members of the Armed Forces. They are Cases 11, 12 and 20 respectively of Schedule 15 to the Rent Act 1977.
The underlying purpose of the proposed ground is unclear. There is no particular reason why landlords in general should be entitled to possession where, for example, they have defaulted on their mortgage payments, although such an entitlement may be justified in cases (as provided for in the Rent Act) where the landlords have let their homes or intended retirement homes. Nor is there any overriding need to provide mortgagees with an additional safeguard, exercised through the landlord, against finding themselves unable to secure vacant possession on account of a sitting tenant. Most mortgage deeds contain a term prohibiting the borrower from letting the property, at least without consent, and it is well established that a tenancy granted in breach of such a term is not binding on the mortgagee as a protected

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tenancy within the meaning of the Rent Act. I refer to the case of Dudley and District Benefit Building Society v. Emerson, 1949.
The ground would therefore appear to be both unreasonably wide in the scope of tenancies to which it applies and superfluous. Moreover, it is open to abuse because some landlords might seek to engineer through a linked company a sham arrangement for a mortgage in order to bring the tenancy within the scope of the ground.
The Minister has satisfied me that the sham grounds upon which I rested part of my case in respect of the earlier amendment was fairly rebutted by him. He will not need me to remind him that the kind of arrangement to which I have referred in respect of linked companies is rife in a certain strata of landlords. We are not castigating "landlordism" as such but we are speaking passionately and powerfully on behalf of some people who are affected by their activities. I beg to move.
9 p.m.
The Earl of Caithness: My Lords, I believe I am right in saying that we are speaking to Amendment No. 17, and to the two consequential amendments, Nos. 26 and 30.
These amendments would drop an essential ground for possession and reinstate an amended version of tests in the Rent Act which we have consciously decided to abandon. Amendment No. 26 restores Case 9, the discretionary case for possession where a landlord wishes to obtain possession of his property for himself or certain specified family members to live in, but provides that it may not be used where the landlord purchased the property with a sitting tenant, or where the tenant previously occupied those same premises under a different tenancy, or lived elsewhere in the building purchased by the landlord. Amendment No. 30 restores the "greater hardship" test of the Rent Act. The court may only order possession under the "family member" ground where it is persuaded that greater hardship would not be caused by granting the order than by refusing it.
It is not an accident that this ground and the "greater hardship" test are not repeated in this Bill. It has been an invidious task for courts to decide whether the tenant or the landlord who wishes to repossess will suffer greater hardship if the order is not granted, and it has been notoriously difficult for the landlord to recover his property. It is of course a cardinal aim of this Bill to encourage landlords to make more accommodation available.
Here there is a difference of philosophy between Members on this side of the Dispatch Box and those opposite. The noble Lord, Lord Graham, said that we have a rosier outlook on the Bill than he—
Lord Graham of Edmonton,Lord Graham of Edmonton,: I said more sanguine.
The Earl of Caithness: I remember sitting on those Benches opposite—not in the hallowed place at the Dispatch Box where the noble Lord opposite is standing and thinking that the Labour Party had a
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very rosy and sanguine outlook on some of their legislation which I did not think would work terribly well. However, there is a difference of philosophy between us. We believe that we shall not achieve some of our aims if we restore the more restrictive parts of the Rent Act. I consider that the two amendments do that.
I also cannot accept that Ground 2 should be deleted. If a mortgagee wishes to exercise a power of sale, that is in itself a good enough ground for possession. If a landlord has defaulted on his mortgage repayments, his mortgagee should be able to recover the property. We amend the Rent Act and the Housing Act 1980 to enable mortgagees to recover possession where a mortgagee was entitled to exercise a power of sale under the Law of Property Act 1925. That ground gives effect to those provisions in this Bill. Indeed, Amendment No. 29 reinstated such a provision in Schedule 5.
I do not accept that there is a need for a restrictive ground for possession, as in Amendment No. 26, or for the difficult hardship test in Amendment No. 30. We need Ground 2. The noble Lord, Lord Graham, also spoke of landlords setting up bogus mortgages to gain possession under Ground 2. Where Ground 2 could be used, the landlord must have served a notice under Ground 1 and so could recover possession. Therefore, the subterfuge mentioned by the noble Lord would not be as effective as I believe he thought it would be when he moved the amendment.
Lord Swinfen: Perhaps my noble friend would consider the case where a mortgage on a property is made some time after the tenancy has started. As I understand it, the grounds in the Bill are to cover cases where somebody has bought a house for his own use, has gone abroad for a time and has let it to pay the mortgage before returning. However, what about a case where there is already a tenant in the house; the landlord needs to raise money; obtains a mortgage on the house to raise the money and subsequently defaults on the mortgage and the mortgagee then wishes to sell the property to recover his money?
Lord McIntosh of Haringey: Surely in such a case the landlord is borrowing money on the market and uses the house as security. However, there is no reason that the tenant should suffer in any way under those circumstances.
Lord Swinfen: That is what I am saying.
The Earl of Caithness: As my noble friend knows, we are happy to consider anything which is put to us. I should like to consider that point. However, if a landlord applies for a mortgage or a bank loan on property which is subject to a tenancy at the time, it will doubtless be a far smaller mortgage than if the property were in vacant possession.
Lord Graham of Edmonton: That is not the answer to the problem that was raised. The Minister reminds us of the times when he sat on these Benches and took the same view as he says I am taking about Government action. The difference is that the Labour

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Government were right and the noble Earl was wrong. One might say that nothing has changed except the two sides of the Chamber.
I appreciate how careful the Minister has been. One of the purposes of our debates is to provide those outside the Committee with as full an explanation as possible of the raison d'être for those parts of the Bill which we are seeking to amend. There are those outside who are much closer to the problems of tenants—and not necessarily closer to the problems of landlords who I acknowledge have problems—and who are genuinely concerned primarily about the security of tenure and that there is no proper recourse to the law. However, I shall read what the Minister has said and possibly come back to the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 18:
Page 96, line 40, at end insert—
("and
(c) suitable alternative accommodation is available for the tenant or will be available for him when the order for possession takes effect.").
The noble Lord said: In moving Amendment No. 18 1 shall also speak to Amendments Nos. 18A, 18B, 19, 20, 27 and 28. These amendments are concerned with the vexed issue of suitable alternative accommodation. It has to be recognised that throughout the whole history of housing legislation, the provision of suitable alternative accommodation as a reason for a landlord gaining possession of tenanted property has been peculiarly difficult. When the law is too lax, the landlord can offer a rabbit-hutch and the law will support him. When the law is too tight—although I am not sure that I can bring to mind any examples of the law being too tight—it becomes virtually impossible for the landlord to make a reasonable offer to a tenant in order to obtain possession for a perfectly reasonable purpose.
These amendments are particularly concerned with the case referred to in Ground 6 where the landlord needs possession—and we accept that that is a genuine situation—in order to redevelop the property. We are not saying that there should be no right of repossession. We are saying that the present Bill goes much too far in making it easy for the landlord to offer alternative accommodation which does not have the same quality or degree of security as the existing accommodation.
One of the most common abuses of the suitable alternative accommodation provision in housing legislation has been where the landlord has offered accommodation which is, in effect, tied accommodation, because it belongs to his business associates, his family or other connections which he has. In the past, indeed after the Landlord and Tenant Act 1954, business tenancies were used as a way of getting people out without any real intention to redevelop. It is possible to go through the motions of redevelopment, even to go so far as to seek planning permission, and then do nothing about it after the tenant has been evicted. We are anxious that that phoney redevelopment should not have effect.
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Therefore, we are asking that the words "suitable alternative accommodation" should be added into the reasons under Ground 6—the redevelopment ground—for mandatory possession in cases where a court must give an order for possession. That is in Amendment No. 18.
Amendments Nos. 27 and 28 are consequential amendments. Amendments Nos. 18A and 18B are two different ways—complementary rather than conflicting—of approaching the issue which I addressed a few moments ago. That is, the phoney alternative where the landlord offers the chance of moving to other property of the same landlord, an associated company, relative, business associate, or whatever it may be. It will be obvious to the Committee that when that happens the degree of security in the new property will not be comparable to the original. It will provide far too easy a ground for the landlord to obtain possession in the redevelopment case.
Therefore, all these amendments are designed to provide some safeguards for tenants. It is not that we are opposed to repossession where there is a genuine need for redevelopment. However, bearing in mind the experiences which have unfortunately shown over many years that, in the end, many of these claims for repossession on grounds of redevelopment are phoney, we want to provide a certain number of restrictions around such a ground.
I can see what the Minister has down for his reply. He will say that it is in the Rent Act which we are deliberately moving away from. I have eagle eyes in these matters. However, that is not good enough. The abuse that has taken place over many years in which we have had legislation relating to rent control—and, above all, security of tenure—does not give us any confidence that the existing ground (particularly the ground that requires that this is a mandatory reason for possession in which the court must give possession of the property) is adequate to meet the abuses which have taken place, are taking place and I fear will continue to take place under the proposed legislation. I beg to move.
Lord Seebohm: This is an interesting amendment. I have had the same experience. I was turned out of my accommodation because of the danger from asbestos and all the floors had to be taken up. However, I had a right of re-entry. Perhaps the amendment is not absolutely correct and the noble Earl might consider whether an amendment is required to give a right of return when the necessary work is completed.
The Earl of Lytton: I have great sympathy with what the noble Lord, Lord McIntosh of Haringey, has put forward. He referred to the commercial landlord and tenant legislation and the grounds upon which a landlord can seek possession of property because of redevelopment.
My understanding is that the courts have interpreted that fairly strictly and that the present position is not simply that you must have planning consent but that you must also have a genuine scheme which is, so to speak, ready, willing and able to go ahead. That is my understanding of the position.

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Therefore, I do not see an analogy there as being anything less than what the noble Lord is asking for.
I certainly believe that the redevelopment criterion should not be used as a ploy for getting out tenants where there is no intention to proceed with any such scheme. Clearly that would be an abuse of the system.
I am a little unclear—perhaps the noble Lord could clarify the position—regarding the provision of alternative accommodation. Is he suggesting that there should be an offer as part and parcel of exercising this redevelopment option, if I may call it that? Is he suggesting that alternative accommodation should be provided? If so, that would appear to be a duplication of what is provided for elsewhere in the Bill.
As we heard earlier, we are referring to new tenancies. It would appear to me no great difficulty for landlords to look forward a little and include in their tenancy agreement a provision for re-entry in the same way as is dealt with in the commercial field. There should be a redevelopment clause with an appropriate period of notice. Then the tenant can hardly say that he has not been warned about it. It puts the landlord into the position of making his intentions quite clear from the outset. I wonder whether the Minister would care to comment upon that also.
9.15 p.m.
The Earl of Caithness: I shall take first Amendment No. 18 and the consequential Amendments Nos. 27 and 28. The issue whether suitable alternative accommodation should be provided by a landlord wishing to use this ground was, as the Committee knows, discussed in Committee in another place. This ground is for people who wish to develop property. It is based on the well-known and well-tried similar gound in the Landlord and Tenant Act 1954. It is already tightly drawn so that it cannot be used where the landlord purchases the property with sitting tenants, or where he can do the development work around the tenant without actually displacing him. We do not want to circumscribe it so tightly that it can never be used at all, and that is what would happen if the landlord were obliged to find suitable alternative accommodation for the tenant every time he wished to redevelop. It would make largescale development impossible. I know that the noble Earl, Lord Lytton, will be the first to appreciate that developers of necessity have to operate to tight timescales, and they cannot afford the sorts of complication and delays that would be entailed if we were to accept these amendments. There is in any event a discretionary ground for possession where the landlord is able to provide suitable alternative accommodation, and if he can offer it, he does not need to use this ground.
The noble Lord, Lord McIntosh, was right to mention to the Committee the question of the landlord who might have no intention to develop notwithstanding the fact that that was the ground under which he was trying to obtain possession. The noble Earl, Lord Lytton, is right in saying that there is extensive case law under the Landlord and Tenant Act 1954 as regards business tenancies which shows
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that the courts require extensive evidence of the landlord's intention to develop if possession is to be given. If the landlord misrepresents the position or conceals material facts, the tenant can seek compensation under Clause 12.
I appreciate the intentions behind amendments Nos. 18A and 18B. The noble Lord, Lord McIntosh of Haringey, will have noted that we have drafted the ground so that it cannot be used by a landlord who employs the device of granting a new tenancy to the same tenant of the same property and then claims that the ground applies because he acquired the property before the start of that tenancy. These amendments seek to catch the landlord who would try to evade the requirements of the ground by granting subsequent tenancies through associate companies or persons with whom he was otherwise connected. Unfortunately, the amendments also have the effect of depriving landlords who acquire their interest in a property other than by purchase, say by inheritance, from using the ground. The amendment bites not only on people who should not be able to use the ground, but also on those whose predecessors other than by purchase had a legitimate case to use the ground. I might add that the amendments as drafted do not work because the new landlord must be immediately before the grant the same as the old landlord. I believe that to be a practical impossibility. So I appreciate the intention behind these amendments, but I trust the noble Lord, Lord McIntosh, will accept that they bite on the good just as hard as they bite on the bad.
Amendment No. 19 is again aimed at abuse, but it is drawn so widely that it would actually prevent the sort of redevelopment which this ground should facilitate. As drafted, the amendment would mean that a landlord could not use the ground where he had granted a tenancy to someone who was a former tenant of his but of different accommodation. It would prevent the sort of development where a landlord buys an empty block, lets some of it and moves tenants around as he redevelops. This is how development often happens. The ground as it is drafted aims at protecting tenants, particularly sitting tenants whose property is bought over their heads; but it also aims at enabling landlords to undertake large development projects, letting the property in the course of development, and obtaining possession where they need to because the work cannot be done round the tenant. I believe that as drafted it achieves these aims. The noble Lord, Lord McIntosh, has excellent eyesight, as we all know, and he suggested that I might be using words like "we want to get away from the existing Rent Act" when I answered this amendment. I believe he misread the brief.
Lord McIntosh of Haringey: Before I make up my mind what to do about Amendment No. 18, can I press the Minister for a moment more regarding Amendments Nos. 18A and 18B? I accept what he says and I appreciate that it is a defect of the amendments that they cover property which changed hands through inheritance rather than by purchase. I accept that the effect of the amendments would be, as he said, to bite on the good as well as on the bad. If

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the Minister accepts that biting on the bad is a good thing—if I may put it that way—would he be prepared to consider sympathetically amendments which do not have the defects which he has pointed out or would the Minister be prepared to join with me in seeking to draft amendments which bite on the bad but not on the good?
The Earl of Caithness: I am always happy to discuss with the noble Lord anything that would be an improvement to the Bill.
Lord McIntosh of Haringey: I am grateful to the Minister. We could together make some improvements of real value.
I was especially interested in the comments of the noble Lord, Lord Seebohm, and of the noble Earl, Lord Lytton, both of whom spoke about the right of re-entry as a protection to tenants as opposed to the straightforward possession procedures which occupy most of this Part of the Bill. I see the force of what the Minister was saying about the process of development of residential property: work is carried out down through the house, tenants are moved out and they are perhaps them moved back into their original part of the building. This is especially true of blocks of flats. I am sure that that is a sensible approach to redevelopment which ought to be encouraged. If my amendments make that more difficult, I am happy to withdraw them. I shall not ask the Minister to make a commitment now; but there is scope for further consultation between now and later stages on the question of re-entry. I am sure that we can bring forward amendments which do not contain the difficulties of the amendments that I have just moved but yet provide real protection for tenants in this sector of housing.
I listened with interest to the comments of the noble Earl, Lord Lytton, about business tenancies. I am a business tenant and for 19 years 1 have had a redevelopment clause in my lease. As a result, I have had a lower rent and I have taken the risk of being redeveloped out of my premises for all of that time. I consider it a risk worth taking. As a businessman I am perfectly content with that. I am not sure that the same conditions apply to residential property. Indeed, I am sure that they do not apply for residential property, and I am sure that we need greater protection for people whose homes are at stake than for those who simply have to move their businesses to another location.
In the light both of the Minister's indications that there is scope for further amendment and of the comments that have been made, and without any undertaking that we shall not return to this matter at a later stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 18A to 20 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 21:
Page 97, line 13, leave out lines 13 to 24.
The noble Lord said: This amendment refers to another ground for possession, that of rent arrears. I
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note that, although I am not speaking to them, the amendments in the name of the noble Lord, Lord Monson, Amendments Nos. 22 to 26, seek to go in the direction opposite to that in which I want to go. I have no doubt that we shall debate those amendments in due course.
The intention of Amendment No. 21 is to replace the mandatory possession criterion for rent arrears with a discretion for the courts. If we have that wrong, I apologise; but I believe that the drafting in this respect is correct. Ground 8 is one of the mandatory grounds on which the court must grant possession. It says that if both at the time of service of the notice seeking possession and at the time of the hearing more than three months' arrears are owed the court must grant possession. On the face of it, it may seem that the provision that the arrears must be owing both at the time of the service of the notice and at the time of the hearing is a protection for the tenant. I want to suggest to the Committee that that is not the case.
The gap between the two times will not be very great. Under the Bill, it is possible, for example, for a landlord to give only two weeks' notice prior to starting proceedings. I am not expert on the law's delays, but I should imagine that a fairly simple matter of this kind could reach the courts quite rapidly. I think the idea that the courts must order possession in such a case is peculiarly objectionable. Under the terms of the Bill as drafted, the court cannot consider why the rent has fallen into arrears; it cannot consider what the present financial situation of the tenant is, and it cannot consider whether the tenant is willing or able to make realistic proposals to clear the arrears. Further, it cannot suspend a possession order on the basis that the arrears will be paid off within a given time.
I am sure that those Members of the Committee who are magistrates will wish to keep the kind of discretion which the courts have at present to order something other than that a person should be driven out of his home, unless there is really no alternative available. There are many reasons why a tenant may fall behind with his rent. For example, it is unfortunately not uncommon for housing benefit claims to take three months or more to be processed. While that is happening, the tenant cannot pay. It is possible, for example, for a mother with children to be reliant upon maintenance payments from a husband or ex-husband. It is not uncommon either for husbands or ex-husbands not to keep up with their maintenance payments, and it can be difficult to trace them. Under those circumstances, the tenant cannot pay.
It is also possible for a tenant to fall behind with his rent because of unemployment or ill-health, both of which might be temporary. If those situations are permanent then clearly other arrangements must be made. But they could be temporary and the arrears could be recovered. The court in its wisdom and discretion may feel that temporary financial difficulties are not a reason for shifting people out of their homes, but should be a reason for a sensible assessment of the tenant's ability to pay and whether the payments can be made up.
There is also, I am sorry to say, the possibility that landlords may encourage rent arrears in order to gain possession. It is not uncommon for landlords to refuse to collect the rent, to fail to collect the rent—for what appear to be plausible reasons—or even to fail to provide receipts for rent. Of course, the law says that you should not do that, but landlords do. Indeed, we know of far too many such cases. Surely it is preferable that courts which have much experience in the matter should be given the possibility of ordering that the arrears should be paid off—which they sometimes cannot be between the service of notice and the time of the hearing.
The discretionary Ground 10, which we are not seeking to change, provides a perfectly adequate remedy for cases of rent arrears; namely, the suspension of the order and an order to pay off over a period of time in addition to the current rent. All of those are perfectly possible and reasonable, and the courts have effectively exercised such powers for many years. It would be a great pity if in the Bill, without anyone noticing very much, we should suddenly take away from courts—especially magistrates' courts—the discretion to seek to get the money for the landlord without the upheaval of a repossession, which is clearly undesirable. Moreover, in many cases it may be costly to the public purse because those who are thrown out for reasons of inability to pay are almost certainly going to land up before the local authority as homeless or needing housing help of some kind. Therefore in the interests of prudent public economy, as well as in the interests of compassion and common sense, I hope that the Government will see tit to agree to the amendment. I beg to move.
9.30 p.m.
The Deputy Chairman of Committees (Lord Ampthill): I should remind the Committee that if this amendment is agreed to, then I cannot call Amendments Nos. 22 to 25.
The Earl of Lytton: There seems to be one element which the noble Lord, Lord McIntosh has overlooked in the matter; namely, that if, as the Government claim, the Bill will produce an increase in supply then the consequence on the risk of being thrown out of one's accommodation is that much less.
There is just one point that I should like to pick him up on. It concerns the time-scale between the service of notice and the proceedings before a court. Under the present pattern of events, I do not see that being anything other than protracted. There is ample time for the tenant to come to some arrangement with the landlord.
I know that the noble Lord, Lord McIntosh, will say, "He would say that, wouldn't he?" but my next point is, who is ultimately supposed to bolster up the sagging resources of the tenant? Is it the landlord, who has let in good faith in the hope of getting a reasonable return on his capital, or should it be the public sector; and, if so, how? I put that question without necessarily offering an answer.
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With regard to the noble Lord's point about the possible claim of failure to pay, such as a receipt not being issued, if a tenant could demonstrate to a court that he had paid, and the landlord was trying to make out that he had not, that would be a matter of fact which, clearly, if proved in the tenant's favour, would defeat the landlord straight away.
I do not believe that landlords incur the costs of going to court to evict their tenants unless they feel frustrated by not being able to get their rent or they have no other choice. The noble Lord referred earlier today to a certain gentleman, whose name I shall not mention, who might be regarded very much as a fringe operator, and certainly a well-publicised one. Not all landlords fall into that category. An enormous number of landlords genuinely and honestly try to discharge their duties as landlords towards their tenants; but there are a number of tenants who deliberately work the system in every possible way to the detriment of landlords. I am sure that those in this place who are private landlords will know that that is so. Therefore, while I have sympathy with what the noble Lord put forward, I am frankly pessimistic about his grounds. I hope to be able to support the noble Lord, Lord Monson, on an amendment which will be moved shortly.
Lord Trafford: Perhaps I may ask the noble Lord, Lord McIntosh, one question about this matter. I believe that I fully understood his argument. How long does he feel would he a reasonable time in respect of the landlord's difficulties with regard to rent arrears, as opposed to the tenant's difficulty in keeping up with his rent? They should be balanced out. In this instance, under this schedule, it is three months. If he believes that that is unreasonable as a length of time, what length of time does he suggest is reasonable before someone goes to court, or does he think that the matter should never go to the court and that some discretion should always be used?
I can understand that point with regard to the public sector, but I should have a great deal of difficulty in appreciating that from the small landlord's point of view, although perhaps not from the point of view of the largest landlords. The small landlord's cash flow may not be much better than that of his tenant in many cases. How long does the noble Lord feel that rent arrears should be allowed to run before some sort of action is taken? I gather that he excludes 13 weeks as being too short.
Lord McIntosh of Haringey: No. I believe that both noble Lords have misunderstood the purpose of the amendment. I am not attacking the three-month period or the power of the landlord to go to the courts, which the noble Earl, Lord Lytton, seems to think I am. In the amendment I am saying that when the landlord goes to the court after three months—there are different periods for different types of tenant, which again I am not attacking—the court should have an opportunity to order something such as repayment, a suspended payment, or whatever it may be, rather than be forced to order possession without any discretion. That is the basis of my argument.
Lord Trafford: I am sorry, I think that the noble Lord may have misunderstood my point. I understand what he was saying. I referred to the 13 weeks as it happens to be in the Bill as it stands. What I was asking the noble Lord is, bearing in mind the problems which small landlords in particular might face, is it not better, to put it another way, to clarify the issue by putting in some specific date to show when it becomes virtually mandatory? It seems to me that when one starts to refer to the discretion of courts in the private sector of letting, one can frequently be absolutely ruining the landlord under these circumstances.
In the public sector the courts have far greater discretion, partly because of the sheer size of the usual public sector landlord, which is the local authority. It would be perfectly reasonable, I agree, if a tenant were in such a position as the noble Lord described of being three or four months behind. The tenant has plenty of time to make arrangements if he is unemployed or ill or in difficulties, etc. —the kind of thing the noble Lord mentioned. But how long should it be allowed to go on before it becomes mandatory'? It does not seem wrong to me to tidy up the legislation and have a firm point so that everybody, landlord and tenant, is aware exactly how much leeway there is.
Lord McIntosh of Haringey: I have not misunderstood the noble Lord, Lord Trafford, at all. I must insist that I am not suggesting any change in the period as proposed by the Government. I am saying that there may be the circumstances which I gave where the landlord had failed to collect the rent or had not given proper receipts, as well as circumstances where the arrears were totally out of the tenant's control and would be put right as soon as the housing benefit or the maintenance payments were made. It would be put right as soon as the court was satisfied that there was no doubt that the housing benefit or the maintenance payments would be paid. Under those circumstances I am suggesting that a court's discretion is better than a mandatory possession order. That is regardless of the period of arrears.
Lord Coleraine: I should like to ask my noble friend one question about Ground 8. Subsection (c) says:
"at least one quarter's rent is more than three months in arrears".
That subsection could mean something quite different if the rent were payable in advance than if it were payable in arrears. Where the rent is payable in advance it could only be three months in arrears. Where the rent itself is payable in arrears, it is six months. I should have thought that Ground 8 ought to make some provision for this.
The Earl of Caithness: The private landlord rents out property—and he is encouraged to do so—on a commercial basis. He does it for profit and we believe there is nothing dishonourable in that. If the activity is unprofitable, he cannot be expected to continue with it, and that would be to the detriment of tenants
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as well. One of the things which matters most to a landlord is that the tenant should pay the agreed rent on time. It is one of the features of the Rent Act which causes constant criticism from private landlords that tenants are able to run up arrears with impunity, knowing that only in the most extreme cases will the courts award possession. If we are to attract private investment into housing on any scale, it is essential that we should provide some mechanism to deal with this problem. That is the purpose of Ground 8 of Schedule 2, which this amendment seeks to delete.
This ground enables a landlord to seek possession where the tenant is, broadly speaking, three months in arrears with the rent both at the date when proceedings are begun and at the date of the court hearing. Unlike the other rent arrears grounds in Part II of the schedule, it is a mandatory ground. So, if the ground is made out, the court must grant possession.
The noble Lord, Lord McIntosh of Haringey, has protested that this is too harsh on the tenant, especially in cases where the arrears of rent are not the tenant's own fault. The Government do not agree. In practice it will normally take six to eight weeks for the case to come to court. So if the landlord is to succeed, the tenant will often be four to five months in arrears with the rent. It does not seem at all unreasonable that landlords should be able to gain possession in these circumstances, rather than, as often occurs under the present system, the court allowing a tenant to pay off the arrears perhaps over a period of years. All that a tenant faced with an action under this ground needs to do is to pay an amount before the court hearing sufficient to bring the arrears below three months. If he does that, the ground will not apply.
The noble Lord, Lord McIntosh, mentioned a specific case where a tenant had offered to pay rent and the landlord had refused it. I wish to make it clear that if a landlord refuses to accept rent from a tenant, the tenant cannot be in arrears with his rent and would be able to prove that.
My noble friend Lord Coleraine asked about paragraph (c) of the ground. I believe that that works, whether rent is payable in advance or in arrears. The ground applies where a quarter's rent is three months in arrears. So, whether it is payable in advance or in arrears, once the three-month period is up the ground begins to work and take effect.
The noble Lord, Lord McIntosh, raised the question of housing benefit delays. Yes, delays occur, although most local authorities claim to deal with applications within the statutory limit of 14 days. Where a local authority is so inefficient that it cannot deal with benefit applications within four to five months I simply do not see why the landlord should suffer. I see no reason why, where a tenant has received notice of possession proceedings under this ground, it should not be possible for the local authority to sort out matters before the case gets to court. I see three very eminent local government people on the other side of the Committee. I am sure that they would be the first to condemn a local authority should it be so inefficient that it could not get housing benefit out in four to five months.
Lord Dean of Beswick: I am grateful to the Minister for giving way to one of those three very eminent persons, as he described them. Is he not aware that this particular provision concerning the mandatory action of the court is nothing new? If one goes not too far back in history, one will find that there used to be an Act called, I believe, the Small Tenancies Act under which landlords could apply to the magistrates' court. The only thing that the magistrates' court could do was order an eviction; it had no discretion in the matter whatever.
It was because of the difficulties that that situation caused years ago—and I am going back to the early 1960s—that it was decided that rent arrears court cases had to go to the County Court, where discretion could be used. In this particular situation I believe that the overwhelming majority of landlords will not opt for the discretionary clause; they will go straightaway for possession.
If I am correct on this matter—and the Minister may not be able to give me a pat reply—if one goes back in history one will see that this has been tried before. As a result of the unpleasant consequences, successive governments moved away from it and decided that eviction of tenants from property had to go through the County Court.
The Earl of Caithness: I shall certainly look again at the situation that the noble Lord mentioned. But I think I am right in saying that as regards the cases he mentioned housing benefit was not available. Therefore a lot of the problems to which the noble Lord referred will now be accounted for as, it is to be hoped, after a short interim period which has been pretty detrimental, more efficient and reasonable local authorities are now back in power who will try to keep within the statutory limit of 14 days.
Conversely to the amendment of the noble Lord, Lord McIntosh, there was the amendment spoken to by the noble Earl, Lord Lytton. The noble Earl wished to go the other way and to reduce the amount of arrears which must be outstanding before a landlord has a mandatory right to possession. But I am afraid that I cannot go with the noble Earl down that road. We have, in Ground 10, provided a discretionary ground which the landlord can use where smaller amounts of rent are overdue. Moreover, Ground 11 can be used where the tenant has persistently delayed paying the rent. We think therefore that we have struck the right balance in the mandatory Ground 8, and we would not be willing to see it widened in the way that the noble Earl wished. It appears that the Government have got it right between what the noble Lord, Lord McIntosh, wants on one hand and what the noble Earl, Lord Lytton, wants on the other.
Lord Swinfen: Before my noble friend sits down, perhaps he will tell the Committee whether, if a tenant is in difficulties through a delay in housing benefit or through illness, he can get help with his rent from the Social Fund.
9.45 p.m.
The Earl of Caithness: Offhand, I cannot tell my noble friend the answer to that question. I shall look
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into that matter. If, as I suggested, someone was subject to possession proceedings because the local authority had not paid housing benefit for four or five months—that is the length of time involved; there must be three months of arrears and a court case would not follow until six or eight weeks later—I am sure that the local authority would be able to help in that situation.
Lord McIntosh of Haringey: This is the second time today that the Minister has sought to use the argument that because there are arguments on either side of his position, he must be right. I do not know the correct syllogistic formulation for that fallacy. However, I assure him that it is a fallacy. We put forward reasonable arguments; the Government give unreasonable answers; other noble Lords put forward extremely unreasonable answers; and on that basis the Government claim that they are right. That will not wash. The Minister ought to stop using that argument.
The Minister fell back, as the Government often do in seeking to rebut our amendments, on the one case which I cited involving the responsibility of local authorities. I agree that local authorities ought to deal with housing benefit within a statutory 14 days. I agree that it would be extremely unreasonable if cases were not dealt with within four or five months. However, by diverting attention to one example, the Minister totally ignored the other examples which I gave.
For instance, maintenance payments are not the responsibiliity of local authorities; they are the responsibility of those who are required to make the payments and of the courts. The Minister did not attempt to deny that there are many cases where maintenance payments are in arrears by four or five months. He was also unable to answer the question posed by his noble friend Lord Swinfen as regards payments for illness from the Social Fund.
In the cases which I cited I was not arguing that the time period for rent arrears should be changed. I was arguing that the discretion of the courts ought to be maintained. I notice that the Minister failed to answer all but a tiny minority of cases. I am not convinced by the answers that he gave. I believe that they were addressed to the wrong issue.
If the Minister has no faith in the courts to act reasonably as regards assessment of right or wrong between discretion and the ordering of repayments, so be it. Many of those who are involved in this very common kind of case will resent such an implication. They will feel that better guidance from the Government, the Magistrates' Association or the Association of County Court Clerks on how to deal with such cases would be more helpful than taking discretion away altogether, as Ground 8 does.
I am far from convinced that the blanket denial of court discretion in cases of arrears is the right way to proceed. I am sure that those who are involved in the administration of justice will agree with me. Were it not for the lateness of the hour, I believe that this is a matter on which I ought to test the opinion of the Committee. I give notice that it is highly likely that we shall return to the matter at a later stage. It is only on

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that basis that I am prepared to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Monson Lord Monson moved Amendment No. 22:
Page 97, line 16, leave out ("thirteen") and insert ("eight").
The noble Lord said: With the leave of the Committee, in moving the amendment, I should like to speak at the same time to Amendments Nos. 23, 24 and 25. Those amendments were not grouped with Amendment No. 21, which is why I have kept quiet until now.
As the Bill stands at present, a landlord cannot be certain of being able to repossess his property from a defaulting tenant until the tenant is at least three months in arrears with his rent. Before that time the court may help the landlord, as has been pointed out; but, again, it may not. Courts have a natural tendency to sympathise with the tenant who falls on hard times.
That may be a burden which a large landlord can shoulder without excessive difficulty, assuming that he owns a number of properties over which the deficit can be spread. However, the delay in receiving backrents amounting to between, say, £200 and more than £1,000 will be extremely burdensome for a small landlord owning only one, two or three houses, as the noble Lord, Lord Trafford, pointed out when speaking to the earlier amendment. The noble Earl, Lord Caithness, also pointed out when speaking to the previous amendment that because of court delays the burden imposed upon a small landlord will be much greater so that double the amounts I mentioned could be outstanding.
The landlord in question may well have spent recently two or three times that sum on repairing the tenant's roof. What is more, the rent due may not only be delayed, it may be lost altogether.
Lord McIntosh of Haringey: If the noble Lord will permit me, I am curious about the phrase "repairing the tenant's roof". Presumably he is repairing his own roof if he is the landlord.
Lord Monson: The noble Lord is perfectly correct in pointing out my error. That gives me the opportunity to point out that the repair of the roof could wipe out an entire year's rent very easily indeed. The noble Lord may not have realised that. A tenant who is evicted for non-payment of rent may well abscond after the court orders his eviction. The small landlord will not have the financial resources or legal expertise to track him down and obtain judgment for the moneys due. I suggest that allowing an improvident tenant to fall two months behind with his rent, as this amendment does, is more than generous. I beg to move.
The Earl of Lytton: I should like to rise in support of the noble Lord, Lord Monson. It should be borne in mind that we are talking about a commercial arrangement between landlord and tenant, not related to commercial property but nonetheless a commercial bargain all the same. In most similar contractual arrangements the period after which a
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tenant is in default and after which forfeiture provisions bite is very much shorter than the noble Lord, Lord Monson, has proposed. I see no reason why a private landlord who, as the noble Lord pointed out, may have only one property to let should subsidise for a period of time a tenant who falls into arrears. It seems to me that in the context of landlord and tenant the payment of rent ought to be one of the first considerations and not one of the last. Therefore, I wholeheartedly support the amendment.
Baroness Gardner of Parkes: I do not support the amendment. However, I recognise that there is a very real situation in which a landlord may be losing a lot of money. I wonder whether the courts are allowed to award interest for the period that the rent was not received; and, if that is not so, whether it could be considered.
The Earl of Caithness: I am grateful to the noble Lord, Lord Monson, for having moved the amendment because it gives me the opportunity to say to my noble friend Lord Swinfen that the social fund is not available for housing purposes. Housing benefit is available for housing costs so the tenant could not obtain an emergency payment from that particular fund.
To the noble Lord, Lord Monson, I repeat that I understand the points he has made. As I said when speaking to the last amendment we had to make a judgment about the amount of arrears which would justify a mandatory ground for possession—and it is a mandatory ground, as my noble friend Lord Trafford said. It clarifies the rather vague position in which we are now as a result of the Rent Act, and an area which, as I said, had led to immense difficulties.
We chose three months. On balance, I think that two months is too short, and therefore I cannot recommend the Committee to accept the amendments that the noble Lord has moved. Finally, I confirm to my noble friend Lady Gardner of Parkes that courts can add interest on if there is a delay.
Lord Swinfen: I should like to pick up a remark made by my noble friend. I find the answer that he has given to me somewhat disturbing under certain circumstances. As an example, let us take a self-employed person who does not have any sickness benefit for one reason or another. If, through injury and no fault of his own, he were off work for two or three months, he would lose the roof from over his head as well possibly as his business. I think that that is something that he should bring to the attention of his noble and right honourable friends in the Department of Health and Social Security.
The Earl of Caithness: Of course I should like to look into the point raised by my noble friend; but although local authorities cannot make payments to tenants from the Social Fund, they can make interim payments of benefit where they are not yet in possession of all the information necessary to make the regular housing benefit payments. It is in the local authority's interest to make such payments because otherwise it could be faced with a homeless person to house.
Lord Monson: I have naturally taken notes of the Minister's remarks. I appreciate that the Government genuinely believe that they have the balance right. However, I have to say that the Government seem to have only a slightly better perception of the problems confronting the landlord at the sharp end (to use a dreadful but useful modern clich½) than does the noble Lord, Lord McIntosh.
Let me correct that view. The Government may be well aware of the thought processes and motivations of the large, mainly institutional, landlords. I know very little about them; but perhaps large landlords will be happy to live with the Bill as it stands. If the Government believe that they can successfully float off this Bill when it is enacted on the backs of large landlords only, then all well and good; but I think that on the whole small landlords will not be happy to live with it as it stands.
Earlier this afternoon the noble Lord, Lord Bellwin, spoke of something in the order of 200,000 houses and flats that were waiting to be released onto the market if this Bill is successful and if landlords are attracted back into the market. Unless the Government stop loading the dice against the small landlords—I know that they indignantly refute the suggestion that they are doing so—most of those 200,000 houses and flats will remain unlet. I may come back to this matter at a later stage, but for the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 23 to 30 not moved.]
Schedule 2, agreed to.
Clause 8 [Notice of proceedings for possession]:
[Amendment No. 31 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 32:
Page 7, line 10, leave out ("that ground is") and insert ("both that ground and particulars thereof are").
The noble Lord said: In listening to some noble Lords speak in this debate, I have been reminded of a song that I learnt when I was a member of the National Association of Labour Student Organisations. I shall not sing it. The title of the song is "Pity the down-trodden landlord":
"The landlord whose house he has lent,
Oh, heed his fond prayers,
Don't ask for repairs,
And don't get behind with the rent".
I shall sing it to any noble Lords who wish to hear the song afterwards.
This is a fall-back amendment. We failed to persuade the Government that it was right to restore the court's discretion to provide alternatives to eviction in the case of arrears of rent. Now that I consider it, eviction is a much better term than possession. It is eviction from the tenant's point of view—and there are far more tenants than landlords. Possession sounds all right except to those of us who know what eviction means. It means your furniture being put out on the street and yourself being forced on the tender mercies of the local authority or the charities. We are talking about eviction and not possession.
However, a particular case is referred to in Amendment No. 32. It is the case where a tenant who has had a possession order taken out against him is unable to find out the grounds of that possession order. If it is rent arrears, he does not know the claims that are being made to the court. He does not know whether he is being accused of three months' rent arrears or a greater period. He knows what he thinks the rent arrears are. He may well think that the rent arrears are less than three months. Unfortunately there is all too much experience of disputes between the tenant and landlord about how much rent has been paid and what arrears there are.
The same argument would apply to Ground 11, which is discretionary. It refers to partial rent arrears. It may apply to Ground 12, which refers to breach of a tenancy obligation where, as the Bill is drafted, the landlord is not obliged to tell the tenant what tenancy obligation has been breached. If there is any nuisance or annoyance under Ground 14, the landlord is not obliged to give any detail of the alleged misconduct, as the Bill is at present drafted.
It is therefore very difficult for the tenant to find out what he needs to do in order to meet the conditions which the court may apply. Quite unjustly and wrongly, as a result of withholding relevant information by the landlord, we may find a possession order being taken out. The tenant is unable to defend himself adequately in the court because he has not been given notice.
I understand that in some civil cases there are provisions for disclosure of the argument in advance of a court hearing.
Lord Renton: It is not disclosure of the argument but of the facts in support of it.
Lord McIntosh of Haringey: I am grateful to the noble Lord, Lord Renton. It is indeed the facts in support of the argument that we are asking for rather than the argument. I apologise for my mis-statement of the law. However, it will be readily seen that when I talk about the ground, and the particulars thereof, I am talking about the facts and not about any argument. It will be consistent with other aspects of the civil law. It will be patently just that the landlord should give particulars of his complaint—of basis on which possession is being sought—before the court is required to give any decision on the matter. I beg to move.
Lord Renton: The noble Lord, Lord McIntosh, has a good point here. I am not absolutely certain that it is necessary to specify that the particulars may or should be given. However, I think that it is a wise precaution. I hope that my noble friends on the Front Bench will regard this sympathetically.
10 p.m.
Lord Hesketh: If a landlord is to obtain possession from a tenant with an assured tenancy he must serve a notice in the prescribed form. The notice must state the ground in Schedule 2 on which possession is sought and must give the tenant the information set out in subsection (3) of Clause 8.

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The noble Lord in this amendment wants to go a little further. He has argued that the notice should state not only the ground on which possession is sought, but also the details—for instance, how much rent the tenant is alleged to owe, which obligation of the tenancy he is said to have broken, and so on. We agree that it is reasonable that the tenant should have this information.
We had proposed, in prescribing the form of the notice under subsection (3) of Clause 8, to include a requirement to this effect. But there is no harm in including this on the face of the Bill, and therefore if the noble Lord will withdraw his amendment I undertake that we shall bring forward one of our own to the same effect.
Lord McIntosh of Haringey: I could not ask for more than that. I am grateful to the Government, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clauses 9 to 12 agreed to.
Clause 13 [Increases of rent under assured periodic tenancies]:
[Amendments Nos. 33 and 34 not moved.]
Clause 13 agreed to.
Clause 14 [Determination of rent by rent assessment committee]:
[Amendments Nos. 35 to 37 not moved.]
Clause 14 agreed to.
Clause 15 [Limited prohibition on assignment etc. without consent]:
[Amendments Nos. 38 and 39 not moved.]
Clause 15 agreed to.
Clause 16 agreed to.
Lord Hesketh: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

South Yorkshire Light Rail Transit Bill
Reported from the Unopposed Bill Committee.

Local Government Finance Bill
Returned from the Commons with certain amendments agreed to; with one other amendment agreed to with an amendment; with one other amendment disagreed to, but with an amendment in lieu thereof; and with the remaining amendments disagreed to, with Reasons for such disagreements;
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the Commons amendments and Reasons ordered to be printed.
House adjourned at seven minutes past ten o'clock.

  SERIOUS FRAUD OFFICE
  SERIOUS FRAUD OFFICE
  HMS "ACHILLES"
  HMS "ACHILLES"
  RESIDENTIAL HOMES FOR THE ELDERLY: PAYMENT OF FEES AFTER PRIVATISATION
  RESIDENTIAL HOMES FOR THE ELDERLY: PAYMENT OF FEES AFTER PRIVATISATION
  WIDDICOMBE REPORT: RESPONSE
  WIDDICOMBE REPORT: RESPONSE